Exhibit 2.1
DISTRIBUTION AGREEMENT
between
GP STRATEGIES CORPORATION
and
NATIONAL PATENT DEVELOPMENT CORPORATION
dated as of
________________, 2004
DISTRIBUTION AGREEMENT, dated as of _______, 2004, between GP
Strategies Corporation, a Delaware corporation ("GP"), and National Patent
Development Corporation, a Delaware corporation ("NPDC").
R E C I T A L S
WHEREAS, the Board of Directors of GP has deemed it appropriate and
advisable, to:
(a) separate and divide the existing businesses of GP so that the NPDC Business
shall be owned directly and indirectly by NPDC, and
(b) distribute, following such separation and division, as a dividend to the
holders of shares of Common Stock of GP (the "GP Common Stock") and Class B
Capital Stock of GP (the "GP Class B Stock" and, collectively with the GP Common
Stock, the "GP Stock") all of the outstanding shares of common stock of NPDC
(the "NPDC Common Stock");
WHEREAS, GP and NPDC have determined that it is necessary and desirable
to set forth the principal corporate transactions required to effect such
separation, division and distribution and to set forth other agreements that
will govern certain other matters prior to and following such separation,
division and distribution.
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained in this Agreement, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.01 General. Unless otherwise defined herein or unless the context
otherwise requires, the following terms will have the following meanings (such
meanings to be equally applicable to the singular and plural forms of the terms
defined).
"Action" means any action, suit, arbitration, inquiry, proceeding or
investigation by or before any Governmental Authority or any arbitration
tribunal.
"Affiliate" means, when used with respect to a specified Person,
another Person that directly, or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with the Person
specified.
"Agent" means Computershare Investor Services LLC, or such other
company designated by GP, who shall act as agent for the holders of GP Stock in
connection with the Distribution.
"Agreement" means this Distribution Agreement between GP and NPDC,
including any amendments hereto and each Schedule and Exhibit attached hereto.
"Books and Records" means all books, records, manuals, agreements and
other materials (in any form or medium), including without limitation, all
mortgages, licenses, indentures, contracts, financial data, customer lists,
marketing materials and studies, advertising materials, price lists,
correspondence, distribution lists, supplier lists, production data, sales and
promotional materials and records, purchasing materials and records, personnel
records, manufacturing and quality control records and procedures, blue prints,
research and development files, records, data and laboratory books, accounts
records, sales order files, litigation files, computer files, microfiche, tape
recordings and photographs.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor law.
"Commission" means the United States Securities and Exchange Commission.
"Consents" has the meaning ascribed to such term in Section 2.07
hereof.
"Conveyancing and Assumption Instruments" means, collectively, the
various written agreements, instruments and other documents to be entered into
to effect the Corporate Restructuring Transactions or to otherwise effect the
transfer of assets and the assumption of Liabilities in the manner contemplated
by this Agreement, the Related Agreements and the Corporate Restructuring
Transactions.
"Corporate Restructuring Transactions" means, collectively, (a) each of
the distributions, transfers, conveyances, contributions, assignments and other
transactions described and set forth in Exhibit A attached hereto, and (b) such
other distributions, transfers, conveyances, contributions, assignments and
other transactions (so long as such other distributions, transfers, conveyances,
contributions, assignments and other transactions do not, individually or in the
aggregate, adversely affect the GP Business (other than to a de minimis extent))
that may be required to be accomplished, effected or consummated by GP, NPDC or
any of their respective Subsidiaries and Affiliates in order to separate and
divide, in a series of transactions that, to the extent intended to qualify for
tax-free transactions under the Code, shall qualify for tax-free treatment under
the Code, the existing businesses of GP so that, except as otherwise expressly
set forth in Exhibit A hereto:
(i) assets, liabilities and business necessary for the continuing
operation of the NPDC Business shall be owned, directly and
indirectly, by NPDC;
(ii) the businesses, assets and liabilities of GP that remain after
the separations and divisions described in clause (i) above,
including, without limitation, the assets, liabilities and
business necessary for the continuing operation of the GP
Business, are, after giving effect to the Distribution, owned,
directly and indirectly, by GP.
"Distribution" means the distribution on the Distribution Date as a
dividend to holders of record of shares of GP Stock as of the Distribution
Record Date of all of the outstanding NPDC Common Shares owned by GP on the
basis provided in Section 3.02 hereof.
"Distribution Date" means such date as may hereafter be determined by
GP's Board of Directors as the date on which the Distribution shall be effected.
"Distribution Record Date" means the close of business on the date
determined by the Board of Directors of GP for the purpose of determining the
holders of record of GP Stock entitled to participate in the Distribution.
"DGCL" means the Delaware General Corporation Law, as amended.
"Environmental Laws" means any and all federal, state. local and
foreign statutes, Laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions (including without limitation the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. xx.xx. 9601,
et seq.), whether now or hereafter in existence, relating to the environment,
natural resources or human health and safety or endangered or threatened species
of fish, wildlife and plants or to emissions, discharges or releases of
pollutants, contaminants, petroleum or petroleum products, chemicals or toxic or
hazardous substances or waste into the environment, including, without
limitation, ambient air, surface water, ground water or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, petroleum or
petroleum products, chemicals or toxic or hazardous substances or waste or the
cleanup or other remediation thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Act File Material" means the Registration Statement, as
amended at the time it was declared effective under the Exchange Act, the
related Information Statement or any amendment or supplement thereto, the
related letter of transmittal, any related stockholder communication, any other
exhibits to any of the foregoing and any amendment or supplement thereto, in
each case including all information incorporated by reference therein.
"GAAP" means United States generally accepted accounting principles and
practices, as in effect on the date of this Agreement, as promulgated by the
Financial Accounting Standards Board and its predecessors.
"Governmental Authority" means any government or any agency, bureau,
board, commission, court, department, official, political subdivision, tribunal
or other instrumentality of any government, whether federal, state or local,
domestic or foreign.
"GP" means GP Strategies Corporation, a Delaware corporation.
"GP Assets" means, collectively, all the rights and assets owned by GP
or any of its Subsidiaries as of the close of business on the Distribution Date
other than the NPDC Assets and the capital stock of NPDC, including without
limitation:
(i) the capital stock of the GP Subsidiaries;
(ii) all of the assets included on the GP Business Pro Forma Balance
Sheet that are owned by GP and its Subsidiaries as of
the close of business on the Distribution Date and any other asset
acquired by GP or any of its Subsidiaries from the date of the GP
Business Pro Forma Balance Sheet to the close of business on the
Distribution Date that is owned by GP and its Subsidiaries as of the
close of business on the Distribution Date and that is of a type or
nature that would have resulted in such asset being included as an
asset on the GP Business Pro Forma Balance Sheet had it been acquired
on or prior to the date of the GP Business Pro Forma Balance Sheet,
determined on a basis consistent with the determination of assets
included on the GP Business Pro Forma Balance Sheet; and
(iii) all of the assets and rights expressly allocated to GP or any of
the Subsidiaries under this Agreement or any of the Related
Agreements.
"GP Business" means the businesses (other than the NPDC Business) that,
after giving effect to the Corporate Restructuring Transactions, are or were
conducted by:
(i) GP, the GP Subsidiaries or any of the other members of the GP
Group;
(ii) any other division, Subsidiary or investment of GP, or any GP
Subsidiary or any of the other members of the GP Group managed or
operated or in existence as of the date of this Agreement or any prior
time, unless such other division, Subsidiary or investment is
expressly included in the NPDC Group immediately after giving effect
to the Corporate Restructuring Transactions; and
(iii) any business entity acquired or established by or for GP or any
of the GP Subsidiaries between the date of this Agreement and the
close of business on the Distribution Date that is engaged in, or
intends to engage in, any business that is of a type or nature that
would have resulted in such business being included either as a GP
Subsidiary or an asset of GP on the GP Business Pro Forma Balance
Sheet had it been acquired or established on or prior to the date of
the GP Business Pro Forma Balance Sheet, determined on a basis
consistent with the determination of the Subsidiaries and assets
included on the GP Business Pro Forma Balance Sheet.
"GP Business Pro Forma Balance Sheet" means the Pro Forma Consolidated
Balance Sheet for GP and the GP Subsidiaries as of [ ] attached hereto as
Exhibit B.
"GP Class B Stock" has the meaning ascribed to such term in the
Recitals to this Agreement.
"GP Common Stock" has the meaning ascribed to such term in the Recitals
to this Agreement.
"GP Corporate Records" has the meaning ascribed to such term in Section
6.01(a) hereof.
"GP Group" means GP, the GP Subsidiaries and the corporations,
partnerships, joint ventures, investments and other entities that represent
equity investments of GP or any of the GP Subsidiaries following consummation of
the Corporate Restructuring Transactions and the Distribution.
"GP Holders" means the holders of record of GP Stock as of the
Distribution Record Date.
"GP Indemnified Parties" means:
(i) GP, the GP Subsidiaries and each Affiliate thereof after giving
effect to the Corporate Restructuring Transactions and the
Distribution; and
(ii) each of the respective past, present and future directors,
officers, employees and agents of any of the entities described in the
immediately preceding clause (i) and each of the heirs, executors,
successors and assigns of such directors, officers, employees and
agents.
"GP Liabilities" means, collectively, all of the Liabilities of GP and
the GP Subsidiaries and each of the other members of the GP Group remaining
after giving effect to the Corporate Restructuring Transactions and the
Distribution, including without limitation:
(i) all of the Liabilities included on the GP Business Pro Forma
Balance Sheet that remain outstanding as of the close of business on
the Distribution Date;
(ii) all other Liabilities that are incurred or that otherwise accrue
or are accrued at any time on, prior to or after the date of the GP
Business Pro Forma Balance Sheet and that arise or arose out of, or in
connection with, the GP Assets or the GP Business, determined on a
basis consistent with the determination of Liabilities of GP included
on the GP Business Pro Forma Balance Sheet;
(iii) all of the Liabilities of GP, the GP Subsidiaries or any of the
other members of the GP Group under, or to be retained or assumed by
GP, any GP Subsidiary or any of the other members of the GP Group
pursuant to, the Corporate Restructuring Transactions, this Agreement
or any of the Related Agreements;
(iv) all of the Liabilities of the parties hereto or their respective
Subsidiaries (whenever arising whether prior to, on or following the
Distribution Date) arising out of or in connection with or otherwise
relating to the management or conduct before or after the Distribution
Date of the GP Business;
(v) all other liabilities of GP, the GP Subsidiaries or any of the
other members of the GP Group (that do not constitute NPDC
Liabilities), which other liabilities of GP, the GP Subsidiaries or
any of the other members of the GP Group shall include, without
limitation, any and all Liabilities arising out of or relating to any
Action or Third Party Claim by any Governmental Authority or any other
Person that is based on any alleged breach of fiduciary duty by the
Board of Directors of GP or any member thereof, or any GP stockholder
derivative suit or other similar Actions;
(vi) NPDC Securities Liabilities;
(vii) Securities Liabilities arising out of events occurring prior to
the Distribution Date, and Securities Liabilities arising out of
events occurring after the Distribution Date and relating to GP.
"GP Records" has the meaning ascribed to such term in Section 6.01(b)
hereof.
"GP Stock" has the meaning ascribed to such term in the Recitals to
this Agreement.
"GP Subsidiaries" means the Subsidiaries of GP set forth in Exhibit C
hereto and all other Subsidiaries of GP other than NPDC or its Subsidiaries.
"GP Trademarks and Trade Names" means all trademarks, service marks,
and trade names containing "GP" or variations thereof, along with their
respective applications and registrations wherever used or registered.
"Indemnifiable Losses" means, with respect to any Person, any and all
losses, liabilities, penalties, claims, damages, demands, costs and expenses
(including, without limitation, reasonable attorneys' fees, investigation
expenses and any and all other out-of-pocket expenses, but excluding any
punitive or consequential damages) or other Liabilities whatsoever that are
assessed, imposed, awarded against, incurred or accrued by such Person either
(a) in investigating, preparing for, defending against or otherwise arising out
of or in connection with any Actions, any potential or threatened Actions or any
Third Party Claims for which such Person would be entitled to indemnification
under Article VII hereof, or (b) in respect of any other event, occurrence or
matter for which such Person would be entitled to indemnification under Article
VII hereof, in each case whether accrued or incurred on, before or after the
date of this Agreement.
"Indemnifying Party" has the meaning ascribed to such term in Section
7.04(a) hereof.
"Indemnified Party" has the meaning ascribed to such term in Section
7.04(a) hereof.
"Information Statement" means the NPDC Information Statement.
"Insurance Proceeds" means, with respect to any insured party, those
monies, net of any applicable premium adjustment, retrospectively-rated premium,
deductible, retention, or cost of reserve paid or held by or for the benefit of
such insured, which are either.
(i) received by an insured from an insurance carrier, or
(ii) paid by an insurance carrier on behalf of an insured.
"Law" means all laws, statutes and ordinances and all regulations,
rules and other pronouncements of Governmental Authorities having the effect of
law of the United States, any foreign country, or any domestic or foreign state,
province, commonwealth, city, country, municipality, territory, protectorate,
possession or similar instrumentality, or any Governmental Authority thereof.
"Liabilities" means any and all debts, liabilities, obligations,
losses, damages (whether compensatory, punitive or treble), fines, penalties and
sanctions, absolute or contingent, matured or unmatured, liquidated or
unliquidated. foreseen or unforeseen, joint, several or individual, asserted or
unasserted, accrued or unaccrued, known or unknown, whenever arising, including,
without limitation, those arising under or in connection with any Law (including
any Environmental Law), Action, threatened Action, order or consent decree of
any Governmental Authority or any award of any arbitration tribunal, and those
arising under any contract, guarantee, commitment or undertaking, whether sought
to be imposed by a Governmental Authority, private party, or party to this
Agreement, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute, or otherwise, and including any costs,
expenses, interest, attorneys' fees, disbursements and expense of counsel,
expert and consulting fees and costs related thereto or to the investigation or
defense thereof.
"Management Agreements" means the Management Agreements between GP and
NPDC, which agreements shall be entered into on or prior to the Distribution
Date, in the forms attached hereto as Exhibits D-1 and D-2, except for such
changes or modifications thereto that do not, individually or in the aggregate,
adversely affect the GP Business or the NPDC Business (other than to a de
minimis extent).
"NPDC" means National Patent Development Corporation, a Delaware
corporation, the NPDC Subsidiaries and the corporations, partnerships, joint
ventures, investments and other entities that represent equity investments of
any of NPDC or any of the NPDC Subsidiaries following the consummation of the
Corporate Restructuring Transactions and the Distribution.
"NPDC Assets" means, collectively, all of the following rights and
assets that are owned by GP and or any of its Subsidiaries as of the close of
business on the Distribution Date:
(i) the capital stock of the NPDC Subsidiaries;
(ii) all of the assets included on the NPDC Business Pro Forma Balance
Sheet that are owned by GP or any of its Subsidiaries as of the close
of business on the Distribution Date and any other asset acquired by
GP or any of its Subsidiaries from the date of the NPDC Business Pro
Forma Balance Sheet to the close of business on the Distribution Date
that is owned by GP or any of its Subsidiaries as of the close of
business on the Distribution Date and that is of a nature or type that
would have resulted in such asset being included as an asset on the
NPDC Business Pro Forma Balance Sheet had it been acquired on or prior
to the date of the NPDC Business Pro Forma Balance Sheet, determined
on a basis consistent with the determination of the assets included on
the NPDC Business Pro Forma Balance Sheet; and
(iii) all of the assets and rights expressly allocated to NPDC or any
of the NPDC Subsidiaries under this Agreement or any of the Related
Agreements.
"NPDC Business" means the businesses that, after giving effect to the
Corporate Restructuring Transactions, are conducted by:
(i) NPDC and its Subsidiaries or any of the other members of the NPDC
Group; and
(ii) any business entity acquired or established by or for GP or NPDC
or any of its Subsidiaries between the date of this Agreement and the
close of business on the Distribution Date that is engaged in, or
intends to engage in, any business that is of a type or nature that
would have resulted in such business being included either as a NPDC
Subsidiary or an asset of NPDC on the NPDC Business Pro Forma Balance
Sheet had it been acquired or established on or prior to the date of
the NPDC Business Pro Forma Balance Sheet, determined on a basis
consistent with the determination of the Subsidiaries and assets
included on the NPDC Business Pro Forma Balance Sheet.
"NPDC Common Shares" means the shares of NPDC Common Stock owned by GP
after giving effect to the stock dividend provided for in Section 2.02 hereof.
"NPDC Common Stock" has the meaning ascribed to such term in the
Recitals to this Agreement.
"NPDC Group" means NPDC, the NPDC Subsidiaries and the corporations,
partnerships, joint ventures, investments and other entities that represent
equity investments of NPDC or any of the NPDC Subsidiaries following the
consummation of the Corporate Restructuring Transactions and the Distribution.
"NPDC Indemnified Parties" means:
(i) NPDC, the NPDC Subsidiaries and each Affiliate thereof after
giving effect to the Corporate Restructuring Transactions and the
Distribution; and
(ii) each of the respective past, present and future directors,
officers, employees and agents of any of the entities described in the
immediately preceding clause (i) and each of the heirs, executors,
successors and assigns of any of such directors, officers, employees
and agents.
"NPDC Information Statement" means the Information Statement relating
to NPDC and the transactions contemplated hereby to be distributed to holders of
GP Stock pursuant to the terms of this Agreement.
"NPDC Liabilities" means, collectively, all of the Liabilities of NPDC,
the NPDC Subsidiaries and each of the other members of the NPDC Group after
giving effect to the Corporate Restructuring Transactions and the Distribution,
including, without limitation:
(i) all of the Liabilities included on the NPDC Business Pro Forma
Balance Sheet that remain outstanding as of the close of business on
the Distribution Date;
(ii) all other Liabilities that are incurred or that otherwise accrue
or are accrued at any time on, prior to or after the date of the NPDC
Business Pro Forma Balance Sheet and that arise or arose out of, or in
connection with, the NPDC Assets, the NPDC Business or the Prior NPDC
Businesses, determined on a basis consistent with the determination of
Liabilities of NPDC on the NPDC Business Pro Forma Balance Sheet;
(iii) all of the Liabilities of NPDC, the NPDC Subsidiaries or any of
the other members of the NPDC Group under, or to be retained or
assumed by NPDC, any NPDC Subsidiary or any of the other members of
the NPDC Group pursuant to, this Agreement or any of the Related
Agreements;
(iv) all the Liabilities of the parties hereto or their respective
Subsidiaries (whenever arising whether prior to, on or following the
Distribution Date) arising out of or in connection with or otherwise
relating to the management or conduct before or after the Distribution
Date of the NPDC Business; and
(v) Securities Liabilities arising out of events occurring after the
Distribution Date and relating to the NPDC.
"NPDC Business Pro Forma Balance Sheet" means the Pro Forma
Consolidated Balance Sheet for NPDC and the NPDC Subsidiaries as of [ ] attached
hereto as Exhibit E.
"NPDC Records" has the meaning ascribed to such term in Section 6.01(a)
hereof.
"NPDC Registration Statement" or "Registration Statement" means the
Registration Statement on Form 10 to be filed with the Commission pursuant to
the requirements of Section 12 of the Exchange Act and the rules and regulations
thereunder in order to register the NPDC Common Stock under Section 12(b) of the
Exchange Act.
"NPDC Securities Liabilities" means any and all Securities Liabilities
arising out of, or in connection with, or relating in whole or in part to any of
the following: (i) the NPDC Registration Statement; (ii) the NPDC Information
Statement; (iii) any of the information, data (financial or otherwise) or
disclosures in (or any alleged failure to set forth certain information, data or
disclosures in) the NPDC Registration Statement or NPDC Information Statement
irrespective of (A) who authored, prepared or provided such information, data or
disclosures (or, as the case may be, the section or discussion in which certain
information, data or disclosure is alleged to have been omitted), or (B) the
form in which, or medium through which (e.g., verbally, in writing, etc.), such
information, data, disclosures, discussion or section were provided.
"NPDC Subsidiaries" means the Subsidiaries listed in Exhibit F hereto.
"NYSE" means the New York Stock Exchange, Inc.
"Person" means any natural person, corporation, business trust, joint
venture, association, company, partnership, limited liability company or other
entity, or any government. or any agency or political subdivision thereof.
"Prior NPDC Businesses" means, collectively, all divisions,
Subsidiaries, other business entities or investments of NPDC that were sold,
transferred, otherwise disposed of or discontinued prior to the date of the NPDC
Business Pro Forma Balance Sheet.
"Privilege" has the meaning ascribed to such term in Section 6.07(a)
hereof.
"Privileged Information" has the meaning ascribed to such term in
Section 6.07(a) hereof.
"Related Agreements" means all of the written agreements, instruments,
understandings, assignments or other arrangements (other than this Agreement)
entered into by the parties hereto or any other member of their respective
Groups in connection with the Corporate Restructuring Transactions, the
Distribution and the other transactions contemplated hereby or thereby,
including, without limitation, (i) the Conveyancing and Assumption Instruments;
(ii) the Tax Sharing Agreement; and (iii) the Management Agreements.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Liabilities" means any and all losses, liabilities,
penalties, claims, damages, demands, costs or expenses or other Liabilities
whatsoever that are assessed, imposed, awarded against, incurred or accrued by a
Person arising out of or relating in whole or in part to any Action, any
potential or threatened Action or any Third Party Claim (or potential or
threatened Third Party Claim) by any Governmental Authority or any other Person
that is based on any violations or alleged violations of the Securities Act,
Exchange Act, any of the rules or regulations of the Commission promulgated
under the Securities Act or Exchange Act, or any other securities or other
similar Law.
"Subsidiary" means, with respect to any Person:
(i) any corporation of which at least a majority in interest of the
outstanding voting stock (having by the terms thereof voting power
under ordinary circumstances to elect a majority of the directors of
such corporation, irrespective of whether or not at the time stock of
any other class or classes of such corporation shall have or might
have voting power by reason of the happening of a contingency) is at
the time, directly or indirectly, owned or controlled by such Person
or by such Person and one or more of its Subsidiaries; or
(ii) any non-corporate entity in which such Person or such Person and
one or more Subsidiaries of such Person either (a) directly or
indirectly, as of the date of determination thereof, has at least a
majority ownership interest, or (b) as of the date of determination is
a general partner or an entity performing similar functions (e.g.,
manager of a Limited Liability Company or a trustee of a trust).
"Tax" or "Taxes" means any income, gross income, gross receipts,
profits, capital stock, franchise, withholding, payroll, social security,
workers compensation, unemployment, disability, property, ad valorem, stamp,
excise, occupation, services, sales, use, license, lease, transfer, import,
export, value added, alternative minimum, estimated or other similar tax
(including any fee, assessment or other charge in the nature of or in lieu of
any tax) imposed by any governmental entity or political subdivision thereof,
and any interest, penalties, additions to tax, or additional amounts in respect
of the foregoing.
"Tax Sharing Agreement" means the Tax Sharing Agreement between GP and
NPDC which agreement shall be entered into on or prior to the Distribution Date
in the form attached hereto as Exhibit G, except for such changes or
modifications thereto that do not, individually or in the aggregate, adversely
affect the GP Business (other than to a de minimis extent).
"Termination Date" means the date on which this Agreement is terminated
pursuant to and in accordance with the provisions of Section 8.10 of this
Agreement.
"Third Party Claim" has the meaning as defined in Section 7.04(a)
hereof.
Section 1.02 References. References to an "Exhibit" or to a "Schedule" are,
unless otherwise specified, to one of the Exhibits or Schedules attached to this
Agreement, and references to a "Section" are, unless otherwise specified, to one
of the Sections of this Agreement.
ARTICLE II
PRE-DISTRIBUTION TRANSACTIONS; CERTAIN COVENANTS
Section 2.01 Corporate Restructuring Transactions. On or prior to the
Distribution Date and otherwise in accordance with the terms and provisions set
forth in Exhibit A hereto, GP and NPDC shall, and shall cause each of their
respective Subsidiaries to, as applicable, take such actions as are necessary to
cause, effect and consummate the Corporate Restructuring Transactions. GP and
NPDC hereby agree that any one or more of the Corporate Restructuring
Transactions may be modified, supplemented or eliminated; provided such
modification, supplement or elimination (a) is necessary or appropriate to
divide the existing businesses of GP so that the NPDC Business shall be owned,
directly or indirectly, by NPDC, and (b) does not, individually or in the
aggregate, adversely affect the GP Business (other than to a de minimis extent).
Section 2.02 Pre-Distribution Stock Dividends to GP. On or prior to the
Distribution Date, NPDC shall issue to GP, as a stock dividend, the number of
shares of NPDC Common Stock as is required to effect the Distribution, as
certified by the Agent. In connection therewith, GP shall deliver to NPDC for
cancellation the share certificate (or certificates) currently held by it
representing all NPDC Common Stock.
4
Section 2.03 Charter and Bylaws of NPDC. On or prior to the Distribution
Date, GP and NPDC shall take all necessary actions so that, as of the
Distribution Date, the Amended and Restated Certificate of Incorporation and
Amended and Restated Bylaws of NPDC will be substantially in the forms set forth
in Exhibits H and I, respectively.
Section 2.04 Election of Directors of NPDC. On or prior to the Distribution
Date, GP, as the sole stockholder of NPDC, shall take all necessary action so
that as of the Distribution Date the directors of NPDC will be as set forth in
the NPDC Information Statement.
Section 2.05 Transfer and Assignment of Certain Licenses and Permits.
(a) Licenses and Permits Relating to the NPDC Business. On or prior to the
Distribution Date, or as soon as reasonably practicable thereafter, GP shall
(and, if applicable, shall cause any other Person over which it has legal or
effective direct or indirect control to) duly and validly transfer or cause to
be duly and validly transferred to the appropriate member of the NPDC Group (as
directed by NPDC) all transferable licenses, permits and authorizations issued
by any Governmental Authority that relate to the NPDC Business but which are
held in the name of any member of the GP Group, or any of their respective
employees, officers, directors, stockholders or agents.
(b) Licenses and Permits Relating to the GP Business. On or prior to the
Distribution Date, or as soon as reasonably practicable thereafter, NPDC shall
(and, if applicable, shall cause any other Person over which it has legal or
effective direct or indirect control to) duly and validly transfer or cause to
be duly and validly transferred to the appropriate member of the GP Group (as
directed by GP) all transferable licenses, permits and authorizations issued by
any Governmental Authority that relate to the GP Business but which are held in
the name of any member of the NPDC Group, or any of their respective employees,
officers, directors, stockholders or agents.
Section 2.06 Transfer and Assignment of Certain Agreements.
(a) Transfer and Assignment of GP Business Agreements. On or prior to the
Distribution Date, or as soon as reasonably practicable thereafter, and subject
to the limitations set forth in this Section 2.06, NPDC shall (and, if
applicable, shall cause any of the other members of its Group over which it has
legal or effective direct or indirect control to) assign, transfer and convey to
GP (or such other member of the GP Group as GP shall direct) all of its (or such
other member of its Group's) right, title and interest in and to any and all
agreements that relate exclusively to the GP Business or any member of the GP
Group.
(b) Transfer and Assignment of NPDC Business Agreements. On or prior to the
Distribution Date, or as soon as reasonably practicable thereafter, and subject
to the limitations set forth in this Section 2.06, GP shall (and, if applicable,
shall cause any of the other members of its Group over which it has legal or
effective direct or indirect control to) assign, transfer and convey to NPDC (or
such other member of the NPDC Group as NPDC shall direct) all of its (or such
other member of its Group's) right, title and interest in and to any and all
agreements that relate exclusively to the NPDC Business or any member of the
NPDC Group.
(c) Joint Agreements. Subject to the provisions of Section 2.06(e) below,
any agreement to which any party hereto (or any other member of such party's
Group) is a party that inures to the benefit of both the GP Business and the
NPDC Business shall be assigned in part, at the expense and risk of the
assignee, on or prior to the Distribution Date or as soon as reasonably
practicable thereafter, so that each party (or such other member of such party's
Group) shall be entitled to the rights and benefits inuring to its business
under such agreement.
(d) Obligations of Assignees. The assignee of any agreement assigned, in
whole or in part, hereunder (an "Assignee") shall, as a condition to such
assignment, (i) in the case of an assignment in whole, (A) assume and agree to
pay, perform, and fully discharge all obligations of the assignor under such
agreement (whether such obligations arose or were incurred prior to, on or
subsequent to the Distribution Date and irrespective of whether such obligations
have been asserted as of the Distribution Date) and (B) use its commercially
reasonable efforts to cause the assignor of such agreement to be released from
its obligations under the assigned agreements and (ii) in the case of an
assignment in part under Section 2.06(c) above, (A) assume and agree to pay,
perform, and fully discharge the portion of the obligations of the assignor
under such agreement that relates to the rights and benefits assigned (whether
such obligations arose or were incurred prior to, on or subsequent to the
Distribution Date and irrespective of whether such obligations have been
asserted as of the Distribution Date) and (B) use its commercially reasonable
efforts to cause the assignor of such agreement to be released from such
obligations under the assigned agreements.
(e) No Assignment of Certain Agreements. Notwithstanding anything in this
Agreement to the contrary, this Agreement shall not constitute an agreement to
assign any agreement, in whole or in part, or any rights thereunder, if the
agreement to assign or attempt to assign, without the consent of a third party,
would constitute a breach thereof or in any way adversely affect the rights of
the Assignee thereof, until such consent is obtained. Until such consent is
obtained, the parties hereto will cooperate with each other to effect any
arrangement designed reasonably to provide for the Assignee the benefits of, and
to permit the Assignee to assume liabilities under, any such agreement, to the
extent provided in this Section 2.06.
Section 2.07 Consents. The parties hereto shall use their reasonable
efforts to obtain any third-party consents or approvals that are required to
consummate the Corporate Restructuring Transactions, the Distribution and the
other transactions contemplated herein (the "Consents").
Section 2.08 Other Transactions. On or prior to the Distribution Date, GP
and NPDC shall consummate those other transactions in connection with the
Corporate Restructuring Transactions and the Distribution that are contemplated
by the NPDC Information Statement and the ruling request submission by GP to the
Internal Revenue Service dated November 14, 2002 (as subsequently supplemented),
and not specifically referred to in Sections 2.01 through 2.07 above.
Section 2.09 Election of Officers of NPDC. On or prior to the Distribution
Date, GP and NPDC shall, as applicable, take all actions necessary and desirable
so that as of the Distribution Date the officers of NPDC will be as set forth in
the NPDC Information Statement.
Section 2.10 Preparation and Filing of NPDC Registration Statement. GP and
NPDC shall prepare or cause to be prepared, and NPDC shall file or cause to be
filed with the Commission, the NPDC Registration Statement. The NPDC
Registration Statement shall include or incorporate by reference the NPDC
Information Statement setting forth appropriate disclosure concerning GP, NPDC,
the Distribution and such other matters as may be required to be disclosed
therein by the provisions of the Exchange Act and the rules and regulations
promulgated thereunder. GP and NPDC shall take all such actions as may be
reasonably necessary or appropriate in order to cause the NPDC Registration
Statement to become effective by order of the Commission pursuant to the
Exchange Act.
Section 2.11 State Securities Laws. Prior to the Distribution Date, GP and
NPDC 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 in order to effect the Distribution.
Section 2.12 Listing Application. Prior to the Distribution Date, GP and
NPDC shall take all such actions as shall be necessary or desirable in order to
cause the quotation of the NPDC Common Shares on the OTC Bulletin Board
Section 2.13 Certain Financial and Other Arrangements.
(a) Settlement of Intercompany Accounts Between NPDC Group and GP Group.
All intercompany receivables, payables and loans (other than receivables,
payables and loans otherwise specifically provided for in any of the Related
Agreements or hereunder), including, without limitation, in respect of any cash
balances, any cash balances representing deposited checks or drafts for which
only a provisional credit has been allowed or any cash held in any centralized
cash management system, between any member of the NPDC Group and any member of
the GP Group shall, as of the close of business on the Distribution Date, be
settled, capitalized or converted into ordinary trade accounts, in each case as
may be agreed in writing prior to the Distribution Date by duly authorized
representatives of GP and NPDC.
(b) Operations in Ordinary Course. Except as otherwise provided in this
Agreement or any Related Agreement, during the period from the date of this
Agreement through the Distribution Date, GP and NPDC shall, and shall cause any
entity that is a Subsidiary of such party at any time during such period to,
conduct its business in a manner substantially consistent with current and past
operating practices and in the ordinary course, including, without limitation,
with respect to the payment and administration of accounts payable and the
collection and administration of accounts receivable, the purchase of capital
assets and equipment and the management of inventories.
Section 2.14 Director, Officer and Employee Resignations. Subject to the
provisions of Section 2.04 and Section 2.09 above:
(a) Resignations by Directors and Employees of the GP Group. GP shall cause
all of its directors and all employees of the GP Group to resign, effective as
of the close of business on the Distribution Date, from all boards of directors
or similar governing bodies of each member of the NPDC Group on which they
serve, and from all positions as officers or employees of any member of the NPDC
Group, except as otherwise set forth in the NPDC Information Statement or
mutually agreed to in writing on or prior to the Distribution Date by GP and
NPDC.
(b) Resignations by Directors and Employees of the NPDC Group. NPDC shall
cause all of its directors and all employees of the NPDC Group to resign,
effective as of the close of business on the Distribution Date, from all boards
of directors or similar governing bodies of each member of the GP Group on which
they serve, and from all positions as officers or employees of any member of the
GP Group, except as otherwise set forth in the NPDC Information Statement or
mutually agreed to in writing on or prior to the Distribution Date by NPDC and
GP.
Section 2.15 Transfers Not Effected Prior to the Distribution; Transfers
Deemed Effective as of the Distribution Date. To the extent that any transfers
contemplated by this Article II shall not have been consummated on or prior to
the Distribution Date, the parties hereto shall cooperate (and shall cause each
of their respective Affiliates and each member of their respective Groups over
which they have legal or effective direct or indirect control to cooperate) to
effect such transfers as promptly following the Distribution Date as shall be
practicable. Nothing herein shall be deemed to require the transfer of any
assets or the assumption of any Liabilities which by their terms or operation of
Law cannot be transferred or assumed; provided, however, that the parties hereto
shall cooperate (and shall cause each of their respective Affiliates and each
member of their respective Groups over which they have legal or effective direct
or indirect control to cooperate) to seek to obtain any necessary consents or
approvals for the transfer of all assets and Liabilities contemplated to be
transferred pursuant to this Article II. In the event that any such transfer of
assets or Liabilities has not been consummated, from and after the Distribution
Date the party retaining such asset or Liability (or, as applicable, such other
member or members of such party's Group) shall hold such asset in trust for the
use and benefit of the party entitled thereto (at the expense of the party
entitled thereto) or retain such Liability for the account of the party by whom
such Liability is to be assumed pursuant hereto, as the case may be, and take
such other action as may be reasonably requested by the party to whom such asset
is to be transferred, or by whom such Liability is to be assumed, as the case
may be, in order to place such party, insofar as is reasonably possible, in the
same position as would have existed had such asset or Liability been transferred
or assumed as contemplated hereby. As and when any such asset or Liability
becomes transferable or assumable, such transfer shall be effected forthwith. As
of the Distribution Date, each party hereto (or, if applicable, such other
members of such party's Group) shall be deemed to have acquired (or, as
applicable, retained) complete and sole beneficial ownership over all of the
assets, together with all rights, powers and privileges incident thereto, and
shall be deemed to have assumed in accordance with the terms of this Agreement
all of the Liabilities, and all duties, obligations and responsibilities
incident thereto, which such party (or any other member of such party's Group)
is entitled to acquire or required to assume pursuant to the terms of this
Agreement.
Section 2.16 Related Agreements. Prior to the Distribution Date, GP and
NPDC shall enter into, and/or where applicable shall cause such other members of
their respective Groups to enter into, (a) the Related Agreements and (b) any
other agreements in respect of the Corporate Restructuring Transactions and the
Distribution as are reasonably necessary or appropriate in connection with the
transactions contemplated hereby and thereby so long as such agreements do not
adversely affect the GP Business (other than to a de minimis extent).
ARTICLE III
THE DISTRIBUTION
Section 3.01 GP Action Prior to the Distribution. Subject to the terms and
conditions set forth herein, GP shall take, or cause to be taken, the following
acts or actions in connection with, and to otherwise effect in accordance with
the terms of this Agreement, the Distribution.
(a) Declaration of Distribution and Establishment of Distribution Date. The
Board of Directors of GP shall, in its sole discretion and subject to and in
accordance with the applicable rules of the NYSE and provisions of the DGCL,
declare the Distribution and establish the Distribution Record Date, the
Distribution Date, the date on which NPDC Common Shares shall be mailed to the
GP Holders and all appropriate procedures in connection with the Distribution to
the extent not provided for herein; provided, however, that no such action shall
create any obligation on the part of GP to effect the Distribution or in any way
limit GP's power of termination as set forth in Section 8.10 hereof or alter the
consequences of any such termination from those specified in such Section.
(b) Notice to NYSE. GP shall, to the extent possible, give the NYSE not
less than ten days advance notice of the Distribution Record Date in compliance
with Rule 10b-17 under the Exchange Act.
(c) Mailing of NPDC Information Statement. GP shall, as soon as practicable
after the NPDC Registration Statement shall have been declared effective under
the Exchange Act, cause the NPDC Information Statement to be mailed to the GP
Holders.
Section 3.02 The Distribution.
(a) Duties and Obligations of GP. Subject to the conditions contained
herein, on the Distribution Date, but effective immediately following the close
of business on the Distribution Date, GP shall:
(i) deliver to the Agent the share certificates representing the NPDC
Common Shares issued to GP by NPDC pursuant to Section 2.02 hereof,
endorsed by GP in blank, for the benefit of the GP Holders; and
(ii) instruct the Agent to distribute, as soon as practicable following
consummation of the Distribution, to the GP Holders one share of NPDC
Common Stock for every one share of GP Stock.
(b) Duties and Responsibilities of NPDC. NPDC shall provide, or cause to be
provided, to the Agent sufficient certificates representing NPDC Common Stock in
such denominations as the Agent may request in order to effect the Distribution.
All shares of NPDC Common Stock issued pursuant to the Distribution will be
validly issued, fully paid and non-assessable and free of any preemptive (or
similar) rights.
Section 3.03 Unclaimed Stock or Cash. Any NPDC Common Stock and dividends
or distributions with respect to NPDC Common Stock that remain unclaimed by any
GP Holder 180 days after the Distribution Date shall be delivered to NPDC and
any such GP Holder shall look only to NPDC for the NPDC Common Stock and any
such dividends or distributions to which they are entitled, subject in each case
to applicable escheat or other abandoned property laws.
ARTICLE IV
CONDITIONS TO THE DISTRIBUTION
Section 4.01 Conditions Precedent to the Distribution. The obligation of GP
to cause the Distribution to be consummated shall be subject, at the option of
GP, to the fulfillment or waiver, on or prior to the Termination Date, of each
of the following conditions:
(a) Related Agreements. GP and NPDC shall have executed and delivered all
of the Related Agreements, and each such agreement shall be in full force and
effect.
(b) Effective Date of Registration Statement. The Registration Statement
shall have been declared effective by order of the Commission and no stop order
shall have been entered, and no proceeding for that purpose shall have been
initiated or threatened by the Commission with respect thereto.
(c) Quotation. GP and NPDC shall have been notified that the NPDC Common
Shares will be quoted on the OTC Bulletin Board immediately after the
Distribution.
(d) Tax Ruling. GP shall have received rulings from the Internal Revenue
Service reasonably acceptable to GP, which rulings shall be in full force and
effect as of the Distribution Date, to the effect that the transfers to NPDC and
MXL (except transfers to satisfy intercompany debt) constitute tax-free
transfers under Sections 368 and 351 of the Code and the NPDC Distribution as
contemplated hereunder will be tax-free for federal income tax purposes to GP
under Section 355(c)(1) of the Code and to the stockholders of GP under Section
355(a) of the Code.
(e) Pre-Distribution Transactions. Each of the transactions and other
matters contemplated by Article II and Section 3.01 hereof (including, without
limitation, each of the distributions, transfers, conveyances, contributions,
assignments or other transactions included in, or otherwise necessary to
consummate, the Corporate Restructuring Transactions) shall have been fully
effected, consummated and accomplished.
(f) Covenants. The covenants contained in Article V of this Agreement that
are required to be performed on or before the Distribution Date shall have been
fully performed.
(g) No Prohibitions. Consummation of the transactions contemplated hereby
shall not be prohibited by Law and no Governmental Authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, executive order, decree, injunction or other order
(whether temporary, preliminary or permanent) which is in effect and which
materially restricts, prevents or prohibits consummation of the Distribution or
any transaction contemplated by this Agreement, it being understood that the
parties hereto hereby agree to use their commercially reasonable efforts to
cause any such decree, judgment, injunction or other order to be vacated or
lifted as promptly as possible.
(h) Consents. GP, NPDC and the other members of their respective Groups
shall have obtained all Consents the failure of which to obtain would,
in the determination of the Board of Directors of GP, have a material
adverse effect on the GP Group or the NPDC Group, each taken as a
whole, and such Consents shall be in full force and effect.
Section 4.02 No Constraint. Notwithstanding the provisions of Section 4.01
above, the fulfillment or waiver of any or all of the conditions precedent to
the Distribution set forth therein shall not:
(i) create any obligation on the part of GP or any other party
hereto to effect the Distribution;
(ii) in any way limit GP's right and power under Section 8.10
hereof to terminate this Agreement and the process leading to
the Distribution and to abandon the Distribution; or
(iii) alter the consequences of any such termination under Section
8.10 hereof from those specified in such Section.
Section 4.03 Deferral of Distribution Date. If the Distribution Date shall
have been established by the Board of Directors of GP but all the conditions
precedent to the Distribution set forth in this Agreement have not theretofore
been fulfilled or waived, or GP does not reasonably anticipate that they will be
fulfilled or waived, on or prior to the date established as the Distribution
Date, GP may, by resolution of its Board of Directors (or a committee thereof,
so authorized), defer the Distribution Date to a later date.
Section 4.04 Public Notice of Deferred Distribution Date. If the Board of
Directors (or a committee thereof, so authorized) of GP shall defer the
Distribution Date in accordance with Section 4.03 above and public announcement
of the prior Distribution Date has theretofore been made, GP shall promptly
thereafter issue, in accordance with the advice of legal counsel, a public
announcement with respect to such deferment and shall, with the advice of legal
counsel, take such other actions as may be deemed necessary or desirable with
respect to the dissemination of such information.
ARTICLE V
COVENANTS
Section 5.01 Further Assurances. GP and NPDC shall use all commercially
reasonable efforts to:
(a) take or cause to be taken all actions, and do or cause to be done all
things reasonably necessary, proper or advisable under applicable Law and
agreements or otherwise to consummate and make effective the transactions
contemplated hereby, including without limitation using commercially reasonable
efforts to obtain any consents and approvals from, enter into any amendatory
agreements with and make any applications, registrations or filings with, any
third Person or any Governmental Authority necessary or desirable in order to
consummate the transactions contemplated hereby or to carry out the purposes of
this Agreement; and
(b) execute and deliver such further instruments and documents and take
such other actions as the other party may reasonably request in order to
consummate the transactions contemplated hereby and effectuate the purposes of
this Agreement.
Section 5.02 Assumption and Satisfaction of Liabilities. Except as
otherwise specifically set forth in any Related Agreement, from and after the
Distribution Date:
(a) GP shall, and shall cause each of the other members of the GP Group
over which it has legal or effective direct or indirect control to, assume, pay,
perform and discharge all GP Liabilities in accordance with their terms, when
determined, and otherwise as determined in accordance with the practice of the
parties prior to the Distribution; and
(b) NPDC shall, and shall cause each of the other members of the NPDC Group
over which it has legal or effective direct or indirect control to, assume, pay,
perform and discharge all NPDC Liabilities in accordance with their terms, when
determined, and otherwise as determined in accordance with the practice of
the parties prior to the Distribution.
Section 5.03 No Representations or Warranties; Consents.
(a) General. Each of the parties hereto understands and agrees that no
party hereto is, in this Agreement or in any other agreement or document
contemplated by this Agreement (including the Related Agreements) or otherwise,
making any representation or warranty whatsoever, including without limitation,
any representation or warranty:
(i) as to the value or freedom from encumbrance of, or any other
matter concerning, any assets of such party; or
(ii) as to the legal sufficiency to convey title to any asset as of
the execution, delivery and filing of this Agreement or any
Related Agreement, including, without limitation, any
Conveyancing and Assumption Instrument.
(b) Disclaimer of Merchantability or Fitness of Assets. Each party hereto
further understands and agrees that there are no warranties, express or implied,
as to the merchantability of fitness of any of the assets either transferred to
or retained by the GP Group or the NPDC Group, pursuant to Corporate
Restructuring Transactions and the other terms and provisions of this Agreement,
any Conveyancing and Assumption Agreement or any Related Agreement, and all such
assets that are so transferred will be transferred on an "AS IS, WHERE IS"
basis, and the party to which any such assets are transferred hereunder, or
which retains assets hereunder, shall bear the economic and legal risk that any
conveyances of such assets shall prove to be insufficient or that the title of
such party or any other member of its respective Group to any such assets shall
be other than good and marketable and free from encumbrances.
(c) Acknowledgement of Disclosure and Waiver. NPDC acknowledges, for itself
and on behalf of each other member of its Group, that:
(i) GP and the other members of the GP Group have disclosed, and
NPDC has knowledge of, all matters pertaining to the assets
and properties to be conveyed to NPDC or any member of its
Group pursuant to the Corporate Restructuring Transactions or
otherwise pursuant to the other terms of this Agreement to the
same extent that GP and the other members of the GP Group have
knowledge of such matters; and
(ii) such knowledge constitutes notice and disclosure of such
matters.
NPDC waives, to the fullest extent permitted by Law, for itself and for
each other member of its Group, any and all claims or causes of action which any
of them may have arising out of such matters or the failure of any Conveyancing
and Assumption Instrument to describe or refer to, or provide notice of, any
such matters.
(d) No Representations or Warranties Regarding Consents. Each of the
parties hereto understands and agrees that no party hereto is, in this Agreement
or any Related Agreement or in any other agreement or document contemplated by
this Agreement or any Related Agreement or otherwise, representing or warranting
in any way that the obtaining of any consents or approvals, the execution and
delivery of any amendatory agreements and the making of any filings or
applications contemplated by this Agreement will satisfy the provisions of any
or all applicable agreements or the requirements of any or all applicable Law.
Each of the parties hereto further agrees and understands that the party to
which any assets are transferred as contemplated by the Corporate Restructuring
Transactions or the other provisions of this Agreement shall bear the economic
and legal risk that any necessary consents or approvals are not obtained, that
any necessary amendatory agreements are not executed and delivered or that any
requirements of Law are not complied with.
(e) Covenant to Use Reasonable Efforts to Obtain Consents. Notwithstanding
the provisions of Section 5.03(d) above, each of the parties hereto shall (and
shall cause each other member of its respective Group over which it has direct
or indirect legal or effective control to) use commercially reasonable efforts
to obtain all consents and approvals, to enter into all amendatory agreements
and to make all filings and applications that may be reasonably required for the
consummation of the transactions contemplated by this Agreement and shall take
all such further reasonable actions as shall be reasonably necessary to preserve
for each of the GP Group and the NPDC Group, to the greatest extent feasible,
the economic and operational benefits of the allocation of assets and
Liabilities contemplated by this Agreement. In case at any time after the
Distribution Date any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and directors of each party to
this Agreement shall take all such necessary or desirable action.
Section 5.04 Removal of Certain Guarantees.
(a) Removal of GP Group as Guarantor of NPDC Liabilities. Except as
otherwise contemplated in the Corporate Restructuring Transactions or otherwise
specified in any Related Agreement or the Information Statement, GP and NPDC
shall use commercially reasonable efforts to have, on or prior to the
Distribution Date, or as soon as practicable thereafter, GP and any other member
of the GP Group removed as a guarantor of, or obligor under or for, any NPDC
Liability.
(b) Removal of NPDC Group as Guarantor of GP Liabilities. Except as
otherwise contemplated in the Corporate Restructuring Transactions or otherwise
specified in any Related Agreement or the Information Statement, GP and NPDC
shall use commercially reasonable efforts to have, on or prior to the
Distribution Date, or as soon as practicable thereafter, NPDC and any other
member of the NPDC Group removed as a guarantor of, or obligor under or for, any
GP Liability.
Section 5.05 Public Announcements. Each party hereto shall consult with
each other before issuing any press release or otherwise issuing any other
similar written public statement with respect to this Agreement or the
Distribution and shall not issue any such press release or make any such public
statement without the prior consent of each other party, which shall not be
unreasonably withheld; provided, however, that a party may, without the prior
consent of any other party, issue such press release or other similar written
public statement as may be required by Law or any listing agreement with a
national securities exchange to which any party hereto (or any member of such
party's Group) is a party.
Section 5.06 Intercompany Agreements. Effective as of the consummation of
the Distribution, NPDC and GP shall (and shall cause each other member of its
respective Group over which it has legal or effective direct or indirect control
to) terminate each and every agreement between it and any member of the other
Group other than this Agreement and the Related Agreements; provided, however,
that such termination shall not have any effect whatsoever on any of its rights
and/or obligations that accrued or were incurred prior to the Distribution Date
(subject to the terms of Section 2.13 above).
Section 5.07 Tax Matters. GP and the NPDC intend the Distribution to be
treated as a tax-free distribution under Code Section 355 and each such party
shall use its reasonable efforts to cause the Distribution to so qualify.
Neither GP nor NPDC shall take any action that might cause:
(i) the Distribution to fail to qualify as a tax-free distribution
under Code Section 355; or
(ii) any other transfer described in the Corporate Restructuring
Transaction that is intended (as described in GP's request for
rulings from the Internal Revenue Service) to qualify as a
tax-free transfer under Code Section 355, 361 or 368 to fail
to so qualify.
ARTICLE VI
ACCESS TO INFORMATION
Section 6.01 Provision, Transfer and Delivery of Applicable Corporate
Records.
(a) Provision, Transfer and Delivery of NPDC Records. GP shall (and shall
cause each other member of its Group over which it has legal or effective direct
or indirect control to) arrange as soon as practicable following the
Distribution Date for the transportation (at NPDC's cost) to NPDC of the Books
and Records in its possession that relate primarily to the NPDC Business
(collectively, the "NPDC Records"), except to the extent such items are already
in the possession of any member of the NPDC Group.
(b) Provision, Transfer and Delivery of GP Records. NPDC shall (and shall
cause each other member of its Group over which it has legal or effective direct
or indirect control to) arrange as soon as practicable following the
Distribution Date for the transportation (at GP's cost) to GP of the Books and
Records in its possession that relate primarily to the GP Business
(collectively, the "GP Records"), except to the extent such items are already in
the possession of any member of the GP Group.
Section 6.02 Access to Information.
(a) Access to Books and Records. Unless otherwise contemplated by Section
6.06 hereof, from and after the Distribution Date, GP and NPDC shall (and shall
cause each of the other members of its respective Group over which it has legal
or effective direct or indirect control to) afford to each other party and its
authorized accountants, counsel and other designated representatives reasonable
access and duplicating rights (all such duplicating costs to be borne by the
requesting party) during normal business hours, subject to appropriate
restrictions for classified, privileged or confidential information, to the
personnel, properties, Books and Records and other data and information of such
party and each other member of such party's Group relating to operations prior
to the Distribution insofar as such access is reasonably required by the other
requesting party for the conduct of the requesting party's business (but not for
competitive purposes).
(b) Provision of Post-Distribution Commission Filings. For a period of five
years following the Distribution Date, GP and NPDC shall (and shall cause each
of the other members of its respective Group over which it has legal or
effective direct or indirect control to) provide to the other, promptly
following such time at which such documents are filed with the Commission, all
documents (other than documents or portions thereof for which confidential
treatment has been granted or a request for confidential treatment is pending)
filed by it and by each other member of such party's Group with the Commission
pursuant to the Securities Act or the periodic and interim reporting
requirements of the Exchange Act and the rules and regulations of the Commission
promulgated thereunder.
Section 6.03 Reimbursement; Other Matters. Except to the extent otherwise
contemplated hereby or by any Related Agreement, a party providing Books and
Records or access to information to any other party (or such party's
representatives) under this Article VI shall be entitled to receive from such
other party, upon the presentation of invoices therefor, payments for such
amounts, relating to supplies, disbursements and other out-of-pocket expenses,
as may be reasonably incurred in providing such Books and Records or access to
information.
Section 6.04 Confidentiality.
(a) General Restriction on Disclosure. GP and NPDC shall not (and shall not
permit any other member of its respective Group over which it has legal or
effective direct or indirect control to) use or permit the use of (without the
prior written consent of the other) and shall hold, and shall cause its
consultants, advisors and other representatives and any other member of its
respective Group (over which it has legal or effective direct or indirect
control) to hold, in strict confidence, all information concerning each other
party hereto and the other members of such other party's Group in its
possession, custody or control to the extent such information either
(i) relates to the period up to the Distribution Date,
(ii) relates to any Related Agreement, or
(iii) is obtained in the course of performing services for the other party
pursuant to any Related Agreement, and each party hereto shall not (and
shall cause each other member of its respective Group over which it has
legal or effective direct or indirect control not to) otherwise release
or disclose such information to any other Person, except its auditors,
attorneys, financial advisors, bankers and other consultants and
advisors, without the prior written consent of the other affected party
or parties, unless compelled to disclose such information by judicial
or administrative process or unless such disclosure is required by Law
and such party has used reasonable efforts to consult with the other
affected party or parties prior to such disclosure.
(b) Compelled Disclosure. To the extent that a party hereto is compelled by
judicial or administrative process to disclose such information under
circumstances in which any evidentiary privilege would be available, such party
agrees to assert such privilege in good faith prior to making such disclosure.
Each of the parties shall consult with the other party in connection with any
such judicial or administrative process, including, without limitation, in
determining whether any privilege is available, and shall not object to each
such relevant party and its counsel participating in any hearing or other
proceeding (including, without limitation, any appeal of an initial order to
disclose) in respect of such disclosure and assertion of privilege.
(c) Exceptions to Confidential Treatment. Anything herein to the contrary
notwithstanding, no party hereto shall be prohibited from using or permitting
the use of, or required to hold in confidence, any information to the extent
that (i) such information has been or is in the public domain through no fault
of such party, (ii) such information is, after the Distribution Date, lawfully
acquired from other sources by such party, (iii) this Agreement, any Related
Agreement or any other agreement entered into pursuant hereto permits the use or
disclosure of such information by such party, or (iv) such information is
provided to the Internal Revenue Service in connection with GP's pending ruling
application on the Distribution.
Section 6.05 Witness Services. At all times from and after the Distribution
Date, GP and NPDC shall each use its reasonable efforts to make available to
each other party hereto, upon reasonable written request, the officers,
directors, employees and agents of each member of its respective Group for fact
finding, consultation or interviews and as witnesses to the extent that:
(a) such persons may reasonably be required in connection with the
prosecution or defense of any Action in which the requesting party or any member
of its respective Group may from time to time be involved; and
(b) there is no conflict in the Action between the requesting party or any
member of its respective Group and the party to which a request is made pursuant
to this Section 6.05 or any member of such party's Group. Except as otherwise
agreed by the parties, a party providing witness services to any other party
under this Section shall be entitled to receive from the recipient of such
services, upon the presentation of invoices therefor, payments for such amounts,
relating to supplies, disbursements and other out-of-pocket expenses (but not
salary expenses) and direct and indirect costs of employees who participate in
fact finding, consultation or interviews or are witnesses, as are actually and
reasonably incurred in providing such fact finding, consulting, interviews or
witness services by the party providing such services.
Section 6.06 Retention of Records. Except when a longer period is required
by Law or is specifically provided for herein or in any Related Agreement, each
party hereto shall (and shall cause the members of its Group over which it has
legal or effective direct or indirect control to) retain for a period of at
least seven years following the Distribution Date all material information
(including without limitation all material Books and Records) relating to the
operations of such party or its Group prior to the Distribution Date.
Notwithstanding the foregoing, any party hereto may offer in writing to deliver
to the other party all or a portion of such information as it relates to the
offering party or members of the offering party's Group and, if such offer is
accepted in writing within 90 days after receipt thereof, the offering party
shall promptly arrange for the delivery of such information (or copies thereof)
to the accepting party (at the expense of such accepting party). If such offer
is not so accepted, the offered information may be destroyed or otherwise
disposed of by the offering party at any time thereafter.
Section 6.07 Privileged Matters.
(a) Privileged Information. The parties hereto shall (and shall cause the
members of its Group over which it has legal or effective direct or indirect
control to) use its reasonable efforts to maintain, preserve, protect and assert
all privileges including, without limitation, all privileges arising under or
relating to the attorney-client relationship (including without limitation the
attorney-client and attorney work product privileges) that relate directly or
indirectly to any member of any other Group for any period prior to the
Distribution Date ("Privilege" or "Privileges"). The parties hereto shall use
reasonable efforts not to waive (or permit any member of its Group over which it
has legal or effective direct or indirect control to waive) any such Privilege
that could be asserted under applicable Law without the prior written consent of
the other party. With respect to each party, the rights and obligations created
by this Section 6.07 shall apply to all information as to which a member of any
Group did assert or, but for the Distribution, would have been entitled to
assert the protection of a Privilege ("Privileged Information") including, but
not limited to, any and all information that either:
(i) was generated or received prior to the Distribution Date but which,
after the Distribution, is in the possession of a member of another
Group; or
(ii) is generated or received after the Distribution Date but refers to or
relates to Privileged Information that was generated or received prior
to the Distribution Date.
(b) Production of Privileged Information. Upon receipt by a party or any
member of its Group of any subpoena, discovery or other request that arguably
calls for the production or disclosure of Privileged Information, or if a party
or any member of its Group obtains knowledge that any current or former employee
of such party or any member of its Group has received any subpoena, discovery or
other request that arguably calls for the production or disclosure of Privileged
Information, such party shall promptly notify the other party of the existence
of the request and shall provide the other party a reasonable opportunity to
review the information and to assert any rights it may have under this Section
6.07 or otherwise to prevent the production or disclosure of Privileged
Information. No party will (or will permit any member of its Group over which it
has direct or indirect legal or effective control to) produce or disclose any
information arguably covered by a Privilege under this Section 6.07 unless:
(i) the party has provided its express written consent to such production
or disclosure; or
(ii) a court of competent jurisdiction has entered an order which is not
then appealable or a final, non-appealable order finding that the
information is not entitled to protection under any applicable
privilege.
(c) No Waiver. The parties hereto understand and agree that the transfer of
any Books and Records or other information between any members of the GP Group
or the NPDC Group shall be made in reliance on the agreements of GP and NPDC, as
set forth in Section 6.04 and Section 6.07 hereof, to maintain the
confidentiality of Privileged Information and to assert and maintain all
applicable Privileges. The Books and Records being transferred pursuant to
Section 6.01 hereof, the access to information being granted pursuant to Section
6.02 hereof, the agreement to provide witnesses and individuals pursuant to
Section 6.05 hereof and the transfer of Privileged Information to either party
pursuant to this Agreement shall not be deemed a waiver of any Privilege that
has been or may be asserted under this Section or otherwise.
ARTICLE VII
INDEMNIFICATION
Section 7.01 Indemnification by GP. Except as otherwise specifically set
forth in any provision of this Agreement or of any Related Agreement, GP shall,
to the fullest extent permitted by Law, indemnify, defend and hold harmless the
NPDC Indemnified Parties from and against any and all Indemnifiable Losses of
the NPDC Indemnified Parties arising out of, by reason of or otherwise in
connection with either (i) the GP Liabilities, or (ii) the breach by GP of any
provision of this Agreement or any Related Agreement.
Section 7.02 Indemnification by NPDC. Except as otherwise specifically set
forth in any provision of this Agreement or of any Related Agreement, NPDC
shall, to the fullest extent permitted by Law, indemnify, defend and hold
harmless the GP Indemnified Parties from and against any and all Indemnifiable
Losses of the GP Indemnified Parties arising out of, by reason of or otherwise
in connection with either (i) the NPDC Liabilities, or (ii) the breach by NPDC
of any provision of this Agreement or any Related Agreement.
Section 7.03 Reductions for Insurance Proceeds and Other Recoveries. The
amount that any party (an "Indemnifying Party") is or may be required to pay to
19
any other Person (an "Indemnified Party") pursuant to Section 7.01 or Section
7.02, as applicable, shall be reduced (retroactively or prospectively) by any
Insurance Proceeds or other amounts actually recovered from third parties by or
on behalf of such Indemnified Party in respect of the related Indemnifiable
Losses (except that nothing herein shall be construed as requiring any
Indemnified Party in respect of any NPDC Securities Liability to file any claim
for insurance). The existence of a claim by an Indemnified Party for insurance
or against a third party in respect of any Indemnifiable Loss shall not,
however, delay any payment pursuant to the indemnification provisions contained
herein and otherwise determined to be due and owing by an Indemnified Party.
Rather the Indemnifying Party shall make payment in full of such amount so
determined to be due and owing by it against an assignment by the Indemnified
Party to the Indemnifying Party of the entire claim of the Indemnified Party for
such insurance or against such third party. Notwithstanding any other provisions
of this Agreement, it is the intention of the parties hereto that no insurer or
any other third party shall be (i) entitled to a benefit it would not be
entitled to receive in the absence of the foregoing indemnification provisions
or (ii) relieved of the responsibility to pay any claims for which it is
obligated. If an Indemnified Party shall have received the payment required by
this Agreement from an Indemnifying Party in respect of any Indemnifiable Losses
and shall subsequently actually receive Insurance Proceeds or other amounts in
respect of such Indemnifiable Losses, then such Indemnified Party shall hold
such Insurance Proceeds in trust for the benefit of such Indemnifying Party and
shall pay to such Indemnifying Party a sum equal to the amount of such Insurance
Proceeds or other amounts actually received, up to the aggregate amount of any
payments received from such Indemnifying Party pursuant to this Agreement in
respect of such Indemnifiable Losses.
Section 7.04 Procedures for Indemnification. Except as otherwise
specifically provided in any Related Agreement:
(a) Notice of Third Party Claims. If a claim or demand is made against an
Indemnified Party by any Person who is not a member of the GP Group or NPDC
Group (a "Third Party Claim") as to which such Indemnified Party is entitled to
indemnification pursuant to this Agreement, such Indemnified Party shall notify
the Indemnifying Party in writing, and in reasonable detail, of the Third Party
Claim promptly (and in any event within 15 business days) after receipt by such
Indemnified Party of written notice of the Third Party Claim; provided, however,
that failure to give such notification shall not affect the Indemnified Party's
right to indemnification hereunder except to the extent the Indemnifying Party
shall have been actually prejudiced as a result of such failure (except that the
Indemnifying Party shall not be liable for any expenses incurred during the
period in which the Indemnified Party failed to give such notice). Thereafter,
the Indemnified Party shall deliver to the Indemnifying Party, promptly (and in
any event within 15 business days) after the Indemnified Party's receipt
thereof, copies of all notices and documents (including court papers) received
by the Indemnified Party relating to the Third Party Claim.
(b) Legal Defense of Third Party Claims. If a Third Party Claim is made
against an Indemnified Party, the Indemnifying Party shall be entitled to
participate in the defense thereof and, if it so chooses, to assume the defense
thereof with counsel selected by the Indemnifying Party, which counsel shall be
reasonably satisfactory to the Indemnified Party. Should the Indemnifying Party
so elect to assume the defense of a Third Party Claim, the Indemnifying Party
shall not be liable to the Indemnified Party for legal or other expenses
subsequently incurred by the Indemnified Party in connection with the defense
thereof. If the Indemnifying Party assumes such defense, the Indemnified Party
shall have the right to participate in the defense thereof and to employ
counsel, at its own expense, separate from the counsel employed by the
Indemnifying Party, it being understood that the Indemnifying Party shall
control such defense. The Indemnifying Party shall be liable for the reasonable
fees and expenses of counsel employed by the Indemnified Party for any period
during which the Indemnifying Party has failed to assume the defense of the
Third Party Claim (other than during the period prior to the time the
Indemnified Party shall have given notice of the Third Party Claim as provided
above). If the Indemnifying Party so elects to assume the defense of any Third
Party Claim, all of the Indemnified Parties shall cooperate with the
Indemnifying Party in the defense or prosecution thereof. Notwithstanding the
foregoing:
(i) the Indemnifying Party shall not be entitled to assume the
defense of any Third Party Claim (and shall be liable to the
Indemnified Party for the reasonable fees and expenses of
counsel incurred by the Indemnified Party in defending such
Third Party Claim) if the Third Party Claim seeks an order,
injunction or other equitable relief or relief for other than
money damages against the Indemnified Party which the
Indemnified Party reasonably determines, after conferring with
its counsel, cannot be separated from any related claim for
money damages; provided, however, that if such equitable
relief or other relief portion of the Third Party Claim can be
so separated from that for money damages, the Indemnifying
Party shall be entitled to assume the defense of the portion
relating to money damages;
(ii) an Indemnifying Party shall not be entitled to assume the
defense of any Third Party Claim (and shall be liable for the
reasonable fees and expenses of counsel incurred by the
Indemnified Party in defending such Third Party Claim) if, in
the Indemnified Party's reasonable judgment, a conflict of
interest between such Indemnified Party and such Indemnifying
Party exists in respect of such Third Party Claim; and
(iii) if at any time after assuming the defense of a Third Party
Claim an Indemnifying Party shall fail to prosecute or shall
withdraw from the defense of such Third Party Claim, the
Indemnified Party shall be entitled to resume the defense
thereof and the Indemnifying Party shall be liable for the
reasonable fees and expenses of counsel incurred by the
Indemnified Party in such defense;
provided that the Indemnifying Party shall not be liable for the reasonable
fees and expenses of more than one law firm (and one local counsel if necessary)
for all Indemnified Parties with respect to any Third Party Claim or related
Third Party Claims.
(c) Settlement of Third Party Claims. Except as otherwise provided below in
this Section 7.05(c), or as otherwise specifically provided in any Related
Agreement,
(i) if the Indemnifying Party has assumed the defense of
any Third Party Claim, then
(A) in no event will the Indemnified Party admit any liability with respect
to, or settle, compromise or discharge, any Third Party Claim without the
Indemnifying Party's prior written consent; provided, however, that the
Indemnified Party shall have the right to settle, compromise or discharge such
Third Party Claim without the consent of the Indemnifying Party if the
Indemnified Party releases the Indemnifying Party from its indemnification
obligation hereunder with respect to such Third Party Claim and such settlement,
compromise or discharge would not otherwise adversely affect the Indemnifying
Party, and
(B) the Indemnified Party will agree to any settlement, compromise or
discharge of a Third Party Claim that the Indemnifying Party may recommend and
that by its terms obligates the Indemnifying Party to pay the full amount of the
liability in connection with such Third Party Claim and releases the Indemnified
Party completely in connection with such Third Party Claim and that would not
otherwise adversely affect the Indemnified Party;
provided, however, that the Indemnified Party may refuse to agree to any
such settlement, compromise or discharge if the Indemnified Party agrees
that the Indemnifying Party's indemnification obligation with respect to
such Third Party Claim shall not exceed the amount that would be required
to be paid by or on behalf of the Indemnifying Party in connection with
such settlement, compromise or discharge, in which case the Indemnified
Party shall thereafter control the defense of such Third Party Claim.
(ii) if the Indemnifying Party has not assumed the defense
of a Third Party Claim then in no event shall the
Indemnified Party settle, compromise or discharge
such Third Party Claim without providing prior
written notice to the Indemnifying Party, which shall
have the option within 15 business days following
receipt of such notice to:
(A) approve and agree to pay the settlement,
(B) approve the amount of the settlement, reserving the right to contest
the Indemnified Party's right to indemnity pursuant to this Agreement,
(C) disapprove the settlement and assume in writing all past and future
responsibility for such Third Party Claim (including all of Indemnified Party's
prior expenditures in connection therewith), or
(D) disapprove the settlement and continue to refrain from participation in
the defense of such Third Party Claim, in which event the Indemnifying Party
shall have no further right to contest the amount or reasonableness of the
settlement if the Indemnified Party elects to proceed therewith.
In the event the Indemnifying Party does not respond to such
written notice from the Indemnified Party within such fifteen
15 business-day period, the Indemnifying Party shall be deemed
to have elected option (A).
(d) Other Claims. Any claim on account of an Indemnifiable Loss that does
not result from a Third Party Claim shall be asserted by written notice given by
the Indemnified Party to the applicable Indemnifying Party. Such Indemnifying
Party shall have a period of 15 business days after the receipt of such notice
within which to respond thereto. If such Indemnifying Party does not respond
within such 15 business-day period or rejects such claim in whole or in part,
such Indemnified Party shall be free to pursue such remedies as may be available
to such party under applicable Law or under this Agreement.
Section 7.05 Indemnification Payments. Indemnification required by this
Article VII shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or loss,
liability, claim, damage or expense is incurred.
Section 7.06 Other Adjustments. If the amount of any Indemnifiable Losses
shall, at any time subsequent to any indemnification payment made by the
Indemnifying Party pursuant to this Article VII, be reduced by recovery,
settlement or otherwise, the amount of such reduction, less any expenses
incurred in connection therewith, shall promptly be repaid by the Indemnified
Party to the Indemnifying Party, up to the aggregate amount of any payments
received from such Indemnifying Party pursuant to this Agreement in respect of
such Indemnifiable Losses.
Section 7.07 Obligations Absolute. The foregoing contractual obligations of
indemnification set forth in this Article VII shall:
(i) also apply to any and all Third Party Claims that allege that
any Indemnified Party is independently, directly, vicariously
or jointly and severally liable to such third party;
(ii) to the extent permitted by applicable law, apply even if the
Indemnified Party is partially negligent or otherwise
partially culpable or at fault, whether or not such liability
arises under any doctrine of strict liability; and
(iii) be in addition to any liability or obligation that an
Indemnifying Party may have other than pursuant to this
Agreement.
Section 7.08 Survival of Indemnities. The obligations of GP and NPDC under
this Article VII shall survive the sale or other transfer by any of them of any
assets or businesses or the assignment by them of any Liabilities, with respect
to any Indemnifiable Loss of any Indemnified Party related to such assets,
businesses or Liabilities.
Section 7.09 Remedies Cumulative. The remedies provided in this Article VII
shall be cumulative and shall not preclude assertion by any Indemnified Party of
any other rights or the seeking of any and all other remedies against any
Indemnifying Party.
Section 7.10 Cooperation of the Parties With Respect to Actions and Third
Party Claims.
(a) Identification of Party in Interest. Any party to this Agreement that
has responsibility for an Action or Third Party Claim shall identify
itself as the true party in interest with respect to such Action or
Third Party Claim and shall use its reasonable efforts to obtain the
dismissal of any other party to this Agreement from such Action or
Third Party Claim.
(b) Exchange of Information. In connection with the handling of current or
future Actions or Third Party Claims, the parties may determine that it
is in their mutual interest to exchange privileged or confidential
information. If so, the parties agree to discuss whether it is in their
mutual interest to enter into a joint defense agreement or information
exchange agreement to maintain the confidentiality of their
communications and to permit them to maintain the confidentiality of
proprietary information or information that is otherwise confidential
or subject to an applicable privilege, including but not limited to the
attorney-client, work product, executive, deliberative process, or
self-evaluation privileges.
Section 7.11 Contribution. To the extent that any indemnification provided
for under Section 7.01 or Section 7.02 is unavailable to an Indemnified Party,
then the Indemnifying Party under such Section, in lieu of indemnifying such
Indemnified Party thereunder, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such Indemnifiable Losses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Indemnifying Party on the one hand and the Indemnified Party on the other hand
from the transaction or other matter that resulted in the Indemnifiable Losses
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Indemnifying Party on the one hand and of the Indemnified Party on the other
hand in connection with the action, inaction, statements or omissions that
resulted in such Indemnifiable Losses as well as any other relevant equitable
considerations.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Complete Agreement; Construction. This Agreement, including
the Exhibits and Schedules hereto, and the Related Agreements shall constitute
the entire agreement between the parties with respect to the subject matter
hereof and shall supersede all previous negotiations, commitments and writings
with respect to such subject matter. In the event of any inconsistency between
this Agreement and any Schedule or Exhibit hereto, the Schedule or Exhibit, as
the case may be, shall prevail. Notwithstanding any other provisions in this
Agreement to the contrary, in the event and to the extent that there shall be a
conflict between the provisions of this Agreement and the provisions of any
Related Agreement, such Related Agreement shall control.
Section 8.02 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but both of which together shall be
constitute one and the same agreement.
Section 8.03 Survival of Agreements. Except as otherwise expressly provided
herein, all covenants and agreements of the parties contained in this Agreement
shall survive the Distribution Date.
Section 8.04 Responsibility for Expenses.
(a) Expenses Incurred on or Prior to Distribution Date. Subject to the
provisions of Section 8.04(c) below and except as otherwise set forth in this
Agreement or any Related Agreement, all costs and expenses incurred on or prior
to the Distribution Date (whether or not paid on or prior to the Distribution
Date) in connection with the preparation, execution, delivery and implementation
of this Agreement and any Related Agreement, the Information Statements and the
Distribution, and the consummation of the transactions contemplated hereby and
thereby, shall be charged to and paid by GP; provided, however, NPDC shall be
solely responsible and liable for any expenses, fees, or other costs that it
separately and directly incurs in connection with any of the transactions
contemplated under this Agreement or any of the Related Agreements.
(b) Expenses Incurred or Accrued After Distribution Date. Subject to the
provisions of Section 8.04(c) below and except as otherwise set forth in this
Agreement or any Related Agreement, each party shall bear its own costs and
expenses incurred after the Distribution Date.
(c) Environmental Expenses. Notwithstanding the provisions of Section
8.04(a) and Section 8.04(b) above, expenses and other costs incurred in
connection with compliance with any Environmental Laws applicable to the
transactions contemplated hereby shall be paid by the party that after the
Distribution Date will, or that this Agreement contemplates will, own the assets
or operate the business subject to such Environmental Laws.
Section 8.05 Notices. All notices and other communications to a party
hereunder shall be in writing and hand delivered, delivered via overnight
delivery service with proof of delivery, mailed by registered or certified mail
(return receipt requested), or sent by any means of electronic message
transmission with delivery confirmed (by voice or otherwise) to such party (and
will be deemed given on the date on which the notice is received by such party)
at the address for such party set forth below (or at such other address for the
party as the party shall, from time to time, specify by like notice to the other
parties):
If to GP, at: GP Strategies Corporation
000 Xxxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Fax: (000) 000-0000
If to NPDC, at: National Patent Development Corporation
000 Xxxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
Attention: Xxxxx XxXxxxxx
Fax: (000) 000-0000
Section 8.06 Waivers. The failure of any party hereto to require strict
performance by any other party of any provision in this Agreement will not waive
or diminish that party's right to demand strict performance thereafter of that
or any other provision hereof.
Section 8.07 Amendments. Subject to the terms of Section 8.10 hereof, this
Agreement may not be modified or amended except by an agreement in writing
signed by the parties hereto.
Section 8.08 Assignment. This Agreement shall be assignable in whole in
connection with a merger or consolidation or the sale of all or substantially
all the assets of a party hereto so long as the resulting, surviving or
transferee entity assumes all the obligations of the relevant party hereto by
operation of law or pursuant to an agreement in form and substance reasonably
satisfactory to the other parties to this Agreement. Otherwise this Agreement
shall not be assignable, in whole or in part, directly or indirectly, by any
party hereto without the prior written consent of the others, and any attempt to
assign any rights or obligations arising under this Agreement without such
consent shall be void.
Section 8.09 Successors and Assigns. The provisions of this Agreement shall
be binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and permitted assigns.
Section 8.10 Termination. This Agreement may be terminated and the
Distribution may be amended, modified or abandoned at any time prior to the
Distribution by and in the sole discretion of GP without the approval of NPDC or
the stockholders of GP. In the event of such termination, no party shall have
any liability of any kind to any other party. After the Distribution, this
Agreement may not be terminated except by an agreement in writing signed by the
parties hereto; provided, however, that Article VIII shall not be terminated or
amended after the Distribution in respect of the third party beneficiaries
thereto without the consent of such persons.
Section 8.11 Third Party Beneficiaries. Except as provided in Article VII
hereof (relating to Indemnified Parties), this Agreement is solely for the
benefit of the parties hereto, and the members of their respective Groups and
Affiliates and should not be deemed to confer upon third parties any remedy,
claim, liability, right of reimbursement, claim of action or other right not
existing without reference to this Agreement.
Section 8.12 Attorney Fees. A party in breach of this Agreement shall, on
demand, indemnify and hold harmless the other parties hereto for and against all
out-of-pocket expenses, including, without limitation, reasonable legal fees,
incurred by such other party by reason of the enforcement and protection of its
rights under this Agreement. The payment of such expenses is in addition to any
other relief to which such other party may be entitled hereunder or otherwise.
Section 8.13 Title and Headings. Titles and headings to Sections herein are
inserted for the convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.
Section 8.14 Exhibits and Schedules. The Exhibits and Schedules attached
hereto shall be construed with and as an integral part of this Agreement to the
same extent as if the same had been set forth verbatim herein.
Section 8.15 Governing Law. All questions or disputes concerning the
construction, validity and interpretation of this Agreement and the Schedules
and Exhibits hereto shall be governed by the laws of the State of New York,
without giving effect to conflict of laws.
Section 8.16 Severability. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby. The parties shall endeavor in good faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions, the economic
effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
Section 8.17 Subsidiaries. Each of the parties hereto shall cause to be
performed, and hereby guarantee the performance of, all actions, agreements and
obligations set forth herein to be performed by any Subsidiary of such party
which is contemplated to be a Subsidiary of such party on and after the
Distribution Date.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
GP STRATEGIES CORPORATION
By:
--------------------------------
Name:
Title:
NATIONAL PATENT DEVELOPMENT CORPORATION
By:
--------------------------------
Name:
Title:
Exhibit A
Corporate Restructuring Transactions
1. GP will transfer 1,000,000 of its shares of the common stock of
Millennium Cell Inc. ("Millennium Cell") and its investment in
Valera Pharmaceuticals, Inc. ("Valera") to MXL Industries, Inc.
("MXL") in repayment of approximately $10,000,000 of debt owed by
GP to MXL.
2. GP will transfer to NPDC $1,875,000 of the $7,500,000 received for
the sale of certain notes and warrants to certain Gabelli funds.
3. In exchange for all of the common stock of NPDC, GP will transfer
to NPDC (i) all of the MXL stock held by GP, (ii) all of its shares
of the capital stock of Five Star Products, Inc., (iii) all of its
remaining shares of stock of Millennium Cell, (iv) all of its
shares of the capital stock of Avenue Entertainment Group, Inc.,
(v) all of its shares of the capital stock of JL Distributors,
Inc., (vi) an option to acquire 500,000 shares of the common stock
of Red Storm Scientific, Inc., (vii) the right to receive the first
$5 million of any proceeds (net of certain litigation expenses),
and 50% of any proceeds (net of certain litigation expenses) in
excess of $15 million, received with respect to an action by GP
alleging that MCI Communications Corporation, its Systemhouse
subsidiaries, and Electronic Data Systems Corporation, as successor
to Systemhouse, committed fraud in connection with GP's 1998
acquisition of Learning Technologies from them, (viii) one thousand
acres of undeveloped real property located in Pawling, New York,
(ix) all of the common stock of Chestnut Hill Reservoir Company,
and (x) an option to acquire up to $5,000,000 of the series B
preferred stock of Valera at a price of $.725 per share through
March 31, 2004 (collectively, the "Transferred Assets").
4. In exchange for additional MXL stock, NPDC will transfer to MXL the
Transferred Assets (other than the MXL stock).
Exhibit B
GP Business Pro Forma Balance Sheet
Exhibit C
GP Subsidiaries
[Add]
Exhibits D-1 and D-2
Management Agreements
Exhibit E
NPDC Business Pro Forma Balance Sheet
Exhibit F
NPDC Subsidiaries
[Add]
Exhibit G
Tax Sharing Agreement
Exhibit H
NPDC Amended and Restated Certificate of Incorporation
Exhibit I
NPDC Bylaws
