EXHIBIT 10.19
EMPLOYEE BENEFITS TRANSFER and ASSUMPTION
AGREEMENT
AGREEMENT dated as of November 6, 1996, among Xxxxxx
Industries Inc., a Tennessee corporation ("Industries"), Xxxxxx Micro Inc., a
Delaware corporation ("Micro"), and Xxxxxx Entertainment Inc., a Tennessee
corporation ("Entertainment" and, together with Industries and Micro, the
"Ingram Companies").
NOW, THEREFORE, it is agreed as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. (a) The following terms, as used
herein, shall have the following meanings:
"Code" means the Internal Revenue Code of 1986, as amended, and
the rules and regulations thereunder.
"Employee Benefit Plan" means any "employee benefit plan" (as
defined in Section 3(3) of ERISA) maintained at any time by any of the Ingram
Companies or their Subsidiaries.
"Entertainment Employees" means those individuals listed on the
payroll records of Entertainment or any Subsidiary thereof immediately after
the Second Closing.
"Entertainment Group" means all Entertainment Employees and
Entertainment Retirees, including their respective beneficiaries.
"Entertainment Retiree" means each individual who was employed
by Entertainment or any Subsidiary thereof immediately prior to such
individual's retirement or other termination of employment from all Ingram
Companies and their Subsidiaries or is otherwise listed on Schedule 3 as an
Entertainment Retiree.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations thereunder.
"Exchange Agreement" means the Amended and Restated Exchange
Agreement dated as of September 4, 1996, as amended and restated as of October
17, 1996, among the Ingram Companies and the other persons listed on the
signature pages thereof.
"First Closing" and "First Closing Date" shall have the
meanings ascribed thereto in the Exchange Agreement.
"Industries Employees" means those individuals listed on the
payroll records of Industries or any Subsidiary thereof immediately after the
First Closing.
"Industries Equity-Based Plans" means the plans identified as
such on Schedule 6 hereto.
"Industries Group" means all Industries Employees and
Industries Retirees, including their respective beneficiaries.
"Industries Retiree" means each individual who was employed by
Industries or any Subsidiary thereof immediately prior to such individual's
retirement or other termination of employment from all Ingram Companies and
their Subsidiaries and who is not otherwise a member of the Micro Group or
Entertainment Group.
"Micro Common Stock" means shares of Class B common stock, par
value $.01 per share, of Micro.
"Micro Employees" means those individuals listed on the payroll
records of Micro or any Subsidiary thereof immediately after the First
Closing.
"Micro Group" means all Micro Employees and Micro Retirees,
including their respective beneficiaries.
"Micro Retiree" means each individual who was employed by Micro
or any Subsidiary thereof immediately prior to such individual's retirement or
other termination of employment from all Ingram Companies and their
Subsidiaries or is otherwise listed on Schedule 3 as a Micro Retiree.
"Person" means an individual, corporation, limited liability
company, partnership, association, trust, or other entity or organization,
including a government or political subdivision or an agency or
instrumentality thereof.
"Reorganization Agreement" shall have the meaning set forth in
the Exchange Agreement.
"Second Closing" and "Second Closing Date" shall have the
meanings ascribed thereto in the Exchange Agreement.
"Subsidiary" means, (i) with respect to Entertainment or Micro,
any entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions are directly or indirectly owned by such Person
immediately after the First Closing and (ii) with respect to Industries, any
entity (other than Entertainment or its Subsidiaries) of which securities or
other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are
directly or indirectly owned by Industries immediately after the First Closing.
(b) Each of the following terms is defined in the Section set
forth opposite such term:
Terms Sections
----- --------
Actuarial Valuation 3.03
Entertainment Assumed Liabilities 3.04
Entertainment Indemnified Person 5.01
Entertainment Plan Participants 3.03
Entertainment Retirement Plan 3.03
Entertainment Supplemental Retirement
Assets and Liabilities 3.02
Entertainment Supplemental Thrift
Assets and Liabilities 3.02
Entertainment Thrift Plan 3.01
ERP Amount 3.03
ERP Transition Period 3.03
Industries Indemnified Person 5.01
Industries Retained Liabilities 3.04
Industries Retirement Plan 3.03
Industries Supplemental Executive Retirement Plan 3.02
Industries Supplemental Thrift Plan 3.02
Industries Thrift Plan 3.01
IRS 3.01
Loss 5.02
Micro Assumed Liabilities 3.04
Micro Indemnified Person 5.02
Micro Plan Participants 3.03
Micro Retirement Plan 3.03
Micro Supplemental Retirement
Assets and Liabilities 3.02
Micro Supplemental Thrift Assets
and Liabilities 3.02
Micro Thrift Plan 3.01
MRP Amount 3.03
MRP Transition Period 3.03
PBGC 3.03
Retained Retirement Assets and Liabilities 3.03
Retained Supplemental Assets
and Liabilities 3.02
Retained Thrift Assets and Liabilities 3.01
ARTICLE II
EMPLOYEES;
CERTAIN AGREEMENTS
SECTION 2.01. Employees. Subject to the terms and conditions
of this Agreement, effective at the time of the First Closing, Industries,
Micro and Entertainment or their respective Subsidiaries shall employ each
Industries Employee, Micro Employee or Entertainment Employee,
respectively. No provision of this Agreement, however, shall require any
Xxxxxx Company or any of their respective Subsidiaries to continue the
employment of any of their respective employees following the First
Closing.
SECTION 2.02. Certain Agreements. (a) Except as provided
in Section 2.02(b), this Agreement shall not apply or be deemed to apply to
the Industries Equity-Based Plans and any options, awards, grants or sales
made or to be made thereunder shall not be deemed to be Micro Assumed
Agreements or Entertainment Assumed Agreements.
(b) Micro shall assume all liability relating to, and be
responsible for, all incentive stock units granted to Xx. Xxxxxxxx
Elcheson, under the Industries Equity-Based Plans. Industries shall inform
Micro on a quarterly basis of the status of such liability, including any
changes thereto.
ARTICLE III
ALLOCATION OF ASSETS AND LIABILITIES
SECTION 3.01. Industries Thrift Plan. (a) (i) As soon as
practicable after and effective as of the First Closing, Micro shall adopt
or designate a profit-sharing plan with a salary reduction arrangement that
covers the Micro Group and meets the requirements of Sections 401(a) and
401(k) of the Code ("Micro Thrift Plan"). Micro agrees that all service
credited under the Ingram Thrift Plan ("Industries Thrift Plan") as of the
First Closing with respect to the Micro Group shall be credited under the
Micro Thrift Plan for all plan purposes, including eligibility and vesting.
(ii) Within 30 days after the adoption or designation of
the Micro Thrift Plan by Micro or as soon as practicable thereafter,
Industries shall cause an amount, in cash or in kind as Industries and
Micro shall agree, equivalent to the account balances of all members of the
Micro Group under the Industries Thrift Plan as of the date of the
transfer, to be transferred from the trust maintained under the Industries
Thrift Plan to the trust maintained under the Micro Thrift Plan. Such
transfer shall include the number of shares of Micro Common Stock allocable
or attributable to the account balances of all members of the Micro Group.
Such transfer of assets shall be made only after Micro has supplied to
Industries either (A) a copy of an Internal Revenue Service ("IRS")
determination letter finding the Micro Thrift Plan to be a qualified plan
meeting the requirements of Sections 401(a) and 401(k) of the Code or (B)
an opinion of counsel or written representation from Micro (with
appropriate indemnities), in either case, to the effect that the Micro
Thrift Plan has been established in accordance with the Code and ERISA, and
an agreement that Micro will request a determination letter from the IRS
and make any and all changes to the Micro Thrift Plan necessary to receive
a favorable determination letter. Micro and Industries shall cooperate
with each other during the period beginning on the date hereof and ending
on the date the assets are transferred to the trust maintained under the
Micro Thrift Plan to ensure the ongoing operation and administration of the
Micro Thrift Plan and the Industries Thrift Plan with respect to the Micro
Group.
(iii) Notwithstanding anything herein to the contrary, each
transfer to the Micro Thrift Plan of shares of Micro Common Stock pursuant
to this Section shall be made in compliance with the provisions of the
Transfer Restrictions Agreement, if any, of even date herewith among Micro
and each of the other parties thereto, including Sections 2.1 and 3.7
thereof.
(b) (i) Not later than the Second Closing, Entertainment
shall adopt or designate a profit-sharing plan with a salary reduction
arrangement that covers the Entertainment Group and meets the requirements
of Sections 401(a) and 401(k) of the Code ("Entertainment Thrift Plan").
Entertainment agrees that all service credited under the Industries Thrift
Plan as of such adoption or designation with respect to the Entertainment
Group shall be credited under the Entertainment Thrift Plan for all plan
purposes, including eligibility and vesting.
(ii) Within 30 days after the adoption or designation of
the Entertainment Thrift Plan by Entertainment or as soon as practicable
thereafter, Industries shall cause an amount, in cash or in kind as
Industries and Entertainment shall agree, equivalent to the account
balances of all members of the Entertainment Group under the Industries
Thrift Plan as of the date of transfer to be transferred from the trust
maintained under the Industries Thrift Plan to the trust maintained under
the Entertainment Thrift Plan. Such transfer shall include the number of
shares of Micro Common Stock allocable or attributable to the account
balances of all members of the Entertainment Group. Such transfer of
assets shall be made only after Entertainment has supplied to Industries
either (A) a copy of an IRS determination letter finding the Entertainment
Thrift Plan to be a qualified plan meeting the requirements of Sections
401(a) and 401(k) of the Code or (B) an opinion of counsel or written
representation from Entertainment (with appropriate indemnities), in either
case, to the effect that the Entertainment Thrift Plan has been established
in accordance with the Code and ERISA, and an agreement that Entertainment
will request a determination letter from the IRS and make any and all
changes to the Entertainment Thrift Plan necessary to receive a favorable
determination letter. Entertainment and Industries shall cooperate with
each other during the period beginning on the date hereof and ending on the
date the assets are transferred to the trust maintained under the
Entertainment Thrift Plan to ensure the ongoing operation and
administration of the Entertainment Thrift Plan and the Industries Thrift
Plan with respect to the Entertainment Group.
(iii) Notwithstanding anything herein to the contrary, each
transfer to the Entertainment Thrift Plan of shares of Micro Common Stock
pursuant to this Section shall be made in compliance with the provisions of
the Transfer Restrictions Agreement, if any, of even date herewith among
Entertainment and each of the other parties thereto, including Sections 2.1
and 3.7 thereof.
(c) Industries shall retain all assets and liabilities
under the Industries Thrift Plan except as otherwise provided in Section
3.01(a) and (b) ("Retained Thrift Assets and Liabilities").
SECTION 3.02. Industries Supplemental Plans. (a) All
liabilities under the Ingram Supplemental Thrift Plan ("Industries
Supplemental Thrift Plan") and the Xxxxxx Industries Inc. Supplemental
Executive Retirement Plan ("Industries Supplemental Retirement Plan") to
the extent applicable to any member of the Micro Group and any assets
allocable to such liabilities shall be transferred to and assumed by Micro
as of the First Closing ("Micro Supplemental Assets and Liabilities").
(b) All liabilities under the Industries Supplemental
Thrift Plan and the Industries Supplemental Retirement Plan to the extent
applicable to any member of the Entertainment Group and any assets
allocable to such liabilities shall be transferred to and assumed by
Entertainment not later than the Second Closing ("Entertainment
Supplemental Assets and Liabilities").
(c) Industries shall retain all assets and liabilities
under the Industries Supplemental Thrift Plan and the Industries
Supplemental Retirement Plan except as otherwise provided in Section
3.02(a) and (b) hereof and Article 3 of the Reorganization Agreement
("Retained Supplemental Assets and Liabilities").
SECTION 3.03. Industries Retirement Plan. (a) (i) As
soon as practicable after and effective as of the First Closing, Micro
shall adopt or designate a defined benefit plan ("Micro Retirement Plan")
that covers the members of the Micro Group listed as participants therein
on Schedule 2 and Schedule 3 ("Micro Plan Participants") and meets the
requirements of Section 401(a) of the Code. Micro agrees that all service
credited under the Xxxxxx Retirement Plan (as amended effective January 1,
1989 and restated December 31, 1994) ("Industries Retirement Plan") as of
the First Closing with respect to the Micro Plan Participants shall be
credited under the Micro Retirement Plan for all plan purposes, including
eligibility, vesting and benefit accrual; provided, however, that those
individuals determined to be highly compensated employees under Section
414(q) of the Code shall accrue their benefits on and after the First
Closing under an unfunded defined benefit plan that is not qualified under
Section 401(a) of the Code.
(ii) Within 30 days after the adoption or designation of
the Micro Retirement Plan by Micro or as soon as practicable thereafter,
Industries shall cause an amount in cash or in kind determined as of the
First Closing pursuant to subparagraph (iii) below (the "MRP Amount"),
adjusted as set forth therein, to be transferred from the trust maintained
under the Industries Retirement Plan to the trust maintained under the
Micro Retirement Plan. Such transfer of assets shall be made only after
Micro has supplied to Industries (x) either (A) a copy of an IRS
determination letter finding the Micro Retirement Plan to be a qualified
plan meeting the requirements of Section 401(a) of the Code or (B) an
opinion of counsel or a written representation from Micro (with appropriate
indemnities), in either case, to the effect that the Micro Retirement Plan
has been established in accordance with the Code and ERISA, and an
agreement that Micro will request a determination letter from the IRS and
make any and all changes to the Micro Retirement Plan necessary to receive
a favorable determination letter and (y) information enabling the enrolled
actuary for the Industries Retirement Plan to issue the certification
required by Section 414(l) of the Code (Form 5310-A). Micro and Industries
shall cooperate with each other during the period beginning on the date
hereof and ending on the date the assets are transferred to the trust
maintained under the Micro Retirement Plan ("MRP Transition Period") to
ensure the ongoing operation and administration of the Micro Retirement
Plan and the Industries Retirement Plan with respect to the Micro Plan
Participants.
(iii) The MRP Amount shall be equal to that portion of the
total value of the assets held in the Industries Retirement Plan, valued as
of the First Closing Date or as soon as practicable thereafter, that bears
the same relation to such total as the aggregate present value of benefits
(vested and non-vested, including special early retirement benefits and
death benefit coverage both before and after the expected retirement ages
of Micro Plan Participants) accrued under the Industries Retirement Plan
for Micro Plan Participants, as determined in the Industries Retirement
Plan actuarial valuation as of January 1, 1996 (the "Actuarial Valuation"),
shall bear to the aggregate present value of such benefits accrued under
the Industries Retirement Plan for all participants therein, in each case
determined by Industries' enrolled actuary, using the projected unit credit
funding method and based on the actuarial assumptions used for funding
purposes as set forth in the Actuarial Valuation. The MRP Amount shall be
adjusted as may be required by the Pension Benefit Guaranty Corporation
("PBGC") and the IRS to maintain the status of the Industries Retirement
Plan or the Micro Retirement Plan as an employee pension plan meeting the
requirements of Section 401(a) of the Code. Within at least 30 days prior
to the First Closing or as soon as practicable thereafter, Industries and
Micro shall make any required governmental filings necessary to effect the
asset transfers described herein, including the filing of IRS Form 5310-A.
(iv) The assets to be transferred to the trust maintained
under the Micro Retirement Plan shall be held, invested and distributed as
required under the Industries Retirement Plan and the related trust
thereunder for the benefit of Micro Plan Participants during the MRP
Transition Period, pending the transfer to the trust maintained under the
Micro Retirement Plan pursuant to this Section 3.03(a). Industries and
Micro shall use their best efforts to effectuate the above transfer as
promptly as possible following the First Closing.
(b) (i) Not later than the Second Closing, Entertainment
shall adopt or designate a defined benefit plan that covers the
Entertainment Employees and members of the Entertainment Group listed on
Schedule 3 ("Entertainment Plan Participants") and meets the requirements
of Section 401(a) of the Code ("Entertainment Retirement Plan").
Entertainment agrees that all service credited under the Industries
Retirement Plan as of such adoption or designation with respect to the
Entertainment Plan Participants shall be credited under the Entertainment
Retirement Plan for all plan purposes, including eligibility, vesting and
benefit accrual.
(ii) Within 30 days after the adoption or designation of
the Entertainment Retirement Plan by Entertainment or as soon as
practicable thereafter, Industries shall cause an amount in cash or in kind
determined as of the Second Closing pursuant to subparagraph (iii) below
(the "ERP Amount"), adjusted as set forth therein, to be transferred from
the trust maintained under the Industries Retirement Plan to the trust
maintained under the Entertainment Retirement Plan. Such transfer of
assets shall be made only after Entertainment has supplied to Industries
(x) either (A) a copy of an IRS determination letter finding the
Entertainment Retirement Plan to be a qualified plan meeting the
requirements of Section 401(a) of the Code or (B) an opinion of counsel or
a written representation from Entertainment (with appropriate indemnities),
in either case, to the effect that the Entertainment Retirement Plan has
been established in accordance with the Code and ERISA, and an agreement
that Entertainment will request a determination letter from the IRS and
make any and all changes to the Entertainment Retirement Plan necessary to
receive a favorable determination letter and (y) information enabling the
enrolled actuary for the Industries Retirement Plan to issue the
certification required by Section 414(l) of the Code (Form 5310-A).
Entertainment and Industries shall cooperate with each other during the
period beginning on the date hereof and ending on the date the assets are
transferred to the trust maintained under the Entertainment Retirement Plan
(the "ERP Transition Period") to ensure the ongoing operation and
administration of the Entertainment Retirement Plan and the Industries
Retirement Plan with respect to the Entertainment Plan Participants.
(iii) The ERP Amount shall be equal to that portion of the
total value of the assets held in the Industries Retirement Plan, valued as
of the adoption or designation referred to in (i) above or as soon as
practicable thereafter, that bears the same relation to such total as the
aggregate present value of benefits (vested and non-vested, including
special early retirement benefits and death benefit coverage both before
and after the expected retirement ages of Entertainment Plan Participants)
accrued under the Industries Retirement Plan for Entertainment Plan
Participants, as determined in the Actuarial Valuation or such later
valuation to the extent one is available, shall bear to the aggregate
present value of such benefits accrued under the Industries Retirement Plan
for all participants therein, in each case determined by Industries'
enrolled actuary using the projected unit credit funding method and based
on the actuarial assumptions used for funding purposes as set forth in the
Actuarial Valuation. The ERP Amount shall be adjusted as may be required
by the PBGC and the IRS to maintain the status of the Industries Retirement
Plan or the Entertainment Retirement Plan as an employee pension plan
meeting the requirements of Section 401(a) of the Code. Within at least 30
days prior to the Second Closing or as soon as practicable thereafter,
Industries and Entertainment shall make any required governmental filings
necessary to effect the asset transfers described herein, including the
filing of IRS Form 5310-A.
(iv) The assets to be transferred to the trust maintained
under the Entertainment Retirement Plan shall be held, invested and
distributed as required under the Industries Retirement Plan and the
related trust thereunder for the benefit of Entertainment Plan Participants
during the ERP Transition Period, pending the transfer to the trust
maintained under the Entertainment Retirement Plan pursuant to this Section
3.03(b). Industries and Entertainment shall effectuate the above transfer
on such date as Industries and Entertainment shall agree but not later than
the Second Closing.
(c) Industries shall retain all assets and liabilities
under the Industries Retirement Plan except as otherwise provided in
Section 3.03(a) and (b) ("Retained Retirement Assets and Liabilities").
SECTION 3.04. Assumption of Liabilities Generally. (a)
Subject to the terms and conditions of this Agreement, effective as of the
First Closing, Micro shall assume and agree to pay when due, honor and
discharge, the following ("Micro Assumed Liabilities"):
(i) all obligations and liabilities arising under any
employment, separation or retirement agreement or arrangement to
the extent applicable to any member of the Micro Group which has
been established or entered into by any of the Ingram Companies or
any of their Subsidiaries, whether or not listed on any Schedule
attached hereto;
(ii) all obligations and liabilities arising under the Micro
Thrift Plan, the Micro Supplemental Assets and Liabilities and the
Micro Retirement Plan;
(iii) all obligations and liabilities arising under the welfare
benefit plans and other arrangements listed on or otherwise
described in Schedule 4 hereto to the extent applicable to any
member of the Micro Group;
(iv) all obligations and liabilities arising under any other
employee benefit plan or arrangement maintained at any time by any
of the Ingram Companies or any of their Subsidiaries to the extent
applicable to any member of the Micro Group;
(v) all obligations and liabilities to any member of the
Micro Group in respect of the continuation of coverage rules under
Sections 601 through 608 of ERISA and Section 4980B of the Code,
including all liabilities and obligations relating to qualifying
events that have occurred on or prior to the First Closing;
(vi) all obligations and liabilities arising under any
federal, state, local or foreign law, order or regulation
(including, without limitation, ERISA and the Code) to the extent
they relate to participation by any member of the Micro Group in
any Employee Benefit Plan, whether relating to events occurring on
or prior to the First Closing or arising by reason of the
transactions contemplated by this Agreement or otherwise; and
(vii) all statutory obligations and liabilities to any member
of the Micro Group, which arise, directly or indirectly, by reason
of the transactions contemplated by this Agreement.
(b) Subject to the terms and conditions of this Agreement,
effective as of such date as Industries and Entertainment shall agree but
not later than the Second Closing, Entertainment shall assume and agree to
pay when due, honor and discharge, the following ("Entertainment Assumed
Liabilities"):
(i) all obligations and liabilities arising under any
employment, separation or retirement agreement or arrangement to
the extent applicable to any member of the Entertainment Group
which has been established or entered into by any Xxxxxx Company
or any of their Subsidiaries, whether or not listed on any
Schedule attached hereto;
(ii) all obligations and liabilities arising under the
Entertainment Thrift Plan, the Entertainment Supplemental Assets
and Liabilities and the Entertainment Retirement Plan;
(iii) all obligations and liabilities arising under the welfare
benefit plans and other arrangements listed on or otherwise
described in Schedule 4 hereto to the extent applicable to any
member of the Entertainment Group;
(iv) all obligations and liabilities arising under any other
employee benefit plan or arrangement maintained at any time by any
of the Ingram Companies or any of their Subsidiaries to the extent
applicable to any member of the Entertainment Group;
(v) all obligations and liabilities to any member of the
Entertainment Group in respect of the continuation of coverage
rules under Sections 601 through 608 of ERISA and Section 4980B of
the Code, including all liabilities and obligations relating to
qualifying events that have occurred on or prior to the Second
Closing;
(vi) all obligations and liabilities arising under any
federal, state, local or foreign law, order or regulation
(including, without limitation, ERISA and the Code) to the extent
they relate to participation by any member of the Entertainment
Group in any Employee Benefit Plan, whether relating to events
occurring on or prior to the Second Closing or arising by reason
of the transactions contemplated by this Agreement or otherwise;
and
(vii) all statutory obligations and liabilities to any member
of the Entertainment Group which arises, directly or indirectly,
by reason of the transactions contemplated by this Agreement.
(c) Subject to the terms and conditions of this Agreement,
effective as of the First Closing, Industries shall retain and agree to pay
when due, honor and discharge, the following ("Industries Retained
Liabilities"):
(i) all obligations and liabilities arising under any
employment, separation or retirement agreement or arrangement to
the extent applicable to any member of the Industries Group which
has been established or entered into by any of the Ingram
Companies or any of their Subsidiaries, whether or not listed on
any Schedule attached hereto;
(ii) obligations and liabilities arising under the Retained
Thrift Assets and Liabilities, the Retained Supplemental Assets
and Liabilities, and the Retained Retirement Assets and
Liabilities;
(iii) all obligations and liabilities arising under the welfare
benefit plans and other arrangements listed on or otherwise
described in Schedule 4 hereto to the extent applicable to any
member of the Industries Group;
(iv) all obligations and liabilities arising under any other
employee benefit plan or arrangement maintained at any time by any
Xxxxxx Company or any of their Subsidiaries to the extent
applicable to any member of the Industries Group;
(v) all obligations and liabilities to any member of the
Industries Group in respect of the continuation of coverage rules
under Sections 601 through 608 of ERISA and Section 4980B of the
Code, including all liabilities and obligations relating to
qualifying events that have occurred on or prior to the First
Closing;
(vi) all obligations and liabilities arising under any
federal, state, local or foreign law, order or regulation
(including, without limitation, ERISA and the Code) to the extent
they relate to participation by any member of the Industries Group
in any Employee Benefit Plan, whether relating to events occurring
on or prior to the First Closing or arising by reason of the
transactions contemplated by this Agreement or otherwise; and
(vii) all statutory obligations and liabilities to any member
of the Industries Group, which arise, directly or indirectly, by
reason of the transactions contemplated by this Agreement.
(d) Subject to the terms and conditions of this Agreement,
effective as of the Second Closing Industries shall confirm to Entertainment
the retention by and agreement of Industries to pay when due, honor and
discharge the Industries Retained Liabilities.
(e) All obligations, liabilities and responsibilities arising
out of or relating to workers' compensation shall be transferred among and
assumed by the parties pursuant to the terms of the Risk Management Agreement
dated as of the First Closing among Industries, Micro and Entertainment.
SECTION 3.05. Method of Settlement. Notwithstanding anything
herein to the contrary, any transfer or assumption of liabilities pursuant to
this Article III shall be effected through a corresponding adjustment in the
relevant intercompany account balances of the parties hereto.
SECTION 3.06. Further Assurances. (a) On and after the date
hereof, Industries will, at the reasonable request of Micro, execute,
acknowledge and deliver all such endorsements, assurances, consents,
assignments, transfers, conveyances, powers of attorney and other instruments
and documents, and take such other actions necessary (i) to assign, transfer,
convey and deliver to Micro, acting in its fiduciary capacity, all the assets
to be transferred to Micro pursuant to Article III hereof and (ii) to assist
Micro in obtaining the consent and approval of all governmental bodies and
other Persons required to be obtained by Micro to effect the transfer thereof
and the assumption of the Micro Assumed Liabilities by Micro or otherwise
appropriate to carry out the transactions contemplated hereby.
(b) On and after the date hereof, Industries will, at the
reasonable request of Entertainment, execute, acknowledge and deliver all
such endorsements, assurances, consents, assignments, transfers,
conveyances, powers of attorney and other instruments and documents, and
take such other actions necessary (i) to assign, transfer, convey and
deliver to Entertainment, acting in its fiduciary capacity, all the assets
to be transferred to Entertainment pursuant to Article III hereof, and (ii)
to assist Entertainment in obtaining the consent and approval of all
governmental bodies and other Persons required to be obtained by
Entertainment to effect the transfer thereof and the assumption of the
Entertainment Assumed Liabilities by Entertainment or otherwise appropriate
to carry out the transactions contemplated hereby.
(c) On and after the date hereof, each of Micro and
Entertainment will, at the reasonable request of Industries, execute,
acknowledge and deliver all such assumptions, endorsements and other
instruments and documents, and take such other actions necessary (i) to
assume, pay, honor and discharge the Micro Assumed Liabilities and
Entertainment Assumed Liabilities, respectively, and (ii) to assist
Industries in obtaining the consent and approval of all governmental bodies
and other Persons required to be obtained by Industries to effect the
transfer of the assets to be transferred to Micro or Entertainment pursuant
to Article III hereof, respectively, and the assumption of the Micro
Assumed Liabilities and Entertainment Assumed Liabilities by Micro and
Entertainment, respectively, or otherwise appropriate to carry out the
transactions contemplated hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Certain Industries Representations.
Industries hereby represents and warrants to Micro and Entertainment on the
date hereof, and to Entertainment on the date of the adoption or
designation of the Entertainment Thrift Plan and the Entertainment
Retirement Plan, that the Industries Thrift Plan and the Industries
Retirement Plan have been established in accordance with the Code and
ERISA, are qualified under Section 401(a) of the Code, have been so
qualified during the period from their adoption to the date hereof and each
will be so qualified as of the date of the transfers referred to in Section
3.01 and 3.03 respectively, and that each trust forming a part thereof is
exempt from tax pursuant to Section 501(a) of the Code.
ARTICLE V
INDEMNIFICATION
SECTION 5.01. Indemnification by Micro. Micro agrees to
indemnify and hold harmless Entertainment and its Subsidiaries and their
respective directors, officers, agents and employees (each, an
"Entertainment Indemnified Person") and Industries, its Subsidiaries and
their respective directors, officers, agents and employees (each, an
"Industries Indemnified Person") from any and all damage, loss, liability
and expense (including, without limitation, reasonable expenses of
investigation and reasonable attorneys' fees and expenses in connection
with any action, suit or proceeding) (collectively, "Loss") incurred or
suffered by such Entertainment Indemnified Person or Industries Indemnified
Person, as the case may be, arising out of or related to the Micro Assumed
Liabilities.
SECTION 5.02. Indemnification by Entertainment.
Entertainment agrees to indemnify and hold harmless Micro and its
Subsidiaries and their respective directors, officers, agents and employees
(each, a "Micro Indemnified Person") and each Industries Indemnified Person
from any and all Losses, incurred or suffered by such Micro Indemnified
Person or Industries Indemnified Person, as the case may be, arising out of
or related to the Entertainment Assumed Liabilities.
SECTION 5.03. Indemnification by Industries. Industries
agrees to indemnify and hold harmless each Entertainment Indemnified Person
and each Micro Indemnified Person from any and all Losses, incurred or
suffered by such Micro Indemnified Person or Industries Indemnified Person,
as the case may be, arising out of or related to the Industries Retained
Liabilities.
ARTICLE VI
GENERAL PROVISIONS
SECTION 6.01. Parties. Nothing in this Agreement, express
or implied, is intended to confer upon any person not a party any rights
and remedies hereunder.
SECTION 6.02. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Tennessee, without regard to its conflict of laws provisions.
SECTION 6.03. Headings. The Section and other headings
contained in this Agreement are for reference purposes only and shall not
in any way affect the meaning or interpretation of this Agreement.
SECTION 6.04. Entire Agreement. This Agreement constitutes
the entire agreement between the parties in respect of the subject matter
contained herein and neither this Agreement nor any term or provision
hereof may be amended or changed except by an instrument in writing signed
by Industries, Micro and Entertainment. Industries shall deliver prompt
written notice to each other party hereto of any amendment to this
Agreement approved pursuant to this Section.
SECTION 6.05. Assignments. This Agreement shall not be
assignable by any party, without the written consent of the other parties
hereto. No assignment of any right or benefit hereunder shall relieve any
obligation of the assignor hereunder without the written consent of the
other party.
SECTION 6.06. Notices. Any notice, request, instruction or
other document to be given hereunder by any party hereto to another party
hereto shall be in writing (including telecopier or similar writing) and
shall be given to such party at its address set forth on the signature
pages hereof, or to such other address as the party to whom notice is to be
given may provide in a written notice to the party giving such notice, a
copy of which written notice shall be on file with the Secretary of
Industries. Each such notice, request or other communication shall be
effective (i) if given by telecopy, when such telecopy is transmitted to
the telecopy number specified on the signature pages hereof and the
appropriate confirmation is received, (ii) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage
prepaid addressed as aforesaid or (iii) if given by any other means, when
delivered at the address specified in this Section 6.06.
SECTION 6.07. Severability. The invalidity or
unenforceability of any provisions of this Agreement in any jurisdiction
shall not affect the validity, legality or enforceability of the remainder
of this Agreement in such jurisdiction or the validity, legality or
enforceability of this Agreement, including any such provision, in any
other jurisdiction, it being intended that all rights and obligations of
the parties hereunder shall be enforceable to the fullest extent permitted
by law.
SECTION 6.08. Counterparts. This Agreement may be executed
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.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
XXXXXX INDUSTRIES INC.
By: /s/ Xxxx X. Xxxxxx
----------------------------
Name: Xxxx X. Xxxxxx
Title: Co-President
One Belle Xxxxx Place
0000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
XXXXXX MICRO INC.
By: /s/ Xxxxxxx X. Xxxxx
----------------------------
Name: Xxxxxxx X. Xxxxx
Title:
0000 Xxxx Xxxxx Xxxxxx Xxxxx
Xxxxx Xxx, XX 00000
Telecopy: (000) 000-0000
XXXXXX ENTERTAINMENT INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman and President
Xxx Xxxxxx Xxxxxxxxx
Xx Xxxxxx, XX 00000
Telecopy: (000) 000-0000
