Exhibit 2.1
DISTRIBUTION AGREEMENT
between
GP STRATEGIES CORPORATION
and
NATIONAL PATENT DEVELOPMENT CORPORATION
dated as of
________________, 2004
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DISTRIBUTION AGREEMENT, dated as of _______, 2004, between GP
Strategies Corporation, a Delaware
corporation ("GP"), and National Patent
Development Corporation, a Delaware
corporation ("NPDC").
R E C I T A L S
WHEREAS, the Board of Directors of GP has deemed it appropriate
and
advisable, to:
(a) separate and divide the existing
businesses of GP so that the NPDC Business
shall be owned directly and indirectly by
NPDC, and
(b) distribute, following such separation
and division, as a dividend to the
holders of shares of Common Stock of GP
(the "GP Common Stock") and Class B
Capital Stock of GP (the "GP Class B Stock"
and, collectively with the GP Common
Stock, the "GP Stock") all of the
outstanding shares of common stock of NPDC
(the "NPDC Common Stock");
WHEREAS, GP and NPDC have determined that it is necessary and
desirable
to set forth the principal corporate
transactions required to effect such
separation, division and distribution and
to set forth other agreements that
will govern certain other matters prior to
and following such separation,
division and distribution.
NOW, THEREFORE, in consideration of the mutual agreements,
provisions
and covenants contained in this Agreement,
the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.01 General. Unless otherwise
defined herein or unless the context
otherwise requires, the following terms
will have the following meanings (such
meanings to be equally applicable to the
singular and plural forms of the terms
defined).
"Action" means any action, suit, arbitration, inquiry, proceeding
or
investigation by or before any Governmental
Authority or any arbitration
tribunal.
"Affiliate" means, when used with respect to a specified
Person,
another Person that directly, or indirectly
through one or more intermediaries,
controls or is controlled by or is under
common control with the Person
specified.
"Agent" means Computershare Investor Services LLC, or such
other
company designated by GP, who shall act as
agent for the holders of GP Stock in
connection with the Distribution.
"Agreement" means this Distribution Agreement between GP and
NPDC,
including any amendments hereto and each
Schedule and Exhibit attached hereto.
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"Books and Records" means all books, records, manuals, agreements
and
other materials (in any form or medium),
including without limitation, all
mortgages, licenses, indentures, contracts,
financial data, customer lists,
marketing materials and studies,
advertising materials, price lists,
correspondence, distribution lists,
supplier lists, production data, sales and
promotional materials and records,
purchasing materials and records, personnel
records, manufacturing and quality control
records and procedures, blue prints,
research and development files, records,
data and laboratory books, accounts
records, sales order files, litigation
files, computer files, microfiche, tape
recordings and photographs.
"Code" means the Internal Revenue Code of 1986, as amended, or
any
successor law.
"Commission" means the United States Securities and Exchange
Commission.
"Consents" has the meaning ascribed to such term in Section
2.07
hereof.
"Conveyancing and Assumption Instruments" means, collectively,
the
various written agreements, instruments and
other documents to be entered into
to effect the Corporate Restructuring
Transactions or to otherwise effect the
transfer of assets and the assumption of
Liabilities in the manner contemplated
by this Agreement, the Related Agreements
and the Corporate Restructuring
Transactions.
"Corporate Restructuring Transactions" means, collectively, (a)
each of
the distributions, transfers, conveyances,
contributions, assignments and other
transactions described and set forth in
Exhibit A attached hereto, and (b) such
other distributions, transfers,
conveyances, contributions, assignments and
other transactions (so long as such other
distributions, transfers, conveyances,
contributions, assignments and other
transactions do not, individually or in the
aggregate, adversely affect the GP Business
(other than to a de minimis extent))
that may be required to be accomplished,
effected or consummated by GP, NPDC or
any of their respective Subsidiaries and
Affiliates in order to separate and
divide, in a series of transactions that,
to the extent intended to qualify for
tax-free transactions under the Code, shall
qualify for tax-free treatment under
the Code, the existing businesses of GP so
that, except as otherwise expressly
set forth in Exhibit A hereto:
(i)
assets, liabilities and business necessary for the continuing
operation of the NPDC Business shall be owned, directly and
indirectly, by NPDC;
(ii)
the businesses, assets and liabilities of GP that remain after
the separations and divisions described in clause (i) above,
including, without limitation, the assets, liabilities and
business necessary for the continuing operation of the GP
Business, are, after giving effect to the Distribution, owned,
directly and indirectly, by GP.
"Distribution" means the distribution on the Distribution Date as
a
dividend to holders of record of shares of
GP Stock as of the Distribution
Record Date of all of the outstanding NPDC
Common Shares owned by GP on the
basis provided in Section 3.02 hereof.
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"Distribution Date" means such date as may hereafter be determined
by
GP's Board of Directors as the date on
which the Distribution shall be effected.
"Distribution Record Date" means the close of business on the
date
determined by the Board of Directors of GP
for the purpose of determining the
holders of record of GP Stock entitled to
participate in the Distribution.
"DGCL" means the Delaware General Corporation Law, as amended.
"Environmental Laws" means any and all federal, state. local
and
foreign statutes, Laws, regulations,
ordinances, rules, judgments, orders,
decrees, permits, concessions, grants,
franchises, licenses, agreements or other
governmental restrictions (including
without limitation the Comprehensive
Environmental Response, Compensation and
Liability Act, 42 U.S.C. ss.ss. 9601,
et seq.), whether now or hereafter in
existence, relating to the environment,
natural resources or human health and
safety or endangered or threatened species
of fish, wildlife and plants or to
emissions, discharges or releases of
pollutants, contaminants, petroleum or
petroleum products, chemicals or toxic or
hazardous substances or waste into the
environment, including, without
limitation, ambient air, surface water,
ground water or land, or otherwise
relating to the manufacture, processing,
distribution, use, treatment, storage,
disposal, transport or handling of
pollutants, contaminants, petroleum or
petroleum products, chemicals or toxic or
hazardous substances or waste or the
cleanup or other remediation thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Act File Material" means the Registration Statement,
as
amended at the time it was declared
effective under the Exchange Act, the
related Information Statement or any
amendment or supplement thereto, the
related letter of transmittal, any related
stockholder communication, any other
exhibits to any of the foregoing and any
amendment or supplement thereto, in
each case including all information
incorporated by reference therein.
"GAAP" means United States generally accepted accounting principles
and
practices, as in effect on the date of this
Agreement, as promulgated by the
Financial Accounting Standards Board and
its predecessors.
"Governmental Authority" means any government or any agency,
bureau,
board, commission, court, department,
official, political subdivision, tribunal
or other instrumentality of any government,
whether federal, state or local,
domestic or foreign.
"GP" means GP Strategies Corporation, a Delaware corporation.
"GP Assets" means, collectively, all the rights and assets owned by
GP
or any of its Subsidiaries as of the close
of business on the Distribution Date
other than the NPDC Assets and the capital
stock of NPDC, including without
limitation:
(i) the capital stock of the GP Subsidiaries;
(ii) all of the assets included on the GP Business Pro Forma
Balance
Sheet that
are owned by GP and its Subsidiaries as of
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the close of business on the Distribution Date and any other
asset
acquired by GP or any of its Subsidiaries from the date of the
GP
Business Pro Forma Balance Sheet to the close of business on
the
Distribution Date that is owned by GP and its Subsidiaries as of
the
close of business on the Distribution Date and that is of a type
or
nature that would have resulted in such asset being included as
an
asset on the GP Business Pro Forma Balance Sheet had it been
acquired
on or prior to the date of the GP Business Pro Forma Balance
Sheet,
determined on a basis consistent with the determination of
assets
included on the GP Business Pro Forma Balance Sheet; and
(iii) all of the assets and rights expressly allocated to GP or any
of
the Subsidiaries under this Agreement or any of the Related
Agreements.
"GP Business" means the businesses (other than the NPDC Business)
that,
after giving effect to the Corporate
Restructuring Transactions, are or were
conducted by:
(i) GP, the GP Subsidiaries or any of the other members of the
GP
Group;
(ii) any
other division, Subsidiary or investment of GP, or any GP
Subsidiary or any of the other members of the GP Group managed
or
operated or in existence as of the date of this Agreement or any
prior
time, unless such other division, Subsidiary or investment is
expressly included in the NPDC Group immediately after giving
effect
to the Corporate Restructuring Transactions; and
(iii) any business entity acquired or established by or for GP or
any
of the GP Subsidiaries between the date of this Agreement and
the
close of business on the Distribution Date that is engaged in,
or
intends to engage in, any business that is of a type or nature
that
would have resulted in such business being included either as a
GP
Subsidiary or an asset of GP on the GP Business Pro Forma
Balance
Sheet had it been acquired or established on or prior to the date
of
the GP Business Pro Forma Balance Sheet, determined on a basis
consistent with the determination of the Subsidiaries and
assets
included on the GP Business Pro Forma Balance Sheet.
"GP Business Pro Forma Balance Sheet" means the Pro Forma
Consolidated
Balance Sheet for GP and the GP
Subsidiaries as of [ ] attached hereto as
Exhibit B.
"GP Class B Stock" has the meaning ascribed to such term in the
Recitals to this Agreement.
"GP Common Stock" has the meaning ascribed to such term in the
Recitals
to this Agreement.
"GP Corporate Records" has the meaning ascribed to such term in
Section
6.01(a) hereof.
<PAGE>
"GP Group" means GP, the GP Subsidiaries and the corporations,
partnerships, joint ventures, investments
and other entities that represent
equity investments of GP or any of the GP
Subsidiaries following consummation of
the Corporate Restructuring Transactions
and the Distribution.
"GP Holders" means the holders of record of GP Stock as of the
Distribution Record Date.
"GP Indemnified Parties" means:
(i) GP, the GP Subsidiaries and each Affiliate thereof after
giving
effect to the Corporate Restructuring Transactions and the
Distribution; and
(ii) each of the respective past, present and future directors,
officers, employees and agents of any of the entities described in
the
immediately preceding clause (i) and each of the heirs,
executors,
successors and assigns of such directors, officers, employees
and
agents.
"GP Liabilities" means, collectively, all of the Liabilities of GP
and
the GP Subsidiaries and each of the other
members of the GP Group remaining
after giving effect to the Corporate
Restructuring Transactions and the
Distribution, including without
limitation:
(i) all of the Liabilities included on the GP Business Pro
Forma
Balance Sheet that remain outstanding as of the close of business
on
the Distribution Date;
(ii)
all other Liabilities that are incurred or that otherwise
accrue
or are accrued at any time on, prior to or after the date of the
GP
Business Pro Forma Balance Sheet and that arise or arose out of, or
in
connection with, the GP Assets or the GP Business, determined on
a
basis consistent with the determination of Liabilities of GP
included
on the GP Business Pro Forma Balance Sheet;
(iii) all of the Liabilities of GP, the GP Subsidiaries or any of
the
other members of the GP Group under, or to be retained or assumed
by
GP, any GP Subsidiary or any of the other members of the GP
Group
pursuant to, the Corporate Restructuring Transactions, this
Agreement
or any of the
Related Agreements;
(iv) all of the Liabilities of the parties hereto or their
respective
Subsidiaries (whenever arising whether prior to, on or following
the
Distribution Date) arising out of or in connection with or
otherwise
relating to the management or conduct before or after the
Distribution
Date of the GP Business;
(v) all other liabilities of GP, the GP Subsidiaries or any of
the
other members of the GP Group (that do not constitute NPDC
Liabilities), which other liabilities of GP, the GP Subsidiaries
or
any of the other members of the GP Group shall include, without
limitation, any and all Liabilities arising out of or relating to
any
<PAGE>
Action or Third Party Claim by any Governmental Authority or any
other
Person that is based on any alleged breach of fiduciary duty by
the
Board of Directors of GP or any member thereof, or any GP
stockholder
derivative suit or other similar Actions;
(vi) NPDC Securities Liabilities;
(vii) Securities Liabilities arising out of events occurring prior
to
the Distribution Date, and Securities Liabilities arising out
of
events occurring after
the Distribution Date and relating to GP.
"GP Records" has the meaning ascribed to such term in Section
6.01(b)
hereof.
"GP Stock" has the meaning ascribed to such term in the Recitals
to
this Agreement.
"GP
Subsidiaries" means the Subsidiaries of GP set forth in Exhibit
C
hereto and all other Subsidiaries of GP
other than NPDC or its Subsidiaries.
"GP Trademarks and Trade Names" means all trademarks, service
marks,
and trade names containing "GP" or
variations thereof, along with their
respective applications and registrations
wherever used or registered.
"Indemnifiable Losses" means, with respect to any Person, any and
all
losses, liabilities, penalties, claims,
damages, demands, costs and expenses
(including, without limitation, reasonable
attorneys' fees, investigation
expenses and any and all other
out-of-pocket expenses, but excluding any
punitive or consequential damages) or other
Liabilities whatsoever that are
assessed, imposed, awarded against,
incurred or accrued by such Person either
(a) in investigating, preparing for,
defending against or otherwise arising out
of or in connection with any Actions, any
potential or threatened Actions or any
Third Party Claims for which such Person
would be entitled to indemnification
under Article VII hereof, or (b) in respect
of any other event, occurrence or
matter for which such Person would be
entitled to indemnification under Article
VII hereof, in each case whether accrued or
incurred on, before or after the
date of this Agreement.
"Indemnifying Party" has the meaning ascribed to such term in
Section
7.04(a) hereof.
"Indemnified Party" has the meaning ascribed to such term in
Section
7.04(a) hereof.
"Information Statement" means the NPDC Information Statement.
"Insurance Proceeds" means, with respect to any insured party,
those
monies, net of any applicable premium
adjustment, retrospectively-rated premium,
deductible, retention, or cost of reserve
paid or held by or for the benefit of
such insured, which are either.
(i) received by an insured from an insurance carrier, or
(ii) paid by an insurance carrier on behalf of an insured.
<PAGE>
"Law" means all laws, statutes and ordinances and all
regulations,
rules and other pronouncements of
Governmental Authorities having the effect of
law of the United States, any foreign
country, or any domestic or foreign state,
province, commonwealth, city, country,
municipality, territory, protectorate,
possession or similar instrumentality, or
any Governmental Authority thereof.
"Liabilities" means any and all debts, liabilities,
obligations,
losses, damages (whether compensatory,
punitive or treble), fines, penalties and
sanctions, absolute or contingent, matured
or unmatured, liquidated or
unliquidated. foreseen or unforeseen,
joint, several or individual, asserted or
unasserted, accrued or unaccrued, known or
unknown, whenever arising, including,
without limitation, those arising under or
in connection with any Law (including
any Environmental Law), Action, threatened
Action, order or consent decree of
any Governmental Authority or any award of
any arbitration tribunal, and those
arising under any contract, guarantee,
commitment or undertaking, whether sought
to be imposed by a Governmental Authority,
private party, or party to this
Agreement, whether based in contract, tort,
implied or express warranty, strict
liability, criminal or civil statute, or
otherwise, and including any costs,
expenses, interest, attorneys' fees,
disbursements and expense of counsel,
expert and consulting fees and costs
related thereto or to the investigation or
defense thereof.
"Management Agreements" means the Management Agreements between GP
and
NPDC, which agreements shall be entered
into on or prior to the Distribution
Date, in the forms attached hereto as
Exhibits D-1 and D-2, except for such
changes or modifications thereto that do
not, individually or in the aggregate,
adversely affect the GP Business or the
NPDC Business (other than to a de
minimis extent).
"NPDC" means National Patent Development Corporation, a
Delaware
corporation, the NPDC Subsidiaries and the
corporations, partnerships, joint
ventures, investments and other entities
that represent equity investments of
any of NPDC or any of the NPDC Subsidiaries
following the consummation of the
Corporate Restructuring Transactions and
the Distribution.
"NPDC Assets" means, collectively, all of the following rights
and
assets that are owned by GP and or any of
its Subsidiaries as of the close of
business on the Distribution Date:
(i) the capital stock of the NPDC Subsidiaries;
(ii) all of the assets included on the NPDC Business Pro Forma
Balance
Sheet that are owned by GP or any of its Subsidiaries as of the
close
of business on the Distribution Date and any other asset acquired
by
GP or any of its Subsidiaries from the date of the NPDC Business
Pro
Forma Balance Sheet to
the close of business on the Distribution Date
that is owned by GP or any of its Subsidiaries as of the close
of
business on the Distribution Date and that is of a nature or type
that
would have resulted in such asset being included as an asset on
the
NPDC Business Pro Forma Balance Sheet had it been acquired on or
prior
to the date of the NPDC Business Pro Forma Balance Sheet,
determined
on a basis consistent with the determination of the assets included
on
the NPDC Business Pro Forma Balance Sheet; and
<PAGE>
(iii) all of the assets and rights expressly allocated to NPDC or
any
of the NPDC Subsidiaries under this Agreement or any of the
Related
Agreements.
"NPDC Business" means the businesses that, after giving effect to
the
Corporate Restructuring Transactions, are
conducted by:
(i) NPDC and its Subsidiaries or any of the other members of the
NPDC
Group; and
(ii) any business entity acquired or established by or for GP or
NPDC
or any of its Subsidiaries between the date of this Agreement and
the
close of business on the Distribution Date that is engaged in,
or
intends to engage in, any business that is of a type or nature
that
would have resulted in such business being included either as a
NPDC
Subsidiary or an asset of NPDC on the NPDC Business Pro Forma
Balance
Sheet had it been acquired or established on or prior to the date
of
the NPDC Business Pro Forma Balance Sheet, determined on a
basis
consistent with the determination of the Subsidiaries and
assets
included on the NPDC Business Pro Forma Balance Sheet.
"NPDC Common Shares" means the shares of NPDC Common Stock owned by
GP
after giving effect to the stock dividend
provided for in Section 2.02 hereof.
"NPDC Common Stock" has the meaning ascribed to such term in
the
Recitals to this Agreement.
"NPDC Group" means NPDC, the NPDC Subsidiaries and the
corporations,
partnerships, joint ventures, investments
and other entities that represent
equity investments of NPDC or any of the
NPDC Subsidiaries following the
consummation of the Corporate Restructuring
Transactions and the Distribution.
"NPDC Indemnified Parties" means:
(i) NPDC, the NPDC Subsidiaries and each Affiliate thereof
after
giving effect to the Corporate Restructuring Transactions and
the
Distribution; and
(ii) each of the respective past, present and future directors,
officers, employees and agents of any of the entities described in
the
immediately preceding clause (i) and each of the heirs,
executors,
successors and assigns of any of such directors, officers,
employees
and agents.
"NPDC Information Statement" means the Information Statement
relating
to NPDC and the transactions contemplated
hereby to be distributed to holders of
GP Stock pursuant to the terms of this
Agreement.
"NPDC Liabilities" means, collectively, all of the Liabilities of
NPDC,
the NPDC Subsidiaries and each of the other
members of the NPDC Group after
giving effect to the Corporate
Restructuring Transactions and the Distribution,
including, without limitation:
<PAGE>
(i) all of the Liabilities included on the NPDC Business Pro
Forma
Balance Sheet that remain outstanding as of the close of business
on
the Distribution Date;
(ii) all other Liabilities that are incurred or that otherwise
accrue
or are accrued at any time on, prior to or after the date of the
NPDC
Business Pro Forma Balance Sheet and that arise or arose out of, or
in
connection with, the NPDC Assets, the NPDC Business or the Prior
NPDC
Businesses, determined on a basis consistent with the determination
of
Liabilities of NPDC on the NPDC Business Pro Forma Balance
Sheet;
(iii) all of the Liabilities of NPDC, the NPDC Subsidiaries or any
of
the other members of the NPDC Group under, or to be retained or
assumed by NPDC, any NPDC Subsidiary or any of the other members
of
the NPDC Group pursuant to, this Agreement or any of the
Related
Agreements;
(iv) all the Liabilities of the parties hereto or their
respective
Subsidiaries (whenever arising whether prior to, on or following
the
Distribution Date) arising out of or in connection with or
otherwise
relating to the management or conduct before or after the
Distribution
Date of the NPDC Business; and
(v) Securities Liabilities arising out of events occurring after
the
Distribution Date and relating to the NPDC.
"NPDC Business Pro Forma Balance Sheet" means the Pro Forma
Consolidated Balance Sheet for NPDC and the
NPDC Subsidiaries as of [ ] attached
hereto as Exhibit E.
"NPDC Records" has the meaning ascribed to such term in Section
6.01(a)
hereof.
"NPDC Registration Statement" or "Registration Statement" means
the
Registration Statement on Form 10 to be
filed with the Commission pursuant to
the requirements of Section 12 of the
Exchange Act and the rules and regulations
thereunder in order to register the NPDC
Common Stock under Section 12(b) of the
Exchange Act.
"NPDC Securities Liabilities" means any and all Securities
Liabilities
arising out of, or in connection with, or
relating in whole or in part to any of
the following: (i) the NPDC Registration
Statement; (ii) the NPDC Information
Statement; (iii) any of the information,
data (financial or otherwise) or
disclosures in (or any alleged failure to
set forth certain information, data or
disclosures in) the NPDC Registration
Statement or NPDC Information Statement
irrespective of (A) who authored, prepared
or provided such information, data or
disclosures (or, as the case may be, the
section or discussion in which certain
information, data or disclosure is alleged
to have been omitted), or (B) the
form in which, or medium through which
(e.g., verbally, in writing, etc.), such
information, data, disclosures, discussion
or section were provided.
"NPDC Subsidiaries" means the Subsidiaries listed in Exhibit F
hereto.
<PAGE>
"NYSE" means the New York Stock Exchange, Inc.
"Person" means any natural person, corporation, business trust,
joint
venture, association, company, partnership,
limited liability company or other
entity, or any government. or any agency or
political subdivision thereof.
"Prior NPDC Businesses" means, collectively, all divisions,
Subsidiaries, other business entities or
investments of NPDC that were sold,
transferred, otherwise disposed of or
discontinued prior to the date of the NPDC
Business Pro Forma Balance Sheet.
"Privilege" has the meaning ascribed to such term in Section
6.07(a)
hereof.
"Privileged Information" has the meaning ascribed to such term
in
Section 6.07(a) hereof.
"Related Agreements" means all of the written agreements,
instruments,
understandings, assignments or other
arrangements (other than this Agreement)
entered into by the parties hereto or any
other member of their respective
Groups in connection with the Corporate
Restructuring Transactions, the
Distribution and the other transactions
contemplated hereby or thereby,
including, without limitation, (i) the
Conveyancing and Assumption Instruments;
(ii) the Tax Sharing Agreement; and (iii)
the Management Agreements.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Liabilities" means any and all losses, liabilities,
penalties, claims, damages, demands, costs
or expenses or other Liabilities
whatsoever that are assessed, imposed,
awarded against, incurred or accrued by a
Person arising out of or relating in whole
or in part to any Action, any
potential or threatened Action or any Third
Party Claim (or potential or
threatened Third Party Claim) by any
Governmental Authority or any other Person
that is based on any violations or alleged
violations of the Securities Act,
Exchange Act, any of the rules or
regulations of the Commission promulgated
under the Securities Act or Exchange Act,
or any other securities or other
similar Law.
"Subsidiary" means, with respect to any Person:
(i) any corporation of which at least a majority in interest of
the
outstanding voting stock (having by the terms thereof voting
power
under ordinary circumstances to elect a majority of the directors
of
such corporation, irrespective of whether or not at the time stock
of
any other class or classes of such corporation shall have or
might
have voting power by reason of the happening of a contingency) is
at
the time, directly or indirectly, owned or controlled by such
Person
or by such Person and one or more of its Subsidiaries; or
(ii) any non-corporate entity in which such Person or such Person
and
one or more Subsidiaries of such Person either (a) directly or
indirectly, as of the date of determination thereof, has at least
a
majority ownership interest, or (b) as of the date of determination
is
<PAGE>
a general partner or an entity performing similar functions
(e.g.,
manager of a Limited Liability Company or a trustee of a
trust).
"Tax" or "Taxes" means any income, gross income, gross
receipts,
profits, capital stock, franchise,
withholding, payroll, social security,
workers compensation, unemployment,
disability, property, ad valorem, stamp,
excise, occupation, services, sales, use,
license, lease, transfer, import,
export, value added, alternative minimum,
estimated or other similar tax
(including any fee, assessment or other
charge in the nature of or in lieu of
any tax) imposed by any governmental entity
or political subdivision thereof,
and any interest, penalties, additions to
tax, or additional amounts in respect
of the foregoing.
"Tax Sharing Agreement" means the Tax Sharing Agreement between GP
and
NPDC which agreement shall be entered into
on or prior to the Distribution Date
in the form attached hereto as Exhibit G,
except for such changes or
modifications thereto that do not,
individually or in the aggregate, adversely
affect the GP Business (other than to a de
minimis extent).
"Termination Date" means the date on which this Agreement is
terminated
pursuant to and in accordance with the
provisions of Section 8.10 of this
Agreement.
"Third Party Claim" has the meaning as defined in Section
7.04(a)
hereof.
Section 1.02
References. References to an "Exhibit" or to a "Schedule" are,
unless otherwise specified, to one of the
Exhibits or Schedules attached to this
Agreement, and references to a "Section"
are, unless otherwise specified, to one
of the Sections of this Agreement.
ARTICLE II
PRE-DISTRIBUTION TRANSACTIONS; CERTAIN COVENANTS
Section 2.01
Corporate Restructuring Transactions. On or prior to the
Distribution Date and otherwise in
accordance with the terms and provisions set
forth in Exhibit A hereto, GP and NPDC
shall, and shall cause each of their
respective Subsidiaries to, as applicable,
take such actions as are necessary to
cause, effect and consummate the Corporate
Restructuring Transactions. GP and
NPDC hereby agree that any one or more of
the Corporate Restructuring
Transactions may be modified, supplemented
or eliminated; provided such
modification, supplement or elimination (a)
is necessary or appropriate to
divide the existing businesses of GP so
that the NPDC Business shall be owned,
directly or indirectly, by NPDC, and (b)
does not, individually or in the
aggregate, adversely affect the GP Business
(other than to a de minimis extent).
Section 2.02
Pre-Distribution Stock Dividends to GP. On or prior to the
Distribution Date, NPDC shall issue to GP,
as a stock dividend, the number of
shares of NPDC Common Stock as is required
to effect the Distribution, as
certified by the Agent. In connection
therewith, GP shall deliver to NPDC for
cancellation the share certificate (or
certificates) currently held by it
representing all NPDC Common Stock.
4
<PAGE>
Section 2.03
Charter and Bylaws of NPDC. On or prior to the Distribution
Date, GP and NPDC shall take all necessary
actions so that, as of the
Distribution Date, the Amended and Restated
Certificate of Incorporation and
Amended and Restated Bylaws of NPDC will be
substantially in the forms set forth
in Exhibits H and I, respectively.
Section 2.04
Election of Directors of NPDC. On or prior to the Distribution
Date, GP, as the sole stockholder of NPDC,
shall take all necessary action so
that as of the Distribution Date the
directors of NPDC will be as set forth in
the NPDC Information Statement.
Section 2.05
Transfer and Assignment of Certain Licenses and Permits.
(a) Licenses and
Permits Relating to the NPDC Business. On or prior to the
Distribution Date, or as soon as reasonably
practicable thereafter, GP shall
(and, if applicable, shall cause any other
Person over which it has legal or
effective direct or indirect control to)
duly and validly transfer or cause to
be duly and validly transferred to the
appropriate member of the NPDC Group (as
directed by NPDC) all transferable
licenses, permits and authorizations issued
by any Governmental Authority that relate
to the NPDC Business but which are
held in the name of any member of the GP
Group, or any of their respective
employees, officers, directors,
stockholders or agents.
(b) Licenses and
Permits Relating to the GP Business. On or prior to the
Distribution Date, or as soon as reasonably
practicable thereafter, NPDC shall
(and, if applicable, shall cause any other
Person over which it has legal or
effective direct or indirect control to)
duly and validly transfer or cause to
be duly and validly transferred to the
appropriate member of the GP Group (as
directed by GP) all transferable licenses,
permits and authorizations issued by
any Governmental Authority that relate to
the GP Business but which are held in
the name of any member of the NPDC Group,
or any of their respective employees,
officers, directors, stockholders or
agents.
Section 2.06
Transfer and Assignment of Certain Agreements.
(a) Transfer and
Assignment of GP Business Agreements. On or prior to the
Distribution Date, or as soon as reasonably
practicable thereafter, and subject
to the limitations set forth in this
Section 2.06, NPDC shall (and, if
applicable, shall cause any of the other
members of its Group over which it has
legal or effective direct or indirect
control to) assign, transfer and convey to
GP (or such other member of the GP Group as
GP shall direct) all of its (or such
other member of its Group's) right, title
and interest in and to any and all
agreements that relate exclusively to the
GP Business or any member of the GP
Group.
(b) Transfer and
Assignment of NPDC Business Agreements. On or prior to the
Distribution Date, or as soon as reasonably
practicable thereafter, and subject
to the limitations set forth in this
Section 2.06, GP shall (and, if applicable,
shall cause any of the other members of its
Group over which it has legal or
effective direct or indirect control to)
assign, transfer and convey to NPDC (or
<PAGE>
such other member of the NPDC Group as NPDC
shall direct) all of its (or such
other member of its Group's) right, title
and interest in and to any and all
agreements that relate exclusively to the
NPDC Business or any member of the
NPDC Group.
(c) Joint
Agreements. Subject to the provisions of Section 2.06(e) below,
any agreement to which any party hereto (or
any other member of such party's
Group) is a party that inures to the
benefit of both the GP Business and the
NPDC Business shall be assigned in part, at
the expense and risk of the
assignee, on or prior to the Distribution
Date or as soon as reasonably
practicable thereafter, so that each party
(or such other member of such party's
Group) shall be entitled to the rights and
benefits inuring to its business
under such agreement.
(d) Obligations
of Assignees. The assignee of any agreement assigned, in
whole or in part, hereunder (an "Assignee")
shall, as a condition to such
assignment, (i) in the case of an
assignment in whole, (A) assume and agree to
pay, perform, and fully discharge all
obligations of the assignor under such
agreement (whether such obligations arose
or were incurred prior to, on or
subsequent to the Distribution Date and
irrespective of whether such obligations
have been asserted as of the Distribution
Date) and (B) use its commercially
reasonable efforts to cause the assignor of
such agreement to be released from
its obligations under the assigned
agreements and (ii) in the case of an
assignment in part under Section 2.06(c)
above, (A) assume and agree to pay,
perform, and fully discharge the portion of
the obligations of the assignor
under such agreement that relates to the
rights and benefits assigned (whether
such obligations arose or were incurred
prior to, on or subsequent to the
Distribution Date and irrespective of
whether such obligations have been
asserted as of the Distribution Date) and
(B) use its commercially reasonable
efforts to cause the assignor of such
agreement to be released from such
obligations under the assigned
agreements.
(e) No
Assignment of Certain Agreements. Notwithstanding anything in
this
Agreement to the contrary, this Agreement
shall not constitute an agreement to
assign any agreement, in whole or in part,
or any rights thereunder, if the
agreement to assign or attempt to assign,
without the consent of a third party,
would constitute a breach thereof or in any
way adversely affect the rights of
the Assignee thereof, until such consent is
obtained. Until such consent is
obtained, the parties hereto will cooperate
with each other to effect any
arrangement designed reasonably to provide
for the Assignee the benefits of, and
to permit the Assignee to assume
liabilities under, any such agreement, to the
extent provided in this Section 2.06.
Section 2.07
Consents. The parties hereto shall use their reasonable
efforts to obtain any third-party consents
or approvals that are required to
consummate the Corporate Restructuring
Transactions, the Distribution and the
other transactions contemplated herein (the
"Consents").
Section 2.08
Other Transactions. On or prior to the Distribution Date, GP
and NPDC shall consummate those other
transactions in connection with the
Corporate Restructuring Transactions and
the Distribution that are contemplated
by the NPDC Information Statement and the
ruling request submission by GP to the
<PAGE>
Internal Revenue Service dated November 14,
2002 (as subsequently supplemented),
and not specifically referred to in
Sections 2.01 through 2.07 above.
Section 2.09
Election of Officers of NPDC. On or prior to the Distribution
Date, GP and NPDC shall, as applicable,
take all actions necessary and desirable
so that as of the Distribution Date the
officers of NPDC will be as set forth in
the NPDC Information Statement.
Section 2.10
Preparation and Filing of NPDC Registration Statement. GP and
NPDC shall prepare or cause to be prepared,
and NPDC shall file or cause to be
filed with the Commission, the NPDC
Registration Statement. The NPDC
Registration Statement shall include or
incorporate by reference the NPDC
Information Statement setting forth
appropriate disclosure concerning GP, NPDC,
the Distribution and such other matters as
may be required to be disclosed
therein by the provisions of the Exchange
Act and the rules and regulations
promulgated thereunder. GP and NPDC shall
take all such actions as may be
reasonably necessary or appropriate in
order to cause the NPDC Registration
Statement to become effective by order of
the Commission pursuant to the
Exchange Act.
Section 2.11
State Securities Laws. Prior to the Distribution Date, GP and
NPDC shall take all such action as may be
necessary or appropriate under the
securities or Blue Sky laws of states or
other political subdivisions of the
United States in order to effect the
Distribution.
Section 2.12
Listing Application. Prior to the Distribution Date, GP and
NPDC shall take all such actions as shall
be necessary or desirable in order to
cause the quotation of the NPDC Common
Shares on the OTC Bulletin Board
Section 2.13
Certain Financial and Other Arrangements.
(a) Settlement
of Intercompany Accounts Between NPDC Group and GP Group.
All intercompany receivables, payables and
loans (other than receivables,
payables and loans otherwise specifically
provided for in any of the Related
Agreements or hereunder), including,
without limitation, in respect of any cash
balances, any cash balances representing
deposited checks or drafts for which
only a provisional credit has been allowed
or any cash held in any centralized
cash management system, between any member
of the NPDC Group and any member of
the GP Group shall, as of the close of
business on the Distribution Date, be
settled, capitalized or converted into
ordinary trade accounts, in each case as
may be agreed in writing prior to the
Distribution Date by duly authorized
representatives of GP and NPDC.
(b) Operations
in Ordinary Course. Except as otherwise provided in this
Agreement or any Related Agreement, during
the period from the date of this
Agreement through the Distribution Date, GP
and NPDC shall, and shall cause any
entity that is a Subsidiary of such party
at any time during such period to,
conduct its business in a manner
substantially consistent with current and past
operating practices and in the ordinary
course, including, without limitation,
with respect to the payment and
administration of accounts payable and the
<PAGE>
collection and administration of accounts
receivable, the purchase of capital
assets and equipment and the management of
inventories.
Section 2.14
Director, Officer and Employee Resignations. Subject to the
provisions of Section 2.04 and Section 2.09
above:
(a) Resignations
by Directors and Employees of the GP Group. GP shall cause
all of its directors and all employees of
the GP Group to resign, effective as
of the close of business on the
Distribution Date, from all boards of directors
or similar governing bodies of each member
of the NPDC Group on which they
serve, and from all positions as officers
or employees of any member of the NPDC
Group, except as otherwise
