\nARTICLE I MUTUAL RELEASES; INDEMNIFICATION………………………………………1
\n Section 1.1 Release of Pre-Separation Date Claims…………..1
\n Section 1.2 Indemnification by Coach………………………2
\n Section 1.3 Indemnification by Sara Lee……………………3
\n Section 1.4 Indemnification With Respect to Environmental
\n Actions and Conditions……………………….4
\n Section 1.5 Reductions for Insurance Proceeds
\n and Other Recoveries ………………………..5
\n Section 1.6 Procedures for Defense, Settlement and
\n Indemnification of Third Party Claims………….7
\n Section 1.7 Additional Matters……………………………8
\n Section 1.8 Survival of Indemnities……………………….9<\/p>\nARTICLE II INSURANCE MATTERS………………………………………………….10
\n Section 2.1 Coach Insurance Coverage During
\n the Insurance Transition Period………………10
\n Section 2.2 Cooperation; Payment of Insurance
\n Proceeds to Coach; Agreement
\n Not to Release Carriers……………………..10
\n Section 2.3 Coach Insurance Coverage After the Insurance
\n Transition Period…………………………..11
\n Section 2.4 Responsibilities for Deductibles and\/or
\n Self-insured Obligations…………………….12
\n Section 2.5 Procedures With Respect to Insured
\n Coach Liabilities…………………………..12
\n Section 2.6 Insufficient Limits of Liability for Sara Lee
\n Liabilities and Coach Liabilities…………….12
\n Section 2.7 Cooperation…………………………………14
\n Section 2.8 No Assignment or Waiver………………………14
\n Section 2.9 No Liability………………………………..15<\/p>\n
-i-<\/p>\n
Section 2.10 Additional or Alternate Insurance……………..15
\n Section 2.11 Further Agreements…………………………..15
\n Section 2.12 Matters Governed by Employee Matters
\n Agreement………………………………….15<\/p>\n
ARTICLE III MISCELLANEOUS…………………………………………………….15
\n Section 3.1 Entire Agreement…………………………….15
\n Section 3.2 Governing Law and Jurisdiction………………..16
\n Section 3.3 Termination…………………………………16
\n Section 3.4 Dispute Resolution…………………………..16
\n Section 3.5 Notices…………………………………….17
\n Section 3.6 Parties in Interest………………………….18
\n Section 3.7 Other Agreements Evidencing
\n Indemnification Obligations………………….18
\n Section 3.8 Counterparts………………………………..19
\n Section 3.9 Assignment………………………………….19
\n Section 3.10 Severability………………………………..19
\n Section 3.11 Failure or Indulgence Not Waiver………………19
\n Section 3.12 Amendment…………………………………..19
\n Section 3.13 Authority…………………………………..20
\n Section 3.14 Interpretation………………………………20<\/p>\n
ARTICLE IV DEFINITIONS……………………………………………………….20
\n Section 4.1 AAA………………………………………..20
\n Section 4.2 Action……………………………………..20
\n Section 4.3 Affiliated Company…………………………..20
\n Section 4.4 Ancillary Agreements…………………………20
\n Section 4.5 Assets……………………………………..21
\n Section 4.6 Assignment Agreement…………………………21
\n Section 4.7 Coach Affiliate……………………………..21
\n Section 4.8 Coach Assets………………………………..21
\n Section 4.9 Coach Business………………………………21
\n Section 4.10 Coach Covered Parties………………………..21
\n Section 4.11 Coach Facilities…………………………….21
\n Section 4.12 Coach Group…………………………………21
\n Section 4.13 Coach Indemnitees……………………………21
\n Section 4.14 Coach Liabilities……………………………21
\n Section 4.15 Contract……………………………………22
\n Section 4.16 Dispute…………………………………….22
\n Section 4.17 Dispute Resolution Commencement Date…………..22<\/p>\n
-ii-<\/p>\n
Section 4.18 Distribution………………………………..22
\n Section 4.19 Distribution Date……………………………22
\n Section 4.20 Employee Matters Agreement……………………22
\n Section 4.21 Environmental Actions………………………..22
\n Section 4.22 Environmental Conditions……………………..22
\n Section 4.23 Environmental Laws…………………………..23
\n Section 4.24 Final Determination………………………….23
\n Section 4.25 Governmental Authority……………………….23
\n Section 4.26 Hazardous Materials………………………….23
\n Section 4.27 Indemnifying Party…………………………..23
\n Section 4.28 Indemnitee………………………………….23
\n Section 4.29 Insurance Policies…………………………..23
\n Section 4.30 Insurance Proceeds…………………………..23
\n Section 4.31 Insurance Transition Period…………………..24
\n Section 4.32 Insured Coach Liability………………………24
\n Section 4.33 IPO………………………………………..24
\n Section 4.34 IPO Closing Date…………………………….24
\n Section 4.35 IPO Liabilities……………………………..24
\n Section 4.36 IPO Registration Statement……………………24
\n Section 4.37 Lemelson Litigation………………………….24
\n Section 4.38 Liabilities…………………………………25
\n Section 4.39 Loss and Losses……………………………..25
\n Section 4.40 Person……………………………………..25
\n Section 4.41 Release…………………………………….25
\n Section 4.42 Sara Lee Affiliate…………………………..25
\n Section 4.43 Sara Lee Business……………………………25
\n Section 4.44 Sara Lee Facilities………………………….25
\n Section 4.45 Sara Lee Group………………………………26
\n Section 4.46 Sara Lee Guarantee…………………………..26
\n Section 4.47 Sara Lee Indemnitees…………………………26
\n Section 4.48 Sara Lee Portions……………………………26
\n Section 4.49 Securities Act………………………………26
\n Section 4.50 Separation………………………………….26
\n Section 4.51 Separation Agreement…………………………26
\n Section 4.52 Separation Date……………………………..26
\n Section 4.53 Shared Coach Percentage………………………26
\n Section 4.54 Shared Percentage……………………………27
\n Section 4.55 Shared Sara Lee Percentage……………………27
\n Section 4.56 Subsidiary………………………………….27
\n Section 4.57 Tax Sharing Agreement………………………..27<\/p>\n
-iii-<\/p>\n
Section 4.58 Tax and Taxes……………………………….27
\n Section 4.59 Third Party Claim……………………………27<\/p>\n
-iv-<\/p>\n
Schedule 2.1(a) Insurance Policies……………………………………………29
\n<\/c><\/s><\/caption>\n<\/table>\n
-v-<\/p>\n
INDEMNIFICATION AND INSURANCE MATTERS AGREEMENT<\/p>\n
This Indemnification and Insurance Matters Agreement (this
\n“Agreement”) is dated as of August 24, 2000 between Sara Lee Corporation, a
\nMaryland corporation (“Sara Lee”), and Coach, Inc., a Maryland corporation
\n(“Coach”). Capitalized terms used herein and not otherwise defined herein
\nshall have the meanings ascribed to such terms in Article IV below.<\/p>\n
RECITALS<\/p>\n
WHEREAS, Sara Lee has transferred or will transfer to Coach
\neffective as of the Separation Date, substantially all of the Assets of the
\nCoach Business in accordance with the Master Separation Agreement dated as of
\nAugust 24, 2000 between Sara Lee and Coach (the “Separation Agreement”).<\/p>\n
WHEREAS, the parties desire to set forth certain agreements
\nregarding indemnification and insurance.<\/p>\n
NOW, THEREFORE, in consideration of the foregoing and the
\ncovenants and agreements set forth below, the parties hereto agree as follows:<\/p>\n
ARTICLE I<\/p>\n
MUTUAL RELEASES; INDEMNIFICATION<\/p>\n
Section 1.1 RELEASE OF PRE-SEPARATION DATE CLAIMS.<\/p>\n
(a) COACH RELEASE. Except as provided in Section 1.1(c),
\neffective as of the Separation Date, Coach does hereby, for itself and as
\nagent for each member of the Coach Group, remise, release and forever
\ndischarge the Sara Lee Indemnitees from any and all Liabilities whatsoever,
\nwhether at law or in equity (including any right of contribution), whether
\narising under any contract or agreement, by operation of law or otherwise,
\nexisting or arising from any past acts or events occurring or failing to
\noccur or alleged to have occurred or to have failed to occur or any
\nconditions existing or alleged to have existed on or before the Separation
\nDate, including in connection with the transactions and all other activities
\nto implement any of the Separation, the IPO and any Distribution.<\/p>\n
1<\/p>\n
(b) SARA LEE RELEASE. Except as provided in Section 1.1(c),
\neffective as of the Separation Date, Sara Lee does hereby, for itself and as
\nagent for each member of the Sara Lee Group, remise, release and forever
\ndischarge the Coach Indemnitees from any and all Liabilities whatsoever,
\nwhether at law or in equity (including any right of contribution), whether
\narising under any contract or agreement, by operation of law or otherwise,
\nexisting or arising from any past acts or events occurring or failing to
\noccur or alleged to have occurred or to have failed to occur or any
\nconditions existing or alleged to have existed on or before the Separation
\nDate, including in connection with the transactions and all other activities
\nto implement any of the Separation, the IPO and any Distribution.<\/p>\n
(c) NO IMPAIRMENT. Nothing contained in Section 1.1(a) or
\nSection 1.1(b) shall limit or otherwise affect any party’s rights or
\nobligations pursuant to or contemplated by the Separation Agreement or any
\nother Ancillary Agreement (including this Agreement), in each case in
\naccordance with its terms, including, without limitation, any obligations
\nrelating to indemnification, Coach’s assumption of the Coach Liabilities and
\nany Insurance Proceeds under any Sara Lee Insurance Policies relating to the
\nCoach Business which Coach is entitled to be paid.<\/p>\n
(d) NO ACTIONS AS TO RELEASED PRE-SEPARATION DATE CLAIMS.
\nCoach agrees, for itself and as agent for each member of the Coach Group, not
\nto make any claim or demand, or commence any Action asserting any claim or
\ndemand, including any claim of contribution or any indemnification, against
\nSara Lee or any member of the Sara Lee Group, or any other Person released
\npursuant to Section 1.1(a), with respect to any Liabilities released pursuant
\nto Section 1.1(a). Sara Lee agrees, for itself and as agent for each member
\nof the Sara Lee Group, not to make any claim or demand, or commence any
\nAction asserting any claim or demand, including any claim of contribution or
\nany indemnification, against Coach or any member of the Coach Group, or any
\nother Person released pursuant to Section 1.1(b), with respect to any
\nLiabilities released pursuant to Section 1.1(b).<\/p>\n
(e) FURTHER INSTRUMENTS. At any time, at the request of any
\nother party, each party shall cause each member of its respective Sara Lee
\nGroup or Coach Group, as applicable, to execute and deliver releases
\nreflecting the provisions hereof.<\/p>\n
Section 1.2 INDEMNIFICATION BY COACH. Except as otherwise provided in
\nthis Agreement, Coach shall, for itself and as agent for each member of the
\nCoach Group, indemnify, defend (or, where applicable, pay the defense costs
\nfor) and hold harmless the Sara Lee Indemnitees from and against, and shall
\nreimburse such Sara Lee Indemnitees with respect to, any and all Losses that
\nany third party seeks to <\/p>\n
2<\/p>\n
impose upon the Sara Lee Indemnitees, or which are imposed upon the Sara Lee
\nIndemnitees, and that result from, relate to or arise, whether prior to or
\nfollowing the Separation Date, out of or in connection with any of the
\nfollowing items (without duplication):<\/p>\n
(i) any Coach Liability;<\/p>\n
(ii) any breach by Coach or any member of the Coach Group
\n of the Separation Agreement or any of the Ancillary Agreements
\n (including this Agreement); and<\/p>\n
(iii) any IPO Liabilities, other than the Sara Lee
\n Portions.<\/p>\n
In the event that any member of the Coach Group makes a payment to the Sara
\nLee Indemnitees hereunder, and any of the Sara Lee Indemnitees subsequently
\ndiminishes the Liability on account of which such payment was made, either
\ndirectly or through a third-party recovery (other than a recovery indirectly
\nfrom Sara Lee), Sara Lee will promptly repay (or will procure a Sara Lee
\nIndemnitee to promptly repay) such member of the Coach Group the amount by
\nwhich the payment made by such member of the Coach Group exceeds the actual
\ncost of the associated indemnified Liability. This Section 1.2 shall not
\napply to any Liability indemnified under Section 1.4.<\/p>\n
Section 1.3 INDEMNIFICATION BY SARA LEE. Except as otherwise provided
\nin this Agreement, Sara Lee shall, for itself and as agent for each member of
\nthe Sara Lee Group, indemnify, defend (or, where applicable, pay the defense
\ncosts for) and hold harmless the Coach Indemnitees from and against, and
\nshall reimburse such Coach Indemnitee with respect to, any and all Losses
\nthat any third party seeks to impose upon the Coach Indemnitees, or which are
\nimposed upon the Coach Indemnitees, and that result from, relate to or arise,
\nwhether prior to or following the Separation Date, out of or in connection
\nwith any of the following items (without duplication):<\/p>\n
(i) any Liability of the Sara Lee Group other than the
\n Coach Liabilities, any Liability for Taxes (which are governed solely by
\n the Tax Sharing Agreement) and all Liabilities arising out of the
\n operation or conduct of the Sara Lee Business;<\/p>\n
3<\/p>\n
(ii) any breach by Sara Lee or any member of the Sara Lee
\n Group of the Separation Agreement or any of the Ancillary Agreements
\n (including this Agreement); and<\/p>\n
(iii) any IPO Liabilities with respect to the Sara Lee
\n Portions only.<\/p>\n
In the event that any member of the Sara Lee Group makes a payment to the
\nCoach Indemnitees hereunder, and any of the Coach Indemnitees subsequently
\ndiminishes the Liability on account of which such payment was made, either
\ndirectly or through a third-party recovery (other than a recovery indirectly
\nfrom Coach), Coach will promptly repay (or will procure a Coach Indemnitee to
\npromptly repay) such member of the Sara Lee Group the amount by which the
\npayment made by such member of the Sara Lee Group exceeds the actual cost of
\nthe indemnified Liability. This Section 1.3 shall not apply to any Liability
\nindemnified under Section 1.4.<\/p>\n
Section 1.4 INDEMNIFICATION WITH RESPECT TO ENVIRONMENTAL ACTIONS AND
\nCONDITIONS.<\/p>\n
(a) INDEMNIFICATION BY COACH. Coach shall, for itself and as
\nagent for each member of the Coach Group, indemnify, defend and hold harmless
\nthe Sara Lee Indemnitees from and against any and all Environmental Actions
\nrelating to, arising out of or resulting from any of the following items:<\/p>\n
(i) Environmental Conditions arising out of operations
\n occurring on or after the Separation Date at any of the Coach
\n Facilities;<\/p>\n
(ii) Except to the extent arising out of the operations of
\n the Sara Lee Group on and after the Separation Date, Environmental
\n Conditions existing on, under, about or in the vicinity of any of the
\n Coach Facilities arising from an event causing contamination to the
\n extent occurring on or after the Separation Date (including any Release
\n of Hazardous Materials occurring after the Separation Date that migrates
\n to any of the Coach Facilities);<\/p>\n
(iii) the violation of Environmental Law as a result of
\n the operation of any of the Coach Facilities on or after the Separation
\n Date; and<\/p>\n
4<\/p>\n
(iv) Environmental Conditions at any third-party site to
\n the extent liability arises from Hazardous Materials generated at any
\n Coach Facility on or after the Separation Date.<\/p>\n
(b) INDEMNIFICATION BY SARA LEE. Sara Lee shall, for itself
\nand as agent for each member of the Sara Lee Group, indemnify, defend and
\nhold harmless the Coach Indemnitees from and against any and all
\nEnvironmental Actions relating to, arising out of or resulting from any of
\nthe following items:<\/p>\n
(i) Environmental Conditions (x) existing on, under, about
\n or in the vicinity of any of the Coach Facilities prior to the
\n Separation Date, or (y) arising out of operations occurring before the
\n Separation Date at any of the Coach Facilities;<\/p>\n
(ii) Except as arising out of the operations of the Coach
\n Group on and after the Separation Date, Environmental Conditions on,
\n under, about or arising out of operations occurring at any time, whether
\n before or after the Separation Date, at any of the Sara Lee Facilities;<\/p>\n
(iii) the violation of Environmental Law as a result of
\n the operation of any of the Coach Facilities prior to the Separation
\n Date; and<\/p>\n
(iv) Environmental Conditions at any third- party site to
\n the extent liability arises from Hazardous Materials generated at any
\n Coach Facility prior to the Separation Date.<\/p>\n
(c) AGREEMENT REGARDING PAYMENTS TO INDEMNITEE. In the event
\nan Indemnifying Party makes any payment to or on behalf of an Indemnitee with
\nrespect to an Environmental Action for which the Indemnifying Party is
\nobligated to indemnify under this Section 1.4, and the Indemnitee
\nsubsequently receives any payment from a third party on account of the same
\nfinancial obligation covered by the payment made by the Indemnifying Party
\nfor that Environmental Action or otherwise diminishes the financial
\nobligation, the Indemnitee will promptly pay the Indemnifying Party the
\namount by which the payment made by the Indemnifying Party exceeds the actual
\ncost of the financial obligation.<\/p>\n
Section 1.5 REDUCTIONS FOR INSURANCE PROCEEDS AND OTHER RECOVERIES.<\/p>\n
5<\/p>\n
(a) INSURANCE PROCEEDS. The amount that any Indemnifying Party
\nis or may be required to provide indemnification to or on behalf of any
\nIndemnitee pursuant to Sections 1.2, 1.3 or 1.4, as applicable, shall be
\nreduced (retroactively or prospectively) by any Insurance Proceeds or other
\namounts actually recovered from third parties by or on behalf of such
\nIndemnitee in respect of the related Loss. The existence of a claim by an
\nIndemnitee for monies from an insurer or against a third party in respect of
\nany indemnifiable Loss shall not, however, delay any payment pursuant to the
\nindemnification provisions contained herein and otherwise determined to be
\ndue and owing by an Indemnifying Party. Rather, the Indemnifying Party shall
\nmake payment in full of the amount determined to be due and owing by it
\nagainst an assignment by the Indemnitee to the Indemnifying Party of the
\nentire claim of the Indemnitee for Insurance Proceeds or against such third
\nparty. Notwithstanding any other provisions of this Agreement, it is the
\nintention of the parties that no insurer or any other third party shall be
\n(i) entitled to a benefit it would not be entitled to receive in the absence
\nof the foregoing indemnification provisions, or (ii) relieved of the
\nresponsibility to pay any claims for which it is obligated. If an Indemnitee
\nhas received the payment required by this Agreement from an Indemnifying
\nParty in respect of any indemnifiable Loss and later receives Insurance
\nProceeds or other amounts in respect of such indemnifiable Loss, then such
\nIndemnitee shall hold such Insurance Proceeds or other amounts in trust for
\nthe benefit of the Indemnifying Party (or Indemnifying Parties) and shall pay
\nto the Indemnifying Party, as promptly as practicable after receipt, a sum
\nequal to the amount of such Insurance Proceeds or other amounts received, up
\nto the aggregate amount of any payments received from the Indemnifying Party
\npursuant to this Agreement in respect of such indemnifiable Loss (or, if
\nthere is more than one Indemnifying Party, the Indemnitee shall pay each
\nIndemnifying Party, its proportionate share (based on payments received from
\nthe Indemnifying Parties) of such Insurance Proceeds).<\/p>\n
(b) TAX COST\/TAX BENEFIT. The amount that any Indemnifying
\nParty is or may be required to provide indemnification to or on behalf of any
\nIndemnitee pursuant to Sections 1.2, 1.3 or 1.4, as applicable, shall be (i)
\nincreased to take account of any net Tax cost incurred by the Indemnitee
\narising from the receipt or accrual of an indemnification payment hereunder
\n(grossed up for such increase) and (ii) reduced to take account of any net
\nTax benefit realized by the Indemnitee arising from incurring or paying such
\nloss or other liability. In computing the amount of any such Tax cost or Tax
\nbenefit, the Indemnitee shall be deemed to recognize all other items of
\nincome, gain, loss, deduction or credit before recognizing any item arising
\nfrom the receipt or accrual of any indemnification payment hereunder or
\nincurring or paying any indemnified Loss. Any indemnification <\/p>\n
6<\/p>\n
payment hereunder shall initially be made without regard to this Section
\n1.5(b) and shall be increased or reduced to reflect any such net Tax cost
\n(including gross-up) or net Tax benefit only after the Indemnitee has
\nactually realized such cost or benefit. For purposes of this Agreement, an
\nIndemnitee shall be deemed to have “actually realized” a net Tax cost or a
\nnet Tax benefit to the extent that, and at such time as, the amount of Taxes
\npayable by such Indemnitee is increased above or reduced below, as the case
\nmay be, the amount of Taxes that such Indemnitee would be required to pay but
\nfor the receipt or accrual of the indemnification payment or the incurrence
\nor payment of such Loss, as the case may be. The amount of any increase or
\nreduction hereunder shall be adjusted to reflect any Final Determination with
\nrespect to the Indemnitee’s liability for Taxes, and payments between such
\nindemnified parties to reflect such adjustment shall be made if necessary.<\/p>\n
Section 1.6 PROCEDURES FOR DEFENSE, SETTLEMENT AND INDEMNIFICATION OF
\nTHIRD PARTY CLAIMS.<\/p>\n
(a) NOTICE OF CLAIMS. If an Indemnitee shall receive notice or
\notherwise learn of the assertion by a Person (including any Governmental
\nAuthority) who is not a member of the Sara Lee Group or the Coach Group of
\nany claim or of the commencement by any such Person of any Action
\n(collectively, a “Third Party Claim”) with respect to which an Indemnifying
\nParty may be obligated to provide indemnification, Sara Lee and Coach (as
\napplicable) will ensure that such Indemnitee shall give such Indemnifying
\nParty written notice thereof within 30 days after becoming aware of such
\nThird Party Claim. Any such notice shall describe the Third Party Claim in
\nreasonable detail. Notwithstanding the foregoing, the delay or failure of any
\nIndemnitee or other Person to give notice as provided in this Section 1.6(a)
\nshall not relieve the related Indemnifying Party of its obligations under
\nthis Article I, except to the extent that such Indemnifying Party is actually
\nand substantially prejudiced by such delay or failure to give notice.<\/p>\n
(b) DEFENSE BY INDEMNIFYING PARTY. An Indemnifying Party shall
\nbe entitled to participate in the defense of any Third Party Claim, to the
\nextent that it wishes, at its cost, risk and expense, to assume the defense
\nthereof, with counsel reasonably satisfactory to the party seeking
\nindemnification. After timely notice from the Indemnifying Party to the
\nIndemnitee of such election to so assume the defense thereof, the
\nIndemnifying Party shall not be liable to the party seeking indemnification
\nfor any legal expenses of other counsel or any other expenses subsequently
\nincurred by Indemnitee in connection with the defense thereof. The Indemnitee
\nagrees to cooperate in all reasonable respects with the Indemnifying Party
\nand its counsel in the defense against any Third Party Claim. The
\nIndemnifying Party <\/p>\n
7<\/p>\n
shall be entitled to compromise or settle any Third Party Claim as to which
\nit is providing indemnification, which compromise or settlement shall be made
\nonly with the written consent of the Indemnitee, such consent not to be
\nunreasonably withheld.<\/p>\n
(c) DEFENSE BY INDEMNITEE. If an Indemnifying Party fails to
\nassume the defense of a Third Party Claim within 30 calendar days after
\nreceipt of notice of such claim, Indemnitee will, upon delivering notice to
\nsuch effect to the Indemnifying Party, have the right to undertake the
\ndefense, compromise or settlement of such Third Party Claim on behalf of and
\nfor the account of the Indemnifying Party subject to the limitations as set
\nforth in this Section 1.6; PROVIDED, HOWEVER, that such Third Party Claim
\nshall not be compromised or settled without the written consent of the
\nIndemnifying Party, which consent shall not be unreasonably withheld. If the
\nIndemnitee assumes the defense of any Third Party Claim, it shall keep the
\nIndemnifying Party reasonably informed of the progress of any such defense,
\ncompromise or settlement. The Indemnifying Party shall reimburse all such
\ncosts and expenses of the Indemnitee in the event it is ultimately determined
\nthat the Indemnifying Party is obligated to indemnify the Indemnitee with
\nrespect to such Third Party Claim. In no event shall an Indemnifying Party be
\nliable for any settlement effected without its consent, which consent will
\nnot be unreasonably withheld.<\/p>\n
Section 1.7 ADDITIONAL MATTERS.<\/p>\n
(a) COOPERATION IN DEFENSE AND SETTLEMENT. With respect to any
\nThird Party Claim that implicates both Coach and Sara Lee in a material
\nfashion due to the allocation of Liabilities, responsibilities for management
\nof defense and related indemnities set forth in the Separation Agreement,
\nthis Agreement or any of the Ancillary Agreements, the parties agree to
\ncooperate fully and maintain a joint defense (in a manner that will preserve
\nthe attorney-client privilege, joint defense or other privilege with respect
\nthereto) so as to minimize such Liabilities and defense costs associated
\ntherewith. The party that is not responsible for managing the defense of such
\nThird Party Claims shall, upon reasonable request, be consulted with respect
\nto significant matters relating thereto and may, if necessary or helpful,
\nassociate counsel to assist in the defense of such claims.<\/p>\n
(b) PRE-SEPARATION ACTIONS. Sara Lee may, in its sole
\ndiscretion have exclusive authority and control over the investigation,
\nprosecution, defense and appeal of all Actions pending at the Separation Date
\nrelating to or arising in connection with, in any manner (other then solely
\nwith respect to or solely in connection with) the Coach Business, the Coach
\nAssets or the Coach Liabilities if <\/p>\n
8<\/p>\n
Sara Lee or a member of the Sara Lee Group is named as a party thereto;
\nPROVIDED, HOWEVER, that Sara Lee must obtain the written consent of Coach,
\nsuch consent not to be unreasonably withheld, to settle or compromise or
\nconsent to the entry of judgment with respect to such Action. After any such
\ncompromise, settlement, consent to entry of judgment or entry of judgment,
\nSara Lee shall reasonably and fairly allocate to Coach and Coach shall be
\nresponsible for Coach’s proportionate share of any such compromise,
\nsettlement, consent or judgment attributable to the Coach Business, the Coach
\nAssets or the Coach Liabilities, including its proportionate share of the
\ncosts and expenses associated with defending same. Notwithstanding the
\nforegoing, Sara Lee shall have exclusive authority and control over the
\ninvestigation, prosecution, defense and appeal of the Lemelson Litigation and
\nhereby indemnifies and holds harmless the Coach Indemnitees from and against,
\nand shall reimburse such Coach Indemnitees with respect to, any and all
\nLosses that any third party seeks to impose upon the Coach Indemnitees, or
\nwhich are imposed upon the Coach Indemnitees, and that result from, relate to
\nor arise, whether prior to or following the Separation Date, out of or in
\nconnection with the Lemelson Litigation, including any and all costs and
\nexpenses relating to the investigation, prosecution, defense and appeal of
\nthe Lemelson Litigation.<\/p>\n
(c) SUBSTITUTION. In the event of an Action in which the
\nIndemnifying Party is not a named defendant, if either the Indemnitee or the
\nIndemnifying Party shall so request, the parties shall endeavor to substitute
\nthe Indemnifying Party for the named defendant. If such substitution or
\naddition cannot be achieved for any reason or is not requested, the rights
\nand obligations of the parties regarding indemnification and the management
\nof the defense of claims as set forth in this Article I shall not be altered.<\/p>\n
(d) SUBROGATION. In the event of payment by or on behalf of
\nany Indemnifying Party to or on behalf of any Indemnitee in connection with
\nany Third Party Claim, such Indemnifying Party shall be subrogated to and
\nshall stand in the place of such Indemnitee, in whole or in part based upon
\nwhether the Indemnifying Party has paid all or only part of the Indemnitee’s
\nLiability, as to any events or circumstances in respect of which such
\nIndemnitee may have any right, defense or claim relating to such Third Party
\nClaim against any claimant or plaintiff asserting such Third Party Claim or
\nagainst any other person. Such Indemnitee shall cooperate with such
\nIndemnifying Party in a reasonable manner, and at the cost and expense of
\nsuch Indemnifying Party, in prosecuting any subrogated right, defense or
\nclaim.<\/p>\n
(e) NOT APPLICABLE TO TAXES. This Agreement shall not apply to
\nTaxes (which are solely covered by the Tax Sharing Agreement).<\/p>\n
9<\/p>\n
Section 1.8 SURVIVAL OF INDEMNITIES. Subject to Section 3.7, the
\nrights and obligations of the members of the Sara Lee Group and the Coach
\nGroup under this Article I shall survive the sale or other transfer by any
\nparty of any Assets or businesses or the assignment by it of any Liabilities
\nor the sale by any member of the Sara Lee Group or the Coach Group of the
\ncapital stock or other equity interests of any Subsidiary to any Person.<\/p>\n
10<\/p>\n
ARTICLE II<\/p>\n
INSURANCE MATTERS<\/p>\n
Section 2.1 COACH INSURANCE COVERAGE DURING THE INSURANCE TRANSITION
\nPERIOD.<\/p>\n
(a) MAINTAIN COMPARABLE INSURANCE. As of the Separation Date,
\nSara Lee maintains insurance coverage under the Insurance Policies listed in
\nSchedule 2.1(a) hereto. Throughout the period beginning on the Separation
\nDate and ending on the Distribution Date (the “Insurance Transition Period”),
\nSara Lee shall, subject to insurance market conditions and other factors
\nbeyond its control, maintain policies of insurance, including for the benefit
\nof Coach or any of its Subsidiaries, directors, officers, employees or other
\ncovered parties (collectively, the “Coach Covered Parties”) which are
\ncomparable to those maintained generally by Sara Lee; PROVIDED, HOWEVER, that
\nif Sara Lee determines that (i) the amount or scope of such coverage will be
\nreduced to a level materially inferior to the level of coverage in existence
\nimmediately prior to the Insurance Transition Period or (ii) the retention or
\ndeductible level applicable to such coverage, if any, will be increased to a
\nlevel materially greater than the levels in existence immediately prior to
\nthe Insurance Transition Period (excluding the increases effective October ,
\n2000 of which Coach is aware), each other than as a result of the Separation,
\nSara Lee shall give Coach notice of such determination as promptly as
\npracticable. Upon notice of such determination, Coach shall be entitled to no
\nless than 60 days to evaluate its options regarding continuance of coverage
\nhereunder and may cancel its interest in all or any portion of such coverage
\nas of any day within such 60 day period.<\/p>\n
(b) REIMBURSEMENT FOR PREMIUMS, DEDUCTIBLES AND RETENTION
\nAMOUNTS. Coach shall promptly pay or reimburse Sara Lee, as the case may be,
\nfor premium expenses, deductibles or retention amounts and Coach Covered
\nParties shall promptly pay or reimburse Sara Lee for any costs and expenses
\nwhich Sara Lee may incur in connection with the insurance coverages
\nmaintained pursuant to this Section 2.1, including but not limited to any
\nsubsequent premium adjustments.<\/p>\n
Section 2.2 COOPERATION; PAYMENT OF INSURANCE PROCEEDS TO COACH;
\nAGREEMENT NOT TO RELEASE CARRIERS. Each of Sara Lee and Coach will share such
\ninformation as is reasonably necessary in order to permit the other to manage
\nand conduct its insurance matters in an orderly fashion. Sara Lee, at the
\nrequest of Coach, shall cooperate with and use commercially reasonable
\nefforts to assist Coach <\/p>\n
11<\/p>\n
in recovering Insurance Proceeds under Sara Lee Insurance Policies for claims
\nrelating to the Coach Business, the Coach Assets or the Coach Liabilities,
\nwhether such claims arise under any contract or agreement, by operation of
\nlaw or otherwise, existing or arising from any past acts or events occurring
\nor failing to occur or alleged to have occurred or to have failed to occur or
\nany conditions existing or alleged to have existed before the Separation
\nDate, on the Separation Date or during the Insurance Transition Period, and
\nshall promptly pay any such recovered Insurance Proceeds to Coach. Neither
\nSara Lee nor Coach, nor any of their Subsidiaries, shall take any action
\nwhich would intentionally jeopardize or otherwise interfere with either
\nparty’s ability to collect any proceeds payable pursuant to any insurance
\npolicy. Except as otherwise contemplated by the Separation Agreement, this
\nAgreement or any Ancillary Agreement, after the Separation Date, neither Sara
\nLee nor Coach shall (and each party shall ensure that no member of the such
\nparty’s Group shall), without the consent of the other, provide any insurance
\ncarrier with a release, or amend, modify or waive any rights under any such
\npolicy or agreement, if such release, amendment, modification or waiver would
\nadversely affect any rights or potential rights of any member of the Sara Lee
\nGroup or the Coach Group thereunder. However, nothing in this Section 2.2
\nshall (A) preclude any member of the Sara Lee Group or the Coach Group from
\npresenting any claim or from exhausting any policy limit, (B) require any
\nmember of the Sara Lee Group or the Coach Group to pay any premium or other
\namount or to incur any Liability, or (C) require any member of the Sara Lee
\nGroup or the Coach Group to renew, extend or continue any policy in force.<\/p>\n
Section 2.3 COACH INSURANCE COVERAGE AFTER THE INSURANCE TRANSITION
\nPERIOD.<\/p>\n
(a) GENERALLY. From and after expiration of the Insurance
\nTransition Period, Coach shall be responsible for obtaining and maintaining
\ninsurance programs for its risk of loss and such insurance arrangements shall
\nbe separate and apart from Sara Lee’s insurance programs. Notwithstanding the
\nforegoing, Sara Lee, upon the request of Coach, shall use all commercially
\nreasonable efforts to assist Coach in the transition to its own separate
\ninsurance programs from and after the Insurance Transition Period, and shall
\nprovide Coach with any information that is in the possession of Sara Lee and
\nis reasonably available and necessary to either obtain insurance coverages
\nfor Coach or to assist Coach in preventing unintended self-insurance, in
\nwhatever form.<\/p>\n
(b) SARA LEE GUARANTEES. Coach agrees that from and after the
\nexpiration of the Insurance Transition Period and for so long as there is a
\nSara Lee <\/p>\n
12<\/p>\n
Guarantee obligation outstanding, Coach (i) will take all actions necessary
\nand consistent with Sara Lee’s current insurance practices, to purchase and
\nmaintain insurance coverage of substantially the same types and amounts so as
\nto not reduce insurance coverage, if any, on any liability that is the
\nsubject of any Sara Lee Guarantee then in effect and (ii) provide that Sara
\nLee be a “named insured” under those liability policies of Coach which are
\nsolely controlled by Coach in respect of Liabilities that Sara Lee may incur
\nas a result of any Sara Lee Guarantee obligation with respect to the Coach
\nBusiness, the Coach Assets or the Coach Liabilities, at no premium cost to
\nSara Lee therefor, such that Sara Lee has rights to coverage thereunder no
\nless than the rights conferred on any other insured to the extent of its
\ninterest therein. During the applicable period set forth in the first
\nsentence of this Section 2.3(b), Coach will use all commercially reasonable
\nefforts to ensure that all of Coach’s liability policies to which the
\npreceding sentence applies provide that Sara Lee will be given at least 60
\ndays advance written notice by the insurer of any cancellation of such
\npolicies, a reduction in coverage thereunder, or any deletion of Sara Lee as
\na “named insured,” and Coach shall not cancel any such policy or reduce the
\ncoverage available thereunder in any manner detrimental to Sara Lee, without
\nSara Lee’s prior written consent, not to be unreasonably withheld. Sara Lee
\nagrees to promptly release Coach from its obligations under this Section
\n2.3(b) following the date on which there are no Sara Lee Guarantee
\nobligations outstanding.<\/p>\n
Section 2.4 RESPONSIBILITIES FOR DEDUCTIBLES AND\/OR SELF-INSURED
\nOBLIGATIONS. Coach will reimburse Sara Lee for all amounts necessary to
\nexhaust or otherwise satisfy all applicable self-insured retentions, amounts
\nfor fronted policies, deductibles and retrospective premium adjustments and
\nsimilar amounts not covered by Insurance Policies in connection with Coach
\nLiabilities and Insured Coach Liabilities to the extent that Sara Lee is
\nrequired to pay any such amounts.<\/p>\n
Section 2.5 PROCEDURES WITH RESPECT TO INSURED COACH LIABILITIES.<\/p>\n
(a) REIMBURSEMENT. Coach will reimburse Sara Lee for all
\namounts incurred to pursue insurance recoveries from Insurance Policies for
\nInsured Coach Liabilities.<\/p>\n
(b) MANAGEMENT OF CLAIMS. The defense of claims, suits or
\nactions giving rise to potential or actual Insured Coach Liabilities will be
\nmanaged (in conjunction with Sara Lee’s insurers, as appropriate) by the
\nparty that would have had responsibility for managing such claims, suits or
\nactions had such Insured Coach Liabilities been Coach Liabilities.<\/p>\n
13<\/p>\n
Section 2.6 INSUFFICIENT LIMITS OF LIABILITY FOR SARA LEE LIABILITIES
\nAND COACH LIABILITIES.<\/p>\n
(a) INSUFFICIENT LIMITS OF LIABILITY. In the event that there
\nare insufficient limits of liability available under Sara Lee’s Insurance
\nPolicies in effect prior to the Distribution Date to cover the Liabilities of
\nSara Lee and\/or Coach that would otherwise be covered by such Insurance
\nPolicies, then to the extent that other insurance is not available to Sara
\nLee and\/or Coach for such Liabilities an adjustment will be made in
\naccordance with the following procedures:<\/p>\n
(i) To the extent the parties are able to specifically
\n quantify and verify the actual Liabilities incurred by each party to the
\n exclusion of the other party, such Liabilities shall be allocated to
\n each party;<\/p>\n
(ii) To the extent that the parties are unable to
\n specifically quantify and verify any such Liabilities or any part of
\n such Liabilities to each party (to the exclusion of the other party),
\n each party will be allocated an amount equal to their Shared Percentage
\n of the lesser of (A) the available limits of liability available under
\n Sara Lee’s Insurance Policies in effect prior to the Distribution Date
\n net of uncollectible amounts attributable to insurer insolvencies, and
\n (B) the proceeds received from Sara Lee’s Insurance Policies if the
\n Liabilities are the subject of disputed coverage claims and, following
\n consultation with each other, Sara Lee and\/or Coach agree to accept less
\n than full policy limits from Sara Lee’s and Coach’s insurers (the
\n “Coverage Amount”).<\/p>\n
(iii) A party who receives more than its share of the
\n Coverage Amount (the “Overallocated Party”) agrees to reimburse the
\n other party (the “Underallocated Party”) to the extent that the
\n Liabilities of the Underallocated Party that would have been covered
\n under such Insurance Policies is less than the Underallocated Party’s
\n share of the Coverage Amount.<\/p>\n
(iv) This Section 2.6(a) shall terminate ten years
\n following the Distribution Date.<\/p>\n
14<\/p>\n
(b) ILLUSTRATIONS. The following illustrations are intended to
\nprovide guidance concerning how this Section 2.6 is intended to apply to
\nclaims implicating insurance policies issued prior to the Distribution Date.<\/p>\n
(i) Illustration No.1. Ten separate claims are brought
\n arising from ten separate “occurrences,” each resulting in Coach
\n Liability of $10 million. The self-insured retention is $10 million “per
\n occurrence.” Result: This Section 2.6 is inapplicable. Coach may pursue
\n self-insurance, to the extent it is permitted to do so by law, subject
\n to reimbursement of Sara Lee under Section 2.4 of this Agreement.<\/p>\n
(ii) Illustration No. 2. Ten separate claims are brought
\n arising from ten separate “occurrences,” each resulting in a Coach
\n Liability of $40 million, for a total of $400 million. Fifteen separate
\n claims are brought arising from fifteen separate “occurrences,” each
\n resulting in a Sara Lee Liability of $40 million, for a total of $600
\n million. The limits of liability in the Insurance Policies applicable to
\n the claims is $200 million. The self-insured retention is $10 million
\n “per occurrence,” leaving a remaining liability (after the payment of
\n self-insured retentions) of $30 million “per occurrence,” or $300
\n million in the aggregate for Coach and $450 million in the aggregate for
\n Sara Lee. The Coach Liabilities are incurred prior to the Sara Lee
\n Liabilities, and paid for by Sara Lee’s Insurance Policies in effect
\n prior to the Distribution Date, which are exhausted by these payments.
\n This leaves Coach with an additional liability of $100 million (plus its
\n self-insured retentions of $100 million). Result: The $200 million from
\n the Insurance Policies is split 95\/5: $190 million is allocated to Sara
\n Lee and $10 million is allocated to Coach. Coach should pay Sara Lee
\n $190 million, Sara Lee’s share of the Coverage Amount.<\/p>\n
(iii) Illustration No. 3. Same as Illustration No. 2,
\n except that Sara Lee’s claims ($200 million) were paid for by Sara Lee’s
\n Insurance Policies in effect prior to the Distribution Date, which are
\n exhausted by these payments. This leaves Coach with a liability of $300
\n million (plus its self-insured retentions of $100 million). Sara Lee
\n should pay Coach $10 million.<\/p>\n
15<\/p>\n
Section 2.7 COOPERATION. Sara Lee and Coach will cooperate with each
\nother in all respects, and they shall execute any additional documents which
\nare reasonably necessary, to effectuate the provisions of this Article II.<\/p>\n
Section 2.8 NO ASSIGNMENT OR WAIVER. This Agreement shall not be
\nconsidered as an attempted assignment of any policy of insurance or as a
\ncontract of insurance and shall not be construed to waive any right or remedy
\nof any member of the Sara Lee Group in respect of any Insurance Policy or any
\nother contract or policy of insurance.<\/p>\n
16<\/p>\n
Section 2.9 NO LIABILITY. Coach does hereby, for itself and as agent
\nfor each other member of the Coach Group, agree that no member of the Sara
\nLee Group or any Sara Lee Indemnitee shall have any Liability whatsoever as a
\nresult of the insurance policies and practices of Sara Lee and its
\nSubsidiaries as in effect at any time prior to the end of the Insurance
\nTransition Period, including as a result of the level or scope of any such
\ninsurance, the creditworthiness of any insurance carrier, the terms and
\nconditions of any policy, the adequacy or timeliness of any notice to any
\ninsurance carrier with respect to any claim or potential claim or otherwise.<\/p>\n
Section 2.10 ADDITIONAL OR ALTERNATE INSURANCE. Notwithstanding any
\nprovision of this Agreement, during the Insurance Transition Period Sara Lee
\nand Coach shall work together to evaluate insurance options and secure
\nadditional or alternate insurance for Coach and\/or Sara Lee if desired by and
\ncost effective for Coach and Sara Lee. Nothing in this Agreement shall be
\ndeemed to restrict any member of the Coach Group from acquiring at its own
\nexpense any other insurance policy in respect of any Liabilities or covering
\nany period.<\/p>\n
Section 2.11 FURTHER AGREEMENTS. The parties acknowledge that they
\nintend to allocate financial obligations without violating any laws regarding
\ninsurance, self-insurance or other financial responsibility. If it is
\ndetermined that any action undertake pursuant to the Separation Agreement,
\nthis Agreement or any Ancillary Agreement is violative of any insurance,
\nself-insurance or related financial responsibility law or regulation, the
\nparties agree to work together to do whatever is necessary to comply with
\nsuch law or regulation while trying to accomplish, as much as possible, the
\nallocation of financial obligations as intended in the Separation Agreement,
\nthis Agreement and any Ancillary Agreement.<\/p>\n
Section 2.12 MATTERS GOVERNED BY EMPLOYEE MATTERS AGREEMENT. This
\nArticle II shall not apply to any insurance policies that are the subject of
\nthe Employee Matters Agreement.<\/p>\n
ARTICLE III<\/p>\n
MISCELLANEOUS<\/p>\n
Section 3.1 ENTIRE AGREEMENT. This Agreement, the Separation
\nAgreement, the other Ancillary Agreements and the Exhibits and Schedules
\nattached hereto and thereto, constitute the entire agreement between the
\nparties with respect to the subject matter hereof and shall supersede all
\nprior written and oral and all <\/p>\n
17<\/p>\n
contemporaneous oral agreements and understandings with respect to the
\nsubject matter hereof.<\/p>\n
Section 3.2 GOVERNING LAW AND JURISDICTION. This Agreement shall be
\nconstrued in accordance with and all Disputes hereunder shall be governed by
\nthe laws of the State of Illinois, excluding its conflict of law rules. The
\nparties agree that the Circuit Court of Cook County, Illinois and\/or the
\nUnited States District Court for the Northern District of Illinois shall have
\nexclusive jurisdiction over all actions between the parties for preliminary
\nrelief in aid of arbitration pursuant to Section 3.4 herein, and non
\nexclusive jurisdiction over any action for enforcement of an arbitral award.<\/p>\n
Section 3.3 TERMINATION. This Agreement, the Separation Agreement and
\nall Ancillary Agreements may be terminated at any time prior to the IPO
\nClosing Date by and in the sole discretion of Sara Lee without the approval
\nof Coach and, if so terminated, all transactions taken in connection
\ntherewith shall be void. This Agreement may be terminated at any time after
\nthe IPO Closing Date and before the Distribution Date by mutual consent of
\nSara Lee and Coach. In the event of termination pursuant to this Section 3.3,
\nno party shall have any liability of any kind to the other party.<\/p>\n
Section 3.4 DISPUTE RESOLUTION.<\/p>\n
(a) Any dispute, controversy or claim arising out of or
\nrelating to this Agreement or the Ancillary Agreements or the breach,
\ntermination or validity thereof (“Dispute”) which arises between the parties
\nshall first be negotiated between appropriate senior executives of each party
\nwho shall have the authority to resolve the matter. Such executives shall
\nmeet to attempt in good faith to negotiate a resolution of the Dispute prior
\nto pursuing other available remedies, within 10 days of receipt by a party of
\nnotice of a dispute, which date of receipt shall be referred to herein as the
\n“Dispute Resolution Commencement Date.” Discussions and correspondence
\nrelating to trying to resolve such Dispute shall be treated as confidential
\ninformation developed for the purpose of settlement and shall be exempt from
\ndiscovery or production and shall not be admissible in any subsequent
\nproceeding between the parties. If the senior executives are unable to
\nresolve the Dispute within thirty (30) days from the Dispute Resolution
\nCommencement Date, then, on the request of any party, the Dispute will be
\nmediated by a mediator appointed pursuant to the mediation rules of the
\nAmerican Arbitration Association (“AAA”). Both parties will share the
\nadministrative costs of the mediation and the mediator’s fees and expenses
\nequally, and each party shall bear all of its other costs <\/p>\n
18<\/p>\n
and expenses related to the mediation, including but not limited to
\nattorney’s fees, witness fees, and travel expenses. The mediation shall take
\nplace in Cook County Illinois or in whatever alternative forum on which the
\nparties may agree.<\/p>\n
(b) Any Dispute which the parties cannot resolve through
\nmediation within forty-five days of the appointment of the mediator, shall at
\nthe request of any party be submitted to final and binding arbitration under
\nthe then current Commercial Arbitration Rules of the AAA in Cook County,
\nIllinois. There shall be three (3) neutral arbitrators of whom Sara Lee shall
\nappoint one and Coach shall appoint one within 30 days of the receipt by the
\nrespondent of the demand for arbitration. The two arbitrators so appointed
\nshall select the chair of the arbitral tribunal within 30 days of the
\nappointment of the second arbitrator. If any arbitrator is not appointed
\nwithin the time limit provided herein, such arbitrator shall be appointed by
\nthe AAA by using a list striking and ranking procedure in accordance with the
\nRules. Any arbitrator appointed by the AAA shall be a retired judge or a
\npracticing attorney with no less than fifteen years of experience and an
\nexperienced arbitrator. The prevailing party in such arbitration shall be
\nentitled to be awarded its expenses, including its share of administrative
\nand arbitrator fees and expenses and reasonable attorneys’ and other
\nprofessional fees, incurred in connection with the arbitration (but excluding
\nany costs and fees associated with prior negotiation or mediation). The
\ndecision of the arbitrators shall be final and binding on the parties and may
\nbe enforced in any court of competent jurisdiction.<\/p>\n
(c) By agreeing to arbitration, the parties do not intend to
\ndeprive any court of its jurisdiction to issue a pre-arbitral injunction,
\npre-arbitral attachment, or other order in aid of arbitration proceedings and
\nthe enforcement of any award. Without prejudice to such provisional remedies
\nas may be available under the juris diction of a court, the arbitral tribunal
\nshall have full authority to grant provisional remedies or modify or vacate
\nany temporary or preliminary relief issued by a court, to issue an award for
\ntemporary or permanent injunctive relief (including specific performance) and
\nto award damages for the failure of any party to respect the arbitral
\ntribunal’s orders to that effect.<\/p>\n
Section 3.5 NOTICES. Notices, offers, requests or other
\ncommunications required or permitted to be given by either party pursuant to
\nthe terms of this Agreement shall be given in writing to the respective
\nparties to the following addresses or facsimile numbers:<\/p>\n
19<\/p>\n
if to Sara Lee :<\/p>\n
Sara Lee Corporation
\n Three First National Plaza
\n 70 West Madison
\n Chicago, Illinois 60602-4260
\n Attention: General Counsel
\n Facsimile No.: (312) 345-5706<\/p>\n
if to Coach:<\/p>\n
Coach, Inc.
\n 516 West 34th Street
\n New York, New York 10001
\n Attention: General Counsel
\n Facsimile No.: (212) 629-2398<\/p>\n
or to such other address or facsimile number as the party to whom notice is
\ngiven may have previously furnished to the other in writing as provided
\nherein. Any notice involving non-performance, termination, or renewal shall
\nbe sent by hand delivery, recognized overnight courier or, within the United
\nStates, may also be sent via certified mail, return receipt requested. All
\nother notices may also be sent by facsimile, confirmed by first class mail.
\nAll notices shall be deemed to have been given when received, if hand
\ndelivered; when transmitted, if transmitted by facsimile or similar
\nelectronic transmission method; one working day after it is sent, if sent by
\nrecognized overnight courier; and three days after it is postmarked, if
\nmailed first class mail or certified mail, return receipt requested, with
\npostage prepaid.<\/p>\n
Section 3.6 PARTIES IN INTEREST. This Agreement, including the
\nSchedules and Exhibits hereto, and the other documents referred to herein,
\nshall be binding upon Sara Lee, Sara Lee’s Subsidiaries, Coach and Coach’s
\nSubsidiaries and inure solely to the benefit of the Coach Indemnitees and the
\nSara Lee Indemnitees and their respective permitted assigns, and nothing in
\nthis Agreement, express or implied, is intended to confer upon any other
\nPerson any rights or remedies of any nature whatsoever under or by reason of
\nthis Agreement.<\/p>\n
Section 3.7 OTHER AGREEMENTS EVIDENCING INDEMNIFICATION OBLIGATIONS.
\nSara Lee hereby agrees to execute, for the benefit of any Coach Indemnitee,
\nsuch documents as may be reasonably requested by such Coach Indemnitee,
\nevidencing Sara Lee’s agreement that the indemnification obligations of Sara
\nLee set forth in this Agreement inure to the benefit of and are enforceable
\nby such Coach Indemnitee. <\/p>\n
20<\/p>\n
Coach hereby agrees to execute, for the benefit of any Sara Lee Indemnitee,
\nsuch documents as may be reasonably requested by such Sara Lee Indemnitee,
\nevidencing Coach’s agreement that the indemnification obligations of Coach
\nset forth in this Agreement inure to the benefit of and are enforceable by
\nsuch Sara Lee Indemnitee.<\/p>\n
Section 3.8 COUNTERPARTS. This Agreement, including the Schedules and
\nExhibits hereto, and the other documents referred to herein, may be executed
\nin counterparts, each of which shall be deemed to be an original but all of
\nwhich shall constitute one and the same agreement.<\/p>\n
Section 3.9 ASSIGNMENT. This Agreement shall inure to the benefit of
\nand be binding upon the parties hereto and their respective legal
\nrepresentatives and successors, and nothing in this Agreement, express or
\nimplied, is intended to confer upon any other Person any rights or remedies
\nof any nature whatsoever under or by reason of this Agreement. This Agreement
\nmay be enforced separately by each member of the Sara Lee Group and each
\nmember of the Coach Group. Neither party may assign this Agreement or any
\nrights or obligations hereunder, without the prior written consent of the
\nother party, and any such assignment shall be void; provided, however, either
\nparty may assign this Agreement to a successor entity in conjunction with
\nsuch party’s reincorporation.<\/p>\n
Section 3.10 SEVERABILITY. If any term or other provision of this
\nAgreement or the Schedules or Exhibits attached hereto is determined by a
\nnonappealable decision by a court, administrative agency or arbitrator to be
\ninvalid, illegal or incapable of being enforced by any rule of law or public
\npolicy, all other conditions and provisions of this Agreement shall
\nnevertheless remain in full force and effect so long as the economic or legal
\nsubstance of the transactions contemplated hereby is not affected in any
\nmanner materially adverse to any party. Upon such determination that any term
\nor other provision is invalid, illegal or incapable of being enforced, the
\nparties hereto shall negotiate in good faith to modify this Agreement so as
\nto effect the original intent of the parties as closely as possible in an
\nacceptable manner to the end that transactions contemplated hereby are
\nfulfilled to the fullest extent possible.<\/p>\n
Section 3.11 FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on
\nthe part of either party hereto in the exercise of any right hereunder shall
\nimpair such right or be construed to be a waiver of, or acquiescence in, any
\nbreach of any representation, warranty or agreement herein, nor shall any
\nsingle or partial exercise of any such right preclude other or further
\nexercise thereof or of any other right.<\/p>\n
21<\/p>\n
Section 3.12 AMENDMENT. No change or amendment will be made to this
\nAgreement except by an instrument in writing signed on behalf of each of the
\nparties to this Agreement.<\/p>\n
Section 3.13 AUTHORITY. Each of the parties hereto represents to the
\nother that (a) it has the corporate or other requisite power and authority to
\nexecute, deliver and perform this Agreement, (b) the execution, delivery and
\nperformance of this Agreement by it have been duly authorized by all
\nnecessary corporate or other action, (c) it has duly and validly executed and
\ndelivered this Agreement, and (d) this Agreement is a legal, valid and
\nbinding obligation, enforceable against it in accordance with its terms
\nsubject to applicable bankruptcy, insolvency, reorganization, moratorium or
\nother similar laws affecting creditors’ rights generally and general equity
\nprinciples.<\/p>\n
Section 3.14 INTERPRETATION. The headings contained in this
\nAgreement, in any Exhibit or Schedule hereto and in the table or contents to
\nthis Agreement are for reference purposes only and shall not affect in any
\nway the meaning or interpretation of this Agreement. Any capitalized term
\nused in any Schedule or Exhibit but not otherwise defined therein, shall have
\nthe meaning assigned to such term in this Agreement. When a reference is made
\nin this Agreement to an Article or a Section, Exhibit or Schedule, such
\nreference shall be to an Article or Section of, or an Exhibit or Schedule to,
\nthis Agreement unless otherwise indicated.<\/p>\n
ARTICLE IV<\/p>\n
DEFINITIONS<\/p>\n
Section 4.1 AAA. “AAA” has the meaning set forth in Section 3.4(a) of
\nthis Agreement.<\/p>\n
Section 4.2 ACTION. “Action” means any demand, action, suit,
\ncountersuit, arbitration, inquiry, proceeding or investigation by or before
\nany federal, state, local, foreign or international governmental authority or
\nany arbitration or mediation tribunal, other than any demand, action, suit,
\ncountersuit, arbitration, inquiry, proceeding or investigation relating to
\nTaxes.<\/p>\n
Section 4.3 AFFILIATED COMPANY. “Affiliated Company” of any Person
\nmeans any entity that controls, is controlled by, or is under common control
\nwith such Person. As used herein, “control” means the possession, directly or
\nindirectly, of the power to direct or cause the direction of the management
\nand policies of such <\/p>\n
22<\/p>\n
entity, whether through ownership of voting securities or other interests, by
\ncontract or otherwise.<\/p>\n
Section 4.4 ANCILLARY AGREEMENTS. “Ancillary Agreements” has the
\nmeaning set forth in the Separation Agreement.<\/p>\n
Section 4.5 ASSETS. “Assets” has the meaning set forth in the
\nAssignment Agreement.<\/p>\n
Section 4.6 ASSIGNMENT AGREEMENT. “Assignment Agreement” means the
\nGeneral Assignment and Assumption Agreement attached as Exhibit C to the
\nSeparation Agreement.<\/p>\n
Section 4.7 COACH AFFILIATE. “Coach Affiliate” means any corporation
\nor other entity directly or indirectly controlled by Coach.<\/p>\n
Section 4.8 COACH ASSETS. “Coach Assets” has the meaning set forth in
\nthe Assignment Agreement.<\/p>\n
Section 4.9 COACH BUSINESS. “Coach Business” means the business and
\noperations of Coach, as described in the IPO Registration Statement and
\nexcept as otherwise expressly provided herein, any terminated, divested or
\ndiscontinued businesses or operations that at the time of termination,
\ndivestiture or discontinuation primarily related to the Coach Business as
\nthen conducted.<\/p>\n
Section 4.10 COACH COVERED PARTIES. “Coach Covered Parties” has the
\nmeaning set forth in Section 2.1(a) of this Agreement.<\/p>\n
Section 4.11 COACH FACILITIES. “Coach Facilities” means all of those
\ninterests in real estate to be transferred to Coach on or after the
\nSeparation Date as set forth on Schedule 1 to the Real Estate Matters
\nAgreement.<\/p>\n
Section 4.12 COACH GROUP. “Coach Group” means the Affiliated Group,
\nor similar group of entities as defined under corresponding provisions of the
\nlaws of other jurisdictions, of which Coach will be the common parent
\ncorporation immediately after the Distribution, and any corporation or other
\nentity which may become a member of such group from time to time.<\/p>\n
23<\/p>\n
Section 4.13 COACH INDEMNITEES. “Coach Indemnitees” means Coach, each
\nmember of the Coach Group and each of their respective directors, officers
\nand employees.<\/p>\n
Section 4.14 COACH LIABILITIES. “Coach Liabilities” has the meaning
\nset forth in the Assignment Agreement.<\/p>\n
Section 4.15 CONTRACT. “Contract” means any contract, agreement,
\nlease, license, sales order, purchase order, instrument or other commitment
\nthat is binding on any Person or any part of its property under applicable
\nlaw.<\/p>\n
Section 4.16 DISPUTE. “Dispute” has the meaning set forth in Section
\n3.4(a) of this Agreement.<\/p>\n
Section 4.17 DISPUTE RESOLUTION COMMENCEMENT DATE. “Dispute
\nResolution Commencement Date” has the meaning set forth in Section 3.4(a) of
\nthis Agreement.<\/p>\n
Section 4.18 DISTRIBUTION. A “Distribution” means the divestiture by
\nSara Lee of all or a significant portion of the shares of capital stock of
\nCoach owned by Sara Lee, which divestiture may be effected by Sara Lee as a
\ndividend, an exchange with existing Sara Lee stockholders for shares of Sara
\nLee capital stock, a spin-off or otherwise, as a result of which Sara Lee is
\nno longer required to consolidate Coach’s results of operations and financial
\nposition (determined in accordance with generally accepted accounting
\nprinciples consistently applied).<\/p>\n
Section 4.19 DISTRIBUTION DATE. “Distribution Date” means the date on
\nwhich a Distribution is consummated.<\/p>\n
Section 4.20 EMPLOYEE MATTERS AGREEMENT. “Employee Matters Agreement”
\nmeans the Employee Matters Agreement attached as Exhibit E to the Separation
\nAgreement.<\/p>\n
Section 4.21 ENVIRONMENTAL ACTIONS. “Environmental Actions” means any
\nnotice or disclosure to or any, claim, act, cause of action, order, decree or
\ninvestigation by any third party (including, without limitation, any
\nGovernmental Authority) alleging potential liability (including potential
\nliability for investigatory costs, cleanup costs, governmental response
\ncosts, natural resources damages, damage to flora or fauna caused by
\nEnvironmental Conditions, real property damages, personal injuries or
\npenalties) arising out of, based on or resulting from the <\/p>\n
24<\/p>\n
Release of or exposure of any individual to any Hazardous Materials or any
\nviolation of Environmental Laws.<\/p>\n
Section 4.22 ENVIRONMENTAL CONDITIONS. “Environmental Conditions”
\nmeans the presence in the environment, including the soil, groundwater,
\nsurface water or ambient air, of any Hazardous Materials at a level which
\nexceeds any applicable standard or threshold under any Environmental Law or
\notherwise requires investigation or remediation (including, without
\nlimitation, investigation, study, health or risk assessment, monitoring,
\nremoval, treatment or transport) under any applicable Environmental Laws.<\/p>\n
Section 4.23 ENVIRONMENTAL LAWS. “Environmental Laws” means all laws
\nand regulations of any Governmental Authority with jurisdiction that relate
\nto the protection of the environment (including ambient air, surface water,
\nground water, land surface or subsurface strata) including laws, regulations,
\nordinances, permits, licenses or any other binding legal obligation in effect
\nnow or in the future relating to the Release of Hazardous Materials, or
\notherwise relating to the treatment, storage, disposal, transport or handling
\nof Hazardous Materials, or to the exposure of any individual to a Release of
\nHazardous Materials.<\/p>\n
Section 4.24 FINAL DETERMINATION. “Final Determination” has the
\nmeaning set forth in the Tax Sharing Agreement.<\/p>\n
Section 4.25 GOVERNMENTAL AUTHORITY. “Governmental Authority” means
\nany federal, state, local, foreign or international court, government,
\ndepartment, commission, board, bureau, agency, official or other regulatory,
\nadministrative or governmental authority.<\/p>\n
Section 4.26 HAZARDOUS MATERIALS. “Hazardous Materials” means
\nchemicals, pollutants, contaminants, wastes, toxic substances, radioactive
\nand biological materials, hazardous substances, petroleum and petroleum
\nproducts or any fraction thereof, including, without limitation, such
\nsubstances referred to by such terms as defined in any Environmental Laws.<\/p>\n
Section 4.27 INDEMNIFYING PARTY. “Indemnifying Party” means any party
\nwhich may be obligated to provide indemnification to an Indemnitee pursuant
\nto Sections 1.2, 1.3 or 1.4 hereof or any other section of the Separation
\nAgreement or any Ancillary Agreement.<\/p>\n
25<\/p>\n
Section 4.28 INDEMNITEE. “Indemnitee” means any party which may be
\nentitled to indemnification from an Indemnifying Party pursuant to Sections
\n1.2, 1.3 or 1.4 hereof or any other section of the Separation Agreement or
\nany Ancillary Agreement.<\/p>\n
Section 4.29 INSURANCE POLICIES. “Insurance Policies” means insurance
\npolicies pursuant to which a Person makes a true risk transfer to an insurer.<\/p>\n
26<\/p>\n
Section 4.30 INSURANCE PROCEEDS. “Insurance Proceeds” means those
\nmonies:<\/p>\n
(a) received by an insured from an insurance carrier; or<\/p>\n
(b) paid by an insurance carrier on behalf of the insured;<\/p>\n
(c) from Insurance Policies.<\/p>\n
Section 4.31 INSURANCE TRANSITION PERIOD. “Insurance Transition Period”
\nhas the meaning set forth in Section 2.1(a) of this Agreement.<\/p>\n
Section 4.32 INSURED COACH LIABILITY. “Insured Coach Liability” means
\nany Coach Liability to the extent that (i) it is covered under the terms of
\nSara Lee’s Insurance Policies in effect prior to the end of the Insurance
\nTransition Period, and (ii) Coach is not a named insured under, or otherwise
\nentitled to the benefits of, such Insurance Policies.<\/p>\n
Section 4.33 IPO. “IPO” means Coach’s initial public offering of
\ncommon stock.<\/p>\n
Section 4.34 IPO CLOSING DATE. “IPO Closing Date” has the meaning set
\nforth in the Separation Agreement.<\/p>\n
Section 4.35 IPO LIABILITIES. “IPO Liabilities” means any Liabilities
\nrelating to, arising out of or resulting from any untrue statement or alleged
\nuntrue statement of a material fact or omission or alleged omission to state
\na material fact required to be stated therein or necessary to make the
\nstatements therein not misleading, with respect to all information contained
\nin the IPO Registration Statement or any preliminary, final or supplemental
\nprospectus forming a part of a IPO Registration Statement.<\/p>\n
Section 4.36 IPO REGISTRATION STATEMENT. “IPO Registration Statement”
\nmeans the registration statement on Form S-1 pursuant to the Securities Act
\nto be filed with the SEC registering the shares of common stock of Coach to
\nbe issued in the IPO, together with all amendments thereto.<\/p>\n
27<\/p>\n
Section 4.37 LEMELSON LITIGATION. “Lemelson Litigation” means
\nLemelson Medical, Research & Education Foundation Limited Partnership v. Sara
\nLee Corporation.<\/p>\n
Section 4.38 LIABILITIES. “Liabilities” means all debts, liabilities,
\nguarantees, assurances, commitments and obligations, whether fixed,
\ncontingent or absolute, asserted or unasserted, matured or unmatured,
\nliquidated or unliquidated, accrued or not accrued, known or unknown, due or
\nto become due, whenever or however arising (including, without limitation,
\nwhether arising out of any Contract or tort based on negligence or strict
\nliability) and whether or not the same would be required by generally
\naccepted principles and accounting policies to be reflected in financial
\nstatements or disclosed in the notes thereto.<\/p>\n
Section 4.39 LOSS AND LOSSES. “Loss and Losses” mean any and all
\ndamages, losses, deficiencies, Liabilities, obligations, penalties,
\njudgments, settlements, claims, payments, fines, interest, costs and expenses
\n(including, without limitation, the costs and expenses of any and all Actions
\nand demands, assessments, judgments, settlements and compromises relating
\nthereto and the costs and expenses of attorneys’, accountants’, consultants’
\nand other professionals’ fees and expenses incurred in the investigation or
\ndefense thereof or the enforcement of rights hereunder), including direct and
\nconsequential damages, but excluding punitive damages (other than punitive
\ndamages awarded to any third party against an indemnified party).<\/p>\n
Section 4.40 PERSON. “Person” means an individual, a partnership, a
\ncorporation, a limited liability company, an association, a joint stock
\ncompany, a trust, a joint venture, an unincorporated organization and a
\ngovernmental entity or any department, agency or political subdivision
\nthereof.<\/p>\n
Section 4.41 RELEASE. “Release” means any release, spill, emission,
\nleaking, pumping, injection, deposit, disposal, discharge, dispersal,
\nleaching or migration into the indoor or outdoor environment, including,
\nwithout limitation, the movement of Hazardous Materials through ambient air,
\nsoil, surface water, groundwater, wetlands, land or subsurface strata.<\/p>\n
Section 4.42 SARA LEE AFFILIATE. “Sara Lee Affiliate” means any
\ncorporation or other entity directly or indirectly Controlled by Sara Lee,
\nbut excluding Coach and any Coach Affiliate.<\/p>\n
28<\/p>\n
Section 4.43 SARA LEE BUSINESS. “Sara Lee Business” means any
\nbusiness of Sara Lee other than the Coach Business.<\/p>\n
Section 4.44 SARA LEE FACILITIES. “Sara Lee Facilities” means all of
\nthe real property and improvements thereon owned or occupied at any time on
\nor before the Separation Date by any member of the Sara Lee Group, whether
\nfor the Sara Lee Business or the Coach Business, excluding the Coach
\nFacilities.<\/p>\n
Section 4.45 SARA LEE GROUP. “Sara Lee Group” means the Affiliated
\nGroup, or similar group of entities as defined under corresponding provisions
\nof the laws of other jurisdictions, of which Sara Lee is the common parent
\ncorporation, and any corporation or other entity which may be, may have been
\nor may become a member of such group from time to time, but excluding any
\nmember of the Coach Group.<\/p>\n
Section 4.46 SARA LEE GUARANTEE. “Sara Lee Guarantee” means any loan,
\nfinancing, lease, contract or other obligation in existence as of the
\nSeparation Date pertaining to the Coach Business, Coach Assets or Coach
\nLiabilities for which Sara Lee is or may be liable, as guarantor, original
\ntenant, primary obligor or otherwise.<\/p>\n
Section 4.47 SARA LEE INDEMNITEES. “Sara Lee Indemnitees” means Sara
\nLee, each member of the Sara Lee Group and each of their respective
\ndirectors, officers and employees.<\/p>\n
Section 4.48 SARA LEE PORTIONS. “Sara Lee Portions” means all
\ninformation set forth in, or incorporated by reference into, the IPO
\nRegistration Statement, to the extent such information relates exclusively to
\n(a) Sara Lee and the Sara Lee Group, (b) the Sara Lee Business, (c) Sara
\nLee’s intentions with respect to the Distribution or (d) the terms of the
\nDistribution, including, without limitation, the form, structure and terms of
\nany transaction(s) and\/or offering(s) to effect the Distribution and the
\ntiming of and conditions to the consummation of the Distribution.<\/p>\n
Section 4.49 SECURITIES ACT. “Securities Act” means the Securities
\nAct of 1933, as amended.<\/p>\n
Section 4.50 SEPARATION. “Separation” has the meaning set forth in
\nthe Separation Agreement.<\/p>\n
Section 4.51 SEPARATION AGREEMENT. “Separation Agreement” has the
\nmeaning set forth in the preamble of this Agreement.<\/p>\n
29<\/p>\n
Section 4.52 SEPARATION DATE. “Separation Date” means the effective
\ndate and time of each transfer of property, assumption of liability, license,
\nundertaking, or agreement in connection with the Separation, which shall be
\n12:01 a.m., Central Time, the date two days prior to the date the IPO
\nRegistration Statement is declared effective, or such date as may be fixed by
\nthe Board of Directors of Sara Lee.<\/p>\n
Section 4.53 SHARED COACH PERCENTAGE. “Shared Coach Percentage” means
\n5%.<\/p>\n
Section 4.54 SHARED PERCENTAGE. “Shared Percentage” means the Shared
\nCoach Percentage or the Shared Sara Lee Percentage, as the case may be.<\/p>\n
Section 4.55 SHARED SARA LEE PERCENTAGE. “Shared Sara Lee Percentage”
\nmeans 95%.<\/p>\n
Section 4.56 SUBSIDIARY. “Subsidiary” of any Person means a
\ncorporation or other organization whether incorporated or unincorporated of
\nwhich at least a majority of the securities or interests having by the terms
\nthereof ordinary voting power to elect at least a majority of the board of
\ndirectors or others performing similar functions with respect to such
\ncorporation or other organization is directly or indirectly owned or
\ncontrolled by such Person or by any one or more of its Subsidiaries, or by
\nsuch Person and one or more of its Subsidiaries; provided, however, that no
\nPerson that is not directly or indirectly wholly-owned by any other Person
\nshall be a Subsidiary of such other Person unless such other Person controls,
\nor has the right, power or ability to control, that Person.<\/p>\n
Section 4.57 TAX SHARING AGREEMENT. “Tax Sharing Agreement” means the
\nTax Sharing Agreement, attached as Exhibit E to the Separation Agreement.<\/p>\n
Section 4.58 TAX AND TAXES. “Tax and Taxes” have the meaning set
\nforth in the Tax Sharing Agreement.<\/p>\n
Section 4.59 THIRD PARTY CLAIM. “Third Party Claim” has the meaning
\nset forth in Section 1.6(a) of this Agreement.<\/p>\n
30<\/p>\n
IN WITNESS WHEREOF, each of the parties has caused this
\nIndemnification and Insurance Matters Agreement to be executed on its behalf
\nby its officers hereunto duly authorized on the day and year first above
\nwritten.<\/p>\n
SARA LEE CORPORATION<\/p>\n
By:
\n —————————–
\n Name:
\n Title:<\/p>\n
COACH, INC.<\/p>\n
By:
\n —————————–
\n Name:
\n Title:<\/p>\n
Schedule 2.1(a)<\/p>\n
Insurance Policies<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7133,8758],"corporate_contracts_industries":[9424,9401],"corporate_contracts_types":[9622,9628],"class_list":["post-43428","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-coach-inc","corporate_contracts_companies-sara-lee-corp","corporate_contracts_industries-food__diversified","corporate_contracts_industries-consumer__leather","corporate_contracts_types-planning","corporate_contracts_types-planning__separation"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43428","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43428"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43428"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43428"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43428"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}