1
Exhibit 2.1
FORM OF
SEPARATION AND DISTRIBUTION AGREEMENT
BY AND AMONG
ALLEGHENY TELEDYNE INCORPORATED,
TDY HOLDINGS, LLC,
TELEDYNE INDUSTRIES, INC.
AND
WATER PIK TECHNOLOGIES, INC.
DATED AS OF ___________, 1999
2
Table of Contents
Page
----
ARTICLE I DEFINITIONS........................................................................................ 2
ARTICLE II THE SEPARATION..................................................................................... 13
2.01. Transfer of Assets and Assumption of Liabilities................................................... 13
2.02. Water Pik Assets................................................................................... 13
2.03. Water Pik Liabilities.............................................................................. 14
2.04. Termination of Agreements.......................................................................... 15
2.05. Documents Relating to Transfer of Real Property Interests
and Tangible Property Located Thereon.............................................................. 16
2.06. Documents Further Evidencing Transfers of Assets and Assumption of Liabilities..................... 16
2.07. Other Ancillary Agreements......................................................................... 16
2.08. Disclaimer of Representations and Warranties....................................................... 17
2.09. Financing Arrangements............................................................................. 17
2.10. Governmental Approvals and Consents................................................................ 17
2.11. Novation of Assumed Water Pik Liabilities.......................................................... 18
2.12. Transfer of Subsidiary Assets and Assumption of Subsidiary Liabilities............................. 19
2.13. Consummation of Purchase and Sale Agreement........................................................ 19
2.14. TI Contribution and Liquidation.................................................................... 19
2.15. Interim Distributions.............................................................................. 19
ARTICLE III THE DISTRIBUTION................................................................................... 20
3.01. The Distribution................................................................................... 20
3.02. Actions Prior to the Distribution.................................................................. 20
3.03. Fractional Shares.................................................................................. 21
ARTICLE IV THE PUBLIC OFFERING................................................................................ 21
4.01. The Public Offering................................................................................ 21
4.02. Proceeds of the Public Offering.................................................................... 22
4.03. Remedies........................................................................................... 22
ARTICLE V MUTUAL RELEASES; INDEMNIFICATION................................................................... 22
5.01. Release of Pre-Distribution Claims................................................................. 22
5.02. Indemnification by Water Pik....................................................................... 25
5.03. Indemnification by ATI............................................................................. 25
5.04. Indemnification Obligations Net of Insurance Proceeds and other Amounts............................ 26
5.05. Procedures for Indemnification of Third Party Claims............................................... 26
5.06. Additional Matters................................................................................. 27
5.07. Remedies Cumulative................................................................................ 28
5.08. Survival of Indemnities............................................................................ 28
ARTICLE VI CERTAIN OTHER MATTERS.............................................................................. 28
6.01. Insurance Matters.................................................................................. 28
6.02. Certain Business Matters........................................................................... 31
6.03. Late Payments...................................................................................... 31
6.04. Certain Governance Matters......................................................................... 31
ARTICLE VII EXCHANGE OF INFORMATION; CONFIDENTIALITY........................................................... 31
i
3
7.01. Agreement for Exchange of Information; Archives.................................................... 31
7.02. Ownership of Information........................................................................... 32
7.03. Compensation for Providing Information............................................................. 32
7.04. Record Retention................................................................................... 32
7.05. Other Agreements Providing For Exchange of Information............................................. 32
7.06. Production of Witnesses; Records; Cooperation...................................................... 32
7.07. Confidentiality.................................................................................... 33
7.08. Protective Arrangements............................................................................ 34
ARTICLE VIII FURTHER ASSURANCES................................................................................. 34
8.01. Further Assurances................................................................................. 34
ARTICLE IX TERMINATION........................................................................................ 35
9.01. Termination........................................................................................ 35
9.02. Effect of Termination.............................................................................. 35
ARTICLE X MISCELLANEOUS...................................................................................... 35
10.01. Counterparts; Entire Agreement; Corporate Power.................................................... 35
10.02. Governing Law; Consent to Jurisdiction............................................................. 36
10.03. Assignability...................................................................................... 37
10.04. Third Party Beneficiaries.......................................................................... 37
10.05. Notices............................................................................................ 37
10.06. Severability....................................................................................... 38
10.07. Force Majeure...................................................................................... 38
10.08. Headings........................................................................................... 38
10.09. Survival of Covenants.............................................................................. 38
10.10. Waivers of Default................................................................................. 38
10.11. Specific Performance............................................................................... 38
10.12. Amendments......................................................................................... 39
10.13. Interpretation..................................................................................... 39
10.14. Disputes........................................................................................... 39
10.15. Exclusivity of Tax Sharing Agreement............................................................... 40
ii
4
SEPARATION AND DISTRIBUTION AGREEMENT
THIS SEPARATION AND DISTRIBUTION AGREEMENT, dated as of ____________,
1999, is by and among Allegheny Teledyne Incorporated, a Delaware corporation
("ATI"), TDY Holdings, LLC, a Delaware limited liability company the sole member
of which is ATI ("Holdings"), Teledyne Industries, Inc., a California
corporation and an indirect wholly owned subsidiary of ATI ("TII"), and Water
Pik Technologies, Inc., a Delaware corporation and wholly owned subsidiary of
TII ("Water Pik"). Capitalized terms used herein and not otherwise defined shall
have the respective meanings assigned to them in Article I hereof.
WHEREAS, the Board of Directors of ATI has determined that it is in the
best interests of ATI and its stockholders to separate ATI's existing businesses
into three independent businesses; and
WHEREAS, in furtherance of the foregoing, it is appropriate and
desirable to transfer the Water Pik Assets to Water Pik and to cause Water Pik
to assume the Water Pik Liabilities, all as more fully described in this
Agreement and the Ancillary Agreements; and
WHEREAS, ATI intends, subject to completion of the transactions
contemplated hereby (including the foregoing transfer of Water Pik Assets and
assumption of Water Pik Liabilities) and to the other terms of this Agreement
and to further action by its Board of Directors, to effect the Distribution; and
WHEREAS, the Form 10 Registration Statement has become effective under
the Exchange Act; and
WHEREAS, ATI has received a private letter ruling from the Internal
Revenue Service to the effect that, among other things, the Distribution will
qualify as a tax-free distribution for federal income tax purposes under Section
355 of the Code; and
WHEREAS, the Distribution is to be followed by the Public Offering; and
WHEREAS, it is expected that, following certain transfers of other
Assets and assignments and assumptions of other Liabilities, ATI will distribute
to its stockholders all of the capital stock of Teledyne Technologies
Incorporated ("Teledyne Technologies") held directly or indirectly by ATI and
that, in connection therewith, ATI and Teledyne Technologies have entered into
agreements, including the Teledyne Technologies Separation and Distribution
Agreement, to address matters relating to the Teledyne Technologies
Distribution; and
WHEREAS, it is appropriate and desirable to set forth the principal
corporate transactions required to effect the Separation, the Distribution and
the Public Offering and certain other agreements that will govern certain
matters relating to the Separation, the Distribution and the Public Offering and
the relationships of ATI and Water Pik and their respective Subsidiaries
following the Separation and the Distribution;
NOW, THEREFORE, the parties, intending to be legally bound, agree as
follows:
5
ARTICLE I
DEFINITIONS
For the purpose of this Agreement the following terms shall have the
following meanings:
1.01. ACTION means any demand, action, suit, countersuit, arbitration,
inquiry, proceeding or investigation by or before any federal, state, local,
foreign or international Governmental Authority or any arbitration or mediation
tribunal.
1.02. AFFILIATE of any Person means a Person that controls, is
controlled by, or is under common control with such Person. As used herein,
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such entity, whether
through ownership of voting securities or other interests, by contract or
otherwise.
1.03. AGENT means the distribution agent to be appointed by ATI to
distribute to the stockholders of ATI the shares of Water Pik Common Stock held
by ATI pursuant to the Distribution.
1.04. AGREEMENT means this Separation and Distribution Agreement,
including all of the Schedules hereto.
1.05. ANCILLARY AGREEMENTS means the deeds, lease assignments and
assumptions, leases, subleases and sub-subleases, subscription or contribution
agreements, stock powers, and the supplemental and other agreements and
instruments related thereto contemplated by Article II, including the Laars Inc.
Transfer and Assumption Agreement, the Water Pik Inc. Transfer and Assumption
Agreement, the Purchase and Sale Agreement, the Employee Benefits Agreement, the
Interim Services Agreement, the Trademark License Agreement, the Patent
Assignments and related powers of attorney and the Tax Sharing Agreement.
1.06. ASSETS means assets, properties and rights (including goodwill),
wherever located (including in the possession of vendors or other third parties
or elsewhere), whether real, personal or mixed, tangible, intangible or
contingent, 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, including the following:
(a) all accounting and other books, records and files whether
in paper, microfilm, microfiche, computer tape or disc, magnetic tape
or any other form;
(b) all apparatus, computers and other electronic data
processing equipment, fixtures, machinery, equipment, furniture, office
equipment, automobiles, trucks, rolling stock, vessels, motor vehicles
and other transportation equipment, special and general tools, test
devices, prototypes and models and other tangible personal property;
(c) all inventories of materials, parts, raw materials,
supplies, work-in-process and finished goods and products;
2
6
(d) all interests in real property of whatever nature,
including easements, whether as owner, lessor, sublessor, lessee,
sublessee or otherwise;
(e) all interests in any capital stock or other equity
interests of any Subsidiary or any other Person, all bonds, notes,
debentures or other securities issued by any Subsidiary or any other
Person, all loans, advances or other extensions of credit or capital
contributions to any Subsidiary or any other Person and all other
investments in securities of any Person;
(f) all license agreements, leases of personal property, open
purchase orders for raw materials, supplies, parts or services,
unfilled orders for the manufacture and sale of products and other
contracts, agreements or commitments;
(g) all deposits, letters of credit and performance and surety
bonds;
(h) Information, including that prepared by consultants and
other third parties;
(i) all domestic and foreign patents, copyrights, trade names,
domain names, trademarks, service marks and registrations and
applications for any of the foregoing, mask works, trade secrets,
inventions, other proprietary information and licenses from third
Persons granting the right to use any of the foregoing ("Intellectual
Property");
(j) all computer applications, programs and other software,
including operating software, network software, firmware, middleware,
internet web pages, design software, design tools, systems
documentation and instructions;
(k) all cost information, sales and pricing data, customer
prospect lists, supplier records, customer and supplier lists, customer
and vendor data, correspondence and lists, product literature, artwork,
design, development and manufacturing files, vendor and customer
drawings, formulations and specifications, quality records and reports
and other books, records, studies, surveys, reports, plans and
documents;
(l) all prepaid expenses, trade accounts and other accounts
and notes receivables;
(m) all rights under contracts or agreements, all claims or
rights against any Person arising from the ownership of any Asset, all
rights in connection with any bids or offers and all related claims,
chooses in action or similar rights, whether accrued or contingent,
including any claims of infringement of Intellectual Property against
third parties;
(n) all rights as a named insured under insurance policies and
all rights in the nature of insurance, indemnification or contribution;
(o) all licenses, permits, approvals and authorizations which
have been issued by any Governmental Authority;
3
7
(p) cash or cash equivalents, bank accounts, lock boxes and
other deposit agreements; and
(q) interest rate, currency, commodity or other swap, collar,
cap or other hedging or similar agreements or arrangements.
1.07. ATI AUTOMOBILE POLICIES means those ATI Policies that (i) insure
Water Pik or any other member of the Water Pik Group, and (ii) provide
automobile insurance.
1.08. ATI COMMON STOCK means the Common Stock, par value $0.10 per
share, of ATI.
1.09. ATI GENERAL LIABILITY POLICIES means those ATI Policies that (i)
insure Water Pik or any other member of the Water Pik Group, and (ii) provide
general liability, public liability, or comprehensive general liability
insurance.
1.10. ATI GROUP means ATI and each Person (other than any member of the
Water Pik Group or the Water Pik Group) that is an Affiliate of ATI immediately
after the Effective Time.
1.11. ATI INDEMNITEES has the meaning set forth in Section 5.02.
1.12. ATI LIABILITIES means all Liabilities of ATI other than Water Pik
Liabilities and Teledyne Technologies Liabilities.
1.13. ATI POLICIES means policies of insurance that have been issued
to, or in favor of, ATI or Subsidiaries of ATI.
1.14. ATI PRODUCT LIABILITY POLICIES means those insurance ATI Policies
that (i) insure Water Pik or any other member of the Water Pik Group, and (ii)
provide product liability insurance.
1.15. ATI WORKERS COMPENSATION POLICIES means those ATI Policies that
(i) insure Water Pik or any other member of the Water Pik Group, and (ii)
provide workers compensation insurance.
1.16. CODE means the Internal Revenue Code of 1986, as amended.
1.17. COMMISSION means the Securities and Exchange Commission.
1.18. CONSENTS means any consents, waivers or approvals from, or
notification requirements to, any third parties.
1.19. DESIGNATED OFFICERS means, (i) in the case of ATI, the Senior
Vice President, General Counsel and Secretary of ATI or his successor, and (ii)
in the case of Water Pik, the Senior Vice President, General Counsel and
Secretary of Water Pik or his successor.
4
8
1.20. DGCL means the Delaware General Corporation Law, as amended.
1.21. DISPUTES has the meaning set forth in Section 10.14.
1.22. DISTRIBUTION means the distribution by ATI on a pro rata basis to
holders of ATI Common Stock of all of the outstanding shares of Water Pik Common
Stock.
1.23. DISTRIBUTION DATE means the date on which the Distribution
occurs.
1.24. EFFECTIVE TIME means 5:00 p.m., Eastern Standard Time or Eastern
Daylight Time (whichever shall be then in effect), on the Distribution Date.
1.25. EMPLOYEE BENEFITS AGREEMENT means the Employee Benefits
Agreement, dated as of the date hereof, by and between ATI and Water Pik.
1.26. ENVIRONMENTAL LAW means any federal, state, local, foreign or
international statute, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, common law (including tort and environmental
nuisance law), legal doctrine, order, judgment, decree, injunction, requirement
or agreement with any Governmental Authority, now or hereafter in effect
relating to health, safety, pollution or the environment (including ambient air,
surface water, groundwater, land surface or subsurface strata) or to emissions,
discharges, releases or threatened releases of any substance currently or at any
time hereafter listed, defined, designated or classified as hazardous, toxic,
waste, radioactive or dangerous, or otherwise regulated, under any of the
foregoing, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of any such substances,
including the Comprehensive Environmental Response, Compensation and Liability
Act, the Superfund Amendments and Reauthorization Act and the Resource
Conservation and Recovery Act and comparable provisions in state, local, foreign
or international law.
1.27. ENVIRONMENTAL LIABILITIES means all Liabilities relating to,
arising out of or resulting from any Environmental Law or contract or agreement
relating to environmental, health or safety matters (including all removal,
remediation or cleanup costs, investigatory costs, governmental response costs,
natural resources damages, property damages, personal injury damages, costs of
compliance with any settlement, judgment or other determination of Liability and
indemnity, contribution or similar obligations) and all costs and expenses
(including allocated costs of in-house counsel and other personnel), interest,
fines, penalties or other monetary sanctions in connection therewith.
1.28. EXCHANGE ACT means the Securities Exchange Act of 1934, as
amended, together with the rules and regulations promulgated thereunder.
1.29. EXCLUDED ASSETS has the meaning set forth in Section 2.02(b).
1.30. EXPENSE FACTORS means expense factors or similar factors or
multipliers set forth in policies of insurance or related agreements applicable
to liabilities, losses or defense costs insured thereunder that are subject to a
Self-Insurance Obligation.
5
9
1.31. FINANCING FACILITY means the Credit Agreement among ATI, Water
Pik, _____________________ and other financial institutions party thereto to be
entered into prior to the Distribution and any substitute or successor credit
facility.
1.32. FORM 10 REGISTRATION STATEMENT means the registration statement
on Form 10 filed under the Exchange Act, pursuant to which Water Pik Common
Stock will be registered under the Exchange Act following the Distribution,
together with all amendments thereto.
1.33. GOVERNMENTAL APPROVALS means any notices, reports or other
filings to be made, or any consents, registrations, approvals, permits or
authorizations to be obtained from, any Governmental Authority.
1.34. GOVERNMENTAL AUTHORITY shall mean any federal, state, local,
foreign or international court, government, department, commission, board,
bureau, agency, official or other regulatory, administrative or governmental
authority.
1.35. GROUP means the ATI Group, the Water Pik Group or the Teledyne
Technologies Group, as the context requires.
1.36. INCURRED LOSSES means the sum of paid losses (indemnity and loss
adjustment expenses) and reserves for unpaid losses.
1.37. INDEMNIFYING PARTY has the meaning set forth in Section 5.04(a).
1.38. INDEMNITEE has the meaning set forth in Section 5.04(a).
1.39. INDEMNITY PAYMENT has the meaning set forth in Section 5.04(a).
1.40. INFORMATION means information, whether or not patentable or
copyrightable, in written, oral, electronic or other tangible or intangible
forms, stored in any medium, including studies, reports, records, books,
contracts, instruments, surveys, discoveries, ideas, concepts, know-how,
analyses, techniques, designs, specifications, drawings, blueprints, diagrams,
models, operating and maintenance manuals, prototypes, samples, flow charts,
data, computer data, disks, diskettes, tapes, computer programs or other
software, marketing plans, customer names, communications by or to attorneys
(including attorney-client privileged communications), memos and other materials
prepared by attorneys or under their direction (including attorney work
product), and other technical, financial, employee or business information or
data, whether prepared by or for any affected party.
1.41. INFORMATION STATEMENT means the Information Statement forming a
part of the Form 10 Registration Statement to be mailed to holders of ATI Common
Stock in connection with the Distribution.
1.42. INITIAL MEDIATION PERIOD has the meaning set forth in Section
10.14.
6
10
1.43. INSURANCE POLICIES means the insurance policies written by
insurance carriers unaffiliated with ATI pursuant to which Water Pik or one or
more of its Subsidiaries (or their respective officers or directors) will be
insured parties after the Effective Time.
1.44. INSURANCE PROCEEDS means those monies:
(a) received by an insured from an insurance carrier;
(b) paid by an insurance carrier on behalf of the insured; or
(c) received (including by way of set off) from any third
party in the nature of insurance, contribution or indemnification in
respect of any Liability;
in any such case net of any applicable premium adjustments (including reserves
and retrospectively rated premium adjustments) and net of any costs or expenses
(including allocated costs of in-house counsel and other personnel) incurred in
the collection thereof.
1.45. INTERIM SERVICES AGREEMENT means the Interim Services Agreement,
dated as of the date hereof, by and between ATI and Water Pik.
1.46. LAARS INC. means Laars Inc., a Delaware corporation.
1.47. LAARS INC. ASSETS means those Water Pik Assets described in
Schedule 1.47.
1.48. LAARS INC. LIABILITIES means those Water Pik Liabilities
described in Schedule 1.48.
1.49. LAARS INC. TRANSFER AND ASSUMPTION AGREEMENT means the Asset
Transfer and Liabilities Assumption Agreement, dated as of the date hereof,
between Water Pik and Laars Inc.
1.50. 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, reckonings, bonds, specialties,
indemnities and similar obligations, exonerations, covenants, contracts,
controversies, agreements, promises, doings, omissions, variances, guarantees,
make whole agreements and similar obligations, and other liabilities, 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 reasonable attorneys' fees and any and all costs and expenses (including
allocated costs of in-house counsel and other personnel), whatsoever incurred in
investigating, preparing or defending against any such Actions or threatened or
contemplated Actions), order or consent decree of any Governmental Authority 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 or any Ancillary Agreement, in each case, whether or not recorded or
reflected or
7
11
required to be recorded or reflected on the books and records or financial
statements of any Person.
1.51. NYSE means The New York Stock Exchange, Inc.
1.52. NON-WATER PIK ASSETS means any Assets of ATI or any of its
Affiliates (including any member of the Water Pik Group) other than the Water
Pik Assets.
1.53. PATENT ASSIGNMENTS means the Patent Assignments, effective as of
the Distribution, executed and delivered by TII to Water Pik.
1.54 PER CASE MAXIMUM means (i) with respect to any single occurrence
covered under ATI Automobile Policies, $100,000 (inclusive of indemnity and loss
adjustment expenses multiplied by applicable Expense Factors) and (ii) with
respect to any single occurrence covered by ATI Workers Compensation policies,
$150,000 (inclusive of indemnity and loss adjustment expenses multiplied by
applicable Expense Factors).
1.55. PERSON means an individual, a general or limited partnership, a
corporation, a trust, a joint venture, an unincorporated organization, a limited
liability entity, any other entity and any Governmental Authority.
1.56 POOLED LOSS COSTS ALLOCABLE TO WATER PIK means the share allocated
to Water Pik by virtue of its participation in a pooling arrangement among ATI
divisions applicable to claims that (i) are covered under ATI Automobile
Policies and ATI Workers Compensation Policies; (ii) exceed the Per Case
Maximum; and (iii) are within a policy's deductible or other form of
self-insurance, which allocation to Water Pik will be based upon the same or
substantially similar to those factors as have been applied immediately before
the Distribution Date.
1.57. PRIME RATE means the rate which PNC Bank, N.A., Pittsburgh,
Pennsylvania (or any successor thereto or other commercial bank agreed to by the
parties hereto) announces from time to time as its prime lending rate, as in
effect from time to time.
1.58. PUBLIC OFFERING means the underwritten public offering by Water
Pik of shares of Water Pik Common Stock pursuant to the Public Offering
Registration Statement and as contemplated by the Tax Sharing Agreement.
1.59. PUBLIC OFFERING REGISTRATION STATEMENT means the registration
statement to be filed by Water Pik under the Securities Act of 1933, as amended,
pursuant to which the offering and sale of shares of Water Pik Common Stock to
be issued in the Public Offering will be registered, together with all
amendments thereto.
1.60. PURCHASE AND SALE AGREEMENT means the Purchase and Sale
Agreement, dated as of the date hereof, between TICL Newco and TICL.
8
12
1.61. RECORD DATE means the close of business on the date determined by
the ATI Board of Directors as the record date for determining stockholders of
ATI entitled to receive shares of Water Pik Common Stock in the Distribution.
1.62. RIGHTS means the Rights to be distributed by Water Pik in respect
of Water Pik Common Stock in accordance with Section 3.02 hereof and pursuant to
the Rights Agreement between Water Pik and ChaseMellon Shareholder Services,
L.L.C.
1.63. RULING REQUEST means the request for ruling (including all
exhibits), as amended and supplemented, under Section 355 and other provisions
of the Code, originally filed on behalf of ATI on April 6, 1999 in respect of
the Distribution.
1.64. SECURITY INTEREST means any mortgage, security interest, pledge,
lien, charge, claim, option, right to acquire, voting or other restriction,
right-of-way, covenant, condition, easement, encroachment, restriction on
transfer, or other encumbrance of any nature whatsoever.
1.65. SELF INSURANCE OBLIGATION means an obligation by one or more
insureds to pay or reimburse to the issuers of an insurance policy (whether by
way of deductible, retrospective premium, premium adjustment, self-insured
retention or other form of self-insurance), indemnity, allocated loss expense,
and other proceeds multiplied by Expense Factors, if any.
1.66. SEPARATION means the transfer of the Water Pik Assets to Water
Pik and its Subsidiaries and the assumption by Water Pik and its Subsidiaries of
the Water Pik Liabilities, all as more fully described in this Agreement and the
Ancillary Agreements.
1.67. 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 or ability to control, that Person.
1.68. TAX SHARING AGREEMENT means the Tax Sharing and Indemnification
Agreement, dated as of the date hereof, as the same may be amended, by and
between ATI and Water Pik.
1.69. TAXES has the meaning set forth in the Tax Sharing Agreement.
1.70. TELEDYNE TECHNOLOGIES COMMON STOCK means the Common Stock, par
value $.01 per share, of Teledyne Technologies.
9
13
1.71. TELEDYNE TECHNOLOGIES DISTRIBUTION means the distribution by ATI
on a pro rata basis to holders of ATI Common Stock of all of the outstanding
shares of Teledyne Technologies Common Stock owned by ATI.
1.72. TELEDYNE TECHNOLOGIES GROUP means Teledyne Technologies, each
Subsidiary of Teledyne Technologies and each other Person that is contemplated
to be controlled directly or indirectly by Teledyne Technologies at the time of
the Teledyne Technologies Distribution.
1.73. TELEDYNE TECHNOLOGIES LIABILITIES has the meaning assigned to
that term in the Teledyne Technologies Separation and Distribution Agreement.
1.74. TELEDYNE TECHNOLOGIES SEPARATION AND DISTRIBUTION AGREEMENT means
the Separation and Distribution Agreement among ATI, Holdings, TII and Teledyne
Technologies.
1.75. THIRD PARTY CLAIM has the meaning set forth in Section 5.05(a).
1.76. TI means Teledyne, Inc., a Delaware corporation.
1.77. TICL means Teledyne Industries Canada Limited, an Ontario
corporation.
1.78. TICL ASSETS means those certain assets of TICL listed and
described in Schedule 1.78.
1.79. TICL LIABILITIES means those liabilities of TICL described in
Schedule 1.79.
1.80. TICL NEWCO means Water Pik Canada, Ltd., an Ontario corporation
wholly owned by Water Pik.
1.81. TI LIQUIDATION means the dissolution and liquidation of TI in
accordance with applicable provisions of the DGCL and Section 332 of the Code,
as a result of which Holdings will own all of the outstanding capital stock of
TII.
1.82. UNDERWRITERS means the managing underwriters for the Public
Offering.
1.83. UNDERWRITING AGREEMENT means an underwriting agreement in
customary form to be entered into among Water Pik and the Underwriters with
respect to the Public Offering.
1.84. UNPAID LOSSES means liabilities and losses, including indemnity
payments and allocated loss expenses, that are subject to a Self Insurance
Obligation and that, as of the Distribution Date have not been paid by Water Pik
or a member of Water Pik Group and that do not appear on Schedule 1.84.
10
14
1.85. WATER PIK ASSETS has the meaning set forth in Section 2.02(a).
1.86. WATER PIK BALANCE SHEET means the audited consolidated balance
sheet of Water Pik, including the notes thereto, as of [September 30], 1999.
1.87. WATER PIK BUSINESS means the business and operations of the
divisions and Subsidiaries of TI or TII comprising Teledyne Water Pik, Jandy and
Teledyne Laars and any business or operation conducted by Water Pik or any
Affiliate of Water Pik at any time on or after the Distribution Date.
1.88. WATER PIK COMMON STOCK means the Common Stock, $.01 par value per
share, of Water Pik and, after the distribution of Rights referred to in Section
3.02, shall include the associated Rights.
1.89. WATER PIK CONTRACTS means the following contracts and agreements
to which TII or any of its Affiliates is a party or by it or any of its
Affiliates or any of their respective Assets is bound, whether as of the date
hereof or prior to or at the Effective Time, and whether or not in writing,
except for any such contract or agreement that is expressly contemplated to be
retained by any member of the ATI Group pursuant to any provision of this
Agreement or any Ancillary Agreement:
(a) any contract or agreement entered into in the name of, or
expressly on behalf of, any division, business unit or member of the
Water Pik Group;
(b) any contract or agreement that relates exclusively to the
Water Pik Business, including those listed or described on Schedule
1.89(b);
(c) federal, state and local government and other contracts
and agreements that relate exclusively to the Water Pik Business,
including those listed or described on Schedule 1.89(c);
(d) any contract or agreement representing capital or
operating equipment lease obligations reflected on the Water Pik
Balance Sheet, including obligations as lessee under those contracts or
agreements listed on Schedule 1.89(d) (as such Schedule may be
supplemented after the date hereof and prior to the Effective Time to
assign capital and operating equipment lease obligations that relate
exclusively to the Water Pik Business and that were, are or may be
executed and delivered after the date of the Water Pik Balance Sheet);
(e) any contract or agreement that is otherwise expressly
contemplated pursuant to this Agreement or any of the Ancillary
Agreements to be assigned to Water Pik or any member of the Water Pik
Group;
(f) any guarantee, indemnity, representation, warranty or
other Liability of any member of the Water Pik Group or the ATI Group
in respect of any other Water Pik Contract, any Water Pik Liability or
the Water Pik Business (including guarantees of
11
15
financing incurred by customers or other third parties in connection
with purchases of products or services from the Water Pik Business);
and
(g) the contracts, agreements and other documents listed or
described on Schedule 1.89(g).
1.90. WATER PIK GROUP means Water Pik, each Subsidiary of Water Pik and
each other Person that is contemplated to be controlled directly or indirectly
by Water Pik as of the Effective Time.
1.91. WATER PIK INC. means Water Pik Inc., a Delaware corporation.
1.92. WATER PIK INC. ASSETS means those Water Pik Assets described in
Schedule 1.92.
1.93. WATER PIK LIABILITIES means those Water Pik Liabilities
described in Schedule 1.93.
1.94. WATER PIK TRANSFER AND ASSUMPTION AGREEMENT means the Asset and
Transfer and Liabilities Assumption Agreement, dated as of the date hereof,
between Water Pik and Water Pik Inc.
1.95. WATER PIK INDEMNITEES has the meaning set forth in Section
5.03(a).
1.96. WATER PIK LIABILITIES has the meaning set forth in Section 2.03.
1.97. YEAR 2000 COMPLIANT means, with respect to an Asset, that such
Asset will (i) accurately process date/time data (including, but not limited to,
calculating, comparing, sorting, sequencing and calendar generation), including
single century formulas and multi-century formulas, from, into and between the
twentieth and twenty-first centuries and the years 1999 and 2000, including leap
year calculations, and will not malfunction or generate incorrect values or
invalid results involving such dates/times; (ii) accurately interface with other
systems, as appropriate, in order to supply, receive or process dates/times and
other data, to the extent that other information technology properly exchanges
data with it; (iii) provide that date/time-related functionalities, date/time
fields and any user input interfaces include a four digit year format and/or
other indication of century, as applicable; and (iv) not cause any other Asset
that is otherwise Year 2000 Compliant to fail to be Year 2000 Compliant.
12
16
ARTICLE II
THE SEPARATION
2.01. TRANSFER OF ASSETS AND ASSUMPTION OF LIABILITIES. (a) TII hereby
assigns, transfers, conveys and delivers to Water Pik, and agrees to cause its
applicable Subsidiaries to assign, transfer, convey and deliver to Water Pik,
and Water Pik hereby accepts from TII and its Subsidiaries, all of TII's and its
applicable Subsidiaries' respective right, title and interest in all Water Pik
Assets.
(b) Water Pik hereby assumes and agrees faithfully to perform, satisfy,
discharge and fulfill all the Water Pik Liabilities in accordance with their
respective terms. Water Pik shall be responsible for all Water Pik Liabilities,
regardless of when or where such Liabilities arose or arise or whether the facts
on which they are based occurred prior to or subsequent to the date hereof,
regardless of where or against whom such Liabilities are asserted or determined
or whether asserted or determined prior to the date hereof, and regardless of
whether arising from or alleged to arise from negligence, recklessness,
violation of law, fraud or misrepresentation (whether based on tort, contract,
statute or otherwise) by any member of the ATI Group or the Water Pik Group or
any of their respective directors, officers, employees, agents, Subsidiaries or
Affiliates.
(c) In the event that at any time or from time to time (whether prior
to or after the Distribution Date) any party hereto (or any member of such
party's respective Group), shall receive or otherwise possess any Asset that is
allocated to any other Person pursuant to this Agreement or any Ancillary
Agreement, such party or member shall promptly transfer, or cause to be
transferred, such Asset to the Person so entitled thereto. Prior to any such
transfer, the Person receiving or possessing such Asset shall hold such Asset in
trust for any such other Person.
2.02. WATER PIK ASSETS. (a) For purposes of this Agreement, "Water Pik
Assets" shall mean (without duplication):
(i) all Assets reflected in the Water Pik Balance Sheet as
Assets of Water Pik and its Subsidiaries, subject to any dispositions
of any such Assets subsequent to the date of the Water Pik Balance
Sheet;
(ii) all Assets acquired by or for the exclusive benefit of
Water Pik subsequent to the date of the Water Pik Balance Sheet and
prior to the Effective Time that would have been reflected in the Water
Pik Balance Sheet as Assets of Water Pik had they been owned on the
date of the Water Pik Balance Sheet;
(iii) subject to Section 6.01, any rights of any member of the
Water Pik Group under any of the Insurance Policies, including any
rights thereunder arising after the Distribution Date in respect of any
Insurance Policies that are occurrence policies; and
(iv) (A) any Assets that any Ancillary Agreement contemplates
will be transferred to any member of the Water Pik Group, (B) any Water
Pik Contracts and (C) all issued and outstanding capital stock of the
Subsidiaries, the partnership interests and other Assets of TII listed
on Schedule 2.02(a)(iv).
13
17
Notwithstanding the foregoing, the Water Pik Assets shall not in any event
include the Excluded Assets referred to in Section 2.02(b) below.
(b) For the purposes of this Agreement, "Excluded Assets" shall mean:
(i) the Assets listed or described on Schedule 2.02(b)(i); and
(ii) any and all Assets that are expressly contemplated by
this Agreement or any Ancillary Agreement (or the Schedules hereto or
thereto) as Assets to be retained by ATI or any other member of the ATI
Group (including the Teledyne Technologies Group).
(c) Water Pik acknowledges and agrees that the Assets reflected as
Water Pik Assets in the Water Pik Balance Sheet are so reflected based on the
books and records maintained, and other information supplied, by Water Pik
personnel, and that the Water Pik Assets constitute all of the Assets necessary
to operate the Water Pik Business as presently conducted.
2.03. WATER PIK LIABILITIES. For the purposes of this Agreement, "Water
Pik Liabilities" shall mean (without duplication):
(a) any and all Liabilities that are expressly contemplated by this
Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as
Liabilities to be assumed by Water Pik or any member of the Water Pik Group,
including those described in Schedule 2.03(i), and all agreements, obligations
and Liabilities of any member of the Water Pik Group under this Agreement or any
of the Ancillary Agreements;
(b) all Liabilities, including any employee-related Liabilities and
Environmental Liabilities, relating to, arising out of or resulting from:
(i) the operation of the Water Pik Business as conducted at
any time prior to, at or after the Effective Time (including any
Liability relating to, arising out of or resulting from the design,
manufacture and sale of products or services of the Water Pik Business
or from any act or failure to act by any director, officer, employee,
agent or representative of any Person (whether or not such act or
failure to act is or was within such Person's authority));
(ii) the operation of any business conducted by any member of
the Water Pik Group at any time after the Effective Time (including any
Liability relating to, arising out of or resulting from any act or
failure to act by any director, officer, employee, agent or
representative of any Person (whether or not such act or failure to act
is or was within such Person's authority)); or
(iii) any Water Pik Assets (including any Water Pik Contracts
and any real property and leasehold interests) or ownership of any
Water Pik Assets at any time prior to, at or after the Effective Time;
in any such case whether arising before, on or after the Effective Time;
14
18
(c) all Liabilities relating to, arising out of or resulting from the
Financing Facility;
(d) all Liabilities relating to, arising out of or resulting from any
of the terminated, divested or discontinued businesses and operations listed or
described on Schedule 2.03(iv);
(e) all Liabilities reflected as liabilities or obligations of Water
Pik in the Water Pik Balance Sheet, subject to any discharge of such Liabilities
subsequent to the date of the Water Pik Balance Sheet, and all liabilities or
obligations of Water Pik incurred subsequent to the date of the Water Pik
Balance Sheet that would have been reflected in the Water Pik Balance Sheet had
they been incurred as of the date of the Water Pik Balance Sheet;
(f) any Liabilities relating to, arising out of or resulting from any
infringement of any Intellectual Property of any third party, including but not
limited to patent rights, trademark and service xxxx rights (registered and
common law), trade dress rights, copyrights, misappropriation of trade secret,
based upon or resulting from the operation of the Water Pik Business and
regardless of whether said infringement occurred prior to, on or after the
Distribution Date;
(g) any and all guarantees by ATI or any member of the ATI Group of
obligations to assure payment or performance by or other Liabilities of the
Water Pik Group or the Water Pik Business; and
(h) any Liabilities relating to, arising out of, or resulting from any
of the Water Pik Assets that are not Year 2000 Compliant.
2.04. TERMINATION OF AGREEMENTS. (a) Except as set forth in Section
2.04(b), in furtherance of the releases and other provisions of Section 5.01
hereof, Water Pik and each member of the Water Pik Group, on the one hand, and
each of ATI and the respective members of the ATI Group, on the other hand,
hereby terminate any and all agreements, arrangements, commitments or
understandings, whether or not in writing, between or among Water Pik and/or any
member of the Water Pik Group, on the one hand, and ATI or any member of the ATI
Group, on the other hand, effective as of the Effective Time, including (except
as set forth in Schedule 2.04(a)) any intercompany accounts payable or accounts
receivable accrued as of the Effective Time that are reflected in the books and
records of the parties or otherwise documented in writing in accordance with
past practices; provided, however, to the extent that the termination of any
such agreement, arrangement, commitment or understanding is inconsistent with
any Ancillary Agreement, such termination shall be effective as of the date of
effectiveness of the applicable Ancillary Agreement. No such terminated
agreement, arrangement, commitment or understanding (including any provision
thereof which purports to survive termination) shall be of any further force or
effect after the Effective Time (or, to the extent contemplated by the proviso
to the immediately preceding sentence, after the effective time of the
applicable Ancillary Agreement). Each party shall, at the reasonable request of
any other party, take, or cause to be taken, such other actions as may be
necessary to effect the foregoing.
15
19
(b) The provisions of Section 2.04(a) shall not apply to any of the
following agreements, arrangements, commitments or understandings (or to any of
the provisions thereof): (i) this Agreement and the Ancillary Agreements (and
each other agreement or instrument expressly contemplated by this Agreement or
any Ancillary Agreement to be entered into by any of the parties hereto or any
of the members of their respective Groups); (ii) any agreements, arrangements,
commitments or understandings listed or described on Schedule 2.04(b)(ii); (iii)
any agreements, arrangements, commitments or understandings to which any Person
other than the parties hereto and their respective Affiliates is a party (it
being understood that to the extent that the rights and obligations of the
parties and the members of their respective Groups under any such agreements,
arrangements, commitments or understandings constitute Water Pik Assets or Water
Pik Liabilities, they shall be assigned and assumed pursuant to Section 2.01);
and (iv) any other agreements, arrangements, commitments or understandings that
this Agreement or any Ancillary Agreement expressly contemplates will survive
the Effective Time.
2.05. DOCUMENTS RELATING TO TRANSFER OF REAL PROPERTY INTERESTS AND
TANGIBLE PROPERTY LOCATED THEREON. In furtherance of the assignment, transfer
and conveyance of Water Pik Assets and the assumption of Water Pik Liabilities
set forth in Section 2.01(a) and (b), simultaneously with the execution and
delivery hereof or as promptly as practicable thereafter, each of TII and Water
Pik or their applicable Subsidiaries is executing and delivering or will execute
and deliver such deeds, lease assignments and assumptions, leases, subleases and
sub-subleases as may be necessary to effectively transfer any real property and
leasehold interests forming part of the Water Pik Assets and conform to any
laws, regulations or usage applicable in the jurisdiction in which the relevant
real property is located.
2.06. DOCUMENTS FURTHER EVIDENCING TRANSFERS OF ASSETS AND ASSUMPTION
OF LIABILITIES. In furtherance of the assignment, transfer and conveyance of
Water Pik Assets and the assumption of Water Pik Liabilities set forth in
Section 2.01(a) and (b), simultaneously with the execution and delivery hereof
or as promptly as practicable thereafter, (i) TII shall execute and deliver, and
shall cause its Subsidiaries to execute and deliver, such further bills of sale,
stock powers, certificates of title, assignments of contracts and other
instruments of transfer, conveyance and assignment as and to the extent
necessary to fully evidence the transfer, conveyance and assignment of all of
TII's and its respective Subsidiaries' right, title and interest in and to the
Water Pik Assets to Water Pik and (ii) Water Pik shall execute and deliver to
TII and its Subsidiaries such further bills of sale, stock powers, certificates
of title, assumptions of contracts and other instruments of assumption as and to
the extent necessary to fully evidence the valid and effective assumption of the
Water Pik Liabilities by Water Pik.
2.07. OTHER ANCILLARY AGREEMENTS. Effective as of the date hereof each
of ATI, TII and Water Pik will execute and deliver, and cause any of their
respective Subsidiaries that are parties thereto to execute and deliver all
Ancillary Agreements to which it is a party.
16
20
2.08. DISCLAIMER OF REPRESENTATIONS AND WARRANTIES. Each of ATI (on
behalf of itself and each member of ATI, including TII) and Water Pik (on behalf
of itself and each member of the Water Pik Group) understands and agrees that,
except as expressly set forth herein or in any Ancillary Agreement, no party to
this Agreement, any Ancillary Agreement or any other agreement or document
contemplated by this Agreement, any Ancillary Agreement or otherwise, is
representing or warranting in any way as to the Assets, businesses or
Liabilities transferred or assumed as contemplated hereby or thereby (including
whether an asset is Year 2000 Compliant), as to any consents or approvals
required in connection therewith, as to the value or freedom from any Security
Interests of, or any other matter concerning, any Assets of such party, or as to
the absence of any defenses or rights of setoff or freedom from counterclaims
with respect to any claim or other Asset, including any accounts receivable, of
any party, or as to the legal sufficiency of any assignment, document or
instrument delivered hereunder to convey title to any Asset or thing of value
upon the execution, delivery and filing hereof or thereof. Without limiting the
scope of the foregoing, no party makes any representations or warranties as to
the Intellectual Property sought to be transferred herein, including, without
limitation, whether such Intellectual Property or any portion thereof is valid,
enforceable, freely transferable, free and clear of liens (except permitted
liens) or sufficient and complete in order to conduct the Water Pik Business,
whether any party herein owns, has the exclusive right to use or has the ability
to practice such Intellectual Property or any portion thereof, or whether such
Intellectual Property or the operation of any aspect of the Water Pik Business
infringes or conflicts in any way with any Intellectual Property right of any
third party. Except as may expressly be set forth herein or in any Ancillary
Agreement, all such Assets are being transferred on an "as is," "where is,"
"with all faults" basis (and, in the case of any real property, by means of a
quitclaim or similar form deed or conveyance) and the respective transferees
shall bear the economic and legal risks that any conveyance shall prove to be
insufficient to vest in the transferee good and marketable title, free and clear
of any Security Interest. Without limiting the foregoing, neither ATI nor any
other party hereto (excluding Water Pik), or to any Ancillary Agreement, is
making any representation or warranty to Water Pik or any other Person in
respect of the Water Pik Balance Sheet, including in respect of the accuracy or
presentation thereof, or the adequacy of accruals, reserves and other amounts
reflected thereon.
2.09. FINANCING ARRANGEMENTS. Each of the parties hereto acknowledges
that (a) ATI has arranged availability for up to $___ million in senior secured
financing pursuant to the Financing Facility, (b) that ATI has, prior to the
date hereof, incurred $____ million in indebtedness pursuant to such Financing
Facility; and (c) that ATI has used, or will use prior to the Distribution Date,
such indebtedness to refinance other outstanding indebtedness of ATI. Water Pik
agrees that, following the Distribution Date, Water Pik will indemnify ATI (and
all the other members of the ATI Group) and defend and hold such parties
harmless from and against all the obligations of ATI (or Water Pik) arising
under the Financing Facility (including the obligation to repay such $___
million in outstanding borrowings), with the effect that ATI (and all other
members of the ATI Group) shall have no further liability or obligation under
the Financing Facility.
2.10. GOVERNMENTAL APPROVALS AND CONSENTS. (a) To the extent that the
Separation requires any Governmental Approvals or Consents, the parties will use
all reasonable efforts to obtain any such Governmental Approvals and Consents.
(b) If and to the extent that the valid, complete and perfected
transfer or assignment (or novation of any federal government contract) to the
Water Pik Group of any Water Pik Assets (or from the Water Pik Group of any
Non-Water Pik Assets) would be a violation of applicable laws or require any
Consent or Governmental Approval in connection with the Separation, then, unless
ATI shall otherwise determine, the transfer or assignment to or from the Water
Pik Group, as the case may be, of such Water Pik Assets or Non-Water Pik Assets,
17
21
respectively, shall be automatically deemed deferred and any such purported
transfer or assignment shall be null and void until such time as all legal
impediments are removed and/or such Consents or Governmental Approvals have been
obtained. Notwithstanding the foregoing, such Asset shall be deemed a Water Pik
Asset for purposes of determining whether any Liability is a Water Pik
Liability.
(c) If the transfer or assignment of any Assets intended to be
transferred or assigned hereunder is not consummated prior to or at the
Effective Time, whether as a result of the provisions of Section 2.10(b) or for
any other reason, then the Person retaining such Asset shall thereafter hold
such Asset for the use and benefit, insofar as reasonably possible, of the
Person entitled thereto (at the expense of the Person entitled thereto). In
addition, the Person retaining such Asset shall take such other actions as may
be reasonably requested by the Person to whom such Asset is to be transferred in
order to place such Person, insofar as reasonably possible, in the same position
as if such Asset had been transferred as contemplated hereby and so that all the
benefits and burdens relating to such Water Pik Assets (or such Non-Water Pik
Assets, as the case may be), including possession, use, risk of loss, potential
for gain, and dominion, control and command over such Assets, are to inure from
and after the Effective Time to the Water Pik Group (or the ATI Group, as the
case may be).
(d) If and when the Consents and/or Governmental Approvals, the absence
of which caused the deferral of transfer of any Asset pursuant to Section
2.10(b), are obtained, the transfer of the applicable Asset shall be effected in
accordance with the terms of this Agreement and/or the applicable Ancillary
Agreement.
(e) The Person retaining an Asset due to the deferral of the transfer
of such Asset shall not be obligated, in connection with the foregoing, to
expend any money unless the necessary funds are advanced by the Person entitled
to the Asset, other than reasonable out-of-pocket expenses, attorneys' fees and
recording or similar fees, all of which shall be promptly reimbursed by the
Person entitled to such Asset.
2.11. NOVATION OF ASSUMED WATER PIK LIABILITIES. (a) Each of ATI, TII
and Water Pik at the request of any of the others, shall use all reasonable
efforts to obtain, or to cause to be obtained, any consent, substitution,
approval or amendment required to novate (including with respect to any federal
government contract) or assign all obligations under agreements, leases,
licenses and other obligations or Liabilities, or to obtain in writing the
unconditional release of all parties to such arrangements other than any member
of the Water Pik Group, so that, in any such case, Water Pik and its
Subsidiaries will be solely responsible for such Liabilities; provided, however,
that no member of the ATI Group shall be obligated to pay any consideration
therefor to any third party from whom such consents, approvals, substitutions
and amendments are requested.
(b) If ATI, TII or Water Pik is unable to obtain, or to cause to be
obtained, any such required consent, approval, release, substitution or
amendment, the applicable member of the ATI Group shall continue to be bound by
such agreements, leases, licenses and other obligations and, unless not
permitted by law or the terms thereof, Water Pik shall, as agent or
subcontractor for ATI, TII or such other Person, as the case may be, pay,
perform and discharge fully all the
18
22
obligations or other Liabilities of ATI, TII or such other Person, as the case
may be, thereunder from and after the date hereof. Water Pik shall indemnify and
defend each ATI Indemnitee and hold each of them harmless against any
Liabilities arising in connection therewith. Each of ATI and TII, as the case
may be, shall, without further consideration, pay and remit, or cause to be paid
or remitted, to Water Pik promptly all money, rights and other consideration
received by it or any member of its respective Group in respect of such
performance (unless any such consideration is an Excluded Asset). If and when
any such consent, approval, release, substitution or amendment shall be obtained
or such agreement, lease, license or other rights or obligations shall otherwise
become assignable or able to be novated, each of ATI and TII, as the case may
be, shall thereafter assign, or cause to be assigned, all its rights,
obligations and other Liabilities thereunder or any rights or obligations of any
member of its respective Group to Water Pik without payment of further
consideration and Water Pik shall, without the payment of any further
consideration, assume such rights and obligations.
2.12. TRANSFER OF SUBSIDIARY ASSETS AND ASSUMPTION OF SUBSIDIARY
LIABILITIES. Immediately following the transfer of Water Pik Assets and
assumption of Water Pik Liabilities contemplated by Section 2.01, Water Pik
shall contribute to Water Pik Inc. the Water Pik Inc. Assets and cause Water Pik
Inc. to assume the Water Pik Inc. Liabilities in accordance with the Water Pik
Inc. Transfer and Assumption Agreement, and shall contribute to Laars Inc. the
Laars Inc. Assets and cause Laars Inc. to assume the Laars Inc. Liabilities in
accordance with the Laars Inc. Transfer and Assumption Agreement.
2.13. CONSUMMATION OF PURCHASE AND SALE AGREEMENT. Immediately
following the transfer of Assets and assumption of Liabilities contemplated by
Section 2.12, the parties hereto will cause the transactions contemplated by the
Purchase and Sale Agreement to be consummated, pursuant to which TICL Newco will
purchase the TICL Assets from TICL for approximately $5,600,000 in cash.
2.14. TI CONTRIBUTION AND LIQUIDATION. Prior to consummation of the
transactions contemplated by Section 2.15, ATI will contribute to Holdings all
of the outstanding capital stock of TI and the TI Liquidation will be effected.
2.15. INTERIM DISTRIBUTIONS. Following the TI Liquidation, TII will
distribute to Holdings and Holdings will distribute to ATI all of the
outstanding Water Pik Common Stock.
19
23
ARTICLE III
THE DISTRIBUTION
3.01. THE DISTRIBUTION. The ATI Board shall have the sole and absolute
discretion to determine whether and when to effect the Distribution. If the ATI
Board declares the Distribution, on or prior to the Distribution Date, ATI will
deliver to the Agent for the benefit of holders of record of ATI Common Stock on
the Record Date, a single stock certificate, endorsed by ATI in blank,
representing all of the outstanding shares of Water Pik Common Stock then owned
by ATI or any member of the ATI Group, and will instruct the Agent to
distribute, or make book-entry credits for, one share of Water Pik Common Stock
in respect of every twenty shares of ATI Common Stock held by holders of record
of ATI Common Stock on the Record Date, subject to Section 3.03.
3.02. ACTIONS PRIOR TO THE DISTRIBUTION. Prior to the Distribution:
(a) On such date as ATI shall determine, Water Pik shall mail to the
holders of ATI Common Stock the Information Statement.
(b) ATI and Water Pik shall cooperate in preparing, filing with the
Commission under the Securities Act and causing to become effective any
registration statements or amendments thereto that are appropriate to reflect
the establishment of or amendments to any employee benefit plan contemplated by
the Employee Benefits Agreement.
(c) ATI and Water Pik shall by means of a reclassification, stock split
or stock distribution or other means cause the number of outstanding shares of
Water Pik Common Stock held by ATI to be equal to the number of shares to be
distributed in the Distribution (as determined by ATI).
(d) ATI and Water Pik shall take all such action as may be necessary or
appropriate under the securities or blue sky laws of states or other political
subdivisions of the United States in connection with the transactions
contemplated by this Agreement or any Ancillary Agreement.
(e) Water Pik shall use all efforts to have approved an application to
permit listing of the Water Pik Common Stock on the NYSE or another mutually
agreeable stock exchange or quotation system.
(f) ATI and Water Pik shall take all actions which may be required to
elect or otherwise appoint as directors of Water Pik, on or prior to the
Distribution Date, the persons named in the Form 10 Registration Statement to
constitute the Board of Directors of Water Pik on the Distribution Date.
(g) ATI shall cause a Certificate of Amendment and Restatement of the
Water Pik Certificate of Incorporation substantially in the form filed with the
Form 10 Registration Statement, to be filed for record with the Secretary of
State of Delaware and to be in effect on the Distribution Date, and the Board of
Directors of Water Pik shall amend the Bylaws of Water Pik
20
24
so that the Water Pik Bylaws are substantially in the form filed with the Form
10 Registration Statement.
(h) Water Pik shall declare a distribution of, and distribute, one
Right with respect to each share of Water Pik Common Stock to be distributed in
the Distribution.
(i) ATI and Water Pik shall take all actions as may be necessary to
approve the stock-based employee benefit plans of Water Pik in order to satisfy
the requirements of Section 162(m) and other applicable provisions of the Code
and any requirements of the NYSE (or any other stock exchange or quotations
system on which Water Pik Common Stock is to be listed or traded).
3.03. FRACTIONAL SHARES. No certificates or scrip representing
fractional shares of Water Pik Common Stock will be distributed to holders of
ATI Common Stock in the Distribution. The Agent will, as soon as practicable
after the Distribution Date, (a) determine the number of whole shares and
fractional shares of Water Pik Common Stock allocable to each holder of record
of ATI Common Stock as of the Record Date, (b) aggregate all fractional shares
held by such holders, and (c) sell the whole shares attributable to the
aggregate of such fractional shares, in open market transactions, in each case
at the then prevailing trading prices, and to cause to be distributed to each
such holder, in lieu of any fractional share, without interest, such holder's
ratable share of the proceeds of such sale, after making appropriate deductions
of the amount required, if any, to be withheld for U.S. federal income tax
purposes.
ARTICLE IV
THE PUBLIC OFFERING
4.01. THE PUBLIC OFFERING. (a) Water Pik shall consummate the Public
Offering not later than one year following the Distribution Date. Actions
required in order to so consummate the Public Offering shall include, but not
necessarily be limited to, those specified in this Section 4.01.
(b) Water Pik shall file the Public Offering Registration Statement not
later than at the end of the eighth month following the month in which the
Distribution Date occurs, and shall file such amendments or supplements thereto,
as may be necessary in order to cause the same to become and remain effective as
required by law or by the Underwriters, including, but not limited to, filing
such amendments to the Public Offering Registration Statement as may be required
by the Underwriting Agreement, the Commission or federal, state or foreign
securities laws.
(c) Water Pik shall enter into the Underwriting Agreement and shall
comply with its obligations thereunder.
(d) Water Pik shall take all such action as may be necessary or
appropriate under state securities and blue sky laws of the United States (and
any comparable laws under any foreign jurisdictions) in connection with the
Public Offering.
21
25
(e) Water Pik shall prepare, file and take all actions necessary to
make effective an application for listing of the Water Pik Common Stock issued
in the Public Offering on the NYSE, subject to official notice of issuance.
(f) Water Pik shall participate in the preparation of materials and
presentations as the Underwriters shall deem necessary or desirable.
(g) Water Pik shall pay all third party costs, fees and expenses
relating to the Public Offering, all of the reimbursable expenses of the
Underwriters pursuant to the Underwriting Agreement, all of the costs of
producing, printing, mailing and otherwise distributing the Prospectus, as well
as the Underwriters' discount as provided in the Underwriting Agreement.
4.02. PROCEEDS OF THE PUBLIC OFFERING. The Public Offering will be a
primary offering of Water Pik Common Stock and the net proceeds of the Public
Offering will be retained by Water Pik. Water Pik will use such net proceeds as
provided in the Tax Sharing Agreement and the Ruling Request.
4.03. REMEDIES. Water Pik acknowledges that its agreements in this
Article IV are of a special, unique, unusual and extraordinary character.
Because the failure of Water Pik to perform its obligations set forth in the
provisions of this Article IV could cause unique and extraordinary injury to
ATI, ATI shall, notwithstanding anything to the contrary herein, have the right
in addition to any other remedies available, at law or in equity, to seek an
injunction in a court of equity to compel Water Pik to perform such obligations.
Water Pik hereby waives any and all defenses it may have on the ground of lack
of jurisdiction or competence of the court to grant an injunction or other
equitable relief, or otherwise, and agrees that it will not assert any such
defense or any defense to a request by ATI for injunctive relief based on the
alleged existence of an adequate remedy at law or for money damages. Without
limiting the foregoing, Water Pik hereby waives the right to require ATI to post
any bond or other security with respect to any proceeding to enforce the
provisions of this Article IV. The existence of the rights of ATI set forth in
this Section 4.03 shall not preclude any other rights and remedies at law or in
equity which ATI may have.
ARTICLE V
MUTUAL RELEASES; INDEMNIFICATION
5.01. RELEASE OF PRE-DISTRIBUTION CLAIMS. (a) Except as provided in
Section 5.01(c), effective as of the Effective Time, Water Pik does hereby, for
itself and each other member of the Water Pik Group, their respective Affiliates
(other than any member of the ATI Group), successors and assigns, and all
Persons who at any time prior to the Effective Time have been stockholders,
directors, officers, agents or employees of any member of the Water Pik Group
(in each case, in their respective capacities as such), remise, release and
forever discharge each of ATI and Teledyne Technologies, the respective members
of the ATI Group and the Teledyne Technologies Group, their respective
Affiliates (other than any member of the Water Pik Group), successors and
assigns, and all Persons who at any time prior to the Effective Time have
22
26
been stockholders, directors, officers, agents or employees of any member of ATI
or the Teledyne Technologies Group (in each case, in their respective capacities
as such), and their respective heirs, executors, administrators, successors and
assigns, 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 Effective Time, including in connection with the transactions and all
other activities undertaken to implement the Separation or the Distribution.
(b) Except as provided in Section 5.01(c), effective as of the
Effective Time, ATI does hereby, for itself and each other member of the ATI
Group and its Affiliates (other than any member of the Water Pik Group),
successors and assigns, and all Persons who at any time prior to the Effective
Time have been stockholders, directors, officers, agents or employees of any
member of the ATI Group (in each case, in their respective capacities as such),
remise, release and forever discharge Water Pik, the respective members of the
Water Pik Group, their respective Affiliates (other than any member of the ATI
Group), successors and assigns, and all Persons who at any time prior to the
Effective Time have been stockholders, directors, officers, agents or employees
of any member of the Water Pik Group (in each case, in their respective
capacities as such), and their respective heirs, executors, administrators,
successors and assigns, 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 Effective Time, including in connection with the
transactions and all other activities undertaken to implement the Separation or
the Distribution.
(c) Nothing contained in Section 5.01(a) or (b) shall impair any right
of any Person to enforce this Agreement, any Ancillary Agreement or any
agreements, arrangements, commitments or understandings that are specified in
Section 2.04(b) or the applicable Schedules thereto not to terminate as of the
Effective Time, in each case in accordance with its terms. Nothing contained in
Section 5.01(a) or (b) shall release any Person from:
(i) any Liability provided in or resulting from any agreement
among any members of the ATI Group or the Water Pik Group that is
specified in Section 2.04(b) or the applicable Schedules thereto as not
to terminate as of the Effective Time, or any other Liability specified
in such Section 2.04(b) as not to terminate as of the Effective Time;
(ii) any Liability, 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, this Agreement or any Ancillary Agreement;
(iii) any Liability for the sale, lease, construction or
receipt of goods, property or services purchased, obtained or used in
the ordinary course of business by a member of one Group from a member
of any other Group prior to the Effective Time;
23
27
(iv) any Liability for unpaid amounts for products or services
or refunds owing on products or services due on a value-received basis
for work done by a member of one Group at the request or on behalf of a
member of another Group;
(v) 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 this Article V and, if applicable, the
appropriate provisions of the Ancillary Agreements; or
(vi) any Liability the release of which would result in the
release of any Person other than a Person released pursuant to this
Section 5.01; provided 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 to such Liability by this Section 5.01 but for
the provisions of this clause (vi).
(d) Water Pik shall not make, and shall not permit any member of the
Water Pik Group to make, any claim or demand, or commence any Action asserting
any claim or demand, including any claim of contribution or indemnification,
against ATI, Teledyne Technologies or any member of the ATI Group or Teledyne
Technologies Group, or any other Person released pursuant to Section 5.01(a),
with respect to any Liabilities released pursuant to Section 5.01(a). Without
limiting the generality of the foregoing, Water Pik shall not make, and shall
not permit any other member of the Water Pik Group to make, any claim or demand,
or commence any Action asserting any claim or demand, including any claim of
contribution or indemnification, against ATI, Teledyne Technologies or any
member of the ATI Group or the Teledyne Technologies Group, or any other Person
released pursuant to Section 5.01(a), with respect to whether any Asset should
or should not have been classified as a Water Pik Asset or whether any Liability
should or should not have been classified as a Water Pik Liability or with
respect to the Water Pik Balance Sheet, including in respect of the accuracy or
presentation thereof, or the adequacy of accruals, reserves and other amounts
reflected thereon. ATI shall not, and shall not permit any member of the ATI
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
Water Pik or any member of the Water Pik Group, or any other Person released
pursuant to Section 5.01(b), with respect to any Liabilities released pursuant
to Section 5.01(b).
(e) It is the intent of each of ATI and Water Pik by virtue of the
provisions of this Section 5.01 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
Effective Time, between or among Water Pik or any member of the Water Pik Group,
on the one hand, and ATI, Water Pik or any member of the ATI Group or the
Teledyne Technologies 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 Effective Time), except as expressly set forth in
Section 5.01(c) or otherwise in this Agreement. 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.
24
28
5.02. INDEMNIFICATION BY WATER PIK. Except as provided in Section 5.04,
Water Pik shall indemnify, defend and hold harmless ATI, each member of the ATI
Group and each of their respective directors, officers, employees, agents and
representatives, and each of the heirs, executors, successors and assigns of any
of the foregoing (collectively, the "ATI Indemnitees"), and Teledyne
Technologies, each member of the Teledyne Technologies Group and each of their
respective directors, officers and employees, and each of the heirs, executors,
successors and assigns of any of the foregoing (collectively, the "Teledyne
Technologies Indemnitees"), from and against any and all Liabilities of the ATI
Indemnitees and the Teledyne Technologies Indemnitees, respectively, relating
to, arising out of or resulting from any of the following items (without
duplication):
(a) the failure of Water Pik or any other member of the Water Pik Group
or any other Person to pay, perform or otherwise promptly discharge any Water
Pik Liabilities or Water Pik Contract in accordance with their respective terms,
whether prior to or after the Effective Time or the date hereof;
(b) the Water Pik Business, any Water Pik Liability or any Water Pik
Contract;
(c) any breach by Water Pik or any member of the Water Pik Group of
this Agreement or any of the Ancillary Agreements;
(d) the operation of the Water Pik Business, as conducted at any time
prior to, on or after the Distribution Date (including any Liability relating
to, arising out of or resulting from any act or failure to act by any director,
officer, employee, agent or representative (whether or not such act or failure
to act is or was within such Person's authority));
(e) any infringement of any Intellectual Property right of any third
party, including, but not limited to, patent rights, trademark and service xxxx
rights (registered and common law), trade dress rights, copyrights,
misappropriation of trade secret, based upon or resulting from the operation of
the Water Pik Business and regardless of whether said alleged infringement
occurred prior to, on or after the Distribution Date or any claim based on the
actual or alleged invalidity, unenforceability or transferability or ownership
of Intellectual Property to be transferred hereby or pursuant to any Ancillary
Agreement;
(f) Liabilities assumed by any member of the Water Pik Group under any
Ancillary Agreement;
(g) any guarantee, indemnity, representation, warranty or other
Liability of or made by any member of the ATI Group in respect of any Liability
or alleged Liability of any member of the Water Pik Group; and
(h) any untrue statement or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, with respect
to all information contained in the Form 10 Registration Statement or the
Information Statement.
5.03. INDEMNIFICATION BY ATI. (a) ATI shall indemnify, defend and hold
harmless Water Pik, each member of the Water Pik Group and each of their
respective directors, officers, employees, agents and representatives, and each
of the heirs, executors, successors and assigns of any of the
25
29
foregoing (collectively, the "Water Pik Indemnitees"), from and against any and
all Liabilities of the Water Pik Indemnitees relating to, arising out of or
resulting from any of the following items (without duplication):
(a) the failure of ATI or any other member of the ATI Group to
pay, perform or otherwise promptly discharge any ATI Liabilities; and
(b) any breach by ATI of this Agreement or any of the
Ancillary Agreements.
5.04. INDEMNIFICATION OBLIGATIONS NET OF INSURANCE PROCEEDS AND OTHER
AMOUNTS. (a) The parties intend that any Liability subject to indemnification or
reimbursement pursuant to this Article V will be net of Insurance Proceeds that
actually reduce the amount of the Liability. Accordingly, the amount which any
party (an "Indemnifying Party") is required to pay to any Person entitled to
indemnification hereunder (an "Indemnitee") will be reduced by any Insurance
Proceeds theretofore actually recovered by or on behalf of the Indemnitee in
reduction of the related Liability. If an Indemnitee receives a payment (an
"Indemnity Payment") required by this Agreement from an Indemnifying Party in
respect of any Liability and subsequently receives Insurance Proceeds, then the
Indemnitee will pay to the Indemnifying Party an amount equal to the excess of
the Indemnity Payment received over the amount of the Indemnity Payment that
would have been due if the Insurance Proceeds had been received, realized or
recovered before the Indemnity Payment was made.
(b) An insurer who would otherwise be obligated to pay any claim shall
not be relieved of the responsibility with respect thereto or, solely by virtue
of the indemnification provisions hereof, have any subrogation rights with
respect thereto, it being expressly understood and agreed that no insurer or any
other third party shall be entitled to a "windfall" (i.e., a benefit they would
not be entitled to receive in the absence of the indemnification provisions) by
virtue of the indemnification provisions hereof. Nothing contained in this
Agreement or any Ancillary Agreement shall obligate any member of any Group to
seek to collect or recover any Insurance Proceeds.
5.05. PROCEDURES FOR INDEMNIFICATION OF THIRD PARTY CLAIMS. (a) If an
Indemnitee shall receive notice or otherwise learn of the assertion by a Person
(including any Governmental Authority) who is not a member of the ATI Group or
the Water Pik Group of any claim or of the commencement by any such Person of
any Action (collectively, a "Third Party Claim") with respect to which an
Indemnifying Party may be obligated to provide indemnification to such
Indemnitee pursuant to Section 5.02 or 5.03, or any other Section of this
Agreement or any Ancillary Agreement, such Indemnitee shall give such
Indemnifying Party and, if ATI is not the Indemnifying Party, ATI written notice
thereof as soon as practicable but in any event not less than 20 days after
becoming aware of such Third Party Claim. Any such notice shall describe the
Third Party Claim in reasonable detail. Notwithstanding the foregoing, the
failure of any Indemnitee or other Person to give notice as provided in this
Section 5.05(a) shall not relieve the related Indemnifying Party of its
obligations under this Article V, except to the extent that such Indemnifying
Party is actually prejudiced by such failure to give notice.
26
30
(b) An Indemnifying Party may elect to defend (and, unless the
Indemnifying Party has specified any reservations or exceptions, to seek to
settle or compromise), at such Indemnifying Party's own expense and by such
Indemnifying Party's own counsel, any Third Party Claim. Within 30 days after
the receipt of notice from an Indemnitee in accordance with Section 5.05(a) (or
sooner, if the nature of such Third Party Claim so requires), the Indemnifying
Party shall notify the Indemnitee of its election whether the Indemnifying Party
will assume responsibility for defending such Third Party Claim, which election
shall specify any reservations or exceptions. After notice from an Indemnifying
Party to an Indemnitee of its election to assume the defense of a Third Party
Claim, such Indemnitee shall have the right to employ separate counsel and to
participate in (but not control) the defense, compromise, or settlement thereof,
but the fees and expenses of such counsel shall be the expense of such
Indemnitee except as set forth in the next sentence. In the event that the
Indemnifying Party has elected to assume the defense of the Third Party Claim
but has specified, and continues to assert, any reservations or exceptions in
such notice, then, in any such case, the reasonable fees and expenses of one
separate counsel for all Indemnitees shall be borne by the Indemnifying Party.
(c) If an Indemnifying Party elects not to assume responsibility for
defending a Third Party Claim, or fails to notify an Indemnitee of its election
as provided in Section 5.05(b), such Indemnitee may defend such Third Party
Claim at the cost and expense (including allocated costs of in-house counsel and
other personnel) of the Indemnifying Party.
(d) Unless the Indemnifying Party has failed to assume the defense of
the Third Party Claim in accordance with the terms of this Agreement, no
Indemnitee may settle or compromise any Third Party Claim without the consent of
the Indemnifying Party.
(e) No Indemnifying Party shall consent to entry of any judgment or
enter into any settlement of the Third Party Claim without the consent of the
Indemnitee if the effect thereof is to permit any injunction, declaratory
judgment, other order or other nonmonetary relief to be entered, directly or
indirectly, against any Indemnitee.
5.06. ADDITIONAL MATTERS. (a) Any claim on account of a Liability which
does not result from a Third Party Claim shall be asserted by written notice
given by the Indemnitee to the related Indemnifying Party. Such Indemnifying
Party shall have a period of 30 days after the receipt of such notice within
which to respond thereto. If such Indemnifying Party does not respond within
such 30-day period, such Indemnifying Party shall be deemed to have refused to
accept responsibility to make payment. If such Indemnifying Party does not
respond within such 30-day period or rejects such claim in whole or in part,
such Indemnitee shall be free to pursue such remedies as may be available to
such party as contemplated by this Agreement and the Ancillary Agreements.
(b) In the event of payment by or on behalf of any Indemnifying Party
to any Indemnitee in connection with any Third Party Claim, such Indemnifying
Party shall be subrogated to and shall stand in the place of such Indemnitee as
to any events or circumstances in respect of which such Indemnitee may have any
right, defense or claim relating to such Third Party Claim against any claimant
or plaintiff asserting such Third Party Claim or against any other person. Such
Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner,
27
31
and at the cost and expense (including allocated costs of in-house counsel and
other personnel) of such Indemnifying Party, in prosecuting any subrogated
right, defense or claim.
(c) In the event of an Action in which the Indemnifying Party is not a
named defendant, if either the Indemnified Party or Indemnifying Party shall so
request, the parties shall endeavor to substitute the Indemnifying Party for the
named defendant. If such substitution or addition cannot be achieved for any
reason or is not requested, the named defendant shall allow the Indemnifying
Party to manage the Action as set forth in this Section and the Indemnifying
Party shall fully indemnify the named defendant against all costs of defending
the Action (including court costs, sanctions imposed by a court, attorneys'
fees, experts' fees and all other external expenses, and the allocated costs of
in-house counsel and other personnel), the costs of any judgment or settlement,
and the cost of any interest or penalties relating to any judgment or
settlement.
5.07. REMEDIES CUMULATIVE. The remedies provided in this Article V
shall be cumulative and shall not preclude assertion by any Indemnitee of any
other rights or the seeking of any and all other remedies against any
Indemnifying Party.
5.08. SURVIVAL OF INDEMNITIES. The rights and obligations of each of
the Indemnitees under this Article V shall survive the sale or other transfer by
any party of any Assets or businesses or the assignment by it of any
Liabilities.
ARTICLE VI
CERTAIN OTHER MATTERS
6.01. INSURANCE MATTERS. (a) In no event shall ATI, any other member of
the ATI Group or any ATI Indemnitee have any liability or obligation whatsoever
to any member of the Water Pik Group in the event that any Insurance Policy or
other contract or policy of insurance shall be terminated or otherwise cease to
be in effect for any reason, shall be unavailable or inadequate to cover any
Liability of any member of the Water Pik Group for any reason whatsoever or
shall not be renewed or extended beyond the current expiration date.
(b) (i) Except as otherwise provided in any Ancillary Agreement, the
parties intend by this Agreement that Water Pik and each other member of the
Water Pik Group be successors-in-interest to all rights that any member of the
Water Pik Group may have as of the Distribution Date as a subsidiary, affiliate,
division or department of ATI prior to the Distribution Date under any policy of
insurance issued to ATI and intended to insure the Water Pik Group by any
insurance carrier unaffiliated with ATI or under any agreements related to such
policies executed and delivered prior to the Distribution Date, including any
rights such member of the Water Pik Group may have, as an insured or additional
named insured, subsidiary, affiliate, division or department, to avail itself of
any such policy of insurance or any such agreements related to such policies as
in effect prior to the Distribution Date. At the request of Water Pik, ATI shall
take all reasonable steps, including the execution and delivery of any
instruments, to effect the foregoing; provided however that ATI shall not be
required to pay any amounts, waive any rights or incur any Liabilities in
connection therewith.
28
32
(ii) Except as otherwise contemplated by any Ancillary Agreement, after
the Distribution Date, neither of ATI nor Water Pik or any member of their
respective Groups shall, without the consent of the other, provide any such
insurance carrier with a release, or amend, modify or waive any rights under any
such policy or agreement, if such release, amendment, modification or waiver
would adversely affect any rights or potential rights of any member of the other
Group thereunder; provided however that the foregoing shall not (A) preclude any
member of any Group from presenting any claim or from exhausting any policy
limit, (B) require any member of any Group to pay any premium or other amount or
to incur any Liability, or (C) require any member of any Group to renew, extend
or continue any policy in force. Each of Water Pik and ATI will, and will cause
its respective Group to, share such information as is reasonably necessary in
order to permit the other to manage and conduct its insurance matters in an
orderly fashion.
(c) This Agreement shall not be considered as an attempted assignment
of any policy of insurance or as a contract of insurance and shall not be
construed to waive any right or remedy of any member of the ATI Group in respect
of any Insurance Policy or any other contract or policy of insurance.
(d) Water Pik does hereby, for itself and each other member of the
Water Pik Group, agree that no member of the ATI Group or any ATI Indemnitee
shall have any Liability whatsoever as a result of the insurance policies and
practices of ATI and its Affiliates as in effect at any time prior to the
Distribution Date, including as a result of the level or scope of any such
insurance, the creditworthiness of any insurance carrier, the terms and
conditions of any policy, the adequacy or timeliness of any notice to any
insurance carrier with respect to any claim or potential claim or otherwise.
(e) Nothing in this Agreement shall be deemed to restrict any member of
the Water Pik Group from acquiring at its own expense any other insurance policy
in respect of any Liabilities or covering any period.
(f) With respect to policy periods prior to the Distribution Date:
(i) Water Pik shall be responsible for: (A) all Unpaid Losses
(but not to exceed the applicable Per Case Maximum) as of the
Distribution Date attributable to Water Pik Liabilities covered under
ATI Automobile Policies and ATI Workers Compensation Policies for
policies in effect prior to the Distribution Date; and (B) Pooled Loss
Costs Allocable to Water Pik.
(ii) On or before June 1, 2000 and on a quarterly basis
thereafter, ATI shall provide Water Pik with a calculation of amounts
due ATI or refunds due Water Pik for Water Pik's obligations incurred
under ATI Automobile Policies and ATI Workers Compensation Policies for
policies under subparagraph immediately (i) above. The initial
calculations shall be based on (A) the change in total Incurred Losses
between the Distribution Date and March 31, 2000 for all such policies
in effect prior to the Distribution Date multiplied by the Expense
Factors set forth in such policies and applicable to such Incurred
Losses, but only with respect to that portion of Incurred
29
33
Losses attributable to Water Pik Liabilities not exceeding the
applicable Per Case Maximum; and (B) the change in Pooled Loss Costs
Allocable to Water Pik for the period between the Distribution Date and
March 31, 2000 for all such policies in effect prior to the
Distribution Date. Subsequent calculations shall be based on (A) the
change in total Incurred Losses for the subsequent quarterly periods
multiplied by the Expense Factors set forth in such policies and
applicable to such losses; but only with respect to that portion of
losses attributable to Water Pik Liabilities not exceeding the
applicable Per Case Maximum, and (B) the change in Pooled Loss Costs
Allocable to Water Pik for the subsequent quarterly period. It is
specifically understood and agreed that Water Pik Liabilities and
losses that are covered under ATI Policies, other than ATI Workers
Compensation Policies and ATI Automobile Policies, shall not be subject
to a pooling arrangement among ATI divisions that prior to the
Distribution Date applied with respect to certain claims subject to a
Self-Insurance Obligation.
(iii) Within 30 days after receipt by Water Pik of ATI's
calculations referred to in subparagraph (ii) immediately above, Water
Pik on the one hand and ATI on the other hand shall pay to the other
the net amount owed after taking into account the combined amounts
reflected on the calculations.
(g) At its sole option, ATI shall have the right to handle, defend,
resolve, and administer claims in its sole discretion, with respect to Water Pik
Liabilities covered, in whole or in part, by ATI Policies, including, without
limitation, the reporting of claims to the issuers of such ATI Policies
insurance carriers, as well as the management, defense and settlement of claims.
Water Pik agrees to cooperate, at its own expense, with ATI in the reporting,
handling, defense, resolution and administration of such claims. Alternatively,
ATI, at its sole option shall have the right to require, at any time and from
time to time, that Water Pik and any member of the Water Pik Group, at their
sole expense, defend, resolve and administer any one or more or all claims with
respect to Water Pik Liabilities covered in whole, or in part, by ATI Policies,
including without limitation, the reporting of claims to the issuers of such ATI
Policies, as well as the management, defense and settlement of such claims and,
if ATI exercises such option, Water Pik and members of the Water Pik Group, at
ATI's request, shall at their expense provide ATI with any and all information
concerning, and permit ATI to monitor, the foregoing management, defense,
settlement and insurance handling of such claims. Except with the express
written consent of ATI, neither Water Pik nor any member of the Water Pik Group
shall provide any issuer of ATI Policies with a release, nor shall they amend,
modify, or waive any rights under such ATI Policies, if such release, amendment,
modification or waiver would adversely affect rights or potential rights of ATI
or any other member of the ATI Group.
(h) With respect to policies procured by or for the Water Pik Group
subsequent to January 1999 and to policy years commencing on or after the
Distribution Date, Water Pik shall be responsible for all aspects of claims
administration with respect to Water Pik Liabilities, and ATI shall have no
responsibility therefor whatsoever.
(i) With respect to any Water Pik Liabilities or Water Pik losses
covered under ATI Policies other than ATI Workers Compensation Policies and ATI
Automobile Policies,
30
34
including, but not limited to ATI General Liability Policies and ATI Product
Liability Policies, Water Pik shall be responsible for all Unpaid Losses and all
costs and expenses that give rise to a Self-Insurance Obligation. In the event
that ATI pays any such costs and expenses, Water Pik shall reimburse ATI within
thirty days of receipt of a billing for any such costs and expenses.
6.02. CERTAIN BUSINESS MATTERS. No member of any Group shall have any
duty to refrain from (i) engaging in the same or similar activities or lines of
business as any member of any other Group, (ii) doing business with any
potential or actual supplier or customer of any member of any other Group, or
(iii) engaging in, or refraining from, any other activities whatsoever relating
to any of the potential or actual suppliers or customers of any member of any
other Group.
6.03. LATE PAYMENTS. Except as expressly provided to the contrary in
this Agreement or in any Ancillary Agreement, any amount not paid when due
pursuant to this Agreement or any Ancillary Agreement (and any amounts billed or
otherwise invoiced or demanded and properly payable that are not paid within 30
days of such xxxx, invoice or other demand) shall accrue interest at a rate per
annum equal to the Prime Rate plus 2%.
6.04. CERTAIN GOVERNANCE MATTERS. (a) Water Pik and ATI intend that
until the third annual meeting of stockholders of Water Pik held following the
Distribution Date, at least a majority of the members of the Board of Directors
of Water Pik will at all times consist of persons who are also members of the
Board of Directors of ATI. The initial members of the Board of Directors of
Water Pik and the respective initial Classes of the Board in which they will
serve are as follows:
Class I: Xxxxxxx X. Xxxxxxx, Xx.
Xxxxx X. Xxxx
Class II: Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxx
Class III: Xxxxxx X. Xxxxxxx
W. Xxxxx XxXxxxxxxx
(b) Water Pik will, with respect to the first annual meeting of
stockholders of Water Pik held following the Distribution Date, nominate for
election and recommend to stockholders the election of Xxxxxxx X. Xxxxxxx, Xx.
and Xxxxx X. Xxxx (or, if either is unable or unwilling to serve, such other
candidate as Messrs. Xxxxxxx, XxXxxxxxxx and Xxxxx or the survivor of them shall
designate) to serve as continuing Class I directors of Water Pik.
(c) Water Pik shall take such action from time to time as ATI requests
in order to assure that, until the third annual meeting of stockholders of Water
Pik following the Distribution Date, at least a majority of the members of the
Board of Directors of Water Pik will at all times consist of persons who are
also members of the Board of Directors of ATI. Without limiting the generality
of the foregoing, if for any reason (including death, resignation or
disqualification) there are no directors of Water Pik who are also directors of
ATI, Water Pik will immediately take all action requested by ATI to appoint to
the Board of Directors of Water Pik such members of the Board of Directors of
ATI as ATI shall designate.
ARTICLE VII
EXCHANGE OF INFORMATION; CONFIDENTIALITY
7.01. AGREEMENT FOR EXCHANGE OF INFORMATION; ARCHIVES. (a) Each of ATI
and Water Pik, on behalf of itself and its respective Group, agrees to provide,
or cause to be provided, to each other Group, at any time before or after the
Distribution Date, as soon as reasonably practicable after written request
therefor, any Information in the possession or under the control of such
respective Group which the requesting party reasonably requires (i) to comply
with reporting, disclosure, filing or other requirements imposed on the
requesting party (including under applicable securities or tax laws) by a
Governmental Authority having jurisdiction over the requesting party, (ii) for
use in any other judicial, regulatory, administrative, tax or other proceeding
or in order to satisfy audit, accounting, claims, regulatory, litigation, tax or
other similar requirements, or (iii) to comply with its obligations under this
Agreement or any Ancillary Agreement; provided, however, that in the event that
any party determines that any such provision of Information could be
commercially detrimental, violate any law or agreement, or waive any
attorney-client privilege, the parties shall take all reasonable measures to
permit the compliance with such obligations in a manner that avoids any such
harm or consequence.
(b) After the Distribution Date, each of ATI and Water Pik shall have
access during regular business hours (as in effect from time to time) to the
documents and objects of historic significance that relate to their respective
Businesses that are in the possession of any other of such parties or members of
their respective Groups. Any party seeking such access may, at its cost, obtain
copies (but not originals) of documents for bona fide business purposes and may
obtain objects for exhibition purposes for commercially reasonable periods of
time if required for bona fide business purposes, provided that such party shall
cause any such objects to be returned promptly in the same condition in which
they were delivered and shall comply with any rules, procedures or other
requirements, and shall be subject to any restrictions (including prohibitions
on removal of specified objects), that are then applicable to the possessing
party.
31
35
(c) After the Distribution Date, (i) Water Pik shall maintain in effect
adequate systems and controls to the extent necessary to enable the members of
the ATI Group to satisfy their respective reporting, accounting, audit and other
obligations, and (ii) Water Pik shall provide, or cause to be provided, to ATI,
all financial and other data and information as ATI determines necessary or
advisable in order to prepare ATI financial statements and reports or filings
with any Governmental Authority.
7.02. OWNERSHIP OF INFORMATION. Any Information owned by one Group that
is provided to a requesting party pursuant to Section 7.01 shall be deemed to
remain the property of the providing party. Unless specifically set forth
herein, nothing contained in this Agreement shall be construed as granting or
conferring rights of license or otherwise in any such Information.
7.03. COMPENSATION FOR PROVIDING INFORMATION. The party requesting such
Information agrees to reimburse the other party for the reasonable costs, if
any, of creating, gathering and copying such Information, to the extent that
such costs are incurred for the benefit of the requesting party. Except as may
be otherwise specifically provided elsewhere in this Agreement or in any other
agreement between the parties, such costs shall be computed in accordance with
the providing party's standard methodology and procedures.
7.04. RECORD RETENTION. To facilitate the possible exchange of
Information pursuant to this Article VII and other provisions of this Agreement
after the Distribution Date, the parties agree to use their reasonable best
efforts to retain all Information in their respective possession or control on
the Distribution Date in accordance with the policies of ATI as in effect on the
Distribution Date. No party will destroy, or permit any of its Subsidiaries to
destroy, any Information which the other party may have the right to obtain
pursuant to this Agreement prior to the seventh anniversary of the date hereof
without first using its reasonable best efforts to notify the other party of the
proposed destruction and giving the other party the opportunity to take
possession of such information prior to such destruction; provided, however,
that in the case of any Information relating to Taxes or to Environmental
Liabilities, such period shall be extended to the expiration of the applicable
statute of limitations (giving effect to any extensions thereof).
7.05. OTHER AGREEMENTS PROVIDING FOR EXCHANGE OF INFORMATION. The
rights and obligations granted under this Article VII are subject to any
specific limitations, qualifications or additional provisions on the sharing,
exchange or confidential treatment of Information set forth in any Ancillary
Agreement.
7.06. PRODUCTION OF WITNESSES; RECORDS; COOPERATION. (a) After the
Distribution Date, except in the case of an adversarial Action by one party
against another party, each party hereto shall use its reasonable efforts to
make available to each other party, upon written request, the former, current
and future directors, officers, employees, other personnel and agents of the
members of its respective Group as witnesses and any books, records or other
documents within its control or which it otherwise has the ability to make
available, to the extent that any such person (giving consideration to business
demands of such directors, officers, employees, other personnel and agents) or
books, records or other documents may reasonably be required in connection with
any Action in which the requesting party may from time
32
36
to time be involved, regardless of whether such Action is a matter with respect
to which indemnification may be sought hereunder. The requesting party shall
bear all costs and expenses (including allocated costs of in-house counsel and
other personnel) in connection therewith.
(b) If an Indemnifying Party chooses to defend or to seek to compromise
or settle any Third Party Claim, the other parties shall make available to such
Indemnifying Party, upon written request, the former, current and future
directors, officers, employees, other personnel and agents of the members of its
respective Group as witnesses and any books, records or other documents within
its control or which it otherwise has the ability to make available, to the
extent that any such person (giving consideration to business demands of such
directors, officers, employees, other personnel and agents) or books, records or
other documents may reasonably be required in connection with such defense,
settlement or compromise, or such prosecution, evaluation or pursuit, as the
case may be, and shall otherwise cooperate in such defense, settlement or
compromise, or such prosecution, evaluation or pursuit, as the case may be.
(c) Without limiting any provision of this Section, the parties shall
cooperate and consult to the extent reasonably necessary with respect to any
Action, and each of the parties agrees to cooperate, and to cause each member of
its respective Group to cooperate, with each other in the defense of any
infringement or similar claim with respect to any intellectual property and
shall not claim to acknowledge, or permit any member of its respective Group to
claim to acknowledge, the validity or infringing use of any intellectual
property of a third Person in a manner that would hamper or undermine the
defense of such infringement or similar claim.
(d) The obligation of the parties to provide witnesses pursuant to this
Section 7.06 is intended to be interpreted in a manner so as to facilitate
cooperation and shall include the obligation to provide as witnesses inventors
and other officers without regard to whether the witness or the employer of the
witness could assert a possible business conflict (subject to the qualifications
set forth in the first sentence of Section 7.06(a)).
(e) In connection with any matter contemplated by this Section 7.06,
the parties will enter into a mutually acceptable joint defense agreement so as
to maintain to the extent practicable any applicable attorney-client privilege
or work product immunity of any member of any Group.
7.07. CONFIDENTIALITY. (a) Subject to Section 7.08, each of ATI and
Water Pik, on behalf of itself and each member of its respective Group, agrees
to hold, and to cause its respective directors, officers, employees, agents,
accountants, counsel and other advisors and representatives to hold, in strict
confidence, with at least the same degree of care that applies to ATI's
confidential and proprietary information pursuant to policies in effect as of
the Distribution Date, all Information concerning each such other Group that is
either in its possession or furnished by any such other Group or its respective
directors, officers, employees, agents, accountants, counsel and other advisors
and representatives at any time pursuant to this Agreement, any Ancillary
Agreement or otherwise, and shall not use any such Information other than for
such purposes as shall be expressly permitted hereunder or thereunder, except,
in each case, to the extent that such Information has been (i) in the public
domain through no fault of such party or any member of such Group or any of
their respective directors, officers, employees,
33
37
agents, accountants, counsel and other advisors and representatives, (ii) later
lawfully acquired from other sources by such party (or any member of such
party's Group) which sources are not themselves bound by a confidentiality
obligation), or (iii) independently generated without reference to any
proprietary or confidential Information of the other party.
(b) Each party agrees not to release or disclose, or permit to be
released or disclosed, any such Information to any other Person, except its
directors, officers, employees, agents, accountants, counsel and other advisors
and representatives who need to know such Information (who shall be advised of
their obligations hereunder with respect to such Information), except in
compliance with Section 7.08. Without limiting the foregoing, when any
Information is no longer needed for the purposes contemplated by this Agreement
or any Ancillary Agreement, each party will promptly after request of the other
party either return to the other party all Information in a tangible form
(including all copies thereof and all notes, extracts or summaries based
thereon) or certify to the other party that it has destroyed such Information
(and such copies thereof and such notes, extracts or summaries based thereon).
7.08. PROTECTIVE ARRANGEMENTS. In the event that any party or any
member of its Group either determines on the advice of its counsel that it is
required to disclose any Information pursuant to applicable law or receives any
demand under lawful process or from any Governmental Authority to disclose or
provide Information of any other party (or any member of any other party's
Group) that is subject to the confidentiality provisions hereof, such party
shall notify the other party prior to disclosing or providing such Information
and shall cooperate at the expense of the requesting party in seeking any
reasonable protective arrangements requested by such other party. Subject to the
foregoing, the Person that received such request may thereafter disclose or
provide Information to the extent required by such law (as so advised by
counsel) or by lawful process or such Governmental Authority.
ARTICLE VIII
FURTHER ASSURANCES
8.01. FURTHER ASSURANCES. (a) In addition to the actions specifically
provided for elsewhere in this Agreement, each of the parties hereto shall use
its reasonable efforts, prior to, on and after the Distribution Date, to take,
or cause to be taken, all actions, and to do, or cause to be done, all things,
reasonably necessary, proper or advisable under applicable laws, regulations and
agreements to consummate and make effective the transactions contemplated by
this Agreement and the Ancillary Agreements.
(b) Without limiting the foregoing, prior to, on and after the date
hereof, each party hereto shall cooperate with the other parties, and without
any further consideration, but at the expense of the requesting party, to
execute and deliver, or use its reasonable efforts to cause to be executed and
delivered, all instruments, including instruments of conveyance, assignment and
transfer, and to make all filings with, and to obtain all consents, approvals or
authorizations of, any Governmental Authority or any other Person under any
permit, license, agreement, indenture or other instrument (including any
Consents or Governmental Approvals), and to take all such other actions as such
party may reasonably be requested to take by any other party hereto
34
38
from time to time, consistent with the terms of this Agreement and the Ancillary
Agreements, in order to effectuate the provisions and purposes of this Agreement
and the Ancillary Agreements and the transfers of the Water Pik Assets and the
assignment and assumption of the Water Pik Liabilities and the other
transactions contemplated hereby and thereby. Without limiting the foregoing,
each party will, at the reasonable request, cost and expense of any other party,
take such other actions as may be reasonably necessary to vest in such other
party good and marketable title, free and clear of any Security Interest, if and
to the extent it is practicable to do so.
(c) On or prior to the Distribution Date, ATI and Water Pik in their
respective capacities as direct and indirect stockholders of their respective
Subsidiaries, shall each ratify any actions which are reasonably necessary or
desirable to be taken by ATI or Water Pik or any other Subsidiary of ATI, as the
case may be, to effectuate the transactions contemplated by this Agreement.
(d) ATI and Water Pik, on behalf of itself and each member of its
respective Group, waive (and agree not to assert against any of the others) any
claim or demand that any of them may have against any of the others for any
Liabilities or other claims relating to or arising out of: (i) the failure of
Water Pik or any member of the Water Pik Group, on the one hand, or of ATI or
any member of the ATI Group, on the other hand, to provide any notification or
disclosure required under any state Environmental Law in connection with the
Separation or the other transactions contemplated by this Agreement, including
the transfer by any member of any Group to any member of any other Group of
ownership or operational control of any Assets not previously owned or operated
by such transferee; or (ii) any inadequate, incorrect or incomplete notification
or disclosure under any such state Environmental Law by the applicable
transferor. To the extent any Liability to any Governmental Authority or any
third Person arises out of any action or inaction described in clause (i) or
(ii) above, the transferee of the applicable Asset hereby assumes and agrees to
pay any such Liability.
ARTICLE IX
TERMINATION
9.01. TERMINATION. This Agreement may be terminated by ATI at any time
prior to the Distribution Date.
9.02. EFFECT OF TERMINATION. In the event of any termination of this
Agreement pursuant to Section 9.01, no party to this Agreement (or any of its
directors or officers) shall have any Liability or further obligation to any
other party.
ARTICLE X
MISCELLANEOUS
10.01. COUNTERPARTS; ENTIRE AGREEMENT; CORPORATE POWER. (a) This
Agreement and each Ancillary Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party.
35
39
(b) This Agreement, and the Ancillary Agreements and the Exhibits,
Schedules and Appendices hereto and thereto contain the entire agreement between
the parties with respect to the subject matter hereof, supersede all previous
agreements, negotiations, discussions, writings, understandings, commitments and
conversations with respect to such subject matter and there are no agreements or
understandings between the parties other than those set forth or referred to
herein or therein.
(c) ATI represents on behalf of itself and each other member of the ATI
Group and Water Pik represents on behalf of itself and each other member of the
Water Pik Group, as follows:
(i) each such Person has the requisite corporate or other
power and authority and has taken all corporate or other action
necessary in order to execute, deliver and perform each of this
Agreement and each other Ancillary Agreements to which it is a party
and to consummate the transactions contemplated hereby and thereby; and
(ii) this Agreement and each Ancillary Agreement to which it
is a party has been duly executed and delivered by it and constitutes a
valid and binding agreement of it enforceable in accordance with the
terms thereof.
(d) Each party hereto acknowledges that it and each other party hereto
may be executing certain of the Ancillary Agreements by facsimile, stamp or
mechanical signature. Each party hereto expressly adopts and confirms each such
facsimile, stamp or mechanical signature made in its respective name as if it
were a manual signature, agrees that it will not assert that any such signature
is not adequate to bind such party to the same extent as if it were signed
manually and agrees that at the reasonable request of any other party hereto at
any time it will as promptly as reasonably practicable cause each such Ancillary
Agreement to be manually executed (any such execution to be as of the date of
the initial date thereof).
10.02. GOVERNING LAW; CONSENT TO JURISDICTION. (a) This Agreement and,
unless expressly provided therein, each Ancillary Agreement, shall be governed
by and construed and interpreted in accordance with the laws of the Commonwealth
of Pennsylvania as to all matters, including matters of validity, construction,
effect, enforceability, performance and remedies, irrespective of the choice of
laws principles of the Commonwealth of Pennsylvania.
(b) Each of the parties hereto irrevocably submits to the exclusive
jurisdiction of (i) the Court of Common Pleas of Allegheny County, Pennsylvania
and (ii) the United States District Court for the Western District of
Pennsylvania, for the purposes of any suit, action or other proceeding arising
out of this Agreement or any Ancillary Agreement or any transaction contemplated
hereby or thereby (and agrees not to commence any action, suit or proceeding
relating thereto except in such courts). Each of the parties hereto further
agrees that service of any process, summons, notice or document hand delivered
or sent by U.S. registered mail to such party's respective address set forth in
Section 10.05 will be effective service of process for any action, suit or
proceeding in Pennsylvania with respect to any matters to which it has submitted
to jurisdiction as set forth in the immediately preceding sentence. Each of the
parties hereto
36
40
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or any Ancillary
Agreement or the transactions contemplated hereby or thereby in (i) the Court of
Common Pleas of Allegheny County, Pennsylvania or (ii) the United States
District Court for the Western District of Pennsylvania, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum.
10.03. ASSIGNABILITY. Except as set forth in any Ancillary Agreement,
this Agreement and each Ancillary Agreement shall be binding upon and inure to
the benefit of the parties hereto and thereto, respectively, and their
respective successors and assigns (including any direct or indirect assignee of
any of the Water Pik Assets); provided, however, that no party hereto or thereto
may assign its respective rights or delegate its respective obligations under
this Agreement or any Ancillary Agreement without the express prior written
consent of the other parties hereto or thereto.
10.04. THIRD PARTY BENEFICIARIES. Except for the indemnification rights
under this Agreement of any ATI Indemnitee, Water Pik Indemnitee or Teledyne
Technologies Indemnitee in their respective capacities as such, (a) the
provisions of this Agreement and each Ancillary Agreement are solely for the
benefit of the parties and are not intended to confer upon any Person except the
parties any rights or remedies hereunder, (b) there are no third party
beneficiaries of this Agreement or any Ancillary Agreement, and (c) neither this
Agreement nor any Ancillary Agreement shall provide any third person with any
remedy, claim, liability, reimbursement, claim of action or other right in
excess of those existing without reference to this Agreement or any Ancillary
Agreement. No party hereto shall have any right, remedy or claim with respect to
any provision of this Agreement or any Ancillary Agreement to the extent such
provision relates solely to the other two parties hereto or the members of such
other two parties' respective Groups. No party shall be required to deliver any
notice under this Agreement or under any Ancillary Agreement to any other party
with respect to any matter in which such other party has no right, remedy or
claim.
10.05. NOTICES. All notices or other communications under this
Agreement or any Ancillary Agreement shall be in writing and shall be deemed to
be duly given when (a) delivered in person or (b) deposited in the United States
mail or private express mail, postage prepaid, addressed as follows:
If to ATI, Holdings
or TII, to: Allegheny Teledyne Incorporated
0000 Xxx XXX Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attn: Senior Vice President, General
Counsel & Secretary
37
41
If to Water Pik
to : Water Pik Technologies, Inc.
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Senior Vice President, General Counsel
and Secretary
Any party may, by notice to the other party, change the address to which such
notices are to be given.
10.06. SEVERABILITY. If any provision of this Agreement or any
Ancillary Agreement or the application thereof to any Person or circumstance is
determined by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions hereof or thereof, or the application of
such provision to Persons or circumstances or in jurisdictions other than those
as to which it has been held invalid or unenforceable, shall remain in full
force and effect and shall in no way be affected, impaired or invalidated
thereby, so long as the economic or legal substance of the transactions
contemplated hereby or thereby, as the case may be, is not affected in any
manner adverse to any party. Upon such determination, the parties shall
negotiate in good faith in an effort to agree upon such a suitable and equitable
provision to effect the original intent of the parties.
10.07. FORCE MAJEURE. No party shall be deemed in default of this
Agreement or any Ancillary Agreement to the extent that any delay or failure in
the performance of its obligations under this Agreement or any Ancillary
Agreement results from any cause beyond its reasonable control and without its
fault or negligence, such as acts of God, acts of civil or military authority,
embargoes, epidemics, war, riots, insurrections, fires, explosions, earthquakes,
floods, unusually severe weather conditions, labor problems or unavailability of
parts, or, in the case of computer systems, Year 2000 problems or any failure in
electrical or air conditioning equipment. In the event of any such excused
delay, the time for performance shall be extended for a period equal to the time
lost by reason of the delay.
10.08. HEADINGS. The article, section and paragraph headings contained
in this Agreement and in the Ancillary Agreements are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement or any Ancillary Agreement.
10.09. SURVIVAL OF COVENANTS. Except as expressly set forth in any
Ancillary Agreement, the covenants, representations and warranties contained in
this Agreement and each Ancillary Agreement, and liability for the breach of any
obligations contained herein, shall survive each of the Separation and the
Distribution and shall remain in full force and effect.
10.10. WAIVERS OF DEFAULT. Waiver by any party of any default by the
other party of any provision of this Agreement or any Ancillary Agreement shall
not be deemed a waiver by the waiving party of any subsequent or other default,
nor shall it prejudice the rights of the other party.
10.11. SPECIFIC PERFORMANCE. In the event of any actual or threatened
default in, or breach of, any of the terms, conditions and provisions of this
Agreement or any
38
42
Ancillary Agreement, the party or parties who are or are to be thereby aggrieved
shall have the right to specific performance and injunctive or other equitable
relief of its rights under this Agreement or such Ancillary Agreement, in
addition to any and all other rights and remedies at law or in equity, and all
such rights and remedies shall be cumulative. The parties agree that the
remedies at law for any breach or threatened breach, including monetary damages,
are inadequate compensation for any loss and that any defense in any action for
specific performance that a remedy at law would be adequate is waived. Any
requirements for the securing or posting of any bond with such remedy are
waived.
10.12. AMENDMENTS. No provisions of this Agreement or any Ancillary
Agreement shall be deemed waived, amended, supplemented or modified by any
party, unless such waiver, amendment, supplement or modification is in writing
and signed by the authorized representative of the party against whom it is
sought to enforce such waiver, amendment, supplement or modification. Without
limiting the foregoing, the parties agree that any waiver, amendment, supplement
or modification of this Agreement or any Ancillary Agreement that solely relates
to and affects only two of the three parties hereto shall not require the
consent of the third party hereto.
10.13. INTERPRETATION. Words in the singular shall be held to include
the plural and vice versa and words of one gender shall be held to include the
other genders as the context requires. The terms "hereof," "herein," and
"herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement (or the applicable Ancillary Agreement) as
a whole (including all of the Schedules, Exhibits and Appendices hereto and
thereto) and not to any particular provision of this Agreement (or such
Ancillary Agreement). Article, Section, Exhibit, Schedule and Appendix
references are to the Articles, Sections, Exhibits, Schedules and Appendices to
this Agreement (or the applicable Ancillary Agreement) unless otherwise
specified. The word "including" and words of similar import when used in this
Agreement (or the applicable Ancillary Agreement) shall mean "including, without
limitation," unless the context otherwise requires or unless otherwise
specified. The word "or" shall not be exclusive. Unless expressly stated to the
contrary in this Agreement or in any Ancillary Agreement, all references to "the
date hereof," "the date of this Agreement," "hereby" and "hereupon" and words of
similar import shall all be references to __________, 1999, regardless of any
amendment or restatement hereof.
10.14. DISPUTES. (a) Resolution of any and all disputes arising from or
in connection with this Agreement other than those arising from or in connection
with Article IV of this Agreement, whether based on contract, tort, statute or
otherwise, including, but not limited to, disputes in connection with claims by
third parties (collectively, "Disputes"), shall be subject to the provisions of
this Section 10.14; provided, however, that nothing contained herein shall
preclude any party from seeking or obtaining (i) injunctive relief or (ii)
equitable or other judicial relief to enforce the provisions hereof or to
preserve the status quo pending resolution of Disputes hereunder.
(b) Any party may give the other parties written notice of any Dispute
not resolved in the normal course of business. The parties shall attempt in good
faith to resolve any Dispute promptly by negotiation between executives of the
parties who have authority to settle
39
43
the controversy. Within 15 days after delivery of the notice, the foregoing
executives of both parties shall meet at a mutually acceptable time and place,
and thereafter as often as they reasonably deem necessary for a period not to
exceed five days, to attempt to resolve the Dispute. All reasonable requests for
information made by one party to the other will be honored. If the parties do
not resolve the Dispute within such 20 day period (the "Initial Mediation
Period"), the parties shall attempt in good faith to resolve the Dispute by
negotiation between or among the Designated Officers. The Designated Officers
shall meet at a mutually acceptable time and place (but in no event no later
than 15 days following the expiration of the Initial Mediation Period) and
thereafter as often as they reasonably deem necessary for a period not to exceed
15 days, to attempt to resolve the Dispute.
(c) If the Dispute has not been resolved by negotiation within 50 days
of the first party's notice, or if the parties failed to meet within 15 days of
the first party's notice, or if the Designated Officers failed to meet within 35
days of the first party's notice, any party may commence any litigation or other
procedure allowed by law.
10.15. EXCLUSIVITY OF TAX SHARING AGREEMENT. Notwithstanding anything
in this Agreement to the contrary, and subject to the provisions of Article IV
hereof, the Tax Sharing Agreement will be the exclusive agreement among the
parties with respect to all matters pertaining to Taxes, including, without
limitation, indemnification with respect to matters pertaining to Taxes and
indemnification with respect to the qualification of the Distribution as a
tax-free distribution under Section 355 and related provisions of the Code.
IN WITNESS WHEREOF, the parties have caused this Separation and
Distribution Agreement to be executed by their duly authorized representatives.
ALLEGHENY TELEDYNE INCORPORATED
By:
-------------------------------
Name:
Title:
TDY HOLDINGS, LLC
By:
-------------------------------
Name:
Title:
TELEDYNE INDUSTRIES, INC.
By:
-------------------------------
Name:
Title:
40
44
WATER PIK TECHNOLOGIES, INC.
By:
-------------------------------
Name:
Title:
41
