Exhibit 10.7
INSURANCE CLAIMS AGREEMENT
INSURANCE CLAIMS AGREEMENT, dated as of September 28, 2001
(this "Agreement"), between ▇▇▇▇▇▇-▇▇▇▇▇▇▇, Inc., a Delaware corporation
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("Company"), and Armkel, LLC, a Delaware limited liability company
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("Buyer")(each of the Company and Buyer, a "Party" and collectively, the
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"Parties").
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RECITALS:
WHEREAS, the Company and Buyer have executed and delivered an
Asset Purchase Agreement, dated as of May 7, 2001 (including the exhibits,
schedules and annexes thereto, the "Asset Purchase Agreement"), providing for,
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among other things, the sale, conveyance, transfer, assignment and delivery to
Buyer of all of the Company's and its Affiliates' rights, title and interest in
and to the Purchased Assets (as defined in the Asset Purchase Agreement) and the
assumption by Buyer of all of the Assumed Liabilities (as defined in the Asset
Purchase Agreement; such sales, transfers, assignments, purchases, acceptances
and assumptions collectively, the "Asset Purchase"), effective in each case
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immediately prior to the ABC Merger (as defined herein);
WHEREAS, the Company, CPI Development Corporation, a Delaware
corporation ("ABC"), MedPointe Inc., a Delaware corporation ("Parent"), MCC
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Merger Sub Corporation, a Delaware corporation and a wholly owned subsidiary of
Parent ("Company Merger Sub"), and MCC Acquisition Sub Corporation, a Delaware
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corporation and a wholly owned subsidiary of Parent ("ABC Merger Sub"), have
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executed and delivered an Agreement and Plan of Merger, dated as of May 7, 2001
(including the exhibits, schedules and annexes thereto, the "Merger Agreement"),
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providing for, among other things, the merger of ABC Merger Sub with and into
ABC (the "ABC Merger") and the merger of Company Merger Sub with and into the
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Company; and
WHEREAS, in connection with the transactions contemplated by
the Asset Purchase Agreement, the Company and the Buyer wish to enter into this
Agreement.
NOW, THEREFORE, the Parties, in consideration of the premises
and the mutual covenants contained herein, agree as follows:
ARTICLE I
DEFINITIONS
1.1 General Terms. For purposes of this Agreement, the
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following terms have the meanings hereinafter indicated:
"Affiliate" means, with respect to any Person, any other
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Person directly or indirectly controlling, controlled by or under common control
with such Person as of the time of determination.
"Claims Handling Agreement" shall mean any third party
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administrator or claims handling agreement of any kind or nature to which either
Party is directly or indirectly a party, in effect as of the date hereof,
related to the handling of Insured Buyer Claims.
"Insurance Administration" shall mean, with respect to each
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Insurance Policy, (i) the accounting for retrospectively-related premiums,
defense costs, indemnity payments, deductibles and retentions as appropriate
under the terms and conditions of each of the Insurance Policies, (ii) the
reporting to insurance carriers of any losses or claims and (iii) the
distribution of Insurance Proceeds as contemplated by this Agreement.
"Insurance Policy" shall mean insurance policies and insurance
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contracts of any kind that as of the effective date of this Agreement are or
have been owned or maintained by or provide a benefit in favor of the Company
(including, without limitation, with respect to the Purchased Assets and Assumed
Liabilities) or any of its predecessors, including without limitation primary,
umbrella and excess comprehensive general liability policies, automobile
insurance policies, aviation and aircraft insurance policies, worker's
compensation insurance policies (including without limitation policies covering
occupational disease), property, casualty and business interruption insurance
policies, fiduciary insurance policies, fidelity insurance policies, directors
and officers liability insurance policies (including any such policy for
directors and officers liability which has been purchased to provide coverage
for both continuing and former directors, officers and employees for claims
arising from or relating to events, occurrences or other matters prior to or on
the Closing Date).
"Insurance Proceeds" shall mean those monies received by or on
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behalf of an insured from an insurance carrier or paid by an insurance carrier
on behalf of the insured.
"Insured Buyer Claim" shall mean any claim with respect to any
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Loss or expense that is covered by any Insurance Policy and that is related to
the Purchased Assets, Assumed Liabilities, the Business or any Available
Employee.
"Insured Claims" shall mean any claim with respect to those
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Losses that, individually or in the aggregate, are covered within the terms and
conditions of any of the Insurance Policies, whether or not subject to
deductibles, coinsurance, uncollectibility or retrospectively-rated premium
adjustments, but only to the extent that such Losses are within applicable
Insurance Policy limits, including aggregates.
"Loss" shall mean any damage, claim, loss, charge, action,
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suit, proceeding, deficiency, tax, interest, penalty, punitive damages,
exemplary damages and reasonable costs and expenses (including reasonable
attorneys' fees).
"Person" shall mean any natural person, corporation, business
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trust, limited liability company, joint venture, association, company,
partnership or government, or any agency or political subdivision thereof.
Capitalized terms used herein and not otherwise defined have
the meaning ascribed to them in the Asset Purchase Agreement.
ARTICLE II
INSURANCE
2.1 Insurance Policies and Rights. (a) To the extent permitted
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by law, without limiting the generality of the definition of Purchased Assets
set forth in Section 2.1 of the Asset Purchase Agreement, the Purchased Assets
shall include any and all rights of an insured party, including rights of
indemnity and the right to be defended by or at the expense of the
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insurer, and to receive Insurance Proceeds with respect to all Insured Buyer
Claims under any Insurance Policies. Buyer shall be solely responsible for any
and all deductibles, self-insured retentions, retrospective premiums (including
but not limited to loss experience and exposure change), claims handling and
other charges owed under the Insurance Policies with respect to the coverage
provided for Insured Buyer Claims.
(b) To the extent permitted by law, without limiting the
generality of the definition of Excluded Assets set forth in Section 2.2 of the
Asset Purchase Agreement, the Excluded Assets shall include any and all rights
of an insured party including rights of indemnity and the right to be defended
by or at the expense of the insurer, and to receive Insurance Proceeds under any
Insurance Policies other than the rights under the Insurance Policies which are
included in Purchased Assets pursuant to Section 2.1(a) of the Asset Purchase
Agreement and Section 2.1 of this Agreement. The Company shall be solely
responsible for all deductibles, self-insured retentions, retrospective
premiums, claims handling and other charges owed under the Insurance Policies
with respect to the coverage provided for Insured Claims other than Insured
Buyer Claims.
2.2 Administration and Reserves. From and after the Closing
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Date:
(a) The Company shall be responsible for Insurance
Administration of all Insured Claims other than Insured Buyer Claims.
(b) Buyer shall be responsible for Insurance Administration of
all Insured Buyer Claims.
(c) The Parties hereto shall cooperate with respect to
Insurance Administration, and shall share information concerning such matters so
that both Buyer and the Company are aware on a continuing basis of remaining
aggregate limits of coverage, deductible payments and other matters relevant to
continued dealings with insurers providing coverage for Losses of both Parties.
(d) Nothing in this Agreement shall be construed or deemed to
affect in any way the right of either Party to obtain and administer future
insurance policies or to enter into future indemnification agreements on
whatever terms it believes to be advisable.
2.3 Allocation of Insurance Proceeds; Cooperation.
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(a) The Parties shall use reasonable efforts to insure that
Insurance Proceeds received with respect to claims, costs and expenses under the
Insurance Policies shall be paid to the Company with respect to all Insured
Claims other than Insured Buyer Claims and to the Buyer with respect to all
Insured Buyer Claims. In addition, any deductible shall be incurred by either
party in proportion to the related Insurance Proceeds received by such Party.
(b) With respect to policies that provide insurance against
liability to third parties, each party agrees that it will not, without the
prior written consent of the other Party (which shall not be unreasonably
withheld, delayed or conditioned), collect from the insurer on claims otherwise
payable to it, more than the percentage, arrived at as provided in the next
sentence, of the aggregate limits of liability provided by each such policy. For
each such Insurance Policy that is related to the Purchased Assets, Assumed
Liabilities, the Business, or any Available Employee, the Parties will agree on
the percentages referred to in the previous sentence based on the loss history
under that policy and such other factors as they may reasonably consider
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relevant. If either Party receives payment from the insurer of a claim for which
the Party receiving payment was entitled to be indemnified by the other Party
then for purposes of the percentage limitations in the previous sentence, that
payment shall be deemed to have been made to the other Party.
2.4 No Reduction of Coverage. Except for any reductions in
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coverage resulting from the submission and payment of Insured Claims, neither
Party shall take any action to eliminate or reduce coverage available to the
other Party under any Insurance Policy or Claims Handling Agreement for any
Losses or claims without the prior written consent of the other Party (which
shall not be unreasonably withheld, delayed or conditioned).
ARTICLE III
MISCELLANEOUS AND GENERAL
3.1 Modification or Amendment. Subject to the provisions of
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applicable law, the Parties hereto may only modify or amend this Agreement by
written agreement executed and delivered by duly authorized officers of Buyer
and the Company.
3.2 Counterparts. This Agreement may be executed in any number
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of counterparts, each such counterpart being deemed to be an original
instrument, and all such counterparts shall together constitute the same
agreement.
3.3 GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL.
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(i) THIS AGREEMENT AND ANY DISPUTES, CLAIMS OR CONTROVERSIES
ARISING FROM OR RELATING TO THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN
ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAW
PRINCIPLES THEREOF. The Parties hereby irrevocably submit to the jurisdiction of
the courts of the State of New York and the Federal courts of the United States
of America located in the County of New York, New York solely in respect of the
interpretation and enforcement of the provisions of this Agreement and of the
documents referred to in this Agreement, and in respect of the transactions
contemplated hereby, and hereby waive, and agree not to assert, as a defense in
any action, suit or proceeding for the interpretation or enforcement hereof or
of any such document, that it is not subject thereto or that such action, suit
or proceeding may not be brought or is not maintainable in said courts or that
the venue thereof may not be appropriate or that this Agreement or any such
document may not be enforced in or by such courts, and the Parties hereto
irrevocably agree that all claims with respect to such action or proceeding
shall be heard and determined in such a New York State or Federal court. The
Parties hereby consent to and grant any such court jurisdiction over the person
of such Parties and over the subject matter of such dispute and agree that
mailing of process or other papers in connection with any such action or
proceeding by certified mail in the manner provided in Section 3.4 or in such
other manner as may be permitted by law shall be valid and sufficient service
thereof.
(ii) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION
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DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY
MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 3.3.
3.4 Notices. Any notice, request, instruction or other
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document to be given hereunder by any party to the others shall be in writing
and shall be deemed to have been delivered (i) on the date of service, if served
personally, (ii) upon confirmation of receipt, if transmitted by facsimile,
electronic or digital transmission method, (iii) on the first business day after
sent, if sent for next day delivery by recognized overnight delivery service and
(iv) on the third day after it is sent, if sent by first class mail. In each
case, notice shall have been sent to the Parties at the following addresses:
if to Buyer
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Armkel, LLC
c/o Kelso & Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇/▇▇/▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(with copies to:
▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
and
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▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: 917-777-2770)
if to the Company
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MedPointe Inc.
▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇/▇▇/ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. Wild
fax: (▇▇▇) ▇▇▇-▇▇▇▇
(with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: 212-455-2502)
or to such other persons or addresses as may be designated in writing by the
Party to receive such notice as provided above.
3.5 Entire Agreement. This Agreement, the Asset Purchase
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Agreement and the other Ancillary Agreements (as defined in the Asset Purchase
Agreement), including any schedules and exhibits hereto and thereto, constitute
the entire agreement and supersede all other prior agreements, understandings,
representations and warranties both written and oral, among the Parties, with
respect to the subject matter hereof.
3.6 Severability. It is the intention of the Parties that the
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provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof. It is the intention of the
Parties that if any provision of this Agreement, or the application thereof to
any Person or any circumstance, is invalid or unenforceable, (a) a suitable and
equitable provision shall be substituted therefor in order to carry out, so far
as may be valid and enforceable, the intent and purpose of such invalid or
unenforceable provision and (b) the remainder of this Agreement and the
application of such provision to other Persons or circumstances shall not be
affected by such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
3.7 Assignment. This Agreement and any rights and obligations
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hereunder shall not be assignable by any Party whether by operation of law or
otherwise, without the prior written consent of the other Party, and any
assignment made in contravention of this Section 3.7 shall be null and void;
provided that any Affiliate of a Party may perform any obligations due to be
rendered by such Party to the other Party hereunder and any Party may cause any
obligation
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due to it by the other Party hereunder to be rendered to its Affiliate, if in
either of such cases, such substitution does not change the nature of the
obligations in any way or otherwise have any material adverse impact on the
other Party; provided further, that if a Party's Affiliate is performing any
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obligations on behalf of such Party, such Party shall continue to be directly
and primarily liable hereunder for the performance thereof.
3.8 No Third-Party Beneficiary Rights. This Agreement is not
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intended to confer upon any Person other than the Parties any
rights or remedies hereunder or in connection herewith.
3.9 Headings/Construction. Section headings contained in this
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Agreement are for convenient reference only, and shall not in any way affect the
meaning or interpretation of this Agreement. The language used in this Agreement
will be deemed the language chosen by the Parties to express their mutual
intent, and no rule of strict construction will be applied against any Person.
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IN WITNESS WHEREOF, the Parties hereby have caused this
Agreement to be executed by their proper officers, duly authorized to do so, as
of the date first written above.
▇▇▇▇▇▇-▇▇▇▇▇▇▇, Inc.
By: _________________________
Name:
Title:
Armkel, LLC
By: _________________________
Name:
Title:
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