AMENDED AND RESTATED SPIN-OFF AGREEMENT
Exhibit 2.1
AMENDED
AND RESTATED
SPIN-OFF AGREEMENT
SPIN-OFF AGREEMENT
This AMENDED AND RESTATED SPIN-OFF AGREEMENT (this
“Agreement”), is dated as of April 25,
2007, by and among NACCO Industries, Inc., a Delaware
corporation (“Parent”), Housewares Holding
Company, a Delaware corporation and a wholly owned subsidiary of
Parent (“Housewares”), Xxxxxxxx Beach, Inc., a
Delaware corporation and a wholly owned subsidiary of Housewares
(“Xxxxxxxx Beach”), and Xxxxxxxx
Beach/Xxxxxxx-Silex, Inc. (“HB/PS”), a Delaware
corporation and wholly owned subsidiary of Xxxxxxxx Beach.
RECITALS
A. On July 23, 2006, the parties hereto entered into
that certain Spin-Off Agreement, which each of the parties
hereby desires to amend and restate as set forth herein.
B. In accordance with the terms hereof, Housewares will
make a pro rata distribution to Parent of all of the
outstanding shares of capital stock of Xxxxxxxx Beach and,
immediately thereafter, Parent will make a pro rata
distribution to Parent stockholders of all of the outstanding
shares of capital stock of Xxxxxxxx Beach (both distributions
collectively the “Spin-Off”).
C. HB/PS will pay out of funds legally available therefor
the Special Dividend (as defined herein) prior to the Spin-Off
Date (as defined herein) to Xxxxxxxx Beach, as the holder of
record of all of the capital stock of HB/PS and, immediately
thereafter, Xxxxxxxx Beach will pay the Special Dividend to
Housewares, and immediately thereafter, Housewares will pay the
Special Dividend to Parent.
D. As a consequence of the Spin-Off, neither Xxxxxxxx Beach
nor HB/PS will be a Subsidiary (as defined herein) of Parent.
E. Pursuant to Treasury Regulations
Section 1.1502-6,
Parent and each Subsidiary that was a member of the Parent Group
(as defined herein), including Housewares and its consolidated
Subsidiaries, during any part of a consolidated return year is
severally liable for the consolidated federal income tax
liability of the Parent Group for such year.
F. The Parties intend that the Spin-Off will qualify as a
tax-free spin-off under Section 355 of the Internal Revenue
Code of 1986, as amended (the “Code”).
G. Parent and Xxxxxxxx Beach desire to allocate certain
rights and responsibilities with respect to Taxes (as defined
herein) and other responsibilities of Parent, Xxxxxxxx Beach and
their respective Subsidiaries (as defined herein) and successors
for periods before and after the Spin-Off and to provide for
certain other Tax and other matters.
Accordingly, the parties agree as follows:
ARTICLE I
Definitions
1.1 Definitions. In addition
to the terms defined elsewhere herein, as used in this
Agreement, the following terms will have the meanings specified
below when used in this Agreement with initial capital letters:
“Action” means any controversy, claim, action,
litigation, arbitration, mediation or any other proceeding by or
before any Governmental Entity, arbitrator, mediator or other
Person acting in a dispute resolution capacity, or any
investigation, subpoena or demand preliminary to any of the
foregoing.
“Affiliate” means, with respect to a Person,
another Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under
common control with, such Person.
“Business Day” means any day on which
commercial banks in New York, New York are not required or
authorized to be closed by Law or executive order.
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“Cash and Cash Equivalents” means all cash,
cash equivalents, including certificates of deposit or
bankers’ acceptances maturing within one year from the date
of acquisition thereof, marketable direct obligations issued by,
or unconditionally guaranteed by, the United States government
or an agency thereof, and investments in money market funds with
assets of $5,000,000 or greater, and other liquid investments,
including all deposited but uncleared bank deposits.
“Consolidated Return” means any federal income
Tax Return filed with respect to the Parent Group.
“ERISA” means the Employee Retirement Income
Security Act of 1974, as amended, and the regulations
promulgated thereunder.
“Expenses” means all
out-of-pocket
costs and expenses (including all fees and expenses of counsel,
accountants, investment bankers, experts and consultants to a
party to this Agreement) incurred at or prior to the Spin-Off by
a party to this Agreement or on its behalf in connection with or
related to the authorization, preparation, negotiation,
execution or performance of this Agreement, the Transition
Services Agreement, the Trademark License Agreement and the
Spin-Off, excluding all costs and expenses that constitute
ongoing business expenses (as opposed to Spin-Off-related
expenses) of such party including, salary and benefits of a
party’s employees or similar overhead costs that a party
would have regardless of pursuit of the Spin-Off.
“Final Determination” means the final
resolution of liability for any Tax for any taxable period,
including any related interest, additions or penalties, by or as
a result of: (i) a final and unappealable decision,
judgment, decree or other order by any court of competent
jurisdiction; (ii) a closing agreement or accepted offer in
compromise under Section 7121 or 7122 of the Code, or
comparable agreement under the laws of other jurisdictions which
resolves the entire Tax liability for any taxable period; or
(iii) any allowance of a refund or credit in respect of an
overpayment of Tax, but only after the expiration of all periods
during which such refund may be recovered by the jurisdiction
imposing the Tax.
“GAAP” means United States generally accepted
accounting principles as in effect from time to time,
consistently applied.
“Governmental Entity” means any arbitrator,
court, judicial, legislative, administrative or regulatory
agency, commission, department, board, bureau, body or other
governmental authority or instrumentality or any Person
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, whether
foreign, federal, state or local.
“Xxxxxxxx Beach Class A Common Stock”
means the Class A common stock of Xxxxxxxx Beach, par value
$0.01 per share.
“Xxxxxxxx Beach Class B Common Stock”
means the Class B common stock of Xxxxxxxx Beach, par value
$0.01 per share.
“Xxxxxxxx Beach Common Stock” means the
Xxxxxxxx Beach Class A Common Stock and the Xxxxxxxx Beach
Class B Common Stock, taken together.
“Xxxxxxxx Beach Financial Instruments” means
all credit facilities, guarantees, commercial paper, interest
rate swap agreements, foreign currency forward exchange
contracts, comfort letters, letters of credit and similar
instruments used solely for the purposes of the conduct of
Xxxxxxxx Beach’s business under which Parent or any of its
Subsidiaries (other than Xxxxxxxx Beach or any of its
Subsidiaries) has any primary, secondary, contingent, joint,
several or other Liability after the Spin-Off Date.
“Xxxxxxxx Beach Group” means as the context may
require, (i) Xxxxxxxx Beach, (ii) any one or more of
those members of the affiliated group (as defined in
Section 1504 of the Code) which following the Spin-Off will
file a consolidated federal income Tax Return with Xxxxxxxx
Beach,
and/or
(iii) any one or more of the corporations which following
the Spin-Off will file consolidated or combined state or local
Tax Returns with Xxxxxxxx Beach.
“HB/PS Term Loan Agreement” means the
definitive term loan agreement of HB/PS containing substantially
the terms contemplated by the Term Loan Commitment Letter.
“Indebtedness” means, of any Person at any date
(x) any obligation of such Person (A) with respect to
indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services, including all
accrued and unpaid interest, premiums, penalties and fees
thereon (other than accounts payable, accrued expenses
(including book overdrafts) and other current liabilities
arising in the ordinary course of business)
and/or
(B) evidenced by a note, bond, debenture or similar
instrument (including a purchase money obligation) or under any
lease or similar arrangement that would be required to be
accounted for by the lessee
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as a capital lease in accordance with GAAP, (y) any
guarantee (or keepwell agreement) by such Person of any
indebtedness of others described in the preceding
clause (x), and (z) all obligations to reimburse any
bank or other Person for amounts paid under a letter of credit
or similar instrument.
“Indemnified Liability” means any liability
imposed upon or incurred either by the Parent Group or the
Xxxxxxxx Beach Group for which it is a Tax Indemnified Party,
and for which it is to be indemnified under Section 3.6.
“Law” means any statute, law, ordinance, rule
or regulation of any Governmental Entity.
“Liability” or “Liabilities”
mean all debts, liabilities and obligations whether absolute or
contingent, matured or unmatured, liquidated or unliquidated,
accrued or unaccrued, known or unknown, whenever arising, and
whether or not the same would properly be reflected on a balance
sheet; provided that, except for references in
Articles IV and VI, “Liabilities” will not
include any liabilities for or in respect of Taxes, which will
be governed solely by Article III of this Agreement, or any
liabilities for or in respect of any benefit plans, programs,
agreements, and arrangements, which will be governed solely by
Articles IV and VI of this Agreement.
“Net Xxxxxxxx Beach Indebtedness” means
(A) the aggregate amount of Indebtedness of Xxxxxxxx Beach
and its Subsidiaries immediately prior to the Spin-Off Date
which will remain an obligation of Xxxxxxxx Beach or any of
Xxxxxxxx Beach’s Subsidiaries following the Spin-Off Date
minus (B) the aggregate amount of Cash and Cash Equivalents
of Xxxxxxxx Beach and Xxxxxxxx Beach’s Subsidiaries as of
the Spin-Off Date. The Net Xxxxxxxx Beach Indebtedness will be
calculated by Parent and Housewares in accordance with GAAP,
consistently applied in good faith, utilizing the same
methodology and adjustments as would be consistent with past
practices.
“Order” means any order, judgment, ruling,
decree, writ, permit, license or other requirement of any
Governmental Entity.
“Parent Class A Common Stock” means the
Class A common stock of Parent, par value $1.00 per
share.
“Parent Class B Common Stock” means the
Class B common stock of Parent, par value $1.00 per
share.
“Parent Common Stock” means the Parent
Class A Common Stock and the Parent Class B Common
Stock, taken together.
“Parent Financial Instruments” means all credit
facilities, guarantees, commercial paper, interest rate swap
agreements, foreign currency forward exchange contracts, comfort
letters, letters of credit and similar instruments related to
Parent’s business under which Xxxxxxxx Beach or any of its
Subsidiaries has any primary, secondary, contingent, joint,
several or other Liability after the Spin-Off Date.
“Parent Group” means, as the context may
require, (i) Parent, (ii) any one or more of those
members of the affiliated group (as defined in Section 1504
of the Code) which file a consolidated federal income Tax Return
with Parent,
and/or
(iii) any one or more of the corporations which file
consolidated or combined state or local Tax Returns with Parent.
“Person” means any individual or legal entity,
including any partnership, joint venture, corporation, trust,
unincorporated organization, limited liability company or
Governmental Entity.
“Post-Closing Period” means all taxable periods
or portions of periods beginning after the Spin-Off Date.
“Pre-Closing Period” means all taxable periods
or portions of periods ending on or before the Spin-Off Date.
“Record Date” means the close of business on
the date to be determined by the Board of Directors of Parent as
the record date for determining stockholders of Parent entitled
to receive the Spin-Off, which date will be a business day
preceding the day of the Spin-Off Date.
“Special Dividend” means a dividend in an
amount of $110 million, which amount will not exceed the
“surplus” (as defined in Section 154 of the
Delaware General Corporation Law) of HB/PS, and which will be
declared and paid in cash by HB/PS prior to the Spin-Off.
“Spin-Off Date” means the date on which the
Spin-Off occurs.
“Spin-Off Tax Opinion” means the opinion
received by Parent pursuant to Section 7.1(c) of this
Agreement.
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“Straddle Period” means any Tax period that
begins on or before, and ends after, the Spin-Off Date.
“Subsidiary” of any Person means any Person
whose financial results are required to be consolidated with the
financial results of the first Person in the preparation of the
first Person’s financial statements under GAAP.
“Target Net Xxxxxxxx Beach Indebtedness” will
be the amount of Indebtedness not to exceed $195 million.
“Taxes” means (a) any federal, state,
local or foreign income, excise, gross receipts, gross income,
ad valorem, profits, gains, property, capital,
sales, transfer, use, payroll, employment, severance,
withholding, intangibles, franchise, backup withholding, or
other tax, charge, levy, duty or like assessment, imposed by a
Tax Authority together with all penalties and additions and
interest thereon and (b) any liability for Taxes described
in clause (a) under Treasury
Regulation Section 1.1502-6
(or any similar provision of state, local or foreign Law) or
pursuant to agreement, successor liability or otherwise, but
does not include any Liabilities owed to, or imposed by, the
Pension Benefit Guaranty Corporation under ERISA on account of
the Parent Pension Plan or Other Parent Plan Obligations.
“Tax Authority” means, with respect to any Tax,
the governmental entity or political subdivision thereof that
imposes such Tax and agency (if any) charged with the collection
of such Tax for such entity or subdivision.
“Tax Benefit” means any decrease in Taxes paid
or payable, any increase in any Tax attribute or any other
beneficial Tax consequence.
“Tax Contest” means an audit, review,
examination or any other administrative or judicial proceeding
with the purpose or effect of redetermining any Taxes (including
any administrative or judicial review of any claim for refund).
“Tax Detriment” means any increase in Taxes
paid or payable, any decrease in any Tax attribute or any other
adverse Tax consequence.
“Tax Return” means a report, return, statement
or other information (including any attached schedules or any
amendments to such report, return or other information) required
to be supplied to or filed with a Tax Authority with respect to
any Tax, including an information return, claim for refund,
amended return or declaration of estimated Tax.
“Term Loan Commitment Letter” means the
commitment letter attached hereto as Exhibit A.
“Trademark License Agreement” means the
Trademark License Agreement between HB/PS and The Kitchen
Collection, Inc., and joined in by Parent for the specific
purposes provided therein, in substantially the form attached
hereto as Exhibit B.
“Transition Services Agreement” means the
Transition Services Agreement among Parent, Xxxxxxxx Beach and
The Kitchen Collection, Inc., in substantially the form attached
hereto as Exhibit C.
1.2 Other Definitions. The
following terms have the meanings given them as follows:
Term
|
Where Defined | |||
Agent
|
2.6 | |||
Agreement
|
Preamble | |||
AlixPartners
|
7.1 | (a) | ||
Code
|
Recitals | |||
Confidential Information
|
5.7 | |||
Damages
|
6.1 | |||
Eligible Amount
|
3.2 | (h) | ||
Xxxxxxxx Beach
|
Preamble | |||
Xxxxxxxx Beach Benefit Plans
|
4.1 | (a) | ||
Xxxxxxxx Beach Financing
|
2.1 | (b) | ||
Xxxxxxxx Beach Indemnified Parties
|
6.1 | |||
HB/PS
|
Preamble | |||
Housewares
|
Preamble | |||
Indemnified Party
|
6.5 |
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Term
|
Where Defined | |||
Indemnifying Party
|
6.5 | |||
Intended Tax Treatment of the
Spin-Off
|
3.4 | |||
Delaware Litigation
|
5.3 | (b) | ||
Maximum Premium
|
5.8 | |||
Other Parent Plan Obligations
|
4.1 | (b) | ||
Other Parent Plans
|
4.1 | (b) | ||
Parent
|
Preamble | |||
Parent Benefit Plans
|
4.1 | (c) | ||
Parent Indemnified Parties
|
6.2 | |||
Parent Pension Plan
|
4.1 | (a) | ||
Pension Plan Obligations
|
4.1 | (a) | ||
Share Issuance
|
2.4 | |||
Special Dividend Record Date
|
2.1 | (a) | ||
Spin-Off
|
Recitals | |||
Tainting Act
|
5.2 | (a) | ||
Tax Indemnified Party
|
3.6 | (a) | ||
Tax Sharing Agreement
|
3.1 | (a) |
1.3 Interpretation. (a) When
a reference is made in this Agreement to Articles, Sections,
Exhibits or Schedules, such reference will be to an Article or
Section or Exhibit or Schedule to this Agreement unless
otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and
will not affect in any way the meaning or interpretation of this
Agreement. Whenever the words “include,”
“includes” or “including” are used in this
Agreement, they will be deemed to be followed by the words
“without limitation.” Unless the context otherwise
requires, (i) “or” is disjunctive but not
necessarily exclusive, (ii) words in the singular include
the plural and vice versa, (iii) the use in this Agreement
of a pronoun in reference to a party hereto includes the
masculine, feminine or neuter, as the context may require, and
(iv) terms used herein which are defined in GAAP have the
meanings ascribed to them therein. This Agreement will not be
interpreted or construed to require any Person to take any
action, or fail to take any action, that would violate any
applicable Law.
(b) The parties have participated jointly in negotiating
and drafting this Agreement. In the event that an ambiguity or a
question of intent or interpretation arises, this Agreement will
be construed as if drafted jointly by the parties, and no
presumption or burden of proof will arise favoring or
disfavoring any party by virtue of the authorship of any
provision of this Agreement.
ARTICLE II
Spin-Off
2.1 Special Dividend; Xxxxxxxx Beach
Financing. (a) Subject to the terms
hereof, (i) the Board of Directors of HB/PS will fix a
special dividend record date (the “Special Dividend
Record Date”) for the determination of its stockholders
to which HB/PS will pay, out of funds legally available
therefor, the Special Dividend prior to the Spin-Off Date,
(ii) the Board of Directors of Xxxxxxxx Beach will fix the
same Special Dividend Record Date for the determination of its
stockholders to which Xxxxxxxx Beach will pay the same Special
Dividend immediately after receipt thereof and prior to the
Spin-Off Date, and (iii) the Board of Directors of
Housewares will fix the same Special Dividend Record Date for
the determination of its stockholders to which Housewares will
pay the same Special Dividend immediately after receipt thereof
and prior to the Spin-Off Date.
(b) On or prior to the Spin-Off Date, HB/PS will enter into
the HB/PS Term Loan Agreement to pay the Special Dividend (the
“Xxxxxxxx Beach Financing”).
(c) Parent, Xxxxxxxx Beach and HB/PS will use their
respective commercially reasonable efforts to cause the Xxxxxxxx
Beach Financing to be consummated and cause their respective
employees, accountants, counsel and other representatives to
reasonably cooperate with each other in carrying out the
transactions contemplated by the Xxxxxxxx Beach Financing,
including delivering all documents and instruments deemed
reasonably
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necessary by Parent, Xxxxxxxx Beach or HB/PS and taking all
actions reasonably necessary in connection with the Xxxxxxxx
Beach Financing.
2.2 Financial
Instruments. (a) Xxxxxxxx Beach will, at
its expense, take or cause to be taken all actions, and enter
into (or cause its Subsidiaries to enter into) such agreements
and arrangements, as will be reasonably necessary to effect the
release of and substitution for Parent and each of its
Subsidiaries (other than Xxxxxxxx Beach or any of its
Subsidiaries), as of the Spin-Off Date, from all primary,
secondary, contingent, joint, several and other Liabilities in
respect of Xxxxxxxx Beach Financial Instruments to the extent
related to Xxxxxxxx Beach or any of its Subsidiaries or Xxxxxxxx
Beach’s business.
(b) Parent will, at its expense, take or cause to be taken
all actions, and enter into (or cause its Subsidiaries to enter
into) such agreements and arrangements, as will be necessary to
effect the release of and substitution for Xxxxxxxx Beach and
each of its Subsidiaries, as of the Spin-Off Date, from all
primary, secondary, contingent, joint, several and other
Liabilities, if any, in respect of Parent Financial Instruments
to the extent related to Parent or any of its Subsidiaries
(other than Xxxxxxxx Beach or any of its Subsidiaries) or
Parent’s business.
(c) The parties’ rights and obligations under this
Section 2.2 will continue to be applicable to all Xxxxxxxx
Beach Financial Instruments and Parent Financial Instruments
identified at any time by Parent or Xxxxxxxx Beach, whether
before, on or after the Spin-Off Date.
2.3 Record Date and Spin-Off
Date. Subject to the satisfaction, or to the
extent permitted by applicable Law, waiver of the conditions set
forth herein, the Board of Directors of Parent, consistent with
Delaware law, will establish the Record Date and the Spin-Off
Date and any necessary or appropriate procedures in connection
with the Spin-Off.
2.4 Xxxxxxxx Beach Share
Issuance. Immediately prior to the Spin-Off
Date, Parent, Housewares and Xxxxxxxx Beach will take, or cause
to be taken, all actions necessary to issue to Parent such
number of shares of Xxxxxxxx Beach Common Stock, including, if
applicable, by reclassifying the outstanding shares of Xxxxxxxx
Beach Common Stock or by declaring a dividend payable in shares
of Xxxxxxxx Beach Common Stock (the “Share
Issuance”), for the purpose of increasing the
outstanding shares of Xxxxxxxx Beach Common Stock such that,
immediately prior to the Spin-Off Date, Xxxxxxxx Beach will have
an aggregate number of outstanding shares of Xxxxxxxx Beach
Class A Common Stock and Xxxxxxxx Beach Class B Common
Stock that is equal to one-half of one share of Xxxxxxxx Beach
Class A Common Stock and one-half of one share of Xxxxxxxx
Beach Class B Common Stock for each share of Parent Common
Stock issued and outstanding on the Record Date.
2.5 Net Xxxxxxxx Beach
Indebtedness. Immediately prior to the
Spin-Off, after giving effect to the other transactions
contemplated hereby, Xxxxxxxx Beach will have Net Xxxxxxxx Beach
Indebtedness of not more than the Target Net Xxxxxxxx Beach
Indebtedness.
2.6 Delivery of Shares to the
Agent. On or prior to the Spin-Off Date,
Parent will authorize the book-entry transfer by Parent’s
transfer agent, (the “Agent”) of all of the
outstanding shares of Xxxxxxxx Beach Common Stock to be
distributed in connection with the Spin-Off. After the Spin-Off
Date, upon the request of the Agent, Xxxxxxxx Beach will provide
all book-entry transfer authorizations that the Agent requires
in order to effect the Spin-Off of the shares of Xxxxxxxx Beach
Common Stock to Parent stockholders.
2.7 The Spin-Off. Upon the
terms and subject to the conditions of this Agreement,
Housewares will declare and pay the Spin-Off of all of the
shares of Xxxxxxxx Beach Common Stock held by Housewares and,
immediately thereafter and following consummation of the Share
Issuance, Parent will declare and pay the Spin-Off of all of the
shares of Xxxxxxxx Beach Common Stock held by Parent. Until the
consummation of the Spin-Off, the Agent will hold the shares of
Xxxxxxxx Beach Common Stock as nominee on behalf of and for the
benefit of the holders of Parent Common Stock. Upon consummation
of the Spin-Off, pursuant to, and in accordance with the terms
hereof, the Agent will distribute by book-entry transfer
(i) in respect of each outstanding share of Parent
Class A Common Stock held by holders of record of Parent
Class A Common Stock on the Record Date, one-half of one
share of Xxxxxxxx Beach Class A Common Stock and one-half
of one share of Xxxxxxxx Beach Class B Common Stock and
(ii) in respect of each outstanding share of Parent
Class B Common Stock held by holders of record of Parent
Class B Common Stock on the Record Date, one-half of one
share of Xxxxxxxx Beach Class A Common Stock and one-half
of one share of Xxxxxxxx Beach Class B Common Stock.
2.8 Fractional Shares. No
certificate or scrip representing fractional shares of Xxxxxxxx
Beach Common Stock will be issued as part of the Spin-Off. Each
holder of Parent Common Stock who otherwise
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would have been entitled to a fraction of a share of Xxxxxxxx
Beach Class A Common Stock or Xxxxxxxx Beach Class B
Common Stock pursuant to Section 2.7 (after aggregating all
of such Person’s shares of Xxxxxxxx Beach Class A
Common and aggregating all of such Person’s shares of
Xxxxxxxx Beach Class B Common Stock immediately prior to
the consummation of the Spin-Off) will receive a cash payment in
lieu of such fractional shares. Parent will instruct the Agent
to (i) determine the number of whole shares and fractional
shares of Xxxxxxxx Beach Class A Common Stock and Xxxxxxxx
Beach Class B Common Stock allocable to each holder of
record or beneficial owner of Parent Common Stock on the
Spin-Off Date, (ii) aggregate all such fractional shares
into whole shares of Xxxxxxxx Beach Class A Common Stock
and Xxxxxxxx Beach Class B Common Stock, (iii) convert
the whole shares of Xxxxxxxx Beach Class B Common Stock
into shares of Xxxxxxxx Beach Class A Common Stock,
(iv) sell the whole shares of Xxxxxxxx Beach Class A
Common Stock obtained in clauses (ii) and (iii) in the
open market on behalf of holders of record or beneficial owners
who otherwise would be entitled to receive fractional shares of
Xxxxxxxx Beach Common Stock, and (v) distribute to each
such holder or for the benefit of each such beneficial owner
such holder’s or owner’s ratable share of the total
proceeds (net of total selling and conversion expenses) of such
sale; provided, however, that the Agent will have
sole discretion to determine when, how, through which
broker-dealer and at what price to execute the sales;
provided, further, that neither the Agent nor any
broker-dealer used by the Agent will be an Affiliate of Parent
or Xxxxxxxx Beach.
ARTICLE III
Taxes
3.1 Tax Sharing
Agreement. (a) Except as otherwise
provided herein, the Tax liability of Parent and each of the
Parent Group and the Xxxxxxxx Beach Group for a Pre-Closing
Period will be determined by the Amended Tax Sharing Agreement,
dated as of May 14, 1997 (the “Tax Sharing
Agreement”), which will continue in full force and effect
and fixes the rights and obligations of the parties thereto as
to the matters covered thereby except to the extent specifically
modified or supplemented herein.
(b) Immediately prior to the Spin-Off Date,
Sections 4(g)(2) and 4(g)(3) of the Tax Sharing Agreement
will become inapplicable solely with respect to the Xxxxxxxx
Beach Group. After the close of the consolidated taxable year
during which the Spin-Off occurs, Parent and the Xxxxxxxx Beach
Group will make any final payments required by Sections 3
and 4 (not including Sections 4(g)(2) and 4(g)(3)) of the
Tax Sharing Agreement. After the Spin-Off Date, solely with
respect to the Xxxxxxxx Beach Group, the second to last sentence
of Section 5 of the Tax Sharing Agreement will become
inapplicable and the following sentence will become applicable:
“Any amount due to such Former Member from Parent as a
result of such a redetermination shall be paid to such Former
Member.”
3.2 Preparation of Tax
Returns. (a) The taxable period of the
Xxxxxxxx Beach Group will be treated as ending at the close of
business on the Spin-Off Date; if the taxable period does not
end on the Spin-Off Date, the Parties will apportion all tax
items between the Pre-Closing Period and the Post-Closing Period
based on the closing of the books method.
(b) For all Pre-Closing Periods, Parent will prepare or
cause to be prepared, and timely file or cause to be timely
filed, the Consolidated Return and all other Tax Returns that
are filed on a consolidated, combined or unitary basis and
include the Xxxxxxxx Beach Group. With respect to the taxable
period that includes the Spin-Off Date, Parent will include each
member of the Xxxxxxxx Beach Group in such Tax Returns to the
extent permitted by Law, but only for the Pre-Closing Period as
determined in accordance with Section 3.2(a). Parent will
provide Xxxxxxxx Beach with a copy of each Tax Return prepared
by or on behalf of the Parent Group pursuant to this
Section 3.2(b), together with any supporting schedules, but
only as such Tax Return and supporting schedules pertain to the
Xxxxxxxx Beach Group (including its rights and obligations under
this Agreement and the Tax Sharing Agreement), at least
30 days before the date such Tax Return is to be filed.
(c) Except as provided in Section 3.5, the liability
of the Xxxxxxxx Beach Group for any Taxes shown on a
consolidated, combined or unitary income Tax Return for a
Pre-Closing Period shall not exceed the amount of Tax that would
have been shown had the Xxxxxxxx Beach Group separately filed
such income Tax Return without inclusion of any other member of
the Parent Group.
(d) With respect to any Pre-Closing Period or Straddle
Period for which Parent must file a Tax Return pursuant to
Section 3.2(a) or (b), Xxxxxxxx Beach will, at least
90 days before the date on which such Tax Return is to be
filed by Parent, provide to Parent all supporting work papers
and schedules that pertain to the Xxxxxxxx Beach Group and are
necessary for Parent to prepare any such Tax Returns.
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(e) For all Pre-Closing Periods or Straddle Periods,
Xxxxxxxx Beach (except as provided in Section 3.2(b)) will
prepare or cause to be prepared, and timely file or cause to be
timely filed, all Tax Returns that the Xxxxxxxx Beach Group has
historically filed in accordance with past practice.
(f) The filing of all Tax Returns relating to the Xxxxxxxx
Beach Group for Post-Closing Periods will be the responsibility
of Xxxxxxxx Beach. Unless otherwise provided in this Agreement,
the Xxxxxxxx Beach Group will pay all Taxes and will be entitled
to receive and retain all Tax Benefits, including refunds of
Taxes, with respect to the Xxxxxxxx Beach Group for any
Post-Closing Period. Except as otherwise provided herein or with
Parent’s prior written consent, which consent will not be
unreasonably withheld or delayed, all Tax Returns of the
Xxxxxxxx Beach Group for the two (2) taxable periods
beginning immediately after the Spin-Off Date will be prepared
on a basis consistent with the elections, accounting methods,
conventions, assumptions and principles of taxation used by the
Xxxxxxxx Beach Group for the most recent Pre-Closing Period that
includes the Spin-Off Date.
(g) Except as otherwise provided herein, all Tax Returns
and schedules prepared pursuant to Sections 3.2(a), 3.2(b)
and 3.2(e) will be prepared on a basis consistent with the
elections, accounting methods, conventions, assumptions and
principles of taxation used for the most recent taxable periods
for which Tax Returns of the Parent Group (including for this
purpose the Xxxxxxxx Beach Group) have been filed.
(h) In the event any net operating loss, capital loss,
credit or other Tax attribute of the Xxxxxxxx Beach Group for
any Post Closing Period is eligible to be carried back to a
taxable period beginning prior to the Spin-Off Date (any such
amount, an “Eligible Amount”), Xxxxxxxx Beach
will, where permissible, elect instead to carry such Eligible
Amount forward to subsequent taxable periods; provided,
however, if such Eligible Amount, pursuant to an
affirmative requirement of Law, may only be carried back to a
taxable period of the Parent Group beginning prior to the
Spin-Off Date, Xxxxxxxx Beach will be entitled to receive and
retain any Tax Benefit; provided further,
however, if Xxxxxxxx Beach carrying such Eligible Amount
back to a taxable period beginning prior to the Spin-Off Date
results in any Tax Detriment to any member of the Parent Group,
Xxxxxxxx Beach will reimburse Parent for that Tax Detriment at
the time any Tax Benefit is received by Xxxxxxxx Beach.
(i) Except as may be required by Law or otherwise provided
herein, Xxxxxxxx Beach will not amend any income Tax Return that
(i) was previously filed on a consolidated, combined or
unitary basis, and (ii) included a member of the Parent
Group (excluding for this purpose the Xxxxxxxx Beach Group),
without Parent’s prior written consent, which consent will
not be unreasonably withheld; provided, however,
if such amendment results in any Tax Detriment to any member of
the Parent Group, Xxxxxxxx Beach will reimburse Parent for that
Tax Detriment at the time Xxxxxxxx Beach amends such Tax Return.
Parent will provide Xxxxxxxx Beach with written notice within
ten Business Days of adjusting, whether by amendment or
otherwise (including adjustments pursuant to a Final
Determination), any income Tax Return for any Pre-Closing Tax
Period that reflects any member of the Xxxxxxxx Beach Group.
(j) If, with respect to a Pre-Closing Period, a Tax Return
of the Parent Group that includes the Xxxxxxxx Beach Group is
adjusted, whether by amendment or otherwise (including
adjustments pursuant to a Final Determination), and if such
adjustment results in a Tax Benefit to the Parent Group
(excluding for this purpose any member of the Xxxxxxxx Beach
Group), within 10 days of actual receipt of any such Tax
Benefit, Parent will reimburse Xxxxxxxx Beach for (i) the
excess, if any, by which (A) the Tax Benefits, net of any
Tax Detriments, actually received by the Parent Group exceeds
(B) the Tax Benefits, net of any Tax Detriments, that would
have been received by the Parent Group without the inclusion of
any member of the Xxxxxxxx Beach Group for such Pre-Closing
Period plus (ii) the portion of the interest actually
received by the Parent Group from any Tax Authority, if any,
allocable to the amount described in clause (i) above.
3.3 Cooperation and Exchange of
Information. (a) Parent and Xxxxxxxx
Beach will, and will cause each member of the Parent Group or
the Xxxxxxxx Beach Group, respectively, to, retain adequate
records, documents, accounting data and other information
(including computer data) necessary for the preparation and
filing of all Tax Returns required to be filed by any member of
the Parent Group or the Xxxxxxxx Beach Group and for any Tax
Contest relating to such Tax Returns or to any Taxes payable by
any member of the Parent Group or the Xxxxxxxx Beach Group.
(b) Each of the parties will provide the other parties with
such cooperation and information as is reasonably requested in
(i) filing any Tax Return, (ii) determining a
liability for Taxes or a right to a refund of Taxes, or
(iii) participating in or conducting any Tax Contest or
other proceeding in respect of Taxes. Such cooperation and
information will include the furnishing or making available of
records, personnel, books of
8
account, powers of attorney or other materials necessary or
helpful for the preparation of such Tax Returns, determination
of the right to a refund, the conduct of audit examinations or
the defense of claims by Tax Authorities as to the imposition of
Taxes.
(c) The obligations set forth above in Sections 3.3(a)
and 3.3(b) will continue until the longer of (i) the time
of a Final Determination or (ii) expiration of all
applicable statutes of limitations, to which the records and
information relate. For purposes of the preceding sentence, each
party will assume that no applicable statute of limitations has
expired unless such party has received notification or otherwise
has actual knowledge that such statute of limitations has
expired.
(d) Any information obtained under this Section 3.3
will be kept confidential, except as may be otherwise necessary
in connection with the filing of Tax Returns, in conducting a
Tax Contest or other proceeding, or as required by Law.
3.4 Parent Spin-Off Tax
Liability. Except as otherwise provided in
Section 3.5, Parent will be liable for, and will indemnify
and hold harmless Xxxxxxxx Beach and each member of the Xxxxxxxx
Beach Group from and against any liability (including reasonable
attorneys’ fees and other costs incurred in connection
therewith) for (i) any Tax resulting from the Spin-Off
failing to qualify for tax-free treatment under Section 355
of the Code (the “Intended Tax Treatment of the
Spin-Off”), or corresponding provisions of other
applicable Tax Laws, (ii) any Tax resulting from any income
or gain recognized by Parent or any member of the Parent Group
and the Xxxxxxxx Beach Group under Treasury
Regulation Sections 1.1502-13
or 1.1502-19, or any corresponding provisions of other
applicable Tax Laws, as a result of the Spin-Off, (iii) any
sales and use, gross receipts or other transfer Taxes imposed on
the transfers occurring pursuant to the Spin-Off, (iv) any
Tax of the Parent Group by reason of the Xxxxxxxx Beach Group
being severally liable for such Tax pursuant to Treasury
Regulations
Section 1.1502-6
or any analogous provision of state or local or foreign Law.
3.5 Xxxxxxxx Beach Spin-Off Tax
Liability. Except as otherwise provided in
Section 3.4, Xxxxxxxx Beach will be liable for, and will
indemnify and hold harmless Parent and each member of the Parent
Group from and against any liability (including reasonable
attorneys’ fees and other costs incurred in connection
therewith) for any Tax resulting from any income or gain
recognized by Parent or any member of the Parent Group as a
result of the Spin-Off failing to qualify for the Intended Tax
Treatment of the Spin-Off to the extent arising from
(i) any breach by Xxxxxxxx Beach of the representations or
covenants under Article V hereof or (ii) a Tainting
Act (as defined herein) with respect to which the exception
under Section 5.2(c)(i), but not Section 5.2(c)(ii),
is satisfied; provided, however, that Xxxxxxxx
Beach will not be liable under this Agreement for the failure of
the Spin-Off to qualify for the Intended Tax Treatment of the
Spin-Off if such failure results from or is attributable to
(w) the consummation of the Spin-Off or other action taken
by Xxxxxxxx Beach or any of its Subsidiaries expressly permitted
or required by the terms of this Agreement, the Transition
Services Agreement or the Trademark License Agreement,
(x) a Tainting Act (as defined herein) with respect to
which the exception under Section 5.2(c)(ii) is satisfied
or (y) any action taken, or failure to act, by Xxxxxxxx
Beach prior to the Spin-Off Date at the written or oral
direction of Parent or Housewares.
3.6 Tax
Contests. (a) Each party that may be
entitled to indemnification under this Agreement (a “Tax
Indemnified Party”) will provide prompt written notice
to the other parties of any pending or threatened Tax audit,
assessment or proceeding or other Tax Contest of which the Tax
Indemnified Party becomes aware for which the Tax Indemnified
Party is indemnified pursuant to this Agreement;
provided, however, that any delay or failure to
give such prompt written notice will not affect the indemnifying
party’s indemnification obligations under this Agreement
except to the extent the indemnifying party’s defense of
such Tax Contests is adversely prejudiced by such delay. Written
notice provided pursuant to this Section 3.6(a) will
contain factual information (to the extent known) describing any
asserted Tax liability in reasonable detail and will be
accompanied by copies of any notice and other documents received
from any Tax Authority in respect of any such matters.
(b) Each of Parent and Xxxxxxxx Beach will promptly notify
the other in writing if it obtains knowledge that any Tax
Authority has begun to investigate or inquire into the Spin-Off
(whether or not such investigation or inquiry is a formal or
informal investigation or inquiry, and whether or not the party
obtaining such knowledge has any obligation to indemnify the
other with respect to such matter); provided,
however, that any delay or failure to give such prompt
written notice will not affect the indemnifying party’s
indemnification obligations under this Agreement except to the
extent the indemnifying party’s defense of such Tax Contest
is adversely prejudiced by such delay. Such notice will contain
factual information (to the extent known) describing any
asserted Tax liability in reasonable detail and will be
accompanied by copies of any notice and other documents received
from any Tax Authority in respect of any such matters. Each of
the parties will
9
(i) consult with the other from time to time as to the
conduct of such investigation or inquiry, (ii) provide the
other with copies of all correspondence provided on its behalf
(or on behalf of any member of the Parent Group or the Xxxxxxxx
Beach Group) to such Tax Authority with respect to such
investigation or inquiry, and (iii) arrange for a
representative of the other to be present at (but not
participate in, except as otherwise provided in
Section 3.6(d) below) all meetings with such Tax Authority
pertaining to such investigation or inquiry.
(c) Promptly upon receipt of notice as provided in
Section 3.6(a), the indemnifying party will confirm in
writing to the Tax Indemnified Party that the liability asserted
in the notice of deficiency, claim or adjustment or other
written communication would, if imposed upon or incurred by the
Tax Indemnified Party, be an Indemnified Liability, unless the
indemnifying party believes in good faith that such liability
would not be an Indemnified Liability in which case it will set
forth in writing to the Tax Indemnified Party the grounds for
such belief.
(d) Any proceeding that may result in an Indemnified
Liability, which is acknowledged as such by indemnifying party
pursuant to Section 3.6(c) hereof, will be conducted in
accordance with this Section 3.6(d) hereof.
(i) Promptly upon the indemnifying party’s written
acknowledgment that the asserted liability is an Indemnified
Liability pursuant to Section 3.6(c) hereof, the
indemnifying party will assume and direct the defense or
settlement of the Tax Contest, subject to the participation and
consultation of the Tax Indemnified Party. If the Indemnified
Liability is grouped with other unrelated asserted liabilities
or issues in the proceeding, the Tax Indemnified Party and the
indemnifying party will use their respective commercially
reasonable efforts to cause the Indemnified Liability to be the
subject of a separate Tax Contest. If such severance is not
possible, the indemnifying party will assume and direct and be
responsible only for the matters relating to the Indemnified
Liability.
(ii) The indemnifying party will pay all expenses related
to the Indemnified Liability, including fees for attorneys,
accountants, expert witnesses or other consultants retained by
it and, to the extent that any such expenses have been or are
paid by the Tax Indemnified Party, the indemnifying party will
promptly reimburse the Tax Indemnified Party therefor.
(iii) The Tax Indemnified Party will not pay (unless
otherwise required by a proper notice of assessment and after
prompt notification to the indemnifying party of the Tax
Indemnified Party’s receipt of notice and demand for
payment), settle, compromise or concede any portion of the
Indemnified Liability without the written consent of the
indemnifying party. The Tax Indemnified Party will, at the
indemnifying party’s sole cost (including any reasonable
out-of-pocket
costs incurred by the Tax Indemnified Party), take such action
as the indemnifying party may reasonably request (including the
execution of powers of attorney for one or more persons
designated by the indemnifying party and the filing of a
petition, complaint, amended Tax Return or claim for refund) in
contesting the Indemnified Liability. The indemnifying party
will, on a timely basis, keep the Tax Indemnified Party informed
of all developments in the proceeding and provide the Tax
Indemnified Party with copies of all pleadings, briefs, orders,
and other written papers pertaining thereto.
(iv) Subject to satisfaction of the conditions herein set
forth, the indemnifying party may direct the Tax Indemnified
Party to settle the Indemnified Liability on such terms and for
such amount as the indemnifying party may direct. The Tax
Indemnified Party may condition such settlement on receipt,
prior to the settlement, from the indemnifying party of the
indemnity payment with respect to the Indemnified Liability less
any amounts to be paid directly by the indemnifying party to the
Tax Authority. The indemnifying party may direct the Tax
Indemnified Party, at the indemnifying party’s expense, to
pay an asserted deficiency for the Indemnified Liability out of
funds provided by the indemnifying party, and to file a claim
for refund.
(e) Should the indemnifying party not provide the Tax
Indemnified Party with the confirmation contemplated by
Section 3.6(c) hereof within thirty (30) days
following receipt of notice provided in Section 3.6(a)
hereof, or should the Tax Indemnified Party reasonably determine
after due investigation that the indemnifying party may not be
able to pay the full amount of the Indemnified Liability, if
required, and the indemnifying party fails to furnish a
guarantee or performance bond satisfactory to the Tax
Indemnified Party in an amount equal to the amount of the
Indemnified Liability then being asserted by the Tax Authority,
then the Tax Indemnified Party may assume control of the Tax
Contest in accordance with this Section 3.6(e).
10
(i) The Tax Indemnified Party will diligently defend
against the claim of the Tax Authority, including the pursuit of
the appeal of any adverse determinations to the appropriate
tribunal (unless advised in writing by independent outside
counsel in its reasonable judgment at the indemnifying
party’s sole cost that the Tax Indemnified Party would not
prevail upon any such appeal) and will employ such resources,
including independent counsel, in conducting such defense as are
reasonably commensurate to the nature and magnitude of the claim.
(ii) The Tax Indemnified Party will consult with the
indemnifying party as to the conduct of all proceedings, will
provide the indemnifying party with copies of all protests,
pleadings, briefs, filings, correspondence and similar materials
relative to the proceedings and will arrange for a
representative of the indemnifying party to be present at (but
not to participate in) all meetings with the relevant Tax
Authority and all hearings before any court.
(iii) The Tax Indemnified Party will not settle, compromise
or concede any claim that would result in an Indemnified
Liability unless the Tax Indemnified Party has made the
determination, and has been so advised in writing by independent
outside counsel at the indemnifying party’s sole expense,
that such settlement is reasonable in the circumstance.
(f) Unless otherwise agreed in writing, the indemnifying
party will pay to the Tax Indemnified Party the amount with
respect to an Indemnified Liability (less any amount paid
directly by the indemnifying party to the Tax Authority or made
available to the Tax Indemnified Party under Section 3.6(e)
hereof) at least two Business Days prior to the date payment of
the Indemnified Liability is to be made to the Tax Authority.
Such payment will be paid by the indemnifying party to the Tax
Indemnified Party by wire transfer of immediately available
funds to an account designated by the Tax Indemnified Party by
written notice to the indemnifying party at least 15 business
days prior to the due date of such payment. If the indemnifying
party delays making payment beyond the due date hereunder, it
will pay interest to the Tax Indemnified Party on the amount
unpaid at the rate of the monthly average of the “prime
rate” as published in the Wall Street Journal for each day
and the actual number of days for which any amount due hereunder
is unpaid; provided, however, that this provision
for interest will not be construed to give the indemnifying
party the right to defer payment beyond the due date hereunder.
(g) Should the Tax Indemnified Party or any member of the
Parent Group or Xxxxxxxx Beach Group, as applicable, receive a
refund in respect of amounts paid by the indemnifying party to
any Tax Authority on the Tax Indemnified Party’s behalf, or
paid by the indemnifying party to the Tax Indemnified Party for
payment to a Tax Authority, or should any such amounts that
would otherwise be refundable to the Tax Indemnified Party be
applied or credited by the Tax Authority to obligations of the
Tax Indemnified Party or any member of the Parent Group or
Xxxxxxxx Beach Group, as applicable, unrelated to an Indemnified
Liability, then the Tax Indemnified Party will, promptly
following receipt (or notification of credit), remit such refund
(including any statutory interest that is included in such
refund or credited amount) to the indemnifying party.
(h) Subject to the provisions of Section 3.3 hereof,
Parent and Xxxxxxxx Beach will reasonably cooperate with one
another in a timely manner in any Tax Contest involving any
matter that may result in an Indemnified Liability. Parent and
Xxxxxxxx Beach agree that such cooperation will include making
available to the other party, during normal business hours, all
books, records and information, officers and employees (without
substantial interruption of employment) necessary or useful in
connection with any such judicial or administrative Tax Contest.
The party requesting or otherwise entitled to any books,
records, information, officers or employees pursuant to this
Section 3.6(h) will bear all reasonable
out-of-pocket
costs and expenses (except reimbursement of salaries, employee
benefits and general overhead) incurred in connection with
providing such books, records, information, officers or
employees.
ARTICLE IV
Employee Matters
4.1 Employee
Matters. (a) Employees and former
employees of Xxxxxxxx Beach and its Subsidiaries are currently
provided benefits under employee benefit plans, programs,
policies or arrangements that are sponsored and maintained by
Xxxxxxxx Beach or a Subsidiary of Xxxxxxxx Beach (collectively,
the “Xxxxxxxx Beach Benefit Plans”). On and
after the Spin-Off Date, employees and former employees of
Xxxxxxxx Beach and its Subsidiaries will continue to receive
benefits under the Xxxxxxxx Beach Benefit Plans. Immediately
prior to the Spin-Off Date, Xxxxxxxx Beach will, and Parent will
cause Xxxxxxxx Beach to, withdraw from and cease its
participation in the Combined Defined Benefit Plan for Parent
and its Subsidiaries (the “Parent
11
Pension Plan”) and, as a result thereof, employees
of Xxxxxxxx Beach and its Subsidiaries will cease to participate
in the Parent Pension Plan as active participants thereunder
immediately prior to the Spin-Off Date but will continue to be
entitled to receive any benefits that have previously accrued
under the Parent Pension Plan, in accordance with the terms
thereof, as in effect from time to time. The assets and
Liabilities of the Parent Pension Plan (including the assets and
Liabilities relating to the employees and former employees of
Xxxxxxxx Beach and its Subsidiaries) will remain with Parent and
its Subsidiaries (other than Xxxxxxxx Beach and its
Subsidiaries) and no such assets or Liabilities will be
transferred to Xxxxxxxx Beach and its Subsidiaries as a result
of the Spin-Off. In furtherance of, but without limiting the
foregoing, effective as of the Spin-Off Date, (1) Xxxxxxxx
Beach and its Subsidiaries will have no Liability or
obligations, and Parent agrees to assume and pay for any such
Liabilities or obligations, under the Parent Pension Plan (the
“Pension Plan Obligations”) and
(2) Xxxxxxxx Beach and its Subsidiaries will have no
further responsibility for the administration of the Parent
Pension Plan except as specified in the Transition Services
Agreement.
(b) Effective as of the Spin-Off Date (1) Xxxxxxxx
Beach and its Subsidiaries will have no Liability or
obligations, and Parent agrees to assume and pay for any
Liabilities or obligations under or relating to any nonqualified
plans or other employee benefit plans or arrangements sponsored
or maintained by Parent, including as required by, or imposed
pursuant to, applicable Law (all of such plans or arrangements
other than the Parent Pension Plan being referred to as the
“Other Parent Plans” and all of such
Liabilities or obligations described in this Section 4.1(b)
being referred to as the “Other Parent Plan
Obligations”) and (2) Xxxxxxxx Beach and its
Subsidiaries will have no responsibility for the administration
of the Other Parent Plans.
(c) Employees of Parent and its Subsidiaries (other than
Xxxxxxxx Beach and its Subsidiaries) are currently provided
benefits under employee benefit plans, programs, policies or
arrangements that are sponsored and maintained by Parent or its
Subsidiaries (other than Xxxxxxxx Beach and its Subsidiaries)
(collectively, the “Parent Benefit Plans”). On
and after the Spin-Off Date, employees of Parent and its
Subsidiaries (but not employees of Xxxxxxxx Beach and its
Subsidiaries) will continue to receive benefits under the Parent
Benefit Plans.
(d) On or before the Spin-Off Date, Parent, Xxxxxxxx Beach
and HB/PS will take such actions as they determine are necessary
and advisable to establish separate administrative services
agreements and funding vehicles for Xxxxxxxx Beach Benefit Plans
and Parent Benefit Plans
and/or to
provide for transitional services related thereto.
ARTICLE V
Representations and Covenants
5.1 Representations. (a) Parent
represents that, as of the date of this Agreement, there is no
fact that may cause the Tax treatment of the Spin-Off to be
other than the Intended Tax Treatment of the Spin-Off.
(b) Parent represents and warrants that neither it, nor any
of its Affiliates, has any plan or intent to take, nor has it
taken, any action which is inconsistent with any factual
statements or representations made in connection with the
Intended Tax Treatment of the Spin-Off.
(c) Each party to this Agreement has full power and
authority to execute and deliver this Agreement and to
consummate the Spin-Off. The execution and delivery of this
Agreement and the consummation of the Spin-Off have been duly
and validly authorized by each party to this Agreement, and no
other proceedings on the part of such party or any other person
are necessary to authorize the execution and delivery by such
party of this Agreement or the consummation of the Spin-Off.
This Agreement has been duly and validly executed and delivered
by the parties hereto, and (assuming the valid execution and
delivery of this Agreement by the other parties hereto and
thereto) constitutes the legal, valid and binding agreement of
such party enforceable against it in accordance with its terms,
except as such obligations and their enforceability may be
limited by (i) bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting the enforcement of
creditors’ rights generally, (ii) by general
principles of equity, or (iii) the power of a court to deny
enforcement of remedies based on public policy.
(d) Each of Xxxxxxxx Beach and HB/PS, on the one hand, and
Parent and Housewares, on the other hand, has retained separate
legal advisors in connection with the Spin-Off, and the terms of
this Agreement, together with the Transition Services Agreement,
have been negotiated by such parties at arm’s length and in
good faith by their respective representatives.
12
5.2 Tax
Covenants. (a) Xxxxxxxx Beach covenants
and agrees that (i) Xxxxxxxx Beach will not take any action
or fail to take any action, and Xxxxxxxx Beach will cause each
member of the Xxxxxxxx Beach Group to not take any action or
fail to take any action, that causes the Tax treatment of the
Spin-Off to be other than the Intended Tax Treatment of the
Spin-Off, and (ii) through the second anniversary of the
Spin-Off Date, it will not enter into, and it will cause each
member of the Xxxxxxxx Beach Group to refrain from entering
into, any understandings, agreements, arrangements or
substantial negotiations with respect to transactions or events
(including stock issuances, option grants, capital
contributions, acquisitions, or changes in the voting power of
any of its stock) which cause the Spin-Off to be treated under
Section 355(e)(2)(A) of the Code as part of a plan or
series of related transactions pursuant to which one or more
persons acquire directly or indirectly stock of Xxxxxxxx Beach,
or any predecessor or successor, representing a fifty percent or
greater interest (each, a “Tainting Act”).
(b) Each of Parent and Xxxxxxxx Beach covenants and agrees
that it will not take, and will cause the members of the Parent
Group or the Xxxxxxxx Beach Group, respectively, to refrain from
taking, any position on a Tax Return that is inconsistent with
the treatment of the Spin-Off as tax free under Section 355
of the Code.
(c) Notwithstanding the foregoing, Xxxxxxxx Beach will be
permitted to take any action listed in Section 5.2(a) that
might be a Tainting Act if, prior to taking such action,
Xxxxxxxx Beach provides notification to Parent of its plans with
respect to such action and promptly responds to any inquiries by
Parent following such notification, and either:
(i) Obtains an unqualified opinion reasonably acceptable to
Parent of an independent nationally recognized tax counsel
reasonably acceptable to Parent, on the basis of facts and
representations consistent with the facts at the time of such
action, that such action will not adversely affect the Intended
Tax Treatment of the Spin-Off; or
(ii) Obtains Parent’s or Housewares’ consent in
writing to such action, which consent will not be unreasonably
withheld.
5.3 Litigation Matters.
(a) For a period of five years after the Closing Date, each
party hereto will, to aid each other party hereto in the defense
of any third-party Action relating to Xxxxxxxx Beach’s
business, make available during normal business hours, but
without unreasonably disrupting their respective businesses, all
personnel and records in their possession, custody
and/or
control relating to Xxxxxxxx Beach’s business reasonably
necessary to permit the effective defense or investigation of
such Action. If information other than that pertaining to
Xxxxxxxx Beach’s business is contained in such records,
Parent and Xxxxxxxx Beach will make reasonable efforts to
protect any confidential information, including but not limited
to entering into appropriate confidentiality agreements. To the
extent any such Action relates solely to Xxxxxxxx Beach’s
or any of its Subsidiaries’ businesses, all such documented
costs will be borne by Xxxxxxxx Beach. To the extent any such
Action relates solely to Parent’s or any of its
Subsidiaries’ businesses (other than Xxxxxxxx Beach or any
of its Subsidiaries), all such documented costs will be borne by
Parent. To the extent any such Action relates to Parent’s
or any of its Subsidiaries’ businesses (other than Xxxxxxxx
Beach or any of its Subsidiaries) and Xxxxxxxx Beach’s or
any of its Subsidiaries’ businesses, all such documented
costs will be allocated proportionately, based on their
respective business interest in such action, between Xxxxxxxx
Beach and Parent.
(b) Notwithstanding anything contained herein to the
contrary, Xxxxxxxx Beach, formerly known as and suing as HB-PS
Holding Company, Inc., hereby assigns to Parent all of Xxxxxxxx
Beach’s rights and interests arising from the claims in the
Action captioned NACCO Industries, Inc., et al. v.
Applica Incorporated, et al. , C.A.
No. 2541, commenced in Delaware Chancery Court in 2006 (the
“Delaware Litigation”). This assignment grants
Parent the sole right to administer the Delaware Litigation in
any manner and take any actions as it deems fit in connection
with the Delaware Litigation. This assignment also grants Parent
the right to retain any recovery obtained through the
prosecution of the claims in the Delaware Litigation.
Notwithstanding anything contained herein to the contrary,
Xxxxxxxx Beach will fully cooperate and aid Parent in connection
with the Delaware Litigation, make available during normal
business hours, but without unreasonably disrupting Xxxxxxxx
Beach’s business (including that of any of its
Subsidiaries), all personnel and records in its possession,
custody
and/or
control relating to Xxxxxxxx Beach’s business (including
that of any of its Subsidiaries) reasonably necessary to permit
the effective prosecution or investigation of the Delaware
Litigation; provided, however, that Parent will
reimburse Xxxxxxxx Beach for all reasonable documented
out-of-pocket
expenses incurred on or after the date of this Agreement by
Xxxxxxxx Beach in connection with any such cooperation or aid in
connection with the Delaware Litigation; and provided
further,
13
however, that to the extent that any claim is asserted by
any of the defendants in the Delaware Litigation against
Xxxxxxxx Beach or any of Xxxxxxxx Beach’s Subsidiaries
arising out of or related to facts alleged in the complaint
filed in the Delaware Litigation, Parent will indemnify and hold
harmless from and against and will promptly defend the Xxxxxxxx
Beach Indemnified Parties (as defined herein) from and reimburse
the Xxxxxxxx Beach Indemnified Parties for any and all Damages
which such parties may directly or indirectly at any time suffer
or incur or become subject to as a result of or in connection
with any such claim in the Delaware Litigation.
5.4 Other
Cooperation. Parent and Xxxxxxxx Beach will
comply fully with all notification, reporting and other
requirements under any Law or Order applicable to the Spin-Off.
Parent and Xxxxxxxx Beach will use their commercially reasonable
efforts to obtain, as soon as practicable, the authorizations
that may be or become necessary for the performance of their
respective obligations under this Agreement and the consummation
of the Spin-Off and will cooperate fully with each other in
promptly seeking to obtain such authorizations, except that no
such party hereto will be required to make any material
expenditure in connection with its obligations under this
Section 5.4. Where the cooperation of third parties such as
insurers or trustees would be necessary in order for a party
hereto to completely fulfill its obligations under this
Agreement, such party will use commercially reasonable efforts
to cause such third parties to provide such cooperation, except
that no party hereto will be required to make any material
expenditure in connection therewith.
5.5 Expenses. Whether or not
the Spin-Off is consummated, all costs, fees and expenses
incurred in connection with this Agreement and the Spin-Off will
be borne as follows, unless otherwise provided herein or in the
Transition Services Agreement or Trademark License Agreement:
Parent will bear all of the Expenses of Parent and its
Subsidiaries (other than Xxxxxxxx Beach and its Subsidiaries)
and Xxxxxxxx Beach will bear all of the Expenses of Xxxxxxxx
Beach and its Subsidiaries (other than Parent and its
Subsidiaries other than Xxxxxxxx Beach and its Subsidiaries).
5.6 Certain Insurance
Matters. With respect to any Damages suffered
by Xxxxxxxx Beach or any of its Subsidiaries after the Spin-Off
Date relating to, resulting from or arising out of the conduct
of Xxxxxxxx Beach’s business prior to the Spin-Off Date for
which Parent or any of its Subsidiaries would be entitled to
assert, or cause any other Person to assert, a claim for
recovery under any policy of insurance maintained by Parent or
for the benefit of Parent or any of its Subsidiaries in respect
of Xxxxxxxx Beach’s business, Parent or any of its
Subsidiaries, any product of Xxxxxxxx Beach’s business or
any Xxxxxxxx Beach employee, at the request of Xxxxxxxx Beach,
Parent will use its commercially reasonable efforts to assert
and administer, or to assist Xxxxxxxx Beach or any of its
Subsidiaries to assert and administer, one or more claims under
such policy of insurance covering such Damage if Xxxxxxxx Beach
or any of its Subsidiaries is not itself entitled to assert such
claim, and any recovery in respect thereof will be paid to the
party suffering such Damages; provided, however,
that all of Parent’s reasonable
out-of-pocket
costs and expenses incurred in connection with the foregoing,
including retroactive or other premium matters, are promptly
reimbursed by Xxxxxxxx Beach. Notwithstanding the foregoing,
Parent will have the sole right to administer all such claims in
any manner and take any actions as it deems fit except to the
extent any such administration or actions may adversely affect
the availability of insurance coverage, the amount of any such
coverage, the applicability of any coverage
and/or the
availability of future coverage or coverage limits with respect
to Xxxxxxxx Beach or any of its Subsidiaries, in which case any
administration or actions by Parent shall only be taken after
consultation with, and consent of, Xxxxxxxx Beach. Nothing in
this Section 5.6 will affect or modify or be deemed to
affect or modify in any way any parties’ obligations under
Article VI of this Agreement.
5.7 Confidentiality. The
parties hereto will keep strictly confidential any and all
proprietary, technical, business, marketing, sales and other
information disclosed to another party hereto in connection with
the performance of this Agreement (the “Confidential
Information”), and will not disclose the same or any
part thereof to any third party, or use the same for their own
benefit or for the benefit of any third party. The obligations
of secrecy and nonuse as set forth herein will survive the
termination of this Agreement for a period of five years.
Excluded from this provision is any information available in the
public domain and any information disclosed to any of the
parties by a third party who is not in breach of confidential
obligations owed to another person or entity. Notwithstanding
the foregoing, each party hereto may disclose Confidential
Information (a) to its bankers, attorneys, accountants and
other advisors subject to the same confidentiality obligations
imposed herein and (b) as may be required by law from time
to time.
5.8 D&O
Insurance. Parent will (i) maintain in
effect for a period of six years after the Spin-Off Date, if
available, the current policies of directors’ and
officers’ liability insurance maintained by Parent with
respect to directors and officers of Xxxxxxxx Beach and its
Subsidiaries (provided that Parent may substitute therefor
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policies of at least the same coverage and amounts containing
terms and conditions which are not less advantageous to the
directors and officers of Xxxxxxxx Beach and its Subsidiaries)
or (ii) obtain as of the Spin-Off Date “tail”
insurance policies with a claims period of six years from the
Spin-Off Date with at least the same coverage and amounts and
containing terms and conditions which are no less advantageous
to the directors and officers of Xxxxxxxx Beach and its
Subsidiaries, in each case, with respect to claims arising out
of or relating to events which occurred before or at the
Spin-Off Date; provided, however, that in no event
will Parent be required to expend an annual premium for such
coverage in excess of 250% of the last annual premium paid by it
for such insurance prior to the date of this Agreement (the
“Maximum Premium”). If such insurance coverage
can only be obtained at an annual premium in excess of the
Maximum Premium, Parent will obtain that amount of
directors’ and officers’ insurance (or
“tail” coverage) obtainable for an annual premium
equal to the Maximum Premium.
ARTICLE VI
Indemnification
6.1 Indemnity by
Parent. Following the Closing, Parent will
indemnify and hold Xxxxxxxx Beach, its Subsidiaries and each of
their respective officers, directors, employees, agents and
representatives and each of the successors and assigns of any of
the foregoing (“Xxxxxxxx Beach Indemnified
Parties”) harmless from and against and will promptly
defend such parties from and reimburse such parties for any and
all losses, damages, costs, expenses, Liabilities, obligations
and claims of any kind, including reasonable attorneys’
fees and other costs and expenses, but excluding Taxes, which
are covered by Article III (“Damages”)
which such parties may directly or indirectly at any time suffer
or incur or become subject to, as a result of or in connection
with (a) any breach by Parent of any representation in this
Agreement, (b) the failure by Parent to perform any
covenant to be performed by it or its Subsidiaries under this
Agreement in whole or in part after the Spin-Off Date,
(c) the conduct of any business of Parent or its
Subsidiaries other than Xxxxxxxx Beach’s business,
including any indemnity or Liability thereof or any amount due
or to become due in respect of the foregoing, and (d) any
Pension Plan Obligation or any Other Parent Plan Obligations.
6.2 Indemnity by Xxxxxxxx
Beach. Following the Closing, Xxxxxxxx Beach
will, on behalf of its successors and assigns, indemnify and
hold Parent, its Subsidiaries and each of their respective
officers, directors, employees, agents and representatives and
each of the successors and assigns of any of the foregoing
(“Parent Indemnified Parties”) harmless from
and against, and will promptly defend such parties from and
reimburse such parties for, any and all Damages which such
parties may directly or indirectly at any time suffer or incur
or become subject to, as a result of or in connection with
(a) any breach by Xxxxxxxx Beach of any representation in
this Agreement, (b) the failure by Xxxxxxxx Beach to
perform any covenant to be performed by it or its Subsidiaries
under this Agreement in whole or in part after the Spin-Off Date
and (c) the conduct of any business of Xxxxxxxx Beach or
its Subsidiaries, including any indemnity or Liability thereof
or any amount due or to become due in respect of the foregoing;
provided, however, that under no circumstances
xxxx Xxxxxxxx Beach be required to indemnify any Parent
Indemnified Party for any Pension Plan Obligation or any Other
Parent Plan Obligations. For the avoidance of doubt, following
the Spin-Off, no Parent Indemnified Party will be liable for,
and Xxxxxxxx Beach will indemnify, defend and fully protect each
Parent Indemnified Party from and against any action or failure
to take action by Xxxxxxxx Beach, any of its Subsidiaries or any
of their respective directors, officers, employees, agents or
representatives in their capacities as such whether prior to or
on the Spin-Off Date, including any transaction based in whole
or in part on the Spin-Off, except as expressly provided herein.
6.3 Insurance Coverage. The
indemnification to which any party is entitled hereunder will be
net of all insurance proceeds actually received, if any, by the
indemnified party with respect to the losses for which
indemnification is provided in Section 6.1 or
Section 6.2.
6.4 Right of Party to
Indemnification. Each party entitled to
indemnification hereunder will be entitled to indemnification
for losses sustained in accordance with the provisions of this
Article VI regardless of any Law or public policy that
would limit or impair the right of the party to recover
indemnification under the circumstances.
6.5 Indemnification
Procedures. Any party seeking indemnification
under this Article VI for a third party claim (the
“Indemnified Party”) must notify the party from
whom such indemnity is sought (the “Indemnifying
Party”) in writing of any claim, demand, action or
proceeding for which indemnification will be sought;
provided, however, that the failure to so notify
will not adversely impact the Indemnified Party’s right to
indemnification hereunder except to the extent that such failure
to notify actually prejudices, or
15
prevents the Indemnifying Party’s ability to defend such
claim, demand, action or proceeding. The Indemnifying Party will
have the right at its expense to assume the defense thereof
using counsel reasonably acceptable to the Indemnified Party.
The Indemnified Party will have the right (i) to
participate, at its own expense, with respect to any claim,
demand, action or proceeding that is being diligently defended
by the Indemnifying Party and (ii) to assume the defense of
any claim, demand, action or proceeding at the cost and expense
of the Indemnifying Party if the Indemnifying Party fails or
ceases to defend the same. In connection with any such claim,
demand, action or proceeding the parties will cooperate with
each other and provide each other with access to relevant books
and records in their possession. If a firm written offer is made
to the Indemnifying Party to settle any such claim, demand,
action or proceeding solely in exchange for monetary sums to be
paid by the Indemnifying Party (and such settlement contains a
complete release of the Indemnified Party and its Subsidiaries
and their respective directors, officers and employees) and the
Indemnifying Party proposes to accept such settlement and the
Indemnified Party refuses to consent to such settlement, then
(i) the Indemnifying Party will be excused from, and the
Indemnified Party will be solely responsible for, all further
defense of such claim, demand, action or proceeding,
(ii) the maximum liability of the Indemnifying Party
relating to such claim, demand, action or proceeding will be the
amount of the proposed settlement if the amount thereafter
recovered from the Indemnified Party on such claim, demand,
action or proceeding is greater than the amount of the proposed
settlement, and (iii) the Indemnified Party will pay all
attorneys’ fees and legal costs and expenses incurred after
rejection of such settlement by the Indemnified Party;
provided, however, that if the amount thereafter
recovered by the third party from the Indemnified Party is less
than the amount of the proposed settlement, the Indemnified
Party will be reimbursed by the Indemnifying Party for such
attorneys’ fees and legal costs and expenses up to a
maximum amount equal to the difference between the amount
recovered by the third party and the amount of the proposed
settlement.
ARTICLE VII
Conditions
7.1 Parent Conditions to the
Distribution. The obligations of Parent
pursuant to this Agreement to effect the Spin-Off are subject to
the fulfillment (or waiver by Parent pursuant to
Section 7.2) on or prior to the Spin-Off Date (provided
that certain of such conditions will occur substantially
contemporaneous with the Spin-Off) of the following conditions:
(a) the receipt by Parent and Housewares of a reliance
letter, dated as of a date prior to the Spin-Off Date and
delivered in connection with the consummation of the financing
and declaration of the Special Dividend, stating that Parent,
Housewares and Xxxxxxxx Beach’s lenders are entitled to
rely on the written opinion or opinions delivered to Xxxxxxxx
Beach and HB/PS, dated as of a date prior to the Spin-Off Date,
from AlixPartners, LLP (“AlixPartners”) to the
effect that the Special Dividend will not render Xxxxxxxx Beach
or HB/PS insolvent (as described in such opinion(s)) and that
each of Xxxxxxxx Beach and HB/PS will have capital surplus (as
described by such opinion) prior to and after giving effect to
the Special Dividend;
(b) the receipt by Parent and Housewares, dated as of a
date prior to the Spin-Off Date, of an opinion or opinions from
AlixPartners to the effect that each of Parent and Housewares
will have capital surplus (as described by such opinion) prior
to and after giving effect to the Spin-Off;
(c) the receipt by Parent of a written opinion, dated as of
the Spin-Off Date, from Xxxxx Day, tax counsel to Parent, to the
effect that the Spin-Off will qualify as a tax-free spin-off
under Section 355 and related provisions of the Code. In
rendering the foregoing opinion, counsel will be permitted to
rely upon and assume the accuracy of certificates executed by
officers of Parent and Xxxxxxxx Beach substantially in
compliance with IRS published advanced ruling guidelines, with
customary exceptions and modification thereto to enable such
firm to deliver the legal opinion; and
(d) the receipt by Parent and Housewares of a reliance
letter, dated as of a date prior to the Spin-Off Date, from
AlixPartners stating that Parent and Housewares are entitled to
rely on the written bring-down opinion or opinions delivered to
Xxxxxxxx Beach and HB/PS to the effect that neither Xxxxxxxx
Beach nor HB/PS will be insolvent (as described in such
opinion(s)) immediately after the Spin-Off.
7.2 Waiver of Parent
Conditions. The conditions set forth in
Section 7.1 hereof (excluding the condition set forth in
Section 7.1(b)) may be waived in the sole discretion of the
Board of Directors of Parent. The conditions set forth in
Section 7.1 (excluding the condition set forth in
Section 7.1(b)) are for the sole
16
benefit of Parent and will not give rise to or create any duty
on the part of Parent or the Board of Directors of Parent to
waive or not waive any such conditions.
7.3 Xxxxxxxx Beach Conditions to the
Distribution. The obligations of Xxxxxxxx
Beach and HB/PS pursuant to this Agreement to effect the
Spin-Off will be subject to the fulfillment on or prior to the
Spin-Off Date (provided that certain of such conditions will
occur substantially contemporaneous with the Spin-Off) of the
receipt by Xxxxxxxx Beach and HB/PS of an opinion from
AlixPartners to the effect that the Special Dividend will not
render Xxxxxxxx Beach or HB/PS insolvent (as described by such
opinion) and that each of Xxxxxxxx Beach and HB/PS will have
capital surplus (as described by such opinion) prior to and
after giving effect to the Special Dividend.
ARTICLE VIII
Termination
8.1 Termination. This
Agreement may be terminated by Parent, in its sole discretion,
prior to the date the Board of Directors of Parent declares a
dividend giving effect to the Spin-Off.
8.2 Effect of Termination. If this
Agreement is terminated as provided in Section 8.1, then
this Agreement will forthwith become void and there will be no
liability on the part of any party to any other party or any
other Person in respect hereof regardless of the circumstances.
ARTICLE IX
Miscellaneous
9.1 Survival. All representations
and warranties of the parties contained in this Agreement or
made pursuant to this Agreement will expire as of the Spin-Off
Date without further action by the parties, with the result that
if the Spin-Off Date occurs, no party will have any liability or
obligation in respect thereof, whether asserted before or after
the Spin-Off Date, other than for actual fraud. The agreements
contained herein that by their terms apply or are to be
performed in whole or in part after the Spin-Off Date will
survive indefinitely.
9.2 Amendment. This Agreement may
be amended, modified or supplemented only by the written
agreement of the parties hereto or thereto.
9.3 Waiver of Compliance. Except as
otherwise provided in this Agreement, the failure by any Person
to comply with any obligation, covenant, agreement or condition
under such agreements may be waived by the Person entitled to
the benefit thereof only by a written instrument signed by the
Person granting such waiver, but such waiver or failure to
insist upon strict compliance with such obligation, covenant,
agreement or condition will not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure. The
failure of any Person to enforce at any time any of the
provisions of such agreements will in no way be construed to be
a waiver of any such provision, nor in any way to affect the
validity of such agreements or any part thereof or the right of
any Person thereafter to enforce each and every such provision.
No waiver of any breach of such provisions will be held to be a
waiver of any other or subsequent breach.
9.4 Notices. All notices required
or permitted pursuant to this Agreement must be in writing and
will be deemed to be properly given when actually received by
the Person entitled to receive the notice at the address stated
below, or at such other address as a party may provide by notice
to the other:
If to Parent or Housewares:
NACCO Industries, Inc.
0000 Xxxxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxxxxxx
Facsimile: (000) 000-0000
0000 Xxxxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxxxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxxx Day
North Point
000 Xxxxxxxx Xxxxxx
North Point
000 Xxxxxxxx Xxxxxx
00
Xxxxxxxxx, Xxxx
00000-0000
Attention: Xxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
If to Xxxxxxxx Beach
and/or HB/PS:
Xxxxxxxx Beach/Xxxxxxx-Silex, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
0000 Xxxxxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
With a copy to:
McGuireWoods LLP
One Xxxxx Center
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxxx X. Xxxxxxxx, XX
Facsimile: (000) 000-0000
One Xxxxx Center
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxxx X. Xxxxxxxx, XX
Facsimile: (000) 000-0000
9.5 Third Party
Beneficiaries. Except as otherwise provided in
this Agreement, nothing in this Agreement, expressed or implied,
is intended to confer on any Person other than the Parties or
their respective successors and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
9.6 Successors and Assigns. This
Agreement will be binding upon and will inure to the benefit of
the signatories hereto and their respective successors and
permitted assigns. None of the parties may assign this
Agreement, or any of their rights or liabilities thereunder,
without the prior written consent of the other parties thereto,
and any attempt to make any such assignment without such consent
will be null and void. Any such assignment will not relieve the
party making the assignment from any liability under such
agreements.
9.7 Severability. The illegality or
partial illegality of any or all of this Agreement or any
provision hereof, will not affect the validity of the remainder
of such agreements, or any provision thereof, and the illegality
or partial illegality of any such agreements will not affect the
validity of any such agreements in any jurisdiction in which
such determination of illegality or partial illegality has not
been made, except in either case to the extent such illegality
or partial illegality causes such agreements to no longer
contain all of the material provisions reasonably expected by
the parties to be contained therein.
9.8 Governing Law. This Agreement
will be governed by and construed in accordance with the
internal Laws of the State of Delaware applicable to contracts
made and wholly performed within such state, without regard to
any applicable conflict of laws principles.
9.9 Submission to Jurisdiction;
Waivers. Each party irrevocably agrees that any
legal action or proceeding with respect to this Agreement, the
Spin-Off, any provision hereof, the breach, performance,
validity or invalidity hereof or for recognition and enforcement
of any judgment in respect hereof brought by another party
hereto or its successors or permitted assigns may only be
brought and determined in any federal or state court located in
the State of Delaware, and each party hereby irrevocably submits
with regard to any such action or proceeding for itself and in
respect to its property, generally and unconditionally, to the
exclusive jurisdiction of the aforesaid courts. Each party
hereby irrevocably waives, and agrees not to assert, by way of
motion, as a defense, counterclaim or otherwise, in any action
or proceeding with respect to this Agreement, the Spin-Off, any
provision hereof or the breach, performance, enforcement,
validity or invalidity hereof, (a) any claim that it is not
personally subject to the jurisdiction of the above-named courts
for any reason other than the failure to lawfully serve process,
(b) that it or its property is exempt or immune from
jurisdiction of any such court or from any legal process
commenced in such courts (whether through service of notice,
attachment prior to judgment, attachment in aid of execution of
judgment, execution of judgment or otherwise), and (c) to
the fullest extent permitted by applicable Laws, that
(i) the suit, action or proceeding in any such court is
brought in an inconvenient forum, (ii) the venue of such
suit, action or proceeding is improper and (iii) this
Agreement, or the subject matter hereof, may not be enforced in
or by such courts.
9.10 Specific Performance. The
parties hereby acknowledge and agree that the failure of any
party to perform its agreements and covenants hereunder,
including its failure to take all actions as are necessary on
its part to the consummation of the Spin-Off, will cause
irreparable injury to the other parties for which damages, even
if available, will not be an adequate remedy. Accordingly, each
party hereby consents to the issuance of
18
injunctive relief by any court of competent jurisdiction to
compel performance of such party’s obligations and to the
granting by any court of the remedy of specific performance of
its obligations hereunder.
9.11 Counterparts. This Agreement
may be executed in two or more counterparts, all of which will
be considered one and the same agreement and will become
effective when counterparts have been signed by each of the
parties and delivered to the other parties, it being understood
that each party need not sign the same counterpart.
9.12 Entire Agreement. This
Agreement (including the documents and the instruments referred
to in this Agreement), constitute the entire agreement and
supersede all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter
of this Agreement.
[SIGNATURES ON FOLLOWING PAGE]
19
IN WITNESS WHEREOF, each of the signatories hereto has caused
this Agreement to be signed by its duly authorized officer as of
the date first above written.
NACCO INDUSTRIES, INC.
By: |
/s/ Xxxxxx
X. Xxxxxx, Xx.
|
Name: Xxxxxx X. Xxxxxx, Xx.
Title: | Chairman, President and Chief |
Executive Officer
HOUSEWARES HOLDING COMPANY
By: |
/s/ Xxxxxx
X. Xxxxxx, Xx.
|
Name: Xxxxxx X. Xxxxxx, Xx.
Title: | President |
XXXXXXXX BEACH, INC.
By: |
/s/ Xxxxxxx
X. Xxxxxxxxx
|
Name: Xxxxxxx X. Xxxxxxxxx
Title: | President and Chief Executive Officer |
XXXXXXXX BEACH/XXXXXXX-SILEX, INC.
By: |
/s/ Xxxxxxx
X. Xxxxxxxxx
|
Name: Xxxxxxx X. Xxxxxxxxx
Title: | President and Chief Executive Officer |
20