<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 29, 1999
Allegheny Technologies Incorporated
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-12001 25-1792394
---------------------------- ----------- -------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1000 Six PPG Place, Pittsburgh, Pennsylvania 15222-5479
-------------------------------------------- ----------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: 412-394-8400
Allegheny Teledyne Incorporated
-------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE> 2
Item 2. Acquisition or Disposition of Assets.
In January 1999, Allegheny Technologies Incorporated (the "Company")
announced plans to effect a major transformation of the Company that included
the spin-offs of certain businesses in two of the Company's business segments
into independent, publicly-traded companies (the "Spin-Offs"). Teledyne
Technologies Incorporated, a Delaware corporation ("Teledyne"), is comprised of
certain businesses in the Company's former Aerospace and Electronics segment.
Water Pik Technologies, Inc., a Delaware corporation ("Water Pik"), is comprised
of the Company's former Consumer segment.
On August 2, 1999, the Company received a tax ruling from the Internal
Revenue Service that the Spin-Offs would be tax-free to the Company and to the
Company's stockholders. On November 29, 1999 (the "Distribution Date"), the
Company distributed all of the common stock of Teledyne and Water Pik to the
Company's stockholders of record as of November 22, 1999. Information Statements
with respect to Teledyne and Water Pik were distributed to the Company's
stockholders prior to the Distribution Date. No consideration was payable by the
Company's stockholders for the shares of Teledyne or Water Pik common stock, nor
were the Company's stockholders required to surrender or exchange shares of the
Company's common stock or take any other action in order to receive the Teledyne
or Water Pik shares.
As a result of the Spin-Offs, Teledyne and Water Pik are separate
publicly-traded companies and the common stock of both companies trade on the
New York Stock Exchange under the symbols "TDY" and "PIK", respectively.
Immediately following the Spin-Offs, the Company effected a one-for-two reverse
split of its common stock (the "Reverse Stock Split") and changed its name from
"Allegheny Teledyne Incorporated" to "Allegheny Technologies Incorporated."
Common stock of the Company is traded on the New York Stock Exchange under the
symbol "ATI".
2
<PAGE> 3
Item 5. Other Events
The following financial information of Allegheny Technologies
Incorporated is filed as part of this Current Report on Form 8-K:
(1) Sales and operating profit by business segment for the three months
ended March 31, 1999, June 30, 1999 and September 30, 1999 and for the
nine months ended September 30, 1999;
(2) Sales and operating profit by business segment for the three months
ended March 31, 1998, June 30, 1998, September 30, 1998 and December
31, 1998 and for the year ended December 31, 1998;
(3) Basic and diluted net income per common share for the three months
ended March 31, 1999, June 30, 1999 and September 30, 1999 and for the
nine months ended September 30, 1999;
(4) Basic and diluted net income per common share for the three months
ended March 31, 1998, June 30, 1998, September 30, 1998 and December
31, 1998 and for the year ended December 31, 1998.
The Flat-Rolled Products segment consists of Allegheny Ludlum
Corporation, Rodney Metals, the Allegheny Rodney Strip Division of Allegheny
Ludlum and the Company's interest in the Chinese joint venture company known as
Shanghai STAL Precision Stainless Steel Limited Company. The companies in the
segment produce, convert and distribute stainless steel sheet, strip and plate,
Precision Rolled Strip products, flat-rolled nickel-based alloys and titanium,
silicon electrical steels and tool steels.
The High Performance Metals segment consists of Allvac, Allvac Ltd.,
Oremet-Wah Chang, Titanium Industries and Rome Metals. These companies produce,
convert and distribute nickel- and cobalt-based alloys and superalloys, titanium
and titanium-based alloys, zirconium and zirconium chemicals, hafnium and
niobium, tantalum and other special metals, primarily in long-product form.
The Industrial Products segment consists of Metalworking Products,
Casting Service and Portland Forge. The companies in this segment produce
tungsten powder, tungsten carbide materials and cutting tools, large gray and
ductile iron castings and carbon, alloy steel and non-ferrous forgings.
Intersegment sales are generally recorded at full cost or market.
Common services are allocated on the basis of estimated utilization.
3
<PAGE> 4
Sales and Operating Profit by Business Segment
for the Three Months Ended
March 31, 1999, June 30, 1999 and September 30, 1999
and for the Nine Months Ended September 30, 1999
(in millions)
(unaudited)
<TABLE>
<CAPTION>
Nine
Months
Three Months Ended Ended
-------------------------------- --------
3/31/99 6/30/99 9/30/99 9/30/99
------- ------- ------- --------
<S> <C> <C> <C> <C>
Total sales:
Flat-Rolled Products $315.2 $326.5 $334.2 $ 975.9
High Performance Metals 212.8 202.9 191.0 606.7
Industrial Products 78.3 68.7 67.0 214.0
------ ------ ------ --------
606.3 598.1 592.2 1,796.6
Intersegment sales:
Flat-Rolled Products 4.6 6.2 7.8 18.6
High Performance Metals 16.2 19.2 21.9 57.3
------ ------ ------ --------
20.8 25.4 29.7 75.9
Sales to external customers:
Flat-Rolled Products 310.6 320.3 326.4 957.3
High Performance Metals 196.6 183.7 169.1 549.4
Industrial Products 78.3 68.7 67.0 214.0
------ ------ ------ --------
$585.5 $572.7 $562.5 $1,720.7
====== ====== ====== ========
</TABLE>
4
<PAGE> 5
<TABLE>
<CAPTION>
Nine
Months
Three Months Ended Ended
------------------------------ -------
3/31/99 6/30/99 9/30/99 9/30/99
------- ------- ------- -------
<S> <C> <C> <C> <C>
Operating profit:
Flat-Rolled Products $33.7 $28.2 $ 11.9 $ 73.8
Operating profit as a % of sales 10.8% 8.8% 3.6% 7.7%
High Performance Metals 25.7 23.5 16.5 65.7
Operating profit as a % of sales 13.1% 12.8% 9.8% 12.0%
Industrial Products 7.4 1.0 1.8 10.2
Operating profit as a % of sales 9.5% 1.5% 2.7% 4.8%
----- ----- ------ ------
Operating profit 66.8 52.7 30.2 149.7
Operating profit as a % of sales 11.4% 9.2% 5.4% 8.7%
Corporate expenses (9.1) (7.9) (10.8) (27.8)
Interest expense, net (9.0) (8.4) (2.3) (19.7)
Gains on asset sales and other (1.4) 7.3 (0.7) 5.2
Excess pension income 14.9 14.4 16.2 45.5
----- ----- ------ ------
Income from continuing operations
before income taxes and extraordinary gains 62.2 58.1 32.6 152.9
Provision for income taxes 21.8 21.5 11.7 55.0
----- ----- ------ ------
Income from continuing operations
before extraordinary gains 40.4 36.6 20.9 97.9
Income from discontinued operations 20.2 20.7 17.1 58.0
Extraordinary gains on sales of operations -- -- 129.6 129.6
----- ----- ------ ------
Net income $60.6 $57.3 $167.6 $285.5
===== ===== ====== ======
</TABLE>
5
<PAGE> 6
Sales and Operating Profit by Business Segment
For the Three Months Ended
March 31, 1998, June 30, 1998, September 30, 1998 and December 31, 1998
and for the Year Ended December 31, 1998
(in millions)
(unaudited)
<TABLE>
<CAPTION>
Year
Three Months Ended Ended
--------------------------------------- --------
3/31/98 6/30/98 9/30/98 12/31/98 12/31/98
------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
Total sales:
Flat-Rolled Products $331.1 $309.8 $292.5 $292.6 $1,226.0
High Performance Metals 241.7 236.4 211.2 224.4 913.7
Industrial Products 92.0 93.8 80.8 82.4 349.0
------ ------ ------ ------ --------
664.8 640.0 584.5 599.4 2,488.7
Intersegment sales:
Flat-Rolled Products 17.5 10.5 8.6 5.1 41.7
High Performance Metals 10.6 7.9 8.1 18.0 44.6
------ ------ ------ ------ --------
28.1 18.4 16.7 23.1 86.3
Sales to external customers:
Flat-Rolled Products 313.6 299.3 283.9 287.5 1,184.3
High Performance Metals 231.1 228.5 203.1 206.4 869.1
Industrial Products 92.0 93.8 80.8 82.4 349.0
------ ------ ------ ------ --------
$636.7 $621.6 $567.8 $576.3 $2,402.4
====== ====== ====== ====== ========
</TABLE>
6
<PAGE> 7
<TABLE>
<CAPTION>
Year
Three Months Ended Ended
-------------------------------------- --------
3/31/98 6/30/98 9/30/98 12/31/98 12/31/98
------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
Operating profit:
Flat-Rolled Products $28.2 $32.9 $26.4 $34.0 $121.5
Operating profit as a % of sales 9.0% 11.0% 9.3% 11.8% 10.3%
High Performance Metals 42.2 45.9 33.2 39.5 160.8
Operating profit as a % of sales 18.3% 20.1% 16.3% 19.1% 18.5%
Industrial Products 10.4 12.1 8.0 5.3 35.8
Operating profit as a % of sales 11.3% 12.9% 9.9% 6.4% 10.3%
----- ----- ----- ----- ------
Operating profit 80.8 90.9 67.6 78.8 318.1
Operating profit as a % of sales 12.7% 14.6% 11.9% 13.7% 13.2%
Merger and restructuring costs (60.6) (7.2) -- -- (67.8)
Corporate expenses (10.3) (8.1) (8.9) (9.2) (36.5)
Interest expense, net (3.9) (4.9) (4.0) (6.6) (19.4)
Gains on asset sales and other 4.8 0.2 8.8 (2.2) 11.6
Excess pension income 10.5 10.6 10.5 12.2 43.8
----- ----- ----- ----- ------
Income from continuing
operations before income taxes 21.3 81.5 74.0 73.0 249.8
Provision for income taxes 9.3 28.8 28.5 28.2 94.8
----- ----- ----- ----- ------
Income from continuing operations 12.0 52.7 45.5 44.8 155.0
Income from discontinued operations 14.9 22.8 20.0 28.5 86.2
----- ----- ----- ----- ------
Net income $26.9 $75.5 $65.5 $73.3 $241.2
===== ===== ===== ===== ======
</TABLE>
7
<PAGE> 8
Basic and Diluted Net Income Per Common Share
For the Three Months Ended
March 31, 1999, June 30, 1999 and September 30, 1999
and for the Nine Months Ended September 30, 1999
(unaudited)
<TABLE>
<CAPTION>
Nine
Months
Three Months Ended Ended
----------------------------- -------
3/31/99 6/30/99 9/30/99 9/30/99
------- ------- ------- -------
<S> <C> <C> <C> <C>
Basic net income per common share:
Income from continuing operations $0.41 $0.38 $0.22 $1.02
Income from discontinued operations 0.21 0.22 0.18 0.60
Extraordinary gains on sales of businesses -- -- 1.36 1.35
----- ----- ----- -----
Basic net income per common share $0.62 $0.60 $1.76 $2.97
===== ===== ===== =====
Diluted net income per common share:
Income from continuing operations $0.41 $0.38 $0.21 $1.01
Income from discontinued operations 0.21 0.21 0.18 0.60
Extraordinary gains on sales of businesses -- -- 1.36 1.34
----- ----- ----- -----
Diuted net income per common share $0.62 $0.59 $1.75 $2.95
===== ===== ===== =====
</TABLE>
8
<PAGE> 9
Basic and Diluted Net Income Per Common Share
For the Three Months Ended
March 31, 1998, June 30, 1998, September 30, 1998 and December 31, 1998
and for the Year Ended December 31, 1998
(unaudited)
<TABLE>
<CAPTION>
Year
Three Months Ended Ended
----------------------------------- --------
3/31/98 6/30/98 9/30/98 12/31/98 12/31/98
------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
Basic net income per common share:
Income from continuing operations $0.12 $0.54 $0.46 $0.46 $1.57
Income from discontinued operations 0.15 0.23 0.20 0.29 0.88
----- ----- ----- ----- -----
Basic net income per common share $0.27 $0.77 $0.66 $0.75 $2.45
===== ===== ===== ===== =====
Diluted net income per common share:
Income from continuing operations $0.12 $0.53 $0.46 $0.45 $1.56
Income from discontinued operations 0.15 0.23 0.20 0.29 0.87
----- ----- ----- ----- -----
Diluted net income per common share $0.27 $0.76 $0.66 $0.74 $2.43
===== ===== ===== ===== =====
</TABLE>
9
<PAGE> 10
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired
None.
(b) Pro Forma Financial Information
The unaudited pro forma consolidated financial information of the
Company, included in Item 7(b) of this Report, is based on and should be read in
conjunction with the audited consolidated financial statements and notes thereto
appearing in the Company's Annual Report on Form 10-K for the year ended
December 31, 1998 and the unaudited consolidated financial statements and notes
thereto appearing in the Company's Form 10-Q for the period ended September 30,
1999. The accompanying unaudited pro forma consolidated income statements for
the nine months ended September 30, 1999 and 1998 and the year ended December
31, 1998 and the unaudited pro forma balance sheet at September 30, 1999 present
the results of operations and financial position of the Company assuming that
the transactions contemplated by the Spin-Offs and the Reverse Stock Split had
been completed as of the beginning of 1998 with respect to the consolidated
income statements and as of September 30, 1999 with respect to the consolidated
balance sheet. In addition, the statements reflect the operations of the
companies spun off and the companies sold as discontinued. Sold companies
include Ryan Aeronautical, the McCormick Selph Ordnance Unit and the pressure
relief valve, vehicle control valve, nitrogen gas springs, consumer drinkware,
construction and mining and material handling businesses.
In the opinion of management, the statements include all material
adjustments necessary to reflect, on a pro forma basis, the impact of the
Spin-Offs and the Reverse Stock Split on the historical financial information of
the Company. The adjustments are described in the notes to pro forma financial
information and are set forth in the "Pro Forma Adjustments" column.
The unaudited pro forma financial information has been presented for
informational purposes only and does not reflect the results of operations or
financial position of the Company that would have occurred had the Company
operated as a company without the spun-off operations and the companies sold for
the periods represented. Actual results might have differed. The unaudited pro
forma financial information should not be relied upon as being indicative of
results the Company would have had or of future results after the Spin-Offs and
sales of companies.
10
<PAGE> 11
ALLEGHENY TECHNOLOGIES INCORPORATED AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
September 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Historical Pro Forma
(In millions) Allegheny Pro Forma Allegheny
Technologies Adjustments Technologies
------------ ----------- ------------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 49.2 $ 133.7 $ 182.9
Accounts receivable 504.3 (163.8) 340.5
Inventories 647.6 (88.5) 559.1
Deferred income taxes 60.8 (26.0) 34.8
Prepaid expenses and other current assets 28.1 (3.6) 24.5
-------- ------- --------
Total Current Assets 1,290.0 (148.2) 1,141.8
Property, plant and equipment 994.3 (88.7) 905.6
Prepaid pension cost 501.9 16.5 518.4
Cost in excess of net assets acquired 242.8 (36.5) 206.3
Net assets of discontinued operations -- 20.7 20.7
Other assets 112.0 (15.7) 96.3
-------- ------- --------
Total Assets $3,141.0 $(251.9) $2,889.1
======== ======= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 238.9 $ (76.3) $ 162.6
Accrued liabilities 324.6 (75.0) 249.6
Short-term debt and current portion of long-term debt 73.9 (0.2) 73.7
-------- ------- --------
Total Current Liabilities 637.4 (151.5) 485.9
Long-term debt 256.7 (6.8) 249.9
Accrued postretirement benefits 578.0 (33.3) 544.7
Other 251.2 (11.1) 240.1
-------- ------- --------
Total Liabilities 1,723.3 (202.7) 1,520.6
Stockholders' Equity:
Preferred stock -- -- --
Common stock 19.8 (9.9) 9.9
Additional paid-in capital 470.8 9.9 480.7
Retained earnings 1,107.7 (50.1) 1,057.6
Treasury stock (183.9) -- (183.9)
Foreign currency translation losses (4.4) 0.9 (3.5)
Unrealized gains on securities 7.7 -- 7.7
-------- ------- --------
Total Stockholders' Equity 1,417.7 (49.2) 1,368.5
-------- ------- --------
Total Liabilities and Stockholders' Equity $3,141.0 $(251.9) $2,889.1
======== ======= ========
</TABLE>
The accompanying notes are an integral part of these statements.
11
<PAGE> 12
ALLEGHENY TECHNOLOGIES INCORPORATED AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
For the Nine Months Ended September 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Historical Pro Forma
(In millions, except Allegheny Pro Forma Allegheny
per share amounts) Technologies Adjustments Technologies
------------ ----------- ------------
<S> <C> <C> <C>
Sales $2,708.4 $(987.7) $1,720.7
Costs and expenses:
Cost of sales 2,093.8 (701.2) 1,392.6
Selling and administrative expenses 349.1 (190.0) 159.1
Transformation costs 7.4 (7.4) --
Interest expense, net 19.8 (0.1) 19.7
-------- ------- --------
2,470.1 (898.7) 1,571.4
Earnings before other income 238.3 (89.0) 149.3
Other income 5.1 (1.5) 3.6
-------- ------- --------
Income from continuing
operations before income taxes
and extraordinary gains 243.4 (90.5) 152.9
Provision for income taxes 87.5 (32.5) 55.0
-------- ------- --------
Income from continuing operations
before extraordinary gains 155.9 (58.0) 97.9
Income from discontinued operations,
net of income taxes -- 58.0 58.0
Extraordinary gains on sales of operations,
net of income taxes 129.6 -- 129.6
-------- ------- --------
Net income $ 285.5 $ -- $ 285.5
======== ======= ========
</TABLE>
12
<PAGE> 13
<TABLE>
<CAPTION>
Pro Forma
Historical Pro Forma Effect of
Allegheny Pro Forma Allegheny Reverse
Technologies Adjustments Technologies Stock Split
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Basic net income per common share:
Income from continuing operations
before extraordinary gains $0.81 $(0.30) $0.51 $1.02
Income from discontinued operations -- 0.30 0.30 0.60
Extraordinary gains on sales of operations 0.67 -- 0.67 1.35
----- ------ ----- -----
Basic net income per common share $1.48 $ -- $1.48 $2.97
===== ====== ===== =====
Diluted net income per common share:
Income from continuing operations
before extraordinary gains $0.81 $(0.30) $0.51 $1.01
Income from discontinued operations -- 0.30 0.30 0.60
Extraordinary gains on sales of operations 0.67 -- 0.67 1.34
----- ------ ----- -----
Diluted net income per common share $1.48 $ -- $1.48 $2.95
===== ====== ===== =====
</TABLE>
The accompanying notes are an integral part of these statements.
13
<PAGE> 14
ALLEGHENY TECHNOLOGIES INCORPORATED AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
For the Year Ended December 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma
Historical Pro Forma Effect of
(In millions, except Allegheny Pro Forma Allegheny Reverse
per share amounts) Technologies Adjustments Technologies Stock Split
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Sales $3,923.4 $(1,521.0) $2,402.4
Costs and expenses:
Cost of sales 2,950.2 (1,118.5) 1,831.7
Selling and administrative expenses 507.6 (263.2) 244.4
Transformation, merger and restructuring costs 67.8 -- 67.8
Interest expense, net 19.3 0.1 19.4
-------- --------- --------
3,544.9 (1,381.6) 2,163.3
Earnings before other income 378.5 (139.4) 239.1
Other income 12.7 (2.0) 10.7
-------- --------- --------
Income from continuing operations before income taxes 391.2 (141.4) 249.8
Provision for income taxes 150.0 (55.2) 94.8
-------- --------- --------
Income from continuing operations 241.2 (86.2) 155.0
Income from discontinued operations, net of income taxes -- 86.2 86.2
-------- --------- --------
Net income $ 241.2 $ -- $ 241.2
======== ========= ========
Basic net income per common share:
Income from continuing operations $ 1.23 $ (0.44) $ 0.79 $1.57
Income from discontinued operations -- 0.44 0.44 0.88
-------- --------- -------- -----
Basic net income per common share $ 1.23 $ -- $ 1.23 $2.45
======== ========= ======== =====
Diluted net income per common share:
Income from continuing operations $ 1.22 $ (0.44) $ 0.78 $1.56
Income from discontinued operations -- 0.44 0.44 0.87
-------- --------- -------- -----
Diluted net income per common share $ 1.22 $ -- $ 1.22 $2.43
======== ========= ======== =====
</TABLE>
The accompanying notes are an integral part of these statements.
14
<PAGE> 15
ALLEGHENY TECHNOLOGIES INCORPORATED
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
For the Nine Months Ended September 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma
Historical Pro Forma Effect of
(In millions, except Allegheny Pro Forma Allegheny Reverse
per share amounts) Technologies Adjustments Technologies Stock Split
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Sales $2,948.4 $(1,122.3) $1,826.1
Costs and expenses:
Cost of sales 2,248.8 (835.0) 1,413.8
Selling and administrative expenses 363.4 (194.7) 168.7
Transformation, merger and restructuring costs 67.8 -- 67.8
Interest expense, net 12.7 0.1 12.8
-------- --------- --------
2,692.7 (1,029.6) 1,663.1
Earnings before other income 255.7 (92.7) 163.0
Other income 15.9 (2.1) 13.8
-------- --------- --------
Income from continuing operations before income taxes 271.6 (94.8) 176.8
Provision for income taxes 103.7 (37.1) 66.6
-------- --------- --------
Income from continuing operations 167.9 (57.7) 110.2
Income from discontinued operations, net of income taxes -- 57.7 57.7
-------- --------- --------
Net income $ 167.9 $ -- $ 167.9
======== ========= ========
Basic net income per common share:
Income from continuing operations $ 0.85 $ (0.29) $ 0.56 $1.12
Income from discontinued operations -- 0.29 0.29 0.59
-------- --------- -------- -----
Basic net income per common share $ 0.85 $ -- $ 0.85 $1.71
======== ========= ======== =====
Diluted net income per common share:
Income from continuing operations $ 0.85 $ (0.29) $ 0.56 $1.11
Income from discontinued operations -- 0.29 0.29 0.58
-------- --------- -------- -----
Diluted net income per common share $ 0.85 $ -- $ 0.85 $1.69
======== ========= ======== =====
</TABLE>
The accompanying notes are an integral part of these statements.
15
<PAGE> 16
NOTES TO PRO FORMA FINANCIAL INFORMATION
The pro forma unaudited consolidated balance sheet was prepared
assuming the Spin-Offs and Reverse Stock Split occurred on September 30, 1999
and includes "Pro Forma Adjustments" as follows:
(i) To reclassify the operations sold and operations spun-off as
discontinued operations.
(ii) To record cash proceeds of $134 million from credit facilities
established by the Company on behalf of Teledyne and Water Pik. The repayment
obligations of $100 million and $34 million under these credit facilities were
assumed by Teledyne and Water Pik, respectively.
(iii) To record the distribution of the spun-off companies to Company
stockholders.
(iv) To reflect the Reverse Stock Split.
The pro forma unaudited consolidated income statements were prepared
assuming the Spin-Offs and Reverse Stock Split occurred at the beginning of
1998. These statements include "Pro Forma Adjustments" as follows:
(i) To reclassify the operations sold and operations spun-off as
discontinued operations.
(ii) To reflect the Reverse Stock Split.
16
<PAGE> 17
(c) Exhibits
2.1 Separation and Distribution Agreement dated November 29, 1999
among Allegheny Teledyne Incorporated (now known as Allegheny
Technologies Incorporated), TDY Holdings, LLC, Teledyne Industries,
Inc. and Teledyne Technologies Incorporated.
2.2 Separation and Distribution Agreement dated November 29, 1999
among Allegheny Teledyne Incorporated (now known as Allegheny
Technologies Incorporated), TDY Holdings, LLC, Teledyne Industries,
Inc. and Water Pik Technologies, Inc.
17
<PAGE> 18
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Allegheny Technologies Incorporated
(Registrant)
Date: December 13, 1999 By: /s/ James L. Murdy
------------------------
James L. Murdy
Executive Vice President Finance and
Administration and Chief Financial Officer
18
<PAGE> 19
EXHIBIT INDEX
2.1 Separation and Distribution Agreement dated November 29, 1999 among
Allegheny Teledyne Incorporated (now known as Allegheny Technologies
Incorporated), TDY Holdings, LLC, Teledyne Industries, Inc. and Teledyne
Technologies Incorporated.
2.2 Separation and Distribution Agreement dated November 29, 1999 among
Allegheny Teledyne Incorporated (now known as Allegheny Technologies
Incorporated), TDY Holdings, LLC, Teledyne Industries, Inc. and Water Pik
Technologies, Inc.
19
<PAGE> 1
Exhibit 2.1
SEPARATION AND DISTRIBUTION AGREEMENT
BY AND AMONG
ALLEGHENY TELEDYNE INCORPORATED,
TDY HOLDINGS, LLC,
TELEDYNE INDUSTRIES, INC.
AND
TELEDYNE TECHNOLOGIES INCORPORATED
DATED AS OF NOVEMBER 29, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I DEFINITIONS................................................................................2
ARTICLE II THE SEPARATION...........................................................................13
2.01. Transfer of Assets and Assumption of Liabilities.....................................13
2.02. Teledyne Technologies Assets.........................................................14
2.03. Teledyne Technologies Liabilities....................................................14
2.04. Termination of Agreements............................................................16
2.05. Documents Relating to Transfer of Real Property Interests
and Tangible Property Located Thereon.............................................16
2.06. Documents Further Evidencing Transfers of Assets and
Assumption of Liabilities.........................................................17
2.07. Other Ancillary Agreements...........................................................17
2.08. Disclaimer of Representations and Warranties.........................................17
2.09. Financing Arrangements...............................................................18
2.10. Governmental Approvals and Consents..................................................18
2.11. Novation of Assumed Teledyne Technologies Liabilities................................19
2.12. Transfer of Brown Assets and Assumption of Brown Liabilities.........................20
2.13. Consummation of Purchase and Sale Agreements;
Interim Contribution..............................................................20
2.14. TI Contribution And Liquidation......................................................20
2.15. Interim Distributions................................................................20
ARTICLE III THE DISTRIBUTION........................................................................20
3.01. The Distribution.....................................................................20
3.02. Actions Prior to the Distribution....................................................20
3.03. Fractional Shares....................................................................21
ARTICLE IV THE PUBLIC OFFERING......................................................................22
4.01. The Public Offering..................................................................22
4.02. Proceeds of the Public Offering......................................................22
4.03. Remedies.............................................................................23
ARTICLE V MUTUAL RELEASES; INDEMNIFICATION..........................................................23
5.01. Release of Pre-Distribution Claims...................................................23
5.02. Indemnification by Teledyne Technologies.............................................25
5.03. Indemnification by ATI...............................................................26
5.04. Indemnification Obligations Net of Insurance Proceeds and Other Amounts..............27
5.05. Procedures for Indemnification of Third Party Claims.................................27
5.06. Additional Matters...................................................................28
5.07. Remedies Cumulative..................................................................29
5.08. Survival of Indemnities..............................................................29
</TABLE>
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<TABLE>
<S> <C>
ARTICLE VI CERTAIN OTHER MATTERS....................................................................29
6.01. Insurance Matters....................................................................29
6.02. Certain Business Matters.............................................................32
6.03. Late Payments........................................................................32
6.04. Certain Governance Matters...........................................................32
ARTICLE VII EXCHANGE OF INFORMATION; CONFIDENTIALITY................................................33
7.01. Agreement for Exchange of Information; Archives......................................33
7.02. Ownership of Information.............................................................33
7.03. Compensation For Providing Information...............................................33
7.04. Record Retention.....................................................................34
7.05. Other Agreements Providing for Exchange of Information...............................34
7.06. Production of Witnesses; Records; Cooperation........................................34
7.07. Confidentiality......................................................................35
7.08. Protective Arrangements..............................................................36
ARTICLE VIII FURTHER ASSURANCES......................................................................36
8.01. Further Assurances...................................................................36
ARTICLE IX TERMINATION..............................................................................37
9.01. Termination..........................................................................37
9.02. Effect of Termination................................................................37
ARTICLE X MISCELLANEOUS.............................................................................37
10.01. Counterparts; Entire Agreement; Corporate Power.....................................37
10.02. Governing Law; Consent to Jurisdiction..............................................38
10.03. Assignability.......................................................................38
10.04. Third Party Beneficiaries...........................................................39
10.05. Notices.............................................................................39
10.06. Severability........................................................................39
10.07. Force Majeure.......................................................................40
10.08. Headings............................................................................40
10.09. Survival of Covenants...............................................................40
10.10. Waivers of Default..................................................................40
10.11. Specific Performance................................................................40
10.12. Amendments..........................................................................40
10.13. Interpretation......................................................................41
10.14. Disputes............................................................................41
10.15. Exclusivity of Tax Sharing Agreement................................................42
</TABLE>
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SEPARATION AND DISTRIBUTION AGREEMENT
THIS SEPARATION AND DISTRIBUTION AGREEMENT, dated as of November 29,
1999, is by and among Allegheny Teledyne Incorporated, a Delaware corporation
("ATI"), TDY Holdings, LLC, a Delaware limited liability company the sole member
of which is ATI ("Holdings"), Teledyne Industries, Inc., a California
corporation and an indirect wholly owned subsidiary of ATI ("TII"), and Teledyne
Technologies Incorporated, a Delaware corporation and wholly owned subsidiary of
TII ("Teledyne Technologies"). Capitalized terms used herein and not otherwise
defined shall have the respective meanings assigned to them in Article I hereof.
WHEREAS, the Board of Directors of ATI has determined that it is in the
best interests of ATI and its stockholders to separate ATI's existing businesses
into three independent businesses; and
WHEREAS, in furtherance of the foregoing, it is appropriate and
desirable to transfer the Teledyne Technologies Assets to Teledyne Technologies
and to cause Teledyne Technologies to assume the Teledyne Technologies
Liabilities, all as more fully described in this Agreement and the Ancillary
Agreements; and
WHEREAS, ATI intends, subject to completion of the transactions
contemplated hereby (including the foregoing transfer of Teledyne Technologies
Assets and assumption of Teledyne Technologies Liabilities) and to the other
terms of this Agreement and to further action by its Board of Directors, to
effect the Distribution; and
WHEREAS, the Form 10 Registration Statement has become effective under
the Exchange Act; and
WHEREAS, ATI has received a private letter ruling from the Internal
Revenue Service to the effect that, among other things, the Distribution will
qualify as a tax-free distribution for federal income tax purposes under Section
355 of the Code; and
WHEREAS, the Distribution is to be followed by the Public Offering; and
WHEREAS, it is expected that, following certain transfers of other
Assets and assignments and assumptions of other Liabilities, ATI will distribute
to its stockholders all of the capital stock of Water Pik Technologies, Inc.
("Water Pik") held directly or indirectly by ATI and that, in connection
therewith, ATI and Water Pik have entered into agreements, including the Water
Pik Separation and Distribution Agreement, to address matters relating to the
Water Pik Distribution; and
WHEREAS, it is appropriate and desirable to set forth the principal
corporate transactions required to effect the Separation, the Distribution and
the Public Offering and certain other agreements that will govern certain
matters relating to the Separation, the Distribution and the Public Offering and
the relationships of ATI and Teledyne Technologies and their respective
Subsidiaries following the Separation and the Distribution;
<PAGE> 5
NOW, THEREFORE, the parties, intending to be legally bound, agree as
follows:
ARTICLE I
DEFINITIONS
For the purpose of this Agreement the following terms shall have the
following meanings:
1.01 ACTION means any demand, action, suit, countersuit, arbitration,
inquiry, proceeding or investigation by or before any federal, state, local,
foreign or international Governmental Authority or any arbitration or mediation
tribunal.
1.02 AFFILIATE of any Person means a Person that controls, is
controlled by, or is under common control with such Person. As used herein,
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such entity, whether
through ownership of voting securities or other interests, by contract or
otherwise.
1.03 AGENT means the distribution agent to be appointed by ATI to
distribute to the stockholders of ATI the shares of Teledyne Technologies Common
Stock held by ATI pursuant to the Distribution.
1.04 AGREEMENT means this Separation and Distribution Agreement,
including all of the Schedules hereto.
1.05 ANCILLARY AGREEMENTS means the deeds, lease assignments and
assumptions, leases, subleases and sub-subleases, subscription or contribution
agreements, stock powers, and the supplemental and other agreements and
instruments related thereto contemplated by Article II, including the Brown
Transfer and Assumption Agreement, the Purchase and Sale Agreements, the
Employee Benefits Agreement, the Interim Services Agreement, the License
Agreement, the Patent Assignments and related agreements regarding powers of
attorney and the Tax Sharing Agreement.
1.06 ASSETS means assets, properties and rights (including goodwill),
wherever located (including in the possession of vendors or other third parties
or elsewhere), whether real, personal or mixed, tangible, intangible or
contingent, in each case whether or not recorded or reflected or required to be
recorded or reflected on the books and records or financial statements of any
Person, including the following:
(a) all accounting and other books, records and files whether in paper,
microfilm, microfiche, computer tape or disc, magnetic tape or any other form;
(b) all apparatus, computers and other electronic data processing
equipment, fixtures, machinery, equipment, furniture, office equipment,
automobiles, trucks, rolling stock, vessels, motor vehicles and other
transportation equipment, special and general tools, test devices, prototypes
and models and other tangible personal property;
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<PAGE> 6
(c) all inventories of materials, parts, raw materials, supplies,
work-in-process and finished goods and products;
(d) all interests in real property of whatever nature, including
easements, whether as owner, lessor, sublessor, lessee, sublessee or otherwise;
(e) all interests in any capital stock or other equity interests of any
Subsidiary or any other Person, all bonds, notes, debentures or other securities
issued by any Subsidiary or any other Person, all loans, advances or other
extensions of credit or capital contributions to any Subsidiary or any other
Person and all other investments in securities of any Person;
(f) all license agreements, leases of personal property, open purchase
orders for raw materials, supplies, parts or services, unfilled orders for the
manufacture and sale of products and other contracts, agreements or commitments;
(g) all deposits, letters of credit and performance and surety bonds;
(h) Information, including that prepared by consultants and other
parties;
(i) all domestic and foreign patents, copyrights, trade names, domain
names, trademarks, service marks and registrations and applications for any of
the foregoing, mask works, trade secrets, inventions, other proprietary
information and licenses from third Persons granting the right to use any of the
foregoing ("Intellectual Property");
(j) all computer applications, programs and other software, including
operating software, network software, firmware, middleware, internet web pages,
design software, design tools, systems documentation and instructions;
(k) all cost information, sales and pricing data, customer prospect
lists, supplier records, customer and supplier lists, customer and vendor data,
correspondence and lists, product literature, artwork, design, development and
manufacturing files, vendor and customer drawings, formulations and
specifications, quality records and reports and other books, records, studies,
surveys, reports, plans and documents;
(l) all prepaid expenses, trade accounts and other accounts and notes
receivables;
(m) all rights under contracts or agreements, all claims or rights
against any Person arising from the ownership of any Asset, all rights in
connection with any bids or offers and all related claims, choses in action or
similar rights, whether accrued or contingent, including any claims of
infringement of Intellectual Property against third parties;
(n) all rights as a named insured under insurance policies and all
rights in the nature of insurance, indemnification or contribution;
(o) all licenses, permits, approvals and authorizations which have been
issued by any Governmental Authority;
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(p) cash or cash equivalents, bank accounts, lock boxes and other depos
it agreements; and
(q) interest rate, currency, commodity or other swap, collar, cap or
other hedging or similar agreements or arrangements.
1.07 ATI AUTOMOBILE POLICIES means those ATI Policies that (i) insure
Teledyne Technologies or any other member of the Teledyne Technologies Group,
and (ii) provide automobile insurance.
1.08 ATI COMMON STOCK means the Common Stock, par value $0.10 per
share, of ATI.
1.09 ATI GENERAL LIABILITY POLICIES means those ATI Policies that (i)
insure Teledyne Technologies or any other member of the Teledyne Technologies
Group, and (ii) provide general liability, public liability, or comprehensive
general liability insurance.
1.10 ATI GROUP means ATI and each Person (other than any member of the
Teledyne Technologies Group or the Water Pik Group) that is an Affiliate of ATI
immediately after the Effective Time.
1.11 ATI INDEMNITEES has the meaning set forth in Section 5.02.
1.12 ATI LIABILITIES means all Liabilities of ATI other than Teledyne
Technologies Liabilities and Water Pik Liabilities.
1.13 ATI POLICIES means policies of insurance that have been issued to,
or in favor of, ATI or Subsidiaries of ATI.
1.14 ATI PRODUCT LIABILITY POLICIES means those ATI Policies that (i)
insure Teledyne Technologies or any other member of the Teledyne Technologies
Group, and (ii) provide product liability insurance, other than aircraft
products liability insurance.
1.15 ATI WORKERS COMPENSATION POLICIES means those ATI Policies that
(i) insure Teledyne Technologies or any other member of the Teledyne
Technologies Group, and (ii) provide workers compensation insurance.
1.16 BROWN means Teledyne Brown Engineering, Inc., a Delaware
corporation and wholly owned subsidiary of Teledyne Technologies.
1.17 BROWN ASSETS means those Teledyne Technologies Assets described in
the Brown Transfer and Assumption Agreement.
1.18 BROWN LIABILITIES means those Teledyne Technologies Liabilities
described in the Brown Transfer and Assumption Agreement.
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<PAGE> 8
1.19 BROWN TRANSFER AND ASSUMPTION AGREEMENT means the Asset Transfer
and Liabilities Assumption Agreement, dated as of the date hereof, between
Teledyne Technologies and Brown.
1.20 CODE means the Internal Revenue Code of 1986, as amended.
1.21 COMMISSION means the Securities and Exchange Commission.
1.22 CONSENTS means any consents, waivers or approvals from, or
notification requirements to, any third parties.
1.23 DESIGNATED OFFICERS means, (i) in the case of ATI, the Senior Vice
President, General Counsel and Secretary of ATI or his successor, and (ii) in
the case of Teledyne Technologies, the Senior Vice President, General Counsel
and Secretary of Teledyne Technologies or his successor.
1.24 DGCL means the Delaware General Corporation Law, as amended.
1.25 DISPUTES has the meaning set forth in Section 10.14.
1.26 DISTRIBUTION means the distribution by ATI on a pro rata basis to
holders of ATI Common Stock of all of the outstanding shares of Teledyne
Technologies Common Stock.
1.27 DISTRIBUTION DATE means the date on which the Distribution occurs.
1.28 EFFECTIVE TIME means 12:00 noon, Eastern Standard Time or Eastern
Daylight Time (whichever shall be then in effect), on the Distribution Date.
1.29 EMPLOYEE BENEFITS AGREEMENT means the Employee Benefits Agreement,
dated as of the date hereof, by and between ATI and Teledyne Technologies.
1.30 ENVIRONMENTAL LAW means any federal, state, local, foreign or
international statute, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, common law (including tort and environmental
nuisance law), legal doctrine, order, judgment, decree, injunction, requirement
or agreement with any Governmental Authority, now or hereafter in effect
relating to health, safety, pollution or the environment (including ambient air,
surface water, groundwater, land surface or subsurface strata) or to emissions,
discharges, releases or threatened releases of any substance currently or at any
time hereafter listed, defined, designated or classified as hazardous, toxic,
waste, radioactive or dangerous, or otherwise regulated, under any of the
foregoing, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of any such substances,
including the Comprehensive Environmental Response, Compensation and Liability
Act, the Superfund Amendments and Reauthorization Act and the Resource
Conservation and Recovery Act and comparable provisions in state, local, foreign
or international law.
1.31 ENVIRONMENTAL LIABILITIES means all Liabilities relating to,
arising out of or resulting from any Environmental Law or contract or agreement
relating to environmental,
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health or safety matters (including all removal, remediation or cleanup costs,
investigatory costs, governmental response costs, natural resources damages,
property damages, personal injury damages, costs of compliance with any
settlement, judgment or other determination of Liability and indemnity,
contribution or similar obligations) and all costs and expenses (including
allocated costs of in-house counsel and other personnel), interest, fines,
penalties or other monetary sanctions in connection therewith.
1.32 EXCHANGE ACT means the Securities Exchange Act of 1934, as
amended, together with the rules and regulations promulgated thereunder.
1.33 EXCLUDED ASSETS has the meaning set forth in Section 2.02(b).
1.34 EXPENSE FACTORS means expense factors or similar factors or
multipliers set forth in policies of insurance or related agreements applicable
to liabilities, losses or defense costs insured thereunder that are subject to a
Self-Insurance Obligation.
1.35 FINANCING FACILITY means the Credit Agreement, dated October 29,
1999, among ATI, Teledyne Technologies, Bank of America, N.A., as Administrative
Agent, Swing Line Lender and Issuing Lender, and the other financial
institutions party thereto, and any substitute or successor credit facility.
1.36 FORM 10 REGISTRATION STATEMENT means the registration statement on
Form 10 filed under the Exchange Act, pursuant to which Teledyne Technologies
Common Stock will be registered under the Exchange Act following the
Distribution, together with all amendments thereto.
1.37 GOVERNMENTAL APPROVALS means any notices, reports or other filings
to be made, or any consents, registrations, approvals, permits or authorizations
to be obtained from, any Governmental Authority.
1.38 GOVERNMENTAL AUTHORITY shall mean any federal, state, local,
foreign or international court, government, department, commission, board,
bureau, agency, official or other regulatory, administrative or governmental
authority.
1.39 GROUP means the ATI Group, the Teledyne Technologies Group or the
Water Pik Group, as the context requires.
1.40 INCURRED LOSSES means the sum of paid losses (indemnity and loss
adjustment expenses) and reserves for unpaid losses.
1.41 INDEMNIFYING PARTY has the meaning set forth in Section 5.04(a).
1.42 INDEMNITEE has the meaning set forth in Section 5.04(a).
1.43 INDEMNITY PAYMENT has the meaning set forth in Section 5.04(a).
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1.44 INDUSTRIES INTERNATIONAL means Teledyne Industries International,
Inc., a California corporation.
1.45 INDUSTRIES STOCK INTERESTS means an 83% common stock interest in
Ensambles de Precision, S.A. de C.V.
1.46 INFORMATION means information, whether or not patentable or
copyrightable, in written, oral, electronic or other tangible or intangible
forms, stored in any medium, including studies, reports, records, books,
contracts, instruments, surveys, discoveries, ideas, concepts, know-how,
analyses, techniques, designs, specifications, drawings, blueprints, diagrams,
models, operating and maintenance manuals, prototypes, samples, flow charts,
data, computer data, disks, diskettes, tapes, computer programs or other
software, marketing plans, customer names, communications by or to attorneys
(including attorney-client privileged communications), memos and other materials
prepared by attorneys or under their direction (including attorney work
product), and other technical, financial, employee or business information or
data, whether prepared by or for any affected party.
1.47 INFORMATION STATEMENT means the Information Statement forming a
part of the Form 10 Registration Statement to be mailed to holders of ATI Common
Stock in connection with the Distribution.
1.48 INITIAL MEDIATION PERIOD has the meaning set forth in Section
10.14.
1.49 INSURANCE POLICIES means the insurance policies written by
insurance carriers unaffiliated with ATI pursuant to which Teledyne Technologies
or one or more of its Subsidiaries (or their respective officers or directors)
will be insured parties after the Effective Time.
1.50 INSURANCE PROCEEDS means those monies:
(a) received by an insured from an insurance carrier;
(b) paid by an insurance carrier on behalf of the insured; or
(c) received (including by way of set off) from any third party in the
nature of insurance, contribution or indemnification in respect of any
Liability;
in any such case net of any applicable premium adjustments (including reserves
and retrospectively rated premium adjustments) and net of any costs or expenses
(including allocated costs of in-house counsel and other personnel) incurred in
the collection thereof.
1.51 INTERIM SERVICES AGREEMENT means the Interim Services Agreement,
dated as of the date hereof, by and between ATI and Teledyne Technologies.
1.52 LIABILITIES means any and all losses, claims, charges, debts,
demands, actions, causes of action, suits, damages, obligations, payments, costs
and expenses, sums of money, accounts, reckonings, bonds, specialties,
indemnities and similar obligations, exonerations,
7
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covenants, contracts, controversies, agreements, promises, doings, omissions,
variances, guarantees, make whole agreements and similar obligations, and other
liabilities, including all contractual obligations, whether absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising, and including those arising under
any law, rule, regulation, Action, threatened or contemplated Action (including
the costs and expenses of demands, assessments, judgments, settlements and
compromises relating thereto and reasonable attorneys' fees and any and all
costs and expenses (including allocated costs of in-house counsel and other
personnel), whatsoever incurred in investigating, preparing or defending against
any such Actions or threatened or contemplated Actions), order or consent decree
of any Governmental Authority or any award of any arbitrator or mediator of any
kind, and those arising under any contract, commitment or undertaking, including
those arising under this Agreement or any Ancillary Agreement, in each case,
whether or not recorded or reflected or required to be recorded or reflected on
the books and records or financial statements of any Person.
1.53 LICENSE AGREEMENT means the Trademark License Agreement, dated as
of the date hereof, by and between TII and Teledyne Technologies.
1.54 NYSE means The New York Stock Exchange, Inc.
1.55 NON-TELEDYNE TECHNOLOGIES ASSETS means any Assets of ATI or any of
its Affiliates (including any member of the Water Pik Group) other than the
Teledyne Technologies Assets.
1.56 PATENT ASSIGNMENTS means the Patent Assignments, effective as of
the Distribution, executed and delivered by TTI to Teledyne Technologies.
1.57 PER CASE MAXIMUM means (i) with respect to any single occurrence
covered under ATI General Liability Policies, ATI Product Liability Policies,
and ATI Automobile Policies, $100,000 (inclusive of indemnity and loss
adjustment expenses multiplied by applicable Expense Factors) and (ii) with
respect to any single occurrence covered by ATI Workers Compensation policies,
$150,000 (inclusive of indemnity and loss adjustment expenses multiplied by
applicable Expense Factors).
1.58 PERSON means an individual, a general or limited partnership, a
corporation, a trust, a joint venture, an unincorporated organization, a limited
liability entity, any other entity and any Governmental Authority.
1.59 POOLED LOSS COSTS ALLOCABLE TO TELEDYNE TECHNOLOGIES means the
share allocated to Teledyne Technologies by virtue of its participation in a
pooling arrangement among ATI divisions applicable to claims that (i) are
covered under ATI General Liability Policies, ATI Product Liability Policies,
ATI Automobile Policies, and ATI Workers Compensation Policies; (ii) exceed the
Per Case Maximum; and (iii) are within a policy's deductible or other form of
self-insurance, which allocation to Teledyne Technologies will be based upon the
same or substantially similar to those factors as have been applied immediately
before the Distribution Date.
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1.60 PRIME RATE means the rate which PNC Bank, N.A., Pittsburgh,
Pennsylvania (or any successor thereto or other commercial bank agreed to by the
parties hereto) announces from time to time as its prime lending rate, as in
effect from time to time.
1.61 PUBLIC OFFERING means the underwritten public offering by Teledyne
Technologies of shares of Teledyne Technologies Common Stock pursuant to the
Public Offering Registration Statement and as contemplated by the Tax Sharing
Agreement.
1.62 PUBLIC OFFERING REGISTRATION STATEMENT means the registration
statement to be filed by Teledyne Technologies under the Securities Act of 1933,
as amended, pursuant to which the offering and sale of shares of Teledyne
Technologies Common Stock to be issued in the Public Offering will be
registered, together with all amendments thereto.
1.63 PURCHASE AND SALE AGREEMENTS means (i) the Purchase and Sale
Agreement, dated as of the date hereof, between Brown and Teledyne
Environmental, (ii) the Purchase and Sale Agreement, dated as of the date
hereof, between Teledyne Ltd. and Teledyne Limited, (iii) the Purchase and Sale
Agreement, dated as of the date hereof, between Teledyne Technologies and
Industries International, and (iv) the Purchase and Sale Agreement, dated as of
the date hereof, between Industries International and Teledyne Investment.
1.64 RECORD DATE means the close of business on the date determined by
the ATI Board of Directors as the record date for determining stockholders of
ATI entitled to receive shares of Teledyne Technologies Common Stock in the
Distribution.
1.65 RIGHTS means the Rights to be distributed by Teledyne Technologies
in respect of Teledyne Technologies Common Stock in accordance with Section 3.02
hereof and pursuant to the Rights Agreement between Teledyne Technologies and
ChaseMellon Shareholder Services, L.L.C.
1.66 RULING REQUEST means the request for ruling (including all
exhibits), as amended and supplemented, under Section 355 and other provisions
of the Code, originally filed on behalf of ATI on April 6, 1999 in respect of
the Distribution.
1.67 SECURITY INTEREST means any mortgage, security interest, pledge,
lien, charge, claim, option, right to acquire, voting or other restriction,
right-of-way, covenant, condition, easement, encroachment, restriction on
transfer, or other encumbrance of any nature whatsoever.
1.68 SELF INSURANCE OBLIGATION means an obligation by one or more
insureds to pay or reimburse to the issuers of an insurance policy (whether by
way of deductible, retrospective premium, premium adjustment, self-insured
retention or other form of self-insurance), indemnity, allocated loss expense,
and other proceeds multiplied by Expense Factors, if any.
1.69 SEPARATION means the transfer of the Teledyne Technologies Assets
to Teledyne Technologies and its
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Subsidiaries and the assumption by Teledyne Technologies and its Subsidiaries of
the Teledyne Technologies Liabilities, all as more fully described in this
Agreement and the Ancillary Agreements.
1.70 SUBSIDIARY of any Person means any corporation or other
organization whether incorporated or unincorporated of which at least a majority
of the securities or interests having by the terms thereof ordinary voting power
to elect at least a majority of the board of directors or others performing
similar functions with respect to such corporation or other organization is
directly or indirectly owned or controlled by such Person or by any one or more
of its Subsidiaries, or by such Person and one or more of its Subsidiaries;
provided, however that no Person that is not directly or indirectly wholly owned
by any other Person shall be a Subsidiary of such other Person unless such other
Person controls, or has the right, power or ability to control, that Person.
1.71 TAX SHARING AGREEMENT means the Tax Sharing and Indemnification
Agreement, dated as of the date hereof, as the same may be amended, by and
between ATI and Teledyne Technologies.
1.72 TAXES has the meaning set forth in the Tax Sharing Agreement.
1.73 TELEDYNE ENVIRONMENTAL means Teledyne Environmental, Inc., a
California corporation wholly owned by TI.
1.74 TELEDYNE ENVIRONMENTAL ASSETS means those certain assets of
Teledyne Environmental described in the Purchase and Sale Agreement, dated as of
the date hereof, between Brown and Teledyne Environmental.
1.75 TELEDYNE INVESTMENT means Teledyne Investment, Inc., a Delaware
corporation.
1.76 TELEDYNE LIMITED means TDY Limited, a company organized under the
laws of the United Kingdom and an indirect wholly owned subsidiary of TI.
1.77 TELEDYNE LIMITED ASSETS means those certain assets of Teledyne
Limited described in the Purchase and Sale Agreement, dated as of the date
hereof, between TDY Limited and Teledyne Limited.
1.78 TELEDYNE LTD means Teledyne Limited, a corporation organized under
the laws of the United Kingdom and wholly owned by Teledyne Technologies.
1.79 TELEDYNE TECHNOLOGIES ASSETS has the meaning set forth in Section
2.02(a).
1.80 TELEDYNE TECHNOLOGIES BALANCE SHEET means the consolidated balance
sheet of Teledyne Technologies, including the notes thereto, as of September 30,
1999.
1.81 TELEDYNE TECHNOLOGIES BUSINESS means the business and operations
of the divisions and Subsidiaries of TI or TII comprising Teledyne Electronic
Technologies,
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Teledyne Brown Engineering, Teledyne Continental Motors and Teledyne Cast Parts
and any business or operation conducted by Teledyne Technologies or any
Affiliate of Teledyne Technologies at any time on or after the Distribution
Date.
1.82 TELEDYNE TECHNOLOGIES COMMON STOCK means the Common Stock, $.01
par value per share, of Teledyne Technologies and, after the distribution of
Rights referred to in Section 3.02, shall include the associated Rights.
1.83 TELEDYNE TECHNOLOGIES CONTRACTS means the following contracts and
agreements to which TII or any of its Affiliates is a party or by it or any of
its Affiliates or any of their respective Assets is bound, whether as of the
date hereof or prior to or at the Effective Time, and whether or not in writing,
except for any such contract or agreement that is expressly contemplated to be
retained by any member of the ATI Group pursuant to any provision of this
Agreement or any Ancillary Agreement:
(a) any contract or agreement entered into in the name of, or
expressly on behalf of, any division, business unit or member of the Teledyne
Technologies Group;
(b) any contract or agreement that relates exclusively to the Teledyne
Technologies Business;
(c) federal, state and local government and other contracts and
agreements that relate exclusively to the Teledyne Technologies Business;
(d) any contract or agreement representing capital or operating
equipment lease obligations reflected on the Teledyne Technologies Balance
Sheet, including obligations as lessee under those contracts or agreements
listed on Schedule 1.83(d) (as such Schedule may be supplemented after the date
hereof and prior to the Effective Time to assign capital and operating equipment
lease obligations that relate exclusively to the Teledyne Technologies Business
and that were, are or may be executed and delivered after the date of the
Teledyne Technologies Balance Sheet);
(e) any contract or agreement that is otherwise expressly contemplated
pursuant to this Agreement or any of the Ancillary Agreements to be assigned to
Teledyne Technologies or any member of the Teledyne Technologies Group;
(f) any guarantee, indemnity, representation, warranty or other
Liability of any member of the Teledyne Technologies Group or the ATI Group in
respect of any other Teledyne Technologies Contract, any Teledyne Technologies
Liability or the Teledyne Technologies Business (including guarantees of
financing incurred by customers or other third parties in connection with
purchases of products or services from the Teledyne Technologies Business); and
(g) the contracts, agreements and other documents listed or described
on Schedule 1.83(g).
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1.84 TELEDYNE TECHNOLOGIES GROUP means Teledyne Technologies, each
Subsidiary of Teledyne Technologies and each other Person that is contemplated
to be controlled directly or indirectly by Teledyne Technologies as of the
Effective Time.
1.85 TELEDYNE TECHNOLOGIES INDEMNITEES has the meaning set forth in
Section 5.03(a).
1.86 TELEDYNE TECHNOLOGIES LIABILITIES has the meaning set forth in
Section 2.03.
1.87 THIRD PARTY CLAIM has the meaning set forth in Section 5.05(a).
1.88 TI means Teledyne, Inc., a Delaware corporation, and its
successors and assigns.
1.89 TI LIQUIDATION means the dissolution and liquidation of TI in
accordance with applicable provisions of the DGCL and Section 332 of the Code,
as a result of which Holdings will own all of the outstanding capital stock of
TII.
1.90 TRADEMARK, SERVICE MARK AND TRADE DRESS ASSIGNMENT means the
Trademark, Service Mark and Trade Dress Assignment, dated as of the date hereof,
by TII to Teledyne Technologies.
1.91 UNDERWRITERS means the managing underwriters for the Public
Offering.
1.92 UNDERWRITING AGREEMENT means an underwriting agreement in
customary form to be entered into among Teledyne Technologies and the
Underwriters with respect to the Public Offering.
1.93 UNPAID LOSSES means liabilities and losses, including indemnity
payments and allocated loss expenses, that are subject to a Self Insurance
Obligation and that, as of the Distribution Date have not been paid by Teledyne
Technologies or a member of Teledyne Technologies Group and that do not appear
on Schedule 1.93.
1.94 WATER PIK COMMON STOCK means the Common Stock, par value $.01 per
share, of Water Pik.
1.95 WATER PIK DISTRIBUTION means the distribution by ATI on a pro rata
basis to holders of ATI Common Stock of all of the outstanding shares of Water
Pik Common Stock owned by ATI.
1.96 WATER PIK GROUP means Water Pik, each Subsidiary of Water Pik and
each other Person that is contemplated to be controlled directly or indirectly
by Water Pik at the time of the Water Pik Distribution.
1.97 WATER PIK LIABILITIES has the meaning assigned to that term in the
Water Pik Separation and Distribution Agreement.
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1.98 WATER PIK SEPARATION AND DISTRIBUTION AGREEMENT means the
Separation and Distribution Agreement, dated as of the date hereof, among ATI,
Holdings, TII and Water Pik.
1.99 YEAR 2000 COMPLIANT means, with respect to an Asset, that such
Asset will (i) accurately process date/time data (including, but not limited to,
calculating, comparing, sorting, sequencing and calendar generation), including
single century formulas and multi-century formulas, from, into and between the
twentieth and twenty-first centuries and the years 1999 and 2000, including leap
year calculations, and will not malfunction or generate incorrect values or
invalid results involving such dates/times; (ii) accurately interface with other
systems, as appropriate, in order to supply, receive or process dates/times and
other data, to the extent that other information technology properly exchanges
data with it; (iii) provide that date/time-related functionalities, date/time
fields and any user input interfaces include a four digit year format and/or
other indication of century, as applicable; and (iv) not cause any other Asset
that is otherwise Year 2000 Compliant to fail to be Year 2000 Compliant.
ARTICLE II
THE SEPARATION
2.01 TRANSFER OF ASSETS AND ASSUMPTION OF LIABILITIES. (a) TII hereby
assigns, transfers, conveys and delivers to Teledyne Technologies, and agrees to
cause its applicable Subsidiaries to assign, transfer, convey and deliver to
Teledyne Technologies, and Teledyne Technologies hereby accepts from TII and its
Subsidiaries, in each case effective as of the Effective Time, all of TII's and
its applicable Subsidiaries' respective right, title and interest in all
Teledyne Technologies Assets.
(b) Effective as of the Effective Time, Teledyne Technologies hereby
assumes and agrees faithfully to perform, satisfy, discharge and fulfill all the
Teledyne Technologies Liabilities in accordance with their respective terms.
Teledyne Technologies shall be responsible for all Teledyne Technologies
Liabilities, regardless of when or where such Liabilities arose or arise or
whether the facts on which they are based occurred prior to or subsequent to the
date hereof, regardless of where or against whom such Liabilities are asserted
or determined or whether asserted or determined prior to the date hereof, and
regardless of whether arising from or alleged to arise from negligence,
recklessness, violation of law, fraud or misrepresentation (whether based on
tort, contract, statute or otherwise) by any member of the ATI Group or the
Teledyne Technologies Group or any of their respective directors, officers,
employees, agents, Subsidiaries or Affiliates.
(c) In the event that at any time or from time to time after the
Distribution Date any party hereto (or any member of such party's respective
Group), shall receive or otherwise possess any Asset that is allocated to any
other Person pursuant to this Agreement or any Ancillary Agreement, such party
or member shall promptly transfer, or cause to be transferred, such Asset to the
Person so entitled thereto. Prior to any such transfer, the Person receiving or
possessing such Asset shall hold such Asset in trust for any such other Person.
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2.02 TELEDYNE TECHNOLOGIES ASSETS. (a) For purposes of this Agreement,
"Teledyne Technologies Assets" shall mean (without duplication):
(i) all Assets reflected in the Teledyne Technologies Balance
Sheet as Assets of Teledyne Technologies and its Subsidiaries, subject
to any dispositions of any such Assets subsequent to the date of the
Teledyne Technologies Balance Sheet;
(ii) all Assets acquired by or for the exclusive benefit of
Teledyne Technologies subsequent to the date of the Teledyne
Technologies Balance Sheet and prior to the Effective Time that would
have been reflected in the Teledyne Technologies Balance Sheet as
Assets of Teledyne Technologies had they been owned on the date of the
Teledyne Technologies Balance Sheet;
(iii) subject to Section 6.01, any rights of any member of the
Teledyne Technologies Group under any of the Insurance Policies,
including any rights thereunder arising after the Distribution Date in
respect of any Insurance Policies that are occurrence policies; and
(iv) (A) any Assets that any Ancillary Agreement contemplates
will be transferred to any member of the Teledyne Technologies Group,
(B) any Teledyne Technologies Contracts and (C) all issued and
outstanding capital stock of the Subsidiaries, the partnership
interests and other Assets of TII listed on Schedule 2.02(a)(iv).
Notwithstanding the foregoing, the Teledyne Technologies Assets shall not in any
event include the Excluded Assets referred to in Section 2.02(b) below.
(b) For the purposes of this Agreement, "Excluded Assets" shall mean:
(i) the Assets listed or described on Schedule 2.02(b)(i); and
(ii) any and all Assets that are expressly contemplated by
this Agreement or any Ancillary Agreement (or the Schedules hereto or
thereto) as Assets to be retained by ATI or any other member of the ATI
Group (including the Water Pik Group).
(c) Teledyne Technologies acknowledges and agrees that the Assets
reflected as Teledyne Technologies Assets in the Teledyne Technologies Balance
Sheet are so reflected based on the books and records maintained, and other
information supplied, by Teledyne Technologies personnel, and that the Teledyne
Technologies Assets constitute all of the Assets necessary to operate the
Teledyne Technologies Business as presently conducted.
2.03 TELEDYNE TECHNOLOGIES LIABILITIES. For the purposes of this
Agreement, "Teledyne Technologies Liabilities" shall mean (without duplication):
(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 assumed by Teledyne Technologies or any member of the Teledyne
Technologies Group, and all agreements,
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obligations and Liabilities of any member of the Teledyne Technologies Group
under this Agreement or any of the Ancillary Agreements;
(ii) all Liabilities, including any employee-related Liabilities and
Environmental Liabilities, relating to, arising out of or resulting from:
(A) the operation of the Teledyne Technologies Business as
conducted at any time prior to, at or after the Effective Time
(including any Liability relating to, arising out of or resulting from
the design, manufacture and sale of products or services of the
Teledyne Technologies Business or from any act or failure to act by any
director, officer, employee, agent or representative of any Person
(whether or not such act or failure to act is or was within such
Person's authority));
(B) the operation of any business conducted by any member of
the Teledyne Technologies Group at any time after the Effective Time
(including any Liability relating to, arising out of or resulting from
any act or failure to act by any director, officer, employee, agent or
representative of any Person (whether or not such act or failure to act
is or was within such Person's authority)); or
(C) any Teledyne Technologies Assets (including any Teledyne
Technologies Contracts and any real property and leasehold interests)
or ownership of any Teledyne Technologies Assets at any time prior to,
at or after the Effective Time;
in any such case whether arising before, on or after the Effective Time,
including, without limitation, the matters listed or described on Schedule
2.03(ii);
(iii) all Liabilities relating to, arising out of or resulting from the
Financing Facility;
(iv) all Liabilities reflected as liabilities or obligations of
Teledyne Technologies in the Teledyne Technologies Balance Sheet, subject to any
discharge of such Liabilities subsequent to the date of the Teledyne
Technologies Balance Sheet, and all liabilities or obligations of Teledyne
Technologies incurred subsequent to the date of the Teledyne Technologies
Balance Sheet that would have been reflected in the Teledyne Technologies
Balance Sheet had they been incurred as of the date of the Teledyne Technologies
Balance Sheet;
(v) any Liabilities relating to, arising out of or resulting from any
infringement of any intellectual property of any third party, including but not
limited to patent rights, trademark and service mark rights (registered and
common law), trade dress rights, copyrights, misappropriation of trade secret,
based upon or resulting from the operation of the Teledyne Technologies Business
and regardless of whether said infringement occurred prior to, on or after the
Distribution Date;
(vi) all obligations of ATI or Teledyne Technologies under the advance
agreement made and entered into the 15th day of July, 1999, by and between the
United States Department of Defense on behalf of the United States of America
and ATI and any other advance agreements that such parties may enter into prior
to the Distribution Date;
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(vii) any and all guarantees by ATI or any member of the ATI Group of
obligations to assure payment or performance by or other Liabilities of the
Teledyne Technologies Group or the Teledyne Technologies Business; and
(viii) any Liabilities relating to, arising out of, or resulting from
any of the Teledyne Technologies Assets and any products manufactured by the
Teledyne Technologies Business that are not Year 2000 Compliant.
2.04 TERMINATION OF AGREEMENTS. (a) Except as set forth in Section
2.04(b), in furtherance of the releases and other provisions of Section 5.01
hereof, effective as of the Effective Time, Teledyne Technologies and each
member of the Teledyne Technologies Group, on the one hand, and each of ATI and
the respective members of the ATI Group, on the other hand, hereby terminate any
and all agreements, arrangements, commitments or understandings, whether or not
in writing, between or among Teledyne Technologies and/or any member of the
Teledyne Technologies Group, on the one hand, and ATI or any member of the ATI
Group, on the other hand, including (except as set forth in Schedule 2.04(a))
any intercompany accounts payable or accounts receivable accrued as of the
Effective Time that are reflected in the books and records of the parties or
otherwise documented in writing in accordance with past practices; provided,
however, to the extent that the termination of any such agreement, arrangement,
commitment or understanding is inconsistent with any Ancillary Agreement, such
termination shall be effective as of the date of effectiveness of the applicable
Ancillary Agreement. No such terminated agreement, arrangement, commitment or
understanding (including any provision thereof which purports to survive
termination) shall be of any further force or effect after the Effective Time
(or, to the extent contemplated by the proviso to the immediately preceding
sentence, after the effective time of the applicable Ancillary Agreement). Each
party shall, at the reasonable request of any other party, take, or cause to be
taken, such other actions as may be necessary to effect the foregoing.
(b) The provisions of Section 2.04(a) shall not apply to any of the
following agreements, arrangements, commitments or understandings (or to any of
the provisions thereof): (i) this Agreement and the Ancillary Agreements (and
each other agreement or instrument expressly contemplated by this Agreement or
any Ancillary Agreement to be entered into by any of the parties hereto or any
of the members of their respective Groups); (ii) any agreements, arrangements,
commitments or understandings listed or described on Schedule 2.04(b)(ii); (iii)
any agreements, arrangements, commitments or understandings to which any Person
other than the parties hereto and their respective Affiliates is a party (it
being understood that to the extent that the rights and obligations of the
parties and the members of their respective Groups under any such agreements,
arrangements, commitments or understandings constitute Teledyne Technologies
Assets or Teledyne Technologies Liabilities, they shall be assigned and assumed
pursuant to Section 2.01); and (iv) any other agreements, arrangements,
commitments or understandings that this Agreement or any Ancillary Agreement
expressly contemplates will survive the Effective Time.
2.05 DOCUMENTS RELATING TO TRANSFER OF REAL PROPERTY INTERESTS AND
TANGIBLE PROPERTY LOCATED THEREON. In furtherance of the assignment, transfer
and conveyance of Teledyne Technologies Assets and the assumption of
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Teledyne Technologies Liabilities set forth in Section 2.01(a) and (b),
simultaneously with the execution and delivery hereof or as promptly as
practicable thereafter, each of TII and Teledyne Technologies or their
applicable Subsidiaries is executing and delivering or will execute and deliver
such deeds, lease assignments and assumptions, leases, subleases and
sub-subleases as may be necessary to effectively transfer any real property and
leasehold interests forming part of the Teledyne Technologies Assets and conform
to any laws, regulations or usage applicable in the jurisdiction in which the
relevant real property is located.
2.06 DOCUMENTS FURTHER EVIDENCING TRANSFERS OF ASSETS AND ASSUMPTION OF
LIABILITIES. In furtherance of the assignment, transfer and conveyance of
Teledyne Technologies Assets and the assumption of Teledyne Technologies
Liabilities set forth in Section 2.01(a) and (b), (i) TII shall execute and
deliver, and shall cause its Subsidiaries to execute and deliver, such further
bills of sale, stock powers, certificates of title, assignments of contracts and
other instruments of transfer, conveyance and assignment as and to the extent
necessary to fully evidence the transfer, conveyance and assignment of all of
TII's and its respective Subsidiaries' right, title and interest in and to the
Teledyne Technologies Assets to Teledyne Technologies and (ii) Teledyne
Technologies shall execute and deliver to TII and its Subsidiaries such further
bills of sale, stock powers, certificates of title, assumptions of contracts and
other instruments of assumption as and to the extent necessary to fully evidence
the valid and effective assumption of the Teledyne Technologies Liabilities by
Teledyne Technologies.
2.07 OTHER ANCILLARY AGREEMENTS. Effective as of the date hereof each
of ATI, TII and Teledyne Technologies will execute and deliver, and cause any of
their respective Subsidiaries that are parties thereto to execute and deliver
all Ancillary Agreements to which it is a party.
2.08 DISCLAIMER OF REPRESENTATIONS AND WARRANTIES. Each of ATI (on
behalf of itself and each member of ATI, including TII) and Teledyne
Technologies (on behalf of itself and each member of the Teledyne Technologies
Group) understands and agrees that, except as expressly set forth herein or in
any Ancillary Agreement, no party to this Agreement, any Ancillary Agreement or
any other agreement or document contemplated by this Agreement, any Ancillary
Agreement or otherwise, is representing or warranting in any way as to the
Assets, businesses or Liabilities transferred or assumed as contemplated hereby
or thereby (including whether an Asset is Year 2000 Compliant), as to any
consents or approvals required in connection therewith, as to the value or
freedom from any Security Interests of, or any other matter concerning, any
Assets of such party, or as to the absence of any defenses or rights of setoff
or freedom from counterclaims with respect to any claim or other Asset,
including any accounts receivable, of any party, or as to the legal sufficiency
of any assignment, document or instrument delivered hereunder to convey title to
any Asset or thing of value upon the execution, delivery and filing hereof or
thereof. Without limiting the scope of the foregoing, no party makes any
representations or warranties as to the Intellectual Property sought to be
transferred herein, including, without limitation, whether such Intellectual
Property or any portion thereof is valid, enforceable, freely transferable, free
and clear of liens (except permitted liens) or sufficient and complete in order
to conduct the Teledyne Technologies Business, whether any party herein owns,
has the exclusive right to use or has the ability to practice such Intellectual
Property or any portion thereof, or whether such Intellectual Property or the
operation of any aspect of the
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Teledyne Technologies Business infringes or conflicts in any way with any
Intellectual Property right of any third party. Except as may expressly be set
forth herein or in any Ancillary Agreement, all such Assets are being
transferred on an "as is," "where is," "with all faults" basis (and, in the case
of any real property, by means of a quitclaim or similar form deed or
conveyance) and the respective transferees shall bear the economic and legal
risks that any conveyance shall prove to be insufficient to vest in the
transferee good and marketable title, free and clear of any Security Interest.
Without limiting the foregoing, neither ATI nor any other party hereto
(excluding Teledyne Technologies), or to any Ancillary Agreement, is making any
representation or warranty to Teledyne Technologies or any other Person in
respect of the Teledyne Technologies Balance Sheet, including in respect of the
accuracy or presentation thereof, or the adequacy of accruals, reserves and
other amounts reflected thereon.
2.09 FINANCING ARRANGEMENTS. Each of the parties hereto acknowledges
that (a) ATI has arranged availability for up to $200 million in senior secured
financing pursuant to the Financing Facility, (b) that ATI has, prior to the
date hereof, incurred $100 million in indebtedness pursuant to such Financing
Facility; and (c) that ATI has used, or will use prior to the Distribution Date,
such indebtedness to refinance other outstanding indebtedness of ATI. Teledyne
Technologies agrees that, following the Distribution Date, Teledyne Technologies
will indemnify ATI (and all the other members of the ATI Group) and defend and
hold such parties harmless from and against all the obligations of ATI (or
Teledyne Technologies) arising under the Financing Facility (including the
obligation to repay such $100 million in outstanding borrowings), with the
effect that ATI (and all other members of the ATI Group) shall have no further
liability or obligation under the Financing Facility.
2.10 GOVERNMENTAL APPROVALS AND CONSENTS. (a) To the extent that the
Separation requires any Governmental Approvals or Consents, the parties will use
all reasonable efforts to obtain any such Governmental Approvals and Consents.
(b) If and to the extent that the valid, complete and perfected
transfer or assignment (or novation of any federal government contract) to the
Teledyne Technologies Group of any Teledyne Technologies Assets (or from the
Teledyne Technologies Group of any Non-Teledyne Technologies Assets) would be a
violation of applicable laws or require any Consent or Governmental Approval in
connection with the Separation, then, unless ATI shall otherwise determine, the
transfer or assignment to or from the Teledyne Technologies Group, as the case
may be, of such Teledyne Technologies Assets or Non-Teledyne Technologies
Assets, respectively, shall be automatically deemed deferred and any such
purported transfer or assignment shall be null and void until such time as all
legal impediments are removed and/or such Consents or Governmental Approvals
have been obtained. Notwithstanding the foregoing, such Asset shall be deemed a
Teledyne Technologies Asset for purposes of determining whether any Liability is
a Teledyne Technologies Liability.
(c) If the transfer or assignment of any Assets intended to be
transferred or assigned hereunder is not consummated prior to or at the
Effective Time, whether as a result of the provisions of Section 2.10(b) or for
any other reason, then the Person retaining such Asset shall thereafter hold
such Asset for the use and benefit, insofar as reasonably possible, of the
Person entitled thereto (at the expense of the Person entitled thereto). In
addition, the Person retaining
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such Asset shall take such other actions as may be reasonably requested by the
Person to whom such Asset is to be transferred in order to place such Person,
insofar as reasonably possible, in the same position as if such Asset had been
transferred as contemplated hereby and so that all the benefits and burdens
relating to such Teledyne Technologies Assets (or such Non-Teledyne Technologies
Assets, as the case may be), including possession, use, risk of loss, potential
for gain, and dominion, control and command over such Assets, are to inure from
and after the Effective Time to the Teledyne Technologies Group (or the ATI
Group, as the case may be).
(d) If and when the Consents and/or Governmental Approvals, the absence
of which caused the deferral of transfer of any Asset pursuant to Section
2.10(b), are obtained, the transfer of the applicable Asset shall be effected in
accordance with the terms of this Agreement and/or the applicable Ancillary
Agreement.
(e) The Person retaining an Asset due to the deferral of the transfer
of such Asset shall not be obligated, in connection with the foregoing, to
expend any money unless the necessary funds are advanced by the Person entitled
to the Asset, other than reasonable out-of-pocket expenses, attorneys' fees and
recording or similar fees, all of which shall be promptly reimbursed by the
Person entitled to such Asset.
2.11 NOVATION OF ASSUMED TELEDYNE TECHNOLOGIES LIABILITIES. (a) Each of
ATI, TII and Teledyne Technologies at the request of any of the others, shall
use all reasonable efforts to obtain, or to cause to be obtained, any consent,
substitution, approval or amendment required to novate (including with respect
to any federal government contract) or assign all obligations under agreements,
leases, licenses and other obligations or Liabilities, or to obtain in writing
the unconditional release of all parties to such arrangements other than any
member of the Teledyne Technologies Group, so that, in any such case, Teledyne
Technologies and its Subsidiaries will be solely responsible for such
Liabilities; provided, however, that no member of the ATI Group shall be
obligated to pay any consideration therefor to any third party from whom such
consents, approvals, substitutions and amendments are requested.
(b) If ATI, TII or Teledyne Technologies is unable to obtain, or to
cause to be obtained, any such required consent, approval, release, substitution
or amendment, the applicable member of the ATI Group shall continue to be bound
by such agreements, leases, licenses and other obligations and, unless not
permitted by law or the terms thereof, Teledyne Technologies shall, as agent or
subcontractor for ATI, TII or such other Person, as the case may be, pay,
perform and discharge fully all the obligations or other Liabilities of ATI, TII
or such other Person, as the case may be, thereunder from and after the date
hereof. Teledyne Technologies shall indemnify and defend each ATI Indemnitee and
hold each of them harmless against any Liabilities arising in connection
therewith. Each of ATI and TII, as the case may be, shall, without further
consideration, pay and remit, or cause to be paid or remitted, to Teledyne
Technologies promptly all money, rights and other consideration received by it
or any member of its respective Group in respect of such performance (unless any
such consideration is an Excluded Asset). If and when any such consent,
approval, release, substitution or amendment shall be obtained or such
agreement, lease, license or other rights or obligations shall otherwise become
assignable or able to be novated, each of ATI and TII, as the case may be, shall
thereafter assign, or cause to be assigned, all its rights, obligations and
other Liabilities thereunder or any rights or
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obligations of any member of its respective Group to Teledyne Technologies
without payment of further consideration and Teledyne Technologies shall,
without the payment of any further consideration, assume such rights and
obligations.
2.12 TRANSFER OF BROWN ASSETS AND ASSUMPTION OF BROWN LIABILITIES.
Immediately following the transfer of Teledyne Technologies Assets and
assumption of Teledyne Technologies Liabilities contemplated by Section 2.01,
Teledyne Technologies shall contribute to Brown approximately $6,800,000 in cash
and the Brown Assets and cause Brown to assume the Brown Liabilities, all in
accordance with the Brown Transfer and Assumption Agreement.
2.13 CONSUMMATION OF PURCHASE AND SALE AGREEMENTS; INTERIM
CONTRIBUTION. Immediately following the transfer of Assets and assumption of
Liabilities contemplated by Section 2.12, the parties hereto will cause the
transactions contemplated by the Purchase and Sale Agreements to be consummated,
pursuant to which (i) Brown will purchase the Teledyne Environmental Assets from
Teledyne Environmental for approximately $6,800,000 in cash, (ii) Teledyne Ltd
will purchase the Teledyne Limited Assets from Teledyne Limited for
approximately $5,700,000 in cash, (iii) Teledyne Technologies will purchase the
Industries Stock Interests from Industries International for approximately
$200,000 in cash, and (iv) Teledyne Investment will purchase a 1% common stock
interest in Ensambles de Precision, S.A. de C.V. from Industries International
for approximately $2,000 in cash.
2.14 TI CONTRIBUTION AND LIQUIDATION. Prior to consummation of the
transactions contemplated by Section 2.15, ATI will contribute to Holdings all
of the outstanding capital stock of TI and the TI Liquidation will be effected.
2.15 INTERIM DISTRIBUTIONS. Following the TI Liquidation, TII will
distribute to Holdings and Holdings will distribute to ATI all of the
outstanding Teledyne Technologies Common Stock.
ARTICLE III
THE DISTRIBUTION
3.01 THE DISTRIBUTION. The ATI Board shall have the sole and absolute
discretion to determine whether and when to effect the Distribution. If the ATI
Board declares the Distribution, on or prior to the Distribution Date, ATI will
deliver to the Agent for the benefit of holders of record of ATI Common Stock on
the Record Date, a single stock certificate, endorsed by ATI in blank,
representing all of the outstanding shares of Teledyne Technologies Common Stock
then owned by ATI or any member of the ATI Group, and will instruct the Agent to
distribute, or make book-entry credits for, one share of Teledyne Technologies
Common Stock in respect of every seven shares of ATI Common Stock held by
holders of record of ATI Common Stock on the Record Date, subject to Section
3.03.
3.02 ACTIONS PRIOR TO THE DISTRIBUTION. Prior to the Distribution:
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(a) On such date as ATI shall determine, Teledyne Technologies shall
mail to the holders of ATI Common Stock the Information Statement.
(b) ATI and Teledyne Technologies shall cooperate in preparing, filing
with the Commission under the Securities Act and causing to become effective any
registration statements or amendments thereto that are appropriate to reflect
the establishment of or amendments to any employee benefit plan contemplated by
the Employee Benefits Agreement.
(c) ATI and Teledyne Technologies shall by means of a reclassification,
stock split or stock distribution or other means cause the number of outstanding
shares of Teledyne Technologies Common Stock held by ATI to be equal to the
number of shares to be distributed in the Distribution (as determined by ATI).
(d) ATI and Teledyne Technologies shall take all such action as may be
necessary or appropriate under the securities or blue sky laws of states or
other political subdivisions of the United States in connection with the
transactions contemplated by this Agreement or any Ancillary Agreement.
(e) Teledyne Technologies shall use all efforts to have approved an
application to permit listing of the Teledyne Technologies Common Stock on the
NYSE or another mutually agreeable stock exchange or quotation system.
(f) ATI and Teledyne Technologies shall take all actions which may be
required to elect or otherwise appoint as directors of Teledyne Technologies, on
or prior to the Distribution Date, the persons named in the Form 10 Registration
Statement to constitute the Board of Directors of Teledyne Technologies on the
Distribution Date.
(g) ATI shall cause a Certificate of Amendment and Restatement of the
Teledyne Technologies Certificate of Incorporation substantially in the form
filed with the Form 10 Registration Statement, to be filed for record with the
Secretary of State of Delaware and to be in effect on the Distribution Date, and
the Board of Directors of Teledyne Technologies shall amend the Bylaws of
Teledyne Technologies so that the Teledyne Technologies Bylaws are substantially
in the form filed with the Form 10 Registration Statement.
(h) Teledyne Technologies shall declare a distribution of, and
distribute, one Right with respect to each share of Teledyne Technologies Common
Stock to be distributed in the Distribution.
(i) ATI and Teledyne Technologies shall take all actions as may be
necessary to approve the stock-based employee benefit plans of Teledyne
Technologies in order to satisfy the requirements of Section 162(m) and other
applicable provisions of the Code and any requirements of the NYSE (or any other
stock exchange or quotations system on which Teledyne Technologies Common Stock
is to be listed or traded).
3.03 FRACTIONAL SHARES. No certificates or scrip representing
fractional shares of Teledyne Technologies Common Stock will be distributed to
holders of ATI Common Stock in the Distribution. The Agent will, as soon as
practicable after the Distribution Date, (a) determine
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the number of whole shares and fractional shares of Teledyne Technologies Common
Stock allocable to each holder of record of ATI Common Stock as of the Record
Date, (b) aggregate all fractional shares held by such holders, and (c) sell the
whole shares attributable to the aggregate of such fractional shares, in open
market transactions, in each case at the then prevailing trading prices, and to
cause to be distributed to each such holder, in lieu of any fractional share,
without interest, such holder's ratable share of the proceeds of such sale,
after making appropriate deductions of the amount required, if any, to be
withheld for U.S. federal income tax purposes.
ARTICLE IV
THE PUBLIC OFFERING
4.01 THE PUBLIC OFFERING. (a) Teledyne Technologies shall consummate
the Public Offering not later than one year following the Distribution Date.
Actions required in order to so consummate the Public Offering shall include,
but not necessarily be limited to, those specified in this Section 4.01.
(b) Teledyne Technologies shall file the Public Offering Registration
Statement not later than at the end of the eighth month following the month in
which the Distribution Date occurs, and shall file such amendments or
supplements thereto, as may be necessary in order to cause the same to become
and remain effective as required by law or by the Underwriters, including, but
not limited to, filing such amendments to the Public Offering Registration
Statement as may be required by the Underwriting Agreement, the Commission or
federal, state or foreign securities laws.
(c) Teledyne Technologies shall enter into the Underwriting Agreement
and shall comply with its obligations thereunder.
(d) Teledyne Technologies shall take all such action as may be
necessary or appropriate under state securities and blue sky laws of the United
States (and any comparable laws under any foreign jurisdictions) in connection
with the Public Offering.
(e) Teledyne Technologies shall prepare, file and take all actions
necessary to make effective an application for listing of the Teledyne
Technologies Common Stock issued in the Public Offering on the NYSE, subject to
official notice of issuance.
(f) Teledyne Technologies shall participate in the preparation of
materials and presentations as the Underwriters shall deem necessary or
desirable.
(g) Teledyne Technologies shall pay all third party costs, fees and
expenses relating to the Public Offering, all of the reimbursable expenses of
the Underwriters pursuant to the Underwriting Agreement, all of the costs of
producing, printing, mailing and otherwise distributing the Prospectus, as well
as the Underwriters' discount as provided in the Underwriting Agreement.
4.02 PROCEEDS OF THE PUBLIC OFFERING. The Public Offering will be a
primary offering of Teledyne Technologies Common Stock and the net proceeds of
the Public
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Offering will be retained by Teledyne Technologies. Teledyne Technologies will
use such net proceeds as provided in the Tax Sharing Agreement and the Ruling
Request.
4.03 REMEDIES. Teledyne Technologies acknowledges that its agreements
in this Article IV are of a special, unique, unusual and extraordinary
character. Because the failure of Teledyne Technologies to perform its
obligations set forth in the provisions of this Article IV could cause unique
and extraordinary injury to ATI, ATI shall, notwithstanding anything to the
contrary herein, have the right in addition to any other remedies available, at
law or in equity, to seek an injunction in a court of equity to compel Teledyne
Technologies to perform such obligations. Teledyne Technologies hereby waives
any and all defenses it may have on the ground of lack of jurisdiction or
competence of the court to grant an injunction or other equitable relief, or
otherwise, and agrees that it will not assert any such defense or any defense to
a request by ATI for injunctive relief based on the alleged existence of an
adequate remedy at law or for money damages. Without limiting the foregoing,
Teledyne Technologies hereby waives the right to require ATI to post any bond or
other security with respect to any proceeding to enforce the provisions of this
Article IV. The existence of the rights of ATI set forth in this Section 4.03
shall not preclude any other rights and remedies at law or in equity which ATI
may have.
ARTICLE V
MUTUAL RELEASES; INDEMNIFICATION
5.01 RELEASE OF PRE-DISTRIBUTION CLAIMS. (a) Except as provided in
Section 5.01(c), effective as of the Effective Time, Teledyne Technologies does
hereby, for itself and each other member of the Teledyne Technologies Group,
their respective Affiliates (other than any member of the ATI Group), successors
and assigns, and all Persons who at any time prior to the Effective Time have
been stockholders, directors, officers, agents or employees of any member of the
Teledyne Technologies Group (in each case, in their respective capacities as
such), remise, release and forever discharge each of ATI and Water Pik, the
respective members of the ATI Group and the Water Pik Group, their respective
Affiliates (other than any member of the Teledyne Technologies Group),
successors and assigns, and all Persons who at any time prior to the Effective
Time have been stockholders, directors, officers, agents or employees of any
member of ATI or the Water Pik Group (in each case, in their respective
capacities as such), and their respective heirs, executors, administrators,
successors and assigns, from any and all Liabilities whatsoever, whether at law
or in equity (including any right of contribution), whether arising under any
contract or agreement, by operation of law or otherwise, existing or arising
from any acts or events occurring or failing to occur or alleged to have
occurred or to have failed to occur or any conditions existing or alleged to
have existed on or before the Effective Time, including in connection with the
transactions and all other activities undertaken to implement the Separation or
the Distribution.
(b) Except as provided in Section 5.01(c), effective as of the
Effective Time, ATI does hereby, for itself and each other member of the ATI
Group and its Affiliates (other than any member of the Teledyne Technologies
Group), successors and assigns, and all Persons who at any time prior to the
Effective Time have been stockholders, directors, officers, agents or employees
of any member of the ATI Group (in each case, in their respective capacities as
such), remise,
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release and forever discharge Teledyne Technologies, the respective members of
the Teledyne Technologies Group, their respective Affiliates (other than any
member of the ATI Group), successors and assigns, and all Persons who at any
time prior to the Effective Time have been stockholders, directors, officers,
agents or employees of any member of the Teledyne Technologies Group (in each
case, in their respective capacities as such), and their respective heirs,
executors, administrators, successors and assigns, from any and all Liabilities
whatsoever, whether at law or in equity (including any right of contribution),
whether arising under any contract or agreement, by operation of law or
otherwise, existing or arising from any acts or events occurring or failing to
occur or alleged to have occurred or to have failed to occur or any conditions
existing or alleged to have existed on or before the Effective Time, including
in connection with the transactions and all other activities undertaken to
implement the Separation or the Distribution.
(c) Nothing contained in Section 5.01(a) or (b) shall impair any right
of any Person to enforce this Agreement, any Ancillary Agreement or any
agreements, arrangements, commitments or understandings that are specified in
Section 2.04(b) or the applicable Schedules thereto not to terminate as of the
Effective Time, in each case in accordance with its terms. Nothing contained in
Section 5.01(a) or (b) shall release any Person from:
(i) any Liability provided in or resulting from any agreement
among any members of the ATI Group or the Teledyne Technologies Group
that is specified in Section 2.04(b) or the applicable Schedules
thereto as not to terminate as of the Effective Time, or any other
Liability specified in such Section 2.04(b) as not to terminate as of
the Effective Time;
(ii) any Liability, contingent or otherwise, assumed,
transferred, assigned or allocated to the Group of which such Person is
a member in accordance with, or any other Liability of any member of
any Group under, this Agreement or any Ancillary Agreement;
(iii) any Liability for the sale, lease, construction or
receipt of goods, property or services purchased, obtained or used in
the ordinary course of business by a member of one Group from a member
of any other Group prior to the Effective Time;
(iv) any Liability for unpaid amounts for products or services
or refunds owing on products or services due on a value-received basis
for work done by a member of one Group at the request or on behalf of a
member of another Group;
(v) any Liability that the parties may have with respect to
indemnification or contribution pursuant to this Agreement for claims
brought against the parties by third Persons, which Liability shall be
governed by the provisions of this Article V and, if applicable, the
appropriate provisions of the Ancillary Agreements; or
(vi) any Liability the release of which would result in the
release of any Person other than a Person released pursuant to this
Section 5.01; provided that the parties agree not to bring suit or
permit any of their Subsidiaries to bring suit against any Person with
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respect to any Liability to the extent that such Person would be
released with respect to such Liability by this Section 5.01 but for
the provisions of this clause (vi).
(d) Teledyne Technologies shall not make, and shall not permit any
member of the Teledyne Technologies Group to make, any claim or demand, or
commence any Action asserting any claim or demand, including any claim of
contribution or indemnification, against ATI, Water Pik or any member of the ATI
Group or Water Pik Group, or any other Person released pursuant to Section
5.01(a), with respect to any Liabilities released pursuant to Section 5.01(a).
Without limiting the generality of the foregoing, Teledyne Technologies shall
not make, and shall not permit any other member of the Teledyne Technologies
Group to make, any claim or demand, or commence any Action asserting any claim
or demand, including any claim of contribution or indemnification, against ATI,
Water Pik or any member of the ATI Group or the Water Pik Group, or any other
Person released pursuant to Section 5.01(a), with respect to whether any Asset
should or should not have been classified as a Teledyne Technologies Asset or
whether any Liability should or should not have been classified as a Teledyne
Technologies Liability or with respect to the Teledyne Technologies Balance
Sheet, including in respect of the accuracy or presentation thereof, or the
adequacy of accruals, reserves and other amounts reflected thereon. ATI shall
not, and shall not permit any member of the ATI Group, to make any claim or
demand, or commence any Action asserting any claim or demand, including any
claim of contribution or any indemnification, against Teledyne Technologies or
any member of the Teledyne Technologies Group, or any other Person released
pursuant to Section 5.01(b), with respect to any Liabilities released pursuant
to Section 5.01(b).
(e) It is the intent of each of ATI and Teledyne Technologies by virtue
of the provisions of this Section 5.01 to provide for a full and complete
release and discharge of all Liabilities existing or arising from all acts and
events occurring or failing to occur or alleged to have occurred or to have
failed to occur and all conditions existing or alleged to have existed on or
before the Effective Time, between or among Teledyne Technologies or any member
of the Teledyne Technologies Group, on the one hand, and ATI, Water Pik or any
member of the ATI Group or the Water Pik Group, on the other hand (including any
contractual agreements or arrangements existing or alleged to exist between or
among any such members on or before the Effective Time), except as expressly set
forth in Section 5.01(c) or otherwise in this Agreement. At any time, at the
request of any other party, each party shall cause each member of its respective
Group to execute and deliver releases reflecting the provisions hereof.
5.02 INDEMNIFICATION BY TELEDYNE TECHNOLOGIES. Except as provided in
Section 5.04, Teledyne Technologies shall indemnify, defend and hold harmless
ATI, each member of the ATI Group and each of their respective directors,
officers, employees, agents and representatives, and each of the heirs,
executors, successors and assigns of any of the foregoing (collectively, the
"ATI Indemnitees"), and Water Pik, each member of the Water Pik Group and each
of their respective directors, officers and employees, and each of the heirs,
executors, successors and assigns of any of the foregoing (collectively, the
"Water Pik Indemnitees"), from and against any and all Liabilities of the ATI
Indemnitees and the Water Pik Indemnitees, respectively, relating to, arising
out of or resulting from any of the following items (without duplication):
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(a) the failure of Teledyne Technologies or any other member of the
Teledyne Technologies Group or any other Person to pay, perform or otherwise
promptly discharge any Teledyne Technologies Liabilities or Teledyne
Technologies Contract in accordance with their respective terms, whether prior
to or after the Effective Time or the date hereof;
(b) the Teledyne Technologies Business, any Teledyne Technologies
Liability or any Teledyne Technologies Contract;
(c) any breach by Teledyne Technologies or any member of the Teledyne
Technologies Group of this Agreement or any of the Ancillary Agreements;
(d) the operation of the Teledyne Technologies Business, as conducted
at any time prior to, on or after the Distribution Date (including any Liability
relating to, arising out of or resulting from any act or failure to act by any
director, officer, employee, agent or representative (whether or not such act or
failure to act is or was within such Person's authority));
(e) any infringement of any Intellectual Property right of any third
party, including, but not limited to, patent rights, trademark and service mark
rights (registered and common law), trade dress rights, copyrights,
misappropriation of trade secret, based upon or resulting from the operation of
the Teledyne Technologies Business and regardless of whether said alleged
infringement occurred prior to, on or after the Distribution Date or any claim
based on the actual or alleged invalidity, unenforceability or transferability
or ownership of Intellectual Property to be transferred hereby or pursuant to
any Ancillary Agreement;
(f) Liabilities assumed by any member of the Teledyne Technologies
Group under any Ancillary Agreement;
(g) any guarantee, indemnity, representation, warranty or other
Liability of or made by any member of the ATI Group in respect of any Liability
or alleged Liability of any member of the Teledyne Technologies Group; and
(h) any untrue statement or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, with respect
to all information contained in the Form 10 Registration Statement or the
Information Statement.
5.03 INDEMNIFICATION BY ATI. (a) ATI shall indemnify, defend and hold
harmless Teledyne Technologies, each member of the Teledyne Technologies Group
and each of their respective directors, officers, employees, agents and
representatives, and each of the heirs, executors, successors and assigns of any
of the foregoing (collectively, the "Teledyne Technologies Indemnitees"), from
and against any and all Liabilities of the Teledyne Technologies Indemnitees
relating to, arising out of or resulting from any of the following items
(without duplication):
(i) the failure of ATI or any other member of the ATI Group to
pay, perform or otherwise promptly discharge any ATI Liabilities; and
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(ii) any breach by ATI of this Agreement or any of the
Ancillary Agreements.
5.04 INDEMNIFICATION OBLIGATIONS NET OF INSURANCE PROCEEDS AND OTHER
AMOUNTS. (a) The parties intend that any Liability subject to indemnification or
reimbursement pursuant to this Article V will be net of Insurance Proceeds that
actually reduce the amount of the Liability. Accordingly, the amount which any
party (an "Indemnifying Party") is required to pay to any Person entitled to
indemnification hereunder (an "Indemnitee") will be reduced by any Insurance
Proceeds theretofore actually recovered by or on behalf of the Indemnitee in
reduction of the related Liability. If an Indemnitee receives a payment (an
"Indemnity Payment") required by this Agreement from an Indemnifying Party in
respect of any Liability and subsequently receives Insurance Proceeds, then the
Indemnitee will pay to the Indemnifying Party an amount equal to the excess of
the Indemnity Payment received over the amount of the Indemnity Payment that
would have been due if the Insurance Proceeds had been received, realized or
recovered before the Indemnity Payment was made.
(b) An insurer who would otherwise be obligated to pay any claim shall
not be relieved of the responsibility with respect thereto or, solely by virtue
of the indemnification provisions hereof, have any subrogation rights with
respect thereto, it being expressly understood and agreed that no insurer or any
other third party shall be entitled to a "windfall" (i.e., a benefit they would
not be entitled to receive in the absence of the indemnification provisions) by
virtue of the indemnification provisions hereof. Nothing contained in this
Agreement or any Ancillary Agreement shall obligate any member of any Group to
seek to collect or recover any Insurance Proceeds.
5.05 PROCEDURES FOR INDEMNIFICATION OF THIRD PARTY CLAIMS. (a) If an
Indemnitee shall receive notice or otherwise learn of the assertion by a Person
(including any Governmental Authority) who is not a member of the ATI Group or
the Teledyne Technologies Group of any claim or of the commencement by any such
Person of any Action (collectively, a "Third Party Claim") with respect to which
an Indemnifying Party may be obligated to provide indemnification to such
Indemnitee pursuant to Section 5.02 or 5.03, or any other Section of this
Agreement or any Ancillary Agreement, such Indemnitee shall give such
Indemnifying Party and, if ATI is not the Indemnifying Party, ATI written notice
thereof as soon as practicable but in any event not less than 20 days after
becoming aware of such Third Party Claim. Any such notice shall describe the
Third Party Claim in reasonable detail. Notwithstanding the foregoing, the
failure of any Indemnitee or other Person to give notice as provided in this
Section 5.05(a) shall not relieve the related Indemnifying Party of its
obligations under this Article V, except to the extent that such Indemnifying
Party is actually prejudiced by such failure to give notice.
(b) An Indemnifying Party may elect to defend (and, unless the
Indemnifying Party has specified any reservations or exceptions, to seek to
settle or compromise), at such Indemnifying Party's own expense and by such
Indemnifying Party's own counsel, any Third Party Claim. Within 30 days after
the receipt of notice from an Indemnitee in accordance with Section 5.05(a) (or
sooner, if the nature of such Third Party Claim so requires), the Indemnifying
Party shall notify the Indemnitee of its election whether the Indemnifying Party
will assume responsibility for defending such Third Party Claim, which election
shall specify any reservations or exceptions. After notice from an Indemnifying
Party to an Indemnitee of its election to assume the defense of
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a Third Party Claim, such Indemnitee shall have the right to employ separate
counsel and to participate in (but not control) the defense, compromise, or
settlement thereof, but the fees and expenses of such counsel shall be the
expense of such Indemnitee except as set forth in the next sentence. In the
event that the Indemnifying Party has elected to assume the defense of the Third
Party Claim but has specified, and continues to assert, any reservations or
exceptions in such notice, then, in any such case, the reasonable fees and
expenses of one separate counsel for all Indemnitees shall be borne by the
Indemnifying Party.
(c) If an Indemnifying Party elects not to assume responsibility for
defending a Third Party Claim, or fails to notify an Indemnitee of its election
as provided in Section 5.05(b), such Indemnitee may defend such Third Party
Claim at the cost and expense (including allocated costs of in-house counsel and
other personnel) of the Indemnifying Party.
(d) Unless the Indemnifying Party has failed to assume the defense of
the Third Party Claim in accordance with the terms of this Agreement, no
Indemnitee may settle or compromise any Third Party Claim without the consent of
the Indemnifying Party.
(e) No Indemnifying Party shall consent to entry of any judgment or
enter into any settlement of the Third Party Claim without the consent of the
Indemnitee if the effect thereof is to permit any injunction, declaratory
judgment, other order or other nonmonetary relief to be entered, directly or
indirectly, against any Indemnitee.
5.06 ADDITIONAL MATTERS. (a) Any claim on account of a Liability which
does not result from a Third Party Claim shall be asserted by written notice
given by the Indemnitee to the related Indemnifying Party. Such Indemnifying
Party shall have a period of 30 days after the receipt of such notice within
which to respond thereto. If such Indemnifying Party does not respond within
such 30-day period, such Indemnifying Party shall be deemed to have refused to
accept responsibility to make payment. If such Indemnifying Party does not
respond within such 30-day period or rejects such claim in whole or in part,
such Indemnitee shall be free to pursue such remedies as may be available to
such party as contemplated by this Agreement and the Ancillary Agreements.
(b) In the event of payment by or on behalf of any Indemnifying Party
to any Indemnitee in connection with any Third Party Claim, such Indemnifying
Party shall be subrogated to and shall stand in the place of such Indemnitee as
to any events or circumstances in respect of which such Indemnitee may have any
right, defense or claim relating to such Third Party Claim against any claimant
or plaintiff asserting such Third Party Claim or against any other person. Such
Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner,
and at the cost and expense (including allocated costs of in-house counsel and
other personnel) of such Indemnifying Party, in prosecuting any subrogated
right, defense or claim.
(c) In the event of an Action in which the Indemnifying Party is not a
named defendant, if either the Indemnified Party or Indemnifying Party shall so
request, the parties shall endeavor to substitute the Indemnifying Party for the
named defendant. If such substitution or addition cannot be achieved for any
reason or is not requested, the named defendant shall allow the Indemnifying
Party to manage the Action as set forth in this Section and the Indemnifying
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Party shall fully indemnify the named defendant against all costs of defending
the Action (including court costs, sanctions imposed by a court, attorneys'
fees, experts' fees and all other external expenses, and the allocated costs of
in-house counsel and other personnel), the costs of any judgment or settlement,
and the cost of any interest or penalties relating to any judgment or
settlement.
5.07 REMEDIES CUMULATIVE. The remedies provided in this Article V shall
be cumulative and shall not preclude assertion by any Indemnitee of any other
rights or the seeking of any and all other remedies against any Indemnifying
Party.
5.08 SURVIVAL OF INDEMNITIES. The rights and obligations of each of the
Indemnitees under this Article V shall survive the sale or other transfer by any
party of any Assets or businesses or the assignment by it of any Liabilities.
ARTICLE VI
CERTAIN OTHER MATTERS
6.01 INSURANCE MATTERS. (a) In no event shall ATI, any other member of
the ATI Group or any ATI Indemnitee have any liability or obligation whatsoever
to any member of the Teledyne Technologies Group in the event that any Insurance
Policy or other contract or policy of insurance shall be terminated or otherwise
cease to be in effect for any reason, shall be unavailable or inadequate to
cover any Liability of any member of the Teledyne Technologies Group for any
reason whatsoever or shall not be renewed or extended beyond the current
expiration date.
(b) (i) Except as otherwise provided in any Ancillary Agreement, the
parties intend by this Agreement that Teledyne Technologies and each other
member of the Teledyne Technologies Group be successors-in-interest to all
rights that any member of the Teledyne Technologies Group may have as of the
Distribution Date as a subsidiary, affiliate, division or department of ATI
prior to the Distribution Date under any policy of insurance issued to ATI and
intended to insure the Teledyne Technologies Group by any insurance carrier
unaffiliated with ATI or under any agreements related to such policies executed
and delivered prior to the Distribution Date, including any rights such member
of the Teledyne Technologies Group may have, as an insured or additional named
insured, subsidiary, affiliate, division or department, to avail itself of any
such policy of insurance or any such agreements related to such policies as in
effect prior to the Distribution Date. At the request of Teledyne Technologies,
ATI shall take all reasonable steps, including the execution and delivery of any
instruments, to effect the foregoing; provided however that ATI shall not be
required to pay any amounts, waive any rights or incur any Liabilities in
connection therewith.
(ii) Except as otherwise contemplated by any Ancillary Agreement, after
the Distribution Date, neither ATI nor Teledyne Technologies or any member of
their respective Groups shall, without the consent of the other, provide any
such insurance carrier with a release, or amend, modify or waive any rights
under any such policy or agreement, if such release, amendment, modification or
waiver would adversely affect any rights or potential rights of any
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member of the other Group thereunder; provided however that the foregoing shall
not (A) preclude any member of any Group from presenting any claim or from
exhausting any policy limit, (B) require any member of any Group to pay any
premium or other amount or to incur any Liability, or (C) require any member of
any Group to renew, extend or continue any policy in force. Each of Teledyne
Technologies and ATI will, and will cause its respective Group to, share such
information as is reasonably necessary in order to permit the other to manage
and conduct its insurance matters in an orderly fashion.
(c) This Agreement shall not be considered as an attempted assignment
of any policy of insurance or as a contract of insurance and shall not be
construed to waive any right or remedy of any member of the ATI Group in respect
of any Insurance Policy or any other contract or policy of insurance.
(d) Teledyne Technologies does hereby, for itself and each other member
of the Teledyne Technologies Group, agree that no member of the ATI Group or any
ATI Indemnitee shall have any Liability whatsoever as a result of the insurance
policies and practices of ATI and its Affiliates as in effect at any time prior
to the Distribution Date, including as a result of the level or scope of any
such insurance, the creditworthiness of any insurance carrier, the terms and
conditions of any policy, the adequacy or timeliness of any notice to any
insurance carrier with respect to any claim or potential claim or otherwise.
(e) Nothing in this Agreement shall be deemed to restrict any member of
the Teledyne Technologies Group from acquiring at its own expense any other
insurance policy in respect of any Liabilities or covering any period.
(f) With respect to policy periods prior to the Distribution Date:
(i) Teledyne Technologies shall be responsible for: (A) all Unpaid
Losses (but not to exceed the applicable Per Case Maximum) as of the
Distribution Date attributable to Teledyne Technologies Liabilities covered
under ATI General Liability Policies, ATI Automobile Policies, ATI Workers
Compensation Policies and ATI Product Liability Policies for policies in effect
prior to the Distribution Date; and (B) Pooled Loss Costs Allocable to Teledyne
Technologies.
(ii) On or before June 1, 2000 and on a quarterly basis thereafter, ATI
shall provide Teledyne Technologies with a calculation of amounts due ATI or
refunds due Teledyne Technologies for Teledyne Technologies' obligations
incurred under ATI General Liability Policies, ATI Automobile Policies, ATI
Workers Compensation Policies and ATI Product Liability Policies for policies
under subparagraph (i) immediately above. The initial calculations shall be
based on (A) the change in total Incurred Losses between the Distribution Date
and March 31, 2000 for all such policies in effect prior to the Distribution
Date multiplied by the Expense Factors set forth in such policies and applicable
to such Incurred Losses, but only with respect to that portion of Incurred
Losses attributable to Teledyne Technologies Liabilities not exceeding the
applicable Per Case Maximum; and (B) the change in Pooled Loss Costs Allocable
to Teledyne Technologies for the period between the Distribution Date and March
31, 2000 for all such policies in effect prior to the Distribution Date.
Subsequent calculations shall be based on (A) the change in total Incurred
Losses for the subsequent quarterly periods multiplied by the
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Expense Factors set forth in such policies and applicable to such losses; but
only with respect to that portion of losses attributable to Teledyne
Technologies Liabilities not exceeding the applicable Per Case Maximum, and (B)
the change in Pooled Loss Costs Allocable to Teledyne Technologies for the
subsequent quarterly period.
(iii) Within 30 days after receipt by Teledyne Technologies of ATI's
calculations referred to in subparagraph (ii) immediately above, Teledyne
Technologies on the one hand and ATI on the other hand shall pay to the other
the net amount owed after taking into account the combined amounts reflected on
the calculations.
(g) At its sole option, ATI shall have the right to handle, defend,
resolve, and administer any and all claims in its sole discretion, with respect
to Teledyne Technologies Liabilities covered, in whole or in part, by ATI
Policies, including, without limitation, the reporting of claims to the issuers
of such ATI Policies, as well as the management, defense and settlement of
claims. ATI will not enter into any such settlement of a claim without the
consent of Teledyne Technologies (which will not be unreasonably withheld) if
the effect thereof is to render Teledyne Technologies liable for a monetary
obligation with respect to such claim. Teledyne Technologies agrees to
cooperate, at its own expense, with ATI in the reporting, handling, defense,
resolution and administration of such claims. Alternatively, ATI, at its sole
option shall have the right to require, at any time and from time to time, that
Teledyne Technologies and any member of the Teledyne Technologies Group, at
their sole expense, defend, resolve and administer any one or more or all claims
with respect to Teledyne Technologies Liabilities covered in whole, or in part,
by ATI Policies, including without limitation, the reporting of claims to the
issuers of such ATI Policies, as well as the management, defense and settlement
of such claims and, if ATI exercises such option, Teledyne Technologies and
members of the Teledyne Technologies Group, at ATI's request, shall at their
expense provide ATI with any and all information concerning, and permit ATI to
monitor, the foregoing management, defense, settlement and insurance handling of
such claims. Except with the express written consent of ATI, neither Teledyne
Technologies nor any member of the Teledyne Technologies Group shall provide any
issuer of ATI Policies with a release, nor shall they amend, modify, or waive
any rights under such ATI Policies, if such release, amendment, modification or
waiver would adversely affect rights or potential rights of ATI or any other
member of the ATI Group.
(h) With respect to policies procured by or for the Teledyne
Technologies Group subsequent to January 1999 and to policy years commencing on
or after the Distribution Date, Teledyne Technologies shall be responsible for
all aspects of claims administration with respect to Teledyne Technologies
Liabilities, and ATI shall have no responsibility therefor whatsoever.
(i) With respect to any Teledyne Technologies Liabilities or Teledyne
Technologies losses covered under ATI Policies, other than ATI General Liability
Policies, ATI Automobile Policies, ATI Workers Compensation Policies and ATI
Product Liability Policies, Teledyne Technologies shall be responsible for all
Unpaid Losses and all costs and expenses that give rise to a Self-Insurance
Obligation. In the event that ATI pays any such costs and expenses, Teledyne
Technologies shall reimburse ATI within thirty days of receipt of a billing for
any such costs and expenses.
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6.02 CERTAIN BUSINESS MATTERS. No member of any Group shall have any
duty to refrain from (i) engaging in the same or similar activities or lines of
business as any member of any other Group, (ii) doing business with any
potential or actual supplier or customer of any member of any other Group, or
(iii) engaging in, or refraining from, any other activities whatsoever relating
to any of the potential or actual suppliers or customers of any member of any
other Group.
6.03 LATE PAYMENTS. Except as expressly provided to the contrary in
this Agreement or in any Ancillary Agreement, any amount not paid when due
pursuant to this Agreement or any Ancillary Agreement (and any amounts billed or
otherwise invoiced or demanded and properly payable that are not paid within 30
days of such bill, invoice or other demand) shall accrue interest at a rate per
annum equal to the Prime Rate plus 2%.
6.04 CERTAIN GOVERNANCE MATTERS. (a) Teledyne Technologies and ATI
intend that until the third annual meeting of stockholders of Teledyne
Technologies held following the Distribution Date, at least a majority of the
members of the Board of Directors of Teledyne Technologies will at all times
consist of persons who are also members of the Board of Directors of ATI. The
initial members of the Board of Directors of Teledyne Technologies and the
respective initial Classes of the Board in which they will serve are as follows:
Class I: Thomas A. Corcoran (Chairman)
Diane C. Creel
C. Fred Fetterolf
Class II: Paul S. Brentlinger
Robert Mehrabian
Class III: Robert P. Bozzone
Frank V. Cahouet
Charles J. Queenan, Jr.
(b) Teledyne Technologies will, with respect to the first annual
meeting of stockholders of Teledyne Technologies held following the Distribution
Date, nominate for election and recommend to stockholders the election of Thomas
A. Corcoran, Diane C. Creel and C. Fred Fetterolf (or, if any such candidate
unable or unwilling to serve, such other candidate as Messrs. Bozzone, Cahouet
and Queenan or the survivor of them shall designate) to serve as a continuing
Class I director of Teledyne Technologies.
(c) Teledyne Technologies shall take such action from time to time as
ATI requests in order to assure that, until the third annual meeting of
stockholders of Teledyne Technologies following the Distribution Date, at least
a majority of the members of the Board of Directors of Teledyne Technologies
will at all times consist of persons who are also members of the Board of
Directors of ATI. Without limiting the generality of the foregoing, if for any
reason (including death, resignation or disqualification) there are no directors
of Teledyne Technologies who are also directors of ATI, Teledyne Technologies
will immediately take all action requested by ATI to appoint to the Board of
Directors of Teledyne Technologies such members of the Board of Directors of ATI
as ATI shall designate.
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ARTICLE VII
EXCHANGE OF INFORMATION; CONFIDENTIALITY
7.01 AGREEMENT FOR EXCHANGE OF INFORMATION; ARCHIVES. (a) Each of ATI
and Teledyne Technologies, on behalf of itself and its respective Group, agrees
to provide, or cause to be provided, to each other Group, at any time before or
after the Distribution Date, as soon as reasonably practicable after written
request therefor, any Information in the possession or under the control of such
respective Group which the requesting party reasonably requires (i) to comply
with reporting, disclosure, filing or other requirements imposed on the
requesting party (including under applicable securities or tax laws) by a
Governmental Authority having jurisdiction over the requesting party, (ii) for
use in any other judicial, regulatory, administrative, tax or other proceeding
or in order to satisfy audit, accounting, claims, regulatory, litigation, tax or
other similar requirements, or (iii) to comply with its obligations under this
Agreement or any Ancillary Agreement; provided, however, that in the event that
any party determines that any such provision of Information could be
commercially detrimental, violate any law or agreement, or waive any
attorney-client privilege, the parties shall take all reasonable measures to
permit the compliance with such obligations in a manner that avoids any such
harm or consequence.
(b) After the Distribution Date, each of ATI and Teledyne Technologies
shall have access during regular business hours (as in effect from time to time)
to the documents and objects of historic significance that relate to the their
respective Businesses that are in the possession of any other of such parties or
members of their respective Groups. Any party seeking such access may, at its
cost, obtain copies (but not originals) of documents for bona fide business
purposes and may obtain objects for exhibition purposes for commercially
reasonable periods of time if required for bona fide business purposes, provided
that such party shall cause any such objects to be returned promptly in the same
condition in which they were delivered and shall comply with any rules,
procedures or other requirements, and shall be subject to any restrictions
(including prohibitions on removal of specified objects), that are then
applicable to the possessing party.
(c) After the Distribution Date, (i) Teledyne Technologies shall
maintain in effect adequate systems and controls to the extent necessary to
enable the members of the ATI Group to satisfy their respective reporting,
accounting, audit and other obligations, and (ii) Teledyne Technologies shall
provide, or cause to be provided, to ATI, all financial and other data and
information as ATI determines necessary or advisable in order to prepare ATI
financial statements and reports or filings with any Governmental Authority.
7.02 OWNERSHIP OF INFORMATION. Any Information owned by one Group that
is provided to a requesting party pursuant to Section 7.01 shall be deemed to
remain the property of the providing party. Unless specifically set forth
herein, nothing contained in this Agreement shall be construed as granting or
conferring rights of license or otherwise in any such Information.
7.03 COMPENSATION FOR PROVIDING INFORMATION. The party requesting such
Information agrees to reimburse the other party for the reasonable costs, if
any, of creating, gathering and copying such Information, to the extent that
such costs are incurred for the benefit of the requesting party. Except as may
be otherwise specifically provided elsewhere in this
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Agreement or in any other agreement between the parties, such costs shall be
computed in accordance with the providing party's standard methodology and
procedures.
7.04 RECORD RETENTION. To facilitate the possible exchange of
Information pursuant to this Article VII and other provisions of this Agreement
after the Distribution Date, the parties agree to use their reasonable best
efforts to retain all Information in their respective possession or control on
the Distribution Date in accordance with the policies of ATI as in effect on the
Distribution Date. No party will destroy, or permit any of its Subsidiaries to
destroy, any Information which the other party may have the right to obtain
pursuant to this Agreement prior to the seventh anniversary of the date hereof
without first using its reasonable best efforts to notify the other party of the
proposed destruction and giving the other party the opportunity to take
possession of such information prior to such destruction; provided, however,
that in the case of any Information relating to Taxes or to Environmental
Liabilities, such period shall be extended to the expiration of the applicable
statute of limitations (giving effect to any extensions thereof).
7.05 OTHER AGREEMENTS PROVIDING FOR EXCHANGE OF INFORMATION. The rights
and obligations granted under this Article VII are subject to any specific
limitations, qualifications or additional provisions on the sharing, exchange or
confidential treatment of Information set forth in any Ancillary Agreement.
7.06 PRODUCTION OF WITNESSES; RECORDS; COOPERATION. (a) After the
Distribution Date, except in the case of an adversarial Action by one party
against another party, each party hereto shall use its reasonable efforts to
make available to each other party, upon written request, the former, current
and future directors, officers, employees, other personnel and agents of the
members of its respective Group as witnesses and any books, records or other
documents within its control or which it otherwise has the ability to make
available, to the extent that any such person (giving consideration to business
demands of such directors, officers, employees, other personnel and agents) or
books, records or other documents may reasonably be required in connection with
any Action in which the requesting party may from time to time be involved,
regardless of whether such Action is a matter with respect to which
indemnification may be sought hereunder. The requesting party shall bear all
costs and expenses (including allocated costs of in-house counsel and other
personnel) in connection therewith.
(b) If an Indemnifying Party chooses to defend or to seek to compromise
or settle any Third Party Claim, the other parties shall make available to such
Indemnifying Party, upon written request, the former, current and future
directors, officers, employees, other personnel and agents of the members of its
respective Group as witnesses and any books, records or other documents within
its control or which it otherwise has the ability to make available, to the
extent that any such person (giving consideration to business demands of such
directors, officers, employees, other personnel and agents) or books, records or
other documents may reasonably be required in connection with such defense,
settlement or compromise, or such prosecution, evaluation or pursuit, as the
case may be, and shall otherwise cooperate in such defense, settlement or
compromise, or such prosecution, evaluation or pursuit, as the case may be.
(c) Without limiting any provision of this Section, the parties shall
cooperate and consult to the extent reasonably necessary with respect to any
Action, and each of the parties
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agrees to cooperate, and to cause each member of its respective Group to
cooperate, with each other in the defense of any infringement or similar claim
with respect to any intellectual property and shall not claim to acknowledge, or
permit any member of its respective Group to claim to acknowledge, the validity
or infringing use of any intellectual property of a third Person in a manner
that would hamper or undermine the defense of such infringement or similar
claim.
(d) The obligation of the parties to provide witnesses pursuant to this
Section 7.06 is intended to be interpreted in a manner so as to facilitate
cooperation and shall include the obligation to provide as witnesses inventors
and other officers without regard to whether the witness or the employer of the
witness could assert a possible business conflict (subject to the qualifications
set forth in the first sentence of Section 7.06(a)).
(e) In connection with any matter contemplated by this Section 7.06,
the parties will enter into a mutually acceptable joint defense agreement so as
to maintain to the extent practicable any applicable attorney-client privilege
or work product immunity of any member of any Group.
7.07 CONFIDENTIALITY. (a) Subject to Section 7.08, each of ATI and
Teledyne Technologies, on behalf of itself and each member of its respective
Group, agrees to hold, and to cause its respective directors, officers,
employees, agents, accountants, counsel and other advisors and representatives
to hold, in strict confidence, with at least the same degree of care that
applies to ATI's confidential and proprietary information pursuant to policies
in effect as of the Distribution Date, all Information concerning each such
other Group that is either in its possession or furnished by any such other
Group or its respective directors, officers, employees, agents, accountants,
counsel and other advisors and representatives at any time pursuant to this
Agreement, any Ancillary Agreement or otherwise, and shall not use any such
Information other than for such purposes as shall be expressly permitted
hereunder or thereunder, except, in each case, to the extent that such
Information has been (i) in the public domain through no fault of such party or
any member of such Group or any of their respective directors, officers,
employees, agents, accountants, counsel and other advisors and representatives,
(ii) later lawfully acquired from other sources by such party (or any member of
such party's Group) which sources are not themselves bound by a confidentiality
obligation), or (iii) independently generated without reference to any
proprietary or confidential Information of the other party.
(b) Each party agrees not to release or disclose, or permit to be
released or disclosed, any such Information to any other Person, except its
directors, officers, employees, agents, accountants, counsel and other advisors
and representatives who need to know such Information (who shall be advised of
their obligations hereunder with respect to such Information), except in
compliance with Section 7.08. Without limiting the foregoing, when any
Information is no longer needed for the purposes contemplated by this Agreement
or any Ancillary Agreement, each party will promptly after request of the other
party either return to the other party all Information in a tangible form
(including all copies thereof and all notes, extracts or summaries based
thereon) or certify to the other party that it has destroyed such Information
(and such copies thereof and such notes, extracts or summaries based thereon).
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7.08 PROTECTIVE ARRANGEMENTS. In the event that any party or any member
of its Group either determines on the advice of its counsel that it is required
to disclose any Information pursuant to applicable law or receives any demand
under lawful process or from any Governmental Authority to disclose or provide
Information of any other party (or any member of any other party's Group) that
is subject to the confidentiality provisions hereof, such party shall notify the
other party prior to disclosing or providing such Information and shall
cooperate at the expense of the requesting party in seeking any reasonable
protective arrangements requested by such other party. Subject to the foregoing,
the Person that received such request may thereafter disclose or provide
Information to the extent required by such law (as so advised by counsel) or by
lawful process or such Governmental Authority.
ARTICLE VIII
FURTHER ASSURANCES
8.01 FURTHER ASSURANCES. (a) In addition to the actions specifically
provided for elsewhere in this Agreement, each of the parties hereto shall use
its reasonable efforts, prior to, on and after the Distribution Date, to take,
or cause to be taken, all actions, and to do, or cause to be done, all things,
reasonably necessary, proper or advisable under applicable laws, regulations and
agreements to consummate and make effective the transactions contemplated by
this Agreement and the Ancillary Agreements.
(b) Without limiting the foregoing, prior to, on and after the date
hereof, each party hereto shall cooperate with the other parties, and without
any further consideration, but at the expense of the requesting party, to
execute and deliver, or use its reasonable efforts to cause to be executed and
delivered, all instruments, including instruments of conveyance, assignment and
transfer, and to make all filings with, and to obtain all consents, approvals or
authorizations of, any Governmental Authority or any other Person under any
permit, license, agreement, indenture or other instrument (including any
Consents or Governmental Approvals), and to take all such other actions as such
party may reasonably be requested to take by any other party hereto from time to
time, consistent with the terms of this Agreement and the Ancillary Agreements,
in order to effectuate the provisions and purposes of this Agreement and the
Ancillary Agreements and the transfers of the Teledyne Technologies Assets and
the assignment and assumption of the Teledyne Technologies Liabilities and the
other transactions contemplated hereby and thereby. Without limiting the
foregoing, each party will, at the reasonable request, cost and expense of any
other party, take such other actions as may be reasonably necessary to vest in
such other party good and marketable title, free and clear of any Security
Interest, if and to the extent it is practicable to do so.
(c) On or prior to the Distribution Date, ATI and Teledyne Technologies
in their respective capacities as direct and indirect stockholders of their
respective Subsidiaries, shall each ratify any actions which are reasonably
necessary or desirable to be taken by ATI or Teledyne Technologies or any other
Subsidiary of ATI, as the case may be, to effectuate the transactions
contemplated by this Agreement.
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(d) ATI and Teledyne Technologies, on behalf of itself and each member
of its respective Group, waive (and agree not to assert against any of the
others) any claim or demand that any of them may have against any of the others
for any Liabilities or other claims relating to or arising out of: (i) the
failure of Teledyne Technologies or any member of the Teledyne Technologies
Group, on the one hand, or of ATI or any member of the ATI Group, on the other
hand, to provide any notification or disclosure required under any state
Environmental Law in connection with the Separation or the other transactions
contemplated by this Agreement, including the transfer by any member of any
Group to any member of any other Group of ownership or operational control of
any Assets not previously owned or operated by such transferee; or (ii) any
inadequate, incorrect or incomplete notification or disclosure under any such
state Environmental Law by the applicable transferor. To the extent any
Liability to any Governmental Authority or any third Person arises out of any
action or inaction described in clause (i) or (ii) above, the transferee of the
applicable Asset hereby assumes and agrees to pay any such Liability.
ARTICLE IX
TERMINATION
9.01 TERMINATION. This Agreement may be terminated by ATI at any time
prior to the Distribution.
9.02 EFFECT OF TERMINATION. In the event of any termination of this
Agreement pursuant to Section 9.01, no party to this Agreement (or any of its
directors or officers) shall have any Liability or further obligation to any
other party.
ARTICLE X
MISCELLANEOUS
10.01. COUNTERPARTS; ENTIRE AGREEMENT; CORPORATE POWER. (a) This
Agreement and each Ancillary Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party.
(b) This Agreement, and the Ancillary Agreements and the Exhibits,
Schedules and Appendices hereto and thereto contain the entire agreement between
the parties with respect to the subject matter hereof, supersede all previous
agreements, negotiations, discussions, writings, understandings, commitments and
conversations with respect to such subject matter and there are no agreements or
understandings between the parties other than those set forth or referred to
herein or therein.
(c) ATI represents on behalf of itself and each other member of the ATI
Group, and Teledyne Technologies represents on behalf of itself and each other
member of the Teledyne Technologies Group, as follows:
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(i) each such Person has the requisite corporate or other
power and authority and has taken all corporate or other action
necessary in order to execute, deliver and perform each of this
Agreement and each other Ancillary Agreements to which it is a party
and to consummate the transactions contemplated hereby and thereby; and
(ii) this Agreement and each Ancillary Agreement to which it
is a party has been duly executed and delivered by it and constitutes a
valid and binding agreement of it enforceable in accordance with the
terms thereof.
(d) Each party hereto acknowledges that it and each other party hereto
may be executing certain of the Ancillary Agreements by facsimile, stamp or
mechanical signature. Each party hereto expressly adopts and confirms each such
facsimile, stamp or mechanical signature made in its respective name as if it
were a manual signature, agrees that it will not assert that any such signature
is not adequate to bind such party to the same extent as if it were signed
manually and agrees that at the reasonable request of any other party hereto at
any time it will as promptly as reasonably practicable cause each such Ancillary
Agreement to be manually executed (any such execution to be as of the date of
the initial date thereof).
10.02. GOVERNING LAW; CONSENT TO JURISDICTION. (a) This Agreement and,
unless expressly provided therein, each Ancillary Agreement, shall be governed
by and construed and interpreted in accordance with the laws of the Commonwealth
of Pennsylvania as to all matters, including matters of validity, construction,
effect, enforceability, performance and remedies, irrespective of the choice of
laws principles of the Commonwealth of Pennsylvania.
(b) Each of the parties hereto irrevocably submits to the exclusive
jurisdiction of (i) the Court of Common Pleas of Allegheny County, Pennsylvania
and (ii) the United States District Court for the Western District of
Pennsylvania, for the purposes of any suit, action or other proceeding arising
out of this Agreement or any Ancillary Agreement or any transaction contemplated
hereby or thereby (and agrees not to commence any action, suit or proceeding
relating thereto except in such courts). Each of the parties hereto further
agrees that service of any process, summons, notice or document hand delivered
or sent by U.S. registered mail to such party's respective address set forth in
Section 10.05 will be effective service of process for any action, suit or
proceeding in Pennsylvania with respect to any matters to which it has submitted
to jurisdiction as set forth in the immediately preceding sentence. Each of the
parties hereto irrevocably and unconditionally waives any objection to the
laying of venue of any action, suit or proceeding arising out of this Agreement
or any Ancillary Agreement or the transactions contemplated hereby or thereby in
(i) the Court of Common Pleas of Allegheny County, Pennsylvania or (ii) the
United States District Court for the Western District of Pennsylvania, and
hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum.
10.03. ASSIGNABILITY. Except as set forth in any Ancillary Agreement,
this Agreement and each Ancillary Agreement shall be binding upon and inure to
the benefit of the parties hereto and thereto, respectively, and their
respective successors and assigns (including any direct or indirect assignee of
any of the Teledyne Technologies Assets); provided, however, that
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no party hereto or thereto may assign its respective rights or delegate its
respective obligations under this Agreement or any Ancillary Agreement without
the express prior written consent of the other parties hereto or thereto.
10.04. THIRD PARTY BENEFICIARIES. Except for the indemnification rights
under this Agreement of any ATI Indemnitee, Teledyne Technologies Indemnitee or
Water Pik Indemnitee in their respective capacities as such, (a) the provisions
of this Agreement and each Ancillary Agreement are solely for the benefit of the
parties and are not intended to confer upon any Person except the parties any
rights or remedies hereunder, (b) there are no third party beneficiaries of this
Agreement or any Ancillary Agreement, and (c) neither this Agreement nor any
Ancillary Agreement shall provide any third person with any remedy, claim,
liability, reimbursement, claim of action or other right in excess of those
existing without reference to this Agreement or any Ancillary Agreement. No
party hereto shall have any right, remedy or claim with respect to any provision
of this Agreement or any Ancillary Agreement to the extent such provision
relates solely to the other two parties hereto or the members of such other two
parties' respective Groups. No party shall be required to deliver any notice
under this Agreement or under any Ancillary Agreement to any other party with
respect to any matter in which such other party has no right, remedy or claim.
10.05. NOTICES. All notices or other communications under this
Agreement or any Ancillary Agreement shall be in writing and shall be deemed to
be duly given when (a) delivered in person or (b) deposited in the United States
mail or private express mail, postage prepaid, addressed as follows:
If to ATI, Holdings or TII, to: Allegheny Teledyne Incorporated
1000 Six PPG Place
Pittsburgh, Pennsylvania 15222-5479
Attn: Senior Vice President, General
Counsel and Secretary
If to Teledyne Technologies, to: Teledyne Technologies Incorporated
2049 Century Park East
Los Angeles, California 90067-3101
Attn: Senior Vice President, General
Counsel and Secretary
Any party may, by notice to the other party, change the address to which such
notices are to be given.
10.06. SEVERABILITY. If any provision of this Agreement or any
Ancillary Agreement or the application thereof to any Person or circumstance is
determined by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions hereof or thereof, or the application of
such provision to Persons or circumstances or in jurisdictions other than those
as to
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which it has been held invalid or unenforceable, shall remain in full force and
effect and shall in no way be affected, impaired or invalidated thereby, so long
as the economic or legal substance of the transactions contemplated hereby or
thereby, as the case may be, is not affected in any manner adverse to any party.
Upon such determination, the parties shall negotiate in good faith in an effort
to agree upon such a suitable and equitable provision to effect the original
intent of the parties.
10.07. FORCE MAJEURE. No party shall be deemed in default of this
Agreement or any Ancillary Agreement to the extent that any delay or failure in
the performance of its obligations under this Agreement or any Ancillary
Agreement results from any cause beyond its reasonable control and without its
fault or negligence, such as acts of God, acts of civil or military authority,
embargoes, epidemics, war, riots, insurrections, fires, explosions, earthquakes,
floods, unusually severe weather conditions, labor problems or unavailability of
parts, or, in the case of computer systems, Year 2000 problems or any failure in
electrical or air conditioning equipment. In the event of any such excused
delay, the time for performance shall be extended for a period equal to the time
lost by reason of the delay.
10.08. HEADINGS. The article, section and paragraph headings contained
in this Agreement and in the Ancillary Agreements are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement or any Ancillary Agreement.
10.09. SURVIVAL OF COVENANTS. Except as expressly set forth in any
Ancillary Agreement, the covenants, representations and warranties contained in
this Agreement and each Ancillary Agreement, and liability for the breach of any
obligations contained herein, shall survive each of the Separation and the
Distribution and shall remain in full force and effect.
10.10. WAIVERS OF DEFAULT. Waiver by any party of any default by the
other party of any provision of this Agreement or any Ancillary Agreement shall
not be deemed a waiver by the waiving party of any subsequent or other default,
nor shall it prejudice the rights of the other party.
10.11. SPECIFIC PERFORMANCE. In the event of any actual or threatened
default in, or breach of, any of the terms, conditions and provisions of this
Agreement or any Ancillary Agreement, the party or parties who are or are to be
thereby aggrieved shall have the right to specific performance and injunctive or
other equitable relief of its rights under this Agreement or such Ancillary
Agreement, in addition to any and all other rights and remedies at law or in
equity, and all such rights and remedies shall be cumulative. The parties agree
that the remedies at law for any breach or threatened breach, including monetary
damages, are inadequate compensation for any loss and that any defense in any
action for specific performance that a remedy at law would be adequate is
waived. Any requirements for the securing or posting of any bond with such
remedy are waived.
10.12. AMENDMENTS. No provisions of this Agreement or any Ancillary
Agreement shall be deemed waived, amended, supplemented or modified by any
party, unless such waiver, amendment, supplement or modification is in writing
and signed by the authorized representative of the party against whom it is
sought to enforce such waiver, amendment, supplement or
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modification. Without limiting the foregoing, the parties agree that any waiver,
amendment, supplement or modification of this Agreement or any Ancillary
Agreement that solely relates to and affects only two of the three parties
hereto shall not require the consent of the third party hereto.
10.13. INTERPRETATION. Words in the singular shall be held to include
the plural and vice versa and words of one gender shall be held to include the
other genders as the context requires. The terms "hereof," "herein," and
"herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement (or the applicable Ancillary Agreement) as
a whole (including all of the Schedules, Exhibits and Appendices hereto and
thereto) and not to any particular provision of this Agreement (or such
Ancillary Agreement). Article, Section, Exhibit, Schedule and Appendix
references are to the Articles, Sections, Exhibits, Schedules and Appendices to
this Agreement (or the applicable Ancillary Agreement) unless otherwise
specified. The word "including" and words of similar import when used in this
Agreement (or the applicable Ancillary Agreement) shall mean "including, without
limitation," unless the context otherwise requires or unless otherwise
specified. The word "or" shall not be exclusive. Unless expressly stated to the
contrary in this Agreement or in any Ancillary Agreement, all references to "the
date hereof," "the date of this Agreement," "hereby" and "hereupon" and words of
similar import shall all be references to November 29, 1999, regardless of any
amendment or restatement hereof.
10.14. DISPUTES. (a) Resolution of any and all disputes arising from or
in connection with this Agreement other than those arising from or in connection
with Article IV of this Agreement, whether based on contract, tort, statute or
otherwise, including, but not limited to, disputes in connection with claims by
third parties (collectively, "Disputes"), shall be subject to the provisions of
this Section 10.14; provided, however, that nothing contained herein shall
preclude any party from seeking or obtaining (i) injunctive relief or (ii)
equitable or other judicial relief to enforce the provisions hereof or to
preserve the status quo pending resolution of Disputes hereunder.
(b) Any party may give the other parties written notice of any Dispute
not resolved in the normal course of business. The parties shall attempt in good
faith to resolve any Dispute promptly by negotiation between executives of the
parties who have authority to settle the controversy. Within 15 days after
delivery of the notice, the foregoing executives of both parties shall meet at a
mutually acceptable time and place, and thereafter as often as they reasonably
deem necessary for a period not to exceed five days, to attempt to resolve the
Dispute. All reasonable requests for information made by one party to the other
will be honored. If the parties do not resolve the Dispute within such 20 day
period (the "Initial Mediation Period"), the parties shall attempt in good faith
to resolve the Dispute by negotiation between or among the Designated Officers.
The Designated Officers shall meet at a mutually acceptable time and place (but
in no event no later than 15 days following the expiration of the Initial
Mediation Period) and thereafter as often as they reasonably deem necessary for
a period not to exceed 15 days, to attempt to resolve the Dispute.
(c) If the Dispute has not been resolved by negotiation within 50 days
of the first party's notice, or if the parties failed to meet within 15 days of
the first party's notice, or if the
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Designated Officers failed to meet within 35 days of the first party's notice,
any party may commence any litigation or other procedure allowed by law.
10.15. EXCLUSIVITY OF TAX SHARING AGREEMENT. Notwithstanding anything
in this Agreement to the contrary, and subject to the provisions of Article IV
hereof, the Tax Sharing Agreement will be the exclusive agreement among the
parties with respect to all matters pertaining to Taxes, including, without
limitation, indemnification with respect to matters pertaining to Taxes and
indemnification with respect to the qualification of the Distribution as a
tax-free distribution under Section 355 and related provisions of the Code.
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IN WITNESS WHEREOF, the parties have caused this Separation and
Distribution Agreement to be executed by their duly authorized representatives.
ALLEGHENY TELEDYNE INCORPORATED
By: /s/ James L. Murdy
--------------------------------
Name:
Title:
TDY HOLDINGS, LLC
By: /s/ James L. Murdy
--------------------------------
Name:
Title:
TELEDYNE INDUSTRIES, INC.
By: /s/ James L. Murdy
--------------------------------
Name:
Title:
TELEDYNE TECHNOLOGIES INCORPORATED
By: /s/ Robert Mehrabian
--------------------------------
Name:
Title:
43
<PAGE> 1
Exhibit 2.2
SEPARATION AND DISTRIBUTION AGREEMENT
BY AND AMONG
ALLEGHENY TELEDYNE INCORPORATED,
TDY HOLDINGS, LLC,
TELEDYNE INDUSTRIES, INC.
AND
WATER PIK TECHNOLOGIES, INC.
DATED AS OF NOVEMBER 29, 1999
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Table of Contents
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ARTICLE I DEFINITIONS.......................................................................................2
ARTICLE II THE SEPARATION...................................................................................12
2.01. Transfer of Assets and Assumption of Liabilities.................................................12
2.02. Water Pik Assets.................................................................................13
2.03. Water Pik Liabilities............................................................................14
2.04. Termination of Agreements........................................................................15
2.05. Documents Relating to Transfer of Real Property Interests
and Tangible Property Located Thereon............................................................16
2.06. Documents Further Evidencing Transfers of Assets and
Assumption of Liabilities........................................................................16
2.07. Other Ancillary Agreements.......................................................................16
2.08. Disclaimer of Representations and Warranties.....................................................16
2.09. Financing Arrangements...........................................................................17
2.10. Governmental Approvals and Consents..............................................................17
2.11. Novation of Assumed Water Pik Liabilities........................................................18
2.12. Transfer of Subsidiary Assets and Assumption of Subsidiary Liabilities...........................19
2.13. Consummation of Purchase and Sale Agreement......................................................19
2.14. TI Contribution and Liquidation..................................................................19
2.15. Interim Distributions............................................................................19
ARTICLE III THE DISTRIBUTION.................................................................................19
3.01. The Distribution.................................................................................19
3.02. Actions Prior to the Distribution................................................................19
3.03. Fractional Shares................................................................................20
ARTICLE IV THE PUBLIC OFFERING..............................................................................21
4.01. The Public Offering..............................................................................21
4.02. Proceeds of the Public Offering..................................................................21
4.03. Remedies.........................................................................................21
ARTICLE V MUTUAL RELEASES; INDEMNIFICATION.................................................................22
5.01. Release of Pre-Distribution Claims...............................................................22
5.02. Indemnification by Water Pik.....................................................................24
5.03. Indemnification by ATI...........................................................................25
5.04. Indemnification Obligations Net of Insurance Proceeds and other Amounts..........................25
5.05. Procedures for Indemnification of Third Party Claims.............................................26
5.06. Additional Matters...............................................................................27
5.07. Remedies Cumulative..............................................................................27
5.08. Survival of Indemnities..........................................................................27
ARTICLE VI CERTAIN OTHER MATTERS............................................................................27
6.01. Insurance Matters................................................................................27
6.02. Certain Business Matters.........................................................................30
6.03. Late Payments....................................................................................30
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6.04. Certain Governance Matters.......................................................................30
ARTICLE VIII EXCHANGE OF INFORMATION; CONFIDENTIALITY.........................................................31
7.01. Agreement for Exchange of Information; Archives..................................................31
7.02. Ownership of Information.........................................................................32
7.03. Compensation for Providing Information...........................................................32
7.04. Record Retention.................................................................................32
7.05. Other Agreements Providing For Exchange of Information...........................................32
7.06. Production of Witnesses; Records; Cooperation....................................................32
7.07. Confidentiality..................................................................................33
7.08. Protective Arrangements..........................................................................34
ARTICLE VIII FURTHER ASSURANCES...............................................................................34
8.01. Further Assurances...............................................................................34
ARTICLE X TERMINATION......................................................................................35
9.01. Termination......................................................................................35
9.02. Effect of Termination............................................................................35
ARTICLE X MISCELLANEOUS....................................................................................35
10.01. Counterparts; Entire Agreement; Corporate Power..................................................35
10.02. Governing Law; Consent to Jurisdiction...........................................................36
10.03. Assignability....................................................................................37
10.04. Third Party Beneficiaries........................................................................37
10.05. Notices..........................................................................................37
10.06. Severability.....................................................................................38
10.07. Force Majeure....................................................................................38
10.09. Headings.........................................................................................38
10.10. Survival of Covenants............................................................................38
10.11. Waivers of Default...............................................................................38
10.12. Specific Performance.............................................................................38
10.13. Amendments.......................................................................................38
10.14. Interpretation...................................................................................39
10.15. Disputes.........................................................................................39
10.16. Exclusivity of Tax Sharing Agreement.............................................................41
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SEPARATION AND DISTRIBUTION AGREEMENT
THIS SEPARATION AND DISTRIBUTION AGREEMENT, dated as of
November 29, 1999, is by and among Allegheny Teledyne Incorporated, a Delaware
corporation ("ATI"), TDY Holdings, LLC, a Delaware limited liability company the
sole member of which is ATI ("Holdings"), Teledyne Industries, Inc., a
California corporation and an indirect wholly owned subsidiary of ATI ("TII"),
and Water Pik Technologies, Inc., a Delaware corporation and wholly owned
subsidiary of TII ("Water Pik"). Capitalized terms used herein and not otherwise
defined shall have the respective meanings assigned to them in Article I hereof.
WHEREAS, the Board of Directors of ATI has determined that it
is in the best interests of ATI and its stockholders to separate ATI's existing
businesses into three independent businesses; and
WHEREAS, in furtherance of the foregoing, it is appropriate
and desirable to transfer the Water Pik Assets to Water Pik and to cause Water
Pik to assume the Water Pik Liabilities, all as more fully described in this
Agreement and the Ancillary Agreements; and
WHEREAS, ATI intends, subject to completion of the
transactions contemplated hereby (including the foregoing transfer of Water Pik
Assets and assumption of Water Pik Liabilities) and to the other terms of this
Agreement and to further action by its Board of Directors, to effect the
Distribution; and
WHEREAS, the Form 10 Registration Statement has become
effective under the Exchange Act; and
WHEREAS, ATI has received a private letter ruling from the
Internal Revenue Service to the effect that, among other things, the
Distribution will qualify as a tax-free distribution for federal income tax
purposes under Section 355 of the Code; and
WHEREAS, the Distribution is to be followed by the Public
Offering; and
WHEREAS, it is expected that, following certain transfers of
other Assets and assignments and assumptions of other Liabilities, ATI will
distribute to its stockholders all of the capital stock of Teledyne Technologies
Incorporated ("Teledyne Technologies") held directly or indirectly by ATI and
that, in connection therewith, ATI and Teledyne Technologies have entered into
agreements, including the Teledyne Technologies Separation and Distribution
Agreement, to address matters relating to the Teledyne Technologies
Distribution; and
WHEREAS, it is appropriate and desirable to set forth the
principal corporate transactions required to effect the Separation, the
Distribution and the Public Offering and certain other agreements that will
govern certain matters relating to the Separation, the Distribution and the
Public Offering and the relationships of ATI and Water Pik and their respective
Subsidiaries following the Separation and the Distribution;
NOW, THEREFORE, the parties, intending to be legally bound,
agree as follows:
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ARTICLE I
DEFINITIONS
For the purpose of this Agreement the following terms shall
have the following meanings:
1.01. ACTION means any demand, action, suit, countersuit,
arbitration, inquiry, proceeding or investigation by or before any federal,
state, local, foreign or international Governmental Authority or any arbitration
or mediation tribunal.
1.02. AFFILIATE of any Person means a Person that controls, is
controlled by, or is under common control with such Person. As used herein,
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such entity, whether
through ownership of voting securities or other interests, by contract or
otherwise.
1.03. AGENT means the distribution agent to be appointed by
ATI to distribute to the stockholders of ATI the shares of Water Pik Common
Stock held by ATI pursuant to the Distribution.
1.04. AGREEMENT means this Separation and Distribution
Agreement, including all of the Schedules hereto.
1.05. ANCILLARY AGREEMENTS means the deeds, lease assignments
and assumptions, leases, subleases and sub-subleases, subscription or
contribution agreements, stock powers, and the supplemental and other agreements
and instruments related thereto contemplated by Article II, including the Laars
Inc. Transfer and Assumption Agreement, the Water Pik Inc. Transfer and
Assumption Agreement, the Purchase and Sale Agreement, the Employee Benefits
Agreement, the Interim Services Agreement, the Patent Assignments and related
powers of attorney and the Tax Sharing Agreement.
1.06. ASSETS means assets, properties and rights (including
goodwill), wherever located (including in the possession of vendors or other
third parties or elsewhere), whether real, personal or mixed, tangible,
intangible or contingent, in each case whether or not recorded or reflected or
required to be recorded or reflected on the books and records or financial
statements of any Person, including the following:
(a) all accounting and other books, records and files whether
in paper, microfilm, microfiche, computer tape or disc, magnetic tape
or any other form;
(b) all apparatus, computers and other electronic data
processing equipment, fixtures, machinery, equipment, furniture, office
equipment, automobiles, trucks, rolling stock, vessels, motor vehicles
and other transportation equipment, special and general tools, test
devices, prototypes and models and other tangible personal property;
(c) all inventories of materials, parts, raw materials,
supplies, work-in-process and finished goods and products;
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(d) all interests in real property of whatever nature,
including easements, whether as owner, lessor, sublessor, lessee,
sublessee or otherwise;
(e) all interests in any capital stock or other equity
interests of any Subsidiary or any other Person, all bonds, notes,
debentures or other securities issued by any Subsidiary or any other
Person, all loans, advances or other extensions of credit or capital
contributions to any Subsidiary or any other Person and all other
investments in securities of any Person;
(f) all license agreements, leases of personal property, open
purchase orders for raw materials, supplies, parts or services,
unfilled orders for the manufacture and sale of products and other
contracts, agreements or commitments;
(g) all deposits, letters of credit and performance and surety
bonds;
(h) Information, including that prepared by consultants and
other third parties;
(i) all domestic and foreign patents, copyrights, trade names,
domain names, trademarks, service marks and registrations and
applications for any of the foregoing, mask works, trade secrets,
inventions, other proprietary information and licenses from third
Persons granting the right to use any of the foregoing ("Intellectual
Property");
(j) all computer applications, programs and other software,
including operating software, network software, firmware, middleware,
internet web pages, design software, design tools, systems
documentation and instructions;
(k) all cost information, sales and pricing data, customer
prospect lists, supplier records, customer and supplier lists, customer
and vendor data, correspondence and lists, product literature, artwork,
design, development and manufacturing files, vendor and customer
drawings, formulations and specifications, quality records and reports
and other books, records, studies, surveys, reports, plans and
documents;
(l) all prepaid expenses, trade accounts and other accounts
and notes receivables;
(m) all rights under contracts or agreements, all claims or
rights against any Person arising from the ownership of any Asset, all
rights in connection with any bids or offers and all related claims,
choses in action or similar rights, whether accrued or contingent,
including any claims of infringement of Intellectual Property against
third parties;
(n) all rights as a named insured under insurance policies and
all rights in the nature of insurance, indemnification or contribution;
(o) all licenses, permits, approvals and authorizations which
have been issued by any Governmental Authority;
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(p) cash or cash equivalents, bank accounts, lock boxes and
other deposit agreements; and
(q) interest rate, currency, commodity or other swap, collar,
cap or other hedging or similar agreements or arrangements.
1.07. ATI AUTOMOBILE POLICIES means those ATI Policies that
(i) insure Water Pik or any other member of the Water Pik Group, and (ii)
provide automobile insurance.
1.08. ATI COMMON STOCK means the Common Stock, par value $0.10
per share, of ATI.
1.09. ATI GENERAL LIABILITY POLICIES means those ATI Policies
that (i) insure Water Pik or any other member of the Water Pik Group, and (ii)
provide general liability, public liability, or comprehensive general liability
insurance.
1.10. ATI GROUP means ATI and each Person (other than any
member of the Water Pik Group or the Water Pik Group) that is an Affiliate of
ATI immediately after the Effective Time.
1.11. ATI INDEMNITEES has the meaning set forth in Section
5.02.
1.12. ATI LIABILITIES means all Liabilities of ATI other than
Water Pik Liabilities and Teledyne Technologies Liabilities.
1.13. ATI POLICIES means policies of insurance that have been
issued to, or in favor of, ATI or Subsidiaries of ATI.
1.14. ATI PRODUCT LIABILITY POLICIES means those insurance ATI
Policies that (i) insure Water Pik or any other member of the Water Pik Group,
and (ii) provide product liability insurance.
1.15. ATI WORKERS COMPENSATION POLICIES means those ATI
Policies that (i) insure Water Pik or any other member of the Water Pik Group,
and (ii) provide workers compensation insurance.
1.16. CODE means the Internal Revenue Code of 1986, as
amended.
1.17. COMMISSION means the Securities and Exchange Commission.
1.18. CONSENTS means any consents, waivers or approvals from,
or notification requirements to, any third parties.
1.19. DESIGNATED OFFICERS means, (i) in the case of ATI, the
Senior Vice President, General Counsel and Secretary of ATI or his successor,
and (ii) in the case of Water Pik, the President of Water Pik or his successor.
1.20. DGCL means the Delaware General Corporation Law, as
amended.
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1.21. DISPUTES has the meaning set forth in Section 10.14.
1.22. DISTRIBUTION means the distribution by ATI on a pro rata
basis to holders of ATI Common Stock of all of the outstanding shares of Water
Pik Common Stock.
1.23. DISTRIBUTION DATE means the date on which the
Distribution occurs.
1.24. EFFECTIVE TIME means 12:00 noon, Eastern Standard Time
or Eastern Daylight Time (whichever shall be then in effect), on the
Distribution Date.
1.25. EMPLOYEE BENEFITS AGREEMENT means the Employee Benefits
Agreement, dated as of the date hereof, by and between ATI and Water Pik.
1.26. ENVIRONMENTAL LAW means any federal, state, local,
foreign or international statute, ordinance, rule, regulation, code, license,
permit, authorization, approval, consent, common law (including tort and
environmental nuisance law), legal doctrine, order, judgment, decree,
injunction, requirement or agreement with any Governmental Authority, now or
hereafter in effect relating to health, safety, pollution or the environment
(including ambient air, surface water, groundwater, land surface or subsurface
strata) or to emissions, discharges, releases or threatened releases of any
substance currently or at any time hereafter listed, defined, designated or
classified as hazardous, toxic, waste, radioactive or dangerous, or otherwise
regulated, under any of the foregoing, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of any such substances, including the Comprehensive Environmental
Response, Compensation and Liability Act, the Superfund Amendments and
Reauthorization Act and the Resource Conservation and Recovery Act and
comparable provisions in state, local, foreign or international law.
1.27. ENVIRONMENTAL LIABILITIES means all Liabilities relating
to, arising out of or resulting from any Environmental Law or contract or
agreement relating to environmental, health or safety matters (including all
removal, remediation or cleanup costs, investigatory costs, governmental
response costs, natural resources damages, property damages, personal injury
damages, costs of compliance with any settlement, judgment or other
determination of Liability and indemnity, contribution or similar obligations)
and all costs and expenses (including allocated costs of in-house counsel and
other personnel), interest, fines, penalties or other monetary sanctions in
connection therewith.
1.28. EXCHANGE ACT means the Securities Exchange Act of 1934,
as amended, together with the rules and regulations promulgated thereunder.
1.29. EXCLUDED ASSETS has the meaning set forth in Section
2.02(b).
1.30. EXPENSE FACTORS means expense factors or similar factors
or multipliers set forth in policies of insurance or related agreements
applicable to liabilities, losses or defense costs insured thereunder that are
subject to a Self-Insurance Obligation.
1.31. FINANCING FACILITY means the credit facilities entered
into by Water Pik on or prior to the Distribution and any substitute or
successor credit facility.
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1.32. FORM 10 REGISTRATION STATEMENT means the registration
statement on Form 10 filed under the Exchange Act, pursuant to which Water Pik
Common Stock will be registered under the Exchange Act following the
Distribution, together with all amendments thereto.
1.33. GOVERNMENTAL APPROVALS means any notices, reports or
other filings to be made, or any consents, registrations, approvals, permits or
authorizations to be obtained from, any Governmental Authority.
1.34. GOVERNMENTAL AUTHORITY shall mean any federal, state,
local, foreign or international court, government, department, commission,
board, bureau, agency, official or other regulatory, administrative or
governmental authority.
1.35. GROUP means the ATI Group, the Water Pik Group or the
Teledyne Technologies Group, as the context requires.
1.36. INCURRED LOSSES means the sum of paid losses (indemnity
and loss adjustment expenses) and reserves for unpaid losses.
1.37. INDEMNIFYING PARTY has the meaning set forth in Section
5.04(a).
1.38. INDEMNITEE has the meaning set forth in Section 5.04(a).
1.39. INDEMNITY PAYMENT has the meaning set forth in Section
5.04(a).
1.40. INFORMATION means information, whether or not patentable
or copyrightable, in written, oral, electronic or other tangible or intangible
forms, stored in any medium, including studies, reports, records, books,
contracts, instruments, surveys, discoveries, ideas, concepts, know-how,
analyses, techniques, designs, specifications, drawings, blueprints, diagrams,
models, operating and maintenance manuals, prototypes, samples, flow charts,
data, computer data, disks, diskettes, tapes, computer programs or other
software, marketing plans, customer names, communications by or to attorneys
(including attorney-client privileged communications), memos and other materials
prepared by attorneys or under their direction (including attorney work
product), and other technical, financial, employee or business information or
data, whether prepared by or for any affected party.
1.41. INFORMATION STATEMENT means the Information Statement
forming a part of the Form 10 Registration Statement to be mailed to holders of
ATI Common Stock in connection with the Distribution.
1.42. INITIAL MEDIATION PERIOD has the meaning set forth in
Section 10.14.
1.43. INSURANCE POLICIES means the insurance policies written
by insurance carriers unaffiliated with ATI pursuant to which Water Pik or one
or more of its Subsidiaries (or their respective officers or directors) will be
insured parties after the Effective Time.
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1.44. INSURANCE PROCEEDS means those monies:
(a) received by an insured from an insurance carrier;
(b) paid by an insurance carrier on behalf of the insured; or
(c) received (including by way of set off) from any third
party in the nature of insurance, contribution or indemnification in
respect of any Liability;
in any such case net of any applicable premium adjustments (including reserves
and retrospectively rated premium adjustments) and net of any costs or expenses
(including allocated costs of in-house counsel and other personnel) incurred in
the collection thereof.
1.45. INTERIM SERVICES AGREEMENT means the Interim Services
Agreement, dated as of the date hereof, by and between ATI and Water Pik.
1.46. LAARS INC. means Laars Inc., a Delaware corporation.
1.47. LAARS INC. ASSETS means those Water Pik Assets described
in the Laars Inc. Transfer and Assumption Agreement.
1.48. LAARS INC. LIABILITIES means those Water Pik Liabilities
described in the Laars Inc. Transfer and Assumption Agreement.
1.49. LAARS INC. TRANSFER AND ASSUMPTION AGREEMENT means the
Asset Transfer and Liabilities Assumption Agreement, dated as of the date
hereof, between Water Pik and Laars Inc.
1.50. LIABILITIES means any and all losses, claims, charges,
debts, demands, actions, causes of action, suits, damages, obligations,
payments, costs and expenses, sums of money, accounts, reckonings, bonds,
specialties, indemnities and similar obligations, exonerations, covenants,
contracts, controversies, agreements, promises, doings, omissions, variances,
guarantees, make whole agreements and similar obligations, and other
liabilities, including all contractual obligations, whether absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising, and including those arising under
any law, rule, regulation, Action, threatened or contemplated Action (including
the costs and expenses of demands, assessments, judgments, settlements and
compromises relating thereto and reasonable attorneys' fees and any and all
costs and expenses (including allocated costs of in-house counsel and other
personnel), whatsoever incurred in investigating, preparing or defending against
any such Actions or threatened or contemplated Actions), order or consent decree
of any Governmental Authority or any award of any arbitrator or mediator of any
kind, and those arising under any contract, commitment or undertaking, including
those arising under this Agreement or any Ancillary Agreement, in each case,
whether or not recorded or reflected or required to be recorded or reflected on
the books and records or financial statements of any Person.
1.51. NYSE means The New York Stock Exchange, Inc.
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1.52. NON-WATER PIK ASSETS means any Assets of ATI or any of
its Affiliates (including any member of the Water Pik Group) other than the
Water Pik Assets.
1.53. PATENT ASSIGNMENTS means the Patent Assignments,
effective as of the Distribution, executed and delivered by TII to Water Pik.
1.54 PER CASE MAXIMUM means (i) with respect to any single
occurrence covered under ATI Automobile Policies, $100,000 (inclusive of
indemnity and loss adjustment expenses multiplied by applicable Expense Factors)
and (ii) with respect to any single occurrence covered by ATI Workers
Compensation policies, $150,000 (inclusive of indemnity and loss adjustment
expenses multiplied by applicable Expense Factors).
1.55. PERSON means an individual, a general or limited
partnership, a corporation, a trust, a joint venture, an unincorporated
organization, a limited liability entity, any other entity and any Governmental
Authority.
1.56 POOLED LOSS COSTS ALLOCABLE TO WATER PIK means the share
allocated to Water Pik by virtue of its participation in a pooling arrangement
among ATI divisions applicable to claims that (i) are covered under ATI
Automobile Policies and ATI Workers Compensation Policies; (ii) exceed the Per
Case Maximum; and (iii) are within a policy's deductible or other form of
self-insurance, which allocation to Water Pik will be based upon the same or
substantially similar to those factors as have been applied immediately before
the Distribution Date.
1.57. PRIME RATE means the rate which PNC Bank, N.A.,
Pittsburgh, Pennsylvania (or any successor thereto or other commercial bank
agreed to by the parties hereto) announces from time to time as its prime
lending rate, as in effect from time to time.
1.58. PUBLIC OFFERING means the underwritten public offering
by Water Pik of shares of Water Pik Common Stock pursuant to the Public Offering
Registration Statement and as contemplated by the Tax Sharing Agreement.
1.59. PUBLIC OFFERING REGISTRATION STATEMENT means the
registration statement to be filed by Water Pik under the Securities Act of
1933, as amended, pursuant to which the offering and sale of shares of Water Pik
Common Stock to be issued in the Public Offering will be registered, together
with all amendments thereto.
1.60. PURCHASE AND SALE AGREEMENT means the Purchase and Sale
Agreement, dated as of the date hereof, between TICL Newco and TICL.
1.61. RECORD DATE means the close of business on the date
determined by the ATI Board of Directors as the record date for determining
stockholders of ATI entitled to receive shares of Water Pik Common Stock in the
Distribution.
1.62. RIGHTS means the Rights to be distributed by Water Pik
in respect of Water Pik Common Stock in accordance with Section 3.02 hereof and
pursuant to the Rights Agreement between Water Pik and ChaseMellon Shareholder
Services, L.L.C.
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1.63. RULING REQUEST means the request for ruling (including
all exhibits), as amended and supplemented, under Section 355 and other
provisions of the Code, originally filed on behalf of ATI on April 6, 1999 in
respect of the Distribution.
1.64. SECURITY INTEREST means any mortgage, security interest,
pledge, lien, charge, claim, option, right to acquire, voting or other
restriction, right-of-way, covenant, condition, easement, encroachment,
restriction on transfer, or other encumbrance of any nature whatsoever.
1.65. SELF INSURANCE obligation means an obligation by one or
more insureds to pay or reimburse to the issuers of an insurance policy (whether
by way of deductible, retrospective premium, premium adjustment, self-insured
retention or other form of self-insurance), indemnity, allocated loss expense,
and other proceeds multiplied by Expense Factors, if any.
1.66. SEPARATION means the transfer of the Water Pik Assets to
Water Pik and its Subsidiaries and the assumption by Water Pik and its
Subsidiaries of the Water Pik Liabilities, all as more fully described in this
Agreement and the Ancillary Agreements.
1.67. SUBSIDIARY of any Person means any corporation or other
organization whether incorporated or unincorporated of which at least a majority
of the securities or interests having by the terms thereof ordinary voting power
to elect at least a majority of the board of directors or others performing
similar functions with respect to such corporation or other organization is
directly or indirectly owned or controlled by such Person or by any one or more
of its Subsidiaries, or by such Person and one or more of its Subsidiaries;
provided, however that no Person that is not directly or indirectly wholly owned
by any other Person shall be a Subsidiary of such other Person unless such other
Person controls, or has the right, power or ability to control, that Person.
1.68. TAX SHARING AGREEMENT means the Tax Sharing and
Indemnification Agreement, dated as of the date hereof, as the same may be
amended, by and between ATI and Water Pik.
1.69. TAXES has the meaning set forth in the Tax Sharing
Agreement.
1.70. TELEDYNE TECHNOLOGIES COMMON STOCK means the Common
Stock, par value $.01 per share, of Teledyne Technologies.
1.71. TELEDYNE TECHNOLOGIES DISTRIBUTION means the
distribution by ATI on a pro rata basis to holders of ATI Common Stock of all of
the outstanding shares of Teledyne Technologies Common Stock owned by ATI.
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1.72. TELEDYNE TECHNOLOGIES GROUP means Teledyne Technologies,
each Subsidiary of Teledyne Technologies and each other Person that is
contemplated to be controlled directly or indirectly by Teledyne Technologies at
the time of the Teledyne Technologies Distribution.
1.73. TELEDYNE TECHNOLOGIES LIABILITIES has the meaning
assigned to that term in the Teledyne Technologies Separation and Distribution
Agreement.
1.74. TELEDYNE TECHNOLOGIES SEPARATION AND DISTRIBUTION
AGREEMENT means the Separation and Distribution Agreement, dated the date
hereof, among ATI, Holdings, TII and Teledyne Technologies.
1.75. THIRD PARTY CLAIM has the meaning set forth in Section
5.05(a).
1.76. TI means Teledyne, Inc., a Delaware corporation.
1.77. TICL means Teledyne Industries Canada Limited, an
Ontario corporation.
1.78. TICL ASSETS means those certain assets of TICL described
in the Purchase and Sale Agreement.
1.79. TICL LIABILITIES means those liabilities of TICL
described in the Purchase and Sale Agreement
1.80. TICL NEWCO means Water Pik Canada, Ltd., an Ontario
corporation wholly owned by Water Pik.
1.81. TI LIQUIDATION means the dissolution and liquidation of
TI in accordance with applicable provisions of the DGCL and Section 332 of the
Code, as a result of which Holdings will own all of the outstanding capital
stock of TII.
1.82. UNDERWRITERS means the managing underwriters for the
Public Offering.
1.83. UNDERWRITING AGREEMENT means an underwriting agreement
in customary form to be entered into among Water Pik and the Underwriters with
respect to the Public Offering.
1.84. UNPAID LOSSES means liabilities and losses, including
indemnity payments and allocated loss expenses, that are subject to a Self
Insurance Obligation and that, as of the Distribution Date have not been paid by
Water Pik or a member of Water Pik Group and that do not appear on Schedule
1.84.
1.85. WATER PIK ASSETS has the meaning set forth in Section
2.02(a).
1.86. WATER PIK BALANCE SHEET means the audited consolidated
balance sheet of Water Pik, including the notes thereto, as of September 30,
1999.
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1.87. WATER PIK BUSINESS means the business and operations of
the divisions and Subsidiaries of TI or TII comprising Teledyne Water Pik, Jandy
and Teledyne Laars and any business or operation conducted by Water Pik or any
Affiliate of Water Pik at any time on or after the Distribution Date.
1.88. WATER PIK COMMON STOCK means the Common Stock, $.01 par
value per share, of Water Pik and, after the distribution of Rights referred to
in Section 3.02, shall include the associated Rights.
1.89. WATER PIK CONTRACTS means the following contracts and
agreements to which TII or any of its Affiliates is a party or by it or any of
its Affiliates or any of their respective Assets is bound, whether as of the
date hereof or prior to or at the Effective Time, and whether or not in writing,
except for any such contract or agreement that is expressly contemplated to be
retained by any member of the ATI Group pursuant to any provision of this
Agreement or any Ancillary Agreement:
(a) any contract or agreement entered into in the name of, or
expressly on behalf of, any division, business unit or member of the
Water Pik Group;
(b) any contract or agreement that relates exclusively to the
Water Pik Business;
(c) federal, state and local government and other contracts
and agreements that relate exclusively to the Water Pik Business;
(d) any contract or agreement representing capital or
operating equipment lease obligations reflected on the Water Pik
Balance Sheet, including obligations as lessee under those contracts or
agreements listed on Schedule 1.89(d) (as such Schedule may be
supplemented after the date hereof and prior to the Effective Time to
assign capital and operating equipment lease obligations that relate
exclusively to the Water Pik Business and that were, are or may be
executed and delivered after the date of the Water Pik Balance Sheet);
(e) any contract or agreement that is otherwise expressly
contemplated pursuant to this Agreement or any of the Ancillary
Agreements to be assigned to Water Pik or any member of the Water Pik
Group;
(f) any guarantee, indemnity, representation, warranty or
other Liability of any member of the Water Pik Group or the ATI Group
in respect of any other Water Pik Contract, any Water Pik Liability or
the Water Pik Business (including guarantees of financing incurred by
customers or other third parties in connection with purchases of
products or services from the Water Pik Business); and
(g) the contracts, agreements and other documents listed or
described on Schedule 1.89(g)).
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1.90. WATER PIK GROUP means Water Pik, each Subsidiary of
Water Pik and each other Person that is contemplated to be controlled directly
or indirectly by Water Pik as of the Effective Time.
1.91. WATER PIK INC. means Water Pik, Inc., a Delaware
corporation.
1.92. WATER PIK INC. ASSETS means those Water Pik Assets
described in the Water Pik Inc. Transfer and Assumption Agreement.
1.93. WATER PIK INC. LIABILITIES means those Water Pik
Liabilities described in the Water Pik Inc. Transfer and Assumption Agreement.
1.94. WATER PIK INC. TRANSFER AND ASSUMPTION AGREEMENT means
the Asset and Transfer and Liabilities Assumption Agreement, dated as of the
date hereof, between Water Pik and Water Pik Inc.
1.95. WATER PIK INDEMNITEES has the meaning set forth in
Section 5.03(a).
1.96. WATER PIK LIABILITIES has the meaning set forth in
Section 2.03.
1.97. YEAR 2000 COMPLIANT means, with respect to an Asset,
that such Asset will (i) accurately process date/time data (including, but not
limited to, calculating, comparing, sorting, sequencing and calendar
generation), including single century formulas and multi-century formulas, from,
into and between the twentieth and twenty-first centuries and the years 1999 and
2000, including leap year calculations, and will not malfunction or generate
incorrect values or invalid results involving such dates/times; (ii) accurately
interface with other systems, as appropriate, in order to supply, receive or
process dates/times and other data, to the extent that other information
technology properly exchanges data with it; (iii) provide that date/time-related
functionalities, date/time fields and any user input interfaces include a four
digit year format and/or other indication of century, as applicable; and (iv)
not cause any other Asset that is otherwise Year 2000 Compliant to fail to be
Year 2000 Compliant.
ARTICLE II
THE SEPARATION
2.01. TRANSFER OF ASSETS AND ASSUMPTION OF LIABILITIES. (a)
TII hereby assigns, transfers, conveys and delivers to Water Pik, and agrees to
cause its applicable Subsidiaries to assign, transfer, convey and deliver to
Water Pik, and Water Pik hereby accepts from TII and its Subsidiaries, in each
case effective as of the Effective Time, all of TII's and its applicable
Subsidiaries' respective right, title and interest in all Water Pik Assets.
(b) Effective as of the Effective Time, Water Pik hereby
assumes and agrees faithfully to perform, satisfy, discharge and fulfill all the
Water Pik Liabilities in accordance with their respective terms. Water Pik shall
be responsible for all Water Pik Liabilities, regardless of when or where such
Liabilities
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arose or arise or whether the facts on which they are based occurred prior to or
subsequent to the date hereof, regardless of where or against whom such
Liabilities are asserted or determined or whether asserted or determined prior
to the date hereof, and regardless of whether arising from or alleged to arise
from negligence, recklessness, violation of law, fraud or misrepresentation
(whether based on tort, contract, statute or otherwise) by any member of the ATI
Group or the Water Pik Group or any of their respective directors, officers,
employees, agents, Subsidiaries or Affiliates.
(c) In the event that at any time or from time to time after
the Distribution Date any party hereto (or any member of such party's respective
Group), shall receive or otherwise possess any Asset that is allocated to any
other Person pursuant to this Agreement or any Ancillary Agreement, such party
or member shall promptly transfer, or cause to be transferred, such Asset to the
Person so entitled thereto. Prior to any such transfer, the Person receiving or
possessing such Asset shall hold such Asset in trust for any such other Person.
2.02. WATER PIK ASSETS. (a) For purposes of this Agreement,
"Water Pik Assets" shall mean (without duplication):
(i) all Assets reflected in the Water Pik Balance Sheet as
Assets of Water Pik and its Subsidiaries, subject to any dispositions
of any such Assets subsequent to the date of the Water Pik Balance
Sheet;
(ii) all Assets acquired by or for the exclusive benefit of
Water Pik subsequent to the date of the Water Pik Balance Sheet and
prior to the Effective Time that would have been reflected in the Water
Pik Balance Sheet as Assets of Water Pik had they been owned on the
date of the Water Pik Balance Sheet;
(iii) subject to Section 6.01, any rights of any member of the
Water Pik Group under any of the Insurance Policies, including any
rights thereunder arising after the Distribution Date in respect of any
Insurance Policies that are occurrence policies; and
(iv) (A) any Assets that any Ancillary Agreement contemplates
will be transferred to any member of the Water Pik Group, (B) any Water
Pik Contracts and (C) all issued and outstanding capital stock of the
Subsidiaries, the partnership interests and other Assets of TII listed
on Schedule 2.02(a)(iv).
Notwithstanding the foregoing, the Water Pik Assets shall not in any event
include the Excluded Assets referred to in Section 2.02(b) below.
(b) For the purposes of this Agreement, "Excluded Assets"
shall mean:
(i) the Assets listed or described on Schedule 2.02(b)(i);
and
(ii) any and all Assets that are expressly contemplated by
this Agreement or any Ancillary Agreement (or the Schedules hereto or
thereto) as Assets to be retained by ATI or any other member of the ATI
Group (including the Teledyne Technologies Group).
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(c) Water Pik acknowledges and agrees that the Assets reflected as
Water Pik Assets in the Water Pik Balance Sheet are so reflected based on the
books and records maintained, and other information supplied, by Water Pik
personnel, and that the Water Pik Assets constitute all of the Assets necessary
to operate the Water Pik Business as presently conducted.
2.03. WATER PIK LIABILITIES. For the purposes of this
Agreement, "Water Pik Liabilities" shall mean (without duplication):
(a) any and all Liabilities that are expressly contemplated by
this Agreement or any Ancillary Agreement (or the Schedules hereto or
thereto) as Liabilities to be assumed by Water Pik or any member of the
Water Pik Group, and all agreements, obligations and Liabilities of any
member of the Water Pik Group under this Agreement or any of the
Ancillary Agreements;
(b) all Liabilities, including any employee-related
Liabilities and Environmental Liabilities, relating to, arising out of
or resulting from:
(i) the operation of the Water Pik Business as
conducted at any time prior to, at or after the Effective Time
(including any Liability relating to, arising out of or
resulting from the design, manufacture and sale of products or
services of the Water Pik Business or from any act or failure
to act by any director, officer, employee, agent or
representative of any Person (whether or not such act or
failure to act is or was within such Person's authority));
(ii) the operation of any business conducted by any
member of the Water Pik Group at any time after the Effective
Time (including any Liability relating to, arising out of or
resulting from any act or failure to act by any director,
officer, employee, agent or representative of any Person
(whether or not such act or failure to act is or was within
such Person's authority)); or
(iii) any Water Pik Assets (including any Water Pik
Contracts and any real property and leasehold interests) or
ownership of any Water Pik Assets at any time prior to, at or
after the Effective Time;
in any such case whether arising before, on or after the Effective
Time, including, without limitation, the matters listed or described on
Schedule 2.03(b);
(c) all Liabilities relating to, arising out of or resulting
from the Financing Facility;
(d) all Liabilities reflected as liabilities or obligations of
Water Pik in the Water Pik Balance Sheet, subject to any discharge of
such Liabilities subsequent to the date of the Water Pik Balance Sheet,
and all liabilities or obligations of Water Pik incurred subsequent to
the date of the Water Pik Balance Sheet that would have been reflected
in
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the Water Pik Balance Sheet had they been incurred as of the date of
the Water Pik Balance Sheet;
(e) any Liabilities relating to, arising out of or resulting
from any infringement of any Intellectual Property of any third party,
including but not limited to patent rights, trademark and service mark
rights (registered and common law), trade dress rights, copyrights,
misappropriation of trade secret, based upon or resulting from the
operation of the Water Pik Business and regardless of whether said
infringement occurred prior to, on or after the Distribution Date;
(f) any and all guarantees by ATI or any member of the ATI
Group of obligations to assure payment or performance by or other
Liabilities of the Water Pik Group or the Water Pik Business; and
(g) any Liabilities relating to, arising out of, or resulting
from any of the Water Pik Assets and any products manufactured by the
Water Pik Business that are not Year 2000 Compliant.
2.04. TERMINATION OF AGREEMENTS. (a) Except as set forth in
Section 2.04(b), in furtherance of the releases and other provisions of Section
5.01 hereof, effective as of the Effective Time, Water Pik and each member of
the Water Pik Group, on the one hand, and each of ATI and the respective members
of the ATI Group, on the other hand, hereby terminate any and all agreements,
arrangements, commitments or understandings, whether or not in writing, between
or among Water Pik and/or any member of the Water Pik Group, on the one hand,
and ATI or any member of the ATI Group, on the other hand, including (except as
set forth in Schedule 2.04(a)) any intercompany accounts payable or accounts
receivable accrued as of the Effective Time that are reflected in the books and
records of the parties or otherwise documented in writing in accordance with
past practices; provided, however, to the extent that the termination of any
such agreement, arrangement, commitment or understanding is inconsistent with
any Ancillary Agreement, such termination shall be effective as of the date of
effectiveness of the applicable Ancillary Agreement. No such terminated
agreement, arrangement, commitment or understanding (including any provision
thereof which purports to survive termination) shall be of any further force or
effect after the Effective Time (or, to the extent contemplated by the proviso
to the immediately preceding sentence, after the effective time of the
applicable Ancillary Agreement). Each party shall, at the reasonable request of
any other party, take, or cause to be taken, such other actions as may be
necessary to effect the foregoing.
(b) The provisions of Section 2.04(a) shall not apply to any
of the following agreements, arrangements, commitments or understandings (or to
any of the provisions thereof): (i) this Agreement and the Ancillary Agreements
(and each other agreement or instrument expressly contemplated by this Agreement
or any Ancillary Agreement to be entered into by any of the parties hereto or
any of the members of their respective Groups); (ii) any agreements,
arrangements, commitments or understandings listed or described on Schedule
2.04(b)(ii); (iii) any agreements, arrangements, commitments or understandings
to which any Person other than the parties hereto and their respective
Affiliates is a party (it being understood that to the extent
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that the rights and obligations of the parties and the members of their
respective Groups under any such agreements, arrangements, commitments or
understandings constitute Water Pik Assets or Water Pik Liabilities, they shall
be assigned and assumed pursuant to Section 2.01); and (iv) any other
agreements, arrangements, commitments or understandings that this Agreement or
any Ancillary Agreement expressly contemplates will survive the Effective Time.
2.05. DOCUMENTS RELATING TO TRANSFER OF REAL PROPERTY
INTERESTS AND TANGIBLE PROPERTY LOCATED THEREON. In furtherance of the
assignment, transfer and conveyance of Water Pik Assets and the assumption of
Water Pik Liabilities set forth in Section 2.01(a) and (b), simultaneously with
the execution and delivery hereof or as promptly as practicable thereafter, each
of TII and Water Pik or their applicable Subsidiaries is executing and
delivering or will execute and deliver such deeds, lease assignments and
assumptions, leases, subleases and sub-subleases as may be necessary to
effectively transfer any real property and leasehold interests forming part of
the Water Pik Assets and conform to any laws, regulations or usage applicable in
the jurisdiction in which the relevant real property is located.
2.06. DOCUMENTS FURTHER EVIDENCING TRANSFERS OF ASSETS AND
ASSUMPTION OF LIABILITIES. In furtherance of the assignment, transfer and
conveyance of Water Pik Assets and the assumption of Water Pik Liabilities set
forth in Section 2.01(a) and (b), (i) TII shall execute and deliver, and shall
cause its Subsidiaries to execute and deliver, such further bills of sale, stock
powers, certificates of title, assignments of contracts and other instruments of
transfer, conveyance and assignment as and to the extent necessary to fully
evidence the transfer, conveyance and assignment of all of TII's and its
respective Subsidiaries' right, title and interest in and to the Water Pik
Assets to Water Pik and (ii) Water Pik shall execute and deliver to TII and its
Subsidiaries such further bills of sale, stock powers, certificates of title,
assumptions of contracts and other instruments of assumption as and to the
extent necessary to fully evidence the valid and effective assumption of the
Water Pik Liabilities by Water Pik.
2.07. OTHER ANCILLARY AGREEMENTS. Effective as of the date
hereof each of ATI, TII and Water Pik will execute and deliver, and cause any of
their respective Subsidiaries that are parties thereto to execute and deliver
all Ancillary Agreements to which it is a party.
2.08. DISCLAIMER OF REPRESENTATIONS AND WARRANTIES. Each of
ATI (on behalf of itself and each member of ATI, including TII) and Water Pik
(on behalf of itself and each member of the Water Pik Group) understands and
agrees that, except as expressly set forth herein or in any Ancillary Agreement,
no party to this Agreement, any Ancillary Agreement or any other agreement or
document contemplated by this Agreement, any Ancillary Agreement or otherwise,
is representing or warranting in any way as to the Assets, businesses or
Liabilities transferred or assumed as contemplated hereby or thereby (including
whether an asset is Year 2000 Compliant), as to any consents or approvals
required in connection therewith, as to the value or freedom from any Security
Interests of, or any other matter concerning, any Assets of such party, or as to
the absence of any defenses or rights of setoff or freedom from counterclaims
with respect to any claim or other Asset, including any accounts receivable, of
any party, or as to
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the legal sufficiency of any assignment, document or instrument delivered
hereunder to convey title to any Asset or thing of value upon the execution,
delivery and filing hereof or thereof. Without limiting the scope of the
foregoing, no party makes any representations or warranties as to the
Intellectual Property sought to be transferred herein, including, without
limitation, whether such Intellectual Property or any portion thereof is valid,
enforceable, freely transferable, free and clear of liens (except permitted
liens) or sufficient and complete in order to conduct the Water Pik Business,
whether any party herein owns, has the exclusive right to use or has the ability
to practice such Intellectual Property or any portion thereof, or whether such
Intellectual Property or the operation of any aspect of the Water Pik Business
infringes or conflicts in any way with any Intellectual Property right of any
third party. Except as may expressly be set forth herein or in any Ancillary
Agreement, all such Assets are being transferred on an "as is," "where is,"
"with all faults" basis (and, in the case of any real property, by means of a
quitclaim or similar form deed or conveyance) and the respective transferees
shall bear the economic and legal risks that any conveyance shall prove to be
insufficient to vest in the transferee good and marketable title, free and clear
of any Security Interest. Without limiting the foregoing, neither ATI nor any
other party hereto (excluding Water Pik), or to any Ancillary Agreement, is
making any representation or warranty to Water Pik or any other Person in
respect of the Water Pik Balance Sheet, including in respect of the accuracy or
presentation thereof, or the adequacy of accruals, reserves and other amounts
reflected thereon.
2.09. FINANCING ARRANGEMENTS. Each of the parties hereto
acknowledges that (a) ATI has arranged availability for up to $60 million in
senior secured financing pursuant to the Financing Facility, (b) that ATI has,
prior to the date hereof, incurred $34 million in indebtedness pursuant to such
Financing Facility; and (c) that ATI has used, or will use prior to the
Distribution Date, such indebtedness to refinance other outstanding indebtedness
of ATI. Water Pik agrees that, following the Distribution Date, Water Pik will
indemnify ATI (and all the other members of the ATI Group) and defend and hold
such parties harmless from and against all the obligations of ATI (or Water Pik)
arising under the Financing Facility (including the obligation to repay such $34
million in outstanding borrowings), with the effect that ATI (and all other
members of the ATI Group) shall have no further liability or obligation under
the Financing Facility.
2.10. GOVERNMENTAL APPROVALS AND CONSENTS. (a) To the extent
that the Separation requires any Governmental Approvals or Consents, the parties
will use all reasonable efforts to obtain any such Governmental Approvals and
Consents.
(b) If and to the extent that the valid, complete and
perfected transfer or assignment (or novation of any federal government
contract) to the Water Pik Group of any Water Pik Assets (or from the Water Pik
Group of any Non-Water Pik Assets) would be a violation of applicable laws or
require any Consent or Governmental Approval in connection with the Separation,
then, unless ATI shall otherwise determine, the transfer or assignment to or
from the Water Pik Group, as the case may be, of such Water Pik Assets or
Non-Water Pik Assets, respectively, shall be automatically deemed deferred and
any such purported transfer or assignment shall be null and void until such time
as all legal impediments are removed and/or such Consents or Governmental
Approvals have been obtained. Notwithstanding the foregoing, such
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Asset shall be deemed a Water Pik Asset for purposes of determining whether any
Liability is a Water Pik Liability.
(c) If the transfer or assignment of any Assets intended to be
transferred or assigned hereunder is not consummated prior to or at the
Effective Time, whether as a result of the provisions of Section 2.10(b) or for
any other reason, then the Person retaining such Asset shall thereafter hold
such Asset for the use and benefit, insofar as reasonably possible, of the
Person entitled thereto (at the expense of the Person entitled thereto). In
addition, the Person retaining such Asset shall take such other actions as may
be reasonably requested by the Person to whom such Asset is to be transferred in
order to place such Person, insofar as reasonably possible, in the same position
as if such Asset had been transferred as contemplated hereby and so that all the
benefits and burdens relating to such Water Pik Assets (or such Non-Water Pik
Assets, as the case may be), including possession, use, risk of loss, potential
for gain, and dominion, control and command over such Assets, are to inure from
and after the Effective Time to the Water Pik Group (or the ATI Group, as the
case may be).
(d) If and when the Consents and/or Governmental Approvals,
the absence of which caused the deferral of transfer of any Asset pursuant to
Section 2.10(b), are obtained, the transfer of the applicable Asset shall be
effected in accordance with the terms of this Agreement and/or the applicable
Ancillary Agreement.
(e) The Person retaining an Asset due to the deferral of the
transfer of such Asset shall not be obligated, in connection with the foregoing,
to expend any money unless the necessary funds are advanced by the Person
entitled to the Asset, other than reasonable out-of-pocket expenses, attorneys'
fees and recording or similar fees, all of which shall be promptly reimbursed by
the Person entitled to such Asset.
2.11. NOVATION OF ASSUMED WATER PIK LIABILITIES. (a) Each of
ATI, TII and Water Pik at the request of any of the others, shall use all
reasonable efforts to obtain, or to cause to be obtained, any consent,
substitution, approval or amendment required to novate (including with respect
to any federal government contract) or assign all obligations under agreements,
leases, licenses and other obligations or Liabilities, or to obtain in writing
the unconditional release of all parties to such arrangements other than any
member of the Water Pik Group, so that, in any such case, Water Pik and its
Subsidiaries will be solely responsible for such Liabilities; provided, however,
that no member of the ATI Group shall be obligated to pay any consideration
therefor to any third party from whom such consents, approvals, substitutions
and amendments are requested.
(b) If ATI, TII or Water Pik is unable to obtain, or to cause
to be obtained, any such required consent, approval, release, substitution or
amendment, the applicable member of the ATI Group shall continue to be bound by
such agreements, leases, licenses and other obligations and, unless not
permitted by law or the terms thereof, Water Pik shall, as agent or
subcontractor for ATI, TII or such other Person, as the case may be, pay,
perform and discharge fully all the obligations or other Liabilities of ATI, TII
or such other Person, as the case may be, thereunder from and after the date
hereof. Water Pik shall indemnify and defend each ATI Indemnitee and hold each
of them harmless against any Liabilities arising in connection therewith. Each
of ATI
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and TII, as the case may be, shall, without further consideration, pay and
remit, or cause to be paid or remitted, to Water Pik promptly all money, rights
and other consideration received by it or any member of its respective Group in
respect of such performance (unless any such consideration is an Excluded
Asset). If and when any such consent, approval, release, substitution or
amendment shall be obtained or such agreement, lease, license or other rights or
obligations shall otherwise become assignable or able to be novated, each of ATI
and TII, as the case may be, shall thereafter assign, or cause to be assigned,
all its rights, obligations and other Liabilities thereunder or any rights or
obligations of any member of its respective Group to Water Pik without payment
of further consideration and Water Pik shall, without the payment of any further
consideration, assume such rights and obligations.
2.12. TRANSFER OF SUBSIDIARY ASSETS AND ASSUMPTION OF
SUBSIDIARY LIABILITIES. Immediately following the transfer of Water Pik Assets
and assumption of Water Pik Liabilities contemplated by Section 2.01, Water Pik
shall contribute to Water Pik Inc. the Water Pik Inc. Assets and cause Water Pik
Inc. to assume the Water Pik Inc. Liabilities in accordance with the Water Pik
Inc. Transfer and Assumption Agreement, and shall contribute to Laars Inc. the
Laars Inc. Assets and cause Laars Inc. to assume the Laars Inc. Liabilities in
accordance with the Laars Inc. Transfer and Assumption Agreement.
2.13. CONSUMMATION OF PURCHASE AND SALE AGREEMENT. Immediately
following the transfer of Assets and assumption of Liabilities contemplated by
Section 2.12, the parties hereto will cause the transactions contemplated by the
Purchase and Sale Agreement to be consummated, pursuant to which TICL Newco will
purchase the TICL Assets from TICL for approximately $5,600,000 in cash.
2.14. TI CONTRIBUTION AND LIQUIDATION. Prior to consummation
of the transactions contemplated by Section 2.15, ATI will contribute to
Holdings all of the outstanding capital stock of TI and the TI Liquidation will
be effected.
2.15. INTERIM DISTRIBUTIONS. Following the TI Liquidation, TII
will distribute to Holdings and Holdings will distribute to ATI all of the
outstanding Water Pik Common Stock.
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ARTICLE III
THE DISTRIBUTION
3.01. THE DISTRIBUTION. The ATI Board shall have the sole and
absolute discretion to determine whether and when to effect the Distribution. If
the ATI Board declares the Distribution, on or prior to the Distribution Date,
ATI will deliver to the Agent for the benefit of holders of record of ATI Common
Stock on the Record Date, a single stock certificate, endorsed by ATI in blank,
representing all of the outstanding shares of Water Pik Common Stock then owned
by ATI or any member of the ATI Group, and will instruct the Agent to
distribute, or make book-entry credits for, one share of Water Pik Common Stock
in respect of every twenty shares of ATI Common Stock held by holders of record
of ATI Common Stock on the Record Date, subject to Section 3.03.
3.02. ACTIONS PRIOR TO THE DISTRIBUTION. Prior to the
Distribution:
(a) On such date as ATI shall determine, Water Pik shall mail
to the holders of ATI Common Stock the Information Statement.
(b) ATI and Water Pik shall cooperate in preparing, filing
with the Commission under the Securities Act and causing to become effective any
registration statements or amendments thereto that are appropriate to reflect
the establishment of or amendments to any employee benefit plan contemplated by
the Employee Benefits Agreement.
(c) ATI and Water Pik shall by means of a reclassification,
stock split or stock distribution or other means cause the number of outstanding
shares of Water Pik Common Stock held by ATI to be equal to the number of shares
to be distributed in the Distribution (as determined by ATI).
(d) ATI and Water Pik shall take all such action as may be
necessary or appropriate under the securities or blue sky laws of states or
other political subdivisions of the United States in connection with the
transactions contemplated by this Agreement or any Ancillary Agreement.
(e) Water Pik shall use all efforts to have approved an
application to permit listing of the Water Pik Common Stock on the NYSE or
another mutually agreeable stock exchange or quotation system.
(f) ATI and Water Pik shall take all actions which may be
required to elect or otherwise appoint as directors of Water Pik, on or prior to
the Distribution Date, the persons named in the Form 10 Registration Statement
to constitute the Board of Directors of Water Pik on the Distribution Date.
(g) ATI shall cause a Certificate of Amendment and Restatement
of the Water Pik Certificate of Incorporation substantially in the form filed
with the Form 10 Registration Statement, to be filed for record with the
Secretary of State of Delaware and to be in effect on the Distribution Date, and
the Board of Directors of Water Pik shall amend the Bylaws of Water Pik
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so that the Water Pik Bylaws are substantially in the form filed with the Form
10 Registration Statement.
(h) Water Pik shall declare a distribution of, and distribute,
one Right with respect to each share of Water Pik Common Stock to be distributed
in the Distribution.
(i) ATI and Water Pik shall take all actions as may be
necessary to approve the stock-based employee benefit plans of Water Pik in
order to satisfy the requirements of Section 162(m) and other applicable
provisions of the Code and any requirements of the NYSE (or any other stock
exchange or quotations system on which Water Pik Common Stock is to be listed or
traded).
3.03. FRACTIONAL SHARES. No certificates or scrip representing
fractional shares of Water Pik Common Stock will be distributed to holders of
ATI Common Stock in the Distribution. The Agent will, as soon as practicable
after the Distribution Date, (a) determine the number of whole shares and
fractional shares of Water Pik Common Stock allocable to each holder of record
of ATI Common Stock as of the Record Date, (b) aggregate all fractional shares
held by such holders, and (c) sell the whole shares attributable to the
aggregate of such fractional shares, in open market transactions, in each case
at the then prevailing trading prices, and to cause to be distributed to each
such holder, in lieu of any fractional share, without interest, such holder's
ratable share of the proceeds of such sale, after making appropriate deductions
of the amount required, if any, to be withheld for U.S. federal income tax
purposes.
ARTICLE IV
THE PUBLIC OFFERING
4.01. THE PUBLIC OFFERING. (a) Water Pik shall consummate the
Public Offering not later than one year following the Distribution Date. Actions
required in order to so consummate the Public Offering shall include, but not
necessarily be limited to, those specified in this Section 4.01.
(b) Water Pik shall file the Public Offering Registration
Statement not later than at the end of the eighth month following the month in
which the Distribution Date occurs, and shall file such amendments or
supplements thereto, as may be necessary in order to cause the same to become
and remain effective as required by law or by the Underwriters, including, but
not limited to, filing such amendments to the Public Offering Registration
Statement as may be required by the Underwriting Agreement, the Commission or
federal, state or foreign securities laws.
(c) Water Pik shall enter into the Underwriting Agreement and
shall comply with its obligations thereunder.
(d) Water Pik shall take all such action as may be necessary
or appropriate under state securities and blue sky laws of the United States
(and any comparable laws under any foreign jurisdictions) in connection with the
Public Offering.
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(e) Water Pik shall prepare, file and take all actions
necessary to make effective an application for listing of the Water Pik Common
Stock issued in the Public Offering on the NYSE, subject to official notice of
issuance.
(f) Water Pik shall participate in the preparation of
materials and presentations as the Underwriters shall deem necessary or
desirable.
(g) Water Pik shall pay all third party costs, fees and
expenses relating to the Public Offering, all of the reimbursable expenses of
the Underwriters pursuant to the Underwriting Agreement, all of the costs of
producing, printing, mailing and otherwise distributing the Prospectus, as well
as the Underwriters' discount as provided in the Underwriting Agreement.
4.02. PROCEEDS OF THE PUBLIC OFFERING. The Public Offering
will be a primary offering of Water Pik Common Stock and the net proceeds of the
Public Offering will be retained by Water Pik. Water Pik will use such net
proceeds as provided in the Tax Sharing Agreement and the Ruling Request.
4.03. REMEDIES. Water Pik acknowledges that its agreements in
this Article IV are of a special, unique, unusual and extraordinary character.
Because the failure of Water Pik to perform its obligations set forth in the
provisions of this Article IV could cause unique and extraordinary injury to
ATI, ATI shall, notwithstanding anything to the contrary herein, have the right
in addition to any other remedies available, at law or in equity, to seek an
injunction in a court of equity to compel Water Pik to perform such obligations.
Water Pik hereby waives any and all defenses it may have on the ground of lack
of jurisdiction or competence of the court to grant an injunction or other
equitable relief, or otherwise, and agrees that it will not assert any such
defense or any defense to a request by ATI for injunctive relief based on the
alleged existence of an adequate remedy at law or for money damages. Without
limiting the foregoing, Water Pik hereby waives the right to require ATI to post
any bond or other security with respect to any proceeding to enforce the
provisions of this Article IV. The existence of the rights of ATI set forth in
this Section 4.03 shall not preclude any other rights and remedies at law or in
equity which ATI may have.
ARTICLE V
MUTUAL RELEASES; INDEMNIFICATION
5.01. RELEASE OF PRE-DISTRIBUTION CLAIMS. (a) Except as
provided in Section 5.01(c), effective as of the Effective Time, Water Pik does
hereby, for itself and each other member of the Water Pik Group, their
respective Affiliates (other than any member of the ATI Group), successors and
assigns, and all Persons who at any time prior to the Effective Time have been
stockholders, directors, officers, agents or employees of any member of the
Water Pik Group (in each case, in their respective capacities as such), remise,
release and forever discharge each of ATI and Teledyne Technologies, the
respective members of the ATI Group and the Teledyne Technologies Group, their
respective Affiliates (other than any member of the Water Pik Group), successors
and assigns, and all Persons who at any time prior to the Effective Time have
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been stockholders, directors, officers, agents or employees of any member of ATI
or the Teledyne Technologies Group (in each case, in their respective capacities
as such), and their respective heirs, executors, administrators, successors and
assigns, from any and all Liabilities whatsoever, whether at law or in equity
(including any right of contribution), whether arising under any contract or
agreement, by operation of law or otherwise, existing or arising from any acts
or events occurring or failing to occur or alleged to have occurred or to have
failed to occur or any conditions existing or alleged to have existed on or
before the Effective Time, including in connection with the transactions and all
other activities undertaken to implement the Separation or the Distribution.
(b) Except as provided in Section 5.01(c), effective as of the
Effective Time, ATI does hereby, for itself and each other member of the ATI
Group and its Affiliates (other than any member of the Water Pik Group),
successors and assigns, and all Persons who at any time prior to the Effective
Time have been stockholders, directors, officers, agents or employees of any
member of the ATI Group (in each case, in their respective capacities as such),
remise, release and forever discharge Water Pik, the respective members of the
Water Pik Group, their respective Affiliates (other than any member of the ATI
Group), successors and assigns, and all Persons who at any time prior to the
Effective Time have been stockholders, directors, officers, agents or employees
of any member of the Water Pik Group (in each case, in their respective
capacities as such), and their respective heirs, executors, administrators,
successors and assigns, from any and all Liabilities whatsoever, whether at law
or in equity (including any right of contribution), whether arising under any
contract or agreement, by operation of law or otherwise, existing or arising
from any acts or events occurring or failing to occur or alleged to have
occurred or to have failed to occur or any conditions existing or alleged to
have existed on or before the Effective Time, including in connection with the
transactions and all other activities undertaken to implement the Separation or
the Distribution.
(c) Nothing contained in Section 5.01(a) or (b) shall impair
any right of any Person to enforce this Agreement, any Ancillary Agreement or
any agreements, arrangements, commitments or understandings that are specified
in Section 2.04(b) or the applicable Schedules thereto not to terminate as of
the Effective Time, in each case in accordance with its terms. Nothing contained
in Section 5.01(a) or (b) shall release any Person from:
(i) any Liability provided in or resulting from any agreement
among any members of the ATI Group or the Water Pik Group that is
specified in Section 2.04(b) or the applicable Schedules thereto as not
to terminate as of the Effective Time, or any other Liability specified
in such Section 2.04(b) as not to terminate as of the Effective Time;
(ii) any Liability, contingent or otherwise, assumed,
transferred, assigned or allocated to the Group of which such Person is
a member in accordance with, or any other Liability of any member of
any Group under, this Agreement or any Ancillary Agreement;
(iii) any Liability for the sale, lease, construction or
receipt of goods, property or services purchased, obtained or used in
the ordinary course of business by a member of one Group from a member
of any other Group prior to the Effective Time;
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(iv) any Liability for unpaid amounts for products or services
or refunds owing on products or services due on a value-received basis
for work done by a member of one Group at the request or on behalf of a
member of another Group;
(v) any Liability that the parties may have with respect to
indemnification or contribution pursuant to this Agreement for claims
brought against the parties by third Persons, which Liability shall be
governed by the provisions of this Article V and, if applicable, the
appropriate provisions of the Ancillary Agreements; or
(vi) any Liability the release of which would result in the
release of any Person other than a Person released pursuant to this
Section 5.01; provided that the parties agree not to bring suit or
permit any of their Subsidiaries to bring suit against any Person with
respect to any Liability to the extent that such Person would be
released with respect to such Liability by this Section 5.01 but for
the provisions of this clause (vi).
(d) Water Pik shall not make, and shall not permit any member
of the Water Pik Group to make, any claim or demand, or commence any Action
asserting any claim or demand, including any claim of contribution or
indemnification, against ATI, Teledyne Technologies or any member of the ATI
Group or Teledyne Technologies Group, or any other Person released pursuant to
Section 5.01(a), with respect to any Liabilities released pursuant to Section
5.01(a). Without limiting the generality of the foregoing, Water Pik shall not
make, and shall not permit any other member of the Water Pik Group to make, any
claim or demand, or commence any Action asserting any claim or demand, including
any claim of contribution or indemnification, against ATI, Teledyne Technologies
or any member of the ATI Group or the Teledyne Technologies Group, or any other
Person released pursuant to Section 5.01(a), with respect to whether any Asset
should or should not have been classified as a Water Pik Asset or whether any
Liability should or should not have been classified as a Water Pik Liability or
with respect to the Water Pik Balance Sheet, including in respect of the
accuracy or presentation thereof, or the adequacy of accruals, reserves and
other amounts reflected thereon. ATI shall not, and shall not permit any member
of the ATI Group, to make any claim or demand, or commence any Action asserting
any claim or demand, including any claim of contribution or any indemnification,
against Water Pik or any member of the Water Pik Group, or any other Person
released pursuant to Section 5.01(b), with respect to any Liabilities released
pursuant to Section 5.01(b).
(e) It is the intent of each of ATI and Water Pik by virtue of
the provisions of this Section 5.01 to provide for a full and complete release
and discharge of all Liabilities existing or arising from all acts and events
occurring or failing to occur or alleged to have occurred or to have failed to
occur and all conditions existing or alleged to have existed on or before the
Effective Time, between or among Water Pik or any member of the Water Pik Group,
on the one hand, and ATI, Water Pik or any member of the ATI Group or the
Teledyne Technologies Group, on the other hand (including any contractual
agreements or arrangements existing or alleged to exist between or among any
such members on or before the Effective Time), except as expressly set forth in
Section 5.01(c) or otherwise in this Agreement. At any time, at the request of
any other party, each party shall cause each member of its respective Group to
execute and deliver releases reflecting the provisions hereof.
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5.02. INDEMNIFICATION BY WATER PIK. Except as provided in
Section 5.04, Water Pik shall indemnify, defend and hold harmless ATI, each
member of the ATI Group and each of their respective directors, officers,
employees, agents and representatives, and each of the heirs, executors,
successors and assigns of any of the foregoing (collectively, the "ATI
Indemnitees"), and Teledyne Technologies, each member of the Teledyne
Technologies Group and each of their respective directors, officers and
employees, and each of the heirs, executors, successors and assigns of any of
the foregoing (collectively, the "Teledyne Technologies Indemnitees"), from and
against any and all Liabilities of the ATI Indemnitees and the Teledyne
Technologies Indemnitees, respectively, relating to, arising out of or resulting
from any of the following items (without duplication):
(a) the failure of Water Pik or any other member of the Water
Pik Group or any other Person to pay, perform or otherwise promptly discharge
any Water Pik Liabilities or Water Pik Contract in accordance with their
respective terms, whether prior to or after the Effective Time or the date
hereof;
(b) the Water Pik Business, any Water Pik Liability or any
Water Pik Contract;
(c) any breach by Water Pik or any member of the Water Pik
Group of this Agreement or any of the Ancillary Agreements;
(d) the operation of the Water Pik Business, as conducted at
any time prior to, on or after the Distribution Date (including any Liability
relating to, arising out of or resulting from any act or failure to act by any
director, officer, employee, agent or representative (whether or not such act or
failure to act is or was within such Person's authority));
(e) any infringement of any Intellectual Property right of any
third party, including, but not limited to, patent rights, trademark and service
mark rights (registered and common law), trade dress rights, copyrights,
misappropriation of trade secret, based upon or resulting from the operation of
the Water Pik Business and regardless of whether said alleged infringement
occurred prior to, on or after the Distribution Date or any claim based on the
actual or alleged invalidity, unenforceability or transferability or ownership
of Intellectual Property to be transferred hereby or pursuant to any Ancillary
Agreement;
(f) Liabilities assumed by any member of the Water Pik Group
under any Ancillary Agreement;
(g) any guarantee, indemnity, representation, warranty or
other Liability of or made by any member of the ATI Group in respect of any
Liability or alleged Liability of any member of the Water Pik Group; and.
(h) any untrue statement or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
with respect to all information contained in the Form 10 Registration Statement
or the Information Statement.
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5.03. INDEMNIFICATION BY ATI . (a) ATI shall indemnify, defend
and hold harmless Water Pik, each member of the Water Pik Group and each of
their respective directors, officers, employees, agents and representatives, and
each of the heirs, executors, successors and assigns of any of the foregoing
(collectively, the "Water Pik Indemnitees"), from and against any and all
Liabilities of the Water Pik Indemnitees relating to, arising out of or
resulting from any of the following items (without duplication):
(a) the failure of ATI or any other member of the ATI Group to
pay, perform or otherwise promptly discharge any ATI Liabilities; and
(b) any breach by ATI of this Agreement or any of the
Ancillary Agreements.
5.04. INDEMNIFICATION OBLIGATIONS NET OF INSURANCE PROCEEDS
AND OTHER AMOUNTS. (a) The parties intend that any Liability subject to
indemnification or reimbursement pursuant to this Article V will be net of
Insurance Proceeds that actually reduce the amount of the Liability.
Accordingly, the amount which any party (an "Indemnifying Party") is required to
pay to any Person entitled to indemnification hereunder (an "Indemnitee") will
be reduced by any Insurance Proceeds theretofore actually recovered by or on
behalf of the Indemnitee in reduction of the related Liability. If an Indemnitee
receives a payment (an "Indemnity Payment") required by this Agreement from an
Indemnifying Party in respect of any Liability and subsequently receives
Insurance Proceeds, then the Indemnitee will pay to the Indemnifying Party an
amount equal to the excess of the Indemnity Payment received over the amount of
the Indemnity Payment that would have been due if the Insurance Proceeds had
been received, realized or recovered before the Indemnity Payment was made.
(b) An insurer who would otherwise be obligated to pay any
claim shall not be relieved of the responsibility with respect thereto or,
solely by virtue of the indemnification provisions hereof, have any subrogation
rights with respect thereto, it being expressly understood and agreed that no
insurer or any other third party shall be entitled to a "windfall" (i.e., a
benefit they would not be entitled to receive in the absence of the
indemnification provisions) by virtue of the indemnification provisions hereof.
Nothing contained in this Agreement or any Ancillary Agreement shall obligate
any member of any Group to seek to collect or recover any Insurance Proceeds.
5.05. PROCEDURES FOR INDEMNIFICATION OF THIRD PARTY CLAIMS.
(a) If an Indemnitee shall receive notice or otherwise learn of the assertion by
a Person (including any Governmental Authority) who is not a member of the ATI
Group or the Water Pik Group of any claim or of the commencement by any such
Person of any Action (collectively, a "Third Party Claim") with respect to which
an Indemnifying Party may be obligated to provide indemnification to such
Indemnitee pursuant to Section 5.02 or 5.03, or any other Section of this
Agreement or any Ancillary Agreement, such Indemnitee shall give such
Indemnifying Party and, if ATI is not the Indemnifying Party, ATI written notice
thereof as soon as practicable but in any event not less than 20 days after
becoming aware of such Third Party Claim. Any such notice shall describe the
Third Party Claim in reasonable detail. Notwithstanding the foregoing, the
failure of any Indemnitee or other Person to give notice as provided in this
Section 5.05(a) shall not relieve the related Indemnifying Party of its
obligations
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under this Article V, except to the extent that such Indemnifying Party is
actually prejudiced by such failure to give notice.
(b) An Indemnifying Party may elect to defend (and, unless the
Indemnifying Party has specified any reservations or exceptions, to seek to
settle or compromise), at such Indemnifying Party's own expense and by such
Indemnifying Party's own counsel, any Third Party Claim. Within 30 days after
the receipt of notice from an Indemnitee in accordance with Section 5.05(a) (or
sooner, if the nature of such Third Party Claim so requires), the Indemnifying
Party shall notify the Indemnitee of its election whether the Indemnifying Party
will assume responsibility for defending such Third Party Claim, which election
shall specify any reservations or exceptions. After notice from an Indemnifying
Party to an Indemnitee of its election to assume the defense of a Third Party
Claim, such Indemnitee shall have the right to employ separate counsel and to
participate in (but not control) the defense, compromise, or settlement thereof,
but the fees and expenses of such counsel shall be the expense of such
Indemnitee except as set forth in the next sentence. In the event that the
Indemnifying Party has elected to assume the defense of the Third Party Claim
but has specified, and continues to assert, any reservations or exceptions in
such notice, then, in any such case, the reasonable fees and expenses of one
separate counsel for all Indemnitees shall be borne by the Indemnifying Party.
(c) If an Indemnifying Party elects not to assume
responsibility for defending a Third Party Claim, or fails to notify an
Indemnitee of its election as provided in Section 5.05(b), such Indemnitee may
defend such Third Party Claim at the cost and expense (including allocated costs
of in-house counsel and other personnel) of the Indemnifying Party.
(d) Unless the Indemnifying Party has failed to assume the
defense of the Third Party Claim in accordance with the terms of this Agreement,
no Indemnitee may settle or compromise any Third Party Claim without the consent
of the Indemnifying Party.
(e) No Indemnifying Party shall consent to entry of any
judgment or enter into any settlement of the Third Party Claim without the
consent of the Indemnitee if the effect thereof is to permit any injunction,
declaratory judgment, other order or other nonmonetary relief to be entered,
directly or indirectly, against any Indemnitee.
5.06. ADDITIONAL MATTERS. (a) Any claim on account of a
Liability which does not result from a Third Party Claim shall be asserted by
written notice given by the Indemnitee to the related Indemnifying Party. Such
Indemnifying Party shall have a period of 30 days after the receipt of such
notice within which to respond thereto. If such Indemnifying Party does not
respond within such 30-day period, such Indemnifying Party shall be deemed to
have refused to accept responsibility to make payment. If such Indemnifying
Party does not respond within such 30-day period or rejects such claim in whole
or in part, such Indemnitee shall be free to pursue such remedies as may be
available to such party as contemplated by this Agreement and the Ancillary
Agreements.
(b) In the event of payment by or on behalf of any
Indemnifying Party to any Indemnitee in connection with any Third Party Claim,
such Indemnifying Party shall be subrogated to and shall stand in the place of
such Indemnitee as to any events or circumstances in
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respect of which such Indemnitee may have any right, defense or claim relating
to such Third Party Claim against any claimant or plaintiff asserting such Third
Party Claim or against any other person. Such Indemnitee shall cooperate with
such Indemnifying Party in a reasonable manner, and at the cost and expense
(including allocated costs of in-house counsel and other personnel) of such
Indemnifying Party, in prosecuting any subrogated right, defense or claim.
(c) In the event of an Action in which the Indemnifying Party
is not a named defendant, if either the Indemnified Party or Indemnifying Party
shall so request, the parties shall endeavor to substitute the Indemnifying
Party for the named defendant. If such substitution or addition cannot be
achieved for any reason or is not requested, the named defendant shall allow the
Indemnifying Party to manage the Action as set forth in this Section and the
Indemnifying Party shall fully indemnify the named defendant against all costs
of defending the Action (including court costs, sanctions imposed by a court,
attorneys' fees, experts' fees and all other external expenses, and the
allocated costs of in-house counsel and other personnel), the costs of any
judgment or settlement, and the cost of any interest or penalties relating to
any judgment or settlement.
5.07. REMEDIES CUMULATIVE. The remedies provided in this
Article V shall be cumulative and shall not preclude assertion by any Indemnitee
of any other rights or the seeking of any and all other remedies against any
Indemnifying Party.
5.08. SURVIVAL OF INDEMNITIES. The rights and obligations of
each of the Indemnitees under this Article V shall survive the sale or other
transfer by any party of any Assets or businesses or the assignment by it of any
Liabilities.
ARTICLE VI
CERTAIN OTHER MATTERS
6.01. INSURANCE MATTERS. (a) In no event shall ATI, any other
member of the ATI Group or any ATI Indemnitee have any liability or obligation
whatsoever to any member of the Water Pik Group in the event that any Insurance
Policy or other contract or policy of insurance shall be terminated or otherwise
cease to be in effect for any reason, shall be unavailable or inadequate to
cover any Liability of any member of the Water Pik Group for any reason
whatsoever or shall not be renewed or extended beyond the current expiration
date.
(b) (i) Except as otherwise provided in any Ancillary
Agreement, the parties intend by this Agreement that Water Pik and each other
member of the Water Pik Group be successors-in-interest to all rights that any
member of the Water Pik Group may have as of the Distribution Date as a
subsidiary, affiliate, division or department of ATI prior to the Distribution
Date under any policy of insurance issued to ATI and intended to insure the
Water Pik Group by any insurance carrier unaffiliated with ATI or under any
agreements related to such policies executed and delivered prior to the
Distribution Date, including any rights such member of the Water Pik Group may
have, as an insured or additional named insured, subsidiary, affiliate, division
or department, to avail itself of any such policy of insurance or any such
agreements related to such policies as in effect prior to the Distribution Date.
At the request of Water Pik, ATI shall take all reasonable steps, including the
execution and delivery of any instruments, to
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effect the foregoing; provided however that ATI shall not be required to pay any
amounts, waive any rights or incur any Liabilities in connection therewith.
(ii) Except as otherwise contemplated by any Ancillary
Agreement, after the Distribution Date, neither of ATI nor Water Pik or any
member of their respective Groups shall, without the consent of the other,
provide any such insurance carrier with a release, or amend, modify or waive any
rights under any such policy or agreement, if such release, amendment,
modification or waiver would adversely affect any rights or potential rights of
any member of the other Group thereunder; provided however that the foregoing
shall not (A) preclude any member of any Group from presenting any claim or from
exhausting any policy limit, (B) require any member of any Group to pay any
premium or other amount or to incur any Liability, or (C) require any member of
any Group to renew, extend or continue any policy in force. Each of Water Pik
and ATI will, and will cause its respective Group to, share such information as
is reasonably necessary in order to permit the other to manage and conduct its
insurance matters in an orderly fashion.
(c) This Agreement shall not be considered as an attempted
assignment of any policy of insurance or as a contract of insurance and shall
not be construed to waive any right or remedy of any member of the ATI Group in
respect of any Insurance Policy or any other contract or policy of insurance.
(d) Water Pik does hereby, for itself and each other member of
the Water Pik Group, agree that no member of the ATI Group or any ATI Indemnitee
shall have any Liability whatsoever as a result of the insurance policies and
practices of ATI and its Affiliates as in effect at any time prior to the
Distribution Date, including as a result of the level or scope of any such
insurance, the creditworthiness of any insurance carrier, the terms and
conditions of any policy, the adequacy or timeliness of any notice to any
insurance carrier with respect to any claim or potential claim or otherwise.
(e) Nothing in this Agreement shall be deemed to restrict any
member of the Water Pik Group from acquiring at its own expense any other
insurance policy in respect of any Liabilities or covering any period.
(f) With respect to policy periods prior to the Distribution
Date:
(i) Water Pik shall be responsible for: (A) all
Unpaid Losses (but not to exceed the applicable Per Case Maximum) as of
the Distribution Date attributable to Water Pik Liabilities covered
under ATI Automobile Policies and ATI Workers Compensation Policies for
policies in effect prior to the Distribution Date; and (B) Pooled Loss
Costs Allocable to Water Pik.
(ii) On or before June 1, 2000 and on a quarterly
basis thereafter, ATI shall provide Water Pik with a calculation of
amounts due ATI or refunds due Water Pik for Water Pik's obligations
incurred under ATI Automobile Policies and ATI Workers Compensation
Policies for policies under subparagraph immediately (i) above. The
initial calculations shall be based on (A) the change in total Incurred
Losses between the
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Distribution Date and March 31, 2000 for all such policies in effect
prior to the Distribution Date multiplied by the Expense Factors set
forth in such policies and applicable to such Incurred Losses, but
only with respect to that portion of Incurred Losses attributable to
Water Pik Liabilities not exceeding the applicable Per Case Maximum;
and (B) the change in Pooled Loss Costs Allocable to Water Pik for the
period between the Distribution Date and March 31, 2000 for all such
policies in effect prior to the Distribution Date. Subsequent
calculations shall be based on (A) the change in total Incurred Losses
for the subsequent quarterly periods multiplied by the Expense Factors
set forth in such policies and applicable to such losses; but only
with respect to that portion of losses attributable to Water Pik
Liabilities not exceeding the applicable Per Case Maximum, and (B) the
change in Pooled Loss Costs Allocable to Water Pik for the subsequent
quarterly period. It is specifically understood and agreed that Water
Pik Liabilities and losses that are covered under ATI Policies, other
than ATI Workers Compensation Policies and ATI Automobile Policies,
shall not be subject to a pooling arrangement among ATI divisions that
prior to the Distribution Date applied with respect to certain claims
subject to a Self-Insurance Obligation.
(iii) Within 30 days after receipt by Water Pik of
ATI's calculations referred to in subparagraph (ii) immediately above,
Water Pik on the one hand and ATI on the other hand shall pay to the
other the net amount owed after taking into account the combined
amounts reflected on the calculations.
(g) At its sole option, ATI shall have the right to handle,
defend, resolve, and administer claims in its sole discretion, with respect to
Water Pik Liabilities covered, in whole or in part, by ATI Policies, including,
without limitation, the reporting of claims to the issuers of such ATI Policies
insurance carriers, as well as the management, defense and settlement of claims.
ATI will not enter into any such settlement of a claim without the consent of
Water Pik (which will not be unreasonably withheld) if the effect thereof is to
render Water Pik liable for a monetary obligation with respect to such claim.
Water Pik agrees to cooperate, at its own expense, with ATI in the reporting,
handling, defense, resolution and administration of such claims. Alternatively,
ATI, at its sole option shall have the right to require, at any time and from
time to time, that Water Pik and any member of the Water Pik Group, at their
sole expense, defend, resolve and administer any one or more or all claims with
respect to Water Pik Liabilities covered in whole, or in part, by ATI Policies,
including without limitation, the reporting of claims to the issuers of such ATI
Policies, as well as the management, defense and settlement of such claims and,
if ATI exercises such option, Water Pik and members of the Water Pik Group, at
ATI's request, shall at their expense provide ATI with any and all information
concerning, and permit ATI to monitor, the foregoing management, defense,
settlement and insurance handling of such claims. Except with the express
written consent of ATI, neither Water Pik nor any member of the Water Pik Group
shall provide any issuer of ATI Policies with a release, nor shall they amend,
modify, or waive any rights under such ATI Policies, if such release, amendment,
modification or waiver would adversely affect rights or potential rights of ATI
or any other member of the ATI Group.
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(h) With respect to policies procured by or for the Water Pik
Group subsequent to January 1999 and to policy years commencing on or after the
Distribution Date, Water Pik shall be responsible for all aspects of claims
administration with respect to Water Pik Liabilities, and ATI shall have no
responsibility therefor whatsoever.
(i) With respect to any Water Pik Liabilities or Water Pik
losses covered under ATI Policies other than ATI Workers Compensation Policies
and ATI Automobile Policies, including, but not limited to ATI General Liability
Policies and ATI Product Liability Policies, Water Pik shall be responsible for
all Unpaid Losses and all costs and expenses that give rise to a Self-Insurance
Obligation. In the event that ATI pays any such costs and expenses, Water Pik
shall reimburse ATI within thirty days of receipt of a billing for any such
costs and expenses.
6.02. CERTAIN BUSINESS MATTERS. No member of any Group shall
have any duty to refrain from (i) engaging in the same or similar activities or
lines of business as any member of any other Group, (ii) doing business with any
potential or actual supplier or customer of any member of any other Group, or
(iii) engaging in, or refraining from, any other activities whatsoever relating
to any of the potential or actual suppliers or customers of any member of any
other Group.
6.03. LATE PAYMENTS. Except as expressly provided to the
contrary in this Agreement or in any Ancillary Agreement, any amount not paid
when due pursuant to this Agreement or any Ancillary Agreement (and any amounts
billed or otherwise invoiced or demanded and properly payable that are not paid
within 30 days of such bill, invoice or other demand) shall accrue interest at a
rate per annum equal to the Prime Rate plus 2%.
6.04. CERTAIN GOVERNANCE MATTERS. (a) Water Pik and ATI intend
that until the third annual meeting of stockholders of Water Pik held following
the Distribution Date, at least a majority of the members of the Board of
Directors of Water Pik will at all times consist of persons who are also members
of the Board of Directors of ATI. The initial members of the Board of Directors
of Water Pik and the respective initial Classes of the Board in which they will
serve are as follows:
Class I: Charles J. Queenan, Jr.
James E. Rohr
Class II: Michael P. Hoopis
William G. Ouchi
Class III: Robert P. Bozzone (Chairman)
W. Craig McClelland
(b) Water Pik will, with respect to the first annual meeting
of stockholders of Water Pik held following the Distribution Date, nominate for
election and recommend to stockholders the election of Charles J. Queenan, Jr.
and James E. Rohr (or, if either such candidate is unable or unwilling to serve,
such other candidate as Messrs. Bozzone and McClelland or the survivor of them
shall designate) to serve as a continuing Class I directors of Water Pik.
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<PAGE> 35
(c) Water Pik shall take such action from time to time as ATI
requests in order to assure that, until the third annual meeting of stockholders
of Water Pik following the Distribution Date, at least a majority of the members
of the Board of Directors of Water Pik will at all times consist of persons who
are also members of the Board of Directors of ATI. Without limiting the
generality of the foregoing, if for any reason (including death, resignation or
disqualification) there are no directors of Water Pik who are also directors of
ATI, Water Pik will immediately take all action requested by ATI to appoint to
the Board of Directors of Water Pik such members of the Board of Directors of
ATI as ATI shall designate.
ARTICLE VII
EXCHANGE OF INFORMATION; CONFIDENTIALITY
7.01. AGREEMENT FOR EXCHANGE OF INFORMATION; ARCHIVES. (a)
Each of ATI and Water Pik, on behalf of itself and its respective Group, agrees
to provide, or cause to be provided, to each other Group, at any time before or
after the Distribution Date, as soon as reasonably practicable after written
request therefor, any Information in the possession or under the control of such
respective Group which the requesting party reasonably requires (i) to comply
with reporting, disclosure, filing or other requirements imposed on the
requesting party (including under applicable securities or tax laws) by a
Governmental Authority having jurisdiction over the requesting party, (ii) for
use in any other judicial, regulatory, administrative, tax or other proceeding
or in order to satisfy audit, accounting, claims, regulatory, litigation, tax or
other similar requirements, or (iii) to comply with its obligations under this
Agreement or any Ancillary Agreement; provided, however, that in the event that
any party determines that any such provision of Information could be
commercially detrimental, violate any law or agreement, or waive any
attorney-client privilege, the parties shall take all reasonable measures to
permit the compliance with such obligations in a manner that avoids any such
harm or consequence.
(b) After the Distribution Date, each of ATI and Water Pik
shall have access during regular business hours (as in effect from time to time)
to the documents and objects of historic significance that relate to the their
respective Businesses that are in the possession of any other of such parties or
members of their respective Groups. Any party seeking such access may, at its
cost, obtain copies (but not originals) of documents for bona fide business
purposes and may obtain objects for exhibition purposes for commercially
reasonable periods of time if required for bona fide business purposes, provided
that such party shall cause any such objects to be returned promptly in the same
condition in which they were delivered and shall comply with any rules,
procedures or other requirements, and shall be subject to any restrictions
(including prohibitions on removal of specified objects), that are then
applicable to the possessing party.
(c) After the Distribution Date, (i) Water Pik shall maintain
in effect adequate systems and controls to the extent necessary to enable the
members of the ATI Group to satisfy their respective reporting, accounting,
audit and other obligations, and (ii) Water Pik shall provide, or cause to be
provided, to ATI, all financial and other data and information as ATI determines
necessary or advisable in order to prepare ATI financial statements and reports
or filings with any Governmental Authority.
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<PAGE> 36
7.02. OWNERSHIP OF INFORMATION. Any Information owned by one
Group that is provided to a requesting party pursuant to Section 7.01 shall be
deemed to remain the property of the providing party. Unless specifically set
forth herein, nothing contained in this Agreement shall be construed as granting
or conferring rights of license or otherwise in any such Information.
7.03. COMPENSATION FOR PROVIDING INFORMATION. The party
requesting such Information agrees to reimburse the other party for the
reasonable costs, if any, of creating, gathering and copying such Information,
to the extent that such costs are incurred for the benefit of the requesting
party. Except as may be otherwise specifically provided elsewhere in this
Agreement or in any other agreement between the parties, such costs shall be
computed in accordance with the providing party's standard methodology and
procedures.
7.04. RECORD RETENTION. To facilitate the possible exchange of
Information pursuant to this Article VII and other provisions of this Agreement
after the Distribution Date, the parties agree to use their reasonable best
efforts to retain all Information in their respective possession or control on
the Distribution Date in accordance with the policies of ATI as in effect on the
Distribution Date. No party will destroy, or permit any of its Subsidiaries to
destroy, any Information which the other party may have the right to obtain
pursuant to this Agreement prior to the seventh anniversary of the date hereof
without first using its reasonable best efforts to notify the other party of the
proposed destruction and giving the other party the opportunity to take
possession of such information prior to such destruction; provided, however,
that in the case of any Information relating to Taxes or to Environmental
Liabilities, such period shall be extended to the expiration of the applicable
statute of limitations (giving effect to any extensions thereof).
7.05. OTHER AGREEMENTS PROVIDING FOR EXCHANGE OF INFORMATION.
The rights and obligations granted under this Article VII are subject to any
specific limitations, qualifications or additional provisions on the sharing,
exchange or confidential treatment of Information set forth in any Ancillary
Agreement.
7.06. PRODUCTION OF WITNESSES; RECORDS; COOPERATION. (a) After
the Distribution Date, except in the case of an adversarial Action by one party
against another party, each party hereto shall use its reasonable efforts to
make available to each other party, upon written request, the former, current
and future directors, officers, employees, other personnel and agents of the
members of its respective Group as witnesses and any books, records or other
documents within its control or which it otherwise has the ability to make
available, to the extent that any such person (giving consideration to business
demands of such directors, officers, employees, other personnel and agents) or
books, records or other documents may reasonably be required in connection with
any Action in which the requesting party may from time to time be involved,
regardless of whether such Action is a matter with respect to which
indemnification may be sought hereunder. The requesting party shall bear all
costs and expenses (including allocated costs of in-house counsel and other
personnel) in connection therewith.
(b) If an Indemnifying Party chooses to defend or to seek to
compromise or settle any Third Party Claim, the other parties shall make
available to such Indemnifying Party, upon written request, the former, current
and future directors, officers, employees, other personnel and
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<PAGE> 37
agents of the members of its respective Group as witnesses and any books,
records or other documents within its control or which it otherwise has the
ability to make available, to the extent that any such person (giving
consideration to business demands of such directors, officers, employees, other
personnel and agents) or books, records or other documents may reasonably be
required in connection with such defense, settlement or compromise, or such
prosecution, evaluation or pursuit, as the case may be, and shall otherwise
cooperate in such defense, settlement or compromise, or such prosecution,
evaluation or pursuit, as the case may be.
(c) Without limiting any provision of this Section, the
parties shall cooperate and consult to the extent reasonably necessary with
respect to any Action, and each of the parties agrees to cooperate, and to cause
each member of its respective Group to cooperate, with each other in the defense
of any infringement or similar claim with respect to any intellectual property
and shall not claim to acknowledge, or permit any member of its respective Group
to claim to acknowledge, the validity or infringing use of any intellectual
property of a third Person in a manner that would hamper or undermine the
defense of such infringement or similar claim.
(d) The obligation of the parties to provide witnesses
pursuant to this Section 7.06 is intended to be interpreted in a manner so as to
facilitate cooperation and shall include the obligation to provide as witnesses
inventors and other officers without regard to whether the witness or the
employer of the witness could assert a possible business conflict (subject to
the qualifications set forth in the first sentence of Section 7.06(a)).
(e) In connection with any matter contemplated by this Section
7.06, the parties will enter into a mutually acceptable joint defense agreement
so as to maintain to the extent practicable any applicable attorney-client
privilege or work product immunity of any member of any Group.
7.07. CONFIDENTIALITY. (a) Subject to Section 7.08, each of
ATI and Water Pik, on behalf of itself and each member of its respective Group,
agrees to hold, and to cause its respective directors, officers, employees,
agents, accountants, counsel and other advisors and representatives to hold, in
strict confidence, with at least the same degree of care that applies to ATI's
confidential and proprietary information pursuant to policies in effect as of
the Distribution Date, all Information concerning each such other Group that is
either in its possession or furnished by any such other Group or its respective
directors, officers, employees, agents, accountants, counsel and other advisors
and representatives at any time pursuant to this Agreement, any Ancillary
Agreement or otherwise, and shall not use any such Information other than for
such purposes as shall be expressly permitted hereunder or thereunder, except,
in each case, to the extent that such Information has been (i) in the public
domain through no fault of such party or any member of such Group or any of
their respective directors, officers, employees, agents, accountants, counsel
and other advisors and representatives, (ii) later lawfully acquired from other
sources by such party (or any member of such party's Group) which sources are
not themselves bound by a confidentiality obligation), or (iii) independently
generated without reference to any proprietary or confidential Information of
the other party.
(b) Each party agrees not to release or disclose, or permit to
be released or disclosed, any such Information to any other Person, except its
directors, officers, employees,
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<PAGE> 38
agents, accountants, counsel and other advisors and representatives who need to
know such Information (who shall be advised of their obligations hereunder with
respect to such Information), except in compliance with Section 7.08. Without
limiting the foregoing, when any Information is no longer needed for the
purposes contemplated by this Agreement or any Ancillary Agreement, each party
will promptly after request of the other party either return to the other party
all Information in a tangible form (including all copies thereof and all notes,
extracts or summaries based thereon) or certify to the other party that it has
destroyed such Information (and such copies thereof and such notes, extracts or
summaries based thereon).
7.08. PROTECTIVE ARRANGEMENTS. In the event that any party or
any member of its Group either determines on the advice of its counsel that it
is required to disclose any Information pursuant to applicable law or receives
any demand under lawful process or from any Governmental Authority to disclose
or provide Information of any other party (or any member of any other party's
Group) that is subject to the confidentiality provisions hereof, such party
shall notify the other party prior to disclosing or providing such Information
and shall cooperate at the expense of the requesting party in seeking any
reasonable protective arrangements requested by such other party. Subject to the
foregoing, the Person that received such request may thereafter disclose or
provide Information to the extent required by such law (as so advised by
counsel) or by lawful process or such Governmental Authority.
ARTICLE VIII
FURTHER ASSURANCES
8.01. FURTHER ASSURANCES. (a) In addition to the actions
specifically provided for elsewhere in this Agreement, each of the parties
hereto shall use its reasonable efforts, prior to, on and after the Distribution
Date, to take, or cause to be taken, all actions, and to do, or cause to be
done, all things, reasonably necessary, proper or advisable under applicable
laws, regulations and agreements to consummate and make effective the
transactions contemplated by this Agreement and the Ancillary Agreements.
(b) Without limiting the foregoing, prior to, on and after the
date hereof, each party hereto shall cooperate with the other parties, and
without any further consideration, but at the expense of the requesting party,
to execute and deliver, or use its reasonable efforts to cause to be executed
and delivered, all instruments, including instruments of conveyance, assignment
and transfer, and to make all filings with, and to obtain all consents,
approvals or authorizations of, any Governmental Authority or any other Person
under any permit, license, agreement, indenture or other instrument (including
any Consents or Governmental Approvals), and to take all such other actions as
such party may reasonably be requested to take by any other party hereto from
time to time, consistent with the terms of this Agreement and the Ancillary
Agreements, in order to effectuate the provisions and purposes of this Agreement
and the Ancillary Agreements and the transfers of the Water Pik Assets and the
assignment and assumption of the Water Pik Liabilities and the other
transactions contemplated hereby and thereby. Without limiting the foregoing,
each party will, at the reasonable request, cost and expense of any other party,
take such other actions as may be reasonably necessary to vest in such other
party good and
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<PAGE> 39
marketable title, free and clear of any Security Interest, if and to the extent
it is practicable to do so.
(c) On or prior to the Distribution Date, ATI and Water Pik in
their respective capacities as direct and indirect stockholders of their
respective Subsidiaries, shall each ratify any actions which are reasonably
necessary or desirable to be taken by ATI or Water Pik or any other Subsidiary
of ATI, as the case may be, to effectuate the transactions contemplated by this
Agreement.
(d) ATI and Water Pik, on behalf of itself and each of member
of its respective Group, waive (and agree not to assert against any of the
others) any claim or demand that any of them may have against any of the others
for any Liabilities or other claims relating to or arising out of: (i) the
failure of Water Pik or any member of the Water Pik Group, on the one hand, or
of ATI or any member of the ATI Group, on the other hand, to provide any
notification or disclosure required under any state Environmental Law in
connection with the Separation or the other transactions contemplated by this
Agreement, including the transfer by any member of any Group to any member of
any other Group of ownership or operational control of any Assets not previously
owned or operated by such transferee; or (ii) any inadequate, incorrect or
incomplete notification or disclosure under any such state Environmental Law by
the applicable transferor. To the extent any Liability to any Governmental
Authority or any third Person arises out of any action or inaction described in
clause (i) or (ii) above, the transferee of the applicable Asset hereby assumes
and agrees to pay any such Liability.
ARTICLE IX
TERMINATION
9.01. TERMINATION. This Agreement may be terminated by ATI at
any time prior to the Distribution.
9.02. EFFECT OF TERMINATION. In the event of any termination
of this Agreement pursuant to Section 9.01, no party to this Agreement (or any
of its directors or officers) shall have any Liability or further obligation to
any other party.
ARTICLE X
MISCELLANEOUS
10.01. COUNTERPARTS; ENTIRE AGREEMENT; CORPORATE POWER. (a)
This Agreement and each Ancillary Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party.
(b) This Agreement, and the Ancillary Agreements and the
Exhibits, Schedules and Appendices hereto and thereto contain the entire
agreement between the parties with respect to the subject matter hereof,
supersede all previous agreements, negotiations, discussions, writings,
understandings, commitments and conversations with respect to such subject
matter and
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<PAGE> 40
there are no agreements or understandings between the parties other than those
set forth or referred to herein or therein.
(c) ATI represents on behalf of itself and each other member
of the ATI Group and Water Pik represents on behalf of itself and each other
member of the Water Pik Group, as follows:
(i) each such Person has the requisite corporate or
other power and authority and has taken all corporate or other action
necessary in order to execute, deliver and perform each of this
Agreement and each other Ancillary Agreements to which it is a party
and to consummate the transactions contemplated hereby and thereby; and
(ii) this Agreement and each Ancillary Agreement to
which it is a party has been duly executed and delivered by it and
constitutes a valid and binding agreement of it enforceable in
accordance with the terms thereof.
(d) Each party hereto acknowledges that it and each other
party hereto may be executing certain of the Ancillary Agreements by facsimile,
stamp or mechanical signature. Each party hereto expressly adopts and confirms
each such facsimile, stamp or mechanical signature made in its respective name
as if it were a manual signature, agrees that it will not assert that any such
signature is not adequate to bind such party to the same extent as if it were
signed manually and agrees that at the reasonable request of any other party
hereto at any time it will as promptly as reasonably practicable cause each such
Ancillary Agreement to be manually executed (any such execution to be as of the
date of the initial date thereof).
10.02. GOVERNING LAW; CONSENT TO JURISDICTION. (a) This
Agreement and, unless expressly provided therein, each Ancillary Agreement,
shall be governed by and construed and interpreted in accordance with the laws
of the Commonwealth of Pennsylvania as to all matters, including matters of
validity, construction, effect, enforceability, performance and remedies,
irrespective of the choice of laws principles of the Commonwealth of
Pennsylvania.
(b) Each of the parties hereto irrevocably submits to the
exclusive jurisdiction of (i) the Court of Common Pleas of Allegheny County,
Pennsylvania and (ii) the United States District Court for the Western District
of Pennsylvania, for the purposes of any suit, action or other proceeding
arising out of this Agreement or any Ancillary Agreement or any transaction
contemplated hereby or thereby (and agrees not to commence any action, suit or
proceeding relating thereto except in such courts). Each of the parties hereto
further agrees that service of any process, summons, notice or document hand
delivered or sent by U.S. registered mail to such party's respective address set
forth in Section 10.05 will be effective service of process for any action, suit
or proceeding in Pennsylvania with respect to any matters to which it has
submitted to jurisdiction as set forth in the immediately preceding sentence.
Each of the parties hereto irrevocably and unconditionally waives any objection
to the laying of venue of any action, suit or proceeding arising out of this
Agreement or any Ancillary Agreement or the transactions contemplated hereby or
thereby in (i) the Court of Common Pleas of Allegheny County, Pennsylvania or
(ii) the United States District Court for the Western District of Pennsylvania,
and
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hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum.
10.03. ASSIGNABILITY. Except as set forth in any Ancillary
Agreement, this Agreement and each Ancillary Agreement shall be binding upon and
inure to the benefit of the parties hereto and thereto, respectively, and their
respective successors and assigns (including any direct or indirect assignee of
any of the Water Pik Assets); provided, however, that no party hereto or thereto
may assign its respective rights or delegate its respective obligations under
this Agreement or any Ancillary Agreement without the express prior written
consent of the other parties hereto or thereto.
10.04. THIRD PARTY BENEFICIARIES. Except for the
indemnification rights under this Agreement of any ATI Indemnitee, Water Pik
Indemnitee or Teledyne Technologies Indemnitee in their respective capacities as
such, (a) the provisions of this Agreement and each Ancillary Agreement are
solely for the benefit of the parties and are not intended to confer upon any
Person except the parties any rights or remedies hereunder, (b) there are no
third party beneficiaries of this Agreement or any Ancillary Agreement, and (c)
neither this Agreement nor any Ancillary Agreement shall provide any third
person with any remedy, claim, liability, reimbursement, claim of action or
other right in excess of those existing without reference to this Agreement or
any Ancillary Agreement. No party hereto shall have any right, remedy or claim
with respect to any provision of this Agreement or any Ancillary Agreement to
the extent such provision relates solely to the other two parties hereto or the
members of such other two parties' respective Groups. No party shall be required
to deliver any notice under this Agreement or under any Ancillary Agreement to
any other party with respect to any matter in which such other party has no
right, remedy or claim.
10.05. NOTICES. All notices or other communications under this
Agreement or any Ancillary Agreement shall be in writing and shall be deemed to
be duly given when (a) delivered in person or (b) deposited in the United States
mail or private express mail, postage prepaid, addressed as follows:
If to ATI, Holdings
or TII, to: Allegheny Teledyne Incorporated
1000 Six PPG Place
Pittsburgh, Pennsylvania 15222-5479
Attn: Senior Vice President, General Counsel & Secretary
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If to Water Pik
to: Water Pik Technologies, Inc.
660 Newport Center Drive, Suite 470
Newport Beach, California 92660
Attn: President
Any party may, by notice to the other party, change the address to which such
notices are to be given.
10.06. SEVERABILITY. If any provision of this Agreement or any
Ancillary Agreement or the application thereof to any Person or circumstance is
determined by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions hereof or thereof, or the application of
such provision to Persons or circumstances or in jurisdictions other than those
as to which it has been held invalid or unenforceable, shall remain in full
force and effect and shall in no way be affected, impaired or invalidated
thereby, so long as the economic or legal substance of the transactions
contemplated hereby or thereby, as the case may be, is not affected in any
manner adverse to any party. Upon such determination, the parties shall
negotiate in good faith in an effort to agree upon such a suitable and equitable
provision to effect the original intent of the parties.
10.07. FORCE MAJEURE. No party shall be deemed in default of
this Agreement or any Ancillary Agreement to the extent that any delay or
failure in the performance of its obligations under this Agreement or any
Ancillary Agreement results from any cause beyond its reasonable control and
without its fault or negligence, such as acts of God, acts of civil or military
authority, embargoes, epidemics, war, riots, insurrections, fires, explosions,
earthquakes, floods, unusually severe weather conditions, labor problems or
unavailability of parts, or, in the case of computer systems, Year 2000 problems
or any failure in electrical or air conditioning equipment. In the event of any
such excused delay, the time for performance shall be extended for a period
equal to the time lost by reason of the delay.
10.08. HEADINGS. The article, section and paragraph headings
contained in this Agreement and in the Ancillary Agreements are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement or any Ancillary Agreement.
10.09. SURVIVAL OF COVENANTS. Except as expressly set forth in
any Ancillary Agreement, the covenants, representations and warranties contained
in this Agreement and each Ancillary Agreement, and liability for the breach of
any obligations contained herein, shall survive each of the Separation and the
Distribution and shall remain in full force and effect.
10.10. WAIVERS OF DEFAULT. Waiver by any party of any default
by the other party of any provision of this Agreement or any Ancillary Agreement
shall not be deemed a waiver by the waiving party of any subsequent or other
default, nor shall it prejudice the rights of the other party.
10.11. SPECIFIC PERFORMANCE. In the event of any actual or
threatened default in, or breach of, any of the terms, conditions and provisions
of this Agreement or any
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Ancillary Agreement, the party or parties who are or are to be thereby aggrieved
shall have the right to specific performance and injunctive or other equitable
relief of its rights under this Agreement or such Ancillary Agreement, in
addition to any and all other rights and remedies at law or in equity, and all
such rights and remedies shall be cumulative. The parties agree that the
remedies at law for any breach or threatened breach, including monetary damages,
are inadequate compensation for any loss and that any defense in any action for
specific performance that a remedy at law would be adequate is waived. Any
requirements for the securing or posting of any bond with such remedy are
waived.
10.12. AMENDMENTS. No provisions of this Agreement or any
Ancillary Agreement shall be deemed waived, amended, supplemented or modified by
any party, unless such waiver, amendment, supplement or modification is in
writing and signed by the authorized representative of the party against whom it
is sought to enforce such waiver, amendment, supplement or modification. Without
limiting the foregoing, the parties agree that any waiver, amendment, supplement
or modification of this Agreement or any Ancillary Agreement that solely relates
to and affects only two of the three parties hereto shall not require the
consent of the third party hereto.
10.13. INTERPRETATION. Words in the singular shall be held to
include the plural and vice versa and words of one gender shall be held to
include the other genders as the context requires. The terms "hereof," "herein,"
and "herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement (or the applicable Ancillary Agreement) as
a whole (including all of the Schedules, Exhibits and Appendices hereto and
thereto) and not to any particular provision of this Agreement (or such
Ancillary Agreement). Article, Section, Exhibit, Schedule and Appendix
references are to the Articles, Sections, Exhibits, Schedules and Appendices to
this Agreement (or the applicable Ancillary Agreement) unless otherwise
specified. The word "including" and words of similar import when used in this
Agreement (or the applicable Ancillary Agreement) shall mean "including, without
limitation," unless the context otherwise requires or unless otherwise
specified. The word "or" shall not be exclusive. Unless expressly stated to the
contrary in this Agreement or in any Ancillary Agreement, all references to "the
date hereof," "the date of this Agreement," "hereby" and "hereupon" and words of
similar import shall all be references to November 29, 1999, regardless of any
amendment or restatement hereof.
10.14. DISPUTES. (a) Resolution of any and all disputes
arising from or in connection with this Agreement other than those arising from
or in connection with Article IV of this Agreement, whether based on contract,
tort, statute or otherwise, including, but not limited to, disputes in
connection with claims by third parties (collectively, "Disputes"), shall be
subject to the provisions of this Section 10.14; provided, however, that nothing
contained herein shall preclude any party from seeking or obtaining (i)
injunctive relief or (ii) equitable or other judicial relief to enforce the
provisions hereof or to preserve the status quo pending resolution of Disputes
hereunder.
(b) Any party may give the other parties written notice of any
Dispute not resolved in the normal course of business. The parties shall attempt
in good faith to resolve any Dispute promptly by negotiation between executives
of the parties who have authority to settle
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<PAGE> 44
the controversy. Within 15 days after delivery of the notice, the foregoing
executives of both parties shall meet at a mutually acceptable time and place,
and thereafter as often as they reasonably deem necessary for a period not to
exceed five days, to attempt to resolve the Dispute. All reasonable requests for
information made by one party to the other will be honored. If the parties do
not resolve the Dispute within such 20 day period (the "Initial Mediation
Period"), the parties shall attempt in good faith to resolve the Dispute by
negotiation between or among the Designated Officers. The Designated Officers
shall meet at a mutually acceptable time and place (but in no event no later
than 15 days following the expiration of the Initial Mediation Period) and
thereafter as often as they reasonably deem necessary for a period not to exceed
15 days, to attempt to resolve the Dispute.
(c) If the Dispute has not been resolved by negotiation within
50 days of the first party's notice, or if the parties failed to meet within 15
days of the first party's notice, or if the Designated Officers failed to meet
within 35 days of the first party's notice, any party may commence any
litigation or other procedure allowed by law.
10.15. EXCLUSIVITY OF TAX SHARING AGREEMENT. Notwithstanding
anything in this Agreement to the contrary, and subject to the provisions of
Article IV hereof, the Tax Sharing Agreement will be the exclusive agreement
among the parties with respect to all matters pertaining to Taxes, including,
without limitation, indemnification with respect to matters pertaining to Taxes
and indemnification with respect to the qualification of the Distribution as a
tax-free distribution under Section 355 and related provisions of the Code.
IN WITNESS WHEREOF, the parties have caused this Separation
and Distribution Agreement to be executed by their duly authorized
representatives.
ALLEGHENY TELEDYNE INCORPORATED
By: /s/ Jon D. Walton
____________________________________
Name:
Title:
TDY HOLDINGS, LLC
By: /s/ Jon D. Walton
____________________________________
Name:
Title:
TELEDYNE INDUSTRIES, INC.
By: /s/ Jon D. Walton
____________________________________
Name:
Title:
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WATER PIK TECHNOLOGIES, INC.
By: /s/ Michael Hoopis
____________________________________
Name:
Title:
JOINDER
The undersigned, Water Pik Inc. and Laars Inc. hereby join this Separation
and Distribution Agreement and agree, intending to be legally bound, to be
jointly and severally liable with Water Pik Technologies, Inc. for obligations
of Water Pik Technologies, Inc. under this Separation and Distribution
Agreement.
WATER PIK, INC.
By: /s/ Michael Hoopis
____________________________________
Name:
Title:
LAARS, INC.
By: /s/ Michael Hoopis
____________________________________
Name:
Title:
42
