EXHIBIT 2.2
EXHIBIT F
INDEMNIFICATION AND INSURANCE AGREEMENT
BETWEEN
AMBASSADORS INTERNATIONAL, INC.
AND
AMBASSADORS GROUP, INC.
EFFECTIVE AS OF
_________________, 2001
TABLE OF CONTENTS
PAGE
1. MUTUAL RELEASES; INDEMNIFICATION............................................................... 1
1.1. Release of Pre-Closing Claims....................................................... 1
1.2. Indemnification by Education........................................................ 2
1.3. Indemnification by Ambassadors...................................................... 2
1.4. Procedures for Defense, Settlement and Indemnification of Third Party Claims........ 3
1.5. Additional Matters.................................................................. 4
1.6. Survival of Indemnities............................................................. 4
1.7. Other Agreements Evidencing Indemnification Obligations............................. 4
2. INSURANCE MATTERS.............................................................................. 4
2.1. Education Insurance Coverage After the Separation Date.............................. 4
2.2. Cooperation and Agreement Not to Release Carriers................................... 4
2.3. Procedures With Respect to Insured Education Liabilities............................ 5
2.4. Cooperation......................................................................... 5
2.5. No Assignment or Waiver............................................................. 5
2.6. No Liability........................................................................ 5
2.7. Further Agreements.................................................................. 5
2.8. Matters Governed by Employee Matters Agreement...................................... 6
3. DISPUTE RESOLUTION............................................................................. 6
4. MISCELLANEOUS.................................................................................. 6
4.1. Authority........................................................................... 6
4.2. Amendment and Execution............................................................. 6
4.3. Counterparts........................................................................ 6
4.4. Effectiveness....................................................................... 6
4.5. Effect If Separation And/or Distribution Does Not Occur............................. 6
4.6. Termination......................................................................... 6
4.7. Binding Effect; Assignment.......................................................... 6
4.8. Performance......................................................................... 7
4.9. Additional Assurances............................................................... 7
4.10. Entire Agreement.................................................................... 7
4.11. Attachments......................................................................... 7
4.12. Descriptive Headings................................................................ 7
4.13. Gender and Number................................................................... 7
4.14. Severability........................................................................ 7
4.15. Survival of Agreements.............................................................. 7
4.16. Governing Law....................................................................... 7
4.17. Notices............................................................................. 8
4.18. Waivers; Remedies................................................................... 8
4.19. Limitation of Liability............................................................. 8
4.20. Force Majeure....................................................................... 8
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PAGE
5. DEFINITIONS.................................................................................... 8
Section 5.1. Action...................................................................... 9
Section 5.2. Ambassadors Business........................................................ 9
Section 5.3. Ambassadors Facilities...................................................... 9
Section 5.4. Ambassadors Group........................................................... 9
Section 5.5. Ambassadors Indemnitees..................................................... 9
Section 5.6. Education Business.......................................................... 9
Section 5.7. Education Facilities........................................................ 9
Section 5.8. Education Group............................................................. 9
Section 5.9. Education Indemnitees....................................................... 9
Section 5.10. Education Liabilities....................................................... 9
Section 5.11. Employee Matters Agreement.................................................. 9
Section ▇.▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Lease Liabilities............................................ 10
Section 5.13. Form 10 Liabilities......................................................... 10
Section 5.14. Form 10 Registration Statement.............................................. 10
Section 5.15. Indemnifying Party.......................................................... 10
Section 5.16. Indemnitee.................................................................. 10
Section 5.17. Insurance Policies.......................................................... 10
Section 5.18. Insured Education Liability................................................. 10
Section 5.19. Liabilities................................................................. 10
Section 5.20. Person...................................................................... 10
Section 5.21. Separation.................................................................. 10
Section 5.22. Separation Agreement........................................................ 10
Section 5.23. Separation Date............................................................. 10
Section 5.24. Subsidiary.................................................................. 10
Section 5.25. Tax Sharing Agreement....................................................... 10
Section 5.26. Taxes....................................................................... 10
Section 5.27. Third Party Claim........................................................... 10
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INDEMNIFICATION AND INSURANCE MATTERS AGREEMENT
This Indemnification and Insurance Matters Agreement (this "Agreement")
is entered into as of __________, 2001, between Ambassadors International, Inc.,
a Delaware corporation ("Ambassadors"), and Ambassadors Group, Inc., a Delaware
corporation ("Education"). Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to such terms in Article 5
below. Ambassadors and Education are sometimes referred to herein individually
as a "party" or collectively as the "parties."
RECITALS
WHEREAS, Ambassadors currently owns all of the issued and outstanding
capital stock of Education; and,
WHEREAS, the Board of Directors of Ambassadors has determined that it is
appropriate and desirable to separate the business of the parties (the
"Separation") and to distribute all of the shares of Education common stock pro
rata to the holders of Ambassadors common stock (the "Distribution"), all on the
terms and conditions contemplated by a Master Separation and Distribution
Agreement dated _____________, 2001 (the "Separation Agreement");
WHEREAS, in connection with the Separation and Distribution, the parties
wish to make certain agreements regarding indemnification and insurance.
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements set forth below, the parties hereto agree as follows:
1. MUTUAL RELEASES; INDEMNIFICATION.
1.1. RELEASE OF PRE-CLOSING CLAIMS.
1.1.1. EDUCATION RELEASE. Except as provided in Section 1.1.3 to
this Agreement, effective as of the Separation Date, Education
does hereby, for itself and as agent for each member of the
Education Group, remise, release and forever discharge the
Ambassadors Indemnitees 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 Separation Date, including in connection
with the transactions and all other activities to implement any of
the Separation and the Distribution.
1.1.2. AMBASSADORS RELEASE. Except as provided in Section 1.1.3 to
this Agreement, effective as of the Separation Date, Ambassadors
does hereby, for itself and as agent for each member of the
Ambassadors Group, remise, release and forever discharge the
Education Indemnitees 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 Separation Date, including in connection
with the transactions and all other activities to implement any of
the Separation and the Distribution.
1.1.3. NO IMPAIRMENT. Nothing contained in Section 1.1.1 or 1.1.2
shall impair any right of any Person arising under the Separation
Agreement or any other Ancillary Agreement (including this
Agreement), in each case in accordance with its terms.
1.1.4. NO ACTIONS AS TO RELEASED CLAIMS. Education agrees, for
itself and as agent for each member of the Education Group, not to
make any claim or demand, or commence any Action asserting any
claim or demand, including any claim of contribution or any
indemnification, against Ambassadors or any member
of the Ambassadors Group, or any other Person released pursuant to
Section 1.1.1, with respect to any Liabilities released pursuant
to Section 1.1.1. Ambassadors agrees, for itself and as agent for
each member of the Ambassadors Group, not to make any claim or
demand, or commence any Action asserting any claim or demand,
including any claim of contribution or any indemnification,
against Education or any member of the Education Group, or any
other Person released pursuant to Section 1.1.2, with respect to
any Liabilities released pursuant to Section 1.1.2.
1.1.5. FURTHER INSTRUMENTS. 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.
1.2. INDEMNIFICATION BY EDUCATION. Subject to Section 1.4 or as otherwise
provided in this Agreement, Education shall, for itself and as agent for
each member of the Education Group, indemnify, defend (or, where
applicable, pay the defense costs for) and hold harmless the Ambassadors
Indemnitees from and against any and all Liabilities that any third party
seeks to impose upon the Ambassadors Indemnitees, or which are imposed
upon the Ambassadors Indemnitees, and that relate to, arise out of, or
result from:
1.2.1. the Education Business prior to the Separation Date, other
than any Liability which arises out of or results from the
intentional and willful misconduct of an employee of the
Ambassadors Group other than an employee who becomes an employee
of the Education, excluding however Liabilities arising from or
relating to legal proceedings (including threatened) in connection
with the Education Business prior to the Separation Date which are
not covered by insurance;
1.2.2. the Education Business after the Separation Date;
1.2.3. any Education Liability or any Education Contract other
than any Liability which arises out of or results from the
intentional and willful misconduct of an employee of the
Ambassadors Group prior to the Separation Date, other than an
employee who becomes an employee of the Education Group;
1.2.4. any breach by Education or any member of the Education
Group of the Separation Agreement or any of the Ancillary
Agreements (including this Agreement);
1.2.5. any Form 10 Liabilities; and
1.2.6. any ▇▇▇▇▇▇▇ Street Lease Liabilities.
This Section 1.2 shall not apply to (i) any amounts recovered from any
third party and/or covered by any insurance policy by Ambassadors in
respect of the related loss; (ii) any Liability created under federal or
state securities laws arising from or related to statements made by
Ambassadors in its filings with the United States Securities and Exchange
Commission or press releases issued by Ambassadors addressing the
Education Business; or (iii) any Liability indemnified under Section 1.4.
The parties agree that the ▇▇▇▇▇▇▇ Street Lease Liabilities are the sole
responsibility of Education.
1.3. INDEMNIFICATION BY AMBASSADORS. Except as otherwise provided in this
Agreement, Ambassadors shall, for itself and as agent for each member of
the Ambassadors Group, indemnify, defend (or, where applicable, pay the
defense costs for) and hold harmless the Education Indemnitees from and
against any and all Liabilities that any third party seeks to impose upon
the Education Indemnitees, or which are imposed upon the Education
Indemnitees, and that relate to, arise out of, or result from:
1.3.1. the Education Business prior to the Separation Date to the
extent that such items are not the responsibility of Education as
an Indemnifying Party pursuant to Sections 1.2.1 to 1.2.5 above;
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1.3.2. the Ambassadors Business or any Liability of the
Ambassadors Group other than the Education Liabilities;
1.3.3. any breach by Ambassadors or any member of the Ambassadors
Group of the Separation Agreement or any of the Ancillary
Agreements (including this Agreement).
1.4. PROCEDURES FOR DEFENSE, SETTLEMENT AND INDEMNIFICATION OF THIRD
PARTY CLAIMS.
1.4.1. NOTICE OF CLAIMS. If a Ambassadors Indemnitee or a
Education Indemnitee (as applicable) (an "Indemnitee") shall
receive notice or otherwise learn of the assertion by a Person
(including any Governmental Authority) who is not a member of the
Ambassadors Group or the Education Group of any claim or of the
commencement by any such Person of any Action (collectively, a
"Third Party Claim") with respect to which a party (an
"Indemnifying Party") may be obligated to provide indemnification
to such Indemnitee pursuant to Section 1.2, 1.3 or 1.4, or any
other section of the Separation Agreement or any Ancillary
Agreement (including this Agreement), Ambassadors and Education
(as applicable) will ensure that such Indemnitee shall give such
Indemnifying Party written notice thereof within 30 days after
becoming aware of such Third Party Claim. Any such notice shall
describe the Third Party Claim in reasonable detail.
Notwithstanding the foregoing, the delay or failure of any
Indemnitee or other Person to give notice as provided in this
Section 1.5.1 shall not relieve the related Indemnifying Party of
its obligations under this Article 1, except to the extent that
such Indemnifying Party is actually and substantially prejudiced
by such delay or failure to give notice.
1.4.2. DEFENSE BY INDEMNIFYING PARTY. Except as otherwise
inconsistent with the provisions of any applicable Insurance
Policy, an Indemnifying Party will manage the defense of and may
settle or compromise any Third Party Claim. Within 30 days after
the receipt of notice from an Indemnitee in accordance with
Section 1.5.1 (or sooner, if the nature of such Third Party Claim
so requires), the Indemnifying Party shall notify the Indemnitee
that the Indemnifying Party will assume responsibility for
managing the defense of such Third Party Claim, which notice shall
specify any reservations or exceptions.
1.4.3. DEFENSE BY INDEMNITEE. If an Indemnifying Party fails to
assume responsibility for managing the defense of a Third Party
Claim, or fails to notify an Indemnitee that it will assume
responsibility as provided in Section 1.5.1, such Indemnitee may
manage the defense of such Third Party Claim; provided, however,
that the Indemnifying Party shall reimburse all such costs and
expenses in the event it is ultimately determined that the
Indemnifying Party is obligated to indemnify the Indemnitee with
respect to such Third Party Claim.
1.4.4. NO SETTLEMENT BY INDEMNITEE WITHOUT CONSENT. Unless the
Indemnifying Party has failed to manage the defense of the Third
Party Claim in accordance with the terms of this Agreement, no
Indemnitee may settle or compromise any Third Party Claim without
the consent of the Indemnifying Party.
1.4.5. NO CONSENT TO CERTAIN JUDGMENTS OR SETTLEMENTS WITHOUT
CONSENT. Notwithstanding any provision of this SECTION 1.4, no
party shall consent to entry of any judgment or enter into any
settlement of a Third Party Claim without the consent of the other
party (such consent not to be unreasonably withheld) if the effect
of such judgment or settlement is to (i) permit any injunction,
declaratory judgment, other order or other nonmonetary relief to
be entered, directly or indirectly, against the other party or
(ii) affect the other party in a material fashion due to the
allocation of Liabilities and related indemnities set forth in the
Separation Agreement, this Agreement or any other Ancillary
Agreement.
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1.5. ADDITIONAL MATTERS.
1.5.1. COOPERATION IN DEFENSE AND SETTLEMENT. With respect to any
Third Party Claim that implicates both Education and Ambassadors
in a material fashion due to the allocation of Liabilities,
responsibilities for management of defense and related indemnities
set forth in the Separation Agreement, this Agreement or any of
the Ancillary Agreements, the parties agree to cooperate fully and
maintain a joint defense (in a manner that will preserve the
attorney-client privilege with respect thereto) so as to minimize
such Liabilities and defense costs associated therewith. The party
that is not responsible for managing the defense of such Third
Party Claims shall, upon reasonable request, be consulted with
respect to significant matters relating thereto and may, if
necessary or helpful, associate counsel to assist in the defense
of such claims.
1.5.2. SUBROGATION. In the event of payment by or on behalf of any
Indemnifying Party to or on behalf of 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, in
whole or in part based upon whether the Indemnifying Party has
paid all or only part of the Indemnitee's Liability, as to any
events or circumstances in respect of which such Indemnitee may
have any right, defense or claim relating to such Third Party
Claim against any claimant or plaintiff asserting such Third Party
Claim or against any other person. Such Indemnitee shall cooperate
with such Indemnifying Party in a reasonable manner, and at the
cost and expense of such Indemnifying Party, in prosecuting any
subrogated right, defense or claim.
1.5.3. NOT APPLICABLE TO TAXES. This Agreement shall not apply to
Taxes (which are covered by the Tax Sharing Agreement).
1.6. SURVIVAL OF INDEMNITIES. Subject to Section 4.5, the rights and
obligations of the members of the Ambassadors Group and the Education
Group under this Article 1 shall survive the sale or other transfer by
any party of any Assets or businesses or the assignment by it of any
Liabilities or the sale by any member of the Ambassadors Group or the
Education Group of the capital stock or other equity interests of any
Subsidiary to any Person.
1.7. OTHER AGREEMENTS EVIDENCING INDEMNIFICATION OBLIGATIONS. Ambassadors
hereby agrees to execute, for the benefit of any Education Indemnitee,
such documents as may be reasonably requested by such Education
Indemnitee, evidencing Ambassadors' agreement that the indemnification
obligations of Ambassadors set forth in this Agreement inure to the
benefit of and are enforceable by such Education Indemnitee. Education
hereby agrees to execute, for the benefit of any Ambassadors Indemnitee,
such documents as may be reasonably requested by such Ambassadors
Indemnitee, evidencing Education's agreement that the indemnification
obligations of Education set forth in this Agreement inure to the benefit
of and are enforceable by such Ambassadors Indemnitee.
2. INSURANCE MATTERS.
2.1. EDUCATION INSURANCE COVERAGE AFTER THE SEPARATION DATE. From and
after the Separation Date, Education shall be responsible for obtaining
and maintaining insurance programs for its risk of loss and such
insurance arrangements shall be separate and apart from Ambassadors'
insurance programs. Notwithstanding the foregoing, Ambassadors, upon the
request of Education, shall use all commercially reasonable efforts to
assist Education in the transition to its own separate insurance programs
from and after the Separation Date, and shall provide Education with any
information that is in the possession of Ambassadors and is reasonably
available and necessary to either obtain insurance coverages for
Education or to assist Education in preventing unintended self-insurance,
in whatever form.
2.2. COOPERATION AND AGREEMENT NOT TO RELEASE CARRIERS. Each of
Ambassadors and Education will share such information as is reasonably
necessary in order to permit the other to manage and conduct its
insurance
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matters in an orderly fashion. Each of Ambassadors and Education, at the
request of the other, shall cooperate with and use commercially
reasonable efforts to assist the other in recoveries for claims made
under any insurance policy for the benefit of any insured party, and
neither Ambassadors nor Education, nor any of their Subsidiaries, shall
take any action which would intentionally jeopardize or otherwise
interfere with either party's ability to collect any proceeds payable
pursuant to any insurance policy. Except as otherwise contemplated by the
Separation Agreement, this Agreement or any Ancillary Agreement, after
the Separation Date, neither Ambassadors nor Education shall (and shall
ensure that no member of their respective Groups shall), without the
consent of the other, provide any insurance carrier with a release, or
amend, modify or waive any rights under any such policy or agreement, if
such release, amendment, modification or waiver would adversely affect
any rights or potential rights of any member of the other Group
thereunder. However, nothing in this SECTION 2.2 shall (i) preclude any
member of any Group from presenting any claim or from exhausting any
policy limit, (ii) require any member of any Group to pay any premium or
other amount or to incur any Liability, or (iii) require any member of
any Group to renew, extend or continue any policy in force.
2.3. PROCEDURES WITH RESPECT TO INSURED EDUCATION LIABILITIES.
2.3.1. REIMBURSEMENT. Ambassadors shall seek Education's approval,
which approval shall not be unreasonably withheld, to incur
attorneys fees, costs (including internal costs), or any other
amounts to pursue insurance recoveries from Insurance Policies for
insured Education Liabilities. Ambassadors will ▇▇▇▇ Education and
Education will reimburse Ambassadors on a monthly basis for all
such amounts incurred to pursue insurance recoveries from
Insurance Policies for Insured Education Liabilities.
2.3.2. MANAGEMENT OF CLAIMS. Except as otherwise inconsistent with
the provisions of any applicable Insurance Policy, the defense of
claims, suits or actions giving rise to potential or actual
Insured Education Liabilities will be managed (in conjunction with
Ambassadors' insurers, as appropriate) by the party that would
have had responsibility for managing such claims, suits or actions
had such Insured Education Liabilities been Education Liabilities.
2.4. COOPERATION. Ambassadors and Education will cooperate with each
other in all respects, and they shall execute any additional documents
which are reasonably necessary, to effectuate the provisions of this
Article 2.
2.5. NO ASSIGNMENT OR WAIVER. This Agreement shall not be considered as
an attempted assignment of any policy of insurance or as a contract of
insurance and shall not be construed to waive any right or remedy of any
member of the Ambassadors Group or the Education Group in respect of any
Insurance Policy or any other contract or policy of insurance.
2.6. NO LIABILITY. Education does hereby, for itself and as agent for
each other member of the Education Group, agree that no member of the
Ambassadors Group or any Ambassadors Indemnitee shall have any Liability
whatsoever as a result of the insurance policies and practices of
Ambassadors and its Subsidiaries as in effect at any time prior to the
Separation Date, including as a result of the level or scope of any such
insurance, the creditworthiness of any insurance carrier, the terms and
conditions of any policy, the adequacy or timeliness of any notice to any
insurance carrier with respect to any claim or potential claim or
otherwise.
2.7. FURTHER AGREEMENTS. The Parties acknowledge that they intend to
allocate financial obligations without violating any laws regarding
insurance, self-insurance or other financial responsibility. If it is
determined that any action undertake pursuant to the Separation
Agreement, this Agreement or any Ancillary Agreement is violative of any
insurance, self-insurance or related financial responsibility law or
regulation, the parties agree to work together to do whatever is
necessary to comply with such law or regulation while trying to
accomplish, as much as possible, the allocation of financial obligations
as intended in the Separation Agreement, this Agreement and any Ancillary
Agreement.
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2.8. MATTERS GOVERNED BY EMPLOYEE MATTERS AGREEMENT. This Article 2 shall
not apply to any insurance policies that are the subject of the Employee
Matters Agreement.
3. DISPUTE RESOLUTION. Resolution of any and all Disputes arising from or in
connection with this Agreement shall be exclusively governed by and settled in
accordance with the provisions of Section 4.6 of the Separation Agreement.
4. MISCELLANEOUS.
4.1. AUTHORITY. Each of the parties hereto represents to the other that
(i) it has the corporate or other requisite power and authority to
execute, deliver and perform this Agreement, (ii) the execution, delivery
and performance of this Agreement by it have been duly authorized by all
necessary corporate or other actions, (iii) it has duly and validly
executed and delivered this Agreement, and (iv) this Agreement is a
legal, valid and binding obligation, enforceable against it in accordance
with its terms subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally and general equity principles.
4.2. AMENDMENT AND EXECUTION. The Boards of Directors of Education and
Ambassadors may mutually agree to amend the provisions of this Agreement
at any time or times, for any reason, either prospectively or
retroactively, to such extent and in such manner as the Boards mutually
deem advisable. Each Board may delegate its amendment power, in whole or
in part, to one or more Persons or committees as it deems advisable. No
change or amendment will be made to this Agreement, except by an
instrument in writing signed by authorized individuals. This Agreement
and amendments hereto shall be in writing and executed on behalf of
Ambassadors and Education by their respective duly authorized officers
and representatives.
4.3. COUNTERPARTS. This Agreement, including any attachments hereto and
the other documents referred to herein, may be executed via facsimile or
otherwise in counterparts, each of which shall be deemed to be an
original but all of which shall constitute one and the same agreement.
4.4. EFFECTIVENESS. All covenants and agreements of the parties contained
in this Agreement shall be subject to and conditioned upon the
Distribution becoming effective.
4.5. EFFECT IF SEPARATION AND/OR DISTRIBUTION DOES NOT OCCUR. If the
Separation and/or Distribution does not occur, then all actions and
events that are, under this Agreement, to be taken or occur effective as
of the Separation Date and/or Distribution Date, or otherwise in
connection with the Separation and/or Distribution, shall not be taken or
occur except to the extent specifically agreed by Education and
Ambassadors.
4.6. TERMINATION. This Agreement may be terminated and the Distribution
abandoned at any time prior to the Time of Distribution by and in the
sole discretion of the Ambassadors Board of Directors without the
approval of Education or of Ambassadors's shareholders. In the event of
such termination, no party will have any liability of any kind to any
other party on account of such termination.
4.7. BINDING EFFECT; ASSIGNMENT. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
legal representatives and successors, and nothing in this Agreement,
express or implied, is intended to confer upon any other Person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement. Except as herein specifically provided to the contrary,
neither party may assign this Agreement or any rights or obligations
hereunder, without the prior written consent of the other party, and any
such assignment shall be void; provided, however, either party (or its
permitted successive assignees or transferees hereunder) may assign or
transfer this Agreement as a whole without consent to an entity that
succeeds to all or substantially all of the business or assets of such
party to which this Agreement relates.
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4.8. PERFORMANCE. Each party hereto will cause to be performed, and
hereby guarantees the performance of all actions, agreements and
obligations set forth herein to be performed by any subsidiary or any
member of such party's Group.
4.9. ADDITIONAL ASSURANCES. Except as may be specifically provided herein
to the contrary, the provisions of this Agreement shall be self-operative
and shall not require further agreement by the parties; provided,
however, at the request of either party, the other party shall execute
such additional instruments and take such additional acts as are
reasonable, and as the requesting party may reasonably deem necessary, to
effectuate this Agreement.
4.10. ENTIRE AGREEMENT. This Agreement, the Separation Agreement, all
other Transaction Agreements, including any annexes, schedules and
exhibits hereto or thereto, and other agreements and documents referred
to herein and therein, will together constitute the entire agreement
between the parties with respect to the subject matter hereof and thereof
and shall supersede all prior negotiations, agreements and understandings
of the parties of any nature, whether oral or written, with respect to
such subject matter.
4.11. ATTACHMENTS. All attachments hereto are hereby incorporated in and
made a part of this Agreement as if set forth in full herein. Capitalized
terms used in the attachments hereto but not otherwise defined therein
will have the respective meanings assigned to such terms in this
Agreement.
4.12. DESCRIPTIVE HEADINGS. The headings contained in this Agreement, in
any Exhibit or Schedule hereto and in the table of contents to this
Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. When a reference is made
in this Agreement to an Article or a Section, Exhibit or Schedule, such
reference shall be to an Article or Section of, or an Exhibit or Schedule
to, this Agreement unless otherwise indicated.
4.13. GENDER AND NUMBER. Whenever the context of this Agreement requires,
the gender of all words herein shall include the masculine, feminine and
neuter, and the number of all words herein shall include the singular and
plural.
4.14. SEVERABILITY. The parties hereto have negotiated and prepared the
terms of this Agreement in good faith with the intent that each and every
one of the terms, covenants and conditions herein be binding upon and
inure to the benefit of the respective parties. Accordingly, if any one
or more of the terms, provisions, promises, covenants or conditions of
this Agreement or the application thereof to any person or circumstance
shall be adjudged to any extent invalid, unenforceable, void or voidable
for any reason whatsoever by a court of competent jurisdiction, such
provision shall be as narrowly construed as possible, and each and all of
the remaining terms, provisions, promises, covenants and conditions of
this Agreement or their application to other persons or circumstances
shall not be affected thereby and shall be valid and enforceable to the
fullest extent permitted by law. To the extent this Agreement is in
violation of applicable law, then the parties agree to negotiate in good
faith to amend the Agreement, to the extent possible consistent with its
purposes, to conform to law and effect the original intent of the
parties.
4.15. SURVIVAL OF AGREEMENTS. Except as otherwise contemplated by this
Agreement, all covenants and agreements of the parties contained in this
Agreement shall remain in full force and effect and shall survive the
time of Distribution.
4.16. GOVERNING LAW. This Agreement shall be construed in accordance with
and all Disputes hereunder shall be governed by the laws of the State of
California, excluding its conflict of law rules and the United Nations
Convention on Contracts for the International Sale of Goods. The Superior
Court of Los Angeles County and/or the United States District Court for
the Southern District of California shall have jurisdiction and venue
over all Disputes between the parties that are permitted to be brought in
a court of law pursuant to Section 3 above.
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4.17. NOTICES. Any notice, demand, offer, request or other communication
required or permitted to be given by either party pursuant to the terms
of this Agreement shall be in writing and shall be deemed effectively
given the earlier of (i) when received, (ii) when delivered personally,
(iii) one Business Day after being delivered by facsimile (with receipt
of appropriate confirmation), (iv) one Business Day after being deposited
with a nationally recognized overnight courier service or (v) four days
after being deposited in the U.S. mail, First Class with postage prepaid,
and addressed to:
If to Ambassadors: With a copy to:
Ambassadors International, Inc. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Richman, Mann, Chizever, Philips & ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇: ▇▇▇ ▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇ ▇▇▇-▇▇▇▇
If to Education: With a copy to:
Ambassadors Group, Inc. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ Building Richman, Mann, Chizever, Philips & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇ ▇▇▇-▇▇▇▇ Facsimile: ▇▇▇ ▇▇▇-▇▇▇▇
Ambassadors and Education may substitute a different address or facsimile
number, from time to time, if such substitute is provided to the intended
notice recipient in writing by notice given in the manner provided in
this section.
4.18. WAIVERS; REMEDIES. No failure or delay by any party hereto in
exercising any right, power or privilege hereunder will operate as a
waiver thereof, nor will any waiver on the part of any party hereto of
any right, power or privilege hereunder operate as a waiver of any other
right, power or privilege hereunder, nor will any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege hereunder. The rights and remedies herein provided are
cumulative and are not exclusive of any rights or remedies which the
parties may otherwise have at law or equity.
4.19. LIMITATION OF LIABILITY. In no event shall any member of the
Ambassadors Group or Education Group be liable to any other member of the
Ambassadors Group or Education Group for any special, consequential,
indirect, incidental or punitive damages or lost profits, however caused
and on any theory of liability (including negligence) arising in any way
out of this Agreement, whether or not such party has been advised of the
possibility of such damages; provided, however, that the foregoing
limitations shall not limit each party's indemnification obligations for
liabilities to third parties as set forth in this Agreement.
4.20. FORCE MAJEURE. Neither party shall be liable or deemed to be in
default for any delay or failure in performance under this Agreement or
other interruption of service deemed to result, directly or indirectly,
from acts of God, civil or military authority, acts of public enemy, war,
accidents, explosions, earthquakes, floods, failure of transportation,
strikes or other work interruptions by either party's employees, or any
other similar cause beyond the reasonable control of either party unless
such delay or failure in performance is expressly addressed elsewhere in
this Agreement.
5. DEFINITIONS. For the purposes of this Agreement, the following terms shall
have the following meanings. Any capitalized terms which are not defined in this
Agreement shall have the meaning assigned to them in the Separation Agreement.
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5.1. "ACTION" means any demand, action, suit, countersuit, arbitration,
inquiry, proceeding or investigation by or before any federal, state,
local, foreign or international governmental authority or any arbitration
or mediation tribunal.
5.2. "AMBASSADORS BUSINESS" means the business and operations of
Ambassadors as they currently exist, exclusive of the Education Business.
5.3. "AMBASSADORS FACILITIES" means all of the real property and
improvements thereon owned or occupied at any time on or before the
Separation Date by any member of the Ambassadors Group, excluding the
Education Facilities.
5.4. "AMBASSADORS GROUP" has the meaning set forth in Section 6.1 of the
Separation Agreement.
5.5. "AMBASSADORS INDEMNITEES" means Ambassadors, each member of the
Ambassadors Group and each of their respective directors, officers and
employees.
5.6. "EDUCATION BUSINESS" has the meaning set forth in Section 6.12 of
the Separation Agreement.
5.7. "EDUCATION FACILITIES" means all of the real property and
improvements thereon owned or occupied on the Separation Date by any
member of the Education Group.
5.8. "EDUCATION GROUP" has the meaning set forth in Section 6.13 of the
Separation Agreement.
5.9. "EDUCATION INDEMNITEES" means Education, each member of the
Education Group and each of their respective directors, officers and
employees.
5.10. "EDUCATION LIABILITIES" shall mean the following Liabilities,
except as otherwise provided for in any Ancillary Agreement or other
express agreement of the parties, but excluding Insured Education
Liabilities:
5.10.1. all Liabilities reflected in the Education balance sheet
as of the Separation Date;
5.10.2. all Education Contingent Liabilities;
5.10.3. all Liabilities (other than Liabilities for Taxes),
whether arising before, on or after the Separation Date, primarily
relating to, arising out of or resulting from:
5.10.3.1. the operation of the Education Business, as
conducted at any time prior to, on or after the Separation
Date (including any Liability relating to, arising out of
or resulting from any act or failure to act by any
director, officer, employee, agent or representative
(whether or not such act or failure to act is or was within
such Person's authority));
5.10.3.2. the operation of any business conducted by any
member of the Education Group at any time after the
Separation Date (including any Liability relating to,
arising out of or resulting from any act or failure to act
by any director, officer, employee, agent or representative
(whether or not such act or failure to act is or was within
such Person's authority)); or
5.10.3.3. any Education Assets;
5.10.4. all obligations and Liabilities of Education under the
Separation Agreement, this Agreement or any of the other Ancillary
Agreements.
5.11. "EMPLOYEE MATTERS AGREEMENT" means the Employee Matters Agreement
attached as Exhibit C to the
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Separation Agreement.
5.12. "▇▇▇▇▇▇▇ STREET LEASE LIABILITIES" means any Liabilities relating
to, arising out of or resulting from the lease of the real property at
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
5.13. "FORM 10 LIABILITIES" means any Liabilities relating to, arising
out of or resulting from any untrue statement or alleged untrue statement
of a material fact or omission or alleged omission to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, with respect to all information contained in the
Form 10 Registration Statement or any information statement relating to
the Form 10 Registration Statement.
5.14. "FORM 10 REGISTRATION STATEMENT" has the meaning set forth in
Section 6.15 of the Separation Agreement.
5.15. "INDEMNIFYING PARTY" has the meaning set forth in Section 1.5.1
hereof.
5.16. "INDEMNITEE" has the meaning set forth in Section 1.5.1 hereof.
5.17. "INSURANCE POLICIES" means insurance policies pursuant to which a
Person makes a true risk transfer to an insurer.
5.18. "INSURED EDUCATION LIABILITY" means any Education Liability to the
extent that it is covered under the terms of Ambassadors' Insurance
Policies.
5.19. "LIABILITIES" means all debts, liabilities, guarantees, assurances,
commitments and obligations, whether fixed, contingent or absolute,
asserted or unasserted, matured or unmatured, liquidated or unliquidated,
accrued or not accrued, known or unknown, due or to become due, whenever
or however arising (including, without limitation, whether arising out of
any Contract or tort based on negligence or strict liability) and whether
or not the same would be required by GAAP to be reflected in financial
statements or disclosed in the notes thereto.
5.20. "PERSON" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization and a governmental
entity or any department, agency or political subdivision thereof.
5.21. "SEPARATION" has the meaning set forth in the Recitals of the
Separation Agreement.
5.22. "SEPARATION AGREEMENT" means the Master Separation and Distribution
Agreement dated as of _____________, 2001 between Ambassadors and
Education.
5.23. "SEPARATION DATE" has the meaning set forth in Section 1.1 of the
Separation Agreement.
5.24. "SUBSIDIARY" has the meaning set forth in Section 6.26 of the
Separation Agreement.
5.25. "TAX SHARING AGREEMENT" means the Tax Sharing Agreement, attached
as Exhibit D to the Separation Agreement.
5.26. "TAXES" has the meaning set forth in the Tax Sharing Agreement.
5.27. "THIRD PARTY CLAIM" has the meaning set forth in Section 1.5.1 of
this Agreement.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the parties as of the date first written
above.
Ambassadors International, Inc., Ambassadors Group, Inc.,
a Delaware corporation a Delaware corporation
By: By:
------------------------------- -------------------------------------
Title: Title:
---------------------------- ----------------------------------
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