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Exhibit
10.4
INDEMNIFICATION AND
COOPERATION AGREEMENT
This INDEMNIFICATION AND
COOPERATION AGREEMENT (this “ Agreement ”) is
made and entered into as of July 16, 2007 by and among American
Standard Companies Inc. (“ ASD ”), Ideal
Standard, France SAS (“ IS France ”), Ideal
Standard GmbH & Co. OHG (“ IS Belgium
”), WABCO Austria GesmbH (“ WABCO Austria
”), Ideal Standard GmbH (Germany) (“ IS Germany
”), Ideal Standard Italia s.r.l. (Italy) (“ IS
Italy ”), Ideal Standard Nederland BV (“
Venlo ”), WABCO Holdings Inc. (“ WABCO
”) and American Standard Europe BVBA ( “ ASE
” or the “ Indemnitor ”). Each of the
foregoing parties is individually referred to herein as a “
Party ” and collectively as the “ Parties
.” Certain capitalized terms used herein are defined in
Section 1.1. Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to such terms in
the Distribution Agreement (defined below).
RECITALS
WHEREAS, the Board of
Directors of ASD has determined that it is appropriate, desirable
and in the best interests of ASD and its shareholders to separate
ASD into three separate companies: (i) one comprising the VCS
Business, which shall be owned and conducted, directly or
indirectly, by WABCO, all of the common stock of which is intended
to be distributed to ASD shareholders, (ii) one comprising the
HVAC Business, which shall continue to be owned and conducted,
directly or indirectly, by ASD and (iii) one comprising the
B&K Business, which ASD currently intends to sell to one or
more third parties;
WHEREAS, as part of the
foregoing, ASD and WABCO have entered into the Separation and
Distribution Agreement, dated as of July 16, 2007 (the “
Distribution Agreement ”), which provides, among other
things, for the pro-rata distribution by ASD of all of its shares
in WABCO Common Stock to the holders of ASD Common Stock, and the
execution and delivery of certain other agreements in order to
facilitate and provide for the foregoing, including without
limitation, the Tax Sharing Agreement, the Employee Matters
Agreement, the Transition Services Agreement and this
Agreement;
WHEREAS, on March 28,
2007, the Charged Parties, along with a number of other companies
not affiliated with ASD or WABCO, received a Statement of
Objections from the European Commission (the “ Statement
of Objections ”) alleging infringements of European Union
competition rules by certain bathroom fixture and fittings
companies, including the Charged Parties;
WHEREAS, the Parties
acknowledge and agree that the Indemnifiable Matters relate to the
B&K Business that is conducted by a division of ASD which is
intended to be sold and, upon completion of such sale, will no
longer be owned by ASD, WABCO or any of their
Affiliates;
WHEREAS, given the standard
practice of the European Commission, it is anticipated that each
Charged Party will be held jointly and severally liable for any
fines or other
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judgments that may be rendered against
or imposed on any of the other Charged Parties in connection with
the Bathroom Fittings and Fixtures Proceedings;
WHEREAS, the alleged
wrongdoings, as outlined in the Statement of Objections, are
alleged to have occurred between May 5, 1988 and
November 9, 2004, and while it is expected that a fine will be
imposed in the Bathroom Fixtures and Fittings Proceedings, the
exposure relating thereto is a contingent liability the amount of
which is uncertain as of the date hereof;
WHEREAS, this Agreement
constitutes an integral part of the overall allocation of Assets
and Liabilities in the Separation (including the determination by
ASD not to transfer any Indebtedness to WABCO or ASE (other than
Indebtedness incurred by WABCO in connection with the Distribution)
and to indemnify WABCO and its Affiliates, including ASE, against
the Remainco Liabilities (which include, among other things,
significant asbestos liabilities which are attributable, in part,
to historical operations of the WABCO Group)) and the determination
by ASD to proceed with the Separation on the basis of this overall
allocation;
WHEREAS, the Parties
acknowledge that WABCO or ASE will receive substantial benefits
from the Separation and the transactions contemplated by the
Distribution Agreement and Ancillary Agreements, and in
consideration thereof, WABCO and ASE have agreed to enter this
Agreement to provide for the indemnification, cooperation and other
obligations specified herein including the obligation of ASE to be
responsible for the indemnification obligations specified
herein;
WHEREAS, the Parties desire
to set forth the agreements, understandings and procedures pursuant
to which ASE shall indemnify, defend and hold harmless the
Indemnitees against the Indemnifiable Losses relating to the
Indemnifiable Matters;
WHEREAS, the Parties have
also concluded that it is in their common interests with respect to
the Indemnifiable Matters to cooperate with one another and to
provide access to documents, information, and analyses, with
respect to the Indemnifiable Matters; and
WHEREAS, the Parties
recognize and acknowledge that any unauthorized disclosure or
dissemination of any documents or information exchanged between the
Parties would be detrimental to them and to the conduct of any
potential claims.
NOW, THEREFORE, in
consideration of the recitals and of the respective agreements and
covenants contained herein, and intending to be legally bound
hereby, the Parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain
Definitions . For purposes of this Agreement, the following
terms shall have the meanings specified:
(a) “ Accepted and
Confirmed Bank Guarantee ” shall have the meaning
specified in Section 4.1(b)(ii).
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(b) “ Appeal
Deadline Date ” means the date specified in the Initial
Decision or as required under applicable Laws of the European Union
in respect of the Bathroom Fittings and Fixtures Proceedings
pursuant to which the Charged Parties are required to submit an
appeal to the Initial Decision rendered against such Charged
Party.
(c) “ ASD
” shall have the meaning specified in the Preamble to this
Agreement.
(d) “ ASD Charged
Parties ” means ASD and any other member of the ASD Group
(other than any WABCO Charged Party or B&K Charged Party) that
is or becomes a named party in the Bathroom Fittings and Fixtures
Proceedings from and after the Effective Time.
(e) “ ASD Election
Notice ” shall have the meaning specified in
Section 2.2(c).
(f) “ ASD Non-Appeal
Notice ” shall have the meaning specified in
Section 2.2(c).
(g) “ ASE
” shall have the meaning specified in the Preamble to this
Agreement.
(h) “ ASE Election
Notice ” shall have the meaning specified in Section
2.2(c).
(i) “ ASE Non-Appeal
Notice ” shall have the meaning specified in Section
2.2(c).
(j) “ Bathroom
Fittings and Fixtures Proceedings ” means the proceedings
initiated by the Commission of the European Communities
contemplated by that certain Statement of Objections, dated
March 26, 2007, relating to case COMP/E-1/39.092, as the same
may be amended, supplemented or superseded by a new Statement of
Objections, including any appeals relating thereto.
(k) “ B&K Buyer
Parties ” means those Persons that acquire all or any
portion of the B&K Business pursuant to a B&K
Sale.
(l) “ B&K
Charged Parties ” means, collectively, Venlo, IS France,
IS Belgium, IS Germany and IS Italy and any member of the ASD Group
that is sold to a B&K Buyer Party and is or becomes a named
party in the Bathroom Fittings and Fixtures Proceedings from and
after the Effective Time.
(m) “ B&K Sale
Agreement ” shall have the meaning specified in
Section 4.5.
(n) “ Change in
Control ” means, and shall be deemed to have occurred if,
on or after the Effective Time, (i) any “person”
(as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended), other than a trustee or other
fiduciary holding securities under an employee benefit plan of
WABCO or any of its Subsidiaries acting in such capacity, is or
becomes the “beneficial owner” (as defined in Rule
13d-3 under said Act), directly or indirectly, of securities of
WABCO or ASE, as applicable, representing more than 35% of the
total voting power represented by WABCO’s or ASE’s, as
applicable, then outstanding Voting Securities, (ii) during
any period of two consecutive years, individuals who at the
beginning of such period constitute the board of directors of WABCO
or ASE, as applicable, and any new director whose election by the
board of directors of WABCO or ASE, as applicable, or nomination
for election by WABCO’s or ASE’s, stockholders as
applicable, was approved by a vote of at least two thirds
(2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute a majority thereof, (iii) the
stockholders of WABCO or ASE, as applicable, approve a merger or
consolidation of WABCO or ASE, as applicable, with any other
corporation other than a merger or consolidation that would result
in the Voting Securities of WABCO or ASE, as applicable,
outstanding
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immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into Voting Securities of the surviving entity) at least 65% of the
total voting power represented by the Voting Securities of WABCO or
ASE, as applicable, or such surviving entity outstanding
immediately after such merger or consolidation, (iv) the
stockholders of WABCO or ASE, as applicable, approve a plan of
complete liquidation of WABCO or ASE, as applicable, or an
agreement for the sale or disposition by WABCO or ASE, as
applicable, of (in one transaction or a series of related
transactions) all or substantially all of their respective assets,
or (v) WABCO or ASE, as applicable, shall file or have filed
against it, and such filing shall not be dismissed, any bankruptcy,
insolvency or dissolution proceedings, or a trustee, administrator
or creditors committee shall be appointed to manage or supervise
the affairs of WABCO or ASE, as applicable,
(o) “ Charged
Party ” means any ASD Charged Party, B&K Charged
Party or WABCO Charged Party.
(p) “ Common
Interest Materials ” shall have the meaning specified in
Section 3.4(b).
(q) “ Defense
Agreement ” shall have the meaning specified in
Section 3.3.
(r) “ Defense
Costs ” shall mean fees, costs and expenses incurred on
or after the Effective Time by a Party in connection with the
defense of any Indemnifiable Matter, including, without limitation,
legal, consultant, expert, economists, witness, accounting and
other professional fees and expenses, but excluding, for the
avoidance of doubt, the payment of any amounts to Governmental
Entities in connection with any such Indemnifiable
Matter.
(s) “ Dispute
” shall have the meaning specified in
Section 5.1.
(t) “ Distribution
Agreement ” shall have the meaning specified in the
Recitals to this Agreement.
(u) “ Escrow
Account ” shall have the meaning specified in
Section 4.1(b).
(v) “ Escrow
Agreement ” shall have the meaning specified in
Section 4.1(b).
(w) “ Escrowed
Amount ” shall have the meaning specified in
Section 4.1(b).
(x) “ Indemnifiable
Loss ” and “ Indemnifiable Losses ”
shall mean any and all fines, penalties, judgments, obligations,
interest and amounts paid in settlement, in each case arising
solely out of the Indemnifiable Matters and that are imposed on any
Indemnitee (whether directly or indirectly, through contract,
operation of law or otherwise, or through theories of successor or
transferee liability, de facto merger or similar indirect theory of
liability), including, without limitation, the Initial Decision
Amount (as may be modified pursuant to any appeal judgment(s)) and
the amount of any interest that will accrue on the Initial Decision
Amount and will be due and owing to the European Commission between
the Payment Due Date and the date on which the fine and any accrued
interest thereon have been paid in full following the rendering of
a final resolution of the Bathroom Fittings and Fixtures
Proceedings (including the final judgment concluding the appeal
process initiated by the Charged Parties in connection with the
Bathroom Fittings and Fixtures Proceedings), in each case
determined in accordance with the Initial Decision and the
applicable rules in force in the European Union.
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(y) “ Indemnifiable
Matters ” shall mean (i) the Bathroom Fittings and
Fixtures Proceedings, and (ii) following a B&K Sale, any
indemnification claims that may be brought against any member of
the ASD Group (and their respective Affiliates and their respective
directors, officers, employees and agents, in each case, together
with their respective heirs, executors, administrators, successors
and assigns) by any B&K Buyer Party or any of their respective
Affiliates (including any B&K Charged Party) or their
Representatives solely in connection with the Bathroom Fittings and
Fixtures Proceedings. For the avoidance of doubt, third party
Actions that have arisen or may arise prior to or after the
Effective Time that relate to or arise out of the subject matter of
the Bathroom Fittings and Fixtures Proceedings (including, without
limitation, shareholder lawsuits but excluding the Bathroom
Fittings and Fixtures Proceedings themselves and excluding any
indemnification claims brought by a B&K Buyer Party or any of
their respective Affiliates (including any B&K Charged Party)
or Representatives), are not Indemnifiable Matters under this
Agreement. The Distribution Agreement (rather than this Agreement)
addresses, allocates responsibility and indemnification obligations
for, and shall exclusively control, with respect to such third
party Actions.
(z) “
Indemnitees ” shall mean the ASD Charged Parties and
the B&K Charged Parties and their respective Affiliates (other
than any member of the WABCO Group or a WABCO Charged Party) and
their respective directors, officers, employees and agents, in each
case, together with their respective heirs, executors,
administrators, successors and assigns, and, if applicable, the
B&K Buyer Parties and other assignees following any assignment
by ASD in accordance with Section 6.3 hereof.
(aa) “ Indemnitee
Representative ” shall have the meaning specified in
Section 6.17.
(bb) “
Indemnitor ” shall have the meaning set forth in the
Preamble to this Agreement.
(cc) “ Indemnitor
Representative ” shall have the meaning specified in
Section 6.16.
(dd) “ Initial
Decision ” shall mean the initial decision rendered by
the European Commission in the Bathroom Fittings and Fixtures
Proceedings in which the Initial Decision Amount is
imposed.
(ee) “ Initial
Decision Amount ” shall mean the aggregate amount of the
fines (or other amounts, if any) imposed by the European Commission
on all Charged Parties on the Initial Decision Date as reflected in
the Initial Decision.
(ff) “ Initial
Decision Date ” shall mean the first date upon which the
European Commission imposes a fine on any Charged Party and/or any
of the other Indemnitees or Indemnitors or any other member of the
ASD Group or WABCO Group in the Bathroom Fittings and Fixtures
Proceedings.
(gg) “ IS
Belgium ” shall have the meaning specified in the
Preamble to this Agreement.
(hh) “ IS France
” shall have the meaning specified in the Preamble to this
Agreement.
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(ii) “ IS
Germany ” shall have the meaning specified in the
Preamble to this Agreement.
(jj) “ IS Italy
” shall have the meaning specified in the Preamble to this
Agreement.
(kk) “ New York
Courts ” shall have the meaning specified in
Section 6.6.
(ll) “ Non-Appeal
Notice ” shall mean either an ASE Non-Appeal Notice or an
ASD Non-Appeal Notice, as applicable.
(mm) “ Party
” shall have the meaning specified in the Preamble to this
Agreement.
(nn) “ Payment Due
Date ” means the date specified in the Initial Decision
or as required under the rules in force in the European Union in
respect of the Bathroom Fittings and Fixtures Proceedings pursuant
to which the Charged Parties are required to make payment of the
Initial Decision Amount.
(oo) “ Privilege
” shall have the meaning specified in
Section 3.3(a).
(pp) “ Privileged
Information ” shall have the meaning specified in
Section 3.3(a).
(qq) “ Release
Date ” shall have the meaning specified in
Section 4.2.
(rr) “
Representative ” shall mean any Affiliates, directors,
officers, members, partners, employees, accountants, agents,
counsel and other professional advisors of any of the Parties to
this Agreement.
(ss) “ Statement of
Objections ” shall have the meaning specified in the
Recitals to this Agreement.
(tt) “ Venlo
” shall have the meaning specified in the Preamble to this
Agreement.
(uu) “ Voting
Securities ” means any securities of WABCO or ASE, as
applicable, that vote generally in the election of directors of
WABCO or ASE, respectively.
(vv) “ WABCO
” shall have the meaning specified in the Preamble to this
Agreement.
(ww) “ WABCO
Austria ” shall have the meaning specified in the
Preamble to this Agreement.
(xx) “ WABCO Charged
Parties ” means ASE, WABCO Austria and any other member
of the WABCO Group that is or becomes a named party in the Bathroom
Fittings and Fixtures Proceedings from and after the Effective
Time.
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ARTICLE II
INDEMNIFICATION
Section 2.1
Indemnification; Release .
(a) The Indemnitor shall
indemnify and hold harmless the Indemnitees from and against, and
shall reimburse the Indemnitees with respect to, any and all
Indemnifiable Losses, whether arising prior to or following the
Effective Time and whether or not arising out of any acts or
omissions by any Indemnitee occurring prior to or following the
Effective Time. For the avoidance of doubt, Indemnifiable Losses
shall not include Defense Costs.
(b) WABCO and the WABCO
Charged Parties hereby remise, release and forever discharge the
Indemnitees from any and all Liabilities whatsoever, whether at law
or in equity (including any right of contribution), whether arising
under any contract, by operation of law or otherwise (or any
theories of successor or transferee liability or de facto merger or
similar indirect theory of liability), including for fraud or
willful misconduct, 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 date of this Agreement, in each case
relating to any of the Indemnifiable Matters. WABCO and the WABCO
Charged Parties hereby unconditionally and irrevocably agree, on
behalf of themselves and any of their Affiliates, that they shall
not initiate, pursue or cause or be initiated or pursued, directly
or indirectly, any judicial proceeding or Action seeking a
judgment, holding or declaration that this Agreement or any of the
indemnification or release obligations of WABCO and the WABCO
Charged Parties provided hereunder is, was or would be illegal,
invalid or unenforceable in accordance with its terms, and WABCO
and the WABCO Charged Parties unconditionally and irrevocably agree
that they shall not raise or assert any defense to this effect in
any such proceeding or Action. WABCO and the WABCO Charged Parties
acknowledge that they will receive substantial direct and indirect
benefits from the transactions contemplated by the Distribution
Agreement and the Ancillary Agreements (including, without
limitation, the assumption by ASD of the Remainco Liabilities) and
that the waiver, release and agreements set forth in this
Section 2.1(b) are knowingly made in contemplation of such
benefits and after the advice of counsel.
Section 2.2 Bathroom
Fittings and Fixtures Proceedings .
(a) ASE shall have the right
and the duty to control the defense of the Bathroom Fittings and
Fixtures Proceedings (on behalf of itself, the other WABCO Charged
Parties and the B&K Charged Parties); provided, however, from
and after the time a B&K Sale is consummated, upon the prior
written consent of ASD, the B&K Buyer Parties (on behalf of
themselves and the B&K Charged Parties) shall have the right to
observe and participate in the defense of the Bathroom Fittings and
Fixtures Proceedings, the specific scope of such observation and
participation to be determined by mutual agreement of ASD and ASE
in good faith, it being understood that, without ASE’s prior
written consent, such observation and participation shall in no
event constitute active control in the defense, including, without
limitation, affirmative rights to determine whether to appeal the
Initial Decision or take other actions contemplated by this
Section 2.2 (on behalf of the WABCO Charged Parties or B&K
Charged Parties). ASD shall have the right and the duty to control
the defense of the Bathroom Fittings and Fixtures Proceedings on
behalf of itself and the ASD Charged Parties.
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(b) ASD shall be entitled to
select and engage counsel on behalf of itself and the ASD Charged
Parties in respect of their defense and involvement in the Bathroom
Fittings and Fixtures Proceedings. The Indemnitor Representative
shall be entitled to select counsel on behalf of the WABCO Charged
Parties and B&K Charged Parties in respect of their involvement
and defense in the Bathroom Fittings and Fixtures Proceedings; it
being acknowledged that the Indemnitor Representative shall provide
prior notice to ASD and the B&K Charged Parties of the
selection of any such counsel other than counsel retained by the
WABCO Charged Parties and B&K Charged Parties at the Effective
Time and it is further acknowledged that to the extent the
Indemnitor Representative (on behalf of the WABCO Charged Parties
and B&K Charged Parties) choose not to retain either
Baker & McKenzie or McDermott Will & Emery, ASD
shall be entitled to retain either such law firm and WABCO and ASE
shall not object (and shall provide a waiver of privilege to the
extent requested to do so by ASD) in any way to ASD retaining such
counsel on its own behalf in connection with any matter, including
the Bathroom Fittings and Fixtures Proceedings. From and after the
time a B&K Sale is consummated, upon the prior written consent
of ASD, the B&K Buyer Parties (on behalf of themselves and the
B&K Charged Parties) shall be entitled to select counsel on
behalf of the B&K Charged Parties in respect of their
observation of and participation in the Bathroom Fittings and
Fixtures Proceedings to the limited extent contemplated by
Section 2.2(a); it being understood that the Defense Costs
associated with such counsel shall be the responsibility of the
B&K Charged Parties as further provided in Section 2.2(e)
hereof.
(c) Once an Initial Decision
is rendered in the Bathroom Fittings and Fixtures Proceedings, and
to the extent that the Charged Parties have standing under
applicable Law to appeal the Initial Decision, (i) ASD (on
behalf of the ASD Charged Parties) shall have the right, in its
sole discretion and without the consent of any other Party, to
appeal the Initial Decision with respect to the decision rendered
against any ASD Charged Party, (ii) ASE (on behalf of the
WABCO Charged Parties and the B&K Charged Parties) shall have
the right, in its sole discretion and without the consent of any
other Party, to appeal the Initial Decision with respect to the
decision rendered against any WABCO Charged Party or any B&K
Charged Party, (iii) the WABCO Charged Parties and the B&K
Charged Parties may not decide to forego an appeal to the Initial
Decision with respect to the decision rendered against any WABCO
Charged Party or any B&K Charged Party if the failure to appeal
the Initial Decision would, in any way (as determined in good faith
by ASD) prejudice ASD’s appeal of the Initial Decision with
respect to the decision rendered against any ASD Charged Party; it
being understood that if the Indemnitor Representative provides
written notice to ASD no later than twenty Business Days prior to
the Appeal Deadline Date that it does not wish to appeal the
Initial Decision with respect to the decision rendered against any
WABCO Charged Party or any B&K Charged Party (an “ ASE
Non-Appeal Notice ”), ASD shall have the right, if it has
determined in good faith that such non-appeal would, in any way
prejudice ASD’s appeal of the Initial Decision with respect
to the decision rendered against any ASD Charged Party, to cause
the WABCO Charged Parties and the B&K Charged Parties to appeal
the Initial Decision with respect to the decision rendered against
the WABCO Charged Parties and the B&K Charged Parties by
delivering a written notice within ten Business Days after its
receipt of the ASE Non-Appeal Notice to the Indemnitor
Representative and the B&K Charged Parties of its election to
exercise such right (the “ ASD Election Notice
”), and upon delivery of the ASD Election Notice the
provisions of Section 4.7 shall become applicable,
(iv) ASD (on behalf of the ASD Charged Parties) may not decide
to forego an
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appeal to the Initial Decision with
respect to the decision rendered against any ASD Charged Party if
the failure to appeal the Initial Decision would, in any way (as
determined in good faith by ASE) prejudice ASE’s appeal of
the Initial Decision (on behalf of the WABCO Charged Parties and
B&K Charged Parties) with respect to the decision rendered
against any WABCO Charged Party or B&K Charged Party; it being
understood that if ASD provides written notice to the Indemnitor
Representative no later than twenty Business Days prior to the
Appeal Deadline Date that it does not wish to appeal the Initial
Decision with respect to the decision rendered against any ASD
Charged Party (an “ ASD Non-Appeal Notice ”),
the Indemnitor Representative shall have the right, if it has
determined in good faith that such non-appeal would, in any way
prejudice ASE’s appeal of the Initial Decision with respect
to the decision rendered against any WABCO Charged Party or B&K
Charged Party, to cause the ASD Charged Parties to appeal the
Initial Decision with respect to the decision rendered against the
ASD Charged Parties by delivering a written notice within ten
Business Days after its receipt of the ASD Non-Appeal Notice to ASD
of its election to exercise such right (the “ ASE Election
Notice ”), and upon delivery of the ASE Election Notice
the provisions of Section 4.8 shall become applicable and
(v) except in connection with an appeal initiated by ASE (or
ASD, in the case of an ASD Election Notice), as applicable, on
behalf of the B&K Charged Parties, the B&K Charged Parties
shall not have the right to otherwise appeal the Initial Decision
with respect to the decision rendered against any B&K Charged
Party, unless the B&K Charged Parties agree to indemnify the
ASD Charged Parties and the WABCO Charged Parties for any fines
imposed on the B&K Charged Parties in the Bathroom Fittings and
Fixtures Proceedings with such indemnification to be provided
pursuant to an agreement that is mutually acceptable to ASD and
ASE. Upon prior written notice delivered by ASE (or ASD, in the
case of an ASD Election Notice), as applicable, the B&K Charged
Parties agree to be a party to any appeal of the Initial Decision
initiated by ASE (or ASD, in the case of an ASD Election Notice),
as applicable, on behalf of the WABCO Charged Parties and B&K
Charged Parties.
(d) Each of ASD (on behalf of
the ASD Charged Parties) and ASE (on behalf of the WABCO Charged
Parties and B&K Charged Parties) will give the other Party
prompt notice of any intent to appeal the Initial Decision with
respect to the decision rendered against such Charged Parties;
provided, that any Non-Appeal Notice must be delivered in
accordance with Section 2.2(c). Any written submissions and
responses, or the provision of any information or documents to
Governmental Entities, in each case, with respect to the Bathroom
Fittings and Fixtures Proceedings, including the contents of any
submissions in the appeals process, if applicable, shall be
prepared by ASD (with respect to any such matters submitted on
behalf of any ASD Charged Party) and ASE (with respect to any such
matters submitted on behalf of any WABCO Charged Party or any
B&K Charged Party); provided, that if ASD delivers an ASD
Election Notice, the contents of any such submissions on behalf of
any WABCO Charged Party or any B&K Charged Party shall be
prepared at the direction of ASD (which may include preparation by
counsel to the WABCO Charged Parties and B&K Charged Parties
existing as of the Effective Time or at the time of any such
submission) and with consultation with the Indemnitor
Representative; provided, further, however, if ASE delivers an ASE
Election Notice, the contents of any such submissions on behalf of
any ASD Charged Party shall be prepared at the direction of ASE
(which may include preparation by counsel to the ASD Charged
Parties existing as of the Effective Time or at the
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time of any such submission) and with
consultation with ASD. The Parties shall, and shall cause their
Affiliates to, promptly inform the other of any communication from
any Governmental Entity relating to the Bathroom Fixtures and
Fittings Proceedings and shall promptly furnish the other with
copies of any such written notices or other communications. In the
event that any Party or its Affiliates receives a request for
information or other documentary material from any such
Governmental Entity relating to the Bathroom Fixtures and Fittings
Proceedings, ASD or ASE, as the case may be, shall endeavor in good
faith to make, or cause to be made, as soon as reasonably
practicable and after consultation with the other Party, an
appropriate response in compliance with such request and to provide
the other Parties (and their counsel), upon request, advance drafts
of all filings or submissions in connection therewith. ASD or ASE,
as applicable, shall provide the other with a reasonable
opportunity in light of the circumstances to review and comment on
such filings or submissions (including any memorandum of law,
pleadings and briefs) and shall consider in good faith
modifications or comments to such filings or submissions that are
requested by the other. ASD and ASE shall each offer the other the
opportunity to jointly participate in any scheduled hearings or
other meetings with Governmental Entities with respect to the
Bathroom Fittings and Fixtures Proceedings, except in the unusual
circumstance where it is impractical (given the timing and
circumstances) to do so, provided that in such case, the Party
participating in such informal meeting or discussions shall
promptly provide notice to the other Parties of the content and
substance of any such meetings or discussions. For the avoidance of
doubt, the Parties acknowledge that the information and documents
referred to in this Section 2.2(d) shall be subject to
Sections 3.3, 3.4 and 4.6 of this Agreement.
(e) In connection with the
Bathroom Fittings and Fixtures Proceedings, (i) ASD shall be
responsible for the Defense Costs of the ASD Charged Parties
incurred prior to the delivery of an ASE Election Notice, if any,
or if no ASE Election Notice is delivered, at all times from and
after the Effective Time, and (ii) ASE shall be responsible
for the Defense Costs of the WABCO Charged Parties and the B&K
Charged Parties incurred prior to the delivery of an ASD Election
Notice, if any, or if no ASD Election Notice is delivered, at all
times from and after the Effective Time; provided, however, if the
B&K Charged Parties engage counsel on their own behalf to the
limited extent permitted by Section 2.2(a), the B&K Buyer
Parties and/or B&K Charged Parties, as applicable, shall be
responsible for the Defense Costs associated with the B&K
Charged Parties’ limited involvement in the Bathroom Fittings
and Fixtures Proceedings. If and only if ASD delivers an ASD
Election Notice in accordance with Section 2.2(c), then from
and after the delivery of such ASD Election Notice, ASD shall be
responsible for the Defense Costs of the WABCO Charged Parties and
the B&K Charged Parties incurred at the direction of ASD. If
and only if ASE delivers an ASE Election Notice in accordance with
Section 2.2(c), then from and after the delivery of such ASE
Election Notice, ASE shall be responsible for the Defense Costs of
the ASD Charged Parties incurred at the direction of
ASE.
(f) Notwithstanding anything
to the contrary contained in this Agreement, the rights and
obligations of the Parties with respect to the settlement of the
Bathroom Fixtures and Fittings Proceedings shall be governed
exclusively by this Section 2.2(f). No Charged Party may
consent to the entry of any judgment or enter into any settlement
with respect to the Bathroom Fittings and Fixtures Proceedings,
whether prior to the Initial Decision Date or at any time
thereafter without the consent of ASD and ASE;
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provided, that, ASE may enter into any
settlement with respect to the Bathroom Fittings and Fixtures
Proceedings if (x) the settlement relates solely to the liability
of the WABCO Charged Parties and B&K Charged Parties and (y)
ASD has determined in good faith that such settlement would not in
any way prejudice (i) ASD’s defense of any outstanding
charges in the Bathroom Fixtures and Fittings Proceedings against
any ASD Charged Party or (ii) any ASD Charged Party’s right
to indemnification under this Agreement. ASE shall notify ASD in
writing of any settlement into which ASE proposes to enter, and
within seven (7) calendar days of its receipt of such notice ASD
shall notify ASE of its determination as to whether the conditions
in clauses in (y)(i) and (y)(ii) of the preceding sentence have
been met.
(g) Following the
consummation of a B&K Sale, if ASD shall receive notice or
otherwise learn of the assertion of any indemnification claim that
may be brought against ASD or any of its Affiliates or their
respective Representatives by the B&K Buyer Parties or any of
their Affiliates (including, following a B&K Sale, any B&K
Charged Party) or their Representatives that relate to the Bathroom
Fittings and Fixtures Proceedings and as to which ASD is or may be
entitled to indemnification pursuant to this Agreement, ASD shall
notify the Indemnitor Representative in writing, and in reasonable
detail, of such claim promptly (and in any event within five
(5) Business Days) after receipt by ASD of written notice of,
or upon becoming aware of, such claim; provided ,
however , that the failure to provide notice of any such
claim pursuant to this sentence shall not release the Indemnitor
from any of its obligations hereunder except and solely to the
extent the Indemnitor shall have been materially prejudiced as a
result of such failure. Thereafter, ASD shall deliver to the
Indemnitor Representative, promptly (and in any event within five
(5) Business Days) after ASD’s receipt thereof, copies
of all notices and documents received by ASD relating to such
claim.
ARTICLE III
COOPERATION AND OTHER
MATTERS
Section 3.1
Cooperation . Each Party to this Agreement, through and with
the involvement of its respective counsel to the extent
contemplated by Section 2.2(a), shall in good faith cooperate,
engage in communications and share and exchange documents,
information, and analyses in connection with, and in order to
respond to, the Indemnifiable Matters. Such cooperation shall
include, without limitation, (i) the provision to the other
Parties to this Agreement of records and information which are
necessary to the defense or appeal of such Indemnifiable Matters
and which are reasonably requested by any other Party and making
employees (and, to the extent reasonably feasible, former
employees) available on a mutually convenient basis to provide
additional information and explanation of any material provided
hereunder, regardless of whether any conflict of interest exists
between or among any Parties hereto with respect to any
Indemnifiable Matter and (ii) consultation regarding the
defense of the Indemnifiable Matters. For the avoidance of doubt,
the Parties acknowledge that the information and documents referred
to in this Section 3.1 shall be subject to Sections 3.3, 3.4
and 4.6 of this Agreement.
Section 3.2 Witness
Services . Subject to Section 4.6, each of the Parties
shall use their respective reasonable efforts to make available to
the other Parties, upon reasonable written request, their and their
Affiliates officers, directors, employees and agents as witnesses
to the extent that such individuals may reasonably be required to
testify or otherwise cooperate in connection with the defense of
the Indemnifiable Matters (including any appeals relating
thereto).
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Section 3.3 Privileged
Information .
(a) Each Par
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