Exhibit 2.1
Form
of
SEPARATION AND DISTRIBUTION AGREEMENT
by and between
U.S. BANCORP
and
▇▇▇▇▇ ▇▇▇▇▇▇▇ COMPANIES
Dated as of ________ __, 2003
TABLE OF CONTENTS
PAGE
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ARTICLE I. DEFINITIONS..............................................................................2
1.1 Definitions..............................................................................2
1.2 General.................................................................................11
1.3 References to Time......................................................................11
ARTICLE II. THE MERGER AND THE CONTRIBUTION.........................................................11
2.1 Merger..................................................................................11
2.2 Contribution............................................................................11
2.3 Conditions Precedent to Consummation of the Merger and the Contribution.................12
2.4 Ancillary Agreements....................................................................12
2.5 Non-Transferability.....................................................................13
2.6 Capital Contribution....................................................................14
ARTICLE III. THE DISTRIBUTIONS.......................................................................14
3.1 The Distributions.......................................................................14
3.2 Actions Prior to the Distribution.......................................................15
3.3 Conditions to Obligations...............................................................16
3.4 Certificate of Incorporation; By-laws; Rights Plan......................................17
ARTICLE IV. SURVIVAL AND INDEMNIFICATION............................................................17
4.1 Survival of Agreements..................................................................17
4.2 Indemnification of ▇▇▇▇▇ ▇▇▇▇▇▇▇........................................................17
4.3 Indemnification by Parent...............................................................18
4.4 Indemnification Obligations Net of Insurance Proceeds and Other Amounts.................19
4.5 Procedures for Indemnification of Third Party Claims....................................20
4.6 Additional Matters......................................................................22
4.7 Remedies Cumulative.....................................................................23
4.8 Survival of Indemnities.................................................................23
ARTICLE V. CERTAIN ADDITIONAL COVENANTS............................................................23
5.1 Notices to Third Parties................................................................23
5.2 Licenses and Permits....................................................................23
5.3 Intercompany Agreements; Intercompany Accounts..........................................23
5.4 Guarantee Obligations...................................................................24
5.5 Further Assurances......................................................................25
ARTICLE VI. ACCESS TO INFORMATION...................................................................26
6.1 Agreement for Exchange of Information...................................................26
6.2 Ownership of Information................................................................26
6.3 Compensation for Providing Information..................................................26
6.4 Record Retention........................................................................27
6.5 Limitation of Liability.................................................................27
6.6 Other Agreements Providing for Exchange of Information..................................27
6.7 Production of Witnesses; Records; Cooperation...........................................27
6.8 Confidentiality.........................................................................28
6.9 Protective Arrangements.................................................................29
ARTICLE VII. NO REPRESENTATIONS OR WARRANTIES........................................................30
7.1 No Representations or Warranties........................................................30
ARTICLE VIII. TERMINATION.............................................................................30
8.1 Termination.............................................................................30
8.2 Effect of Termination...................................................................30
ARTICLE IX. MISCELLANEOUS...........................................................................30
9.1 Complete Agreement; Representations.....................................................30
9.2 Expenses................................................................................31
9.3 Governing Law...........................................................................31
9.4 Notices.................................................................................31
9.5 Amendment, Modification or Waiver.......................................................32
9.6 Successors and Assigns; No Third Party Beneficiaries....................................32
9.7 Counterparts............................................................................32
9.8 Negotiation.............................................................................32
9.9 Specific Performance....................................................................33
9.10 Minnesota Forum.........................................................................33
9.11 Interpretation; Conflict with Ancillary Agreements......................................33
9.12 Severability............................................................................33
Exhibits to
Separation and Distribution Agreement
Exhibit A Form of Amended and Restated Bylaws
Exhibit B Form of Amended and Restated Certificate of Incorporation
Exhibit C Form of Business Alliance Agreement
Exhibit D Form of Employee Benefits Agreement
Exhibit E Form of Insurance Matters Agreement
Exhibit F Form of Preferred Share Purchase Rights Agreement
Exhibit G Form of Sublease Agreement
Exhibit H Form of Tax Sharing Agreement
Exhibit I Form of $180,000,000 Subordinated Loan Agreement
SEPARATION AND DISTRIBUTION AGREEMENT
This
SEPARATION AND DISTRIBUTION AGREEMENT (this "AGREEMENT"),
dated as of _______ __, 2003, by and between U.S. Bancorp, a
Delaware
corporation ("PARENT"), and ▇▇▇▇▇ ▇▇▇▇▇▇▇ Companies, a
Delaware corporation and
an indirect, wholly owned subsidiary of Parent ("▇▇▇▇▇ ▇▇▇▇▇▇▇").
RECITALS
WHEREAS, the Board of Directors of Parent has determined that it
is in the best interests of Parent and its stockholders to separate Parent's
businesses into two independent public companies (the "SEPARATION"), on the
terms and subject to the conditions set forth in this Agreement;
WHEREAS, to effect the Separation, Parent intends to cause, on
the terms and subject to the conditions set forth herein, the merger (the
"MERGER") of U.S. Bancorp Investments, Inc., a
Delaware corporation and a wholly
owned subsidiary of Parent ("USBI"), with and into U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇
Companies Inc., a
Delaware corporation and a wholly owned subsidiary of Parent
("USBPJC"), pursuant to which USBPJC will be the surviving corporation in the
Merger and will be renamed "U.S. Bancorp Investments, Inc." (the "SURVIVING
CORPORATION");
WHEREAS, to effect the Separation, Parent further intends to
cause the Surviving Corporation to transfer and contribute to ▇▇▇▇▇ ▇▇▇▇▇▇▇ all
of the issued and outstanding capital stock of certain of its Subsidiaries (as
defined below) and certain other assets of the Surviving Corporation relating to
the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Business, and in exchange therefor ▇▇▇▇▇ ▇▇▇▇▇▇▇ intends to
assume certain liabilities of Parent and its Subsidiaries related to the ▇▇▇▇▇
▇▇▇▇▇▇▇ Business and to issue shares of common stock, par value $.01 per share,
of ▇▇▇▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇▇ ▇▇▇▇▇▇▇ COMMON STOCK") to the Surviving Corporation
(such transactions, collectively, the "CONTRIBUTION"), each on the terms and
subject to the conditions set forth in this Agreement;
WHEREAS, to effect the Separation, Parent further intends to (1)
cause the Surviving Corporation to distribute to Parent all of the issued and
outstanding shares of ▇▇▇▇▇ ▇▇▇▇▇▇▇ Common Stock beneficially owned by the
Surviving Corporation by means of a dividend of such ▇▇▇▇▇ ▇▇▇▇▇▇▇ Common Stock
to Parent as its sole stockholder (the "INTERNAL DISTRIBUTION"), and (2) upon
consummation of the Internal Distribution, distribute on a pro rata basis to
holders of issued and outstanding shares of common stock, par value $.01 per
share, of Parent ("PARENT COMMON STOCK"), other than with respect to shares of
Parent Common Stock held in the treasury of Parent, all of the issued and
outstanding shares of ▇▇▇▇▇ ▇▇▇▇▇▇▇ Common Stock beneficially owned by Parent by
means of a dividend of such ▇▇▇▇▇ ▇▇▇▇▇▇▇ Common Stock to such stockholders (the
"DISTRIBUTION," and together with the Internal Distribution, the
"DISTRIBUTIONS"), each on the terms and subject to the conditions set forth in
this Agreement;
WHEREAS, it is the intention of the Parties that, for United
States federal income tax purposes, the Merger shall qualify as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "CODE"), and the Contribution and the
Distributions shall qualify as transactions that are generally tax free under
Section 355 and/or Section 368(a)(1)(D) of the Code;
WHEREAS, the Boards of Directors of Parent and ▇▇▇▇▇ ▇▇▇▇▇▇▇
have each determined that the Separation, the Merger, the Contribution, the
Distributions and the other transactions contemplated by this Agreement and the
Ancillary Agreements (as defined below) are in furtherance of and consistent
with their respective business strategies and are in the best interests of their
respective companies and stockholders or sole stockholder, as applicable, and
have approved this Agreement and each of the Ancillary Agreements; and
WHEREAS, it is appropriate and desirable to set forth the
principal corporate transactions required to effect the Separation and certain
other agreements that will govern certain matters relating to the Separation,
the Merger, the Contribution and the Distributions and the relationship of
Parent and ▇▇▇▇▇ ▇▇▇▇▇▇▇ and their respective Subsidiaries following the
Distribution.
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements set forth herein, and
intending to be legally bound hereby, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. As used in this Agreement, the
following terms shall have the meanings set forth below (such meanings to be
equally applicable to both the singular and plural forms of the terms defined):
"$180,000,000 SUBORDINATED LOAN AGREEMENT" has the meaning
assigned to such term in Section 3.2(f) hereto.
"ACTION" means any demand, action, suit, countersuit,
arbitration, inquiry, proceeding or investigation by or before any Governmental
Authority or any arbitration or mediation tribunal or authority.
"AFFILIATE" means, with respect to any specified Person, a
Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with, such specified
Person; PROVIDED, HOWEVER, that, for purposes of this Agreement, no member of a
Group shall be deemed to be an Affiliate of any member of the other Group. 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.
"AGENT" means the distribution agent to be appointed by Parent
to distribute the shares of ▇▇▇▇▇ ▇▇▇▇▇▇▇ Common Stock to be distributed by
Parent pursuant to the Distribution.
"AGREEMENT" has the meaning assigned to such term in the
Preamble hereto.
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"AMENDED AND RESTATED BYLAWS" means the Amended and Restated
Bylaws of ▇▇▇▇▇ ▇▇▇▇▇▇▇ substantially in the form of EXHIBIT A hereto, with such
changes as may be agreed to by the Parties.
"AMENDED AND RESTATED CERTIFICATE OF INCORPORATION" means the
Amended and Restated Certificate of Incorporation of ▇▇▇▇▇ ▇▇▇▇▇▇▇ substantially
in the form of EXHIBIT B hereto, with such changes as may be agreed to by the
Parties.
"ANCILLARY AGREEMENTS" means the Benefits Agreement, the
Business Alliance Agreement, the Insurance Matters Agreement, the Sublease
Agreement, the Tax Sharing Agreement and the other agreements to be entered
into in connection with the Separation pursuant to Section 2.4.
"ASSET" means any right, property or asset, whether real,
personal or mixed, tangible or intangible, of any kind, nature and description,
whether accrued, contingent or otherwise, and wheresoever situated and whether
or not carried or reflected, or required to be carried or reflected, on the
books of any Person.
"BANK CONTRIBUTION AGREEMENT" has the meaning assigned to such
term in the definition of "Holdco Formation" below.
"BENEFITS AGREEMENT" means the Employee Benefits Agreement to be
entered into by and between Parent and ▇▇▇▇▇ ▇▇▇▇▇▇▇, substantially in the form
of EXHIBIT C hereto, with such changes as may be agreed to by the Parties.
"BUSINESS" means the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Business or the Parent
Business.
"BUSINESS ALLIANCE AGREEMENT" means the Business Alliance
Agreement to be entered into by and between Parent and ▇▇▇▇▇ ▇▇▇▇▇▇▇,
substantially in the form of EXHIBIT D hereto, with such changes as may be
agreed to by the Parties.
"CAPITAL CONTRIBUTION" shall have the meaning assigned to such
term in Section 2.6.
"CHANGE IN CONTROL" means:
(1) the acquisition by any Person (it being understood that the
use of the term "Person" in this definition shall be deemed to include any group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of
Persons) of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act for the purposes of this definition) of securities of
▇▇▇▇▇ ▇▇▇▇▇▇▇ where such acquisition causes such Person, directly or indirectly,
to beneficially own more than 50% of either (i) the then outstanding shares of
common stock of ▇▇▇▇▇ ▇▇▇▇▇▇▇ ("OUTSTANDING COMMON STOCK") or (ii) the combined
voting power of the then outstanding voting securities of ▇▇▇▇▇ ▇▇▇▇▇▇▇ entitled
to vote generally in the election of directors ("OUTSTANDING VOTING
SECURITIES"); PROVIDED, HOWEVER, that for purposes of this subsection (a), any
acquisition by (A) any employee benefit plan (or related trust) sponsored or
maintained by ▇▇▇▇▇ ▇▇▇▇▇▇▇ or any corporation controlled by ▇▇▇▇▇ ▇▇▇▇▇▇▇ or
(B) any corporation, limited
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liability company or other entity pursuant to a transaction which complies with
clauses (i) and (ii) of subsection (2) below, shall not be deemed to result in a
Change of Control; or
(2) the consummation of, a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the
assets of ▇▇▇▇▇ ▇▇▇▇▇▇▇ (a "BUSINESS COMBINATION"), in each case, unless,
following such Business Combination, (i) all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Common Stock and Outstanding Voting Securities immediately prior to
such Business Combination beneficially own, directly or indirectly, more than
50% of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns ▇▇▇▇▇ ▇▇▇▇▇▇▇ or all or
substantially all of ▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ assets either directly or through one or
more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Common Stock
and Outstanding Voting Securities, as the case may be, and (ii) no Person
beneficially owns, directly or indirectly, more than 50% of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding voting
securities of such corporation.
"CODE" has the meaning assigned to such term in the Recitals
hereto.
"CONSENTS" means any consents, waivers or approvals from, or
notification requirements to, any third parties.
"CONTRIBUTED SHARES" means all of the outstanding capital
stock of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities, consisting of (1) 1,450,000 ordinary
shares, par value (pound)1 per share, of ▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Markets Ltd.;
(2) 1,000 shares of common stock, par value $1.00 per share, of ▇▇▇▇▇ ▇▇▇▇▇▇▇
Financial Products; (3) 1,000 shares of common stock, par value $1.00 per share,
of ▇▇▇▇▇ ▇▇▇▇▇▇▇ Financial Products II; (4) 459 shares of common stock, par
value $2,500.00 per share, of ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.; and (5) 1,000 shares of common
stock, par value $1.00 per share, of ▇▇▇▇▇ ▇▇▇▇▇▇▇ Ventures.
"CONTRIBUTION" has the meaning assigned to such term in the
Recitals hereto.
"CONTRIBUTION EFFECTIVE TIME" has the meaning assigned to such
term in Section 2.2.
"COVERED SPECIFIED LIABILITY" has the meaning assigned to such
term in Section 4.3(d).
"DISTRIBUTION" has the meaning assigned to such term in the
Recitals to this Agreement.
"DISTRIBUTION DATE" means the date as of which the
Distribution shall be effected, to be determined by, or under the authority of,
the Board of Directors of Parent consistent with this Agreement.
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"DISTRIBUTIONS" has the meaning assigned to such term in the
Recitals to this Agreement.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, together with the rules and regulations promulgated thereunder.
"EXCLUDED LIABILITY" means all Liabilities listed on SCHEDULE
1.1(a).
"GOVERNMENTAL APPROVALS" means any notices, reports or other
filings to be made, or any consents, registrations, approvals, licenses, permits
or authorizations to be obtained from, any Governmental Authority.
"GOVERNMENTAL AUTHORITY" means any federal, state, local,
foreign or international court, government, department, commission, board,
bureau or agency, or any other regulatory, administrative or governmental
authority, including the NYSE and the National Association of Securities
Dealers.
"GROUP" means the Parent Group or the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group, as
applicable.
"HOLDCO FORMATION" means the contribution of (1) the capital
stock of U.S. Bank National Association, a nationally chartered banking
association and a wholly owned subsidiary of Parent, to USB Holdings, Inc., a
Delaware corporation and a wholly owned subsidiary of Parent ("USB HOLDINGS"),
pursuant to that certain Contribution Agreement, dated as of August 1, 2003, by
and between Parent and USB Holdings (the "BANK CONTRIBUTION AGREEMENT"), (2) the
capital stock of U.S. Bank National Association ND, a nationally chartered
banking association and a wholly owned subsidiary of Parent, to USB Holdings,
pursuant to the Bank Contribution Agreement and (3) the other assets provided
for in the Bank Contribution Agreement, in each case in exchange for shares of
common stock of USB Holdings.
"HOLDCO NOTE" means the subordinated note to be issued at
Parent's election by USB Holdings to Parent in exchange for a loan by Parent to
USB Holdings on such terms and in such principal amount as determined by Parent.
"INDEMNIFYING PARTY" has the meaning assigned to such term in
Section 4.4(a).
"INDEMNITEE" has the meaning assigned to such term in Section
4.4(a).
"INDEMNITY PAYMENT" has the meaning assigned to such term in
Section 4.4(a).
"INFORMATION" means all 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,
techniques, designs, specifications, drawings, blueprints, diagrams, models,
prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes,
computer programs or other software, marketing plans, customer names,
communications by or to attorneys, memos and other materials prepared by
attorneys or under their direction (including attorney work product), and other
technical, financial, legal, employee or business information or data.
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"INFORMATION STATEMENT" means the information statement and
any related documentation to be distributed to holders of Parent Common Stock in
connection with the Distribution, including any amendments or supplements
thereto.
"INSURANCE MATTERS AGREEMENT" means the Insurance Matters
Agreement to be entered into by and between Parent and ▇▇▇▇▇ ▇▇▇▇▇▇▇,
substantially in the form of EXHIBIT E hereto, with such changes as may be
agreed by the Parties.
"INSURANCE PROCEEDS" means amounts:
(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
incurred in the collection thereof.
"INTELLECTUAL PROPERTY RIGHTS" means any domestic and foreign
patents and applications therefor, statutory, common law and registered
copyrights and registrations therefor, trademarks and registrations and
applications therefor, service marks and registrations and applications
therefor, trade names and registrations and applications therefor, service names
and registrations and applications therefor, trade styles and registrations and
applications therefor, product registrations and licenses and applications
therefor, and translations, adaptations, derivations and combinations of the
foregoing; any mask works, inventions, discoveries, trade secrets, confidential
information, know-how, data, proprietary processes and formulae (including any
registrations, licenses and similar agreements and research, analysis and
supporting documentation in respect of the foregoing); any unregistered
trademarks, service marks, trade names, service names and trade styles; any
income, royalties and payments that accrue as of the Distribution or thereafter
with respect to any of the items listed in this paragraph, including payments
for past, present or future infringements or misappropriation thereof, and the
right to ▇▇▇ and recover for past infringements or misappropriation thereof; any
goodwill associated with any of the foregoing; and any rights to use the
foregoing and other rights in, to and under the foregoing.
"INTERNAL DISTRIBUTION" has the meaning assigned to such term
in the Recitals hereto.
"LIABILITIES" means any and all losses, liabilities, claims,
charges, debts, demands, actions, causes of action, suits, damages, obligations,
payments, costs and expenses, sums of money, bonds, indemnities and similar
obligations, covenants, contracts, controversies, agreements, promises,
omissions, guarantees, make whole agreements and similar obligations, and other
liabilities, including all contractual obligations, whether absolute or
contingent, inchoate or otherwise, matured or unmatured, liquidated or
unliquidated, accrued or unaccrued, known or unknown, whenever arising, and
including those arising under any law, rule,
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regulation, Action, threatened or contemplated Action (including the costs and
expenses of demands, assessments, judgments, settlements and compromises
relating thereto and attorneys' fees and any and all costs and expenses
(including allocated costs of in-house counsel and other personnel) reasonably
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 required to be recorded or reflected on the books and
records or financial statements of any Person.
"MERGER" has the meaning assigned to such term in the Recitals
hereto.
"NYSE" means the New York Stock Exchange, Inc.
"PARENT" has the meaning assigned to such term in the Preamble
hereto.
"PARENT ASSETS" means all Assets of Parent and the Parent
Group other than the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Assets.
"PARENT BUSINESS" means all businesses and operations
(including related joint ventures and alliances) of Parent and the Parent Group,
other than the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Business.
"PARENT COMMON STOCK" has the meaning assigned to such term in
the Recitals hereto.
"PARENT GROUP" means Parent and its Subsidiaries other than
Persons in the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group.
"PARENT INDEMNITEES" has the meaning assigned to such term in
Section 4.2.
"PARENT LIABILITIES" means all of the Liabilities of the
Parent Group (including any Excluded Liabilities), other than (1) the ▇▇▇▇▇
▇▇▇▇▇▇▇ Liabilities and (2) all Liabilities for which a Parent Indemnitee is
entitled to indemnification pursuant to this Agreement.
"PARENT SUBSIDIARIES" means all direct and indirect
Subsidiaries of Parent other than ▇▇▇▇▇ ▇▇▇▇▇▇▇ and the ▇▇▇▇▇ ▇▇▇▇▇▇▇
Subsidiaries.
"PARTY" means Parent or ▇▇▇▇▇ ▇▇▇▇▇▇▇ and their respective
successors and permitted assigns.
"PERSON" means any individual, corporation, limited liability
company, trust, joint venture, association, company, partnership or other legal
entity or a government or any department or agency thereof.
"▇▇▇▇▇ ▇▇▇▇▇▇▇" has the meaning assigned to such term in the
Preamble hereto.
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"▇▇▇▇▇ ▇▇▇▇▇▇▇ ASSETS" means (1) the Assets of the Surviving
Corporation set forth on SCHEDULE 1.1(B) hereto, (2) the ▇▇▇▇▇ ▇▇▇▇▇▇▇
Intellectual Property Assets, (3) the Contributed Shares, and (4) the Capital
Contribution.
"▇▇▇▇▇ ▇▇▇▇▇▇▇ BALANCE SHEET" means the audited combined
statement of financial position of ▇▇▇▇▇ ▇▇▇▇▇▇▇, including the notes thereto,
as of December 31, 2002.
"▇▇▇▇▇ ▇▇▇▇▇▇▇ BUSINESS" means (1) all businesses and
operations (including related joint ventures and alliances), whether historical
or current, of the capital markets businesses of Parent and its Subsidiaries
currently operated by USBPJC or its Subsidiaries, (2) all business and
operations (including related joint ventures and alliances) of any member of the
▇▇▇▇▇ ▇▇▇▇▇▇▇ Group at any time on or after the Contribution Effective Time or
the Distribution Date, and (3) all businesses and operations (including related
joint venture and alliances) of USBI and its Subsidiaries that were managed by
USBPJC or its Subsidiaries and that will not be contributed to ▇▇▇▇▇ ▇▇▇▇▇▇▇ in
the Contribution, but only for any and all periods such businesses and
operations were managed or operated by USBPJC or its Subsidiaries (for the
avoidance of doubt, this clause (3) shall (a) include the entire fixed income
capital markets business of USBI and its Subsidiaries that was managed by USBPJC
or its Subsidiaries prior to the transfer of a portion of that business to ▇▇▇▇▇
▇▇▇▇▇▇▇ Inc. that occurred on March 21, 2003 and (b) exclude all activities
related to the Libra Division of USBI, and all of the USBI businesses and
operations that were not managed or operated by USBPJC or its Subsidiaries at
any time prior to the Distribution); PROVIDED, HOWEVER, ▇▇▇▇▇ ▇▇▇▇▇▇▇ Business
shall not include the asset management businesses and operations, whether
historical or current, managed by U.S. Bancorp Asset Management or its
predecessors.
"▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL MARKETS LTD." means U.S. Bancorp ▇▇▇▇▇
▇▇▇▇▇▇▇ Capital Markets Ltd., a company incorporated in England and Wales
(registered number 191657) whose registered office is at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇, Phoenix House, London, England EC4 N7 US and that is a wholly owned
subsidiary of USBPJC.
"▇▇▇▇▇ ▇▇▇▇▇▇▇ COMMON STOCK" has the meaning assigned to such
term in the Recitals hereto.
"▇▇▇▇▇ ▇▇▇▇▇▇▇ ENTITIES" means ▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Markets
Ltd., ▇▇▇▇▇ ▇▇▇▇▇▇▇ Financial Products, ▇▇▇▇▇ ▇▇▇▇▇▇▇ Financial Products II,
▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc., and ▇▇▇▇▇ ▇▇▇▇▇▇▇ Ventures.
"▇▇▇▇▇ ▇▇▇▇▇▇▇ FINANCIAL PRODUCTS" means U.S. Bancorp ▇▇▇▇▇
▇▇▇▇▇▇▇ Financial Products Inc., a
Delaware corporation and a wholly owned
subsidiary of USBPJC.
"▇▇▇▇▇ ▇▇▇▇▇▇▇ FINANCIAL PRODUCTS II" means U.S. Bancorp ▇▇▇▇▇
▇▇▇▇▇▇▇ Financial Products II Inc., a
Delaware corporation and a wholly owned
subsidiary of USBPJC.
"▇▇▇▇▇ ▇▇▇▇▇▇▇ GROUP" means ▇▇▇▇▇ ▇▇▇▇▇▇▇ and the ▇▇▇▇▇
▇▇▇▇▇▇▇ Subsidiaries.
"▇▇▇▇▇ ▇▇▇▇▇▇▇ INC." means U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc., a
Delaware corporation and subsidiary owned by USBI and USBPJC.
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"▇▇▇▇▇ ▇▇▇▇▇▇▇ INDEMNITEES" has the meaning assigned to such
term in Section 4.3.
"▇▇▇▇▇ ▇▇▇▇▇▇▇ INTELLECTUAL PROPERTY ASSETS" means
Intellectual Property Rights owned by the Parent Group that are specifically set
forth on SCHEDULE 1.1(C) hereto.
"▇▇▇▇▇ ▇▇▇▇▇▇▇ LIABILITIES" means (1) all Liabilities that are
contemplated by this Agreement or any Ancillary Agreement (or the Schedules
hereto or thereto) as Liabilities of, or to be assumed by, ▇▇▇▇▇ ▇▇▇▇▇▇▇ or any
other member of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group, and all agreements, obligations and
Liabilities of any member of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group under this Agreement or any
of the Ancillary Agreements; (2) all Liabilities to the extent relating to,
arising out of or resulting from any ▇▇▇▇▇ ▇▇▇▇▇▇▇ Asset; (3) all Liabilities to
the extent relating to, arising out of or resulting from the operation of the
▇▇▇▇▇ ▇▇▇▇▇▇▇ Business or the operation of any business conducted by any member
of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group, in either case as conducted at any time prior to, on
or after the Distribution Date, including any Liabilities relating to, arising
out of or resulting from the offering or provision of any services or products
of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Business; (4) all Liabilities to the extent relating to,
arising out of or resulting from any of the terminated, divested or discontinued
businesses and operations that were part of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Business prior to
such termination, divestiture or discontinuation, or otherwise; (5) all
Liabilities reflected as liabilities or obligations of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group
in the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Balance Sheet but that are not currently direct or indirect
Liabilities of any of the members of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group, subject to any
discharge of such Liabilities subsequent to the date of the ▇▇▇▇▇ ▇▇▇▇▇▇▇
Balance Sheet; (6) all Liabilities relating to, arising out of or resulting from
the Actions or any Actions involving similar allegations described on SCHEDULE
1.1(D) (the "SPECIFIED LIABILITIES"), whether arising before, on or after the
Distribution Date; and (7) all Liabilities listed on SCHEDULE 1.1(E); PROVIDED
that the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Liabilities shall not include any Excluded Liability.
"▇▇▇▇▇ ▇▇▇▇▇▇▇ RIGHTS" means the preferred share purchase
rights of ▇▇▇▇▇ ▇▇▇▇▇▇▇ to be issued pursuant to the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Rights Plan.
"▇▇▇▇▇ ▇▇▇▇▇▇▇ RIGHTS PLAN" means the Preferred Share Purchase
Rights Agreement of ▇▇▇▇▇ ▇▇▇▇▇▇▇, substantially in the form of EXHIBIT F
hereto, with such changes as may be agreed by the Parties.
"▇▇▇▇▇ ▇▇▇▇▇▇▇ SHARES" has the meaning assigned to such term
in Section 2.2(a)(ii) hereto.
"▇▇▇▇▇ ▇▇▇▇▇▇▇ SUBSIDIARIES" means all direct and indirect
Subsidiaries of ▇▇▇▇▇ ▇▇▇▇▇▇▇, including the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities and other
Subsidiaries to be transferred to or formed by ▇▇▇▇▇ ▇▇▇▇▇▇▇ in connection with
the Separation.
"▇▇▇▇▇ ▇▇▇▇▇▇▇ VENTURES" means U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇
Ventures Inc., a
Delaware corporation and a wholly owned subsidiary of USBPJC.
"PLAN OF MERGER" means the Agreement and Plan of Merger to be
entered by and between USBI and USBPJC to effect the Merger.
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"RECORD DATE" means the close of business on the date to be
determined by the Board of Directors of Parent as the record date for
determining shareholders of Parent entitled to receive shares of ▇▇▇▇▇ ▇▇▇▇▇▇▇
Common Stock in the Distribution.
"REGISTRATION STATEMENT" means the Registration Statement on
Form 10 of ▇▇▇▇▇ ▇▇▇▇▇▇▇ relating to registration under the Exchange Act of
▇▇▇▇▇ ▇▇▇▇▇▇▇ Common Stock and ▇▇▇▇▇ ▇▇▇▇▇▇▇ Rights, including any amendments or
supplements thereto.
"REPRESENTATIVE" means, with respect to any Person, any of
such Person's directors, officers, employees, agents, consultants, advisors,
accountants, attorneys and representatives.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended,
together with the rules and regulations promulgated thereunder.
"SEPARATION" has the meaning assigned to such term in the
Recitals to this Agreement.
"SPECIFIED CLAIM" has the meaning assigned to such term in
Section 4.5(e).
"SPECIFIED LIABILITIES" has the meaning assigned to such term
in the definition of "▇▇▇▇▇ ▇▇▇▇▇▇▇ Liability" above.
"SUBLEASE AGREEMENT" means the Sublease Agreement to be
entered into by and among Parent, as lessee, ▇▇▇▇▇ ▇▇▇▇▇▇▇, as sublessee, and
▇▇▇▇▇ Operating Partnership LP, as lessor, substantially in the form of EXHIBIT
G hereto, with such changes as may be agreed to by the parties thereto.
"SUBSIDIARY" means, with respect to any specified Person, any
corporation, limited liability company, trust, joint venture, association,
company, partnership or other legal entity of which a Person (either alone or
through or together with any other Subsidiary of such Person) owns, directly or
indirectly, a majority of the stock or other equity interests the holders of
which are generally entitled to vote for the election of the board of directors
or other governing body of such corporation or other legal entity.
"SURVIVING CORPORATION" has the meaning assigned to such term
in the Recitals hereto.
"TAX SHARING AGREEMENT" means the Tax Sharing Agreement to be
entered into by and between Parent and ▇▇▇▇▇ ▇▇▇▇▇▇▇, substantially in the form
of EXHIBIT H hereto, with such changes as may be determined by the Parties.
"THIRD-PARTY CLAIM" has the meaning assigned to such term in
Section 4.5(a).
"TRANSACTION AGREEMENTS" has the meaning assigned to such term
in Section 9.1(b)(i).
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"USB HOLDINGS" has the meaning assigned to such term in the
definition of "Holdco Formation" above.
"USBI" has the meaning assigned to such term in the Recitals
hereto.
"USBPJC" has the meaning assigned to such term in the Recitals
hereto.
SECTION 1.2 GENERAL. References to:
(a) "DOLLARS" or "$" means United States dollars;
(b) the words "INCLUDE" and "INCLUDING" (and words of similar
import) shall be deemed to be followed by the phrase "without
limitation";
(c) the terms "HEREIN," "HEREOF" and "HEREUNDER" and other
words of similar import refer to this Agreement as a whole and not to
any particular article, section, paragraph, clause or subdivision;
(d) articles, sections, paragraphs, clauses and subdivisions
not attributed to a particular document shall be references to such
parts of this Agreement; and
(e) exhibits and schedules not attributed to a particular
document shall be references to such exhibits and schedules to this
Agreement.
SECTION 1.3 REFERENCES TO TIME. All references in this
Agreement to times of day shall be to New York City time.
ARTICLE II
THE MERGER AND THE CONTRIBUTION
SECTION 2.1 MERGER. On or prior to the Distribution Date and
prior to the Contribution, subject to satisfaction or waiver of the conditions
set forth in Section 2.3, Parent shall effect the Merger by causing USBI to
merge within and into USBPJC in accordance with the General Corporation Law of
the State of
Delaware and the Plan of Merger.
SECTION 2.2 CONTRIBUTION. (a) On or prior to the Distribution
Date (but in any event prior to the Distribution) and subject to the provisions
of this Section 2.2 and Section 2.5 and the satisfaction or waiver of the
conditions set forth in Section 2.3, Parent shall effect the Contribution by
causing the Surviving Corporation to contribute, assign, transfer, convey and
deliver to ▇▇▇▇▇ ▇▇▇▇▇▇▇ all of the Surviving Corporation's rights, title and
interests in and to the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Assets; PROVIDED, that the effective time
of the Contribution (the "CONTRIBUTION EFFECTIVE TIME") shall occur after the
effective time of the Merger. In consideration therefor, ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall
simultaneously therewith (i) assume and agree faithfully to perform and
discharge in due course in full all of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Liabilities in
accordance with their respective terms and (ii) issue and deliver to the
Surviving Corporation [ ] duly and validly issued shares of ▇▇▇▇▇ ▇▇▇▇▇▇▇ Common
Stock (the "▇▇▇▇▇ ▇▇▇▇▇▇▇ SHARES"), free and clear of all liens, encumbrances
and other restrictions on transfer or title, which ▇▇▇▇▇ ▇▇▇▇▇▇▇ Shares,
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together with the 100 duly and validly issued shares of ▇▇▇▇▇ ▇▇▇▇▇▇▇ Common
Stock beneficially owned by USBPJC as of the date hereof, will constitute all of
the issued and outstanding capital stock of ▇▇▇▇▇ ▇▇▇▇▇▇▇. From and after the
Contribution Effective Time, ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall be responsible for all ▇▇▇▇▇
▇▇▇▇▇▇▇ 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 (including any ▇▇▇▇▇ ▇▇▇▇▇▇▇
Liabilities arising out of claims made by Parent's or ▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ respective
directors, officers, employees, agents, Subsidiaries or Affiliates against any
member of the Parent Group or the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group) 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 by any member of the Parent Group or the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group
or any of their respective directors, officers, employees, agents, Subsidiaries
or Affiliates.
(b) INTELLECTUAL PROPERTY. Except as provided in any Ancillary
Agreement, any Intellectual Property Rights of Parent or any of its Subsidiaries
that are ▇▇▇▇▇ ▇▇▇▇▇▇▇ Intellectual Property Assets shall be assigned,
transferred and conveyed to the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group pursuant to the Contribution
and in accordance with the procedures set forth on Schedule 2.2(b). As soon as
practicable following the Distribution, the Parent Group shall expressly abandon
any and all trademark or service ▇▇▇▇ registrations and/or applications that
combine any Parent Group ▇▇▇▇ with any ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group ▇▇▇▇. Following the
Distribution, Parent and the Parent Group, and ▇▇▇▇▇ ▇▇▇▇▇▇▇ and the ▇▇▇▇▇
▇▇▇▇▇▇▇ Group, respectively, shall discontinue any and all use or exercise of
the Intellectual Property Rights owned by any member of the other Group, unless,
with respect to a particular Intellectual Property Right or group thereof,
otherwise agreed in writing by the owner of such Intellectual Property Right.
SECTION 2.3 CONDITIONS PRECEDENT TO CONSUMMATION OF THE MERGER
AND THE CONTRIBUTION. The obligations of the Parties to consummate the Merger
and the Contribution shall be conditioned on the satisfaction, or waiver by
Parent in its sole discretion, of the following conditions:
(a) Final approval of the Merger and the Contribution shall
have been given by the Board of Directors of Parent in its sole
discretion.
(b) Each of the conditions precedent to the consummation of
the Distributions set forth in Section 3.3 hereof (other than Section
3.3(h) thereof) shall have been satisfied.
The obligation of the Parties to consummate the Contribution shall be
conditioned upon the satisfaction, or waiver by Parent in its sole discretion,
of the condition that the Merger shall have been consummated in accordance with
Section 2.1. Any determination made by Parent (including the Board of Directors
of Parent) prior to the Merger or the Contribution concerning the satisfaction
or waiver of any or all of the conditions set forth in this Section 2.3 shall be
conclusive and binding on the Parties for the purposes of this Section 2.3 only.
SECTION 2.4 ANCILLARY AGREEMENTS. On or prior to the
Contribution Effective Time, each of Parent and ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall enter into,
or cause the appropriate members of the
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Group of which it is a member to enter into, (i) such bills of sale, stock
powers, certificates of title, assignments of contracts and other instruments of
transfer, conveyance and assignment requested by Parent that are necessary to
evidence the contribution, transfer, conveyance and assignment of all of the
Surviving Corporation's right, title and interest in and to the ▇▇▇▇▇ ▇▇▇▇▇▇▇
Assets to ▇▇▇▇▇ ▇▇▇▇▇▇▇ pursuant to Section 2.2; (ii) such bills of sale, stock
powers, certificates of title, assumptions of contracts and other instruments of
transfer, conveyance, assignment and assumption requested by Parent that are
necessary to evidence the valid and effective issuance and delivery of the ▇▇▇▇▇
▇▇▇▇▇▇▇ Shares to the Surviving Corporation, and the assumption of the ▇▇▇▇▇
▇▇▇▇▇▇▇ Liabilities, by ▇▇▇▇▇ ▇▇▇▇▇▇▇ pursuant to Section 2.2; and (iii) such
other agreements, certificates and other documents as may be deemed to be
advisable by Parent in connection with the Separation.
SECTION 2.5 NON-TRANSFERABILITY. (a) Nothing herein shall be
deemed to require the contribution, assignment, transfer, conveyance or delivery
of any ▇▇▇▇▇ ▇▇▇▇▇▇▇ Assets or the assumption of any ▇▇▇▇▇ ▇▇▇▇▇▇▇ Liabilities
that by their terms or operation of law cannot be contributed, assigned,
transferred, conveyed, delivered or assumed; PROVIDED, HOWEVER, that Parent and
▇▇▇▇▇ ▇▇▇▇▇▇▇ shall, and shall cause the respective members of their Groups to,
use their commercially reasonable efforts and cooperate to obtain any necessary
consents, approvals or waivers for, and to resolve any impediments to, the
contribution, assignment, transfer, conveyance or delivery of such ▇▇▇▇▇ ▇▇▇▇▇▇▇
Assets or assumption of such ▇▇▇▇▇ ▇▇▇▇▇▇▇ Liabilities contemplated to be
contributed, assigned, transferred, conveyed, delivered or assumed pursuant to
this Article II.
(b) To the extent that any contribution, assignment, transfer,
conveyance, delivery or assumption referred to in Section 2.5(a) shall not have
been consummated as of the Contribution Effective Time, (i) Parent and ▇▇▇▇▇
▇▇▇▇▇▇▇ shall, and shall cause the respective members of their Groups to, use
reasonable best efforts and cooperate to effect such contribution, assignment,
transfer, conveyance, delivery or assumption as promptly following the
Contribution Effective Time as shall be practicable; and (ii) Parent shall
thereafter, with respect to any such ▇▇▇▇▇ ▇▇▇▇▇▇▇ Asset, use reasonable best
efforts, with the costs of Parent related thereto to be promptly reimbursed by
▇▇▇▇▇ ▇▇▇▇▇▇▇, to hold such Asset in trust for the use and benefit of ▇▇▇▇▇
▇▇▇▇▇▇▇ and, with respect to any such ▇▇▇▇▇ ▇▇▇▇▇▇▇ Liability, retain such ▇▇▇▇▇
▇▇▇▇▇▇▇ Liability for the account of ▇▇▇▇▇ ▇▇▇▇▇▇▇, and to take such other
action, including as may be reasonably requested by ▇▇▇▇▇ ▇▇▇▇▇▇▇, in order to
place each Party, insofar as reasonably possible, in the same position as would
have existed had such ▇▇▇▇▇ ▇▇▇▇▇▇▇ Asset or ▇▇▇▇▇ ▇▇▇▇▇▇▇ Liability been
contributed, assigned, transferred, conveyed, delivered or assumed as
contemplated hereby (it being understood that Parent shall not be required to
take any action pursuant to this sentence that would, or could reasonably be
expected to, result in a material financial obligation, or restriction on the
business or operations, of Parent). To the extent that ▇▇▇▇▇ ▇▇▇▇▇▇▇ is provided
the use or benefits of any ▇▇▇▇▇ ▇▇▇▇▇▇▇ Asset or has any ▇▇▇▇▇ ▇▇▇▇▇▇▇
Liability held for its account pursuant to this Section 2.5(b), ▇▇▇▇▇ ▇▇▇▇▇▇▇
shall perform at the direction of Parent and for the benefit of any third Person
the obligations of Parent thereunder or in connection therewith; PROVIDED, that
if ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall fail to perform to the extent required herein, ▇▇▇▇▇
▇▇▇▇▇▇▇ shall hold Parent harmless and indemnify Parent therefor. As and when
any such ▇▇▇▇▇ ▇▇▇▇▇▇▇ Asset or ▇▇▇▇▇ ▇▇▇▇▇▇▇ Liability becomes contributable,
assignable, transferable, conveyable, deliverable or assumable, such
contribution, assignment, transfer, conveyance, delivery or assumption, as
applicable, shall be effected as promptly as practicable thereafter.
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(c) The Parties agree that, notwithstanding anything in this
Section 2.5 to the contrary, ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall be deemed to have acquired all
of the Surviving Corporation's right, title and interest in and to the ▇▇▇▇▇
▇▇▇▇▇▇▇ Assets, and shall be deemed to have assumed in full in accordance with
the terms of this Agreement all of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Liabilities, in each case
effective as of the Contribution Effective Time.
SECTION 2.6 CAPITAL CONTRIBUTION. Prior to the Contribution
Effective Time, Parent shall determine the amount of the Capital Contribution to
be made in connection with the Contribution. For the purposes of this Section
2.6, "Capital Contribution" means an amount of cash equal to the sum of (1) the
reduction of regulatory capital, if any, as computed pursuant to Rule 15c3-1
under the Exchange Act and reflected in the financial statements of ▇▇▇▇▇
▇▇▇▇▇▇▇ in accordance with United States generally accepted accounting
principles, that is directly attributable to the replacement of options to
purchase shares of Parent Common Stock with options to purchase shares of ▇▇▇▇▇
▇▇▇▇▇▇▇ Common Stock and shares of restricted ▇▇▇▇▇ ▇▇▇▇▇▇▇ Common Stock under
the Benefits Agreement in connection with the Distribution, and (2) any other
amounts that the Parent and ▇▇▇▇▇ ▇▇▇▇▇▇▇ mutually agree to in writing prior to
the Contribution. Prior to the Contribution, the Parties shall agree in good
faith on a reasonable estimate of the reduction, if any, of regulatory capital
described in clause (1) of the previous sentence, which estimate shall be final
and binding on the Parties. Immediately upon receipt of the Capital
Contribution, ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall pay the accounts payable, borrowings, notes
and other indebtedness of members of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group specified by Parent
in an aggregate amount equal to the Capital Contribution (or such lesser amount
as the Parties may agree).
ARTICLE III
THE DISTRIBUTIONS
SECTION 3.1 THE DISTRIBUTIONS. (a) Subject to the satisfaction
or waiver of the conditions set forth in Section 3.3, Parent shall effect the
Distributions as follows:
(i) Parent shall effect the Internal Distribution by causing
the Surviving Corporation to distribute all of the issued and
outstanding shares of ▇▇▇▇▇ ▇▇▇▇▇▇▇ Common Stock beneficially owned by
the Surviving Corporation to Parent by means of a dividend of such ▇▇▇▇▇
▇▇▇▇▇▇▇ Common Stock to its sole stockholder, and
(ii) Upon consummation of the Internal Distribution, Parent
shall effect the Distribution by distributing all of the issued and
outstanding shares of ▇▇▇▇▇ ▇▇▇▇▇▇▇ Common Stock beneficially owned by
Parent to holders of shares of Parent Common Stock, other than with
respect to shares of Parent Common Stock held in the treasury of Parent,
by means of a pro rata dividend of such ▇▇▇▇▇ ▇▇▇▇▇▇▇ Common Stock to
such stockholders;
each on the terms and subject to the conditions set forth in this Agreement.
Subject to the satisfaction or waiver of the conditions set forth in Section
3.3, the Board of Directors of Parent shall establish the Record Date and the
Distribution Date and any appropriate procedures in connection with the
Distribution.
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(b) Subject to Section 3.1(e) and to the satisfaction or
waiver of the conditions set forth in Section 3.3, each holder of Parent Common
Stock on the Record Date (or such holder's designated transferee or
transferees), other than in respect of shares of Parent Common Stock held in the
treasury of Parent, will be entitled to receive in the Distribution a number of
shares of ▇▇▇▇▇ ▇▇▇▇▇▇▇ Common Stock equal to the number of shares of Parent
Common Stock held by such holder on the Record Date multiplied by a fraction,
the numerator of which is the number of shares of ▇▇▇▇▇ ▇▇▇▇▇▇▇ Common Stock
beneficially owned by Parent or any other member of the Parent Group on the
Record Date and the denominator of which is the number of shares of Parent
Common Stock outstanding on the Record Date (other than shares of Parent Common
Stock held in the treasury of Parent).
(c) Prior to the Distribution, Parent shall enter into an
agreement with the Agent providing for, among other things, the payment of the
Distribution to the holders of Parent Common Stock in accordance with this
Article III.
(d) Prior to the Distribution, Parent and ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall
deliver to the Agent a share certificate representing (or authorize the related
book-entry transfer of) all of the outstanding shares of ▇▇▇▇▇ ▇▇▇▇▇▇▇ Common
Stock to be distributed in connection with the payment of the Distribution.
After the Distribution, upon the request of the Agent, ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall
provide all certificates for shares (or book-entry transfer authorizations) of
▇▇▇▇▇ ▇▇▇▇▇▇▇ Common Stock that the Agent shall require in order to effect the
Distribution.
(e) As soon as practicable after the Distribution Date, Parent
shall direct the Agent to determine the number of whole shares and fractional
shares of ▇▇▇▇▇ ▇▇▇▇▇▇▇ Common Stock allocable to each holder of record or
beneficial owner of ▇▇▇▇▇ ▇▇▇▇▇▇▇ Common Stock as of the Record Date entitled to
receive ▇▇▇▇▇ ▇▇▇▇▇▇▇ Common Stock in the Distribution, to aggregate all such
fractional shares and sell the whole shares obtained thereby, at the direction
of Parent, either to Parent, in open market transactions or otherwise, in each
case at then prevailing trading prices, and to cause to be distributed to each
such holder or for the benefit of each such beneficial owner, in lieu of any
fractional share, such holder's or owner's ratable share of the proceeds of such
sale, after making appropriate deductions of the amount required to be withheld
for federal income tax purposes and after deducting an amount equal to all
brokerage charges, commissions and transfer taxes attributed to such sale.
SECTION 3.2 ACTIONS PRIOR TO THE DISTRIBUTION. (a) Parent and
▇▇▇▇▇ ▇▇▇▇▇▇▇ shall use reasonable best efforts to (i) cause the Registration
Statement to become effective under the Exchange Act and to keep the
Registration Statement effective as long as is necessary to consummate the
Distribution, and (ii) mail, promptly after effectiveness of the Registration
Statement and the Record Date and in any event prior to the Distribution Date,
to the holders of Parent Common Stock as of the Record Date, the Information
Statement.
(b) Parent and ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall take all such action as
Parent may determine necessary or appropriate under federal or state securities
or blue sky laws of the United States (and any comparable laws under any foreign
jurisdiction) in connection with the Distribution.
(c) Prior to the Distribution, each of Parent and ▇▇▇▇▇
▇▇▇▇▇▇▇ shall enter into, or cause the appropriate members of the Group of which
it is a member to enter into, each of the
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Benefits Agreement, the Business Alliance Agreement, the Insurance Matters
Agreement, the Sublease Agreement and the Tax Sharing Agreement.
(d) Prior to the Distribution, Parent shall execute, or cause
the appropriate members of the Parent Group to execute, and ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall
execute, or cause the appropriate members of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group to execute,
assignment documents that Parent and ▇▇▇▇▇ ▇▇▇▇▇▇▇ agree to be necessary or
appropriate to effect the transfer of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Intellectual Property
Assets to the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group pursuant to the Contribution and in accordance
with the procedures set forth on Schedule 2.2(b).
(e) Parent shall use its reasonable best efforts to cause the
Holdco Formation to be effected prior to the effective time of the Distribution.
(f) Prior to the Distribution, each of Parent and ▇▇▇▇▇
▇▇▇▇▇▇▇ shall cause the appropriate members of the Group of which it is a member
to enter into the $180,000,000 Subordinated Loan Agreement by and between USB
Holdings, Inc. and ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc., (the "$180,000,000 SUBORDINATED LOAN
AGREEMENT"), subject to approval by the NYSE of inclusion of amounts outstanding
under the $180,000,000 Subordinated Loan Agreement as net capital of ▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. for the purposes of Rule 15c3-1 of the Exchange Act, which
$180,000,000 Subordinated Loan Agreement will replace the $215,000,000
subordinated debt facility currently in place between Parent and ▇▇▇▇▇ ▇▇▇▇▇▇▇
Inc. and (2) such other financial arrangements, if any, that Parent and ▇▇▇▇▇
▇▇▇▇▇▇▇ agree to enter into prior to the Distribution. The $180,000,000
Subordinated Loan Agreement will be substantially in the form of EXHIBIT I
hereto, with such changes as may be agreed to by the parties thereto.
(g) In the event that Parent determines to cause USB Holdings
to issue the Holdco Note, Parent shall use its reasonable best efforts to cause
USB Holdings to issue the Holdco Note prior to the effective time of the
Distribution.
SECTION 3.3 CONDITIONS TO OBLIGATIONS. The obligations of the
Parties to consummate the Distributions are subject to the satisfaction, or
waiver by Parent in its sole discretion, of each of the following conditions:
(a) Final approval of the Distributions shall have been given
by the Board of Directors of Parent in its sole discretion.
(b) The Registration Statement shall have been filed and
declared effective by the SEC, and there shall be no stop-order in
effect with respect thereto.
(c) The actions and filings necessary or appropriate under
federal and state securities laws and state blue sky laws of the United
States (and any comparable laws under any foreign jurisdictions) in
connection with the Distributions (including, if applicable, any actions
and filings relating to the Registration Statement) shall have been
taken and, where applicable, have become effective or been accepted.
(d) The ▇▇▇▇▇ ▇▇▇▇▇▇▇ Common Stock to be issued in the
Distribution shall have been accepted for listing on the NYSE, subject
to official notice of issuance.
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(e) No order, injunction or decree issued by any court or
agency of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Separation, the Merger, the
Contribution or the Distributions or any of the other transactions
contemplated by this Agreement or any Ancillary Agreement shall be in
effect.
(f) Parent shall have received an opinion of Wachtell, Lipton,
▇▇▇▇▇ & ▇▇▇▇, in form and substance satisfactory to Parent, to the
effect that the Contribution and the Internal Distribution and the
Distribution will qualify as transactions that are generally tax-free
under Section 355 and/or Section 368(a)(1)(D) of the Code.
(g) All Consents and Governmental Approvals required in
connection with the transactions contemplated hereby shall have been
received.
(h) Each of the Merger, the Contribution and the Holdco
Formation shall have been consummated in accordance with this Agreement.
(i) In the event that Parent determines to cause USB Holdings
to issue the Holdco Note, USB Holdings shall have issued the Holdco Note
in accordance with this Agreement.
(j) This Agreement shall not have been terminated.
Any determination made by Parent (including the Board of Directors of Parent)
prior to the Distribution concerning the satisfaction or waiver of any or all of
the conditions set forth in this Section 3.3 shall be conclusive and binding on
the Parties.
SECTION 3.4 CERTIFICATE OF INCORPORATION; BYLAWS; RIGHTS PLAN.
Parent and ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall take all action necessary so that the Amended and
Restated Certificate of Incorporation, the Amended and Restated Bylaws and the
▇▇▇▇▇ ▇▇▇▇▇▇▇ Rights Plan shall be in effect prior to the closing of the
Distributions.
ARTICLE IV
SURVIVAL AND INDEMNIFICATION
SECTION 4.1 SURVIVAL OF AGREEMENTS. All covenants and
agreements of the Parties contained in this Agreement shall survive each of the
Separation, the Merger, the Contribution and the Distributions.
SECTION 4.2 INDEMNIFICATION BY ▇▇▇▇▇ ▇▇▇▇▇▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
shall indemnify, defend and hold harmless Parent, each member of the Parent
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 "PARENT INDEMNITEES"), from and against any and all
Liabilities of the Parent Indemnitees relating to, arising out of or resulting
from any of the following items regardless of whether arising from or alleged to
arise from negligence, recklessness, violation of law, fraud or
misrepresentation (without duplication):
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(a) the failure of ▇▇▇▇▇ ▇▇▇▇▇▇▇ or any other member of the
▇▇▇▇▇ ▇▇▇▇▇▇▇ Group or any other Person to pay, perform or otherwise
promptly discharge any ▇▇▇▇▇ ▇▇▇▇▇▇▇ Liabilities or any contract,
agreement or arrangement included in the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Assets in
accordance with their respective terms, whether prior to or after the
Distribution Date or the date hereof;
(b) the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group, any ▇▇▇▇▇ ▇▇▇▇▇▇▇ Liability
(except to the extent expressly provided in Section 4.3(d) below with
respect to Covered Specified Liabilities) or any ▇▇▇▇▇ ▇▇▇▇▇▇▇ Asset;
(c) any breach by ▇▇▇▇▇ ▇▇▇▇▇▇▇ or any member of the ▇▇▇▇▇
▇▇▇▇▇▇▇ Group of this Agreement or any of the Ancillary Agreements; and
(d) except to the extent set forth in Section 4.3(e), 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, contained in the Registration Statement or the Information
Statement or in any registration statement on Form S-8 filed by ▇▇▇▇▇
▇▇▇▇▇▇▇ in connection with the Separation (or related prospectus).
SECTION 4.3 INDEMNIFICATION BY PARENT. Parent shall indemnify,
defend and hold harmless ▇▇▇▇▇ ▇▇▇▇▇▇▇, each member of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ 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 "▇▇▇▇▇ ▇▇▇▇▇▇▇ INDEMNITEES"), from and against any and all Liabilities of
the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Indemnitees relating to, arising out of or resulting from any
of the following items regardless of whether arising from or alleged to arise
from negligence, recklessness, violation of law, fraud or misrepresentation
(without duplication):
(a) the failure of Parent or any other member of the Parent
Group or any other Person to pay, perform or otherwise promptly
discharge any Parent Liabilities other than the ▇▇▇▇▇ ▇▇▇▇▇▇▇
Liabilities, whether prior to or after the Distribution Date or the date
hereof;
(b) any Parent Liability other than the ▇▇▇▇▇ ▇▇▇▇▇▇▇
Liabilities;
(c) any breach by Parent or any member of the Parent Group of
this Agreement or any of the Ancillary Agreements;
(d) any Specified Liability up to, but not exceeding, an
aggregate amount (when aggregated with all other such Specified
Liabilities, including those previously paid pursuant to this Section
4.3(d)) equal to $17,500,000 (the "COVERED SPECIFIED LIABILITIES"); and
(e) 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, in each case to the extent relating to the
Parent Group (excluding for this purpose the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Business and
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USBPJC and USBI to the extent related to the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Business),
contained in the Registration Statement or the Information Statement.
Notwithstanding anything to the contrary set forth herein, Parent may, in its
sole discretion, elect to terminate the indemnity obligation of Parent under
clause (d) above in full in the event of a Change in Control. Any election by
Parent to terminate such indemnity obligation shall be deemed to be effective
immediately upon the occurrence of the applicable Change in Control, regardless
of whether such notice is given on, prior to or after such Change in Control,
and all pending claims for indemnification under clause (d) above shall
terminate in full as of the occurrence of such Change in Control; PROVIDED,
HOWEVER, that any pending obligation of Parent to indemnify ▇▇▇▇▇ ▇▇▇▇▇▇▇ in
accordance with such clause (d) for a Covered Specified Liability that has been
finally determined prior to the occurrence of such Change in Control, including
(without limitation) by settlement, compromise or entry of a judgment or order
and including related legal fees incurred through the date of such occurrence,
shall not be terminated pursuant to this paragraph. In the event that a Change
of Control is reasonably likely to occur or has occurred, ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall
promptly give Parent written notice of such Change in Control, specifying in
reasonable detail the nature, parties and material terms of such Change in
Control.
SECTION 4.4 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 IV will be net of
Insurance Proceeds actually recovered by or on behalf of the Indemnitee in
reduction of the related Liability, except as otherwise expressly provided in
Article VI of the Insurance Matters Agreement. Accordingly, except as otherwise
expressly provided in Article VI of the Insurance Matters Agreement, (i) the
amount that 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; and (ii) 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 promptly 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 it would not be entitled to receive in the absence of the
indemnification provisions) by virtue of the indemnification provisions hereof.
(c) The existence of a claim by an Indemnitee for monies from
an insurer or against a third party in respect of an indemnifiable loss shall
not, however, delay any Indemnity Payment pursuant to the indemnification
provisions contained herein and otherwise determined to be due and owning by an
Indemnifying Party.
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SECTION 4.5 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 Parent Group or the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group of any claim, or of the
commencement by any such Person of any Action, with respect to which an
Indemnifying Party may be obligated to provide indemnification to such
Indemnitee pursuant to Section 4.2 or 4.3, or any other Section of this
Agreement or any Ancillary Agreement (collectively, a "THIRD-PARTY CLAIM"), such
Indemnitee shall give such Indemnifying Party and, if Parent is not the
Indemnifying Party, Parent written notice thereof within 30 days after receiving
notice of such Third-Party Claim. If any Indemnitee shall receive notice of or
otherwise learn of the assertion of a Third-Party Claim which may reasonably be
determined to be in whole or in part a Covered Specified Liability, Parent or
▇▇▇▇▇ ▇▇▇▇▇▇▇, as appropriate depending on which Group such Indemnitee is a
member of or otherwise affiliated with, shall give the other Party written
notice thereof within 30 days after such Indemnitee receives notice or otherwise
learns of the assertion of such Third-Party Claim. Any such notice shall
describe the Third-Party Claim in reasonable detail, including, if known, the
amount of the Liability for which indemnification may be available.
Notwithstanding the foregoing, the failure of any Indemnitee or other Person to
give notice as provided in this Section 4.5(a) shall not relieve the related
Indemnifying Party of its obligations under this Article IV, except to the
extent that such Indemnifying Party is actually prejudiced by such failure to
give notice.
(b) An Indemnifying Party may elect (but is not required) to
assume the defense of and defend, 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 4.5(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.
(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 4.5(b), such Indemnitee may
defend such Third-Party Claim at the cost and expense of the Indemnifying Party;
PROVIDED, that in the event of any such failure to notify, the Indemnifying
Party may thereafter assume the defense of such Third-Party Claim upon notice to
the Indemnitee (but the cost and expense of such Indemnitee in defending such
Third-Party Claim incurred from the last day of the notice period under Section
4.5(c) until such date as the Indemnifying Party shall assume the defense of
such Third-Party Claim shall be paid by 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.
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(e) Notwithstanding anything to the contrary in this Section
4.5, Sections 4.5(b) - 4.5(d) shall not apply to any Third-Party Claim that is
or may be a Covered Specified Liability (a "SPECIFIED CLAIM"), which Specified
Claim shall be governed by this Section 4.5(e).
(i) Parent shall be entitled to participate in the defense,
compromise and settlement, at Parent's own expense and with Parent's own
counsel, of any Specified Claim; PROVIDED that in the event that each of
the Indemnitees who may be entitled to seek any indemnity from Parent
under Section 4.3 in respect of such Specified Claim shall elect not to
seek any such indemnity from Parent, each such Indemnitee shall provide
an executed written notice to Parent to such effect together with the
written notice required under Section 4.5(a) above, and upon receipt of
all such notices Parent's rights under this Section 4.5(e), and
obligation to indemnify such Indemnitees in respect of such Specified
Claim under Section 4.3, shall terminate in full. Within 30 days after
the receipt of notice from an Indemnitee in accordance with Section
4.5(a), Parent shall notify the Indemnitee of its election to
participate in the defense, compromise and settlement of such Specified
Claim. If Parent elects not to participate in the defense, compromise
and settlement of such Specified Claim, or fails to notify an Indemnitee
of its election as provided in the immediately preceding sentence, such
Indemnitee may proceed with the defense, compromise and settlement of
such Specified Claim otherwise in accordance with this Section 4.5(e);
PROVIDED, HOWEVER, Parent shall have the right at any time to elect to
participate in the defense, compromise and settlement, at Parent's own
expense and with Parent's own counsel, of such Specified Claim upon
notice to Indemnitee. Except as otherwise provided in the Insurance
Matters Agreement, all fees and expenses related to Parent's
participation in the defense, settlement and compromise of any Specified
Claim in accordance with this Section 4.5(e) shall be borne by Parent.
(ii) In addition to, and not in limitation of, Parent's right
to participate in the defense, compromise or settlement of any Specified
Claim pursuant to Section 4.5(e)(i), ▇▇▇▇▇ ▇▇▇▇▇▇▇ and such Indemnitee
shall, and shall cause their respective affiliates to, (1) cooperate
with Parent, including in connection with any investigation or other
inquiry, in respect of any Specified Claim, and (2) if requested by
Parent, promptly notify Parent of any material developments regarding,
or material communications to ▇▇▇▇▇ ▇▇▇▇▇▇▇ or such Indemnitee from any
Governmental Authority or third party with respect to, any Specified
Claim.
(iii) Notwithstanding anything herein to the contrary, neither
▇▇▇▇▇ ▇▇▇▇▇▇▇ nor any Indemnitee may settle or compromise any Specified
Claim in any respect without the express prior written consent of
Parent, which consent may not be unreasonably withheld. For purposes of
this Section 4.5(e)(iii), the parties recognize that Parent's liability
with respect to Specified Claims is limited to $17.5 million whereas
▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ liability with respect to Specified Claims is
potentially unlimited beyond $17.5 million. Accordingly, the withholding
of Parent's consent as to any particular Specified Claim shall not be
deemed reasonable if Parent does not give due consideration to the total
possible financial exposure arising out of such Specified Claim,
regardless of whether such exposure would be borne by Parent on the one
hand, or ▇▇▇▇▇ ▇▇▇▇▇▇▇ or any Indemnitee on the other hand. For example,
Parent must give due consideration to the total possible financial
exposure arising out of a Specified Claim even though in the event
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of an adverse outcome substantially all of the liability would be borne
by ▇▇▇▇▇ ▇▇▇▇▇▇▇ as opposed to Parent as a result of Parent's liability
for Specified Claims being limited to $17.5 million.
(f) The Indemnifying Party shall have the right to compromise
or settle a Third-Party Claim the defense of which it shall have assumed
pursuant to Section 4.5(b) or Section 4.5(c) and any such settlement or
compromise made or caused to be made of a Third-Party Claim in accordance with
this Article IV shall be binding on the Indemnitee, in the same manner as if a
final judgment or decree had been entered by a court of competent jurisdiction
in the amount of such settlement or compromise. Notwithstanding the foregoing
sentence, the Indemnifying Party shall not have the right to admit Liability on
behalf of the Indemnitee and shall not compromise or settle a Third-Party Claim
unless the compromise or settlement includes, as a part thereof, an
unconditional release of the Indemnitee from liability with respect to such
Third-Party Claim and does not require the Indemnitee to make any payment that
is not fully indemnified under this Agreement or to be subject to any
non-monetary remedy, in each case without the express prior consent of the
Indemnitee (not to be unreasonably withheld or delayed).
(g) The provisions of Sections 4.2 through 4.6 shall not apply
to Spin-Off Tax Liabilities, Income Tax Liabilities, Other Tax Liabilities and
Tax-Related Losses (as such terms are defined in the Tax Sharing Agreement),
which are governed exclusively by the Tax Sharing Agreement.
SECTION 4.6 ADDITIONAL MATTERS. (a) Any claim on account of a
Liability that 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 agreed 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, and at the cost and expense 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 at all practicable. 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.
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(d) ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall, and shall cause its other Indemnitees
to, and Parent shall, and shall cause its other Indemnitees to, make available
to each other, their counsel and other representatives, all information and
documents reasonably available to them that relate to any Third-Party Claim, and
otherwise cooperate as may reasonably be required in connection with the
investigation, defense and settlement thereof, subject to the terms and
conditions of a mutually acceptable joint defense agreement.
SECTION 4.7 REMEDIES CUMULATIVE. The remedies provided in this
Article IV 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; PROVIDED, that the procedures set forth in
Section 4.5 shall be the exclusive procedures governing any indemnity action
brought under this Agreement, except as otherwise specifically provided in any
of the Ancillary Agreements.
SECTION 4.8 SURVIVAL OF INDEMNITIES. The rights and
obligations of each of Parent and ▇▇▇▇▇ ▇▇▇▇▇▇▇ and their respective Indemnitees
under this Article IV shall survive the sale or other transfer by any Party of
any Assets or businesses or the assignment by it of any Liabilities.
ARTICLE V
CERTAIN ADDITIONAL COVENANTS
SECTION 5.1 NOTICES TO THIRD PARTIES. In addition to the
actions described in Section 5.2, the members of the Parent Group and the
members of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group shall cooperate to make all other filings and
to give notice to and obtain any Consent or Governmental Approval that is
required or advisable to consummate the transactions contemplated by this
Agreement and the Ancillary Agreements.
SECTION 5.2 LICENSES AND PERMITS. Each Party shall cause the
appropriate members of its Group to prepare and file with the appropriate
Governmental Authorities applications for the transfer or issuance, as may be
necessary or advisable in connection with the transactions contemplated by this
Agreement and the Ancillary Agreements, to its Group of all material
Governmental Approvals required for the members of its Group to operate its
Business after the Distribution Date. The members of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group and
the members of the Parent Group shall cooperate and use all reasonable efforts
to secure the transfer or issuance of the Governmental Approvals.
SECTION 5.3 INTERCOMPANY AGREEMENTS; INTERCOMPANY ACCOUNTS.
(a) All contracts, licenses, agreements, commitments or other arrangements,
formal or informal, between any member of the Parent Group, on the one hand, and
any member of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group, on the other hand, in existence as of the
Distribution Date, shall terminate effective as of the Distribution Date, except
(i) as specifically provided herein, for this Agreement or any Ancillary
Agreement (including each other agreement or instrument expressly contemplated
by this Agreement or any Ancillary Agreement to be entered into by any of the
Parties or any of the members of their respective Groups), (ii) for any
contracts, licenses, agreements, commitments or other arrangements to which any
Person other than the Parties or their respective wholly
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owned Subsidiaries is a party, or (iii) as otherwise agreed by the Parties in
writing on or after the date hereof and prior to the Distribution Date. From and
after the Distribution Date, no member of either Group shall have any rights
under any such contract, license, agreement, commitment or arrangement with any
member of the other Group, except as specifically provided herein or in the
Ancillary Agreements.
(b) Notwithstanding anything to the contrary in Section
5.3(a), after the Distribution Date, the Parties shall be obligated to pay only
those intercompany accounts between members of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group and
members of the Parent Group outstanding as of the Distribution Date that arose
in connection with transfers of goods and services in the ordinary course of
business, consistent with past practices (which the Parties shall use reasonable
efforts to settle prior to the Distribution Date) and any intercompany accounts
payable or accounts receivable accrued as of the Distribution Date that are
reflected in the books and records of the Parties or otherwise documented in
writing in accordance with past practices, and all other intercompany accounts
outstanding as of the Distribution Date shall be deemed to be settled as of the
Distribution Date, except as otherwise contemplated by this Agreement.
SECTION 5.4 GUARANTEE OBLIGATIONS. (a) Parent and ▇▇▇▇▇
▇▇▇▇▇▇▇ shall cooperate, and shall cause their respective Groups to cooperate,
to terminate, or to cause a member of the Parent Group to be substituted in all
respects for any member of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group in respect of, all
obligations of any member of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group under any Parent
Liabilities for which such member of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group may be liable, as
guarantor, original tenant, primary obligor or otherwise. If such a termination
or substitution is not effected by the Distribution Date, (i) Parent shall
indemnify and hold harmless the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Indemnitees for any Indemnifiable
Loss arising from or relating thereto, and (ii) without the prior written
consent of the Chief Financial Officer, Treasurer or any Assistant Treasurer of
▇▇▇▇▇ ▇▇▇▇▇▇▇, from and after the Distribution Date, Parent shall not, and shall
not permit any member of the Parent Group or any of its Affiliates to, renew or
extend the term of, increase its obligations under, or transfer to a third
party, any loan, lease, contract or other obligation for which any member of the
▇▇▇▇▇ ▇▇▇▇▇▇▇ Group is or may be liable unless all obligations of the ▇▇▇▇▇
▇▇▇▇▇▇▇ Group with respect thereto are thereupon terminated by documentation
reasonably satisfactory in form and substance to the Chief Financial Officer,
Treasurer or any Assistant Treasurer of ▇▇▇▇▇ ▇▇▇▇▇▇▇; PROVIDED, that the
limitations in clause (ii) shall not apply in the event that a member of the
Parent Group obtains a letter of credit from a financial institution reasonably
acceptable to ▇▇▇▇▇ ▇▇▇▇▇▇▇ and for the benefit of ▇▇▇▇▇ ▇▇▇▇▇▇▇ with respect to
such obligation of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group.
(b) Parent and ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall cooperate, and shall cause
their respective Groups to cooperate, to terminate, or to cause a member of the
▇▇▇▇▇ ▇▇▇▇▇▇▇ Group to be substituted in all respects for any member of the
Parent Group in respect of, all obligations of any member of the Parent Group
under any ▇▇▇▇▇ ▇▇▇▇▇▇▇ Liabilities for which such member of the Parent Group
may be liable, as guarantor, original tenant, primary obligor or otherwise. If
such a termination or substitution is not effected by the Distribution Date, (i)
▇▇▇▇▇ ▇▇▇▇▇▇▇ shall indemnify and hold harmless the Parent Indemnitees for any
Liabilities arising from or relating thereto, and (ii) without the prior written
consent of the Chief Financial Officer, Treasurer or any Assistant Treasurer of
Parent, from and after the Distribution Date, ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall not, and shall
not permit any member of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group to, renew or extend the term
of, increase
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its obligations under, or transfer to a third party, any loan, lease, contract
or other obligation for which any member of the Parent Group is or may be liable
unless all obligations of the Parent Group with respect thereto are thereupon
terminated by documentation reasonably satisfactory in form and substance to the
Chief Financial Officer, Treasurer or any Assistant Treasurer of Parent;
PROVIDED, that the limitations in clause (ii) shall not apply in the event that
a member of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group obtains a letter of credit from a financial
institution reasonably acceptable to ▇▇▇▇▇ ▇▇▇▇▇▇▇ and for the benefit of Parent
with respect to such obligation of the Parent Group.
SECTION 5.5 FURTHER ASSURANCES. (a) In addition to the actions
specifically provided for elsewhere in this Agreement and except as otherwise
provided in Section 2.5 with respect to commercially reasonable efforts, each of
the Parties shall use its reasonable best 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. Each
Party has appointed the individual(s) identified on SCHEDULE 5.5(A) opposite
such Party's name to act as its agent and attorney-in-fact with full right and
power to execute any instruments necessary to transfer any Asset and Liabilities
allocated to any other Person.
(b) Without limiting the foregoing, prior to, on and after the
Distribution Date, each Party shall cooperate with the other Party, and without
any further consideration, but at the expense of the requesting Party, 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
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 ▇▇▇▇▇ ▇▇▇▇▇▇▇ Assets and
the assignment and assumption of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Liabilities and the other
transactions contemplated hereby and thereby.
(c) On or prior to the Distribution Date, Parent and ▇▇▇▇▇
▇▇▇▇▇▇▇, in their respective capacities as direct and indirect stockholders of
their respective Subsidiaries, shall each properly ratify any actions that are
reasonably necessary or desirable to be taken by Parent and ▇▇▇▇▇ ▇▇▇▇▇▇▇, or
any of their respective Subsidiaries, as the case may be, to effectuate the
transactions contemplated by this Agreement. On or prior to the Distribution
Date, Parent and ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall take all actions as may be necessary to
approve the stock-based employee benefit plans of ▇▇▇▇▇ ▇▇▇▇▇▇▇ in order to
satisfy any applicable requirement, including Rule 16b-3 under the Exchange Act,
Section 162(m) of the Code and the rules and regulations of the NYSE to the
extent practicable prior to the Distribution.
(d) Each of the Parties shall, and shall cause the members of
their respective Groups to, at the request of the other, use its reasonable best
efforts to obtain, or 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,
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licenses and other obligations or Liabilities of any nature whatsoever that
constitute ▇▇▇▇▇ ▇▇▇▇▇▇▇ Liabilities, or to obtain in writing the unconditional
release of all parties to such arrangements other than any member of the ▇▇▇▇▇
▇▇▇▇▇▇▇ Group, so that, in any such case, ▇▇▇▇▇ ▇▇▇▇▇▇▇ and its Group will be
solely responsible for such Liabilities.
ARTICLE VI
ACCESS TO INFORMATION
SECTION 6.1 AGREEMENT FOR EXCHANGE OF INFORMATION. (a) Each of
Parent and ▇▇▇▇▇ ▇▇▇▇▇▇▇, on behalf of its respective Group, agrees to provide,
or cause to be provided, to the other Party, at any time before, on or after the
Distribution Date, as soon as reasonably practicable after written request
therefor from such other Party, any Information in the possession or under the
control of such respective Group that the requesting Party reasonably needs (i)
to comply with reporting, disclosure, filing or other requirements imposed on
the requesting Party (including under applicable securities laws) by a
Governmental Authority having jurisdiction over the requesting Party, (ii) for
use in any other judicial, regulatory, administrative or other proceeding or in
order to satisfy audit, accounting, claims, regulatory, litigation 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 reasonably determines that any such provision of Information could be
commercially detrimental to such Party or any member of its Group, violate any
law or agreement to which such Party or member of its Group is a party, or waive
any attorney-client privilege applicable to such Party or member of its Group,
the Parties shall take all reasonable measures to permit the compliance with the
obligations pursuant to this Section 6.1(a) in a manner that avoids any such
harm or consequence. Parent and ▇▇▇▇▇ ▇▇▇▇▇▇▇ intend that any transfer of
Information that would otherwise be within the attorney-client privilege shall
not operate as a waiver of any potentially applicable privilege.
(b) Each Party shall make its employees and facilities
available and accessible during normal business hours and on reasonable prior
notice to provide an explanation of any Information provided hereunder.
(c) Notwithstanding anything to the contrary in Section
6.1(a), after the Distribution Date, ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall provide, or cause to be
provided, to Parent in such form as Parent shall request, at no charge to
Parent, all financial and other data and Information as Parent determines
necessary or advisable in order to prepare Parent's financial statements and
reports or filings with any Governmental Authority.
SECTION 6.2 OWNERSHIP OF INFORMATION. Any Information owned by
one Group that is provided to a requesting Party pursuant to Section 6.1 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.
SECTION 6.3 COMPENSATION FOR PROVIDING INFORMATION. The Party
requesting such Information agrees to reimburse the other Party for the
reasonable out-of-pocket costs, if
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any, of creating, gathering and copying such Information, to the extent that
such costs are incurred for the benefit of the requesting Party by or on behalf
of such other Party's Group. Except as may be otherwise specifically provided
elsewhere in this Agreement or in any other Ancillary Agreement, such costs
shall be computed in accordance with the providing Party's standard methodology
and procedures.
SECTION 6.4 RECORD RETENTION. To facilitate the possible
exchange of Information pursuant to this Article VI 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 Parent as in effect
on the Distribution Date. No Party will destroy, or permit any of the members of
the Group to destroy, any Information that 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 such 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 Liabilities relating to, arising
out or resulting from any environmental law, such period shall be extended to
the expiration of the applicable statute of limitations (giving effect to any
extensions thereof).
SECTION 6.5 LIMITATION OF LIABILITY. No Party shall have any
liability to the other Party in the event that any Information exchanged or
provided pursuant to this Agreement that is an estimate or forecast, or which is
based on an estimate or forecast, is found to be inaccurate, in the absence of
willful misconduct or fraud by the Party providing such Information. No Party
shall have any liability to the other Party if any Information is destroyed
after using its reasonable best efforts in accordance with the provisions of
Section 6.4.
SECTION 6.6 OTHER AGREEMENTS PROVIDING FOR EXCHANGE OF
INFORMATION. . The rights and obligations granted under this Article VI 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. The provisions of Section 6.1 through 6.5 shall not apply
to any exchange of Information relating to Income Taxes or Other Taxes (as such
terms are defined in the Tax Sharing Agreement), which is governed exclusively
by the Tax Sharing Agreement.
SECTION 6.7 PRODUCTION OF WITNESSES; RECORDS; COOPERATION. (a)
After the Distribution Date, except in the case of an adversarial Action by one
Party against another Party (which shall be governed by such discovery rules as
may be applicable thereto), each Party shall use its reasonable best efforts to
make available to the 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 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
out-of-pocket costs and expenses (including allocated costs of in-house counsel
and other personnel) in connection therewith.
-27-
(b) If an Indemnifying Party or Parent chooses to defend or to
seek to compromise or settle any Third-Party Claim, Parent or ▇▇▇▇▇ ▇▇▇▇▇▇▇, as
the case may be, shall use its reasonable best efforts to make available to the
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 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 the foregoing, the Parties shall
cooperate and consult, and to cause each member of its respective Group to
cooperate and consult, to the extent reasonably necessary with respect to any
Actions.
(d) Without limiting any provision of this Section 6.7, 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.
(e) The obligation of the Parties to provide witnesses
pursuant to this Section 6.7 is intended to be interpreted in a manner so as to
facilitate cooperation and shall include the obligation to provide as witnesses,
directors, officers, employees, other personnel and agents without regard to
whether any such individual could assert a possible business conflict (subject
to the exception set forth in the first sentence of Section 6.7(a)).
(f) In connection with any matter contemplated by this Section
6.7, 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.
SECTION 6.8 CONFIDENTIALITY. (a) Subject to Section 6.9, each
of Parent and ▇▇▇▇▇ ▇▇▇▇▇▇▇, 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 Parent'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 (including Information in
its possession prior to any of the date hereof, the Contribution Effective Time
or the Distribution Date) 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) publicly
disclosed through no fault of such Party or any member of such Group or any of
-28-
their respective directors, officers, employees, agents, accountants, counsel
and other advisors and representatives, or (ii) later lawfully acquired from
other sources by such Party (or any member of such Party's Group) on a
non-public basis which sources are not themselves bound by a confidentiality
obligation.
(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 6.9. 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).
(c) Notwithstanding anything in this Agreement or any of the
Ancillary Agreements to the contrary, Parent and ▇▇▇▇▇ ▇▇▇▇▇▇▇ agree that each
Party (and each employee, representative or other agent of such Party) may
disclose to any and all persons, without limitation of any kind, the "tax
treatment" and "tax structure" (as those terms are defined in Treasury
Regulation Section 1.6011-4) of the transactions contemplated by this Agreement
or any of the Ancillary Agreements and all materials of any kind (including
opinions or other tax analyses) that are provided to such Person relating to
such tax treatment and tax structure. This authorization does not extend to
disclosure of any other information, including (without limitation) (i) the
identity of any Party (or any representative thereof), (ii) the existence and
status of any negotiations, or (iii) financial, business, legal or personal
information of or regarding a Party (or any of its representatives) to the
extent not related to the tax treatment or tax structure of such transactions.
SECTION 6.9 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 the other Party (or any member of the 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 if and to the extent required by such law (as so
advised by counsel) or by lawful process or such Governmental Authority;
PROVIDED, that the Person shall only disclose such portion of the Information so
required to be disclosed or provided.
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ARTICLE VII
NO REPRESENTATIONS OR WARRANTIES
SECTION 7.1 NO REPRESENTATIONS OR WARRANTIES. ▇▇▇▇▇ ▇▇▇▇▇▇▇,
on behalf of itself and all members of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group, understands and
agrees that, except as expressly set forth herein or in any other Ancillary
Agreement, (a) no member of the Parent Group or any other Person is, in this
Agreement or in any other agreement or document, making any representation or
warranty of any kind whatsoever, express or implied, to ▇▇▇▇▇ ▇▇▇▇▇▇▇ or any
member of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group in any way with respect to any of the
transactions contemplated hereby or the business, assets, condition or prospects
(financial or otherwise) of, or any other matter involving, the Assets,
Liabilities or businesses of Parent, any member of the Parent Group, ▇▇▇▇▇
▇▇▇▇▇▇▇ or any member of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group, any ▇▇▇▇▇ ▇▇▇▇▇▇▇ Assets, any
▇▇▇▇▇ ▇▇▇▇▇▇▇ Liabilities or the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Business, (b) ▇▇▇▇▇ ▇▇▇▇▇▇▇ and
each member of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group shall take all of the ▇▇▇▇▇ ▇▇▇▇▇▇▇
Assets, the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Business and ▇▇▇▇▇ ▇▇▇▇▇▇▇ Liabilities on an "as is,
where is" basis, and all implied warranties of merchantability, fitness for a
specific purpose or otherwise are hereby expressly disclaimed, and (c) none of
Parent or any members of the Parent Group or any other Person makes any
representation or warranty with respect to the Separation, the Merger, the
Contribution, the Distributions or the entering into of this Agreement or the
Ancillary Agreements or the transactions contemplated hereby and thereby. Except
as expressly set forth herein or in any other Ancillary Agreement, ▇▇▇▇▇ ▇▇▇▇▇▇▇
and each member of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group shall bear the economic and legal
risk that the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Assets shall prove to be insufficient or that the
title of any member of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group to any ▇▇▇▇▇ ▇▇▇▇▇▇▇ Assets shall
be other than good and marketable and free from encumbrances.
ARTICLE VIII
TERMINATION
SECTION 8.1 TERMINATION. This Agreement may be terminated by
Parent in its sole discretion at any time prior to the consummation of the
Distribution.
SECTION 8.2 EFFECT OF TERMINATION. In the event of any
termination of this Agreement prior to consummation of the Distribution, no
Party (or any member of its Group or any of its or its Group's directors or
officers) shall have any Liability or further obligation to the other Party.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 COMPLETE AGREEMENT; REPRESENTATIONS. (a) This
Agreement, the Exhibits and Schedules hereto and the Ancillary Agreements shall
constitute the entire agreement between the Parties with respect to the subject
matter hereof and shall supersede all previous negotiations, commitments and
writings with respect to such subject matter.
-30-
(b) Parent represents on behalf of itself and each other
member of the Parent Group and ▇▇▇▇▇ ▇▇▇▇▇▇▇ represents on behalf of itself and
each other member of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ 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 Agreement (collectively, the
"TRANSACTION AGREEMENTS") to which it is a party and to consummate the
transactions contemplated by the Transaction Agreements to which it is a
party; and
(ii) this Agreement has been duly executed and delivered by
such Person (if such Person is a Party) and constitutes a valid and
binding agreement of it enforceable in accordance with the terms thereof
(assuming the due execution and delivery thereof by the other Party),
and each of the other Transaction Agreements to which it will be a party
will be duly executed and delivered by it and will constitute a valid
and binding agreement of it enforceable in accordance with the terms
thereof (assuming the due execution and delivery thereof by the other
party or parties to such Transaction Agreement).
SECTION 9.2 EXPENSES. Except as expressly set forth in this
Agreement or in any Ancillary Agreement, and regardless whether or not the
Separation or the Distribution is consummated, all third-party fees, costs and
expenses paid or incurred in connection with the transactions contemplated by
this Agreement and the Ancillary Agreements will be paid by the Party incurring
such fees, costs or expenses. Notwithstanding the foregoing, Parent shall
promptly reimburse ▇▇▇▇▇ ▇▇▇▇▇▇▇ for all of its out-of-pocket third-party fees,
costs and expenses incurred directly in connection with the Separation or the
Distribution, including third-party fees, costs and expenses related to the
Registration Statement, to the extent incurred prior to the Distribution or, if
incurred thereafter, to the extent such third-party fees, costs and expenses,
including the amount thereof, were approved by Parent in writing prior to the
Distribution.
SECTION 9.3 GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware (other than
the laws regarding choice of laws and conflicts of laws that would apply the
substantive laws of any other jurisdiction) as to all matters, including matters
of validity, construction, effect, performance and remedies.
SECTION 9.4 NOTICES. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be deemed given
to a Party when (a) delivered to the appropriate address by hand or by
nationally recognized overnight courier service (costs prepaid); (b) sent by
facsimile with confirmation of transmission by the transmitting equipment; or
(c) received or rejected by the addressee, if sent by certified mail, return
receipt requested, in each case to the following addresses and facsimile numbers
and marked to the attention of the person (by name or title) designated below
(or to such other address, facsimile number or person as a Party may designate
by notice to the other Party):
-31-
If to Parent or any member of the Parent Group:
U.S. Bancorp
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to ▇▇▇▇▇ ▇▇▇▇▇▇▇ or any member of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group:
▇▇▇▇▇ ▇▇▇▇▇▇▇ Companies
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 9.5 AMENDMENT, MODIFICATION OR WAIVER. This Agreement
may be amended, modified, waived or supplemented, in whole or in part, only by a
written agreement signed by all of the Parties. The waiver by such Parties of
any breach of this Agreement shall not be construed as a waiver of any
subsequent breach.
SECTION 9.6 SUCCESSORS AND ASSIGNS; NO THIRD-PARTY
BENEFICIARIES. (a) This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the Parties and their successors and
permitted assigns, but neither this Agreement nor any of the rights, interests
and obligations hereunder shall be assigned or otherwise transferred, in whole
or in part, by any Party without the prior written consent of the other Party.
(b) Except for the provisions of Sections 4.2 through 4.8
relating to indemnification, which are also for the benefit of the Indemnitees,
this Agreement is solely for the benefit of the Parties and is not intended to
confer upon any other Persons any rights or remedies hereunder.
SECTION 9.7 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 9.8 NEGOTIATION. In the event of any dispute or
disagreement between any member of the Parent Group, on the one hand, and any
member of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Group, on the other hand, arising out of or in
connection with this Agreement or any Ancillary Agreement (including with
respect to the interpretation or performance of any provision thereof), the
dispute or disagreement, upon written request of Parent or ▇▇▇▇▇ ▇▇▇▇▇▇▇, as
applicable, shall be referred to representatives of the Parties for decision,
Parent being represented by its Chief Financial Officer or General Counsel and
▇▇▇▇▇ ▇▇▇▇▇▇▇ being represented by its Chief Financial Officer or General
Counsel. Such representatives of the Parties shall promptly meet in a good faith
effort to resolve the dispute or disagreement or determine a means to resolve
the dispute or disagreement. If such representatives do not agree upon a
decision within 30 days after reference of the matter to them, each of Parent
and ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall be free to exercise all rights and remedies available to
them under this Agreement or the applicable Ancillary Agreement.
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SECTION 9.9 SPECIFIC PERFORMANCE. From and after the
Distribution, 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 Ancillary
Agreement, the Parties agree that the party or parties to this Agreement or such
Ancillary Agreement who are or are to be thereby aggrieved shall have the right
to specific performance and injunctive or other equitable relief of its or their
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, from and after the
Distribution, the remedies at law for any breach or threatened breach of this
Agreement or any Ancillary Agreement, including monetary damages, are inadequate
compensation for any loss, that any defense in any action for specific
performance that a remedy at law would be adequate is hereby waived, and that
any requirements for the securing or posting of any bond with such remedy are
hereby waived.
SECTION 9.10 MINNESOTA FORUM. Each of the Parties agrees that,
notwithstanding anything herein or in any of the Ancillary Agreements, all
actions or proceedings arising out of or in connection with this Agreement or
any Ancillary Agreement, or for recognition and enforcement of any judgment
arising out of or in connection with the foregoing agreements, shall be tried
and determined exclusively in the state or federal courts in the State of
Minnesota, and each of the Parties hereby irrevocably submits with regard to any
such action or proceeding for itself and in respect to its property, generally
and unconditionally, to the exclusive jurisdiction of the aforesaid courts. Each
of the Parties hereby expressly waives any right it may have to assert, and
agrees not to assert, by way of motion, as a defense, counterclaim or otherwise,
in any such action or proceeding: (1) any claim that it is not subject to
personal jurisdiction in the aforesaid courts for any reason; (2) any claim that
it or its property is exempt or immune from jurisdiction of any such court or
from any legal process commenced in such courts; and (3) any claim that (i) any
of the aforesaid courts is an inconvenient or inappropriate forum for such
action or proceeding, (ii) venue is not proper in any of the aforesaid courts
and (iii) this Agreement or any such Ancillary Agreement, or the subject matter
hereof or thereof, may not be enforced in or by any of the aforesaid courts.
SECTION 9.11 INTERPRETATION; CONFLICT WITH ANCILLARY
AGREEMENTS. The Article and Section headings contained in this Agreement are
solely for the purpose of reference, are not part of the agreement of the
Parties and shall not in any way affect the meaning or interpretation of this
Agreement. The provisions of this Agreement shall govern in the event of any
conflict between any provision of this Agreement and that of any Ancillary
Agreement.
SECTION 9.12 SEVERABILITY. If any provision of this 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 the application of such provision to Persons or
circumstances 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 is not affected in any manner
adverse to any Party.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to
be duly executed as of the date first above written.
U.S. BANCORP
By:_______________________________
Name:
Title:
▇▇▇▇▇ ▇▇▇▇▇▇▇ COMPANIES
By:_______________________________
Name:
Title:
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