Exhibit 2.4
FORM OF
DISTRIBUTION AGREEMENT
BETWEEN
ACX TECHNOLOGIES, INC.
AND
COORSTEK, INC.
December 1, 1999
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS 1
ARTICLE II PRE-DISTRIBUTION TRANSACTIONS 5
2.01 Transferred Assets and Assumed Liabilities 5
2.02 Financing Arrangements 5
2.03 Related Agreements 6
2.04 ACX Approval 6
2.05 Securities Law Actions 6
ARTICLE III ASSUMPTION AND RETENTION OF LIABILITIES 6
3.01 Assumed Liabilities 6
3.02 Retained Liabilities 7
ARTICLE IV THE DISTRIBUTION 7
4.01 The Distribution 7
4.02 Fractional Shares 7
4.03 ACX Board Action 7
ARTICLE V SURVIVAL, INDEMNIFICATION, CLAIMS AND OTHER MATTERS 8
5.01 Survival of Agreements 8
5.02 Indemnification 8
5.03 Procedure for Indemnification 9
5.04 Direct Claims 10
5.05 Adjustment of Indemnifiable Losses 11
5.06 No Third Party Beneficiaries 12
5.07 Joint Defense Agreements 12
5.08 Special Notices 12
ARTICLE VI CERTAIN ADDITIONAL MATTERS 13
6.01 Construction of Agreements 13
6.02 No Representations or Warranties; Exceptions 13
6.03 Further Assurances 14
6.04 Consents, etc. 14
6.05 Officers and Directors 14
6.06 Existing Intercompany Arrangements 14
6.07 Intercompany Accounts 14
6.08 Transfer Taxes 14
6.09 Proration of Taxes, Lease and Utility Payments 15
ARTICLE VII ACCESS TO INFORMATION AND SERVICES 15
7.01 Provision of Corporate Records 15
7.02 Access to Information 15
7.03 Production of Witnesses and Individuals 16
7.04 Retention of Records 16
7.05 Confidentiality 16
7.06 Privileged Matters 17
ARTICLE VIII INSURANCE 18
8.01 General 18
8.02 Certain Insured Claims 19
ARTICLE IX DISPUTE RESOLUTION 19
9.01 Initiation 19
9.02 Mediation 19
9.03 Arbitration 20
9.04 Cost of Arbitration 20
ARTICLE X MISCELLANEOUS 20
10.01 Complete Agreement 20
10.02 Expenses 21
10.03 Governing Law 21
10.04 Notices 21
10.05 Amendment and Modification 21
10.06 Termination 21
10.07 Successors and Assigns 22
10.08 No Third Party Beneficiaries 22
10.09 Counterparts 22
10.10 Interpretation 22
10.11 Schedules, Etc. 22
10.12 Legal Enforceability 22
SCHEDULE I - TRANSFERRED ASSETS AND ASSUMED LIABILITIES
SCHEDULE II - INTERCOMPANY DEBT
EXHIBIT A - FORM OF PROMISSORY NOTE
EXHIBIT B - FORM OF ENVIRONMENTAL RESPONSIBILITY
AGREEMENT
EXHIBIT C - FORM OF TRANSITIONAL SERVICES AGREEMENT
EXHIBIT D - FORM OF TAX SHARING AGREEMENT
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT (this "Distribution Agreement"
or this "Agreement"), dated as of December 1, 1999, is between
ACX Technologies, Inc., a Colorado corporation ("ACX"), and
COORSTEK, INC., a Colorado corporation and a wholly-owned
subsidiary of ACX (together with its subsidiaries, "CTI").
RECITALS
1. ACX conducts its business through its subsidiaries,
Graphic Packaging Holdings Inc. and its subsidiaries, ACX
International Sales Corp. and CTI.
2. The Board of Directors of ACX (the "Board") has
authorized a plan that, if completed as contemplated herein,
will separate CTI from ACX's business by distributing the CTI
common stock (the "CTI Common Stock"), to the holders of
the common stock of ACX (the "ACX Common Stock"), on a pro rata
basis.
3. ACX and CTI have determined that it is necessary and
desirable to establish the principal corporate transactions
required to separate CTI's business from ACX and distribute the
CTI Common Stock, and to agree on certain other matters, all as
provided in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained herein, ACX and CTI
agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, capitalized terms shall have the
following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
ACX Group: ACX and its Affiliates immediately following the
Distribution.
Action: any action, claim, suit, arbitration, inquiry,
subpoena, discovery request, proceeding or investigation by or
before any court or grand jury, any governmental or other
regulatory or administrative agency or commission or any
arbitration tribunal.
Affiliate: with respect to any specified person, a person
that, directly or indirectly, through one or more intermediaries,
controls, or is controlled by, or is under common control with,
such specified person; provided that ACX (and its subsidiaries)
shall not be deemed to be Affiliates of CTI (and its
subsidiaries), and vice versa, for purposes of this Agreement;
further provided, that neither ACX nor CTI (and their respective
subsidiaries) shall be deemed to be Affiliates of Adolph Coors
Company (and its subsidiaries), or vice versa, for purposes of
this Agreement.
Agent: Norwest Bank Minnesota, NA, the distribution agent
appointed by ACX to distribute the CTI Common Stock.
Assumed Liabilities: collectively, the Liabilities and
other obligations of ACX related to CTI that are described or
listed on Schedule 1 hereto.
Bill of Sale, Assignment and Assumption Agreements: one or
more bills of sale, assignments and assumption agreements to be
entered into between ACX and CTI on or after the date of this
Distribution Agreement pursuant to which ACX transfers the
Transferred Assets to CTI and CTI assumes the Assumed
Liabilities, as and when contemplated by Section 2.01 of this
Distribution Agreement.
Board: as defined in the Recitals to this Agreement.
Books and Records: the books and records (including
computerized books and records) of ACX or its Affiliates that
relate principally to CTI, all books and records relating to
Employees; and all files relating to any Action being assumed by
CTI as part of the Assumed Liabilities or any Action in which, as
between the parties hereto or their Affiliates, CTI is the
principal party in interest.
CTI Group: CTI and its Affiliates immediately following the
Distribution.
Code: the Internal Revenue Code of 1986, as amended.
Conveyancing and Assumption Instruments: collectively, the
Bill of Sale, Assignment and Assumption Agreements and any other
agreements, instruments and other documents to be entered into in
order to effect the transfer to CTI of the Transferred Assets and
the assumption by CTI of the Assumed Liabilities.
Distribution: the distribution as a dividend to holders of
ACX Common Stock of CTI Common Stock on the basis provided in
Article IV hereof, which shall be made on the date specified by
the Board.
Distribution Date: the date of the Distribution as
determined by the Board.
Distribution Ratio: as determined by the Board, the ratio
of the number of shares (or fraction thereof) of CTI Common Stock
to be distributed to the holders of each share of ACX Common Stock
on the Record Date.
Dividend: the special cash dividend in an amount equal to
$200 million less the Intercompany Debt to be paid by CTI to ACX
on the Distribution Date.
Employee: any employee of ACX or any of its subsidiaries
other than CTI who is assigned to CTI on or prior to the
Distribution Date, including but not limited to any such employee
who was laid off, on leave of absence or on disability leave as
of the Distribution Date.
Environmental Responsibility Agreement: the agreement,
substantially in the form of Exhibit B hereto, pursuant to which
ACX and CTI will provide for responsibility for potential
environmental matters.
Exchange Act: the Securities Exchange Act of 1934, as
amended.
Final Determination: as defined in the Tax Sharing
Agreement.
Form 10: the registration statement on Form 10, as amended
from time to time, filed by CTI with the SEC to register the CTI
Common Stock pursuant to the Exchange Act.
Indemnifiable Loss Deduction: as defined in
Section 5.05(b).
Indemnifiable Losses: with respect to any claim by an
Indemnitee for indemnification authorized pursuant to Article V
hereof, any and all losses, liabilities, claims, damages,
obligations, payments, costs and expenses (including, without
limitation, the costs and expenses of any and all Actions,
demands, assessments, judgments, settlements and compromises
relating thereto and reasonable attorneys' fees and expenses in
connection therewith) suffered by such Indemnitee with respect to
such claim.
Indemnifying Party: any party who is required to pay any
other person pursuant to Article V hereof.
Indemnity Return: as defined in Section 5.05.
Indemnitee: any party who is entitled to receive payment
from an Indemnifying Party pursuant to Article V hereof.
Indemnity Payment: the amount an Indemnifying Party is
required to pay an Indemnitee pursuant to Article V hereof.
Information Statement: the definitive information
statement, substantially in compliance with Schedule 14C under
the Exchange Act, to be mailed to the holders of ACX Common Stock
in connection with the Distribution.
Insurance Effective Time: as defined in Section 8.03(a).
Insurance Program: collectively, the series of policies as
of the date of this Agreement pursuant to which various insurance
carriers provide or have provided insurance coverage to ACX and
its Affiliates.
Intercompany Debt: the aggregate intercompany debt owed to
ACX by CTI set forth on Schedule II hereto. In no event shall
trade payables incurred in the ordinary course of business
between ACX and CTI or their Affiliates be considered Intercompany
Debt for purposes of this definition.
Intercompany Debt Methodology: the financial methodology
heretofore approved by the Board to split the consolidated debt
of ACX between ACX and CTI prior to the Distribution.
Liabilities: any and all debts, liabilities and
obligations, whether accrued, contingent or reflected on a
balance sheet, known or unknown, including, without limitation,
those arising under any law, rule, regulation, Action, order or
consent decree of any governmental entity or any judgment of any
court of any kind or award of any arbitrator of any kind, and
those arising under any contract, commitment or undertaking.
New Debt: shall mean at least $205 million principal amount
of debt to be incurred by CTI prior to the Distribution Date.
Notice: as defined in Section 9.01.
Policy Termination Date: as defined in Section 8.01(a).
Privilege: as defined in Section 7.06(a).
Privileged Information: as defined in Section 7.06(a).
Promissory Note: as defined in Section 2.02.
Record Date: the date determined by the Board as the record
date for the Distribution.
Recovery: the amount obtained pursuant to a claim under an
insurance policy in the Insurance Program.
Related Agreements: the Environmental Responsibility
Agreement, Transitional Services Agreement, Tax Sharing
Agreement, any joint defense agreement, the Conveyancing and
Assumption Instruments, all other agreements referred to in
Section 2.04 and any other agreement entered into by ACX or one
or more of its Affiliates, and CTI and one or more of its
Affiliates pursuant to this Agreement or otherwise in
connection with the Distribution.
Restated Tax Saving Amount: as defined in Section 5.05(b).
Retained Liabilities: collectively, all Liabilities and
obligations of ACX that are not Assumed Liabilities.
SEC: the Securities and Exchange Commission.
Tax Ruling: the ruling by the Internal Revenue Service that
the Distribution will be tax free to ACX and ACX stockholders
under Section 355 of the Code.
Tax Saving Amount: as defined in Section 5.05.
Tax Sharing Agreement: the agreement substantially in the
form of Exhibit D hereto, pursuant to which ACX and CTI will
provide for certain tax matters.
Third Party Claim: as defined in Section 5.03(b).
Transferred Assets: Collectively, all assets of ACX being
transferred to CTI that are described or listed on Schedule I
hereto.
Transfer Taxes: as defined in Section 6.08.
Transitional Services Agreement: the agreement,
substantially in the form of Exhibit C hereto, pursuant to which
ACX and CTI, or their Affiliates, will provide certain
transitional services to each other.
ARTICLE II
PRE-DISTRIBUTION TRANSACTIONS
Section 2.01 Transferred Assets and Assumed Liabilities.
Certain Transferred Assets to be transferred and certain Assumed
Liabilities to be assumed pursuant to this Agreement are to be
transferred and assumed on or before December 15, 1999. Certain
other Transferred Assets to be transferred and Assumed
Liabilities to be assumed are to be transferred and assumed as of
the close of business on the Distribution Date. Schedule I
hereto sets forth the Transferred Assets and Assumed Liabilities
and their respective transfer and assumption dates. ACX and CTI
agree to execute such Bill of Sale, Assignment and Assumption
Agreements as necessary or desirable to effect such transfers and
assumptions in accordance with this Agreement and such Schedule.
Section 2.02 Financing Arrangements. ACX and CTI shall
use their respective best efforts to cause the following to occur
on or before the close of business on the Distribution Date:
(a) the incurrence by CTI of the New Debt;
(b) the repayment by CTI from the proceeds of the New
Debt of the Intercompany Debt; and
(c) the payment by CTI of the Dividend to ACX from the
proceeds of the New Debt.
ACX and CTI agree that if CTI shall not have received the
proceeds of the New Debt on or before the close of business on
the Distribution Date, then CTI shall make the payments in
subsections (b) and (c) above by issuing to ACX on the
Distribution Date a promissory note substantially in the form of
Exhibit A hereto, which shall be due on January 4, 1999 subject to
extension to a later date by mutual agreement of the parties. ACX
and CTI further agree that CTI shall indemnify ACX pursuant to
Article V for any payment or fee ACX is required to pay or any
other expense ACX may incur in respect of the New Debt.
Section 2.03 Related Agreements. ACX and CTI shall use
their best efforts to cause, on or before the Distribution Date,
the execution and delivery by ACX and CTI, or their respective
Affiliates, of the Transitional Services Agreement, Environmental
Responsibility Agreement, any Joint Defense Agreement, Tax
Sharing Agreement, and other agreements deemed necessary or
desirable by the applicable parties to establish and govern their
post-Distribution relationships.
Section 2.04 ACX Approval. ACX, as the sole shareholder
of CTI, shall approve or ratify any actions that are reasonably
necessary or desirable to be taken by CTI to effectuate the
transactions contemplated by this Agreement in a manner
consistent with the terms of this Agreement, including, without
limitation, approval of appropriate equity or other plans,
agreements and arrangements for Employees and non-Employee
members of CTI's Board of Directors.
Section 2.05 Securities Law Actions. ACX and CTI shall
have prepared and filed with the SEC, the Form 10, which shall
include or incorporate by reference the Information Statement
setting forth appropriate disclosure concerning CTI, the
Distribution and any other appropriate matters required to be
stated therein. ACX and CTI shall update, supplement and amend
this information and shall use reasonable efforts to cause the
Form 10 to become effective under the Exchange Act, and
thereafter ACX shall mail the Information Statement to holders of
ACX Common Stock as of the Record Date.
(b) ACX and CTI 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
connection with the Distribution.
(c) CTI shall prepare and file an application and
shall pursue inclusion of its Common Stock in the Nasdaq National
Market System.
ARTICLE III
ASSUMPTION AND RETENTION OF LIABILITIES
Section 3.01 Assumed Liabilities. Upon the terms and
subject to the conditions set forth in this Agreement and the
Bill of Sale, Assignment and Assumption Agreements, CTI hereby
agrees with ACX to assume, pay, perform and discharge in due
course any and all Assumed Liabilities.
Section 3.02 Retained Liabilities. Upon the terms and
subject to the conditions set forth in this Agreement and the
Bill of Sale, Assignment and Assumption Agreements, ACX hereby
agrees with CTI to pay, perform and discharge in due course any
and all Retained Liabilities.
ARTICLE IV
THE DISTRIBUTION
Section 4.01 The Distribution. Prior to the Distribution
Date, ACX shall deliver to CTI the certificate for 200,000
shares of CTI Common Stock held by ACX and representing all of
the outstanding CTI Common Stock, and CTI shall cancel such
certificate and issue and deliver to ACX in exchange therefor
an omnibus stock certificate representing that number of shares
of CTI Common Stock equal to the product of (i) the number of
shares of ACX Common Stock outstanding on the Record Date
multiplied by (ii) the Distribution Ratio. ACX shall then
deliver such omnibus certificate to the Agent and shall
instruct the Agent to distribute, beginning on the Distribution
Date, to holders of ACX Common Stock on the Record Date, the
appropriate number of shares of CTI Common Stock based on the
Distribution Ratio, and, as soon thereafter as reasonably
practicable, cash, if applicable, in lieu of fractional shares
obtained in the manner provided in Section 4.02 hereof. CTI
agrees to provide to the Agent sufficient certificates in such
denominations as the Agent may request in order to effect the
Distribution. All of the shares of CTI Common Stock issued in
the Distribution shall be fully paid, nonassessable and free of
preemptive rights. ACX shareholders shall not be required to pay
cash or other consideration for the CTI Common Stock received in
the Distribution.
Section 4.02 Fractional Shares. No certificate or scrip
representing fractional shares of CTI Common Stock shall be
issued as part of the Distribution. In lieu of receiving
fractional shares, each holder of ACX Common Stock who would
otherwise be entitled to receive a fractional share of CTI Common
Stock pursuant to the Distribution will receive cash for such
fractional share. ACX shall instruct the Agent to determine the
number of whole shares and fractional shares of CTI Common Stock
allocable to each holder of record of ACX Common Stock on the
Record Date, to aggregate all such fractional shares into whole
shares and sell the whole shares obtained thereby in the open
market at then prevailing prices on behalf of holders who
otherwise would be entitled to receive fractional share interests
and to distribute to each such holder such holder's ratable share
of the total proceeds (net of total selling expenses) of such
sale; provided however that the Agent shall have sole discretion
to determine when, how, through which broker-dealer and at what
price to make its sales; further provided that the broker-dealer
shall not be an affiliate of ACX or CTI.
Section 4.03 ACX Board Action.
(a) The Board, in its discretion, shall establish the
Record Date, the Distribution Date, the Distribution Ratio and
all appropriate procedures in connection with the Distribution.
(b) In its sole discretion for any reason, (including
failure to receive confirmation (if requested) of the Tax Ruling)
the Board may refuse to declare the Distribution; and after the
declaration and until the Distribution, the Board may postpone or
rescind the Distribution. In any event, the Board shall refuse
to declare the Distribution until and unless the following
conditions have been satisfied:
(i) the Tax Ruling shall have been obtained and
shall continue to be in effect;
(ii) CTI Common Stock shall have been approved for
inclusion in the Nasdaq National Market.
ARTICLE V
SURVIVAL, INDEMNIFICATION, CLAIMS
AND OTHER MATTERS
Section 5.01 Survival of Agreements.
(a) The obligations of CTI with respect to the Assumed
Liabilities and the obligations of ACX with respect to the
Retained Liabilities, and the related indemnification rights
under this Agreement, shall survive indefinitely. Except as
specifically provided for herein or in any Related Agreement, all
other obligations of ACX and CTI shall terminate and be of no
further force and effect on the tenth anniversary of the
Distribution Date.
(b) The obligations of ACX and CTI under this
Agreement shall survive the sale or other transfer by either of
them of any assets or businesses or the assignment by either of
them of any Liabilities. To the extent that ACX transfers any of
the Retained Liabilities (except for such amounts of Retained
Liabilities that are not material individually or in the
aggregate), ACX shall cause the transferee of such Retained
Liabilities to assume specifically its obligations with respect
thereto under this Agreement and to fulfill its obligations
related to such Retained Liabilities. To the extent that CTI
transfers any of the Assumed Liabilities (except for such amounts
of Assumed Liabilities that are not material individually or in
the aggregate), CTI shall cause the transferee of such Assumed
Liabilities to assume specifically its obligations with respect
thereto under this Agreement and to fulfill its obligations
related to such Assumed Liabilities. No such transfer shall
relieve either ACX or CTI from its respective obligations under
this Agreement or the Related Agreements.
Section 5.02 Indemnification.
(a) ACX shall indemnify, defend and hold harmless the
CTI Group, and each of their respective directors, officers,
employees and agents from and against any and all Indemnifiable
Losses incurred or suffered by the CTI Group in connection with
any Action or threatened Action and arising out of or due to,
directly or indirectly, (i) any of the Retained Liabilities, or
(ii) any failure to perform, or violation of, any provision of
this Agreement or any Related Agreement that is to be performed
or complied with by ACX or its Affiliate.
(b) CTI shall indemnify, defend and hold harmless the
ACX Group, and each of their respective directors, officers,
employees and agents from and against any and all Indemnifiable
Losses incurred or suffered by the ACX Group in connection with
any Action or threatened Action and arising out of or due to,
directly or indirectly, (i) any of the Assumed Liabilities, (ii)
any payment, fee or other expense incurred by ACX in respect of
the New Debt, or (iii) any failure to perform, or violation of,
any provision of this Agreement or any Related Agreement that is
to be performed or complied with by CTI or its Affiliates.
Section 5.03 Procedure for Indemnification.
(a) The following procedures shall apply to any claim
for indemnification made by the ACX Group or the CTI Group
pursuant to the indemnities provided in Section 5.02 of this
Agreement and pursuant to any indemnities provided in any Related
Agreement unless such Related Agreement establishes other
procedures with respect to indemnities thereunder.
(b) If ACX or CTI shall receive notice of any Action
by any third party, or any fact or allegation upon which such
Action could be based (hereinafter a "Third Party Claim"), with
respect to which the other party is or may be obligated to make
an Indemnity Payment, it shall give such other party prompt
notice thereof (including any pleadings relating thereto),
specifying in reasonable detail the nature of such Third Party
Claim and the amount or estimated amount thereof to the extent
then feasible (which estimate shall not be conclusive of the
final amount of such Indemnity Payment); provided, however, that
the failure of a party to give notice as provided in this
Section 5.03 shall not relieve the other party of its
indemnification obligations under this Article V, except to the
extent that such other party is actually prejudiced by such
failure to give notice.
(c) For any Third Party Claim upon which notice is
required to be given under paragraph (b) of this Section 5.03,
the Indemnifying Party shall defend such Third Party Claim at its
sole cost and expense and through counsel employed by the
Indemnifying Party and reasonably acceptable to the Indemnitee.
Within 30 days of receipt of the notice of Third Party Claim
received under paragraph (b), the Indemnifying Party shall give
notice of its intent to defend or objection to the claim of
indemnification specifying in reasonable detail the grounds
therefore. Failure to provide such notice within such 30-day
period shall be deemed acknowledgment by the Indemnifying Party
of its indemnity obligation for the Third Party Claim.
(d) The Indemnifying Party's right to defend any Third
Party Claim includes the right to control, manage and direct the
defense of the Third Party Claim and to compromise, settle or
consent to the entry of any judgment or determination of
liability concerning such Third Party Claim; provided, however,
that the Indemnifying Party shall not compromise, settle or
consent to the entry of judgment or determination of liability
against the Indemnitee without prior written approval by the
Indemnitee, which approval shall not be unreasonably withheld;
provided, however, that if the Indemnifying Party shall seek the
approval of the Indemnitee to a settlement for monetary damages
for which the Indemnifying Party accepts responsibility and if
the Indemnitee shall withhold approval of such settlement, then
the obligation of the Indemnifying Party shall be limited to the
amount of the proposed and unapproved settlement, plus attorney's
fees and costs to the date of the proposed settlement, and the
Indemnitee shall be solely responsible for any additional amount.
(e) The Indemnitee may participate in the Indemnifying
Party's defense of any Third Party Claim in which the Indemnitee
has an interest and be represented by counsel of its own choosing
at the Indemnitee's sole cost and expense.
(f) If the Indemnifying Party fails to defend a Third
Party Claim, the Indemnitee may defend and may compromise and
settle or consent to an entry of judgment or a determination of
liability concerning such Third Party Claim at the sole cost and
expense of the Indemnifying Party.
(g) Regardless of the party that defends a Third Party
Claim, the other shall make available to the Indemnifying Party
all employees, Books and Records, communications, and documents,
within its possession or control that are necessary,
appropriate or reasonably deemed relevant with respect to such
defense, and otherwise shall reasonably cooperate in the defense
of the Third Party Claim.
(h) With respect to any Third Party Claim, neither
party to this Agreement shall enter into any compromise or
settlement or consent to the entry of any judgment that does
not include as an unconditional term thereof the giving by the
third party of a release, from all further liability concerning
such Third Party Claim, of the other party to this Agreement.
(i) Upon final judgment after exhaustion of all
appeals, settlement, compromise or other final resolution of any
Third Party Claim, and unless otherwise agreed by the parties,
the Indemnifying Party shall pay promptly on behalf of the
Indemnitee, or to the Indemnitee in reimbursement of any amount
theretofore required to be paid by it, the amount so determined
by final judgment after exhaustion of all appeals, settlement,
compromise or final resolution. Upon the payment in full by the
Indemnifying Party of such amount, the Indemnifying Party shall
succeed to the rights of such Indemnitee, to the extent not
waived in settlement, against any third party.
Section 5.04 Direct Claims. Any claim for indemnity
pursuant to Section 5.02 on account of an Indemnifiable Loss made
directly by the Indemnitee against the Indemnifying Party and
does not result from a Third Party Claim shall be asserted by
written notice from the Indemnitee to the Indemnifying Party.
Such Indemnifying Party shall have a period of 90 days (or such
shorter time period as may be required by law as indicated by the
Indemnitee in the written notice) within which to respond
thereto. If such Indemnifying Party does not respond within such
90-day (or lesser period), such Indemnifying Party shall be
deemed to have accepted responsibility to make payment and shall
have no further right to contest the validity of such claim. If
such Indemnifying Party does respond within such 90-day (or
lesser) period and rejects such claim in whole or in part, such
Indemnitee shall be free to pursue resolution as provided in
Article IX.
Section 5.05 Adjustment of Indemnifiable Losses.
(a) The amount which an Indemnifying Party is required
to pay to an Indemnitee pursuant to Section 5.02(a) or
Section 5.02(b) shall be reduced (including, without limitation,
retroactively) by any insurance proceeds and other amounts
actually recovered by such Indemnitee in reduction of the related
Indemnifiable Loss. If an Indemnitee shall have received an
Indemnity Payment in respect of an Indemnifiable Loss and shall
subsequently actually receive insurance proceeds or other amounts
in respect of such Indemnifiable Loss, then such Indemnitee shall
pay to such Indemnifying Party a sum equal to the lesser of the
amount of such insurance proceeds or other amounts actually
received or the net amount of Indemnity Payments actually
received previously. The Indemnitee agrees that (i) it shall use
commercially reasonable efforts to recover all insurance proceeds
that may be available, and (ii) the Indemnifying Party shall be
subrogated to such Indemnitee under any insurance policy.
(b) (i) If an Indemnitee receives a tax saving by
reason of having incurred an Indemnifiable Loss for which such
Indemnitee shall have received an Indemnity Payment from an
Indemnifying Party, then such Indemnitee shall pay to such
Indemnifying Party an amount equal to such tax saving. For
purposes of this Section 5.05(b), an Indemnitee shall be deemed
to have received a tax saving with respect to an Indemnifiable
Loss if, upon the filing of a Federal, state or local income tax
return for a taxable year ending on or after the Distribution
Date (the "Indemnity Return"), an amount attributable to an
Indemnifiable Loss is deductible by the Indemnitee or any of its
Affiliates and the amount of the related Indemnity Payment that
is includible in gross income by the Indemnitee or any of its
Affiliates is less than the amount of such tax deduction. The
amount, if any, by which such deduction exceeds the amount of the
related gross income is referred to herein as the "Indemnifiable
Loss Deduction." Both ACX and CTI shall consult with each other
and act in good faith to coordinate tax return filing positions
with respect to Indemnity Payments for the periods that include
an Indemnity Payment.
(ii) In the event that an Indemnitee will receive
a tax saving by reason of an Indemnifiable Loss, such Indemnitee
shall pay the Indemnifying Party within 30 days after the filing
of an Indemnity Return, a sum equal to the Indemnifiable Loss
Deduction multiplied by an amount equal to A + [(1 - A) x .05)],
where A equals the highest marginal corporate Federal income tax
rate applicable to corporations taxable under Subchapter C of the
Code on the date the Indemnity Return is filed (the "Tax Saving
Amount").
(iii) In the event that an Indemnitee may
receive a tax saving by reason of an Indemnifiable Loss, such
Indemnitee shall adopt, in good faith, a reasonable tax return
filing position so as to report the Indemnifiable Loss Deduction
on such returns. The Indemnitee shall have the sole
responsibility for the preparation of its tax returns and
reporting thereon such Indemnifiable Loss Deduction. If a
dispute arises between the Indemnitee and the Indemnifying Party
as to the reasonableness of an Indemnity Return filing position
with respect to an Indemnifiable Loss Deduction, such dispute
shall be resolved by a mutually agreed upon party selected and
approved by both the Indemnitee and Indemnifying Party. The cost
of retaining such mutually agreed upon party shall be shared by
the parties equally, and the decision shall be binding on the
parties.
(iv) There shall be an adjustment to any Tax
Saving Amount calculated under Section 5.05(b)(ii) hereof in the
event of an audit or other proceeding that results in a Final
Determination that increases or decreases the amount of the
Indemnifiable Loss Deduction (the "Restated Indemnifiable Loss
Deduction") reported on the Indemnity Tax Return by the
Indemnitee. The Indemnitee shall promptly inform the
Indemnifying Party of any such audit or proceeding and shall
attempt in good faith to sustain the tax saving at issue. Upon
receiving a written notice of a Final Determination in respect of
a Restated Indemnifiable Loss Deduction, the Indemnitee shall
redetermine the Tax Saving Amount attributable to the Restated
Indemnifiable Loss Deduction under the tax saving calculation of
Section 5.05(b) (ii) hereof substituting the Restated
Indemnifiable Loss Deduction for the Indemnifiable Loss
Deduction, taking into account the Final Determination (the
"Restated Tax Saving Amount"). If the Restated Tax Saving Amount
is greater than the Tax Saving Amount, the Indemnitee shall pay
the Indemnifying Party a sum equal to the difference between such
amounts, within 30 days after receiving written notice of the
Final Determination. If the Restated Tax Saving Amount is less
than the Tax Saving Amount, then the Indemnifying Party shall pay
the Indemnitee, within 30 days of receiving written notice from
the Indemnitee of the Final Determination, an amount equal to the
sum of (1) the difference between such amounts, plus (2) any
interest assessed against the Indemnitee by a tax authority which
is attributable to any tax assessed as a result of a reduction in
the Indemnifiable Loss Deduction effected by the Final
Determination.
Section 5.06 No Third Party Beneficiaries. Except to the
extent expressly provided otherwise in this Article V, the
indemnification provided for by this Article V shall not inure to
the benefit of any third party or parties and shall not relieve
any insurer or other third party who would otherwise be obligated
to pay any claim of the responsibility with respect thereto or,
solely by virtue of the indemnification provisions hereof,
provide any subrogation rights with respect thereto, and each
party agrees to waive such rights against the other to the
fullest extent permitted.
Section 5.07 Joint Defense Agreements. Except as
otherwise provided in this Agreement, for any Third Party Claim
in which both ACX (or its Affiliate) and CTI (or its Affiliate)
share an actual or potential material interest, ACX and CTI or
their respective Affiliates shall enter into a Joint Defense
Agreement. Unless an Indemnifying Party is the sole indemnifying
party or the parties otherwise specifically agree in writing in a
Joint Defense Agreement, each party shall pay its proportionate
share (as provided in the Joint Defense Agreement) of all costs
and expenses reasonably incurred in connection with the defense
of such Third Party Claim.
Section 5.08 Special Notices.
(a) CTI shall notify ACX, in the manner specified in
subparagraph 5.03(b), concerning all Third Party Claims where
ACX is or could be named a party thereto or where, based on
information available to CTI at that time, there is a
reasonable likelihood that, based on the outcome of such Third
Party Claim, the reputation of ACX or any Affiliate of ACX
could be adversely affected, or ACX's or any Affiliate's
ability to conduct its business or to take certain actions with
respect thereto could be impaired as a result of any injunctive
relief sought, or ACX could be liable for the payment of monetary
damages. ACX or its Affiliate shall have the right to
participate in the development and execution of strategy for the
response to, preparation for and handling of such Third Party
Claim in addition to its rights under Section 5.03.
(a) ACX shall notify CTI, in the manner specified in
subparagraph 5.03(b), concerning all Third Party Claims where
CTI is or could be named a party thereto or where, based on
information available to ACX at that time, there is a
reasonable likelihood that, based on the outcome of such Third
Party Claim, the reputation of CTI or any Affiliate of CTI
could be adversely affected, or CTI's or any Affiliate's
ability to conduct its business or to take certain actions with
respect thereto could be impaired as a result of any injunctive
relief sought, or CTI could be liable for the payment of monetary
damages. CTI or its Affiliate shall have the right to
participate in the development and execution of strategy for the
response to, preparation for and handling of such Third Party
Claim in addition to its rights under Section 5.03.
ARTICLE VI
CERTAIN ADDITIONAL MATTERS
Section 6.01 Construction of Agreements. Notwithstanding
any other provisions in this Agreement to the contrary, in the
event and to the extent that there is a conflict between the
provisions of this Agreement (or any Conveyancing and Assumption
Instrument) and the provisions of any Related Agreement, the
provisions of such Related Agreement shall control.
Section 6.02 No Representations or Warranties; Exceptions.
CTI understands and agrees that ALL OF THE TRANSFERRED ASSETS ARE
BEING TRANSFERRED "AS IS, WHERE IS" and that ACX is not, in this
Agreement or in any other agreement or document contemplated by
this Agreement, representing or warranting in any way (i) the
value or freedom from encumbrance of, or any other matter
concerning, any Transferred Assets or (ii) the legal sufficiency
to convey title to any Transferred Assets of the execution,
delivery and filing of the Conveyancing and Assumption
Instruments, and that CTI shall bear the economic and legal risk
that CTI's title to any such assets shall be other than good and
marketable and free from encumbrances. Similarly, CTI
understands and agrees that ACX is not in this Agreement, or in
any other agreement or document contemplated by this Agreement,
representing or warranting in any way that the obtaining of the
consents or approvals, the execution and delivery of any
amendatory agreements or the making of the filings and
applications contemplated by this Agreement shall satisfy the
provisions of all applicable agreements or the requirements of
all applicable laws or judgments, it being understood and agreed
that, subject to Section 6.04 hereof, CTI shall bear the economic
and legal risk that any necessary consents or approvals are not
obtained or that any requirements of law or judgments are not
complied with.
Section 6.03 Further Assurances. Each of ACX and CTI
shall execute and deliver such further instruments of conveyance,
transfer and assignment and shall take such other actions as each
of them may reasonably request of the other as may be necessary
or desirable to effect, perfect or confirm the record and
beneficial transfer of the Transferred Assets, the assumption of
the Assumed Liabilities and the purposes of this Agreement and to
carry out the terms hereof. Notwithstanding the foregoing, ACX
and CTI shall not be obligated, in connection with the foregoing,
to expend monies other than reasonable out-of-pocket expenses and
attorneys' fees.
Section 6.04 Consents, etc. ACX and CTI shall use their
best efforts to obtain any consent, approval or amendment
required to novate and/or assign all agreements, leases, licenses
and other rights of any nature whatsoever relating to the
Transferred Assets to CTI; provided, however, that ACX shall not
be obligated to pay any consideration therefor (except for filing
fees and other administrative charges) to the third party from
whom such consents, approvals and amendments are requested.
Section 6.05 Officers and Directors. On or before the
Distribution Date, CTI and ACX shall take all necessary actions
to elect or otherwise appoint individuals to be directors or
officers (or both) of CTI and to cause the resignations of
individuals as officers and directors of each so that there are
no common directors or officers except as described in the
Information Statement under the sections entitled "Management--
Directors" and "--Executive Officers."
Section 6.06 Existing Intercompany Arrangements. Except
as contemplated by this Agreement or any Related Agreement, all
material existing agreements relating to goods, rights or
services provided or licensed between ACX or any of its
Affiliates and CTI or any of its Affiliates shall be terminated
effective as of the close of business on the Distribution Date.
Until the Distribution Date, no such existing agreement shall
be deemed terminated, amended or otherwise affected by this
Agreement. After the Distribution Date, any such agreement
between ACX or any of its Affiliates and CTI or any of its
Affiliates shall be the result of arms-length negotiations
and on the basis of fair market pricing.
Section 6.07 Intercompany Accounts. Any intercompany
receivable, payable or loan between ACX or its Affiliates and CTI
or its Affiliates outstanding on the Distribution Date (other
than the Intercompany Debt) shall not be deemed altered, amended
or terminated as a result of this Agreement or the consummation
of the transactions contemplated hereby and shall be settled
between ACX or its Affiliates and CTI or its Affiliates in due
course following the Distribution Date.
Section 6.08 Transfer Taxes.
(a) CTI shall pay all federal, state and local sales
taxes, use taxes, documentary taxes, stock transfer taxes, real
property transfer taxes and any other transfer taxes or fees,
including any interest, penalties or additions to such taxes (the
"Transfer Taxes") with respect to the transactions described in
Section 2.01 hereof.
(b) ACX shall file timely all tax returns and reports
with respect to Transfer Taxes that it is required to file under
applicable law, and CTI shall reimburse ACX for any Transfer
Taxes due and paid with such returns and reports. CTI shall file
timely all returns and reports with respect to Transfer Taxes
that it is required to file under applicable law and shall pay
the taxes due with such returns and reports.
(c) The responsibility and authority for filing
amended returns and refund claims with respect to Transfer Taxes
and the overall coordination and administration of audits and any
dispute resolution proceedings related to Transfer Taxes shall be
as set forth in the Tax Sharing Agreement. CTI shall be
obligated for any additional Transfer Taxes that are payable, and
shall be entitled to all refunds of Transfer Taxes previously
paid, pursuant to these transactions.
Section 6.09 Proration of Taxes, Lease and Utility
Payments. All real property, personal property and similar taxes
and installments of general and special assessments, if any, with
respect to the Transferred Assets shall be prorated on the basis
of actual days elapsed between the commencement of the relevant
fiscal tax year and the date of transfer, based on a 365-day year
and the most recent tax statements or bills applicable thereto,
without later adjustment. Any installment of rental payments
with respect to leases that are part of the Transferred Assets,
or utility or similar periodic charges incurred by any entity
which are payable with respect to the current period in which the
transfer occurs shall be prorated between ACX and CTI on the
basis of actual days elapsed from the first day of the relevant
period to the date of transfer. ACX shall be responsible for all
such taxes, payments and charges allocable to all times prior to
and including the date of transfer and CTI shall be responsible
for all such taxes, payments and charges allocable to all times
after the date of transfer. Following the date of this
Agreement, each party shall, upon request of the other party,
immediately reimburse the other party for any such taxes,
payments and charges or other expenses for which said party is
responsible but which have been paid by or are owed by the other
party and for collections made by one party on behalf of the
other party.
ARTICLE VII
ACCESS TO INFORMATION AND SERVICES
Section 7.01 Provision of Corporate Records. As soon as
practicable after the date of this Agreement, ACX shall deliver
to CTI all Books and Records. Such Books and Records shall be
the property of CTI, but shall be retained and made available
readily to ACX for review and duplication until the earlier of
notice from ACX that such records are no longer needed by ACX or
the tenth anniversary of the Distribution Date. Notwithstanding
the foregoing provisions of this Section 7.01, those Books and
Records relating to any Action that is the subject matter of a
Joint Defense Agreement shall be handled as provided in such
Joint Defense Agreement.
Section 7.02 Access to Information. From and after the
Distribution Date, ACX and CTI shall afford to each other and to
each other's authorized accountants, counsel and other designated
representatives reasonable access and duplicating rights (with
copying costs to be borne by the requesting party) during normal
business hours to all Books and Records and documents,
communications, items and matters, including computer programs
and data within each other's knowledge, possession or control
relating to the Transferred Assets or the Employees, insofar as
such access is reasonably required by ACX or CTI, as the case may
be (and shall use reasonable efforts to cause persons or firms
possessing relevant items or information to give similar access).
Items or information may be requested under this Article VII for
any legitimate business purpose including, without limitation,
audit, accounting, claims, Actions, litigation and tax purposes,
as well as for purposes of fulfilling disclosure and reporting
obligations, but not for competitive purposes.
Section 7.03 Production of Witnesses and Individuals.
From and after the date of this Agreement, ACX and CTI shall use
reasonable efforts to make available to each other, upon written
request, its officers, directors, employees and agents for fact
finding, consultation and interviews and as witnesses to the
extent that any such person may reasonably be required in
connection with any Actions in which the requesting party may
from time to time be involved relating to the conduct of CTI
prior to the date of this Agreement. Except as otherwise agreed
between the parties or pursuant to a Joint Defense Agreement, ACX
and CTI agree to reimburse each other for reasonable out-of-
pocket expenses (but not labor charges or salary payments)
incurred by the other in connection with providing individuals
and witnesses pursuant to this Section 7.03.
Section 7.04 Retention of Records. Except when a longer
retention period is otherwise required by law, agreed to in
writing or specifically provided for herein or in any Related
Agreement, ACX and CTI shall retain, for a period of at least ten
years following the date of this Agreement, all material
Information relating to CTI. Notwithstanding the foregoing, in
lieu of retaining any specific information, ACX or CTI may offer
in writing to deliver such information to the other and, if such
offer is not accepted within 90 days, the offered information may
be destroyed or otherwise disposed of at any time. If a
recipient of such offer shall request in writing prior to the
scheduled date for such destruction or disposal that any of the
information proposed to be destroyed or disposed of be delivered
to such requesting party, the party proposing the destruction or
disposal shall promptly arrange for the delivery of such of the
information as was requested (at the cost of the requesting
party).
Section 7.05 Confidentiality. ACX and CTI shall hold, and
shall cause its directors, officers, employees, agents,
consultants and advisors to hold, in strict confidence, unless
compelled to disclose by judicial or administrative process or,
in the opinion of its independent legal counsel, by other
requirements of law, all information concerning the other party
furnished it by such other party or its representatives pursuant
to this Agreement (except to the extent that such information can
be shown to have been (a) available to such party on a non-
confidential basis prior to its disclosure by the other party,
(b) in the public domain through no fault of such party or
(c) later lawfully acquired from other sources by the party to
which it was furnished), and neither party shall release or
disclose such information to any other person, except its
auditors, attorneys, financial advisors, bankers and other
consultants and advisors who shall be bound by the provisions of
this Section 7.05. Each party shall be deemed to have satisfied
its obligation to hold confidential information concerning or
supplied by the other party if it exercises the same care as it
takes to preserve confidentiality for its own similar
information.
Section 7.06 Privileged Matters.
(a) The parties each agree that they will maintain,
preserve and assert all privileges, including without limitation
privileges arising under or relating to the attorney-client
relationship (which shall include without limitation the attorney-
client and work product privileges), that relate directly or
indirectly to such party for any period prior to the Distribution
Date ("Privilege" or "Privileges"). Neither party shall not
waive any Privilege that could be asserted under applicable law
without the prior written consent of the other party. The rights
and obligations created by this paragraph shall apply to all
information as to which, but for the Distribution, a party would
have been entitled to assert or did assert the protection of a
Privilege ("Privileged Information"), including but not limited
to (i) any and all information generated prior to the
Distribution Date but which, after the Distribution, is in the
possession of the other party; (ii) all communications subject
to a Privilege occurring prior to the Distribution Date between
counsel for such party and any person who, at the time of the
communication, was an employee of such party, regardless of
whether such employee is or becomes an employee of the other
party; and (iii) all information generated, received or arising
after the Distribution Date that refers or relates to Privileged
Information generated, received or arising prior to the
Distribution Date.
(b) Upon receipt by a party or any of its Affiliates
of any subpoena, discovery or other request that arguably calls
for the production or disclosure of Privileged Information or
if such party or any of its Affiliates obtains knowledge that
any current or former employee of such party or any of its
Affiliates has received any subpoena, discovery or other
request which 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 7.06 or otherwise to prevent the production or
disclosure of Privileged Information. Neither party will
produce or disclose any information arguably covered by a
Privilege under this Section 7.06 unless (a) the other party
has provided its express written consent to such production
or disclosure, or (b) a court of competent jurisdiction has
entered a final, non-appealable order finding that the
information is not entitled to protection under any
applicable privilege.
(c) ACX's transfer of Books and Records and other
information to CTI, and each party's agreement to permit
the other to possess Privileged Information occurring or
generated prior to the date of this Agreement, are made in
reliance on such other party's agreement, as set forth in
this Section 7.06, to maintain the confidentiality of
Privileged Information and to assert and maintain all
applicable Privileges. The access to information being
granted pursuant to Section 7.02 hereof, the agreement to
provide witnesses and individuals pursuant to Section 7.03
hereof and transfer of Privileged Information pursuant to
this Agreement shall not be deemed a waiver of any
Privilege that has been or may be asserted under this
Section 7.06 or otherwise. Nothing in this Distribution
Agreement shall operate to reduce, minimize or condition
the rights granted to, or the obligations imposed upon
either party by this Section 7.06.
(d) If there is a reasonable likelihood that the
waiver by either party of any Privilege could expose the
other party or any of its Affiliates to liability or could
otherwise adversely affect the other party or any of its
Affiliates, such party will notify the other party prior
to such waiver, and, at the other party's request, such
party will assert or preserve the Privilege, as applicable,
if such party's interests will not be adversely affected
by its assertion or preservation of the Privilege.
ARTICLE VIII
INSURANCE
Section 8.01 General.
(a) ACX shall use its best efforts to keep in effect
all policies under its Insurance Program that are in effect as of
the date of this Agreement insuring the Transferred Assets and
CTI until the next termination date of each policy occurring on
or after the Distribution Date. If ACX's insurers will not
provide continued coverage, ACX shall assist CTI in obtaining
such insurance to be effective on the Distribution Date.
Premiums for such continued policies and any applicable interest
charges for such policies shall be allocated between ACX and CTI
in accordance with the methods employed by ACX for the allocation
of such premiums among ACX, its Affiliates and CTI as of the date
of this Agreement. The date and time as of which each ACX policy
issued under its Insurance Program will, pursuant to this
provision, cease covering the Transferred Assets or CTI will be
referred to herein as the "Policy Termination Date" for that
policy. CTI understands that ACX will be terminating coverage
under each policy issued under its Insurance Program with respect
to the Transferred Assets and CTI as of the Policy Termination
Date of each policy. After such date, ACX shall, if so requested
by CTI, use reasonable efforts to assist CTI in obtaining its own
insurance coverage, but shall not be obligated to obtain or pay
for such insurance, and if CTI is unable to obtain its own
policies, and if requested by CTI, ACX will use reasonable
efforts to obtain coverage for CTI, at CTI's expense.
(b) From the Distribution Date and until the Policy
Termination Date, CTI shall be responsible for reporting to ACX
any claims it or any of its Affiliates may have under any policy
continued under paragraph (a). From and after the Policy
Termination Date, CTI shall be responsible for notifying the
appropriate insurance carrier of any claims it or any of its
Affiliates may have.
(c) Each of ACX and CTI shall cooperate with and
assist the other party in making claims under insurance policies
relating to periods prior to the Policy Termination Date and
collecting Recoveries with respect thereto. ACX and CTI shall
each give the other periodic reports regarding claims arising
prior to the Policy Termination Date that are material or may
reasonably jeopardize the availability of coverage for the other
and shall give each other prompt notice of any dispute that is
anticipated to give rise to a claim against any insurance
carrier.
Section 8.02 Certain Insured Claims. ACX agrees that
with respect to claims made prior to the Policy Termination Date
that arise from or relate to the Transferred Assets or
Transferred Business, ACX or its Affiliate will, prior to the
Policy Termination Date, use its reasonable efforts to obtain
Recoveries for CTI and remit to CTI any Recovery obtained by ACX
pursuant to such claims. From and after the Policy Termination
Date, CTI shall be responsible for administering all claims
relating to the Transferred Assets or CTI, including those claims
initiated prior to the Policy Termination Date; provided,
however, that if a claim relates to both ACX or its Affiliates,
and CTI or its Affiliates, ACX or its Affiliate shall continue to
administer the claim, and CTI shall pay its proportionate share
of the costs of such administration, based on the reasonable
estimate of the proportionate amount of each party's claim, as
agreed to by the parties. If the amount of any Recovery is less
than the claims of ACX and CTI or their Affiliates to be paid
from such Recovery, the parties shall agree on the allocation of
the Recovery between the parties.
ARTICLE IX
DISPUTE RESOLUTION
Section 9.01 Initiation. Except with respect to matters
involving Section 7.06 hereof, if ACX or its Affiliate and CTI or
its Affiliate are unable to resolve any disagreement or dispute,
either party may refer the matter to the Chief Executive Officers
(CEOs) of the parties by giving the other party written notice
("Notice"). Within 20 days after delivery of Notice, or if the
CEOs fail to meet within 20 days after delivery of Notice, the
CEOs of both parties shall meet at a mutually acceptable time and
place to exchange relevant information and to attempt to resolve
the dispute. If the matter has not been resolved within 45 days
after delivery of Notice, or if the CEOs fail to meet within
20 days after delivery of Notice, either party may initiate
mediation and, if applicable, arbitration proceedings as set
forth herein. All negotiations pursuant to this Section 9.01
shall be confidential and shall be treated as compromise and
settlement negotiations for purposes of the Federal Rules of
Evidence and state rules of evidence.
Section 9.02 Mediation. In the event a dispute exists
between the parties and the respective CEOs are unable to resolve
the dispute, the parties agree to participate in a nonbinding
mediation procedure as follows:
(a) A mediator will be selected by having counsel for
each party agree on a person to act as mediator. The parties'
counsel as well as the CEOs of each party and not more than two
other participants from each party will appear before the
mediator at a time and place determined by the mediator, but not
more than 60 days after delivery of Notice. The fees of the
mediator and other costs of mediation shall be shared equally by
the parties.
(b) Each party's counsel will have 45 minutes to
present a review of the issues and arguments before the mediator.
After each counsel's presentation, the other counsel may present
specific counter-arguments not to exceed 10 minutes. The 45-
minute and 10-minute periods will be exclusive of the time
required to answer questions from the mediator or attendees.
(c) After both presentations, the CEOs may ask
questions of the other side. At the conclusion of both
presentations and the question periods, the CEOs and their
respective counsel will meet together to try and resolve the
dispute. The length of the meeting will be as agreed between the
parties. Either party may abandon the procedure at the end of
the presentations and question periods if they feel it is not
productive to go further. This mediation procedure shall not be
binding on either party.
(d) The duties of the mediator are to be sure that the
above set-out time periods are adhered to and to ask questions so
as to clarify the issues and understanding of the parties. The
mediator may also offer possible resolutions of the issue but has
no duty to do so.
Section 9.03 Arbitration. After applying the mediation
procedure set forth above, or if either party refuses to take
part in the mediation process, the parties hereby agree to submit
all controversies, claims and matters of difference that are
unresolved to arbitration in Denver, Colorado, according to the
rules and practices of the American Arbitration Association from
time to time in force, except that insofar as such rules and
practices are unenforceable under or are directly supplemented by
the Colorado Rules of Civil Procedure or any other provisions of
Colorado law then in force, such Colorado rules and provisions
shall govern. This submission and agreement to arbitrate shall
be specifically enforceable. Arbitration may proceed in
the absence of either party if notice of the proceedings has been
given to such party. The arbitrators are not empowered to award
damages in excess of compensatory damages, and each party hereby
irrevocably waives any damages in excess of compensatory damages.
The parties agree to abide by all awards rendered n such
proceedings. Such awards shall be final and binding on all
parties to the extent and in the manner provided by the Colorado
Rules of Civil Procedure. All awards may be filed with the clerk
of one or more courts, state or federal, having jurisdiction over
the party against whom such award is rendered or such party's
property as a basis of judgment and of the issuance of execution
for its collection.
Section 9.04 Cost of Arbitration. The costs of
arbitration shall be apportioned between ACX and CTI as
determined by the arbitrator in such manner as the arbitrator
deems reasonable taking into account the circumstances of the
case, the conduct of the parties during the proceeding, and the
result of the arbitration.
ARTICLE X
MISCELLANEOUS
Section 10.01 Complete Agreement. This Agreement,
including the Schedules and Exhibits and the agreements and other
documents referred to herein, shall constitute the entire
agreement between ACX and CTI with respect to the subject matter
hereof and shall supersede all previous negotiations, commitments
and writings with respect to such subject matter.
Section 10.02 Expenses. Except as otherwise expressly
provided in this Agreement, ACX and CTI shall each pay their own
costs and expenses incurred in connection with the Distribution
and the consummation of the transactions contemplated by this
Agreement.
Section 10.03 Governing Law. This Agreement shall be
governed by and construed and enforced in accordance with the
laws of the State of Colorado (regardless of the laws that might
otherwise govern under applicable principles of conflicts law) as
to all matters, including, without limitation, matters of
validity, construction, effect, performance and remedies.
Section 10.04 Notices. All notices, requests, demands and
other communications under this Agreement shall be in writing and
shall be deemed to have been duly given (i) on the date of
service if served personally on the party to whom notice is
given, (ii) on the day of transmission if sent via facsimile
transmission to the facsimile number given below, provided
telephonic confirmation of receipt is obtained promptly after
completion of transmission, (iii) on the business day after
delivery to an overnight courier service or the Express mail
service maintained by the United States Postal Service, provided
receipt of delivery has been confirmed, or (iv) on the fifth day
after mailing, provided receipt of delivery is confirmed, if
mailed to the party to whom notice is to be given, by registered
or certified mail, postage prepaid, properly addressed and return-
receipt requested, to the party as follows:
If to ACX: ACX Technologies, Inc.
Attn: Jill B.W. Sisson, General Counsel
4455 Table Mountain Drive
Golden, Colorado 80403
If to CTI: CoorsTek, Inc.
Attn: Katherine A. Resler, General Counsel
16000 Table Mountain Parkway
Golden, Colorado 80403
Any party may change its address by giving the other party
written notice of its new address in the manner set forth above.
Section 10.05 Amendment and Modification. This Agreement
may be amended, modified or supplemented only by written
agreement of the parties.
Section 10.06 Termination. This Agreement may be
terminated and the Distribution abandoned at any time prior to
the Distribution Date by and in the sole discretion of the Board
without the approval of CTI. In the event of such termination,
no party shall have any liability of any kind to any other party.
Section 10.07 Successors and Assigns. This Agreement and
all of the provisions hereof shall be binding upon and inure to
the benefit of the parties and their respective successors and
permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by
either party without the prior written consent of the other
party.
Section 10.08 No Third Party Beneficiaries. This Agreement
is solely for the benefit of the parties hereto and is not
intended to confer upon any other person except the parties
hereto any rights or remedies hereunder.
Section 10.09 Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same instrument.
Section 10.10 Interpretation. The Article and Section
headings contained in this Agreement are solely for the purpose
of reference, are not part of the agreement of the parties and
shall not in any way affect the meaning or interpretation of this
Agreement. As used in this Agreement, the term "person" shall
mean and include an individual, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a
government or any department or agency thereof. Whenever any
words are used herein in the masculine gender, they shall be
construed as though they were also used in the feminine gender in
all cases where they would so apply.
Section 10.11 Schedules, Etc.. The Schedules and Exhibits
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 10.12 Legal Enforceability. Any provision of this
Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such
prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this
Distribution Agreement to be executed and delivered as of the day
and year first written above.
ACX TECHNOLOGIES, INC.
By: /s/ Jill B. W. Sisson
-----------------------------
Name: Jill B. W. Sisson
Title: General Counsel
and Secretary
COORSTEK, INC.
By: /s/ Katherine A. Resler
----------------------------
Name: Katherine A. Resler
Title: General Counsel
and Secretary
SCHEDULE I
Transferred Assets and Assumed Liabilities
Transferred Assets:
1. [Airplane]
2. [Sports tickets]
Assumed Liabilities:
[?]
SCHEDULE II
Intercompany Debt
[describe and schedule]
EXHIBIT A
FORM OF PROMISSORY NOTE
January 1, 2000 $ ____________
PROMISSORY NOTE
For value received, the undersigned, COORSTEK, INC., a
Delaware corporation and having its principal executive offices
in Colorado ("Maker"), hereby promises to pay to the order of
ACX TECHNOLOGIES, INC., a Colorado corporation, or its assigns
(the "Holder"), the principal amount of $______________, with
interest, compounded [daily/monthly/annually], accruing from the
date hereof at __% per annum, payable in full on January ___,
2000 or earlier upon demand.
This Promissory Note is an assignable, endorsable and
transferable note of Maker.
All payments due under this Promissory Note shall be
satisfied in lawful money of the United States at the offices of
Holder's agent located at 16000 Table Mountain Parkway, Golden,
Colorado 80403, or at such other place as Holder may designate.
This Promissory Note may be prepaid without premium or penalty,
in whole or in part, at any time and from time to time in each
case together with payment of all accrued, but unpaid interest on
the principal amount being prepaid.
Maker waives presentment, demand, protest and notice thereof
or of dishonor, and waives the right to be released by reason of
any extension of time or change in terms of payment or any
change, alteration or release of any security given for the
payment hereof. No waiver of any payment under this Promissory
Note shall operate as a waiver of any other payment. Maker
agrees to pay all reasonable out-of-pocket expenses, including
reasonable attorney fees, incurred by Holder in collecting any
amounts due hereunder, by litigation or otherwise. All principal
and interest and any other sums due hereunder can be made, unless
agreed otherwise between the Holder and the Maker, by way of set
off, recoupment or counterclaim.
If any provision of this Promissory Note shall be held
invalid, illegal or unenforceable in any jurisdiction, the
validity, legality or enforceability of any defective provision
shall not be in any way be affected or impaired in any other
jurisdiction. In the event that any interest payable hereunder
shall exceed the maximum lawful rate of interest in the State of
Colorado, the applicable interest rate shall be limited to the
lesser of such rates (the "Maximum Rate"), but only for such
period as the applicable interest rate hereunder exceeds the
Maximum Rate.
No delay or failure of Holder in the exercise of any
available right or remedy shall be deemed a waiver of such right
by Holder, and no exercise of any right or remedy shall be deemed
a waiver of any other right or remedy that Holder may have.
This Promissory Note is to be governed by and construed
according to the laws of the State of Colorado.
DATED as of the date first set forth above.
COORSTEK, INC.
By:
Name:
Title:
EXHIBIT B
FORM OF ENVIRONMENTAL RESPONSIBILITY AGREEMENT
EXHIBIT C
FORM OF TRANSITIONAL SERVICES AGREEMENT
EXHIBIT D
FORM OF TAX SHARING AGREEMENT