Exhibit 2.2
DISTRIBUTION AGREEMENT
BETWEEN
IVEX PACKAGING CORPORATION
AND
PACKAGING DYNAMICS CORPORATION
DATED AS OF MARCH 18, 2002
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS
Section 1.01 Definitions...................................................................1
ARTICLE II TRANSFERS AND ASSUMPTION OF LIABILITIES
Section 2.01 Transfers of Certain Assets to Spinco.........................................6
Section 2.02 Assumption of Certain Liabilities.............................................6
ARTICLE III THE DISTRIBUTION
Section 3.01 Cooperation Prior to the Distribution.........................................6
Section 3.02 Ivex Board Action; Conditions Precedent to the Distribution...................7
Section 3.03 The Distribution..............................................................7
ARTICLE IV INDEMNIFICATION AND OTHER MATTERS
Section 4.01 Spinco Group Indemnification of Ivex Group....................................8
Section 4.02 Ivex Indemnification of Spinco................................................8
ARTICLE V ACCESS TO INFORMATION
Section 5.01 Provision of Corporate Records................................................9
Section 5.02 Access to Information.........................................................9
Section 5.03 Litigation Cooperation. From and after the Distribution Date..................9
Section 5.04 Reimbursement................................................................10
Section 5.05 Retention of Records.........................................................10
Section 5.06 Confidentiality..............................................................10
Section 5.07 Inapplicability of Article V to Tax Matters..................................11
ARTICLE VI CERTAIN OTHER AGREEMENTS
Section 6.01 Intercompany Accounts........................................................11
Section 6.02 Further Assurances and Consents..............................................12
Section 6.03 Third Party Beneficiaries....................................................12
ARTICLE VII MISCELLANEOUS
Section 7.01 Notices......................................................................12
Section 7.02 Amendments; No Waivers.......................................................13
Section 7.03 Expenses.....................................................................14
Section 7.04 Successors and Assigns.......................................................14
Section 7.05 Governing Law................................................................14
Section 7.06 Counterparts; Effectiveness..................................................15
Section 7.07 Entire Agreement.............................................................15
Section 7.08 Tax Sharing Agreement; Certain Transfer Taxes................................15
Section 7.09 Jurisdiction.................................................................15
Section 7.10 Severability.................................................................16
Section 7.11 Survival.....................................................................16
Section 7.12 Captions.....................................................................16
Section 7.13 Specific Performance.........................................................16
DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT dated as of March 18, 2002 (this
"Agreement") between Ivex Packaging Corporation, a Delaware corporation
("Ivex"), and Packaging Dynamics Corporation, a Delaware corporation
("Spinco").
WITNESSETH:
WHEREAS, Spinco is presently a wholly-owned subsidiary of Ivex;
WHEREAS, the Board of Directors of Ivex has determined that it is
in the best interests of Ivex, its shareholders and Spinco that the number
of shares as provided herein of Spinco Common Stock (as defined below) be
distributed pro rata to Ivex's shareholders (provided that all conditions
precedent to the Distribution have been satisfied) and that, pursuant to an
agreement and plan of merger dated as of March 18, 2002 (the "Merger
Agreement") among Ivex, Alcoa Inc., a Pennsylvania corporation ("Parent"),
and AI Merger Sub Inc., a Delaware corporation and a wholly-owned
subsidiary of Parent ("Merger Subsidiary"), Merger Subsidiary be merged
with and into Ivex, as a result of which Ivex will become a wholly-owned
subsidiary of Parent (the "Merger");
WHEREAS, for United States federal income Tax (as defined below)
purposes, it is intended that the holders of common stock of Ivex be
treated as having received cash consideration from Parent and the Spinco
Common Stock in redemption and disposition of the outstanding Ivex Common
Stock (as defined below);
WHEREAS, Ivex is concurrently herewith entering into, or proposes
to enter into prior to or on the Distribution Date (as defined below), the
Ancillary Agreements (as defined below); and
WHEREAS, the parties hereto desire to set forth herein the
principal corporate transactions to be effected in connection with the
Distribution and certain other matters relating to the relationship and the
respective rights and obligations of the parties following the
Distribution.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. The following terms, as used herein,
have the following meanings:
"Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 of the Exchange Act (as defined herein).
"Agreement" has the meaning set forth in the recitals.
"Ancillary Agreements" means each of the Tax Sharing Agreement and
the PD Letter Agreement.
"Business Day" means any day other than a Saturday, Sunday or one
on which banks are authorized or required by law to close in New York, New
York.
"CB" means CB Investors, L.L.C., a Delaware limited liability
company.
"Commission" means the Securities and Exchange Commission.
"Confidentiality Agreement" means the Confidentiality Agreement
dated as of November 29, 2001 between Parent and Ivex.
"Damages" means, with respect to any person, any and all damages
(including punitive and consequential damages), losses, Liabilities and
expenses incurred or suffered by such person (including, but not limited
to, all expenses of investigation, all attorneys' and expert witnesses'
fees and all other out-of-pocket expenses incurred in connection with any
demand, action, claim, suit, countersuit, arbitration, inquiry, proceeding
or governmental investigation ("Action") or threatened Action).
"DCBS" means DCBS Investors, L.L.C., a Delaware limited liability
company.
"Distribution" means the distribution by Ivex, pursuant to the
terms and subject to the conditions hereof, of the number of shares as
provided herein of Spinco Common Stock on a pro rata basis to the Ivex
Shareholders of record as of the Distribution Date.
"Distribution Agent" means Equiserve Trust Company, N.A.
"Distribution Date" means the Business Day on which the
Distribution is effected.
"Distribution Documents" means this Agreement and the Ancillary
Agreements and any other agreements or documents entered into to effect the
transactions contemplated hereby or by the Ancillary Agreements (but
excluding the Confidentiality Agreement and the Merger Agreement).
"Distribution Time" means the time immediately before the Merger
Effective Time (as defined below).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Form 10" means the registration statement on Form 10 to be filed
by Spinco with the Commission to effect the registration of Spinco Common
Stock pursuant to the Exchange Act in connection with the Distribution, as
such registration statement may be amended from time to time.
"Group" means, as the context requires, the Spinco Group (as
defined below) or the Ivex Group (as defined below).
"Information Statement" means the information statement to be sent
to each Ivex Shareholder of record as of the Record Date in connection with
the Distribution.
"Ivex" has the meaning set forth in the recitals.
"Ivex Business" means the businesses and operations of the Ivex
Group as conducted as of the date hereof.
"Ivex Common Stock" means the common stock, par value $.01 per
share, of Ivex.
"Ivex Group" means Ivex, the Ivex Subsidiaries and all successors
to each of those persons.
"Ivex Group Liabilities" means, except as otherwise specifically
provided in the Merger Agreement or any Distribution Document, all
Liabilities (including Liabilities arising out of any litigation), whether
arising before, at or after the Distribution Time, of or relating to the
Ivex Group or Spinco to the extent arising from the conduct of, in
connection with or relating to, the Ivex Business, or the ownership or use
of assets or property in connection therewith. However, notwithstanding the
foregoing, "Ivex Group Liabilities" shall exclude any and all: (1)
Liabilities for Taxes (which Liabilities shall be governed by the Tax
Sharing Agreement), and (2) other Liabilities to the extent specifically
retained or assumed by the Spinco Group.
"Ivex Indemnitee" has the meaning set forth in Section 4.01(a).
"Ivex Shareholders" means the holders of the Ivex Common Stock and
Options (as defined in the Merger Agreement) (except for options with an
exercise price of $23.25).
"Ivex Subsidiaries" means (i) the direct and indirect Subsidiaries
of Ivex other than the Spinco Group, and (ii) the respective minority
ownership interests of the Persons referred to in clause (i).
"Law" means any applicable law, statute, rule or regulation,
having the effect of law of the United States or any state, county, city or
other political subdivision thereof or of any governmental entity.
"Liability" or "Liabilities" means any and all losses, claims,
charges, debts, demands, actions, causes of action, suits, damages,
obligations, payments, costs and expenses, sums of money, accounts,
reckonings, bonds, specialties, indemnities and similar obligations,
exoneration, covenants, contracts, controversies, agreements, promises,
doings, omissions, variances, guarantees, make whole agreements and similar
obligations, and other liabilities and requirements, including all
contractual obligations, whether absolute or contingent, matured, or
unmatured, liquidated or unliquidated, accrued or unaccrued, known or
unknown, whenever arising, and including those arising under any law, rule,
regulation, Action, threatened or contemplated Action (including the costs
and expenses of demands, assessments, judgments, settlements and
compromises relating thereto and attorney's fees and any and all costs and
expenses, whatsoever reasonably incurred in investigating, preparing or
defending against any such Actions or threatened or contemplated Actions),
order or consent decree of any governmental authority or any award of any
arbitrator or mediator of any kind, and those arising under any contract,
commitment or undertaking, including those arising under the Distribution
Documents, in each case, whether or not recorded or reflected or required
to be recorded or reflected on the books and records or financial
statements of any person.
"Merger" has the meaning set forth in the recitals.
"Merger Agreement" has the meaning set forth in the recitals.
"Merger Effective Time" has the meaning assigned to the term
Effective Time in the Merger Agreement.
"Merger Subsidiary" has the meaning set forth in the recitals.
"Packaging Investors" means Packaging Investors, L.P., a Delaware
limited partnership.
"Parent" has the meaning set forth in the recitals.
"PD Letter Agreement" means that certain letter agreement, dated
as of March 18, 2002, by and among Ivex, DCBS, CB and Packaging Investors.
"Record Date" means the date determined by Ivex's Board of
Directors (or by a committee of that board or any other persona acting
under authority duly delegated to that committee or person by Ivex's Board
of Directors or a committee of that Board) as the record date for
determining the Ivex Shareholders of record entitled to receive the Form
10.
"Representatives" has the meaning set forth in Section 5.06.
"Restructuring" means the settlement of intercompany accounts in
accordance with Section 6.01 hereof, the Distribution and the other
transactions contemplated by this Agreement and the Ancillary Agreements.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"Spinco" has the meaning set forth in the recitals.
"Spinco Business" means the businesses and operations of the
Spinco Group, as conducted on the date hereof, but taking into account the
Restructuring.
"Spinco Common Stock" means the common stock, par value $0.01 per
share, of Spinco.
"Spinco Group" means Spinco, the Subsidiaries of Spinco (including
Packaging Holdings, L.L.C. and its Subsidiaries) and all successors to each
of those persons.
"Spinco Indemnitee" has the meaning set forth in Section 4.02(a).
"Spinco Liabilities" means, except as otherwise specifically
provided in the Merger Agreement or any Distribution Document, all
Liabilities, whether arising before, at or after the Distribution Time, of
or relating to the Ivex Group or the Spinco Group, to the extent arising
from the conduct of, in connection with or relating to the Spinco Business,
or the ownership or use of assets or property in connection therewith.
Notwithstanding the foregoing, "Spinco Liabilities" shall exclude any and
all: (1) Liabilities for Taxes (which Liabilities shall be governed by the
Tax Sharing Agreement) and (2) other Liabilities to the extent specifically
retained or assumed by the Ivex Group.
"Subsidiary" means, with respect to any person, any corporation or
other entity of which at least a majority of the securities or other
ownership interests having by their terms ordinary voting power to elect a
majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned or controlled by
such person or by one or more of its respective Subsidiaries or by such
person and any one or more of its respective Subsidiaries.
"Tax" means Tax as such term is defined in the Tax Sharing
Agreement.
"Tax Sharing Agreement" means the Tax Sharing Agreement to be
entered into as of the Distribution Date among Ivex, Parent and Spinco, on
customary terms which shall be in form and substance reasonably
satisfactory to Ivex, Spinco and Parent.
"Transfer" has the meaning set forth in Section 2.01.
Any reference in this Agreement to a statute shall be to such
statute, as amended from time to time, and to the rules and regulations
promulgated thereunder. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed
by the words "without limitation". 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. The words "date hereof" shall refer to the date of this
Agreement. The term "or" is not exclusive. The word "extent" in the phrase
"to the extent" shall mean the degree to which a subject or other thing
extends, and such phrase shall not mean simply "if". The definitions
contained in this Agreement are applicable to the singular as well as the
plural forms of such terms. Any agreement or instrument defined or referred
to herein or in any agreement or instrument that is referred to herein
means such agreement or instrument as from time to time amended, modified
or supplemented. References to a person are also to its permitted
successors and assigns.
ARTICLE II
TRANSFERS AND ASSUMPTION OF LIABILITIES
Section 2.01 Transfers of Certain Assets to Spinco. Upon the terms
and subject to the conditions set forth in the Merger Agreement, this
Agreement or any Ancillary Agreement, except as otherwise expressly set
forth herein or therein, effective prior to or as of the Distribution Time
or as soon as practicable after the Distribution Time, subject to receipt
of any necessary consents or approvals of third parties or of Governmental
Entities, (i) Ivex shall, or, if requested, shall cause the relevant member
of Ivex Group to, assign, contribute, convey, transfer and deliver
("Transfer") to Spinco all of the right, title and interest of Ivex or such
member of the Ivex Group in and to its ownership interest in Packaging
Holdings, L.L.C., a Delaware limited liability company ("Packaging
Holdings") and (ii) pursuant to the terms of the PD Letter Agreement, each
of DCBS, CB and Packaging Investors shall Transfer to Spinco all of the
right, title and interest of DCBS, CB and Packaging Investors, as the case
may be, in and to its respective ownership interest in Packaging Holdings.
Section 2.02 Assumption of Certain Liabilities. (a) Upon the terms
and subject to the conditions set forth in the Merger Agreement, this
Agreement or any Ancillary Agreement, except as otherwise expressly set
forth herein or therein, effective as of the Distribution Time, in partial
consideration for the Transfers pursuant to Section 2.01, Spinco hereby
unconditionally (i) assumes all Spinco Liabilities to the extent not then
an existing obligation of the Spinco Group and (ii) undertakes to pay,
satisfy and discharge when due in accordance with their terms all Spinco
Liabilities.
ARTICLE III
THE DISTRIBUTION
Section 3.01 Cooperation Prior to the Distribution. (a) As
promptly as practicable after the date of this Agreement, Ivex and Spinco
shall prepare, and Spinco shall file with the Commission, the Form 10,
which shall include or incorporate by reference the Information Statement.
Ivex and Spinco shall use their reasonable best efforts to cause the Form
10 to become effective under the Exchange Act as soon as practicable. After
the Form 10 has become effective, Ivex shall mail the Information Statement
as promptly as practicable to the Ivex Shareholders of record as of the
Record Date. The Form 10 shall be included as an attachment to, and be
deemed a part of, the Proxy Statement (as defined in the Merger Agreement).
(a) Ivex and Spinco shall take all such action as may be necessary
or appropriate under the securities or blue sky laws of states or other
political subdivisions of the United States and shall take reasonable best
efforts to comply with all applicable foreign securities laws in connection
with the transactions contemplated hereby or by the Ancillary Agreements.
(b) Spinco shall prepare, file and use its reasonable best efforts
to have approved, subject to official notice of issuance, an application
for the listing of the Spinco Common Stock on the New York Stock Exchange
("NYSE") or The Nasdaq Stock Market ("Nasdaq").
Section 3.02 Ivex Board Action; Conditions Precedent to the
Distribution. Ivex's Board of Directors shall establish (or delegate
authority to establish) the Record Date and the Distribution Date and any
appropriate procedures in connection with the Distribution. Ivex's Board of
Directors shall cause the Distribution to occur as promptly as practicable
after the date hereof, upon and subject to the satisfaction (or waiver) of
the following conditions:
(a) the Form 10 shall have become effective under the Exchange Act
and shall have been mailed to all Ivex Shareholders of record on the Record
Date;
(b) the Spinco Common Stock to be delivered in the Distribution
shall have been approved for listing on the NYSE or Nasdaq, as the case may
be, subject to official notice of issuance;
(c) the transfers referred to in Section 2.01, and the assumptions
of Liabilities referred to in Section 2.02, shall have been effected;
(d) each of the Ancillary Agreements shall have been duly executed
and delivered by the parties thereto; and
(e) each condition to the Merger set forth in Sections 7.1(a), (b)
and (c), 7.2 and 7.3 of the Merger Agreement shall have been satisfied or
waived.
Section 3.03 The Distribution. Subject to the terms and conditions
set forth in this Agreement, (a) immediately prior to the Distribution
Time, Ivex shall deliver to Spinco for cancellation, for the benefit of the
Ivex Shareholders of record on the Distribution Date, a stock certificate
or certificates, endorsed by Ivex in blank, representing all of the
then-outstanding shares of Spinco Common Stock owned by Ivex, (b) the
Distribution shall be effective as of the Distribution Time and (c) Spinco
shall issue and deliver to each of Ivex, DCBS, CB and Packaging Investors
the number of shares of Spinco Common Stock to be received by such party as
set forth in paragraph 2 of the PD Letter Agreement and (d) Ivex shall
instruct the Distribution Agent to distribute, as soon as practicable after
the Distribution Date, to each Ivex Shareholder of record as of the
Distribution Date, one share of Spinco Common Stock for every five shares
of Ivex Common Stock or shares covered by an Option (except for any Option
with an exercise price of $23.25) so held rounded up to the nearest whole
share. The Merger and Distribution shall be effected such that the Merger
Consideration (as defined in the Merger Agreement) and the shares of Spinco
Common Stock to be distributed in the Distribution are payable and
distributable, as applicable, only to the same Ivex Shareholders, it being
understood that the Distribution shall be effective immediately before the
Merger Effective Time.
ARTICLE IV
INDEMNIFICATION AND OTHER MATTERS
Section 4.01 Spinco Group Indemnification of Ivex Group. (a) From
and after the Distribution Date, the Spinco Group shall indemnify, defend
and hold harmless each member of the Ivex Group, their Affiliates
(including, for the avoidance of doubt, Parent) and their respective
officers, directors and employees (each, an "Ivex Indemnitee") from and
against any and all Damages incurred or suffered by any Ivex Indemnitee
arising out of (i) any and all Spinco Liabilities and (ii) the breach by
Spinco of any obligation under any Distribution Document (subject to any
limitation set forth therein), other than the Tax Sharing Agreement (all
indemnities thereunder being governed by the specific terms of the Tax
Sharing Agreement), including Damages reasonably incurred, arising out of
enforcement of this Section 4.01.
(b) From and after the Distribution Date, the Spinco Group shall
indemnify, defend and hold harmless each Ivex Indemnitee and each person,
if any, who controls any Ivex Indemnitee within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against any and all Damages caused by any untrue statement or alleged
untrue statement of a material fact contained in the Form 10 or any
amendment thereof or the Information Statement (in each case as amended or
supplemented), or caused by any omission or alleged omission to state
therein a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
except to the extent that those Damages are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information that is furnished to Spinco by Parent or any of its Affiliates
(other than the Ivex Group) specifically for use therein.
Section 4.02 Ivex Indemnification of Spinco. (a) From and after
the Distribution Date, the Ivex Group shall indemnify, defend and hold
harmless Spinco, its Affiliates and its officers, directors and employees
(each, a "Spinco Indemnitee") from and against any and all Damages incurred
or suffered by any Spinco Indemnitee arising out of (i) any and all Ivex
Group Liabilities and (ii) the breach by any member of the Ivex Group of
any obligation under any Distribution Document (subject to any limitation
set forth therein), other than the Tax Sharing Agreement (all indemnities
thereunder being governed by the specific terms of the Tax Sharing
Agreement), including Damages reasonably incurred arising out of
enforcement of this Section 4.02.
(b) From and after the Distribution Date, the Ivex Group shall
indemnify, defend and hold harmless each Spinco Indemnitee and each person,
if any, who controls any Spinco Indemnitee within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against any and all Damages caused by any untrue statement or alleged
untrue statement of a material fact contained in the Form 10 or any
amendment thereof or the Information Statement (in each case as amended or
supplemented), or caused by any omission or alleged omission to state
therein a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, in
each case to the extent that those Damages are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information that is furnished to Spinco by Parent or any of its Affiliates
(other than the Ivex Group) specifically for use therein.
ARTICLE V
ACCESS TO INFORMATION
Section 5.01 Provision of Corporate Records. Except as otherwise
specifically set forth in this Agreement or any Ancillary Agreement,
immediately prior to or as soon as practicable following the Distribution
Date, each Group shall provide to the other Group all documents, contracts,
books, records and data (including but not limited to minute books, stock
registers, stock certificates and documents of title) in its possession
relating primarily to the other Group or its business, assets and affairs
(after giving effect to the transactions contemplated hereby); provided
that if any such documents, contracts, books, records or data relate to
both Groups or the business and operations of both Groups, each such Group
shall provide to the other Group true and complete copies of such
documents, contracts, books, records or data. Data stored in electronic
form shall be provided in the format in which it existed at the
Distribution Date, except as otherwise specifically set forth in this
Agreement or any Ancillary Agreement.
Section 5.02 Access to Information. From and after the
Distribution Date, each Group shall, for a reasonable period of time,
afford promptly to the other Group and its accountants, counsel and other
designated Representatives reasonable access during normal business hours
to all documents, contracts, books, records, computer data and other data
in such Group's possession relating to such other Group or the business and
affairs of such other Group (after giving effect to the transactions
contemplated hereby), insofar as such access is reasonably required by such
other Group, including, without limitation, for audit, accounting,
litigation, regulatory compliance and disclosure and reporting purposes.
Section 5.03 Litigation Cooperation. From and after the
Distribution Date: (a) each Group shall use all reasonable best efforts to
make available to the other Group and its accountants, counsel, and other
designated representatives, upon written request, its current and former
directors, officers, employees and representatives as witnesses, and shall
otherwise cooperate with the other Group, to the extent reasonably required
in connection with any Action or threatened Action arising out of either
Group's business and operations in which the requesting party may from time
to time be involved.
(b) Each party hereto shall promptly notify the other party
hereto, upon its receipt or the receipt by any of its Affiliates, of a
request or requirement (by oral questions, interrogatories, requests for
information or documents, subpoenas, civil investigative demands or other
similar processes) which relates to the business and operations of the
other party (a "Request") reasonably regarded as calling for the inspection
or production of any documents or other information in its possession,
custody or control, as received from any person that is a party in any
Action, or in the event the person delivering the Request is not a party to
such Action, as received from such person. In addition to complying with
the applicable provisions of Section 5.06, each party shall assert and
maintain, or cause its Affiliates to assert and maintain, any applicable
claim to privilege, immunity, confidentiality or protection in order to
protect such documents and other information from disclosure, and shall
seek to condition any disclosure which may be required on such protective
terms as may be appropriate. No party may waive, undermine or fail to take
any action necessary to preserve an applicable privilege without the prior
written consent of the affected party hereto (or any affected Affiliate or
Affiliates of any such party) except, in the opinion of such party's
counsel, as required by law.
Section 5.04 Reimbursement. Except to the extent that any member
of one Group is obligated to indemnify any member of the other Group under
Article IV for that cost or expense, each Group providing information or
witnesses to the other Group, or otherwise incurring any expense in
connection with cooperating, under Sections 5.01, 5.02 or 5.03 shall be
entitled to receive from the recipient thereof, upon the presentation of
invoices therefor, payment for all out-of-pocket costs and expenses that
may be incurred in providing such information, witnesses or cooperation.
Section 5.05 Retention of Records. From and after the Distribution
Date, except as otherwise required by law or agreed to in writing, each
party shall, and shall cause the members of its respective Group to, retain
all information relating to the other Group's business and operations in
accordance with the then general practice of such party with respect to
information relating to its own business and operations. Notwithstanding
the foregoing, any party may destroy or otherwise dispose of any such
information at any time, provided that, prior to such destruction or
disposal, (i) such party shall provide not less than 90 calendar days'
prior written notice to the other party, specifying the information
proposed to be destroyed or disposed of and the scheduled date for such
destruction or disposal, and (ii) if the recipient of such notice shall
request in writing prior to the scheduled date for such destruction or
disposal that any of the information proposed to be destroyed or disposed
of be delivered to such requesting party, the party proposing the
destruction or disposal shall promptly arrange for the delivery of such of
the information as was requested at the expense of the requesting party.
Section 5.06 Confidentiality. From and after the Distribution
Date, each party shall hold and shall cause its Affiliates and their
respective directors, officers, employees, counsel, accountants, agents,
consultants, advisors and other authorized representatives
("Representatives") to hold in strict confidence all documents and other
information (other than any such documents and other information relating
solely to the business or affairs of such party) concerning the other party
and/or its Affiliates ("Confidential Information") unless such party would
be permitted to disclose such information pursuant to the terms of the
third and fourth paragraphs of the Confidentiality Agreement.
Notwithstanding the foregoing, such party may disclose such Confidential
Information to its Representatives so long as such persons are informed by
such party of the confidential nature of such Confidential Information and
are directed by such party to treat such documents and/or other information
confidentially. In the event that such party or any of its Representatives
is requested or required (by oral questions, interrogatories, requests for
information or documents, subpoenas, civil investigative demands or other
similar processes) to disclose any of the Confidential Information, such
party will promptly notify the other party so that the other party may seek
a protective order or other remedy or waive such party's compliance with
this Section 5.06. Such party shall exercise reasonable best efforts to
preserve the confidentiality of the Confidential Information, including,
but not limited to, by cooperating with the other party to obtain an
appropriate protective order or other reliable assurance that confidential
treatment will be accorded the Confidential Information. If, in the absence
of a protective order or other remedy or the absence of receipt of a waiver
of the other party, such party or any of its Representatives is nonetheless
legally compelled to disclose any of the Confidential Information, such
party or such Representative may disclose only that portion of the
Confidential Information which is legally required to be disclosed. Such
party agrees to be responsible for any breach of this Section 5.06 by it
and/or its Representatives.
Section 5.07 Inapplicability of Article V to Tax Matters.
Notwithstanding anything to the contrary in this Article V, this Article V
shall not apply with respect to documents, other information and/or other
matters relating to Taxes, all of which shall be governed by the Tax
Sharing Agreement.
ARTICLE VI
CERTAIN OTHER AGREEMENTS
Section 6.01 Intercompany Accounts. (a) Except as otherwise
specifically set forth herein or in any of the Ancillary Agreements or in
the Merger Agreement, (i) at the Distribution Time Ivex shall deliver or
cause to be delivered to Packaging Holdings for cancellation that certain
12.0% Subordinated Note due November 21, 2005, dated November 20, 1998,
made by Packaging Holdings payable to IPMC, Inc. in the original principal
amount of $12,500,000 and (ii) all intercompany accounts receivable and
accounts payable between any member of one Group and any member of another
Group in existence at the Distribution Time shall be paid in full, in cash
or other immediately available funds, by the party or parties owing such
obligations as soon as practicable (but in no event more than 30 calendar
days after the Distribution Time). Ivex represents and warrants that there
are no material intercompany accounts receivable and accounts payable
between any member of the Ivex Group and any member of the Spinco Group.
(b) Except as otherwise contemplated hereby or as set forth on
Schedule 6.01 or in any of the other Ancillary Agreements or in the Merger
Agreement, all prior agreements and arrangements, including those relating
to goods, rights or services provided or licensed, between any member of
the Spinco Group and any member of the Ivex Group shall be terminated
effective as of the Distribution Time, if not previously terminated. No
such agreements or arrangements shall be in effect after the Distribution
Time unless embodied in this Agreement, the Ancillary Agreements or set
forth on Schedule 6.01.
Section 6.02 Further Assurances and Consents. In addition to the
actions specifically provided for elsewhere in this Agreement, each of the
parties hereto shall use its reasonable best efforts to take, or cause to
be taken, all actions, and to do, or cause to be done, all things,
reasonably necessary, proper or advisable under applicable laws,
regulations and agreements or otherwise to consummate and make effective
the transactions contemplated by this Agreement, including, without
limitation, using its reasonable best efforts to obtain any consents and
approvals and to make any filings and applications necessary or desirable
in order to consummate the transactions contemplated by this Agreement. The
parties agree to enter into and execute such additional Distribution
Documents as may be reasonably necessary, proper or advisable to effect the
transactions contemplated by this Agreement or the Ancillary Agreements,
provided, however that such additional Distribution Documents shall not
diminish any of the rights granted or increase any of the Liabilities
assumed under this Agreement or the Ancillary Agreements.
Section 6.03 Third Party Beneficiaries. Parent shall be a third
party beneficiary of this Agreement. Except as contemplated in the
preceding sentence, nothing contained in this Agreement is intended to
confer upon any person or entity other than the parties hereto and their
respective successors and permitted assigns and Parent, any benefit, right
or remedies under or by reason of this Agreement, except that the
provisions of Article IV shall inure to the benefit of the Spinco
Indemnitees and the Ivex Indemnitees.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Notices. All notices and other communications to any
party hereunder shall be in writing (including telecopy or similar writing)
and shall be deemed given when received addressed as follows:
If to Ivex to:
Ivex Packaging Corporation
000 Xxx-Xxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
Executive Vice President and
Chief Financial Officer
With copies to:
Alcoa Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
If to Spinco, to:
Spinco
----------------------
----------------------
----------------------
c/o Ivex Packaging Corporation
000 Xxx-Xxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
Executive Vice President and
Chief Financial Officer
Any party may, by written notice so delivered to the other
parties, change the address to which delivery of any notice shall
thereafter be made.
Section 7.02 Amendments; No Waivers. (a) Any provision of this
Agreement may be amended or waived if, and only if, such amendment or
waiver is in writing and signed, in the case of an amendment, by Ivex and
Spinco, or in the case of a waiver, by the party against whom the waiver is
to be effective. In addition, unless the Merger Agreement shall have been
terminated in accordance with its terms, any such amendment or waiver shall
be subject to the written consent of Parent.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
Section 7.03 Expenses. All costs and expenses incurred by Ivex or
Spinco in connection with the preparation, execution and delivery of the
Ancillary Agreements and the consummation of the Distribution and the other
transactions contemplated hereby and therein (including the fees and
expenses of all counsel, accountants and financial and other advisors of
both Groups in connection therewith, and all expenses in connection with
preparation, filing and printing of the Form 10 and the Information
Statement) shall be paid by Ivex; provided that Parent and its Affiliates
shall pay their own expenses, if any, incurred in connection with the
Distribution.
Section 7.04 Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. If any party or any of
its successors or assigns (i) shall consolidate with or merge into any
other person and shall not be the continuing or surviving corporation or
entity of such consolidation or merger or (ii) shall transfer all or
substantially all of its properties and assets to any person, then, and in
each such case, proper provisions shall be made so that the successors and
assigns of such party shall assume all of the obligations of such party
under the Distribution Documents.
Section 7.05 Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of Delaware, without
regard to the conflict of laws rules thereof.
Section 7.06 Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the
same instrument. This Agreement shall become effective when each party
hereto shall have received a counterpart hereof signed by the other party
hereto.
Section 7.07 Entire Agreement. This Agreement, the Merger
Agreement, the Confidentiality Agreement and the other Distribution
Documents constitute the entire understanding of the parties with respect
to the subject matter hereof and thereof and supersede all prior
agreements, understandings and negotiations, both written and oral, between
the parties with respect to the subject matter hereof and thereof. No
representation, inducement, promise, understanding, condition or warranty
not set forth herein or in the Confidentiality Agreement, the Merger
Agreement or the other Distribution Documents has been made or relied upon
by any party hereto. To the extent that the provisions of this Agreement
are inconsistent with the provisions of any other Ancillary Agreement, the
provisions of such other Ancillary Agreement shall prevail.
Section 7.08 Tax Sharing Agreement; Certain Transfer Taxes. (a)
Except as otherwise specifically provided herein and not inconsistent with
the Tax Sharing Agreement, this Agreement shall not govern any Tax, and any
and all claims, losses, damages, demands, costs, expenses or liabilities
relating to Taxes shall be exclusively governed by the Tax Sharing
Agreement. The Tax Sharing Agreement shall provide that all income Taxes
imposed on a member of the Ivex Group as a result of the Transfer or
Distribution shall be borne by the Ivex Group.
(b) Except as otherwise provided in the Ancillary Agreements, all
transfer, documentary, sales, use, stamp and registration taxes and fees
(including any penalties and interest) incurred in connection with any of
the transactions described in Article II of this Agreement shall be borne
and paid by Ivex. The party that is required by applicable law to file any
Return (as defined in the Tax Sharing Agreement) or make any payment with
respect to any of those taxes shall do so, and the other party shall
cooperate with respect to that filing or payment as necessary. The
non-paying party shall reimburse the paying party in accordance with this
Section 7.08(b), as appropriate, within 5 Business Days after it receives
notice of the payment of those taxes. This Section 7.08(b) shall be
interpreted in accordance with the principles set forth in the Tax Sharing
Agreement and shall be subject to the dispute resolution provisions
contained in the Tax Sharing Agreement.
Section 7.09 Jurisdiction. Each of the parties hereto (a) consents
to submit itself to the exclusive jurisdiction of any Delaware state court
or any federal court located in the State of Delaware in the event any
dispute arises out of this Agreement, the other Distribution Documents or
any transaction contemplated hereby or thereby, (b) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court, (c) agrees that it will not bring
any action relating to this Agreement, the Distribution Documents or any
transaction contemplated hereby or thereby in any court other than any
Delaware state court or any federal court sitting in the State of Delaware
and (d) waives any right to trial by jury with respect to any action
related to or arising out of, this Agreement, the other Distribution
Agreements or any transaction contemplated hereby or thereby. Process in
any such Action may be served on any party anywhere in the world, whether
within or without the jurisdiction of any such court. Without limiting the
foregoing, each party agrees that service of process on such party as
provided in Section 7.01 shall be deemed effective service of process on
such party.
Section 7.10 Severability. If any one or more of the provisions
contained in this Agreement should be declared invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained in this Agreement shall not in any way
be affected or impaired thereby so long as the economic or legal substance
of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such a declaration, the parties shall
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner so that the transactions
contemplated hereby are consummated as originally contemplated to the
fullest extent possible.
Section 7.11 Survival. All covenants and agreements of the parties
contained in this Agreement and the Confidentiality Agreement shall survive
the Distribution Date indefinitely, unless a specific survival or other
applicable period is expressly set forth therein.
Section 7.12 Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
Section 7.13 Specific Performance. Each party to this Agreement
acknowledges and agrees that damages for a breach or threatened breach of
any of the provisions of this Agreement would be inadequate and irreparable
harm would occur. In recognition of this fact, each party agrees that, if
there is a breach or threatened breach, in addition to any damages, the
other nonbreaching party to this Agreement, without posting any bond, shall
be entitled to seek and obtain equitable relief in the form of specific
performance, temporary restraining order, temporary or permanent
injunction, attachment, or any other equitable remedy which may then be
available to obligate the breaching party (i) to perform its obligations
under this Agreement or (ii) if the breaching party is unable, for whatever
reason, to perform those obligations, to take any other actions as are
necessary, advisable or appropriate to give the other party to this
Agreement the economic effect which comes as close as possible to the
performance of those obligations (including, but not limited to,
transferring, or granting liens on, the assets of the breaching party to
secure the performance by the breaching party of those obligations).
IN WITNESS WHEREOF the parties hereto have caused this
Distribution Agreement to be duly executed by their respective authorized
officers as of the date first above written.
IVEX PACKAGING CORPORATION
By: /s/ X.X. Xxxxxxxxx
-----------------------
Name: X.X. Xxxxxxxxx
Title: VP and General Counsel
PACKAGING DYNAMICS CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Authorized Signatory
