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EXHIBIT 2.1
AGREEMENT AND PLAN OF DISTRIBUTION
BY AND BETWEEN
NATIONAL SERVICE INDUSTRIES, INC.
AND
L & C SPINCO, INC.
DATED AS OF , 2001
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TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS..........................................................................................1
Section 1.1. General.........................................................................1
Section 1.2. Reference; Interpretation......................................................12
ARTICLE II DISTRIBUTION AND OTHER TRANSACTIONS; CERTAIN COVENANTS.............................................12
Section 2.1. The Distribution and Other Transactions........................................12
Section 2.2. Assumption and Satisfaction of Liabilities.....................................14
Section 2.3. Resignations...................................................................15
Section 2.4. Limited Representations or Warranties..........................................15
Section 2.5. Removal of Parent Group from Certain Guarantees; Releases of Parent Group
From Liabilities...............................................................15
Section 2.6. Removal of SpinCo from Certain Guarantees; Releases of SpinCo from
Liabilities....................................................................16
Section 2.7. Witness Services...............................................................17
Section 2.8. Conveyancing and Assumption Instruments........................................17
Section 2.9. Ancillary Agreements...........................................................17
Section 2.10. Corporate Names; Trademarks....................................................17
Section 2.11. Post-Distribution Remittances..................................................18
Section 2.12. Non-Solicitation...............................................................18
Section 2.13. Further Assurances.............................................................19
ARTICLE III INDEMNIFICATION...................................................................................20
Section 3.1. Indemnification by Parent......................................................20
Section 3.2. Indemnification by SpinCo......................................................20
Section 3.3. Procedures for Indemnification.................................................20
Section 3.4. Indemnification Payments.......................................................22
ARTICLE IV ACCESS TO INFORMATION..............................................................................22
Section 4.1. Provision of Corporate Records.................................................22
Section 4.2. Access to Information..........................................................23
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Section 4.3. Reimbursement; Other Matters...................................................23
Section 4.4. Confidentiality................................................................23
Section 4.5. Privileged Matters.............................................................24
Section 4.6. Ownership of Information.......................................................25
Section 4.7. Retention of Records...........................................................25
Section 4.8. Limitation of Liability; Release...............................................26
Section 4.9. Other Agreements Providing for Exchange of Information.........................26
ARTICLE V DISPUTE RESOLUTION..................................................................................27
Section 5.1. Negotiation....................................................................27
Section 5.2. Mediation......................................................................27
Section 5.3. Arbitration....................................................................27
Section 5.4. Continuity of Service and Performance..........................................28
Section 5.5. Other Remedies.................................................................28
ARTICLE VI INSURANCE..........................................................................................28
Section 6.1. Policies and Rights Included Within Assets.....................................28
Section 6.2. Post-Distribution Date Claims..................................................29
Section 6.3. Administration; Other Matters..................................................29
Section 6.4. Agreement for Waiver of Conflict and Shared Defense............................31
Section 6.5. Cooperation....................................................................31
ARTICLE VII MISCELLANEOUS.....................................................................................31
Section 7.1. Complete Agreement; Construction...............................................31
Section 7.2. Ancillary Agreements...........................................................32
Section 7.3. Counterparts...................................................................32
Section 7.4. Survival of Agreements.........................................................32
Section 7.5. Distribution Expenses..........................................................32
Section 7.6. Notices........................................................................32
Section 7.7. Waivers........................................................................33
Section 7.8. Amendments.....................................................................34
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Section 7.9. Successors and Assigns.........................................................34
Section 7.10. Termination....................................................................34
Section 7.11. Subsidiaries...................................................................34
Section 7.12. Third Party Beneficiaries......................................................34
Section 7.13. Title and Headings.............................................................34
Section 7.14. Exhibits and Schedules.........................................................34
Section 7.15. Governing Law..................................................................34
Section 7.16. Consent to Jurisdiction........................................................34
Section 7.17. Severability...................................................................35
Section 7.18. Consolidation, Merger, Etc.....................................................35
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EXHIBITS
Exhibit Description of Exhibit
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Exhibit A Ancillary Workers' Compensation Agreement
Exhibit B Limited Warranty Deed
Exhibit C Employee Benefits Agreement
Exhibit D Lease Agreement (Parent Corporate Headquarters)
Exhibit E Tax Disaffiliation Agreement
Exhibit F Transition Services Agreement
SCHEDULES
Schedule Description of Schedule
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Schedule 1.1(p) Corporate Transactions
Schedule 1.1(pp) Parent Businesses/Discontinued Parent Businesses
Schedule 1.1(tt)(ii) Specific Parent Liabilities
Schedule 1.1(tt)(iii) Parent Business Litigation
Schedule 1.1(uu) Parent Policies
Schedule 1.1(vv) Parent Shared Policies
Schedule 1.1(ww) Parent Subsidiaries
Schedule 1.1(ggg) SpinCo Balance Sheet
Schedule 1.1(hhh) SpinCo Businesses
Schedule 1.1(lll)(ii) Specific SpinCo Liabilities
Schedule 1.1(lll)(iv)(A) Specific SpinCo Liabilities
Schedule 1.1(lll)(iv)(B) SpinCo Business Litigation
Schedule 1.1(mmm) SpinCo Policies
Schedule 1.1(ooo) SpinCo Subsidiaries
Schedule 2.1(f) Consents
Schedule 2.1(g) Registration Statement/Information Statement
Liabilities (Part I and Part II)
Schedule 2.5(a) Guarantees (from which Parent Group Members are to be
Released)
Schedule 2.6(a) Guarantees (from which SpinCo Group Members are to be
Released)
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AGREEMENT AND PLAN OF DISTRIBUTION
This AGREEMENT AND PLAN OF DISTRIBUTION (this "Agreement"), dated as of
_____________, 2001, by and between National Service Industries, Inc., a
Delaware corporation ("Parent"), and L & C Spinco, Inc., a Delaware corporation
("SpinCo");
WHEREAS, SpinCo originally was a wholly owned subsidiary of NSI
Enterprises, Inc., a California corporation ("Enterprises"), which is a wholly
owned subsidiary of Parent;
WHEREAS, on _____________, 2001, SpinCo became a wholly owned
subsidiary of Parent;
WHEREAS, Parent Group (as defined herein) currently conducts the Parent
Business (as defined herein), owns the Parent Assets (as defined herein) and is
subject to the Parent Liabilities (as defined herein);
WHEREAS, as of the Effective Time SpinCo Group (as defined herein) will
conduct the SpinCo Business (as defined herein), will own the SpinCo Assets (as
defined herein) and will be subject to the SpinCo Liabilities (as defined
herein);
WHEREAS, the Board of Directors of Parent has authorized the
distribution by Parent to the holders of the issued and outstanding shares of
common stock, par value $1.00 per share, of Parent (the "Parent Common Stock")
as of the record date of 100% of the issued and outstanding shares of common
stock, par value $0.01 per share, of SpinCo (the "SpinCo Common Stock"),
together with the associated preferred stock purchase rights (each share of such
stock, together with the associated preferred stock purchase right, a "SpinCo
Share"), on the basis of one (1) SpinCo Share for each share of Parent Common
Stock (the "Distribution"); and
WHEREAS, the parties hereto have determined to set forth the principal
corporate and other transactions required to effect the Distribution and to set
forth other agreements that will govern certain other matters prior to and
following the Distribution.
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. GENERAL. Unless otherwise defined herein or unless the
context otherwise requires, as used in this Agreement, the following terms shall
have the following meanings:
(a) "Action" shall mean any demand, action, suit, arbitration,
inquiry, proceeding or investigation by or before any Governmental Authority or
any arbitration or mediation tribunal.
(b) "Affiliate" shall mean, when used with respect to any
specified Person, a Person that directly or indirectly controls, is controlled
by, or is under common control with such specified Person; provided, however,
that for purposes of this Agreement, any Person who was a member of both Groups
prior to the Distribution shall be deemed to be an Affiliate only of the Group
of which such Person is a member following the Distribution. 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 Person, whether
through the ownership of voting securities or other interests, by contract or
otherwise. Any contrary provision of this Agreement notwithstanding, neither
Parent nor any Parent Subsidiaries shall be deemed to be an Affiliate of SpinCo,
and neither SpinCo nor any SpinCo Subsidiaries shall be deemed to be an
Affiliate of Parent.
(c) "Agent" shall have the meaning set forth in Section 2.1(b) of
this Agreement.
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(d) "Agreement" shall mean this Agreement.
(e) "Agreement Disputes" shall have the meaning set forth in
Section 5.1 of this Agreement.
(f) "Ancillary Agreements" shall mean all of the written
agreements, instruments, understandings, assignments or other arrangements
(other than this Agreement) entered into by the parties hereto or any other
member of their respective Groups in connection with the transactions
contemplated hereby, including the Conveyancing and Assumption Instruments, the
Employee Benefits Agreement, the Tax Disaffiliation Agreement, the Transition
Services Agreement, the Ancillary Workers' Compensation Agreement, Leases and
the Subleases.
(g) "Ancillary Workers' Compensation Agreement" shall mean the
Ancillary Workers Compensation Agreement by and between Parent and SpinCo, which
agreement shall be entered into prior to or on the Distribution Date in the form
attached hereto as Exhibit A.
(h) "Applicable Rate" shall mean the rate of interest per annum
announced from time to time by Wachovia Bank of Georgia, N.A., as its prime
lending rate, plus four percent (4%).
(i) "Assets" shall mean assets, properties and rights, wherever
located (including in the possession of vendors or other third parties or
elsewhere), whether real, personal or mixed, tangible, intangible or contingent,
in each case whether or not recorded or reflected or required to be recorded or
reflected on the books and records or financial statements of any Person,
including the following:
(i) all accounting and other books, records and files,
whether in paper, microfilm, microfiche, computer tape or disc,
magnetic tape or any other form;
(ii) all apparatus, computers and other electronic data
processing equipment, fixtures, machinery, equipment, furniture, office
equipment, automobiles, trucks, other transportation equipment, special
and general tools, test devices, prototypes and models and other
tangible personal property;
(iii) all inventories of materials, parts, raw materials,
supplies, work-in-process and finished goods and products;
(iv) all interests in real property of whatever nature,
including easements, whether as owner, mortgagee or holder of a
security interest in real property, lessor, sublessor, lessee,
sublessee or otherwise;
(v) all interests in any capital stock or other equity
interests of any Subsidiary or any other Person; all bonds, notes,
debentures or other securities issued by any Subsidiary or any other
Person; all loans, advances or other extensions of credit or capital
contributions to any Subsidiary or any other Person; and all other
investments in securities of any Person;
(vi) all customer contracts; service, maintenance, supply,
vendor, consulting, transportation and consignment agreements;
collective bargaining agreements; employment agreements; license
agreements; leases and subleases of personal property; open purchase
orders for raw materials, supplies, parts or services; unfilled orders
for the manufacture and sale of products; and other contracts,
agreements or commitments (collectively, "Contracts");
(vii) all deposits, letters of credit and performance and
surety bonds;
(viii) all written technical information, data,
specifications, research and development information, engineering
drawings, operating and maintenance manuals, and materials and analyses
prepared by consultants and other Third Parties;
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(ix) all domestic and foreign patents, copyrights, trade
names, trademarks, service marks, logos and registrations and
applications for any of the foregoing, together with the goodwill of
the business symbolized by any of the foregoing; mask works, trade
secrets, inventions, data bases, and other proprietary and confidential
information; and licenses from Third Parties granting the right to use
any of the foregoing;
(x) all computer applications, programs and other
software, including operating software, network software, firmware,
middleware, design software, design tools, systems documentation and
instructions;
(xi) all cost information, sales and pricing data,
customer prospect lists, vendor records, customer and vendor lists,
customer and vendor data, correspondence and lists, product literature,
artwork, design, development and manufacturing files, vendor and
customer drawings, formulations and specifications, quality records and
reports and other books, records, studies, surveys, reports, plans and
documents;
(xii) all prepaid expenses, trade accounts and other
accounts and notes receivable;
(xiii) all rights, claims, demands, choses in action and
similar rights relating to the foregoing, whether accrued or
contingent;
(xiv) all rights under insurance policies and all rights in
the nature of insurance, indemnification or contribution;
(xv) all licenses, permits, approvals and authorizations
which have been issued by any Governmental Authority;
(xvi) cash or cash equivalents, bank accounts, lock boxes
and other deposit arrangements; and
(xvii) interest rate, currency, commodity or other swap,
collar, cap or other hedging or similar agreements or arrangements.
(j) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which commercial banking institutions located in The City of
New York are authorized or obligated by law or executive order to close.
(k) "Claims Administration" shall mean the processing of claims
made under the Parent Shared Policies, including the reporting of claims to the
insurance carriers, management and defense of claims and providing for
appropriate releases upon settlement of claims.
(l) "Code" shall mean the Internal Revenue Code of 1986, as
amended, and the Treasury regulations promulgated thereunder, including any
successor legislation.
(m) "Commission" shall mean the Securities and Exchange
Commission.
(n) "Contracts" shall have the meaning set forth in the definition
of Assets.
(o) "Conveyancing and Assumption Instruments" shall mean,
collectively, the various agreements, instruments and other documents to be or
heretofore entered into to effect the Corporate Transactions or otherwise to
effect the transfer of Assets and the assumption of Liabilities in the manner
contemplated by this Agreement, the Ancillary Agreements and the Corporate
Transactions, including a limited warranty deed in the form attached hereto as
Exhibit B.
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(p) "Corporate Transactions" shall mean, collectively, (a) each of
the mergers, transfers, conveyances, contributions, assignments, dividends,
assumptions, redemptions, purchases and other transactions described and set
forth on Schedule 1.1(p) attached hereto, and (b) such other mergers, transfers,
conveyances, contributions, assignments, dividends, assumptions, redemptions,
purchases and other transactions that may be appropriate or required to be
accomplished, effected or consummated by Parent or SpinCo or any of their
respective Subsidiaries and Affiliates so that: (i) the SpinCo Assets, SpinCo
Liabilities and SpinCo Business shall be owned, directly or indirectly, by
SpinCo after giving effect to the Distribution; and (ii) the Parent Assets,
Parent Liabilities and Parent Business shall be owned, directly or indirectly,
by Parent after giving effect to the Distribution.
(q) "Distribution" shall have the meaning set forth in the
recitals to this Agreement.
(r) "Distribution Date" shall mean such date as may be determined
by the Board of Directors of Parent, or such committee of such Board of
Directors as shall be designated by the Board of Directors of Parent, as the
date as of which the Distribution shall be effected.
(s) "Distribution Record Date" shall mean such date as may be
determined by the Board of Directors of Parent, or such committee of such Board
of Directors as shall be designated by the Board of Directors of Parent, as the
record date for the Distribution.
(t) "Effective Time" shall mean 11:59 p.m., New York City time, on
the Distribution Date.
(u) "Employee Benefits Agreement" shall mean the Employee Benefits
Agreement by and between Parent and SpinCo, which agreement shall be entered
into prior to or on the Distribution Date in the form attached hereto as Exhibit
C.
(v) "Environmental Laws" shall mean any and all federal, state,
local and foreign statutes, laws, regulations, ordinances, rules, principles of
common law, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or other governmental restrictions (including
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. 9601, et seq.), whether now or hereafter in existence, relating to the
environment, natural resources, human health or safety, endangered or threatened
species of fish, wildlife and plants, or to emissions, discharges or releases of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes into the environment
(including indoor or outdoor air, surface water, groundwater and surface or
subsurface soils), or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes or the investigation,
cleanup or other remediation thereof.
(w) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, together with the rules and regulations promulgated thereunder.
(x) "Governmental Authority" shall mean any federal, state, local,
foreign or international court, government, department, commission, board,
bureau, agency, official, the NYSE or other regulatory, administrative or
governmental authority.
(y) "Group" shall mean with respect to Parent, the Parent Group
and, with respect to SpinCo, the SpinCo Group.
(z) "Indemnifiable Losses" shall mean any and all Losses suffered
by an Indemnitee.
(aa) "Indemnifying Party" shall have the meaning set forth in
Section 3.3 of this Agreement.
(bb) "Indemnitee" shall have the meaning set forth in Section 3.3
of this Agreement.
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(cc) "Information Statement" shall mean the Information Statement
filed with the Commission as part of the Registration Statement and mailed to
the holders of shares of Parent Common Stock in connection with the
Distribution, including any amendments or supplements thereto.
(dd) "Insurance Administration" shall mean, with respect to each
Parent Shared Policy, (i) the accounting for premiums, retrospectively rated
premiums, defense costs, indemnity payments, deductibles and retentions, as
appropriate, under the terms and conditions of each of the Parent Shared
Policies; (ii) the reporting to excess insurance carriers of any losses or
claims which may cause the applicable limits of any Parent Shared Policy to be
exceeded; (iii) the distribution of Insurance Proceeds as contemplated by this
Agreement; and (iv) any and all other actions reasonably necessary for the
administration of the Parent Shared Policies.
(ee) "Insurance Proceeds" shall mean those monies (i) received by
an insured from an insurance carrier or (ii) paid by an insurance carrier on
behalf of an insured.
(ff) "Insured Claims" shall mean those Liabilities that,
individually or in the aggregate, are covered within the terms and conditions of
any of the Parent Shared Policies, whether or not subject to deductibles,
self-insured retentions, co-insurance, uncollectibility or retrospectively rated
premium adjustments.
(gg) "IRS" shall mean the Internal Revenue Service.
(hh) "Law" shall mean all laws, statutes and ordinances and all
regulations, rules and other pronouncements of Governmental Authorities having
the effect of law of the United States, any foreign country, or any domestic or
foreign state, province, commonwealth, city, country, municipality, territory,
protectorate, possession or similar instrumentality, or any Governmental
Authority thereof.
(ii) "Leases" shall mean the leases by and between members of the
Parent Group and members of the SpinCo Group, which leases shall be entered into
prior to or on the Distribution Date in such form as is agreed to by Parent and
SpinCo, including the lease agreement, in the form attached hereto as Exhibit D,
pursuant to which Parent will lease to SpinCo a portion of Parent's corporate
headquarters.
(jj) "Liabilities" shall mean any and all debts, liabilities,
obligations, responsibilities, response actions, losses, damages (whether
compensatory, punitive or treble), fines, penalties and sanctions, absolute or
contingent, matured or unmatured, liquidated or unliquidated, foreseen or
unforeseen, joint, several or individual, asserted or unasserted, accrued or
unaccrued, known or unknown, whenever arising, including those arising under or
in connection with any Law (including any Environmental Law), Action, threatened
Action, order or consent decree of any Governmental Authority, or any award of
any arbitration tribunal, and those arising under any contract, guarantee,
commitment or undertaking, whether sought to be imposed by a Governmental
Authority, private party, or party to this Agreement, whether based in contract,
tort, implied or express warranty, strict liability, criminal or civil statute,
or otherwise, and including any costs, expenses, interest, attorneys' fees,
disbursements and expenses of counsel, expert and consulting fees and costs
related thereto or to the investigation or defense thereof.
(kk) "Losses" shall mean all losses, liabilities, damages, claims,
demands, judgments or settlements of any nature or kind, known or unknown,
fixed, accrued, absolute or contingent, liquidated or unliquidated, including
all reasonable costs and expenses (legal, accounting or otherwise as such costs
are incurred) relating thereto.
(ll) "Notices" shall have the meaning set forth in Section 7.6 of
this Agreement.
(mm) "NYSE" shall mean the New York Stock Exchange, Inc.
(nn) "Parent" shall have the meaning set forth in the preamble to
this Agreement.
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(oo) "Parent Assets" shall mean, collectively, all the Assets owned
or held by Parent or any Parent Subsidiary immediately after giving effect to
the Corporate Transactions, except the SpinCo Assets.
(pp) "Parent Business" shall mean each and every business conducted
at any time by Parent Group (including those businesses set forth on Schedule
1.1(pp)), including each and every business conducted in the past and each and
every business which has been discontinued, sold or transferred (including those
businesses set forth on Schedule 1.1(pp)), but excluding the SpinCo Business.
(qq) "Parent Common Stock" shall have the meaning set forth in the
recitals to this Agreement.
(rr) "Parent Group" shall mean Parent and each Person (other than
any member of the SpinCo Group) that is a Parent Subsidiary.
(ss) "Parent Indemnitee" shall mean:
(i) Parent and each Affiliate thereof after giving effect
to the Corporate Transactions and the Distribution; and
(ii) each of the respective past, present and future
Representatives of any of the entities described in the immediately
preceding clause (i) and each of the heirs, executors, successors and
assigns of any of such Representatives, except in the case of clauses
(i) and (ii), the SpinCo Indemnitees.
(tt) "Parent Liabilities" shall mean:
(i) any and all Liabilities that are expressly
contemplated by this Agreement or any Ancillary Agreement (or the
Schedules hereto or thereto) as Liabilities to be retained or assumed
by Parent or any member of the Parent Group, and all agreements,
obligations and Liabilities of any member of the Parent Group under
this Agreement or any of the Ancillary Agreements;
(ii) all Liabilities set forth on Schedule 1.1(tt)(ii);
and
(iii) all Liabilities (other than Taxes and any
employee-related Liabilities which are specifically covered by the Tax
Disaffiliation Agreement and the Employee Benefits Agreement,
respectively) primarily relating to, arising out of or resulting from:
(A) the operation of the Parent Business, as
conducted at any time prior to, on or after the Distribution
Date (including any Liability relating to, arising out of or
resulting from any act or failure to act by any Representative
(whether or not such act or failure to act is or was within
such Person's authority));
(B) the operation of any business conducted by Parent
or any Parent Subsidiary at any time after the Distribution
Date (including any Liability relating to, arising out of or
resulting from any act or failure to act by any Representative
(whether or not such act or failure to act is or was within
such Person's authority)); or
(C) any Parent Assets, whether arising before, on or
after the Distribution Date.
Notwithstanding the foregoing, the Parent Liabilities shall not
include: (y) any Liabilities that are expressly contemplated by this Agreement
or any Ancillary Agreement (or the Schedules hereto or thereto) as Liabilities
to be retained or assumed by SpinCo or any member of the SpinCo Group; or (z)
all agreements and obligations of any member of the SpinCo Group under this
Agreement or any of the Ancillary Agreements. Any contrary provision of this
Agreement notwithstanding, any Liabilities or Losses in respect of any Action
relating to the Parent Business, including the matters set forth on Schedule
1.1(tt)(iii), shall constitute Parent Liabilities.
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(uu) "Parent Policies" shall mean all Policies, current or past,
that are owned or maintained by or on behalf of Parent or any Parent Subsidiary
that do not provide coverage to or with respect to the SpinCo Assets or the
SpinCo Business, or any part thereof, including those Policies set forth on
Schedule 1.1(uu).
(vv) "Parent Shared Policies" shall mean all Policies, current or
past, which are owned or maintained by or on behalf of Parent or any Parent
Subsidiary which provide coverage to or with respect to the SpinCo Group, the
SpinCo Assets or the SpinCo Business, or any part thereof, other than SpinCo
Policies, including those Policies set forth on Schedule 1.1(vv).
(ww) "Parent Subsidiaries" shall mean all of the Subsidiaries of
Parent other than SpinCo and the SpinCo Subsidiaries. The Parent Subsidiaries
shall include the entities set forth on Schedule 1.1(ww).
(xx) "Person" shall mean any natural person, corporation, business
trust, limited liability company, joint venture, association, company,
partnership or government, or any agency or political subdivision thereof.
(yy) "Policies" shall mean insurance policies and insurance
contracts of any kind (other than life and benefits policies or contracts),
including primary, excess and umbrella policies, master comprehensive general
liability policies, director and officer liability, fiduciary liability,
automobile, aircraft, property and casualty, workers' compensation and employee
dishonesty insurance policies, bonds and self-insurance and captive insurance
company arrangements, together with the rights, benefits and privileges
thereunder.
(zz) "Records" shall have the meaning set forth in Section 4.1 of
this Agreement.
(aaa) "Registration Statement" shall mean the registration statement
on Form 10 to effect the registration of the SpinCo Common Stock pursuant to the
Exchange Act.
(bbb) "Representative" shall mean, with respect to any Person, any
of such Person's directors, officers, members, employees, agents, consultants,
advisors, accountants, attorneys and representatives.
(ccc) "Rules" shall have the meaning set forth in Section 5.3 of
this Agreement.
(ddd) "Securities Act" shall mean the Securities Act of 1933, as
amended, together with the rules and regulations promulgated thereunder.
(eee) "SpinCo" shall have the meaning set forth in the preamble to
this Agreement.
(fff) "SpinCo Assets" shall mean collectively, all the Assets that
are owned by SpinCo or any SpinCo Subsidiaries as of the Effective Time and
after giving effect to the Corporate Transactions, including:
(i) the capital stock of the SpinCo Subsidiaries;
(ii) all of the Assets reflected on the SpinCo Balance
Sheet or the accounting records supporting such balance sheet;
(iii) all of the Assets expressly allocated to SpinCo or
any of the SpinCo Subsidiaries under this Agreement or any of the
Ancillary Agreements; and
(iv) any other Asset acquired by Parent or any of the
Parent Subsidiaries from the date of the SpinCo Balance Sheet to the
Effective Time that is owned by Parent, any of the Parent Subsidiaries,
SpinCo or any of the SpinCo Subsidiaries as of the Effective Time and
that is of a nature or type that would have resulted in such Asset
being included as an Asset on the SpinCo Balance Sheet had it been
acquired on or prior to the date of the SpinCo Balance Sheet,
determined on a basis consistent with the determination of the Assets
included on the SpinCo Balance Sheet.
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(ggg) "SpinCo Balance Sheet" shall mean the combined balance sheet
of the SpinCo Group, including the notes thereto, as of August 31, 2001 set
forth on Schedule 1.1(ggg).
(hhh) "SpinCo Business" shall mean each and every business conducted
from and after the Effective Time by SpinCo Group (including those businesses
set forth on Schedule 1.1(hhh)), and each and every business conducted prior to
the Effective Time by Parent Group that is of a nature or type that was or would
have been included in Parent's lighting equipment or chemicals segments for
financial reporting purposes that has been discontinued, sold or transferred by
Parent Group (including those businesses set forth on Schedule 1.1(hhh)).
(iii) "SpinCo Common Stock" shall have the meaning set forth in the
recitals to this Agreement.
(jjj) "SpinCo Group" shall mean SpinCo, the SpinCo Subsidiaries and
the corporations, partnerships and other entities which are contemplated to
remain or become a Subsidiary of SpinCo in connection with the Corporate
Transactions and the Distribution.
(kkk) "SpinCo Indemnitees" shall mean:
(i) SpinCo and each Affiliate thereof after giving effect
to the Corporate Transactions and the Distribution; and
(ii) each of the respective past, present and future
Representatives of any of the entities described in the immediately
preceding clause (i) and each of the heirs, executors, successors and
assigns of any of such Representatives.
(lll) "SpinCo Liabilities" shall mean
(i) any and all Liabilities that are expressly
contemplated by this Agreement or any Ancillary Agreement (or the
Schedules hereto or thereto) as Liabilities to be retained or assumed
by SpinCo or any member of the SpinCo Group, and all agreements,
obligations and Liabilities of any member of the SpinCo Group under
this Agreement or any of the Ancillary Agreements;
(ii) all Liabilities set forth on Schedule 1.1(lll)(ii);
(iii) all Liabilities (other than Taxes and any
employee-related Liabilities which are specifically covered by the Tax
Disaffiliation Agreement and the Employee Benefits Agreement,
respectively), primarily relating to, arising out of or resulting from:
(A) the operation of the SpinCo Business, as
conducted at any time prior to, on or after the Distribution
Date (including any Liability relating to, arising out of or
resulting from any act or failure to act by any Representative
with respect to the SpinCo Business (whether or not such act
or failure to act is or was within such Person's authority));
(B) the operation of any business conducted by SpinCo
or any SpinCo Subsidiary at any time after the Distribution
Date (including any Liability relating to, arising out of or
resulting from any act or failure to act by any Representative
(whether or not such act or failure to act is or was within
such Person's authority)); or
(C) any SpinCo Assets, whether arising before, on or
after the Distribution Date; and
(iv) all Liabilities reflected as liabilities or
obligations on the SpinCo Balance Sheet or the accounting records
supporting such balance sheet, and all Liabilities arising or assumed
after the date of such balance sheet which, had they arisen or been
assumed on or before such date and been retained as of such date, would
have been reflected on such balance sheet, determined on a basis
consistent with the
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determination of the Liabilities included on the SpinCo Balance Sheet,
subject to any discharge of such Liabilities subsequent to the date of
the SpinCo Balance Sheet, including those liabilities set forth on
Schedule 1.1(lll)(iv)(A).
Notwithstanding the foregoing, the SpinCo Liabilities shall not
include: (y) any Liabilities that are expressly contemplated by this Agreement
or any Ancillary Agreement (or the Schedules hereto or thereto) as Liabilities
to be retained or assumed by Parent or any member of the Parent Group; or (z)
all agreements and obligations of any member of the Parent Group under this
Agreement or any of the Ancillary Agreements. Any contrary provision of this
Agreement notwithstanding, any Liabilities or Losses in respect of any Action
relating to the SpinCo Business, including the matters set forth on Schedule
1.1(lll)(iv)(B), shall constitute SpinCo Liabilities.
(mmm) "SpinCo Policies" shall mean all Policies, current or past,
which are owned or maintained by or on behalf of Parent or any Parent
Subsidiary, which relate specifically to the SpinCo Assets or the SpinCo
Business but do not relate to the Parent Business or the Parent Assets, and
which Policies are either maintained by SpinCo or a member of the SpinCo Group
or assignable to SpinCo or a member of the SpinCo Group, including those
Policies set forth on Schedule 1.1(mmm).
(nnn) "SpinCo Share" shall have the meaning set forth in the
recitals to this Agreement.
(ooo) "SpinCo Subsidiaries" shall mean all of the Subsidiaries
listed on Schedule 1.1(ooo).
(ppp) "Subleases" shall mean the subleases, if any, by and between
members of the Parent Group and members of the SpinCo Group, which subleases
shall be entered into prior to or on the Distribution Date in such form as is
agreed to by Parent and SpinCo.
(qqq) "Subsidiary" shall mean with respect to any specified Person,
any corporation or other legal entity of which such Person or any of its
Subsidiaries controls or owns, directly or indirectly, more than 50% of the
stock or other equity interest entitled to vote on the election of members to
the board of directors or similar governing body.
(rrr) "Tax" shall have the meaning set forth in the Tax
Disaffiliation Agreement.
(sss) "Tax Disaffiliation Agreement" shall mean the Tax
Disaffiliation Agreement by and between Parent and SpinCo, which agreement shall
be entered into prior to or on the Distribution Date in the form attached hereto
as Exhibit E.
(ttt) "Third Party" shall mean a Person who is not a party hereto or
a Subsidiary thereof.
(uuu) "Third-Party Claim" shall have the meaning set forth in
Section 3.3 of this Agreement.
(vvv) "Transition Services Agreement" shall mean the Transition
Services Agreement by and between Parent and SpinCo, which agreement shall be
entered into prior to or on the Distribution Date in the form attached hereto as
Exhibit F.
SECTION 1.2. REFERENCE; INTERPRETATION. References in this Agreement to
any gender include references to all genders, and references to the singular
include references to the plural and vice versa. The words "include", "includes"
and "including" when used in this Agreement shall be deemed to be followed by
the phrase "without limitation." Unless the context otherwise requires,
references in this Agreement to Articles, Sections, Exhibits and Schedules shall
be deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement. Unless the context otherwise requires, the words "hereof",
"hereby" and "herein" and words of similar meaning when used in this Agreement
refer to this Agreement in its entirety and not to any particular Article,
Section or provision of this Agreement. Neither this Agreement nor any Ancillary
Agreement shall be construed against either party as the principal draftsperson
hereof or thereof.
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ARTICLE II
DISTRIBUTION AND OTHER TRANSACTIONS; CERTAIN COVENANTS
SECTION 2.1. THE DISTRIBUTION AND OTHER TRANSACTIONS.
(a) Certain Transactions. On or prior to the Distribution Date:
(i) Pursuant to the Corporate Transactions, Parent Group
owns the Parent Assets and is subject to the Parent Liabilities.
(ii) Pursuant to the Corporate Transactions, SpinCo Group
owns the SpinCo Assets and is subject to the SpinCo Liabilities.
(b) Distribution to Parent.
(i) On or prior to the Distribution Date, Parent shall
deliver to Parent's stock transfer agent (the "Agent") a certificate or
certificates representing the SpinCo Shares which are to be distributed
to Parent's stockholders in the Distribution, endorsed by Parent in
blank, for the benefit of the holders of Parent Common Stock, and
Parent shall authorize the Agent to distribute, on or as soon as
practicable following the Distribution Date, such SpinCo Shares to
holders of record of shares of Parent Common Stock on the Distribution
Record Date as further contemplated by the Information Statement and
hereby. SpinCo shall provide any share certificates that the Agent
shall require in order to effect the Distribution.
(ii) The SpinCo Shares distributed in the Distribution
will be distributed only pursuant to a book entry system. Parent shall
authorize the Agent to deliver the SpinCo Shares previously delivered
to the Agent to a depositary and to mail to each holder of record of
Parent Common Stock on the Distribution Record Date, a statement of the
whole and fractional SpinCo Shares credited to such holder's account.
If following the Distribution a holder of SpinCo Common Stock requests
physical certificates instead of participating in the book entry
system, the Agent will issue certificates for such shares, but only for
whole numbers of SpinCo Shares.
(c) Charter; Bylaws; Rights Plan. On or prior to the Distribution
Date, SpinCo and Enterprises or Parent, as the case may be, shall have taken all
necessary actions to provide for the adoption of the form of Certificate of
Incorporation and Bylaws and the execution and delivery of a Stockholder
Protection Rights Agreement, between SpinCo and ▇▇▇▇▇ Fargo Bank of Minnesota,
N.A., as Rights Agent, in substantially the form filed by SpinCo with the
Commission as Exhibits to the Registration Statement.
(d) Directors. On or prior to the Distribution Date, SpinCo and
Enterprises or Parent, as the case may be, shall have taken all necessary action
to cause the Board of Directors of SpinCo to consist of the individuals
identified in the Information Statement as directors of SpinCo.
(e) Certain Licenses and Permits. On or prior to the Distribution
Date or as soon as reasonably practicable thereafter:
(i) Parent shall use its commercially reasonable efforts
to transfer or cause to be transferred all transferable licenses,
permits and authorizations issued by any Governmental Authority which
relate solely to the SpinCo Business but which are held in the name of
any member of the Parent Group, or in the name of any Representative of
any such member on behalf of a member of the SpinCo Group, to the
appropriate member of the SpinCo Group; and
(ii) SpinCo shall use its commercially reasonable efforts
to transfer or cause to be transferred all transferable licenses,
permits and authorizations issued by Governmental Authorities which
relate solely to the Parent Business but which are held in the name of
any member of the SpinCo Group, or in the name
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of any Representative of any such member on behalf of a member of the
Parent Group, to the appropriate member of the Parent Group.
(f) Consents. The parties hereto shall use their commercially
reasonable efforts to obtain those types of required consents and approvals to
transfer and/or assign licenses, permits and authorizations of Governmental
Authorities and those types of consents and approvals to transfer and/or assign
Contracts from Third Parties set forth in Schedule 2.1(f); provided, however,
that no party shall be obligated to pay any consideration therefor (except for
filing fees or other similar charges) to any Third Party from whom such consent
or approval is requested. Whether or not such consent or approval is obtained,
nothing in this Section 2.1(f) shall in any way limit the obligations of the
parties under Article III.
(g) Certain Liabilities. For purposes of this Agreement, including
Article III hereof, Parent and SpinCo agree that (i) any and all Liabilities
arising from or based upon misstatements in or omissions from the Registration
Statement or the Information Statement under the captions set forth on Part 1 of
Schedule 2.1(g) to this Agreement (insofar as such information relates to Parent
or the terms of the Distribution) shall be deemed to be Parent Liabilities and
not SpinCo Liabilities, (ii) fifty percent (50%) of any and all Liabilities
arising from or based upon misstatements in or omissions from the Registration
Statement or the Information Statement under the captions set forth on Part 2 of
Schedule 2.1(g) to this Agreement shall be deemed to be Parent Liabilities and
fifty percent (50%) of such Liabilities shall be deemed to be SpinCo
Liabilities, and (iii) any and all Liabilities arising from or based upon
misstatements in or omissions from the Registration Statement or the Information
Statement other than those specified in Sections 2.1(g)(i) and (ii) shall be
deemed to be SpinCo Liabilities and not Parent Liabilities.
(h) Election of Officers. On or prior to the Distribution Date,
SpinCo shall take all actions necessary and desirable so that as of the
Distribution Date the executive officers of SpinCo will be as set forth in the
Information Statement.
(i) State Securities Laws. Prior to the Distribution Date, Parent
and SpinCo shall take all such action as may be necessary or appropriate under
the securities or blue sky laws of states or other political subdivisions of the
United States in order to effect the Distribution.
(j) Listing Application; Notice to NYSE.
(i) Prior to the Distribution Date, Parent and SpinCo
shall prepare and file with the NYSE a listing application and related
documents and shall take all such other actions with respect thereto as
shall be necessary or desirable in order to cause the NYSE to list on
or prior to the Distribution Date, subject to official notice of
issuance, the SpinCo Shares.
(ii) Prior to the Distribution, Parent shall, to the
extent possible, give the NYSE not less than ten (10) days advance
notice of the Distribution Record Date in compliance with Rule 10b-17
under the Exchange Act.
(k) Other Transactions. On or prior to the Distribution Date, the
parties hereto shall have consummated those other transactions in connection
with the Corporate Transactions and the Distribution that are contemplated by
the Information Statement and not specifically referred to in this Section 2.1.
SECTION 2.2. ASSUMPTION AND SATISFACTION OF LIABILITIES. Except as
otherwise specifically set forth in any Ancillary Agreement, from and after the
Effective Time, (i) Parent shall, or shall cause the applicable member of the
Parent Group to, assume, pay, perform and discharge all Parent Liabilities in
the ordinary course of business, consistent with past practice, and (ii) SpinCo
shall, or shall cause the applicable member of the SpinCo Group to, assume, pay,
perform and discharge all SpinCo Liabilities in the ordinary course of business,
consistent with past practice. To the extent reasonably requested to do so by
another party hereto, each party hereto agrees to execute and deliver such
documents, in a form reasonably satisfactory to such party, as may be reasonably
necessary to evidence the assumption of any Liabilities hereunder.
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SECTION 2.3. RESIGNATIONS. Parent shall cause all its employees to
resign, effective as of the Effective Time, from all positions as officers or
directors of any member of the SpinCo Group in which they serve, and SpinCo
shall cause all its employees to resign, effective as of the Effective Time,
from all positions as officers or directors of any members of the Parent Group
in which they serve.
SECTION 2.4. LIMITED REPRESENTATIONS OR WARRANTIES. Each of the parties
hereto agrees that no party hereto is, in this Agreement or in any other
agreement or document contemplated by this Agreement or otherwise, making any
representation or warranty whatsoever, as to title or value of Assets being
transferred. It is also agreed that all Assets either transferred to or retained
by the parties, as the case may be, shall be "as is, where is" and that (subject
to Section 2.13) the party to which such Assets are to be transferred hereunder
shall bear the economic and legal risk that such party's or any of the
Subsidiaries' title to any such Assets shall be other than good and marketable
and free from encumbrances. Similarly, each party hereto agrees that no party
hereto is representing or warranting in any way that the obtaining of any
consents or approvals, the execution and delivery of any agreements and the
making of any filings or applications contemplated by this Agreement will
satisfy the provisions of any or all applicable Contracts or other agreements or
the requirements of any or all applicable Laws or judgments, it being agreed
that the party to which any Assets are transferred shall bear the economic and
legal risk that any necessary consents or approvals are not obtained or that any
requirements of Laws or judgments are not complied with. Notwithstanding the
foregoing, however, except as otherwise provided in Section 2.5 or Section 2.6
hereof, from and after the Effective Time, the Parent Group shall continue to be
solely responsible for Parent Liabilities, and the SpinCo Group shall continue
to be solely responsible for SpinCo Liabilities.
SECTION 2.5. REMOVAL OF PARENT GROUP FROM CERTAIN GUARANTEES; RELEASES
OF PARENT GROUP FROM LIABILITIES.
(a) Except as otherwise specified in any Ancillary Agreement, SpinCo
shall use its commercially reasonable efforts to have, on or prior to the
Distribution Date, or as soon as practicable thereafter, any member of the
Parent Group removed as guarantor of or obligor for any SpinCo Liability,
including in respect of those guarantees set forth on Schedule 2.5(a) of this
Agreement.
(b) If SpinCo is unable to obtain, or to cause to be obtained, any such
required removal as set forth in clause (a) of this Section 2.5, the applicable
guarantor or obligor shall continue to be bound as such and, unless not
permitted by law or the terms thereof, the relevant beneficiary shall or shall
cause one of its Subsidiaries, as agent or subcontractor for such guarantor or
obligor to pay, perform and discharge fully all the obligations or other
liabilities of such guarantor or obligor thereunder from and after the date
hereof.
(c) If (i) SpinCo is unable to obtain, or to cause to be obtained, any
such required removal as set forth in clause (a) of this Section 2.5, or (ii)
SpinCo Liabilities arise from and after the Effective Time but before a member
of the Parent Group which is a guarantor or obligor with reference to any such
SpinCo Liability is removed pursuant to Section 2.5(a), then such guarantor or
obligor shall be indemnified by SpinCo for all Liabilities incurred by it in its
capacity as guarantor or obligor in accordance with Article III hereof. Without
limiting the foregoing, SpinCo shall, or shall cause a member of the SpinCo
Group to, reimburse any such member of the Parent Group which is a guarantor or
obligor as soon as practicable (but in no event later than thirty (30) days)
following delivery by Parent to SpinCo of notice of a payment made pursuant to
this Section 2.5 in respect of SpinCo Liabilities.
(d) In the event that, at any time before or after the Distribution
Date, Parent identifies any letters of credit, interest rate or foreign exchange
contracts, surety bonds or other Contracts (excluding guarantees) that relate
primarily to the SpinCo Business but for which a member of the Parent Group has
contingent, secondary, joint, several or other Liability of any nature
whatsoever, SpinCo shall, at its expense, take such actions and enter into such
agreements and arrangements as Parent may reasonably request to effect Parent's
(or a member of the Parent Group's ) release or substitution.
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SECTION 2.6. REMOVAL OF SPINCO FROM CERTAIN GUARANTEES; RELEASES OF
SPINCO FROM LIABILITIES.
(a) Except as otherwise specified in any Ancillary Agreement, Parent
shall use its commercially reasonable efforts to have, on or prior to the
Distribution Date, or as soon as practicable thereafter, any member of the
SpinCo Group removed as guarantor of or obligor for any Parent Liability,
including in respect of those guarantees set forth on Schedule 2.6(a) of this
Agreement.
(b) If Parent is unable to obtain, or to cause to be obtained, any such
required removal as set forth in clause (a) of this Section 2.6, the applicable
guarantor or obligor shall continue to be bound as such and, unless not
permitted by law or the terms thereof, the relevant beneficiary shall or shall
cause one of its Subsidiaries, as agent or subcontractor for such guarantor or
obligor to pay, perform and discharge fully all the obligations or other
liabilities of such guarantor or obligor thereunder from and after the date
hereof.
(c) If (i) Parent is unable to obtain, or to cause to be obtained, any
such required removal as set forth in clause (a) of this Section 2.6, or (ii)
Parent Liabilities arise from and after the Effective Time but before a member
of the SpinCo Group which is a guarantor or obligor with reference to any such
Parent Liability is removed pursuant to Section 2.6(a), then such guarantor or
obligor shall be indemnified by Parent for all Liabilities incurred by it in its
capacity as guarantor or obligor in accordance with Article III hereof. Without
limiting the foregoing, Parent shall, or shall cause a member of the Parent
Group to, reimburse any such member of the SpinCo Group which is a guarantor or
obligor as soon as practicable (but in no event later than thirty (30) days)
following delivery by SpinCo to Parent of notice of a payment made pursuant to
this Section 2.6 in respect of Parent Liabilities.
(d) In the event that, at any time before or after the Distribution
Date, SpinCo identifies any letters of credit, interest rate or foreign exchange
contracts, surety bonds or other Contracts (excluding guarantees) that relate
primarily to the Parent Business but for which a member of the SpinCo Group has
contingent, secondary, joint, several or other Liability of any nature
whatsoever, Parent shall, at its expense, take such actions and enter into such
agreements and arrangements as SpinCo may reasonably request to effect SpinCo's
(or a member of the SpinCo Group's ) release or substitution.
SECTION 2.7. WITNESS SERVICES. At all times from and after the
Distribution Date, each of Parent and SpinCo shall use their commercially
reasonable efforts to make available to the other, upon reasonable request, its
and its Subsidiaries' Representatives as witnesses to the extent that (i) such
Persons may reasonably be required in connection with the prosecution or defense
of any Action in which the requesting party from time to time be involved and
(ii) there is no conflict in the Action between the requesting party and Parent
and SpinCo, as applicable. A party providing witness services to the other party
under this Section shall be entitled to receive from the recipient of such
services, upon the presentation of invoices therefor, reimbursement for payments
made for any out-of-pocket expenses (which shall exclude the costs of salaries
and benefits of employees who are witnesses) as may be reasonably incurred in
providing such witness services. Witness services in connection with
indemnification claims under Article III shall be handled as provided in Article
III.
SECTION 2.8. CONVEYANCING AND ASSUMPTION INSTRUMENTS. In connection
with the transfers of Assets and the assumptions of Liabilities contemplated by
this Agreement, on or prior to the Distribution Date, the parties shall execute
or cause to be executed by the appropriate entities the Conveyancing and
Assumption Instruments contemplated hereby for transfers to be effected pursuant
to Delaware law or the Laws of one of the other states of the United States or,
if not appropriate for a given transfer, and for transfers to be effected
pursuant to non-U.S. Laws, in such other form as the parties shall reasonably
agree. The transfer of capital stock shall be effected by means of delivery of
stock certificates and executed stock powers and notation on the stock record
books of the corporation or other legal entities involved, or by such other
means as may be required in any non-U.S. jurisdiction to transfer title to stock
and, to the extent required by applicable Law, by notation on public registries.
SECTION 2.9. ANCILLARY AGREEMENTS. Prior to the Distribution Date, each
of Parent and SpinCo shall enter into, and/or (where applicable) shall cause
members of their respective Groups to enter into, the Ancillary Agreements and
any other agreements in respect of the Distribution reasonably necessary or
appropriate in connection with the transactions contemplated hereby and thereby.
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SECTION 2.10. CORPORATE NAMES; TRADEMARKS.
(a) Except as otherwise specifically provided in any Ancillary
Agreement:
(i) as soon as reasonably practicable after the
Distribution Date but in any event within twelve (12) months
thereafter, SpinCo will, and will cause the SpinCo Subsidiaries to,
each at its own expense, remove (or, if necessary, on an interim basis,
cover up) any and all exterior signs and other identifiers located on
any of its real property or premises or on the real property or
premises used by SpinCo or the SpinCo Subsidiaries which refer or
pertain to Parent or which include the Parent or any Parent Subsidiary
name, logo or other trademark or service ▇▇▇▇ or any similar ▇▇▇▇ or
any derivative thereof or other intellectual property included in the
Parent Assets;
(ii) as soon as is reasonably practicable after the
Distribution Date but in any event within twelve (12) months
thereafter, SpinCo will, and will cause the SpinCo Subsidiaries to,
remove from all letterhead, envelopes, invoices, products, product
labels, product literature, brochures and other communications media of
any kind, all references to Parent, including the "National Service
Industries, Inc." name, logo and any other trademark or service ▇▇▇▇ or
other intellectual property included in the Parent Assets (except that
SpinCo shall not be required to take any such action with respect to
materials in the possession of Third Parties);
(iii) as soon as reasonably practicable after the
Distribution Date but in any event within twelve (12) months
thereafter, Parent will, and will cause the Parent Subsidiaries to,
each at its own expense, remove (or, if necessary, on an interim basis,
cover up) any and all exterior signs and other identifiers located on
any of its real property or premises or on the real property or
premises used by Parent or the Parent Subsidiaries which refer or
pertain to SpinCo or which include the SpinCo or any SpinCo Subsidiary
name, logo or other trademark or any similar ▇▇▇▇ or any derivative
thereof or other intellectual property included in the SpinCo Assets;
and
(iv) as soon as is reasonably practicable after the
Distribution Date but in any event within twelve (12) months
thereafter, Parent will, and will cause the Parent Subsidiaries to,
remove from all letterhead, envelopes, invoices, products, product
labels, product literature, brochures and other communications media of
any kind, all references to SpinCo and its Subsidiaries including the
"______________" name, logo and any other trademark or service ▇▇▇▇ or
other intellectual property included in the SpinCo Assets (except that
Parent shall not be required to take any such action with respect to
materials in the possession of Third Parties).
(b) Prior to January 1, 2008, Parent shall not change its corporate
name from "National Service Industries, Inc.," nor shall Parent engage in any
transaction that causes Parent's corporate name to change from "National Service
Industries, Inc." SpinCo hereby acknowledges and agrees that the SpinCo Group
shall have no right to use the name "National Service Industries, Inc." or any
derivative thereof.
SECTION 2.11. POST-DISTRIBUTION REMITTANCES.
(a) Following the Distribution Date, Parent will promptly remit to
SpinCo, or reimburse SpinCo for, all amounts, and endorse or remit to SpinCo the
proceeds of all checks, drafts, notes or other documents, received by Parent or
a Parent Subsidiary, that should have otherwise been paid to SpinCo or a SpinCo
Subsidiary.
(b) Following the Distribution Date, SpinCo will promptly remit to
Parent, or reimburse Parent for, all amounts, and endorse or remit to Parent the
proceeds of all checks, drafts, notes or other documents, received by Parent or
a Parent Subsidiary, that should have otherwise been paid to SpinCo.
SECTION 2.12. NON-SOLICITATION.
(a) For the period beginning on the Distribution Date and ending on the
second anniversary of the Distribution Date, SpinCo will not and will not permit
any member of the SpinCo Group to, directly or indirectly,
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solicit or recruit for its employment any employee of the Parent Group as of the
Distribution without the prior written consent of Parent; provided, however,
that nothing in this Section 2.12(a) shall (i) prohibit the hiring of any
natural person who applied for employment with the SpinCo Group solely in
response to any public medium advertising, (ii) prohibit the hiring of any
natural person referred by any Person whose principal business is the recruiting
of prospective employees, or (iii) prohibit the hiring of any natural person
whose employment with a member of the Parent Group terminated at least three (3)
months prior to the date of such solicitation or recruitment for a bona fide
reason not designed or intended to circumvent the provisions of this Section
2.12(a) and so long as such natural person was not solicited or recruited by
SpinCo or any member of the SpinCo Group prior to the expiration of such three
(3) month period.
(b) For the period beginning on the Distribution Date and ending on the
second anniversary of the Distribution Date, Parent will not and will not permit
any member of the Parent Group to, directly or indirectly, solicit or recruit
for its employment any employee of the SpinCo Group as of the Distribution
without the prior written consent of SpinCo; provided, however, that nothing in
this Section 2.12(b) shall (i) prohibit the hiring of any natural person who
applied for employment with the Parent Group solely in response to any public
medium advertising, (ii) prohibit the hiring of any natural person referred by
any Person whose principal business is the recruiting of prospective employees,
or (iii) prohibit the hiring of any natural person whose employment with a
member of the SpinCo Group terminated at least three (3) months prior to the
date of such solicitation or recruitment for a bona fide reason not designed or
intended to circumvent the provisions of this Section 2.12(b) and so long as
such natural person was not solicited or recruited by Parent or any member of
the Parent Group prior to the expiration of such three (3) month period.
SECTION 2.13. FURTHER ASSURANCES.
(a) In addition to the actions specifically provided for elsewhere in
this Agreement, each of the parties hereto shall use commercially reasonable
efforts 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. Without limiting the foregoing,
each party hereto shall cooperate with the other party, and execute and deliver,
or use commercially reasonable efforts to cause to be executed and delivered,
all instruments, including instruments of conveyance, assignment and transfer,
and to make all filings with, and to obtain all consents, approvals or
authorizations of, any Governmental Authority or any other Person under any
permit, license, agreement, indenture or other instrument, and take all such
other actions as such party may reasonably be requested to take by the other
party hereto from time to time, consistent with the terms of this Agreement, the
Corporate Transactions, and the Ancillary Agreements, in order to effectuate the
provisions and purposes of this Agreement and the transfers of Assets and
assumptions of Liabilities and the other transactions contemplated hereby.
(b) If any such transfer of Assets or Liabilities is not consummated
prior to or at the Effective Time, then the party hereto retaining such Asset or
Liability shall continue to take the actions required by Section 2.13(a) to
consummate and make effective such transfer as soon as practicable after the
Distribution Date and, in the case of Assets, shall use its commercially
reasonable efforts to preserve the value of such Assets until the time of
transfer. If and when any such Asset or Liability becomes transferable, such
transfer shall be effected forthwith. The parties hereto agree that, no later
than the Distribution Date, each party hereto shall be deemed to have acquired
complete and sole beneficial ownership to all of the Assets, together with all
rights, powers and privileges incident thereto, and shall be deemed to have
assumed in accordance with the terms of this Agreement and the Ancillary
Agreements all of the Liabilities, and all duties, obligations and
responsibilities incident thereto, that such party is entitled or required to
hold or assume pursuant to this Agreement.
(c) Any disagreement regarding whether any Asset or Liability was or
should have been transferred to, retained by or assumed by the Parent Group or
the SpinCo Group shall be resolved in accordance with the provisions of Article
V.
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ARTICLE III
INDEMNIFICATION
SECTION 3.1. INDEMNIFICATION BY PARENT. Parent shall, and shall cause
each member of the Parent Group to, indemnify, defend and hold harmless the
SpinCo Indemnitees from and against any and all Indemnifiable Losses of the
SpinCo Indemnitees arising out of, by reason of or otherwise in connection with
the Parent Liabilities or alleged Parent Liabilities, including any breach by
Parent of any provision of this Section 3.1. Parent and each member of the
Parent Group shall be jointly and severally liable for the indemnification
obligations imposed by this Section 3.1. Subject to the last sentence of Section
7.1, this Agreement is not intended to address, and should not be interpreted to
address, the matters specifically and expressly covered by the Ancillary
Agreements.
SECTION 3.2. INDEMNIFICATION BY SPINCO. SpinCo shall, and shall cause
each member of the SpinCo Group to, indemnify, defend and hold harmless the
Parent Indemnitees from and against any and all Indemnifiable Losses of the
Parent Indemnitees arising out of, by reason of or otherwise in connection with
the SpinCo Liabilities or alleged SpinCo Liabilities, including any breach by
SpinCo of any provision of this Section 3.2. Spinco and each member of the
SpinCo Group shall be jointly and severally liable for the indemnification
obligations imposed by this Section 3.2. Subject to the last sentence of Section
7.1, this Agreement is not intended to address, and should not be interpreted to
address, the matters specifically and expressly covered by the Ancillary
Agreements.
SECTION 3.3. PROCEDURES FOR INDEMNIFICATION.
(a) Third-Party Claims. If a claim or demand is made against a SpinCo
Indemnitee or an Parent Indemnitee (each, an "Indemnitee") by any Third Party (a
"Third-Party Claim") as to which such Indemnitee is entitled to indemnification
pursuant to this Agreement, such Indemnitee shall notify the party which is or
may be required pursuant to Section 3.1 or Section 3.2 hereof to make such
indemnification (the "Indemnifying Party") in writing, and in reasonable detail,
of the Third-Party Claim promptly (and in any event within fifteen (15) Business
Days) after receipt by such Indemnitee of written notice of the Third-Party
Claim; provided, however, that failure to give such notification shall not
affect the indemnification provided hereunder except to the extent the
Indemnifying Party shall have been actually prejudiced as a result of such
failure. Thereafter, the Indemnitee shall deliver to the Indemnifying Party,
promptly (and in any event within ten (10) Business Days) after the Indemnitee's
receipt thereof, copies of all notices and documents (including court papers)
received by the Indemnitee relating to the Third-Party Claim.
If a Third-Party Claim is made against an Indemnitee, the Indemnifying
Party shall be entitled to participate in the defense thereof and, if it so
elects in accordance with this Section 3.3(a), to assume the defense thereof
with counsel selected by the Indemnifying Party; provided, however, that such
counsel is not reasonably objected to by the Indemnitee. Should the Indemnifying
Party so elect to assume the defense of a Third-Party Claim, the Indemnifying
Party shall, within thirty (30) days (or sooner if the nature of the Third-Party
Claim so requires), notify the Indemnitee in writing of its intent to do so, and
the Indemnifying Party shall thereafter not be liable to the Indemnitee for
legal or other expenses subsequently incurred by the Indemnitee in connection
with the defense thereof; provided, however, that such Indemnitee shall have the
right to employ counsel to represent such Indemnitee if, in such Indemnitee's
reasonable judgment, a conflict of interest between such Indemnitee and such
Indemnifying Party exists in respect of such claim that would make
representation of both such parties by one counsel inappropriate, and in such
event the fees and expenses of such separate counsel shall be paid by such
Indemnifying Party. If the Indemnifying Party elects to assume such defense, the
Indemnitee shall have the right to participate in the defense thereof and to
employ counsel, subject to the proviso of the preceding sentence, at its own
expense, separate from the counsel employed by the Indemnifying Party, it being
understood that the Indemnifying Party shall control such defense. The
Indemnifying Party shall be liable for the fees and expenses of counsel employed
by the Indemnitee for any period during which the Indemnifying Party has failed
to assume the defense thereof (other than during the period prior to the time
the Indemnitee shall have given notice of the Third-Party Claim as provided
above). If the Indemnifying Party so elects to assume the defense of any
Third-Party Claim, all of the Indemnitees shall cooperate with the Indemnifying
Party in the defense or prosecution thereof, including by providing or causing
to be provided, Records and witnesses as soon as reasonably practicable after
receiving any request therefor from or on behalf of the Indemnifying Party.
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If an Indemnifying Party elects to assume the defense of a Third-Party
Claim as provided above, in no event will the Indemnitee admit any liability
with respect to, or settle, compromise or discharge, any Third-Party Claim
without the Indemnifying Party's prior written consent; provided, however, that
the Indemnitee shall have the right to settle, compromise or discharge such
Third-Party Claim without the consent of the Indemnifying Party if the
Indemnitee releases the Indemnifying Party from its indemnification obligation
hereunder with respect to such Third-Party Claim and such settlement, compromise
or discharge would not otherwise adversely affect the Indemnifying Party. If an
Indemnifying Party elects to assume the defense of a Third-Party Claim as
provided above, the Indemnitee will agree to any settlement, compromise or
discharge of a Third-Party Claim that the Indemnifying Party may recommend and
that by its terms obligates the Indemnifying Party to pay the full amount of the
liability in connection with such Third-Party Claim and releases the Indemnitee
completely in connection with such Third-Party Claim; provided, however, that,
notwithstanding the foregoing, the Indemnitee shall not be required hereunder to
agree to any such settlement, compromise or discharge involving the stipulation
of facts or the adjudication of any question that the Indemnitee determines in
its discretion would have an adverse effect on the Indemnitee in any other
proceeding or otherwise would affect adversely the Indemnitee. If an
Indemnifying Party elects not to assume the defense of a Third-Party Claim, or
fails to notify an Indemnitee of its election to do so as provided herein, such
Indemnitee may compromise, settle or defend such Third-Party Claim, and such
Indemnitee may recover the Indemnifiable Losses in connection with such
compromise, settlement or defense from the Indemnifying Party.
Notwithstanding the foregoing, the Indemnifying Party shall not be
entitled to assume the defense of any Third-Party Claim (and shall be liable for
the fees and expenses of counsel incurred by the Indemnitee in defending such
Third-Party Claim) if the Third-Party Claim seeks an order, injunction or other
equitable relief or relief for other than money damages against the Indemnitee
which the Indemnitee reasonably determines, after conferring with its counsel,
cannot be separated from any related claim for money damages. If such equitable
relief or other relief portion of the Third-Party Claim can be so separated from
that for money damages, the Indemnifying Party shall be entitled to assume the
defense of the portion relating to money damages.
(b) In the event of payment by an 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 or claim
relating to such Third-Party Claim against any claimant or plaintiff asserting
such Third-Party Claim. 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 or claim.
(c) The remedies provided in this Article III 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.
SECTION 3.4. INDEMNIFICATION PAYMENTS. Unless otherwise agreed to in
writing, indemnification required by this Article III shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or Indemnifiable Losses are incurred. If
the Indemnifying Party fails to make an indemnification payment required by this
Article III within thirty (30) days after receipt of a ▇▇▇▇ therefor or notice
that an Indemnifiable Loss has been incurred, the Indemnifying Party shall also
be required to pay interest on the amount of such indemnification payment, from
the date of receipt of the ▇▇▇▇ or notice of the Indemnifiable Loss to, but not
including the date of payment, at the Applicable Rate.
ARTICLE IV
ACCESS TO INFORMATION
SECTION 4.1. PROVISION OF CORPORATE RECORDS.
(a) Except as otherwise provided in Article III, after the Distribution
Date, upon the prior written request by SpinCo for specific and identified
agreements, documents, books, records or files (collectively, "Records") which
relate to (x) SpinCo, the conduct of the SpinCo Business up to the Effective
Time or the ownership of the SpinCo Assets up to the Effective Time, or (y) any
Ancillary Agreement (other than the Tax Disaffiliation Agreement),
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Parent shall arrange, as soon as reasonably practicable following the receipt of
such request, to provide such Records (or appropriate copies thereof if Parent
has a reasonable need to retain the originals) in the possession or control of
Parent or any of the Parent Subsidiaries, but only to the extent such items are
not already in the possession or control of SpinCo.
(b) Except as otherwise provided in Article III, after the Distribution
Date, upon the prior written request by Parent for specific and identified
Records which relate to (x) Parent, the conduct of the Parent Business up to the
Effective Time or the ownership of the Parent Assets up to the Effective Time,
or (y) any Ancillary Agreement (other than the Tax Disaffiliation Agreement),
SpinCo shall arrange, as soon as reasonably practicable following the receipt of
such request, to provide such Records (or appropriate copies thereof if SpinCo
has a reasonable need to retain the originals) in the possession or control of
SpinCo or any of the SpinCo Subsidiaries, but only to the extent such items are
not already in the possession or control of Parent.
SECTION 4.2. ACCESS TO INFORMATION. Except as otherwise provided in
Article III, from and after the Distribution Date, each of Parent and SpinCo
shall afford to the other and its authorized Representatives reasonable access
during normal business hours, subject to appropriate restrictions for
classified, privileged or confidential information, to the personnel,
properties, and Records of such party and its Subsidiaries insofar as such
access is reasonably required by the other party and relates to (x) such other
party or the conduct of its business or ownership of its Assets prior to the
Effective Time or (y) any Ancillary Agreement.
SECTION 4.3. REIMBURSEMENT; OTHER MATTERS. Except to the extent
otherwise contemplated by any Ancillary Agreement, a party providing Records or
access to information to the other party under this Article IV shall be entitled
to receive from the recipient, upon the presentation of invoices therefor,
reimbursement for payments made for supplies, disbursements and other
out-of-pocket expenses (including attorneys' fees and disbursements), as may be
reasonably incurred in providing such Records or access to information.
SECTION 4.4. CONFIDENTIALITY. Neither (i) Parent nor the Parent
Subsidiaries nor (ii) SpinCo nor the SpinCo Subsidiaries shall use or permit the
use of (without the prior written consent of the other) and each such entity
shall keep, and shall cause its Representatives to keep, confidential all
information concerning the other party in its possession, its custody or under
its control (except to the extent that (A) such information has been in the
public domain through no fault of such party or (B) such information has been
later lawfully acquired from other sources by such party or (C) this Agreement
or any other Ancillary Agreement or any other agreement entered into pursuant
hereto permits the use or disclosure of such information) to the extent such
information, (w) relates to or was acquired during the period up to the
Effective Time, (x) relates to any Ancillary Agreement, (y) is obtained in the
course of performing services for the other party pursuant to any Ancillary
Agreement, or (z) is based upon or is derived from information described in the
preceding clauses (w), (x) or (y), and each party shall not (without the prior
written consent of the other) otherwise release or disclose such information to
any other Person, except such party's Representatives, unless compelled to
disclose such information by judicial or administrative process or unless such
disclosure is required by Law and such party has provided the other party with
prompt notice of such requirement in order to afford the other party the
opportunity to seek an appropriate protective order or other remedy.
SECTION 4.5. PRIVILEGED MATTERS. The parties hereto recognize that
legal and other professional services that have been and will be provided prior
to the Distribution Date have been and will be rendered for the benefit of each
of the members of the Parent Group, and each of the members of the SpinCo Group,
and that each of the members of the Parent Group, and each of the members of the
SpinCo Group should be deemed to be the client for the purposes of asserting all
privileges which may be asserted under applicable Law. Except as otherwise
specifically provided in the Tax Disaffiliation Agreement with respect to tax
matters, to allocate the interests of each party in the information as to which
any party is entitled to assert a privilege, the parties agree as follows:
(a) Parent shall be entitled, in perpetuity, to control the assertion
or waiver of all privileges in connection with privileged information which
relates solely to the Parent Business, whether or not the privileged information
is in the possession of or under the control of Parent or SpinCo. Parent shall
also be entitled, in perpetuity, to control the assertion or waiver of all
privileges in connection with privileged information that relates solely to the
subject matter of any claims constituting Parent Liabilities, now pending or
which may be asserted in the future, in any
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Action initiated against or by Parent, whether or not the privileged information
is in the possession of or under the control of Parent or SpinCo.
(b) SpinCo shall be entitled, in perpetuity, to control the assertion
or waiver of all privileges in connection with privileged information which
relates solely to the SpinCo Business, whether or not the privileged information
is in the possession of or under the control of Parent or SpinCo. SpinCo shall
also be entitled, in perpetuity, to control the assertion or waiver of all
privileges in connection with privileged information which relates solely to the
subject matter of any claims constituting SpinCo Liabilities, now pending or
which may be asserted in the future, in any Action initiated against or by
SpinCo, whether or not the privileged information is in the possession of SpinCo
or under the control of Parent or SpinCo.
(c) The parties hereto agree that they shall have a shared privilege,
with equal right to assert or waive, subject to the restrictions in this Section
4.5, with respect to all privileges not allocated pursuant to the terms of
Sections 4.5(a) and (b). All privileges relating to any Action, disputes or
other matters which involve Parent and SpinCo in respect of which such parties
retain any responsibility or liability under this Agreement, shall be subject to
a shared privilege among them.
(d) No party hereto may waive any privilege which could be asserted
under any applicable Law, and in which any other party hereto has a shared
privilege, without the consent of the other party, which consent shall not be
unreasonably withheld or delayed, except to the extent reasonably required in
connection with any Action with Third Parties or as provided in subsection (e)
below. Consent shall be in writing, or shall be deemed to be granted unless
written objection is made within twenty (20) days after notice upon the other
party requesting such consent.
(e) In the event of any Action or dispute between any of the parties
hereto, any party and a Subsidiary of another party hereto, or a Subsidiary of
one party hereto and a Subsidiary of another party hereto, either such party, to
the extent necessary in connection with such Action or dispute, may waive a
privilege in which the other party has a shared privilege, without obtaining the
consent of the other party, provided that such waiver of a shared privilege
shall be effective only as to the use of information with respect to such Action
or dispute between the relevant parties and/or their Subsidiaries, and shall not
operate as a waiver of the shared privilege with respect to Third Parties.
(f) If a dispute arises between or among the parties hereto or their
respective Subsidiaries regarding whether a privilege should be waived to
protect or advance the interest of any party, each party agrees that it shall
negotiate in good faith, shall endeavor to minimize any prejudice to the rights
of the other parties, and shall not unreasonably withhold consent to any request
for waiver by another party. Each party hereto specifically agrees that it will
not withhold consent to waiver for any purpose except to protect its own
legitimate interests.
(g) Upon receipt by any party hereto or by any Subsidiary thereof of
any subpoena, discovery or other request which arguably calls for the production
or disclosure of information subject to a shared privilege or as to which
another party has the sole right hereunder to assert a privilege, or if any
party obtains knowledge that any of its or any of its Subsidiaries' current or
former Representatives has received any subpoena, discovery or other requests
which arguably calls for the production or disclosure of such privileged
information, such party shall promptly notify the other party of the existence
of the request and shall provide the other party a reasonable opportunity to
review the information (to the extent such information is available to such
party) and to assert any rights it or they may have under this Section 4.5 or
otherwise to prevent the production or disclosure of such privileged
information.
(h) The transfer of all Records and other information pursuant to this
Agreement is made in reliance on the agreement of Parent and SpinCo, as set
forth in Sections 4.4 and 4.5, to maintain the confidentiality of privileged
information and to assert and maintain all applicable privileges. The access to
information being granted pursuant to Sections 4.1 and 4.2 hereof, the agreement
to provide witnesses and individuals pursuant to Sections 2.7 and 3.3 hereof,
the furnishing of notices and documents and other cooperative efforts
contemplated by Section 3.3 hereof, and the transfer of privileged information
between and among the parties and their respective Subsidiaries pursuant
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to this Agreement shall not be deemed a waiver of any privilege that has been or
may be asserted under this Agreement or otherwise.
SECTION 4.6. OWNERSHIP OF INFORMATION. Any information owned by one
party or any of its Subsidiaries that is provided to a requesting party pursuant
to Article III or this Article IV 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 4.7. RETENTION OF RECORDS.
(a) Parent shall deliver to SpinCo upon SpinCo's request all Records
that are specifically identified by SpinCo and known by Parent, after reasonable
inquiry, to be in its control or possession relating to SpinCo Assets, SpinCo
Liabilities or the SpinCo Business. Except (a) as provided in the Tax
Disaffiliation Agreement or (b) when a longer retention period is otherwise
required by Law or agreed to in writing, the Parent Group and the SpinCo Group
shall retain in a reasonably retrievable format, for a period of at least six
(6) years, all Records relating to the SpinCo Business as of the Effective Time.
Notwithstanding the foregoing, in lieu of retaining any specific Records, Parent
may offer in writing to deliver such Records to SpinCo and, if such offer is not
accepted within ninety (90) days, the offered Records may be destroyed or
otherwise disposed of at any time. If SpinCo shall request in writing prior to
the expiration of such 90-day period that any of Records proposed to be
destroyed or disposed of be delivered to SpinCo, Parent shall promptly arrange
for delivery of such requested Records (at SpinCo's cost).
(b) SpinCo shall deliver to Parent upon Parent's request all Records
that are specifically identified by Parent and known by SpinCo, after reasonable
inquiry, to be in its control or possession relating to Parent Assets, Parent
Liabilities or the Parent Business. Except (a) as provided in the Tax
Disaffiliation Agreement or (b) when a longer retention period is otherwise
required by Law or agreed to in writing, the Parent Group and the SpinCo Group
shall retain in a reasonably retrievable format, for a period of at least six
(6) years, all Records relating to the Parent Business as of the Effective Time.
Notwithstanding the foregoing, in lieu of retaining any specific Records, SpinCo
may offer in writing to deliver such Records to Parent and, if such offer is not
accepted within ninety (90) days, the offered Records may be destroyed or
otherwise disposed of at any time. If Parent shall request in writing prior to
the expiration of such 90-day period that any of Records proposed to be
destroyed or disposed of be delivered to Parent, SpinCo shall promptly arrange
for delivery of such requested Records (at Parent's cost).
SECTION 4.8. LIMITATION OF LIABILITY; RELEASE.
(a) No party shall have any liability to any other party in the event
that any information exchanged or provided pursuant to this Agreement which is
an estimate or forecast, or which is based on an estimate or forecast, is found
to be inaccurate.
(b) Effective upon the Distribution and except as otherwise
specifically set forth in this Agreement, each of Parent and SpinCo releases and
forever discharges the other and its Representatives and Subsidiaries, of and
from all Liabilities against such other party, its Representatives and
Subsidiaries or any of its successors or assigns, which the releasing party has
or ever had, which arise out of or relate to events, circumstances or actions
taken by such other party prior to the Distribution; provided, however, that the
foregoing general release shall not apply to this Agreement, the Ancillary
Agreements or the transactions contemplated hereby or thereby and shall not
affect either party's right to enforce this Agreement or any of the Ancillary
Agreements in accordance with their terms.
SECTION 4.9. OTHER AGREEMENTS PROVIDING FOR EXCHANGE OF INFORMATION.
The rights and obligations granted under this Article IV 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.
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ARTICLE V
DISPUTE RESOLUTION
SECTION 5.1. NEGOTIATION. In the event of a controversy, dispute or
claim arising out of, in connection with, or in relation to the interpretation,
performance, nonperformance, validity or breach of this Agreement or otherwise
arising out of, or in any way related to this Agreement or the transactions
contemplated hereby, including any claim based on contract, tort, statute or
constitution (but excluding any controversy, dispute or claim arising out of any
agreement relating to the use or lease of real property if any Third Party is a
party to such controversy, dispute or claim) (collectively, "Agreement
Disputes"), the management of the parties shall negotiate in good faith for a
reasonable period of time to settle such Agreement Dispute; provided, however,
such reasonable period shall not, unless otherwise agreed by the parties in
writing, exceed sixty (60) days from the time the parties began such
negotiations; and provided further, however, that in the event of any mediation
or arbitration in accordance with Sections 5.2 and 5.3 hereof, (i) the parties
shall not assert the defenses of statute of limitations and laches arising for
the period beginning after the date the parties began negotiations hereunder,
and (ii) any statute of limitations or any contractual time period or deadline
under this Agreement or any Ancillary Agreement shall not be deemed to have
passed with respect to such Agreement Dispute until such Agreement Dispute has
been resolved.
SECTION 5.2. MEDIATION. If after such reasonable period such management
are unable to settle such Agreement Dispute (and in any event, unless otherwise
agreed in writing by the parties, after ninety (90) days have elapsed from the
time the parties began such negotiations) and the Agreement Dispute involves a
controversy, dispute or claim of less than $500,000, such Agreement Dispute
shall be determined, at the request of any party, by mediation conducted in
Wilmington, Delaware or at another location which the parties mutually select,
before a retired judge sitting on the panel of Judicial Arbitration & Mediation
Services, Inc. The mediation process shall continue as the exclusive method of
resolving the Agreement Dispute (other than negotiation between the parties)
until the earlier of the Agreement Dispute being resolved or the mediator
finding in good faith that all settlement possibilities have been exhausted and
that the matter is not resolvable through mediation. If the mediator makes such
a finding, at the request of any party, the Agreement Dispute shall then be
determined by binding arbitration in accordance with Section 5.3 hereof.
SECTION 5.3. ARBITRATION. If after such reasonable period such
management are unable to settle such Agreement Dispute (and in any event, unless
otherwise agreed in writing by the parties, after ninety (90) days have elapsed
from the time the parties began such negotiations) and the Agreement Dispute
involves a controversy, dispute or claim of $500,000 or more, or a mediator
makes a finding under Section 5.2 hereof that all settlement possibilities have
been exhausted and that a matter is not resolvable through mediation, such
Agreement Dispute shall be determined, at the demand of any party, by binding
arbitration conducted in Wilmington, Delaware or at another location which the
parties mutually select, before and in accordance with the then-existing
Commercial Arbitration Rules of the American Arbitration Association (the
"Rules"). In any Agreement Dispute between the parties hereto, the numbers of
arbitrators shall be three (3) (one selected by Parent, one selected by SpinCo,
and one jointly selected by the two arbitrators so selected). Any judgment or
award rendered by the arbitrator shall be final, binding and nonappealable
(except upon grounds specified in 9 U.S.C. Section 10(a) as in effect on the
date hereof). If the parties are unable to agree on the arbitrators, the
arbitrators shall be selected in accordance with the Rules. Except as otherwise
provided herein, any controversy concerning whether an Agreement Dispute is an
arbitrable Agreement Dispute, whether arbitration has been waived, whether an
assignee of this Agreement is bound to arbitrate, or as to the interpretation of
enforceability of this Article V shall be determined by the arbitrators. In
resolving any Agreement Dispute, the parties intend that the arbitrators apply
the terms and conditions of this Agreement and the substantive laws of the State
of Delaware, without regard to the choice of law principles thereof. The parties
intend that the provisions to arbitrate set forth herein be valid, enforceable
and irrevocable. The parties agree to comply with any award made in any such
arbitration proceedings that has become final in accordance with the Rules and
agree to enforcement of or entry of judgment upon such award, by any court of
competent jurisdiction, including (a) the state courts of the State of Delaware,
located in Wilmington, or (b) the United States District Court for the District
of Delaware, in accordance with Section 7.16 hereof. The arbitrators shall be
entitled, if appropriate, to award any remedy in such proceedings, including
monetary damages, specific performance and all other forms of legal and
equitable relief; provided, however, the arbitrators shall not be entitled to
award punitive damages. Without limiting the provisions of the Rules, unless
otherwise agreed in writing by or among the parties or permitted by this
Agreement, the parties shall keep confidential all matters relating to the
arbitration or the award, provided
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such matters may be disclosed (i) to the extent reasonably necessary in any
proceeding brought to enforce the award or for entry of a judgment upon the
award and (ii) to the extent otherwise required by Law. Nothing contained herein
is intended to or shall be construed to prevent any party, in accordance with
Article 21(3) of the Rules or otherwise, from applying to any court of competent
jurisdiction for interim measures or other provisional relief in connection with
the subject matter of any Agreement Disputes.
SECTION 5.4. CONTINUITY OF SERVICE AND PERFORMANCE. Unless otherwise
agreed in writing, the parties will continue to provide service and honor all
other commitments under this Agreement and each Ancillary Agreement during the
course of dispute resolution pursuant to the provisions of this Article V with
respect to all matters not subject to such dispute, controversy or claim.
SECTION 5.5. OTHER REMEDIES. Nothing in this Article V shall limit the
right that any party may otherwise have to seek to obtain from any court to
which the parties consent to jurisdiction under Section 7.16 (a) preliminary
injunctive relief in order to preserve the status quo pending the resolution of
a dispute or (b) temporary or permanent injunctive relief from any breach of any
provisions of this Agreement. By seeking such relief, a party in no way waives
its arbitration rights under this Agreement.
ARTICLE VI
INSURANCE
SECTION 6.1. POLICIES AND RIGHTS INCLUDED WITHIN ASSETS. The SpinCo
Assets shall include (a) any and all rights of an insured party under each of
the Parent Shared Policies, subject to the terms of such Parent Shared Policies
and any limitations or obligations of SpinCo contemplated by this Article VI,
specifically including rights of indemnity and the right to be defended by or at
the expense of the insurer, with respect to all claims, suits, actions,
proceedings, injuries, losses, liabilities, damages and expenses incurred or
claimed to have been incurred prior to the Effective Time by any party in or in
connection with the conduct of the SpinCo Business or the ownership of the
SpinCo Assets or, to the extent any claim is made against SpinCo or any of the
SpinCo Subsidiaries, the conduct of the Parent Business or the ownership of the
Parent Assets, and which claims, suits, actions, proceedings, injuries, losses,
liabilities, damages and expenses may arise out of an insured or insurable
occurrence under one or more of such Parent Shared Policies, and (b) the SpinCo
Policies.
SECTION 6.2. POST-DISTRIBUTION DATE CLAIMS. If, subsequent to the
Distribution Date, any Person shall assert a claim against SpinCo or any of the
SpinCo Subsidiaries (including where SpinCo or the SpinCo Subsidiaries are joint
defendants with other Persons) with respect to any claim, suit, action,
proceeding, injury, loss, liability, damage or expense incurred or claimed to
have been incurred prior to the Effective Time in or in connection with the
conduct of the SpinCo Business or the ownership of the SpinCo Assets or, to the
extent any claim is made against SpinCo or any of the SpinCo Subsidiaries
(including where SpinCo or the SpinCo Subsidiaries are joint defendants with
other Persons), the conduct of the Parent Business or the ownership of the
Parent Assets, and which claim, suit, action, proceeding, injury, loss,
liability, damage or expense may arise out of an insured or insurable occurrence
under one or more of the Parent Shared Policies, Parent shall assert and collect
any related Insurance Proceeds under such Parent Shared Policy on behalf of
SpinCo and remit promptly to SpinCo any Insurance Proceeds so collected, and
Parent shall further on behalf of SpinCo assert any and all rights of an insured
party under such Parent Shared Policy with respect to such asserted claim,
specifically including rights of indemnity and the right to be defended by or at
the expense of the insurer and the right to any applicable Insurance Proceeds
thereunder. The parties hereby acknowledge and agree that nothing herein shall
limit SpinCo's right to assert directly and collect any related Insurance
Proceeds under any Parent Shared Policy and that, should SpinCo become liable
for any Parent Liabilities covered by any Parent Shared Policy or any Parent
Policy, SpinCo shall have the right to assert directly and collect any related
Insurance Proceeds under any such Parent Shared Policy or Parent Policy.
SECTION 6.3. ADMINISTRATION; OTHER MATTERS.
(a) Administration. Subject to Section 6.3(c) and Section 6.3(d), from
and after the Distribution Date, (i) Parent shall be responsible for (A)
Insurance Administration of the Parent Shared Policies with respect to all
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Liabilities except SpinCo Liabilities and (B) Claims Administration (except as
provided below) under such Parent Shared Policies with respect to all
Liabilities except SpinCo Liabilities, and (ii) SpinCo shall be responsible for
(A) Insurance Administration of the Parent Shared Policies with respect to all
SpinCo Liabilities and (B) Claims Administration (except as provided below)
under such Parent Shared Policies with respect to all SpinCo Liabilities;
provided, however, that the retention of such responsibilities by Parent or
SpinCo, as the case may be, is in no way intended to limit, inhibit or preclude
(i) any right to insurance coverage for any Insured Claim of a named insured
under such Policies as contemplated by the terms of this Agreement or (ii) the
sharing between Parent and SpinCo of information relating to the matters
addressed in this Article VI; and provided further that Parent's retention or
SpinCo's retention, as the case may be, of the administrative responsibilities
for the Parent Shared Policies shall not relieve the party submitting any
Insured Claim of the primary responsibility for reporting such Insured Claim
accurately, completely and in a timely manner or of such party's authority to
settle any such Insured Claim within any period permitted or required by the
relevant Policy. Parent or SpinCo, as the case may be, may discharge its
administrative responsibilities under this Section 6.3 by contracting for the
provision of services by independent parties. Each of the parties hereto shall
administer and pay any costs relating to defending its respective Insured Claims
under Parent Shared Policies to the extent such defense costs are not covered
under such Policies and shall be responsible for obtaining or reviewing the
appropriateness of releases upon settlement of its respective Insured Claims
under Parent Shared Policies. SpinCo shall reimburse Parent promptly for all
disbursements, out-of-pocket expenses and direct and indirect costs of employees
or agents of Parent relating to Claims Administration and Insurance
Administration contemplated by this Section 6.3(a) on behalf of SpinCo.
Likewise, Parent shall reimburse SpinCo promptly for all disbursements,
out-of-pocket expenses and direct and indirect costs of employees or agents of
SpinCo relating to Claims Administration and Insurance Administration
contemplated by this Section 6.3(a) on behalf of Parent.
(b) Claims. Where a Parent Shared Policy specifically covers SpinCo
Liabilities for periods prior to the Distribution Date or covers claims made
after the Distribution Date with respect to an occurrence prior to the
Distribution Date, then from and after the Distribution Date SpinCo may, subject
to Section 6.3(c) and Section 6.3(d), claim coverage for Insured Claims under
such Parent Shared Policy as and to the extent that such insurance is available
up to the full extent of the applicable limits of liability of such Parent
Shared Policy (and may receive any Insurance Proceeds with respect thereto as
contemplated by Section 6.2 or Section 6.3(c) hereof), subject to the terms of
this Section 6.3.
(c) Allocation of Insurance Proceeds. Insurance Proceeds received with
respect to claims, costs and expenses under the Parent Shared Policies shall be
paid directly to the appropriate Person or to Parent, which shall thereafter
administer the Parent Shared Policies by paying the Insurance Proceeds, as
appropriate, to Parent with respect to Parent Liabilities and to SpinCo with
respect to the SpinCo Liabilities. Payment of the allocable portions of
indemnity costs of Insurance Proceeds resulting from such Policies will be made
by Parent to the appropriate Person upon receipt from the insurance carrier. In
the event that the applicable limits on any particular Parent Shared Policy are
exceeded by the amount of outstanding Insured Claims by the relevant parties
hereto, such parties agree to allocate the Insurance Proceeds received
thereunder based upon their respective percentage of the total of their bona
fide claims (measured as of the date costs related to such bona fide claims were
incurred, such incurrence to be measured, (i) in the case of fees and expenses
incurred for services performed that are attributable to the defense or
disposition of Insured Claims, as of the date such fees and expenses are billed
to an insurance carrier, and (ii) in the case of sums payable in settlement or
satisfaction of a judgment attributable to Insured Claims, as of the date of any
such judgment) which were covered under such Parent Shared Policy (their
"allocable portion of Insurance Proceeds"), and any party who has received
Insurance Proceeds in excess of such party's allocable portion of Insurance
Proceeds shall pay to the other party the appropriate amount so that each party
will have received its allocable portion of Insurance Proceeds pursuant hereto.
Each of the parties agrees to use commercially reasonable efforts to maximize
available coverage under those Parent Shared Policies applicable to it, and to
take all commercially reasonable steps to recover from all other responsible
parties in respect of an Insured Claim to the extent coverage limits under a
particular Parent Shared Policy have been exceeded or would be exceeded as a
result of such Insured Claim.
(d) Allocation of Deductibles, Etc. In the event that the parties have
bona fide claims under any Parent Shared Policy for which a deductible or a
retrospectively rated premium adjustment is payable or for which a
self-insurance retention amount has been applied, the parties agree that the
aggregate amount of the deductible or
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retrospectively rated premium adjustment paid or retention amount applied shall
be borne by the parties in the same proportion which the Insurance Proceeds
received by each such party bears to the total Insurance Proceeds received under
the applicable Parent Shared Policy (their "allocable share of the deductible,
premium adjustment or retention amount"), and any party who has paid more than
its allocable share of the deductible, premium adjustment or retention amount
shall be entitled to receive from the other party an appropriate amount so that
each party has borne its allocable share of the deductible, premium adjustment
or retention amount pursuant hereto. Further, if a party receives no Insurance
Proceeds under that applicable Parent Shared Policy, that party shall have no
allocable share of the deductible, premium adjustment or retention amount under
that applicable Parent Shared Policy, and the other party shall bear all of the
allocable share of the deductible, premium adjustment or retention amount under
that applicable Parent Shared Policy.
(e) Workers Compensation. With respect to any workers compensation
claims for the period prior to the Effective Time, the terms of the Ancillary
Workers Compensation Agreement shall govern.
(f) Continued Responsibility. Notwithstanding anything in this Article
VI to the contrary, the Parent Group shall remain liable to the SpinCo
Indemnitees for the indemnification obligations contemplated by Section 3.1, and
the SpinCo Group shall remain liable to the Parent Indemnitees for the
indemnification obligations contemplated by Section 3.2, in each case, to the
extent any Loss or Liability is not fully paid to or on behalf of the applicable
party by Insurance Proceeds.
SECTION 6.4. AGREEMENT FOR WAIVER OF CONFLICT AND SHARED DEFENSE. In
the event that Insured Claims of more than one of the parties hereto exist
relating to the same occurrence, the parties shall jointly defend and waive any
conflict of interest necessary to the conduct of the joint defense. Nothing in
this Article VI shall be construed to limit or otherwise alter in any way the
obligations of the parties to this Agreement, including those created by this
Agreement, by operation of Law or otherwise.
SECTION 6.5. COOPERATION. The parties agree to use their commercially
reasonable efforts to cooperate with respect to the various insurance matters
contemplated by this Agreement.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1. COMPLETE AGREEMENT; CONSTRUCTION. This Agreement,
including the Exhibits and Schedules, 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. In the event of any inconsistency
between this Agreement and any Schedule hereto, the Schedule shall prevail.
Other than Section 2.4, Section 4.5 and Article V, which shall prevail over any
inconsistent or conflicting provisions in any Ancillary Agreement,
notwithstanding any other provisions in this Agreement to the contrary, in the
event and to the extent that there shall be a conflict between the provisions of
this Agreement and the provisions of any Ancillary Agreement, such Ancillary
Agreement shall control.
SECTION 7.2. ANCILLARY AGREEMENTS. Subject to the last sentence of
Section 7.1, this Agreement is not intended to address, and should not be
interpreted to address, the matters specifically and expressly covered by the
Ancillary Agreements.
SECTION 7.3. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more such counterparts have been signed
by each of the parties and delivered to the other parties.
SECTION 7.4. SURVIVAL OF AGREEMENTS. Except as otherwise contemplated
by this Agreement, all covenants and agreements of the parties contained in this
Agreement shall survive the Distribution Date.
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SECTION 7.5. DISTRIBUTION EXPENSES. Except as otherwise set forth in
this Agreement or any Ancillary Agreement, all costs and expenses incurred on or
prior to the Distribution Date and which are outstanding as of the Distribution
Date or arise after the Distribution Date in connection with the preparation,
execution, delivery, printing and implementation of this Agreement and any
Ancillary Agreement, the Information Statement (including the Registration
Statement) and the Distribution and the consummation of the transactions
contemplated thereby (including (i) costs and expenses incurred pursuant to
Sections 2.1(e), 2.1(i), and 2.10 and (ii) any transfer taxes imposed on the
transfer of real or personal property in the Corporate Transactions) shall be
charged to and paid by SpinCo, and such costs and expenses shall be deemed to be
SpinCo Liabilities. Further, except as otherwise set forth in this Agreement or
any Ancillary Agreement (including the retention and assumption by the Parent
Group of the Parent Liabilities and the retention and assumption by the SpinCo
Group of the SpinCo Liabilities in accordance with Section 2.2 hereof), all
other Liabilities (to the extent not otherwise satisfied prior to the Effective
Time) directly resulting from actions taken prior to the Effective Time in
connection with the preparation, execution, delivery, printing and
implementation of this Agreement and any Ancillary Agreement, the Information
Statement (including the Registration Statement) and the Distribution and the
consummation of the transactions contemplated thereby shall be deemed to be
SpinCo Liabilities. Except as otherwise set forth in this Agreement or any
Ancillary Agreement, each party shall bear its own costs and expenses incurred
after the Distribution Date, and any amount or expense to be paid or reimbursed
by any party hereto to any other party hereto shall be so paid or reimbursed
promptly after the existence and amount of such obligation is determined and
written demand therefor is made.
SECTION 7.6. NOTICES. All notices and other communications hereunder
shall be in writing, shall reference this Agreement and shall be hand delivered
or mailed by registered or certified mail (return receipt requested) or sent by
any means of electronic message transmission with delivery confirmed (by voice
or otherwise) to the parties at the following addresses (or at such other
addresses for a party as shall be specified by like notice) and will be deemed
given on the date on which such notice is received ("Notices"):
To Parent:
National Service Industries, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: _______________________
With a copy to:
McGuireWoods LLP
One ▇▇▇▇▇ Center
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
To SpinCo:
L & C Spinco, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: _______________________
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With a copy to:
King & Spalding
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 7.7. WAIVERS. The failure of any party to require strict
performance by any other party of any provision in this Agreement will not waive
or diminish that party's right to demand strict performance thereafter of that
or any other provision hereof.
SECTION 7.8. AMENDMENTS. Subject to the terms of Section 7.10 hereof,
this Agreement may not be modified or amended except by an agreement in writing
signed by each of the parties hereto.
SECTION 7.9. SUCCESSORS AND ASSIGNS. The provisions to this Agreement
shall be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and assigns.
SECTION 7.10. TERMINATION. This Agreement (including Article III
hereof) may be terminated and the Distribution may be amended, modified or
abandoned at any time prior to the Distribution by and in the sole discretion of
Parent without the approval of SpinCo or the stockholders of Parent. In the
event of such termination, no party shall have any liability of any kind to any
other party or any other Person. After the Distribution, this Agreement may not
be terminated except by an agreement in writing signed by the parties; provided,
however, that Article III shall not be terminated or amended after the
Distribution in respect of any Indemnitees not a party to this Agreement without
the consent of such Persons.
SECTION 7.11. SUBSIDIARIES. Each of the parties hereto shall cause to
be performed, and hereby guarantees the performance of, all actions, agreements
and obligations set forth herein to be performed by any Subsidiary of such party
or by any entity that is contemplated to be a Subsidiary of such party on and
after the Distribution Date.
SECTION 7.12. THIRD-PARTY BENEFICIARIES. Except for the right of
Indemnitees to enforce the provisions of Article III hereof, this Agreement is
solely for the benefit of the parties hereto and their respective Subsidiaries
and Affiliates and should not be deemed to confer upon Third Parties any remedy,
claim, liability, reimbursement, cause of action or other right in excess of
those existing without reference to this Agreement.
SECTION 7.13. TITLE AND HEADINGS. Titles and headings to Sections
herein are inserted for convenience of reference only and are not intended to be
a part of or to affect the meaning or interpretation of this Agreement.
SECTION 7.14. EXHIBITS AND SCHEDULES. The Exhibits and Schedules shall
be construed with and as an integral part of this Agreement to the same extent
as if the same had been set forth verbatim herein.
SECTION 7.15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF DELAWARE.
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SECTION 7.16. CONSENT TO JURISDICTION. Without limiting the provisions
of Article V hereof, each of the parties irrevocably submits to the exclusive
jurisdiction of (a) the state courts of the State of Delaware, located in the
City of Wilmington, and (b) the United States District Court for the District of
Delaware, for the purposes of any suit, action or other proceeding arising out
of this Agreement, the Ancillary Agreements or any transaction contemplated
hereby or thereby. Each of the parties agrees to commence any action, suit or
proceeding relating hereto either in the United States District Court for the
District of Delaware or if such suit, action or other proceeding may not be
brought in such court for jurisdictional reasons, in the state courts of the
State of Delaware, located in the City of Wilmington. Each of the parties
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement, the Ancillary
Agreements or the transactions contemplated hereby or thereby in (i) the state
courts of the State of Delaware, located in the City of Wilmington, or (ii) the
United States District Court for the District of Delaware, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum.
SECTION 7.17. SEVERABILITY. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions, the economic or operational effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 7.18. CONSOLIDATION, MERGER, ETC.
(a) Involving SpinCo. SpinCo shall not consolidate with or merge into
any other Person or convey, transfer or lease all or any substantial portion of
its properties and assets to any Person, and SpinCo shall not permit any Person
to consolidate with or merge into SpinCo or convey, transfer or lease all or any
substantial portion of its properties and assets to SpinCo, unless, in each case
such Person is a corporation, partnership, limited liability company or trust
and expressly assumes, by a written agreement, executed and delivered to Parent,
in form reasonably satisfactory to Parent, all of the liabilities, obligations
and expenses to be assumed by SpinCo under this Agreement and the due and
punctual performance or observance of every agreement and covenant of this
Agreement and the Ancillary Agreements on the part of SpinCo to be performed or
observed.
(b) Involving Parent. Parent shall not consolidate with or merge into
any other Person or convey, transfer or lease all or any substantial portion of
its properties and assets to any Person, and Parent shall not permit any Person
to consolidate with or merge into Parent or convey, transfer or lease all or any
substantial portion of its properties and assets to Parent, unless, in each case
such Person is a corporation, partnership, limited liability company or trust
and expressly assumes, by a written agreement, executed and delivered to SpinCo,
in form reasonably satisfactory to SpinCo, all of the liabilities, obligations
and expenses to be assumed by Parent under this Agreement and the due and
punctual performance or observance of every agreement and covenant of this
Agreement and the Ancillary Agreements on the part of Parent to be performed or
observed.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
NATIONAL SERVICE INDUSTRIES, INC.
By
------------------------------
Name:
Title:
Witness:
-----------------------------
Name:
L & C SPINCO, INC.
By
------------------------------
Name:
Title:
Witness:
-----------------------------
Name:
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