EXHIBIT 10.1
CONTRIBUTION AND DISTRIBUTION AGREEMENT
between
IMPCO TECHNOLOGIES, INC.
and
QUANTUM FUEL SYSTEMS TECHNOLOGIES WORLDWIDE, INC.
Dated as of July 23, 2002
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS................................................................. 2
Section 1.1 General..................................................................... 2
Section 1.2 References; Interpretation.................................................. 17
ARTICLE II DISTRIBUTION AND OTHER TRANSACTIONS; CERTAIN COVENANTS...................... 18
Section 2.1 The Distribution And Other Transactions..................................... 18
Section 2.2 IMPCO Board Action; Conditions Precedent To The Distribution................ 27
Section 2.3 Intercompany Accounts....................................................... 29
Section 2.4 Assumption And Satisfaction Of Liabilities.................................. 29
Section 2.5 Resignations................................................................ 29
Section 2.6 Non-Solicitation Of Employees............................................... 30
Section 2.7 Further Assurances.......................................................... 30
Section 2.8 Limited Representations Or Warranties....................................... 30
Section 2.9 Guarantees.................................................................. 31
Section 2.10 Witness Services............................................................ 32
Section 2.11 Tax And Other Matters....................................................... 32
Section 2.12 Transfers Not Effected Prior To The Distribution; Transfers Deemed
Effective As Of The Distribution Date....................................... 33
Section 2.13 Conveyancing And Assumption Instruments..................................... 34
Section 2.14 Ancillary Agreements........................................................ 34
Section 2.15 Corporate Names............................................................. 34
Section 2.16 Joint Business Opportunities; Non-Competition; Protection Of
Information................................................................. 35
Section 2.17 Adjustment of IMPCO Warrants................................................ 35
ARTICLE III INDEMNIFICATION............................................................. 38
Section 3.1 Indemnification By Impco.................................................... 38
Section 3.2 Indemnification By Quantum.................................................. 38
Section 3.3 Procedures For Indemnification.............................................. 39
Section 3.4 Indemnification Payments.................................................... 41
Section 3.5 Future Business Relationships............................................... 42
ARTICLE IV ACCESS TO INFORMATION....................................................... 42
Section 4.1 Provision Of Corporate Records.............................................. 42
Section 4.2 Access To Information....................................................... 42
Section 4.3 Reimbursement; Other Matters................................................ 43
Section 4.4 Confidentiality............................................................. 43
Section 4.5 Privileged Matters.......................................................... 44
Section 4.6 Ownership Of Information.................................................... 46
Section 4.7 Estimates................................................................... 46
i
TABLE OF CONTENTS
Page
----
Section 4.8 Other Agreements Providing For Exchange Of Information................. 46
ARTICLE V TERMINATION OF AGREEMENTS; MUTUAL RELEASE.............................. 46
Section 5.1 Termination of Agreements.............................................. 46
Section 5.2 Mutual Release......................................................... 47
ARTICLE VI ADMINISTRATIVE SERVICES................................................ 49
Section 6.1 Performance Of Services................................................ 49
Section 6.2 Accounts Receivables................................................... 49
ARTICLE VII DISPUTE RESOLUTION..................................................... 49
Section 7.1 Negotiation............................................................ 49
Section 7.2 Arbitration............................................................ 49
Section 7.3 Continuity Of Service And Performance. ................................ 50
ARTICLE VIII INSURANCE.............................................................. 50
Section 8.1 Policies And Rights Included Within Assets; Assignment Of
Policies............................................................... 50
Section 8.2 Administration; Other Matters.......................................... 51
Section 8.3 Agreement For Waiver Of Conflict And Shared Defense.................... 53
Section 8.4 Cooperation............................................................ 53
ARTICLE IX MISCELLANEOUS.......................................................... 53
Section 9.1 Complete Agreement; Construction....................................... 53
Section 9.2 Ancillary Agreements................................................... 53
Section 9.3 Counterparts........................................................... 53
Section 9.4 Survival Of Agreements................................................. 53
Section 9.5 Expenses............................................................... 54
Section 9.6 Notices................................................................ 54
Section 9.7 Waivers................................................................ 55
Section 9.8 Amendments............................................................. 55
Section 9.9 Assignment............................................................. 55
Section 9.10 Successors And Assigns................................................. 55
Section 9.11 Termination............................................................ 55
Section 9.12 Subsidiaries........................................................... 55
Section 9.13 Third Party Beneficiaries.............................................. 56
Section 9.14 Title And Headings..................................................... 56
Section 9.15 Exhibits And Schedules................................................. 56
Section 9.16 Governing Law.......................................................... 56
Section 9.17 Consent To Jurisdiction................................................ 56
Section 9.18 Severability........................................................... 57
ii
SCHEDULES
---------
Schedule 1.1(jj)(B) ............. Quantum Transferred Assets
Schedule 1.1(pp)(iii) ........... IMPCO Form 10 Liabilities
Schedule 1.1(ccc) ............... Joint Contracts
Schedule 1.1(jjj)(i) ............ Quantum Ownership of Other Entities
Schedule 1.1(jjj)(ii) ........... Quantum Assets
Schedule 1.1 (jjj)(v) ........... Quantum Technology
Schedule 1.1(jjj)(viii) ......... Tri-Shield Tank Technology
Schedule 1.1(kkk) ............... Quantum Balance Sheet and Supporting Schedules
Schedule 1.1(ooo)(i) ............ Assigned Contracts
Schedule 1.1(ooo)(ii) ........... Quantum Group Contracts
Schedule 1.1(ooo)(iii) .......... Government Contracts
Schedule 1.1(ooo)(iv) ........... Capital and Operating Equipment Leases
Schedule 1.1(ppp) ............... Quantum Group
Schedule 1.1(rrr)(i) ............ Specified Liabilities
Schedule 1.1(rrr)(x) ............ Exceptions from Excluded Liabilities
Schedule 1.1(rrr)(y) ............ IMPCO Retained Liabilities
Schedule 2.1(f)(i) .............. Quantum Permits and Licenses
Schedule 2.1(f)(ii) ............. IMPCO Permits and Licenses
Schedule 2.3(a) ................. Excluded Payables and Receivables
Schedule 2.5(b) ................. Joint Employees, Directors and Officers
Schedule 2.9(a) ................. IMPCO Guarantee Releases
Schedule 2.9(b) ................. Quantum Guarantee Releases
Schedule 2.9(c) ................. Guarantee Fees
Schedule 2.16(b)(ii) ............ Quantum Named Competitors
Schedule 2.16(b)(iii) ........... Quantum Named OEM Customers
Schedule 2.16(c) ................ IMPCO Named Competitors
Schedule 2.17(b) ................ Warrant Adjustments
Schedule 5.1(b) ................. Surviving Arrangements
Schedule 8.2(b) ................. IMPCO Insurance Deductibles
Schedule 8.2(d) ................. Shared Policy Deductibles
Schedule 8.2(e) ................. Other Deductibles
Schedule 9.5 .................... Distribution Expense Allocations
iii
CONTRIBUTION AND DISTRIBUTION AGREEMENT
This CONTRIBUTION AND DISTRIBUTION AGREEMENT (this "Agreement"), is
dated as of July 23, 2002, by and between IMPCO Technologies, Inc., a Delaware
corporation ("IMPCO") and Quantum Fuel Systems Technologies Worldwide, Inc., a
Delaware corporation and, prior to the Distribution (as defined herein), a
wholly-owned subsidiary of IMPCO ("Quantum").
WHEREAS, IMPCO, acting directly and through its subsidiaries, currently
conducts a number of businesses, including, without limitation, (i) the Gaseous
Fuel Products Business (as hereinafter defined), (ii) the Automotive OEM
Business (as hereinafter defined), and (iii) the International Business (as
hereinafter defined).
WHEREAS, the Board of Directors of IMPCO has determined that it is
appropriate, desirable and in the best interests of IMPCO and its businesses, as
well as of the holders of shares of common stock, par value $0.001 per share, of
IMPCO (the "IMPCO Common Stock"), to restructure IMPCO to separate from IMPCO
all of the Automotive OEM Business and to cause such Automotive OEM Business to
be owned and conducted, directly or indirectly, by Quantum;
WHEREAS, in order to effect such separation, the Board of Directors of
IMPCO has determined that it is appropriate, desirable and in the best interests
of IMPCO and its businesses, as well as of the holders of IMPCO Common Stock,
for IMPCO (i) to take certain steps to restructure IMPCO's Subsidiaries (as
defined herein) and businesses, and (ii) upon the completion of such
restructuring to distribute to the holders of the IMPCO Common Stock all the
outstanding shares of common stock, par value $0.001 per share, of Quantum (the
"Quantum Common Shares"), as set forth herein;
WHEREAS, each of IMPCO and Quantum has determined that it is necessary
and desirable, on or prior to the Distribution Date (as defined herein), to
allocate and/or assign certain rights in those assets related to the Automotive
OEM Business, except for the IMPCO Assets (as defined herein) and the Reserved
Technology Rights (as defined herein), and to allocate and assign responsibility
for those liabilities in respect of the activities of the businesses related to
the Automotive OEM Business, and those assets and liabilities in respect of
other businesses and activities of IMPCO and its current and former Subsidiaries
and other matters; and
WHEREAS, each of IMPCO and Quantum has determined that it is necessary
and desirable to set forth the principal corporate transactions required to
effect such Distribution and to set forth other agreements that will govern
certain other matters following the Distribution.
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained in this Agreement, the parties hereby agree as follows:
1
ARTICLE I
DEFINITIONS
SECTION 1.1 GENERAL. As used in this Agreement, the following terms
shall have the following meanings:
(a) "Action" shall mean any action, suit, arbitration, inquiry,
proceeding or investigation by or before any court, any governmental or other
regulatory or administrative agency, body or commission or any arbitration
tribunal.
(b) "Affiliate" shall mean, when used with respect to a specified
person, another person that controls, is controlled by, or is under common
control with the person specified. As used herein, "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such person, whether through the
ownership of voting securities or other interests, by contract or otherwise.
(c) "Aftermarket" when used with respect to systems, components, parts
or other items, shall mean the market for any such foregoing item after the
title of which has been transferred from the original equipment manufacturer of
such item to any third party, including without limitation wholesalers,
consumers, dealers or any other third party.
(d) "Agent" shall have the meaning set forth in Section 2.1(c).
(e) "Agreement" shall have the meaning set forth in the recitals
hereto.
(f) "Agreement Disputes" shall have the meaning set forth in Section
7.1.
(g) "allocable portion of Insurance Proceeds" shall have the meaning
set forth in Section 8.2(c).
(h) "allocable share of the deductible" shall have the meaning set
forth in Section 8.2(d).
(i) "Ancillary Agreements" shall mean all of the written agreements,
instruments, assignments or other arrangements (other than this Agreement)
entered into in connection with the transactions contemplated hereby, including,
without limitation, the Tax Allocation and Indemnification Agreement, the
Conveyancing and Assumption Instruments, the Employee Benefit Matters Agreement,
the Strategic Alliance Agreement, and the Transition Services Agreement.
(j) "Assets" shall mean assets, properties and rights (including
goodwill and rights to use), 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, without limitation, the
following:
2
(i) all accounting and other books, records and files
whether in paper, microfilm, microfiche, computer tape or
disc, magnetic tape or any other form;
(ii) all apparatus, computers and other electronic data
processing equipment, fixtures, machinery, equipment, furniture, office
equipment, automobiles, trucks, aircraft and other transportation
equipment, special and general tools, test devices, prototypes and
models and other tangible personal property;
(iii) all inventories of materials, parts, raw materials,
supplies, work-in-process and finished goods and
products;
(iv) all interests in real property of whatever nature,
including easements, whether as owner, mortgagee or holder of a
Security Interest in real property, lessor, sublessor, lessee,
sublessee or otherwise;
(v) all interests in any capital stock or other equity
interests of any Subsidiary or any other person, all bonds, notes,
debentures or other securities issued by any Subsidiary or any other
person, all loans, advances or other extensions of credit or capital
contributions to any Subsidiary or any other person and all other
investments in securities of any person;
(vi) all 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;
(vii) all deposits, letters of credit and performance and
surety bonds;
(viii) Technology and all Documentation primarily relating
thereto;
(ix) 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;
(x) all prepaid expenses, trade accounts and other
accounts and notes receivable;
(xi) 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 claims, choses
in action or similar rights, whether accrued or contingent;
(xii) all rights under insurance policies and all rights in
the nature of insurance, indemnification or contribution;
3
(xiii) all licenses, permits, approvals and authorizations
which have been issued by any Governmental Authority;
(xiv) cash or cash equivalents, bank accounts, lock boxes
and other deposit arrangements; and
(xv) interest rate, currency, commodity or other swap,
collar, cap or other hedging or similar agreements or arrangements.
(k) "Assignee" shall have the meaning set forth in Section 2.1(g).
(l) "Automotive OEM Business" shall mean the design, development,
manufacture, marketing and sale of fuel delivery, fuel storage and electronic
control systems for (i) automotive original equipment manufacturer ("OEM")
applications in vehicles such as trucks, taxis and passenger vehicles, and (ii)
the emerging fuel cell industry which includes, without limitation, mobile
vehicle, stationary and portable power generation and refueling infrastructure
applications.
(m) "Business Entity" shall mean any corporation, partnership,
limited liability company or other entity which may legally hold title to
assets.
(n) "Claims Administration" shall mean the processing of claims
made under the Shared Policies, including, without limitation, the reporting of
claims to the insurance carriers and the management of the defense of claims.
(o) "Code" shall mean the Internal Revenue Code of 1986, as
amended, and the Treasury regulations promulgated thereunder, including any
successor legislation.
(p) "Commission" shall mean the U.S. Securities and Exchange
Commission.
(q) "Confidential Information" of a party (the "Discloser") shall
mean all information or material not generally known by persons other than
personnel of the Discloser (i) which gives the Discloser some competitive
business advantage or the opportunity of obtaining such advantage or the
disclosure of which could be detrimental to the interests of the Discloser; (ii)
which is owned by the Discloser or in which the Discloser has an interest; and
(iii) which is either (A) marked "Confidential Information," "Proprietary
Information" or other similar marking, (B) known by another party (the
"Recipient") to be considered confidential and proprietary by the Discloser or
(C) from all relevant circumstances should reasonably be assumed by the employer
or other designee of the Recipient who learns of such Confidential Information
to be confidential and proprietary to the Discloser. Confidential Information
includes all (i) Technology and other trade secrets, know-how, ideas,
inventions, processes, techniques, algorithms, programs (whether in source code
or object code form), hardware, devices, designs, schematics, drawings,
formulae, data, plans, strategies and forecasts of, and (ii) technical,
engineering, manufacturing, product, marketing, servicing, financial, personnel
and other information and materials of the Discloser. Confidential Information
also includes any information described above which the Discloser obtains from a
third party which the Discloser
4
marks or identifies as confidential or proprietary or which are provided under
circumstances reasonably indicating its confidential nature, whether or not
owned or developed by the Discloser. Notwithstanding the foregoing, however, no
information constitutes Confidential Information if it is information (i) which
becomes publicly known through no act or omission of Recipient, (ii) which is
later lawfully acquired from sources other than the Discloser who do not owe a
duty of confidentiality to the Discloser with respect to such information and
who did not learn of it, directly or indirectly, from Discloser, (iii) which is
independently developed by the Recipient without the use of or reference to such
information of the Discloser, as evidenced by the Recipient's contemporaneous
written records, or (iv) whose disclosure is expressly permitted by this
Agreement or any Ancillary Agreement or any other agreement entered into
pursuant to this Agreement.
(r) "Contribution" shall mean the transfer of the Quantum Assets
to the Quantum Group and the assumption by the Quantum Group of the Quantum
Liabilities, all as more fully described in this Agreement and the Ancillary
Agreements.
(s) "Contribution Date" shall mean July 23, 2002, or any other
such date agreed to in writing by the parties hereto.
(t) "Conveyancing and Assumption Instruments" shall mean,
collectively, the various agreements, instruments and other documents heretofore
entered into and to be entered into to effect the transfer of assets and the
assumption of liabilities in the manner contemplated by this Agreement, or
otherwise arising out of or relating to the transactions contemplated by this
Agreement, including, but not limited to by contribution, assignment or sale,
which shall be in the form or forms as the parties hereto reasonably agree and
as may be required by law; provided however, that such agreements, instruments
and other documents may not contain terms inconsistent with the terms of this
Agreement.
(u) "Copyrights" shall mean (i) all copyrights, and all rights,
title and interests in and to all copyrights, copyright registrations and
applications for copyright registration, certificates of copyright and
copyrighted interests throughout the world; (ii) all unregistered copyrights ;
(iii) all rights in mask works; and (iv) all renewals, extensions, restorations,
and continuations of, and all goodwill associated with, any of the foregoing.
(v) "Discloser" shall have the meaning set forth in Section 1.1(q)
hereof.
(w) "Distribution" shall mean the distribution on the Distribution
Date to holders of record of shares of IMPCO Common Stock as of the Distribution
Record Date of the Quantum Common Shares owned by IMPCO on the basis of one
Quantum Common Share for every outstanding share of IMPCO Common Stock.
(x) "Distribution Date" shall mean July 23, 2002.
(y) "Distribution Record Date" shall mean as of the close of
business of such date as may be determined by the Board of Directors of IMPCO as
the record date for the Distribution.
5
(z) "Documentation" means all notes, diagrams, drawings, research,
reports, presentations, publications, specifications, forms, technical and user
manuals, letters, instruments and other documents existing as of the
Contribution Date.
(aa) "Effective Time" shall mean 11:59 p.m. Eastern Time, on the
Distribution Date.
(bb) "Effective Time of Contribution" shall mean 11:59 p.m. Eastern
Time, on the Contribution Date.
(cc) "Employee Benefit Matters Agreement" shall mean the Employee
Benefit Matters Agreement, dated as of July 23, 2002, by and between IMPCO and
Quantum.
(dd) "Excluded Liabilities" shall have the meaning set forth in
Section 1.1(rrr)(x).
(ee) "Form 10" shall mean the Registration Statement on Form 10 filed
by Quantum with the Commission, including any amendment thereto, and including
the Information Statement.
(ff) "Gaseous Fuel Products Business" shall mean the design,
development, manufacture, marketing and sale of engine components and systems
primarily to the aftermarket that allow internal combustion engines to operate
on clean burning gaseous fuels, primarily propane and natural gas.
(gg) "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.
(hh) "Group" shall mean any of the IMPCO Group or the Quantum Group,
as the context requires.
(ii) "IMPCO" shall have the meaning set forth in the recitals hereto.
(jj) "IMPCO Assets" shall mean, collectively, (A) all the Assets owned
or held by IMPCO or any Subsidiary of IMPCO immediately prior to the Effective
Time of the Contribution, including all right, title and interest thereto, other
than the Quantum Assets, including without limitation all of IMPCO's rights
under the Joint Contracts, and the Reserved Technology Rights, and (B) any and
all assets owned or held immediately prior to the Contribution Date by Quantum
or any member of the Quantum Group that relate primarily to the IMPCO Business,
including 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
transferred or conveyed by Quantum or any member of the Quantum Group to any
member of the IMPCO Group, including without limitation those assets listed on
Schedule 1.1(jj)(B).
(kk) "IMPCO Business" shall mean each and every business conducted at
any time by IMPCO or any Subsidiary of IMPCO prior to the Effective Time, except
the Quantum Business.
6
(ll) "IMPCO Common Stock" shall have the meaning set forth in the
recitals hereto.
(mm) "IMPCO Contracts" shall mean all the contracts and agreements to
which IMPCO or any of its Affiliates is a party or by which it or any of its
Affiliates is bound immediately prior to the Effective Time, except the Quantum
Contracts and the Joint Contracts.
(nn) "IMPCO Group" shall mean IMPCO and each person (other than any
member of the Quantum Group) that is a Subsidiary of IMPCO immediately after the
Effective Time.
(oo) "IMPCO Indemnitees" shall mean IMPCO, each member of the IMPCO
Group, each of their respective directors, officers, employees, agents,
attorneys and representatives and each of the heirs, executors, successors and
assigns of any of the foregoing.
(pp) "IMPCO Liabilities" shall mean collectively, all obligations and
liabilities of IMPCO or any Subsidiary of IMPCO immediately prior to the
Effective Time (except the Quantum Liabilities), including:
(i) all of IMPCO's obligations and liabilities under the Joint
Contracts and with respect to the Transferred Assets and the Reserved
Technology Rights;
(ii) IMPCO's obligations arising under Section 2.11; and
(iii) any liabilities arising out of or based upon any
misstatement in or omission from the Form 10, the Information Statement
or any amendments thereof or supplements thereto made in reliance upon
and in conformity with written information furnished to Quantum by or
on behalf of IMPCO specifically for inclusion therein, it being
understood that the only such information is that set forth in Schedule
1.1(pp)(iii).
(qq) "IMPCO Market" shall mean the following:
(i) on an exclusive basis (even as to Quantum and any
Subsidiary thereof), the worldwide automotive Aftermarket, consisting
of Class 1 through Class 5 vehicles;
(ii) on an exclusive basis (even as to Quantum and any
Subsidiary thereof), the worldwide bus and truck Aftermarket,
consisting of Class 6 through Class 8 vehicles;
(iii) on an exclusive basis (even as to Quantum and any
Subsidiary thereof), the worldwide industrial Aftermarket for vehicles
with internal combustion engines including diesel engines and
consisting of, without limitation, material handling, small and
stationary engines, generators, pumps and other products not used for
transportational purposes;
(iv) on an exclusive basis (even as to Quantum and any
Subsidiary thereof), the worldwide diesel automotive Aftermarket,
consisting of Class 1 through Class 5 diesel vehicles;
7
(v) on an exclusive basis (even as to Quantum and any
Subsidiary thereof), the worldwide diesel bus and truck Aftermarket,
consisting of Class 6 through Class 8 diesel vehicles;
(vi) on an exclusive basis (even as to Quantum and any
Subsidiary thereof) the worldwide industrial diesel Aftermarket,
consisting of, without limitation, material handling, small and
stationary engines, generators, pumps and other diesel products not
used for transportational purposes;
(vii) on a non-exclusive basis, the market for original
equipment manufacturers of Class 1 through Class 5 vehicles with
internal combustion engines, other than diesel vehicles, in all
countries in the world other than the United States and Canada;
(viii) on a non-exclusive basis, the market for original
equipment manufacturers of Class 6 vehicles with internal combustion
engines, other than diessel vehicles, in the United States and Canada;
(ix) on an exclusive basis (even as to Quantum and any
Subisidiary thereof), the market for original equipment manufacturers
of Class 6 vehicles with internal combustion engines, other than diesel
vehicles, in all countries in the world other than the United States
and Canada;
(x) on an exclusive basis (even as to Quantum and any
Subsidiary thereof), the worldwide market for original equipment
manufacturers of Class 7 and Class 8 vehicles with internal combustion
engines, other than diesel vehicles;
(xi) on an exclusive basis (even as to Quantum and any
Subsidiary thereof), the worldwide market for industrial original
equipment manufacturers of items with internal combustion engines and
diesel engines, including, without limitation, original equipment
manufacturers of material handling engines, small and stationary
engines, generators, pumps and other products not used for
transportational purposes;
(xii) in furtherance of the above and not in limitation
thereof, on an exclusive basis (even as to Quantum and any Subsidiary
thereof), the worldwide original equipment manufacturers of all types
and classes of diesel vehicles, engines and products, including without
limitation original equipment manufacturers of diesel vehicles in Class
1 through Class 8.
(rr) "IMPCO Modifications" shall mean any improvements, enhancements,
extensions, and/or modifications of any kind to the Tri-Shield Tank made by or
on behalf of IMPCO, after the Contribution Date. Notwithstanding anything in
this Agreement, in no event shall any Technology, Documentation, or third party
licenses acquired by IMPCO from a third party after the Contribution Date,
whether or not any of the foregoing relates to the Tri-Shield Technology or the
Tri-Shield Tank, be deemed a part of any IMPCO Modification.
8
(ss) "IMPCO Tank" shall have the meaning set forth in Section 2.1(b)
(v).
(tt) "Improvements" shall mean all improvements, modifications,
enhancements, revisions, versions or derivatives that are made, discovered,
developed or otherwise owned or controlled by either party hereto, whether or
not registrable, patentable or copyrightable.
(uu) "Indemnifiable Losses" shall mean all damages, awards, judgments,
penalties, fines, payments, and other losses, however suffered or characterized,
all interest thereon, all costs and expenses of investigating any claim or
Action and any appeal therefrom, all actual attorneys' fees reasonably incurred
in connection therewith, whether or not such claim or Action is ultimately
defeated and all amounts paid incident to any compromise or settlement of any
such claim or Action.
(vv) "Indemnifying Party" and "Indemnitee" shall each have the meaning
set forth in Section 3.3.
(ww) "Information Statement" shall mean the Information Statement sent
to the holders of shares of IMPCO Common Stock in connection with the
Distribution, including any amendment or supplement thereto.
(xx) "Insurance Administration" shall mean, with respect to each
Shared Policy, the accounting for premiums, retrospectively-rated premiums,
defense costs, indemnity payments, deductibles and retentions, as appropriate,
under the terms and conditions of each of the Shared Policies; and the reporting
to excess insurance carriers of any losses or claims which may cause the
per-occurrence, per claim or aggregate limits of any Shared Policy to be
exceeded, and the distribution of Insurance Proceeds as contemplated by this
Agreement.
(yy) "Insured Claims" shall mean those losses, claims, damages, costs
and expenses, and liabilities that, individually or in the aggregate, are
covered within the terms and conditions of any of the Shared Policies, whether
or not subject to deductibles, co-insurance, uncollectibility or
retrospectively-rated premium adjustments.
(zz) "Insurance Proceeds" shall mean those monies (i) received by an
insured from an insurance carrier or (ii) paid by an insurance carrier on behalf
of an insured, in either case net of any applicable premium adjustment,
retrospectively-rated premium, deductible, retention, or cost of reserve paid or
held by or for the benefit of such insured.
(aaa) "Intercompany Accounts" shall mean all accounts between IMPCO and
Quantum and their respective Subsidiaries (as defined herein), including
receivables, payables and loans, or any other accounts that may arise.
(bbb) "International Business" shall mean the business conducted by
IMPCO's Subsidiaries in Australia, Europe, Japan and Mexico that market and sell
products of the Gaseous Fuel Products Business.
9
(ccc) "Joint Contracts" shall mean the contracts or agreements listed
on Schedule 1.1(ccc), and to which any of the parties hereto or any of their
Subsidiaries is a party that inures to the benefit of both the IMPCO Business
and the Quantum Business.
(ddd) "Know-how" means all existing trade secrets and other
information, designs, drawings, inventions, discoveries, processes, methods,
techniques, algorithms, compositions, raw material lists, products
specifications, analytical know-how, show-how, formulae, procedures, protocols,
manufacturing instructions, tooling, results of experimentation and testing,
validation reports, standards, and other technical directions and data in any
form, not generally known.
(eee) "Patents" shall mean (i) all patents, patent rights and all
rights, title and interests in and to all patent applications and patents to
issue on them, all letters patent or equivalent rights and applications,
including any reissue, extension, division, continuation, or
continuation-in-part applications throughout the world; and (ii) goodwill
associated with any of the foregoing.
(fff) "person" shall mean any natural person, Business Entity,
corporation, business trust, joint venture, association, company, partnership,
limited liability company, other entity or government, or any agency or
political subdivision thereof.
(ggg) "Policies" shall mean insurance policies and insurance contracts
of any kind (other than life and benefits policies or contracts), including,
without limitation, primary, excess and umbrella policies, comprehensive general
liability policies, director and officer liability, fiduciary liability,
automobile, aircraft, property and casualty, workers' compensation and employee
dishonesty insurance policies, bonds and self-insurance and captive insurance
company arrangements, together with the rights, benefits and privileges
thereunder.
(hhh) "Quantum" shall have the meaning set forth in the recitals
hereto.
(iii) "Quantum Amended and Restated Certificate" shall have the meaning
set forth in Section 2.1(d).
(jjj) "Quantum Assets" shall mean:
(i) the ownership interests in those Business Entities listed
on Schedule 1.1(jjj)(i);
(ii) those Assets (other than Technology and any Documentation
related primarily thereto) set forth on Schedule 1.1(jjj)(ii) hereto,
or specifically identified in any Ancillary Agreement (or included on
any Schedule hereto or thereto) as Assets which have been or are to be
transferred to Quantum or any other member of the Quantum Group as of
the Contribution Date or are to remain with Quantum or any member of
the Quantum Group subsequent to the Contribution Date;
(iii) any Assets (other than Technology and any Documentation
related primarily thereto) reflected on the Quantum Balance Sheet or
the accounting records supporting such balance sheet and any Assets
(other than Technology and any
10
Documentation related primarily thereto) acquired by or for Quantum,
the Quantum Business or any member of the Quantum Group subsequent to
the date of such balance sheet which, had they been so acquired on or
before such date and owned as of such date, would have been reflected
on such balance sheet if prepared on a consistent basis, subject to any
dispositions of any of such Assets subsequent to the date of such
balance sheet;
(iv) subject to Article VIII, any rights of any member of the
Quantum Group under any of the Policies, including any rights
thereunder arising from and after the Effective Time in respect of any
Policies that are occurrence policies, as more specifically described
in Section 8.1 hereof;
(v) the Technology expressly identified on Schedule 1.1(jjj)(v)
hereto and all Documentation primarily relating to such Technology,
each of which are existing as of the Contribution Date (collectively,
the "Quantum Technology");
(vi) any Quantum Contracts, any rights or claims arising
thereunder (including without limitation all of IMPCO's right, title
and interest in and to any Technology created under or arising from the
performance of any of the Quantum Contracts), and any other rights or
claims or contingent rights or claims primarily relating to or arising
from any Quantum Asset, the Quantum Business or Quantum's rights under
the Joint Contracts;
(vii) all rights under and resulting from the Specified
Litigation, including, without limitation, all rights to recoveries,
all benefits of any claims in, and all rights to continue pursuit of
the Specified Litigation;
(viii) the Tri-Shield Tank Technology, as described in Schedule
1.1(jjj)(viii);
(ix) all goodwill of the Quantum Business; and
(x) except as contemplated by Sections 1.1(jjj)(w) through (z),
any and all assets owned or held immediately prior to the Contribution
Date by IMPCO or any member of the IMPCO Group that (1) at all times
prior to the Contribution Date were used exclusively in the Quantum
Business, and (2) with respect to Technology and Documentation relating
primarily thereto, Quantum provides contemporaneous documentation of
such exclusive use of such Technology and Documentation. The intention
of this clause (x) is only to rectify any inadvertent omission of
transfer or conveyance of any assets that, had the parties given
specific consideration to such asset as of the date hereof, would have
otherwise been classified as a Quantum Asset. No asset shall be deemed
to be a Quantum Asset solely as a result of this clause (x) if such
asset is within the category or type of asset expressly covered by the
subject matter of an Ancillary Agreement. In addition, no Asset shall
be deemed a Quantum Asset solely as a result of this clause (x) unless
a claim with respect thereto is made by Quantum on or prior to the
first anniversary of the Distribution Date.
11
Notwithstanding the foregoing, the Quantum Assets shall not in
any event include:
(v) the exclusive right to conduct business in any specific
markets or with any OEM customers located outside of the United States
and Canada;
(w) all accounting and other books, records and files
whether in paper, microfilm, microfiche, computer tape or disc,
magnetic tape or any other form relating to the Quantum Business
that are in the possession of IMPCO or any member of the IMPCO
Group prior to the Contribution Date;
(x) 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 relating to the Quantum
Business that are in the possession of IMPCO or any member of the
IMPCO Group prior to the Contribution Date;
(y) the Reserved Technology Rights and IMPCO's rights under
the Joint Contracts; or
(z) the Quantum Transferred Assets.
(kkk) "Quantum Balance Sheet" shall mean the combined balance sheet of
the Quantum Group, including the notes and schedules thereto, as of July 23,
2002, set forth as Schedule 1.1(kkk) hereto.
(lll) "Quantum Business" shall mean the Automotive OEM Business as
conducted immediately prior to the Effective Time.
(mmm) "Quantum By-laws" shall have the meaning set forth in Section
2.1(d).
(nnn) "Quantum Common Shares" shall have the meaning set forth in the
recitals hereto.
(ooo) "Quantum Contracts" shall mean the following contracts and
agreements to which Quantum, IMPCO or any of their Affiliates is a party or by
which either or any of their Affiliates or any of their respective assets is
bound, whether or not in writing, except for the Joint Contracts and any such
contract or agreement that is not expressly contemplated to be transferred or
assigned to Quantum, or any other member of the Quantum Group on or prior to the
Contribution Date, and except for any contract or agreement that is not
expressly contemplated to remain with Quantum, or any other member of the
Quantum Group subsequent to the Contribution Date, pursuant to any provision of
this Agreement or any Ancillary Agreement:
12
(i) any contracts or agreements listed or described on Schedule
1.1(ooo)(i);
(ii) any contract or agreement entered into in the name of, or
expressly on behalf of, any division, business unit or member of the
Quantum Group listed or described on Schedule 1.1(ooo)(ii);
(iii) federal, state and local government and other contracts
and agreements that are listed or described on Schedule 1.1(ooo)(iii)
and any other government contracts or agreements entered into after the
date hereof and prior to the Contribution Date that relate primarily to
the Quantum Business;
(iv) any contract or agreement representing capital or operating
equipment lease obligations reflected on the Quantum Balance Sheet,
including obligations as lessee under those contracts or agreements
listed on Schedule 1.1(ooo)(iv);
(v) any contract or agreement that is otherwise expressly
contemplated pursuant to this Agreement or any of the Ancillary
Agreements to be transferred or assigned to Quantum or any member of
the Quantum Group on or prior to the Contribution Date or to remain
with Quantum or any member of the Quantum Group subsequent to the
Contribution Date; and
(vii) any guarantee, indemnity, representation or warranty of any
member of the Quantum Group.
(ppp) "Quantum Group" shall mean (i) Quantum and (ii) each Business
Entity which is a Subsidiary of Quantum prior to the Distribution Date, which
shall include those identified as such on Schedule 1.1(ppp) (which Schedule
shall also indicate the amount of Quantum's direct or indirect ownership
interest therein) hereto.
(qqq) "Quantum Indemnitees" shall mean Quantum, each member of the
Quantum Group, each of their respective directors, officers, employees, agents,
attorneys and representatives and each of the heirs, executors, successors and
assigns of any of the foregoing.
(rrr) "Quantum Liabilities" shall mean:
(i) any and all liabilities that are expressly contemplated by
this Agreement or any Ancillary Agreement (or the Schedules hereto or
thereto) as liabilities to be assumed by Quantum or any member of the
Quantum Group prior to the Effective Time or to remain with any member
of the Quantum Group subsequent to the Effective Time, including
Quantum's obligations under Section 2.11, and all agreements,
obligations and liabilities of Quantum or any member of the Quantum
Group under this Agreement or any of the Ancillary Agreements,
including those liabilities set forth on Schedule 1.1 (rrr)(i) hereto;
13
(ii) all liabilities (other than Taxes, employee-related
liabilities and liabilities relating to employee benefit plans
specifically addressed and allocated in any Ancillary Agreement),
primarily relating to, arising out of or resulting from:
(A) the operation of the Quantum Business, as
conducted at any time prior to, on or after the Effective Time,
including (1) 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),
and (2) all liabilities under and resulting from the Specified
Litigation;
(B) any Quantum Asset or Quantum's obligations and
liabilities under the Joint Contracts, whether arising before, on
or after the Effective Time;
(iii) all liabilities reflected as liabilities or obligations
on the Quantum Balance Sheet or the accounting records supporting such
balance sheet, and all liabilities arising or assumed after the date of
such balance sheet which, had they arisen or been assumed on or before
such date and been retained as of such date, would have been reflected
on such balance sheet or the accounting records supporting such balance
sheet, subject to any discharge of such liabilities subsequent to the
date of the Quantum Balance Sheet; and
(iv) all obligations and liabilities of IMPCO, Quantum or any
member of the IMPCO Group or the Quantum Group under any Quantum
Contract;
(v) all liabilities relating to the Quantum Technology and any
and all of the Quantum Group's use and licensing thereof; and
(vi) all liabilities arising out of, related to or based upon
any misstatement in or omission from the Form 10, the Information
Statement or any amendments thereof or supplements thereto; except to
the extent that any such liabilities arise out of or are based upon
statements made therein in reliance upon and in conformity with written
information furnished to Quantum by or on behalf of IMPCO specifically
for inclusion therein, it being understood that the only such
information is that set forth in Schedule 1.1(pp)(iii).
Notwithstanding the foregoing, the Quantum Liabilities shall not
include:
(x) all liabilities reflected on the Quantum Balance Sheet
Sheet as "(Due to)/from Parent" and "I/C Payables not Vouchered"
(the "Excluded Liabilities"), and all liabilities arising or
assumed after the date of such balance sheet which would have
been designated as included in Excluded Liabilities, had they
arisen or been assumed on or before such date and been retained
as of such date; provided, however that any liabilities set forth
on Schedule 1.1(rrr)(x) shall not be Excluded Liabilities;
14
(y) any liabilities that are expressly contemplated
by this Agreement or any Ancillary Agreement (or the Schedules
hereto or thereto) as liabilities to be retained or assumed by
IMPCO or any member of the IMPCO Group, including any liabilities
set forth in Schedule 1.1(rrr)(y); or
(z) all agreements and obligations of any member of the
IMPCO Group under this Agreement or any of the Ancillary
Agreements.
(sss) "Quantum Market" shall mean the following:
i) on an exclusive basis (even as to IMPCO and any Subsidiary
thereof), the market for original equipment manufacturers of Class 1
though Class 5 vehicles with internal combustion engines, other than
diesel vehicles, in the United States and Canada;
(ii) on a non-exclusive basis, the market for original equipment
manufacturers of Class 1 through Class 5 vehicles with internal
combustion engines, other than diesel vehicles, in all countries in the
world other than United States and Canada;
(iii) on an exclusive basis (even as to IMPCO and any Subsidiary
thereof), the worldwide market for original equipment manufacturers of
Class 1 though Class 5 vehicles which are powered by fuel cell
applications only;
(iv) on a non-exclusive basis, the market for original equipment
manufacturers of Class 6 vehicles with internal combustion engines,
other than diesel vehicles, in the United States and Canada;
(v) on an exclusive basis (even as to IMPCO and any Subsidiary
thereof), the worldwide market for components, subsystems and systems
used in the storage, metering and electronic control of all gaseous
fuels for use with all fuel cell applications only;
(vi) on an exclusive basis (even as to IMPCO and any Subsidiary
thereof), the worldwide market for industrial original equipment
manufacturers of items which are powered by fuel cell applications
only, including, without limitation, original equipment manufacturers
of material handling engines, small and stationary engines, generators,
pumps and other products not used for transportational purposes; and
(vii) on an exclusive basis (even as to IMPCO and any Subsidiary
thereof), the worldwide industrial Aftermarket for vehicles with fuel
cell applications only, consisting of, without limitation, material
handling, small and stationary engines, generators, pumps and other
products not used for transportational purposes.
(ttt) "Quantum Modifications" shall mean any improvements,
enhancements, extensions, and/or modifications of any kind to the Tri-Shield
Tank made by or on behalf of Quantum, after the Contribution Date.
(uuu) "Quantum Technology" shall have the meaning set forth in Section
1.1(jjj)(v).
15
(vvv) "Quantum Transferred Assets" shall mean those assets described in
Section 1.1(jj)(B).
(www) "Recipient" shall have the meaning set forth in Section 1.1(q).
(xxx) "Records" shall have the meaning set forth in Section 4.1.
(yyy) "Restricted Period" shall have the meaning set forth in Section
2.16(b).
(zzz) "Reserved Technology Rights" shall have the meaning set forth in
Section 2.1(b)(i).
(aaaa) [Reserved]
(bbbb) "Rules" shall have the meaning set forth in Section 7.2.
(cccc) "Security Interest" shall mean 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.
(dddd) "Shared Policies" shall mean all Policies, current or past,
which are owned or maintained by or on behalf of IMPCO or any Subsidiary of
IMPCO immediately prior to the Effective Time which relate to both the IMPCO
Business and the Quantum Business.
(eeee) "Specified Litigation" shall mean the litigation entitled IMPCO
Technologies, Inc. v. GFI Control Systems, Inc., Case No. 00-73633 filed in the
United States District Court for the Eastern District of Michigan, Eastern
Division.
(ffff) "Strategic Alliance Agreement" shall mean the Strategic Alliance
Agreement, dated as of July 23, 2002 by and between IMPCO and Quantum.
(gggg) "Subsidiary" shall mean any corporation, partnership, limited
liability company or other entity of which another entity (i) owns, directly or
indirectly, ownership interests sufficient to elect a majority of the Board of
Directors (or persons performing similar functions) (irrespective of whether at
the time any other class or classes of ownership interests of such corporation,
partnership, limited liability company or other entity shall or might have such
voting power upon the occurrence of any contingency) or (ii) is a general
partner or an entity performing similar functions (e.g., a trustee).
(hhhh) "Tax" shall have the meaning set forth in the Tax Allocation and
Indemnification Agreement.
16
(iiii) "Tax Allocation and Indemnification Agreement" shall mean the
Tax Allocation and Indemnification Agreement, dated as of July 23, 2002, by and
between IMPCO and Quantum.
(jjjj) "Technology" shall mean (1) Copyrights, (2) Know-how, (3)
Patents, (4) Trademarks, all intellectual property rights relating to items (1)
through (4) above, and Improvements of items (1) through (4) above.
(kkkk) "Technology Term" shall have the meaning set forth in Section
2.1(b)(iii).
(llll) "Third Party Claim" shall have the meaning set forth in Section
3.3.
(mmmm) "Trademarks" shall mean (i) all trademarks, service marks, trade
names, rights in trade dress, and all trademark interests throughout the world,
and all right, title and interest in related applications and registrations
throughout the world, whether arising under the laws of the United States or any
other state, country or jurisdiction, including all rights or causes of action
for infringement or misappropriation of the foregoing; and (ii) all goodwill
associated with and all amendments to and renewals of any of the foregoing.
(nnnn) "Transition Services Agreement" shall mean the Transition
Services Agreement, dated as of July 23, 2002 by and between IMPCO and Quantum.
(oooo) "Tri-Shield Tank" shall mean the all-composite Type IV tank used
for pressurized storage of gaseous fuels and other fuels.
(pppp) "Tri-Shield Tank Technology" shall mean all Technology relating
to the Tri-Shield Tank.
SECTION 1.2 REFERENCES; INTERPRETATION. References in this Agreement to
any gender include references to all genders, and references to the singular
include references to the plural and vice versa. The words "include," "includes"
and "including" when used in this Agreement shall be deemed to be followed by
the phrase "without limitation." Unless the context otherwise requires,
references in this Agreement to Articles, Sections, Exhibits and Schedules shall
be deemed references to Articles and Sections of, and Exhibits and Schedules to,
such Agreement. Unless the context otherwise requires, the words "hereof,"
"hereby" and "herein" and words of similar meaning when used in this Agreement
refer to this Agreement in its entirety and not to any particular Article,
Section or provision of this Agreement.
17
ARTICLE II
DISTRIBUTION AND OTHER TRANSACTIONS; CERTAIN COVENANTS
SECTION 2.1 THE DISTRIBUTION AND OTHER TRANSACTIONS.
(a) CERTAIN TRANSACTIONS.
(i) On or prior to the Distribution Date, IMPCO shall, on behalf
of itself and its Subsidiaries, transfer or cause to be transferred to
Quantum or another member of the Quantum Group, effective as of the
Effective Time of Contribution, all of IMPCO's and its Subsidiaries'
right, title and interest in and to the Quantum Assets, subject to the
Reserved Technology Rights and the restrictions relating thereto, as
set forth in Section 2.1(b).
(ii) On or prior to the Distribution Date, Quantum shall, on
behalf of itself and its Subsidiaries, transfer or cause to be
transferred to IMPCO or another member of the IMPCO Group, effective as
of the Effective Time of Contribution, all of Quantum's and its
Subsidiaries' right, title and interest in and to the assets described
in Section 1.1(jj)(B).
(b) RESERVED TECHNOLOGY RIGHTS.
(i) Subject to the terms and conditions of this Agreement, IMPCO
hereby reserves the non-exclusive, assignable, sublicenseable (through
multiple-tiers), royalty-free, fully paid up, irrevocable right to (A)
make, have made, use, have used, sell, offer to sell, import,
reproduce, distribute, perform and display (publicly or otherwise),
create derivative works based on, and otherwise fully commercially
exploit the Tri-Shield Tank Technology and (B) make, have made, use,
have used, sell, offer to sell, import, reproduce, distribute, perform
and display (publicly or otherwise), create derivative works based on,
and otherwise fully commercialize the Tri-Shield Tank (collectively the
"Reserved Technology Rights"), in the IMPCO Market, subject to the
restrictions in this Section 2.1(b) and Section 2.16 below. Any and all
of the Reserved Technology Rights may be exercised on behalf of IMPCO
by a third party.
(ii) The parties further agree that, during the Technology Term,
Quantum and the Quantum Group shall be limited to marketing,
manufacturing, importing, selling, licensing, reproducing, distributing
and otherwise commercializing the Tri-Shield Tank solely in the Quantum
Market, subject to the additional restrictions in Section 2.16 below.
(iii) The term ("Technology Term") of IMPCO's rights with regard to
the Reserved Technology Rights shall commence as of the Contribution
Date and will continue for a period of five (5) years, and thereafter
will automatically renew for consecutive one (1) year terms, unless
either party notifies the other in writing at least ninety (90) days
prior to the end of the then existing term of its intention not to
renew the Technology Term.
18
(iv) Within thirty (30) days after receipt of a written request or
as soon as possible thereafter, Quantum agrees to (A) provide IMPCO
with requested information and copies of requested Documentation
relating to the Tri-Shield Tank Technology existing as of the
Contribution Date, including without limitation manufacturing, testing,
quality control, and process control information, technical and process
information, and other Technology relating to the Tri-Shield Tank, and
(B) provide IMPCO reasonable requested assistance and training in
connection with the Tri-Shield Tank Technology, including without
limitation assistance and training in the use, further development, and
commercialization of the Tri-Shield Tank Technology. Subject to the
terms and conditions of this Agreement, Quantum hereby grants to IMPCO
effective as of the Contribution Date, and IMPCO hereby reserves the
non-exclusive, assignable, sublicenseable, royalty-free, paid-up,
irrevocable right and license, during the Technology Term, to make,
have made, use, have used, sell, offer to sell, import, reproduce,
distribute, perform and display (publicly or otherwise), create
derivative works based on, and otherwise fully commercialize, such
Documentation. The foregoing right and license may be exercised on
behalf of IMPCO by a third party.
(v) IMPCO specifically agrees to the following with regard to the
Tri-Shield Tank manufactured, sold or distributed by IMPCO (hereinafter
referred to as the "IMPCO Tank"): (A) IMPCO shall not market, sell, or
distribute the IMPCO Tank under the name "Tri-Shield Tank" (or any
other reasonably similar name that is likely to cause confusion between
the IMPCO Tank and the Tri-Shield Tank manufactured by Quantum); (B)
IMPCO shall not use any of Quantum's Trademarks in conjunction with its
efforts to sell and market the IMPCO Tank, except as otherwise
permitted by applicable law; and (C) Quantum shall have no obligation
to provide any support or maintenance to customers of the IMPCO Tank,
and IMPCO shall make no representations to that effect to its
customers.
(vi) Subject to the terms and conditions of this Agreement, IMPCO
hereby grants to Quantum a non-exclusive, non-assignable (except in
accordance with Section 2.1(b)(ix)), non-sublicenseable,
royalty-bearing, right and license, during the Technology Term, to
make, have made, use, have used, sell, offer to sell, import,
reproduce, distribute, perform and display (publicly or otherwise), and
create derivative works based on the IMPCO Modifications, solely in the
Quantum Market and subject to the restrictions in Section 2.16 below,
for the following limited purposes: (A) solely in connection with the
Tri-Shield Tank; and (B) for performing demonstrations at the
facilities of potential customers (provided that such demonstrations do
not result in the transfer of any Confidential Information of IMPCO) in
connection with the Tri-Shield Tank, provided that Quantum shall not
disparage such IMPCO Modifications and shall otherwise not use any of
IMPCO's Trademarks in connection with the Tri-Shield Tank. The
foregoing right and license may be exercised on behalf of Quantum by a
third party. Subject to the foregoing license, IMPCO shall own all
right, title and interest in and to the IMPCO Modifications. Within
thirty (30) days after receipt of a written request by Quantum, IMPCO
shall provide copies of all relevant Documentation and materials
relating to such IMPCO Modifications.
19
(vii) Subject to the terms and conditions of this Agreement,
Quantum hereby grants to IMPCO a non-assignable (except in accordance
with Section 2.1(b)(ix)), non-sublicenseable, royalty-bearing right and
license, during the Technology Term, to make, have made, use, have
used, sell, offer to sell, import, reproduce, distribute, perform and
display (publicly or otherwise), and create derivative works based on
the Quantum Modifications, solely in the IMPCO Market and subject to
the restrictions in Section 2.16 below, for the following limited
purposes: (A) solely in connection with the Tri-Shield Tank; and (B)
for performing demonstrations at the facilities of potential customers
(provided that such demonstrations do not result in the transfer of any
Confidential Information of Quantum) in connection with the Tri-Shield
Tank, provided that IMPCO shall not disparage such Quantum
Modifications. The foregoing right and license may be exercised on
behalf of IMPCO by a third party. Subject to the foregoing license,
Quantum shall own all right, title and interest in and to the Quantum
Modifications. Quantum shall provide copies of all relevant
Documentation and materials relating to such Quantum Modifications
immediately after such items are fixed in a tangible medium or reduced
to practice. Within thirty (30) days after the receipt of a written
request by IMPCO, Quantum shall provide copies of all relevant
Documentation and materials relating to such Quantum Modifications.
(viii) Royalties.
(A) IMPCO shall pay Quantum the following royalties in
connection with the sale of IMPCO Tanks which include or incorporate
one or more Quantum Modifications: two percent (2%) of net revenues
actually received by IMPCO for the sale of such IMPCO Tanks. For
purposes of this Section 2.1(b)(viii), "net revenues" refers to
revenues actually received by IMPCO from the purchasers of such IMPCO
Tanks less commissions paid or payable to third parties, royalties paid
or payable to third parties, cost of goods, manufacturing costs,
shipping and handling charges, any amounts attributable to fraud, taxes
(sales, use, excise and other taxes), and amounts paid, payable,
credited or to-be-credited for returns and exchanges. With respect to
net revenues generated in foreign currency, the exchange rate used to
determine royalties shall be the applicable exchange rate as set forth
in the final edition of The Wall Street Journal for the business day
immediately preceding the date on which payment in foreign currency was
made by a third party to IMPCO. Net revenues attributable to such IMPCO
Tanks which are bundled with other products shall be based upon the
ratio of the average list prices for the applicable IMPCO Tank during
the immediately preceding three (3) fiscal month period to the average
list prices of the other products in the bundle during the immediately
preceding three (3) fiscal month period, provided that, where there is
no list price for a component, the average list price for such
component shall be determined by IMPCO in good faith. IMPCO shall pay
the royalties with respect to each of IMPCO's fiscal quarters within
forty-five (45) days after the end of such fiscal quarter, or as soon
as possible thereafter. Upon request by Quantum, IMPCO shall provide
the basis for its calculation of the royalties due for such fiscal
quarter.
(B) Quantum shall pay IMPCO the following royalties in
connection with the sale of Tri-Shield Tanks manufactured, sold or
distributed by Quantum which
20
include or incorporate one or more IMPCO Modifications: two percent
(2%) of net revenues actually received by Quantum for the sale of such
tanks. For purposes of this Section 2.1(b)(viii), "net revenues" refers
to revenues actually received by Quantum from the purchasers of such
tanks less commissions paid or payable to third parties, royalties paid
or payable to third parties, cost of goods, manufacturing costs,
shipping and handling charges, any amounts attributable to fraud, taxes
(sales, use, excise and other taxes), and amounts paid, payable,
credited or to-be-credited for returns and exchanges. With respect to
net revenues generated in foreign currency, the exchange rate used to
determine royalties shall be the applicable exchange rate as set forth
in the final edition of The Wall Street Journal for the business day
immediately preceding the date on which payment in foreign currency was
made by a third party to Quantum. Net revenues attributable to such
tanks which are bundled with other products shall be based upon the
ratio of the average list prices for such applicable tank during the
immediately preceding three (3) fiscal month period to the average list
prices of the other products in the bundle during the immediately
preceding three (3) fiscal month period, provided that, where there is
no list price for a component, the average list price for such
component shall be determined by Quantum in good faith. Quantum shall
pay the royalties with respect to each of Quantum's fiscal quarters
within forty-five (45) days after the end of such fiscal quarter, or as
soon as possible thereafter. Upon request by IMPCO, Quantum shall
provide the basis for its calculation of the royalties due for such
fiscal quarter.
(ix) Enforcement of Reserved Technology Rights. During the
Technology Term, IMPCO will have the right, but not the obligation, to
take action to enforce its Intellectual Property Rights in connection
with the Reserved Technology Rights against any third party that
infringes or misappropriates such Reserved Technology Rights. If IMPCO
declines to take any such action and Quantum wishes to take such
action, IMPCO and Quantum will consult with each other to determine the
course of action, if any, to be taken by Quantum in such circumstances.
Upon IMPCO's written authorization to take action against such
infringers, which may be withheld in IMPCO's sole discretion, Quantum
may take the authorized action against such infringers. Quantum shall
be solely responsible for all costs associated with any action taken by
Quantum against infringers of the Intellectual Property Rights
associated with the Reserved Technology Rights. In such circumstances,
any damage that might be awarded to Quantum will, after deduction of
actual costs of Quantum, be paid directly to IMPCO.
(x) Assignment. IMPCO may assign to one or more Affiliate(s) of
IMPCO the right and license granted with respect to the Quantum
Modifications pursuant to Section 2.1(b)(vii), provided that such
Affiliate(s) agrees in writing to be bound by the applicable
restrictions and to assume the applicable obligations set forth in
Sections 2.1(b) and Section 2.16. Quantum may assign to one or more
Affiliate(s) of Quantum the right and license granted with respect to
the IMPCO Modifications pursuant to Section 2.1(b)(vi), provided that
such Affiliate(s) agrees in writing to be bound by the applicable
restrictions and to assume the applicable obligations set forth in
Sections 2.1(b) and 2.16.
(c) ORIGINAL ISSUANCE AND STOCK DIVIDEND TO IMPCO. On or prior to the
Distribution Date, Quantum shall issue to IMPCO as a stock dividend such number
of
21
Quantum Common Shares as will be required to effect the Distribution in
accordance with the distribution ratio fixed by the board of directors of IMPCO.
In connection therewith, Quantum shall deliver to IMPCO a certificate or
certificates (registered in such names and denominations as are directed by
IMPCO in writing) representing such additional Quantum Common Shares. Each
Quantum Common Share delivered by Quantum to IMPCO shall be validly issued,
fully paid and nonassessable and free of any preemptive (or similar) rights.
(d) CHARTER; BY-LAWS. On or prior to the Distribution Date, all
necessary actions shall have been taken to provide for the adoption of the form
of Amended and Restated Certificate of Incorporation of Quantum (the "Quantum
Amended and Restated Certificate"), including the filing thereof with the
Secretary of State of Delaware, and the amended and restated By-laws of Quantum
(the "Quantum By-laws"), in substantially the form filed by Quantum with the
Commission as exhibits to the Form 10.
(e) DIRECTORS. On or prior to the Distribution Date, IMPCO as the sole
stockholder of Quantum, shall have taken all necessary actions on or prior to
the Distribution Date to cause the Board of Directors of Quantum to consist of
the individuals identified in the Information Statement as directors of Quantum.
(f) CERTAIN LICENSES AND PERMITS. Without limiting the generality of
the obligations set forth in Section 2.1(a), on or prior to the Distribution
Date or as soon as reasonably practicable thereafter:
(i) all transferable licenses, permits and authorizations issued
by any Governmental Authority which relate primarily to the Quantum
Business but which are held in the name of IMPCO or any member of the
IMPCO Group, or in the name of any employee, officer, director,
stockholder or agent of IMPCO or any such member, or otherwise, on
behalf of a member of the Quantum Group, including but not limited to
those licenses, permits and authorizations set forth on Schedule
2.1(f)(i), shall be duly and validly transferred or caused to be
transferred by IMPCO to the appropriate member of the Quantum Group;
and
(ii) all transferable licenses, permits and authorizations issued
by Governmental Authorities which do not relate primarily to the
Quantum Business but which are held in the name of any member of the
Quantum Group, or in the name of any employee, officer, director,
stockholder, or agent of any such member, or otherwise, on behalf of a
member of the Quantum Group, including but not limited to those
licenses, permits and authorizations set forth on Schedule 2.1(f)(ii),
shall be duly and validly transferred or caused to be transferred by
Quantum to IMPCO or the appropriate member of the IMPCO Group.
(g) TRANSFER OF AGREEMENTS. Without limiting the generality of the
obligations set forth in Section 2.1(a):
(i) IMPCO hereby agrees that, on or prior to the Distribution Date
or as soon as reasonably practicable thereafter, subject to the
limitations set forth in this Section
22
2.1(g), it will, and it will cause each member of the IMPCO Group to,
assign, transfer and convey to the appropriate member of the Quantum
Group all of IMPCO's or such member of the IMPCO Group's respective
right, title and interest in and to any and all Quantum Contracts.
(ii) Quantum hereby agrees that, on or prior to the
Distribution Date or as soon as reasonably practicable thereafter,
subject to the limitations set forth in this Section 2.1(g), it will,
and it will cause each member of the Quantum Group to, assign, transfer
and convey to IMPCO or the appropriate member of the IMPCO Group all of
Quantum's or such member of the Quantum Group's respective right, title
and interest in and to any and all IMPCO Contracts.
(iii) Subject to the provisions of this Section 2.1(g), the
Joint Contracts shall be assigned in part so that each party shall be
entitled to the rights and benefits inuring to its business under each
such agreement.
(iv) The assignee of any agreement assigned, in whole or in
part, hereunder (an "Assignee") shall assume and agree to pay, perform,
and fully discharge all past, present and future obligations of the
assignor under such agreement or, in the case of a partial assignment
under paragraph (g)(iii), such Assignee's related portion of such
obligations as determined in accordance with the terms of the relevant
agreement, where determinable on the face thereof, and otherwise as
determined in accordance with the practice of the parties prior to the
Distribution.
(v) Notwithstanding anything in this Agreement or any
Ancillary Agreement to the contrary, neither this Agreement nor any
Ancillary Agreement shall constitute an agreement to assign or an
assignment of any agreement, in whole or in part, or any rights
thereunder if the agreement to assign, attempt to assign or assignment,
without the consent of a third party, would constitute a breach thereof
or in any way adversely affect the rights of the assignor or Assignee
thereof. Until such consent is obtained, or if an attempted assignment
thereof would be ineffective or would adversely affect the rights of
any party hereto so that the intended Assignee would not, in fact,
receive all such rights, the parties will cooperate with each other in
any arrangement designed to provide for the intended Assignee the
benefits of, and to permit the intended Assignee to assume liabilities
under, any such agreement.
(vi) Without limiting the generality of the provisions of
paragraph (g)(v) above:
(A) If the parties do not obtain a required consent to
the assignment by IMPCO to Quantum of any Quantum Contract which
contains provisions for the benefit of IMPCO protecting the
confidentiality of proprietary information ("Confidentiality
Provisions"), IMPCO shall, upon the request of Quantum and at Quantum's
sole expense (including disbursements and costs of salaries, plus a
fixed rate in the amount of thirty percent (30%) of such salaries to
cover employee benefits, and all other out-of-pocket expenses incurred
by IMPCO in connection therewith), promptly enforce any breaches by a
third party of any such Confidentiality Provisions, and thereafter
shall remit to
23
Quantum any proceeds of any such enforcement efforts promptly after
receipt thereof (after deduction therefrom of any enforcement expenses
not theretofore reimbursed by Quantum). Quantum shall cooperate fully
with and provide assistance to IMPCO in connection with the enforcement
of any such Confidentiality Provisions.
(B) If the parties do not obtain a required consent to the
assignment by Quantum to IMPCO of any IMPCO Contract which
Confidentiality Provisions for the benefit of Quantum, Quantum shall,
upon the request of IMPCO and at IMPCO's sole expense (including
disbursements and costs of salaries, plus a fixed rate in the amount of
thirty percent (30%) of such salaries to cover employee benefits, and
all other out-of-pocket expenses incurred by Quantum in connection
therewith), promptly enforce any breaches by a third party of any such
Confidentiality Provisions, and thereafter shall remit to IMPCO any
proceeds of any such enforcement efforts promptly after receipt thereof
(after deduction therefrom of any enforcement expenses not theretofore
reimbursed by IMPCO). IMPCO shall cooperate fully with and provide
assistance to Quantum in connection with the enforcement of any such
Confidentiality Provisions.
(C) If the parties do not obtain a required consent to the
assignment by IMPCO to Quantum of any agreement with an independent
contractor constituting a Quantum Contract which contains invention
assignment provisions ("Invention Assignment Provisions") for the
benefit of IMPCO, and if, in accordance with paragraph (v) above, the
parties enter into an arrangement to provide Quantum the benefits of
such Quantum Contract, then IMPCO shall, upon the request of Quantum
and at Quantum's sole expense (including disbursements and costs of
salaries, plus a fixed rate in the amount of thirty percent (30%) of
such salaries to cover employee benefits, and all other out-of-pocket
expenses incurred by IMPCO in connection therewith), promptly enforce
any such Invention Assignment Provisions and promptly assign to Quantum
all of IMPCO's rights to any such Technology assigned to IMPCO under
any such Invention Assignment Provisions. Quantum shall cooperate fully
with and provide assistance to IMPCO in connection with the enforcement
of any such Invention Assignment Provisions.
(D) If the parties do not obtain a required consent to the
assignment by Quantum to IMPCO of any agreement with an independent
contractor constituting an IMPCO Contract which contains Invention
Assignment Provisions for the benefit of Quantum, and if, in accordance
with paragraph (g)(v) above, the parties enter into an arrangement to
provide IMPCO the benefits of such IMPCO Contract, then Quantum shall,
upon the request of IMPCO and at IMPCO's sole expense (including
disbursements and costs of salaries, plus a fixed rate in the amount of
thirty percent (30%) of such salaries to cover employee benefits, and
all other out-of-pocket expenses incurred by Quantum in connection
therewith), promptly enforce any such Invention Assignment Provisions
and promptly assign to IMPCO all of Quantum's rights to any such
Technology assigned to Quantum under any such Invention Assignment
Provisions. IMPCO shall cooperate fully with and provide assistance to
Quantum in connection with the enforcement of any such Invention
Assignment Provisions.
24
(h) NOVATION OF ASSUMED QUANTUM LIABILITIES. Without limiting the
generality of the obligations set forth in Section 2.1(a):
(i) Each of IMPCO and Quantum, at the request of the other, shall
use its reasonable best efforts to obtain, or to cause to be obtained,
any consent, substitution, approval or amendment required to novate
(including with respect to any contract with a Governmental Authority)
or assign all obligations under agreements, leases, licenses and other
obligations or liabilities of any nature whatsoever that constitute
Quantum Liabilities, or to obtain in writing the unconditional
prospective release of any and all obligations or liabilities arising
from and after the Contribution Date of all parties to such
arrangements other than any member of the Quantum Group, so that, in
any such case, Quantum and its Subsidiaries will be solely responsible
for such liabilities; provided, however, that none of IMPCO or Quantum
shall be obligated to pay any consideration therefor to any third party
from whom such consents, approvals, substitutions, amendments and
prospective releases are requested if the consideration requested by
any such third party exceeds 10% of the total amounts payable by or to
Quantum under such contract. IMPCO and Quantum agree to enter into a
novation agreement with the United States Government providing for the
assignment of government contracts that are Quantum Contracts from
IMPCO to Quantum substantially in the form of the novation agreement
prescribed by the Federal Acquisition Regulation ("FAR") or upon such
terms as may be reasonably requested by the federal government and to
provide the documents prescribed by the FAR to be filed with such
novation request.
(ii) If IMPCO or Quantum is unable to obtain, or to cause to be
obtained, any such required consent, approval, prospective release,
substitution or amendment, the applicable member of the IMPCO Group
shall continue to be bound by such agreements, leases, licenses and
other obligations ("Unreleased IMPCO Liabilities") and, unless not
permitted by law or the terms thereof, Quantum shall, as agent or
subcontractor for IMPCO or such other person and where appropriate in
the name thereof, as the case may be, pay, perform and discharge fully
all the Unreleased IMPCO Liabilities from and after the Contribution
Date. Quantum shall indemnify each IMPCO Indemnitee and hold each of
them harmless from and against any Unreleased IMPCO Liabilities. IMPCO
shall, without further consideration, pay and remit, or cause to be
paid or remitted to Quantum promptly all money, rights and other
consideration received by it or any member of its Group in respect of
such performance (unless any such consideration is an IMPCO Asset). If
and when any such consent, approval, prospective 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, IMPCO 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 Group to Quantum without
payment of further consideration and Quantum shall, without the payment
of any further consideration, assume such rights and obligations.
(i) NOVATION OF LIABILITIES OTHER THAN QUANTUM LIABILITIES. Without
limiting the generality of the obligations set forth in Section 2.1(a):
25
(i) Each of IMPCO and Quantum, at the request of the other, shall
use its reasonable best efforts to obtain, or to cause to be obtained,
any consent, substitution, approval or amendment required to novate or
assign all obligations under agreements, leases, licenses and other
obligations or liabilities of any nature whatsoever that do not
constitute Quantum Liabilities, or to obtain in writing the
unconditional prospective release of any and all obligations or
liabilities arising from and after the Contribution Date of all parties
to such arrangements other than any member of the IMPCO Group, so that,
in any such case, the members of the IMPCO Group will be solely
responsible for such liabilities; provided, however, that neither IMPCO
nor Quantum shall be obligated to pay any consideration therefor to any
third party from whom such consents, approvals, substitutions,
amendments and prospective releases are requested.
(ii) If IMPCO or Quantum is unable to obtain, or to cause to be
obtained, any such required consent, approval, prospective release,
substitution or amendment, the applicable member of the Quantum Group
shall continue to be bound by such agreements, leases, licenses and
other obligations ("Unreleased Quantum Liabilities") and, unless not
permitted by law or the terms thereof, IMPCO shall cause a member of
the IMPCO Group, as agent or subcontractor for such member of the
Quantum Group and where appropriate in the name thereof, to pay,
perform and discharge fully all the Unreleased Quantum Liabilities from
and after the Contribution Date. IMPCO shall indemnify each Quantum
Indemnitee and hold each of them harmless from and against any
Unreleased Quantum Liabilities. Quantum shall cause each member of the
Quantum Group without further consideration, to pay and remit, or cause
to be paid or remitted, to IMPCO or to another member of the IMPCO
Group specified by IMPCO promptly all money, rights and other
consideration received by it or any member of the Quantum Group in
respect of such performance (unless such consideration is a Quantum
Asset). If and when any such consent, approval, prospective 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, Quantum shall promptly assign, or
cause to be assigned, all its rights, obligations and other liabilities
thereunder or any rights or obligations of any member of the Quantum
Group to IMPCO or to another member of the IMPCO Group specified by
IMPCO without payment of further consideration and IMPCO, without the
payment of any further consideration shall, or shall cause such other
member of the IMPCO Group to, assume such rights and obligations.
(j) CONSENTS. The parties hereto shall use their commercially
reasonable efforts to obtain required consents to the transfer and/or assignment
of licenses, permits and authorizations of Governmental Authorities and of
agreements hereunder.
(k) DELIVERY OF SHARES TO AGENT. IMPCO shall deliver to the
distribution agent (the "Agent") the share certificate or certificates
representing the Quantum Common Shares which are to be distributed to the
holders of IMPCO Common Stock in the Distribution and shall instruct the Agent
to distribute, on or as soon as practicable following the Distribution Date,
certificates representing such Quantum Common Shares to holders of record of
shares of IMPCO Common Stock on the Distribution Record Date as further
contemplated by the
26
Information Statement and herein. Quantum shall provide all share certificates
and other documents that the Agent shall require in order to effect the
Distribution.
(l) FRACTIONAL SHARES. As soon as practicable after the Distribution
Date, IMPCO shall direct the Agent to determine the number of whole shares and
fractional shares (if any) of Quantum Common Stock allocable to each holder of
record or beneficial owner of IMPCO Common Stock as of the Distribution Record
Date, to aggregate all such fractional shares and sell the whole shares obtained
thereby in open market transactions or otherwise, in each case at then
prevailing trading prices (and in each case in accordance with the rules,
regulations and interpretations of the Commission), and to cause to be
distributed to each such holder or for the benefit of each such beneficial
owner, in lieu of any fractional share, such holder's or owner's ratable share
of the proceeds of such sale, after making appropriate deductions of the amount
required to be withheld for federal income tax purposes and after deducting an
amount equal to all brokerage charges, commissions and transfer taxes attributed
to such sale.
(m) CERTAIN LIABILITIES. For purposes of this Agreement, including
Article III hereof, Quantum agrees with IMPCO that:
(i) any and all liabilities arising from or based upon
misstatements in or omissions from the Form 10 filed by Quantum shall
be deemed to be Quantum Liabilities and not IMPCO liabilities;
provided, however, Quantum will not be liable to the extent that any
such liability arises out of or is based upon any misstatement in or
omission from the Form 10 made therein in reliance upon and in
conformity with written information furnished to Quantum by or on
behalf of IMPCO specifically for inclusion therein, it being understood
that the only such information is that set forth in Schedule
1.1(pp)(iii).
(ii) except as otherwise provided in this Agreement or the
Ancillary Agreements, any liabilities not specifically allocated to
Quantum pursuant to this Agreement (including the schedules hereto) or
the Ancillary Agreements (including all schedules thereto) shall be
deemed to be IMPCO Liabilities and not Quantum Liabilities.
(n) OTHER TRANSACTIONS. On or prior to the Distribution Date, each of
IMPCO and Quantum shall consummate those other transactions in connection with
the Distribution that are contemplated by the Form 10 in order to implement the
Distribution. After the Distribution Date, each of IMPCO and Quantum will
exercise good faith commercially reasonable efforts to consummate as promptly as
practicable all other transactions which must be consummated in order fully to
complete the Contribution, the Distribution and any of the transactions
contemplated hereby or by any of the Ancillary Agreements.
SECTION 2.2 IMPCO BOARD ACTION; CONDITIONS PRECEDENT TO THE
DISTRIBUTION. IMPCO's Board of Directors shall, in its sole discretion,
establish the Distribution Record Date and the Distribution Date and any
appropriate procedures in connection with the Distribution. In no event shall
the Distribution occur unless the following conditions shall, unless waived by
IMPCO in its sole discretion, have been satisfied:
27
(a) the Form 10 shall have been declared effective under the Exchange
Act, and there shall be no stop order in effect with respect thereto and no
proceeding for that purpose shall have been instituted by the Commission;
(b) Quantum's Board of Directors, as named in the Form 10, shall have
been elected by IMPCO, as sole stockholder of Quantum, and the Quantum Amended
and Restated Certificate and the Quantum Bylaws shall be in effect;
(c) the Quantum Common Stock shall have been approved for listing on the
Nasdaq National Market, subject to official notice of issuance;
(d) all action shall have been taken as may be necessary or appropriate
under the securities or blue sky laws of the United States (and any comparable
laws under any foreign jurisdiction) in connection with the Distribution;
(e) IMPCO's Board of Directors shall have formally approved the
Distribution and shall not have abandoned, deferred or modified the Distribution
at any time prior to the Distribution Date;
(f) IMPCO shall have received an opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP to
the effect that the Distribution will qualify as a distribution under Section
355(a) of the Code, and such opinion shall be in form and substance satisfactory
to IMPCO's Board of Directors in its sole discretion;
(g) the transaction's transfer of assets and assumption of liabilities
as contemplated by Article II shall have been consummated in all material
respects and each of the Ancillary Agreements, in form and substance
satisfactory to IMPCO, shall have been executed by the parties thereto and each
of the transactions contemplated by the Ancillary Agreements to be consummated
on or prior to the Distribution Date shall have been consummated;
(h) all material approvals or consents of any Governmental Authority
necessary to consummate the Distribution shall have been obtained and be in full
force and effect;
(i) no preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a government,
regulatory or administrative agency or commission, and no statute, rule,
regulation or executive order promulgated or enacted by any Governmental
Authority, shall be in effect preventing the payment of the Distribution;
(j) no other events or developments shall have occurred subsequent to the
date hereof that, in the judgment of the IMPCO Board of Directors, would result
in the Distribution having a material adverse effect on IMPCO or on the
stockholders of IMPCO;
(k) IMPCO or Quantum shall have received an opinion from its financial
advisor, satisfactory to the Board of Directors of IMPCO, as to the business
purpose of the Distribution.
28
PROVIDED, that the satisfaction of such conditions shall not create any
obligation on the part of IMPCO to effect the Distribution or in any way limit
IMPCO's power of termination set forth in Section 9.11 or alter the consequences
of any such termination from those specified in such Section.
SECTION 2.3 INTERCOMPANY ACCOUNTS.
(a) All Intercompany Accounts (other than receivables, payables and loans
otherwise specifically provided for hereunder, under any Ancillary Agreement or
set forth on Schedule 2.3(a), including payables created or required hereby or
by any Ancillary Agreement), which exist and are reflected in the accounting
records of the relevant parties as of January 31, 2002 or which arise on or
after January 31, 2002 and to the extent not settled by the Distribution Date or
cancelled, shall be paid or settled in the ordinary course of business in a
manner consistent with the payment or settlement of similar accounts arising
from transactions with third parties no later than thirty (30) days after the
Distribution Date.
(b) At the Effective Time, the Excluded Liabilities shall be deemed to
have been cancelled.
SECTION 2.4 ASSUMPTION AND SATISFACTION OF LIABILITIES. Notwithstanding
anything provided in any Ancillary Agreement, from and after the Effective Time
of the Contribution, (i) IMPCO shall, and shall cause each member of the IMPCO
Group to, assume, pay, perform and discharge all IMPCO Liabilities and (ii)
Quantum shall, and shall cause each member of the Quantum Group to, assume, pay,
perform and discharge all Quantum Liabilities. In addition to the obligations of
the parties in Sections 2.1(h) and 2.1(i), to the extent reasonably requested to
do so by another party hereto, each party hereto agrees to sign such documents,
in a form reasonably satisfactory to the requesting party, as may be reasonably
necessary to evidence the assumption of any liabilities hereunder.
SECTION 2.5 RESIGNATIONS.
(a) Subject to Section 2.5(b), IMPCO shall cause all of its employees,
and shall cause all of its Subsidiaries to cause all of their respective
employees, to resign, effective as of the Effective Time, from all positions as
officers or directors of any member of the Quantum Group in which they serve,
and Quantum shall cause all its employees, and shall cause all of its
Subsidiaries to cause all of their respective employees, to resign, effective as
of the Effective Time, from all positions as officers or directors of IMPCO or
any members of the IMPCO Group in which they serve.
(b) No person shall be required by any party hereto to resign from any
position or office with another party hereto if such person is listed on
Schedule 2.5(b) hereto or is disclosed in the Information Statement as the
person who is to hold such position or office following the Distribution.
29
SECTION 2.6 NON-SOLICITATION OF EMPLOYEES.
(a) From the date of this Agreement, and for a period of two years after
the Effective Time, Quantum hereby covenants and agrees that neither it nor any
of its Affiliates shall actively solicit, or cause or authorize, directly or
indirectly, to be solicited for employment or employ or cause or authorize,
directly or indirectly, to be employed or engaged as an employee, for or on
behalf of itself or any other person, any person who is currently, or was, less
than 90 days prior to the date of this Agreement, an executive officer, senior
manager (or the equivalent thereof), executive vice president or employee of
IMPCO or any of IMPCO's Subsidiaries, without IMPCO's prior written approval.
(b) From the date of this Agreement, and for a period of two years after
the Effective Time, IMPCO hereby covenants and agrees that neither it nor any of
its Affiliates shall actively solicit, or cause or authorize, directly or
indirectly, to be solicited for employment or employ or cause or authorize,
directly or indirectly, to be employed or engaged as an employee, for or on
behalf of itself or any other person, any person who is currently, or was, less
than 90 days prior to the date of this Agreement, an executive officer, senior
manager (or the equivalent thereof), executive vice president or employee of the
Quantum Business, Quantum or any of Quantum's Subsidiaries, without Quantum's
prior written approval.
SECTION 2.7 FURTHER ASSURANCES. In case at any time after the Effective
Time any further action is reasonably necessary or desirable to carry out the
purposes of this Agreement and the Ancillary Agreements, the proper officers of
each party to this Agreement shall take all such necessary action. Without
limiting the foregoing, IMPCO and Quantum shall use their commercially
reasonable efforts promptly to obtain all consents and approvals, to enter into
all amendatory agreements and to make all filings and applications that may be
required for the consummation of the transactions contemplated by this Agreement
and the Ancillary Agreements, including, without limitation, all applicable
governmental and regulatory filings.
SECTION 2.8 LIMITED REPRESENTATIONS OR WARRANTIES. EACH OF THE PARTIES
HERETO AGREES THAT IMPCO DOES NOT MAKE, IN THIS AGREEMENT OR IN ANY OTHER
AGREEMENT OR DOCUMENT CONTEMPLATED BY THIS AGREEMENT OR OTHERWISE, AND IMPCO
EXPRESSLY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES WHATSOEVER, WHETHER
EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING WITHOUT LIMITATION
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NON-INFRINGEMENT OF THIRD PARTY RIGHTS, TITLE, VALUE, AND ANY WARRANTIES ARISING
OUT OF A COURSE OF PERFORMANCE, DEALING OR TRADE USAGE, INCLUDING WITHOUT
LIMITATION ANY WARRANTIES RELATING IN ANY MANNER TO THE QUANTUM ASSETS, AND
RELATED RIGHTS AND PRIVILEGES BEING TRANSFERRED HEREBY. IT IS ALSO AGREED THAT,
NOTWITHSTANDING ANYTHING TO THE CONTRARY OTHERWISE EXPRESSLY PROVIDED IN THE
RELEVANT CONVEYANCING AND ASSUMPTION INSTRUMENT, ALL QUANTUM ASSETS TRANSFERRED
TO THE QUANTUM PARTIES OR RETAINED BY THE QUANTUM PARTIES SHALL BE TRANSFERRED
OR RETAINED, AS THE CASE MAY BE, ON AN "AS IS, WHERE IS" BASIS AND THAT (SUBJECT
TO SECTION
30
2.7) THE QUANTUM PARTIES SHALL BEAR THE ECONOMIC AND LEGAL RISK THAT THE QUANTUM
PARTIES' USE OF OR TITLE TO ANY SUCH QUANTUM ASSETS SHALL BE OTHER THAN GOOD AND
MARKETABLE AND FREE FROM ENCUMBRANCES. Similarly, each party hereto agrees that,
notwithstanding anything to the contrary otherwise expressly provided in the
relevant Conveyancing and Assumption Instrument, no party hereto represents or
warrants in any way that the obtaining of any consents or approvals, the
execution and delivery of any amendatory agreements and the making of any
filings or applications contemplated by this Agreement will satisfy the
provisions of any or all applicable agreements or the requirements of any or all
applicable laws or judgments, it being agreed that the party to which any Assets
are transferred shall bear the economic and legal risk that any necessary
consents or approvals are not obtained or that any requirements of laws or
judgments are not complied with.
SECTION 2.9 GUARANTEES.
(a) Except as otherwise specified herein or in any Ancillary Agreement,
Quantum and IMPCO shall use their commercially reasonable efforts to have, on or
prior to the Contribution Date, or as soon as practicable thereafter, IMPCO and
any member of the IMPCO Group removed as guarantor of or obligor for any Quantum
Liability, including, without limitation, in respect of those guarantees set
forth on Schedule 2.9(a) to the extent that they relate to Quantum Liabilities.
(b) Except as otherwise specified herein or in any Ancillary Agreement,
Quantum and IMPCO shall use their commercially reasonable efforts to have, on or
prior to the Contribution Date, or as soon as practicable thereafter, Quantum
and any member of the Quantum Group removed as guarantor of or obligor for any
IMPCO Liability, including, without limitation, in respect of those guarantees
set forth on Schedule 2.9(b) to the extent that they relate to IMPCO
Liabilities.
(c) If Quantum or IMPCO is unable to obtain, or to cause to be obtained,
any such required removal as set forth in clauses (a) or (b) of this Section
2.9, the applicable guarantor or obligor shall continue to be bound as such and,
unless not permitted by law or the terms thereof, the relevant beneficiary shall
or shall cause one of its Subsidiaries, as agent or subcontractor for such
guarantor or obligor to pay, perform and discharge fully all the obligations or
other liabilities of such guarantor or obligor thereunder from and after the
Distribution Date. Either party shall indemnify and hold harmless the other
party for any and all liabilities incurred in connection with this Section 2.9.
(d) Each party agrees and covenants that if Quantum or IMPCO is unable to
obtain, or to cause to be obtained, any such required removal as set forth in
clauses (a) or (b) of this Section 2.9:
(i) the relevant beneficiary will use its commercially reasonable
efforts to ensure that the applicable guarantor will incur no liability
under the obligation guarantied or other credit support provided by the
applicable guarantor;
31
(ii) the relevant beneficiary will perform and be bound by all
covenants set forth in the instrument setting forth the relevant
guaranty; and
(iii) that, notwithstanding anything to the contrary herein or
in any Ancillary Agreement, any and all fees and costs incurred by
either party in connection with the relevant guaranty or other credit
support provided by the applicable guarantor and the pursuit of the
independent line of credit will be borne by the relevant beneficiary.
SECTION 2.10 WITNESS SERVICES. At all times from and after the
Distribution Date, each of IMPCO and Quantum shall use their commercially
reasonable efforts to make available to the other, upon reasonable written
request, its and its Subsidiaries' officers, directors and employees as
witnesses to the extent that (i) such persons may reasonably be required in
connection with the prosecution or defense of any Action in which the requesting
party may from time to time be involved relating to (A) the operation of the
Quantum Business or the IMPCO Business prior to the Effective Time or (B) the
Reserved Technology Rights, and (ii) there is no conflict in the Action between
the requesting party and IMPCO or Quantum as applicable. A party providing
witness services to the other party under this Section shall be entitled to
receive from the recipient of such services, upon the presentation of invoices
therefor, payments for such amounts, relating to disbursements and other
out-of-pocket expenses (which shall be deemed to exclude the costs of salaries
and benefits of employees who are witnesses), as may be reasonably incurred in
providing such witness services.
SECTION 2.11 TAX AND OTHER MATTERS.
(a) (i) IMPCO shall comply and shall cause its Subsidiaries to comply
with and otherwise not take action inconsistent with each representation and
statement made to ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP in connection with the request by
IMPCO for an opinion in respect of the Distribution as to certain federal income
tax aspects of the Distribution, and (ii) at least until three years after the
Distribution Date, IMPCO will maintain its status as a company engaged in the
active conduct of a trade or business, within the meaning of Section 355(b) of
the Code.
(b) (i) Quantum shall comply and shall cause its Subsidiaries to comply
with and otherwise not take action inconsistent with each representation and
statement made to ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP in connection with the request by
IMPCO for an opinion in respect of the Distribution as to certain federal income
tax aspects of the Distribution, and (ii) at least until three years after the
Distribution Date, Quantum will maintain its status as a company engaged in the
active conduct of a trade or business, within the meaning of Section 355(b) of
the Code.
(c) During the three-year period beginning on the Distribution Date,
Quantum will not (i) merge, consolidate or combine with or into any other
corporation, (ii) liquidate or partially liquidate, (iii) sell or transfer all
or substantially all of its assets (within the meaning of Rev. Proc. 77-37,
1977-2 C.B. 568) in a single transaction or series of related transactions, (iv)
redeem or otherwise repurchase any Quantum Common Shares (other than as
described in Section 4.05(1)(b) of Rev. Proc. 96-30, 1996-1 C.B. 696), or (v)
subject to Section 2.11(d) below, take any other action or actions which could
reasonably be expected have the effect of causing Section 355(e) of the Code to
apply to the Distribution, unless prior to taking such action
32
Quantum has obtained (and provided to IMPCO) a written opinion of a law firm
reasonably acceptable to IMPCO, or a ruling from the Internal Revenue Service,
that such action or actions will not result in the Quantum Common Shares failing
to qualify as qualified property for purposes of Section 355(c)(2) or 361(c)(2)
of the Code by reason of Section 355(e) of the Code
(d) Quantum shall not be required to obtain a legal opinion or ruling
from the Internal Revenue Service required pursuant to Section 2.11(c) above in
connection with (i) the issuance by Quantum of shares of its Series A or Series
B common stock to General Motors Corporation or an affiliate thereof (or the
issuance of Quantum Common Stock upon conversion thereof) pursuant to the terms
of the Corporate Alliance Agreement and the Stock Transfer Agreement between
Quantum and General Motors, each dated June 12, 2001 and amended as of July 19,
2002 (collectively, the "GM Issuances"), or (ii) the offer and sale by Quantum
of common stock in its first public offering following the Distribution Date
pursuant to a registration statement under the Securities Act of 1933, as
amended (the "IPO"). Nothing in this Section 2.11(d) shall limit the obligation
of Quantum to indemnify IMPCO pursuant Section 2.11(e) below in connection with
the GM Issuances or the IPO.
(e) Notwithstanding anything to the contrary herein or in the Ancillary
Agreements, if IMPCO or Quantum (or any of their respective Subsidiaries) fails
to comply with any of its obligations under Sections 2.11(a) through (and
including) 2.11(c) above or takes or fails to take any action on or after the
Distribution Date, and such action or failure to comply, action or omission
contributes to a determination that (i) the Distribution fails to qualify under
Section 355(a) of the Code or (ii) the Quantum Common Shares fail to qualify as
qualified property for purposes of Section 355(c)(2) or 361(c)(2) of the Code by
reason of Section 355(e) of the Code, then such party shall indemnify and hold
harmless the other party, each member of the consolidated group of which the
other party is a member and the stockholders of either party from and against
any and all Taxes imposed upon or incurred by such other party, any member of
its group or any stockholder of either party as a result of the failure of the
Distribution to qualify under Section 355(a) of the Code or the application of
Section 355(e) of the Code. The obligation of Quantum to indemnify IMPCO
pursuant to the preceding sentence shall not be affected by the delivery of any
legal opinion or ruling from the Internal Revenue Service under Section 2.11(c).
SECTION 2.12 TRANSFERS NOT EFFECTED PRIOR TO THE DISTRIBUTION;
TRANSFERS DEEMED EFFECTIVE AS OF THE DISTRIBUTION DATE. To the extent that any
transfers contemplated by this Article II shall not have been consummated on or
prior to the Distribution Date, the parties shall cooperate to effect such
transfers as promptly following the Distribution Date as shall be practicable.
Nothing herein shall be deemed to require the transfer of any assets or the
assumption of any liabilities which by their terms or operation of law cannot be
transferred; provided, however, that the parties hereto and their respective
Subsidiaries shall cooperate to seek to obtain any necessary consents or
approvals for the transfer of all assets and liabilities contemplated to be
transferred pursuant to this Article II. In the event that any such transfer of
assets or liabilities has not been consummated, from and after the Distribution
Date, the party retaining such asset or liability shall hold such asset in trust
for the use and benefit of the party entitled thereto (at the expense of the
party entitled thereto) or retain such liability for the account of the party by
whom such liability is to be assumed pursuant hereto, as the case may
33
be, and take such other action as may be reasonably requested by the party to
whom such asset is to be transferred, or by whom such liability is to be
assumed, as the case may be, in order to place such party, insofar as is
reasonably possible, in the same position as would have existed had such asset
or liability been transferred as contemplated hereby. As and when any such asset
or liability becomes transferable, such transfer shall be effected forthwith.
The parties agree that, as of the Contribution Date, each party hereto shall be
deemed to have acquired complete and sole beneficial ownership over all of the
assets, together with all rights, powers and privileges incident thereto, and
shall be deemed to have assumed in accordance with the terms of this Agreement
all of the liabilities, and all duties, obligations and responsibilities
incident thereto, which such party is entitled to acquire or required to assume
pursuant to the terms of this Agreement.
SECTION 2.13 CONVEYANCING AND ASSUMPTION INSTRUMENTS. In connection with
the transfers of assets and the assumptions of liabilities contemplated by this
Agreement, the parties shall execute, or cause to be executed by the appropriate
entities, the Conveyancing and Assumption Instruments in substantially the form
contemplated hereby. Without limiting the generality of the foregoing, the
transfer of capital stock shall be effected by means of delivery of stock
certificates and executed stock powers and notation on the stock record books of
the legal entities involved, or by such other means as may be required in any
non-U.S. jurisdiction to transfer title to stock and, to the extent required by
applicable law, by notation on public registries. In the event that any
provisions of any Conveyancing and Assumption Instrument is inconsistent or
contradictory to the terms and conditions of this Agreement, the terms and
conditions of this Agreement shall control.
SECTION 2.14 ANCILLARY AGREEMENTS. Prior to the Distribution Date, each of
IMPCO and Quantum shall enter into, and/or (where applicable) shall cause
members of the IMPCO Group or the Quantum Group, as applicable, to enter into,
the Ancillary Agreements and any other agreements in respect of the Distribution
reasonably necessary or appropriate in connection with the transactions
contemplated hereby and thereby.
SECTION 2.15 CORPORATE NAMES.
(a) Except as otherwise specifically provided in any Ancillary Agreement:
(i) As soon as reasonably practicable after the Distribution Date but
in any event within six months thereafter, IMPCO will, at its own expense,
remove (or, if necessary, on an interim basis, cover up) any and all
exterior signs and other identifiers located on any of its property or
premises or on the property or premises used by it or its Subsidiaries
(except property or premises to be shared with Quantum or its Subsidiaries
after the Distribution) which use or display trade names, trademarks and
logos of Quantum, including without limitation "Quantum" and any other
Quantum trade name, trademark or logo (collectively, "Quantum Marks").
(ii) As soon as reasonably practicable after the Distribution Date but
in any event within six months thereafter, IMPCO will, and will cause its
Subsidiaries to, remove from all letterhead, envelopes, invoices and other
communications media of any
34
kind, other than materials already in the possession of customers prior to
the Effective Time, all references to any Quantum Marks. Neither IMPCO nor
its Subsidiaries shall use or display any Quantum Marks or portions
thereof, other than with respect to materials already in the possession of
customers prior to the Effective Time, without the prior written consent of
Quantum, except as permitted by applicable law.
(b) Except as otherwise specifically provided in any Ancillary Agreement:
(i) As soon as reasonably practicable after the Distribution Date
but in any event within six months thereafter, Quantum will, at its own
expense, remove (or, if necessary, on an interim basis, cover up) any and
all exterior signs and other identifiers located on any of their respective
property or premises owned or used by them or their respective Subsidiaries
(except property or premises to be shared with IMPCO or its Subsidiaries
after the Distribution) which use or display trade names, trademarks and
logos of IMPCO, including without limitation "IMPCO Technologies" and
"IMPCO," and any other IMPCO trade name, trademark or logo (collectively,
"IMPCO Marks").
(ii) As soon as reasonably practicable after the Distribution Date
but in any event within six months thereafter, Quantum will, and will cause
its respective Subsidiaries to, remove from all letterhead, envelopes,
invoices and other communications media of any kind, other than materials
already in the possession of customers prior to the Effective Time, all
references to any IMPCO Marks. Neither Quantum nor any of its Subsidiaries
shall use or display any IMPCO Marks or portions thereof, other than with
respect to materials already in the possession of customers prior to the
Effective Time, without the prior written consent of IMPCO except as
permitted by applicable law and as expressly provided in Section
2.15(b)(iii).
(iii) Subject to the trademark guidelines established by IMPCO from
time to time, and subject to IMPCO's approval of samples of each use of an
IMPCO ▇▇▇▇, Effective as of the Effective Time, IMPCO agrees to grant to
Quantum a non-sublicenseable, non-transferable, revocable, royalty-free,
worldwide right and license to use and display the IMPCO Marks as they
appear on existing service parts manufactured by IMPCO prior to the
Contribution Date and which are serviced by Quantum after the Contribution
Date.
SECTION 2.16 JOINT BUSINESS OPPORTUNITIES; NON-COMPETITION; PROTECTION OF
INFORMATION.
(a) IMPCO and Quantum may pursue joint business opportunities to enhance
customer value, on terms and conditions as may be agreed by the parties after
the date hereof. The parties acknowledge and agree that nothing in this Section
2.16(a) shall create a binding obligation on IMPCO or Quantum to enter into or
pursue any such business opportunity.
(b) IMPCO hereby covenants and agrees that none of the members of the
IMPCO Group will, between the Effective Time and the third anniversary of the
Effective Time (the "Restricted Period"):
35
(i) engage in or carry on any business in the United States or
elsewhere in whatever form which would be directly in competition with any
Quantum Business as such businesses are conducted by the Quantum Group in
the Quantum Markets at the Effective Time;
(ii) engage in or carry on any business in the United States or
elsewhere in whatever form, directly or indirectly, with competitors of
Quantum set forth in Schedule 2.16(b)(ii) or their respective subsidiaries
("Quantum Named Competitors"); and
(iii) engage in or carry on any business in the United States or
Canada in whatever form, directly or indirectly, with OEM customers of
Quantum set forth in Schedule 2.16(b)(iii) or their respective subsidiaries
("Quantum Named OEM Customers").
The parties acknowledge and agree that neither (i) IMPCO's exercise of the
Reserved Technology Rights and the use, manufacture, sale, distribution, and
other commercial exploitation of the Tri-Shield Tank in the IMPCO Market,
pursuant to Section 2.1(b)(i), nor (ii) the transfer of employees from the IMPCO
Group to Quantum prior to the Effective Time, shall constitute a breach of this
Section 2.16(b).
(c) Quantum hereby covenants and agrees that none of the members of the
Quantum Group will, during the Restricted Period:
(i) engage in or carry on any business in the United States or
elsewhere in whatever form which would be directly in competition with any
IMPCO Business as such businesses are conducted by the IMPCO Group in the
IMPCO Markets at the Effective Time; and
(ii) engage in or carry on any business in the United States or
elsewhere in whatever form, directly or indirectly, with competitors of
IMPCO set forth in Schedule 2.16(c) or their respective subsidiaries
("IMPCO Named Competitors").
The parties acknowledge and agree that neither (i) Quantum's use,
manufacture, sale, distribution, and other commercial exploitation of the
Tri-Shield Tank, pursuant to Section 2.1(b)(ii), nor (ii) the transfer of
employees from the IMPCO Group to Quantum prior to the Effective Time, shall
constitute a breach of this Section 2.16(c).
(d) Each party acknowledges that the other party and its respective
Subsidiaries would suffer irreparable harm if it were to breach the provisions
of this Section 2.16 and that any remedy at law for any such breach is and will
be insufficient and inadequate, and that the aggrieved party shall be entitled
to equitable relief, including by way of temporary and permanent injunction,
without the necessity of posting bond or proving actual damages, in addition to
any remedies the aggrieved party may have at law.
36
(e) Notwithstanding anything to the contrary in Sections 2.16(b) or
2.16(c) above, nothing in this Section 2.16 shall in any way restrict or
preclude either party or any of its respective Affiliates from: (i) as part of a
bona fide transaction, merging or consolidating with, acquiring all or
substantially all the assets of, selling all or substantially all of its assets
to, or entering into a similar transaction with, any person, including persons
whose primary business is in direct competition with the other party's business
conducted in the United States and elsewhere as of the Effective Time, or (ii)
acquiring ownership up to one percent (1%) of any class of securities of any
corporation or other entity having a class of securities registered under the
Securities Exchange Act of 1934, as amended.
(f) The invalidity or non-enforceability of any provision of this
Section 2.16 in any respect shall not affect the validity or enforceability of
the other provisions of this Section 2.16 in any other respect or of any other
provisions of this Agreement. In the event that any provision of this Section
2.16 shall be held invalid or unenforceable by a court of competent jurisdiction
by reason of the geographic or business scope or the duration thereof, such
invalidity or unenforceability shall attach only to the scope or duration of
such provision and shall not affect or render invalid or unenforceable any other
provision of this Agreement, and, to the fullest extent permitted by law, this
Agreement shall be construed as if the geographic or business scope or the
duration of such provision had been more narrowly drafted so as not to be
invalid or unenforceable.
(g) Each of IMPCO and Quantum acknowledge and agree that the covenants
and agreements contained in this Section 2.16 have been negotiated in good faith
by each of them, and are reasonable and not more restrictive or broader than
necessary to protect the interests of each of IMPCO and Quantum in the IMPCO
Business and the Quantum Business, respectively, and would not achieve their
intended purpose if they were on different terms or for periods of time shorter
than the periods of time provided herein or applied in more restrictive
geographical and business line areas than are provided herein.
SECTION 2.17 ADJUSTMENT OF IMPCO WARRANTS.
(a) As of the Distribution Date, each warrant to purchase IMPCO Common
Stock that is outstanding as of the Distribution Record Date and not exercised
prior to the Distribution Date (each an "IMPCO Warrant") shall be adjusted as
set forth in this Section 2.17. Each IMPCO Warrant shall be converted, as of the
Distribution Date, into two warrants: a warrant (the "IMPCO Adjusted Warrant")
to purchase the same number of shares of IMPCO Common Stock covered by the IMPCO
Warrant and as to which the IMPCO Warrant has not been exercised as of the
Distribution Date and a warrant (the "Quantum Warrant") to purchase a number of
shares of Quantum Common Stock equal to the IMPCO Warrant times a fraction, the
numerator of which is the total number of shares of Quantum Common Stock
distributed to IMPCO stockholders in the Distribution and the denominator of
which is the total number of shares of IMPCO Common Stock outstanding on
Distribution Record Date. The terms of the IMPCO Adjusted Warrant and the
Quantum Warrant (other than the exercise price and the number of shares) shall
be substantially the same as the IMPCO Warrant.
37
(b) The exercise prices per share for each IMPCO Adjusted Warrant and
the Quantum Warrant shall be established, as set forth in Schedule 2.17(b)
hereto, in a manner so that: (a) the aggregate "intrinsic value" (i.e. the
market value of the stock underlying the warrant, less the exercise price of
such warrant, multiplied by the number of shares then covered by such warrant)
after the Distribution of the IMPCO Adjusted Warrant plus the Quantum Warrant is
not greater than the intrinsic value of the related IMPCO Warrant immediately
prior to the Distribution, and (b) the ratio of the exercise price per warrant
to the market value per share after the Distribution is not lower than the ratio
of the exercise price of the IMPCO Warrant to the market value per share of
IMPCO Common Stock immediately prior to the Distribution. The determination of
the exercise prices for each IMPCO Adjusted Warrant and Quantum Warrant shall be
made by IMPCO as advised by its professional advisors.
(c) The Quantum Warrants to be granted pursuant to this Section 2.17
shall be issued by Quantum as soon as practicable following the Distribution
Date, and Quantum shall take all corporate action and make all required filings
under applicable state blue sky laws and the Securities Act to (i) issue the
Quantum Warrants as required under this Section 2.17 and (ii) to register or
qualify the shares of Quantum Common Stock underlying the Quantum Warrants so
that the shares of Quantum Common Stock acquired upon exercise of each Quantum
Warrant may be resold under the Securities Act (except for shares acquired by
Affiliates of Quantum) and each applicable state's blue sky laws, subject in
each case to the receipt by Quantum of investment representations and other
information from the holders of the IMPCO Warrants reasonably necessary to
effect such registration or qualification.
ARTICLE III
INDEMNIFICATION
SECTION 3.1 INDEMNIFICATION BY IMPCO. Except as otherwise specifically
set forth in any provision of this Agreement or of any Ancillary Agreement,
IMPCO shall indemnify, defend and hold harmless the Quantum Indemnitees from and
against any and all Indemnifiable Losses of the Quantum Indemnitees arising out
of, by reason of or otherwise in connection with the IMPCO Liabilities or
alleged IMPCO Liabilities, including any breach by IMPCO of any provision of
this Agreement or any Ancillary Agreement.
SECTION 3.2 INDEMNIFICATION BY QUANTUM. Except as otherwise
specifically set forth in any provision of this Agreement or of any Ancillary
Agreement, Quantum shall indemnify, defend and hold harmless the IMPCO
Indemnitees from and against any and all Indemnifiable Losses of the IMPCO
Indemnitees arising out of, by reason of or otherwise in connection with the
Quantum Liabilities or alleged Quantum Liabilities, including any breach by
Quantum of any provision of this Agreement or any Ancillary Agreement.
38
SECTION 3.3 PROCEDURES FOR INDEMNIFICATION.
(a) THIRD PARTY CLAIMS.
(i) If a claim or demand is made against an IMPCO Indemnitee or a
Quantum Indemnitee (each, an "Indemnitee") by any person who is not a
party to this Agreement (a "Third Party Claim") as to which such
Indemnitee is entitled to indemnification pursuant to this Agreement,
such Indemnitee shall notify the party which is or may be required
pursuant to this Agreement to make such indemnification (the
"Indemnifying Party") in writing, and in reasonable detail, of the
Third Party Claim promptly (and in any event within fifteen (15)
business days) after receipt by such Indemnitee of written notice of
the Third Party Claim; provided, however, that failure to give such
notification shall not affect the indemnification provided hereunder
except to the extent the Indemnifying Party shall have been actually
prejudiced as a result of such failure (except that the Indemnifying
Party shall not be liable for any expenses incurred during the period
in which the Indemnitee failed to give such notice). Thereafter, the
Indemnitee shall deliver to the Indemnifying Party, promptly (and in
any event within five (5) business days) after the Indemnitee's receipt
thereof, copies of all notices and documents (including court papers)
received by the Indemnitee relating to the Third Party Claim.
(ii) If a Third Party Claim is made against an Indemnitee, the
Indemnifying Party shall be entitled to participate in the defense
thereof and, if it so chooses and acknowledges in writing its
obligation to indemnify the Indemnitee therefor, to assume the defense
thereof with counsel selected by the Indemnifying Party; provided that
such counsel is not reasonably objected to by the Indemnitee. Should
the Indemnifying Party so elect to assume the defense of a Third Party
Claim, the Indemnifying Party shall, within thirty 30 days (or sooner
if the nature of the Third Party Claim so requires), notify the
Indemnitee of its intent to do so, and the Indemnifying Party shall
thereafter not be liable to the Indemnitee for legal or other expenses
subsequently incurred by the Indemnitee in connection with the defense
thereof; provided, that such Indemnitee shall have the right to employ
counsel to represent such Indemnitee if, in such Indemnitee's
reasonable judgment, a conflict of interest between such Indemnitee and
such Indemnifying Party exists in respect of such claim which would
make representation of both such parties by one counsel inappropriate,
and in such event the fees and expenses of such separate counsel shall
be paid by such Indemnifying Party. If the Indemnifying Party assumes
such defense, any Indemnitee shall have the right to participate in the
defense thereof and to employ counsel, subject to the proviso of the
preceding sentence, at its own expense, separate from the counsel
employed by the Indemnifying Party, it being understood that (A) the
Indemnifying Party shall control such defense and (B) the Indemnifying
Party shall not, in respect of the legal expenses of any Indemnified
Party in connection with any proceeding or related proceedings in the
same jurisdiction, be liable for the fees and expenses of more than one
separate firm for all such Indemnified Parties. The Indemnifying Party
shall be liable for the fees and expenses of counsel employed by the
Indemnitee for any period during which the Indemnifying Party has
failed to assume the defense thereof (other than during the period
prior to the time the Indemnitee shall have given notice of the Third
Party Claim as provided above). If the Indemnifying Party so elects to
assume the defense of any Third Party Claim, all of the Indemnitees
shall, at
39
the expense of the Indemnifying Party, cooperate with the Indemnifying
Party in the defense or prosecution thereof, including by providing or
causing to be provided, Records and witnesses as soon as reasonably
practicable after receiving any request therefor from or on behalf of
the Indemnifying Party.
(iii) If the Indemnifying Party acknowledges in writing
responsibility for a Third Party Claim, then in no event will the
Indemnitee admit any liability with respect to, or settle, compromise
or discharge, any Third Party Claim without the Indemnifying Party's
prior written consent; provided, however, that the Indemnitee shall
have the right to settle, compromise or discharge such Third Party
Claim without the consent of the Indemnifying Party if the Indemnitee
releases the Indemnifying Party from its indemnification obligation
hereunder with respect to such Third Party Claim and such settlement,
compromise or discharge would not otherwise adversely affect the
Indemnifying Party. If the Indemnifying Party acknowledges in writing
liability for a Third Party Claim, the Indemnitee will agree to any
settlement, compromise or discharge of a Third Party Claim that the
Indemnifying Party may recommend and that by its terms obligates the
Indemnifying Party to pay the full amount of the liability in
connection with such Third Party Claim and releases the Indemnitee
completely in connection with such Third Party Claim and that would not
otherwise adversely affect the Indemnitee; provided, however, that the
Indemnitee may refuse to agree to any such settlement, compromise or
discharge if the Indemnitee agrees that the Indemnifying Party's
indemnification obligation with respect to such Third Party Claim shall
not exceed the amount that would be required to be paid by or on behalf
of the Indemnifying Party in connection with such settlement,
compromise or discharge. If an Indemnifying Party elects not to assume
the defense of a Third Party Claim, or fails to notify an Indemnitee of
its election to do so as provided herein, such Indemnitee may
compromise, settle or defend such Third Party Claim.
(iv) Notwithstanding the foregoing, the Indemnifying Party
shall not be entitled to assume the defense of any Third Party Claim
(and shall be liable for the fees and expenses of counsel incurred by
the Indemnitee in defending such Third Party Claim) if the Third Party
Claim seeks an order, injunction or other equitable relief or relief
for other than money damages against the Indemnitee which the
Indemnitee reasonably determines, after conferring with its counsel,
cannot be separated from any related claim for money damages. If such
equitable relief or other relief portion of the Third Party Claim can
be so separated from that for money damages, the Indemnifying Party
shall be entitled to assume the defense of the portion relating to
money damages (provided, that the Indemnifying Party shall indemnify
the Indemnified Party for the fees and expenses of counsel incurred by
the Indemnified Party in defending such portion of the claim seeking
relief for other than money damages).
(b) SUBROGATION. In the event of payment by an Indemnifying Party
to any Indemnitee in connection with any Third-Party Claim, such Indemnifying
Party shall be subrogated to and shall stand in the place of such Indemnitee as
to any events or circumstances in respect of which such Indemnitee may have any
right or claim relating to such Third-Party Claim against any claimant or
plaintiff asserting such Third-Party Claim. Such Indemnitee shall
40
cooperate with such Indemnifying Party in a reasonable manner, and at the cost
and expense of such Indemnifying Party, in prosecuting any subrogated right or
claim.
(c) OTHER CLAIMS. In the event that an Indemnitee asserts the
existence of a claim giving rise to Indemnifiable Losses (but excluding claims
resulting from the assertion of liability by third parties), it shall give
notice to the Indemnifying Party specifying the nature and amount of the claim
asserted. In the event that the Indemnifying Party contests the assertion of a
claim by giving notice to the Indemnitee, then if the parties hereto, acting in
good faith, cannot reach agreement with respect to such claim within ten days
after such response notice, the Indemnitee is entitled to seek any available
legal remedy in a manner consistent with the dispute resolution mechanism set
forth in Article VII.
(d) CONTRIBUTION. If the indemnification provided for in this Article
III is unavailable to an Indemnitee with respect to an Indemnifiable Loss
arising out of or related to information contained in the Information Statement
or Form 10, then the Indemnifying Party, in lieu of indemnifying such
Indemnitee, shall contribute to the amount paid or payable by such Indemnitee as
a result of such Indemnifiable Loss, in such proportion as is appropriate to
reflect the relative fault of the IMPCO Group, on the one hand, and Quantum, on
the other hand. The relative fault of any party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by that party or one of its Affiliates.
(e) NON-EXCLUSIVE REMEDY. The remedies provided in this Article III
shall be cumulative and shall not preclude assertion by any Indemnitee of any
other rights or the seeking of any and all other remedies against any
Indemnifying Party.
(f) REMEDY LIMITATION. All disputes, controversies or claims arising
out of or relating to this Agreement or the breach, termination or validity
thereof (a "Dispute") brought by a third party beneficiary to this Agreement
shall be exclusively and finally settled in accordance with the dispute
resolution mechanism set forth in Article VII. In the event of a Dispute
regarding the availability of third party benefits, no third party benefits
provided by this Agreement shall be available to any third party beneficiary who
pursues any form of dispute resolution inconsistent with the dispute resolution
mechanism set forth in Article VII.
SECTION 3.4 INDEMNIFICATION PAYMENTS. Indemnification required by this
Article III shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or loss,
liability, claim, damage or expense is incurred.
41
SECTION 3.5 FUTURE BUSINESS RELATIONSHIPS. The parties hereto
acknowledge that after the Distribution Date the parties may enter into
arms-length negotiated business relationships, which relationships will be
described in contracts, agreements and other documents entered into in the
normal course of business. Such documents may include agreements by the parties
and their Affiliates and Subsidiaries to supply materials, products, services
and leases after the Distribution Date. Except for the arrangements under the
Ancillary Agreements, such additional business relationships shall not be
subject to the indemnity provisions hereof, unless the parties expressly agree
to the contrary in the agreements governing such relationships.
ARTICLE IV
ACCESS TO INFORMATION
SECTION 4.1 PROVISION OF CORPORATE RECORDS.
(a) Other than in circumstances in which indemnification is sought
pursuant to Article III (in which event the provisions of such Article will
govern) and subject to Section 4.4, each of IMPCO and Quantum, on behalf of its
respective Group, agrees to provide, or cause to be provided, to each other
Group, as soon as reasonably practicable after written request therefor,
specific and identified agreements, documents, books, records or files
(collectively, "Records") in the possession or under the control of such
respective Group which the requesting party reasonably needs (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, in each case other than claims or allegations that one
party to this Agreement has against the other, or (iii) subject to clause (ii)
above, to comply with its obligations under this Agreement or any Ancillary
Agreement; provided, however, that in the event that any party reasonably
determines that any such provision of Records 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) From and after the Contribution Date, each of IMPCO and Quantum
shall maintain in effect at its own cost and expense adequate systems and
controls to the extent necessary to enable the members of the other Group to
satisfy their respective reporting, accounting, audit and other obligations.
SECTION 4.2 ACCESS TO INFORMATION.
(a) Other than in circumstances in which indemnification is sought
pursuant to Article III (in which event the provisions of such Article will
govern) and subject to Section 4.4, from and after the Distribution Date, each
of IMPCO and Quantum shall afford to the other and its authorized accountants,
counsel and other designated representatives reasonable access during normal
business hours, subject to appropriate restrictions for classified, privileged
or confidential
42
information, to the personnel, properties, books and records of such party and
its Subsidiaries insofar as such access is reasonably required by the other
party and relates to (x) such other party or the conduct of its business prior
to the Effective Time or (y) any Ancillary Agreement to which each of the party
requesting such access and the party requested to grant such access are parties.
(b) Other than in circumstances in which indemnification is sought
pursuant to Article III (in which event the provisions of such Article will
govern) and subject to Section 4.4, from and after the Contribution Date,
Quantum 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 Quantum Business that are located in archives retained or maintained by
IMPCO. Quantum may obtain copies (but not originals) of such documents for bona
fide business purposes. Nothing herein shall be deemed to restrict the access of
any member of the IMPCO Group to any such documents or to impose any liability
on any member of the IMPCO Group if any such documents are not maintained or
preserved by IMPCO; provided, however, that in the event that any party
reasonably determines that any such provision of access 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.
SECTION 4.3 REIMBURSEMENT; OTHER MATTERS. Except to the extent
otherwise contemplated by any Ancillary Agreement, a party providing Records or
access to information to the other party under this Article IV shall be entitled
to receive from the recipient, upon the presentation of invoices therefor,
payments for such amounts, relating to supplies, disbursements and other
out-of-pocket expenses, as may be reasonably incurred in providing such Records
or access to information.
SECTION 4.4 CONFIDENTIALITY.
(a) Each of (i) IMPCO and its Subsidiaries, on the one hand, and (ii)
Quantum and its Subsidiaries, on the other, shall not use, or permit the use of,
or disclose, and shall keep, and shall cause its employees, consultants and
advisors to keep confidential, the Confidential Information of the other parties
except: (a) the Recipient may use the Discloser's Confidential Information in
order to reasonably carry out its obligations and exercise its rights under this
Agreement and the Ancillary Agreements; (b) Recipient may disclose the
Confidential Information of the Discloser to its employees and independent
contractors who have a need to know such Confidential Information and who are
bound by confidentiality obligations similar to those contained in this
Agreement; (c) as permitted under this Agreement or any Ancillary Agreement; and
(d) in order to enforce this Agreement or any Ancillary Agreement. Recipient
will take precautions to prevent unauthorized disclosure or use of the
Confidential Information of the Discloser, and such precautions will be
consistent with the precautions used to protect the Recipient's own Confidential
Information, but in no event less than the care exercised by a reasonable
business person in the protection of its valuable confidential information. In
the event that Recipient is compelled to disclose the Confidential Information
of Discloser pursuant to judicial or administrative process or by law or
applicable securities rules or regulations, the Recipient will give the
Discloser reasonable advance notice of any such disclosure and will
43
cooperate with the Discloser in protecting against any such disclosure and/or
obtaining a protective order narrowing the scope of such disclosure and/or use
of such Confidential Information. The Recipient will not make any copies of the
Discloser's Confidential Information except to the extent reasonably necessary
to carry out its obligations and exercise its rights under this Agreement and
the Ancillary Agreements, or unless otherwise approved in writing in advance by
the Discloser. The Recipient will use commercially reasonable efforts to ensure
that all such copies made after the Effective Time will be identified as the
property of the Discloser and marked "confidential," "proprietary" or with
another similar legend.
(b) Without limiting the generality of the foregoing, (a) IMPCO
shall, upon the request of Quantum and at Quantum's sole expense (including
disbursements and costs of salaries, plus a fixed rate in the amount of thirty
percent (30%), and other out-of-pocket expenses incurred by IMPCO in connection
therewith), during the three (3) year period beginning on the Contribution Date,
promptly enforce the breach by any of its present or former employees of any
agreement between IMPCO and such employee prohibiting such employee from using
or disclosing any Confidential Information owned by Quantum, and (b) Quantum
shall, upon the request of IMPCO and at IMPCO's sole expense (including
disbursements and costs of salaries, plus a fixed rate in the amount of thirty
percent (30%), and other out-of-pocket expenses incurred by Quantum in
connection therewith), during the three (3) year period beginning on the
Contribution Date, promptly enforce the breach by any of its present or former
employees of any agreement between Quantum and such employee prohibiting such
employee from using or disclosing any Confidential Information owned by IMPCO.
SECTION 4.5 PRIVILEGED MATTERS. The parties hereto recognize that
legal and other professional services that have been and will be provided prior
to the Distribution Date have been and will be rendered for the benefit of each
of IMPCO, the members of the IMPCO Group and the members of the Quantum Group,
and that each of IMPCO, the members of the IMPCO Group and the members of the
Quantum Group should be deemed to be the client for the purposes of asserting
all privileges which may be asserted under applicable law. To allocate the
interests of each party in the information as to which any party is entitled to
assert a privilege, the parties agree as follows:
(a) IMPCO shall be entitled, in perpetuity, to control the assertion
or waiver of all privileges in connection with privileged information which
relates solely to the IMPCO Business, whether or not the privileged information
is in the possession of or under the control of IMPCO or Quantum. IMPCO shall
also be entitled, in perpetuity, to control the assertion or waiver of all
privileges in connection with privileged information that relates solely to the
subject matter of any claims constituting IMPCO Liabilities, now pending or
which may be asserted in the future, in any lawsuits or other proceedings
initiated against or by IMPCO, whether or not the privileged information is in
the possession of or under the control of IMPCO or Quantum.
(b) Quantum shall be entitled, in perpetuity, to control the
assertion or waiver of all privileges in connection with privileged information
which relates solely to the Quantum Business, whether or not the privileged
information is in the possession of or under the control of IMPCO or Quantum.
Quantum shall also be entitled, in perpetuity, to control the assertion or
44
waiver of all privileges in connection with privileged information which relates
solely to the subject matter of any claims constituting Quantum Liabilities, now
pending or which may be asserted in the future, in any lawsuits or other
proceedings initiated against or by Quantum whether or not the privileged
information is in the possession of or under the control of IMPCO or Quantum.
(c) The parties hereto agree that they shall have a shared privilege,
with equal right to assert or waive, subject to the restrictions in this Section
4.5, with respect to all privileges not allocated pursuant to the terms of
Sections 4.5(a) and (b). All privileges relating to any claims, proceedings,
litigation, disputes, or other matters which involve both IMPCO and Quantum in
respect of which both parties retain any responsibility or liability under this
Agreement, shall be subject to a shared privilege among them.
(d) No party hereto may waive any privilege which could be asserted
under any applicable law, and in which any other party hereto has a shared
privilege, without the consent of the other party, except to the extent
reasonably required in connection with any litigation with third-parties (and
then only to the limited extent necessary under the circumstances) or as
provided in subsection (e) below. Consent shall be in writing, or shall be
deemed to be granted unless written objection is made within twenty (20) days
after written notice upon the other party requesting such consent.
(e) In the event of any litigation or dispute between or among any of
the parties hereto, any party and a Subsidiary of another party hereto, or a
Subsidiary of one party hereto and a Subsidiary of another party hereto, either
such party may waive a privilege in which the other party has a shared
privilege, without obtaining the consent of the other party, provided that such
waiver of a shared privilege shall be effective only as to the use of
information with respect to the litigation or dispute between the parties and/or
their Subsidiaries, and shall not operate as a waiver of the shared privilege
with respect to third parties.
(f) If a dispute arises between or among the parties hereto or their
respective Subsidiaries regarding whether a privilege should be waived to
protect or advance the interest of any party, each party agrees that it shall
negotiate in good faith, shall endeavor to minimize any prejudice to the rights
of the other parties, and shall not unreasonably withhold consent to any request
for waiver by another party. Each party hereto specifically agrees that it will
not withhold consent to waiver for any purpose except to protect its own
legitimate interests.
(g) Upon receipt by any party hereto or by any Subsidiary thereof of
any subpoena, discovery or other request which arguably calls for the production
or disclosure of information subject to a shared privilege or as to which
another party has the sole right hereunder to assert a privilege, or if any
party obtains knowledge that any of its or any of its Subsidiaries' current or
former directors, officers, agents or employees have received any subpoena,
discovery or other requests which arguably calls for the production or
disclosure of such privileged information, such party shall promptly notify the
other party or parties of the existence of the request and shall provide the
other party or parties a reasonable opportunity to review the information and to
assert any rights it or they may have under this Section 4.5 or otherwise to
prevent the production or disclosure of such privileged information.
45
(h) The transfer of all Records and other information pursuant to this
Agreement is made in reliance on the agreement of IMPCO and Quantum, as set
forth in Sections 4.4 and 4.5, to maintain the confidentiality of privileged
information and to assert and maintain all applicable privileges. The access to
information being granted pursuant to Sections 4.1 and 4.2 hereof, the agreement
to provide witnesses and individuals pursuant to Sections 2.10 and 3.3 hereof,
the furnishing of notices and documents and other cooperative efforts
contemplated by Section 3.3 hereof, and the transfer of privileged information
between and among the parties and their respective Subsidiaries pursuant to this
Agreement shall not be deemed a waiver of any privilege that has been or may be
asserted under this Agreement or otherwise.
SECTION 4.6 OWNERSHIP OF INFORMATION. Any information owned by one party
or any of its Subsidiaries that is provided to a requesting party pursuant to
Article III or this Article IV shall be deemed to remain the property of the
providing party. Unless specifically set forth herein, nothing contained in this
Agreement shall be construed as granting or conferring rights of license or
otherwise in any such information.
SECTION 4.7 ESTIMATES. No party shall have any liability to any other
party in the event that any information exchanged or provided pursuant to this
Agreement which is an estimate or forecast, or which is based on an estimate or
forecast, is found to be inaccurate.
SECTION 4.8 OTHER AGREEMENTS PROVIDING FOR EXCHANGE OF INFORMATION. The
rights and obligations granted under this Article IV are subject to any specific
limitations, qualifications or additional provisions on the sharing, exchange or
confidential treatment of information set forth in any Ancillary Agreement.
ARTICLE V
TERMINATION OF AGREEMENTS; MUTUAL RELEASE
SECTION 5.1 TERMINATION OF AGREEMENTS.
(a) IMPCO and each of its wholly-owned Subsidiaries, on the one hand, and
Quantum and each of its wholly-owned Subsidiaries, on the other hand, hereby
terminate any and all agreements, arrangements, commitments or understandings,
whether or not in writing, between or among, IMPCO and/or any of its
wholly-owned Subsidiaries, on the one hand, and Quantum and/or any of its
wholly-owned Subsidiaries, on the other hand, effective as of the Distribution
Date. 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 Distribution Date. 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 5.1(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
46
expressly contemplated hereby or thereby to be entered into by any of the
parties hereto or any of their wholly-owned Subsidiaries); (ii) any agreements,
arrangements, commitments or understandings listed or described on Schedule
5.1(b); (iii) the Intercompany Accounts referenced in Section 2.3; and (iv) any
other agreements, arrangements, commitments or understandings that this
Agreement, any Ancillary Agreement or any agreements entered into connection
herewith or therewith, expressly contemplates will survive the Distribution
Date.
SECTION 5.2 MUTUAL RELEASE.
(a) Except as provided in Section 5.2(c), effective as of the Distribution
Date, Quantum does hereby, for itself and each member of the Quantum Group,
their respective successors and assigns, remise, release and forever discharge
IMPCO, each of member of the IMPCO Group, and their respective 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 Distribution Date, including in connection with the transactions and
all other activities to implement the Contribution and the Distribution.
(b) Except as provided in Section 5.2(c), effective as of the Distribution
Date, IMPCO does hereby, for itself and each member of the IMPCO Group, their
respective successors and assigns, remise, release and forever discharge
Quantum, each other member of the Quantum Group, and their respective 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 Distribution Date, including in connection with the transactions and
all other activities to implement the Contribution and the Distribution.
(c) Nothing contained in Sections 5.2(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 5.1(b)
or the applicable Schedules thereto, in each case in accordance with its terms.
Nothing contained in Sections 5.2(a) or (b) shall release any person from: (i)
any liability provided in or resulting from any agreements, arrangements,
commitments or understandings among IMPCO or any of its wholly-owned
Subsidiaries and Quantum and any of its wholly-owned Subsidiaries that is
specified in Section 5.1(b) or the applicable Schedules thereto, (ii) any other
liability specified in such Section 5.1(b), (iii) any other liability which by
the terms of this Agreement, any Ancillary Agreement, the Contribution Agreement
or any other agreement entered into in connection herewith or therewith should
survive the Distribution Date; and (iv) 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 Article III of this Agreement and, if applicable,
the appropriate provisions of the Ancillary Agreements. In addition, nothing
contained in Sections 5.2(a) or (b) shall release IMPCO from honoring its
47
existing obligations to indemnify any director, officer or employee of Quantum
who was a director, officer or employee of IMPCO on or prior to the Distribution
Date, to the extent such director, officer or employee was entitled to such
indemnification pursuant to any then-existing obligation of IMPCO.
(d) Quantum shall not make, and shall not permit any member of the Quantum
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
IMPCO or any member of the IMPCO Group with respect to any liabilities released
pursuant to Section 5.2(a). IMPCO shall not, and shall not permit any member of
the IMPCO 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 Quantum or any member of the Quantum Group with respect to any
liabilities released pursuant to Section 5.2(b).
(e) It is the intent of IMPCO and Quantum by virtue of the provisions of
this Section 5.2 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 Distribution Date, between
or among Quantum or any member of the Quantum Group, on the one hand, and IMPCO
or any member of the IMPCO 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 Distribution Date), except as expressly set forth
in Section 5.2(c). 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.
(f) The parties understand and agree that the release herein includes not
only claims presently known to them, but also includes all unknown or
unanticipated claims, rights, demands, actions, obligations, liabilities, and
causes of action of every kind and character that would otherwise come within
the scope of the release as described in this Section 5.2. Each of the parties
understand that they may hereafter discover facts different from what they now
believe to be true, which if known, could have materially affected this
Agreement and the transactions contemplated hereby, but they nevertheless waive
any claims or rights based on different or additional facts. The parties
knowingly and voluntarily waive any and all rights or benefits that they may now
have, or in the future may have, under the terms of Section 1542 of the
California Civil Code, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
48
ARTICLE VI
ADMINISTRATIVE SERVICES
SECTION 6.1 PERFORMANCE OF SERVICES. IMPCO will provide, or cause one or
more of its Subsidiaries to provide, to Quantum and its Subsidiaries such
services on such terms and for such periods of time as may be set forth in the
Transition Services Agreement and the statements of work entered into
thereunder.
SECTION 6.2 ACCOUNTS RECEIVABLE. IMPCO agrees to cooperate with Quantum,
at Quantum's expense, in the collection of any accounts receivable transferred
by IMPCO to Quantum pursuant to the terms of this Agreement (the "Receivables").
IMPCO acknowledges that it may, from time to time, receive payments in respect
of the Receivables. In the event that IMPCO receives any payments with respect
to the Receivables, IMPCO shall promptly upon receipt thereof remit such
payments to Quantum. Quantum shall reimburse IMPCO for all reasonable costs and
expenses incurred by IMPCO in complying with the provisions of this Section 6.2.
ARTICLE VII
DISPUTE RESOLUTION
SECTION 7.1 NEGOTIATION. In the event of a controversy, dispute or claim
arising out of, in connection with, or in relation to the interpretation,
performance, nonperformance, validity or breach of this Agreement, any Ancillary
Agreement or otherwise arising out of, or in any way related to this Agreement
or any Ancillary Agreement or the transactions contemplated hereby or thereby,
including, without limitation, any claim based on contract, tort, statute or
constitution (but excluding any controversy, dispute or claim arising out of any
agreement relating to the use or lease of real property if any third party is a
party to such controversy, dispute or claim) (collectively, "Agreement
Disputes"), the parties shall first negotiate to settle such Agreement Dispute
for a period of time not to exceed 30 days from the time of receipt by a party
of written notice of an Agreement Dispute ("Notice"), unless otherwise agreed by
the parties in writing; provided that in the event of any arbitration in
accordance with Section 6.2 hereof filed within 90 days of receipt of Notice,
the parties shall not assert the defenses of statute of limitations or laches
arising for the period beginning after the date the parties began negotiations
hereunder, and any contractual time period or deadline under this Agreement or
any Ancillary Agreement to which such Agreement Dispute relates shall not be
deemed to have passed until such Agreement Dispute has been resolved.
SECTION 7.2 ARBITRATION. After 30 days have elapsed from the time of
receipt of Notice of an Agreement Dispute, such Agreement Dispute shall be
determined, at the request of any party, by arbitration conducted in Los
Angeles, California before and in accordance with the then-existing Commercial
Arbitration Rules of the American Arbitration Association (the "Rules"). In any
dispute between the parties hereto, the number of arbitrators shall be three.
Any judgment or award rendered by the arbitrators shall be final, binding and
nonappealable (except upon grounds specified in 9 U.S.C. ss. 10(a) as in effect
on the date hereof). If the parties
49
are unable to agree on the arbitrators within 30 days of receipt by the
respondent of the demand, the arbitrators shall be selected in accordance with
the Rules; provided that the arbitrators shall be U.S. nationals. Any
controversy concerning whether an Agreement Dispute is an arbitrable Agreement
Dispute, whether arbitration has been waived, whether an assignee of this
Agreement is bound to arbitrate, or as to the interpretation or enforceability
of this Article VII shall be determined by the arbitrators. In resolving any
dispute, the parties intend that the arbitrators apply the substantive laws of
the State of California, without regard to the choice of law principles thereof.
The parties intend that the provisions to arbitrate set forth herein be valid,
enforceable and irrevocable. The parties agree to comply with any award made in
any such arbitration proceeding that has become final in accordance with the
Rules and agree to enforcement of or entry of judgment upon such award, by any
court of competent jurisdiction, including (a) the Superior Court of the State
of California, Los Angeles County, or (b) the United States District Court for
the Central District of California, in accordance with Section 9.17 hereof. The
arbitrators shall be entitled, if appropriate, to award any remedy in such
proceedings, including, without limitation, monetary damages, specific
performance and all other forms of legal and equitable relief; provided,
however, the arbitrators shall not be entitled to award punitive damages.
Without limiting the provisions of the Rules, unless otherwise agreed in writing
by or among the parties or permitted by this Agreement, the parties shall keep
confidential all matters relating to the arbitration or the award, provided such
matters may be disclosed (i) to the extent reasonably necessary in any
proceeding brought to enforce the award or for entry of a judgment upon the
award and (ii) to the extent otherwise required by law. Notwithstanding Section
52 of the Rules, the party other than the prevailing party in the arbitration
shall be responsible for all of the costs of the arbitration, including legal
fees and other costs specified by such Section 52. Nothing contained herein is
intended to or shall be construed to prevent any party, in accordance with
Section 36 of the Rules or otherwise, from applying to any court of competent
jurisdiction for interim measures or other provisional relief in connection with
the subject matter of any Agreement Disputes.
SECTION 7.3 CONTINUITY OF SERVICE AND PERFORMANCE. Unless otherwise agreed
in writing, the parties will continue to provide service and honor all other
commitments under this Agreement and each Ancillary Agreement during the course
of dispute resolution pursuant to the provisions of this Article VII with
respect to all matters not subject to such dispute, controversy or claim.
ARTICLE VIII
INSURANCE
SECTION 8.1 POLICIES AND RIGHTS INCLUDED WITHIN ASSETS; ASSIGNMENT OF
POLICIES.
(a) POLICY RIGHTS. The Quantum Assets shall include (i) any and all rights
of an insured party under each of the Shared Policies, subject to the terms of
such Shared Policies and any limitations or obligations of Quantum contemplated
by this Article VIII, specifically including rights of indemnity and the right
to be defended by or at the expense of the insurer, with respect to all claims,
suits, actions, proceedings, injuries, losses, liabilities, damages and expenses
incurred or claimed to have been incurred prior to the Effective Time by any
party in or
50
in connection with the conduct of the Quantum Business or, to the extent any
claim is made against Quantum or any of its Subsidiaries, the conduct of the
IMPCO Business, and which claims, suits, actions, proceedings, injuries, losses,
liabilities, damages and expenses may arise out of an insured or insurable
occurrence under one or more of such Shared Policies.
(b) ASSIGNMENT OF SHARED POLICIES. Subject to the terms and conditions
hereof, Quantum hereby assigns, transfers and conveys to IMPCO all of Quantum's
right, title and interest in and to any and all of the Shared Policies,
including, without limitation, the right of indemnity, the right to be defended
by or at the expense of the insurer and the right to any applicable Insurance
Proceeds thereunder; and IMPCO and Quantum shall use their commercially
reasonable efforts to obtain any required consents of insurers to the assignment
contemplated by this paragraph.
(c) DESIGNATION AS ATTORNEY-IN-FACT. If, subsequent to the Distribution
Date, any person shall assert a claim against Quantum or any of its Subsidiaries
(including, without limitation, where Quantum or its Subsidiaries are joint
defendants with other persons) with respect to any claim, suit, action,
proceeding, injury, loss, liability, damage or expense incurred or claimed to
have been incurred prior to the Distribution Date in or in connection with the
conduct of the Quantum Business or, to the extent any claim is made against
Quantum or any of its Subsidiaries (including, without limitation, where Quantum
or its Subsidiaries are joint defendants with other persons), in connection with
the conduct of the IMPCO Business, and which claim, suit, action, proceeding,
injury, loss, liability, damage or expense may arise out of an insured or
insurable occurrence under one or more of the Shared Policies, IMPCO shall, at
the time such claim is asserted, to the extent any such Policy may require that
Insurance Proceeds thereunder be collected directly by the named insured or
anyone other than the party against whom the Insured Claim is asserted, be
deemed to designate, without need of further documentation, Quantum as the agent
and attorney-in-fact to assert and to collect any related Insurance Proceeds
under such Shared Policy.
SECTION 8.2 ADMINISTRATION; OTHER MATTERS.
(a) ADMINISTRATION. From and after the Distribution Date, IMPCO shall
be responsible for (i) Insurance Administration of the Shared Policies and (ii)
Claims Administration under such Shared Policies with respect to Insured Claims
of IMPCO and Insured Claims of Quantum; provided that the assumption of such
responsibilities by IMPCO is in no way intended to limit, inhibit or preclude
any right to insurance coverage for any Insured Claim of a named insured under
such Policies as contemplated by the terms of this Agreement; provided further
that IMPCO's assumption of the administrative responsibilities for the Shared
Policies shall not relieve the party submitting any Insured Claim of the primary
responsibility for reporting such Insured Claim accurately, completely and in a
timely manner or of such party's authority to settle any such Insured Claim
within any period permitted or required by the relevant Policy; and provided
further that all direct or indirect communication with insurers relating to the
Shared Policies shall be conducted by IMPCO. IMPCO may discharge its
administrative responsibilities under this Section 8.2 by contracting for the
provision of services by independent parties. Each of the parties hereto shall
administer and pay any costs relating to defending its respective Insured Claims
under Shared Policies to the extent such defense costs are not covered under
such Policies and shall be responsible for obtaining or reviewing the
appropriateness of
51
releases upon settlement of its respective Insured Claims under Shared Policies.
The disbursements, out-of-pocket expenses and direct and indirect costs of
employees or agents of IMPCO relating to Claims Administration and Insurance
Administration contemplated by this Section 8.2(a) shall be for Quantum's
account if they relate to Insured Claims of Quantum and for IMPCO's account if
they relate to Insured Claims of IMPCO.
(b) EXCEEDING POLICY LIMITS. Except as set forth in this Section
8.2(b), IMPCO and Quantum shall not be liable to one another for claims not
reimbursed by insurers for any reason not within the control of IMPCO or
Quantum, as the case may be, including, without limitation, coinsurance
provisions, deductibles, quota share deductibles, self-insured retentions,
bankruptcy or insolvency of an insurance carrier, Shared Policy limitations or
restrictions, any coverage disputes, any failure to timely claim by IMPCO or
Quantum or any defect in such claim or its processing, provided that Quantum
shall be responsible for the amount of the difference, if any, between the
deductible set forth in any Shared Policy and the deductible allocable to IMPCO
as set forth in Schedule 8.2(b) hereto.
(c) ALLOCATION OF INSURANCE PROCEEDS. Insurance Proceeds received with
respect to claims, costs and expenses under the Shared Policies shall be paid to
IMPCO, which shall thereafter administer the Shared Policies by paying the
Insurance Proceeds, as appropriate, to Quantum with respect to Insured Claims of
Quantum and to IMPCO with respect to Insured Claims of IMPCO. Payment of the
allocable portions of indemnity costs of Insurance Proceeds resulting from such
Policies will be made by IMPCO to the appropriate party upon receipt from the
insurance carrier. In the event that the aggregate limits on any Shared Policies
are exceeded by the aggregate of outstanding Insured Claims by both of the
parties hereto, the parties agree to allocate the Insurance Proceeds received
thereunder based upon their respective percentage of the total of their bona
fide claims which were covered under such Shared Policy (their "allocable
portion of Insurance Proceeds"), and any party who has received Insurance
Proceeds in excess of such party's allocable portion of Insurance Proceeds shall
pay to the other party the appropriate amount so that each party will have
received its allocable portion of Insurance Proceeds pursuant hereto. Each of
the parties agrees to use commercially reasonable efforts to maximize available
coverage under those Shared Policies applicable to it, and to take all
commercially reasonable steps to recover from all other responsible parties in
respect of an Insured Claim to the extent coverage limits under a Shared Policy
have been exceeded or would be exceeded as a result of such Insured Claim.
(d) ALLOCATION OF DEDUCTIBLES. In the event that both parties have bona
fide claims under any Shared Policy for which a deductible is payable, the
parties agree that the aggregate amount of the deductible paid shall be borne by
the parties in the same proportion which the Insurance Proceeds received by each
such party bears to the total Insurance Proceeds received under the applicable
Shared Policy (their "allocable share of the deductible"), and any party who has
paid more than such share of the deductible shall be entitled to receive from
the other party an appropriate amount so that each party has borne its allocable
share of the deductible pursuant hereto. For purposes of this Section 8.2(d),
the amount of the relevant deductible under any Shared Policy shall be that set
forth in Schedule 8.2(d) hereto.
52
(e) Effective as of the Distribution Date, each of Quantum and IMPCO
shall be responsible for its applicable deductible for workers' compensation,
general liability and automobile liability claims as set forth in Schedule
8.2(e).
SECTION 8.3 AGREEMENT FOR WAIVER OF CONFLICT AND SHARED DEFENSE. In the
event that Insured Claims of both of the parties hereto exist relating to the
same occurrence, the parties shall jointly defend and waive any conflict of
interest necessary to the conduct of the joint defense. Nothing in this Article
VIII shall be construed to limit or otherwise alter in any way the obligations
of the parties to this Agreement, including those created by this Agreement, by
operation of law or otherwise.
SECTION 8.4 COOPERATION. The parties agree to use their commercially
reasonable efforts to cooperate with respect to the various insurance matters
contemplated by this Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 COMPLETE AGREEMENT; CONSTRUCTION. This Agreement, including
the Exhibits and Schedules, and the Ancillary Agreements shall constitute the
entire agreement between the parties with respect to the subject matter hereof
and shall supersede all previous negotiations, commitments and writings with
respect to such subject matter. In the event of any inconsistency between this
Agreement and any Schedule hereto, the Schedule shall prevail. Other than
Section 2.8, Section 4.5, and Article VII of this Agreement, which shall prevail
over any inconsistent or conflicting provisions of any Ancillary Agreement,
notwithstanding any other provisions in this Agreements to the contrary, in the
event of and to the extent that there shall be a conflict between the provisions
of this Agreement and the provisions of any Ancillary Agreement, such Ancillary
Agreement shall control.
SECTION 9.2 ANCILLARY AGREEMENTS. Subject to the last sentence of
Section 9.1, this Agreement is not intended to address, and should not be
interpreted to address, the matters specifically and expressly covered by the
Ancillary Agreements.
SECTION 9.3 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to the other parties.
SECTION 9.4 SURVIVAL OF AGREEMENTS. Except as otherwise contemplated by
this Agreement, all covenants and agreements of the parties contained in this
Agreement shall survive the Distribution Date.
53
SECTION 9.5 EXPENSES. Except as set forth on Schedule 9.5(i) or as
otherwise set forth in this Agreement or any Ancillary Agreement, all costs and
expenses incurred in connection with the preparation, execution, delivery and
required implementation of this Agreement and any Ancillary Agreement, the
Information Statement (including any registration statement on Form 10 of which
such Information Statement may be a part) and the Distribution, and the
consummation of the transactions contemplated thereby, and not paid prior to the
Distribution Date, shall be charged to and paid by Quantum. Except as set forth
on Schedule 9.5(ii) or as otherwise set forth in this Agreement or any Ancillary
Agreement, each party shall bear its own costs and expenses incurred after the
Distribution Date. Any amount or expense to be paid or reimbursed by any party
hereto to any other party hereto shall be so paid or reimbursed promptly after
the existence and amount of such obligation is determined and demand therefor is
made.
SECTION 9.6 NOTICES. All notices and other communications hereunder
shall be in writing and hand delivered or mailed by registered or certified mail
(return receipt requested) to the parties at the following addresses (or at such
other addresses for a party as shall be specified by like notice) and will be
deemed given on the date on which such notice is received as evidenced by
written receipt, acknowledgement or other evidence of actual receipt:
(i) if to IMPCO, to:
IMPCO Technologies, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Chief Financial Officer
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
(ii) if to Quantum, to:
Quantum Fuel Systems Technologies Worldwide, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: President
54
SECTION 9.7 WAIVERS. The failure of any party to require strict
performance by any other party of any provision in this Agreement will not waive
or diminish that party's right to demand strict performance thereafter of that
or any other provision hereof.
SECTION 9.8 AMENDMENTS. Subject to the terms of Section 9.11 hereof,
this Agreement may not be modified or amended except by an agreement in writing
signed by each of the parties hereto.
SECTION 9.9 ASSIGNMENT.
(a) This Agreement shall not be assignable, in whole or in part,
directly or indirectly, by operation of law or otherwise, by any party hereto
without the prior written consent of the other parties hereto, and any attempt
to assign any rights or obligations arising under this Agreement without such
consent shall be void.
(b) IMPCO will not distribute to its stockholders any interest in any
IMPCO Business Entity, by way of a spin-off distribution, split-off or exchange
of interests in a IMPCO Business Entity for any interest in IMPCO held by IMPCO
stockholders, or any similar transaction or transactions, unless the distributed
IMPCO Business Entity undertakes to Quantum to be jointly and severally liable
for all liabilities of IMPCO hereunder.
(c) Quantum will not distribute to its stockholders any interest in any
Quantum Business Entity, by way of a spin-off distribution, split-off or
exchange of interests in a Quantum Business Entity for any interest in Quantum
held by Quantum stockholders, or any similar transaction or transactions, unless
the distributed Quantum Business Entity undertakes to IMPCO to be jointly and
severally liable for all liabilities of Quantum hereunder.
SECTION 9.10 SUCCESSORS AND ASSIGNS. The provisions to this Agreement
shall be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and permitted assigns.
SECTION 9.11 TERMINATION. This Agreement (including, without
limitation, Article III hereof) may be terminated and the Distribution may be
amended, modified or abandoned at any time prior to the Effective Time by and in
the sole discretion of IMPCO without the approval of Quantum or the shareholders
of IMPCO. In the event of such termination, no party shall have any liability of
any kind to any other party or any other person. After the Distribution, this
Agreement may not be terminated except by an agreement in writing signed by the
parties; provided, however, that Article III shall not be terminated or amended
after the Distribution in respect of the third party beneficiaries thereto
without the consent of such persons.
SECTION 9.12 SUBSIDIARIES. Each of the parties hereto shall cause to be
performed, and hereby guarantees the performance of, all actions, agreements and
obligations set forth herein to be performed by any Subsidiary of such party or
by any entity that is contemplated to be a Subsidiary of such party on and after
the Effective Time.
55
SECTION 9.13 THIRD PARTY BENEFICIARIES. Except as provided in Article
III relating to Indemnitees, this Agreement is solely for the benefit of the
parties hereto and their respective Subsidiaries and Affiliates and should not
be deemed to confer upon third parties any remedy, claim, liability,
reimbursement, claim of action or other right in excess of those existing
without reference to this Agreement.
SECTION 9.14 TITLE AND HEADINGS. Titles and headings to sections herein
are inserted for the convenience of reference only and are not intended to be a
part of or to affect the meaning or interpretation of this Agreement.
SECTION 9.15 EXHIBITS AND SCHEDULES. The Exhibits and Schedules shall
be construed with and as an integral part of this Agreement to the same extent
as if the same had been set forth verbatim herein.
SECTION 9.16 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF CALIFORNIA, WITHOUT REFERENCE
TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
SECTION 9.17 CONSENT TO JURISDICTION. Without limiting the provisions
of Article VII hereof, each of the parties irrevocably submits to the exclusive
jurisdiction of (a) the Superior Court of the State of California, Los Angeles
County, and (b) the United States District Court for the Central District of
California, for the purposes of any suit, action or other proceeding arising out
of this Agreement or any transaction contemplated hereby. Each of the parties
agrees to commence any action, suit or proceeding relating hereto either in the
United States District Court for the Central District of California or if such
suit, action or other proceeding may not be brought in such court for
jurisdictional reasons, in the Superior Court of the State of California, Los
Angeles County. Each of the parties further agrees that service of any process,
summons, notice or document by U.S. registered mail to such party's respective
address set forth above shall be effective service of process for any action,
suit or proceeding in California with respect to any matters to which it has
submitted to jurisdiction in this Section 9.17. Each of the parties irrevocably
and unconditionally waives any objection to the laying of venue of any action,
suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in (i) Superior Court of the State of California, Los
Angeles County, or (ii) the United States District Court for the Central
District of California, 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.
56
SECTION 9.18 SEVERABILITY. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions, the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
[Signatures follow on next page]
57
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
IMPCO TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
QUANTUM FUEL SYSTEMS TECHNOLOGIES WORLDWIDE, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: President and Chief Operating Officer
58