Exhibit 2.1
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DISTRIBUTION AGREEMENT
by and among
XXXXXXXX CORPORATION,
ENPRO INDUSTRIES, INC.
and
COLTEC INDUSTRIES INC
dated as of
_______________, 2002
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TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS.............................................................2
Section 1.01 Definitions....................................................2
ARTICLE 2 CERTAIN ACTIONS AT OR PRIOR TO THE DISTRIBUTION;
THE DISTRIBUTION........................................................8
Section 2.01 Cooperation Prior to the Distribution..........................8
Section 2.02 Board Actions..................................................9
Section 2.03 Conditions Precedent...........................................9
Section 2.04 The Aerospace Distribution....................................11
Section 2.05 The Distribution..............................................11
Section 2.06 The Coltec Contribution.......................................11
Section 2.07 Stock Dividend................................................11
Section 2.08 Fractional Shares.............................................11
ARTICLE 3 ACCESS TO INFORMATION..................................................12
Section 3.01 Provision of Corporate Records................................12
Section 3.02 Access to Information.........................................12
Section 3.03 Litigation Cooperation........................................12
Section 3.04 Reimbursement.................................................13
Section 3.05 Treatment of Records..........................................13
Section 3.06 Preservation of Privilege.....................................13
Section 3.07 Confidentiality...............................................14
Section 3.08 Notice Preceding Compelled Disclosure.........................14
ARTICLE 4 CERTAIN OTHER AGREEMENTS...............................................14
Section 4.01 Intercompany Accounts.........................................14
Section 4.02 Further Assurances and Consents...............................15
Section 4.03 Payments......................................................15
ARTICLE 5 INDEMNIFICATION........................................................15
Section 5.01 Exculpation and Indemnification by EnPro......................15
Section 5.02 Exculpation and Indemnification by Xxxxxxxx...................16
Section 5.03 Third Party Claims; Notice and Payment of Claims..............16
Section 5.04 Procedures for Defense of Third-Party Claims..................18
Section 5.05 Specific Indemnification Issues...............................18
ARTICLE 6 RELEASES...............................................................20
Section 6.01 Release of Pre-Distribution Claims............................20
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TABLE OF CONTENTS
(continued)
Page
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ARTICLE 7 DISPUTE RESOLUTION.....................................................22
Section 7.01 Application...................................................22
Section 7.02 Initial Discussions...........................................22
Section 7.03 Appeal to Higher Management...................................22
Section 7.04 Mediation.....................................................22
Section 7.05 Jurisdiction..................................................23
ARTICLE 8 MISCELLANEOUS..........................................................23
Section 8.01 Notices.......................................................23
Section 8.02 Interpretation................................................24
Section 8.03 Amendments; No Waivers........................................24
Section 8.04 Nonexclusive Remedies.........................................25
Section 8.05 Successors and Assigns........................................25
Section 8.06 Third-Party Beneficiaries.....................................25
Section 8.07 Governing Law.................................................25
Section 8.08 Counterparts; Effectiveness...................................25
Section 8.09 Entire Agreement..............................................25
Section 8.10 Severability..................................................25
Section 8.11 Termination...................................................25
Section 8.12 Survival......................................................26
Section 8.13 Expenses......................................................26
SCHEDULES
Schedule 1.01 Specific Coltec Liabilities
Schedule 1.02 Contributed Subsidiaries
Schedule 1.03 EnPro Litigation
Schedule 1.04 Xxxxxxxx Litigation
Schedule 5.04(a) Defense Procedure Exceptions
Schedule 8.13 Expense Exceptions
ANNEXES
Annex A Form of Employee Matters Agreement
Annex B Form of Tax Matters Arrangements
Annex C Form of TIDES Indemnification Agreement
Annex D Form of Transition Services Agreement
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DISTRIBUTION AGREEMENT
Distribution Agreement, dated as of ______________, 2002 (this
"AGREEMENT"), by and among Xxxxxxxx Corporation, a New York corporation
("XXXXXXXX"), EnPro Industries, Inc., a North Carolina corporation ("ENPRO")
and Coltec Industries Inc, a Pennsylvania corporation ("COLTEC").
RECITALS
A. The Board of Directors of Coltec, after consultation with Coltec's
management and financial and legal advisors, has determined that it is
appropriate and in the best interests of Coltec and its sole shareholder to
divest Coltec's direct and indirect ownership interest in Coltec Aerospace,
through a dividend of all of the GPEC Common Stock to Xxxxxxxx pursuant to the
terms and subject to the conditions of this Agreement and the Transfer Documents
(the "AEROSPACE DISTRIBUTION").
B. The Board of Directors of Xxxxxxxx, after consultation with Xxxxxxxx'x
management and financial and legal advisors, has determined that it is
appropriate and in the best interests of Xxxxxxxx and the Xxxxxxxx Shareholders
to divest Xxxxxxxx'x indirect ownership interest in the EnPro Business, through
a pro rata distribution of all of the EnPro Common Stock to the Xxxxxxxx
Shareholders pursuant to the terms and subject to the conditions of this
Agreement (the "DISTRIBUTION").
C. The Aerospace Distribution and the Distribution are intended to qualify
as tax-free transactions (except as to payment of cash in lieu of fractional
shares) to Coltec, Xxxxxxxx and their respective shareholders, as applicable,
under Sections 361 and 355 of the Code.
X. Xxxxxxxx, EnPro, Coltec and certain other of their respective
Subsidiaries have entered into the Transfer Documents, and have agreed to
complete the transactions, and take or cause to be taken the other actions,
contemplated by the Transfer Documents in order to (i) consummate the Aerospace
Distribution and (ii) effect the Coltec Contribution.
X. Xxxxxxxx, EnPro and Coltec desire to set forth herein the matters
relating to the relationship and the respective rights and obligations of the
parties to one another following the Aerospace Distribution and the
Distribution.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and
undertakings contained in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Xxxxxxxx, EnPro and Coltec hereby agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01 Definitions. The following terms, as used herein, have the
following meanings:
"Action" means any claim, suit, action, demand, order, arbitration,
inquiry, investigation or other proceeding of any nature (whether criminal,
civil, legislative, administrative, regulatory, prosecutorial or otherwise)
asserted or brought by or before any arbitrator, mediator or Governmental Entity
or similar Person or body.
"Aerospace Distribution" has the meaning set forth in the recitals.
"Aerospace Distribution Date" means _______________, 2002.
"Affiliate" has the meaning ascribed to such term in Rule 12b-2 of the
Exchange Act as of the date hereof; provided, however, that Xxxxxxxx and EnPro
(in each case with the members of their respective Groups) shall not be deemed
to be Affiliates of each other for purposes of this Agreement.
"Agreement" has the meaning set forth in the preamble.
"Ancillary Agreements" means all agreements, certificates, deeds,
instruments, assignments and other written arrangements (other than this
Agreement and the Transfer Documents) entered into between Xxxxxxxx and one or
more members of the EnPro Group in connection with the Aerospace Distribution
and the Distribution, including the Employee Matters Agreement, the Tax Matters
Arrangements, the TIDES Indemnification Agreement and the Transition Services
Agreement.
"Business Day" means any day other than a Saturday, Sunday or one on which
banks are authorized or required by law to close in Charlotte, North Carolina.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder, including any successor language.
"Coltec" has the meaning set forth in the preamble.
"Coltec Aerospace" means the businesses conducted on the Aerospace
Distribution Date by Coltec and its Subsidiaries and the Liabilities listed on
Schedule 1.01 that will be transferred by Coltec to Xxxxxxxx as the Aerospace
Distribution.
"Coltec Contribution" means the contribution from Xxxxxxxx to EnPro after
the Aerospace Distribution Date and prior to the Distribution Date of (i)
Coltec and its direct and indirect Subsidiaries, excluding Coltec Aerospace and
(ii) a portion of the Coltec Senior Notes acquired by Xxxxxxxx in an exchange
offer intended to be conducted by Xxxxxxxx prior to the Aerospace Distribution
Date.
"Coltec Senior Notes" means the $300 million aggregate principal amount of
7 1/2% Senior Notes issued by Coltec and due April 15, 2008.
"Commission" means the Securities and Exchange Commission.
"Contributed Subsidiaries" means all entities listed on Schedule 1.02,
which include (i) the direct or indirect Subsidiaries of EnPro, (ii) those other
entities in which, as of the Distribution Date, EnPro or any direct or indirect
Subsidiary of EnPro owns a minority interest and (iii) all predecessors to those
entities referenced in (i) and (ii) above.
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"Corporate Records" has the meaning set forth in Section 3.01.
"Damages" means, with respect to any Person, any and all damages (including
punitive and consequential damages if not otherwise expressly excluded), losses,
Liabilities, fines, costs and expenses incurred or suffered by such Person
(including all expenses of investigation, all reasonable attorneys' and expert
witnesses' fees and all other costs, charges and out-of-pocket expenses incurred
in connection with any Action or threatened Action).
"Distribution" has the meaning set forth in the recitals.
"Distribution Agent" means Wachovia Bank, N.A.
"Distribution Date" means ______________, 2002.
"Distribution Time" means 11:59 p.m., Charlotte, North Carolina time, on
the Distribution Date.
"Employee Matters Agreement" means the Employee Matters Agreement
substantially in the form attached as Annex A to be entered into on or before
the Distribution Date between Xxxxxxxx and EnPro, with such changes thereto as
Xxxxxxxx and EnPro shall agree, and as it may be amended from time to time.
"EnPro" has the meaning set forth in the preamble.
"EnPro Business" means the businesses conducted by the EnPro Group at any
time prior to or on the Distribution Date, including businesses that have been
discontinued, sold, transferred or otherwise disposed of by a member of the
EnPro Group, but in each case excluding the Xxxxxxxx Business and Coltec
Aerospace.
"EnPro Common Stock" means the common stock, par value $0.01 per share, of
EnPro.
"EnPro Group" means EnPro and the Contributed Subsidiaries, including all
successors to each of those Persons.
"EnPro Group Liabilities" means the following and only the following
obligations and Liabilities of any and all members of the EnPro Group:
o Liabilities of, associated with, arising from or relating primarily to
the ownership, use, possession, operation or conduct of the EnPro
Business or the assets, business or operations of the EnPro Group
prior to, on or after the Distribution Date;
o all other Liabilities of the EnPro Group under this Agreement, any
Transfer Document or any Ancillary Agreement, including, without
limitation, the EnPro Litigation;
o all Liabilities that would be reflected as liabilities or obligations
on a consolidated balance sheet or reflected as contingencies with
respect to such a
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consolidated balance sheet relating to the EnPro Business after giving
effect to the Aerospace Distribution and the Distribution;
o all Liabilities associated with the information in the Information
Statement and the Form 10 provided by EnPro pursuant to the Side
Letter; and
o all Liabilities arising from or out of a breach by any member of the
EnPro Group of its obligations under this Agreement, any Ancillary
Agreement or any Transfer Document.
but does not include (x) Liabilities for Taxes (which will be governed by the
Tax Matters Arrangements), (y) Liabilities specifically addressed in the
Employee Matters Agreement and the TIDES Indemnification Agreement and (z) any
and all Xxxxxxxx Group Liabilities.
"EnPro Indemnifiable Liabilities" has the meaning set forth in Section
5.01.
"EnPro Indemnitees" has the meaning set forth in Section 5.02.
"EnPro Litigation" means the litigation identified as such on Schedule 1.03
and any additional Actions brought in connection therewith.
"EnPro Released Parties" has the meaning set forth in Section 6.01(b).
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Finally Determined" means, with respect to any Action, threatened Action
or other matter, that the outcome or resolution of that Action, threatened
Action or other matter either (i) has been decided through binding arbitration
or by a Governmental Entity of competent jurisdiction by judgment, order, award,
or other ruling or (ii) has been settled or voluntarily dismissed by the parties
pursuant to the dispute resolution procedure set forth in Article 7 or otherwise
and, in the case of each of clauses (i) and (ii), the claimants' rights to
maintain that Action, threatened Action or other matter have been finally
adjudicated, waived, released, discharged, barred or extinguished, and that
judgment, order, ruling, award, settlement or dismissal (whether mandatory or
voluntary, but if voluntary that dismissal must be final, binding and with
prejudice as to all claims specifically pleaded in that Action, threatened
Action or other matter) is subject to no further appeal, vacatur proceeding or
discretionary review.
"Form 10" means the registration statement on Form 10 filed by EnPro with
the Commission to effect the registration of the EnPro Common Stock pursuant to
the Exchange Act in connection with the Distribution, as such registration
statement may be amended or supplemented from time to time.
"Xxxxxxxx" has the meaning set forth in the preamble.
"Xxxxxxxx Business" means the businesses conducted by the Xxxxxxxx Group at
any time prior to or on the Distribution Date, including businesses that have
been discontinued,
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sold, transferred or otherwise disposed of by a member of the Xxxxxxxx Group,
but in each case excluding the EnPro Business.
"Xxxxxxxx Common Stock" means the common stock, par value $5.00 per share,
of Xxxxxxxx.
"Xxxxxxxx Group" means Xxxxxxxx and its direct and indirect Subsidiaries,
including all successors to each of those Persons, other than the EnPro Group.
"Xxxxxxxx Group Liabilities" means the following and only the following
obligations and Liabilities of any and all members of the Xxxxxxxx Group:
o Liabilities of, associated with, arising from or relating primarily to
the ownership, use, possession, operation or conduct of the Xxxxxxxx
Business or the assets, business or operations of the Xxxxxxxx Group
prior to, on or after the Distribution Date;
o all other Liabilities of Xxxxxxxx under this Agreement, any Transfer
Document or any Ancillary Agreement, including, without limitation,
the Xxxxxxxx Litigation;
o all Liabilities that would be reflected as liabilities or obligations
on a consolidated balance sheet or reflected as contingencies with
respect to such a consolidated balance sheet relating to the Xxxxxxxx
Business after giving effect to the Aerospace Distribution and the
Distribution;
o all Liabilities associated with the information in the Information
Statement and the Form 10 provided by Xxxxxxxx pursuant to the Side
Letter; and
o all Liabilities arising from or out of a breach by any member of the
Xxxxxxxx Group of its obligations under this Agreement, any Ancillary
Agreement or any Transfer Document.
but does not include (x) Liabilities for Taxes (which are governed by the Tax
Matters Arrangements), (y) Liabilities specifically addressed in the Employee
Matters Agreement and the TIDES Indemnification Agreement and (z) any and all
EnPro Group Liabilities.
"Xxxxxxxx Indemnifiable Liabilities" has the meaning set forth in Section
5.02.
"Xxxxxxxx Indemnitees" has the meaning set forth in Section 5.01.
"Xxxxxxxx Litigation" means the litigation identified as such on Schedule
1.04 and any additional Actions brought in connection therewith.
"Xxxxxxxx Released Parties" has the meaning set forth in Section 6.01(a).
"Xxxxxxxx Shareholders" means the holders of Xxxxxxxx Common Stock of
record as of the Record Date.
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"Governmental Entity" means any federal, state, local or foreign government
or any court, tribunal, administrative agency or commission or other
governmental or regulatory authority or agency, domestic, foreign or
supranational.
"GPEC" means Xxxxxxxx Pump and Engine Control Systems, Inc.
"GPEC Common Stock" means the common stock, par value $1.00 per share, of
GPEC.
"Group" means, as the context requires, the EnPro Group or the Xxxxxxxx
Group.
"Indemnified Party" has the meaning set forth in Section 5.03(a).
"Indemnifying Party" has the meaning set forth in Section 5.03(a).
"Information Statement" has the meaning set forth in Section 2.01(a).
"IRS" means the Internal Revenue Service.
"Law" means any applicable federal, state, local or foreign law, statute,
ordinance, directive, rule, regulation, judgment, order, injunction, decree,
arbitration award, agency requirement, license or permit of any Governmental
Entity.
"Liability" or "Liabilities" means any and all losses, claims, charges,
debts, demands, actions, causes of action, suits, damages, obligations,
payments, costs and expenses, sums of money, accounts, bonds, indemnities and
similar obligations, exoneration, covenants, contracts, controversies,
agreements, promises, doings, omissions, guarantees, make whole agreements and
similar obligations, and other liabilities and requirements, including all
contractual obligations, whether absolute or contingent, matured or unmatured,
liquidated or unliquidated, accrued or unaccrued, known or unknown, whenever
arising, and including those arising under any law, rule, regulation, Action,
threatened or contemplated Action (including the costs and expenses of demands,
assessments, judgments, settlements and compromises relating thereto and
attorneys' fees and any and all costs and expenses whatsoever reasonably
incurred in investigating, preparing or defending against any such Actions or
threatened or contemplated Actions), order or consent decree of any Governmental
Entity or any award of any arbitrator or mediator of any kind, and those arising
under any contract, commitment or undertaking, including those arising under
this Agreement, any Transfer Document or any Ancillary Agreement, in each case,
whether or not recorded or reflected or required to be recorded or reflected on
the books and records or financial statements of any Person.
"NYSE" means The New York Stock Exchange.
"Person" means any individual, corporation (including not-for-profit
corporations), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, Governmental Entity or other
entity of any kind or nature, unless another definition is specifically provided
for herein, in which instance such other definition shall control only in the
context in which it is used.
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"Record Date" means the date determined by Xxxxxxxx'x Board of Directors
(or by a committee of that Board or any other Person acting under authority duly
delegated to that committee or Person by Xxxxxxxx'x Board of Directors or a
committee of that Board) as the record date for determining the Xxxxxxxx
Shareholders entitled to receive the EnPro Common Stock to be issued in the
Distribution.
"Request" has the meaning set forth in Section 3.03(b).
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Side Letter" has the meaning set forth in Section 5.05(b).
"Subsidiary" of any Person means any corporation or other organization
whether incorporated or unincorporated of which at least a majority of the
securities or interests having by the terms thereof ordinary voting power to
elect at least a majority of the board of directors or others performing similar
functions with respect to such corporation or other organization is directly or
indirectly owned or controlled by such Person or by any one or more of its
Subsidiaries, or by such Person and one or more of its Subsidiaries; provided,
however, that no Person that is not directly or indirectly wholly owned by any
other Person shall be a Subsidiary of such other Person unless such other Person
controls, or has the right, power and ability to control, that Person.
"Taxes" has the meaning set forth in the Tax Matters Arrangements.
"Tax Matters Arrangements" means the Tax Matters Arrangements substantially
in the form of Annex B to be entered into on or before the Distribution Date
between Xxxxxxxx and EnPro, with such changes thereto as Xxxxxxxx and EnPro
shall agree, and as it may be amended from time to time.
"TIDES" means the $150 million liquidation value of 5 1/4% Convertible
Preferred Securities - Term Income Deferred Equity Securities issued by Coltec
Capital Trust.
"TIDES Indemnification Agreement" means the TIDES Indemnification Agreement
substantially in the form of Annex C to be entered into on or before the
Distribution Date among EnPro, Xxxxxxxx, Coltec and Coltec Capital Trust, with
such changes as the parties thereto shall agree, as it may be amended from time
to time.
"Transfer" means assign, contribute, convey, transfer and deliver.
"Transfer Documents" means all agreements, certificates, deeds,
instruments, assignments and other written arrangements relating to the
corporate restructuring that, among other things, will (i) transfer Coltec
Aerospace from Coltec to Xxxxxxxx through a series of transactions that will
culminate in the Aerospace Distribution on the Aerospace Distribution Date and
(ii) effect the Coltec Contribution.
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"Transition Services Agreement" means the Transition Services Agreement
substantially in the form attached as Annex D hereto to be entered into on or
before the Distribution Date between Xxxxxxxx and EnPro, with such changes
thereto as Xxxxxxxx and EnPro shall agree, and as it may be amended from time to
time.
ARTICLE 2
CERTAIN ACTIONS AT OR PRIOR TO THE DISTRIBUTION; THE DISTRIBUTION
Section 2.01 Cooperation Prior to the Distribution. Prior to the
Distribution Date:
(a) Xxxxxxxx, EnPro and Coltec shall prepare, and EnPro shall file with the
Commission, the Form 10, which shall include an information statement (the
"INFORMATION STATEMENT") that will describe the Distribution and EnPro and will
substantially comply with Regulation 14C under the Exchange Act. Xxxxxxxx and
EnPro shall use their reasonable efforts to cause the Form 10 to become
effective under the Exchange Act as promptly as reasonably practicable. As
promptly as reasonably practicable after the Form 10 has become effective,
Xxxxxxxx shall mail the Information Statement to the Xxxxxxxx Shareholders.
(b) Xxxxxxxx and EnPro shall cooperate in preparing, filing with the
Commission and causing to become effective any registration statements or
amendments thereto that are necessary, advisable or appropriate to reflect the
establishment of, or amendments to, any employee benefit or other plans of
Xxxxxxxx or EnPro contemplated by any Ancillary Agreement or otherwise
necessary, advisable or appropriate in connection with the Distribution.
(c) Xxxxxxxx and EnPro shall take all such action as may be necessary,
advisable 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, the Transfer Documents and the
Ancillary Agreements.
(d) Xxxxxxxx and EnPro shall prepare, and EnPro shall file and seek to make
effective, an original listing application to permit the listing of the EnPro
Common Stock on the NYSE.
(e) Coltec shall use its reasonable efforts, both prior to and after the
Aerospace Distribution Date, to duly and validly Transfer all transferable
licenses, permits and authorizations issued by any Governmental Entity that
relate to Coltec Aerospace but that are held in the name of Coltec or any other
member of the EnPro Group or any of their respective employees, officers,
directors, shareholders, agents or otherwise, on behalf of Coltec or any other
member of the EnPro Group, to GPEC (or another member of the Xxxxxxxx Group
designated by Xxxxxxxx). In the event any such Transfer cannot be effected prior
to the Aerospace Distribution Date, Coltec shall, to the extent permitted by
Law, allow GPEC, or the relevant member of the Xxxxxxxx Group, to operate under
such licenses, permits or authorizations until such Transfer can be effected.
(f) Xxxxxxxx shall use its reasonable efforts, both prior to and after the
Distribution Date, to duly and validly Transfer all transferable licenses,
permits and
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authorizations issued by any Governmental Entity that relate to the EnPro
Business but that are held in the name of Xxxxxxxx or any other member of the
Xxxxxxxx Group or any of their respective employees, officers, directors,
shareholders, agents or otherwise, on behalf of Xxxxxxxx or any other member of
the Xxxxxxxx Group, to EnPro (or another member of the EnPro Group designated by
EnPro). In the event any such Transfer cannot be effected prior to the
Distribution Date, Xxxxxxxx shall, to the extent permitted by Law, allow EnPro,
or the relevant member of the EnPro Group, to operate under such licenses,
permits or authorizations until such Transfer can be effected.
(g) Xxxxxxxx and EnPro shall cooperate prior to, on and after the
Distribution Date to identify any product licenses or technology licenses that
are (i) in the name of one or more members of one Group but used solely by the
other Group and (ii) in the name of one or more members of one Group but used
jointly with the other Group. With respect to the licenses described in (i)
above, the Group holding such license shall transfer such license to the other
Group as soon as reasonably practicable and shall grant access, subcontract or
provide such other benefits as may be necessary so that the other Group may
continue to use the relevant products or technology after the Distribution Date
until such Transfer can be effected. With respect to the licenses described in
(ii) above, the Group holding such license shall, as soon as reasonably
practicable, negotiate and enter into a commercially based fair market value
license agreement with the other Group and shall grant access, subcontract or
provide such other benefits as may be necessary so that the other Group may
continue to use the relevant products or technology after the Distribution Date
until such agreement becomes effective. In either case, the Group using the
products or technology will bear any expenses incurred as a result of the use of
the products or technology, including expenses incurred in connection with the
granting of access, subcontracting or provision of other benefits under this
Section 2.01(g).
Section 2.02 Board Actions.
(a) Coltec's Board of Directors shall establish, or delegate authority to
establish, (i) the Aerospace Distribution Date, which shall be the record date
for the Aerospace Distribution, and (ii) any appropriate procedures in
connection with the Aerospace Distribution.
(b) Xxxxxxxx'x Board of Directors shall establish, or delegate authority to
establish, (i) the Record Date and the Distribution Date, and (ii) any
appropriate procedures in connection with the Coltec Contribution and the
Distribution.
(c) EnPro's Board of Directors shall approve the receipt of the
Coltec Contribution and the dividend of the EnPro Common Stock to Xxxxxxxx in
compliance with Section 2.07.
Section 2.03 Conditions Precedent.
(a) The obligation of Coltec to consummate the Aerospace Distribution is
subject to the following conditions, any of which may be waived by Coltec in its
sole and absolute discretion, except to the extent the satisfaction of such
condition is required by Law in connection with the Aerospace Distribution:
(i) all material regulatory approvals necessary to consummate the
Aerospace Distribution shall have been received and shall be in full force
and effect;
(ii) no order, preliminary or permanent injunction or decree issued by
any court or agency of competent jurisdiction or other legal restraint or
prohibition preventing consummation of the Aerospace Distribution shall be
in effect and no other event shall have occurred or failed to occur that
prevents consummation of the Aerospace Distribution;
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(iii) the Coltec Board of Directors shall have approved the Aerospace
Distribution;
(iv) Coltec shall have received an opinion of tax counsel to the
effect that the Aerospace Distribution will be tax-free to Coltec and its
sole shareholder for federal income tax purposes, in form and substance
satisfactory to Coltec in its sole discretion; and
(v) each Transfer Document and the TIDES Indemnification Agreement
shall have been duly executed and delivered by the parties thereto.
(b) The obligation of Xxxxxxxx to consummate the Distribution is subject to
the following conditions, any of which may be waived by Xxxxxxxx in its sole and
absolute discretion, except to the extent the satisfaction of such condition is
required by Law in connection with the Distribution:
(i) the Form 10 shall have become effective under the Exchange Act,
and there shall be no stop order in effect with respect thereto, and the
Information Statement shall have been mailed to all Xxxxxxxx Shareholders;
(ii) the EnPro Common Stock to be delivered in the Distribution shall
have been approved for listing on the NYSE, subject to official notice of
issuance;
(iii) all material regulatory approvals necessary to consummate the
Distribution shall have been received and shall be in full force and
effect;
(iv) no order, preliminary or permanent injunction or decree issued by
any court or agency of competent jurisdiction or other legal restraint or
prohibition preventing consummation of the Distribution shall be in effect
and no other event shall have occurred or failed to occur that prevents
consummation of the Distribution;
(v) the Xxxxxxxx Board of Directors shall have approved the
Distribution and shall have deemed there to be no other events or
developments that shall have occurred that would result in the Distribution
having an adverse effect on Xxxxxxxx or Xxxxxxxx'x Shareholders;
(vi) Xxxxxxxx shall have received an opinion of tax counsel to the
effect that the Distribution will be tax-free to Xxxxxxxx and Xxxxxxxx
Shareholders (except with respect to cash received in lieu of fractional
shares) for federal income tax purposes, in form and substance satisfactory
to Xxxxxxxx in its sole discretion;
(vii) each Ancillary Agreement shall have been duly executed and
delivered by the parties thereto;
(viii) Coltec Aerospace shall have been transferred by Coltec to
Xxxxxxxx on the Aerospace Distribution Date, pursuant to the Transfer
Documents; and
(ix) EnPro shall have complied with Section 2.07.
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Section 2.04 The Aerospace Distribution.
(a) Subject to the terms and conditions of this Agreement and applicable
Law, on the Aerospace Distribution Date Xxxxxxxx shall be entitled to receive in
the Aerospace Distribution all of the outstanding shares of GPEC Common Stock.
(b) On the Aerospace Distribution Date, Coltec will deliver one or more
stock certificates representing all of the outstanding shares of GPEC owned by
Coltec and duly executed stock powers evidencing the transfer of ownership from
Coltec to Xxxxxxxx of all of the outstanding GPEC Common Stock. All such shares
of GPEC Common Stock shall be fully paid, nonassessable and free of preemptive
rights.
Section 2.05 The Distribution.
(a) Subject to the terms and conditions of this Agreement and applicable
Law, each holder of Xxxxxxxx Common Stock on the Record Date, other than
Xxxxxxxx, (or such holder's designated transferee or transferees) will be
entitled to receive in the Distribution one share of EnPro Common Stock for
every five shares of Xxxxxxxx Common Stock held by that shareholder on the
Record Date.
(b) On the Distribution Date, Xxxxxxxx will deliver to the Distribution
Agent a global certificate representing the aggregate number of shares of EnPro
Common Stock to be distributed to Xxxxxxxx Shareholders, other than Xxxxxxxx, in
the Distribution, which number will be certified by the Distribution Agent. Such
certificate shall be registered in the name of the Distribution Agent as agent
for the Xxxxxxxx Shareholders. As soon as practicable following the Distribution
Time, the Distribution Agent will deliver to Xxxxxxxx Shareholders stock
certificates representing shares of EnPro Common Stock. All such distributed
shares of EnPro Common Stock shall be fully paid, nonassessable and free of
preemptive rights. Shares of EnPro Common Stock represented by the global
certificate in excess of the final number of shares to be distributed to
Xxxxxxxx Shareholders will be canceled.
Section 2.06 The Coltec Contribution. After the Aerospace Distribution
Date and before the Distribution Date, Xxxxxxxx shall effect the Coltec
Contribution.
Section 2.07 Stock Dividend. On or before the Distribution Date, EnPro
shall issue to Xxxxxxxx as a stock dividend the number of shares of EnPro Common
Stock equal to the difference of (i) the number of shares of EnPro Common Stock
to be distributed to Xxxxxxxx Shareholders in the Distribution, which number
will be certified by the Distribution Agent, minus (ii) the number of shares of
EnPro Common Stock then held by Xxxxxxxx.
Section 2.08 Fractional Shares. No certificates representing fractional
shares of EnPro Common Stock will be distributed in the Distribution. Xxxxxxxx
will direct the Distribution Agent to determine the number of whole shares and
fractional shares of EnPro Common Stock allocable to each Xxxxxxxx Shareholder.
Upon the determination by the Distribution Agent of the number of fractional
shares of EnPro Common Stock, as soon as practicable after the Distribution
Date, the Distribution Agent, acting on behalf of the holders thereof, shall
sell such fractional shares for cash on the open market in each case at the
then-prevailing market prices and shall disburse to each holder entitled
thereto, in lieu of any fractional share of EnPro Common Stock, without
interest, that holder's ratable share of the proceeds of that sale, after making
appropriate deductions of the amounts required, if any, to be
11
withheld for United States federal income tax purposes, and to repay expenses
reasonably incurred by the Distribution Agent in connection with such sale.
ARTICLE 3
ACCESS TO INFORMATION
Section 3.01 Provision of Corporate Records. Except as otherwise
specifically set forth in this Agreement, any Transfer Document or any Ancillary
Agreement, and subject to normal corporate document retention policies that
permit destruction of documents, prior to or as soon as practicable following
the Distribution Date, each Group shall provide to the other Group all
documents, books, records, computer data and other data (including minute books,
stock registers, stock certificates and documents of title) (collectively,
"CORPORATE RECORDS") in its possession relating primarily to the other Group or
its businesses, operations or properties (after giving effect to the
transactions contemplated hereby and the Transfer Documents); provided, however,
that if any such Corporate Records relate to both Groups or the businesses,
operations or properties of both Groups, each such Group shall provide to the
other Group true and complete copies of such Corporate Records. Data stored in
electronic form shall be provided in the format in which it existed at the
Distribution Date, except as otherwise specifically set forth in this Agreement
or any Ancillary Agreement or any Transfer Document.
Section 3.02 Access to Information. From and after the Distribution Date,
each Group shall afford promptly to the other Group and its accountants, counsel
and other designated representatives reasonable access during normal business
hours to all personnel and Corporate Records in such Group's possession relating
to the other Group or the businesses, operations or properties of the other
Group (after giving effect to the transactions contemplated hereby and by the
Transfer Documents) (other than data and information subject to (i) an
attorney-client or other privilege that is not specifically subject to the
provisions of this Article 3 or (ii) in the case of any joint-defense
arrangements between a member or members of one Group and a member or members of
the other Group, the access provisions of the relevant joint-defense agreement),
insofar as such access is reasonably required by such other Group, including for
audit, accounting, litigation, regulatory compliance, disclosure or reporting
purposes.
Section 3.03 Litigation Cooperation. From and after the Distribution Date:
(a) Each Group shall use reasonable efforts to make available to the other
Group and its accountants, counsel, and other designated representatives, upon
written request, its current and former directors, officers, employees and
representatives as witnesses, and shall otherwise cooperate with the other
Group, to the extent reasonably required in connection with any Action or
threatened Action arising out of either Group's businesses, operations or
properties in which the requesting party may from time to time be involved and
to the extent that there is no conflict in the Action or threatened Action
between the requesting Group and itself.
(b) Each Group shall promptly notify the other Group hereto, upon its
receipt or the receipt by any of its members, of a request or requirement (by
written questions, interrogatories, requests for information or documents,
subpoenas, civil investigative demands or other similar processes) that relates
to the businesses, operations or properties of the other Group (a "REQUEST")
reasonably regarded as calling for the inspection or production of any documents
12
or other information in its possession, custody or control, as received from any
Person. In addition to complying with the applicable provisions of Section 3.06,
each Group shall assert and maintain, or cause its members to assert and
maintain, any applicable claim to privilege, immunity, confidentiality or
protection in order to protect such documents and other information from
disclosure, and shall seek to condition any disclosure that may be required on
such protective terms as may be appropriate. Neither Group may voluntarily
waive, undermine or fail to take any action reasonably necessary to preserve an
applicable privilege without the prior written consent of the affected party (or
any affected Group member or Affiliates of any such party).
Section 3.04 Reimbursement. Except to the extent that any member of a Group
is obligated to indemnify any member of the other Group under Article 5 for that
cost or expense, each Group providing information or witnesses to the other
Group, or otherwise incurring any expense in connection with its cooperation
under Section 3.01, Section 3.02 or Section 3.03, will be entitled to receive
from the recipient thereof, upon the presentation of reasonably detailed
invoices therefor, payment for all out-of-pocket costs and expenses that may
reasonably be incurred in providing such information, witnesses or cooperation.
Section 3.05 Treatment of Records. Except as otherwise required by Law or
agreed to in writing, upon compliance with the requirements set forth in Section
3.01, each of Xxxxxxxx and EnPro shall, and shall cause the members of its
respective Group to return any photocopies or similar reproductions of all
Corporate Records provided by, or relating primarily to, the other Group or its
businesses, operations or properties (after giving effect to the Distribution)
to the other Group. Any Corporate Records received by any member of a Group
after the Distribution Date and relating primarily to the other Group or its
businesses, operations or properties shall promptly be provided to such other
Group in accordance with the procedures set forth in Section 3.01 and this
Section 3.05. Notwithstanding the foregoing, there shall be no requirement for
Xxxxxxxx or EnPro, or any members of their respective Groups, to destroy or
otherwise dispose of any Corporate Records (or photocopies or similar
reproductions thereof) to the extent that such Corporate Records relate to its
respective businesses, operations or properties (after giving effect to the
Distribution).
Section 3.06 Preservation of Privilege. Xxxxxxxx and EnPro recognize that
in preparation for and as a consequence of the transactions contemplated by this
Agreement, the Ancillary Agreements and the Transfer Documents, they may have
common interests in the defense of certain pending or threatened Actions that
may necessitate the exchange between Xxxxxxxx and EnPro or their counsel of
documents or other information that is subject to the attorney-client privilege,
the work product doctrine or other legally recognized privileges, protections or
immunities from discovery. Each of Xxxxxxxx and EnPro agree to take in addition
to, and not in limitation of, its obligations under Section 3.03(b) all
reasonable efforts to protect and maintain, and to cause its Affiliates to
protect and maintain, any applicable claim to privilege, immunity, protection or
confidentiality in order to protect such documents and other information from
disclosure or use of which the affected party (or any of its Affiliates) does
not approve. In addition to, and not in limitation of, its obligations under
Section 3.03(b) and without limiting the generality of the foregoing, neither
Xxxxxxxx nor EnPro nor their respective Affiliates may voluntarily waive or
undermine, or fail to defend in a commercially reasonable manner, any privilege
or protection or take or fail to take any other commercially reasonable
13
action (a) that could result in the disclosure of any common-interest or
joint-defense materials to any Person that is neither a party to this Agreement
nor an Affiliate of any such party or (b) that would have the effect of waiving
or undermining such privilege or protection, in either case, without the prior
written consent of the affected party and any affected Affiliate of such
affected party.
Section 3.07 Confidentiality. Except as may be more specifically addressed
in any Ancillary Agreement or Transfer Document, each party shall hold and shall
cause its consultants and advisors and the members of its Group to hold in
strict confidence, unless compelled to disclose by judicial or administrative
process or, in the opinion of its counsel, by other requirements of Law or
applicable requirements of any national stock exchange or inter-dealer automated
quotation system on which the securities of such party or any of its Affiliates
are traded, all information known to be confidential or proprietary (other than
any such information relating solely to the businesses, operations or properties
of such party) concerning the other Group furnished it by such other Group or
its representatives pursuant to this Agreement, any Transfer Document or any
Ancillary Agreement (except to the extent that such information can be shown to
have been (i) previously known by the receiving party, (ii) in the public domain
through no fault of the receiving party, (iii) independently developed by the
receiving party or (iv) disclosed to the receiving party by a third party
without violation of an obligation of confidentiality known to the receiving
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 who shall be advised of the provisions of this
Section 3.07. Each party shall exercise the same care to hold confidential
information concerning or supplied by the other party as it takes to preserve
confidentiality for its own similar information.
Section 3.08 Notice Preceding Compelled Disclosure. If either Group is
legally compelled, pursuant to a subpoena, civil investigative demand,
regulatory demand or similar process, to disclose any information which relates
to the other Group, such Group will promptly notify the other Group to permit it
to seek a protective order or take other appropriate action. The Group will also
cooperate in all reasonable efforts by the other Group to obtain a protective
order or other reasonable assurance that confidential treatment will be accorded
the information. If, in the absence of a protective order, either Group is
compelled to disclose information as a matter of law (including as a matter of
federal or state securities law) or pursuant to the rules and policies of any
national securities exchange on which any securities of any member of either
Group are listed for trading, such Group may disclose only that part of the
information as is required by law to be disclosed (in which case, prior to such
disclosure, such Group will advise and consult with the other Group, such Group
and its counsel as to such disclosure and the nature and wording of such
disclosure), and, to the extent practical in the circumstances, such Group will
use its reasonable best efforts to obtain confidential treatment for any
information so disclosed.
ARTICLE 4
CERTAIN OTHER AGREEMENTS
Section 4.01 Intercompany Accounts.
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(a) Except as otherwise specifically set forth in any Transfer Document or
any Ancillary Agreement, all intercompany trade, accounts receivable and
accounts payable between any member of one Group and any member of another Group
in existence at the Distribution Time shall be settled and paid in accordance
with their terms.
(b) On or before the Distribution Date, each of Xxxxxxxx and EnPro shall
enter into, or, where applicable, shall cause its respective Subsidiary or
Subsidiaries to enter into, each Ancillary Agreement.
(c) On or before the Aerospace Distribution Date, each of Xxxxxxxx and
Coltec shall enter into, or, where applicable, shall cause its respective
Subsidiary or Subsidiaries to enter into, each Transfer Document.
Section 4.02 Further Assurances and Consents. In addition to the actions
specifically provided for elsewhere in this Agreement, each of Xxxxxxxx, EnPro
and Coltec shall use its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things reasonably necessary,
advisable or appropriate under applicable Laws or otherwise to consummate and
make effective the transactions contemplated by this Agreement, the Ancillary
Agreements and the Transfer Documents, including using its reasonable efforts to
obtain any consents and approvals, to enter into all agreements and to make any
filings and applications necessary, advisable or appropriate in order to
consummate the transactions contemplated by this Agreement. Notwithstanding the
foregoing, no party shall be obligated to pay any consideration therefor (except
for filing fees and other similar charges) to any third party from whom such
consents or approvals are requested or to take any action or omit to take any
action if the taking of or the omission to take such action would be
unreasonably burdensome to the party, its Group or its Group's business. Each of
Xxxxxxxx, EnPro and Coltec agree to enter into and execute such additional
documents as may be reasonably necessary, advisable or appropriate to effect the
transactions contemplated by this Agreement, any Transfer Document or any
Ancillary Agreement; provided, however, that such additional documents shall not
diminish any of the rights granted or increase any of the Liabilities of either
Group, as set forth in this Agreement, any Transfer Document or any Ancillary
Agreement.
Section 4.03 Payments. If, after the Distribution Time, any party or any
member of such party's Group receives payments belonging to another party or any
member of such other party's Group, the recipient shall promptly account for and
remit said payment (or cause it to be accounted for and remitted) to such other
party.
ARTICLE 5
INDEMNIFICATION
Section 5.01 Exculpation and Indemnification by EnPro. Subject to the
provisions of Section 5.03, from and after the Distribution Date, each of EnPro
and Coltec, without any further responsibility or liability of, or recourse to,
Xxxxxxxx, any member of the Xxxxxxxx Group, any Affiliate of Xxxxxxxx or any of
their respective directors, shareholders, officers, employees, agents,
consultants, representatives, successors, transferees or assignees
(collectively, the "XXXXXXXX INDEMNITEES"), shall as between EnPro and Coltec,
on the one hand, and the Xxxxxxxx Group, on the other hand, absolutely and
irrevocably be solely liable and
15
responsible for the EnPro Group Liabilities and shall indemnify, defend, save
and hold harmless Xxxxxxxx and each of the Xxxxxxxx Indemnitees from and against
all Damages not actually paid by cash or delivery of products or services by the
Indemnified Party prior to the Aerospace Distribution Date and arising out of,
associated with or resulting from (i) any EnPro Group Liability and (ii) the
breach by EnPro, Coltec or any other member of the EnPro Group of any of its
obligations under this Agreement or any Transfer Document (clauses (i) and (ii)
are collectively referred to as the "ENPRO INDEMNIFIABLE LIABILITIES"). Neither
Xxxxxxxx nor any Xxxxxxxx Indemnitee shall be liable to EnPro, Coltec, any other
member of the EnPro Group or any of their respective Affiliates, directors,
shareholders, officers, employees, agents, consultants, customers, end users
(including any Persons who came into contact with any product associated with
the EnPro Business), representatives, successors, transferees or assignees for
any reason whatsoever on account of any EnPro Indemnifiable Liabilities.
Notwithstanding the foregoing, Xxxxxxxx shall remain liable to EnPro and Coltec
for any breach by Xxxxxxxx or any member of the Xxxxxxxx Group of any of its or
their obligations under this Agreement.
Section 5.02 Exculpation and Indemnification by Xxxxxxxx. Subject to the
provisions of Section 5.03, from and after the Distribution Date, Xxxxxxxx,
without any further responsibility or liability of, or recourse to, EnPro, any
member of the EnPro Group, any Affiliate of EnPro or any of their respective
directors, shareholders, officers, employees, agents, consultants,
representatives, successors, transferees or assignees (collectively, the "ENPRO
INDEMNITEES"), shall as between Xxxxxxxx and the EnPro Group absolutely and
irrevocably be solely liable and responsible for the Xxxxxxxx Group Liabilities
and shall indemnify, defend, save and hold harmless EnPro and each of the EnPro
Indemnitees from and against all Damages not actually paid by the Indemnified
Party prior to the Aerospace Distribution Date and arising out of, associated
with or resulting from (i) any Xxxxxxxx Group Liability and (ii) the breach by
Xxxxxxxx or any member of the Xxxxxxxx Group of any of its obligations under
this Agreement or any Transfer Document (clauses (i) and (ii) are collectively
referred to as the "XXXXXXXX INDEMNIFIABLE LIABILITIES"). Neither EnPro nor any
of the other EnPro Indemnitees shall be liable to Xxxxxxxx, any member of the
Xxxxxxxx Group or any of their respective Affiliates, directors, shareholders,
officers, employees, agents, consultants, customers, end users (including any
Persons who come in contact with any product associated with the Xxxxxxxx
Business), representatives, successors, transferees or assignees for any reason
whatsoever on account of any Xxxxxxxx Indemnifiable Liabilities. Notwithstanding
the foregoing, EnPro shall remain liable to Xxxxxxxx for any breach by EnPro or
any member of the EnPro Group of any of its or their obligations under this
Agreement.
Section 5.03 Third Party Claims; Notice and Payment of Claims.
(a) (i) If either a party to this Agreement or any Person entitled to a
defense or indemnification under this Agreement (an "INDEMNIFIED PARTY")
determines that it is or may be entitled to a defense or indemnification by
Xxxxxxxx, on the one hand, or EnPro or Coltec, on the other hand, as the case
may be (the "INDEMNIFYING PARTY"), under this Agreement:
(A) the Indemnified Party shall deliver promptly to the Indemnifying
Party a written notice and demand for a defense or indemnification,
specifying the basis for the claim for defense or indemnification, the
nature of the claim, and, if known, the amount for which the Indemnified
Party reasonably believes it is entitled to be indemnified; and
16
(B) the Indemnifying Party shall deliver to the Indemnified Party
promptly after receipt of the notice requesting indemnification a written
notice stating that the Indemnifying Party intends to (x) assume the
defense of such litigation or claim (subject to Section 5.04(a)); (y) pay
the claim in immediately available funds; or (z) object or reserve its
rights with respect to the demand for a defense or indemnification.
(ii) If the amount for which the Indemnifying Party may be liable is not
known or reasonably determinable at the time of such notice, the Indemnified
Party shall deliver to the Indemnifying Party a further notice specifying the
amount for which the Indemnified Party reasonably believes it is entitled to be
indemnified as soon as reasonably practicable after such amount is known or
reasonably determinable and the Indemnifying Party shall have a further
opportunity to take action as set forth above. Nothing in this section shall be
interpreted to abrogate or delay a party's obligation to provide the other with
a defense under this Agreement.
(iii) The failure by an Indemnified Party to promptly notify an
Indemnifying Party of a notice and demand for a defense or indemnification shall
not relieve the Indemnifying Party of any indemnification or defense
responsibility under this Article 5, except to the extent such failure
materially prejudices the ability of the Indemnifying Party to defend such
claim.
(b) Any objection to a claim for a defense or indemnification shall be
resolved in accordance with Article 7. Anything in this Article to the contrary
notwithstanding, the Indemnifying Party shall not without the Indemnified
Party's prior written consent, which shall not be unreasonably withheld, settle
or compromise any Action or claim or consent to the entry of any judgment with
respect to any Action, claim or proceeding for anything other than money damages
paid by the Indemnifying Party unless the settlement does not involve the
imposition of any liability on the Indemnified Party or any restriction on its
activities.
(c) The amount of any Damages for which an Indemnifying Party must provide
indemnification hereunder shall be reduced by any insurance recovery if and when
actually realized or received. With regard to any claim which is covered by a
third party non-captive insurance policy of the Indemnified Party, the
Indemnified Party shall reasonably pursue all rights thereunder. If an
Indemnified Party receives an amount under insurance coverage with respect to
Damages at any time subsequent to any indemnification provided by an
Indemnifying Party pursuant to this Article 5, then such Indemnified Party shall
promptly reimburse the Indemnifying Party for any payment made or expense
incurred by such Indemnifying Party in connection with providing such
indemnification up to such amount actually received by the Indemnified Party.
The potential availability of insurance coverage to Xxxxxxxx or EnPro shall not
relieve the Indemnifying Party of its obligations for defense or indemnification
hereunder or delay its obligation to defend or pay any sums due hereunder. If an
Indemnified Party seeks to resolve an insurance coverage dispute with a third
party non-captive insurer by entering into a settlement agreement, including any
buyback agreement, that releases the insurer from claims or potential claims
under the insurer's policy that, in the absence of insurance coverage, are the
responsibility of the Indemnifying Party, the Indemnified Party must obtain the
Indemnifying Party's written consent prior to entering the settlement agreement
with the insurer. The
17
Indemnifying Party shall be entitled to the portion of such settlement proceeds
that relate to the claims or potential claims that are subject to indemnity.
(d) If any proceeds under any Xxxxxxxx Group captive insurance policy are
paid with respect to any Damages, such amounts shall be reimbursed to the
Xxxxxxxx Group by EnPro.
Section 5.04 Procedures for Defense of Third-Party Claims.
(a) If the Indemnified Party's claim for indemnification is based, under
this Agreement, on an Action, judicial or otherwise, brought by a third party,
and the Indemnifying Party does not object under Section 5.03(b)), the
Indemnifying Party shall assume the defense of such third-party claim at the
Indemnifying Party's sole cost and expense. Any such defenses shall be conducted
by attorneys employed or retained by the Indemnifying Party and reasonably
acceptable to the Indemnified Party. The Indemnified Party shall have the right
to participate in (but not control) the defense of such claim at its sole cost
and expense. Notwithstanding the first sentence of this Section 5.04(a), if (i)
the Indemnifying Party does not assume the defense of a claim as provided in
this Section 5.04(a), (ii) the nature of any claim presents a conflict of
interest between the Indemnified Party and the Indemnifying Party or (iii) as
otherwise provided on Schedule 5.04(a), then the Indemnified Party may assume
and control its own defense, and the Indemnifying Party shall be liable for all
reasonable costs or expenses paid or incurred by the Indemnified Party in
connection therewith.
(b) The Indemnifying Party shall pay to the Indemnified Party in
immediately available funds the amounts for which the Indemnified Party is
entitled to be indemnified within 30 days after such third-party claim is
Finally Determined (or within such longer period as agreed to by the parties).
If the Indemnifying Party does not assume the defense of any such third-party
claims, the Indemnifying Party shall be bound by the result obtained with
respect thereto by the Indemnified Party, except that the Indemnifying Party has
the right to contest that it is obligated to the Indemnified Party in respect of
the third-party claim under the terms of this Agreement.
Section 5.05 Specific Indemnification Issues.
(a) Notwithstanding anything in this Agreement to the contrary: (i) any
claims or demands in connection with the Xxxxxxxx Litigation or the EnPro
Litigation shall not be deemed to be third-party claims for purposes of this
Agreement; (ii) Xxxxxxxx, with respect to the Xxxxxxxx Litigation, and EnPro,
with respect to the EnPro Litigation, shall have the exclusive right to (A)
control the defense of such litigation and (B) settle, compromise or discharge
such litigation; and (iii) Xxxxxxxx, with respect to the EnPro Litigation, and
EnPro, with respect to the Xxxxxxxx Litigation, shall: (Y) provide cooperation
in litigation pursuant to the terms of Section 3.03; and (Z) to the extent
reasonably requested by Xxxxxxxx or EnPro, as the case may be, sign such
documents as may be reasonably necessary to effect or assist in the pursuit,
defense, settlement, compromise or discharge of such litigation.
(b) If the indemnification provided for in this Article 5 is unavailable to
an Indemnified Party with respect to a loss for which indemnification would
otherwise be required to be provided pursuant to the terms hereof that arises
out of or is related to information
18
contained in the Information Statement or Form 10, then the Indemnifying Party,
in lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such loss, in such
proportion as is appropriate to reflect the relative fault of Xxxxxxxx, on the
one hand, and EnPro, on the other hand. The relative fault of any party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by that party or a member of its
Group. Xxxxxxxx and EnPro have entered into a letter agreement that sets forth
the responsibilities of the parties for the disclosure in the Information
Statement and Form 10 (the "SIDE LETTER").
(c) With respect to any Liabilities or any Actions arising out of or
associated with, or alleged to arise out of or be associated with, an act or
omission of any former, current or future officer, director, employee or agent
of Xxxxxxxx on the one hand, or EnPro or any Contributed Subsidiary on the other
hand, prior to the Distribution Date, the respective obligations of Xxxxxxxx and
EnPro pursuant to this Agreement (including their respective indemnification
obligations) shall remain unaffected and in full force and effect, regardless of
whether such person was, at the time of such act or omission, an officer,
director, employee or agent whose duties related primarily to the Xxxxxxxx
Business or the EnPro Business, and regardless of whether such Liabilities or
Actions are alleged or determined in any judgment, award or decree after trial
to arise out of or be associated with such person's negligence, gross
negligence, recklessness or intentional conduct or culpability.
(d) The parties acknowledge that after the Distribution Date the parties
will have negotiated business relationships, which relationships will be
described in contracts, agreements and other documents entered into in the
normal course of business. Such documents may include agreements by the parties
and their Affiliates and Subsidiaries to supply, after the Distribution Date,
materials, products and services and to lease facilities, tangible and
intangible property. Such business relationships shall not be subject to the
indemnity provisions hereof, unless the parties expressly agree to the contrary
in the agreements governing such relationships.
(e) Except as otherwise provided herein, in the event an Action is brought
by a third party in which the liability as between Xxxxxxxx and EnPro is Finally
Determined to be joint or in which the entitlement to indemnification hereunder
is not readily determinable, the parties shall negotiate in good faith in an
effort to agree, as between Xxxxxxxx, on the one hand, and EnPro and Coltec, on
the other hand, on the proper allocation of liability or entitlement to
indemnification, as well as the proper allocation of the costs of any joint
defense or settlement pursuant to Section 5.04, all in accordance with the
provisions of, and the principles set forth in, this Agreement. In the absence
of any such agreement, such allocation of liability or entitlement to
indemnification, and such allocation of costs, shall be subject to ultimate
resolution between Xxxxxxxx, on the one hand, and EnPro and Coltec, on the other
hand, pursuant to Article 7.
(f) Certain of the indemnity provisions in this Article 5 relate to
obligations undertaken by Coltec and Xxxxxxxx in connection with certain
transactions between Coltec and GPEC occurring prior to the Aerospace
Distribution Date and certain transactions between Xxxxxxxx and EnPro occurring
prior to the Aerospace Distribution Date. It is the intention of the parties
that any payments arising out of such obligations be treated as relating back to
such transactions as adjustments to capital (i.e., capital contributions to GPEC
or EnPro, as the case may be), and the parties shall not take any position
inconsistent with such intention before any
19
Tax authority, except to the extent that a final determination (as defined in
Section 1313 of the Code) with respect to the recipient party causes any such
payment not to be so treated.
ARTICLE 6
RELEASES
Section 6.01 Release of Pre-Distribution Claims.
(a) Except as provided in Section 6.01(c)(i), effective as of the
Distribution Date, each of EnPro and Coltec does hereby, for itself and each
other member of the EnPro Group and their respective Affiliates, successors and
assigns, and all Persons who at any time prior to the Distribution Date have
been directors, shareholders, officers, employees, agents, consultants,
representatives or successors of any member of the EnPro Group (in each case, in
their respective capacities as such and in a derivative and not personal
capacity), remise, fully and forever release and absolutely discharge each of
Xxxxxxxx, the members of the Xxxxxxxx Group, their respective Affiliates,
successors and assigns, and all Persons who at any time prior to the
Distribution Date have been directors, shareholders, officers, employees,
agents, consultants, representatives or successors of any member of the Xxxxxxxx
Group (in each case, in their respective capacities as such), and their
respective heirs, executors, administrators, successors and assigns
(collectively, the "XXXXXXXX RELEASED PARTIES"), from any and all Liabilities
whatsoever, whether at law or in equity (including any right of contribution),
whether arising under any contract or agreement, by operation of law or
otherwise, existing or arising from any acts or events occurring or failing to
occur or alleged to have occurred or to have failed to occur or any conditions
existing or alleged to have existed on or before the Distribution Date,
including in connection with the transactions and all other activities to
implement the Distribution.
(b) Except as provided in Section 6.01(c)(i), effective as of the
Distribution Date, Xxxxxxxx does hereby, for itself and each other member of the
Xxxxxxxx Group and their respective Affiliates, successors and assigns, and all
Persons who at any time prior to the Distribution Date have been directors,
shareholders, officers, employees, agents, consultants, representatives or
successors of any member of the Xxxxxxxx Group (in each case, in their
respective capacities as such and in a derivative and not personal capacity),
remise, fully and forever release and absolutely discharge each of EnPro, the
members of the EnPro Group, their respective Affiliates, successors and assigns,
and all Persons who at any time prior to the Distribution Date have been
directors, shareholders, officers, employees, agents, consultants,
representatives or successors of any member of the EnPro Group (in each case, in
their respective capacities as such), and their respective heirs, executors,
administrators, successors and assigns (collectively, the "ENPRO RELEASED
PARTIES"), from any and all Liabilities whatsoever, whether at law or in equity
(including any right of contribution), whether arising under any contract or
agreement, by operation of law or otherwise, existing or arising from any acts
or events occurring or failing to occur or alleged to have occurred or to have
failed to occur or any conditions existing or alleged to have existed on or
before the Distribution Date, including in connection with the transactions and
all other activities to implement the Distribution.
(c) Notwithstanding anything to the contrary in Section 6.01(a) or Section
6.01(b):
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(i) Nothing contained in Section 6.01(a) or Section 6.01(b) shall impair
any right of any Person to enforce this Agreement, any Ancillary Agreement or
any Transfer Document in accordance with its terms. Nothing contained in Section
6.01(a) or Section 6.01(b) shall release any Person from:
(A) any Liabilities, contingent or otherwise, assumed, transferred,
assigned or allocated to the Group of which such Person is a member in
accordance with, or any other Liability of any member of any Group under
the Transfer Documents or any Ancillary Agreement;
(B) any Liability that the parties may have with respect to
indemnification or contribution pursuant to this Agreement for claims
brought against the parties by third Persons, which Liability shall be
governed by the provisions of Article 7 and, if applicable, the appropriate
provisions of the Ancillary Agreement; or
(C) any Liability the release of which would result in the release of
any Person other than a Person released pursuant to this Section 6.01;
provided, however, that the parties agree not to bring suit or permit any
of their Subsidiaries to bring suit against any Person with respect to any
Liability to the extent that such Person would be released with respect
thereto by this Section 6.01 but for the provisions of this clause (C).
(ii) Nothing contained in Section 6.01(a) shall release Xxxxxxxx from
honoring its existing obligations (A) to indemnify any former, current or future
director, officer or employee of EnPro who was a director, officer or employee
of Xxxxxxxx or any Subsidiary of Xxxxxxxx on or prior to the Distribution Date,
to the extent such director, officer or employee becomes a named defendant in
any litigation involving Xxxxxxxx or any former or current Subsidiary of
Xxxxxxxx and was entitled to such indemnification pursuant to then existing
obligations or (B) as a guarantor of the TIDES.
(iii) Nothing contained in Section 6.01(b) shall release any member of the
EnPro Group from honoring its existing obligations to indemnify any former,
current or future director, officer or employee of Xxxxxxxx who was a director,
officer or employee of any member of the EnPro Group on or prior to the
Distribution Date, to the extent such director, officer or employee becomes a
named defendant in any litigation involving any member of the EnPro Group and
was entitled to such indemnification pursuant to then existing obligations.
(d) EnPro shall not, and shall not permit any member of the EnPro Group, to
make any claim or demand or commence any Action asserting any claim or demand,
including any claim of contribution or any indemnification, against Xxxxxxxx or
any member of the Xxxxxxxx Group, or any other Person released pursuant to
Section 6.01(a), with respect to any Liabilities released pursuant to Section
6.01(a). Xxxxxxxx shall not, and shall not permit any member of the Xxxxxxxx
Group, to make any claim or demand or commence any Action asserting any claim or
demand, including any claim of contribution or any indemnification against EnPro
or any member of the EnPro Group, or any other Person released pursuant to
Section 6.01(b), with respect to any Liabilities released pursuant to Section
6.01(b).
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(e) It is the intent of Xxxxxxxx, EnPro and Coltec, by virtue of the
provisions of this Section 6.01, to provide for a full and complete release and
discharge of all Liabilities existing or arising from all acts and events
occurring or failing to occur or alleged to have occurred or to have failed to
occur and all conditions existing or alleged to have existed on or before the
Distribution Date between or among EnPro or any member of the EnPro Group, on
the one hand, and Xxxxxxxx or any member of the Xxxxxxxx Group, on the other
hand (including any contractual agreements or arrangements existing or alleged
to exist between or among any such members on or before the Distribution Date),
except as expressly set forth in Section 6.01(c). At any time, at the request of
any other party, each party shall cause each member of its respective Group to
execute and deliver releases reflecting the provisions hereof.
ARTICLE 7
DISPUTE RESOLUTION
Section 7.01 Application. Any dispute arising out of or relating to this
Agreement, including the breach or termination hereof, shall be resolved in
accordance with the procedures specified in this Article 7, which shall be the
sole and exclusive procedure for the resolution of any such disputes; provided,
however, that a party may file a complaint to seek a preliminary injunction or
other provisional judicial relief, if in its sole judgment such action is
necessary. Despite such action, the parties will continue to participate in good
faith in the procedures set forth in this Article 7 and each party is required
to continue to perform its obligations under this Agreement, pending final
resolution of any dispute arising out of or relating to this Agreement, unless
to do so would be impossible or impracticable under the circumstances. All
negotiations between the parties pursuant to this Article 7 are confidential and
shall be treated as compromise and settlement negotiations for purposes of
applicable rules of evidence. The requirements of this Article 7 shall not be
deemed a waiver of any right of termination under this Agreement.
Section 7.02 Initial Discussions. Any dispute shall be first discussed by
an appropriate senior executive officer of each of the parties or his or her
designee. Any party may initiate such discussions by giving the other party
written notice specifying in detail the nature of the dispute. Within 15
Business Days after delivery of the notice, the receiving party shall submit to
the other a written response, which includes a statement of such party's
position and a summary of arguments supporting such position. Within ten
Business Days (or such other period as agreed upon by the parties) after receipt
of such response, the executives of both parties shall meet at a mutually
acceptable time and place, and thereafter as often as they reasonably deem
necessary, to attempt to resolve the dispute. All reasonable requests for
information made by one party to the other shall be honored.
Section 7.03 Appeal to Higher Management. If, in spite of such discussions,
no mutually acceptable solution is reached within 30 Business Days after the
delivery of one party's written request to the other party to discuss such
dispute, any such dispute shall be referred to the respective chief executive
officers of the parties.
Section 7.04 Mediation. If the dispute is not resolved within 30 Business
Days (or such other period as agreed upon by the parties) following the
submission of the dispute to the chief executive officers, the parties shall
attempt to resolve the dispute employing non-
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binding mediation under the then-current CPR Mediation Procedure. If within ten
Business Days (or any other period agreed upon by the parties) after the
commencement of such mediation the dispute still has not been resolved, each of
the parties may pursue any available legal or equitable remedy.
Section 7.05 Jurisdiction. Any Action seeking to enforce any provision of,
or based on any matter arising out of or in connection with, this Agreement or
the transactions contemplated hereby may be brought in any court of competent
jurisdiction sitting in the State of New York, and each of the parties hereby
consents to the jurisdiction of such court (and of the appropriate appellate
courts therefrom) in any such Action and irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to the
laying of the venue of any such Action in any such court or that any such action
which is brought in any such court has been brought in an inconvenient forum.
Process in any such Action may be served on any party anywhere in the world,
whether within or without the jurisdiction of any such court. Without limiting
the foregoing, each party agrees that service of process on such party as
provided in this Section 7.05 shall be deemed effective service of process on
such party.
ARTICLE 8
MISCELLANEOUS
Section 8.01 Notices. All notices, requests, consents and other
communications hereunder must be in writing and will be deemed to have been duly
given (a) when received if personally delivered or sent by facsimile, (b) one
business day after being sent by nationally recognized overnight delivery
service, or (c) five business days after being sent by nationally registered or
certified mail, return receipt requested, postage prepaid, and in each case
addressed as follows (any party by written notice to the other party in the
manner prescribed by this section may change the address or the persons to whom
notices thereof shall be directed):
To Xxxxxxxx at:
Xxxxxxxx Corporation
Four Coliseum Centre
0000 Xxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: General Counsel
with a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
North Point
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
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To EnPro or Coltec at:
EnPro Industries, Inc. or Coltec Industries Inc
____ Xxxxxxxx Xxxxxxxxx, Xxxxx ___
Xxxxxxxxx, Xxxxx Xxxxxxxx _____
Fax: (704) ___-____
Attention: General Counsel
with a copy to:
Xxxxxxxx, Xxxxxxxx & Xxxxxx P.A.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
Section 8.02 Interpretation. The headings contained in this Agreement are
solely for convenience of reference and shall not be given any effect in the
construction or interpretation of this Agreement. Whenever the word "including"
is used in this Agreement, it shall be deemed to be followed by the words
"without limitation." Whenever a reference is made in this Agreement to a
"party" or "parties," such reference shall be to a party or parties to this
Agreement unless otherwise indicated. The use of any gender herein shall be
deemed to be or include the other genders and the use of the singular herein
shall be deemed to include the plural (and vice versa), wherever appropriate.
Whenever a reference is made in this Agreement to an Article, Section, Schedule
or Annex, such reference shall be to an Article or Section of, or a Schedule or
Annex to, this Agreement unless otherwise indicated. The use of the words
"hereof" and "herein" and words of similar import shall refer to this entire
Agreement and not to any particular article, section, subsection, clause,
paragraph or other subdivision of this Agreement, unless the context clearly
indicates otherwise. Each party stipulates and agrees that the rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement to
favor any party against the other, and that no party, including any drafting
party, shall have the benefit of any legal presumption (including "meaning of
the authors") or the detriment of any burden of proof by reason of any ambiguity
or uncertain meaning contained in this Agreement.
Section 8.03 Amendments; No Waivers.
(a) Any provision of this Agreement may be amended or waived if, and only
if, such amendment or waiver is in writing and signed, in the case of an
amendment, by each party, or in the case of a waiver, by the party against whom
the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
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Section 8.04 Nonexclusive Remedies. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by Law.
Section 8.05 Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the prior written consent of the other parties, which consent shall not
be unreasonably withheld.
Section 8.06 Third-Party Beneficiaries. Nothing contained in this Agreement
is intended to nor shall it confer upon any Person or entity, other than the
parties hereto and their respective Subsidiaries, successors and permitted
assigns, any benefit, right or remedies under or by reason of this Agreement,
except that the provisions of Article 5 shall inure to the benefit of the
Xxxxxxxx Indemnitees and the EnPro Indemnitees and the provisions of Article 6
shall inure to the benefit of the Xxxxxxxx Released Parties and the EnPro
Released Parties.
Section 8.07 Governing Law. This Agreement shall be construed in accordance
with and governed by the law of the State of New York, without regard to the
conflict of laws principles thereof.
Section 8.08 Counterparts; Effectiveness. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
Section 8.09 Entire Agreement. This Agreement, the Ancillary Agreements and
the Transfer Documents constitute the entire understanding of the parties with
respect to the subject matter hereof and thereof and supersede all prior
agreements, understandings and negotiations, both written and oral, between the
parties with respect to the subject matter hereof and thereof. No
representation, inducement, promise, understanding, condition or warranty not
set forth herein or in the Ancillary Agreements and the Transfer Documents has
been made or relied upon by any party. This Agreement is not intended to
address, and should not be interpreted to address, the matters specifically and
expressly covered by a Transfer Document or an Ancillary Agreement.
Section 8.10 Severability. If any one or more of the provisions contained
in this Agreement should be declared invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained in this Agreement shall not in any way be affected or impaired thereby
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
a declaration, the parties shall modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner so
that the transactions contemplated hereby are consummated as originally
contemplated to the fullest extent possible.
Section 8.11 Termination. Notwithstanding any provision in this Agreement
to the contrary, this Agreement may be terminated and the Distribution and the
Aerospace Distribution amended, modified or abandoned at any time prior to the
Distribution, without penalty or liability, by and in the sole and absolute
discretion of Xxxxxxxx by written notice to EnPro and Coltec and without the
approval of EnPro or Coltec.
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Section 8.12 Survival. All covenants and agreements of the parties
contained in this Agreement shall survive the Aerospace Distribution Date and
the Distribution Date.
Section 8.13 Expenses. Except as otherwise set forth in this Agreement or
any Ancillary Agreement, each party shall pay its own costs and expenses
incurred (whether such costs and expenses are incurred prior to, on or after the
Distribution Date), except as set forth on Schedule 8.13.
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IN WITNESS WHEREOF, the parties hereto have caused this Distribution
Agreement to be duly executed by their respective authorized officers as of the
date first above written.
XXXXXXXX CORPORATION
By:
-----------------------------------------------
Name:
Title:
ENPRO INDUSTRIES, INC.
By:
-----------------------------------------------
Name:
Title:
COLTEC INDUSTRIES INC
By:
-----------------------------------------------
Name:
Title:
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