EXHIBIT 10.4
DISTRIBUTION
AND INTERIM SERVICES
AGREEMENT
BY AND BETWEEN
COMMERCIAL INTERTECH CORP.
AND
CUNO INCORPORATED
TABLE OF CONTENTS
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PAGE
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ARTICLE I
DEFINITIONS..................................................................... 1
SECTION 1.01 General.................................................... 1
SECTION 1.02 Annexes, etc............................................... 6
SECTION 1.03 References to Time......................................... 6
ARTICLE II
THE DISTRIBUTION................................................................ 7
SECTION 2.01 The Distribution........................................... 7
SECTION 2.02 Cooperation Prior to the Distribution...................... 7
SECTION 2.03 Conditions to the Distribution............................. 8
ARTICLE III
TRANSACTIONS RELATING TO THE DISTRIBUTION....................................... 8
SECTION 3.01 Intercorporate Reorganization.............................. 8
SECTION 3.02 Repayment of Intercompany Indebtedness..................... 9
SECTION 3.03 The CUNO Board............................................. 9
SECTION 3.04 Business, Administrative and Support Services.............. 9
SECTION 3.05 Insurance ................................................. 10
SECTION 3.06 Use of Names .............................................. 12
SECTION 3.07 Transfers Not Effected Prior to the Distribution;
Transfers Deemed Effective as of the Cutoff Date........... 12
SECTION 3.08 Commercial Intertech Guarantees............................ 13
SECTION 3.09 Corporate Opportunities.................................... 13
ARTICLE IV
INDEMNIFICATION................................................................. 14
SECTION 4.01 Indemnification by Commercial Intertech................... 14
SECTION 4.02 Indemnification by CUNO................................... 14
SECTION 4.03 Limitations on Indemnification Obligations................ 15
SECTION 4.04 Procedures for Indemnification............................ 16
SECTION 4.05 Remedies Cumulative....................................... 18
SECTION 4.06 Survival of Indemnities................................... 18
ARTICLE V
(i)
PAGE
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ACCESS TO INFORMATION......................................................... 18
SECTION 5.01 Access to Information.................................... 18
SECTION 5.02 Production of Witnesses.................................. 19
SECTION 5.03 Retention of Records..................................... 19
SECTION 5.04 Confidentiality.......................................... 19
ARTICLE VI
MISCELLANEOUS................................................................ 20
SECTION 6.01 Complete Agreement; Construction........................ 20
SECTION 6.02 Survival of Agreements.................................. 20
SECTION 6.03 Expenses................................................ 20
SECTION 6.04 Governing Law........................................... 20
SECTION 6.05 Notices................................................. 20
SECTION 6.06 Dispute Resolution...................................... 21
SECTION 6.07 Binding Arbitration..................................... 21
SECTION 6.08 Amendments.............................................. 22
SECTION 6.09 Successors and Assigns.................................. 22
SECTION 6.10 Omitted
SECTION 6.11 No Third Party Beneficiaries............................ 22
SECTION 6.12 Titles and Headings..................................... 23
SECTION 6.13 Legal Enforceability.................................... 23
SECTION 6.14 No Waivers.............................................. 23
SECTION 6.15 Counterparts............................................ 23
SECTION 6.16 Performance............................................. 23
Annex A: Form of Employee Benefits and Compensation Allocation Agreement
Annex B: Form of Tax Allocation Agreement
Annex C: Form of By-laws of CUNO
Annex D: Form of Amended and Restated Certificate of Incorporation of CUNO
SCHEDULES
Schedule 1.02.........................................Commercial Intertech Guarantees
Schedule 3.03...............................................Members of the CUNO Board
(ii)
DISTRIBUTION AND INTERIM SERVICES AGREEMENT
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DISTRIBUTION AND INTERIM SERVICES AGREEMENT (this "Agreement"), dated as of
______________, 1996, by and between COMMERCIAL INTERTECH CORP., an Ohio
corporation ("Commercial Intertech") and CUNO INCORPORATED, a Delaware
corporation and, as of the date hereof, a wholly-owned subsidiary of Commercial
Intertech ("CUNO").
WHEREAS, the Commercial Intertech Board (as defined herein) has determined
that it is appropriate and desirable to distribute all outstanding shares of
CUNO Common Stock (as defined herein) on a pro rata basis to the holders of
Commercial Intertech Common Stock (as defined herein); and
WHEREAS, Commercial Intertech and CUNO have determined that it is
appropriate and desirable to set forth the principal corporate transactions
required to effect such distribution and certain other agreements that will
govern certain matters relating to such distribution;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
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SECTION 1.01 General. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
Action: any action, suit, arbitration, inquiry, proceeding or investigation
by or before any court, any governmental or other regulatory or administrative
agency or commission or any arbitration tribunal.
Affiliate: with respect to any Person, a Person that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, such Person; provided, however, that for purposes of
this Agreement, no member of either Group shall be deemed to be an Affiliate of
any member of the other Group.
Agent: the distribution agent for the stockholders of Commercial Intertech,
as selected by Commercial Intertech, to distribute the CUNO Common Stock in
connection with the Distribution.
Ancillary Agreements: collectively, all of the agreements, instruments,
understandings, assignments or other arrangements entered into in connection
with the transactions contemplated hereby, including, without limitation, the
Conveyance and Assumption Instruments, the Employee Benefits and Compensation
Allocation Agreement and the Tax Allocation Agreement.
By-Laws: CUNO's By-laws substantially in the form attached hereto as ANNEX
C.
Certificate of Incorporation: CUNO's amended and restated certificate of
incorporation substantially in the form attached hereto as ANNEX D.
Chairman: the chair of the arbitration panel.
Claims Administration: (i) the processing of claims made under the
Policies, including the reporting of claims to the insurance carrier, management
and defense of claims, and providing for appropriate releases upon settlement of
claims, (ii) in the case of the CUNO Business, the reporting to Commercial
Intertech of any losses or claims which may cause the per-occurrence deductible
or self-insured retention or limits of any Policy to be exceeded, (iii) the
collection of the proceeds of Policies, and (iv) the reporting to excess
insurance carriers of any losses or claims which may cause the per-occurrence
deductible or self-insured retention or limits of any Policy to be exceeded.
Code: the Internal Revenue Code of 1986, as amended.
Commercial Intertech Assets: collectively, all the assets of Commercial
Intertech and the Commercial Intertech Subsidiaries, including, without
limitation, the Commercial Intertech Patents and Trademarks, other than the CUNO
Assets.
Commercial Intertech Assumed Liabilities: collectively, all Liabilities
relating to or arising in connection with the Commercial Intertech Assets or the
Commercial Intertech Businesses, whether arising before, on or after the
Distribution Date, which are to be assumed by Commercial Intertech or a
Commercial Intertech Subsidiary, as appropriate, pursuant to the transactions
contemplated by SECTION 3.01.
Commercial Intertech Board: the Board of Directors of Commercial
Intertech.
Commercial Intertech Businesses: the businesses currently conducted by
Commercial Intertech and its Subsidiaries other than the CUNO Business.
Commercial Intertech Common Stock: the common stock, par value $1.00 per
share, of Commercial Intertech.
Commercial Intertech Group: Commercial Intertech and its Affiliates,
whether now or hereafter existing, other than members of the CUNO Group.
Commercial Intertech Guarantees: collectively, the guarantees by
Commercial Intertech set forth on SCHEDULE 1.02 which were entered into by
Commercial Intertech with respect to the duties and obligations of the CUNO
Group.
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Commercial Intertech Indemnitees: Commercial Intertech, each Affiliate of
Commercial Intertech and each of their respective directors, officers and
employees and each of the heirs, executors, successors and assigns of any of the
foregoing.
Commercial Intertech Liabilities: collectively, all of (i) the Liabilities
of any member of the Commercial Intertech Group under this Agreement or any
Ancillary Agreement to which it is or becomes a party, (ii) the Liabilities
arising out of or in connection with the businesses, assets or operations of the
Commercial Intertech Group (other than such businesses, assets or operations
which, pursuant to this Agreement, shall, after the Distribution Date, be part
of the CUNO Group), as heretofore, currently, or hereafter conducted, (iii) the
Commercial Intertech Assumed Liabilities, and (iv) the Liabilities retained or
assumed by Commercial Intertech or any Commercial Intertech Subsidiary pursuant
to the Employee Benefits and Compensation Allocation Agreement.
Commercial Intertech Patents and Trademarks: collectively, the patents and
trademarks of Commercial Intertech or any Commercial Intertech Subsidiary.
Commercial Intertech Subsidiary: any subsidiary of Commercial Intertech
other than CUNO or any CUNO Subsidiary.
Commission: the Securities and Exchange Commission.
Conveyance and Assumption Instruments: collectively, the various
agreements, instruments and other documents to be entered into to effect the
transfer of assets and the assumption of Liabilities contemplated by the
transactions set forth in SECTION 3.01 of this Agreement.
CUNO Assets: collectively, all assets which are currently owned by
Commercial Intertech or a Commercial Intertech Subsidiary (including, without
limitation, the Commercial Intertech Patents and Trademarks) which are used in
connection with the CUNO Business, and which pursuant to, or as a consequence
of, this Agreement are to be transferred to CUNO or a CUNO Subsidiary and which,
as of and after the Distribution Date are to be owned by the CUNO Group.
CUNO Assumed Liabilities: collectively, all Liabilities relating to or
arising in connection with the CUNO Assets or the CUNO Business, including,
without limitation, any liabilities relating to or arising in connection with
the Commercial Intertech Guarantees whether arising before, on or after the
Distribution Date, which are to be assumed by CUNO or a CUNO Subsidiary, as
appropriate, pursuant to the transactions contemplated by SECTION 3.01.
CUNO Board: the Board of Directors of CUNO.
CUNO Business: the fluid purification business conducted, as of the date
hereof, by Commercial Intertech, CUNO and their respective Subsidiaries through
the use of the CUNO Assets, and after the Distribution Date to be conducted by
CUNO and the CUNO Subsidiaries.
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CUNO Common Stock: collectively, the common stock, par value $.001 per
share, of CUNO and the rights issued pursuant to the Rights Plan.
CUNO Group: CUNO and that portion of any corporation or other entity,
whether now or hereafter existing, which conduct the CUNO Business.
CUNO Indemnitees: CUNO, each Affiliate of CUNO and each of their
respective directors, officers and employees and each of the heirs, executors,
successors and assigns of any of the foregoing.
CUNO Liabilities: collectively, all of (i) the Liabilities of any member
of the CUNO Group under this Agreement or any Ancillary Agreement to which it is
or becomes a party, (ii) the Liabilities arising out of or in connection with
the businesses, assets or operations of the CUNO Group (other than such
businesses, assets or operations which, pursuant to this Agreement shall, after
the Distribution Date, be part of the Commercial Intertech Group), as
heretofore, currently, or hereafter conducted, (iii) the CUNO Assumed
Liabilities, and (iv) the Liabilities retained or assumed by CUNO or any CUNO
Subsidiary pursuant to the Employee Benefits and Compensation Allocation
Agreement.
CUNO Subsidiary: any subsidiary of CUNO that, as of the Distribution Date,
will be a subsidiary of CUNO, and any other subsidiary of CUNO which thereafter
may be organized or acquired.
Cut-off Date: shall mean the Distribution Date or such other date as
determined by the parties hereto.
Dispute Resolution Committee: a joint committee composed of two
representatives from the managerial staff of each of Commercial Intertech and
CUNO.
Distribution: the distribution on a pro rata basis to holders of
Commercial Intertech Common Stock of the shares of CUNO Common Stock owned by
Commercial Intertech on the Distribution Date.
Distribution Date: the date determined by the Commercial Intertech Board on
which the Distribution shall be effected.
Employee Benefits and Compensation Allocation Agreement: the Employee
Benefits and Compensation Allocation Agreement between Commercial Intertech and
CUNO, substantially in the Form attached hereto as ANNEX A.
Exchange Act: the Securities Exchange Act of 1934, as amended.
Form 10: the registration statement on Form 10 of CUNO, as filed with the
Commission, of which the Information Statement is a part.
Group: the Commercial Intertech Group or the CUNO Group.
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Indemnifying Party: any party who is required to make payment pursuant to
SECTION 4.01 or SECTION 4.02.
Indemnitee: any party who is entitled to receive payment pursuant to
SECTION 4.01 or SECTION 4.02.
Indemnity Payment: the amount of any payment made by an Indemnifying Party
pursuant to this Agreement.
Information: all records, books, contracts, instruments, computer data and
other data and information.
Information Statement: the information statement to be sent to the holders
of Commercial Intertech Common Stock in connection with the Distribution.
Insurance Amount: one hundred twenty percent (120%) of the current annual
premium expended by Commercial Intertech.
IRS: the Internal Revenue Service.
Liabilities: with respect to any Person, any and all debts, liabilities
and obligations, absolute or contingent, matured or unmatured, choate or
inchoate, liquidated or unliquidated, accrued or unaccrued, known or unknown,
whenever arising (unless otherwise specified in this Agreement), including,
without limitation, all costs and expenses relating thereto, and including,
without limitation, those debts, liabilities and obligations arising under any
law, rule, regulation, Action, threatened Action, order or consent decree of any
governmental entity or any award of any arbitrator of any kind, and those
arising under any contract, commitment or undertaking.
Losses: any and all losses, Liabilities, claims, damages, obligations,
payments, costs and expenses, matured or unmatured, absolute or contingent,
accrued or unaccrued, liquidated or unliquidated, known or unknown, whenever
arising (including, without limitation, the costs and expenses of any and all
Actions, threatened Actions, demands, assessments, judgments, settlements and
compromises relating thereto, and attorneys' fees and any and all expenses
whatsoever reasonably incurred in investigating, preparing or defending against
any such Actions or threatened Actions).
Nasdaq: the Nasdaq National Market.
Person: an individual, a partnership, a joint venture, a corporation, a
limited liability company, a trust, an unincorporated organization or a
government or any department or agency thereof.
Policies: various forms of insurance coverage historically provided by
Commercial Intertech.
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Premium Administration: with respect to each Policy, the accounting for
premiums, retrospectively rated premiums, defense costs, indemnity payments,
deductibles and retentions as appropriate under the terms and conditions of each
of the Policies.
Record Date: the close of business on the date to be determined by the
Commercial Intertech Board, or a committee thereof, as the record date for the
Distribution.
Representative: with respect to any Person, any of such Person's
directors, officers, employees, agents, consultants, advisors, accountants,
attorneys and representatives.
Rights Plan: the Stockholder Rights Agreement, to be entered into on or
prior to the Distribution Date, between CUNO and ChaseMellon Shareholder
Services, L.L.C, as rights agent, substantially in the form filed as an exhibit
to the Form 10.
Services: the business services currently provided by Commercial Intertech
to the CUNO Group, including but not limited to services relating to accounting,
payroll, legal, information technology, benefits, human resources, risk
management, consulting, tax, human resources and administration.
Subsidiary: with respect to any Person, any corporation or other legal
entity of which such Person or any Subsidiaries controls or owns, directly or
indirectly, more than 50% of the stock or other equity interest, or more than
50% of the voting power entitled to vote on the election of members to the board
of directors or similar governing body; provided, however, that for purposes of
this Agreement neither CUNO nor any CUNO Subsidiary shall be deemed to be a
Commercial Intertech Subsidiary.
Tax Opinion: an opinion of tax counsel to the effect that, among other
things, for United States federal income tax purposes, the Distribution will
qualify as a tax-free distribution under Section 355 of the Code.
Tax Allocation Agreement: the Tax Sharing Agreement between Commercial
Intertech and CUNO, substantially in the form attached hereto as ANNEX B.
Third Party Claim: the assertion by a Person (including, without
limitation, any governmental entity) who is not a party to the Agreement (or an
Affiliate thereof) or to any Ancillary Agreement of any claim or the
commencement by any such Person of any Action.
SECTION 1.02 Annexes, etc. References to an "Annex" or "Schedule" are,
unless otherwise specified, to one of the Annexes or Schedules attached to this
Agreement, and references to "Section" or "Article" are, unless otherwise
specified, to one of the Sections or Articles of this Agreement.
SECTION 1.03 References to Time. All references in this Agreement to
times of day shall be to Youngstown, Ohio time.
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ARTICLE II
THE DISTRIBUTION
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SECTION 2.01 The Distribution. Subject to SECTION 2.03 hereof and prior
to the Distribution Date, Commercial Intertech will deliver to the Agent for the
benefit of holders of record of Commercial Intertech Common Stock on the Record
Date, a single stock certificate, endorsed by Commercial Intertech in blank,
representing all of the then outstanding shares of CUNO Common Stock owned by
Commercial Intertech, and shall instruct the Agent to distribute on, or as soon
as practicable following, the Distribution Date the appropriate number of such
shares of CUNO Common Stock to each such holder or designated transferee or
transferees of such holder. The Distribution shall be effective as of 5:00 p.m.
Youngstown, Ohio time, on the Distribution Date. CUNO will provide to the Agent
all share certificates and any information required in order to complete the
Distribution on the basis of one share of CUNO Common Stock for each share of
Commercial Intertech Common Stock outstanding on the Record Date.
SECTION 2.02 Cooperation Prior to the Distribution.
(a) Commercial Intertech and CUNO shall prepare, and Commercial Intertech
shall mail to the holders of Commercial Intertech Common Stock on the Record
Date, the Information Statement, which shall set forth appropriate disclosure
concerning CUNO, the Distribution and other matters. Commercial Intertech and
CUNO shall prepare, and CUNO shall file with the Commission, the Form 10, which
includes or incorporates by reference the Information Statement. Commercial
Intertech and CUNO shall use reasonable efforts to cause the Form 10 to become
effective under the Exchange Act as promptly as reasonably practicable.
(b) Commercial Intertech and CUNO shall cooperate in preparing, filing
with the Commission and causing to become effective any registration statements
or amendments thereof which are required to reflect the establishment of, or
amendments to, any employee benefit and other plans contemplated by the
Distribution and the Employee Benefits and Compensation Allocation Agreement.
(c) Commercial Intertech and CUNO shall take all such action as may be
necessary or appropriate under the securities or blue sky laws of the states or
other political subdivisions of the United States and the securities laws of any
applicable foreign countries or other political subdivision thereof, in
connection with the transactions contemplated by this Agreement.
(d) Commercial Intertech and CUNO shall have prepared, and CUNO shall file
and pursue, an application to permit listing of the CUNO Common Stock on Nasdaq
and any other national securities exchanges selected by CUNO.
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(e) Commercial Intertech and CUNO shall each take all such action as may
be necessary or appropriate to cause the conditions set forth in SECTION 2.03 to
be satisfied and to effect the Distribution on the Distribution Date.
SECTION 2.03 Conditions to the Distribution. The Commercial Intertech Board
shall in its discretion establish the Record Date and the Distribution Date and
all appropriate procedures in connection with the Distribution, but in no event
shall the Distribution Date occur prior to such time as each of the following
have occurred or have been waived by the Commercial Intertech Board in its sole
discretion: (i) the later of August 19, 1996 or the earliest practicable date
following approval by Nasdaq of the CUNO Common Stock for trading thereon and
the commencement of trading and (ii) the absence of any order, injunction or
decree of any court or any governmental authority which prohibits or makes
illegal the Distribution.
ARTICLE III
TRANSACTIONS RELATING TO THE DISTRIBUTION
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SECTION 3.01 Intercorporate Reorganization.
(a) Subject to SECTION 3.07, prior to or on the Distribution Date,
Commercial Intertech and CUNO shall undertake to complete all actions necessary
to (i) transfer, or cause to be transferred, to CUNO or a CUNO Subsidiary, as
appropriate, effective as of the Cut-off Date, all of the right, title and
interest of Commercial Intertech or any Commercial Intertech Subsidiary, as
appropriate, in any CUNO Assets and have CUNO or a CUNO Subsidiary, as
appropriate, assume and agree to pay, perform and discharge in due course each
of the CUNO Assumed Liabilities, and (ii) transfer, or cause to be transferred,
to Commercial Intertech or a Commercial Intertech Subsidiary, as appropriate,
effective as of the Cut-off Date, all the right, title and interest of CUNO or
any CUNO Subsidiary, as appropriate, in any Commercial Intertech Assets and have
Commercial Intertech or a Commercial Intertech Subsidiary, as appropriate,
assume and agree to pay, perform and discharge in due course each of the
Commercial Intertech Assumed Liabilities. Following the Distribution Date,
Commercial Intertech and CUNO shall take any additional actions which are
necessary to effectuate the foregoing. In connection with the foregoing, to the
extent a CUNO Asset has not been duly transferred to CUNO or a CUNO Subsidiary,
as appropriate, pursuant to this SECTION 3.01, following the Distribution Date,
all CUNO Assets and CUNO Liabilities shall be deemed to be the property of CUNO,
and all Commercial Intertech Assets and Commercial Intertech Liabilities shall
be deemed to be the property of Commercial Intertech.
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(b) In connection with the transfers of assets other than capital stock and
the assumptions of Liabilities contemplated by subsection (a) of this Section,
Commercial Intertech and CUNO shall execute or cause to be executed by the
appropriate entities the Conveyance and Assumption Instruments in such forms as
Commercial Intertech and CUNO shall reasonably agree, including the transfer of
real property by deed. The transfer of capital stock shall be effected by means
of delivery of stock certificates duly endorsed or accompanied by duly executed
stock powers and notation on the stock records books of the corporation or other
legal entities involved and, to the extent required by applicable law, by
notation on appropriate registries.
(c) 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 or otherwise, representing and warranting in any way as to the value
or freedom from encumbrance of, or any other matter concerning, any assets of
such party, it being agreed and understood that all assets are being transferred
"as is, where is."
SECTION 3.02 Repayment of Intercompany Indebtedness.
(a) Elimination of Intercompany Accounts as of the Cut-off Date. All
intercompany receivables, payables and loans between CUNO and the CUNO
Subsidiaries, on the one hand, and Commercial Intertech and the Commercial
Intertech Subsidiaries, on the other hand, shall be settled within twelve (12)
months from the Distribution Date, with the exact date of payment (or net
payment, including offsets) to be determined by the mutual agreement of the
parties hereto. Proceeds from the $30 million term facility will be used to
immediately repay the loan payable to Commercial Intertech.
(b) Cash Management After the Cut-off Date. Commercial Intertech and CUNO
shall establish and maintain a separate cash management system with respect to
the CUNO Business in accordance with past practice.
SECTION 3.03 The CUNO Board. At the Distribution Date, the CUNO Board
shall consist of, and CUNO and Commercial Intertech shall take all actions which
may be required to elect or otherwise appoint as directors of CUNO on or prior
to the Distribution Date, the persons named on SCHEDULE 3.03.
SECTION 3.04 Business, Administrative and Support Services.
(a) Coverage. Commercial Intertech and its predecessors have historically
provided various business, administrative and support Services to its
Subsidiaries, including CUNO and the CUNO Subsidiaries. From and after the
Distribution Date, CUNO and the CUNO Subsidiaries will be responsible for
procuring or providing such Services in their own right. To ensure that CUNO may
continue to conduct business during the interim period,
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Commercial Intertech agrees to provide the Services to CUNO and the CUNO
Subsidiaries as set forth in this SECTION 3.04.
(b) Agreement to Provide Service. Commercial Intertech, to facilitate
transition by CUNO to standalone capability, agrees to provide the Services to
CUNO or any CUNO Subsidiary following the Distribution Date for a period up to
twelve (12) months from the Distribution Date; provided, however, that certain
Services, upon mutual agreement of CUNO and Commercial Intertech, may be
extended beyond such 12-month period as necessary to assist in the year-end
closing process for the first full fiscal year following the Distribution Date.
Any and all of the Services to be provided by Commercial Intertech may be
terminated prior to completion of the 12-month transition period upon the mutual
consent of both parties.
(c) Scope of Services. Commercial Intertech shall perform the Services in
a manner consistent with the manner in which such Services have been performed
prior to the Distribution Date. Commercial Intertech will also assist CUNO or
the CUNO Subsidiary, as appropriate, in transferring data to CUNO from
Commercial Intertech's systems and establishing interconnection between systems,
and otherwise transferring the operation of the Services to CUNO or the CUNO
Subsidiary.
(d) Compensation. Commercial Intertech shall be paid by CUNO or the CUNO
Subsidiary, as appropriate, for the Services provided, in accordance with past
practice and corporate assessment methods at rates comparable to those charged
to CUNO by Commercial Intertech for similar services provided prior to the
Distribution. Such rates are considered by CUNO and Commercial Intertech to be
reasonable approximations of market-based rates for purposes of this Agreement.
Such services will be invoiced to CUNO by Commercial Intertech on a monthly
basis and are payable by CUNO within 30 days of the invoice date.
(e) Consents of Third Parties. Commercial Intertech shall use commercially
reasonable efforts, at CUNO's direction and expense, to obtain any consents or
licenses from third parties necessary for the continuation of the requested
Services; provided that Commercial Intertech shall have no obligation to provide
Services for which such consent is required and shall not have been obtained.
SECTION 3.05 Insurance.
(a) Coverage. Commercial Intertech has historically provided Policies which
include CUNO and the CUNO Subsidiaries within the definition of the named
insured. Except for those Policies issued in the name of CUNO or any CUNO
Subsidiary, coverage of CUNO and the CUNO Subsidiaries shall cease under the
Policies as of the Distribution Date. From and after the Distribution Date, CUNO
and CUNO Subsidiaries will be responsible for obtaining and maintaining
insurance coverages in their own right. Commercial Intertech shall retain the
existing Policies, together with the rights, benefits and privileges thereunder.
It is agreed that CUNO and the CUNO Subsidiaries shall have the right to present
claims under such Policies for insured
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incidents occurring from the date said coverage first commenced until the
Distribution Date to the extent that the terms and conditions of any such
Policies so allow. It is understood that any such Policies written on a "claims
made" basis rather than "occurrence" basis may not provide coverage to CUNO and
the CUNO Subsidiaries for incidents occurring prior to the Distribution Date but
which are first reported after the Distribution Date.
(b) Administration and Reserves. From and after the Cut-off Date:
(i) Commercial Intertech shall be responsible for the (A) Premium
Administration of all Policies, and (B) Claims Administration with respect
to the Commercial Intertech Liabilities; provided, that the retention of
the existing Policies by Commercial Intertech is in no way intended to
limit, inhibit or preclude any right to insurance coverage for any insured
claim of a named insured under the Policies, including but not limited to
CUNO and the CUNO Subsidiaries;
(ii) CUNO or a CUNO Subsidiary, as appropriate, shall be
responsible for the Claims Administration with respect to the CUNO
Liabilities;
(iii) Commercial Intertech or a Commercial Intertech Subsidiary,
as appropriate, shall be entitled to reserves or the benefit of reserves
held by any insurance carrier, with respect to Commercial Intertech
Liabilities; and
(iv) CUNO or a CUNO Subsidiary, as appropriate, shall be entitled
to reserves, or the benefit of reserves held by any insurance carrier, with
respect to CUNO Liabilities.
(c) Insurance Premiums. Commercial Intertech shall pay the premiums, to the
extent that CUNO or a CUNO Subsidiary does not pay premiums with respect to CUNO
Liabilities (retrospectively-rated or otherwise), as required under the terms
and conditions of the respective Policies, whereupon CUNO or a CUNO Subsidiary,
as appropriate, shall upon receipt of a copy of the retrospective-rating
adjustment forthwith reimburse Commercial Intertech or a Commercial Intertech
Subsidiary, as appropriate, for that portion of such premiums paid by Commercial
Intertech as are attributable to the CUNO Liabilities.
(d) Insurance Proceeds. Proceeds received with respect to claims made under
the Policies shall be paid to Commercial Intertech with respect to the
Commercial Intertech Liabilities and to CUNO with respect to the CUNO
Liabilities.
(e) Agreement for Waiver of Conflict and Shared Defense. In the event that
a Policy or Policies provide coverage for both Commercial Intertech and CUNO
relating to the same occurrence, Commercial Intertech and CUNO agree to jointly
defend and to waive any conflict of interest necessary to the conduct of that
joint defense. Nothing in this subsection (e) shall be construed to limit or
otherwise alter in any way the indemnity obligations of the parties to this
Agreement, including those created by this Agreement, by operation of law or
otherwise.
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(f) Directors' and Officers' Insurance. Commercial Intertech shall use
reasonable efforts to cause the persons currently serving as officers and/or
directors of Commercial Intertech who will become effective as of the
Distribution Date officers and/or directors of CUNO to be covered for a period
of three years from the Distribution Date by the directors' and officers'
liability insurance policy maintained by Commercial Intertech (provided that
Commercial Intertech may substitute therefor policies of at least the same
coverage and amounts containing terms and conditions which are not less
advantageous than such policy) with respect to matters covered under the
existing policy occurring prior to the Distribution Date which were committed by
such officers and/or directors in their capacity as such; provided however, that
in no event shall Commercial Intertech be required to expend with respect to any
year more than the Insurance Amount to maintain or procure insurance coverage
pursuant hereto; provided further, that if Commercial Intertech is unable to
maintain or obtain the insurance called for by this SECTION 3.05(F), Commercial
Intertech shall use reasonable efforts to obtain as much comparable insurance as
available for the Insurance Amount. In the event Commercial Intertech or any of
its successors or assigns (i) consolidates with or merges into any other Person
and shall not be the continuing or surviving corporation or entity of such
consolidation or merger, or (ii) transfers or conveys all or substantially all
of its properties and assets to any Person, then, and in each such case, to the
extent necessary, proper provision shall be made so that the successors and
assigns of Commercial Intertech assume the obligations set forth in this SECTION
3.05(F). The provisions of this SECTION 3.05(F) are intended to be for the
benefit of, and shall be enforceable by, each such officer and director and his
or her heirs and representatives.
SECTION 3.06 Use of Names.
(a) Use of CUNO Name. Any existing printed material showing any affiliation
or connection of Commercial Intertech or any of its Subsidiaries with CUNO or
any CUNO Subsidiary may be used by Commercial Intertech and its Subsidiaries
only for a period ending eight (8) months after the Distribution Date. On and
after the Distribution Date, Commercial Intertech and its Subsidiaries shall not
otherwise represent to third parties that any of them is affiliated with CUNO or
any CUNO Subsidiary.
(b) Use of Commercial Intertech Name. Any existing printed material
showing any affiliation or connection of CUNO or any of its Subsidiaries with
Commercial Intertech or any Commercial Intertech Subsidiary may be used by CUNO
and its Subsidiaries only for a period ending eight (8) months after the
Distribution Date. On and after the Distribution Date, CUNO and its
Subsidiaries shall not otherwise represent to third parties that any of them is
affiliated with Commercial Intertech or any Commercial Intertech Subsidiary.
SECTION 3.07 Transfers Not Effected Prior to the Distribution;
Transfers Deemed Effective as of the Cutoff Date. To the extent that any
transfers and assumptions contemplated by this ARTICLE III shall not have been
consummated prior to the Distribution Date, the parties shall cooperate to
effect such transfers as promptly following the Distribution Date as shall be
practicable, it nonetheless being agreed and understood by all the parties that
no party shall be liable in any manner to any other party for any failure of any
of the transfers contemplated by
12
this Article III to be consummated prior to the Distribution Date. Subject to
the provisions of SECTION 2.03, 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
Commercial Intertech and CUNO shall, and shall cause their respective
Subsidiaries 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 III, In the event that any such transfer of assets
(other than capital stock of corporations to be transferred hereunder) or
Liabilities has not been consummated, effective as of and after the Cut-off
Date, the party retaining such asset or Liability shall thereafter hold such
asset for the party entitled thereto (at the expense of the party entitled
thereto) and retain such Liability for the account of the party by whom such
Liability is to be assumed, 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 reasonably possible, in the same position as would have existed had
such asset or Liability been transferred as of the Cut-off Date. As and when any
such asset or Liability becomes transferable, such transfer shall be effected
forthwith. The parties agree that, as of the Cut-off Date, each party hereto
shall be deemed to have assumed in accordance with the terms of this Agreement
and the Ancillary Agreements all of the Liabilities, and all duties, obligations
and responsibilities incident thereto, which such party is required to assume
pursuant to the terms hereof and thereof.
SECTION 3.08 Commercial Intertech Guarantees. CUNO shall use its
reasonable efforts to cause itself or one of its Affiliates to be substituted in
all respects for Commercial Intertech in respect of all obligations of
Commercial Intertech under any guarantee each of the guarantees and comfort
letters set forth on SCHEDULE 1.02, effective as of the next maturity date
after the date hereof of each of the related agreements with respect to which
such guaranty or comfort letter was issued.
SECTION 3.09. Corporate Opportunities. The parties hereto
acknowledge that certain of the directors and officers of CUNO or a CUNO
Subsidiary may also be a director or officer of Commercial Intertech or a
Commercial Intertech Subsidiary following the Distribution Date. In connection
with the foregoing, the parties hereto agree that following the Distribution
Date, no opportunity, transaction, agreement or other arrangement of which an
officer or director of Commercial Intertech, a Commercial Intertech Subsidiary,
or any other Person in which Commercial Intertech acquires a financial interest
or is a party, has knowledge, shall be the property or corporate opportunity of
CUNO or any CUNO Subsidiary, even if such opportunity, transaction, agreement or
other arrangement relates to the ownership of interests in or the management and
operation of the CUNO Business.
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ARTICLE IV
INDEMNIFICATION
---------------
SECTION 4.01 Indemnification by Commercial Intertech. Except with
respect to claims for proceeds of Policies or other amounts received, which
shall be governed by SECTION 3.05 and SECTION 4.03, Commercial Intertech
shall indemnify, defend and hold harmless the CUNO Indemnitees from and against
each of the following:
(a) The Commercial Intertech Liabilities and any and all Losses of the CUNO
Indemnitees arising out of, or due to the failure or alleged failure of
Commercial Intertech or any of its Affiliates to pay, perform or otherwise
discharge in due course any of the Commercial Intertech Liabilities.
(b) All Losses of any CUNO Indemnitee arising (whether before, on or after
the Distribution Date) in connection with the Commercial Intertech Assets or the
Commercial Intertech Businesses, whether any such Losses relate to events,
occurrences or circumstances occurring or existing, or whether any such Losses
are asserted, before, on or after the Distribution Date.
(c) All Losses of any CUNO Indemnitee arising out of or based upon any
untrue statement or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, with respect to the
information set forth in the following parts of any preliminary or final Form 10
or any amendment thereto: Commercial Intertech's letter to its stockholders or
under the headings "Risk Factors -- Effects on Commercial Intertech Common
Stock," "Introduction," "The Distribution," "Management -- Executive
Compensation," and "Selected Financial and Other Data" (other than with respect
to information provided by the CUNO Group), and any information under
"Information Statement Summary" derived from information contained under such
headings.
Notwithstanding anything in this SECTION 4.01 to the contrary, neither
Commercial Intertech nor any Commercial Intertech Subsidiary shall have any
liability whatsoever to either CUNO or any CUNO Subsidiary in respect of any
Tax, except as otherwise provided in the Tax Allocation Agreement.
SECTION 4.02 Indemnification by CUNO. Except with respect to claims
for proceeds of Policies or other amounts received, which shall be governed by
SECTION 3.05 and SECTION 4.03, CUNO shall indemnify, defend and hold harmless
the Commercial Intertech Indemnitees from and against each of the
following:
(a) The CUNO Liabilities and any and all Losses of the Commercial Intertech
Indemnitees arising out of, or due to the failure or alleged failure of CUNO or
any of its Affiliates to pay, perform or otherwise discharge in due course any
of the CUNO Liabilities.
14
(b) All Losses of any Commercial Intertech Indemnitee arising (whether
before, on or after the Distribution Date) in connection with the CUNO Assets or
the CUNO Business, whether any such Losses relate to events, occurrences or
circumstances occurring or existing, or whether any such Losses are asserted,
before, on or after the Distribution Date.
(c) All Losses of any Commercial Intertech Indemnitee arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, with respect
to all information set forth in any preliminary or final Form 10 or any
amendment thereto, except for information set forth under the headings specified
in SECTION 4.01(c), with respect to which Commercial Intertech will indemnify
CUNO, and except for information set forth under the headings "Arrangements
Between the Company and Commercial Intertech," and "Certain Transactions in
Connection with the Distribution."
Notwithstanding anything in this SECTION 4.02 to the contrary, neither CUNO
nor any CUNO Subsidiary shall have any liability whatsoever to either Commercial
Intertech or any Commercial Intertech Subsidiary in respect of any Tax, except
as otherwise provided in the Tax Allocation Agreement.
SECTION 4.03 Limitations on Indemnification Obligations.
(a) The amount which any Indemnifying Party is or may be required to pay to
any Indemnitee pursuant to SECTION 4.01 or SECTION 4.02 shall be reduced
(including, without limitation, retroactively) by any proceeds of Policies or
other amounts actually recovered by or on behalf of such Indemnitee, in
reduction of the related Loss. If an Indemnitee shall have received the
Indemnity Payment required by this Agreement from an Indemnifying Party in
respect of any Loss and shall subsequently actually receive proceeds of Policies
or other amounts in respect of such Loss, then such Indemnitee shall pay to such
Indemnifying Party a sum equal to the amount actually received (up to but not in
excess of the amount of any Indemnity Payment made hereunder). An insurer who
would otherwise be obligated to pay any claim shall not be relieved of the
responsibility with respect thereto, or, solely by virtue of the indemnification
provisions hereof, have any subrogation rights with respect thereto, it being
expressly understood and agreed that no insurer or any other third party shall
be entitled to a "windfall" (i.e., a benefit they would not be entitled to
receive in the absence of the indemnification provisions) by virtue of the
indemnification provisions hereof.
(b) If any Indemnitee realizes a Tax benefit or detriment in one or more
Tax periods by reason of having incurred an Indemnifiable Loss for which such
Indemnitee receives an Indemnity Payment from an Indemnifying Party, then such
Indemnitee shall pay to such Indemnifying Party an amount equal to the Tax
benefit or such Indemnifying Party shall pay to such Indemnitee an additional
amount equal to the Tax detriment (taking into account any Tax detriment
resulting from the receipt of such additional amounts), as the case may be. The
amount of any Tax benefit or any Tax detriment for a Tax period realized by an
Indemnitee by reason of having incurred an Indemnifiable Loss shall be deemed to
equal the product obtained
15
by multiplying (i) the amount of any deduction or inclusion in income for such
period resulting from such Indemnifiable Loss or the payment thereof, as the
case may be, by (ii) the highest applicable marginal Tax rate for such period
(provided, however, that the amount of any Tax benefit attributable to an amount
that is creditable shall be deemed to equal the amount of such creditable item).
Any payment due under this SECTION 4.03(b) with respect to a Tax benefit or Tax
detriment realized by an Indemnitee in a Tax period shall be due and payable
within 30 days from the time the return for such Tax period is due, without
taking into account any extension of time granted to the party filing such
return.
SECTION 4.04 Procedures for Indemnification.
(a) Procedures for Indemnification of Third Party Claims shall be as
follows:
(i) If an Indemnitee shall receive notice or otherwise learn of a
Third Party Claim with respect to which an Indemnifying Party may be
obligated to provide indemnification pursuant to SECTION 4.01, SECTION
4.02, or any other Section of this Agreement, such Indemnitee shall give
such Indemnifying Party written notice thereof promptly after becoming
aware of such Third Party Claim; provided that the failure of any
Indemnitee to give notice as provided in this SECTION 4.04(a)(i) shall not
relieve the related Indemnifying Party of its obligations under this
ARTICLE IV, except to the extent that such Indemnifying Party is prejudiced
by such failure to give notice. Such notice shall describe the Third Party
Claim in reasonable detail and, if ascertainable, shall indicate the amount
(estimated if necessary) of the Loss that has been or may be sustained by
such Indemnitee.
(ii) An Indemnifying Party may elect to defend or to seek to settle
or compromise, at such Indemnifying Party's own expense and by such
Indemnifying Party's own counsel, any Third Party Claim. Within 30 days of
the receipt of notice from an Indemnitee in accordance with SECTION
4.04(a)(i) (or sooner, if the nature of such Third Party Claim so
requires), the Indemnifying Party shall notify the Indemnitee of its
election whether the Indemnifying Party will assume responsibility for
defending such Third Party Claim, which election shall specify any
reservations or exceptions. After notice from an Indemnifying Party to an
Indemnitee of its election to assume the defense of a Third Party Claim,
such Indemnifying Party shall not be liable to such Indemnitee under this
ARTICLE IV for any legal or other expenses (except expenses approved in
advance by the Indemnifying Party) subsequently incurred by such Indemnitee
in connection with the defense thereof; provided that, if the defendants in
any such claim include both the Indemnifying Party and one or more
Indemnitees and in any Indemnitee's reasonable judgment a conflict of
interest between one or more of such Indemnitees and such Indemnifying
Party exists in respect of such claim or if the Indemnifying Party shall
have assumed responsibility for such claim with any reservations or
exceptions, such Indemnitees shall have the right to employ separate
counsel to represent such Indemnitees and in that event the reasonable fees
and expenses of such separate counsel (but not more than one separate
counsel reasonably satisfactory
16
to the Indemnifying Party) shall be paid by such Indemnifying Party. If an
Indemnifying Party elects not to assume responsibility for defending a
Third Party Claim, or fails to notify an Indemnitee of its election as
provided in this SECTION 4.04(a)(ii), such Indemnitee may defend or
(subject to the remainder of this SECTION 4.04(a)(ii)) seek to compromise
or settle such Third Party Claim. Notwithstanding the foregoing, neither an
Indemnifying Party nor an Indemnitee may settle or compromise any claim
over the objection of the other; provided, however, that consent to
settlement or compromise shall not be unreasonably withheld. Neither an
Indemnifying Party nor an Indemnitee shall consent to entry of any judgment
or enter into any settlement of any Third Party Claim which does not
include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnitee, in the case of a consent or settlement by an
Indemnifying Party, or the Indemnifying Party, in the case of a consent or
settlement by the Indemnitee, of a written release from all liability in
respect to such Third Party Claim.
(iii) If an Indemnifying Party chooses to defend or to seek to
compromise or settle any Third Party Claim, the related Indemnitee shall
make available to such Indemnifying Party any personnel or any books,
records or other documents within its control or which it otherwise has the
ability to make available that are necessary or appropriate for such
defense, settlement or compromise, and shall otherwise cooperate in the
defense, settlement or compromise of such Third Party Claims, subject to
the establishment of appropriate confidentiality arrangements which are
reasonably satisfactory to Commercial Intertech and CUNO.
(iv) Notwithstanding anything else in this SECTION 4.04 to the
contrary, if an Indemnifying Party notifies the related Indemnitee in
writing of such Indemnifying Party's desire to settle or compromise a Third
Party Claim on the basis set forth in such notice (provided that such
settlement or compromise includes as an unconditional term thereof the
giving by the claimant or plaintiff of a written release of the Indemnitee
from all liability in respect thereof) and the Indemnitee shall notify the
Indemnifying Party in writing that such Indemnitee declines to accept any
such settlement or compromise, such Indemnitee may continue to contest such
Third Party Claim, free of any participation by such Indemnifying Party, at
such Indemnitee's sole expense. In such event, the obligation of such
Indemnifying Party to such Indemnitee with respect to such Third Party
Claim shall be equal to (i) the costs and expenses of such Indemnitee prior
to the date such Indemnifying Party notifies such Indemnitee of the offer
to settle or compromise (to the extent such costs and expenses are
otherwise indemnifiable hereunder) plus (ii) the lesser of (A) the amount
of any offer of settlement or compromise which such Indemnitee declined to
accept and (B) the actual out-of-pocket amount such Indemnitee is obligated
to pay subsequent to such date as a result of such Indemnitee's continuing
to pursue such Third Party Claim.
(b) Any claim on account of a Loss which does not result from a Third Party
Claim shall be asserted by written notice given by the Indemnitee to the related
Indemnifying Party. Such Indemnifying Party shall have a period of 30 days
after the receipt of such notice within
17
which to respond thereto. If such Indemnifying Party does not respond within
such 30-day period, such Indemnifying Party shall be deemed to have refused to
accept responsibility to make payment. If such Indemnifying Party does not
respond within such 30-day period or rejects such claim in whole or in part,
such Indemnitee shall be free to pursue such remedies as may be available to
such party under this Agreement or under applicable law.
(c) In addition to any adjustments required pursuant to SECTION 4.03, if
the amount of any Loss shall, at any time subsequent to the payment required by
this Agreement, be reduced by recovery, settlement or otherwise, the amount of
such reduction, less any expenses incurred in connection therewith, shall
promptly be repaid by the Indemnitee to the Indemnifying Party.
(d) In the event of payment by an Indemnifying Party to any Indemnitee in
connection with any Third Party Claim, such Indemnifying Party shall be
subrogated to and shall stand in the place of such Indemnitee as to any events
or circumstances in respect of which such Indemnitee may have any right or claim
relating to such Third Party Claim against any claimant or plaintiff asserting
such Third Party Claim or against any other Person. Such Indemnitee shall
cooperate with such Indemnifying Party in a reasonable manner, and at the cost
and expense of such Indemnifying Party, in prosecuting any subrogated right or
claim.
SECTION 4.05 Remedies Cumulative. The remedies provided in this
ARTICLE IV shall be cumulative and shall not preclude assertion by any
Indemnitee of any other rights or the seeking of any and all other remedies
against any Indemnifying Party.
SECTION 4.06 Survival of Indemnities. The obligations of each of
Commercial Intertech and CUNO under this ARTICLE IV shall survive the sale or
other transfer by it of any assets or businesses or the assignment by it of any
Liabilities, with respect to any Loss of the other related to such assets,
businesses or Liabilities.
ARTICLE V
ACCESS TO INFORMATION
---------------------
SECTION 5.01 Access to Information. From and after the Distribution
Date, Commercial Intertech shall afford to CUNO and its Representatives
reasonable access (including using reasonable efforts to give access to Persons
or firms possessing information) and duplicating rights during normal business
hours to all Information within Commercial Intertech's possession or in the
possession of a Commercial Intertech Subsidiary relating to CUNO, any CUNO
Subsidiary, any CUNO Assets or the CUNO Business, insofar as such access is
reasonably required by CUNO or any CUNO Subsidiary. Similarly, CUNO shall
afford to Commercial Intertech and its Representatives reasonable access
(including using reasonable efforts to give access to Persons or firms
possessing Information) and duplicating rights during normal business hours to
Information within CUNO's possession relating to Commercial Intertech or any
Commercial Intertech Subsidiary and insofar as such access is reasonably
18
required by Commercial Intertech or any Commercial Intertech Subsidiary.
Information may be requested under this ARTICLE V for, without limitation,
audit, accounting, claims, litigation and tax purposes, as well as for purposes
of fulfilling disclosure and reporting obligations and for performing this
Agreement and the transactions contemplated hereby.
SECTION 5.02 Production of Witnesses. After the Distribution Date,
each of Commercial Intertech and CUNO shall, and shall cause their respective
Subsidiaries to, use reasonable efforts to make available to the other party and
its Subsidiaries, upon written request, its directors, officers, employees and
agents as witnesses to the extent that any such Person may reasonably be
required (giving consideration to business demands of such Representatives) in
connection with any legal, administrative or other proceedings in which the
requesting party may from time to time be involved.
SECTION 5.03 Retention of Records. Except as otherwise required by
law or agreed to in writing, each of Commercial Intertech and CUNO shall, and
shall cause each of their respective Subsidiaries to, retain for a period of at
least seven years following the Distribution Date, all significant Information
relating to the business of the other and the other's Subsidiaries. In
addition, after the expiration of such seven-year period, such Information shall
not be destroyed or otherwise disposed of at any time, unless, prior to such
destruction or disposal, (a) the party proposing to destroy or otherwise dispose
of such Information shall provide no less than 30 days' prior written notice to
the other, specifying in reasonable detail the Information proposed to be
destroyed or disposed of and (b) if a recipient of such notice shall request in
writing prior to the scheduled date for such destruction or disposal that any of
the Information proposed to be destroyed or disposed of be delivered to such
requesting party, the party proposing the destruction or disposal shall promptly
arrange for the delivery of such of the Information as was requested at the
expense of the party requesting, such Information.
SECTION 5.04 Confidentiality. Each of Commercial Intertech and CUNO
shall, and shall cause each of their respective Subsidiaries and Representatives
to, hold, in strict confidence, all material Information concerning the other in
its possession or furnished by the other or the other's Representatives pursuant
to either this Agreement or any Ancillary Agreement (except to the extent that
such Information has been (a) in the public domain through no fault of such
party or (b) later lawfully acquired from other sources by such party), and each
party shall use its best efforts to ensure that such Information shall not be
used to the disadvantage of the other, and shall not release or disclose such
Information to any other Person, except its Representatives, unless compelled to
disclose by judicial or administrative process or, as advised by its counsel, by
other requirements of law.
19
ARTICLE VI
MISCELLANEOUS
-------------
SECTION 6.01 Complete Agreement; Construction. This Agreement and the
Ancillary Agreements, including any schedules and exhibits hereto or thereto,
and other agreements and documents referred to herein, 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. 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 the
Employee Benefits and Compensation Allocation Agreement or the Tax Allocation
Agreement, the provisions of the Employee Benefits and Compensation Allocation
Agreement or the Tax Allocation Agreement, as appropriate, shall control.
SECTION 6.02 Survival of Agreements. Except as otherwise contemplated
by this Agreement, all covenants and agreements of the parties contained in this
Agreement shall survive the Distribution Date.
SECTION 6.03 Expenses. CUNO shall bear all costs and expenses related to
the Distribution, including but not limited to legal, audit, tax, employee
benefit, printing, advising and other personal services.
SECTION 6.04 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of laws thereof.
SECTION 6.05 Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be delivered by
hand, mailed by registered or certified mail (return receipt requested), or sent
by cable, telegram, telex or telecopy (confirmed by regular, first-class mail),
to the parties at the following addresses (or at such other addresses for a
party as shall be specified by like notice) and shall be deemed given on the
date on which such notice is received:
if to Commercial Intertech:
Commercial Intertech Corp.
1775 Logan Avenue
Youngstown, Ohio 44505
Attention: President
20
if to CUNO:
CUNO Incorporated
400 Research Parkway
Meridien, Connecticut 06450
Attention: President
SECTION 6.06 Dispute Resolution. Commercial Intertech and CUNO shall each
appoint two members from their managerial staffs to serve on the Dispute
Resolution Committee. The Dispute Resolution Committee shall meet at either
Commercial Intertech's or CUNO's offices, whichever is more appropriate in light
of the issue to be discussed, at such time as either party may demand in
writing, for the purpose of resolving any dispute arising, under this Agreement
or the Ancillary Agreements. If the Dispute Resolution Committee is unable to
resolve any dispute submitted to it by any party hereto within 30 days after
such submission, the Dispute Resolution Committee shall refer the issue to the
Chief Executive Officer of each of Commercial Intertech and CUNO for resolution.
If such officers are unable to resolve such dispute within fifteen days after
referral, such dispute shall be referred to binding arbitration as provided for
in SECTION 6.07. No such dispute shall be the subject of arbitration or other
formal proceeding between the parties hereto before being considered by the
Dispute Resolution Committee and the Chief Executive Officers of Commercial
Intertech and CUNO.
SECTION 6.07 Binding Arbitration.
(a) Any controversy, dispute or claim (whether lying in contract or tort)
between or among the parties arising out of or related to this Agreement or the
Ancillary Agreements shall, after the dispute resolution process set forth in
SECTION 6.06 has been completed, be submitted to arbitration in accordance with
this SECTION 6.07.
(b) Each such controversy, dispute or claim submitted by a party to
arbitration shall be heard by an arbitration panel composed of three
arbitrators, in accordance with the following provisions. Commercial Intertech
and CUNO shall each appoint one arbitrator within fifteen days after the matter
has been submitted to arbitration. The two arbitrators appointed by, or on
behalf of, the parties shall jointly appoint a third arbitrator, who shall act
as Chairman of the arbitration panel. If for any reason an arbitrator is unable
to perform his or her function, he or she shall be replaced and a substitute
shall be appointed in the same manner as the arbitrator replaced.
(c) Except as otherwise stated herein, arbitration proceedings shall be
conducted in accordance with such rules as the parties mutually determine. In
any arbitration proceeding hereunder: (i) proceedings shall, unless otherwise
agreed by the parties, be held in Cleveland, Ohio; (ii) the arbitration panel
shall have no power to award punitive damages and shall be bound by all statutes
of limitation which would otherwise be applicable in a judicial action brought
by a party; and (iii) the decision of a majority of the arbitrators (or the
Chairman if there is no such majority) shall be final and binding on the parties
to this Agreement and shall
21
be enforceable in any court of competent jurisdiction. The parties hereby waive
any rights to appeal or to review of such decision by any court or tribunal and
also waive any objections to such enforcement. THE PARTIES HEREBY AGREE TO
WAIVE ALL RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY CONTROVERSY, DISPUTE OR
CLAIM SUBMITTED TO ARBITRATION UNDER THIS AGREEMENT.
(d) Notice preliminary to, in conjunction with, or incident to any
arbitration proceeding may be sent to the parties by registered or certified
mail (return receipt requested) at the address set forth in SECTION 6.05 and
personal service is hereby waived. The arbitrators shall award recovery of all
costs and fees incurred in connection with the arbitration and the proceeding,
and obtaining any judgment related thereto, of each disputed matter (including,
reasonable attorney's fees and expenses and arbitrator's fees and expenses and
court costs, in each case, with respect to such disputed matter) to the party
that substantially prevails in the arbitration proceeding with respect to such
disputed matter.
(e) No provision of this SECTION 6.07 shall limit the right of any party to
this Agreement to exercise self-help remedies such as set-off, or to obtain
provisional, equitable or ancillary remedies from a court of competent
jurisdiction before, after, or during the pendency of any arbitration or other
proceeding. The exercise of a remedy does not waive the right of either party
to resort to arbitration.
SECTION 6.08 Amendments. This Agreement may not be modified or
amended except by an agreement in writing signed by the parties.
SECTION 6.09 Successors and Assigns. The rights under this Agreement
may not be assigned and duties may not be delegated by any party without the
written consent of the other parties, which consent shall not be unreasonably
withheld. 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.
SECTION 6.10 Omitted.
SECTION 6.11 No Third Party Beneficiaries. Except for the provisions of
ARTICLE IV relating to Indemnitees and SECTION 3.05(f) relating to directors and
officers, this Agreement is solely for the benefit of the parties hereto and
their respective Affiliates and should not be deemed to confer upon third
parties (including any employee of Commercial Intertech or CUNO or of any
Commercial Intertech Subsidiary or CUNO Subsidiary) any remedy, claim,
reimbursement, claim of action or other right in excess of those existing
without reference to this Agreement.
22
SECTION 6.12 Titles and Headings. Titles and headings to sections
herein are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.
SECTION 6.13 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. Without
prejudice to any rights or remedies otherwise available to any party hereto,
each party hereto acknowledges that damages would be an inadequate remedy for
any breach of the provisions of this Agreement and agrees that the obligations
of the parties hereunder shall be specifically enforceable.
SECTION 6.14 No Waivers. No failure by any party hereto to take any
action or assert any right hereunder shall be deemed to be a waiver of such
right in the event of the continuation or repetition of the circumstances giving
rise to such right, unless expressly waived in writing by the party against whom
the existence of such waiver is asserted.
SECTION 6.15 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 6.16 Performance. Each party hereto shall cause to be
performed, and hereby guarantees the performance of, all actions, agreements and
obligations set forth herein to be performed by any Subsidiary or Affiliate of
such party.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
COMMERCIAL INTERTECH CORP.
By:
--------------------------------------
Paul J. Powers
Chairman of the Board, Chief Executive
Officer and President
CUNO INCORPORATED
By:
--------------------------------------
Mark G. Kachur
Chief Operating Officer
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SCHEDULE 1.02
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Commercial Intertech Guarantees
-------------------------------
COMPANY HOLDER INSTRUMENT
- -------------------------------- ----------------- ---------------------
CUNO Filtration Asia Pte. Ltd. ABN Amro Guarantee for USD
1,500,000 short-term
credit facility
CUNO K.K. First NBD Guarantee for JPY
800,000,000 short-
term credit facility
and JPY 150,000,000
term loan due to
mature October 31,
2000
CUNO K.K. Sanwa Bank Comfort letter for
JPY 400,000,000
short-term credit
facility
CUNO K.K. The Bank of Tokyo Comfort letter for
JPY 350,000,000
short-term credit
facility and JPY
250,000,000 term
loan due to mature
October 31, 2000
SCHEDULE 3.03
-------------
CUNO Board of Directors
-----------------------
NAME POSITION
- --------------------- ----------------------------------
Paul J. Powers Chairman of the Board of Directors
Mark G. Kachur Director
John M. Galvin Director
Gerald C. McDonough Director
C. Edward Midgley Director
Charles L. Cooney Director