EXHIBIT C
EXECUTION COPY
SEPARATION AGREEMENT
by and between
GENERAL MOTORS CORPORATION
and
XXXXXX ELECTRONICS CORPORATION
Dated as of April 9, 2003
TABLE OF CONTENTS
Page
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ARTICLE 1 CERTAIN INTERCOMPANY MATTERS...................................................................... 3
Section 1.1. Ancillary Separation Agreements.................................................. 3
Section 1.2. Insurance Matters................................................................ 4
Section 1.3. Registration Rights.............................................................. 5
Section 1.4. GM Contingent Liabilities........................................................ 6
Section 1.5. Publicity........................................................................ 7
Section 1.6. Director and Officer Insurance................................................... 7
Section 1.7. Closing Agreement................................................................ 9
ARTICLE 2 CONFIDENTIALITY................................................................................... 9
Section 2.1. Treatment of Confidential Information............................................ 9
Section 2.2. Legally Required Disclosure of Confidential Information.......................... 10
Section 2.3. Policies and Procedures.......................................................... 10
ARTICLE 3 CONTINUING INFORMATION SUPPORT.................................................................... 11
Section 3.1. Access to Information............................................................ 11
Section 3.2. Production of Witnesses.......................................................... 11
Section 3.3. Reimbursement.................................................................... 11
Section 3.4. Retention of Records............................................................. 12
ARTICLE 4 EXPENSES.......................................................................................... 12
Section 4.1. General.......................................................................... 12
Section 4.2. Certain Transaction Costs........................................................ 12
ARTICLE 5 INDEMNIFICATION................................................................................... 13
Section 5.1. Indemnification by Xxxxxx........................................................ 13
Section 5.2. Indemnification by GM............................................................ 14
Section 5.3. Certain Definitions.............................................................. 16
Section 5.4. Other Liabilities................................................................ 17
Section 5.5. Tax Effects of Indemnification................................................... 18
Section 5.6. Effect of Insurance Upon Indemnification......................................... 18
Section 5.7. Procedure for Indemnification Involving Third-Party Claims....................... 19
Section 5.8. Procedure for Indemnification Not Involving Third-Party Claims................... 20
Section 5.9. Exclusive Remedies............................................................... 20
ARTICLE 6 TERMINATION....................................................................................... 21
Section 6.1. Termination of Agreement......................................................... 21
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TABLE OF CONTENTS
(Continued)
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Section 6.2. Effect of Termination............................................................ 21
ARTICLE 7 MISCELLANEOUS..................................................................................... 21
Section 7.1. Further Assurances............................................................... 21
Section 7.2. Survival......................................................................... 21
Section 7.3. Notices.......................................................................... 21
Section 7.4. Interpretation; Absence of Presumption........................................... 22
Section 7.5. Counterparts..................................................................... 23
Section 7.6. Entire Agreement; Severability................................................... 23
Section 7.7. Third Party Beneficiaries........................................................ 23
Section 7.8. Governing Law.................................................................... 24
Section 7.9. Specific Performance............................................................. 24
Section 7.10. Assignment....................................................................... 24
Section 7.11. Amendment........................................................................ 24
Section 7.12. Dispute Resolution............................................................... 24
Section 7.13. Consent to Jurisdiction.......................................................... 24
Section 7.14. Conditions to Obligation to Close................................................ 25
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EXHIBITS
Exhibit A-1 Amended and Restated Agreement for the Allocation of United
States Income Taxes
Exhibit A-2 Agreement for the Allocation of United States Income Taxes,
effective as of December 29, 1985, by and among General Motors
Corporation, Xxxxxx Electronics Corporation (formerly XX Xxxxxx
Electronics Corporation), HE Holdings, Inc. (formerly Xxxxxx
Aircraft Company), and Delco Electronics Corporation, as
amended
Exhibit A-3 Tax Sharing Agreement, dated as of December 17, 1997, by and
among General Motors Corporation, Xxxxxx Electronics
Corporation and HE Holdings, Inc. (subsequently renamed
Raytheon Company), as amended
Exhibit B Form of Special Employee Items Agreement
Exhibit C Intellectual Property Agreement, effective as of September 25,
2001, by and among General Motors Corporation and Xxxxxx
Electronics Corporation
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INDEX OF DEFINED TERMS
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Affiliate................................................................................................... 16
Agreement................................................................................................... 1
Ancillary Separation Agreements............................................................................. 4
Applicable Law.............................................................................................. 18
Business Days............................................................................................... 19
Certificates................................................................................................ 14
Closing Date................................................................................................ 2
Code........................................................................................................ 3
Confidential Information.................................................................................... 10
Confidentiality Agreement................................................................................... 21
Control..................................................................................................... 16
D&O Insurance............................................................................................... 7
D&O Insurance Policy........................................................................................ 8
Disclosure Documents........................................................................................ 12
Employee Benefit Plan Registration Rights Agreement......................................................... 5
ERISA Affiliate............................................................................................. 16
Exchange Act................................................................................................ 11
FCC......................................................................................................... 12
Final Determination......................................................................................... 18
GM.......................................................................................................... 1
GM $1-2/3 Common Stock...................................................................................... 2
GM Affiliate................................................................................................ 16
GM Business................................................................................................. 17
GM Certificate of Incorporation............................................................................. 1
GM Charter Amendment........................................................................................ 1
GM Class H Common Stock..................................................................................... 1
GM Disclosure Portions...................................................................................... 15
GM Financial Advisors....................................................................................... 13
GM Indemnitees.............................................................................................. 17
GM Sales Process Claim...................................................................................... 16
Governmental Authority...................................................................................... 7
Hourly Pension Plan......................................................................................... 5
Xxxxxx...................................................................................................... 1
Xxxxxx Affiliate............................................................................................ 17
Xxxxxx Business............................................................................................. 17
Xxxxxx Class B Common Stock................................................................................. 1
Xxxxxx Common Stock......................................................................................... 1
Xxxxxx Covered Person....................................................................................... 8
Xxxxxx DCLs................................................................................................. 9
Xxxxxx Disclosure Portions.................................................................................. 13
Xxxxxx ERISA Affiliate...................................................................................... 14
Xxxxxx Financial Advisors................................................................................... 12
Xxxxxx Group................................................................................................ 9
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INDEX OF DEFINED TERMS
(Continued)
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Xxxxxx Indemnitees.......................................................................................... 17
Xxxxxx Permits.............................................................................................. 12
Xxxxxx Separation Transactions.............................................................................. 2
Xxxxxx Succession Agreement................................................................................. 6
Indemnifying Party.......................................................................................... 18
Indemnitee.................................................................................................. 18
Indemnity Payment........................................................................................... 18
Insurance Policy............................................................................................ 4
Insurance Proceeds.......................................................................................... 18
Interim Period.............................................................................................. 6
Liabilities................................................................................................. 7
Losses...................................................................................................... 17
Merger...................................................................................................... 2
Merger Agreement............................................................................................ 2
Merger Sub.................................................................................................. 2
NPAL........................................................................................................ 2
Person...................................................................................................... 6
PRIMESTAR Registration Rights Agreement..................................................................... 5
Proxy/Consent Solicitation Statement........................................................................ 12
Purchaser................................................................................................... 1
Purchaser Stock............................................................................................. 2
Qualified Subsidiary........................................................................................ 1
Registration Rights Agreements.............................................................................. 5
Registration Statements..................................................................................... 12
Representatives............................................................................................. 9
Request..................................................................................................... 20
Salaried Pension Plan....................................................................................... 5
Securities Act.............................................................................................. 5
Separate Counsel............................................................................................ 19
Service Agent............................................................................................... 25
Shares...................................................................................................... 1
Special Dividend............................................................................................ 1
Split-Off................................................................................................... 1
Split-Off Effective Time.................................................................................... 4
Stock Purchase Agreement.................................................................................... 1
Stock Sale.................................................................................................. 1
Subsidiary.................................................................................................. 2
Surviving Corporation....................................................................................... 2
Surviving Corporation Class B Common Stock.................................................................. 2
Surviving Corporation Common Stock.......................................................................... 2
Tax......................................................................................................... 10
Tax Allocation Agreement.................................................................................... 3
Third-Party Claim........................................................................................... 19
Transactions................................................................................................ 2
U.S. Trust.................................................................................................. 5
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INDEX OF DEFINED TERMS
(Continued)
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VEBA........................................................................................................ 5
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SEPARATION AGREEMENT
This Separation Agreement (this "Agreement") is made and entered into as of
April 9, 2003, by and between General Motors Corporation, a Delaware corporation
("GM"), and Xxxxxx Electronics Corporation, a Delaware corporation and a wholly
owned subsidiary of GM ("Xxxxxx").
WHEREAS, Xxxxxx is currently a wholly owned subsidiary of GM;
WHEREAS, the currently outstanding GM Class H Common Stock (as defined in
the Stock Purchase Agreement (as defined below)) represents an approximately
80.1% indirect economic interest in the financial performance of Xxxxxx, and GM
retains an approximately 19.9% economic interest in the financial performance of
Xxxxxx;
WHEREAS, simultaneously with the Stock Sale (as defined below), GM,
pursuant to provisions that have been implemented pursuant to the Stock Purchase
Agreement (as defined below) by means of an amendment of the General Motors
Corporation Restated Certificate of Incorporation (the "GM Certificate of
Incorporation") substantially in the form set forth as Exhibit A to the Stock
Purchase Agreement (the "GM Charter Amendment"), shall distribute to the holders
of record of GM Class H Common Stock as of immediately prior to the Split-Off
Effective Time (as defined below) shares of Xxxxxx Common Stock (as defined in
the Stock Purchase Agreement) in exchange for all of the outstanding shares of
GM Class H Common Stock in accordance with the GM Certificate of Incorporation,
as amended pursuant to the GM Charter Amendment, and the GM Class H Common Stock
shall thereupon be redeemed and cancelled (the "Split-Off");
WHEREAS, GM and Xxxxxx desire to consummate the separation of Xxxxxx from
GM on the terms set forth in this Agreement and to set forth certain rights and
obligations of GM with respect to the separation of Xxxxxx from GM pursuant to
the Split-Off;
WHEREAS, pursuant to the Split-Off, Xxxxxx shall become an independent,
publicly owned company, separate from and no longer wholly owned by GM;
WHEREAS, prior to and as a condition to the Split-Off, Xxxxxx shall
distribute a special cash dividend to GM in an amount equal to Two Hundred
Seventy-Five Million Dollars ($275,000,000) (the "Special Dividend");
WHEREAS, simultaneously with, and as a condition to consummation of the
Split-Off, GM shall sell to The News Corporation Limited, an Australia
corporation ("Purchaser") (or a Qualified Subsidiary (as defined in the Stock
Purchase Agreement) of Purchaser designated by Purchaser) and Purchaser shall
purchase (or cause its Qualified Subsidiary to purchase) from GM, all of its
shares of Xxxxxx Class B Common Stock (as defined in the Stock Purchase
Agreement), representing its retained economic interest in Xxxxxx immediately
prior to the Split-Off, held as of such time (the "Shares") for the purchase
price and upon the terms and conditions set forth in that certain Stock Purchase
Agreement entered into by and among General Motors Corporation, Xxxxxx
Electronics Corporation and The News Corporation Limited on the date hereof (the
"Stock Purchase Agreement") (the "Stock Sale");
WHEREAS, Purchaser's Subsidiary (as defined in the Stock Purchase
Agreement) NPAL (as defined in the Stock Purchase Agreement) currently owns all
of the outstanding capital stock of GMH Merger Sub, Inc., a Delaware corporation
("Merger Sub");
WHEREAS, immediately following the consummation of the Split-Off and the
Stock Sale, Xxxxxx and Purchaser shall merge Merger Sub with and into Xxxxxx
(the "Merger"), with Xxxxxx as the surviving corporation (the "Surviving
Corporation"), as more fully described in that certain Agreement and Plan of
Merger by and among The News Corporation Limited, GMH Merger Sub, Inc. and
Xxxxxx Electronics Corporation dated as of April 9, 2003 (the "Merger
Agreement");
WHEREAS, pursuant to the Merger, (x) all of the Shares shall remain
outstanding as shares of Class B common stock, par value $0.01 per share of the
Surviving Corporation (the "Surviving Corporation Class B Common Stock") and
shall immediately after the Merger Effective Time, convert into an equal number
of shares of common stock of the Surviving Corporation ("Surviving Corporation
Common Stock"), (y) all of the outstanding capital stock of Merger Sub shall be
converted into shares of Surviving Corporation Common Stock, such that
immediately following the Merger Effective Time (as defined in the Stock
Purchase Agreement), Purchaser and its Subsidiaries own, including the shares
described in clause (x) above, thirty-four percent (34%) of the aggregate number
of issued and outstanding shares of Surviving Corporation Common Stock and
Surviving Corporation Class B Common Stock, and (z) all of the shares of Xxxxxx
Common Stock outstanding as of immediately prior to the Merger Effective Time
not held by Purchaser or any Subsidiary of Purchaser shall be converted into
shares of Surviving Corporation Common Stock representing sixty-six percent
(66%) of the aggregate number of shares of Surviving Corporation Common Stock
and Surviving Corporation Class B Common Stock outstanding immediately after the
Merger Effective Time and Purchaser Stock (as defined in the Merger Agreement)
and/or cash, as applicable, in accordance with the terms and conditions of the
Merger Agreement;
WHEREAS, the Special Dividend, the consummation of the Split-Off and the
separation of Xxxxxx from GM as contemplated by this Agreement (collectively,
the "Xxxxxx Separation Transactions" and, together with the Stock Sale and the
Merger, the "Transactions") are conditioned on, among other things, the approval
by the holders of a majority of the outstanding shares of GM $1-2/3 Common Stock
(as defined in the Stock Purchase Agreement) and by the holders of a majority of
the outstanding shares of GM Class H Common Stock, each voting as a separate
class and both voting together as a single class based on their respective per
share voting power, of matters pertaining to the Transactions, including the GM
Charter Amendment;
WHEREAS, the consummation of the Stock Sale is conditioned upon the
consummation of the Split-Off and shall occur on the Closing Date (as defined in
the Stock Purchase Agreement) at the time of the consummation of the Split-Off;
WHEREAS, the consummation of the Merger is conditioned upon the
consummation of the Split-Off and the Stock Sale and shall occur on the Closing
Date immediately after the consummation of the Split-Off and the Stock Sale;
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WHEREAS, Purchaser is unwilling to acquire any shares of Xxxxxx capital
stock unless Xxxxxx shall become a publicly-traded company simultaneously with
such acquisition;
WHEREAS, the parties intend the Split-Off to qualify as a distribution of
Xxxxxx stock to GM stockholders with respect to which no gain or loss will be
recognized pursuant to Section 355 and related provisions of the Internal
Revenue Code of 1986, as amended, together with the rules and regulations
promulgated thereunder (the "Code"), by GM, Xxxxxx and their respective
stockholders; and
WHEREAS, the respective Boards of Directors of GM and Xxxxxx have
determined that the transactions contemplated hereby are advisable, desirable
and in the best interests of their respective stockholders and, by resolutions
duly adopted, the respective Boards of Directors of GM and Xxxxxx have approved
and adopted this Agreement.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereby agree
as follows:
ARTICLE 1
CERTAIN INTERCOMPANY MATTERS
Section 1.1. Ancillary Separation Agreements. GM and Xxxxxx, together with
their respective affiliates specified therein, have entered into either prior
to, or concurrently with, the execution of this Agreement, each of the
following:
(a) the Amended and Restated Agreement for the Allocation of United States
Income Taxes between General Motors Corporation and Xxxxxx Electronics
Corporation in the form set forth as Exhibit A-1 hereto (the "Tax Allocation
Agreement");
(b) the Agreement for the Allocation of United States Income Taxes,
effective as of December 29, 1985, by and among General Motors Corporation,
Xxxxxx Electronics Corporation (formerly XX Xxxxxx Electronics Corporation), HE
Holdings, Inc. (formerly Xxxxxx Aircraft Company), and Delco Electronics
Corporation, as amended, a copy of which is set forth as Exhibit A-2 hereto;
(c) the Tax Sharing Agreement, dated as of December 17, 1997, by and among
General Motors Corporation, Xxxxxx Electronics Corporation and HE Holdings, Inc.
(subsequently renamed Raytheon Company), as amended, a copy of which is set
forth as Exhibit A-3 hereto;
(d) the Special Employee Items Agreement between General Motors Corporation
and Xxxxxx Electronics Corporation, in the form set forth as Exhibit B hereto;
and
(e) the Intellectual Property Agreement, effective as of September 25,
2001, by and among General Motors Corporation and Xxxxxx Electronics
Corporation, a copy of which is set
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forth as Exhibit C hereto (collectively with the agreements specified in clauses
(a) through (d) above, the "Ancillary Separation Agreements").
Section 1.2. Insurance Matters.
(a) Cooperation in Insurance Matters. Prior to the date and time at which
the Split-Off and thus the separation of Xxxxxx from GM becomes effective (the
"Split-Off Effective Time"), GM has maintained insurance programs which provide
certain coverage for a number of entities, including Xxxxxx, certain Xxxxxx
Affiliates (as defined below) and their respective officers and directors. From
and after the Split-Off Effective Time, except as provided herein, Xxxxxx shall
be responsible for obtaining and maintaining its own insurance programs
separately from the GM insurance programs (which may be, but are not required to
be, maintained by GM after the Split-Off Effective Time). Notwithstanding the
foregoing, (i) GM, upon the request of Xxxxxx, shall cooperate with and use
commercially reasonable efforts to assist Xxxxxx in the transition to its own
separate insurance coverage from and after the Split-Off Effective Time, and
shall provide Xxxxxx with any information that is in the possession of GM and is
reasonably available and necessary to either obtain such insurance coverage or
to assist Xxxxxx in preventing gaps in its insurance coverage, (ii) in the event
that prior to the Split-Off Effective Time Xxxxxx is not able to obtain any such
separate insurance coverage or to obtain such on reasonable commercial terms
substantially consistent with the commercial terms applicable to the insurance
coverage intended to be replaced, at the request of Xxxxxx, XX and Xxxxxx shall
cooperate with each other to enter into an arrangement, on an arm's-length
basis, that would permit Xxxxxx for a reasonable period of time after the
Split-Off Effective Time to continue to have the benefit of the insurance
coverage formerly provided by GM's insurance program, on terms that require
Xxxxxx to reimburse GM for the costs of such extended insurance coverage that
are fairly allocable to the inclusion of Xxxxxx among GM and the other GM
parties that otherwise benefit from such coverage, (iii) each of GM and Xxxxxx,
upon the request of the other, shall cooperate with and use commercially
reasonable efforts to assist the other in the collection of proceeds from
insurance claims made under any Insurance Policy (as defined below) for the
benefit of any insured party and (iv) each of GM, Xxxxxx, each GM Affiliate (as
defined below) and each Xxxxxx Affiliate, shall use commercially reasonable
efforts not to take any action that would jeopardize or otherwise interfere with
any party's ability to collect any proceeds payable pursuant to any Insurance
Policy.
(b) Claims. With respect to any claims in respect of the Xxxxxx Business
(as defined below) arising out of events, acts or omissions occurring prior to
the Split-Off Effective Time, for which Xxxxxx, any Xxxxxx Affiliates or any of
their respective officers, directors, employees or other covered parties may be
entitled to assert a claim for recovery under any policy of insurance maintained
by GM or any GM Affiliates prior to the Split-Off Effective Time, other than a
D&O Insurance Policy (as defined below) (an "Insurance Policy") in accordance
with the terms thereof, GM, at the request of Xxxxxx, shall use commercially
reasonable efforts in asserting, or assisting Xxxxxx in asserting, such claims
under any such Insurance Policy; provided that in all cases (i) Xxxxxx shall
promptly pay or reimburse GM for all costs and expenses incurred by GM in
connection with such claims under any Insurance Policy (whether such claims were
made before or are made after the Split-Off Effective Time), including
retrospective premium adjustments to the extent attributable to such claims,
(ii) to the full extent permitted by contract and law, the control and
administration of such Insurance Policies, including with respect to any
proposed buyouts of such Insurance Policies, shall remain with GM, (iii) such
claims under any Insurance Policy shall
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be subject to (and recovery thereon shall be reduced by the amount of) any
applicable deductibles, retentions, self-insurance provisions or any payment or
reimbursement obligations of GM or any GM Affiliates in respect thereof, (iv)
with respect to claims-made Insurance Policies, such claims must have been
incurred and reported prior to the Split-Off Effective Time to the extent
required by such policies, and (v) Xxxxxx shall promptly report to GM any such
claims and keep GM reasonably informed with regard to the status thereof. GM
(or, in the event that the primary economic burden is to be borne by Xxxxxx by
virtue of deductibles, retentions and retrospective premium adjustments, GM and
Xxxxxx, jointly) and GM's insurers shall have the right to control the
investigation, defense and settlement of all claims, but no such settlement may
be effected without the consent of Xxxxxx, which consent shall not be
unreasonably withheld or delayed, unless such settlement includes as an
unconditional term thereof the delivery of a written release of Xxxxxx and any
other insured Xxxxxx Affiliate (without any payment from Xxxxxx or such Xxxxxx
Affiliate) from all liability in respect of such claim.
Section 1.3. Registration Rights.
(a) Registration Rights Agreements. GM hereby represents and warrants that,
other than (A) the First Amended and Restated Registration Rights Agreement,
dated as of March 12, 2003, by and among General Motors Corporation, U.S. Trust
Company of New York ("U.S. Trust"), as Trustee of the GM Special Salaried
Employees Pension Trust established under the GM Retirement Program for Salaried
Employees (the "Salaried Pension Plan"), U.S. Trust, as Trustee of the GM
Special Hourly Employees Pension Trust established under the GM Hourly-Rate
Employees Pension Plan (the "Hourly Pension Plan"), and U.S. Trust, as Trustee
of the Sub-Trust of the GM Welfare Benefit Trust established under the GM
Welfare Benefit Trust, a voluntary employees' beneficiary association trust
established to fund certain collectively bargained hourly retiree health care
benefits under the GM Health Care Program for Hourly Employees and certain
collectively bargained hourly retiree life insurance benefits under the GM Life
and Disability Benefits Program for Hourly Employees and such benefits under
other applicable collectively bargained welfare plans (the "VEBA") (the
"Employee Benefit Plan Registration Rights Agreement") and the First Amended and
Restated Transfer Agreement, dated March 12, 2003, between General Motors
Corporation and U.S. Trust, as trustee for the Salaried Pension Plan, the Hourly
Pension Plan and the VEBA, and all side letters and other agreements and
arrangements related thereto (copies of which have been provided to the
Purchaser) and to the Employee Benefit Plan Registration Rights Agreement, and
(B) the Registration Rights Agreement, dated as of April 28, 1999, between
General Motors Corporation and PRIMESTAR, Inc. and certain related agreements
and arrangements relating thereto (copies of which have been provided to the
Purchaser) (collectively, the "PRIMESTAR Registration Rights Agreement" and,
together with the Employee Benefit Plan Registration Rights Agreement, the
"Registration Rights Agreements"), neither GM nor any GM Affiliate has entered
into or agreed to enter into any contract, agreement or understanding (other
than the Registration Rights Agreements and such other contracts, agreements and
understandings contemplated by this Agreement, the Stock Purchase Agreement or
the Merger Agreement) that would require registration of any Xxxxxx Common Stock
under the Securities Act (as defined in the Stock Purchase Agreement) or under
any state securities law or has granted registration rights with respect to any
shares of Xxxxxx Common Stock that would be in effect from or after the
Split-Off Effective Time.
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(b) Succession Agreement. Simultaneously with the Split-Off Effective Time,
Xxxxxx shall execute and deliver a Xxxxxx Succession Agreement (the "Xxxxxx
Succession Agreement"), substantially in the form of Exhibit C to the Employee
Benefit Plan Registration Rights Agreement. Effective as of the Split-Off
Effective Time, GM shall assign to Xxxxxx all of GM's right, title and interest
in and to the Registration Rights Agreements, and Xxxxxx shall assume all of the
obligations of GM thereunder that arise after the Split-Off Effective Time.
(c) No Amendment. Xxxxxx shall not modify or amend any of the Registration
Rights Agreements in any respect that would adversely affect GM's rights or
obligations referred to in Section 1(c) of the Xxxxxx Succession Agreement, any
rights of GM under Section 10 of the Employee Benefit Plan Registration Rights
Agreement or any other rights or obligations of GM under the PRIMESTAR
Registration Rights Agreement with respect to any registration prior to the
Split-Off Effective Time of shares of GM Class H Common Stock by GM pursuant to
such Registration Rights Agreements and Xxxxxx shall assume all of the
obligations of GM thereunder that arise after the Split-Off Effective Time and
GM shall not modify or amend any of the Registration Rights Agreements in any
respect that would adversely affect Xxxxxx' rights or obligations under such
agreements.
Section 1.4. GM Contingent Liabilities.
(a) Following the Split-Off Effective Time, Xxxxxx shall use commercially
reasonable efforts to assume all of the obligations and commitments of GM or any
GM Affiliate under, and shall indemnify and hold GM and the GM Affiliates
harmless from and against, any and all Liabilities (as defined below), including
reasonable attorneys' fees, incurred or which may be incurred by GM or any GM
Affiliate resulting from or arising out of, the obligations and commitments that
GM or any GM Affiliate has undertaken on behalf of Xxxxxx (or any Person (as
defined in the Stock Purchase Agreement) which prior to the Split-Off was a
Xxxxxx Affiliate) remaining in effect following the Split-Off Effective Time;
provided that during the period from and after the Split-Off Effective Time
until the Merger Effective Time (the "Interim Period"), GM shall not enter into
any further obligations or commitments on behalf of Xxxxxx or any such Person
that GM has not committed prior to the Split-Off Effective Time to enter into.
Xxxxxx shall use commercially reasonable efforts to obtain the termination of
any such obligation or commitment or the full and unconditional release of GM
and the GM Affiliates from any such obligation or commitment.
(b) Following the Split-Off Effective Time, GM shall use commercially
reasonable efforts to assume all of the obligations and commitments of Xxxxxx or
any Xxxxxx Affiliate under, and shall indemnify and hold Xxxxxx and the Xxxxxx
Affiliates harmless from and against, any and all Liabilities, including
reasonable attorneys' fees, incurred or which may be incurred by Xxxxxx or any
Xxxxxx Affiliate resulting from or arising out of, the obligations and
commitments that Xxxxxx or any Xxxxxx Affiliate has undertaken on behalf of GM
(or any Person which prior to the Split-Off was a GM Affiliate) remaining in
effect following the Split-Off Effective Time; provided that during the Interim
Period, Xxxxxx shall not enter into any further obligations or commitments on
behalf of GM or any such Person that Xxxxxx has not committed prior to the
Split-Off Effective Time to enter into. GM shall use commercially reasonable
efforts to obtain the termination of any such obligation or commitment or the
full and unconditional release of Xxxxxx and the Xxxxxx Affiliates from any such
obligation or commitment.
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(c) For the purposes of this Agreement, "Liabilities" means any and all
indebtedness, liabilities, obligations, guarantees, claims, costs and expenses
(other than Taxes), whether accrued, fixed or contingent, mature or inchoate,
known or unknown, reflected on a balance sheet or otherwise, including those
arising under any law, rule, regulation, action, order, injunction or consent
decree of any Governmental Authority (as defined in the Stock Purchase
Agreement) or any judgment of any kind or any award of any arbitrator of any
kind, and those arising under any contract, commitment or undertaking. In the
event of any conflict between this Section 1.4 and any of the provisions of any
of the Transaction Agreements (including the indemnification provisions
thereof), such other provisions shall prevail.
Section 1.5. Publicity. Xxxxxx, with respect to Xxxxxx and all Xxxxxx
Affiliates, and GM, with respect to GM and all GM Affiliates, agree to use
commercially reasonable efforts to discontinue their respective uses as promptly
after the Split-Off Effective Time as is reasonably practicable of any printed
material that indicates a continued parent-subsidiary relationship between GM
and Xxxxxx or any of their respective affiliates. This Section 1.5 shall not be
deemed to prohibit the use of printed material containing appropriate and
accurate references to the historical relationships between the parties or their
affiliates.
Section 1.6. Director and Officer Insurance.
(a) Claims-Made Coverage. Until the six (6) year anniversary of the
Split-Off Effective Time, or until such earlier time as Xxxxxx requests, GM
shall provide directors' and officers' liability insurance ("D&O Insurance")
covering each Xxxxxx Covered Person (as defined below) for all applicable
incidents, acts or omissions occurring at or prior to the Merger Effective Time,
regardless of when, prior to the six (6) year anniversary of the Split-Off
Effective Time (or Xxxxxx' earlier termination of coverage), any claims relating
to such incidents, acts or omissions are presented. Except as set forth in
Section 1.6(d), GM shall provide such coverage at no cost to Xxxxxx. Such
insurance coverage shall be no less favorable to any Xxxxxx Covered Person in
coverage or amount than the lesser of (i) the coverage in effect at the
Split-Off Effective Time or (ii) any applicable insurance coverage in effect for
GM at the time of the claim; provided, however, that with respect to clause (ii)
above, if GM determines that (A) the amount or scope of such coverage will be
reduced to a level materially inferior to the level of coverage in existence
immediately prior to the Split-Off Effective Time or (B) the retention or
deductible levels applicable to such coverage, if any, will be increased to a
level materially greater than the levels in existence immediately prior to the
Split-Off Effective Time, GM shall give Xxxxxx notice of such determination as
promptly as practicable, but in no event less than thirty (30) days prior to the
effectiveness of such reduction in coverage or increase in retention or
deductible levels. Upon notice of such determination, Xxxxxx shall be entitled
to no less than ninety (90) days to evaluate its options regarding continuance
of coverage hereunder and may cancel all or any portion of such coverage as of
any day within such ninety (90) day period, regardless of whether such date
coincides with any anniversary of the Split-Off Effective Time. At any time
during the period that GM is obligated to provide coverage pursuant to this
Section 1.6(a), upon at least thirty (30) days prior written notice, Xxxxxx may
request GM to cancel all or any portion of such coverage as of the next
anniversary of the Split-Off Effective Time. In the event of any cancellation of
coverage by Xxxxxx pursuant to this Section 1.6(a), GM shall have no obligation
to provide such canceled coverage with respect to any period from and after the
effective date of such termination. The term "coverage" as used in this Section
1.6 shall be deemed to include all applicable excess coverage.
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For the purposes of this Agreement, "Xxxxxx Covered Person" means each
individual who served at any time within the six (6) year period prior to the
Split-Off Effective Time as a director, director nominee or officer of Xxxxxx,
any Xxxxxx Affiliate or any corporation to which Xxxxxx is a successor, in each
case to the extent covered by any insurance policy maintained by GM or any GM
Affiliate providing D&O Insurance coverage prior to the Split-Off Effective Time
(a "D&O Insurance Policy").
(b) Occurrence Coverage for Prior Acts. GM shall take no action to remove
any Xxxxxx Covered Person from D&O Insurance coverage under any D&O Insurance
Policy in effect, or that was in effect at any time prior to, the Split-Off
Effective Time that is written on an occurrence basis.
(c) Claims. With respect to any claims for incidents, acts or omissions
occurring prior to or at the Merger Effective Time, for which any Xxxxxx Covered
Person may be entitled to assert a claim for recovery under any D&O Insurance
Policy in accordance with the terms thereof, GM, at the request of Xxxxxx, shall
use commercially reasonable efforts in asserting, or assisting Xxxxxx in
asserting, such claims under any such D&O Insurance Policy providing D&O
Insurance coverage; provided, that in all cases (i) Xxxxxx shall promptly pay or
reimburse GM for all costs and expenses incurred by GM in connection with such
claims under any D&O Insurance Policy (whether such claims were made before or
are made after the Split-Off Effective Time), including retrospective premium
adjustments to the extent attributable to such claims, (ii) to the full extent
permitted by contract and law, the control and administration of such D&O
Insurance Policies providing D&O Insurance coverage, including with respect to
any proposed buyouts of such D&O Insurance Policies, shall remain with GM, (iii)
such claims under any D&O Insurance Policy shall be subject to (and recovery
thereon shall be reduced by the amount of) any applicable deductibles,
retentions, self-insurance provisions or any payment or reimbursement
obligations of GM or any GM Affiliate in respect thereof, (iv) with respect to
claims-made D&O Insurance Policies, such claims must have been incurred and
reported prior to the Split-Off Effective Time to the extent required by such
policies and (v) Xxxxxx shall promptly report to GM any such claims and keep GM
reasonably informed with regard to the status thereof. GM (or, in the event that
the primary economic burden is to be borne by Xxxxxx by virtue of deductibles,
retentions and retrospective premium adjustments, GM and Xxxxxx, jointly) and
GM's insurers shall have the right to control the investigation, defense and
settlement of all claims, but no such settlement may be effected without the
consent of Xxxxxx, which consent shall not be unreasonably withheld or delayed,
unless such settlement includes as an unconditional term thereof the delivery of
a written release of Xxxxxx and any other insured Xxxxxx Covered Person (without
any payment from Xxxxxx or such Xxxxxx Covered Person) from all liability in
respect of such claim.
(d) Treatment of Certain Retentions and Deductibles. Responsibility for
deductible and self-insured amounts with respect to any D&O Insurance Policy
providing D&O Insurance coverage maintained after the Split-Off Effective Time
pursuant to Section 1.6(a) or (b) as it relates to coverage for any Xxxxxx
Covered Person shall be borne one hundred percent (100%) by Xxxxxx.
Notwithstanding the foregoing, if GM and Xxxxxx are involved in the same claim,
GM and Xxxxxx shall negotiate in good faith the fair allocation of any
self-insurance retention or other deductible payable under the D&O Insurance
Policies providing D&O Insurance coverage. Such allocation shall be based upon
all relevant factors, including, as appropriate, the relative number of
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Persons affiliated with Xxxxxx or GM that are involved in such claim and the
nature of the allegations with respect to each such Person.
(e) Adjustment of Premiums Applicable to Period Prior to the Split-Off
Effective Time. Any premiums relating to periods commencing on or after December
15, 2003 that have been paid or are payable by Xxxxxx to GM with respect to D&O
Insurance coverage under any of the D&O Insurance Policies maintained or
provided prior to the Split-Off Effective Time shall be pro-rated, and as soon
as practicable after the Split-Off Effective Time shall be either refunded by GM
to Xxxxxx or paid by Xxxxxx to GM, as appropriate, so that Xxxxxx is responsible
for only those premiums relating to (A) any full policy year ending prior to the
Split-Off Effective Time and (B) the partial policy year ending at the Split-Off
Effective Time. The parties hereto acknowledge and agree that Xxxxxx has paid
all premiums with respect to D&O Insurance through December 15, 2003.
Section 1.7. Closing Agreement. With respect to any dual consolidated
losses within the meaning of Code Section 1503(d) which would otherwise be
required to be taken into account by the Xxxxxx Group (as defined in the Tax
Allocation Agreement) pursuant to Section 3.5 of the Tax Allocation Agreement
("Xxxxxx DCLs"), at the request of Xxxxxx, Xxxxxx and GM shall, to the extent
required to avoid the recapture of any Xxxxxx DCL pursuant to Treasury
Regulation (S) 1.1503-2(g)(2), jointly request a closing agreement with the
Internal Revenue Service, pursuant to Rev. Proc. 2000-42, 2000-43 I.R.B. 394, or
any successor Revenue Procedure or other law pertaining to closing agreements
under Treasury Regulation (S) 1.1503-2(g)(2)(iv)(B)(2)(i) then in effect. Xxxxxx
and GM shall use their respective reasonable best efforts to obtain such a
closing agreement after submitting such request.
ARTICLE 2
CONFIDENTIALITY
Section 2.1. Treatment of Confidential Information.
(a) Restrictions on Disclosure. From and after the Split-Off Effective
Time, each of Xxxxxx and GM agrees that it shall not, and shall not permit any
of its affiliates or any of its directors, officers, employees, agents,
consultants, advisors, accountants or attorneys (collectively,
"Representatives") to, disclose any Confidential Information (as defined below)
to any Person (other than to its Representatives). Notwithstanding the
foregoing, each of Xxxxxx and GM and its respective affiliates and
Representatives may disclose such Confidential Information, and such information
shall no longer be deemed Confidential Information, to the extent that such
party can demonstrate that such Confidential Information is or was (i) available
to such party outside the context of the parties' parent-subsidiary relationship
on a nonconfidential basis prior to its disclosure by the other party, (ii) in
the public domain other than by reason of the breach of this Agreement (or any
other agreement between the parties or their respective affiliates), (iii)
lawfully acquired outside the context of the parties' parent-subsidiary
relationship on a nonconfidential basis, (iv) independently developed by, or on
behalf of, such party by Persons who do not have access to, or descriptions of,
any such Confidential Information or (v) related to the tax structure or tax
treatment (as these terms are used in Section 1.6011-4(b)(3) (or any successor
provision) of the Treasury Regulations promulgated under Section 6011 of the
Code) of the Transactions.
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Confidential Information shall only be used for the business of GM and Xxxxxx
and their affiliates and not for the benefit of any other Person. Each party
hereto acknowledges that it has no proprietary or exclusive rights to any Tax
(as defined below) matter or Tax idea related to the Transactions.
(b) Confidential Information. For the purposes of this Agreement, the term
"Confidential Information" means:
(i) As to Xxxxxx, (a) any information concerning GM, any GM Affiliate
or the GM Business that was obtained by Xxxxxx or any Xxxxxx Affiliate prior to
the Split-Off Effective Time, (b) any information concerning GM or any GM
Affiliate that is obtained by Xxxxxx under Section 3.1 or (c) any other
information obtained by, or furnished to, Xxxxxx or any Xxxxxx Affiliate that
(i) is marked "Confidential" or "Secret" (or like marking) by GM or any GM
Affiliate or (ii) GM or any GM Affiliate has notified Xxxxxx or any Xxxxxx
Affiliate in writing is confidential or secret; and
(ii) As to GM, (a) any information concerning Xxxxxx, any Xxxxxx
Affiliate or the Xxxxxx Business that was obtained by GM or any GM Affiliate
prior to the Split-Off Effective Time, (b) any information concerning Xxxxxx or
any Xxxxxx Affiliate that is obtained by GM under Section 3.1 or (c) any other
information obtained by, or furnished to, GM or any GM Affiliate that (i) is
marked "Confidential" or "Secret" (or like marking) by Xxxxxx or any Xxxxxx
Affiliate or (ii) Xxxxxx or any Xxxxxx Affiliate has notified GM or any GM
Affiliate in writing is confidential or secret.
Section 2.2. Legally Required Disclosure of Confidential Information. If
either party to this Agreement or any of its respective affiliates or
Representatives becomes legally required to disclose any Confidential
Information, such disclosing party shall promptly notify the other party and use
commercially reasonable efforts to cooperate with the other party so that the
other party may seek a protective order or other appropriate remedy and/or waive
compliance with this Article 2. All expenses incurred in seeking a protective
order or other remedy shall be borne by the other party. If such protective
order or other remedy is not obtained, or if the other party waives compliance
with this Article 2, the disclosing party or its affiliate or Representative, as
applicable, shall (a) disclose only that portion of the Confidential Information
which its legal counsel advises it is compelled to disclose or else stand liable
for contempt or suffer other similar significant corporate censure or penalty,
(b) use commercially reasonable efforts to obtain reliable assurance requested
by the other party that confidential treatment will be accorded such
Confidential Information and (c) promptly provide the other party with a copy of
the Confidential Information so disclosed, in the same form and format
disclosed.
Section 2.3. Policies and Procedures. Xxxxxx and GM shall each maintain
current policies and procedures, and develop such further policies and
procedures as shall from time to time become necessary, to ensure compliance
with this Article 2.
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ARTICLE 3
CONTINUING INFORMATION SUPPORT
Section 3.1. Access to Information. Until the seven (7) year anniversary of
the Split-Off Effective Time or such longer period during which any
indemnification claim under this Agreement or any other agreement between GM and
Xxxxxx remains outstanding, Xxxxxx and GM each shall afford to the other, and
shall cause their respective affiliates and Representatives to afford,
reasonable access and duplicating rights upon reasonable advance request and
during normal business hours to all information (other than information subject
to attorney-client, work product or other privilege) within such party's
possession relating to such other party's business, assets or liabilities to the
extent that such access is reasonably required by such other party as a result
of the parties' prior parent-subsidiary relationship for audit, accounting,
claims, litigation (except for litigation between the parties hereto or their
affiliates), regulatory or Tax purposes, or for purposes of fulfilling
disclosure and reporting obligations; provided that to the extent that
disclosing any such information would reasonably be expected to constitute a
waiver of attorney-client, work product or other privilege with respect thereto,
each of Xxxxxx and GM and their respective affiliates shall take all
commercially reasonable action to prevent a waiver of any such privilege,
including entering into an appropriate joint defense agreement in connection
with affording access to such information. In connection therewith, Xxxxxx and
GM shall upon the request of the other party make available their respective
officers and employees (and those of their respective affiliates) to the extent
that they are reasonably necessary to discuss and explain such information with
and to the other party. GM and Xxxxxx shall each cooperate with the other, and
shall cause their respective affiliates to cooperate, in the provision of access
to information reasonably necessary for the preparation of reports required by
or filed under the Exchange Act (as defined in the Stock Purchase Agreement)
with respect to any period entirely or partially prior to the Split-Off
Effective Time. The access provided pursuant to this Section 3.1 shall be
subject to such additional confidentiality and security provisions as the
disclosing party may reasonably deem necessary.
Section 3.2. Production of Witnesses. Until the seven (7) year anniversary
of the Split-Off Effective Time, each of Xxxxxx and GM shall use commercially
reasonable efforts, and shall cause each of their respective affiliates to use
commercially reasonable efforts, to make available to the other, upon written
request, its directors, officers, employees and other Representatives as
witnesses to the extent that any such Person may reasonably be required (giving
consideration to the business demands upon such Person) in connection with any
legal, administrative or other proceedings in which the requesting party may
from time to time be involved.
Section 3.3. Reimbursement. Except with respect to costs and expenses
incurred in connection with any legal, administrative or other proceeding to
which Section 1.2 applies, each party to this Agreement providing access,
information or witnesses to the other party pursuant to Section 3.1 or 3.2 shall
be entitled to receive from the recipient, upon the presentation of invoices
therefor, payment for all reasonable out-of-pocket costs and expenses (excluding
allocated compensation, salary and overhead expense) as may be reasonably
incurred in providing such information or witnesses.
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Section 3.4. Retention of Records. Except as otherwise required by law,
each of Xxxxxx and GM shall use commercially reasonable efforts to accommodate
the other with respect to retention and provision of copies of any significant
information in such party's possession or under its control relating to the
business or operations, assets or liabilities of the other party.
ARTICLE 4
EXPENSES
Section 4.1. General. Except as otherwise provided in this Agreement or in
any of the other documents contemplated by this Agreement, all costs and
expenses incurred by GM, Xxxxxx or their respective Affiliates in connection
with the Transactions and any of the other transactions contemplated in
connection therewith shall be paid by the party that actually incurs such costs
and expenses.
Section 4.2. Certain Transaction Costs. Notwithstanding the provisions of
Section 4.1, the responsibility for certain transaction costs relating to the
Transactions shall be allocated in accordance with the provisions of this
Section 4.2.
(a) Xxxxxx shall pay (or promptly reimburse GM upon invoice) the following:
(i) all filing fees associated with filings made at the FCC (as
defined in the Stock Purchase Agreement) or other Governmental Authorities (as
defined below), arising from notifications to or applications for consent from
Governmental Authorities required with respect to the Xxxxxx Permits (as defined
in the Stock Purchase Agreement); and
(ii) the fees and expenses of the Xxxxxx Financial Advisors (as defined
in the Stock Purchase Agreement) in connection with the Transactions, and the
fees and expenses of Weil, Gotshal & Xxxxxx LLP, Xxxxxx & Xxxxxxx LLP, Xxxxx,
Xxxx and Xxxxxxxx LLP and Xxxxx Day, legal advisors to Xxxxxx, and any other
legal advisors to Xxxxxx (in each case for legal services rendered to Xxxxxx),
in connection with the Transactions.
(b) GM or a GM Affiliate shall pay (or promptly reimburse Xxxxxx upon
invoice) the following:
(i) all costs and expenses of printing and distributing to GM
stockholders the Proxy/Consent Solicitation Statement (as defined in the Stock
Purchase Agreement), any prospectus contained in the Registration Statements (as
defined in the Stock Purchase Agreement) that is combined with the Proxy/Consent
Solicitation Statement, any Disclosure Documents (as defined in the Stock
Purchase Agreement) and any other materials relating to the Transactions;
(ii) all filing fees associated with filing of the Proxy/Consent
Solicitation Statement, any Registration Statement of Xxxxxx, and any other
Disclosure Documents of GM or Xxxxxx with the Securities and Exchange Commission
and any other state and foreign securities law regulators;
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(iii) all costs and expenses of the GM transfer agent and any proxy or
consent solicitation agents, information agents or similar consultants or agents
engaged by GM in connection with effecting the Transactions but excluding any
fees and expenses described in Section 4.2(a); and
(iv) the fees and expenses of the GM Financial Advisors (as defined
in the Stock Purchase Agreement) in connection with the Transactions, and Jenner
& Block, LLC, Xxxxxxxx & Xxxxx and Xxxxxxxx, Xxxxxx & Finger, P.A., legal
advisors to GM, and any other legal advisors to GM (in each case for legal
services rendered to GM), in connection with the Transactions.
ARTICLE 5
INDEMNIFICATION
Section 5.1. Indemnification by Xxxxxx. Subject to Section 5.4, and subject
to the consummation of the Split-Off, from and after the Split-Off Effective
Time, Xxxxxx shall indemnify, defend and hold harmless the GM Indemnitees (as
defined below) from and against any and all Losses (as defined below) incurred
or sustained by the GM Indemnitees to the extent arising from Third-Party Claims
(as defined below) (except in the case of Sections 5.1(a) and 5.2(f), which need
not arise from Third-Party Claims) relating to, arising out of or due to:
(a) directly or indirectly, the Xxxxxx Business, irrespective of whether
such Losses relate to, arise out of or are due to occurrences or conditions
prior to, at or after the Split-Off Effective Time, and including all Losses
relating to, arising out of or due to, directly or indirectly, (i) any business
or operations previously owned by Xxxxxx or any Xxxxxx Affiliate and disposed of
prior to the Split-Off Effective Time or (ii) any occurrence relating to any
disposition of any such business or operations;
(b) directly or indirectly, any breach after the Split-Off Effective Time
by Xxxxxx or any Xxxxxx Affiliate of any of the covenants to be performed by it
under this Agreement or any of the agreements contemplated hereby; provided,
however, that Xxxxxx shall indemnify, defend and hold harmless the GM
Indemnitees from and against only fifty percent (50%) of any such Losses that
relate to, arise out of or are due to any such breach that occurs during the
Interim Period;
(c) any untrue statement or alleged untrue statement of a material fact
contained in, or incorporated by reference into, the Xxxxxx Disclosure Portions
(as defined below) of the Disclosure Documents, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading (it being understood and
agreed that, for the purposes of this Agreement, "Xxxxxx Disclosure Portions"
shall mean any and all information, other than information with respect to Sales
Process Disclosure (as defined below), furnished by or on behalf of Xxxxxx or
any Xxxxxx Affiliate, or any of their respective Representatives, for inclusion
in the Disclosure Documents, including all information relating to: (i) Xxxxxx
or any Xxxxxx Affiliate, the Xxxxxx Business, financial information and data
relating to Xxxxxx (including both historical and pro forma financial data),
(ii) the capital stock of Xxxxxx from and after the Split-Off Effective Time or
(iii) plans regarding the business or operations of Xxxxxx or any Xxxxxx
Affiliate, and other forward-looking information regarding Xxxxxx or any
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Xxxxxx Affiliate, in each case that otherwise does not constitute a part of a GM
Disclosure Portion (as defined below));
(d) actions taken (or omitted to be taken) from and after the Split-Off
Effective Time by Xxxxxx, any Xxxxxx Affiliate or the Xxxxxx transfer agent (or
any successor transfer agent) in connection with (i) recognizing the persons who
were record holders of GM Class H Common Stock immediately prior to the
Split-Off Effective Time as record holders of Xxxxxx Common Stock (or,
immediately following the Merger, Surviving Corporation Common Stock), (ii)
effecting the exchange of certificates representing, or other evidence of
ownership of (any such instruments, "Certificates"), shares of Surviving
Corporation Common Stock or Purchaser Stock or cash, as applicable, for shares
of Xxxxxx Common Stock or (iii) affording the record holders of Xxxxxx Common
Stock (or, immediately following the Merger, Surviving Corporation Common Stock)
the dividend, voting and other rights and privileges incident to the Xxxxxx
Common Stock (or, immediately following the Merger, Surviving Corporation Common
Stock); provided, however, that Xxxxxx shall indemnify, defend and hold harmless
the GM Indemnitees from and against only fifty percent (50%) of any such Losses
that relate to, arise out of or are due to any such any such action taken (or
omitted to be taken) during the Interim Period;
(e) any indebtedness for borrowed money of Xxxxxx or any Xxxxxx Affiliate
to the extent paid by GM or any GM Affiliate at any time after the Split-Off
Effective Time;
(f) (i) any and all Losses arising under Title IV of ERISA (as defined in
the Stock Purchase Agreement) or the Code with respect to any "multiemployer
plan" (as defined in Section 4001(a)(3) of ERISA) or any "pension plan" (as
defined in Section 3(2) of ERISA and which is subject to Section 412 of the
Code) currently or previously maintained or contributed to or required to be
contributed to by Xxxxxx or any Xxxxxx ERISA Affiliate (as defined in the Stock
Purchase Agreement) (other than GM or any GM Affiliate) (other than Losses in
respect of any current or former employee of GM or any GM Affiliate with respect
to their employment with GM or any GM Affiliate) and (ii) any and all Losses
relating to post-retirement health or life insurance benefits (other than in
respect of any employee (including any former employee) of GM or any GM
Affiliate with respect to their employment with GM or any GM Affiliate), in each
case with respect to any current or former employee of Xxxxxx or any Xxxxxx
Affiliate arising from any plan, contract or other arrangement with respect to
which Xxxxxx or any Xxxxxx Affiliate is a party; and
(g) any Tax attributable to the recapture of any Xxxxxx DCL pursuant to
Treasury Regulations ss. 1.1503-2(g)(2) caused by a triggering event after the
Split-Off Effective Time.
Section 5.2. Indemnification by GM. Subject to Section 5.4, and subject to
consummation of the Split-Off, from and after the Split-Off Effective Time, GM
shall indemnify, defend and hold harmless the Xxxxxx Indemnitees (as defined
below) from and against any and all Losses incurred or sustained by the Xxxxxx
Indemnitees to the extent arising from Third-Party Claims (except in the case of
Sections 5.2(a) and 5.2(f), which need not arise from Third-Party Claims)
relating to, arising out of or due to:
(a) directly or indirectly, the GM Business, irrespective of whether such
Losses relate to, arise out of or are due to occurrences or conditions prior to,
at or after the Split-Off Effective
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Time, except to the extent such Losses relate to, arise out of or are due to,
directly or indirectly, the Xxxxxx Business as described in Section 5.1(a);
(b) directly or indirectly, any breach by GM or any GM Affiliate of any of
the covenants to be performed by it under this Agreement or any of the
agreements contemplated hereby;
(c) any untrue statement or alleged untrue statement of a material fact
contained in, or incorporated into, the GM Disclosure Portions (as defined
below) of the Disclosure Documents, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading (it being understood and agreed that, for the
purposes of this Agreement, "GM Disclosure Portions" means any and all
information relating to GM or any GM Affiliate, or any of their respective
Representatives, included in the Disclosure Documents (other than, in the case
of clauses (i) and (iii) below, information furnished by or on behalf of Xxxxxx
or any Xxxxxx Affiliate), including all information relating to: (i) GM or any
GM Affiliate, the capital stock of GM, the GM Business, financial information
and data relating to GM (including both historical and pro forma financial
data), (ii) the capital stock of Xxxxxx prior to the Split-Off Effective Time,
(iii) the process undertaken by GM, Xxxxxx, their respective Boards of Directors
and their respective advisors with respect to the separation of GM from Xxxxxx,
including the Transactions, the background thereto and the transactions
previously agreed to with Echostar Communications Corporation, any and all
alternatives considered in relation to the foregoing, and any and all actions
taken by, and determinations of, GM, Xxxxxx and their respective Boards of
Directors and advisors, including their reasons for entering into the
Transaction Agreements, and recommending approval of the Transactions to
stockholders (collectively, the "Sales Process Disclosure"), or (iv) plans
regarding GM or any GM Affiliate and other forward-looking information regarding
GM or any GM Affiliate, in each case that otherwise do not constitute a part of
a Xxxxxx Disclosure Portion);
(d) actions taken (or omitted to be taken) at or prior to the Split-Off
Effective Time by GM or any GM Affiliate or the GM transfer agent (or any
predecessor thereof) in connection with: (i) effecting the exchange of evidence
of ownership of shares of Xxxxxx Common Stock for evidence of ownership of GM
Class H Common Stock, (ii) recognizing any person who is or was at any time a
record holder of GM Class H Common Stock, or (iii) affording such persons the
dividend, voting and other rights and privileges incident to the GM Class H
Common Stock;
(e) any indebtedness for borrowed money of GM or any GM Affiliate to the
extent paid by Xxxxxx or any Xxxxxx Affiliate at any time after the Split-Off
Effective Time;
(f) (i) any and all Losses arising under Title IV of ERISA or the Code with
respect to any "multiemployer plan" (as defined in Section 4001(a)(3) of ERISA)
or any "pension plan" (as defined in Section 3(2) of ERISA and which is subject
to Section 412 of the Code) currently or previously maintained, contributed to
or required to be contributed to by GM or any ERISA Affiliate (as defined below)
of GM (other than Xxxxxx or any Xxxxxx Affiliate) (other than Losses in respect
of any current or former employee of Xxxxxx or any Xxxxxx Affiliate with respect
to their employment with Xxxxxx or any Xxxxxx Affiliate), (ii) any and all
Losses relating to post-retirement health or life insurance benefits (other than
in respect of any employee (including any former employee) of Xxxxxx or any
Xxxxxx Affiliate with respect to their employment with
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Xxxxxx or any Xxxxxx Affiliate), in each case with respect to any current or
former employee of GM or any GM Affiliate arising from any plan, contract or
other arrangement with respect to which GM or any GM Affiliate is a party, and
(iii) notwithstanding clause (i) above, any and all Losses relating to the
payment of benefits to the persons listed on Section 13.1(b) of the GM
Disclosure Schedule from any employee benefit or retirement plan sponsored,
maintained or contributed to by GM or any GM Affiliate; provided, however, that
the indemnification provided for in clause (iii) shall not pertain to or relieve
Xxxxxx of its obligations to pay and, pursuant to Section 5.1(f) hereof,
indemnify the GM Indemnitees from and against any and all Losses relating to
benefit obligations of Xxxxxx owing to such persons arising out of any employee
benefit plan or retirement plan sponsored, maintained or contributed to by
Xxxxxx or any Xxxxxx Affiliate;
(g) (i) any GM Sales Process Claim (as defined in the Stock Purchase
Agreement); provided, however, that (A) other than with respect to any claim
based on a breach of the Transaction Agreements, Xxxxxx on behalf of itself and
the Xxxxxx Affiliates, respectively, hereby waives, releases and forever
discharges any and all GM Sales Process Claims, except to the extent that Xxxxxx
or any Xxxxxx Affiliate hereafter incurs any Losses in respect thereof arising
out of a claim by a Person other than Xxxxxx or any Xxxxxx Affiliate and (B)
other than with respect to any claim based on a breach of the Transaction
Agreements, Xxxxxx agrees that it shall not, and shall cause the Xxxxxx
Affiliates not to, seek to recover from GM or any GM Affiliate or any of their
respective Representatives for any Losses to the extent that such Losses relate
to, arise out of or are due to a GM Sales Process Claim unless and until such
time as, and only to the extent that, any of Xxxxxx or any Xxxxxx Affiliate
incurs any Losses in respect thereof arising out of a claim by a Person other
than Xxxxxx or any Xxxxxx Affiliate; and (ii) the declaration and payment by
Xxxxxx to GM of the Special Dividend; and
(h) fifty percent (50%) of any Losses relating to breaches or actions taken
(or omitted to be taken) during the Interim Period in respect of the matters in
Sections 5.1(b) and 5.1(d) hereof.
Section 5.3. Certain Definitions. For the purposes of this Agreement, the
following terms shall have the following meanings:
(a) "Affiliate" or "affiliate" means with respect to GM or Xxxxxx, a GM
Affiliate or a Xxxxxx Affiliate, as the case may be;
(b) "Control" means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise or
the beneficial ownership (as such term is used in Rule 13d-3 of the Exchange
Act) of more than fifty percent (50%) of the voting securities of a Person;
(c) "ERISA Affiliate" of any Person means any trade or business, whether or
not incorporated, that together with such Person or such Person's subsidiaries
would be deemed a single employer within the meaning of Section 4001(b)(1) of
ERISA.
(d) "GM Affiliate" means, as of any particular time, a Person that,
directly or indirectly through one or more intermediaries, Controls, is
Controlled by or is under common Control with GM as of such time; provided,
however, that the term "GM Affiliate", as of any particular time, shall not
include Xxxxxx or any Xxxxxx Affiliate as of such time;
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(e) "GM Business" means the business or operations of GM or any GM
Affiliate other than the Xxxxxx Business (as defined below);
(f) "GM Indemnitees" means GM, all GM Affiliates and each of their
respective directors, officers and employees (in their capacities as such);
(g) "Xxxxxx Affiliate" means (i) with respect to any time prior to the
Split-Off Effective Time, a Person that, directly or indirectly through one or
more intermediaries, was Controlled by Xxxxxx as of such time and (ii) with
respect to any time after the Split-Off Effective Time, a Person that, directly
or indirectly through one or more intermediaries, Controls, is Controlled by or
is under common Control with Xxxxxx as of such time; provided, however, that the
term "Xxxxxx Affiliate" shall not include Purchaser or any of its Subsidiaries
(as defined in the Stock Purchase Agreement);
(h) "Xxxxxx Business" means the business or operations of Xxxxxx or any
Xxxxxx Affiliate;
(i) "Xxxxxx Indemnitees" means Xxxxxx, all Xxxxxx Affiliates and each of
their respective directors, officers and employees (in their capacities as
such);
(j) "Losses" means any losses, liabilities, claims, obligations, demands,
judgments, damages, dues, penalties, assessments, fines (civil or criminal),
costs, liens, expenses, forfeitures, settlements or fees, attorneys' fees and
court costs or other expenses, of any nature or kind, whether or not the same
would properly be reflected on a balance sheet; and
(k) "Tax" means any (i) United States federal, state or local or non-United
States income, gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental (including taxes
under Section 59A of the Code), customs duties, capital stock, franchise,
profits, withholding, social security (or similar), unemployment, disability,
real property, personal property, sales, use, transfer, registration, value
added, alternative or add-on minimum, estimated or other tax, assessment or
governmental charge of any kind whatever imposed by any Governmental Authority,
including any interest, penalty or addition thereto, whether disputed or not,
(ii) liability for the payment of any amount of the type described in clause (i)
above arising as a result of being (or having been) a member of any group or
being (or having been) included or required to be included in any Tax return
related thereto and (iii) liability for the payment of any amount of the type
described in clause (i) or clause (ii) above as a result of any express or
implied obligation to indemnify or otherwise assume or succeed to the liability
of any other Person.
Section 5.4. Other Liabilities.
(a) Other than as expressly set forth in this Article 5, this Article 5
shall not be applicable to any Losses relating to, arising out of, or due to,
directly or indirectly, any breach of the provisions of any other contract,
agreement or understanding between GM or any GM Affiliate, on the one hand, and
Xxxxxx or any Xxxxxx Affiliate, on the other hand, which Losses shall be
governed by the terms of such other contract, agreement or understanding.
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(b) Except as provided in Section 13.4(b) of the Stock Purchase Agreement,
this Article 5 shall not be applicable to any matter which is governed by
Article XII of the Stock Purchase Agreement or by the Tax Allocation Agreement.
Section 5.5. Tax Effects of Indemnification.
(a) Any indemnification payment made under this Agreement shall for all Tax
purposes, except as required by Applicable Law (as defined in the Stock Purchase
Agreement), be characterized as a distribution from Xxxxxx to GM or a
contribution by GM to Xxxxxx, as applicable, made immediately prior to the
Split-Off Effective Time.
(b) The amount of any Loss for which indemnification is provided under this
Agreement shall be (i) increased to take account of net Tax cost, if any,
incurred by the Indemnitee and arising from the receipt or accrual of an
Indemnity Payment from an Indemnifying Party (grossed up for such increase) and
(ii) reduced to take account of net Tax benefit, if any, realized by the
Indemnitee arising from incurring or paying such Loss. In computing the amount
of any such Tax cost or Tax benefit, the Indemnitee shall be deemed to recognize
all other items of income, gain, loss, deduction or credit before recognizing
any item arising from the receipt or accrual of any Indemnity Payment hereunder
or incurring or paying any indemnified Loss. Any Indemnity Payment hereunder
shall initially be made without regard to this Section 5.5(b) and shall be
increased or reduced to reflect any such net Tax cost (including gross-up) or
net Tax benefit only after the Indemnitee has actually realized such cost or
benefit. For the purposes of the Transaction Agreements, an Indemnitee shall be
deemed to have "actually realized" a net Tax cost or a net Tax benefit to the
extent that, and at such time as, the amount of Taxes payable by such Indemnitee
is increased above or reduced below, as the case may be, the amount of Taxes
that such Indemnitee would be required to pay but for the receipt or accrual of
the Indemnity Payment or the incurrence or payment of such Loss. The amount of
any increase or reduction hereunder shall be adjusted to reflect any Final
Determination (as defined in the Stock Purchase Agreement) with respect to the
Indemnitee's liability for Taxes, and payments between the applicable parties to
reflect such adjustment shall be made if necessary.
Section 5.6. Effect of Insurance Upon Indemnification. The amount which a
Person obligated to provide indemnification under this Agreement (an
"Indemnifying Party") is required to pay to any Person entitled to seek
indemnification under this Agreement (an "Indemnitee") pursuant to this Article
5 shall be reduced (including retroactively) by any payment actually received
and retained by an Indemnitee from an insurance carrier or paid by an insurance
carrier on behalf of the insured, net of any applicable premium adjustment
("Insurance Proceeds") and other amounts actually recovered by such Indemnitee
in reduction of the related Loss, it being understood and agreed that each of
Xxxxxx and GM shall use commercially reasonable efforts to collect any such
proceeds or other amounts to which it or any of its affiliates is entitled,
without regard to whether it is the Indemnifying Party hereunder. No Indemnitee
shall be required, however, to collect any such proceeds or other amounts prior
to being entitled to indemnification from an Indemnifying Party hereunder. If an
Indemnitee receives a payment from an Indemnifying Party in respect of a Loss
(an "Indemnity Payment") and subsequently receives Insurance Proceeds or other
amounts in respect of such Loss, then such Indemnitee shall pay to such
Indemnifying Party an amount equal to the difference between (a) the sum of the
amount of such Indemnity Payment and the amount of such Insurance Proceeds or
other amounts actually
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received and (b) the amount of such Loss, in each case adjusted (at such time as
appropriate adjustment can be determined) to reflect any premium adjustment
attributable to such claim.
Section 5.7. Procedure for Indemnification Involving Third-Party Claims.
(a) Notice of Claim. If any Indemnitee receives notice of the assertion of
any claim, suit, arbitration, inquiry, proceeding or investigation by or before
any Governmental Authority asserted by a Person other than GM or any GM
Affiliate or Xxxxxx or any Xxxxxx Affiliate (a "Third-Party Claim") with respect
to which an Indemnifying Party is obligated under this Agreement to provide
indemnification, such Indemnitee shall give such Indemnifying Party notice
thereof (together with a copy of such Third-Party Claim, process or other legal
pleading) promptly after becoming aware of such Third-Party Claim; provided,
however, that the failure of any Indemnitee to give notice as provided in this
Section shall not relieve any Indemnifying Party of its obligations under this
Article 5, except to the extent that such Indemnifying Party is actually
prejudiced by such failure to give notice. Such notice shall describe such
Third-Party Claim in reasonable detail.
(b) Obligation of Indemnifying Party. An Indemnifying Party, at such
Indemnifying Party's own expense and through counsel chosen by such Indemnifying
Party (which counsel shall be reasonably acceptable to the Indemnitee), may
elect to defend any Third-Party Claim. If an Indemnifying Party elects to defend
a Third-Party Claim, then, within ten (10) days, other than a Saturday, Sunday
or a day on which banking institutions in the States of New York or Michigan are
authorized or obligated by law or executive order to close ("Business Days"),
after receiving notice of such Third-Party Claim (or sooner, if the nature of
such Third-Party Claim so requires), such Indemnifying Party shall notify the
Indemnitee of its intent to do so, and such Indemnitee shall cooperate in the
defense of such Third-Party Claim. Such Indemnifying Party shall pay such
Indemnitee's reasonable out-of-pocket expenses incurred in connection with such
cooperation. Such Indemnifying Party shall keep the Indemnitee reasonably
informed as to the status of the defense of such Third-Party Claim. After notice
from an Indemnifying Party to an Indemnitee of its election to assume the
defense of a Third-Party Claim, such Indemnifying Party shall not be liable to
such Indemnitee under this Article 5 for any legal or other expenses
subsequently incurred by such Indemnitee in connection with the defense thereof
other than those expenses referred to in the preceding sentence; provided,
however, that such Indemnitee shall have the right to employ one law firm as
counsel, together with a separate local law firm in each applicable jurisdiction
("Separate Counsel"), to represent such Indemnitee in any action or group of
related actions (which firm or firms shall be reasonably acceptable to the
Indemnifying Party) if, in such Indemnitee's reasonable judgment at any time,
either a conflict of interest between such Indemnitee and such Indemnifying
Party exists in respect of such claim, or there may be defenses available to
such Indemnitee which are different from or in addition to those available to
such Indemnifying Party and the representation of both parties by the same
counsel would be inappropriate, and in that event (i) the reasonable fees and
expenses of such Separate Counsel shall be paid by such Indemnifying Party (it
being understood, however, that the Indemnifying Party shall not be liable for
the expenses of more than one Separate Counsel (excluding local counsel) with
respect to any Third-Party Claim (even if against multiple Indemnitees)) and
(ii) each such Indemnifying Party and such Indemnitee shall have the right to
conduct its own defense in respect of such claim. If an Indemnifying Party
elects not to defend against a Third-Party Claim, or fails to notify an
Indemnitee of its election as provided in this Article 5 within the period of
ten (10) Business Days
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described above, the Indemnitee may defend, compromise, and settle such
Third-Party Claim and shall be entitled to indemnification hereunder (to the
extent permitted hereunder); provided, however, that no such Indemnitee may
compromise or settle any such Third-Party Claim without the prior written
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld or delayed. Notwithstanding the foregoing, the Indemnifying Party shall
not, without the prior written consent of the Indemnitee, settle or compromise
any Third-Party Claim or consent to the entry of any judgment which does not
include as an unconditional term thereof the delivery by the claimant or
plaintiff to the Indemnitee of a written release from all liability in respect
of such Third-Party Claim.
(c) Joint Defense of Certain Claims. Notwithstanding the provisions of
Section 5.7(b), GM and Xxxxxx shall jointly control the defense of, and
cooperate with each other with respect to defending, any Third-Party Claim with
respect to which each party is claiming that it is entitled to indemnification
under Section 5.1 or 5.2. If either GM or Xxxxxx fails to defend jointly any
such Third-Party Claim, the other party shall solely defend such Third-Party
Claim and the party failing to defend jointly shall use all commercially
reasonable efforts to cooperate with the other party in its defense of such
Third-Party Claim; provided, however, that neither party may compromise or
settle any such Third-Party Claim without the prior written consent of the other
party, which consent shall not be unreasonably withheld or delayed. All costs
and expenses of either party in connection with, and during the course of, the
joint control of the defense of any such Third-Party Claim shall be initially
paid by the party that incurs such costs and expenses. Such costs and expenses
shall be reallocated and reimbursed in accordance with the respective
indemnification obligations of the parties at the conclusion of the defense of
such Third-Party Claim.
Section 5.8. Procedure for Indemnification Not Involving Third-Party
Claims. If any Indemnitee desires to assert against an Indemnifying Party any
claim for indemnification under this Agreement other than a Third-Party Claim,
the Indemnitee shall deliver to the Indemnifying Party notice of its demand for
satisfaction of such claim (a "Request"), specifying in reasonable detail the
amount of such claim and the basis for asserting such claim. Within thirty (30)
days after the Indemnifying Party has been given a Request, the Indemnifying
Party shall either (i) satisfy the claim requested to be satisfied in such
Request by delivering to the Indemnitee payment by wire transfer or a certified
or bank cashier's check payable to the Indemnitee in immediately available funds
in an amount equal to the amount of such claim, or (ii) notify the Indemnitee
that the Indemnifying Party contests such claim by delivering to the Indemnitee
a written notice of an objection to such claim that specifies in reasonable
detail the basis for contesting such claim.
Section 5.9. Exclusive Remedies. Except for the right to pursue equitable
remedies and for acts constituting fraud and criminal misconduct, the remedies
provided in this Article 5 shall be deemed the sole and exclusive remedies of
the parties with respect to the subject matters of the indemnification
provisions of this Article 5.
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ARTICLE 6
TERMINATION
Section 6.1. Termination of Agreement. This Agreement shall terminate
automatically upon termination of the Stock Purchase Agreement.
Section 6.2. Effect of Termination. If this Agreement is terminated
pursuant to Section 6.1 above, this Agreement shall become void and have no
effect, without any liability on the part of any party or its directors,
officers, employees or stockholders. Notwithstanding the foregoing, nothing in
this Section 6.2 shall relieve any party to this Agreement of liability for a
breach of any provision of this Agreement or invalidate the provisions of the
Confidentiality Agreement (as defined in the Stock Purchase Agreement).
ARTICLE 7
MISCELLANEOUS
Section 7.1. Further Assurances. From time to time, as and when requested
by any party hereto, the other party hereto shall execute and deliver, or cause
to be executed and delivered, all such documents and instruments and shall take,
or cause to be taken, all such further or other actions, as such other party may
reasonably deem necessary or desirable to consummate the transactions
contemplated by this Agreement or any of the agreements contemplated by this
Agreement.
Section 7.2. Survival. The representations and warranties contained in this
Agreement shall survive the execution and delivery hereof and the consummation
of the Split-Off until the expiration of all applicable statutes of limitations.
All covenants which by their terms are to be performed, in whole or in part,
after the delivery hereof or the consummation of the Transactions shall survive
such events.
Section 7.3. Notices. All notices shall be in writing and shall be deemed
given if delivered personally, telecopied (which is confirmed) or dispatched by
a nationally recognized overnight courier service to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) if to GM:
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
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with a copy to:
Jenner & Block, LLC
Xxx XXX Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
(b) if to Xxxxxx:
000 Xxxxx Xxxxxxxxx Xxxxxxxxx
Xx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
The News Corporation Limited
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxx X. Xxxxx
Xxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
Section 7.4. Interpretation; Absence of Presumption.
(a) For the purposes of this Agreement, (i) words in the singular shall
be held to include the plural and vice versa and words of one gender shall be
held to include the other gender as the context requires, (ii) the terms
"hereof", "herein", and "herewith" and words of similar import
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shall, unless otherwise stated, be construed to refer to this Agreement as a
whole (including all of the Exhibits hereto) and not to any particular provision
of this Agreement, and Article, Section, paragraph and Exhibit references are to
the Articles, Sections, paragraphs, and Exhibits to this Agreement unless
otherwise specified, (iii) the word "including" and words of similar import when
used in this Agreement shall mean "including, without limitation," unless the
context otherwise requires or unless otherwise specified, (iv) the word "or"
shall not be exclusive, (v) provisions shall apply, when appropriate, to
successive events and transactions, (vi) unless otherwise specified, all
references to any period of days shall be deemed to be to the relevant number of
calendar days, (vii) "dollars" or "$" means United States dollars and (viii)
"cash" means dollars in immediately available funds.
(b) The Article, Section and paragraph headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(c) This Agreement shall be construed without regard to any presumption or
rule requiring construction or interpretation against the party drafting or
causing any instrument to be drafted.
Section 7.5. Counterparts. This Agreement may be executed in counterparts,
which together shall constitute one and the same Agreement. The parties may
execute more than one copy of the Agreement, each of which shall constitute an
original.
Section 7.6. Entire Agreement; Severability.
(a) This Agreement (including the documents and the instruments referred to
herein) contains the entire agreement between the parties with respect to the
subject matter hereof, supersedes all previous agreements, negotiations,
discussions, writings, understandings, commitments and conversations with
respect to such subject matter and there are no agreements or understandings
between the parties other than those set forth or referred to herein or therein.
(b) If any provision of this Agreement or the application thereof to any
person or circumstance is determined by a court of competent jurisdiction to be
invalid, void or unenforceable, the remaining provisions hereof, or the
application of such provision to persons or circumstances or in jurisdictions
other than those as to which it has been held invalid or unenforceable, shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated thereby, so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner adverse to any
party. Upon such determination, the parties shall negotiate in good faith in an
effort to agree upon such a suitable and equitable provision to effect the
original intent of the parties.
Section 7.7. Third Party Beneficiaries. The Indemnitees and their
respective successors shall be third party beneficiaries of the indemnification
provisions of Article 5 and the Xxxxxx Covered Persons shall be third party
beneficiaries of the director and officer insurance provisions of Section 1.6,
each as applicable, and shall be entitled to enforce those provisions in each
such case as fully and to the same extent as if they were parties to this
Agreement. Except as provided in the previous sentence and in Section 9.11 of
the Stock Purchase Agreement, (a)
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the provisions of this Agreement are solely for the benefit of the parties and
are not intended to confer upon any person except the parties any rights or
remedies hereunder, and (b) there are no third party beneficiaries of this
Agreement and this Agreement shall not provide any third person with any remedy,
claim, liability, reimbursement, claim of action or other right in excess of
those existing without reference to this Agreement.
Section 7.8. Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of Delaware (without regard to
principles of conflicts of laws).
Section 7.9. Specific Performance. The parties agree that the remedies at
law for any breach or threatened breach, including monetary damages, are
inadequate compensation for any loss and that any defense in any action for
specific performance that a remedy at law would be adequate is waived.
Accordingly, in the event of any actual or threatened default in, or breach of,
any of the terms, conditions and provisions of this Agreement, the party or
parties who are or are to be thereby aggrieved shall have the right to specific
performance and injunctive or other equitable relief of its rights under this
Agreement, in addition to any and all other rights and remedies at law or in
equity, and all such rights and remedies shall be cumulative. Any requirements
for the securing or posting of any bond with such remedy are waived.
Section 7.10. Assignment. Except as set forth in the Stock Purchase
Agreement, neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by either of the parties hereto (whether
by operation of law or otherwise) without the prior written consent of the other
party. Subject to the preceding sentence, this Agreement shall be binding upon,
inure to the benefit of and be enforceable by the parties and their respective
successors and assigns.
Section 7.11. Amendment. Subject to Section 9.11 of the Stock Purchase
Agreement, this Agreement may be amended by the parties hereto, by action taken
or authorized by their respective Boards of Directors. Notwithstanding the
foregoing, this Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.
Section 7.12. Dispute Resolution. GM and Xxxxxx shall attempt in good faith
to resolve any dispute between the parties arising out of or relating to this
Agreement promptly through negotiations of the parties prior to seeking any
other legal or equitable remedy.
Section 7.13. Consent to Jurisdiction. Any action, suit or proceeding
arising out of any claim that the parties cannot settle through good faith
negotiations shall be litigated exclusively in the state courts of Delaware.
Each of the parties hereto hereby irrevocably and unconditionally (a) submits to
the jurisdiction of the state courts of Delaware for any such action, suit or
proceeding, (b) agrees not to commence any such action, suit or proceeding
except in the state courts of Delaware, (c) waives, and agrees not to plead or
to make, any objection to the venue of any such action, suit or proceeding in
the state courts of Delaware, (d) waives, and agrees not to plead or to make,
any claim that any such action, suit or proceeding brought in the state courts
of Delaware has been brought in an improper or otherwise inconvenient forum, (e)
waives, and agrees not to plead or to make, any claim that the state courts of
Delaware lack personal jurisdiction over it, and (f) waives its right to remove
any such action, suit or
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proceeding to the federal courts except when such courts are vested with sole
and exclusive jurisdiction by statute. GM and Xxxxxx shall cooperate with each
other in connection with any such action, suit or proceeding to obtain reliable
assurances that confidential treatment will be accorded any information that
either party shall reasonably deem to be confidential or proprietary. Each of
the parties hereto irrevocably designates and appoints its respective Service
Agent (as defined below) as its agent to receive service of process in any such
action, suit or proceeding. Each of the parties hereto further covenants and
agrees that, until the expiration of all applicable statutes of limitations
relating to potential claims under this Agreement, each such party shall
maintain a duly appointed agent for the service of summonses and other legal
process in the State of Delaware, and shall promptly notify the other party
hereto of any change in the name or address of its Service Agent and the name
and address of any replacement for its Service Agent, if such agent is no longer
the Service Agent named herein. This Section 7.13 is meant to comply with 6 Del.
C. Section 2708. For the purposes of this Agreement, "Service Agent" means, for
GM and for Xxxxxx, The Corporation Trust Company, with offices on the date
hereof at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxx of Xxx Xxxxxx, Xxxxxxxx 00000,
or, for either party, such other Person at such other address as such party may
specify in a notice provided to the other party after the date of this Agreement
in accordance with Section 7.13 of this Agreement.
Section 7.14. Conditions to Obligation to Close. The obligations of GM and
Xxxxxx hereunder (other than Section 1.3) shall be subject to the consummation
of the Split-Off.
* * * * *
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IN WITNESS WHEREOF, each of the undersigned, intending to be legally bound,
has caused this Agreement to be duly executed and delivered on the date first
set forth above.
GENERAL MOTORS CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxxx
--------------------------
Title: Assistant General Counsel
XXXXXX ELECTRONICS CORPORATION
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Name: Xxxxx X. Xxxxxx
--------------------------
Title: Senior Vice President
and General Counsel
