DISTRIBUTION AGREEMENT

BETWEEN

TREE TOP INDUSTRIES, INC. AND NETTHRUSTER, INC.

Dated: February 9, 2011

 

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DISTRIBUTION AGREEMENT

TABLE OF CONTENTS

INTRODUCTION
1
        ARTICLE 1 DEFINITIONS
1
 
1.01
General
1
 
1.02
Terms Defined Elsewhere in Agreement
2
ARTICLE 2 TREATMENT OF ASSETS AND LIABILITIES
3
 
2.01
Allocation of Debt
3
 
2.02
Settlement of Intercompany Accounts
3
 
2.03
Limitation on Loans and Distributions by Subsidiary
3
ARTICLE 3 OFFICERS AND DIRECTORS OF SUBSIDIARY
3
 
3.01
Subsidiary Board and Officers
3
ARTICLE 4 THE DISTRIBUTION
3
 
4.01
Cooperation Before the Distribution
3
 
4.02
Distribution Record Date, Distribution Date and Procedures
3
 
4.03
Conditions Precedent to the Distribution
4
 
4.04
The Distribution
4
ARTICLE 5 SATISFACTION OF LIABILITIES
4
 
5.01
Satisfaction of Liabilities
4
 
5.02
Assumption and Satisfaction of Unallocated Contingent Liabilities
4
ARTICLE 6 INDEMNIFICATION
5
 
6.01
Indemnification by Subsidiary
5
 
6.02
Insurance Proceeds
5
 
6.03
Procedure for Indemnification
5
 
6.04
Remedies Cumulative
6
 
6.05
Survival of Indemnities
7
 
6.06
Coordination with Tax Allocation and Indemnity Provisions
7
ARTICLE 7 ACCESS TO INFORMATION AND SERVICES
7
 
7.01
Provision of Corporate Records
7
 
7.02
Access to Information
7
 
7.03
Production of Witnesses
7
 
7.04
Reimbursement
7
 
7.05
Retention of Records
8
 
7.06
Confidentiality
8
 
7.07
Privileged Matters
8
ARTICLE 8 INSURANCE
9
 
8.01
Definitions
9
 
8.02
Policies and Rights Included within the Subsidiary Assets
10
 
8.03
Policies and Rights Included within the Parent Assets
10
 
8.04
Shared Policy Insurance Administration, Reserves and Premiums
10
 
8.05
Insurance after the Distribution
12
 
8.06
Agreement for Waiver of Conflict and Shared Defense
12
ARTICLE 9 EMPLOYMENT AND EMPLOYEE BENEFIT MATTERS
12
 
9.01
Definitions
12
 
9.02
Employment and Related Obligations
14
 
9.03
Labor and Employment Matters
15
 
9.04
Access to Information; Cooperation
15
 
9.05
Reimbursement
15
 
9.06
Preservation of Right To Amend or Terminate Plans
15
 
9.07
Effect on Employees
15

 
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ARTICLE 10 TAX MATTERS
16
 
10.01
Definitions
16
 
10.02
Preparation and Filing of Tax Returns
18
 
10.03
Taxable Years
19
 
10.04
Advance Review of Tax Returns
19
 
10.05
Consistent Positions on Tax Returns
19
 
10.06
Allocation of Straddle Period Taxes
19
 
10.07
Payment of Taxes
20
 
10.08
Amendments to Tax Returns
20
 
10.09
Refunds of Taxes
20
 
10.10
Carrybacks
20
 
10.11
NOL, ITC and AMT Credit Benefit
21
 
10.12
Intentionally Left Blank
21
 
10.13
Tax Indemnification
21
 
10.14
Cooperation; Document Retention; Confidentiality
21
 
10.15
Contests and Audits
22
 
10.16
Tax Elections
23
ARTICLE 11 MISCELLANEOUS
23
 
11.01
Entire Agreement; No Third Party Beneficiaries
23
 
11.02
Forbearance
23
 
11.03
Expenses
23
 
11.04
Governing Law
23
 
11.05
Notices
23
 
11.06
Amendments
23
 
11.07
Assignments; Predecessors and Successors
23
 
11.08
Termination and Effectiveness
24
 
11.09
Specific Performance
24
 
11.10
Headings; References; Rules of Construction
24
 
11.11
Counterparts
24
 
11.12
Severability; Enforcement
24
 
11.13
Payment Method and Character; No Setoffs
24
 
11.14
Third-Party Beneficiaries
24
 
11.15
Further Assurances
24

 
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DISTRIBUTION AGREEMENT

THIS DISTRIBUTION AGREEMENT (the “Agreement”) is made and entered into as of the
9th day of February 2011, by and between Tree Top Industries, Inc., a Nevada
corporation (“Parent”); and NetThruster, Inc., Nevada corporation that is a
wholly-owned subsidiary of Parent (“Subsidiary”).

INTRODUCTION

A.          Distribution of Subsidiary Common Stock.  The Board of Directors of
Parent has determined that it is in the best interests of Parent and the Parent
Shareholders to fully separate the assets and liabilities of the Subsidiary from
Parent through the distribution of all of the Subsidiary Common Stock to the
Parent Shareholders (the “Distribution”). After the Distribution, Parent will
not hold any shares of Subsidiary Common Stock.

B.           Purposes of Agreement.  In connection with the Distribution, Parent
and Subsidiary have determined that it is necessary and desirable to set forth
the principal corporate transactions required to effect the Distribution, and to
set forth the agreements between Parent and Subsidiary that will govern certain
matters after the Distribution.

AGREEMENT

NOW, THEREFORE, in consideration of the facts recited above, which are a part of
this Agreement, and the respective promises set forth below, the parties agree
as follows:

ARTICLE 1
DEFINITIONS

1.01        General.  For purposes of this Agreement, the following terms shall
have the meanings set forth below:

“Action” shall mean any claim, action, suit, cause of action, arbitration,
inquiry, proceeding or investigation by or before any Governmental Entity or any
arbitration tribunal.

“After-Tax Basis” means, with respect to any Liability or other loss indemnified
hereunder, the actual amount of any payment to be made with respect to such
Liability or loss, after giving effect to any Tax cost incurred by the recipient
arising out of the receipt of such payment (unless such receipt is treated as
other than the receipt of Taxable income), and reducing such payment by the
value of, any and all federal, state or other Tax Benefits (as defined in
Section 10.01) attributable to the full payment of the indemnified Liability or
loss, which value shall be determined on an assumed basis by multiplying the
amount of any applicable deduction, credit, offset or other Tax item by the
applicable highest marginal rate of income Taxation in effect for the period for
which the adjustment is made.

“Agreement” has the meaning specified in the first paragraph of this Agreement.

“Code” means the Internal Revenue Code of 1986, as amended.

“Debt” shall mean all (i) indebtedness for borrowed money and obligations
evidenced by bonds, notes, debentures or similar instruments; (ii) obligations
issued or assumed as the deferred purchase price of property or services; (iii)
obligations under capital leases; and (iv) all guarantees of the obligations of
other Persons described in the foregoing clauses (i) - (iii).

“Distribution” shall mean the distribution of Subsidiary Common Stock by Parent
to the Parent Shareholders on the Distribution Date, as such distribution is
more fully described in Section 4.04.

“Distribution Date” means a business day determined by the Parent Board pursuant
to Section 4.02, for the completion of the Distribution.

 
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“Distribution Effective Time” means the close of business on the Distribution
Date.

“Distribution Record Date” means the date established by the Parent Board as the
date for making a record of the Parent Shareholders entitled to participate in
the Distribution, which Distribution Record Date shall, subject to Section 4.02,
be the date five (5) days immediately following the filing of this Agreement as
an exhibit to a Report on Form 8-K to be filed by the Parent with the Securities
and Exchange Commission disclosing the making of this Agreement (the “Disclosure
Date”).

“Governmental Entity” means any court, regulatory or administrative agency or
commission, or other governmental authority or instrumentality.

“Liabilities” shall mean any and all Debts, liabilities and obligations,
absolute or contingent, matured or unmatured, liquidated or unliquidated,
accrued or unaccrued, known or unknown, whenever arising, including 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.

 “Parent” has the meaning set forth in the first paragraph of this Agreement.

“Parent Board” means Parent’s Board of Directors, as constituted at the
applicable time.

“Parent Books and Records” shall mean the books and records (including
computerized records) of Parent that are required by law to be retained by
Parent, including but not limited to original corporate minute books, stock
ledgers and certificates and corporate seals, and all licenses, leases,
agreements and filings, relating to Parent (but not including the Subsidiary
Books and Records; provided, however, that Parent shall have access to, and
shall have the right to obtain duplicate copies of, the Subsidiary Books and
Records in accordance with the provisions of Article 7).

“Parent Common Stock” means the outstanding common stock, par value $.001 per
share, of Parent.

“Parent Shareholders” shall mean the holders of record of Parent Common Stock as
of the close of business on the Distribution Record Date.

 “Person” means any individual, corporation, partnership, limited liability
company, firm, joint venture, association, joint-stock company, trust, estate,
unincorporated organization or Governmental Entity.

“Subsidiary” has the meaning set forth in the first paragraph of this Agreement.

“Subsidiary Board” means Subsidiary’s Board of Directors, as constituted
immediately before the Distribution Record Date.

“Subsidiary Books and Records” shall mean the books and records (including
computerized records) of Subsidiary and any other books and records of Parent
that relate principally to Subsidiary, or are required by law to be retained by
Subsidiary, including, without limitation original corporate minute books, stock
ledgers and certificates, and all licenses, leases, agreements and filings, but
not including the Parent Books and Records.

“Subsidiary Common Stock” has the meaning specified in the Introduction.

“Tax,” “Taxes” and “Taxable” have the respective meanings specified in Section
10.01.

“Tax Return” and “Tax Returns” have the respective meanings specified in Section
10.01.

“Treasury Regulations” shall mean the United States Treasury Regulations, as
amended.

1.02        Terms Defined Elsewhere in Agreement.  Other capitalized terms are
defined in this Agreement for use in specified Articles or Sections, or
elsewhere in this Agreement to the extent expressly stated herein.

 
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ARTICLE 2
TREATMENT OF ASSETS AND LIABILITIES

2.01        Allocation of Debt.  Debt will be allocated as follows:

(a)           Any Debt of Parent, including without limitation any Debt secured
by Parent assets, shall be retained Debt to be satisfied by Parent.

(b)           Any Debt of Subsidiary, including without limitation any Debt
secured by Subsidiary assets, shall be retained as an obligation to be satisfied
by Subsidiary.

2.02        Settlement of Intercompany Accounts.  All accounts between Parent
and Subsidiary shall be paid in full and settled before the Distribution Record
Date; provided, however, that nothing contained in this Section 2.02 shall
affect the assumption and satisfaction of liabilities pursuant to Article 5 or
the indemnification provisions of Article 6 or Article 10.

2.03        Limitation on Loans and Distributions by Subsidiary.  On or after
the Distribution Date, Parent shall not cause Subsidiary to make, nor shall
Subsidiary make, (a) any loans to Parent or any of its subsidiaries, or (b) any
distribution of cash or property to Parent with respect to Subsidiary Common
Stock, except as may be otherwise expressly provided in this Agreement.

ARTICLE 3
OFFICERS AND DIRECTORS OF SUBSIDIARY

3.01        Subsidiary Board and Officers.  Subsidiary and Parent shall take all
actions that may be required to appoint as officers and directors of Subsidiary
those individuals named in Schedule A attached hereto, effective no later than
the Distribution Record Date.  Parent agrees not to remove any such directors or
appoint any additional directors of Subsidiary at any time after the
Distribution Record Date.

ARTICLE 4
THE DISTRIBUTION

4.01        Cooperation Before the Distribution.

(a)           Subsidiary and Parent shall use all reasonable best efforts to
obtain any consents or approvals from any Governmental Entity or other
third-party Person that are necessary or desirable in connection with the
transactions contemplated hereby.

(b)           Subsidiary and Parent will use all reasonable best efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, all
things necessary or desirable under applicable law, to consummate the
transactions contemplated under this Agreement including, but not limited to,
actions relating to the satisfaction of the conditions indicated in Section
4.02.

4.02        Distribution Record Date, Distribution Date and Procedures.  The
Parent Board has established the date five (5) days immediately following the
Disclosure Date as the Distribution Record Date, subject to the following:

(a)           The Parent Board shall establish appropriate procedures in
connection with the Distribution and shall establish a Distribution Date that is
not later than the twentieth (20th) business day following the satisfaction or
waiver of all conditions precedent to the Distribution, as set forth in Section
4.03.

(b)           If the Distribution Date has not occurred on or prior to the 60th
day following the Distribution Record Date (the “Outside Distribution Date”), or
the Subsidiary Board determines in its discretion that such conditions are not
reasonably likely to be satisfied before the Outside Distribution Date, then the
Parent Board shall (i) establish a date designated by the Subsidiary Board in
its discretion as a new Distribution Record Date, and (ii) establish a
Distribution Date that is not later than the twentieth (20th) business day
following the satisfaction or waiver of all conditions precedent to the
Distribution, as set forth in Section 4.03. This Section 4.02(b) shall continue
to apply successively if a Distribution Date has not occurred on or before the
applicable Outside Distribution Date (i.e., the 60th day following the
Distribution Record Date or any new Distribution Record Date, as applicable).

 
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4.03        Conditions Precedent to the Distribution.  In no event shall the
Distribution occur unless the following conditions shall have been satisfied (or
waived as provided below):

(a)           no order, injunction or decree shall have been issued by any court
of competent jurisdiction to prevent consummation of the Distribution or any of
the other transactions contemplated by this Agreement or any of the Related
Agreements;

(b)          all necessary regulatory approvals and consents of Governmental
Entities and other third-party Persons shall have been received, except for any
such approvals or consents the failure of which to obtain would not have a
material adverse effect on the business, operations or condition (financial or
otherwise) of either Parent or Subsidiary; and

(c)           the Parent Board shall not have reasonably determined in good
faith that the Distribution would not be permitted under the Delaware General
Corporation Law.

Parent shall use its best efforts, and shall cooperate with Subsidiary, to take,
or cause to be taken, all actions, and to do, or cause to be done, all things
necessary, appropriate or desirable to consummate and make effective, in the
most expeditious manner practicable, the Distribution and the other transactions
contemplated hereby, including without limitation the satisfaction of the
conditions set forth in this Section 4.03.

4.04        The Distribution.  As of the Distribution Effective Time, subject to
the conditions set forth in this Agreement, Parent shall deliver to Agent (as
defined below), for the benefit of the Parent Shareholders, a share certificate
representing all of the outstanding shares of Subsidiary Common Stock owned by
Parent, which certificate shall be endorsed in blank; and Parent shall instruct
the Agent to distribute to each of the Parent Shareholders, as soon as
practicable after the Distribution Date, a certificate (each a “Subsidiary
Certificate”) representing one share of Subsidiary Common Stock for each share
of Parent Common Stock held by the Parent Shareholder.  Subsidiary agrees to
provide all Subsidiary Certificates that the Agent shall require in order to
effect the Distribution.  “Agent” means the Parent’s transfer agent, acting as
distribution agent appointed by Parent to distribute Subsidiary Common Stock to
the Parent Shareholders pursuant to the Distribution.

ARTICLE 5
SATISFACTION OF LIABILITIES

5.01        Satisfaction of Liabilities.  From and after the Distribution Date,
(a) Subsidiary shall assume, pay, perform and discharge in due course all of the
Subsidiary Liabilities; and (b) Parent shall assume, pay, perform and discharge
in due course all of the Parent Liabilities.

5.02        Assumption and Satisfaction of Unallocated Contingent
Liabilities.  From and after the Distribution Date, to the extent that there is
a Liability incurred by Parent or Subsidiary before the Distribution Effective
Time that is not recorded on the books and records of either Parent or
Subsidiary, and cannot in good faith be allocated by the parties hereto as
either a Parent Liability or a Subsidiary Liability (all such Liabilities,
“Unallocated Contingent Liabilities”), then such Unallocated Contingent
Liabilities shall be allocated between Parent and Subsidiary on a pro rata basis
in proportion to the estimated fair market value of each party’s assets as of
the Distribution Effective Time; and shall be partially assumed, paid, performed
and discharged by each such party based upon such allocation; provided, however,
that Subsidiary’s share of any such Unallocated Contingent Liabilities shall be
limited to the extent required under Section 6.01.

 
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ARTICLE 6
INDEMNIFICATION

6.01        Indemnification by Subsidiary.  Subsidiary shall indemnify, defend
and hold harmless (on an After-Tax Basis) Parent, and each of the past or
present directors, officers, employees and agents, and each of the heirs,
executors, successors and assigns of any of the foregoing (the “Parent
Indemnitees”), from and against any and all Actions, threatened Actions, costs,
damages, Liabilities and expenses, including but not limited to reasonable
attorneys’ fees, the reasonable fees of other professionals and experts, and
court or arbitration costs (“Indemnifiable Losses” and, individually, an
“Indemnifiable Loss”) that are suffered or incurred by any of the Parent
Indemnitees and that relate to or arise from all or any of the following:

(a)           any failure or alleged failure of Subsidiary to (i) pay, perform
or otherwise discharge in due course any of the Subsidiary Liabilities; or (ii)
comply with the provisions of Section 2.02; or

(b)          the operation or ownership of the Subsidiary assets after the
Distribution Date.

6.02        Insurance Proceeds.  The amount which any party (an “Indemnifying
Party”) is or may be required to pay to any other Person (an “Indemnified
Person”) pursuant to Section 6.01 shall be reduced (including, without
limitation, retroactively) by any Insurance Proceeds or other amounts actually
recovered by or on behalf of such Indemnified Person in reduction of the related
Indemnifiable Loss.  If an Indemnified Person has received a payment required by
this Agreement from an Indemnifying Party in respect of an Indemnifiable Loss
and later actually receives Insurance Proceeds, or other amounts in respect of
such Indemnifiable Loss as specified above, then such Indemnified Person shall
pay to such Indemnifying Party a sum equal to the amount of such Insurance
Proceeds or other amounts actually received.

6.03        Procedure for Indemnification.

(a)           Notice of Third-Party Claim.  If an Indemnified Person shall
receive written notice of the assertion by a Person (including, without
limitation, any Governmental Entity) who is not a party to this Agreement or to
any of the Related Agreements of any claim or of the commencement by any such
Person of any Action with respect to which an Indemnifying Party may be
obligated to provide indemnification pursuant to this Agreement (a “Third-Party
Claim”), such Indemnified Person shall give the Indemnifying Party written
notice thereof promptly after becoming aware of such Third-Party Claim;
provided, however, that the failure of any Indemnified Person to give notice as
required by this Section 6.03 shall not relieve the Indemnifying Party of its
obligations under this Article 6, except to the extent that such Indemnifying
Party is materially prejudiced by such failure to give notice.  Such notice
shall describe the Third-Party Claim in reasonable detail, and shall indicate
the amount (estimated if necessary) of the Indemnifiable Loss that has been
claimed against or may be sustained by such Indemnified Person.

(b)           Notice of Election to Defend Third-Party Claim.  Within 15 days
after the receipt of notice from an Indemnified Person in accordance with
Section 6.03(a) (or sooner, if the nature of such Third-Party Claim so
requires), the Indemnifying Party shall notify the Indemnified Person of its
election whether to assume responsibility for such Third-Party Claim (provided
that, if the Indemnifying Party does not so notify the Indemnified Person of its
election within 15 days after receipt of such notice from the Indemnified
Person, the Indemnifying Party shall be deemed to have elected not to assume
responsibility for such Third-Party Claim).  An election not to assume
responsibility for such Third-Party Claim may only be made in the event of a
good faith dispute that a Third-Party Claim is not covered as an Indemnifiable
Loss under the grounds specified in Section 6.01.  Subject to Section 6.03(e) ,
an Indemnifying Party may elect to defend or to seek to settle or compromise, at
such Indemnifying Party’s own expense and by counsel reasonably satisfactory to
the Indemnified Person, any Third-Party Claim; provided, however, that (i) the
Indemnifying Party must confirm in writing that it agrees that the Indemnified
Person is entitled to indemnification hereunder in respect of such Third-Party
Claim; and (ii) no compromise or settlement shall be made without the prior
written consent of the Indemnified Person, which consent shall not be reasonably
withheld.

 
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(c)           Cooperation with Indemnifying Party; Defense Costs.  In the event
that the Indemnifying Party elects to assume responsibility for the Third-Party
Claim, pursuant to Section 6.03(b) above, (i) the Indemnified Person shall
cooperate in good faith in the defense or settlement or compromise of such
Third-Party Claim, including making available to the Indemnifying Party any
personnel and any books, records or other documents within the Indemnified
Person’s control or which it otherwise has the ability to make available that
are necessary or appropriate for the defense of the Third-Party Claim; (ii) the
Indemnifying Party shall keep the Indemnified Person reasonably informed
regarding the strategy, status and progress of the defense of the Third-Party
claim; and (iii) the Indemnifying Party shall consider, in good faith, the
opinions and suggestions of the Indemnified Person with respect to the
Third-Party Claim.  After notice from an Indemnifying Party to an Indemnified
Person of its election to assume responsibility for a Third-Party Claim, such
Indemnifying Party shall not be liable to such Indemnified Person under this
Article 6 for any legal or other costs or expenses (except costs or expenses
approved in advance by the Indemnifying Party) subsequently incurred by such
Indemnified Person in connection with the defense thereof; provided, however,
that if the defendants in any such claim include both the Indemnifying Party and
one or more Indemnified Persons, and in such Indemnified Persons’ reasonable
judgment a conflict of interest between such Indemnified Persons and such
Indemnifying Party exists in respect of such claim, such Indemnified Persons
shall have the right to employ separate counsel and in that event the reasonable
fees and expenses of such separate counsel (but not more than one separate
counsel reasonably satisfactory to the Indemnifying Party) shall be paid by such
Indemnifying Party.

(d)           Procedure if No Defense Election is Made.  If an Indemnifying
Party elects not to assume responsibility for a Third-Party Claim, the
Indemnified Person may defend or (subject to the following sentence) seek to
compromise or settle such Third-Party Claim.  Notwithstanding the foregoing, an
Indemnified Person may not settle or compromise any claim without prior written
notice to the Indemnifying Party, which shall have the option within ten days
following the receipt of such notice (i) to disapprove the settlement, and to
then assume all past and future responsibility for the claim, including
immediately reimbursing the Indemnified Person for prior expenditures in
connection with the claim; (ii) to disapprove the settlement and continue to
refrain from participation in the defense of the claim, in which event the
Indemnified Person may, in its sole discretion, proceed with the settlement and
the Indemnifying Party shall have no further right to contest the amount or
reasonableness of the settlement; (iii) to approve and pay the amount of the
settlement, reserving the Indemnifying Party’s right to contest the Indemnified
Person’s right to indemnity; or (iv) to approve and pay the settlement.  In the
event the Indemnifying Party makes no response to such written notice, the
Indemnifying Party shall be deemed to have elected option (ii).  When the
Indemnifying Party chooses or is deemed to have chosen option (ii) or (iii), the
issue of whether the Indemnified Person has a right to indemnity under this
Article 6 shall be resolved by arbitration pursuant to the provisions of this
Agreement.  If the Indemnifying Party does not prevail in such arbitration, the
Indemnifying Party shall promptly reimburse the Indemnified Person for all
Indemnifiable Losses, plus interest on such amounts at the lower of (i) 10% or
(ii) the highest legal interest rate, accruing from the date of payment by the
Indemnified Person.

(e)           Procedure if Defense Election is Not Effective.  Notwithstanding
the foregoing, if an Indemnified Person reasonably and in good faith determines
that (i) the Indemnifying Party is not financially capable to defend a
Third-Party Claim and to provide full indemnification with respect to any
settlement thereof, or (ii) the Indemnifying Party or such Indemnifying Party’s
attorney is not adequately representing the Indemnified Person’s interests with
respect to such Third-Party Claim, the Indemnified Person may, by notice to the
Indemnifying Party, assume the exclusive right to defend, compromise or settle
such Third-Party Claim and the Indemnifying Party shall remain responsible for,
and be bound by the resolution of, such Third-Party Claim.

(f)           Repayment of Excess Indemnification.  In addition to any
adjustments required pursuant to Section 6.02, if the amount of any
Indemnifiable 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 Indemnified Person to the Indemnifying Party.

(g)           Subrogation Rights.  In the event of payment by an Indemnifying
Party to any Indemnified Person in connection with any Third-Party Claim, such
Indemnifying Party shall be subrogated to and shall stand in the place of such
Indemnified Person as to any events or circumstances in respect of which such
Indemnified Person 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 party that may be liable.  Such Indemnified Person shall
cooperate with such Indemnifying Party in good faith and in a reasonable manner,
and at the cost and expense of such Indemnifying Party, in prosecuting any
subrogated right or claim.

6.04        Remedies Cumulative.  Without limiting the generality of the
foregoing, nothing contained in this Agreement shall limit the rights of any
Indemnified Person to seek or obtain injunctive relief or any other equitable
remedy to which such Indemnified Person is otherwise entitled.

 
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6.05        Survival of Indemnities.  The obligations of the Subsidiary under
this Article 6 shall survive the sale or other transfer by it of any assets or
business or the assignment by it of any Liabilities, with respect to any
Indemnifiable Loss of the other related to such assets, business or Liabilities.

6.06        Coordination with Tax Allocation and Indemnity Provisions.  This
Article 6 shall not govern any Tax matter, and any and all Actions, losses,
damages, costs, expenses, Liabilities, refunds, deductions, write-offs, or
benefits relating to Taxes shall be exclusively governed by Article 10.

ARTICLE 7
ACCESS TO INFORMATION AND SERVICES

7.01        Provision of Corporate Records.

(a)           Subsidiary Books and Records.  Parent shall deliver, on or as soon
as practicable after the Distribution Date, to the extent not previously
delivered in connection with the transactions contemplated in Article 2, to
Subsidiary (at Parent’s cost) all of the Subsidiary Books and Records in
Parent’s possession, except to the extent such items are already in the
possession of Subsidiary.  The Subsidiary Books and Records shall be the
property of Subsidiary, but the Subsidiary Books and Records that reasonably
relate to Parent shall be available to Parent for review and duplication until
Parent shall notify Subsidiary in writing that such records are no longer of use
to Parent.

(b)           Parent Books and Records.  Subsidiary shall deliver, on or as soon
as practicable after the Distribution Date, to the extent not previously
delivered in connection with the transactions contemplated in Article 2, to
Parent (at Parent’s cost) all of the Parent Books and Records in Subsidiary’s
possession, except to the extent such items are already in the possession of
Parent.  The Parent Books and Records shall be the property of Parent, but the
Parent Books and Records that reasonably relate to Subsidiary shall be available
to Subsidiary for review and duplication until Subsidiary shall notify Parent in
writing that such records are no longer of use to Subsidiary.

7.02        Access to Information.  From and after the Distribution Date, Parent
shall afford to Subsidiary and its authorized accountants, counsel and other
designated representatives reasonable access (including using reasonable efforts
to give access to individuals and other Persons possessing information) and
duplicating rights during normal business hours, with respect to all records,
books, contracts, instruments, computer data and other data and information
relating to pre-Distribution operations (collectively, “Information”) within
Parent’s possession or control, insofar as such access is reasonably required by
Subsidiary for the conduct of its business, subject to appropriate restrictions
for classified or Privileged Information.  Similarly, Subsidiary shall afford to
Parent and its authorized accountants, counsel and other designated
representatives reasonable access (including using reasonable efforts to give
access to individuals and other Persons possessing information) and duplicating
rights during normal business hours, with respect to Information within
Subsidiary’s possession or control, insofar as such access is reasonably
required by Parent for the conduct of its business, subject to appropriate
restrictions for classified or Privileged Information.  Information may be
requested under this Article 7 for the legitimate business purposes of either
party, including without limitation, audit, accounting, claims (including claims
for indemnification hereunder), litigation and Tax purposes, as well as for
purposes of fulfilling disclosure and reporting obligations and for performing
this Agreement.

7.03        Production of Witnesses.  At all times from and after the
Distribution Date, each of Subsidiary and Parent shall use reasonable efforts to
make available to the other, upon written request, its and its subsidiaries’
present and past officers, directors, employees and agents as witnesses to the
extent that such Persons may reasonably be required in connection with any
Action.

7.04        Reimbursement.  A party providing Information or witnesses to the
other party under this Article 7 shall be entitled to receive from the
recipient, upon the presentation of invoices therefor, payments of such amounts,
relating to supplies, disbursements and other out-of-pocket expenses (at cost)
of employees who are witnesses or otherwise furnish assistance (at cost), as may
be reasonably incurred in providing such Information or
witnesses.  Notwithstanding the foregoing, the parties acknowledge that a party
providing Information or witnesses shall not be entitled to receive
reimbursement of salary or other compensation expenses relating to any employees
providing such Information or acting as such witnesses.
 
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7.05        Retention of Records.  Except as otherwise required by applicable
law (or otherwise agreed in writing), each of Subsidiary and Parent may destroy
or otherwise dispose of any of the Information that is material Information and
is not contained in other Information retained by the other, only after the
later to occur of (a) all applicable statutes of limitations (including any
waivers or extensions thereof) with respect to Tax Returns which Parent or
Subsidiary, as the case may be, may be obligated to file on behalf of any member
of the Subsidiary Group or any member of the Pre-Distribution Group or the
Post-Distribution Parent Group (each as defined in Section 10.01), as the case
may be; and (b) any retention period required by applicable law or pursuant to
any record retention agreement, provided, however, that before such destruction
or disposal, (x) it shall provide no less than 90 or more than 120 days advance
written notice to the other, specifying in reasonable detail the Information
proposed to be destroyed or disposed of and (y) if a recipient of such notice
shall request in writing before 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.

7.06        Confidentiality.  Each of Parent and its subsidiaries on the one
hand, and Subsidiary and its subsidiaries on the other hand, shall hold, and
shall cause its consultants and advisors to hold, in strict confidence, all
Information concerning the other in its possession or furnished by the other or
the other’s representatives pursuant to this Agreement (except to the extent
that such Information has been (i) in the public domain through no fault of such
party; or (ii) later lawfully acquired from other sources by such party), and
each party shall not release or disclose such Information to any other Person,
except its auditors, attorneys, financial advisors, rating agencies, bankers and
other consultants and advisors, unless compelled to disclose by judicial or
administrative process or, as reasonably advised by its counsel, by other
requirements of law, or unless such Information is reasonably required to be
disclosed in connection with (x) any litigation with any third-parties or
litigation between Parent and Subsidiary, (y) any contractual agreement to which
members of Parent or Subsidiary are currently parties, or (z) in exercise of
either party’s rights hereunder.

7.07        Privileged Matters.  Subsidiary and Parent recognize that certain
legal and other professional services, that have been and will be provided
before the Distribution Effective Time, have been and will be rendered for the
benefit of both Parent and Subsidiary; and that both Parent and the Subsidiary
should be deemed to be the client for the purposes of asserting all Privileges
with respect to such services.  To allocate the interests of each party in the
Privileged Information, the parties agree as follows:

 
(a)
Definitions.

“Privileged Information” means all information as to which Parent or Subsidiary
is entitled to assert the protection of a Privilege.

“Privileges” shall mean all privileges that may be asserted under applicable law
including, without limitation, privileges arising under or relating to the
attorney-client relationship (including but not limited to the attorney-client
and work product privileges), the accountant-client privilege, and privileges
relating to internal evaluative processes.

(b)           Parent shall be entitled, in perpetuity, to control the assertion
or waiver of all Privileges in connection with Privileged Information that
relates solely to Parent, whether or not the Privileged Information is in the
possession of or under the control of Parent or Subsidiary.  Parent shall also
be entitled, in perpetuity, to control the assertion or waiver of all Privileges
in connection with Privileged Information that relates solely to the subject
matter of any claims constituting Parent Liabilities, now pending or which may
be asserted in the future, in any Actions initiated against or by Parent,
whether or not the Privileged Information is in the possession of or under the
control of Parent or Subsidiary.

 
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(c)           Subsidiary shall be entitled, in perpetuity, to control the
assertion or waiver of all Privileges in connection with Privileged Information
that relates solely to the Subsidiary, whether or not the Privileged Information
is in the possession of or under the control of Parent or
Subsidiary.  Subsidiary shall also be entitled, in perpetuity, to control the
assertion or waiver of all Privileges in connection with Privileged Information
which relates solely to the subject matter of any claims constituting Subsidiary
Liabilities, now pending or which may be asserted in the future, in any Actions
initiated against or by Subsidiary, whether or not the Privileged Information is
in the possession of or under the control of Parent or Subsidiary.

(d)           Subsidiary and Parent agree that they shall have a shared
Privilege, with equal right to assert or waive, subject to the restrictions in
this Section 7.07, with respect to all Privileges not allocated pursuant to the
terms of Sections 7.07(a) and (b).  All Privileges relating to any Actions or
other matters which involve both Subsidiary and Parent, or in respect of which
both Subsidiary and Parent retain any responsibility or liability under this
Agreement, shall be subject to a shared Privilege.

(e)           No party may waive any Privilege that could be asserted under any
applicable law, and in which the other party has a shared Privilege, without the
consent of the other party, except to the extent reasonably required in
connection with any litigation with third-parties or as provided in subsection
(e) below.  Any such consent shall be in writing, or shall be deemed to be
granted unless written objection is made within twenty (20) days after written
notice upon the other party requesting such consent.

(f)           In the event of any litigation or dispute between Parent and
Subsidiary, either party may waive a Privilege in which the other party has a
shared Privilege, without obtaining the consent of the other party, provided
that such waiver of a shared Privilege shall be effective only as to the use of
Information with respect to the litigation or dispute between Parent and
Subsidiary, and shall not operate as a waiver of the shared Privilege with
respect to third-parties.

(g)           If a dispute arises between the parties regarding whether a
Privilege should be waived to protect or advance the interest of either party,
each party agrees that it shall negotiate in good faith, shall endeavor to
minimize any prejudice to the rights of the other party, and shall not
unreasonably withhold consent to any request for waiver by the other
party.  Each party specifically agrees that it will not withhold consent to
waiver for any purpose except to protect its own legitimate interests.

(h)           Upon receipt by any party of any subpoena, discovery or other
request which arguably calls for the production or disclosure of Information
subject to a shared Privilege or as to which the other party has the sole right
hereunder to assert a Privilege, or if any party obtains knowledge that any of
its current or former directors, officers, agents or employees has received any
subpoena, discovery or other request that arguably calls for the production or
disclosure of such Privileged Information, such party shall promptly notify the
other party of the existence of the request and shall provide the other party a
reasonable opportunity to review the Information and to assert any rights it may
have under this Section 7.07 or otherwise to prevent the production or
disclosure of such Privileged Information.

(i)           The transfer of the Subsidiary Books and Records and the Parent
Books and Records and other Information between Parent and its subsidiaries and
Subsidiary and its subsidiaries is made in reliance on the agreement of
Subsidiary and Parent, as set forth in Sections 7.06 and 7.07, to maintain the
confidentiality of Privileged Information and to assert and maintain all
applicable Privileges.  The access to Information being granted pursuant to
Sections 7.01 and 7.02, the agreement to provide witnesses and individuals
pursuant to Section 7.03, and the transfer of Privileged Information between
Parent and its subsidiaries and Subsidiary and its subsidiaries pursuant to this
Agreement shall not be deemed a waiver of any Privilege that has been or may be
asserted under this Agreement or otherwise.

ARTICLE 8
INSURANCE

8.01         Definitions.  For purposes of this Article 8, the following terms
shall have the meanings set forth below:

“Insurance Administration” means, with respect to each Policy, this term shall
include, but not be limited to, the accounting for premiums, retrospectively
rated premiums, defense costs, adjuster’s fees, indemnity payments, deductibles
and retentions as appropriate under the terms and conditions of each of the
Policies; and the reporting to primary and excess insurance carriers of any
losses, claims and/or audit exposure in accordance with Policy provisions, and
the distribution of Insurance Proceeds as contemplated by this Agreement.

 
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“Insured Claims” shall mean the property losses or Liabilities that,
individually or in the aggregate, are covered within the terms and conditions of
any of the Policies, whether or not subject to deductibles, co-insurance,
uncollectibility or retrospectively rated premium adjustments, but only to the
extent that such property losses or Liabilities are within applicable Policy
limits, including aggregates.

“Insurance Proceeds” shall mean those moneys (i) received by an insured from an
insurance carrier; or (ii) paid by an insurance carrier on behalf of the
insured, in either case net of any applicable premium adjustment,
retrospectively rated premium, deductible, retention, cost or reserve paid or
held by or for the benefit of such insured.

“Pre-Distribution Policies” shall mean insurance policies and insurance
contracts of any kind relating to the Subsidiary Individuals for any period
before the Distribution Effective Time, including without limitation (a)
comprehensive general, automobile, aircraft, employment, workers’ compensation,
directors’ and officers’ and umbrella liability policies; (b) property and crime
insurance policies; and (d) primary and excess policies included in clause (a)
or (b), in each case together with the rights and benefits thereunder.

“Shared Policies” shall mean all Pre-Distribution Policies, current or past,
that are owned or maintained by or on behalf of Parent and/or any of its
subsidiaries or their respective predecessors; and insure Parent or Subsidiary
or any combination thereof.

8.02        Policies and Rights Included within the Subsidiary Assets.  Without
limiting the generality of the definition of the Subsidiary assets or the effect
of Section 2.01, the Subsidiary assets shall include any and all rights of
Subsidiary as an insured party under each of the Shared Policies, specifically
including rights of indemnity and the right to be defended by or at the expense
of the insurer, where applicable, with respect to all Insured Claims and other
injuries, losses, Liabilities, damages and expenses incurred or claimed to have
been incurred at or before the Distribution Effective Time by any Person, and
which Insured Claims or other injuries, losses, Liabilities, damages and
expenses may arise out of insured or insurable occurrences or events under one
or more of the Shared Policies.

8.03        Policies and Rights Included within the Parent Assets.  Without
limiting the generality of the definition of the Parent assets or the effect of
Section 2.01, the Parent assets shall include any and all rights of Parent as an
insured party under each of the Shared Policies, specifically including rights
of indemnity and the right to be defended by or at the expense of the insurer,
where applicable, with respect to all Insured Claims and other injuries, losses,
Liabilities, damages and expenses incurred or claimed to have been incurred at
or before the Distribution Effective Time by any Person, and which injuries,
losses, Liabilities, damages and expenses may arise out of insured or insurable
occurrences or events under one or more of the Shared Policies.

8.04        Shared Policy Insurance Administration, Reserves and Premiums.

(a)        General.  Notwithstanding the provisions of Article 6, from and after
the Distribution Date:

(i)           Subsidiary shall be responsible for the Insurance Administration
of the Shared Policies (other than any Shared Policies providing insurance
against employment, workers’ compensation or directors’ and officers’
liability); provided, however, that (A) Subsidiary shall not take any action to
remove Parent as an insured or additional insured under the Shared Policies
administered by Subsidiary, until such time as any renewal or replacement Shared
Policy no longer provides coverage for any period before the Distribution
Effective Time; and (B) the administration of such Shared Policies by Subsidiary
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 Shared Policies
including, but not limited to, Parent;

 
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(ii)          Parent shall be responsible for the Insurance Administration of
the Shared Policies providing insurance against employment, workers’
compensation and directors’ and officers’ liability; provided, however, that (A)
Parent shall not take any action to remove Subsidiary as an insured or
additional insured under the Shared Policies administered by Parent, until such
time as any renewal or replacement Shared Policy no longer provides coverage for
any period before the Distribution Effective Time; and (B) the administration of
such Shared Policies by Parent is in no way intended to limit, inhibit or
preclude any right to insurance coverage for any Insured Claim of a named
insured under such Shared Policies including, but not limited to, Subsidiary;

(iii)         Subsidiary shall be entitled to the benefit of reserves held by
any insurance carrier, with respect to the Subsidiary Liabilities; and

(iv)        Parent shall be entitled to the benefit of reserves held by any
insurance carrier, with respect to the Parent Liabilities.

 
(b)
Shared Policy Insurance Premiums.

(i)           Subsidiary shall pay the premiums with respect to the Shared
Policies for which Subsidiary is responsible for Insurance Administration under
the preceding subsection (a).  To the extent that Subsidiary pays premiums for
Parent Liabilities (retrospectively-rated or otherwise), with respect to Shared
Policies as required under the terms and conditions of the respective Policies,
Parent shall upon the written request of Subsidiary forthwith reimburse
Subsidiary for that portion of such premiums paid by Subsidiary as is
attributable to Parent Liabilities.

(ii)          Parent shall pay the premiums with respect to the Shared Policies
for which Parent is responsible for Insurance Administration under the preceding
subsection (a). To the extent that Parent pays premiums for Subsidiary
Liabilities (retrospectively-rated or otherwise), with respect to Shared
Policies as required under the terms and conditions of the respective Policies,
Subsidiary shall upon the written request of Parent forthwith reimburse Parent
for that portion of such premiums paid by Parent as are attributable to
Subsidiary Liabilities.

(c)        Allocation of Insurance Proceeds.  Insurance Proceeds received with
respect to claims, costs and expenses under the Policies shall be paid to
Subsidiary with respect to the Subsidiary Liabilities, and to Parent with
respect to the Parent Liabilities.  Payment of the allocable portions of
indemnity costs of Insurance Proceeds resulting from the Liability policies will
be made to the appropriate party upon receipt from the insurance carrier.  In
the event that the aggregate limits on any Policies are exceeded, the parties
agree to provide an equitable allocation of Insurance Proceeds received after
the Distribution Date based upon their respective bona fide claims taking into
account their relative contributions towards premiums and the Insurance Proceeds
used by each party to satisfy Insured Claims.  The parties agree to use their
reasonable best efforts to cooperate in good faith with respect to insurance
matters.

(c) Shared Policy Insurance Charges.

(i)           Subject to the last paragraph of Section 6.01, Subsidiary assumes
responsibility for and shall pay to the appropriate insurance carriers or
otherwise any premiums, retrospectively rated premiums, defense costs, indemnity
payments, deductibles, retentions or other charges as appropriate (collectively
“Insurance Charges”), whenever arising, that become due and payable upon the
terms and conditions of any applicable Policy in respect of any Insured Claims
against Subsidiary for charges that relate to the period before the Distribution
Effective Time.  If Subsidiary fails to pay any such Insurance Charges when due
and payable, whether at the request of the Person entitled to payment or upon
demand by Parent, Parent may (but shall not be required to) pay such Insurance
Charges for and on behalf of Subsidiary and thereafter Subsidiary shall upon the
written request of Parent forthwith reimburse Parent for such payment.

(ii)          Subject to the last paragraph of Section 6.01, Parent assumes
responsibility for and shall pay to the appropriate insurance carriers or
otherwise any Insurance Charges, whenever arising, that become due and payable
upon the terms and conditions of any applicable Policy in respect of any Insured
Claims against Parent for charges that relate to the period before the
Distribution Effective Time.  If Parent fails to pay any Insurance Charges when
due and payable, whether at the request of the Person entitled to payment or
upon demand by Subsidiary, then Subsidiary may (but shall not be required to)
pay such Insurance Charges for and on behalf of Parent and thereafter Parent
shall upon the written request of Subsidiary forthwith reimburse Subsidiary for
such payment.

 
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8.05        Insurance after the Distribution.

(a)        After the Distribution Effective Time, Parent (for itself and its
subsidiaries) shall be responsible for obtaining or renewing and paying for its
own insurance coverage relating to the Parent Assets and the Parent Liabilities,
with respect to all Insured Claims and other injuries, losses, Liabilities,
damages and expenses incurred or claimed to have been incurred (i) after the
Distribution Effective Time by any Person or (ii) in connection with the
ownership or operation of the Parent assets or the Parent Liabilities after the
Distribution Effective Time.

(b)        After the Distribution Effective Time, Subsidiary (for itself and its
subsidiaries) shall be responsible for obtaining or renewing and paying for its
own insurance coverage relating to the Subsidiary Assets and the Subsidiary
Liabilities, with respect to all Insured Claims and other injuries, losses,
Liabilities, damages and expenses incurred or claimed to have been incurred (i)
after the Distribution Effective Time by any Person or (ii) in connection with
the ownership or operation of the Subsidiary assets or the Subsidiary
Liabilities after the Distribution Effective Time.

8.06        Agreement for Waiver of Conflict and Shared Defense.  In the event
that Insured Claims of both Subsidiary and Parent exist and relate to the same
occurrence, Subsidiary and Parent agree to jointly defend and to waive any
conflict of interest necessary to the conduct of that joint defense.  Nothing in
this paragraph 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.

ARTICLE 9
EMPLOYMENT AND EMPLOYEE BENEFIT MATTERS

9.01        Definitions.  For purposes of this Article 9, the following terms
shall have the meanings set forth below:

“Affiliate” means, with respect to any Employer (the “first Employer”), each
other Person that directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, the first
Employer.  For purposes of this definition, “control” means the possession,
directly or indirectly, of fifty per cent (50%) or more of the voting power or
value of all outstanding voting interests.

“COBRA” means the federal statutes designated as Code Section 4980B and ERISA
Sections 601 through 608, as amended; and any applicable state law that also
establishes Employer requirements for continuation of health care, life
insurance or other Welfare Plan benefits for the benefit of certain current and
former Employees or dependents thereof and any successor legislation to any of
such laws.

“Employee” means, with respect to any Employer, an individual who is considered,
according to the payroll and other records of such Employer, to be employed by
such Employer, regardless of whether such individual is, at the relevant time,
actively at work or on leave of absence (including vacation, holiday, sick
leave, family and medical leave, disability leave, military leave, jury duty,
layoff with rights of recall, and any other leave of absence or similar
interruption of active employment that is not considered, according to the
policies or practices of such Employer, to have resulted in a permanent
termination of such individual’s employment), but excluding any individual who
is, as of the relevant time, on long-term disability leave.  An Employee
includes, without limitation, any individual who is in one of the following
categories: a Parent Terminee, a Transferred Employee, a Parent Employee or a
Subsidiary Employee.

“Employer” means any of the following, as the context so indicates: Parent or
Subsidiary.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 
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“HMO” means any health maintenance organization organized under 42 U.S.C.
Section 300e-9, or a state health maintenance organization statute that provides
medical services for Parent Individuals or Subsidiary Individuals under any
Medical/Dental Plan.

“Medical/Dental Plan” means a Welfare Plan providing health care benefits to
Employees, former Employees and their dependents and beneficiaries; and also
includes a “cafeteria” Plan intended to qualify under Code Section 125.

“Parent Employee” means any individual who is or becomes an employee of Parent
or any of its subsidiaries (but excluding the Subsidiary).

“Parent Individual” means any individual who (i) is a Parent Employee, (ii) is a
Parent Service Provider who is hired or continues to serve in that capacity
after the Distribution Date or (iii) is a dependent or beneficiary of any such
individual described in clause (i) or (ii).

“Parent Medical/Dental Plan” means any Medical/Dental Plan, if any, maintained
for or providing benefits to Parent Individuals after the Distribution Date.

“Parent and Subsidiary Medical/Dental Plan” means the Medical/Dental Plan, if
any, previously maintained by Parent, which has been terminated and no longer
provides coverage for any Person.

“Parent Qualified Beneficiary” means any Parent Individual (or dependent
thereof) who, on or after the Distribution Date, is a Qualified Beneficiary
under the Parent Medical/Dental Plan.

“Parent Service Provider” means any individual, such as a member of the Parent
Board or a consultant, who provides services to Parent and participates in any
Plan maintained for or providing benefits for Employees of Parent, but is not
and has not been a Parent Employee.

“Parent Terminee” means any individual who was formerly an Employee of Parent
and terminated such employment on or before the Distribution Date.

“Plan” means any Retirement Plan, Medical/Dental Plan, Welfare Plan or other
plan, policy, arrangement, contract or agreement providing compensatory benefits
(other than cash or property) for any group of Employees or individual Employees
(including former Employees), or the dependents or beneficiaries of any such
Employee, whether formal or informal or written or unwritten, and including,
without limitation, any means, whether or not legally required, pursuant to
which any benefit is provided by an Employer to any such Employee, former
Employee or the beneficiaries of any such Employee, existing at the Distribution
Effective Time or prior thereto.

“Qualified Beneficiary” means any individual (or dependent thereof) who either
(i) experiences a “qualifying event” (as that term is defined in Code Section
4980B(f)(3) and ERISA Section 603) while a participant in any Medical/Dental
Plan, or (ii) otherwise becomes a “qualified beneficiary,” as that term is
defined in Code Section 4980B(g)(1) and ERISA 607(3), under any Medical/Dental
Plan.

“Retirement Plan” means any Plan that is sponsored by an Employer, provides
deferred compensation for Employees and is described in ERISA as a “pension
plan,” including but not limited to any plan and trust intended to be qualified
under Code Section 401(a) and/or 401(k).

“Service Credit” means the period of time taken into account under any Plan for
purposes of determining length of service or plan participation to satisfy
eligibility, vesting, benefit accrual or similar requirements under such Plan.

“Subsidiary Employee” means any individual who becomes an Employee of Subsidiary
or any of its subsidiaries after the Distribution Date.

 
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“Subsidiary Individual” means any individual who (i) is a Subsidiary Employee;
(ii) is a Subsidiary Service Provider; (iii) is, on or at any time before the
Distribution Date, a Parent Terminee; or (iv) is a dependent or beneficiary of
any individual described in clause (i), (ii) or (iii).

“Subsidiary Service Provider” means any individual, such as a member of the
Subsidiary Board or a consultant, who provides services to Subsidiary and
participates in any Plan maintained for or providing benefits for Employees of
Subsidiary, but is not and has not been an Employee of Subsidiary.

“Transferred Employee” means any individual who was an Employee of Parent on the
day before the Distribution Date and who becomes an Employee of Subsidiary as
of the Distribution Date.

“Welfare Plan” means any Plan that is sponsored by an Employer and provides
medical, health, disability, accident, life insurance, death, dental or any
other welfare benefit described as such in ERISA, including, without limitation,
any post-employment benefit, but excluding vacation benefits and including any
“cafeteria Plan” within the meaning of Code Section 125.

9.02        Employment and Related Obligations.

(a)        Subsidiary Employment Agreements with Transferred Employees.  As of
the Distribution Date, Parent shall assign all rights, and Subsidiary shall
assume all obligations and Liabilities for, and arising under, all written and
oral employment agreements, if any, in each case with respect to Transferred
Employees, if any (the “Transferred Employment Agreements”); and Parent shall
have no Liability or obligation with respect thereto.  Subsidiary shall take, or
cause to be taken, all action necessary and appropriate to assume, as of the
Distribution Date, any Transferred Employment Agreements, with such changes as
may be necessary to reflect the change in the Employer thereunder and such other
changes as Subsidiary shall determine.  Any such Transferred Employment
Agreements shall otherwise have the same terms and conditions as in effect
immediately before the Distribution Date, except that references to employment
by or termination of employment with Parent and its Affiliates shall be changed
to refer to employment by or termination of employment with Subsidiary and its
Affiliates.

(b)        Allocation of Responsibilities as Employer on Distribution Date.  As
of the Distribution Date, except to the extent assumed by Parent under this
Agreement, Subsidiary shall retain or assume, as the case may be, responsibility
as Employer for any Transferred Employees.  After the Distribution Date, Parent
shall not retain responsibility as Employer for any Parent Terminees or
Transferred Employees.

(c)        Assumption of Other Employment-Related Liabilities on Distribution
Date.  Except as specifically provided in this Agreement, or as otherwise agreed
by the parties hereto:

(i)           As of the Distribution Date, Subsidiary shall assume all benefit
obligations and all related rights in connection with any Plan with respect to
any Transferred Employees, Parent Terminees and other Subsidiary Individuals;
and Parent shall have no further liability with respect thereto.  With respect
to any Parent Terminees who become employed by Subsidiary after the Distribution
Date, any benefit obligations and all related rights that accrue after such
employment in connection with any Plan that becomes or continues to be sponsored
by Subsidiary shall be assumed by Subsidiary.

(ii)          Parent shall retain all benefit obligations and all related rights
that accrue before or after the Distribution Date in connection with any Plan
that continues to be sponsored by Parent after the Distribution Date; and
Subsidiary shall have no liability with respect thereto.

(d)        Service Credits.

(i)           Distribution Date Transfers.  In connection with the Distribution
and for purposes of determining Service Credits under any Plan, Subsidiary shall
credit each Transferred Employee with such Employee’s Service Credits and
original hire date as reflected in the records of Parent as of the Distribution
Date.  Such Service Credits and hire date shall continue to be maintained as
described herein for as long as the Transferred Employee does not terminate such
employment or as otherwise may be required by applicable law or any applicable
Plan.

 
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(ii)          Service Credits Following the Distribution Date.  Subject to the
provisions of applicable law, (A) Subsidiary may, in its sole discretion, make
such decisions as it deems appropriate with respect to determining Service
Credits accrued by Transferred Employees after the Distribution Date; and (B)
Parent may, in its sole discretion, make such decisions as it deems appropriate
with respect to determining Service Credits accrued by any Employees it may hire
after the Distribution Date.

9.03        Labor and Employment Matters.  Notwithstanding any other provision
of this Agreement or any other agreement between Parent and Subsidiary to the
contrary, Parent and Subsidiary understand and agree that:

(a)        Separate Employers.  After the Distribution Date and the employment
of the Transferred Employees by Subsidiary, Parent and Subsidiary will be
separate and independent Employers of their respective Employees, extent to the
extent otherwise provided by applicable law.

(b)        Employment Policies and Practices.  Subject to the provisions of
ERISA and the Code, and except as limited by applicable law or agreement, Parent
and Subsidiary may adopt, continue, modify or terminate such employment
policies, compensation practices, Retirement Plans, Welfare Plans and other
employee benefit plans of any kind or description, as each may determine, in its
sole discretion, are necessary or appropriate.

(c)        Notice of Claims.  Without limitation to the scope and application to
each party in the performance of its duties herein, each party hereto will
notify in writing and consult with the other party before making any settlement
of an Employee claim, for the purpose of avoiding any prejudice to such other
party arising from the settlement.

(d)        Employees on Leave of Absence.  As of the Distribution Date,
Subsidiary shall assume responsibility, if any, as Employer for all Employees
returning from an approved leave of absence who, before Distribution Date, were
employed by Parent, and any such Employee shall be treated as a Transferred
Employee.

9.04        Access to Information; Cooperation.  Parent and Subsidiary and their
authorized agents shall be given reasonable access to and may take copies of all
information relating to the subjects of this Article 9 (to the extent permitted
by federal and state confidentiality laws) in the custody of the other party,
including any agent, contractor, subcontractor, agent or any other Person under
the contract of such party.  The parties hereto shall provide one another with
such information within the scope of this Article 9 as is reasonably necessary
to administer each party’s Plans, properly compensate its Employees, perform
payroll administration and make all reports required by applicable laws and
regulations.   The parties hereto shall cooperate in good faith with each other
to minimize the disruption caused by any such access and providing of
information.

9.05        Reimbursement.  Parent and Subsidiary acknowledge that Parent, on
the one hand, and Subsidiary, on the other hand, may incur costs and expenses,
including, but not limited to, contributions to Plans and the payment of
insurance premiums arising from or related to any of the Plans that are, as set
forth in this Agreement, the responsibility of the other party
hereto.  Accordingly, Parent and Subsidiary shall reimburse each other, as soon
as practicable, but in any event within thirty (30) days after receipt from the
other party hereto of appropriate verification, for all such costs and expenses.

9.06        Preservation of Right To Amend or Terminate Plans.  Except as
otherwise expressly provided herein, no provision of this Agreement, including
without limitation the agreement of Parent or Subsidiary to make a contribution
or payment to or under any Plan referred to herein for any period, shall be
construed as a limitation on any right of Parent or Subsidiary to amend such
Plan or terminate its participation therein that Parent or Subsidiary would
otherwise have under the terms of such Plan or otherwise; and no provision of
this Agreement shall be construed to create a right in any Employee or former
Employee, or dependent or beneficiary of such Employee or former Employee under
a Plan that such individual would not otherwise have under the terms of the Plan
itself; provided, however, that neither party shall amend any Plan to the extent
that such amendment would have the effect of increasing the Liabilities of the
other party under any Plan of the other party, without such other party’s
consent.

9.07        Effect on Employees.  No provision of this Agreement shall create
any third party beneficiary rights in any Employee, former Employee or any
beneficiary or dependent thereof, with respect to the compensation, terms and
conditions of employment and benefits that may be provided to any such
individual by either party hereto or under any Plan that a party may maintain.

 
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Nothing contained in this Agreement shall confer upon any Employee any right
with respect to continuance of employment by either party hereto, nor shall
anything herein interfere with the right of either party hereto to terminate the
employment of any Employee at any time, with or without cause, or restrict a
party in the exercise of its independent business judgment in modifying any of
the terms and conditions of the employment of an Employee, except as provided by
any applicable law or any other agreement.

ARTICLE 10
TAX MATTERS

10.01      Definitions.  For purposes of this Article 10, the following terms
shall have the meanings set forth below:

“Affiliated Group” means, with respect to any Taxable Period, an affiliated
group of corporations within the meaning of Code Section 1504(a) (and without
regard to the exclusions contained in Section 1504(b) of the Code) for the
Taxable Period; or, for purposes of any state, foreign or local Income Tax
matters, any consolidated, affiliated, combined or unitary group of corporations
within the meaning of the corresponding provisions of Tax law for the Tax
Authority in question.

“Combined Jurisdiction” means, for any Taxable Period, any state, local or
foreign Tax Authority jurisdiction in which Parent or an Affiliate of Parent is
included in a consolidated, affiliated, combined, unitary or similar Tax Return
with Parent or any other Affiliate of Parent for state, local or foreign Income
Tax purposes.

“Final Determination” means (i) a decision, judgment, decree, or other order by
a court of competent jurisdiction, which has become final and non-appealable;
(ii) a closing agreement or accepted offer in compromise under Code Sections
7121 or 7122, or comparable agreements under the laws of other Tax Authority
jurisdictions; (iii) any other final settlement with the IRS or other Tax
Authority; or (iv) the expiration of an applicable statute of limitations.

“Income Tax(es)” shall mean, with respect to any corporation or Affiliated
Group, any and all Taxes based upon or measured by its net income (regardless of
whether denominated as an income Tax, a franchise Tax or otherwise).

“IRS” means the United States Internal Revenue Service.

“Overdue Rate” means a rate of interest per annum that fluctuates with the
federal short-term rate established from time to time pursuant to Code Section
6621.

“Post-Distribution Member” means a corporation that is a member of the
Post-Distribution Parent Group at any time after the Distribution Date.

“Post-Distribution Straddle Period” means, with respect to any Straddle Period,
the portion beginning on the day after the Distribution Date and ending on the
last day of such Taxable Year.

“Post-Distribution Taxable Period” means a Taxable Year that begins after the
Distribution Date.

“Post-Distribution Parent Group” means, collectively, Parent and each other
corporation that is or becomes a member of an Affiliated Group with respect to
which Parent is or would be the common parent at any time after the Distribution
Effective Time.  To the extent applicable to any state or local Income Tax
matters, the “Post-Distribution Parent Group” shall include all corporations
joining in the filing of a consolidated, unitary or combined Income Tax Return
for the state or local Tax Authority in question for any Straddle Period or
Post-Distribution Taxable Period.

 
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“Post-Distribution Parent Member” means any corporation that is a member of the
Post-Distribution Parent Group.

“Pre-Distribution Group” means the Affiliated Group consisting of Parent,
Subsidiary, and any other members of an Affiliated Group that includes Parent at
any time before the Distribution Effective Time.  For purposes of this
Agreement, the Pre-Distribution Group shall terminate as of the Distribution
Effective Time and the Post-Distribution Parent Group shall then become
effective.  To the extent applicable to any state Income Tax matters, the
“Pre-Distribution Group” shall include all corporations joining in the filing of
a consolidated, combined or unitary Income Tax Return for the state in question
for any Pre-Distribution Taxable Period.

“Pre-Distribution Member” means a corporation that was a member of the
Pre-Distribution Group immediately before the Distribution Effective Time.

“Pre-Distribution Straddle Period” means, with respect to any Straddle Period,
the portion beginning on the first day of such Taxable Year and ending at the
close of business on the Distribution Date.

“Pre-Distribution Taxable Period” means a Taxable Year that ends on or before
the Distribution Date.

“Representative” means, with respect to any Person, any of such Person’s or
entity’s directors, officers, employees, agents, consultants, accountants,
attorneys and other advisors.

“Separate Jurisdiction” means, for any Taxable Period, any state, local or
foreign Tax Authority jurisdiction that is not a Combined Jurisdiction.

“Separate Return Basis” means, with respect to any Taxable Year or portion
thereof, (i) in the case of a Tax Liability of the Subsidiary Group, calculated
with Subsidiary as the common parent of that Affiliated Group and without regard
to any Post-Distribution Parent Group Members; and (ii) in the case of any
individual Subsidiary Member, calculated as if such Subsidiary Member were a
separate entity outside of any Affiliated Group.

“Straddle Period” means any Taxable Year beginning before the Distribution Date
and ending after the Distribution Date.

“Subsidiary Group” means Subsidiary and each other corporation that becomes a
member of an Affiliated Group with respect to which Subsidiary is the common
parent at any time after the Distribution Date.

“Subsidiary Member” means any corporation that is a member of a Subsidiary
Group.

“Tax” (and with the corresponding meaning “Taxes” and “Taxable”):  (i) Any net
income, alternative or add-on minimum, gross income, gross receipts, sales, use,
transfer, value added, ad valorem, franchise, capital stock, profits, license,
withholding, payroll, employment, social security, unemployment, disability,
workers’ compensation, employment-related insurance, excise, environmental,
severance, stamp, occupation, premium, real property, personal property, or
windfall profit tax, custom duty or other tax, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest and any
penalty, addition to tax or additional amount, imposed by any Tax Authority,
whether disputed or not; and (ii) any Liability for the payment of any amount of
the type described in clause (i) as a result of an entity being a member of an
Affiliated Group.

“Tax Benefit(s)” shall mean (i) in the case of an Income Tax for which a
consolidated federal or a consolidated, combined or unitary state or other Tax
Return is filed, the amount by which the Tax Liability of the applicable
Affiliated Group is actually reduced on a “with and without” basis (by
deduction, entitlement to refund, credit, offset or otherwise, whether available
in the current Taxable Year, as an adjustment to Taxable income in any other
Taxable Year or as a carry-forward or carryback, and including the effect on
other Taxes of such reduction), plus any interest received with respect to any
related Tax refund; and (ii) in the case of any other Tax, the amount by which
the Tax Liability of a corporation is actually reduced on a “with and without”
basis (by deduction, entitlement to refund, credit, offset or otherwise, whether
available in the current Taxable Year, as an adjustment to Taxable income in any
other Taxable Year or as a carry-forward or carryback, and including the effect
on other Taxes of such reduction), plus any interest received with respect to
any related Tax refund.

 
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“Tax Practices” shall mean the most recently applied policies, procedures and
practices employed by the Pre-Distribution Group in the preparation and filing
of, and positions taken on, any Tax Returns of Parent or Subsidiary for any
Pre-Distribution Taxable Period.

“Tax Returns” (and with corresponding meaning “Tax Return”):  All returns,
claims for refund, declarations, reports, estimates, elections and information
returns and statements (including any attached schedules and any amendments
thereto) required by a Tax Authority to be filed or sent by or relating to a
party to this Agreement or any member of any Affiliated Group in which the party
is a member; and relating to any Taxes with respect to any income, properties or
operations of such party or any such member.

“Taxable Period” means a Pre-Distribution Taxable Period, a Straddle Period or a
Post-Distribution Taxable Period.

“Taxable Year” means a Taxable year (which may be shorter than a full calendar
or fiscal year), year of assessment or similar period with respect to which any
Tax may be imposed.

“Tax Authority” means the IRS and any other federal, state, local or foreign
Governmental Entity responsible for the administration of any Tax.

10.02      Preparation and Filing of Tax Returns.

(a)          By Parent.  Parent shall prepare and timely file (or cause to be
prepared and timely filed):

(i)           all Tax Returns of the Pre-Distribution Group and any
Pre-Distribution Member (other than such Returns that relate solely to
Subsidiary) for all Pre-Distribution Taxable Periods that are required to be
filed either before or after the Distribution Date; and

(ii)          all Tax Returns of the Post-Distribution Parent Group and any
Post-Distribution Member for all Straddle Periods and Post-Distribution Taxable
Periods.

(b)          By Subsidiary.  Subsidiary shall prepare and timely file (or cause
to be prepared and timely filed):

(i)           all Tax Returns that relate solely to Subsidiary for all
Pre-Distribution Taxable Periods that are required to be filed before or after
the Distribution Date; and

(ii)          all Tax Returns of the Subsidiary Group and any Subsidiary Member
for all Straddle Periods and Post-Distribution Taxable Periods.

(c)           Sales and Transfer Taxes.  Parent and Subsidiary agree to
cooperate in good faith to determine the amount of sales, transfer or other
Taxes (including, without limitation, all real estate, patent, trademark and
transfer Taxes and recording fees, but excluding any Income Taxes), if any,
incurred in connection with the Distribution and other transactions contemplated
by this Agreement (the “Distribution Transaction Taxes”).  Subsidiary agrees to
file promptly and timely the Tax Returns for such Distribution Transaction
Taxes; and Parent will join in the execution of any such Tax Returns and any
related documentation.  Subsidiary shall be responsible for payment of all such
Transaction Taxes.

(d)          Provision of Filing Information.  Subsidiary (or Parent, as the
case may be) shall cooperate in good faith and assist Parent (or Subsidiary) in
the preparation and filing of all Tax Returns and submit to Parent (or
Subsidiary) (i) all necessary filing information in a manner consistent with
past Tax Practices, and (ii) all other information reasonably requested by
Parent (or Subsidiary) in connection with the preparation of such Tax Returns
promptly after such request.  It is expressly understood and agreed that
Parent’s (or Subsidiary’s) ability to discharge its Tax Return preparation and
filing responsibilities is contingent upon Subsidiary (or Parent) providing
Parent (or Subsidiary) with all cooperation, assistance and information
reasonably necessary or requested for the filing of such Income Tax Returns; and
that Subsidiary (or Parent) shall indemnify Parent (or Subsidiary) if, and to
the extent that, Taxes are increased as a result of material inaccuracies in
such information or failures to provide such information and assistance on a
timely basis.

 
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10.03      Taxable Years.  Subsidiary and Parent agree that, to the extent
permitted by applicable Tax law, including but not limited to Treasury
Regulation Section 1.1502-76(b)(ii):

(a)            the Taxable Year of Subsidiary that is included in the
consolidated federal Income Tax Return of the Pre-Distribution Group for the
Pre-Distribution Taxable Period that includes the Distribution Date (and all
corresponding consolidated, combined or unitary state, local or other Income Tax
Returns of the Pre-Distribution Group) shall end as of the Distribution
Effective Time; and

(b)           the Subsidiary Group and each Subsidiary Member shall begin a new
Taxable Year for purposes of such federal, state, local or other Income Taxes as
of the Distribution Effective Time.

The parties further agree that, to the extent permitted by applicable law, all
federal, state, local or other Tax Returns shall be filed consistently with
these positions.

10.04      Advance Review of Tax Returns.  At least thirty (30) days before the
filing of any Income Tax Return (including amendments thereto) that includes
both Parent and Subsidiary, and at least fifteen (15) days before the filing of
any other Tax Return (including amendments thereto) that includes both Parent
and Subsidiary, the party preparing the Tax Return shall provide the other party
with the portion of such Tax Return related to such other party.  Subsidiary and
its Representatives (or Parent and its Representatives, as the case may be)
shall have the right to review all related work papers before the filing of any
such Tax Return.  Parent (or Subsidiary, as the case may be) shall consult with
Subsidiary (or Parent) regarding its comments with respect to such Tax Returns
and shall in good faith (a) consult with Subsidiary (or Parent) in an effort to
resolve any differences with respect to the preparation and accuracy of such Tax
Returns, and their consistency with past Tax Practices; and (b) consider
Subsidiary’s (or Parent’s) recommendations for alternative positions with
respect to items reflected on such Tax Return; provided, however, that Parent
(or Subsidiary) shall not be required to consider any such recommendation if the
result thereof would adversely affect the Taxes of the Post-Distribution Parent
Group or any Post-Distribution Member (or the Subsidiary Group or any Subsidiary
Member) for any Taxable Period beginning after the Distribution Date; and may
condition the acceptance of any such recommendation upon the receipt of
appropriate indemnification from Subsidiary (or Parent) for any increase in Tax
Liability (under this Agreement or otherwise) of such party that may reasonably
be expected to result from the adoption of the relevant alternative position.

10.05      Consistent Positions on Tax Returns.  Parent (or Subsidiary, as the
case may be) shall prepare all Tax Returns filed pursuant to Section 10.02 for
all Pre-Distribution Taxable Periods and Straddle Periods, in a manner
consistent with past Tax Practices, except as otherwise required by changes in
applicable law or material underlying facts or as the parties hereto shall
otherwise agree in writing.

10.06      Allocation of Straddle Period Taxes.  For purposes of this Agreement,
Taxes shall be allocated between each Pre-Distribution Straddle Period and
Post-Distribution Straddle Period, in Subsidiary’s reasonable judgment with the
written consent of Parent (which shall not be unreasonably withheld), in the
following manner:

(a)           To the extent not impractical, on the basis of the actual
operations and Taxable income (if any) for each such period, determined by
closing the books of the entity as of the Distribution Effective Time; or

(b)           To the extent that an allocation based on a closing of the books
is impractical, on the basis of any reasonable method or methods, including
allocations based on (i) allocations of Taxable income, loss, gain, deduction
and credits made for the entity for federal Income Tax purposes, (ii) rounding
to the next nearest accounting period-end, or (iii) the actual number of days in
the Pre-Distribution Straddle Period and Post-Distribution Straddle Period in
proportion to the number of days in the entire Straddle Period.

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10.07      Payment of Taxes.

(a)           Parent shall pay: (i) all Taxes shown to be due and payable on all
Tax Returns filed pursuant to Section 10.02(a); and (ii) subject to Section
10.08, all Taxes that shall thereafter become due and payable as a result of a
Final Determination with respect to all Tax Returns filed by Parent pursuant to
Section 10.02(a); provided, however, that Subsidiary shall reimburse Parent, for
the amount of any Taxes required to be paid as a result of clause (i) or (ii),
within fifteen (15) days after receipt of written notification from Parent, if
and to the extent such Taxes are directly attributable to the Tax Liability of
Subsidiary or one or more Subsidiary Members, as a result of Subsidiary being a
Pre-Distribution Member or otherwise, after Parent takes into account any Tax
Benefit (including but not limited to any Carry-forward described in Section
10.11) that reduces the amount of Parent’s Tax Liability attributable to such
Tax Liability of Subsidiary.

(b)           Subsidiary shall pay: (i) all Taxes shown to be due and payable on
all Tax Returns filed by Subsidiary pursuant to Section 10.02(b); and (ii)
subject to Section 10.08, all Taxes that shall thereafter become due and payable
as a result of a Final Determination with respect to all Tax Returns filed by
Subsidiary pursuant to Section 10.02(b); provided, however, that Parent shall
reimburse Subsidiary, for the amount of any Taxes required to be paid as a
result of clause (i) or (ii), within fifteen (15) days after receipt of written
notification from Subsidiary, if and to the extent such Taxes are directly
attributable to the Tax Liability of Parent (or any of their subsidiaries other
than Subsidiary) for any period beginning after the Distribution Date.

10.08      Amendments to Tax Returns.  Parent (or Subsidiary, as the case may
be) shall be entitled to amend Tax Returns filed by Parent (or Subsidiary)
pursuant to Section 10.02; provided, however, that Parent (or Subsidiary) shall
not amend for any reason whatsoever any Tax Return of Parent, the
Pre-Distribution Group, the Post-Distribution Parent Group or any
Post-Distribution Member (or of Subsidiary, a Subsidiary Group or any Subsidiary
Member) for any Pre-Distribution Taxable Period or any Straddle Period, except
(a) pursuant to the settlement or other resolution of a contest subject to
Section 10.15, or (b) with Parent’s (or Subsidiary’s) written consent (which
shall not be unreasonably withheld); provided, however, that such prohibition
shall not extend to the correction of mathematical or material factual errors or
other adjustments necessary to conform such Tax Return to applicable law or past
Tax Practices.

10.09      Refunds of Taxes.

(a)           Parent shall be entitled to any refund of Taxes attributable to
either a Tax Return filed by Parent pursuant to Section 10.02(a) or a Final
Determination with respect to any such Tax Return; provided, however, that
(except as otherwise provided in this Agreement) Parent shall pay to Subsidiary,
promptly after receipt of such refund, any portion of such refund (including any
interest received on that portion) directly attributable to a Tax for which
Subsidiary reimbursed Parent under Section 10.07(a).

(b)           Subsidiary shall be entitled to any refund of Taxes attributable
to either a Tax Return filed by Subsidiary pursuant to Section 10.02(b) or a
Final Determination with respect to any such Tax Return; provided, however, that
(except as otherwise provided in this Agreement) Subsidiary shall pay to Parent
(in accordance with Section 11.16), promptly after receipt of such refund, any
portion of such refund (including any interest received on that portion)
directly attributable to a Tax for which Parent reimbursed Subsidiary under
Section 10.07(b).

10.10      Carrybacks.  Subsidiary shall notify Parent promptly of the existence
of any items of deduction, loss or credit arising in a Post-Distribution Taxable
Year that are required to be carried back to a Taxable Period of the
Pre-Distribution Group or any Pre-Distribution Member (other than to a separate
Tax Return of Subsidiary).  Subsidiary hereby expressly agrees (on its behalf
and on behalf of all Subsidiary Members and successors thereto) that Parent or
any other member of the Post-Distribution Parent Group may retain any cash
refund or reduction of a Tax Liability or any other Tax Benefit obtained by
Parent or any other member of the Post-Distribution Parent Group as a result of
any such carryback, without compensation to Subsidiary or any Subsidiary
Member.  Subsidiary and Parent agree that Subsidiary shall elect to carry
forward all such items that affect Subsidiary to the extent permitted under
applicable law.
 
 
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10.11      NOL, ITC and AMT Credit Benefit.  Subsidiary acknowledges that
Subsidiary will not be entitled, at any time after the Distribution Date, to use
or benefit from any net operating loss carry-forwards, investment Tax credit
carry-forwards and alternative minimum Tax credit carry-forwards
(“Carry-forwards”) that are attributable to Parent, or any portion of the
consolidated Code Section 382 limitation that Parent could apportion to
Subsidiary under applicable Treasury Regulations.  If Subsidiary has, at any
time after the Distribution Date, any Carry-forwards attributable solely to it
under applicable federal and state Income Tax law, the parties hereto agree that
the Subsidiary Group and the Subsidiary Members shall be exclusively entitled to
use and benefit from those Carry-forwards without compensation to the
Pre-Distribution Group or any other Pre-Distribution Member.  Parent hereby
agrees to take any action or make any election reasonably required to permit
Subsidiary and the Subsidiary Members to utilize any Carry-forwards attributable
solely to Subsidiary; provided, however, that no such action or election shall
be required if it would adversely affect in any way the Income Tax Liabilities
of the Post-Distribution Parent Group or any Post-Distribution Member for any
Taxable Year.  The parties also hereby agree that the provisions of this Section
10.11 shall apply with respect to any similar carry-forwards available under
applicable state, local or foreign Income Tax law.

10.12      Intentionally Left Blank.

10.13      Tax Indemnification.

(a)          By Parent.  Subject to the following subsections of this Section
10.13, other than subsection 10.13(b), Parent shall indemnify, defend and hold
Subsidiary and the Subsidiary Members harmless (on an After-Tax Basis) against:

(i)           each and every Liability for any and all Taxes for which Parent is
ultimately liable under Section 10.07; and

(ii)          each and every Liability for any and all Taxes of the
Post-Distribution Parent Group under Treasury Regulations Section 1.1502-6 or
any similar law, rule or regulation administered by any Tax Authority.

(b)          By Subsidiary.  Subsidiary shall indemnify, defend and hold Parent,
the Post-Distribution Parent Group and the Post-Distribution Members harmless
(on an After-Tax Basis) against each and every Liability for any and all Taxes
for which Subsidiary is ultimately liable under Section 10.07.

10.14      Cooperation; Document Retention; Confidentiality.

(a)           Provision of Cooperation, Documents and Other Information.  Upon
reasonable request by a requesting party, Parent and Subsidiary shall promptly
provide (and shall cause the members of their respective Affiliated Groups to
provide) such requesting party with such cooperation and assistance, documents,
and other information, without charge, as may be necessary or reasonably helpful
in connection with (i) the preparation and filing of any original or amended Tax
Return; (ii) the conduct of any audit or other examination or any judicial or
administrative proceeding involving to any extent Taxes, Tax Returns within the
scope of this Agreement; or (iii) the verification by a party of an amount
payable hereunder to, or receivable hereunder from, another party.  Such
cooperation and assistance shall include, without limitation:  (w) the provision
on demand of books, records, Tax Returns, documentation or other information
relating to any relevant Tax Return; (x) the execution of any document that may
be necessary or reasonably helpful in connection with the filing of any Tax
Return by the Pre-Distribution Group, a Pre-Distribution Member, the
Post-Distribution Parent Group, a Post-Distribution Parent Member, the
Subsidiary Group or a Subsidiary Member, or in connection with any audit,
proceeding, suit or action of the type generally referred to in the preceding
sentence, including, without limitation, the execution of powers of attorney and
extensions of applicable statutes of limitations, with respect to Tax Return
which Parent may be obligated to file on behalf of Subsidiary Members pursuant
to Section 10.02(a); (y) the prompt and timely filing of appropriate claims for
refund; and (z) the use of reasonable best efforts to obtain any documentation
from a Governmental Entity or a third party that may be necessary or helpful in
connection with the foregoing.  Each party shall make its employees and
facilities available on a mutually convenient basis to facilitate such
cooperation.

 
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(b)          Retention of Books and Records.  Parent, each Post Distribution
Member, and Subsidiary shall retain or cause to be retained all Tax Returns
required to be prepared with respect to each Pre-Distribution Taxable Period and
each Straddle Period; and all books, records, schedules, work papers, and other
documents relating thereto, until the expiration of the later of (i) all
applicable statutes of limitations (including any waivers or extensions
thereof), and (ii) any retention period required by law or pursuant to any
record retention agreement.  The parties hereto shall notify each other in
writing of any waivers, extensions or expirations of applicable statutes of
limitations.  The parties hereto shall provide at least thirty (30) days prior
written notice of any intended destruction of the documents referred to in this
subsection (c).  A party giving such a notification shall not dispose of any of
the foregoing materials without first obtaining the written approval (which may
not be unreasonably withheld) of the notified party.
 
(c)          Status and Other Information Regarding Audits and
Litigation.  Parent (or Subsidiary, as the case may be) shall use reasonable
best efforts to keep Subsidiary (or Parent) advised, as to the status of Tax
audits and litigation involving any issue relating to any Taxes, Tax Returns or
Tax Benefits subject to indemnification under this Agreement.  To the extent
relating to any such issue, Parent (or Subsidiary) shall promptly furnish
Subsidiary (or Parent) with copies of any inquiries or requests for information
from any Tax Authority or any other administrative, judicial or other
Governmental Entity, as well as copies of any revenue agent’s report or similar
report, notice of proposed adjustment or notice of deficiency.

(d)          Confidentiality of Documents and Information.  Except as required
by law or with the prior written consent of the other party, all Tax Returns,
documents, schedules, work papers and similar items and all information
contained therein, which Tax Returns and other materials are within the scope of
this Agreement shall be kept confidential by the parties hereto and their
Representatives, shall not be disclosed to any other Person and shall be used
only for the purposes provided herein.

10.15      Contests and Audits.

(a)          Notification of Audits or Disputes.  Upon the receipt by Parent or
any Post-Distribution Parent Member (or Subsidiary or any Subsidiary Member, as
the case may be) of notice of any pending or threatened Tax audit, contest or
assessment that could reasonably be expected to affect any Liability for Taxes
subject to indemnification hereunder, Parent (or Subsidiary) shall promptly
notify Subsidiary (or Parent) in writing of the receipt of such notice.

(b)          Control and Settlement.

(i)           Control and Consultation by Parent.  Parent shall have the right
to control, and to represent the interests of all affected taxpayers in, any Tax
audit or administrative, judicial or other proceeding relating in whole or in
part, to any Pre-Distribution Taxable Period or any other Taxable Period for
which Parent is responsible, in whole or in part, for Taxes under Section
10.07(a) and Section 10.13; and to employ counsel of its choice at its expense;
provided, however, that, with respect to such issues that may impact Subsidiary
or any Subsidiary Member for any Post-Distribution Taxable Period or for which
Subsidiary may be responsible in part under Section 10.07(b) and Section 10.13,
Parent shall (A) afford Subsidiary full opportunity to observe at any such
proceedings and to review any submissions related to such issues, (B) in good
faith consult with Subsidiary regarding its comments with respect to such
proceedings and submissions in an effort to resolve any differences with respect
to Parent’s positions with regard to such issues, (C) in good faith consider
Subsidiary’s recommendations for alternative positions with respect to such
issues, and (D) advise Subsidiary of the reasons for rejecting any such
alternative position.  In the event of any disagreement regarding the
proceedings, Parent shall have the ultimate control of the contest and any
settlement or other resolution thereof.

(ii)           Control and Consultation by Subsidiary.  Subsidiary shall have
the right to control, and to represent the interests of all affected taxpayers
in, any Tax audit or administrative, judicial or other proceeding relating
solely to any Post-Distribution Taxable Period of the Subsidiary Group or any
Subsidiary Member, or relating to any other Taxable Period for which Subsidiary
is solely responsible for Taxes under Section 10.07 and Section 10.13; and to
employ counsel of its choice at its expense; provided, however, that Subsidiary
shall (A) afford Parent full opportunity to observe at any such proceedings and
to review any submissions related thereto and (B) not agree to settle any such
proceeding in a manner that could reasonably be expected to have a material and
adverse effect on (1) any indemnification obligation of Parent hereunder, (2)
any Tax Liability of the Pre-Distribution Group or any Pre-Distribution Member
for any Pre-Distribution Taxable Period or (3) any Tax Liability of the
Post-Distribution Parent Group or any Post-Distribution Parent Member for any
Post-Distribution Taxable Period, without the prior written consent of Parent,
which consent shall not be unreasonably withheld.

 
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(iii)           Delivery of Powers of Attorney.  Subsidiary (and, to the extent
necessary, any other member of any Subsidiary Group) shall execute and deliver
to Parent, promptly upon request, such powers of attorney authorizing Parent to
extend statutes of limitations, receive refunds and take such other actions that
Parent reasonably considers to be appropriate in exercising its control pursuant
to this Section 10.15.

10.16      Tax Elections.  Nothing in this Agreement is intended to change or
otherwise affect any Tax election made before the date of this Agreement by or
on behalf of the Pre-Distribution Group.  Parent, as common parent of the
Pre-Distribution Group, shall continue to have sole discretion to make any and
all elections with respect to all members of the Pre-Distribution Group for all
Taxable Periods for which it is obligated to file Tax Returns under Section
10.02(a).

ARTICLE 11
MISCELLANEOUS

11.01      Entire Agreement; No Third Party Beneficiaries.  This Agreement and
all documents and instruments referred to herein constitute the entire agreement
and supersede all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter of this Agreement; and are
not intended to confer upon any Person other than the parties hereto any rights
or remedies hereunder.

11.02      Forbearance.  Neither the failure nor any delay on the part of any
party hereto to exercise any right under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any right preclude
any other or further exercise of the same or any other risk nor shall any waiver
of any right with respect to any occurrence be construed as a waiver of such
right with respect to any other occurrence.

11.03      Expenses.  Except as specifically provided in this Agreement or in a
Related Agreement, all fees and expenses incurred in connection with this
Agreement and the consummation of the transactions contemplated hereby shall be
paid by the party incurring such expenses.

11.04      Governing Law.  This Agreement shall be governed and construed in
accordance with the laws of the State of Minnesota, without regard to any
applicable conflicts of laws.

11.05      Notices.  All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (which is
confirmed) or mailed by registered or certified mail (return receipt requested)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):

if to Parent, to
Tree Top Industries, Inc.
 
511 Sixth Avenue, Suite 800
 
New York, New York 10011
   
if to Subsidiary, to
NetThruster, Inc.
 
511 Sixth Avenue, Suite 800
 
New York, New York 10011

11.06      Amendments.  This Agreement may be amended only by a written
agreement executed and delivered by duly authorized officers of Subsidiary and
Parent; provided, however, that any amendment made after the Merger Effective
Time shall be effective only if expressly authorized by the Parent Board and the
Subsidiary Board.

11.07      Assignments; Predecessors and Successors.  Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by
either of the parties hereto (whether by operation of law or otherwise) without
the prior written consent of the other party.  Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns. To the
extent necessary to give effect to the purposes of this Agreement, any reference
to any party, any of its Affiliates, any Affiliated Group or member of an
Affiliated Group, shall also include any predecessors or successors thereto, by
operation of law or otherwise.

 
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11.08      Termination and Effectiveness.  This Agreement may be terminated and
the Distribution abandoned at any time before the Distribution Effective Time
only by the written approval of Parent.  In the event of such termination, no
party shall have any liability to any other party pursuant to this
Agreement.  This Agreement shall remain effective on and after the Distribution
Date and shall survive until the expiration of any applicable statute of
limitations.

11.09      Specific Performance.  The parties hereto agree that the remedy at
law for any breach of this Agreement will be inadequate and that any party by
whom this Agreement is enforceable shall be entitled to specific performance in
addition to any other appropriate relief or remedy.  Such party may, in its sole
discretion, apply to a court of competent jurisdiction for specific performance
or injunctive or such other relief as such court may deem just and proper in
order to enforce this Agreement or prevent any violation of this Agreement and,
to the extent permitted by applicable laws, each party waives any objection to
the imposition of such relief.

11.10      Headings; References; Rules of Construction.  The article, section
and paragraph headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.  All references herein to “Articles,” “Sections,” “Exhibits” or
“Schedules” shall be deemed to be references to Articles or Sections of this
Agreement or Exhibits or Schedules attached hereto unless otherwise
indicated.  Any ambiguities in this Agreement shall be resolved without regard
to which party drafted such instrument.

11.11      Counterparts.  This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.

11.12      Severability; Enforcement.  The invalidity of any portion of this
Agreement shall not affect the validity, force or effect of the remaining
portions of this Agreement.  If it is ever held that any restriction hereunder
is too broad to permit enforcement of such restriction to its fullest extent,
each party agrees that a court of competent jurisdiction may enforce such
restriction to the maximum extent permitted by law, and each party hereby
consents and agrees that such scope may be judicially modified accordingly in
any proceeding brought to enforce such restriction.

11.13      Payment Method and Character; No Setoffs.  All payments made pursuant
to this Agreement shall be made in immediately available funds.  Except as
otherwise provided herein, any payment not made within fifteen (15) days after
the date such payment is due shall thereafter bear interest at the Overdue Rate
(as defined in Section 10.01) from the date when the payment was due.  Any
payment (other than interest thereon) made hereunder by Parent to Subsidiary, or
by Subsidiary to Parent, shall be treated by all parties for all purposes to the
extent permitted by law as a non-Taxable dividend distribution or capital
contribution made before the Distribution Effective Time. Except as expressly
provided in this Agreement, all payments to be made by any party under this
Agreement shall be made without setoff, counterclaim or withholding, all of
which are expressly waived.

11.14      Third-Party Beneficiaries.  This Agreement is not intended to confer
any right or cause of action hereunder upon any Person other than the parties
hereto.

11.15      Further Assurances.  Subject to the provisions hereof, the parties
hereto shall make, execute, acknowledge and deliver such other instruments and
documents, and take all such other actions, as may be reasonably required in
order to effectuate the purposes of this Agreement and to consummate the
transactions contemplated hereby.  Subject to the provisions hereof, each party
shall, in connection with entering into this Agreement, performing its
obligations hereunder and taking any and all actions relating hereto, comply
with all applicable laws, regulations, orders and decrees, obtain all required
consents and approvals and make all required filings with any government agency,
other regulatory or administrative agency, commission or similar Governmental
Entity and promptly provide the other party with all such information as it may
reasonably request in order to be able to comply with the provisions of this
paragraph.

 
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IN WITNESS WHEREOF, Parent and Subsidiary have caused this Agreement to be
signed by their respective duly authorized officers as of the date first above
written.

 
Tree Top Industries, Inc.
     
By
/s/ David Reichman
 
David Reichman
 
Its Chief Executive Officer
     
“PARENT”
     
NetThruster, Inc.
     
By
/s/ David Reichman
 
David Reichman
 
Its Chief Executive Officer
     
“SUBSIDIARY”

 
 
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SCHEDULE A

to Distribution Agreement
between Tree Top Industries, Inc.
and NetThruster, Inc.

Dated February 9, 2011

1.           Directors of NetThruster, Inc.:

David Reichman
Kathy Griffin
 
2.           Officers of NetThruster, Inc.:

David Reichman
Chairman of the Board and Chief Executive Officer and Chief Financial Officer
Kathy Griffin
Director, Corporate Secretary

 
 
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