Exhibit 2.1
DISTRIBUTION AGREEMENT
DATED AS OF APRIL 30, 1997
BY AND BETWEEN
XXXXXX INTERNATIONAL, INC.,
AN INDIANA CORPORATION
(TO BE RENAMED "AUTOLIV ASP, INC.")
AND
NEW XXXXXX INTERNATIONAL, INC.,
AN INDIANA CORPORATION
(TO BE RENAMED "XXXXXX INTERNATIONAL, INC.")
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
Section 1.1 General . . . . . . . . . . . . . . . 2
Section 1.2 Exhibits, Etc. . . . . . . . . . . . . 12
ARTICLE II
CERTAIN TRANSACTIONS PRIOR TO THE DISTRIBUTION DATE
Section 2.1 Financing . . . . . . . . . . . . . . 12
Section 2.2 Transfer of New Xxxxxx Assets . . . . 16
Section 2.3 Transfers Not Effected Prior to
the Distribution; Transfers
Deemed Effective as of the
Distribution Date . . . . . . . . . 16
Section 2.4 No Representations or Warranties;
Consents . . . . . . . . . . . . . . 17
Section 2.5 Assumption and Satisfaction of New
Xxxxxx Liabilities; Retention of
Safety Liabilities . . . . . . . . . 17
Section 2.6 Financial Representations and
Warranties . . . . . . . . . . . . . 17
Section 2.7 Conveyancing and Assumption
Instruments . . . . . . . . . . . . 18
Section 2.8 Certificate of Incorporation;
By-laws; Share Purchase Rights
Plan . . . . . . . . . . . . . . . . 18
Section 2.9 New Xxxxxx Capitalization . . . . . . 18
Section 2.10 Certain Pre-Distribution
Transactions . . . . . . . . . . . . 19
ARTICLE III
THE DISTRIBUTION
Section 3.1 Cooperation Prior to the
Distribution . . . . . . . . . . . . 19
Section 3.2 Company Board Action; Distribution
Procedures . . . . . . . . . . . . . 20
Section 3.3 Conditions Precedent to the
Distribution . . . . . . . . . . . . 20
Section 3.4 The Distribution . . . . . . . . . . . 22
ARTICLE IV
SERVICES
Section 4.1 Provision of Management Services . . . 22
Section 4.2 Fee for Services; Expenses . . . . . . 23
Section 4.3 Independent Contractor Status . . . . 23
Section 4.4 Disclaimer; Limited Liability . . . . 23
ARTICLE V
INDEMNIFICATION
Section 5.1 Indemnification by Safety . . . . . . 24
Section 5.2 Indemnification by New Xxxxxx . . . . 25
Section 5.3 Limitations on Indemnification
Obligations . . . . . . . . . . . . 25
Section 5.4 Procedure for Indemnification . . . . 26
Section 5.5 Remedies Cumulative . . . . . . . . . 29
Section 5.6 Survival of Indemnities . . . . . . . 29
Section 5.7 Right of Inquiry . . . . . . . . . . . 30
ARTICLE VI
CERTAIN ADDITIONAL MATTERS AND COVENANTS
Section 6.1 The New Xxxxxx Board . . . . . . . . . 31
Section 6.2 Resignations; Safety Board . . . . . . 31
Section 6.3 Certain Post-Distribution
Transactions . . . . . . . . . . . . 32
Section 6.4 Use of Names . . . . . . . . . . . . . 33
Section 6.5 Restrictions on Hiring of Other
Party's Employees . . . . . . . . . 34
Section 6.6 Further Assurances; Cooperation . . . 34
Section 6.7 Guarantees . . . . . . . . . . . . . . 34
Section 6.8 Shared Facilities . . . . . . . . . . 35
Section 6.9 Thiokol-Xxxxxx Spinoff . . . . . . . . 36
Section 6.10 Non-Competition . . . . . . . . . . . 36
ARTICLE VII
ACCESS TO INFORMATION AND SERVICES
Section 7.1 Provision of Corporate Records . . . . 37
Section 7.2 Access to Information . . . . . . . . 38
Section 7.3 Production of Witnesses . . . . . . . 40
Section 7.4 Reimbursement . . . . . . . . . . . . 41
Section 7.5 Retention of Records . . . . . . . . . 41
Section 7.6 Confidentiality . . . . . . . . . . . 41
ARTICLE VIII
INSURANCE
Section 8.1 Policies and Rights . . . . . . . . . 42
Section 8.2 Post-Distribution Date Claims . . . . 42
Section 8.3 Administration and Reserves . . . . . 43
Section 8.4 Agreement for Waiver of Conflict
and Shared Defense . . . . . . . . . 44
Section 8.5 Cooperation with Respect
to Insurance . . . . . . . . . . . . 44
ARTICLE IX
MISCELLANEOUS
Section 9.1 Complete Agreement; Construction . . . 45
Section 9.2 Survival of Agreements . . . . . . . . 45
Section 9.3 Expenses . . . . . . . . . . . . . . . 45
Section 9.4 Governing Law . . . . . . . . . . . . 45
Section 9.5 Notices . . . . . . . . . . . . . . . 46
Section 9.6 Amendments . . . . . . . . . . . . . . 46
Section 9.7 Successors and Assigns . . . . . . . . 47
Section 9.8 Counterparts . . . . . . . . . . . . . 47
Section 9.9 Subsidiaries . . . . . . . . . . . . . 47
Section 9.10 Third Party Beneficiaries . . . . . . 47
Section 9.11 Titles and Headings . . . . . . . . . 47
Section 9.12 Exhibits and Schedules . . . . . . . . 47
Section 9.13 Legal Enforceability . . . . . . . . . 47
Section 9.14 Consent to Jurisdiction . . . . . . . 48
Schedules and Exhibits
Schedule 1.01(a) Safety Business, Retained Subsidiary
and Other Safety Interests and
Investments
Schedule 1.01(b) Safety Liabilities
Schedule 1.01(c)(1) Company Policies
Schedule 1.01(c)(2) New Xxxxxx Policies
Schedule 1.01(c)(3) Safety Policies
Schedule 1.01(d)(1) New Xxxxxx Real Property
Schedule 1.01(d)(2) Safety Real Property
Schedule 1.01(e) New Xxxxxx Businesses, New Xxxxxx
Subsidiaries and Other New Xxxxxx
Interests and Investments
Schedule 1.01(f) New Xxxxxx Liabilities
Schedule 1.01(g)(1) New Xxxxxx Intellectual Property
Schedule 1.01(g)(2) Safety Intellectual Property
Schedule 4.02 Rates for Services - Formula Format
Schedule 6.08 Terms of Rochester Hills Shared Usage
Exhibit A Form of Employee Benefits Allocation
Agreement
Exhibit B New Xxxxxx By-Laws
Exhibit C New Xxxxxx Articles of Incorporation
Exhibit D Form of Tax Sharing Agreement
Exhibit E Form of New Xxxxxx Share Purchase
Rights Plan
Exhibit F Records Retention Policy
DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT (this "Agreement"), dated as
of April 30, 1997, by and between XXXXXX INTERNATIONAL, INC.,
an Indiana corporation (the "Company") and NEW XXXXXX
INTERNATIONAL, INC., an Indiana corporation and a wholly owned
subsidiary of the Company ("New Xxxxxx").
WHEREAS, the Board of Directors of the Company has
determined it is appropriate and desirable to separate the
Company and its subsidiaries into two companies by
consolidating its Specialty Chemicals and Salt businesses in
New Xxxxxx and distributing to the holders of shares of common
stock, $1 par value per share, of the Company ("Company Common
Stock"), all outstanding shares of common stock $1 par value
per share, of New Xxxxxx ("New Xxxxxx Common Stock"), together
with the associated preferred share purchase rights ("New
Xxxxxx Rights");
WHEREAS, the Board of Directors of the Company has
determined it is appropriate and desirable to enter into the
Combination Agreement, dated as of November 25, 1996 (the
"Combination Agreement"), by and among the Company, Autoliv
AB, a corporation organized under the laws of the Kingdom of
Sweden ("Autoliv"), Autoliv, Inc., a Delaware corporation
("Newco"), and ASP Merger Sub Inc., a Delaware corporation and
a wholly owned subsidiary of Newco ("Newco Sub"), pursuant to
which, among other things, Newco Sub will be merged with and
into the Company (the "Merger") and Newco will offer to
acquire all of the outstanding capital stock of Autoliv
pursuant to the Exchange Offer (as defined in the Combination
Agreement, and, together with the other transactions
contemplated thereby, the "Transactions");
WHEREAS, immediately prior to the Effective Time (as
defined in Section 1.2 of the Combination Agreement) of the
Merger, the Company's Board of Directors (the "Company
Board"), subject to the approval of the Company's stockholders
and the other conditions set forth in Section 3.03 of this
Agreement, expects to distribute to the holders of Company
Common Stock, other than shares held in the treasury of the
Company, on a pro rata basis, all of the issued and
outstanding shares of New Xxxxxx Common Stock (the
"Distribution");
WHEREAS, immediately prior to the Distribution, the
Company Board, subject to the approval of the Company's
stockholders and the other conditions set forth in Section
3.03 of this Agreement, expects to cause (i) the Company to
contribute the New Xxxxxx Assets (as defined below) to New
Xxxxxx or another wholly-owned subsidiary of the Company as a
capital contribution or in exchange for shares of such
subsidiary's stock, (ii) the Company to contribute to New
Xxxxxx the New Xxxxxx Capital Contribution (as defined
herein), the Safety Supplemental Distribution (as defined
herein) as well as the stock of the New Xxxxxx Subsidiaries
(as defined herein) and certain other assets to New Xxxxxx as
a capital contribution and (iii) New Xxxxxx to assume the New
Xxxxxx Liabilities (as defined below), all as more
specifically provided herein (the transactions described in
clauses (i), (ii) and (iii) are referred to collectively as
the "Contribution");
WHEREAS, the purpose of the Distribution is to make
possible the Merger by divesting the Company of the businesses
and operations to be conducted by New Xxxxxx and its
subsidiaries, which Newco and Autoliv have required as a
condition to their willingness to consummate the Transactions;
WHEREAS, it is the intention of the parties to this
Agreement that the Contribution and the Distribution will
qualify as transactions described in Sections 351 and Section
355 of the Internal Revenue Code of 1986, as amended (the
"Code") and/or a "reorganization" within the meaning of
Section 368(a)(1)(D) of the Code; and
WHEREAS, this Agreement sets forth or provides for
certain agreements by and among the Company and New Xxxxxx in
consideration of the separation of the ownership of the
Company and New Xxxxxx.
NOW, THEREFORE, in consideration of the mutual
agreements, provisions and covenants contained in this
Agreement, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 General. As used in this Agreement,
the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and
plural forms of the terms defined):
Action: any action, suit, arbitration, inquiry,
proceeding or investigation by or before any court, any
governmental or other regulatory or administrative agency or
commission or any arbitration tribunal.
Affiliate: as defined in Rule 12b-2 promulgated by
the Commission under the Exchange Act, as such Regulation is
in effect on the date hereof.
Agent: the distribution agent appointed by the
Company to distribute shares of New Xxxxxx Common Stock
pursuant to the Distribution.
Ancillary Agreements: all of the written
agreements, instruments, understandings, assignments or other
arrangements entered into in connection with the Transactions
contemplated hereby, including, without limitation, the
Combination Agreement, the Conveyancing and Assumption
Instruments, the Benefits Agreement, the Safety Credit
Agreement and the Tax Sharing Agreement.
Assets: any and all assets, properties and rights,
whether tangible or intangible, whether real, personal or
mixed, whether fixed, contingent or otherwise, and wherever
located, including, without limitation, the following:
(a) real property interests (including leases),
land, plants, buildings and improvements;
(b) machinery, equipment, tooling, vehicles,
furniture and fixtures, leasehold improvements, repair
parts, tools, plant, laboratory and office equipment and
other tangible personal property, together with any
rights or claims arising out of the breach of any express
or implied warranty by the manufacturers or sellers of
any of such assets or any component part thereof;
(c) inventories, including raw materials, work-in-
process, finished goods, parts, accessories and supplies;
(d) cash, bank accounts, notes, loans and accounts
receivable (whether current or not current), interests as
beneficiary under letters of credit, advances and
performance and surety bonds;
(e) certificates of deposit, banker's acceptances,
shares of stock, bonds, debentures, evidences of
indebtedness, certificates of interest or participation
in profit-sharing agreements, collateral trust
certificates, pre-organization certificates or
subscriptions, transferable shares, investment contracts,
voting-trust certificates, interests in partnerships and
other entities (including joint ventures), puts, calls,
straddles, options, swaps, collars, caps and other
securities or hedging arrangements of any kind;
(f) financial, accounting and operating data and
records including, without limitation, books, records,
notes, sales and sales promotional data, advertising
materials, credit information, cost and pricing
information, customer and supplier lists, reference
catalogs, payroll and personnel records, minute books,
stock ledgers, stock transfer records and other similar
property, rights and information;
(g) patents, patent applications, trademarks,
trademark applications and registrations, trade names,
service marks, service names, copyrights and copyright
applications and registrations, commercial and technical
information including engineering, production and other
designs, drawings, specifications, formulae, technology,
computer and electronic data processing programs and
software, inventions, processes, trade secrets, know-how,
confidential information and other proprietary property,
rights and interests;
(h) agreements, leases, contracts, sale orders,
purchase orders, open bids and other commitments and all
rights therein;
(i) prepaid expenses, deposits and retentions held
by third parties;
(j) claims, causes of action, choses in action,
rights under insurance policies, rights under express or
implied warranties, rights of recovery, rights of set-
off, rights of subrogation and all other rights of any
kind;
(k) licenses, franchises, permits, authorizations
and approvals; and
(l) goodwill and going concern value.
Benefits Agreement: the Employee Benefits
Allocation Agreement, dated as of the date of this Agreement,
between the Company and New Xxxxxx, the form of which is
attached hereto as Exhibit A.
Claims Administration: the processing of claims
made under the Policies, including the reporting of claims to
the insurance carrier, management and defense of claims and
providing for appropriate releases upon settlement of claims.
Code: the Internal Revenue Code of 1986, as
amended, or any successor legislation.
Commission: the Securities and Exchange Commission.
Company Policies: all Policies, current or past,
which are owned or maintained by or on behalf of the Company
or any of its predecessors which relate to both the Safety
Business and the New Xxxxxx Businesses, including without
limitation the Policies identified on Schedule 1.01(c)(1).
Conveyancing and Assumption Instruments:
collectively, the various agreements, instruments and other
documents to be entered into to effect the transfer of assets
and the assumption of Liabilities in the manner contemplated
by this Agreement and the Ancillary Agreements.
Corporate Assets: the Assets of the Company
relating to the Corporate Operations.
Corporate Operations: the activities and operations
of the Company's corporate administrative group and the senior
executive management of the Company, which activities and
operations do not primarily relate to or primarily arise from
the Safety Business.
Distribution Date: the date determined by the
Company Board as of which the Distribution shall be effected,
which is presently contemplated to be April 30, 1997.
Distribution Record Date: the date to be determined
by the Company Board as the record date for the Distribution.
Exchange Act: the Securities Exchange Act of 1934,
as amended.
Foreign Exchange Rate: with respect to any currency
other than United States dollars as of any date of
determination, the average of the opening bid and asked rates
on such date at which such currency may be exchanged for
United States dollars as quoted by Bank of America Illinois
except that, with respect to any Indemnifiable Loss (as
defined in Section 5.01) covered by insurance, the Foreign
Exchange Rate for such currency shall be as set forth in
Section 5.03(b)(ii).
Form S-4: The registration statement on Form S-4 to
be filed by New Xxxxxx with the Commission to effect the
registration of the New Xxxxxx Common Stock and the New Xxxxxx
Rights pursuant to the Securities Act, provided that in the
event such form is not required to be filed, "Form S-4" shall
refer to the registration statement on Form 10 filed by New
Xxxxxx with respect to such securities.
Insurance Administration: with respect to each
Policy, the accounting for premiums, retrospectively-rated
premiums, defense costs, indemnity payments, deductibles and
retentions as appropriate under the terms and conditions of
each of the Policies; and the reporting to excess insurance
carriers of any losses or claims which may cause the per-
occurrence or aggregate limits of any policy to be exceeded,
and the distribution of Insurance Proceeds as contemplated by
this Agreement.
Insurance Proceeds: those monies (a) received by an
insured from an insurance carrier or (b) paid by an insurance
carrier on behalf of the insured, in either case net of any
applicable premium adjustment, co-insurance, retrospectively-
rated premium, deductible, retention, cost or reserve paid or
held by or for the benefit of such insured.
Insured Claims: those Liabilities that,
individually or in the aggregate, are covered within the terms
and conditions of any of the Policies, whether or not subject
to deductibles, co-insurance, uncollectability or
retrospectively-rated premium adjustments, but only to the
extent that such Liabili-ties are within applicable Policy
limits, including aggregates.
IRS: the Internal Revenue Service.
Liabilities: any and all debts, liabilities,
commitments and obligations, absolute or contingent, matured
or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising, including all
costs and expenses relating thereto, and including, without
limitation, those debts, liabilities and obligations arising
under any law, rule, regulation, Action, threatened Action,
order or consent decree of any governmental entity or any
award of any arbitrator of any kind, and those arising under
any contract, commitment or undertaking.
New Xxxxxx Assets: collectively, all of the rights
and Assets of the Company and its subsidiaries other than the
Safety Assets, including without limitation: (a) the assets
included on the consolidated balance sheet of New Xxxxxx as of
June 30, 1996 and any assets acquired by the Company or New
Xxxxxx other than Safety Assets from July 1, 1996 to the
Distribution Date (other than, in each case, assets sold or
otherwise disposed of on or prior to the Distribution Date);
(b) the real property, owned or leased, listed on Schedule
1.01(d)(1); (c) any recoveries under the liabilities listed on
Schedule 1.01(f) or the litigation not included in the Safety
Liabilities; (d) subject to Section 6.04 hereof, the patents,
trademarks, trade names, copyrights (including applications
for any of the foregoing), and invention records of the
Company other than the Safety Assets, including without
limitation the patents, trademarks and copyrights listed on
Schedule 1.01(g)(1); (e) the Company's books and records to
the extent set forth in Section 7.01(a); (f) all of the
outstanding capital stock or other interests of the Company in
the New Xxxxxx Subsidiaries and in the partnerships, joint
ventures and investments listed on Schedule 1.01(e); (g) the
New Xxxxxx Capital Contribution, the Safety Supplemental
Distribution and all domestic and foreign cash bank balances
and short-term investments other than (i) cash generated from
the operations of the Safety Business from July 1, 1996
through the Distribution Date in excess of the sum of (x) the
cash used by the Safety Business from July 1, 1996 through the
Distribution Date, (y) the Safety Supplemental Distribution
and (z) $15 million of expenses incurred by the Company in
connection with the transactions contemplated by the
Combination Agreement and (ii) xxxxx checking and cash
accounts with respect to the Safety Business not maintained,
in the ordinary course of business, on the central company
cash management system, including without limitation to the
extent set forth in Section 2.01(f) of this Agreement; (h) the
New Xxxxxx Policies and the rights under the Company Policies
to the extent set forth in Article VIII of this Agreement; and
(i) the Company's rights under Sections 8.3(b), 8.6, 8.13(c)
and 8.22 of the Combination Agreement that survive the
Effective Time (as defined in the Combination Agreement), and
New Xxxxxx'x rights and Assets under the other Ancillary
Agreements.
New Xxxxxx Board: the Board of Directors of New
Xxxxxx.
New Xxxxxx Businesses: all assets, businesses and
operations of the Company other than those included in the
Safety Business, including without limitation the New Xxxxxx
Assets and the businesses and operations of the Adhesives &
Chemical Specialties Group, the Coatings Group, the Electronic
Materials Group, the Salt Group and the Corporate Operations,
as heretofore, currently or hereafter conducted, including
without limitation the businesses listed on Schedule 1.01(e)
and all assets, businesses or operations managed or operated
by, or otherwise operationally related to, any of such
businesses, which have been sold or otherwise disposed of or
discontinued prior to the Distribution Date but which shall
not include the Safety Business.
New Xxxxxx By-Laws: the By-Laws of New Xxxxxx,
substantially in the form of Exhibit B, to be in effect on the
Distribution Date.
New Xxxxxx Capital Contribution: the capital
contribution or repayment in cash of intercompany indebtedness
(including as provided in Section 2.10(b) of this Agreement)
in the aggregate amount of $750,000,000 to be contributed by
the Company to New Xxxxxx on or immediately prior to the
Distribution Date.
New Xxxxxx Charter: the Articles of Incorporation
of New Xxxxxx, substantially in the form of Exhibit C, to be
in effect on the Distribution Date.
New Xxxxxx Employee: any individual who, on or
prior to the Distribution Date, was employed by the Company or
any of its subsidiaries and who, on or after the Distribution
Date, or otherwise in connection with the Distribution, is
intended by the parties hereto to be employed by New Xxxxxx or
a New Xxxxxx Subsidiary or in a New Xxxxxx Business on an on-
going basis.
New Xxxxxx Liabilities: collectively, all of the
Liabilities of the Company and its subsidiaries incurred on or
prior to the Distribution Date (other than Safety Liabilities)
including without limitation: all of (i) the Liabilities of
New Xxxxxx under this Agreement or any of the Ancillary
Agreements, (ii) the Liabilities arising out of or relating to
any of the New Xxxxxx Businesses or the New Xxxxxx Assets;
(iii) the Liabilities referred to in the proviso contained in
clause (v) of the definition of Safety Liabilities contained
herein, and (iv) the Liabilities specified on Schedule
1.01(f).
New Xxxxxx Policies: all Policies, current or past,
which are owned or maintained by or on behalf of the Company
or any of its predecessors which relate to the New Xxxxxx
Businesses but do not relate to the Safety Business, including
without limitation the Policies identified on Schedule
1.01(c)(2).
New Xxxxxx Subsidiaries: all of the subsidiaries of
the Company other than the Retained Subsidiaries, including
without limitation those listed on Schedule 1.01(e), and any
other subsidiary of New Xxxxxx which hereafter may be
organized or acquired, all of which subsidiaries will become
subsidiaries of New Xxxxxx.
NYSE: New York Stock Exchange, Inc.
Policies: insurance policies and insurance
contracts of any kind, including without limitation primary
and excess policies, comprehensive general liability policies,
automobile, aircraft and workers' compensation insurance
policies, life insurance and other employee benefit insurance
policies, and self-insurance and captive insurance company
arrangements, together with the rights, benefits and
privileges thereunder.
Proxy Statement: the proxy
statement/prospectus/offer to purchase sent to the holders of
shares of Company Common Stock in connection with the Special
Meeting and to the holders of Autoliv common stock in
connection with the Exchange Offer.
Retained Subsidiaries: the subsidiaries of the
Company listed on Schedule 1.01(a).
Rights Agreement: the Rights Agreement, dated as of
April 24, 1997, by and between New Xxxxxx and First Chicago
Trust Company of New York, as Rights Agent, substantially in
the form of Exhibit E hereto.
Ruling Request: the private letter ruling request
to be filed by the Company with the IRS, as supplemented and
amended from time to time, with respect to certain tax aspects
of the Distribution and the Merger.
Safety: Autoliv ASP, Inc., the surviving
corporation of the Merger (as defined in the Combination
Agreement), which shall occur pursuant to the Combination
Agreement immediately subsequent to the Distribution.
Safety Assets: collectively, the following rights
and Assets of the Company and its subsidiaries: (a) the
assets included on the consolidated balance sheet of the
Safety Business as of June 30, 1996 and any assets acquired by
the Company exclusively relating to the Safety Business from
July 1, 1996 to the Distribution Date (other than, in each
case, assets sold or otherwise disposed of on or prior to the
Distribution Date); (b) the real property owned or leased
listed on Schedule 1.01(d)(2); (c) any recoveries under the
litigation listed on Schedule 1.01(b); (d) other than with
respect to the "Xxxxxx" and "Xxxxxx International" names and
related trademarks and trade names (but subject to Section
6.04 hereof), the patents, trademarks, trade names, copyrights
(including applications for any of the foregoing), and
invention records of the Company relating primarily to the
Safety Business, including without limitation the patents,
trademarks and copyrights listed on Schedule 1.01(g)(2); (e)
the Company's books and records to the extent set forth in
Section 7.01(b); (f) all of the outstanding capital stock or
other interests of the Company in the Retained Subsidiaries
and in the partnerships, joint ventures and investments listed
on Schedule 1.01(a); (g) xxxxx checking and cash accounts
with respect to the Safety Business not maintained, in the
ordinary course of business, on the central company cash
management system; (h) cash generated from the operations of
the Safety Business from July 1, 1996 through the Distribution
Date in excess of the sum of (x) cash used by the Safety
Business, (y) the Safety Supplemental Distribution and (z) $15
million of expenses incurred by the Company in connection with
the transactions contemplated by the Combination Agreement;
(i) the Safety Policies and the rights under the Company
Policies to the extent set forth in Article VIII of this
Agreement; (j) the rights and Assets of Safety under the
Ancillary Agreements; and (k) any other rights and Assets of
the Company and its subsidiaries exclusively relating to the
Safety Business, provided that the Safety Assets shall not
include (1) cash and cash equivalents, except as set forth in
clause (g) or (h) above, and (2) assets associated with the
Corporate Operations.
Safety Business: the Safety Assets and the assets,
business and operations of the Company's Automotive Safety
Products Group, as heretofore, currently or hereafter
conducted, including without limitation the businesses listed
on Schedule 1.01(a) and all businesses or operations
predominantly managed or operated by, or otherwise
operationally related to, the Company's Automotive Safety
Products Group which have been sold or otherwise disposed of
or discontinued prior to the Distribution Date but shall not
include any of the New Xxxxxx Businesses.
Safety Credit Agreement: the credit agreement or
other financing agreements or arrangements to be entered into
by the Company prior to the Distribution Date to provide
Safety with working capital, to fund the New Xxxxxx Capital
Contribution and, if necessary, to repay certain intercompany
indebtedness pursuant to Section 2.10(b) hereof.
Safety Employee: any individual who, on or prior to
the Distribution Date, was employed by the Company or any of
its subsidiaries and who, on or after the Distribution Date,
or otherwise in connection with the Distribution, is intended
by the parties hereto to be employed by Safety or a Safety
subsidiary or parent company or in the Safety Business
(including the business of Newco and its subsidiaries) on an
on-going basis.
Safety Liabilities: collectively, all of (i) the
Liabilities assigned to or assumed by the Company under this
Agreement or any of the Ancillary Agreements, except as
otherwise expressly provided herein or therein; (ii) all of
the Liabilities (or portion thereof) relating exclusively to
or arising exclusively from the Safety Business or the Safety
Assets; (iii) the Liabilities listed on Schedule 1.01(b);
(iv) Liabilities on the balance sheet of the Safety Business
as of June 30, 1996 (or reflected in the notes thereto), and
Liabilities incurred by the Safety Business on or after July
1, 1996, excluding, in each case, Liabilities paid or
otherwise satisfied on or prior to the Distribution Date; and
(v) the liabilities of the Company under the Safety Credit
Agreement, provided that Liabilities under the Safety Credit
Agreement relating to the representations and warranties of
the Company, to the extent such Liabilities relate to a
representation or warranty with respect to the New Xxxxxx
Businesses or the New Xxxxxx Assets on or prior to the
Distribution Date, shall not be a Safety Liability and shall
be a New Xxxxxx Liability.
Safety Policies: all Policies, current or past,
which are owned or maintained by or on behalf of the Company
or any of its predecessors which relate to the Safety Business
but do not relate to the New Xxxxxx Businesses, including
without limitation the Policies identified on Schedule
1.01(c)(3).
Safety Supplemental Distribution: an amount in cash
equal to $50,000,000 (subject to adjustment pursuant to
Sections 2.01(a) and 2.10(a)) plus, if the Distribution Date
occurs after March 31, 1997, an additional amount in cash
equal to the product of $7,200,000 times the number of months
(or fraction thereof) between March 31, 1997 and the
Distribution Date, such amounts to be contributed by the
Company to New Xxxxxx on or prior to the Distribution Date.
Securities Act: the Securities Act of 1933, as
amended.
Special Meeting: the Special Meeting of
Stockholders of the Company to consider the Distribution, the
Merger and certain related matters.
Special Meeting Record Date: the record date for
stockholders of the Company entitled to vote at the Special
Meeting.
Subsidiaries: the term "subsidiaries" as used
herein with respect to any entity shall, unless otherwise
indicated, be deemed to refer to both direct and indirect
subsidiaries of such entity and any other entity at least 45%
of the stock or other voting interests of which are owned by
such entity.
Tax Sharing Agreement: the Tax Sharing Agreement,
dated as of the date hereof, between New Xxxxxx and the
Company, the form of which is attached hereto as Exhibit D.
Section 1.2 Exhibits, Etc. References to an
"Exhibit" or to a "Schedule" are, unless otherwise specified,
to one of the Exhibits or Schedules attached to this
Agreement, and references to a "Section" are, unless otherwise
specified, to one of the Sections of this Agreement.
ARTICLE II
CERTAIN TRANSACTIONS PRIOR TO THE DISTRIBUTION DATE
Section 2.1 Financing.
(a) Safety Credit Agreement; New Xxxxxx Capital
Contribution; Safety Supplemental Distribution. On or shortly
prior to the Distribution Date, the Company shall enter into
the Safety Credit Agreement, on terms reasonably acceptable to
Autoliv and the Company, and shall contribute the New Xxxxxx
Capital Contribution to New Xxxxxx. New Xxxxxx shall have no
obligations or Liabilities with respect to the Safety Credit
Agreement. On or prior to the Distribution Date, the Company
shall contribute the Safety Supplemental Distribution to New
Xxxxxx to the extent not previously paid under Section 2.01(c)
of this Agreement; provided that if the estimated retained
earnings (exclusive of any costs and expenses to be paid by
Safety pursuant to Section 9.03 of this Agreement relating to
the transactions contemplated by this Agreement and the
Combination Agreement and prior to giving effect to the Safety
Supplemental Distribution) of the Safety Business from July 1,
1996 through the Distribution Date (or through the most recent
date prior to the Distribution Date for which such estimate
can reasonably be made), based solely upon the Company's
accounting principles, practices, policies and procedures
consistently applied, as set forth in a certificate of the
Chief Financial Officer of the Company dated the Distribution
Date (the "CFO Certificate"), are less than the amount of the
Safety Supplemental Distribution as otherwise determined, the
amount of the Safety Supplemental Distribution shall be
adjusted (without interest) to equal such lesser amount as set
forth in such certificate. The CFO Certificate shall be
prepared in good faith, shall be final and binding upon the
parties, and each party hereby waives and releases any claim
or remedy it might otherwise have with respect thereto.
(b) Credit Sensitive Debentures. Prior to the
Distribution Date, New Xxxxxx shall enter into a supplemental
indenture or other instrument to the extent required by the
indenture pursuant to which the Company's Credit Sensitive
Debentures due June 1, 2020 have been issued, which
supplemental indenture or instrument will provide that, as of
the Distribution Date and pursuant to Sections 801 and 802 of
such indenture, the obligations of the Company thereunder
shall become obligations of New Xxxxxx, and the Company shall
have no remaining obligations thereunder.
(c) Operation of the Safety Business Prior to the
Distribution Date. The Company and New Xxxxxx shall, to the
fullest extent reasonably practicable, treat, solely for the
purposes of this Agreement, the Safety Business as if it were
a stand-alone, self-financed entity from July 1, 1996 through
the Distribution Date. Accordingly, for the period from July
1, 1996 through the Distribution Date (i) the Safety Business
shall be treated as retaining all cash generated from the
operations of the Safety Business in excess of the sum of (x)
the cash used by the Safety Business, (y) the Safety
Supplemental Distribution, which shall be deemed to be made on
the last day of each month on a prorated basis and (z) $15
million of expenses incurred by the Company in connection with
the transactions contemplated by the Combination Agreement,
which shall be the responsibility of the Safety Business, to
the extent not theretofore charged to the Safety Business;
(ii) the Safety Business shall be credited with interest on
its positive cash balances and charged for interest on any
negative cash balances funded by the New Xxxxxx Businesses at
a per annum interest rate equal to the average interest rate
earned on the Company's cash balances during such period, with
any intercompany borrowings to fund the operations of the
Safety Business in excess of the amount reflected on the
audited balance sheet of the Safety Business as of June 30,
1996 treated as a payable to New Xxxxxx from the Company;
(iii) any payments by the Safety Business in connection with
the New Xxxxxx Businesses or the New Xxxxxx Employees
(including, without limitation, any such payments in respect
of New Xxxxxx Liabilities) shall be treated as a payable to
the Safety Business from New Xxxxxx, and any payments by the
New Xxxxxx Businesses in connection with the Safety Business
or the Safety Employees (including, without limitation, any
such payments in respect of Safety Liabilities) shall be
treated as a payable to New Xxxxxx from the Safety Business;
(iv) the Safety Business and the New Xxxxxx Businesses shall
make adjustments for late deposits, checks returned for
insufficient funds and other similar transactions occurring on
or after July 1, 1996 as shall be reasonable under the
circumstances consistent with the purpose and intent of this
Agreement; and (v) the net balance due to the Safety Business
or the New Xxxxxx Businesses, as the case may be, in respect
of the aggregate amounts of clauses (i) through (iv) shall be
paid by New Xxxxxx or Safety, as appropriate, as promptly as
practicable following each month end. For purposes of this
Section 2.01(c), the parties contemplate that the Safety
Business, including but not limited to the administration of
accounts payable and accounts receivable, will be conducted in
the normal course consistent with the covenants contained in
Section 7.1 of the Combination Agreement and that the Safety
Business will not be charged for general administrative
services provided by the Corporate Operations, including
legal, tax compliance, risk management and other similar
corporate services, in a manner consistent with the Company's
practice in preparing the audited balance sheet of the Safety
Business dated as of June 30, 1996. All transactions
contemplated by this Section 2.01(c) shall be subject to
review by the parties, and any dispute thereunder shall be
resolved by Ernst & Young LLP (or another "Big Six" accounting
firm acceptable to the parties), whose decision shall be final
and unappealable.
(d) Consents. Each of the Company and New Xxxxxx
agrees that it shall use reasonable efforts to obtain, prior
to the Distribution Date, all necessary consents, waivers or
amendments to each bank credit agreement, debt security or
other financing facility to which it or its respective
subsidiaries is a party or by which it or any of its
respective subsidiaries is bound, or to refinance such
agreement, security or facility, in each case on terms
satisfactory to the Company and New Xxxxxx and to the extent
necessary to permit the Distribution to be consummated without
any material breach of the terms of such agreement, security
or facility. To the extent Safety determines, in its
reasonable judgment, that such consents, waivers or amendments
would reasonably be expected to create Safety Liabilities,
such terms shall also be reasonably satisfactory to Safety.
From the date hereof until there no longer remain any such
material consents, waivers or amendments to be obtained in
connection with the Distribution pursuant to the terms of this
Agreement and the Ancillary Agreements, New Xxxxxx shall
inform Safety regularly, but not less than on a monthly basis,
of its progress in obtaining such consents, waivers and
amendments.
(e) Intercompany Accounts. All agreements,
contracts, arrangements and commitments between the New Xxxxxx
Businesses, on the one hand, and the Safety Business, on the
other hand, entered into prior to the Distribution Date for
the purchase or sale of goods or services ("Intercompany
Arrangements"), which intercompany arrangements shall be
subject to the reasonable approval of a senior executive of
the Safety Business, shall remain in effect on and after the
Closing Date. All amounts under such Intercompany
Arrangements which are unbilled as of the Distribution Date
shall be billed and payable on and after the Distribution Date
in accordance with the terms thereof. Subject to Sections
2.01(c) and 2.10 of this Agreement, on or before the
Distribution Date, the Company shall cause all intercompany
indebtedness (which shall include payables and receivables but
which shall not include unbilled amounts under Intercompany
Arrangements) between the New Xxxxxx Businesses, on the one
hand, and the Safety Business, on the other hand, to be
settled or otherwise eliminated.
(f) Cash Management and Intercompany Accounts After
the Distribution Date. The Company and New Xxxxxx shall
establish and maintain a separate cash management system and
accounting records with respect to the New Xxxxxx Businesses
effective as of immediately prior to the Distribution Date;
thereafter, (i) any payments by the Company or a Remaining
Subsidiary to or on behalf of New Xxxxxx or a New Xxxxxx
Subsidiary or otherwise, in connection with the New Xxxxxx
Businesses or the New Xxxxxx Employees (including, without
limitation, any such payments in respect of New Xxxxxx
Liabilities) shall be recorded in the accounts of New Xxxxxx
as a payable to the Company from New Xxxxxx; any payments by
New Xxxxxx or a New Xxxxxx Subsidiary to or on behalf of the
Company or a Remaining Subsidiary or otherwise, in connection
with the Safety Business or in connection with Safety
Employees (including, without limitation, any such payments in
respect of Safety Liabilities) shall be recorded in the
accounts of the Company as a payable to New Xxxxxx from the
Company; (ii) other than xxxxx checking and cash accounts with
respect to the Safety Business not maintained, in the ordinary
course of business, on the central Company cash management
system, and the accounts listed on Schedule 1.01(a), which
xxxxx cash, checking and other accounts (but not the balances
therein, except as provided by Section 2.01(c) and the
definition of Safety Assets) the Company shall retain, New
Xxxxxx shall be entitled to all domestic and international
cash bank balances and short-term investments as of the
Distribution Date per the books of the Company (other than
cash which constitutes a Safety Asset) including, without
limitation, such cash balances (other than cash which
constitutes a Safety Asset) representing deposited checks or
drafts for which only a provisional credit has been allowed,
in the depository accounts of the Company or any of its
subsidiaries; any such cash balances as of the Distribution
Date which have not been transferred to New Xxxxxx shall be
recorded as a payable to New Xxxxxx from Safety in the
accounts of Safety; (iii) New Xxxxxx and the Company shall
make adjustments for late deposits, checks returned for not
sufficient funds and other post-Distribution Date transactions
as shall be reasonable under the circumstances consistent with
the purpose and intent of this Agreement; and (iv) the net
balance due to the Company or New Xxxxxx, as the case may be,
in respect of the aggregate amounts of clauses (i), (ii) and
(iii) shall be paid by New Xxxxxx or Safety, as appropriate,
as promptly as practicable. For purposes of this Section
2.01(f), the parties contemplate that the Safety Business and
the New Xxxxxx Businesses, including but not limited to the
administration of accounts payable and accounts receivable,
will be conducted in the normal course. All transactions
contemplated in this Section 2.01(f) shall be subject to
review by the parties, and any dispute thereunder shall be
resolved by Ernst & Young LLP (or another "Big Six" accounting
firm acceptable to the parties), whose decision shall be final
and unappealable.
Section 2.2 Transfer of New Xxxxxx Assets. The
Company shall transfer to New Xxxxxx or, at New Xxxxxx'x
option, to a New Xxxxxx Subsidiary effective as of the
Distribution Date all of the Company's right, title and
interest in the New Xxxxxx Assets.
Section 2.3 Transfers Not Effected Prior to the
Distribution; Transfers Deemed Effective as of the
Distribution Date. To the extent that any transfers
contemplated by this Article II shall not have been
consummated on the Distribution Date, the parties shall
cooperate to effect such transfers as promptly following the
Distribution Date as shall be practicable. Nothing herein
shall be deemed to require the transfer of any Assets or the
assumption of any Liabilities which by their terms or
operation of law cannot be transferred or assumed; provided,
however, that the Company and New Xxxxxx and their respective
subsidiaries shall cooperate to seek to obtain any necessary
consents or approvals for the transfer of all Assets and
Liabilities contemplated to be transferred pursuant to this
Article II. In the event that any such transfer of Assets or
Liabilities has not been consummated, effective as of and
after the Distribution Date, the party retaining such Asset or
Liability shall thereafter hold such Asset in trust for the
use and benefit of the party entitled thereto (at the expense
of the party entitled thereto) and retain such Liability for
the account of the party by whom such Liability is to be
assumed pursuant hereto, and take such other action as may be
reasonably requested by the party to which such Asset is to be
transferred, or by whom such Liability is to be assumed, as
the case may be, in order to place such party, insofar as
reasonably possible, in the same position as would have
existed had such Asset or Liability been transferred as
contemplated hereby. As and when any such Asset or Liability
becomes transferable, such transfer shall be effected
forthwith. The parties agree that, as of the Distribution
Date, each party hereto shall be deemed to have acquired
complete and sole beneficial ownership over all of the Assets,
together with all rights, powers and privileges incident
thereto, and shall be deemed to have assumed in accordance
with the terms of this Agreement all of the Liabilities, and
all duties, obligations and responsibilities incident thereto,
which such party is entitled to acquire or required to assume
pursuant to the terms of this Agreement.
Section 2.4 No Representations or Warranties;
Consents. Except as otherwise contemplated in Section 2.06 or
in connection with any Conveyancing and Assumption Instruments
related to real estate, as to which the Company shall transfer
to New Xxxxxx with "special warranty" or equivalent deeds,
each of the parties hereto understands and agrees that no
party hereto is, in this Agreement or in any other agreement
or document contemplated by this Agreement or otherwise,
representing or warranting in any way (i) as to the value or
freedom from encumbrance of, or any other matter concerning,
any Assets of such party or (ii) as to the legal sufficiency
to convey title to any Asset of the execution, delivery and
filing of this Agreement or any Ancillary Agreement,
including, without limitation, any Conveyancing and Assumption
Instruments. It is also agreed and understood that all Assets
either transferred to or retained by the parties, as the case
may be, shall be "as is, where is" and that the party to which
such Assets are to be transferred hereunder shall bear the
economic and legal risk that any conveyances of such Assets
shall prove to be insufficient or that such party's or any of
its subsidiaries' title to any such Assets shall be other than
good and marketable and free from encumbrances. The parties
shall use their best efforts to obtain all consents and
approvals, to enter into all amendatory agreements and to make
all filings and applications which may be required for the
consummation of the transactions contemplated by this
Agreement, including, without limitation, all applicable
regulatory filings or consents under federal, state or foreign
environmental laws.
Section 2.5 Assumption and Satisfaction of New
Xxxxxx Liabilities; Retention of Safety Liabilities. Except
as set forth in the Benefits Agreement or the Tax Sharing
Agreement, effective as of and after the Distribution Date,
(a) New Xxxxxx shall, or shall cause its subsidiaries to,
assume, pay, perform, and discharge in due course all of the
New Xxxxxx Liabilities and (b) Safety shall, or shall cause
its subsidiaries to, pay, perform and discharge in due course
all of the Safety Liabilities.
Section 2.6 Financial Representations and
Warranties. New Xxxxxx hereby represents and warrants to the
Company that:
(a) Safety Assets. The Safety Assets as of the
Distribution Date shall include all Assets then owned or held
by the Company and its subsidiaries which are exclusively
used in the operation of the Safety Business as such business
is conducted as of such date, including cash and cash
equivalents as provided in clauses (g) and (h) of the
definition of Safety Assets.
(b) Financial Liabilities. The interest-bearing
indebtedness (excluding hedging or similar contracts and
letters or lines of credit in the ordinary course) of the
Safety Business as of the Distribution Date will not exceed
$750,000,000 plus the outstanding amount of the municipal
financing, not to exceed $1,100,000.
The representations contained in this Section 2.06 shall
survive the Distribution Date until March 31, 1998.
Section 2.7 Conveyancing and Assumption
Instruments. In connection with the transfers of Assets other
than capital stock and the assumptions of Liabilities
contemplated by this Agreement, the parties shall execute or
cause to be executed by the appropriate entities the
Conveyancing and Assumption Instruments in such forms as the
parties shall reasonably agree, including the transfer of real
property with special warranty or equivalent deeds. The
transfer of capital stock shall be effected by means of
delivery of stock certificates and executed stock powers and
notation in the stock record books of the corporation or other
legal entities involved and, to the extent required by
applicable law, by notation on public registries.
Section 2.8 Certificate of Incorporation; By-laws;
Share Purchase Rights Plan. Prior to the Distribution Date,
the Company and New Xxxxxx shall take all action necessary so
that, at the Distribution Date, the New Xxxxxx Charter, the
New Xxxxxx By-laws and the Rights Agreement shall be in
effect, with such changes as New Xxxxxx may approve.
Section 2.9 New Xxxxxx Capitalization. Prior to
the Distribution Date, the Company and New Xxxxxx shall take
all steps necessary to increase the outstanding shares of New
Xxxxxx Common Stock so that, except as otherwise contemplated
by this Agreement or the Benefits Agreement, immediately prior
to the Distribution Date the number of shares of New Xxxxxx
Common Stock outstanding and held by the Company shall equal
the number of shares of Company Common Stock outstanding on
the Distribution Record Date.
Section 2.10 Certain Pre-Distribution Transactions.
(a) Prior to the Distribution, the Company shall use its
reasonable best efforts to form a registered German limited
liability corporation (GmbH) ("Safety GmbH"). Prior to the
Distribution, Safety GmbH shall purchase or assume, and the
Company shall cause Xxxxxx International GmbH ("Xxxxxx GmbH"),
a limited liability corporation under the laws of Germany, to
sell or assign, the Safety Assets and Safety Liabilities owned
or held by Xxxxxx GmbH for the fair market value thereof,
which amount shall be determined by mutual agreement of the
Company and New Xxxxxx. The Safety Supplemental Distribution
shall be reduced by the amount of any such cash payment, with
any such cash payment in excess of such amount to be credited
against the New Xxxxxx Capital Contribution.
(b) Prior to the Distribution Date, Xxxxxx
Manufacturing B.V., a limited liability corporation under the
laws of the Netherlands ("Safety B.V."), shall repay in cash
intercompany indebtedness owed by Safety B.V. to each of
Xxxxxx International B.V. and Xxxxxx Service B.V. ("Xxxxxx
B.V."), each a limited liability corporation under the laws of
the Netherlands, with such repayment funded by an intercompany
loan from the Safety Business pursuant to its borrowing under
the Safety Credit Agreement. After such repayment and prior
to the Distribution, Xxxxxx B.V. shall transfer to the Company
all of the outstanding capital stock of Safety B.V. as a
distribution in respect of the shares of Xxxxxx B.V. held by
the Company. Any such cash payments by Safety B.V. to repay
such intercompany indebtedness, up to $51,648,000
(representing the amount of such intercompany indebtedness as
of June 30, 1996), shall be credited against the New Xxxxxx
Capital Contribution.
ARTICLE III
THE DISTRIBUTION
Section 3.1 Cooperation Prior to the Distribution.
Subject to the terms of the Combination Agreement, the Company
and New Xxxxxx shall take the following actions:
(a) the Company and New Xxxxxx shall prepare, and
the Company shall mail to the holders of shares of
Company Common Stock as of the Special Meeting Record
Date, the Proxy Statement, which shall set forth
appropriate disclosure concerning Newco, Autoliv, the
Company, New Xxxxxx, Safety, the Merger, the
Distribution, the Transactions and other matters. The
Company and New Xxxxxx shall also prepare, and New Xxxxxx
shall file with the Commission, the Form S-4, which
shall include the Proxy Statement. The Company and New
Xxxxxx shall use their best efforts to cause the Form S-4
to become effective under the Securities Act;
(b) the Company and New Xxxxxx shall cooperate in
preparing, filing with the Commission and causing to
become effective any registration statements or
amendments thereof which are appropriate to reflect the
establishment of, or amendments to, any employee benefit
and other plans contemplated by the Combination
Agreement, the Benefits Agreement or this Agreement;
(c) the Company and New Xxxxxx shall take all such
action as may be necessary or appropriate under the
securities or blue sky laws of states or other political
subdivisions of the United States in connection with the
transactions contemplated by this Agreement and the
Ancillary Agreements;
(d) the Company and New Xxxxxx shall prepare, and
New Xxxxxx shall file and seek to make effective, subject
to official notice of issuance, an application to permit
the listing of New Xxxxxx Common Stock on the NYSE; and
(e) the Company and New Xxxxxx shall use their best
efforts to obtain the rulings contemplated by the Ruling
Request in form and substance satisfactory to the Company
Board as advised by counsel.
Section 3.2 Company Board Action; Distribution
Procedures. Subject to the terms of the Combination
Agreement, and the satisfaction or waiver of the conditions
set forth in Section 3.03 hereof, the Company Board shall, in
its discretion, establish the Distribution Record Date and the
Distribution Date and any appropriate procedures in connection
with the Distribution. Prior to the Distribution Date, the
Company shall enter into an agreement with the Agent providing
for, among other things, the payment of the Distribution to
the holders of Company Common Stock in accordance with this
Article III.
Section 3.3 Conditions Precedent to the
Distribution. In no event shall the Distribution occur (a) if
at the Distribution Date the Ruling Request shall not have
been granted in form and substance satisfactory to the Company
in its sole discretion and be in full force and effect, or (b)
prior to such time as the following conditions shall have been
satisfied or, to the extent permitted, waived:
(i) all third party consents and governmental
approvals required in connection with the transactions
contemplated hereby shall have been received, except
where the failure to obtain such consents or approvals
would not have a material adverse effect on either (i)
the ability of the parties to consummate the transactions
contemplated by this Agreement or (ii) the business,
financial condition or results of operations of Safety or
New Xxxxxx;
(ii) the Distribution, the Combination Agreement and
the related transactions (including the Merger) shall
have been approved by the holders of a majority of the
outstanding shares of Company Common Stock at the Special
Meeting;
(iii) the transactions contemplated by Sections
2.01, 2.02, 2.05, 2.08, 2.09 and 2.10 shall have been
consummated in all material respects, to the extent
required to be consummated prior to the Distribution;
(iv) the New Xxxxxx Common Stock shall have been
authorized for listing on the NYSE, subject to official
notice of issuance;
(v) the New Xxxxxx Board, composed as contemplated
by Section 6.01, shall have been elected by the Company,
as sole stockholder of New Xxxxxx;
(vi) the Form S-4 (to the extent required) shall
have been declared effective under the Securities Act (or
the Form 10 shall have been declared effective under the
Exchange Act) by the Commission and no stop order
suspending the effectiveness of the Form S-4 (or the Form
10) shall have been issued by the Commission and, to the
knowledge of the Company and New Xxxxxx, no proceeding
for that purpose shall have been instituted by the
Commission;
(vii) the applicable parties shall have entered
into each of the Ancillary Agreements;
(viii) each condition to the Closing of the
Merger and the Exchange Offer set forth in Article IX of
the Combination Agreement, other than with respect to
consummation of the Distribution and the transactions set
forth in Article II hereof, shall have been fulfilled or
waived by the party for whose benefit such condition
exists;
(ix) the Company Board shall be reasonably satisfied
that, after giving effect to the transactions set forth
in Article II hereof, (A) the Company will not be
insolvent and will not have unreasonably small capital
with which to engage in its businesses and (B) the
Company's surplus would be sufficient to permit the
Distribution without violation of Section 23-1-28-3 of
the Indiana Business Corporation Law; and
(x) the representations and warranties contained in
Section 2.06 shall be true and correct.
Neither the Company nor New Xxxxxx shall waive any condition
contained in this Section 3.03 without the consent of Autoliv,
which consent shall not be unreasonably withheld.
Section 3.4 The Distribution. On the Distribution
Date, subject to the conditions and rights of termination set
forth in this Agreement, the Company shall deliver to the
Agent a share certificate representing all of the then
outstanding shares of New Xxxxxx Common Stock owned by the
Company and shall instruct the Agent to distribute, on or as
soon as practicable following the Distribution Date, such New
Xxxxxx Common Stock to holders of record of shares of Company
Common Stock on the Distribution Record Date. New Xxxxxx
agrees to provide all share certificates and any information
that the Agent shall require in order to effect the
Distribution. All shares of New Xxxxxx Common Stock issued in
the Distribution shall be duly authorized, validly issued,
fully paid and nonassessable.
ARTICLE IV
SERVICES
Section 4.1 Provision of Management Services. From
the Distribution Date through not later than the first
anniversary thereof (the "Services Period"), New Xxxxxx shall
make available to Safety the following services (collectively,
the "Services"):
(a) Legal, tax, accounting, patent and other
intellectual property, payroll and payroll tax, real
estate, human resources (including pension
administration), environmental, corporate secretarial,
insurance, treasury and management information services,
in each case including reasonable access to New Xxxxxx'x
systems and resources; and
(b) Such other personnel of New Xxxxxx whose
services the parties agree would be necessary and
desirable to permit Safety and its subsidiaries to
operate its business in the ordinary course and to
facilitate the orderly transition of Safety and Newco to
an independent and self-sufficient company in a
reasonable and timely manner.
It is understood that Services provided to Safety
and its subsidiaries hereunder will be performed by those
employees of New Xxxxxx who perform equivalent services for
New Xxxxxx in the normal course of their employment.
Accordingly, New Xxxxxx shall not be obligated to make
available any services to the extent that doing so would
unreasonably interfere with the performance by any New Xxxxxx
Employee of services for New Xxxxxx or otherwise cause
unreasonable burden to New Xxxxxx, in light of the purposes of
this Agreement. Notwithstanding the other provisions of this
Article IV to the contrary, Safety shall be obligated to
obtain from New Xxxxxx, and New Xxxxxx shall agree to provide
to Safety, Services related to the preparation, filing and
auditing of tax returns for periods ended on or before the
Distribution Date, subject to the provisions of the Tax
Sharing Agreement.
Section 4.2 Fee for Services; Expenses. Subject to
applicable law, Safety shall pay for all Services provided
under Section 4.01 of this Agreement (including tax, audit,
employee benefits and other Services contemplated to be
provided by the Tax Sharing Agreement or the Benefits
Agreement) pursuant to the formula set forth on Schedule 4.02
or as otherwise agreed by the parties, together with
reimbursement of out-of-pocket expenses. Such payments shall
be due and payable by Safety 30 days after receipt of invoices
therefor.
Section 4.3 Independent Contractor Status. New
Xxxxxx shall render and perform the Services as an independent
contractor in accordance with its own standards, subject to
its compliance with the provisions of this Agreement and with
all applicable laws, ordinances and regulations.
Section 4.4 Disclaimer; Limited Liability.
(a) New Xxxxxx makes no express or implied
representations, warranties, or guarantees relating to the
Services or the quality or results of Services to be performed
under this Agreement; provided, however, that New Xxxxxx shall
use reasonable efforts to provide the Services in a manner at
least comparable to the quality of such services provided to
the Safety Business as of and prior to the date hereof in all
material respects.
(b) New Xxxxxx shall not be liable to Safety for
any expense, claim (for malpractice or otherwise), loss or
damage, including, without limitation, indirect, special,
consequential or exemplary damages in performing the Services
pursuant to this Article IV; provided, however, that this
Section 4.04(b) shall not apply to any expense, claim (for
malpractice or otherwise), loss or damage resulting from the
failure of New Xxxxxx to comply with the covenant contained in
the proviso in paragraph (a) above.
(c) New Xxxxxx shall not be liable to Safety for
the consequences of any failure or delay to perform any of its
obligations under this Agreement other than for damages
arising from New Xxxxxx'x willful or reckless misconduct;
provided, that it shall provide reasonably prompt notice to
Safety of such inability and the reasons therefor.
ARTICLE V
INDEMNIFICATION
Section 5.1 Indemnification by Safety.
(a) Except with respect to the matters governed by
the indemnification provisions set forth in the Tax Sharing
Agreement (which shall be governed by those provisions),
Safety shall indemnify, defend and hold harmless New Xxxxxx,
each of its directors, officers, employees and agents and each
Affiliate of New Xxxxxx and each of the heirs, executors,
successors and assigns of any of the foregoing (the "New
Xxxxxx Indemnitees") from and against the Safety Liabilities
and any and all losses, claims and Liabilities (including,
without limitation, the costs and expenses of any and all
Actions, threatened Actions, demands, assessments, judgments,
settlements and compromises relating thereto and attorneys'
fees and any and all expenses whatsoever reasonably incurred
in investigating, preparing or defending against any such
Actions or threatened Actions) (collectively, "Indemnifiable
Losses" and, individually, an "Indemnifiable Loss") of the New
Xxxxxx Indemnitees arising out of or due to the failure or
alleged failure of Safety or any of its Affiliates to pay,
perform or otherwise discharge in due course any of the Safety
Liabilities.
(b) Safety shall indemnify, defend and hold
harmless each of the New Xxxxxx Indemnitees from and against
any and all Indemnifiable Losses of the New Xxxxxx Indemnitees
arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any portion
of the Proxy Statement (including any preliminary filings
related thereto or any amendments thereof) to be supplied by,
or containing information relating to, Autoliv or its
subsidiaries, or the omission or alleged omission to state in
any such portion a material fact required to be stated therein
or necessary to make the statements made therein, in light of
the circumstances under which they were made, not misleading.
Section 5.2 Indemnification by New Xxxxxx.
(a) Except with respect to the matters governed by
the indemnification provisions set forth in the Tax Sharing
Agreement (which shall be governed by those provisions), New
Xxxxxx shall indemnify, defend and hold harmless each of the
Company and Newco, each of the directors, officers, employees
and agents of each of the Company and Newco and each Affiliate
of each of the Company and Newco and each of the heirs,
executors, successors and assigns of any of the foregoing (the
"Safety Indemnitees") from and against the New Xxxxxx
Liabilities and any and all Indemnifiable Losses of the Safety
Indemnitees arising out of or due to the failure or alleged
failure of New Xxxxxx or any of its Affiliates to pay, perform
or otherwise discharge in due course any of the New Xxxxxx
Liabilities.
(b) New Xxxxxx shall indemnify, defend and hold
harmless each of the Safety Indemnitees from and against any
and all Indemnifiable Losses of the Safety Indemnitees arising
out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any portion of the
Proxy Statement (including any preliminary filing related
thereto or any amendments thereof) to be supplied by, or
containing information relating to, any of New Xxxxxx, the New
Xxxxxx Subsidiaries or Safety, or the omission or alleged
omission to state in any such portion a material fact required
to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were
made, not misleading.
Section 5.3 Limitations on Indemnification
Obligations.
(a) Insurance Proceeds. The amount which any party
(an "Indemnifying Party") is or may be required to pay to any
other party (an "Indemnitee") pursuant to Section 5.01 or
Section 5.02 shall be reduced (including, without limitation,
retroactively) by any Insurance Proceeds or other amounts
actually recovered by or on behalf of such Indemnitee, in
reduction of the related Indemnifiable Loss. If an Indemnitee
shall have received the payment required by this Agreement
from an Indemnifying Party in respect of an Indemnifiable Loss
and shall subsequently actually receive Insurance Proceeds or
other amounts in respect of such Indemnifiable Loss, then such
Indemnitee shall pay to such Indemnifying Party a sum equal to
the amount of such Insurance Proceeds or other amounts
actually received.
(b) Foreign Currency Adjustments. In the event
that any indemnification payment required to be made hereunder
or under any Ancillary Agreement shall be denominated in a
currency other than United States dollars, the amount of such
payment shall be translated into United States dollars using
the Foreign Exchange Rate for such currency determined in
accordance with the following rules:
(i) with respect to an Indemnifiable Loss arising
from payment by a financial institution under a
guarantee, comfort letter, letter of credit, foreign
exchange contract or similar instrument, the Foreign
Exchange Rate for such currency shall be determined as of
the date on which such financial institution shall have
been reimbursed;
(ii) with respect to an Indemnifiable Loss covered
by insurance, the Foreign Exchange Rate for such currency
shall be the Foreign Exchange Rate employed by the
insurance company providing such insurance in settling
such Indemnifiable Loss with the Indemnifying Party; and
(iii) with respect to an Indemnifiable Loss not
covered by clause (i) or (ii) above, the indemnification
payment shall be paid in the applicable local currency
without any translation into United States dollars.
Section 5.4 Procedure for Indemnification.
(a) If an Indemnitee shall receive notice or
otherwise learn of the assertion by a person (including,
without limitation, any governmental entity) who is not a
party to this Agreement or to any of the Ancillary Agreements
of any claim or of the commencement by any such person of any
Action (a "Third Party Claim") with respect to which an
Indemnifying Party may be obligated to provide indemnification
pursuant to this Agreement, such Indemnitee shall give such
Indemnifying Party written notice thereof promptly after
becoming aware of such Third Party Claim; provided, that the
failure of any Indemnitee to give notice as provided in this
Section 5.04 (the "Notice") shall not relieve the related
Indemnifying Party of its obligations under this Article V,
except to the extent that such Indemnifying Party is
prejudiced by such failure to give Notice. Such Notice shall
describe the Third Party Claim in reasonable detail, and shall
indicate the amount (to the extent practicable) of the
Indemnifiable Loss that has been or may be sustained by such
Indemnitee.
(b) An Indemnifying Party may elect to defend or to
seek to settle or compromise, at such Indemnifying Party's own
expense and by such Indemnifying Party's own counsel, any
Third Party Claim by delivering to the Indemnitee, within 30
days of receipt of Notice (or sooner (but in no event less
than 10 days after the receipt of Notice), if the nature of
such Third Party Claim so requires), the written
acknowledgment (the "Acknowledgment") of its indemnification
obligation under this Agreement with respect to the Third
Party Claim. The Acknowledgment may specify reservations and
exceptions to the extent reasonably acceptable to the
Indemnitee or consistent with the terms of this Agreement and
the Ancillary Agreements, and such Indemnitee shall cooperate
in the defense or settlement or compromise of such Third Party
Claim. If the Indemnifying Party elects to assume
responsibility for defending such Third Party Claim, the
Indemnifying Party shall also notify the claimant or plaintiff
asserting such Third Party Claim of such election and request
that all communications in relation to the Third Party Claim
be made, delivered or addressed to the Indemnifying Party,
instead of the Indemnitee. If it is later determined that the
defendants to the Third Party Claim include both the
Indemnifying Party and the Indemnitee, the Indemnitee shall
thereupon notify the claimant or plaintiff asserting such
Third Party Claim that all communications in relation to the
Third Party Claim should also be made, delivered or addressed
to the Indemnitee. 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 V for any legal or other
expenses (except expenses approved in advance by the
Indemnifying Party) subsequently incurred by such Indemnitee
in connection with the defense thereof; provided, that, if the
defendants in any such claim include both the Indemnifying
Party and one or more Indemnitees and in such Indemnitees'
reasonable judgment a conflict of interest between such
Indemnitees and such Indemnifying Party exists in respect of
such claim or if the Indemnifying Party shall assume
responsibility for such claim with such reservations or
exceptions to the extent reasonably acceptable to the
Indemnitee or consistent with the terms of this Agreement and
the Ancillary Agreements, such Indemnitees shall have the
right to employ separate counsel to represent such Indemnitees
and in that event the reasonable fees and expenses of such
separate counsel (but not more than one separate counsel
reasonably satisfactory to the Indemnifying Party) shall be
paid by such Indemnifying Party.
If an Indemnifying Party elects not to assume
responsibility for defending a Third Party Claim (which
election may be made only in the event of a good faith dispute
that a claim was inappropriately tendered under Section 5.01
or 5.02, as the case may be) such Indemnitee may defend or
(subject to the following sentence) seek to compromise or
settle such Third Party Claim. Notwithstanding the foregoing,
an Indemnitee may not settle or compromise any claim without
prior written notice to the Indemnifying Party, which shall
have the option within ten days following the receipt of such
notice (i) to disapprove the settlement and assume all past
and future responsibility for the claim, including reimbursing
the Indemnitee for prior expenditures in connection with the
claim, or (ii) to disapprove the settlement and continue to
refrain from participation in the defense of the claim, in
which event the Indemnifying Party shall have no further right
to contest the amount or reasonableness of the settlement if
the Indemnitee elects to proceed therewith, or (iii) to
approve the amount of the settlement, reserving the
Indemnifying Party's right to contest the Indemnitee's right
to indemnity, or (iv) to approve and agree to pay the
settlement. In the event the Indemnifying Party makes no
response to such written notice from the Indemnitee, the
Indemnifying Party shall be deemed to have elected option
(ii).
(c) If an Indemnifying Party chooses to defend or
to seek to compromise any Third Party Claim, the related
Indemnitee shall make available to such Indemnifying Party any
personnel or any books, records or other documents within its
control or which it otherwise has the ability to make
available that are necessary or appropriate for such defense.
(d) Notwithstanding anything else in this Section
5.04 to the contrary, an Indemnifying Party shall not settle
or compromise any Third Party Claim unless such settlement or
compromise contemplates as an unconditional term thereof the
giving by the claimant or plaintiff asserting such Third Party
Claim to the Indemnitee of a written release from all
liability in respect of such Third Party Claim. In the event
the Indemnitee shall notify the Indemnifying Party in writing
that such Indemnitee declines to accept any such settlement or
compromise, such Indemnitee may continue to contest such Third
Party Claim, free of any participation by such Indemnifying
Party, at such Indemnitee's sole expense. In such event, the
obligation of such Indemnifying Party to such Indemnitee with
respect to such Third Party Claim shall be equal to (i) the
costs and expenses of such Indemnitee prior to the date such
Indemnifying Party notifies such Indemnitee of the offer to
settle or compromise (to the extent such costs and expenses
are otherwise indemnifiable hereunder) plus (ii) the lesser of
(A) the amount of any offer of settlement or compromise which
such Indemnitee declined to accept and (B) the actual out-of-
pocket amount such Indemnitee is obligated to pay subsequent
to such date as a result of such Indemnitee's continuing to
pursue such Third Party Claim.
(e) Any claim on account of an Indemnifiable Loss
which does not result from a Third Party Claim shall be
asserted by written notice given by the Indemnitee to the
related Indemnifying Party. Such Indemnifying Party shall
have a period of 30 days after the receipt of such notice
within which to respond thereto. If such Indemnifying Party
does not respond within such 30-day period, such Indemnifying
Party shall be deemed to have refused to accept responsibility
to make payment. If such Indemnifying Party does not respond
within such 30-day period or rejects such claim in whole or in
part, such Indemnitee shall be free to pursue such remedies as
may be available to such party, under applicable law or under
this Agreement.
(f) In addition to any adjustments required
pursuant to Section 5.03, if the amount of any Indemnifiable
Loss shall, at any time subsequent to the payment required by
this Agreement, be reduced by recovery, settlement or
otherwise, the amount of such reduction, less any expenses
incurred in connection therewith, shall promptly be repaid by
the Indemnitee to the Indemnifying Party.
(g) In the event of payment by an Indemnifying
Party to any Indemnitee in connection with any Third Party
Claim, such Indemnifying Party shall be subrogated to and
shall stand in the place of such Indemnitee as to any events
or circumstances in respect of which such Indemnitee may have
any right or claim relating to such Third Party Claim against
any claimant or plaintiff asserting such Third Party Claim.
Such Indemnitee shall cooperate with such Indemnifying Party
in a reasonable manner, and at the cost and expense of such
Indemnifying Party, in prosecuting any subrogated right or
claim.
(h) In the event Safety shall determine in its
reasonable judgment that it is likely that it will be named as
a potentially responsible party in any Superfund or other
environmental litigation or investigation with respect to a
New Xxxxxx Liability, if requested to do so by Safety, New
Xxxxxx shall notify the potential claimant(s) in such
potential litigation of its indemnification obligation in
favor of Safety under this Agreement.
Section 5.5 Remedies Cumulative. The remedies
provided in this Article V shall be cumulative and shall not
preclude assertion by any Indemnitee of any other rights or
the seeking of any and all other remedies against any
Indemnifying Party.
Section 5.6 Survival of Indemnities. The
obligations of New Xxxxxx and the Company under this Article
V, shall survive the Distribution Date and the sale or other
transfer by it of any Assets or businesses or the assignment
by it of any Liabilities, with respect to any Indemnifiable
Loss of the other related to such Assets, businesses or
Liabilities. Such obligations shall be binding upon the
successors and assigns of the Safety Business or the New
Xxxxxx Businesses, as the case may be, and upon any transferee
of all or substantially all of the assets (in one transaction
or a series of related transactions) of the Safety Business or
the New Xxxxxx Businesses, which transferee shall assume in
writing such obligations. If 25% or more of the Assets of the
Safety Business or the New Xxxxxx Businesses, as the case may
be, are spun off to the respective stockholders of Safety or
New Xxxxxx, such spun-off entity shall assume in writing a
proportionate share of the indemnity obligation contained
herein of Safety or New Xxxxxx, as the case may be, based upon
the relative assets of such spun-off entity and the remaining
assets in its parent, and thereafter Safety or New Xxxxxx, as
the case may be, shall be released from the proportionate
share so assumed. The assumption of obligations of a
transferee or spun-off entity shall not apply with respect to
any transaction consummated after the twentieth anniversary of
this Agreement.
Section 5.7 Right of Inquiry.
(a) In the event of a material adverse change after
the Distribution Date in the financial condition of New Xxxxxx
or Safety, which change creates a substantial likelihood that
New Xxxxxx or Safety, as the case may be, will not be able to
satisfy or otherwise settle, when due, its indemnification
obligations to Safety or New Xxxxxx, respectively, under this
Article V, Safety or New Xxxxxx, as the case may be, shall
have the right, subject to entering into an agreement with the
other party to preserve confidentiality and any applicable
privilege for the benefit of such other party, upon
consultation with such party, to have limited access on
reasonable prior notice to such party's personnel in order to
monitor the status of pending and anticipated litigation and
governmental investigations or proceedings for which Safety or
New Xxxxxx, as the case may be, could be contingently liable.
Such right of inquiry shall terminate at such time as there is
no longer a substantial likelihood that the applicable party
will not be able to satisfy its indemnification obligations
under this Agreement and the Ancillary Agreements. The
reasonable attorneys' fees and out-of-pocket costs incurred in
connection with a party's inquiry pursuant to this Section
5.07 shall be treated as Indemnifiable Losses pursuant to this
Article V.
(b) In addition to the provisions of paragraph (a)
above, each of Safety and New Xxxxxx shall have the right on
an annual basis and subject to reasonable prior notice to
meet with the General Counsel of the other party (or such
corporate officer or employee designated by such General
Counsel) and receive an oral report, in a forum in which the
requesting party may ask reasonable questions regarding the
status of material pending and threatened litigation and
material governmental investigations or proceedings for which
the requesting party may be contingently liable. For the
avoidance of doubt, no such right shall require Safety or New
Xxxxxx, as the case may be, to (i) provide non-public written
information, (ii) provide confidential information, (iii)
jeopardize the benefit of any applicable privilege or (iv)
engage in lengthy or burdensome meetings or discussions. In
addition, each of Safety and New Xxxxxx shall have the further
right to request one additional meeting per year in connection
with the public disclosure by the other party during such year
of a material adverse development in any pending or threatened
litigation or governmental investigation or proceeding for
which the requesting party may be contingently liable, such
meeting otherwise to be on the same terms as set forth in this
Section 5.07(b). Each of Safety and New Xxxxxx shall bear its
own cost of attendance at such meetings, which shall be held
at the corporate offices of the non-requesting party.
ARTICLE VI
CERTAIN ADDITIONAL MATTERS AND COVENANTS
Section 6.1 The New Xxxxxx Board. New Xxxxxx and
the Company shall take all actions which may be required to
elect or otherwise appoint, as of the Distribution Date, each
of the directors of the Company Board as a director of New
Xxxxxx.
Section 6.2 Resignations; Safety Board.
(a) The Company shall cause all of its directors
and New Xxxxxx Employees to resign, effective as of the
Distribution Date, from all boards of directors or similar
governing bodies of Safety or the Retained Subsidiaries on
which they serve, and from all positions as officers of Safety
or the Retained Subsidiaries in which they serve. The Company
shall cause all of the Safety Employees to resign from all
boards of directors or similar governing bodies of New Xxxxxx
or any New Xxxxxx Subsidiary on which they serve, and from all
positions as officers of New Xxxxxx or any New Xxxxxx
Subsidiary in which they serve.
(b) The Company shall take all actions which may be
required to elect or otherwise appoint to the Company Board
and the board of directors of each Remaining Subsidiary, as of
the Effective Time, such officers of Newco or the Company as
the Company may designate prior to the Effective Time.
Section 6.3 Certain Post-Distribution Transactions.
(a) New Xxxxxx. (i) New Xxxxxx shall, and shall
cause each New Xxxxxx Subsidiary to, comply with each
representation and statement made, or to be made, to any
taxing authority in connection with any ruling obtained, or to
be obtained, by the Company and New Xxxxxx acting together,
from any such taxing authority with respect to any transaction
contemplated by this Agreement.
(ii) Neither New Xxxxxx nor any New Xxxxxx
Subsidiary shall for a period of one year following the
Distribution Date engage or agree to engage in any of the
following transactions, unless (X) an opinion in form and
substance reasonably satisfactory to Safety is obtained from
nationally recognized tax counsel to New Xxxxxx and/or (Y) a
supplemental ruling is obtained from the IRS, in either case
to the effect that such transaction(s) would not adversely
affect the tax consequences of the contributions, transfers,
assumptions, Merger and Distribution described in Articles II
and III of this Agreement to the Company, any Retained
Subsidiary, or any shareholder or former shareholder of the
Company. The transactions subject to this provision are: (A)
ceasing to engage in an active trade or business within the
meaning of Section 355(b) of the Code, whether by means of a
disposition or distribution of stock or assets, or otherwise;
(B) repurchasing more than 20% of the New Xxxxxx Common Stock
outstanding immediately after the Distribution; (C) issuing an
amount of New Xxxxxx capital stock that would cause the
Distribution to fail to satisfy the requirement that the
Company have been in control of New Xxxxxx within the meaning
of Section 368(c) of the Code immediately prior to the
Distribution or that the New Xxxxxx shareholders be in control
of New Xxxxxx immediately after the Distribution within the
meaning of Section 368(a)(1)(D) of the Code; or (D)
liquidating or merging with or into any other entity
(including a New Xxxxxx Subsidiary). New Xxxxxx hereby
represents and warrants that neither New Xxxxxx nor any New
Xxxxxx Subsidiary has any plan or intention to undertake any
of the transactions set forth in (A), (B), (C), or (D) above.
Notwithstanding the foregoing, any act or transaction that is
consistent with the representations contained in (x) the
request for rulings and any supplement thereto filed with the
IRS in connection with the Distribution or (y) the tax
certificates described in Section 9.1(g)(ii) of the
Combination Agreement relating to the opinions of counsel to
be rendered in connection with the Distribution and the
Merger, shall not be subject to the provisions of this Section
6.03(a)(ii).
(b) The Company. The Company shall, and shall
cause each Remaining Subsidiary to, comply with each
representation and statement made, or to be made, to any
taxing authority in connection with any ruling obtained, or to
be obtained, by the Company and New Xxxxxx acting together,
from any such taxing authority with respect to any transaction
contemplated by this Agreement.
Section 6.4 Use of Names.
(a) Any existing printed material showing any
affiliation or connection of Safety or the Retained
Subsidiaries with New Xxxxxx, including any names using
"Xxxxxx" or a derivative thereof, may be used by Safety or the
Retained Subsidiaries only for a period ending eight months
after the Distribution Date. On and after the Distribution
Date, Safety shall not otherwise represent to third parties
that it is presently affiliated with New Xxxxxx.
(b) From and after the Effective Time, New Xxxxxx
shall have all rights in and use of the names "Xxxxxx" and
"Xxxxxx International" and all other names, marks, scripts,
type fonts, forms, styles, logos, designs, devices, trade
dress, symbols and other forms of trade identity constituting
New Xxxxxx Assets (collectively, the "Xxxxxx Name Rights"),
and all derivatives thereof. The Company acknowledges that
New Xxxxxx has all such rights and that the Company will not
use the New Xxxxxx Rights, or names, marks or other material
confusingly similar therewith except as permitted by this
Agreement. Prior to or promptly after the Effective Time, the
Company shall change its name and the name of any Subsidiary
or other person under its control to eliminate therefrom the
names "Xxxxxx" and "Xxxxxx International" and all derivatives
thereof. For a period of eight months after the Distribution
Date, the Company may use the names "Xxxxxx" and "Xxxxxx
International" only to the extent that it is not practical to
change such names or as permitted by Section 6.04(a),
including in connection with any signs, letterhead, business
cards, invoices or other printed forms, telephone directory
listings or promotional material, and products in inventory as
of the Distribution Date and shall cause the Company and its
subsidiaries to maintain the same standards of quality with
respect to such names, logos and marks as previously
exercised.
(c) Nothing in this Section 6.04 shall obligate
Safety to replace any tooling or other equipment used in the
manufacturing process, provided that Safety uses all
reasonable efforts to comply with the requirements of
paragraphs (a) and (b) with respect to such tooling and
equipment by, for example, affixing labels thereto or
providing other appropriate signage.
(d) As of the date of this Agreement, New Xxxxxx
intends to use "Xxxxxx International, Inc." as its corporate
name following the Effective Time, although nothing herein
shall preclude New Xxxxxx from changing such name in the
future.
Section 6.5 Restrictions on Hiring of Other Party's
Employees. For a period of two years after the Distribution
Date, each of Safety and New Xxxxxx agrees that, without the
prior written consent of the other, it will not, and it will
cause its Affiliates not to, solicit the employment of or
employ any New Xxxxxx Employee or Safety Employee,
respectively.
Section 6.6 Further Assurances; Cooperation. Each
of the parties hereto promptly shall execute such documents
and other instruments and take such further actions as may be
reasonably required or desirable to carry out the provisions
hereof and to consummate the transactions contemplated hereby.
The parties shall cooperate with each other in all reasonable
respects to ensure the transfer to New Xxxxxx or a New Xxxxxx
Subsidiary of the New Xxxxxx Assets, New Xxxxxx Liabilities
and the businesses related thereto, and the retention by the
Company of the Safety Business, including, without limitation,
(i) allocating rights and obligations under contracts,
agreements and other arrangements, if any, of the Company that
relate to both the Safety Business and the New Xxxxxx
Businesses, (ii) determining whether to enter into any service
or other sharing agreements on a mutually acceptable arm's-
length basis that may be necessary to assure a smooth and
orderly transition, and (iii) obtaining any reasonably
necessary or appropriate third-party consents, licenses and
permits in connection with the Distribution. In case at any
time after the Distribution Date any further action is
necessary or desirable to carry out the purposes of this
Agreement, the proper officers and directors of each party to
this Agreement shall take all such necessary or desirable
action.
Section 6.7 Guarantees.
(a) Safety and New Xxxxxx shall cooperate, and
shall cause their respective Affiliates to cooperate, to
terminate, or to cause Safety or one of its Affiliates to be
substituted in all respects for New Xxxxxx or its Affiliates
in respect of, all obligations of New Xxxxxx and its
Affiliates under any loan, financing, lease, contract, or
other obligation in existence as of the Distribution Date
pertaining to the Safety Business for which New Xxxxxx or an
Affiliate of New Xxxxxx may be liable, as guarantor, original
tenant, primary obligor or otherwise. If such a termination
or substitution is not effected by the Distribution Date, (i)
Safety shall indemnify and hold harmless the New Xxxxxx
Indemnitees for any Indemnifiable Loss arising from or
relating thereto, and (ii) without the prior written consent
of the Chief Financial Officer of New Xxxxxx, from and after
the Distribution Date, Safety shall not, and shall not permit
any of its Affiliates to, renew or extend the term of,
increase its obligations under, or transfer to a third party,
any loan, lease, contract or other obligation for which New
Xxxxxx or any of its Affiliates is or may be liable unless all
obligations of New Xxxxxx and its Affiliates with respect
thereto are thereupon terminated by documentation reasonably
satisfactory in form and substance to the Chief Financial
Officer of New Xxxxxx.
(b) Safety and New Xxxxxx shall cooperate, and
shall cause their respective Affiliates to cooperate, to
terminate, or to cause New Xxxxxx or one of its Affiliates to
be substituted in all respects for Safety and its Affiliates
in respect of, all obligations of Safety and its Affiliates
under any loan, financing, lease, contract or other obligation
in existence as of the Distribution Date pertaining to the New
Xxxxxx Businesses for which Safety or its Affiliates may be
liable, as guarantor, original tenant, primary obligor or
otherwise. If such a termination or substitution is not
effected by the Distribution Date, (i) New Xxxxxx shall
indemnify and hold harmless the Company Indemnitees for any
Indemnifiable Loss arising from or relating thereto, and (ii)
without the prior written consent of the Chief Financial
Officer of Safety or Newco, from and after the Distribution
Date, New Xxxxxx shall not, and shall not permit any of its
Affiliates to, renew or extend the term of, increase its
obligations under, or transfer to a third party, any loan,
lease, contract or other obligation for which Safety or its
Affiliates is or may be liable unless all obligations of
Safety and its Affiliates with respect thereto are thereupon
terminated by documentation reasonably satisfactory in form
and substance to the Chief Financial Officer of Safety or
Newco.
(c) Safety and New Xxxxxx shall provide Newco with
information and documentation relating to the actions to be
taken pursuant to this Section 6.07.
Section 6.8 Shared Facilities. From and after the
Distribution Date, New Xxxxxx shall have access to the
facilities specified in Schedule 6.08 on the terms set forth
thereon.
Section 6.9 Thiokol-Xxxxxx Spinoff. Safety agrees
that, at New Xxxxxx'x request and expense and subject to New
Xxxxxx'x obligation to indemnify Safety for such actions,
Safety shall act as agent for New Xxxxxx in making any claim
against Xxxxxx Thiokol, Inc. (now named Thiokol Corporation)
in connection with New Xxxxxx'x indemnification and similar
rights pursuant to the agreements entered into between Thiokol
and Xxxxxx International, Inc. in connection with the 1989
distribution of the capital stock of Xxxxxx International,
Inc. Safety shall not knowingly waive any such rights of New
Xxxxxx without New Xxxxxx'x consent. Notwithstanding the
foregoing, Safety shall not be obligated to take any actions
in furtherance of its obligations under this Section 6.09 if
Safety determines, in its reasonable judgment, that taking
such actions would entail an undue level of risk to Safety or
involve Safety in a substantial controversy or dispute.
Section 6.10 Non-Competition. (a) For a period of
four years from and after the Distribution Date, New Xxxxxx
will not engage, directly or through any subsidiary or other
entity controlled by New Xxxxxx, in the automotive safety
restraint business (as such business is conducted by Newco and
its subsidiaries immediately following the Effective Time (as
defined in the Contribution Agreement)); provided, however,
that this Section 6.10 shall not prevent New Xxxxxx from:
(i) acquiring no more than 10% of the
outstanding stock, partnership or other
equity interests in any corporation,
partnership, limited liability company or
other person or entity ("Person");
(ii) acquiring more than 10% of the outstanding
capital stock, partnership or other equity
interests in any Person for which the
annual revenues derived from the business
of such Person that competes with the
automotive safety restraint business (as
such business is conducted by Newco and
its subsidiaries immediately following the
Effective Time) are not more than 10% of
such Person's total annual revenues;
(iii) acquiring more than 50% of the outstanding
capital stock, partnership or other equity
interests in any Person (or any lesser
percentage if, pursuant to contractual or
other arrangements, New Xxxxxx has the
right to cause such Person to take the
actions specified in the following
proviso) for which the annual revenues
derived from the business of such Person
that competes with the automotive safety
restraint business (as such business is
conducted by Newco and its subsidiaries
immediately following the Effective Time)
are more than 10% (or, in the event such
revenues represent less than 10% of such
Person's total annual revenues, constitute
a stand-alone business that can be
divested without materially affecting the
remaining businesses or operations of such
Person) but less than 40% of such Person's
total annual revenues; provided, however,
that New Xxxxxx shall use all commercially
reasonable efforts to divest that portion
of such Person that competes with the
automotive safety restraint business (as
such business is conducted by Newco and
its subsidiaries immediately following the
Effective Time) on commercially reasonable
terms as soon as practicable after
acquisition of such ownership or interest;
or
(iv) engaging in any investment activities with
respect to any pension plan, trust for the
benefit of employees or retirees, employee
savings or stock ownership plan or other
employee benefit, retirement or welfare
plan or program.
(b) Notwithstanding anything to the contrary in
Section 6.10(a), for a period of ten years from and after the
Distribution Date, New Xxxxxx will not engage, directly or
through any subsidiary or other entity controlled by New
Xxxxxx, in the automotive safety restraint business using as
its trade name any name containing the words "Xxxxxx" or "MI".
ARTICLE VII
ACCESS TO INFORMATION AND SERVICES
Section 7.1 Provision of Corporate Records.
(a) New Xxxxxx Assets shall include the original
corporate minute books, stock ledgers and certificates and
corporate seals of each New Xxxxxx Subsidiary, all licenses,
leases, agreements, litigation files and filings with foreign
governments primarily relating to the New Xxxxxx Businesses
and all other such material that does not relate exclusively
to the Safety Business. Safety shall arrange as soon as
practicable following the Distribution Date for the
transportation to New Xxxxxx of existing corporate records in
its possession primarily relating to the New Xxxxxx
Businesses, except to the extent such items are already in the
possession of New Xxxxxx or a New Xxxxxx Subsidiary or
located at the Company's present principal executive offices
or on premises included in the New Xxxxxx Assets. Such
records shall be the property of New Xxxxxx, but shall be
available to Safety for review and duplication and shall
otherwise be subject to Section 7.05 of this Agreement.
(b) Safety Assets shall include the original
corporate minute books, stock ledgers and certificates and
corporate seals of the Company and the Retained Subsidiaries
and all licenses, leases, agreements, litigation files and
filings exclusively relating to the Safety Business. New
Xxxxxx shall arrange as soon as practicable following the
Distribution Date, to the extent not previously delivered in
connection with the transactions contemplated in Article II,
for the transportation to Safety of existing corporate records
(excluding accounting, tax, and financial records and original
Policies except as otherwise agreed by the parties) in its
possession or located at the Company's principal executive
offices exclusively relating to Safety and the Retained
Subsidiaries, except to the extent such items are already in
the possession of Safety. Such records shall be the property
of Safety, but shall be available to New Xxxxxx for review and
duplication and shall otherwise be subject to Section 7.05 of
this Agreement.
Section 7.2 Access to Information.
(a) From and after the Distribution Date, Safety
shall afford to New Xxxxxx and its authorized accountants,
counsel and other designated representatives reasonable access
(including using reasonable efforts to give access to persons
or firms possessing information) and duplicating rights during
normal business hours to all records, books, contracts,
instruments, computer data and other data and information
(collectively, "Information") within Safety's possession
insofar as such access is reasonably required by New Xxxxxx,
subject to appropriate restrictions for classified
information. Similarly, New Xxxxxx shall afford to Safety and
its authorized accountants, counsel and other designated
representatives reasonable access (including using reasonable
efforts to give access to persons or firms possessing
information) and duplicating rights during normal business
hours to Information within New Xxxxxx'x possession, insofar
as such access is reasonably required by Safety. Information
may be requested under this Article VII for, without
limitation, audit, accounting, claims, litigation and tax
purposes, as well as for purposes of fulfilling disclosure and
reporting obligations and for performing this Agreement and
the transactions contemplated hereby.
(b) For a period of five years following the
Distribution Date, each of New Xxxxxx and Safety shall provide
to the other, promptly following such time at which such
documents shall be filed with the Commission, all documents
which shall be filed by it or any of its subsidiaries with the
Commission pursuant to the periodic and interim reporting
requirements of the Exchange Act and the rules and regulations
of the Commission promulgated thereunder.
(c) In furtherance of the rights and obligations of
the parties set forth in subsections (a) and (b) of this
Section 7.02:
(i) Each party hereto acknowledges that (A) each of
Safety and the Retained Subsidiaries (the "Safety Group")
on the one hand, and New Xxxxxx and the New Xxxxxx
Subsidiaries (the "New Xxxxxx Group") on the other hand,
has or may obtain Information regarding a member of the
other Group, or any of its operations, employees, Assets
or Liabilities (whether in documents or stored in any
other form or known to its employees or agents) that is
or may be protected from disclosure pursuant to the
attorney-client privilege, the work product doctrine or
other applicable privileges ("Privileged Information");
(B) there are a number of actual, threatened or future
litigations, investigations, proceedings (including
arbitration proceedings), claims or other legal matters
that have been or may be asserted by or against, or
otherwise affect, each or both of Safety and New Xxxxxx
(or members of either Group) ("Litigation Matters"); (C)
Safety and New Xxxxxx have a common legal interest in
Litigation Matters, in the Privileged Information, and in
the preservation of the confidential status of the
Privileged Information, in each case relating to the
Safety Business or the New Xxxxxx Businesses as it or
they existed prior to the Distribution Date or relating
to or arising in connection with the relationship between
the constituent elements of the Groups on or prior to the
Distribution Date; and (D) the Company, Safety and New
Xxxxxx intend that the transactions contemplated by this
Agreement and the Ancillary Agreements and any transfer
of Privileged Information in connection herewith or
therewith shall not operate as a waiver of any
potentially applicable privilege.
(ii) Each of the Company, Safety and New Xxxxxx
agrees, on behalf of itself and each member of the Group
of which it is a member, not to disclose or otherwise
waive any privilege attaching to any Privileged
Information relating to the New Xxxxxx Businesses or the
Safety Business as they or it existed prior to the
Distribution Date, respectively, or relating to or
arising in connection with the relationship between the
Groups on or prior to the Distribution Date, without
providing prompt written notice to and obtaining the
prior written consent of the other, which consent shall
not be unreasonably withheld and shall not be withheld if
the other party certifies that such disclosure is to be
made in response to a likely threat of suspension or
debarment or similar action; provided, however, that
Safety and New Xxxxxx may make such disclosure or waiver
with respect to Privileged Information if such Privileged
Information relates, in the case of Safety, solely to the
Safety Business as it existed prior to the Distribution
Date or, in the case of New Xxxxxx, solely to the New
Xxxxxx Businesses as they existed prior to the
Distribution Date. In the event of a disagreement
between any member of the Safety Group and any member of
the New Xxxxxx Group concerning the reasonableness of
withholding such consent, no disclosure shall be made
prior to a final, nonappealable resolution of such
disagreement by a court of competent jurisdiction.
(iii) Upon any member of the Safety Group or any
member of the New Xxxxxx Group receiving any subpoena or
other compulsory disclosure notice from a court, other
governmental agency or otherwise which requests
disclosure of Privileged Information, in each case
relating to the New Xxxxxx Businesses or the Safety
Business, respectively, as they or it existed prior to
the Distribution Date or relating to or arising in
connection with the relationship between the constituent
elements of the Groups on or prior to the Distribution
Date, the recipient of the notice shall promptly provide
to Safety, in the case of receipt by a member of the New
Xxxxxx Group, or New Xxxxxx, in the case of receipt by a
member of the Safety Group, a copy of such notice, the
intended response, and all materials or information
relating to the other Group that might be disclosed. In
the event of a disagreement as to the intended response
or disclosure, unless and until the disagreement is
resolved as provided in paragraph (ii) above, Safety and
New Xxxxxx shall cooperate to assert all defenses to
disclosure claimed by either Group, at the cost and
expense of the Group claiming such defense to disclosure,
and shall not disclose any disputed documents or
information until all legal defenses and claims of
privilege have been finally determined.
Section 7.3 Production of Witnesses. At all times
from and after the Distribution Date, each of New Xxxxxx and
Safety shall use reasonable efforts to make available to the
other upon written request, its and its subsidiaries'
officers, directors, employees and agents as witnesses to the
extent that such persons may reasonably be required in
connection with any legal, administrative or other proceedings
in which the requesting party may from time to time be
involved.
Section 7.4 Reimbursement. Except to the extent
otherwise contemplated by Article IV hereof or any Ancillary
Agreement, a party providing Information or witness services
to the other party under this Article VII shall be entitled to
receive from the recipient, upon the presentation of invoices
therefor, payments for such amounts, relating to supplies,
disbursements and other out-of-pocket expenses and direct and
indirect costs of employees who are witnesses, as may be
reasonably incurred in providing such Information or witness
services.
Section 7.5 Retention of Records. Except as
otherwise required by law or agreed to in writing, each of
Safety and New Xxxxxx may destroy or otherwise dispose of any
of the Information in accordance with the records retention
policy of the Company at the date of this Agreement as set
forth on Exhibit F, provided that, prior to destruction or
disposal of Information relating in any material respect to
the New Xxxxxx Business or the Safety Business, respectively,
(a) it shall provide no less than 90 or more than 120 days
prior written notice to the other, specifying in reasonable
detail the Information proposed to be destroyed or disposed of
and (b) if a recipient of such notice shall request in writing
prior to the scheduled date for such destruction or disposal
that any of the Information proposed to be destroyed or
disposed of be delivered to such requesting party, the party
proposing the destruction or disposal shall promptly arrange
for the delivery of such of the Information as was requested
at the expense of the party requesting such Information.
Section 7.6 Confidentiality. Each of Safety and
the Retained Subsidiaries on the one hand, and New Xxxxxx and
the New Xxxxxx Subsidiaries on the other hand, shall hold, and
shall cause its consultants and advisors to hold, in strict
confidence, all Information concerning the other in its
possession or furnished by the other or the other's
representatives pursuant to this Agreement (except to the
extent that such Information has been (a) in the public domain
through no fault of such party or (b) later lawfully acquired
from other sources by such party), and each party shall not
release or disclose such Information to any other person,
except its auditors, attorneys, financial advisors, bankers
and other consultants and advisors, unless compelled to
disclose by judicial or administrative process or, as advised
by its counsel, by other requirements of law.
ARTICLE VIII
INSURANCE
Section 8.1 Policies and Rights.
(a) New Xxxxxx Assets. Without limiting the
generality of the definition of New Xxxxxx Assets set forth in
Section 1.01 or the effect of Section 2.02, the New Xxxxxx
Assets shall include (i) any and all rights of an insured
party under each of the Company Policies, specifically
including rights of indemnity and the right to be defended by
or at the expense of the insurer, with respect to all
injuries, losses, Liabilities, damages and expenses incurred
or claimed to have been incurred prior to the Distribution
Date by any party in or in connection with the conduct of the
New Xxxxxx Businesses or, to the extent any claim is made
against New Xxxxxx or any of its subsidiaries, the Safety
Business and which injuries, losses, Liabilities, damages and
expenses may arise out of insured or insurable occurrences or
events under one or more of the Company Policies; provided,
however, that nothing in this clause shall be deemed to
constitute (or to reflect) the assignment of the Company
Policies, or any of them, to New Xxxxxx; and (ii) the New
Xxxxxx Policies.
(b) Safety Assets. Without limiting the generality
of the definition of Safety Assets set forth in Section 1.01,
the Safety Assets shall include (i) any and all rights of an
insured party under each of the Company Policies, specifically
including rights of indemnity and the right to be defended by
or at the expense of the insurer, other than the rights under
the Company Policies included in New Xxxxxx Assets pursuant to
Section 8.01(a); and (ii) the Safety Policies.
(c) No Further Indemnity. Nothing in this Article
VIII shall be deemed to constitute an indemnity of New Xxxxxx
by Safety or an indemnity of Safety by New Xxxxxx.
Section 8.2 Post-Distribution Date Claims. If,
subsequent to the Distribution Date, any person, corporation,
firm or entity shall assert a claim against New Xxxxxx or any
New Xxxxxx Subsidiary with respect to any injury, loss,
liability, damage or expense incurred or claimed to have been
incurred prior to the Distribution Date in or in connection
with the conduct of the New Xxxxxx Businesses or, to the
extent any claim is made against New Xxxxxx or any of its
subsidiaries, the Safety Business, or any of them, and which
injury, loss, liability, damage or expense may arise out of
insured or insurable occurrences or events under one or more
of the Company Policies, the Company shall at the time such
claim is asserted be deemed to assign, without need of further
documentation, to New Xxxxxx any and all rights of an insured
party under the applicable Company Policy with respect to such
asserted claim, specifically including rights of indemnity and
the right to be defended by or at the expense of the insurer;
provided, however, that nothing in this sentence shall be
deemed to constitute (or to reflect) the assignment of the
Company Policies, or any of them, to New Xxxxxx.
Section 8.3 Administration and Reserves.
(a) Notwithstanding the provisions of Article III,
from and after the Distribution Date:
(i) New Xxxxxx shall be responsible for the (A)
Insurance Administration of the Company Policies and the
New Xxxxxx Policies, and (B) Claims Administration with
respect to the New Xxxxxx Liabilities; provided, that the
retention of the Company Policies and the New Xxxxxx
Policies by New Xxxxxx is in no way intended to limit,
inhibit, or preclude any right to insurance coverage for
any Insured Claim of a named insured under the Company
Policies and the New Xxxxxx Policies, including but not
limited to Safety and any of its operations, subsidiaries
and Affiliates;
(ii) Unless otherwise agreed pursuant to Article IV
hereof, Safety shall be responsible for the (A) Insurance
Administration of the Safety Policies and (B) Claims
Administration with respect to the Safety Liabilities;
provided that the retention of the Safety Policies by
Safety is in no way intended to limit, inhibit, or
preclude any right to insurance coverage for any Insured
Claim of a named insured under the Safety Policies;
(iii) New Xxxxxx shall be entitled to reserves
established by the Company or any of its subsidiaries, or
the benefit of reserves held by any insurance carrier,
with respect to the New Xxxxxx Liabilities; and
(iv) Safety shall be entitled to reserves
established by the Company or any of its subsidiaries, or
the benefit of reserves held by any insurance carrier,
with respect to the Safety Liabilities.
(b) Insurance Premiums. New Xxxxxx shall have the
right but not the obligation to pay the premiums, to the
extent that Safety does not pay premiums with respect to
Safety Liabilities (retrospectively-rated or otherwise), with
respect to the Company Policies and the New Xxxxxx Policies,
as required under the terms and conditions of the respective
Policies, whereupon Safety shall forthwith reimburse New
Xxxxxx for that portion of such premiums paid by New Xxxxxx as
are attributable to the Safety Liabilities. Unless otherwise
agreed by the parties hereto, Safety shall purchase (subject
to a 50% reimbursement by New Xxxxxx within 15 days of notice
of such purchase) continued coverage under its director and
officer liability insurance policy for claims made prior to
the sixth anniversary of the Distribution Date based upon acts
or omissions occurring on or prior to the Distribution Date.
(c) Allocation of Insurance Proceeds. Insurance
Proceeds received with respect to claims, costs and expenses
under the Policies shall be paid to New Xxxxxx with respect to
the New Xxxxxx Liabilities and to Safety with respect to the
Safety Liabilities. Payment of the allocable portions of
indemnity costs of Insurance Proceeds resulting from the
Policies will be made to the appropriate party upon receipt
from the insurance carrier. In the event that the aggregate
limits on any Company Policies are exceeded, the parties agree
to provide an equitable allocation of Insurance Proceeds based
upon their respective bona fide claims. The parties agree to
use their best efforts to cooperate with respect to insurance
matters.
Section 8.4 Agreement for Waiver of Conflict and
Shared Defense. In the event that Insured Claims of both New
Xxxxxx and Safety exist relating to the same occurrence, New
Xxxxxx and Safety agree to jointly defend and to waive any
conflict of interest necessary to the conduct of that joint
defense. Nothing in this paragraph shall be construed to
limit or otherwise alter in any way the indemnity obligations
of the parties to this Agreement, including those created by
this Agreement, by operation of law or otherwise.
Section 8.5 Cooperation with Respect to Insurance.
New Xxxxxx shall provide all reasonable cooperation in order
to assist Safety during the transition period in obtaining
such continuous insurance coverage as Safety shall request,
provided, that New Xxxxxx shall not be obligated to pay any
premiums or other costs in connection therewith.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Complete Agreement; Construction. This
Agreement, including the Schedules and Exhibits and the
Ancillary Agreements and other agreements and documents
referred to herein, shall (to the extent each party hereto is
a party thereto) constitute the entire agreement between the
parties with respect to the subject matter hereof and shall
supersede all previous negotiations, commitments and writings
with respect to such subject matter. Notwithstanding any
other provisions in this Agreement to the contrary, in the
event and to the extent that there shall be a conflict between
the provisions of this Agreement (or any Conveyancing and
Assumption Instrument or other instrument of assumption) and
the provisions of the Benefits Agreement or the Tax Sharing
Agreement, the provisions of the Benefits Agreement or the Tax
Sharing Agreement, as the case may be, shall control.
Section 9.2 Survival of Agreements. Except as
otherwise contemplated by this Agreement, all covenants and
agreements of the parties contained in this Agreement shall
survive the Distribution Date.
Section 9.3 Expenses. Safety Liabilities shall
include $15 million of expenses incurred by the Company in
connection with the transactions contemplated by the
Combination Agreement to the extent not previously paid by
Safety prior to the Distribution Date, together with all
costs, including financing costs, and expenses (except as
provided in the next succeeding sentence) in connection with
the Safety Credit Agreement, with New Xxxxxx responsible for
any additional expenses incurred by the Company on or prior to
the Distribution Date in connection therewith, including the
costs and expenses incurred by the Company or New Xxxxxx on or
prior to the Distribution Date in connection with the
preparation, execution, delivery and implementation of this
Agreement. New Xxxxxx shall be responsible, up to a maximum
of $500,000, for fifty percent of the costs, including
financing costs, and expenses incurred in connection with the
Safety Credit Agreement.
Section 9.4 Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the
State of Delaware, without regard to the principles of
conflicts of laws thereof.
Section 9.5 Notices. All notices and other
communications hereunder shall be in writing and shall be
delivered by hand or mailed by registered or certified mail
(return receipt requested) to the parties at the following
addresses (or at such other addresses for a party as shall be
specified by like notice) and shall be deemed given on the
date on which such notice is received:
To the Company or Safety:
Autoliv ASP, Inc.
0000 Xxxxxxx Xxxx
Xxxxx, Xxxx 00000
Attention: Corporate Secretary
with a copy to:
Autoliv, Inc.
c/o Autoliv AB
Xxx 000 00
X-000 00 Xxxxxxxxx
Xxxxxx
Attention: Corporate Secretary
and
Skadden, Arps, Slate, Xxxxxxx & Xxxx
One Canada Square
Xxxxxx Xxxxx
Xxxxxx X00 0XX, Xxxxxxx
Attention: Xxxxx X. Xxxxxxx, Xx., Esq.
To New Xxxxxx:
Xxxxxx International, Inc.
000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Secretary
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Section 9.6 Amendments. This Agreement may not be
modified or amended except by an agreement in writing signed
by the respective duly authorized representatives of the
parties.
Section 9.7 Successors and Assigns. This Agreement
and all of the provisions hereof shall be binding upon and
inure to the benefit of the parties and their respective
successors and permitted assigns.
Section 9.8 Counterparts. This Agreement may be
executed in any number of separate counterparts, each such
counterpart being deemed to be an original instrument, and all
such counterparts shall together constitute the same
agreement.
Section 9.9 Subsidiaries. Each of the parties
hereto shall cause to be performed, and hereby guarantees the
performance of, all actions, agreements and obligations set
forth herein to be performed by any subsidiary of such party
which is contemplated to be a subsidiary of such party on and
after the Distribution Date.
Section 9.10 Third Party Beneficiaries. Except for
the provisions of Article V relating to Indemnitees, which
shall be for the benefit of such Indemnitees, and for Newco,
which shall be a third-party beneficiary of the Company's
rights under this Agreement, this Agreement is solely for the
benefit of the parties hereto and their respective
subsidiaries and Affiliates and should not be deemed to confer
upon third parties any remedy, claim, Liability,
reimbursement, claim of action or other right in excess of
those existing without reference to this Agreement.
Section 9.11 Titles and Headings. Titles and
headings to sections herein are inserted for the convenience
of reference only and are not intended to be a part of or to
affect the meaning or interpretation of this Agreement.
Section 9.12 Exhibits and Schedules. The Exhibits
and Schedules shall be construed with and as an integral part
of this Agreement to the same extent as if the same had been
set forth verbatim herein.
Section 9.13 Legal Enforceability. Any provision
of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such
prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction. Without prejudice to any rights or remedies
otherwise available to any party hereto, each party hereto
acknowledges that damages would be an inadequate remedy for
any breach of the provisions of this Agreement and agrees
that the obligations of the parties hereunder shall be
specifically enforceable.
Section 9.14 Consent to Jurisdiction. Each of the
parties hereto irrevocably submits to the exclusive
jurisdiction of any state or federal court in the State of
Delaware for the purposes of any suit, action or other
proceeding arising out of this Agreement or any transaction
contemplated hereby (and agrees not to commence any action,
suit or proceeding relating hereto except in such courts).
Each of the parties hereto further agrees that service of any
process, summons, notice or document hand delivered or sent by
registered mail to such party's respective address set forth
in Section 9.05 will be effective service of process for any
action, suit or proceeding in Delaware with respect to any
matters to which it has submitted to jurisdiction as set forth
in the immediately preceding sentence. Each of the parties
hereto irrevocably and unconditionally waives any objection to
the laying of venue of any action, suit or proceeding arising
out of this Agreement or the transactions contemplated hereby
in any state or federal court in the State of Delaware, and
hereby further irrevocably and unconditionally waives and
agrees not to plead or claim in any such court that any such
action, suit or proceeding brought in any such court has been
brought in an inconvenient forum.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed as of the day and year first
above written.
XXXXXX INTERNATIONAL, INC.
By: /s/ Xxxxxx X. XxXxxxxx
-----------------------------
Xxxxxx X. XxXxxxxx
Vice President Finance and
Chief Financial Officer
NEW XXXXXX INTERNATIONAL, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------
Xxxxxxx X. Xxxxxxxxx
Vice President for Legal
Affairs and General Counsel
