Lgl Group Inc 8-K, filed Aug 9, 2022
Lgl Group Inc (LGL)
About this 8-K
Lgl Group Inc filed this 8-K on August 9, 2022.
Items reported
- Item 1.01: Entered into a material agreement
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Item 1.01. |
Entry into a Material Definitive Agreement. |
On August 3, 2022, The LGL Group, Inc. (the “Company” or “LGL”) announced the record and distribution dates for its contemplated spinoff of its M-tron Industries, Inc. subsidiary (“Mtron”) to holders of LGL common stock (the “Distribution”). In connection with the Distribution, the Company entered into a Separation and Distribution Agreement which provides for, among other things, the mechanics for effecting the Distribution as well as certain ongoing responsibilities of Mtron and LGL subsequent to the Distribution. Further, the Company entered into a Transitional Administrative and Management Services Agreement with Mtron, which, among other things, specifies that LGL will provide Mtron, and Mtron will provide LGL, with certain administrative and management services for up to a twelve-month period after the Distribution, and a Tax Indemnity and Sharing Agreement, which, among other things, contains certain agreements and covenants related to tax matters involving LGL and Mtron and covers time periods before and after the Distribution.
For more information regarding the agreements entered into in connection with the Distribution, please refer to Mtron’s registration statement on Form 10, as amended. The foregoing description of the Separation and Distribution Agreement, Transitional Administrative and Management Services Agreement, and Tax Indemnity and Sharing Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreements, copies of which are filed as Exhibits 10.1, 10.2 and 10.3, respectively, to this Current Report on Form 8-K and incorporated herein by reference.
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Item 9.01. |
Financial Statements and Exhibits. |
(d)Exhibits
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Exhibit No. |
Description |
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10.1 |
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10.2 |
Transitional Administrative and Management Services Agreement. |
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10.3 |
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104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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August 9, 2022 |
THE LGL GROUP, INC. |
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By: |
/s/ James W. Tivy |
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Name: |
James W. Tivy |
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Title: |
Chief Financial Officer |
Exhibit 10.1
SEPARATION AND DISTRIBUTION AGREEMENT
THIS SEPARATION AND DISTRIBUTION AGREEMENT (this “Agreement”) is dated as of August 3, 2022 between The LGL Group, Inc., a Delaware corporation (“LGL”), and M‑tron Industries, Inc., a Delaware corporation and, as of the date of this Agreement, a wholly owned subsidiary of LGL (“Mtron”). As used herein, LGL on the one hand, and Mtron, on the other hand, are sometimes referred to individually as a “Party”, or together, as “Parties”.
RECITALS
WHEREAS, LGL is the sole member of M-tron Systems Holdings, LLC, a Delaware limited liability company (“Mtron Holdings”), and Mtron Holdings is the sole stockholder of Mtron;
WHEREAS, the board of directors of LGL (the “LGL Board”) has determined that it is appropriate and advisable to separate Mtron and its subsidiaries from LGL into a separate publicly traded company (the “Separation”);
WHEREAS, in connection with the Separation, the LGL Board has determined that it is appropriate and advisable for the Mtron common stock, par value $0.01 per share (“Mtron Common Stock”), that LGL owns to be distributed to holders of LGL common stock, par value $0.01 per share (“LGL Common Stock”) (the “Distribution”);
WHEREAS, in its capacity as sole member of Mtron Holdings, LGL has authorized the transfer of Mtron Common Stock to be effected through the Distribution;
WHEREAS, LGL and Mtron intend that, for U.S. federal income tax purposes, the Distribution and the other transactions contemplated by this Agreement shall be generally tax-free under Section 355 of the Code (as defined below); and
WHEREAS, each of LGL and Mtron have determined that it is advisable to set forth the principal transactions required to facilitate and effect the Separation and the Distribution and to provide for other agreements that will govern certain matters regarding the Separation and the Distribution.
NOW, THEREFORE, in consideration of the premises and the mutual promises contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which is acknowledged by LGL and Mtron, LGL and Mtron agree as follows:
ARTICLE I
Definitions; General Interpretative Principles
1.1Definitions. As used in this Agreement, the following terms shall have the following respective meanings:
“Administrative Agreement” shall mean the Transitional Administrative and Management Services Agreement, dated of even date herewith, between LGL and Mtron.
“Affiliate” of any Person shall mean another Person that directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, such first Person; provided, however, that for the purposes of this Agreement from and after the Distribution, no member of the LGL Group shall be deemed to be an Affiliate of any member of the Mtron Group, and no member of the Mtron Group shall be deemed to be an Affiliate of any member of the LGL Group.
“Ancillary Agreements” shall mean those agreements listed on Schedule 1.1(a).
“Code” shall mean the Internal Revenue Code of 1986, as amended.
“Consents” shall mean any consents, waivers or approvals from, or notification requirements to, any third parties, including governmental approvals.
“Distribution” shall have the meaning set forth in the Recitals.
“Distribution Agent” shall have the meaning set forth in Section 3.1.
“Distribution Date” shall mean the date on which the Distribution occurs.
“Distribution Taxes” shall mean any tax, fee, assessment, charge or levy made by a Governmental Authority in connection with, arising from or attributable to the Distribution and the transactions necessary to effect the Distribution.
“Distribution Time” shall mean 11:59 p.m., Eastern Time, on the Distribution Date or such other time designated by the LGL Board as the time at which the Distribution is to be effective on the Distribution Date.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
“Form 10” shall mean the registration statement on Form 10 of Mtron with respect to the registration under the Exchange Act of the Mtron Common Stock, including any amendments or supplements thereto.
“Governmental Authority” shall mean any federal, state or local court, government, department, commission, board, bureau, agency, official or other regulatory or administrative authority.
“Group” shall mean the Mtron Group or the LGL Group, as applicable.
“Indemnifiable Loss” has the meaning set forth in Section 6.3.
“Indemnifying Party” has the meaning set forth in Section 6.5.
“Indemnitee” has the meaning set forth in Section 6.5.
“Information” of a Party shall mean any and all information that such Party or any of its Representatives, whether furnished orally or in writing or by any other means or gathered by inspection and regardless of whether the same is specifically marked or designated as
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“confidential” or “proprietary,” together with any and all notes, memoranda, analyses, compilations, studies or other documents (whether in hard copy or electronic media) prepared by the receiving Party or any of its Representatives which contain or otherwise reflect such information, together with any and all copies, extracts or other reproductions of any of the same; provided, however, that for the purposes hereof, all information relating to the LGL Group and its businesses, assets and liabilities in the possession of any member of the Mtron Group at the time of the Distribution shall be deemed to have been furnished by the LGL Group and all information relating to the Mtron Group and its businesses, assets and liabilities in the possession of any member of the LGL Group at the time of the Distribution shall be deemed to have been furnished by the Mtron Group; and further provided that the term “Information” does not include information that:
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is or becomes generally available to the public through no wrongful act of the receiving Party or its Representatives; |
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is or becomes available to the receiving Party on a non-confidential basis from a source other than the providing Party or its Representatives, provided that such source is not known by the receiving Party to be subject to a confidentiality agreement with the providing Party; or |
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has been independently acquired or developed by the receiving Party without violation of any of the obligations of the receiving Party or its Representatives under this Agreement. |
“Information Statement” shall mean the information statement and any related documentation to be distributed to holders of LGL Common Stock in connection with the Distribution, including any amendments or supplements thereto.
“LGL Board” has the meaning set forth in the Recitals.
“LGL Common Stock” has the meaning set forth in the Recitals.
“LGL Group” shall mean LGL and its Subsidiaries, other than the Mtron Group.
“LGL Indemnifiable Loss” has the meaning set forth in Section 6.3.
“Liabilities” shall mean any and all debts, liabilities, commitments and obligations, whether fixed, contingent or absolute, matured or unmatured, liquidated or unliquidated, accrued or not accrued, known or unknown, whenever or however arising and whether or not the same would be required by generally accepted accounting principles to be reflected in financial statements or disclosed in the notes thereto.
“Mtron” has the meaning set forth in the Preamble.
“Mtron Common Stock” has the meaning set forth in the Recitals.
“Mtron Group” shall mean Mtron and each of the entities set forth on Schedule 1.1(b), and any other entities that may become Subsidiaries of Mtron.
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“Mtron Indemnifiable Loss” has the meaning set forth in Section 6.2.
“Party” has the meaning set forth in the Preamble.
“Person” shall mean any natural person, corporation, general or limited partnership, limited liability company, joint venture, trust, association or entity of any kind.
“Record Date” shall mean the record date for the Distribution determined by the LGL Board for the Distribution.
“Record Holders” has the meaning set forth in Section 3.1.
“Representatives” of a Party shall mean such Party’s officers, directors, employees, accountants, counsel, investment bankers, financial advisors, consultants and other representatives.
“SEC” shall mean the U.S. Securities and Exchange Commission.
“Securities Act” shall mean the Securities Act of 1933, as amended.
“Subsidiary” shall mean, with respect to any Person, any corporation or other organization, whether incorporated or unincorporated, of which (i) such Person or any other Subsidiary of such Person is a general partner or (ii) at least 50% of the securities or other interests having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization or at least 50% of the value of the outstanding equity is directly or indirectly owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries.
“Tax Indemnity and Sharing Agreement” shall mean the Tax Indemnity and Sharing Agreement, dated of even date herewith, by and between LGL and Mtron.
“Third-Party Claim” has the meaning set forth in Section 6.6(a).
1.2General Interpretive Principles. (a) Words in the singular will include the plural and vice versa, and words of one gender will include the other gender, in each case, as the context requires, (b) the word “including” and words of similar import when used in this Agreement will mean “including, without limitation,” unless otherwise specified, (c) any reference to any federal, state, local or foreign statute, law or code will be deemed to also refer to all rules and regulations promulgated thereunder, unless the context otherwise requires and (d) any reference to any agreement will be deemed to mean the agreement as it may be amended from time to time.
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ARTICLE II
Recapitalization
2.1Recapitalization of Mtron. Subject to the satisfaction or waiver of the conditions set forth in Section 3.3, LGL and Mtron will cause as recapitalization of Mtron by means of stock split or stock dividend such that after the Record Date and before the Distribution Time the number of shares of Mtron Common Stock issued and outstanding immediately before the Distribution Time will equal the number of shares of LGL Common Stock issued and outstanding as of the Record Date, which Mtron Common Stock owned by LGL will constitute all of the issued and outstanding capital stock of Mtron.
2.2Amendments to Mtron Corporate Documents. LGL will take, and will cause Mtron to take, all actions necessary such that, as of the Distribution Time, Mtron’s amended and restated certificate of incorporation and amended and restated bylaws will substantially conform to those attached hereto as Exhibit A and Exhibit B, respectively.
2.3Further Assurances.
(a)In addition to the actions specifically provided for elsewhere in this Agreement, each Party will use its commercially reasonable efforts at and after the Distribution Time to take, or cause to be taken, all reasonable actions, and to do, or cause to be done, all things, reasonably necessary, proper or advisable under applicable laws and agreements to consummate and make effective the transactions contemplated by this Agreement and the Ancillary Agreements.
(b)Each Party will cooperate with the other Party, and without any further consideration, to execute and deliver, or use its commercially reasonable efforts to cause to be executed and delivered, all instruments, including instruments of conveyance, assignment and transfer, and to make all filings with, and to obtain all Consents, approvals or authorizations of, any Governmental Authority or any other Person under any permit, license, agreement, indenture or other instrument (including any Consents), and to take all other actions as the Party may reasonably be requested to take by the other Party from time to time, consistent with the terms of this Agreement and the Ancillary Agreements, in order to effectuate the provisions and purposes of this Agreement and the Ancillary Agreements. Notwithstanding the foregoing or anything else in this Agreement or any Ancillary Agreement to the contrary, no member of either Group will be required to make any payment, incur or become subject to any Liability, agree to any restriction, surrender any right or asset or otherwise enter into any agreement, or be required to permit to occur any event, that would be material, in relation to the Consent sought, in order to obtain any such Consent.
2.4No Representations or Warranties. Except as expressly set forth in this Agreement or in any Ancillary Agreement:
(a)no member of the LGL Group or the Mtron Group is making any representation or warranty of any kind whatsoever, express or implied, to any Party or any member of the LGL Group or the Mtron Group in any way with respect to any of the transactions contemplated by
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this Agreement or the business, assets, condition or prospects (financial or otherwise) of, or any other matter involving, any Party; and
(b)none of LGL, Mtron or any member of the LGL Group or the Mtron Group, as applicable, or any other Person makes any representation or warranty with respect to the Separation, the Distribution or the entering into of this Agreement or the transactions contemplated by this Agreement.
ARTICLE III
Plan of Reorganization Transactions
3.1Delivery to Distribution Agent. LGL will deliver to Computershare Trust Company, N.A., as distribution agent (the “Distribution Agent”), for the benefit of holders of record of LGL Common Stock at the close of business on the Record Date (the “Record Holders”) a stock certificate representing (or authorize the related book-entry transfer of) all outstanding shares of Mtron Common Stock and will order the Distribution Agent to effect the Distribution in the manner set forth in Section 3.2.
3.2Mechanics of the Distribution.
(a)LGL will direct the Distribution Agent to, as promptly as practicable following the Distribution Time, distribute to each Record Holder a number of shares of Mtron Common Stock equal to the number of shares of LGL Common Stock held by such Record Holder on the Record Date. All of the shares of Mtron Common Stock so issued will be fully paid and non-assessable. The Distribution will be effective as of the Distribution Time.
(b)LGL will direct the Distribution Agent to determine, as soon as is practicable after the Distribution Date, the number of fractional shares, if any, of Mtron Common Stock allocable to each Record Holder entitled to receive Mtron Common Stock in the Distribution and to promptly aggregate all the fractional shares and sell the whole shares obtained thereby, in open market transactions or otherwise, at the then-prevailing trading prices, and to cause to be distributed to each Record Holder, in lieu of any fractional share, each Record Holder’s ratable share of the proceeds of the sale, after making appropriate deductions of the amounts 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 the sale.
3.3Conditions Precedent to the Distribution. Neither the Distribution nor the related transactions set forth in this Agreement or in any of the Ancillary Agreements will become effective unless the following conditions have been satisfied, at or before the Distribution Time:
(a)the stockholders of LGL shall have approved at a special meeting of stockholders the transfer of substantially all assets of LGL by means of the Separation and the Distribution in accordance with the General Corporation Law of the State of Delaware;
(b)the Form 10 shall be effective under the Exchange Act, with no stop order in effect with respect thereto;
(c)the Information Statement has been mailed to LGL’s stockholders;
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(d)the actions and filings, if any, necessary under securities and blue sky laws of the states of the United States and any comparable laws under any foreign jurisdictions have been taken and become effective;
(e)the approval for listing of the Mtron Common Stock on the New York Stock Exchange American, subject to official notice of issuance, has been obtained;
(f)no order, injunction, decree or regulation issued by any court or agency of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Distribution will be in effect and no other event outside LGL’s control will have occurred or failed to occur that prevents the consummation of the Distribution; and
(g)no event or development has occurred or exists that in the good faith judgment of the LGL Board, in its sole discretion, makes the Distribution inadvisable.
ARTICLE IV
Payment of Liabilities
4.1Payment of Liabilities. Subject to ARTICLE VI of this Agreement, from and after the Distribution Time, (i) Mtron shall indemnify LGL and its respective Representatives with respect to any claims relating to Mtron and its business, assets and liabilities and (ii) LGL shall indemnify Mtron and its Representatives with respect to any claims relating to LGL and its business, assets and liabilities.
ARTICLE V
Other Agreements
5.1Use of Names. Mtron shall have all rights in and use of the trademarks, trade names, and logos that the Mtron Group uses in its operations as of the date hereof.
5.2Books and Records. Prior to or as promptly as practicable after the Distribution and from time to time thereafter as requested by Mtron, LGL shall deliver or cause to be delivered to Mtron all corporate books and records of the Mtron Group in the possession of LGL and the relevant portions (or copies thereof) of all corporate books and records of LGL or any member of the LGL Group relating directly and primarily to the Mtron Group and its businesses, assets and liabilities, including, in each case, all agreements, litigation files, government filings and tax records and files. From and after the Distribution, all such books, records and copies shall be the property of Mtron. LGL may retain copies of all such corporate books and records, subject to the provisions of Section 5.5 below.
5.3Access to Information. Upon reasonable notice, each Party shall, and shall cause its Subsidiaries to afford to Representatives of the other Party reasonable access, during normal business hours throughout the period prior to and following the Distribution, to all of its properties, books, contracts, commitments, and records (including, but not limited to, tax returns) relating to the other Party, its business or its Liabilities and, during such period, each Party shall, and shall cause its Subsidiaries to, furnish promptly to the other Party (i) access to each report, schedule and other document filed or received by it or any of its Subsidiaries pursuant to the requirements of federal or state securities laws or filed with or sent to any federal or state
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regulatory agency or commission and (ii) access to all information concerning themselves, their Subsidiaries, directors, officers and stockholders and such other matters as may be reasonably requested by the other Party in connection with any filings, applications or approvals required or contemplated by this Agreement or for any other reason related to the transactions contemplated by this Agreement; provided, however, that Mtron and the Mtron Group shall be required to grant such access only with respect to information necessary to or required by LGL in preparation of tax returns. Subject to Section 5.6, nothing in this Section 5.3 shall require the Parties to take any action or furnish any access or information which would cause or could reasonably be expected to cause the waiver of any applicable attorney-client privilege. All information for which access is provided hereunder shall be subject to the confidentiality provisions of Section 5.5.
5.4Retention of Records. If any information relating to the businesses, assets and liabilities of the LGL Group or the Mtron Group is retained by the Mtron Group or the LGL Group, respectively, each of LGL and Mtron shall, and shall cause the other members of the LGL Group and the Mtron Group, respectively, to retain all such information in the LGL Group’s or the Mtron Group’s possession or under its control until such information is at least ten (10) years old, except that if, prior to the expiration of such period, any member of the LGL Group or the Mtron Group wishes to destroy or dispose of any such information that is at least three years old, prior to destroying or disposing of any of such information, (a) LGL or Mtron, on behalf of the member of the LGL Group or the Mtron Group that is proposing to dispose of or destroy any such information, shall provide no less than 45 days’ prior written notice to the other Party, specifying the information proposed to be destroyed or disposed of, and (b) if, prior to the scheduled date of such destruction or disposal, the other Party requests in writing that any of the information proposed to be destroyed or disposed of be delivered to such other Party, LGL or Mtron, as applicable, shall promptly arrange for the delivery of the requested information to a location specified by, and at the expense of, the requesting Party. Notwithstanding any of the above, each Party shall retain those documents as required by law, rule, regulation, or court order.
(a)Each Party hereto shall keep and shall cause its Representatives to keep each of the other Parties’ Information strictly confidential and will disclose such Information only to such of its Representatives who need to know such Information and who agree to be bound by this Section 5.5 and not to disclose such Information to any other Person, except as set forth in Section 5.5(b). Without the prior written consent of the other Party, neither Party nor any of its respective Representatives shall disclose any other Party’s Information to any Person or entity except as may be required by law or judicial process and in accordance with Section 5.5(b).
(b)In the event that any Party or any of its Representatives receives a request or is required by law or judicial process to disclose to a court or other tribunal all or any part of any of the other Party’s Information, each receiving Party or its Representatives shall promptly notify the other Party of the request in writing, and consult with and assist the other Party in seeking a protective order or request for other appropriate remedy. In the event that such protective order or other remedy is not obtained or the other Party waives compliance with the terms hereof, such receiving Party or its Representatives, as the case may be, shall disclose only that portion of the
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Information or facts which, in the written opinion of each receiving Party’s outside counsel, is legally required to be disclosed, and each Party will exercise its respective commercially reasonable best efforts to assure that confidential treatment will be accorded such Information or facts by the Persons or entities receiving the same. Each providing Party will be given an opportunity to review the Information or facts prior to disclosure.
(a)Each Party hereto acknowledges that (i) each member of the LGL Group and each member of the Mtron Group has or may obtain Information regarding a member of the Mtron Group or the LGL Group, respectively, or any of its operations, employees, assets or liabilities, as applicable, that is or may be protected from disclosure pursuant to attorney-client privilege, the work product doctrine or other applicable privileges (“Privileged Information”); (ii) actual, threatened or future litigation, investigations, proceedings (including arbitration), claims, or other legal matters have been or may be asserted by or against, or otherwise affect, LGL and/or Mtron (or the LGL Group and/or the Mtron Group) (“Litigation Matters”); (iii) LGL and Mtron have a common legal interest in Litigation Matters, in the Privileged Information, and in the preservation of the confidential status of the Privileged Information, in each case relating to, as applicable, the LGL Group and its business, assets and liabilities or the Mtron Group and its business, assets and liabilities as it or they existed at the time of the Distribution or relating to or arising in connection with the relationship between the constituent elements of the LGL Group and the Mtron Group on or prior to the time of the Distribution; and (iv) LGL and Mtron intend that the transactions contemplated by this Agreement, the Administrative Agreement and any transfer of Privileged Information in connection herewith or therewith shall not operate as a waiver of any potentially applicable privilege.
(b)Each of LGL and Mtron agrees, on its own behalf and on behalf of the LGL Group and the Mtron Group, respectively, not to disclose or otherwise waive any privilege attaching to any Privileged Information relating to, as applicable, the LGL Group and its businesses, assets and liabilities, or the Mtron Group and its businesses, assets and liabilities as it or they existed at the time of the Distribution or relating to or arising in connection with the relationship between the constituent elements of the LGL Group and the Mtron Group on or prior to the time of the Distribution, without providing prompt written notice to and obtaining the prior written consent of the other, which consent shall not be unreasonably withheld, conditioned or delayed if the other Party certifies that such disclosure is to be made in response to a likely threat of suspension, debarment, criminal indictment, or similar action; provided, however, that LGL and Mtron may make disclosure or waiver with respect to Privileged Information if such Privileged Information related, in the case of LGL, solely to the LGL Group and its businesses, assets and liabilities as each existed prior to the time of the Distribution, or in the case of Mtron, solely to Mtron Group and its businesses, assets and liabilities as each existed prior to the time of the Distribution. The Parties will use commercially reasonable efforts to limit any such disclosure or waiver to the maximum extent possible and shall seek the execution of a confidentiality agreement by the third party or parties to which such disclosure or waiver is made.
(c)Upon any member of the LGL Group or the Mtron Group, as the case may be, receiving any subpoena or other compulsory disclosure notice from a court, other governmental
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agency or otherwise that requests disclosure of Privileged Information, in each case relating to LGL Group and its businesses, assets and liabilities or the Mtron Group and its businesses, assets and liabilities as it or they existed at the time of the Distribution or relating to or arising in connection with the relationship between the constituent elements of the LGL Group and the Mtron Group on or prior to the time of the Distribution, the recipient of the notice shall promptly provide to LGL, in the case of receipt by a member of the Mtron Group, or to Mtron, in the case of receipt by a member of the LGL Group, a copy of such notice, the intended response, and all materials or information relating to the other Party (or its Subsidiaries) that might be disclosed. In the event of a disagreement as to the intended response or disclosure, unless and until the disagreement is resolved, LGL and Mtron shall cooperate to assert all defenses to disclosure claimed by either Party (or its Subsidiaries), at the cost and expense of the Party claiming such defense to disclosure, and shall not disclose any disputed documents or information until all legal defenses and claims of privilege shall have been determined.
5.7Cooperation. The Parties shall cooperate with each other in all reasonable respects to ensure that the transactions contemplated herein are carried out in accordance with their terms.
5.8[Reserved.]
5.9Transaction Expenses. Except as otherwise agreed between the Parties, LGL and Mtron shall each be responsible for its out-of-pocket expenses (including attorney’s fees) incurred in connection with the Distribution.
5.10Receivables Collection and Other Payments. If, after the Distribution, any member of the LGL Group or the Mtron Group receives payments belonging to the Mtron Group or the LGL Group, respectively, the recipient shall promptly account for and remit same to the other Party.
5.11Insurance. From and after the time of the Distribution, (a) LGL shall maintain, at its sole cost and expense, all insurance coverage existing at the time of the Distribution related to the Mtron Group and its businesses and assets for periods prior to the Distribution (and shall include Mtron or the members of the Mtron Group, as applicable, as a named insurer thereunder), (b) LGL shall be responsible for obtaining and maintaining all insurance coverage relating to the LGL Group and its businesses and assets for periods prior to and after the Distribution, and (c) Mtron shall be responsible for obtaining and maintaining all insurance coverage relating to the Mtron Group and its businesses and assets for the period from and after the Distribution. Without limiting the foregoing, the businesses and assets of the Mtron Group insured pursuant to clause (a) above shall include any and all rights of an insured party, including without limitation rights of indemnity, the right to be defended by or at the expense of the insurer and the right to receive insurance proceeds. The Parties hereto shall cooperate with regards to the administration of insurance policies contemplated hereunder (including accounting and reporting obligations and the distribution of insurance proceeds) and shall share material information concerning such matters so that both LGL and Mtron are aware on a continuing basis of material matters relevant to joint dealings with insurers. Except as set forth herein, nothing in this Agreement shall be construed or deemed to limit the right of LGL or Mtron to
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obtain and administer future insurance policies on whatever terms such Party believes to be advisable.
ARTICLE VI
Indemnification and Releases
6.1Mutual Release. Effective as of the Distribution and except as otherwise specifically set forth in this Agreement, each of LGL on the one hand, and Mtron, on the other hand, releases and forever discharges the other Party or Parties and their respective Affiliates, and its and their directors, officers, employees and agents of and from all debts, demands, actions, causes of action, suits, accounts, covenants, contracts, agreements, damages, and any and all claims, demands and liabilities whatsoever of every name and nature, both in law and in equity, against each such other Party or any of its assigns, which each releasing Party has or ever had, which arise out of or relate to events, circumstances or actions taken by each such other Party prior to the Distribution; provided, however, that the foregoing general release shall not apply to this Agreement, or the transactions contemplated hereby, and shall not affect each Party’s right to enforce this Agreement or any other agreement contemplated hereby in accordance with its terms. Each Party understands and agrees that, except as otherwise specifically provided herein, neither the other Party or Parties nor any of their Subsidiaries is, in this Agreement or any other agreement or document, representing or warranting to any Party in any way as to Party’s business, assets and liabilities or as to any consents or approvals required in connection with the consummation of the transactions contemplated by this Agreement.
6.2Indemnification by LGL. From and after the time of the Distribution, LGL shall indemnify, defend and hold harmless the Mtron Group and each of their respective directors, officers, employees, agents, and Affiliates, and each of the heirs, executors, successors and assigns of any of the foregoing (the “Mtron Indemnitees”) from and against any and all losses, Liabilities and damages, including the costs and expenses of any and all actions, threatened actions, demands, assessments, judgments, settlements, and compromises relating thereto, attorneys’ fees, and any and all expenses whatsoever reasonably incurred in investigating, preparing, or defending against any such actions or threatened actions (collectively, “Mtron Indemnifiable Losses” and, individually, a “Mtron Indemnifiable Loss”) incurred or suffered by a Mtron Indemnitee arising out of (a) the failure or alleged failure of LGL or any of its Subsidiaries to pay, perform or otherwise discharge in due course any of the LGL Group liabilities, (b) the breach by LGL of any its obligations under this Agreement, and (c) any untrue statement or alleged untrue statement of a material fact (i) contained in any document filed with the SEC by LGL pursuant to the Securities Act, the Exchange Act or any other applicable securities rule, regulation or law, (ii) otherwise disclosed to investors or potential investors in any member of the LGL Group by any member of the LGL Group, or (iii) furnished to any Mtron Indemnitee by any member of the LGL Group for inclusion in any public disclosures to be made by any Mtron Indemnitee, including filings with the SEC or disclosures to investors or potential investors in any member of the Mtron Group, or any omission or alleged omission to state in any information described in clauses (i), (ii) or (iii) above a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Notwithstanding the foregoing, indemnification will be available under clause (c) of this Section 6.2 only to the extent that those Mtron Indemnifiable Losses are caused by any such untrue statement or omission or alleged untrue statement or omission, and the information which
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is the subject of such untrue statement or omission or alleged untrue statement or omission was not supplied after the Distribution by a member of the Mtron Group or an agent thereof acting on its behalf.
6.3Indemnification by Mtron. From and after the time of the Distribution, Mtron shall indemnify, defend and hold harmless the LGL Group and each of their respective directors, officers, employees, agents, and Affiliates, and each of the heirs, executors, successors, and assigns of any of the foregoing (the “LGL Indemnitees”) from and against any and all losses, Liabilities, and damages, including the costs and expenses of any and all actions, threatened actions, demands, assessments, judgments, settlements, and compromises relating thereto, attorneys’ fees, and any and all whatsoever reasonably incurred in investigating, preparing, or defending against any such actions or threatened actions (collectively, “LGL Indemnifiable Losses” and, individually, a “LGL Indemnifiable Loss”) incurred or suffered by a LGL Indemnitee arising out of (a) the failure or alleged failure of Mtron or any of its Subsidiaries to pay, perform or otherwise discharge in due course any of the Mtron Group liabilities, (b) the breach by Mtron of any of its respective obligations under this Agreement, and (c) any untrue statement or alleged untrue statement of a material fact (i) contained in any document filed with the SEC by Mtron following the Distribution pursuant to the Securities Act, the Exchange Act, or any other applicable securities rule, regulation or law, (ii) otherwise disclosed following the Distribution to investors or potential investors in any member of the Mtron Group by any member of the Mtron Group, or (iii) furnished to any LGL Indemnitee by any member of the Mtron Group for inclusion in any public disclosures to be made by any LGL Indemnitee, including filings with the SEC or disclosures to investors or potential investors in any member of the LGL Group; or any omission or alleged omission to state in any information described in clauses (i), (ii) or (iii) above a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Notwithstanding the foregoing, indemnification will be available under clause (c) of this Section 6.3 only to the extent that those LGL Indemnifiable Losses are caused by any such untrue statement or omission or alleged untrue statement or omission, and the information which is the subject of such untrue statement or omission or alleged untrue statement or omission was not supplied by a member of the LGL Group or an agent thereof acting on its behalf. The Mtron Indemnifiable Losses and the LGL Indemnifiable Losses are collectively referred to as the “Indemnifiable Losses.”
6.4Taxes. Mtron agrees to indemnify and hold harmless each member of the LGL Group from and against (i) any and all Distribution Taxes resulting from or attributable to any act or failure to act on the part of any member of the Mtron Group following the Distribution and (ii) all liabilities, costs, expenses (including, without limitation, reasonable expenses of investigation and attorney’s fees and expenses), losses, damages, assessments, settlements, or judgments arising out of or incident to the imposition, assessment, or assertion of any tax or adjustment described in this subsection.
6.5Insurance Proceeds, Tax Benefits; Mitigation. The amount which any Party (an “Indemnifying Party”) is or may be required to pay to any other Person (an “Indemnitee”) pursuant to Sections 6.2 or 6.3 above shall be reduced (including retroactively) by (i) any insurance proceeds or other amounts actually recovered by or on behalf of each such Indemnitee in reduction of the related Indemnifiable Loss and (ii) any tax benefits realized by each such Indemnitee based on the actual reduction in tax liability by reason of such loss (and shall be
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increased by any tax liability incurred by each such Indemnitee based on such indemnity payment). If an Indemnitee shall have received the payment required by this Agreement from an Indemnifying Party in respect of an Indemnifiable Loss and shall subsequently actually receive insurance proceeds, tax benefits, or other amounts in respect of such Indemnifiable Loss as specified above, then each such Indemnitee shall pay to each such Indemnifying Party a sum equal to the amount of such insurance proceeds, tax benefits actually realized, or other amounts actually received. Each Indemnitee shall take all reasonable steps to mitigate all losses, including availing itself of any defenses, limitations, rights of contribution, claims against third parties and other rights at law (it being understood that any reasonable out-of-pocket costs paid to third parties in connection with such mitigation shall constitute losses) and shall provide such evidence and documentation of the nature and extent of any loss as may be reasonably requested by each Indemnifying Party.
6.6Procedure for Indemnification.
(a)If an Indemnitee shall receive notice or otherwise learn of the assertion by a Person (including any governmental entity) who is not a party to this Agreement or to any of the Ancillary Agreements of any claim or of the commencement by any such Person of any action (a “Third-Party Claim”) with respect to which an Indemnifying Party may be obligated to provide indemnification pursuant to this Agreement, each such Indemnitee shall give each such Indemnifying Party written notice thereof promptly after becoming aware of such Third-Party Claim; provided, however, that the failure of any Indemnitee to give notice as required by this Section 6.6 shall not relieve each Indemnifying Party of its obligations under this ARTICLE VI, except to the extent that each such Indemnifying Party is prejudiced by such failure to give notice. Such notice shall describe the Third-Party Claim in reasonable detail and shall indicate the amount (estimated if necessary) of the Indemnifiable Loss that has been or may be sustained by each such Indemnitee.
(b)An Indemnifying Party may elect to defend or to seek to settle or compromise, at such Indemnifying Party’s own expense and by such Indemnifying Party’s own counsel reasonably acceptable to each Indemnitee, any Third-Party Claim, provided that the Indemnifying Party must confirm in writing that it agrees that each Indemnitee is entitled to indemnification hereunder in respect of such Third-Party Claim. Within 30 days of the receipt of notice from an Indemnitee in accordance with Section 6.6(a) (or sooner, if the nature of such Third-Party Claim so requires), the Indemnifying Party shall notify each Indemnitee of its election whether to assume responsibility for such Third-Party Claim (provided that if the Indemnifying Party does not so notify each Indemnitee of its election within 30 days after receipt of such notice from each Indemnitee, the Indemnifying Party shall be deemed to have elected not to assume responsibility for such Third-Party Claim), and each Indemnitee shall cooperate in the defense or settlement or compromise of such Third-Party Claim. After notice from an Indemnifying Party to each Indemnitee of its election to assume responsibility for a Third-Party Claim, such Indemnifying Party shall not be liable to each such Indemnitee under this ARTICLE VI for any legal or other expenses (except expenses approved in advance by the Indemnifying Party) subsequently incurred by each such Indemnitee in connection with the defense thereof; provided, however, that if the defendants in any such claim include both the Indemnifying Party and one or more Indemnitees and in such Indemnitees’ reasonable judgment there exists a conflict of interest between such Indemnitees and the Indemnifying Party, such Indemnitees shall
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have the right to employ separate counsel and in that event the reasonable fees and expenses of such separate counsel (but not more than one separate counsel reasonably satisfactory to the Indemnifying Party) shall be paid by each such Indemnifying Party. If any Indemnifying Party elects not to assume responsibility for a Third-Party Claim (which election may be made only in the event of a good faith dispute that a claim was inappropriately tendered under Section 6.2 or 6.3, as the case may be), each such Indemnitee may defend or (subject to the following sentence) seek to compromise or settle such Third-Party Claim without prior written notice to each such Indemnifying Party, which shall have the option within fifteen days following the receipt of such notice (i) to reject the settlement and assume all past and future responsibility for the claim, including reimbursing each Indemnitee for prior expenditures in connection with the claim, (ii) to reject the settlement and continue to refrain from participation in the defense of the claim, in which event each such Indemnifying Party shall have no further right to contest the amount or reasonableness of the settlement if each Indemnitee elects to proceed therewith, (iii) to approve the amount of the settlement, reserving each such Indemnifying Party’s right to contest each Indemnitee’s right to indemnity, or (iv) to approve and agree to pay the settlement. In the event such Indemnifying Party makes no response to such written notice from an Indemnitee, the Indemnifying Party shall be deemed to have elected option (ii).
(c)If an Indemnifying Party chooses to defend or to seek to compromise any Third-Party Claim, each Indemnitee shall make available to such Indemnifying Party any personnel and any books, records, or other documents within its control or which it otherwise has the ability to make available that are necessary or appropriate for such defense, within the reasonable discretion of each such Indemnifying Party.
(d)Notwithstanding anything else in this Section 6.6 to the contrary, an Indemnifying Party shall not settle or compromise any Third-Party Claim unless (i) such settlement or compromise contemplates as an unconditional term thereof the giving by such claimant or plaintiff to each Indemnitee of a written release from all liability in respect of such Third-Party Claim and (ii) such settlement does not provide for any non-monetary relief by any Indemnitee unless each such Indemnitee consents thereto. In the event any Indemnitee shall notify the Indemnifying Party in writing that such Indemnitee declines to accept any such settlement or compromise, each such Indemnitee may continue to contest such Third-Party Claim free of any participation by such Indemnifying Party, at each such Indemnitee’s sole expense. In such event, the obligation of such Indemnifying Party to each such Indemnitee with respect to such Third-Party Claim shall be equal to (i) the costs and expenses of each such Indemnitee prior to the date such Indemnifying Party notifies each such Indemnitee of such offer of settlement or compromise (to the extent such costs and expenses are otherwise indemnifiable hereunder) plus (ii) the lesser of (A) the amount of any offer of settlement or compromise which each such Indemnitee declined to accept and (B) the actual out-of-pocket amount each such Indemnitee is obligated to pay subsequent to such date as a result of each such Indemnitee’s continuing to pursue such Third-Party Claim.
(e)Any claim on account of an Indemnifiable Loss which does not result from a Third-Party Claim shall be asserted by written notice given by an Indemnitee to each applicable Indemnifying Party. Each such Indemnifying Party shall have a period of 30 days after the receipt of such notice within which to notify each applicable Indemnitee of the Indemnifying Party’s response to the claim. If each such Indemnifying Party does not so notify each such
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Indemnitee during such 30-day period, such Indemnifying Party shall be deemed to have refused to accept responsibility to make payment. If each such Indemnifying Party does not respond within such 30-day period or rejects such claim in whole or in part, each such Indemnitee shall be free to pursue such remedies as may be available to such Party under applicable law or under this Agreement or any other agreement or arrangement between the Parties.
(f)In addition to any adjustments required pursuant to Section 6.5, if the amount of any Indemnifiable Loss shall, at any time subsequent to the payment required by this Agreement, be reduced by recovery, settlement, or otherwise, the amount of such reduction, less any expenses incurred in connection therewith, shall promptly be repaid by each Indemnitee to each Indemnifying Party.
(g)In the event of payment by an Indemnifying Party to any Indemnitee in connection with any Third-Party Claim, such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnitee as to any events or circumstances in respect of which such Indemnitee may have any right or claim relating to such Third-Party Claim against any claimant or plaintiff asserting such Third-Party Claim. Such Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner, and at the cost and expense of such Indemnifying Party, in prosecuting any subrogated right or claim.
6.7Contribution. If for any reason the indemnification provided for in Section 6.2 or 6.3 is unavailable to any Indemnitee, or is insufficient to hold such Indemnitee harmless, then the Indemnifying Party shall contribute to the amount paid or payable by that Indemnitee as a result of the untrue statement or omission or alleged untrue statement or omission of a material fact, in that proportion as is appropriate to reflect the relative fault of the Indemnifying Party, on the one hand, and the Indemnitee, on the other hand. The relative fault shall be determined by reference to, among other things, whether the untrue statement or omission or alleged untrue statement or omission relates to information supplied by the Indemnifying Party or the Indemnitee, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by the Indemnitee referred to above in this Section 6.7 shall be deemed to include, for purposes of this Section 6.7, any legal or other expenses reasonably incurred by the Indemnitee in connection with investigating or defending any such action or claim. Notwithstanding the foregoing, no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.
6.8Remedies Cumulative. The remedies provided in this ARTICLE VI 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.
6.9Survival of Indemnities. The obligations of each of Mtron and LGL under this ARTICLE VI shall survive the Separation and the Distribution, with respect to any Indemnifiable Loss of the other Parties.
6.10Tax Matter Not Covered Under This Agreement. Other than as expressly addressed in this Agreement, any claim for indemnification with respect to any tax Liabilities of
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the LGL Group or the Mtron Group shall be governed by the Tax Indemnity and Sharing Agreement.
ARTICLE VII
Miscellaneous and General
7.1Representations and Warranties. Each Party represents and warrants to the other Party that (a) it is validly existing and in good standing under the laws of the jurisdiction of incorporation, (b) it has the requisite corporate power and authority to carry on its business as conducted on the date hereof, (c) it has the corporate power and authority to execute, deliver, and perform its obligations under this Agreement and the Ancillary Agreements, (d) each of this Agreement and the Ancillary Agreements has been duly and validly executed by such Party and is the legal, valid and binding obligation of such Party enforceable in accordance with its terms, and (e) the execution and delivery of this Agreement and the Ancillary Agreements do not and will not (i) violate any provisions of such Party’s certificate or articles of incorporation or bylaws, (ii) violate any law applicable to such Party, (iii) violate any order, judgment, award, or decree of any court or Governmental Authority applicable to such Party, or (iv) result in any breach or default under any material contract by which such Party is bound.
7.2Modification or Amendment. The Parties hereto may modify or amend this Agreement by written agreement executed and delivered by authorized officers of the respective Parties.
7.3Counterparts. For the convenience of the Parties hereto, this Agreement may be executed in separate counterparts, each such counterpart being deemed to be an original instrument, and which counterparts shall together constitute the same agreement.
7.4Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Florida, without reference to its conflicts of law principles.
7.5Notices. Any notice, request, instruction or other document to be given hereunder by any Party to the other Party shall be in writing and shall be deemed to have been duly given (i) on the date of delivery if delivered by facsimile (upon confirmation of receipt) or personally, (ii) on the first business day following the date of dispatch if delivered by Federal Express or other next-day courier service, or (iii) on the third business day following the date of mailing if delivered by United States Certified Mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the Party to receive such notice:
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If to LGL:
The LGL Group, Inc.
249 Royal Palm Way Suite 503
Palm Beach, FL 33480
Attention: Ivan Arteaga, Chief Financial Officer
If to Mtron:
M-tron Industries, Inc.
2525 Shader Road
Orlando, FL 32804
Attention: James W. Tivy, Chief Financial Officer
7.6Captions. All Article, Section and paragraph captions herein are for convenience of reference only, do not constitute part of this Agreement and shall not be deemed to limit or otherwise affect any of the provisions hereof.
7.7No Third Party Beneficiary. This Agreement is for the purpose of defining the respective rights and obligations of the Parties hereto and is not for the benefit of any employee, creditor, or other third party, except as may be expressly set forth herein.
7.8Assignment; Successors and Assigns. No Party to this Agreement shall convey, assign or otherwise transfer any of its rights or obligations under this Agreement without the express written consent of each of the other Party hereto in its sole and absolute discretion. Any such conveyance, assignment or transfer without the express written consent of each of the other Party shall be void ab initio. No assignment of this Agreement or any rights hereunder shall relieve the assigning Party of its obligations hereunder. Any successor by merger to a Party to this Agreement shall be substituted for such Party as a party to this Agreement and all obligations, duties, and liabilities of the substituted party under this Agreement shall continue in full force and effect as obligations, duties and liabilities of the substituting party, enforceable against the substituting party as a principal, as though no substitution had been made.
7.9Certain Obligations. Whenever this Agreement requires any of the Subsidiaries of any Party to take any action, this Agreement will be deemed to include an undertaking on the part of such Party to cause such Subsidiary to take such action.
7.10Specific Performance. In the event of any actual or threatened default in or breach of any of the terms, conditions and provisions of this Agreement, the Party or Parties who are or are to be thereby aggrieved shall have the right of specific performance and injunctive relief giving effect to its or their rights under this Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative. The Parties agree that the remedies at law for any breach or threatened breach, including monetary damages, are inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at law would be adequate is hereby waived.
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7.11Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is determined to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances other than those remaining provisions hereof, or the application of such provision to Persons or circumstances other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any Party. Upon any such determination, the Parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the Parties.
7.12Arbitration. Any dispute with respect to this Agreement or any Ancillary Agreement shall be arbitrated in Orange County, Florida in accordance with the rules of the American Arbitration Association and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. There will be a single neutral arbitrator selected who resides in Orange County, Florida. The American Arbitration Association will provide a list of five (5) neutral arbitrators. The claimant and respondent will take turns, with the respondent going first, striking one name at a time from the list of five neutral arbitrators. Each Party will have no more than twenty-four (24) hours to take its turn striking a name of a neutral arbitrator. The final remaining arbitrator will serve as the neutral arbitrator. Either Party may apply to the arbitrator seeking injunctive relief until the arbitrator’s award is rendered or the controversy is otherwise resolved. Either Party also may, without waiving any remedy under this Agreement or any Ancillary Agreement, seek from any Florida court having jurisdiction, any interim or provisional relief that is necessary to protect the rights and/or property of that Party, pending the determination of the arbitrator.
[Signatures being on the following page]
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the Parties hereto as of the date first above written.
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THE LGL GROUP, INC. |
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By: |
/s/ James W. Tivy |
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Name: James W. Tivy |
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Title: Chief Financial Officer |
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M-TRON INDUSTRIES, INC. |
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By: |
/s/ Linda M. Biles |
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Name: Linda M. Biles |
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Title: Treasurer |
[Signature Page to Separation and Distribution Agreement]
Schedule 1.1(a)
Ancillary Agreements
Transitional Administrative and Management Services Agreement, dated August 3, 2022, by and between The LGL Group, Inc. and M-tron Industries, Inc.
Tax Indemnity and Sharing Agreement, dated August 3, 2022, by and between The LGL Group, Inc. and M-tron Industries, Inc.
Schedule 1.1(a) to Separation and Distribution Agreement
LEGAL_US_E # 159762149.6
Schedule 1.1(b)
Mtron Subsidiaries
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1. |
Piezo Technology, Inc. |
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2. |
Piezo Technology India Private Ltd. |
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3. |
M-tron Asia, LLC |
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4. |
M-tron Industries, Ltd. |
Schedule 1.1(b) to Separation and Distribution Agreement
LEGAL_US_E # 159762149.6
Exhibit A
Amended and Restated Certificate of Incorporation
M-tron Industries, Inc.
[See Attached]
Exhibit A to Separation and Distribution Agreement – 1
LEGAL_US_E # 159762149.6
Exhibit B
Amended and Restated Bylaws
M-tron Industries, Inc.
[See Attached]
Exhibit B to Separation and Distribution Agreement – 1
LEGAL_US_E # 159762149.6
Exhibit 10.2
TRANSITIONAL ADMINISTRATIVE AND
MANAGEMENT SERVICES AGREEMENT
THIS TRANSITIONAL ADMINISTRATIVE AND MANAGEMENT SERVICES AGREEMENT (this “Agreement”) is dated as of August 3, 2022, between The LGL Group, Inc., a Delaware corporation (“LGL”), and M-tron Industries, Inc., a Delaware corporation (“Mtron”, and together with LGL, “Parties”, or each individually, a “Party”).
WHEREAS, following the consummation of the distribution (the “Distribution”) contemplated by the Separation and Distribution Agreement dated of even date herewith among LGL and Mtron (the “Distribution Agreement”), Mtron desires that LGL provide certain administrative and management services to Mtron, and LGL desires that Mtron provide certain administrative and management services to LGL; and
WHEREAS, subject to the terms and conditions of this Agreement, each Party is willing to provide the other Party with such services for a transitional period.
NOW, THEREFORE, LGL and Mtron agree as follows:
Section 1.Services. Commencing at the time of the Distribution, LGL agrees to provide, or to coordinate the provision by others, to Mtron the transitional services set forth on Exhibit A hereto (the “LGL Management Services”), and Mtron agrees to provide, or to coordinate the provision by others, to LGL the transitional services set forth on Exhibit B hereto (the “Mtron Management Services” and, together with the LGL Management Services, the “Management Services”). Without limiting the foregoing, the Parties may modify the Management Services from time to time and may identify additional services to incorporate into this Agreement.
Section 2.Provision of Management Services.
(a)Consultants and Other Advisors. In providing the Management Services, each Party may, subject to the prior written consent of the other Party, employ consultants and other advisors in addition to utilizing its own employees. The Management Services are intended to be generally comparable in type and quantity to that which a Party provided to the other Party, it affiliates and its businesses prior to the Distribution.
(b)Subrogation of Rights Vis-A-Vis Third Party Contractors. In the event any liability arises from the performance of the Management Services hereunder by a third party contractor, upon indemnification of a Party and/or its representatives, including but not limited to such Party’s officers, directors, employees, accountants, counsel, investment bankers, financial advisors and consultants, the other Party shall be subrogated to such rights, if any, as such indemnified Party may have against such third party contractor with respect to the Management Services provided by such third party contractor.
(c)Laws and Governmental Regulations. Mtron shall be solely responsible for compliance with all laws, rules and regulations including the Investment Advisers Act of 1940.
(d)Relationship of Parties. Nothing in this Agreement shall be deemed or construed by the Parties or any third party as creating the relationship of principal and agent,
partnership or joint venture between the Parties, it being understood and agreed that no provision contained herein, and no actions of the Parties, shall be deemed to create any relationship between the Parties other than the relationship of independent contractor nor be deemed to vest any rights, interest or claims in any third parties.
Section 3.Term; Standard of Care. Each of LGL and Mtron shall provide its respective Management Services to the other Party as the other Party may request for a period of up to twelve (12) months from the date of the Distribution (“Term”); provided that any or all of the Management Services may be terminated by either Party at any time and for any reason on not less than thirty (30) days’ prior written notice to the other Party. In providing the Management Services hereunder, each Party will exercise the same degree of care as it has exercised in providing such Management Services to its affiliates prior to the date hereof, including the same level of quality, responsiveness and timeliness as has been exercised by each Party with respect to such Management Services.
Section 4.Operating Committee.
(a)Organization. The Parties shall create an operating committee (the “Operating Committee”) and shall each appoint one (1) employee to the Operating Committee for the Term. The Operating Committee will oversee the implementation and application of this Agreement and shall at all times reasonably and in good faith attempt to resolve any dispute between the Parties. Each of the Parties shall have the right to change its Operating Committee member at any time with employees of comparable knowledge, expertise and decision-making authority.
(b)Decision Making. All Operating Committee decisions shall be taken unanimously. If the Operating Committee fails to make a decision, resolve a dispute, agree upon any necessary action, or if a Party so requests, in the event of a material breach of this Agreement, a senior officer of LGL and a senior officer of Mtron, neither of whom shall have any direct oversight or responsibility for the subject matter in dispute, shall attempt within a period of fourteen (14) days to conclusively resolve any such unresolved issue.
(c)Meetings. During the Term, the Operating Committee members shall meet, in person or via teleconference, at least once in each month, or less frequently if agreed by the members of the Operating Committee. In addition, the Operating Committee shall meet as often as necessary in order to promptly resolve any disputes submitted to it by any representative of either Party.
Section 5.Compensation.
(a)Charges for Management Services. Each Party will pay the other Party the charges, if any, the applicable charges, if any, set forth on Exhibit A and Exhibit B hereto (collectively, the “Transition Services Schedules”) for the Management Services provided by the other Party set forth herein as may be adjusted, from time to time, in accordance with this Agreement or, if no charges are specifically indicated otherwise on the Transition Services Schedules, the cost of services provided. The Parties intend, having regard to the reciprocal and transitional nature of the Agreement as well as other factors, for the charges to be easy to
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administer and justify; and therefore recognize it may be counter-productive to try and recover every cost, charge or expense, particularly those which are insignificant or de minimis.
(b)Taxes. The fees and charges payable under this Agreement are exclusive of any sales tax or excise tax or other similar charges which may be imposed by a governmental authority. Each Party agrees to remit to the other any such charges promptly upon being billed by the other Party.
(c)Corrections/Adjustments. The Parties agree to develop, through an Operating Committee or their Boards of Directors, mutually acceptable reasonable processes and procedures for conducting any reviews and making adjustments thereof. Payments will then be promptly billed and paid.
Section 6.Personnel.
(a)Right to designate and change personnel. The Party providing the respective Management Services (“Service Provider”) will have the right to designate which personnel it will assign to perform such Management Services. The Service Provider also will have the right to remove and replace any such personnel at any time or designate any of its affiliates or a Subcontractor (as defined below) at any time to perform the Management Services, subject to the provisions of Section 6(c) hereof: provided, however, that the Service Provider will use Commercially Reasonable Efforts (as defined below) to limit the disruption to the other Party (“Service Recipient”) in the transition of the Management Services to different personnel or to a Subcontractor. In the event that personnel with the designated level of experience are not then employed by the Service Provider, the Service Provider will use Commercially Reasonable Efforts to provide such personnel or Subcontractor personnel having an adequate level of experience; provided, however, that the Service Provider will have no obligation to retain any individual employee for the sole purpose of providing the applicable Services. For the purposes of this Agreement, the term “Commercially Reasonable Efforts” means the efforts that a reasonable and prudent person desirous of achieving a business result would use in similar circumstances to ensure that such result is achieved as expeditiously as possible in the context of commercial relations of the type envisaged by this Agreement; provided, however, that an obligation to use Commercially Reasonable Efforts under this Agreement does not require the person subject to that obligation to assume any material obligations or pay any material amounts to a third party.
(b)Financial Responsibility. The Service Provider will pay for all personnel expenses, including wages, of its employees performing the Management Services.
(c)Service Managers and Chief Representatives. During the Term of this Agreement, each Party will appoint (i) one of its employees (the “Service Manager”) who will have overall responsibility for managing and coordinating the delivery of the Management Services and who shall serve as such Party’s representative on the Operating Committee and (ii) one of its employees for each service as indicated in each Transition Services Schedule (the “Chief Representative”). The Service Manager and the Chief Representatives will coordinate and consult with the Service Recipient. The Service Provider may, at its discretion, select other individuals to serve in these capacities during the Term of this Agreement upon providing notice
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to the other Party. For the avoidance of doubt, a Chief Representative may serve as such in respect of one or more Transition Services Schedules.
(d)Subcontractors.
(1)Subcontractors. The Service Provider may, subject to Section 6(d)(2) hereof, engage a “Subcontractor” to perform all or any portion of the Service Provider’s duties under this Agreement, provided that any such Subcontractor agrees in writing to be bound by confidentiality obligations at least as protective as the terms of Section 10(n) of this Agreement regarding confidentiality and non-use of information, and provided further that the Service Provider remains responsible for the performance of such Subcontractor and for paying the Subcontractor. As used in this Agreement, “Subcontractor” will mean any person or entity engaged to perform hereunder, other than employees of the Service Provider of its affiliates.
(2)Assignment. In the event of any subcontracting by the Service Provider to a non-affiliate of the Service Provider of all or any portion of the Service Provider’s duties under this Agreement, the Service Provider shall assign and transfer to the Service Recipient the full benefit of all such non-affiliate subcontractor’s performance covenants, guarantees, warranties or indemnities (if any), to the extent same are transferable or assignable, in the respect of the portion of the Services provided to the Service Recipient pursuant to such subcontracting; and if such guarantees, warranties, indemnities and benefits are not assignable, the Service Provider shall use Commercially Reasonable Efforts to procure the benefit of same for the Service Recipient through other legal permissible means. The Service Provider will also reasonably endeavor to permit the assignment of any Subcontractor engagement to a Service Recipient or its affiliates at the request of the Service Recipient upon termination of Service hereunder.
(e)Insurance. Each Party shall obtain and maintain at its own expense insurance of the type generally maintained in the ordinary course of its business. Except as otherwise specified in the Transition Services Schedules, the Service Provider shall not be required to obtain and maintain any particular insurance in relation to providing any Service.
Section 7.Consents of Third Parties. Each Party shall use commercially reasonable efforts, at the other Party’s direction and expense, to obtain any consents or software licenses from third parties necessary for the continuation of the requested Management Services; provided, that such Party shall have no obligation to provide Management Services for which such consent is required and shall not have been obtained, despite such Party’s use of commercially reasonable efforts to obtain such consent.
Section 8.Limitations of Liability; Indemnification. LGL will indemnify, defend and hold harmless Mtron its affiliates and its businesses and each of their respective directors, officers, agents and employees, and each of the heirs, executors, successors and assigns of any of the foregoing (a “Mtron Indemnitee”) from and against all claims, damages, losses, liabilities, costs, expenses, reasonable attorney’s fees, and court or arbitration costs (“Losses”) (i) arising out of a claim by a third party against a Mtron Indemnitee to the extent resulting from or alleged to have resulted from any act or omission of a member of the LGL Group (as such term is defined in the Distribution Agreement) under or related to this Agreement, or (ii) in the event of (A) the gross negligence, willful misconduct or fraud of a member of the LGL Group; (B) the failure of LGL to perform the LGL Management Services after the Distribution in accordance with the terms of this Agreement; or (C) the breach by LGL of this Agreement. Mtron will indemnify, defend and hold harmless LGL its affiliates and businesses and each of their respective directors, officers, agents and employees, and each of the heirs, executors, successors and assigns of any of the foregoing (each, a “LGL Indemnitee”), from and against all Losses (i) arising out of a claim by a third party against a LGL Indemnitee to the extent resulting from or alleged to have resulted from any act or omission of a member of the Mtron Group (as such term is defined in the Distribution Agreement) under or related to this Agreement, or (ii) in the event of (A) the gross
4
negligence, willful misconduct or fraud of a member of the Mtron Group; (B) the failure of Mtron to perform the Mtron Management Services after the Distribution in accordance with the terms of this Agreement; or (C) the breach by Mtron of this Agreement.
Section 9.Disclaimer of Warranties. SUBJECT TO Section 3 HEREOF, EACH OF THE PARTIES DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OR MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE SERVICES PROVIDED HEREUNDER. NEITHER LGL NOR MTRON MAKES ANY REPRESENTATIONS OR WARRANTIES AS TO THE QUALITY, SUITABILITY OR ADEQUACY OF THE SERVICES FOR ANY PURPOSE OR USE.
Section 10.Miscellaneous Provisions.
(a)Complete Agreement; Construction. Except as set forth in the Tax Indemnity and Sharing Agreement and the Distribution Agreement, each dated of even date herewith, between the Parties, this Agreement 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.
(b)Counterparts. For the convenience of the Parties hereto, this Agreement may be executed in separate counterparts, each such counterpart being deemed to be an original instrument, and which counterparts shall together constitute the same agreement.
(c)Notices. Any notice, request, instruction or other document to be given hereunder by any Party to the other shall be in writing and shall be deemed to have been duly given (i) on the date of delivery if delivered by facsimile (upon confirmation of receipt) or personally, (ii) on the first business day following the date of dispatch if delivered by FedEx or other next-day courier service, or (iii) on the third business day following the date of mailing if delivered by United States Certified Mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the Party to receive such notice:
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If to LGL, at: |
The LGL Group, Inc. |
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If to Mtron, at: |
M-tron Industries, Inc. |
(d)Waivers. The failure of any Party hereto 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.
(e)Modification or Amendments. The Parties hereto may modify or amend this Agreement by written agreement executed and delivered by authorized officers of the respective Parties.
(f)Assignment; Successors and Assigns. No Party to this Agreement shall convey, assign or otherwise transfer any of its rights or obligations under this Agreement without the express written consent of each of the other Party hereto in its sole and absolute discretion. Any such conveyance, assignment or transfer without the express written consent of each of the other parties shall be void ab initio. No assignment of this Agreement or any rights hereunder shall relieve each of the assigning parties of its obligations hereunder. Any successor by merger to a Party to this Agreement shall be substituted for such Party as a party to this Agreement, and all obligations, duties and liabilities of the substituted party under this Agreement shall continue in full force and effect as obligations, duties and liabilities of the substituting party, enforceable against the substituting party as a principal, as though no substitution had been made.
(g)Third Party Beneficiaries. This Agreement is for the purpose of defining the respective rights and obligations of the Parties hereto and is not for the benefit of any employee; creditor or other third party, except as may be expressly set forth herein.
(h)Indemnification for Expenses; Attorney Fees. A Party in breach of this Agreement shall, on demand, indemnify and hold harmless the other Party hereto for and against all out-of-pocket expenses, including, without limitation, reasonable legal fees, incurred by such other Party by reason of the enforcement and protection of its rights under this Agreement, should such Party prevail in such action. The payment of such expenses is in addition to any other relief to which such other Party may be entitled hereunder or otherwise.
(i)Captions. All Article, Section and paragraph captions herein are for convenience of reference only, do not constitute part of this Agreement and shall not be deemed to limit or otherwise affect any of the provisions hereof.
(j)Specific Performance. In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the Party or Parties who are or are to be thereby aggrieved shall have the right of specific performance and injunctive
6
relief giving effect to its or their rights under this Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative. The Parties agree that the remedies at law for any breach or threatened breach, including monetary damages, are inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at law would be adequate is hereby waived.
(k)Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Florida, without reference to its conflicts of law principles.
(l)Severability. If any provision of this Agreement or the application thereof to any person or circumstance is determined to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to persons or circumstances other than those remaining provisions hereof, or the application of such provision to persons or circumstances other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any Party. Upon any such determination, the Parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the Parties.
(m)Cooperation; Further Assurances. The Parties will use good faith efforts to cooperate with each other in all matters relating to the provision of the Services. Each Party will take such actions as may be necessary or reasonably appropriate to implement or give effect to this Agreement.
(n)Records; Confidentiality. Each Party shall keep full and detailed records dealing with all aspects of the Services performed by it and shall provide access to the other Party to such records at all reasonable times. Each Party hereto shall keep, and shall cause its officer, directors, employees, accountants, counsel, investment bankers, financial advisors, consultants and other representatives (“Representatives”) to keep the other Party’s information, whether furnished orally or in writing or by any other means or gathered by inspection and regardless of whether the same is specifically marked or designated as “confidential” or “proprietary,” together with any and all notes, memoranda, analyses, compilations, studies or other documents (whether in hard copy or electronic media) prepared by the receiving Party or any of its Representatives which contain or otherwise reflect such information, together with any and all copies, extracts or other reproductions of any of the same (the “Information”), strictly confidential and will disclose such Information only to such of its Representatives who need to know such Information, and who agree to be bound by this Section 10(n) and not to disclose such Information to any other person. Without the prior written consent of the other parties, neither Party nor any of its respective Representatives shall disclose the other Party’s Information to any person or entity except as may be required by law or judicial process and in accordance with this Section 10(n). The term “Information” does not include information that: (i) is or becomes generally available to the public through no wrongful act of the receiving Party or its Representatives; (ii) is or becomes available to the receiving Party on a non-confidential basis from a source other than the providing Party or its Representatives, provided that such source is not known by the receiving Party to be subject to a confidentiality agreement with the
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providing Party; or (iii) has been independently acquired or developed by the receiving Party without violation of any of the obligations of the receiving Party or its Representatives under this Agreement.
(o)Arbitration. Any dispute with respect to this Agreement shall be arbitrated in Orange County, Florida, in accordance with the rules of the American Arbitration Association and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. There will be a single neutral arbitrator selected who resides in Orange County, Florida. The American Arbitration Association will provide a list of five (5) neutral arbitrators. The claimant and respondent will take turns, with the respondent going first, striking one name at a time from the list of five neutral arbitrators. Each Party will have no more than twenty-four (24) hours to take its turn striking a name of a neutral arbitrator. The final remaining arbitrator will serve as the neutral arbitrator. Either Party may apply to the arbitrator seeking injunctive relief until the arbitrator's award is rendered or the controversy is otherwise resolved. Either Party also may, without waiving any remedy under this Agreement, seek from any Florida court having jurisdiction, any interim or provisional relief that is necessary to protect the rights and/or property of that Party, pending the determination of the arbitrator.
[Signatures begin on the following page]
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed as of the day and year first above written.
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THE LGL GROUP, INC.
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By: |
/s/ James W. Tivy |
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Name: James W. Tivy |
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Title: Chief Financial Officer |
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M-TRON INDUSTRIES, INC.
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By: |
/s/ Linda M. Biles |
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Name: Linda M. Biles |
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Title: Treasurer |
[Signature Page to Transitional Administrative and Management Services Agreement]
EXHIBIT A
LGL Management Services
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1. |
ERP system access, to be charged at a rate of $5,000 per month |
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2. |
General corporate management services, which may include, but not be limited to, operations, supervision of operating subsidiaries, strategic planning, acquisition analysis, investment banking and financial advisory services, supervision of the preparation of corporate tax returns, supervision of financial reporting and other applicable regulatory matters. |
EXHIBIT B
Mtron Management Services
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1. |
Operations and general administrative, including: |
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(a) |
IT services, to be charged at a rate of $4,000 per month |
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(b) |
AP/AR service, to be charged at a rate of $4,000 per month |
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(c) |
Payroll Services, to be charged at a rate of $1,000 per month |
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2. |
General corporate management services, which may include, but not be limited to, operations, supervision of operating subsidiaries, strategic planning, acquisition analysis, investment banking and financial advisory services, supervision of the preparation of corporate tax returns, supervision of financial reporting and other applicable regulatory matters. |
Exhibit 10.3
TAX INDEMNITY AND SHARING AGREEMENT
BETWEEN
THE LGL GROUP, INC.
AND
M-TRON INDUSTRIES, INC.
Dated as of August 3, 2022
Table of Contents
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SECTION 2. Allocation of Taxes and Tax-Related Losses. |
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2.1 |
Allocation of Taxes |
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2.2 |
Allocation of Deconsolidation Taxes, Distribution Taxes and Transfer Taxes |
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2.3 |
Tax Payments |
8 |
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SECTION 3. Preparation and Filing of Tax Returns |
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3.1 |
Combined Returns |
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3.2 |
Separate Returns |
9 |
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3.3 |
Agent |
9 |
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3.4 |
Provision of Information |
10 |
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3.5 |
Special Rules Relating to the Preparation of Tax Returns |
10 |
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3.6 |
Refunds, Credits or Offsets |
10 |
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3.7 |
Carrybacks |
11 |
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3.8 |
Amended Returns |
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SECTION 4. Tax Payments. |
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4.1 |
Payment of Taxes to Tax Authority |
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4.2 |
Indemnification Payments |
12 |
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4.3 |
Interest on Late Payments |
12 |
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4.4 |
Tax Consequences of Payments |
12 |
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4.5 |
Section 336(e) Election |
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4.6 |
Certain Final Determinations |
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SECTION 5. Cooperation and Tax Contests. |
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5.1 |
Cooperation |
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5.2 |
Notices of Tax Contests |
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5.3 |
Control of Tax Contests |
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5.4 |
Cooperation Regarding Tax Contests |
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SECTION 6. Tax Records. |
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6.1 |
Retention of Tax Records |
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6.2 |
Access to Tax Records |
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6.3 |
Confidentiality |
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SECTION 7. Representations and Covenants. |
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7.1 |
Covenants of LGL and Mtron |
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7.2 |
Covenants of Mtron |
17 |
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Table of Contents
(continued)
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7.3 |
Covenants of LGL |
17 |
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7.4 |
Exceptions |
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7.5 |
Injunctive Relief |
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7.6 |
Further Assurances |
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SECTION 8. General Provisions. |
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8.1 |
Predecessors or Successors |
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8.2 |
Construction |
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8.3 |
Ancillary Agreements |
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8.4 |
Counterparts |
19 |
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8.5 |
Notices |
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8.6 |
Amendments |
20 |
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8.7 |
Assignment |
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8.8 |
Successors and Assigns |
20 |
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8.9 |
Change in Law |
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8.10 |
Authorization, Etc |
20 |
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8.11 |
Termination |
20 |
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8.12 |
Subsidiaries |
21 |
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8.13 |
Third-Party Beneficiaries |
21 |
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8.14 |
Titles and Headings |
21 |
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8.15 |
Governing Law |
21 |
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8.16 |
Waiver of Jury Trial |
21 |
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8.17 |
Severability |
21 |
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8.18 |
No Strict Construction; Interpretation |
21 |
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ii
TAX INDEMNITY AND SHARING AGREEMENT
THIS TAX INDEMNITY AND SHARING AGREEMENT (this “Agreement”) is dated as of August 3, 2022, by and between The LGL Group, Inc., a Delaware corporation (“LGL”), and M-tron Industries, Inc., a Delaware corporation and a wholly-owned subsidiary of LGL (“Mtron”). Mtron and LGL are the “Parties.” Unless otherwise indicated, all “Section” references in this Agreement are to sections of this Agreement.
RECITALS
WHEREAS, the board of directors of LGL has determined that it is appropriate and advisable for the Mtron common stock, par value $0.01 per share (“Mtron Common Stock”) that LGL owns to be distributed to holders of LGL common stock, par value $0.01 per share (“LGL Common Stock”) (the “Distribution”), on the terms and conditions set forth in the Separation and Distribution Agreement between LGL and Mtron dated on or about the date hereof (the “Distribution Agreement”);
WHEREAS, LGL intends the Distribution to qualify as a tax-free transaction described under Section 355 of the Code;
WHEREAS, the Parties set forth in the Distribution Agreement the principal arrangements between them regarding the separation of the Mtron Group (as defined below) from the LGL Group (as defined below); and
WHEREAS, the Parties desire to provide for and agree upon the allocation between the Parties of liabilities for Taxes arising prior to, as a result of, and subsequent to the Distribution, and to provide for and agree upon other matters relating to Taxes.
NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, the Parties hereby agree as follows:
. For purposes of this Agreement (including the recitals hereof), the following terms have the following meanings:
“Affiliate” means, when used with respect to any specified Person, a Person that directly or indirectly Controls, is Controlled by, or is under common Control with such specified Person. Unless explicitly provided herein to the contrary, (x) neither LGL nor any member of the LGL Group shall be deemed to be an Affiliate of Mtron or any of its Subsidiaries; and (y) neither Mtron nor any member of the Mtron Group shall be deemed to be an Affiliate of LGL or any of its Subsidiaries.
“Agreement” has the meaning set forth in the preamble hereof.
“Ancillary Agreements” means the agreements encompassed by such term in the Distribution Agreement.
“Business Day” shall mean any day other than a Saturday, Sunday or a day on which commercial banking institutions located in The City of New York are authorized or obligated by law or executive order to close.
“Code” means the U.S. Internal Revenue Code of 1986, as amended.
“Combined Return” means a consolidated, combined or unitary Tax Return that includes, by election or otherwise, one or more members of the LGL Group and one or more members of the Mtron Group.
“Companies” means LGL and Mtron.
“Company” means LGL or Mtron, as the context requires.
“Control” means, with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through ownership of securities or partnership, membership, limited liability company, or other ownership interests, by contract or otherwise and the terms “Controlling” and “Controlled” have meanings correlative to the foregoing.
“Controlling Party” means, with respect to a Tax Contest, the Person that has responsibility, control and discretion in handling, defending, settling or contesting such Tax Contest.
“Covered Income Taxes” means any Income Taxes.
“Deconsolidation Taxes” means any Taxes imposed on any member of the LGL Group or the Mtron Group as a result of or in connection with the Distribution (or any portion thereof), including, but not limited to, any Taxes imposed pursuant to or as a result of Section 311 or 1502 of the Code or the Treasury Regulations thereunder (and under any applicable similar state, local or foreign law), but excluding any Transfer Taxes and Distribution Taxes.
“Disclosing Party” has the meaning set forth in Section 6.3.
“Distribution” has the meaning set forth in the recitals hereof.
“Distribution Agreement” has the meaning set forth in the recitals hereof.
“Distribution Date” has the meaning set forth in the Distribution Agreement.
“Distribution Taxes” means any Taxes arising from a Final Determination that the Distribution failed to be tax-free to LGL in accordance with the requirements of Section 355 of the Code (including any Taxes resulting from the application of Section 355(d) or (e) to the Distribution), or that any stock or obligations of Mtron failed to qualify as “qualified property”
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within the meaning of Section 355(c)(2) of the Code, and shall include any Taxes resulting from an election under Section 336(e) of the Code in the circumstances set forth in Section 4.5 hereof.
“Due Date” has the meaning set forth in Section 4.3.
“Effective Time” shall mean 11:59 p.m., New York City time, on the Distribution Date.
“Excess Taxes” means the excess of (x) the Taxes for which LGL Group is liable if an election is made pursuant to Section 336(e) of the Code under Section 4.5 of this Agreement, over (y) the Taxes for which LGL Group is liable if such an election is not made, in each case taking into account the allocation of Taxes that is otherwise applicable in this Agreement but without regard to Section 4.5 hereof.
“Expert Law Firm” means a law firm nationally recognized for its expertise in the matter for which its opinion is sought.
“Fifty-Percent Equity Interest” means, in respect of any corporation (within the meaning of the Code), stock or other equity interests of such corporation possessing (i) at least fifty percent (50%) of the total combined voting power of all classes of stock or equity interests entitled to vote, or (ii) at least fifty percent (50%) of the total value of shares of all classes of stock or of the total value of all equity interests.
“Final Determination” means a determination within the meaning of Section 1313 of the Code or any similar provision of state or local Tax Law.
“Group” means the LGL Group or the Mtron Group, as the context requires.
“Income Taxes” means any Tax which is based upon, measured by, or calculated with respect to (i) net income or profits (including, but not limited to, any capital gains, gross receipts, value added or minimum Tax) or (ii) multiple bases (including, but not limited to, corporate franchise, doing business or occupation Taxes) if one or more of the bases upon which such Tax may be based, by which it may be measured, or with respect to which it may be calculated is described in clause (i) of this sentence.
“Indemnified Party” shall mean each Mtron Indemnified Party and each LGL Indemnified Party, as the context requires.
“Indemnifying Party” has the meaning set forth in Section 4.4.
“Interest Rate” means the Rate determined below, as adjusted as of each Interest Rate Determination Date. The “Rate” means, with respect to each period between two consecutive Interest Rate Determination Dates, a rate determined at approximately 11:00 a.m., New York time, two Business Days before the first Interest Rate Determination Date equal to: (x) the sum of (i) the six-month dollar LIBOR rate as displayed on page “LR” of Bloomberg (or such other appropriate page as may replace such page), plus (ii) 2%, or (y) if higher and if with respect to a payment to indemnify for a Tax to which the “large corporate underpayment” provision within
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the meaning of Section 6621(c) applies, such interest rate that would be applicable at such time to such “large corporate underpayment.”
“Interest Rate Determination Date” means the Due Date and each March 31, June 30, September 30 and December 31 thereafter.
“LGL” has the meaning set forth in the preamble hereof.
“LGL Common Stock” has the meaning set forth in the recitals to this Agreement.
“LGL Group” means LGL and each Subsidiary of LGL (but only while such Subsidiary is a Subsidiary of LGL) other than any Person that is a member of the Mtron Group (but only during the period such Person is treated as a member of the Mtron Group).
“LGL Indemnified Party” includes each member of the LGL Group, each of their representatives and Affiliates, each of their respective directors, officers, managers and employees, and each of their heirs, executors, trustees, administrators, successors and assigns.
“LGL Tainting Act” means any breach of a representation or covenant made by LGL in Section 7.1 or Section 7.4 of this Agreement, if as a result of such breach a Final Determination is made that the Distribution failed to be tax-free by reason of (i) failing to qualify as a distribution described in Sections 355 of the Code, (ii) any stock or obligations of Mtron failing to qualify as “qualified property” within the meaning of Section 355(c)(2) of the Code or (iii) the application of Sections 355(d) or 355(e) of the Code to the Distribution.
“Mtron” has the meaning set forth in the preamble hereof.
“Mtron Common Stock” has the meaning set forth in the recitals to this Agreement.
“Mtron Group” means (x) with respect to any Tax Year (or portion thereof) ending at or before the Effective Time, Mtron and each of its Subsidiaries at the Effective Time; and (y) with respect to any Tax Year (or portion thereof) beginning after the Effective Time, Mtron and each Subsidiary of Mtron (but only while such Subsidiary is a Subsidiary of Mtron).
“Mtron Indemnified Party” includes each member of the Mtron Group, each of their representatives and Affiliates, each of their respective directors, officers, managers and employees, and each of their heirs, executors, trustees, administrators, successors and assigns.
“Mtron Tainting Act” means a breach of the covenant made by Mtron in Section 7.1 of this Agreement or the taking of a Restricted Action, if as a result of such breach or taking of a Restricted Action a Final Determination is made that the Distribution failed to be tax-free by reason of (i) failing to qualify as a distribution described in Section 355 of the Code, (ii) any stock or obligations of Mtron failing to qualify as “qualified property” within the meaning of Section 355(c)(2) of the Code, or (iii) the application of Sections 355(d) or 355(e) of the Code to the Distribution.
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“Non-Controlling Party” has the meaning set forth in Section 5.3(a).
“Non-Preparer” means any Company that is not responsible for the preparation and filing of the applicable Tax Return pursuant to Sections 3.1 or 3.2.
“Parties” has the meaning set forth in the preamble hereof.
“Payment Date” means (x) with respect to any U.S. federal income tax return, the date on which any required installment of estimated taxes determined under Section 6655 of the Code is due, the date on which (determined without regard to extensions) filing the return determined under Section 6072 of the Code is required, and the date the return is filed, and (y) with respect to any other Tax Return, the corresponding dates determined under the applicable Tax Law.
“Permitted Acquisition” means any acquisition (as a result of the Distribution) of Mtron Common Stock solely by reason of holding LGL Common Stock, but does not include such an acquisition if such LGL Common Stock, before such acquisition, was itself acquired in a manner to which the flush language of Section 355(e)(3)(A) of the Code applies (thus causing, for the avoidance of doubt, Section 355(e)(3)(A)(i), (ii), (iii) or (iv) not to apply).
“Person” means any individual, corporation, company, partnership, trust, incorporated or unincorporated association, joint venture or other entity of any kind.
“Post-Distribution Period” means any Tax Year or other taxable period beginning after the Distribution Date and, in the case of any Straddle Period, that part of the Tax Year or other taxable period that begins at the beginning of the day after the Distribution Date.
“Pre-Distribution Period” means any Tax Year or other taxable period that ends on or before the Distribution Date and, in the case of any Straddle Period, that part of the Tax Year or other taxable period through the end of the day on the Distribution Date.
“Preparer” means the Company that is responsible for the preparation and filing of the applicable Tax Return pursuant to Sections 3.1 or 3.2.
“Receiving Party” has the meaning set forth in Section 6.3.
“Residual Taxes” means all Taxes other than Covered Income Taxes.
“Restricted Action” means any action by Mtron or any of its Subsidiaries inconsistent with the covenants set forth in Section 7.3; and, for the avoidance of doubt, an action shall be and remain a Restricted Action even if Mtron or any of its Subsidiaries is permitted to take such an action pursuant to Section 7.5.
“Restriction Period” means the period beginning on the Distribution Date and ending twenty-four (24) months after the Distribution Date.
“Separate Return” means (a) in the case of any Tax Return required under relevant Tax Law to be filed by any member of the LGL Group (including any consolidated, combined or unitary Tax Return), any such Tax Return that does not include any member of the Mtron Group,
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and (b) in the case of any Tax Return required under relevant Tax Law to be filed by any member of the Mtron Group (including any consolidated, combined or unitary Tax Return), any such Tax Return that does not include any member of the LGL Group.
“Straddle Period” means any taxable period beginning on or prior to, and ending after, the Distribution Date.
“Subsidiary” when used with respect to any Person, means (i) (A) a corporation a majority in voting power of whose share capital or capital stock with voting power, under ordinary circumstances, to elect directors is at the time, directly or indirectly, owned by such Person, by one or more Subsidiaries of such Person, or by such Person and one or more Subsidiaries of such Person, whether or not such power is subject to a voting agreement or similar encumbrance, (B) a partnership or limited liability company in which such Person or a Subsidiary of such Person is, at the date of determination, (1) in the case of a partnership, a general partner of such partnership with the power affirmatively to direct the policies and management of such partnership or (2) in the case of a limited liability company, the managing member or, in the absence of a managing member, a member with the power affirmatively to direct the policies and management of such limited liability company, or (C) any other Person (other than a corporation) in which such Person, one or more Subsidiaries of such Person or such Person and one or more Subsidiaries of such Person, directly or indirectly, at the date of determination thereof, has or have (1) the power to elect or direct the election of a majority of the members of the governing body of such Person, whether or not such power is subject to a voting agreement or similar encumbrance, or (2) in the absence of such a governing body, at least a majority ownership interest or (ii) any other Person of which an aggregate of 50% or more of the equity interests are, at the time, directly or indirectly, owned by such Person and/or one or more Subsidiaries of such Person.
“Tax” or “Taxes” means any income, gross income, gross receipts, profits, capital stock, franchise, withholding, payroll, social security, workers’ compensation, employment, unemployment, disability, property, ad valorem, stamp, excise, severance, occupation, service, sales, use, license, lease, transfer, import, export, value added, alternative minimum, estimated or other similar tax (including any fee, assessment, or other charge in the nature of or in lieu of any tax) imposed by any Tax Authority, any liability attributable to any escheat, abandoned, or unclaimed property law, and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing, together with any reasonable expenses, including attorneys’ fees, incurred in defending against any such Tax.
“Tax Adjustment” has the meaning set forth in Section 4.6.
“Tax Authority” means, with respect to any Tax, the governmental entity or political subdivision, agency, commission or authority thereof that imposes such Tax, and the agency, commission or authority (if any) charged with the assessment, determination or collection of such Tax for such entity or subdivision.
“Tax Benefit” means a reduction in the Tax liability of a taxpayer (or of the affiliated group of which it is a member) for any taxable period. Except as otherwise provided in this Agreement, a Tax Benefit shall be deemed to have been realized or received from a Tax Item in
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a taxable period only if and to the extent that the Tax liability of the taxpayer (or of the affiliated group of which it is a member) for such period, after taking into account the effect of the Tax Item on the Tax liability of such taxpayer in the current period and all prior periods, is less than it would have been if such Tax liability were determined without regard to such Tax Item.
“Tax Contest” means an audit, review, examination, or any other administrative or judicial proceeding with the purpose, potential or effect of re-determining Taxes of any member of either Group (including any administrative or judicial review of any claim for refund).
“Tax-Free Status” means the qualification of the Distribution as a transaction described in Section 355(a) of the Code.
“Tax Item” means, with respect to any Tax, any item of income, gain, loss, deduction, credit or other attribute that may have the effect of increasing or decreasing any Tax.
“Tax Law” means the law of any governmental entity or political subdivision thereof, and any controlling judicial or administrative interpretations of such law, relating to any Tax.
“Tax Records” means Tax Returns, Tax Return work papers, documentation relating to any Tax Contests, and any other books of account or records required to be maintained under applicable Tax Laws (including but not limited to Section 6001 of the Code) or under any record retention agreement with any Tax Authority.
“Tax Return” means any report of Taxes due, any claims for refund of Taxes paid, any information return with respect to Taxes, or any other similar report, statement, declaration, or document filed or required to be filed (by paper, electronically or otherwise) under any applicable Tax Law, including any attachments, exhibits, or other materials submitted with any of the foregoing, and including any amendments or supplements to any of the foregoing.
“Tax Year” means, with respect to any Tax, the year, or shorter period, if applicable, for which the Tax is reported as provided under applicable Tax Law.
“Transfer Taxes” means all U.S. federal, state, local or foreign sales, use, privilege, transfer, documentary, gains, stamp, duties, recording, and similar Taxes and fees (including any penalties, interest or additions thereto) imposed upon any Party hereto or any of its Affiliates in connection with the Distribution.
“Treasury Regulations” means the regulations promulgated from time to time under the Code as in effect for the relevant Tax Year.
“Unqualified Opinion” means an unqualified “will” opinion of an Expert Law Firm that permits reliance by LGL. For the avoidance of doubt, an Unqualified Opinion may be based on factual representations and assumptions that are reasonably satisfactory to LGL.
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SECTION 2.Allocation of Taxes and Tax-Related Losses.
2.1Allocation of Taxes. Except as provided in Section 2.2 (Allocation of Deconsolidation Taxes, Distribution Taxes and Transfer Taxes), Taxes shall be allocated as follows:
(a)LGL shall be liable for and shall be allocated (i) any Taxes attributable to members of the LGL Group for all periods, and (ii) any Covered Income Taxes attributable to members of the Mtron Group for a Pre-Distribution Period.
(b)Mtron shall be liable for and shall be allocated (i) any Residual Taxes attributable to members of the Mtron Group for a Pre-Distribution Period, and (ii) any Taxes attributable to members of the Mtron Group for any Post-Distribution Period.
(c)Notwithstanding the provisions of Sections 2.1(a) and 2.1(b) (but subject to the provisions of Section 2.2), Taxes attributable to any transaction or action taken by or with respect to any member of the Mtron Group before the Effective Time on the Distribution Date shall be allocated to the Pre-Distribution Period, and Taxes attributable to any transaction or action taken by or with respect to any member of the Mtron Group after the Effective Time on the Distribution Date shall be allocated to the Post-Distribution Period.
2.2Allocation of Deconsolidation Taxes, Distribution Taxes and Transfer Taxes
. Notwithstanding any other provision of this Agreement:
(a)Any and all Deconsolidation Taxes shall be borne by LGL.
(b)Mtron shall indemnify and hold harmless each LGL Indemnified Party from and against any liability of LGL for Distribution Taxes to the extent such Distribution Taxes are attributable to an Mtron Tainting Act, provided, however, that Mtron shall have no obligation to indemnify any LGL Indemnified Party hereunder if there has occurred, prior to such Mtron Tainting Act, a LGL Tainting Act.
(c)LGL shall indemnify and hold harmless each Mtron Indemnified Party from and against any liability of Mtron for Distribution Taxes to the extent that Mtron is not liable for such Taxes pursuant to Section 2.2(b).
(d)The Companies shall cooperate with each other and use their commercially reasonable efforts to reduce and/or eliminate any Transfer Taxes. If any Transfer Tax remains payable after application of the first sentence of this Section 2.2(d) and notwithstanding any other provision in this Section 2, all Transfer Taxes shall be allocated to LGL.
2.3Tax Payments. Each Company shall be liable for and shall pay the Taxes allocated to it by this Section 2 either to the applicable Tax Authority or to the other Company in accordance with Section 4 and the other applicable provisions of this Agreement.
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SECTION 3.Preparation and Filing of Tax Returns.
. LGL shall be responsible for preparing and filing (or causing to be prepared and filed) all Combined Returns for any Tax Year, provided, however, that Mtron shall furnish any relevant information, including pro-forma returns, disclosures, apportionment data and supporting schedules, relating to any member of the Mtron Group necessary for completing any Combined Return for any Tax Year in a format suitable for inclusion in such return, and provided further, that Mtron shall have the right to review and comment with respect to items on such returns if and to the extent such items directly relate to Taxes for which Mtron would be liable under Section 2.1(b)(i), such comment not to be unreasonably rejected.
(a)Tax Returns to be Prepared by LGL. LGL shall be responsible for preparing and filing (or causing to be prepared and filed):
(i)all Separate Returns which relate to one or more members of the LGL Group for any Tax Year, and
(ii)all Separate Returns which relate to one or more members of the Mtron Group for any Pre-Distribution Period or Straddle Period if such return is in respect of Covered Income Taxes, provided that Mtron shall furnish any relevant information, including pro-forma returns, disclosures, apportionment data and supporting schedules, relating to any member of the Mtron Group necessary for completing any Separate Return for any Pre-Distribution Period or Straddle Period in a format suitable for inclusion in such return, and provided further, that Mtron shall have the right to review and comment with respect to items on such returns if and to the extent such items relate to a Tax for which Mtron would be liable under Section 2.1(b)(i), such comment not to be unreasonably rejected.
(b)Tax Returns to be Prepared by Mtron. Mtron shall be responsible for preparing and filing (or causing to be prepared and filed) all Separate Returns which relate to one or more members of the Mtron Group and for which LGL is not responsible under Section 3.2(a), provided that in the case of such returns in respect of any Pre-Distribution Period or Straddle Period, LGL shall have the right to review and comment on such returns, such comment not to be unreasonably rejected.
3.3Agent. Subject to the other applicable provisions of this Agreement (including, without limitation, Section 5), Mtron irrevocably designates, and agrees to cause each Affiliate of Mtron so to designate, LGL as its sole and exclusive agent and attorney-in-fact to take such action (including execution of documents) as LGL may deem reasonably appropriate in matters relating to the preparation or filing of any Tax Return described in Sections 3.1 and 3.2(a)(ii).
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(a)LGL shall provide to Mtron, and Mtron shall provide to LGL, any information about members of the LGL Group or the Mtron Group, respectively, that the Preparer reasonably requires to determine the amount of Taxes due on any Payment Date with respect to a Tax Return for which the Preparer is responsible pursuant to Section 3.1 or 3.2 and to properly and timely file all such Tax Returns.
(b)If a member of the Mtron Group supplies information to a member of the LGL Group, or a member of the LGL Group supplies information to a member of the Mtron Group, and an officer of the requesting member intends to sign a statement or other document under penalties of perjury in reliance upon the accuracy of such information, then a duly authorized officer of the member supplying such information shall certify, to the best of such officer’s knowledge, the accuracy of the information so supplied.
3.5Special Rules Relating to the Preparation of Tax Returns.
(a)In General. All Tax Returns that include any members of the Mtron Group or LGL Group, or any of their respective Affiliates, shall be prepared in a manner that is consistent with the qualifying the Distribution for the Tax-Free Status. Except as otherwise set forth in this Agreement, all Tax Returns for which LGL is responsible under Sections 3.1 and 3.2 shall be prepared (x) in accordance with elections, Tax accounting methods and other practices used with respect to such Tax Returns filed prior to the Distribution Date (unless such past practices are not permissible under applicable law), or (y) to the extent any items are not covered by past practices (or in the event such past practices are not permissible under applicable Tax Law), in a manner reasonably acceptable to both Parties; provided, however, that in each case of (x) and (y) to the extent that a change in such elections, methods or practices would not reasonably be expected to result in any adverse impact on Mtron, such Tax Returns shall be prepared in accordance with reasonable practices selected by LGL.
(b)Election to File Consolidated, Combined or Unitary Tax Returns. LGL shall have the sole discretion in electing to file any Tax Return on a consolidated, combined or unitary basis, if such Tax Return would include at least one member of each Group and the filing of such Tax Return is elective under the relevant Tax Law.
3.6Refunds, Credits or Offsets.
(a)Unless otherwise agreed or required by applicable Tax Law, any refunds, credits or offsets with respect to Taxes allocated to, and actually paid by, LGL pursuant to this Agreement shall be for the account of LGL. Unless otherwise agreed or required by applicable Tax Law, any refunds, credits or offsets with respect to Taxes, allocated to, and actually paid by, Mtron pursuant to this Agreement shall be for the account of Mtron.
(b)LGL shall forward to Mtron, or reimburse Mtron for, any such refunds, credits or offsets, plus any interest received thereon, net of any Taxes incurred with respect to the receipt or accrual thereof and any expenses incurred in connection therewith, that are for the account of Mtron within Mtron’s normal course of settlement of such items but not more than 45 days from receipt thereof from receipt thereof by LGL or any of its Affiliates. Mtron shall forward to LGL, or reimburse LGL for, any refunds, credits or offsets, plus any interest received thereon, net of any Taxes incurred with respect to the receipt or accrual thereof and any expenses incurred in connection
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therewith, that are for the account of LGL within LGL’s normal course of settlement of such items but not more than 45 days from receipt thereof by Mtron or any of its Affiliates. Any refunds, credits or offsets, plus any interest received thereon, or reimbursements not forwarded or made within the period specified above shall bear interest from the date received by the refunding or reimbursing party (or its Affiliates) through and including the date of payment at the Interest Rate (treating the date received as the Due Date for purposes of determining such interest). If, subsequent to a Tax Authority’s allowance of a refund, credit or offset, such Tax Authority reduces or eliminates such allowance, any refund, credit or offset, plus any interest received thereon, forwarded or reimbursed under this Section 3.6 shall be returned to the party who had forwarded or reimbursed such refund, credit or offset and interest upon the request of such forwarding party in an amount equal to the applicable reduction, including any interest received thereon.
3.7Carrybacks. To the extent permitted under applicable Tax Laws, the Mtron Group shall make the appropriate elections in respect of any Tax Returns to waive any option to carry back any net operating loss, any credits or any similar item from a Post-Distribution Period to any Pre-Distribution Period or to any Straddle Period. Any refund of or credit for Taxes resulting from any such carryback by a member of the Mtron Group that cannot be waived shall be payable to Mtron net of any Taxes incurred with respect to the receipt or accrual thereof and any expenses incurred in connection therewith.
3.8Amended Returns. Any amended Tax Return or claim for Tax refund, credit or offset with respect to any member of the Mtron Group may be made only by the Company (or its Affiliates) responsible for preparing the original Tax Return with respect to such member pursuant to Sections 3.1 or 3.2 (and, for the avoidance of doubt, subject to the same review and comment rights set forth in Sections 3.1 or 3.2, to the extent applicable). Such Company (or its Affiliates) shall not, without the prior written consent of the other Company (which consent shall not be unreasonably withheld or delayed), file, or cause to be filed, any such amended Tax Return or claim for Tax refund, credit or offset to the extent that such filing, if accepted, is likely to increase the Taxes allocated to, or the Tax indemnity obligations under this Agreement of, such other Company for any Tax Year (or portion thereof); provided, however, that such consent need not be obtained if the Company filing the amended Tax Return by written notice to the other Company agrees to indemnify the other Company for the incremental Taxes allocated to, or the incremental Tax indemnity obligation resulting under this Agreement to, such other Company as a result of the filing of such amended Tax Return.
4.1Payment of Taxes to Tax Authority. LGL shall be responsible for remitting to the proper Tax Authority the Tax shown on any Tax Return for which it is responsible for the preparation and filing pursuant to Section 3.1 or Section 3.2, and Mtron shall be responsible for remitting to the proper Tax Authority the Tax shown on any Tax Return for which it is responsible for
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the preparation and filing pursuant to Section 3.2.
(a)Tax Payments Made by the LGL Group. If any LGL Indemnified Party is required to make a payment to a Tax Authority for Taxes allocated to Mtron under this Agreement, Mtron will pay the amount of Taxes allocated to it to LGL not later than the later of (i) five Business Days after receiving notification requesting such amount, and (ii) one Business Day prior to the date such payment is required to be made to such Tax Authority.
(b)Tax Payments Made by the Mtron Group. If any Mtron Indemnified Party is required to make a payment to a Tax Authority for Taxes allocated to LGL under this Agreement, LGL will pay the amount of Taxes allocated to it to Mtron not later than the later of (i) five (5) Business Days after receiving notification requesting such amount, and (ii) three (3) Business Days prior to the date such payment is required to be made to such Tax Authority.
4.3Interest on Late Payments. Payments pursuant to this Agreement that are not made by the date prescribed in this Agreement or, if no such date is prescribed, not later than five (5) Business Days after demand for payment is made (the “Due Date”) shall bear interest for the period from and including the date immediately following the Due Date through and including the date of payment at the Interest Rate. Such interest will be payable at the same time as the payment to which it relates. Interest will be calculated on the basis of a year of 365 days and the actual number of days for which due.
4.4Tax Consequences of Payments. For all Tax purposes and to the extent permitted by applicable Tax Law, the parties hereto shall treat any payment made pursuant to this Agreement as a capital contribution or a distribution, as the case may be, immediately prior to the Distribution. If the receipt or accrual of any indemnity payment under this Agreement causes, directly or indirectly, an increase in the taxable income of the recipient under one or more applicable Tax Laws, such payment shall be increased so that, after the payment of any Taxes with respect to the payment, the recipient thereof shall have realized the same net amount it would have realized had the payment not resulted in taxable income. For the avoidance of doubt, any liability for Taxes due to an increase in taxable income described in the immediately preceding sentence shall be governed by this Section 4.4 and not by Section 2.2. To the extent that Taxes for which any Party hereto (the “Indemnifying Party”) is required to pay an Indemnified Party pursuant to this Agreement may be deducted or credited in determining the amount of any other Taxes required to be paid by the Indemnified Party (for example, state Taxes which are permitted to be deducted in determining federal Taxes), the amount of any payment made to the Indemnified Party by the Indemnifying Party shall be decreased by taking into account any resulting reduction in other Taxes actually realized by the Indemnified Party. If such a reduction in Taxes of the Indemnified Party occurs following the payment made to the Indemnified Party with respect to the relevant indemnified Taxes, the Indemnified Party shall promptly repay the
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Indemnifying Party the amount of such reduction when actually realized. If the Tax Benefit arising from the foregoing reduction of Taxes described in this Section 4.4 is subsequently decreased or eliminated, then the Indemnifying Party shall promptly pay the Indemnified Party the amount of the decrease in such Tax Benefit.
(a)LGL and Mtron shall make a protective election under Section 336(e) of the Code (and any similar election under state or local law) with respect to the Distribution in accordance with Treasury Regulations Section 1.336-2(h) and (j) (and any applicable provisions under state and local law), provided that Mtron shall indemnify LGL for any cost to the LGL Group of making such an election (but it being understood that any such cost arising from Taxes shall be limited to Excess Taxes). LGL and Mtron shall cooperate in the timely completion and filings of such elections and any related filings or procedures (including filing or amending any Tax Returns to implement an election that becomes effective). This Section 4.5 is intended to constitute a binding, written agreement to make an election under Section 336(e) of the Code with respect to the Distribution.
(b)If Taxes are allocated to a Party (the “Responsible Party”) as a result of any election set forth in this Section 4.5, then to the extent that such Taxes give rise to a Tax Benefit, other than a refund, credit or offset as described in Section 3.6(b), to the other Party (the “Other Party”) or any of its Affiliates, and such Tax Benefit results in an actual reduction in Taxes (determined on a with and without basis) of the Other Party or any of its Affiliates in any Tax Year, the Other Party shall pay to the Responsible Party in the relevant Tax Year an amount equal to such reduction in Taxes (determined on a with and without basis); provided, however, that this provision shall not apply to the extent that the actual reduction in Taxes for the relevant Tax Year and any unpaid reduction in Taxes for all prior Tax Years is less than $50,000.
4.6Certain Final Determinations. If an adjustment (a “Tax Adjustment”) pursuant to a Final Determination in a Tax Contest initiated by a Tax Authority results in a Tax greater than the Tax shown on the relevant Tax Return for any Pre-Distribution Period, the Indemnified Party shall pay to the Indemnifying Party an amount equal to any Tax Benefit as and when actually realized by such Indemnified Party as a result of such Tax Adjustment. The Parties agree that if an Indemnified Party is required to make a payment to an Indemnifying Party pursuant to this Section 4.6, the Parties shall negotiate in good faith to set off the amount of such payment against any indemnity payments owed by the Indemnifying Party to the Indemnified Party, taking into account time value and similar concepts as appropriate.
SECTION 5.Cooperation and Tax Contests.
5.1Cooperation. In addition to the obligations enumerated in Sections 3.4 and 5.4, LGL and Mtron will cooperate (and cause their respective Subsidiaries and Affiliates to cooperate) with each other and with each other’s agents, including accounting firms and legal counsel, in connection with Tax matters, including provision of relevant
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documents and information in their possession and making available to each other, as reasonably requested and available, personnel (including officers, directors, employees and agents of the Parties or their respective Subsidiaries or Affiliates) responsible for preparing, maintaining, and interpreting information and documents relevant to Taxes, and personnel reasonably required as witnesses or for purposes of providing information or documents in connection with any administrative or judicial proceedings relating to Taxes.
5.2Notices of Tax Contests. Each Company shall provide prompt notice to the other Company of any pending or threatened Tax audit, assessment or proceeding or other Tax Contest of which it becomes aware relating to (i) Taxes for which it is or may be indemnified by such other Company hereunder or (ii) Tax Items that may affect the amount or treatment of Tax Items of such other Company. Such notice shall contain factual information (to the extent known) describing any asserted Tax liability in reasonable detail and shall be accompanied by copies of any notice and other documents received from any Tax Authority in respect of any such matters; provided, however, that failure to give such notification shall not affect the indemnification provided hereunder except, and only to the extent that, the indemnifying Company shall have been actually prejudiced as a result of such failure. Thereafter, the indemnified Company shall deliver to the indemnifying Company such additional information with respect to such Tax Contest in its possession that the indemnifying Company may reasonably request.
(a)Controlling Party. Subject to the limitations set forth in Section 5.3(b), each Preparer (or the appropriate member of its Group) shall be the Controlling Party with respect to any Tax Contest involving a Tax reported (or that, it is asserted, should have been reported) on a Tax Return for which such Company is responsible for preparing and filing (or causing to be prepared and filed) pursuant to Section 3 of this Agreement (it being understood, for the avoidance of doubt but subject to the other provisions of this Section 5.3(a), that LGL shall be the Controlling Party with respect to any Tax Contest involving Distribution Taxes), in which case any Non-Preparer that could have liability under this Agreement for a Tax to which such Tax Contest relates shall be treated as the “Non-Controlling Party.” Notwithstanding the immediately preceding sentence, if a Non-Preparer (x) acknowledges to the Preparer in writing its full liability under this Agreement to indemnify for any Tax, and (y) provides to the Preparer evidence (that is satisfactory to the Preparer as determined in the Preparer’s reasonable discretion) of the Non-Preparer’s financial readiness and capacity to make such indemnity payment, then thereafter with respect to the Tax Contest relating solely to such Tax the Non-Preparer shall be the Controlling Party (subject to Section 5.3(b)) and the Preparer shall be treated as the Non-Controlling Party.
(b)Non-Controlling Party Participation Rights. With respect to a Tax Contest of any Tax Return that could result in a Tax liability that is allocated under this Agreement, (i) the Non-Controlling Party shall, at its own cost and expense, be entitled to participate in such Tax Contest and to provide comments and suggestions to the Controlling Party, such comments and suggestions to be considered in good faith and not unreasonably rejected, (ii) the Controlling Party shall keep the Non-Controlling Party
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updated and informed, and shall consult with the Non-Controlling Party, (iii) the Controlling Party shall act in good faith with a view to the merits in connection with the Tax Contest, and (iv) the Controlling Party shall not settle or compromise such Tax Contest without the prior written consent of the Non-Controlling Party (which consent shall not be unreasonably withheld).
5.4Cooperation Regarding Tax Contests. The Parties shall provide each other with all information relating to a Tax Contest which is needed by the other Party to handle, participate in, defend, settle or contest the Tax Contest. At the request of any party, the other Party shall take any action (e.g., executing a power of attorney) that is reasonably necessary in order for the requesting Party to exercise its rights under this Agreement in respect of a Tax Contest. Mtron shall assist LGL, and LGL shall assist Mtron, in taking any remedial actions that are necessary or desirable to minimize the effects of any adjustment made by a Tax Authority. The Indemnifying Party shall reimburse the Indemnified Party for any reasonable out-of-pocket costs and expenses incurred in complying with this Section 5.4.
6.1Retention of Tax Records. Each of LGL and Mtron shall preserve, and shall cause their respective Subsidiaries to preserve, all Tax Records that are in their possession, and that could affect the liability of any member of the other Group for Taxes, for as long as the contents thereof may become material in the administration of any matter under applicable Tax Law, but in any event until the later of (x) the expiration of any applicable statute of limitations, as extended, and (y) seven (7) years after the Distribution Date.
6.2Access to Tax Records. Mtron shall make available, and cause its Subsidiaries to make available, to members of the LGL Group for inspection and copying (x) all Tax Records in their possession that relate to a Pre-Distribution Period, and (y) the portion of any Tax Record in their possession that relates to a Post-Distribution Period and which is reasonably necessary for the preparation of a Tax Return by a member of the LGL Group or any of their Affiliates or with respect to any Tax Contest with respect to such return. LGL shall make available, and cause its Subsidiaries to make available, to members of the Mtron Group for inspection and copying the portion of any Tax Record in their possession that relates to a Pre-Distribution Period and which is reasonably necessary for the preparation of a Tax Return by a member of the Mtron Group or any of their Affiliates or with respect to any Tax Contest with respect to such return.
6.3Confidentiality. Each party hereby agrees that it will hold, and shall use its reasonable best efforts to cause its officers, directors, employees, accountants, counsel, consultants, advisors and agents to hold, in confidence all records and information prepared and shared by and among the Parties in carrying out the intent of this Agreement, except as may otherwise be necessary in connection with the filing of Tax Returns or any administrative or judicial proceedings relating to Taxes or unless disclosure is compelled by a governmental authority. Information and documents of one Party (the “Disclosing Party”) shall not be deemed to be confidential for purposes of this Section 6.3 to the extent that such information or document (i) is previously known to or in the possession of the other Party
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(the “Receiving Party”) and is not otherwise subject to a requirement to be kept confidential, (ii) becomes publicly available by means other than unauthorized disclosure under this Agreement by the Receiving Party or (iii) is received from a third party without, to the knowledge of the Receiving Party after reasonable diligence, a duty of confidentiality owed to the Disclosing Party.
SECTION 7.Representations and Covenants.
7.1Covenants of LGL and Mtron.
(a)LGL hereby covenants that, to the fullest extent permissible under U.S. federal and state income Tax Laws, it will, and will cause the members of the LGL Group to, treat the Distribution in accordance with the Tax-Free Status. Mtron hereby covenants that, to the fullest extent permissible under U.S. federal and state income Tax Laws, it will, and will cause each Subsidiary of Mtron to, treat the Distribution in accordance with the Tax-Free Status.
(b)LGL further covenants that, as of and following the date hereof, LGL shall not and shall cause the members of the LGL Group not to take any action that (or fail to take any action the omission of which) (i) would be inconsistent with the Distribution qualifying, or would preclude the Distribution from qualifying, for the Tax-Free Status, or (ii) would cause any holders of LGL Common Stock that receive stock of Mtron in the Distribution to recognize gain or loss, or otherwise include any amount in income, as a result of the Distribution for U.S. federal income tax purposes (except with respect to cash received in lieu of fractional shares).
(c)Mtron further covenants that, as of and following the date hereof, Mtron shall not and shall cause its Subsidiaries not to take any action that (or fail to take any action the omission of which) (i) would be inconsistent with the Distribution qualifying, or would preclude the Distribution from qualifying, for the Tax-Free Status, including but not limited to within two (2) years of the Distribution Date not entering into any agreement, understanding or arrangement (or substantial negotiations with respect to a transaction) involving the substantial acquisition of stock of Mtron or a substantial shift in ownership (by vote or value) of Mtron and shall not issue any additional shares of capital stock, or transfer or modify any option, warrant, convertible obligation or other instrument that provides for the right or possibility to issue, redeem or transfer any equity interest in Mtron (other than pursuant to and in conformity with Code Sections 83, 414(b), (c), (m) or (o), or 421 as provided in Safe Harbors 8 or 9 of Treasury Regulations Section 1.355-7(d)(8) or (9) or based on advice from an Expert Law Firm would not cause a violation of Code Section 355(d) or (e)), or (ii) would cause any holders of LGL Common Stock that receive stock of Mtron in the Distribution to recognize gain or loss, or otherwise include any amount in income, as a result of the
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Distribution for U.S. federal income tax purposes (except with respect to cash received in lieu of fractional shares).
Without limiting the generality of the provisions of Section 7.1, Mtron, on behalf of itself and its Subsidiaries, agrees and covenants that Mtron and each of its Subsidiaries will not, directly or indirectly, during the Restriction Period, (i) take any action that would result in Mtron’s ceasing to be engaged in the active conduct of the Mtron business as of the date of signing this Agreement with the result that Mtron is not engaged in the active conduct of a trade or business within the meaning of Section 355(b)(2) of the Code, (ii) redeem or otherwise repurchase (directly or through an Affiliate of Mtron) any of Mtron’s outstanding stock, other than through stock purchases meeting the requirements of Section 4.05(1)(b) of Revenue Procedure 96-30, 1996-1 C.B. 696, (iii) amend the certificate of incorporation (or other organizational documents) of Mtron that would affect the relative voting rights of separate classes of Mtron’s stock or would convert one class of Mtron’s stock into another class of its stock, (iv) liquidate (within the meaning of Section 331 of the Code and the Treasury Regulations promulgated thereunder) or partially liquidate (within the meaning of Section 346 of the Code and the Treasury Regulations promulgated thereunder) or dissolve Mtron, (v) merge or consolidate Mtron with any other corporation (other than in a transaction that does not affect the relative shareholding of Mtron shareholders), sell or otherwise dispose of (other than in the ordinary course of business) the assets of Mtron and its Subsidiaries, or take any other action or actions if such merger, sale, other disposition or other action or actions in the aggregate would have the effect that one or more Persons acquire (or have the right to acquire), directly or indirectly, as part of a plan or series of related transactions, assets representing one-half or more of the asset value of the Mtron Group, or (vi) take any other action or actions that in the aggregate would have the effect that one or more Persons acquire (or have the right to acquire), directly or indirectly, as part of a plan or series of related transactions, stock or equity securities of Mtron representing a Fifty-Percent Equity Interest in Mtron, other than a Permitted Acquisition.
(a)Without limiting the generality of the provisions of Section 7.1, LGL, on behalf of itself and each member of the LGL Group, agrees and covenants that LGL and each member of the LGL Group will not, directly or indirectly, during the Restriction Period, (i) take any action that would result in LGL’s ceasing to be engaged in the active conduct of the LGL business as of the date of signing this Agreement with the result that LGL is not engaged in the active conduct of a trade or business within the meaning of Section 355(b)(2) of the Code, (ii) redeem or otherwise repurchase (directly or through an Affiliate of LGL) any of LGL’s outstanding stock, other than through stock purchases meeting the requirements of section 4.05(1)(b) of Revenue Procedure 96-30, 1996-1 C.B. 696, (iii) amend the certificate of incorporation (or other organizational documents) of
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LGL that would affect the relative voting rights of separate classes of LGL’s stock or would convert one class of LGL’s stock into another class of its stock, (iv) liquidate (within the meaning of Section 331 of the Code and the Treasury Regulations promulgated thereunder) or partially liquidate (within the meaning of Section 346 of the Code and the Treasury Regulations promulgated thereunder) LGL, (v) merge LGL with any other corporation (other than in a transaction that does not affect the relative shareholding of LGL shareholders), sell or otherwise dispose of (other than in the ordinary course of business) the assets of LGL and its Subsidiaries, or take any other action or actions if such merger, sale, other disposition or other action or actions in the aggregate would have the effect that one or more Persons acquire (or have the right to acquire), directly or indirectly, as part of a plan or series of related transactions, assets representing one-half or more of the asset value of the LGL Group, or (vi) take any other action or actions that in the aggregate would have the effect that one or more Persons acquire (or have the right to acquire), directly or indirectly, as part of a plan or series of related transactions, stock or equity securities of LGL representing a Fifty-Percent Equity Interest in LGL.
(b)Nothing in this Section 7 shall be construed to give Mtron or any Affiliates of Mtron any right to remedies other than indemnification for any increase in the actual Tax liability (and/or decrease in Tax Benefit) of Mtron or any Affiliate of Mtron that results from LGL Group’s failure to comply with the covenants and representations in this Section 7.
(a)Notwithstanding Section 7.2 above, Mtron or any of its Subsidiaries may take a Restricted Action if LGL consents in writing to such Restricted Action, or if Mtron provides LGL with an Unqualified Opinion (that is reasonably satisfactory to LGL in both form and substance), concluding that such Restricted Action will not alter the Tax-Free Status of the Distribution in respect of LGL and LGL’s shareholders.
(b)Mtron and each of its Subsidiaries agree that LGL and each Affiliate of LGL are to have no liability for any Tax resulting from any Restricted Actions permitted pursuant to this Section 7.4 and, subject to Section 2.2, agree to indemnify and hold harmless each LGL Indemnified Party against any such Tax. Mtron shall bear all costs incurred by it, and all reasonable costs incurred by LGL, in connection with requesting and/or obtaining any Unqualified Opinion reasonably satisfactory to LGL in both form and substance.
7.5Injunctive Relief. For the avoidance of doubt, LGL shall have the right to seek injunctive relief to prevent Mtron or any of its Subsidiaries from taking any action that is not consistent with the covenants of the Mtron or any of its Subsidiaries under Section 7.1 or 7.2.
7.6Further Assurances. For the avoidance of doubt, (i) neither LGL nor a member of the LGL Group shall take any action on the Distribution Date that would result in an increase of the actual Tax liability (or decrease of any Tax Benefit) of Mtron or any of
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its Subsidiaries, other than in the ordinary course of business, except for actions undertaken in connection with the Distribution, and (ii) neither Mtron nor any of its Subsidiaries shall take any action on the Distribution Date that would result in an increase of the actual Tax liability (and/or decrease of any Tax Benefit) of LGL or a member of the LGL Group, other than in the ordinary course of business, except for actions undertaken in connection with the Distribution.
8.1Predecessors or Successors. Any reference to LGL, Mtron, a Person, or a Subsidiary in this Agreement shall include any predecessors or successors (e.g., by merger or other reorganization, liquidation, conversion, or election under Treasury Regulations Section 301.7701-3) of LGL, Mtron, such Person, or such Subsidiary, respectively, including within the meaning of Section 355(e)(4)(D) of the Code and the Treasury Regulations promulgated thereunder. For the avoidance of doubt, no member of the LGL Group shall be deemed to be a predecessor or successor of Mtron and no member of the Mtron Group shall be deemed to be a predecessor or successor of LGL.
8.2Construction. This Agreement shall constitute the entire agreement (except insofar and to the extent that it specifically and expressly references the Distribution Agreement and any other Ancillary 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.
8.3Ancillary Agreements. This Agreement is not intended to address, and should not be interpreted to address, the matters specifically and expressly covered by the Distribution Agreement or any other Ancillary Agreement.
8.4Counterparts. 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 Party.
8.5Notices. All notices and other communications hereunder shall be in writing, shall reference this Agreement and shall be hand delivered or mailed by registered or certified mail (return receipt requested) 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:
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To LGL: |
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The LGL Group, Inc. |
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249 Royal Palm Way Suite 503 |
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Palm Beach, FL 33480 |
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Attention: Ivan Arteaga, Chief Financial Officer |
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To Mtron: |
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M-tron Industries, Inc. |
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2525 Shader Road |
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Orlando, FL 32804 |
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Attention: James W. Tivy, Chief Financial Officer |
8.6Amendments. This Agreement may not be modified or amended except by an agreement in writing signed by each of the Parties.
8.7Assignment. This Agreement shall not be assignable, in whole or in part, directly or indirectly, by any Party without the prior written consent of the other Party, and any attempt to assign any rights or obligations arising under this Agreement without such consent shall be void; provided that, subject to compliance with Section 7, if applicable, either Party may assign this Agreement to a purchaser of all or substantially all of the properties and assets of such Party so long as such purchaser expressly assumes, in a written instrument in form reasonably satisfactory to the non-assigning Party, the due and punctual performance or observance of every agreement and covenant of this Agreement on the part of the assigning Party to be performed or observed.
8.8Successors 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.
8.9Change in Law. Any reference to a provision of the Code or any other Tax Law shall include a reference to any applicable successor provision or law.
8.10Authorization, Etc. Each of the Parties hereto hereby represents and warrants that it has the power and authority to execute, deliver and perform this Agreement, that this Agreement has been duly authorized by all necessary corporate action on the part of such Party, that this Agreement constitutes a legal, valid and binding obligation of such Party and that the execution, delivery and performance of this Agreement by such Party does not contravene or conflict with any provision of law or the Party’s charter or bylaws or any agreement, instrument or order binding such Party.
8.11Termination. This Agreement may be terminated at any time prior to the Distribution by and in the sole discretion of LGL without the approval of Mtron or the stockholders of LGL. In the event of such termination, no Party shall have any liability of
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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.
8.12Subsidiaries. Each of the Parties shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any entity that is contemplated to be a Subsidiary of such Party after the Distribution Date.
8.13Third-Party Beneficiaries. Except with respect to LGL Indemnified Parties and Mtron Indemnified Parties, and in each case, only where and as indicated herein, this Agreement is solely for the benefit of the Parties and their respective Subsidiaries and Affiliates and should not be deemed to confer upon any other Person any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Agreement. Notwithstanding anything in this Agreement to the contrary, this Agreement is not intended to confer upon any Mtron Indemnified Parties any rights or remedies against Mtron hereunder, and this Agreement is not intended to confer upon any LGL Indemnified Parties any rights or remedies against LGL hereunder.
8.14Titles and Headings. Titles and headings to Sections herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.
8.15Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Florida applicable to contracts made and to be performed in the State of New York.
8.16Waiver of Jury Trial. The Parties hereby irrevocably waive any and all right to trial by jury in any legal proceeding arising out of or related to this Agreement or the transactions contemplated hereby.
8.17Severability. 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.
8.18No Strict Construction; Interpretation.
(a)Each of LGL and Mtron acknowledges that this Agreement has been prepared jointly by the Parties hereto and shall not be strictly construed against any Party hereto.
(b)The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”.
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The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. References to a Person are also to its permitted successors and assigns.
[Signatures begin on the following page]
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by the respective officers as of the date first set forth above.
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THE LGL GROUP, INC. |
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By: |
/s/ James W. Tivy |
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Name: James W. Tivy |
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Title: Chief Financial Officer |
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M-TRON INDUSTRIES, INC. |
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By: |
/s/ Linda M. Biles |
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Name: Linda M. Biles |
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Title: Treasurer |
[Signature Page to Tax Indemnity and Sharing Agreement]