EXHIBIT 10.1
EXECUTION COPY
CONTRIBUTION AND DISTRIBUTION AGREEMENT
by and between
▇▇▇▇▇▇▇-▇▇▇▇▇ SQUIBB COMPANY
and
▇▇▇▇▇▇ HOLDINGS, INC.
Dated as of June 29, 2001
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions.............................................. 3
ARTICLE II
THE CONTRIBUTION
SECTION 2.01. Transfer of Zimmer Assets and Assumption of Zimmer
Liabilities........................................... 14
SECTION 2.02. Zimmer Assets .......................................... 17
SECTION 2.03. Zimmer Liabilities ..................................... 18
SECTION 2.04. Termination of Agreements .............................. 20
SECTION 2.05. Transfer Documents ..................................... 21
SECTION 2.06. Ancillary Agreements ................................... 22
SECTION 2.07. The Non-U.S. Plan ...................................... 22
SECTION 2.08. Disclaimer of Representations and Warranties ........... 23
SECTION 2.09. Financing Arrangements ................................. 23
SECTION 2.10. Consents and Governmental Approvals .................... 24
SECTION 2.11. Novation of Assumed Zimmer Liabilities ................. 25
SECTION 2.12. Novation of Liabilities other than Zimmer
Liabilities........................................... 26
ARTICLE III
THE DISTRIBUTION
SECTION 3.01. The Distribution ....................................... 28
SECTION 3.02. Actions Prior to the Distribution ...................... 29
SECTION 3.03. Charter; Bylaws; Rights Plan ........................... 30
SECTION 3.04. Sole Discretion of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb ................ 30
SECTION 3.05. Conditions to Distribution ............................. 31
SECTION 3.06. Fractional Shares ...................................... 33
SECTION 3.07. The ▇▇▇▇▇▇ Board of Directors .......................... 33
ARTICLE IV
MUTUAL RELEASES; INDEMNIFICATION
SECTION 4.01. Release of Pre-Distribution Claims ..................... 34
SECTION 4.02. Indemnification by Zimmer .............................. 37
SECTION 4.03. Indemnification by ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb ................ 38
SECTION 4.04. Indemnification Obligations Net of Insurance
Proceeds and Other Amounts............................ 38
SECTION 4.05. Procedures for Indemnification of Third Party Claims ... 39
SECTION 4.06. Additional Matters ..................................... 42
SECTION 4.07. Remedies Cumulative .................................... 43
SECTION 4.08. Survival of Indemnities ................................ 44
ARTICLE V
CONTINGENT GAINS AND CONTINGENT LIABILITIES
SECTION 5.01. Definitions Relating to Contingent Gains and
Contingent Liabilities................................ 44
SECTION 5.02. Contingent Gains ....................................... 47
SECTION 5.03. Exclusive Contingent Liabilities ....................... 49
SECTION 5.04. Shared Contingent Liabilities .......................... 49
SECTION 5.05. Payments ............................................... 49
SECTION 5.06. Procedures to Determine Status of Contingent
Liability or Contingent Gain.......................... 50
SECTION 5.07. Certain Case Allocation Matters ........................ 51
SECTION 5.08. Termination of Certain Article V Provisions ............ 52
ARTICLE VI
INTERIM OPERATIONS AND CERTAIN OTHER MATTERS
SECTION 6.01. Insurance Matters ...................................... 52
SECTION 6.02. Certain Business Matters ............................... 53
SECTION 6.03. Late Payments .......................................... 53
ARTICLE VII
EXCHANGE OF INFORMATION; CONFIDENTIALITY
SECTION 7.01. Agreement for Exchange of Information; Archives ........ 53
SECTION 7.02. Ownership of Information ............................... 55
SECTION 7.03. Compensation for Providing Information ................. 55
SECTION 7.04. Record Retention ....................................... 55
SECTION 7.05. Limitations of Liability ............................... 56
SECTION 7.06. Other Agreements Providing for Exchange of
Information........................................... 56
SECTION 7.07. Production of Witnesses; Records; Cooperation .......... 56
SECTION 7.08. Confidentiality ........................................ 58
SECTION 7.09. Protective Arrangements ................................ 59
ARTICLE VIII
DISPUTE RESOLUTION
SECTION 8.01. Disputes ............................................... 59
SECTION 8.02. Escalation; Mediation .................................. 60
SECTION 8.03. Court Actions .......................................... 61
ARTICLE IX
FURTHER ASSURANCES
SECTION 9.01. Further Assurances ..................................... 63
ARTICLE X
TERMINATION
SECTION 10.01. Termination ........................................... 64
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Counterparts; Entire Agreement; Corporate Power ....... 64
SECTION 11.02. Governing Law ......................................... 65
SECTION 11.03. Assignability ......................................... 65
SECTION 11.04. Third Party Beneficiaries ............................. 66
SECTION 11.05. Notices ............................................... 66
SECTION 11.06. Severability .......................................... 67
SECTION 11.07. Force Majeure ......................................... 67
SECTION 11.08. Publicity ............................................. 67
SECTION 11.09. Expenses .............................................. 68
SECTION 11.10. Headings .............................................. 68
SECTION 11.11. Survival of Covenants ................................. 68
SECTION 11.12. Waivers of Default .................................... 68
SECTION 11.13. Amendments ............................................ 68
SECTION 11.14. Interpretation ........................................ 68
SCHEDULES
Schedule 1.01(a)(i) Combined International Entities
Schedule 1.01(a)(ii) Assets - Combined International Entities
Schedule 1.01(a)(iii) Non-U.S. Plan -- Combined International Entities
Schedule 1.01(b) International Assets/Excluded
International Assets
Schedule 1.01(c) International Liabilities/Excluded
International Liabilities
Schedule 1.01(d) Other Assets
Schedule 1.01(e)(i) Zimmer International Entities
Schedule 1.01(e)(ii) Shares -- Zimmer International Entities
Schedule 1.01(e)(iii) Non-U.S. Plan -- Zimmer International Entities
Schedule 1.01(f) List of Oldco Subsidiaries
Schedule 1.01(g) Non-U.S. Plan
Schedule 2.01(c) Delayed Transfer Assets and Liabilities
Schedule 2.02(b)(i) List of Excluded Assets
Schedule 2.03(a)(i) Separation Costs Liabilities
Schedule 2.03(b)(i) List of Excluded Liabilities
Schedule 2.03(b)(vii) Separation Costs Excluded Liabilities
Schedule 2.04(b)(ii) Arrangements not to be Terminated
Schedule 5.01(d) Exclusive ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb
Contingent Gains
Schedule 5.01(e) Exclusive ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb
Contingent Liabilities
Schedule 5.01(h) Exclusive Zimmer Contingent Gains
Schedule 5.01(i) Exclusive Zimmer Contingent
Liabilities
Schedule 5.01(k) Shared Contingent Gains
Schedule 5.01(l) Shared Contingent Liabilities
Schedule 5.06 Pending Claims
EXHIBITS
Exhibit A Restated By-laws of Zimmer
Exhibit B Restated Certificate of Incorporation of Zimmer
Exhibit C Employee Benefits Agreement
Exhibit D Interim Services Agreement
Exhibit E Patent Assignments
Exhibit F Rights Agreement
Exhibit G Tax Sharing Agreement
1
THIS CONTRIBUTION AND DISTRIBUTION AGREEMENT, dated as
of June 29, 2001, is by and between ▇▇▇▇▇▇▇-▇▇▇▇▇ SQUIBB
COMPANY, a Delaware corporation ("▇▇▇▇▇▇▇-▇▇▇▇▇ SQUIBB") and
▇▇▇▇▇▇ HOLDINGS, INC., a Delaware corporation ("ZIMMER").
Capitalized terms used herein and not otherwise defined
shall have the respective meanings assigned to them in
Article I hereof.
R E C I T A L S:
WHEREAS, the Board of Directors of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb has
determined that it is in the best interests of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and its
stockholders to separate ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb's orthopaedics business from
its other existing businesses;
WHEREAS, ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb's orthopaedics business is
currently conducted in the United States by ▇▇▇▇▇▇, Inc., a Delaware
corporation and a wholly owned Subsidiary of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb
("OLDCO");
WHEREAS, ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb's orthopaedics business is
currently conducted outside of the United States by (i) Oldco's wholly
owned Subsidiaries (the "OLDCO SUBSIDIARIES"), (ii) certain wholly owned
Subsidiaries of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb that only conduct business and
operations that relate to the distribution or sale of Oldco's products
("ZIMMER INTERNATIONAL ENTITIES") and (iii) certain wholly owned
Subsidiaries of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb that conduct business and operations
that relate to the distribution or sale of Oldco's products and ▇▇▇▇▇▇▇-
▇▇▇▇▇ Squibb Business ("COMBINED INTERNATIONAL ENTITIES");
WHEREAS, subject to the terms and conditions set forth herein,
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb will contribute or transfer, or cause to be
contributed or transferred,
(i) all of the issued and outstanding capital stock of Oldco and
the ▇▇▇▇▇▇ International Entities listed on Schedule 1.01(e)(ii) (the
"SHARES") to Zimmer;
(ii) the assets of the Combined International Entities listed on
Schedule 1.01(a)(ii) related to the ▇▇▇▇▇▇ Business to Zimmer or other
entities designated by Zimmer;
(iii) all of the assets of the ▇▇▇▇▇▇ International Entities
listed on Schedule 1.01(e)(iii) and the Combined International
Entities listed in Schedule 1.01(a)(iii) to be transferred to Zimmer
or other entities designated by Zimmer pursuant to the Non-U.S. Plan
(as defined in Section 1.01); and
(iv) the remaining assets comprising the ▇▇▇▇▇▇ Assets as set
forth in Section 2.02(a) to Zimmer or other entities designated by
▇▇▇▇▇▇;
and ▇▇▇▇▇▇ will assume the ▇▇▇▇▇▇ Liabilities as set forth in Section
2.03(a) (collectively, the "CONTRIBUTION");
WHEREAS, immediately after Oldco becomes a wholly-owned
subsidiary of Zimmer pursuant to the Contribution, (i) Zimmer will
contribute all of the ▇▇▇▇▇▇ Assets received in the Contribution to Oldco
and (ii) Zimmer will cause Oldco or its subsidiaries to assume all of the
▇▇▇▇▇▇ Liabilities assumed by Zimmer in the Contribution, other than the
Liabilities relating to the Financing Facility (as defined in Section
1.01);
WHEREAS, in connection with the Contribution, ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb will distribute, on a pro rata basis, to holders of shares of common
stock, par value $0.10 per share, of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb ("▇▇▇▇▇▇▇-▇▇▇▇▇
SQUIBB COMMON STOCK") all of the outstanding shares of common stock, par
value $0.01 per share, of Zimmer ("ZIMMER COMMON STOCK") owned directly or
indirectly by ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb (the "DISTRIBUTION"); and
WHEREAS, the Contribution is intended to qualify as a tax-free
transaction under Section 368(a)(1)(D) of the Internal Revenue Code of
1986, as amended (the "CODE") and the Distribution is intended to qualify
as a tax-free spin-off under Section 355 of the Code;
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained in this Agreement, the parties,
intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. For the purpose of this Agreement
the following terms shall have the following meanings:
"ACTION" means any demand, action, suit, counter suit,
arbitration, inquiry, proceeding or investigation by or before any Federal,
state, local, foreign or international Governmental Authority or any
arbitration or mediation tribunal.
"AFFILIATE" of any Person means a Person that controls, is
controlled by, or is under common control with such Person. As used
herein, "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of
such Person, whether through ownership of voting securities or other
interests, by contract or otherwise.
"AGENT" means the distribution agent to be appointed by
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb to distribute to the stockholders of ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb pursuant to the Distribution all of the shares of Zimmer Common
Stock held by ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb.
"AGREEMENT" means this Contribution and Distribution Agreement,
including all of the Schedules and Exhibits hereto.
"ANCILLARY AGREEMENTS" means the Employee Benefits Agreement, the
Interim Services Agreement, the Tax Sharing Agreement, the Patent
Assignment, the agreements and other documents comprising the Non-U.S.
Plan, any sublease entered into on or prior to the Distribution Date
between any member of the ▇▇▇▇▇▇ Group, on the one hand, and any member of
the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group, on the other hand, and the supplemental and
other agreements and instruments related to the any of the foregoing.
"▇▇▇▇▇▇▇-▇▇▇▇▇ SQUIBB" has the meaning set forth in the Preamble.
"▇▇▇▇▇▇▇-▇▇▇▇▇ SQUIBB BUSINESS" means: (a)(i) the business and
operations of the divisions and Subsidiaries of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb which
produce, distribute and sell (1) pharmaceutical prescription and consumer
medicines, including cardiovascular, anti-cancer, anti-infective and
central nervous drugs and analgesics, skin care products, cough and cold
remedies, deodorants and anti-perspirants, (2) nutritionals, including
infant formula products, (3) medical devices, including osmotic and wound
care products, but excluding the Zimmer Business, and (4) beauty care
products, including haircoloring and hair care preparation products, and
(ii) all other businesses of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb as of the date hereof not
otherwise included in the Zimmer Business; and (b) except as otherwise
expressly provided herein, any terminated, divested or discontinued
businesses or operations that at the time of termination, divestiture or
discontinuation primarily related to the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Business (as
described in subsection (a) above) as then conducted.
"▇▇▇▇▇▇▇-▇▇▇▇▇ SQUIBB COMMON STOCK" has the meaning set forth in
the Recitals.
"▇▇▇▇▇▇▇-▇▇▇▇▇ SQUIBB GROUP" means ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and each
Person (other than any member of the ▇▇▇▇▇▇ Group) that is an Affiliate of
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb immediately after the Distribution Date.
"▇▇▇▇▇▇▇-▇▇▇▇▇ SQUIBB INDEMNITEES" has the meaning set forth in
Section 4.02.
"BYLAWS" means the Restated Bylaws of Zimmer, substantially in
the form attached hereto as Exhibit A.
"CERTIFICATE OF INCORPORATION" means the Restated Certificate of
Incorporation of Zimmer, substantially in the form attached hereto as
Exhibit B.
"CODE" has the meaning set forth in the Recitals.
"COMBINED INTERNATIONAL ENTITIES" has the meaning set forth in
the Recitals. A comprehensive list of the Combined International Entities
as of the date of this Agreement is set forth in Schedule 1.01(a)(i)
hereto.
"COMMISSION" means the Securities and Exchange Commission.
"CONSENTS" means any consents, waivers or approvals from, or
notification requirements to, any third parties.
"CONTINGENT CLAIM COMMITTEE" has the meaning set forth in Section
5.01(a).
"CONTINGENT GAIN" has the meaning set forth in Section 5.01(b).
"CONTINGENT LIABILITIES" has the meaning set forth in Section
5.01(c).
"CONTRIBUTION" has the meaning set forth in the Recitals.
"CONTRIBUTION DATE" means the Distribution Date or such other
date as ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb may determine.
"DELAYED TRANSFER ASSETS" means any Zimmer Assets that are
expressly provided in this Agreement or any Ancillary Agreement to be
transferred after the Distribution Date.
"DELAYED TRANSFER LIABILITIES" means any Zimmer Liabilities that
are expressly provided in this Agreement or any Ancillary Agreement to be
assumed after the Distribution Date.
"DETERMINATION REQUEST" means a written request made to the
Contingent Claim Committee, pursuant to Section 5.06, for a determination
as to whether a Third Party Claim specified in such request constitutes a
Shared Contingent Liability.
"DISTRIBUTION" has the meaning set forth in the Recitals.
"DISTRIBUTION DATE" has the meaning set forth in Section 3.04.
"EMPLOYEE BENEFITS AGREEMENT" means the Employee Benefits
Agreement by and between ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and Zimmer, substantially in
the form attached hereto as Exhibit C, as of the Distribution Date and
thereafter as amended.
"ENVIRONMENTAL LAW" means any Federal, state, local, foreign or
international statute, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, common law (including tort and
environmental nuisance law), legal doctrine, order, judgment, decree,
injunction, requirement or agreement with any Governmental Authority, now
or hereafter in effect relating to health, safety, pollution or the
environment (including ambient air, surface water, groundwater, land
surface or subsurface strata) or to emissions, discharges, releases or
threatened releases of any substance currently or at any time hereafter
listed, defined designated or classified as hazardous, toxic, waste,
radioactive or dangerous, or otherwise regulated, under any of the
foregoing, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
any such substances, including the Comprehensive Environmental Response,
Compensation and Liability Act, the Superfund Amendments and
Reauthorization Act and the Resource Conservation and Recovery Act and
comparable provisions in state, local, foreign or international law.
"ENVIRONMENTAL LIABILITIES" means all Liabilities relating to,
arising out of or resulting from any Environmental Law or contract or
agreement relating to environmental, health or safety matters (including
all removal, remediation or cleanup costs, investigatory costs,
governmental response costs, natural resources damages, property damages,
personal injury damages, costs of compliance with any product take back
requirements or with any settlement, judgment or other determination of
Liability and indemnity, contribution or similar obligations) and all costs
and expenses, interest, fines, penalties or other monetary sanctions in
connection therewith.
"ESCALATION NOTICE" has the meaning set forth in Section 8.02.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, together with the rules and regulations promulgated thereunder.
"EXCLUDED ASSETS" has the meaning set forth in Section 2.02(b).
"EXCLUDED EMPLOYEE LIABILITIES" means the employee-related
liabilities, as set forth in the Employee Benefits Agreement, retained by
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb related to
(a) U.S. employees of Zimmer under the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb
pension plans and
(b) postretirement medical and life insurance benefits for U.S.
employees of Zimmer who have retired, or who are eligible to retire, as of
the Distribution Date.
"EXCLUDED INTERNATIONAL ASSETS" has the meaning set forth in
Schedule 1.01(b).
"EXCLUDED INTERNATIONAL LIABILITIES" has the meaning set forth in
Schedule 1.01(c).
"EXCLUDED LIABILITIES" has the meaning set forth in Section
2.03(b).
"EXCLUSIVE ▇▇▇▇▇▇▇-▇▇▇▇▇ SQUIBB CONTINGENT GAIN" has the meaning
set forth in Section 5.01(d).
"EXCLUSIVE ▇▇▇▇▇▇▇-▇▇▇▇▇ SQUIBB CONTINGENT LIABILITY" has the
meaning set forth in Section 5.01(e).
"EXCLUSIVE CONTINGENT GAIN" has the meaning set forth in Section
5.01(f).
"EXCLUSIVE CONTINGENT LIABILITY" has the meaning set forth in
Section 5.01(g).
"EXCLUSIVE ZIMMER CONTINGENT GAIN" has the meaning set forth in
Section 5.01(h).
"EXCLUSIVE ZIMMER CONTINGENT LIABILITY" has the meaning set forth
in Section 5.01(i).
"FINANCING FACILITY" means the credit facility to be entered into
prior to the Distribution Date by and among ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb, Zimmer,
and an agent or co-agents selected by ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and Zimmer,
pursuant to which, prior to the Distribution Date, ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb
will borrow an amount determined by ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and, as of the
Distribution Date, Zimmer will become the sole obligor and ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb will have no further liability or obligation thereunder.
"GOVERNMENTAL APPROVALS" means any notices, reports or other
filings to be made, or any consents, registrations, approvals, permits or
authorizations to be obtained from, any Governmental Authority.
"GOVERNMENTAL AUTHORITY" shall mean any Federal, state, local,
foreign or international court, government, department, commission, board,
bureau, agency, official or other regulatory, administrative or
governmental authority.
"GROUP" means the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group or the ▇▇▇▇▇▇ Group,
as the context requires.
"INDEMNIFYING PARTY" has the meaning set forth in Section
4.04(a).
"INDEMNITEE" has the meaning set forth in Section 4.04(a).
"INDEMNITY PAYMENT" has the meaning set forth in Section 4.04(a).
"INFORMATION" means information, whether or not patentable or
copyrightable, in written, oral, electronic or other tangible or intangible
forms, stored in any medium, including studies, reports, records, books,
contracts, instruments, surveys, discoveries, ideas, concepts, know-how,
techniques, designs, specifications, drawings, blueprints, diagrams,
models, prototypes, samples, flow charts, data, computer data, disks,
diskettes, tapes, computer programs or other software, marketing plans,
customer names, communications by or to attorneys (including
attorney-client privileged communications), memos and other materials
prepared by attorneys or under their direction (including attorney work
product), and other technical, financial, employee or business information
or data.
"INFORMATION STATEMENT" means the information statement forming a
part of the Registration Statement.
"INSURANCE POLICIES" means the insurance policies written by any
insurance carrier, pursuant to which Zimmer or one or more of its
Subsidiaries (or their respective officers or directors) will be insured
parties after the Distribution Date.
"INSURANCE PROCEEDS" means those monies:
(a) received by an insured from an insurance carrier; or
(b) paid by an insurance carrier on behalf of the insured, in any
such case net of any applicable premium adjustments (including reserves and
retrospectively rated premium adjustments) and net of any costs or expenses
incurred in the collection thereof.
"INTERIM SERVICES AGREEMENT" means the Interim Services Agreement
by and between ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and Zimmer, substantially in the form
attached hereto as Exhibit D, as of the Distribution Date and thereafter as
amended.
"INTERNATIONAL ASSETS" has the meaning set forth in Schedule
1.01(b).
"INTERNATIONAL LIABILITIES" has the meaning set forth in Schedule
1.01(c).
"LIABILITIES" means any and all losses, claims, charges, debts,
demands, actions, causes of action, suits, damages, obligations, payments,
costs and expenses, sums of money, accounts, reckonings, bonds,
specialties, indemnities and similar obligations, exoneration, covenants,
contracts, controversies, agreements, promises, doings, omissions,
variances, guarantees, make whole agreements and similar obligations, and
other liabilities and requirements, including all contractual obligations,
whether absolute or contingent, matured or unmatured, liquidated or
unliquidated, accrued or unaccrued, known or unknown, whenever arising, and
including those arising under any law, rule, regulation, Action, threatened
or contemplated Action (including the costs and expenses of demands,
assessments, judgments, settlements and compromises relating thereto and
attorneys' fees and any and all costs and expenses, whatsoever reasonably
incurred in investigating, preparing or defending against any such Actions
or threatened or contemplated Actions), order or consent decree of any
Governmental Authority or any award of any arbitrator or mediator of any
kind, and those arising under any contract, commitment or undertaking,
including those arising under this Agreement or any Ancillary Agreement, in
each case, whether or not recorded or reflected or required to be recorded
or reflected on the books and records or financial statements of any
Person.
"NON-U.S. PLAN" means the Non-U.S. Plan, comprised of the series
of transactions, agreements and other arrangements, pursuant to which
certain of the non-U.S. Zimmer Assets and Zimmer Liabilities will be
transferred between the parties hereto, which are set forth or described in
Schedule 1.01(g) (as such Schedule may be supplemented by ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb prior to the Distribution Date).
"NYSE" means The New York Stock Exchange, Inc.
"OLDCO" has the meaning set forth in the Recitals.
"OLDCO SUBSIDIARIES" has the meaning set forth in the Recitals.
A comprehensive list of the Oldco Subsidiaries as of the date of this
Agreement is set forth in Schedule 1.01(f) hereto.
"OTHER ASSETS" means the assets listed on Schedule 1.01(d).
"PATENT ASSIGNMENT" means the Patent Assignment, by and between
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and Zimmer, substantially in the form attached hereto
as Exhibit E, as of the Distribution Date and thereafter as amended.
"PERSON" means an individual, a general or limited partnership, a
corporation, a trust, a joint venture, an unincorporated organization, a
limited liability entity, any other entity and any Governmental Authority.
"PRIME RATE" means the rate which The Chase Manhattan Bank (or
any successor thereto or other major money center commercial bank agreed to
by the parties hereto) announces from time to time as its prime lending
rate, as in effect from time to time.
"RECORD DATE" means the close of business on the date to be
determined by the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Board of Directors as the record
date for determining stockholders of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb entitled to
receive shares of Zimmer Common Stock in the Distribution.
"REGISTRATION STATEMENT" means the registration statement on Form
10 filed under the Exchange Act on March 26, 2001 pursuant to which the
▇▇▇▇▇▇ Common Stock to be distributed in the Distribution will be
registered, together with all amendments thereto.
"RIGHTS PLAN" means the Rights Agreement to be entered into
between Zimmer and ▇▇▇▇▇▇ Investor Services LLC, as rights agent,
substantially in the form attached hereto as Exhibit F.
"SECURITIES ACT" means the Securities Act of 1933, together with
the rules and regulations promulgated thereunder.
"SECURITY INTEREST" means any mortgage, security interest,
pledge, lien, charge, claim, option, right to acquire, voting or other
restriction, right-of-way, covenant, condition, easement, encroachment,
restriction on transfer, or other encumbrance of any nature whatsoever.
"SHARED ▇▇▇▇▇▇▇-▇▇▇▇▇ SQUIBB PERCENTAGE" has the meaning set
forth in Section 5.01(j).
"SHARED CONTINGENT GAIN" has the meaning set forth in Section
5.01(k).
"SHARED CONTINGENT LIABILITY" has the meaning set forth in
Section 5.01(l).
"SHARED PERCENTAGE" has the meaning set forth in Section 5.01(m).
"SHARED ZIMMER PERCENTAGE" has the meaning set forth in Section
5.01(n).
"SHARES" has the meaning set forth in the Recitals.
"SUBSIDIARY" of any Person means any corporation or other
organization whether incorporated or unincorporated of which at least a
majority of the securities or interests having by the terms thereof
ordinary voting power to elect at least a majority of the board of
directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or
controlled by such Person or by any one or more of its Subsidiaries, or by
such Person and one or more of its Subsidiaries; PROVIDED, HOWEVER, that no
Person that is not directly or indirectly wholly owned by any other Person
shall be a Subsidiary of such other Person unless such other Person
controls, or has the right, power or ability to control, that Person.
"TAX SHARING AGREEMENT" means the Tax Sharing Agreement by and
between ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and Zimmer, substantially in the form attached
hereto as Exhibit G, as of the Distribution Date and thereafter as amended.
"TAXES" has the meaning set forth in the Tax Sharing Agreement.
"THIRD PARTY CLAIM" has the meaning set forth in Section 4.05(a).
"ZIMMER" has the meaning set forth in the Preamble.
"ZIMMER ASSETS" has the meaning set forth in Section 2.02(a).
"ZIMMER BALANCE SHEET" means the unaudited combined balance sheet
of Zimmer, including the notes thereto, as of March 31, 2001, as presented
in the Information Statement.
"ZIMMER BUSINESS" means (a) the business and operations of (i)
Oldco, (ii) the Oldco Subsidiaries, (iii) the ▇▇▇▇▇▇ International Entities
and (iv) the Combined International Entities, but only to the extent that
such Combined International Entities' business and operations relate to the
distribution or sale of Oldco's products and (b) except as otherwise
expressly provided herein, any terminated, divested or discontinued
businesses or operations that at the time of termination, divestiture or
discontinuation primarily related to the ▇▇▇▇▇▇ Business (as described in
subsection (a) above) as then conducted, but in any event not the
businesses and operations related to the Excluded Assets.
"ZIMMER COMMON STOCK" has the meaning set forth in the Recitals.
"▇▇▇▇▇▇ GROUP" means Zimmer, each Subsidiary of Zimmer and each
other Person that is either controlled directly or indirectly by Zimmer
immediately after the Distribution Date or that is contemplated to be
controlled by Zimmer pursuant to the terms hereof or the Non-U.S. Plan.
"ZIMMER INDEMNITEES" has the meaning set forth in Section
4.03(a).
"ZIMMER INTERNATIONAL ENTITIES" has the meaning set forth in the
Recitals. A comprehensive list of the ▇▇▇▇▇▇ International Entities as of
the date of this Agreement is set forth in Schedule 1.01(e)(i) hereto.
"▇▇▇▇▇▇ LIABILITIES" has the meaning set forth in Section
2.03(a).
ARTICLE II
THE CONTRIBUTION
SECTION 2.01. TRANSFER OF ▇▇▇▇▇▇ ASSETS AND ASSUMPTION OF ▇▇▇▇▇▇
LIABILITIES. (a) On the terms and subject to the conditions set forth in
this Agreement and with effect as of the Contribution Date, ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb shall contribute, assign, transfer, convey and deliver to ▇▇▇▇▇▇,
and agrees to cause its applicable Subsidiaries to contribute, assign,
transfer, convey and deliver to ▇▇▇▇▇▇, and ▇▇▇▇▇▇ shall accept from
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and its Subsidiaries, all of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb's
and its Subsidiaries' respective rights, title and interest in and to all
▇▇▇▇▇▇ Assets, other than the Delayed Transfer Assets.
(b) On the terms and subject to the conditions set forth in this
Agreement and with effect as of the Contribution Date, ▇▇▇▇▇▇ shall accept,
assume and shall agree faithfully to perform, discharge and fulfill all the
▇▇▇▇▇▇ Liabilities, other than the Delayed Transfer Liabilities, in
accordance with their respective terms. ▇▇▇▇▇▇ shall be responsible for
all ▇▇▇▇▇▇ Liabilities, regardless of when or where such Liabilities arose
or arise, or whether the facts on which they are based occurred prior to or
subsequent to the date hereof, regardless of where or against whom such
Liabilities are asserted or determined (including any ▇▇▇▇▇▇ Liabilities
arising out of claims made by ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb's, or ▇▇▇▇▇▇'▇
respective directors, officers, employees, agents, Subsidiaries or
Affiliates against any member of the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group or the
▇▇▇▇▇▇ Group) or whether asserted or determined prior to the date hereof,
and regardless of whether arising from or alleged to arise from negligence,
recklessness, violation of law, fraud or misrepresentation by any member of
the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group or the ▇▇▇▇▇▇ Group or any of their
respective directors, officers, employees, agents, Subsidiaries or
Affiliates.
(c) Each of the parties hereto agrees that the Delayed Transfer
Assets will be contributed, assigned, transferred, conveyed and delivered,
and the Delayed Transfer Liabilities will be accepted and assumed, in
accordance with the terms of the agreements that provide for such
contribution, assignment, transfer, conveyance and delivery, or such
acceptance and assumption, after the date of this Agreement or as otherwise
set forth on Schedule 2.01(c). Following such contribution, assignment,
transfer, conveyance and delivery of any Delayed Transfer Asset, or the
acceptance and assumption of any Delayed Transfer Liability, the applicable
Delayed Transfer Asset or Delayed Transfer Liability shall be treated for
all purposes of this Agreement and the Ancillary Agreements as a ▇▇▇▇▇▇
Asset or a ▇▇▇▇▇▇ Liability, as the case may be.
(d) Each of the parties hereto agrees that until any Delayed
Transfer Asset is contributed to ▇▇▇▇▇▇ or a Subsidiary of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇-
▇▇▇▇▇ Squibb and ▇▇▇▇▇▇ shall cooperate (at their own expense) in any
lawful and commercially reasonable arrangement proposed by ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb under which ▇▇▇▇▇▇ or a Subsidiary of ▇▇▇▇▇▇ designated by ▇▇▇▇▇▇
shall obtain the economic claims, rights and benefits under such Delayed
Transfer Asset.
(e) Each of the parties hereto agrees that until any Delayed
Transfer Liability is assumed by ▇▇▇▇▇▇ or a Subsidiary of ▇▇▇▇▇▇
designated by ▇▇▇▇▇▇, ▇▇▇▇▇▇ will indemnify and hold harmless the ▇▇▇▇▇▇▇-
▇▇▇▇▇ Squibb Group from such Delayed Transfer Liability.
(f) In the event that any Delayed Transfer Asset has not been
contributed to ▇▇▇▇▇▇ or a Subsidiary of ▇▇▇▇▇▇ designated by ▇▇▇▇▇▇ by
February 1, 2002, for any reason other than the gross negligence or wilful
misconduct of any member of the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group, ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb shall have the option to liquidate such Delayed Transfer Asset at
▇▇▇▇▇▇'▇ expense; PROVIDED, HOWEVER, that any net proceeds of such
liquidation shall be for the account of ▇▇▇▇▇▇.
(g) In the event that at any time or from time to time (whether
prior to or after the Distribution Date), any party hereto (or any member
of such party's respective Group), shall receive or otherwise possess any
asset that is allocated to any other Person pursuant to this Agreement or
any Ancillary Agreement, such party shall promptly transfer, or cause to be
transferred, such asset to the Person so entitled thereto.
(h) On the terms and subject to the conditions set forth in this
Agreement, immediately after Oldco becomes a wholly-owned subsidiary of
▇▇▇▇▇▇ pursuant to the Contribution, ▇▇▇▇▇▇ shall contribute to Oldco all
of ▇▇▇▇▇▇'▇ rights, title and interest in and to all of the ▇▇▇▇▇▇ Assets,
other than the capital stock of Oldco and the Delayed Transfer Assets.
▇▇▇▇▇▇ shall contribute all of ▇▇▇▇▇▇'▇ rights, title and interest in and
to Delayed Transfer Assets to Oldco immediately after such Delayed Transfer
Assets are contributed to ▇▇▇▇▇▇ pursuant to the terms of this Agreement.
(i) On the terms and subject to the conditions set forth in this
Agreement, immediately after Oldco becomes a wholly-owned subsidiary of
▇▇▇▇▇▇ pursuant to the Contribution, ▇▇▇▇▇▇ shall cause Oldco or its
subsidiaries to assume all of the ▇▇▇▇▇▇ Liabilities, other than any ▇▇▇▇▇▇
Liabilities that already are Liabilities of Oldco, a Subsidiary of Oldco or
any entity contributed by ▇▇▇▇▇▇ to Oldco and other than any Liabilities
relating to the Financing Facility or the Delayed Transfer Liabilities, in
accordance with their respective terms. ▇▇▇▇▇▇ shall cause Oldco or its
subsidiaries to assume all of the Delayed Transfer Liabilities in
accordance with their respective terms immediately after such Delayed
Transfer Liabilities are assumed by ▇▇▇▇▇▇ pursuant to the terms of this
Agreement.
SECTION 2.02. ▇▇▇▇▇▇ ASSETS. (a) For purposes of this
Agreement, "▇▇▇▇▇▇ ASSETS" shall mean (without duplication):
(i) the Shares;
(ii) the International Assets;
(iii) the Other Assets;
(iv) subject to the terms of Article V, any Exclusive ▇▇▇▇▇▇
Contingent Gain and any Shared ▇▇▇▇▇▇ Percentage of any Shared
Contingent Gain; and
(v) except as expressly provided in this Agreement or any
Ancillary Agreement, any and all assets owned or held immediately
prior to the Distribution Date by ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb or any of its
Subsidiaries that are used primarily in the ▇▇▇▇▇▇ Business. The
intention of this clause (v) is only to rectify any inadvertent
omission of transfer or conveyance of any assets that, had the parties
given specific consideration to such asset as of the date hereof,
would have otherwise been classified as a ▇▇▇▇▇▇ Asset. No asset
shall be deemed to be a ▇▇▇▇▇▇ Asset solely as a result of this clause
(v) if such asset is expressly covered by the subject matter of an
Ancillary Agreement or utilized by ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb or its
Affiliates to provide shared services to the ▇▇▇▇▇▇ Business or the
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Business. In addition, no asset shall be deemed
a ▇▇▇▇▇▇ Asset solely as a result of this clause (v) unless ▇▇▇▇▇▇
makes a claim with respect thereto on or prior to the first
anniversary of the Distribution Date.
(b) Notwithstanding Section 2.02(a), the ▇▇▇▇▇▇ Assets shall not
in any event include the Excluded Assets. For the purposes of this
Agreement, "EXCLUDED ASSETS" shall mean:
(i) the assets listed or described on Schedule 2.02(b)(i);
(ii) the Excluded International Assets;
(iii) any and all assets that are expressly contemplated by this
Agreement or any Ancillary Agreement (or the Schedules hereto or
thereto) as assets to be retained by ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb or any other
member of the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group; and
(iv) except to the extent expressly set forth in Section
2.02(a)(iv), any Contingent Gains.
SECTION 2.03. ▇▇▇▇▇▇ LIABILITIES. (a) For purposes of this
Agreement, "▇▇▇▇▇▇ LIABILITIES" shall mean (without duplication):
(i) any and all Liabilities of Oldco, the Oldco Subsidiaries and
the ▇▇▇▇▇▇ International Entities listed in Schedule 1.01(e)(ii),
including any and all Liabilities relating to the separation costs and
expenses set forth in Schedule 2.03(a)(i);
(ii) any and all International Liabilities;
(iii) all Liabilities (other than federal income Taxes and State
Income Taxes for the Pre-Distribution Period, each as defined in the
Tax Sharing Agreement), including any employee-related Liabilities
(other than Excluded Employee Liabilities) and Environmental
Liabilities, primarily relating to, arising out of or resulting from:
(A) the operation of the ▇▇▇▇▇▇ Business, as conducted at
any time prior to, on or after the Distribution Date (including any
Liability relating to, arising out of or resulting from any act or failure
to act by any director, officer, employee, agent or representative (whether
or not such act or failure to act is or was within such Person's
authority));
(B) the operation of any business conducted by any member of
the ▇▇▇▇▇▇ Group at any time after the Distribution Date (including any
Liability relating to, arising out of or resulting from any act or failure
to act by any director, officer, employee, agent or representative (whether
or not such act or failure to act is or was within such Person's
authority)); or
(C) any ▇▇▇▇▇▇ Assets;
in any such case whether arising before, on or after the Distribution Date;
(iv) subject to the terms of Article V, all Exclusive ▇▇▇▇▇▇
Contingent Liabilities and the Shared ▇▇▇▇▇▇ Percentage of any Shared
Contingent Liabilities;
(v) all Liabilities relating to, arising out of or resulting from
the Financing Facility, including any third party costs and expenses
incurred by any member of the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group;
(vi) all Liabilities relating to, arising out of or resulting from
any of the terminated, divested or discontinued businesses and
operations of the ▇▇▇▇▇▇ Business (other than the Liabilities set
forth on Schedule 2.03(b)(i); and
(vii) all Liabilities reflected as liabilities or obligations of
▇▇▇▇▇▇ in the ▇▇▇▇▇▇ Balance Sheet, subject to any discharge of such
Liabilities subsequent to the date of the ▇▇▇▇▇▇ Balance Sheet.
(b) Notwithstanding Section 2.03(a), the ▇▇▇▇▇▇ Liabilities shall not
include the Excluded Liabilities. For the purposes of this Agreement,
"EXCLUDED LIABILITIES" shall mean:
(i) any Liabilities listed on Schedule 2.03(b)(i) hereto;
(ii) the Excluded International Liabilities;
(iii) the Excluded Employee Liabilities;
(iv) any and all liabilities relating to, arising out of or
resulting from any Excluded Assets;
(v) subject to the terms of Article V, all Exclusive
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Contingent Liabilities and the Shared
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Percentage of any Shared Contingent Liabilities;
(vi) except as set forth in any Ancillary Agreement, all
Environmental Liabilities accrued as of the date hereof solely
relating to, arising out of or resulting from the existence of any
leasehold interest that is a ▇▇▇▇▇▇ Asset if the applicable lessor,
sublessor or sub-sublessor under the applicable lease, sublease or
subsublease is a member of the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group; and
(vii) any and all Liabilities relating to the separation costs
and expenses set forth in Schedule 2.03(b)(vii).
SECTION 2.04. TERMINATION OF AGREEMENTS. (a) Except as set
forth in Section 2.04(b), in furtherance of the releases and other
provisions of Section 4.01 hereof, ▇▇▇▇▇▇ and each member of the ▇▇▇▇▇▇
Group, on the one hand, and ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and each member of the
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group, on the other hand, hereby terminate, any and
all agreements, arrangements, commitments or understandings, whether or not
in writing, between or among ▇▇▇▇▇▇ and/or any member of the ▇▇▇▇▇▇ Group,
on the one hand, and ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and/or any member of the
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group, on the other hand, effective as of the
Distribution Date. No such terminated agreement, arrangement, commitment
or understanding (including any provision thereof which purports to survive
termination) shall be of any further force or effect after the Distribution
Date. Each party shall, at the reasonable request of any other party,
take, or cause to be taken, such other actions as may be necessary to
effect the foregoing.
(b) The provisions of Section 2.04(a) shall not apply to any of
the following agreements, arrangements, commitments or understandings (or
to any of the provisions thereof): (i) this Agreement and the Ancillary
Agreements (and each other agreement or instrument expressly contemplated
by this Agreement or any Ancillary Agreement to be entered into by any of
the parties hereto or any of the members of their respective Groups); (ii)
any agreements, arrangements, orders, commitments or understandings listed
or described on Schedule 2.04(b)(ii); (iii) any agreements, arrangements,
commitments or understandings to which any Person other than the parties
hereto and their respective Affiliates is a party (it being understood that
to the extent that the rights and obligations of the parties and the
members of their respective Groups under any such agreements, arrangements,
commitments or understandings constitute ▇▇▇▇▇▇ Assets or ▇▇▇▇▇▇
Liabilities, they shall be assigned pursuant to Section 2.01); (iv) any
agreements, arrangements, commitments or understandings to which any
non-wholly owned Subsidiary of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb or ▇▇▇▇▇▇, as the case
may be, is a party (it being understood that directors' qualifying shares
or similar interests will be disregarded for purposes of determining
whether a Subsidiary is wholly owned); and (v) any other agreements,
arrangements, commitments or understandings that this Agreement or any
Ancillary Agreement expressly contemplates will survive the Distribution
Date.
SECTION 2.05. TRANSFER DOCUMENTS. In furtherance of the
contribution, assignment, transfer and conveyance of ▇▇▇▇▇▇ Assets and the
acceptance and assumption of ▇▇▇▇▇▇ Liabilities provided for in
Sections 2.01(a), 2.01(b), 2.01(h) and 2.01(i), on or prior to the
Contribution Date or as promptly as practicable thereafter, (i)
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb shall execute and deliver, and shall cause its
Subsidiaries to execute and deliver, such bills of sale, stock powers,
certificates of title, assignments of contracts and other instruments of
transfer, conveyance and assignment as and to the extent necessary to
evidence the transfer, conveyance and assignment of all of ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb's and its Subsidiaries' right, title and interest in and to the
▇▇▇▇▇▇ Assets to Oldco with effect (subject to Section 2.10) as of the
Contribution Date and (ii) ▇▇▇▇▇▇ shall cause Oldco to execute and deliver,
to ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and its Subsidiaries such bills of sale, stock
powers, certificates of title, assumptions of contracts and other
instruments of assumption as and to the extent necessary to evidence the
valid and effective assumption of the ▇▇▇▇▇▇ Liabilities by Oldco with
effect (subject to Section 2.10) as of the Contribution Date.
SECTION 2.06. ANCILLARY AGREEMENTS. Effective on or prior to
the Contribution Date, the parties shall execute and deliver each of the
following Ancillary Agreements to which it is a party:
(i) the Employee Benefits Agreement;
(ii) the Interim Services Agreement;
(iii) the Tax Sharing Agreement;
(iv) the Patent Assignment;
(v) the agreements and other documents comprising the Non-U.S.
Plan; and
(vi) the supplemental and other agreements and instruments
related to the foregoing.
SECTION 2.07. THE NON-U.S. PLAN. Each of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb
and ▇▇▇▇▇▇ shall take, and shall cause each member of its respective Group
to take, such action as reasonably necessary to consummate the transactions
contemplated by the Non-U.S. Plan (whether prior to or after the
Contribution Date). Notwithstanding anything in this Agreement or in any
Ancillary Agreement to the contrary, no party shall be entitled to receive
or retain any asset unless such party shall have paid any consideration
contemplated to be paid in connection therewith pursuant to the Non-U.S.
Plan.
SECTION 2.08. DISCLAIMER OF REPRESENTATIONS AND WARRANTIES. (a)
Each of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb (on behalf of itself and each member of the
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group), and ▇▇▇▇▇▇ (on behalf of itself and each
member of the ▇▇▇▇▇▇ Group) understands and agrees that, except as
expressly set forth herein or in any Ancillary Agreement, no party to this
Agreement, any Ancillary Agreement or any other agreement or document
contemplated by this Agreement, any Ancillary Agreement or otherwise, is
representing or warranting in any way as to the ▇▇▇▇▇▇ Assets or the ▇▇▇▇▇▇
Liabilities transferred or assumed as contemplated hereby or thereby, as to
any consents or approvals required in connection therewith, as to the value
or freedom from any Security Interests of, or any other matter concerning,
any ▇▇▇▇▇▇ Asset, or as to the absence of any defenses or right of setoff
or freedom from counterclaim with respect to any claim or other ▇▇▇▇▇▇
Asset, including any accounts receivable, of any party, or as to the legal
sufficiency of any assignment, document or instrument delivered hereunder
to convey title to any ▇▇▇▇▇▇ Asset or thing of value upon the execution,
delivery and filing hereof or thereof. Except as may expressly be set
forth herein or in any Ancillary Agreement, all such ▇▇▇▇▇▇ Assets are
being transferred on an "as is," "where is" basis (and, in the case of any
real property, by means of a quitclaim or similar form deed or conveyance)
and the respective transferees shall bear the economic and legal risks that
(i) any conveyance shall prove to be insufficient to vest in the transferee
good and marketable title, free and clear of any Security Interest, and
(ii) any necessary Consents or Governmental Approvals are not obtained or
that any requirements of laws or judgments are not complied with.
SECTION 2.09. FINANCING ARRANGEMENTS. Prior to the Distribution
Date, ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and ▇▇▇▇▇▇ will enter into the Financing
Facility. ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and ▇▇▇▇▇▇ agree to take all such
reasonable action as may be necessary to permit ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb to
borrow such amount as it shall determine under the Financing Facility prior
to the Distribution Date and to assure the assignment to and the assumption
by ▇▇▇▇▇▇ of all obligations thereunder and the full release and discharge
of each of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and any other member of the ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb Group of all of its obligations thereunder as of the Distribution
Date in accordance with the terms of the Financing Facility. ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb and ▇▇▇▇▇▇ shall participate in the preparation of all materials as
may be reasonably necessary to secure funding pursuant to the Financing
Facility, including rating agency presentations necessary to obtain the
requisite ratings needed to secure the financing under the Financing
Facility and such assignment, assumption, release and discharge. As of the
time of such assignment, assumption, release and discharge, ▇▇▇▇▇▇ shall
pay all third party costs and expenses incurred by any member of the
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group associated with the Financing Facility.
SECTION 2.10. CONSENTS AND GOVERNMENTAL APPROVALS. (a) To the
extent that the Contribution requires any Consents or Governmental
Approvals, the parties will use their reasonable efforts to obtain any such
Consents and Governmental Approvals.
(b) If and to the extent that the valid, complete and perfected
transfer or assignment to the ▇▇▇▇▇▇ Group of any ▇▇▇▇▇▇ Assets would be a
material violation of applicable law or require any material Consent or
Governmental Approval in connection with the Contribution or the
Distribution, then, unless ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb shall otherwise determine,
the transfer or assignment to the ▇▇▇▇▇▇ Group of such ▇▇▇▇▇▇ Assets shall
be automatically deemed deferred and any such purported transfer or
assignment shall be null and void until such time as all legal impediments
are removed and/or such Consents or Governmental Approvals have been
obtained and such asset shall be deemed a Delayed Transfer Asset.
Notwithstanding the foregoing, any such asset shall be deemed a ▇▇▇▇▇▇
Asset for purposes of determining whether any Liability is a ▇▇▇▇▇▇
Liability.
(c) If the transfer or assignment of any ▇▇▇▇▇▇ Asset intended to
be transferred or assigned hereunder including pursuant to the Non-U.S.
Plan, is not consummated prior to or at the Distribution Date, whether as a
result of the provisions of Section 2.10(b) or for any other reason, then,
subject to Sections 2.01(d), (e) and (f), the Person retaining such ▇▇▇▇▇▇
Asset shall thereafter hold such ▇▇▇▇▇▇ Asset for the use and benefit
insofar as reasonably possible, of ▇▇▇▇▇▇ (at ▇▇▇▇▇▇'▇ expense). In
addition, subject to Sections 2.01(d), (e) and (f), the Person retaining
such ▇▇▇▇▇▇ Asset shall take such other actions as may be reasonably
requested by ▇▇▇▇▇▇ in order to place ▇▇▇▇▇▇, insofar as reasonably
possible, in the same position as if such ▇▇▇▇▇▇ Asset had been transferred
as contemplated hereby and so that all the benefits and burdens relating to
such ▇▇▇▇▇▇ Assets, including possession, use, risk of loss, potential for
gain, and dominion, control and command over such assets, are to inure from
and after the Distribution Date to the ▇▇▇▇▇▇ Group.
(d) If and when the Consents and/or Governmental Approvals, the
absence of which caused the deferral of transfer of any ▇▇▇▇▇▇ Asset
pursuant to Section 2.10(b), are obtained, subject to Sections 2.01(d), (e)
and (f), the transfer of the applicable ▇▇▇▇▇▇ Asset shall be effected in
accordance with the terms of this Agreement and/or the applicable Ancillary
Agreement.
(e) The Person retaining any ▇▇▇▇▇▇ Asset due to the deferral of
the transfer of such ▇▇▇▇▇▇ Asset shall not be obligated, in connection
with the foregoing, to expend any money unless the necessary funds are
advanced by ▇▇▇▇▇▇, other than reasonable out-of-pocket expenses,
attorneys' fees and recording or similar fees, all of which shall be
promptly reimbursed by ▇▇▇▇▇▇.
SECTION 2.11. NOVATION OF ASSUMED ▇▇▇▇▇▇ LIABILITIES. (a) Each
of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and ▇▇▇▇▇▇, at the request of the other, shall use
its reasonable efforts to obtain, or to cause to be obtained, any consent,
substitution, approval or amendment required to novate or assign all
obligations under agreements, leases, licenses and other obligations or
Liabilities of any nature whatsoever that constitute ▇▇▇▇▇▇ Liabilities,
including any ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group guarantees of ▇▇▇▇▇▇ Liabilities,
or to obtain in writing the unconditional release of all parties to such
arrangements other than any member of the ▇▇▇▇▇▇ Group, so that, in any
such case, ▇▇▇▇▇▇ and its Subsidiaries will be solely responsible for such
Liabilities; PROVIDED, HOWEVER, that neither ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb nor
▇▇▇▇▇▇ shall be obligated to pay any consideration therefor to any third
party from whom such consents, approvals, substitutions and amendments are
requested.
(b) If ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb or ▇▇▇▇▇▇ is unable to obtain, or to
cause to be obtained, any such required consent, approval, release,
substitution or amendment, the applicable member of the ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb Group shall continue to be bound by such agreements, leases,
licenses and other obligations and, unless not permitted by law or the
terms thereof, ▇▇▇▇▇▇ shall, as agent or subcontractor for ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb or such other Person and where appropriate in the name thereof, as
the case may be, pay, perform and discharge fully all the obligations or
other Liabilities of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb or such other Person, as the case
may be, thereunder from and after the Distribution Date. ▇▇▇▇▇▇ shall
indemnify each ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Indemnitee and hold each of them
harmless against any Liabilities arising in connection therewith.
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb shall, without further consideration, pay and remit,
or cause to be paid or remitted to ▇▇▇▇▇▇ promptly all money, rights and
other consideration received by it or any member of its Group in respect of
such performance (unless any such consideration is an Excluded Asset). If
and when any such consent, approval, release, substitution or amendment
shall be obtained or such agreement, lease, license or other rights or
obligations shall otherwise become assignable or able to be novated,
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb shall thereafter assign, or cause to be assigned, all
its rights, obligations and other Liabilities thereunder or any rights or
obligations of any member of its Group to ▇▇▇▇▇▇ without payment of further
consideration and ▇▇▇▇▇▇ shall, without the payment of any further
consideration, assume such rights and obligations.
SECTION 2.12. NOVATION OF LIABILITIES OTHER THAN ▇▇▇▇▇▇
LIABILITIES. (a) Each of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and ▇▇▇▇▇▇, at the request
of the other, shall use its reasonable efforts to obtain, or to cause to be
obtained, any consent, substitution, approval or amendment required to
novate or assign all Excluded Liabilities, or to obtain in writing the
unconditional release from any Excluded Liability of all members of the
▇▇▇▇▇▇ Group, so that, in any such case, the members of the ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb Group will be solely responsible for such Excluded Liabilities;
PROVIDED, HOWEVER, that neither ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb nor ▇▇▇▇▇▇ shall be
obligated to pay any consideration therefor to any third party from whom
such consents, approvals, substitutions and amendments are requested.
(b) If ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb or ▇▇▇▇▇▇ is unable to obtain, or to
cause to be obtained, any such required consent, approval, release,
substitution or amendment, the applicable member of the ▇▇▇▇▇▇ Group shall
continue to be bound by such agreements, leases, licenses and other
obligations under which such Excluded Liabilities arise and, unless not
permitted by law or the terms thereof, ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb shall cause a
member of the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group, as agent or subcontractor for
such member of the ▇▇▇▇▇▇ Group and where appropriate in the name thereof,
to pay, perform and discharge fully all the Excluded Liabilities of such
member of the ▇▇▇▇▇▇ Group thereunder from and after the Distribution Date.
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb shall indemnify each ▇▇▇▇▇▇ Indemnitee and hold each
of them harmless against any Excluded Liabilities arising in connection
therewith. ▇▇▇▇▇▇ shall cause each member of the ▇▇▇▇▇▇ Group without
further consideration, to pay and remit, or cause to be paid or remitted,
to ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb or to another member of the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb
Group specified by ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb promptly all money, rights and
other consideration received by it or any member of the ▇▇▇▇▇▇ Group in
respect of such performance. If and when any such consent, approval,
release, substitution or amendment shall be obtained or such agreement,
lease, license or other rights or obligations shall otherwise become
assignable or able to be novated, ▇▇▇▇▇▇ shall promptly assign, or cause to
be assigned, all Excluded Liabilities and related rights thereunder or any
such Excluded Liabilities and related rights of any member of the ▇▇▇▇▇▇
Group to ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb or to another member of the ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb Group specified by ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb without payment of further
consideration and ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb, without the payment of any further
consideration shall, or shall cause such other member of the ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb Group to, assume such rights and Excluded Liabilities.
ARTICLE III
THE DISTRIBUTION
SECTION 3.01. THE DISTRIBUTION. (a) ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and
▇▇▇▇▇▇ shall use their reasonable efforts to consummate the Distribution.
Such actions shall include, but not necessarily be limited to, those
specified in this Article III.
(b) Subject to Section 3.05 hereof, on or prior to the
Distribution Date, ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb will deliver to the Agent for the
benefit of holders of record of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Common Stock on the
Record Date, a single stock certificate, endorsed by ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb
in blank, representing all of the outstanding shares of ▇▇▇▇▇▇ Common Stock
then owned by ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb or any member of the ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb Group, and shall cause the transfer agent for the shares of
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Common Stock to instruct the Agent to distribute on
the Distribution Date the appropriate number of such shares of ▇▇▇▇▇▇
Common Stock to each such holder or designated transferee or transferees of
such holder. The Distribution shall be effective at 11:59 p.m. Eastern
Standard Time on the Distribution Date.
(c) Subject to Sections 3.05 and 3.06, each holder of
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Common Stock on the Record Date (or such holder's
designated transferee or transferees) will be entitled to receive in the
Distribution a number of shares of ▇▇▇▇▇▇ Common Stock equal to the number
of shares of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Common Stock held by such holder on the
Record Date multiplied by the distribution ratio to be determined by
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb's Board of Directors when it declares the
Distribution. The distribution ratio to be determined by ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb is intended to approximate a fraction the numerator of which is the
number of shares of ▇▇▇▇▇▇ Common Stock beneficially owned by ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb or any other member of the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group on the
Distribution Date and the denominator of which is the number of shares of
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Common Stock outstanding on the Record Date.
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and ▇▇▇▇▇▇, as the case may be, will provide to the
Agent all share certificates and any information required in order to
complete the Distribution on the basis specified above.
SECTION 3.02. ACTIONS PRIOR TO THE DISTRIBUTION.(a) ▇▇▇▇▇▇▇-
▇▇▇▇▇ Squibb and ▇▇▇▇▇▇ shall cooperate in preparing, and ▇▇▇▇▇▇ shall
file, the Registration Statement, and such amendments or supplements
thereto, as may be necessary in order to cause the same to become and
remain effective as required by law, including filing such amendments to
the Registration Statement as may be required by the Commission or Federal,
state or foreign securities laws. ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and ▇▇▇▇▇▇ shall
also cooperate in preparing, filing with the Commission and causing to
become effective registration statements or amendments thereof which are
required to reflect the establishment of, or amendments to, any employee
benefit and other plans necessary or appropriate in connection with the
Contribution, the Distribution or the other transactions contemplated by
this Agreement and the Ancillary Agreements.
(b) ▇▇▇▇▇▇ shall participate in the preparation of materials and
presentations as ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb's financial advisors shall deem
necessary or desirable.
(c) ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and ▇▇▇▇▇▇ shall prepare and mail, on or
prior to the Distribution Date, to the holders of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb
Common Stock, such information concerning ▇▇▇▇▇▇, its business, operations
and management, the Distribution and such other matters as ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb shall reasonably determine and as may be required by law.
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and ▇▇▇▇▇▇ will prepare, and ▇▇▇▇▇▇ will, to the
extent required under applicable law, file with the Commission any such
documentation and any requisite no action letters which ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb determines are necessary or desirable to effectuate the Distribution
and ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and ▇▇▇▇▇▇ shall each use its reasonable efforts
to obtain all necessary approvals from the Commission with respect thereto
as soon as practicable.
(d) ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and ▇▇▇▇▇▇ shall take all such action as
may be necessary or appropriate under the securities or blue sky laws of
the United States (and any comparable laws under any foreign jurisdiction)
in connection with the Distribution.
(e) ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and ▇▇▇▇▇▇ shall cooperate and take all
reasonable steps necessary and appropriate to cause the conditions set
forth in Section 3.05 (subject to Section 3.04 and Section 3.05(a)(viii))
to be satisfied and to effect the Distribution on the Distribution Date.
(f) ▇▇▇▇▇▇ shall prepare and file, and shall use its reasonable
efforts to have approved, an application for the listing of the ▇▇▇▇▇▇
Common Stock to be distributed in the Distribution on the NYSE, subject to
official notice of distribution.
(g) ▇▇▇▇▇▇ shall pay all third party costs, fees and expenses
relating to the costs of producing, printing, mailing and otherwise
distributing the Information Statement other than any such costs, fees and
expenses that are Excluded Liabilities.
SECTION 3.03. CHARTER; BYLAWS; RIGHTS PLAN. At or prior to the
Distribution Date, ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and ▇▇▇▇▇▇ shall each take all
actions that may be required to provide for the adoption by ▇▇▇▇▇▇ of the
Certificate of Incorporation, the Bylaws and the Rights Plan.
SECTION 3.04. SOLE DISCRETION OF ▇▇▇▇▇▇▇-▇▇▇▇▇ SQUIBB.
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb shall have the sole and absolute discretion to
determine whether to proceed with all or part of the Distribution and all
terms of the Distribution, including the form, structure and terms of any
transaction(s) and/or offering(s) to effect the Distribution and the timing
of and conditions to the consummation of the Distribution. In addition,
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb may, in its sole and absolute discretion, determine
the date of consummation of the Distribution (such date as so determined by
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb in accordance with this Article III is referred to
herein as the "DISTRIBUTION DATE") and may at any time and from time to
time until the completion of the Distribution modify or change the terms of
the Distribution including by accelerating or delaying the timing of the
consummation of all or part of the Distribution. ▇▇▇▇▇▇ shall cooperate
with ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb in all respects to accomplish the Distribution
and shall, at ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb's direction, promptly take any and all
actions necessary or desirable to effect the Distribution, including the
registration under the Securities Act of the common stock of ▇▇▇▇▇▇ on an
appropriate registration form or forms to be designated by ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb. ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb shall select any investment banker(s) and
manager(s) in connection with the Distribution, as well as any financial
printer, solicitation and/or exchange agent and outside counsel for
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb, which shall include Cravath, Swaine & ▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP. ▇▇▇▇▇▇ acknowledges, for itself and the ▇▇▇▇▇▇
Group, that Cravath, Swaine & ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP have
acted only in the capacity as counsel to ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and the
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group, and not as counsel to ▇▇▇▇▇▇ or the ▇▇▇▇▇▇
Group, in connection with this Agreement and the Ancillary Agreements and
the documents and transactions contemplated herein or therein (other than
the transactions contemplated by Section 2.09).
SECTION 3.05. CONDITIONS TO DISTRIBUTION. (a) Subject to Section
3.04, the following are the conditions, to ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb's
obligation to effect the Distribution:
(i) the Registration Statement shall have been filed and declared
effective by the Commission, and there shall be no stop-order in
effect with respect thereto and no proceeding for that purpose shall
have been instituted by the Commission;
(ii) ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb shall be satisfied in its sole
discretion that as of the Distribution Date it will have no further
liability or obligation whatsoever under the Financing Facility;
(iii) the actions and filings with regard to state securities and
blue sky laws of the United States (and any comparable laws under any
foreign jurisdictions) described in Section 3.02(d) shall have been
taken and, where applicable, have become effective or been accepted;
(iv) the ▇▇▇▇▇▇ Common Stock to be distributed in the Distribution
shall have been accepted for listing on the NYSE, on official notice
of distribution;
(v) no order, injunction or decree issued by any court or agency
of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Contribution, Distribution or any
of the other transactions contemplated by this Agreement or any
Ancillary Agreement shall be in effect;
(vi) a private letter ruling from the Internal Revenue Service
shall have been obtained, and shall continue in effect, to the effect
that, among other things, the Distribution will qualify as a tax-free
distribution for federal income tax purposes under Section 355 of the
Code and the transfer to ▇▇▇▇▇▇ of the ▇▇▇▇▇▇ Assets and the
assumption by ▇▇▇▇▇▇ of the ▇▇▇▇▇▇ Liabilities in connection with the
Contribution will not result in the recognition of any gain or loss to
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb, ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb's or ▇▇▇▇▇▇'▇
stockholders for Federal income tax purposes, and such ruling shall be
in form and substance satisfactory to ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb in its sole
discretion;
(vii) any material Consents and Governmental Approvals necessary to
consummate the Distribution shall have been obtained and be in full
force and effect;
(viii) no other events or developments shall have occurred
subsequent to the date hereof that, in the judgment of ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb, would result in the Distribution having an adverse effect on
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb or on the stockholders of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb;
and
(ix) this Agreement shall not have been terminated.
(b) The foregoing conditions are for the sole benefit of
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and shall not give rise to or create any duty on the
part of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb or ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb's board of directors
to waive or not waive such conditions or in any way limits ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb's right to terminate this Agreement as set forth in Article X or
alter the consequences of any such termination from those specified in such
Article. Any determination made by ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb prior to the
Distribution concerning the satisfaction or waiver of any or all of the
conditions set forth in this Section 3.05 shall be conclusive.
SECTION 3.06. FRACTIONAL SHARES. ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb shall
direct the Agent to (i) determine the number of whole shares and fractional
shares of ▇▇▇▇▇▇ Common Stock allocable to each holder of record or
beneficial owner of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Common Stock as of the Record
Date, (ii) aggregate all such fractional shares and sell the whole shares
obtained thereby in open market transactions as soon as practicable on or
after the Distribution Date at then prevailing trading prices and (iii)
cause to be distributed to each such holder or for the benefit of each such
beneficial owner, in lieu of any fractional share, such holder's or owner's
ratable share of the proceeds of such sale, after making appropriate
deductions of the amount required to be withheld for federal income tax
purposes and after deducting an amount equal to all brokerage charges,
commissions and transfer taxes attributed to such sale.
SECTION 3.07. THE ▇▇▇▇▇▇ BOARD OF DIRECTORS. ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb and ▇▇▇▇▇▇ shall each take all actions which may be required to
elect or otherwise appoint as directors of ▇▇▇▇▇▇, on or prior to the
Distribution Date, the persons designated as nominees to ▇▇▇▇▇▇'▇ board of
directors in the Information Statement.
ARTICLE IV
MUTUAL RELEASES; INDEMNIFICATION
SECTION 4.01. RELEASE OF PRE-DISTRIBUTION CLAIMS. (a) Except as
provided in Section 4.01(c), effective as of the Distribution Date, ▇▇▇▇▇▇
does hereby, for itself and each other member of the ▇▇▇▇▇▇ Group, their
respective Affiliates (other than any member of the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb
Group), successors and assigns, and all Persons who at any time prior to
the Distribution Date have been stockholders, directors, officers, agents
or employees of any member of the ▇▇▇▇▇▇ Group (in each case, in their
respective capacities as such), remise, release and forever discharge each
of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb, the members of the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group,
their respective Affiliates (other than any member of the ▇▇▇▇▇▇ Group),
successors and assigns, and all Persons who at any time prior to the
Distribution Date have been stockholders, directors, officers, agents or
employees of any member of the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group (in each case, in
their respective capacities as such), and their respective heirs,
executors, administrators, successors and assigns, from any and all
Liabilities whatsoever, whether at law or in equity (including any right of
contribution), whether arising under any contract or agreement, by
operation of law or otherwise, existing or arising from any acts or events
occurring or failing to occur or alleged to have occurred or to have failed
to occur or any conditions existing or alleged to have existed on or before
the Distribution Date, including in connection with the transactions and
all other activities to implement the Contribution and the Distribution.
(b) Except as provided in Section 4.01(c), effective as of the
Distribution Date, ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb does hereby, for itself and each
other member of the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group, their respective Affiliates
(other than any member of the ▇▇▇▇▇▇ Group), successors and assigns, and
all Persons who at any time prior to the Distribution Date have been
stockholders, directors, officers, agents or employees of any member of the
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group (in each case, in their respective capacities as
such), remise, release and forever discharge each of ▇▇▇▇▇▇, the members of
the ▇▇▇▇▇▇ Group, their respective Affiliates (other than any member of the
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group), successors and assigns, and all Persons who at
any time prior to the Distribution Date have been stockholders, directors,
officers, agents or employees of any member of the ▇▇▇▇▇▇ Group (in each
case, in their respective capacities as such), and their respective heirs,
executors, administrators, successors and assigns, from any and all
Liabilities whatsoever, whether at law or in equity (including any right of
contribution), whether arising under any contract or agreement, by
operation of law or otherwise, existing or arising from any acts or events
occurring or failing to occur or alleged to have occurred or to have failed
to occur or any conditions existing or alleged to have existed on or before
the Distribution Date, including in connection with the transactions and
all other activities to implement the Contribution and the Distribution.
(c) Nothing contained in Section 4.01(a) or 4.01(b) shall impair
any right of any Person to enforce this Agreement, any Ancillary Agreement
or any agreements, arrangements, commitments or understandings that are
specified in Section 2.04(b) or the applicable Schedules thereto not to
terminate as of the Distribution Date, in each case in accordance with its
terms. Nothing contained in Section 4.01(a) or 4.01(b) shall release any
Person from:
(i) any Liability provided in or resulting from any agreement
among any members of the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group or the ▇▇▇▇▇▇
Group that is specified in Section 2.04(b) or the applicable Schedules
thereto as not to terminate as of the Distribution Date, or any other
Liability specified in such Section 2.04(b) as not to terminate as of
the Distribution Date;
(ii) any Liability, contingent or otherwise, assumed, transferred,
assigned or allocated to the Group of which such Person is a member in
accordance with, or any other Liability of any member of any Group
under, this Agreement or any Ancillary Agreement;
(iii) any Liability that the parties may have with respect to
indemnification or contribution pursuant to this Agreement for claims
brought against the parties by third Persons, which Liability shall be
governed by the provisions of this Article IV and Article V and, if
applicable, the appropriate provisions of the Ancillary Agreements; or
(iv) any Liability the release of which would result in the
release of any Person other than a Person released pursuant to this
Section 4.01.
In addition, nothing contained in Section 4.01(a) shall release
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb from honoring its existing obligations to indemnify
any director, officer or employee of ▇▇▇▇▇▇ who was a director, officer or
employee of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb on or prior to the Distribution Date, to
the extent such director, officer or employee becomes a named defendant in
any litigation involving ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and was entitled to such
indemnification pursuant to then existing obligations.
(d) ▇▇▇▇▇▇ shall not make, and shall not permit any member of the
▇▇▇▇▇▇ Group to make, any claim or demand, or commence any Action asserting
any claim or demand, including any claim of contribution or any
indemnification, against ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb or any member of the
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group or any other Person released pursuant to
Section 4.01(a), with respect to any Liabilities released pursuant to
Section 4.01(a). ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb shall not, and shall not permit any
member of the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group, to make any claim or demand, or
commence any Action asserting any claim or demand, including any claim of
contribution or any indemnification against ▇▇▇▇▇▇ or any member of the
▇▇▇▇▇▇ Group, or any other Person released pursuant to Section 4.01(b),
with respect to any Liabilities released pursuant to Section 4.0l(b).
(e) It is the intent of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and ▇▇▇▇▇▇ by virtue
of the provisions of this Section 4.01 to provide for a full and complete
release and discharge of all Liabilities existing or arising from all acts
and events occurring or failing to occur or alleged to have occurred or to
have failed to occur and all conditions existing or alleged to have existed
on or before the Distribution Date, between or among ▇▇▇▇▇▇ or any member
of the ▇▇▇▇▇▇ Group, on the one hand, and ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb or any
member of the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group, on the other hand (including any
contractual agreements or arrangements existing or alleged to exist between
or among any such members on or before the Distribution Date), except as
expressly set forth in Section 4.01(c). At any time, at the request of any
other party, each party shall cause each member of its respective Group to
execute and deliver releases reflecting the provisions hereof.
SECTION 4.02. INDEMNIFICATION BY ▇▇▇▇▇▇. Except as provided in
Section 4.04, ▇▇▇▇▇▇ shall indemnify defend and hold harmless ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb, each member of the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group and each of their
respective directors, officers and employees, and each of the heirs,
executors, successors and assigns of any of the foregoing (collectively,
the "▇▇▇▇▇▇▇-▇▇▇▇▇ SQUIBB INDEMNITEES") from and against any and all
Liabilities of the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Indemnitees relating to, arising
out of or resulting from any of the following items (without duplication):
(a) the failure of ▇▇▇▇▇▇ or any other member of the ▇▇▇▇▇▇ Group
or any other Person to pay, perform or otherwise promptly discharge any
▇▇▇▇▇▇ Liability in accordance with its terms, whether prior to or after
the Distribution Date;
(b) the ▇▇▇▇▇▇ Business, any ▇▇▇▇▇▇ Asset or any ▇▇▇▇▇▇
Liability;
(c) any material breach by ▇▇▇▇▇▇ or any member of the ▇▇▇▇▇▇
Group of this Agreement or any of the Ancillary Agreements; and
(d) any untrue statement or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, with respect to all information contained in any
Registration Statement or Information Statement.
SECTION 4.03. INDEMNIFICATION BY ▇▇▇▇▇▇▇-▇▇▇▇▇ SQUIBB. Except
as provided in Section 4.04, ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb shall indemnify, defend
and hold harmless ▇▇▇▇▇▇, each member of the ▇▇▇▇▇▇ Group and each of their
respective directors, officers and employees, and each of the heirs,
executors, successors and assigns of any of the foregoing (collectively,
the "▇▇▇▇▇▇ INDEMNITEES"), from and against any and all Liabilities of the
▇▇▇▇▇▇ Indemnitees relating to, arising out of or resulting from any of the
following items (without duplication):
(a) the failure of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb or any other member of
the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group or any other Person to pay, perform or
otherwise promptly discharge any Liabilities of the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb
Group other than the ▇▇▇▇▇▇ Liabilities, whether prior to or after the
Distribution Date;
(b) the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Business or any Liability of the
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group other than the ▇▇▇▇▇▇ Liabilities; and
(c) any material breach by ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb or any member of
the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group of this Agreement or any of the Ancillary
Agreements.
SECTION 4.04. INDEMNIFICATION OBLIGATIONS NET OF INSURANCE
PROCEEDS AND OTHER AMOUNTS. (a) The parties intend that any Liability
subject to indemnification or reimbursement pursuant to this Article IV or
Article V will be net of Insurance Proceeds that actually reduce the amount
of the Liability. Accordingly, the amount which any party (an
"INDEMNIFYING PARTY") is required to pay to any Person entitled to
indemnification hereunder (an "INDEMNITEE") will be reduced by any
Insurance Proceeds theretofore actually recovered by or on behalf of the
Indemnitee in respect of the related Liability. If an Indemnitee receives
a payment (an "INDEMNITY PAYMENT") required by this Agreement from an
Indemnifying Party in respect of any Liability and subsequently receives
Insurance Proceeds, then the Indemnitee will pay to the Indemnifying Party
an amount equal to the excess of the Indemnity Payment received over the
amount of the Indemnity Payment that would have been due if the Insurance
Proceeds had been received, realized or recovered before the Indemnity
Payment was made.
(b) In the case of any Shared Contingent Liability, any
Insurance Proceeds actually received, realized or recovered by any party in
respect of the Shared Contingent Liability will be shared among the parties
in such manner as may be necessary so that the obligations of the parties
for such Shared Contingent Liability, net of such Insurance Proceeds, will
remain in proportion to their respective Shared Percentages, regardless of
which party or parties may actually receive, realize or recover such
Insurance Proceeds.
(c) An insurer who would otherwise be obligated to pay any claim
shall not be relieved of the responsibility with respect thereto or, solely
by virtue of the indemnification provisions hereof, have any subrogation
rights with respect thereto, it being expressly understood and agreed that
no insurer or any other third party shall be entitled to a "wind-fall"
(i.e., a benefit they would not be entitled to receive in the absence of
the indemnification provisions) by virtue of the indemnification provisions
hereof. Nothing contained in this Agreement or any Ancillary Agreement
shall obligate any member of any Group to seek to collect or recover any
Insurance Proceeds.
SECTION 4.05. PROCEDURES FOR INDEMNIFICATION OF THIRD PARTY
CLAIMS. (a) If an Indemnitee shall receive notice or otherwise learn of
the assertion by a Person (including any Governmental Authority) who is not
a member of the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group or the ▇▇▇▇▇▇ Group of any claim
or of the commencement by any such Person of any Action (collectively, a
"THIRD PARTY CLAIM") with respect to which an Indemnifying Party may be
obligated to provide indemnification to such Indemnitee pursuant to Section
4.02 or 4.03, or any other Section of this Agreement or any Ancillary
Agreement, such Indemnitee shall give such Indemnifying Party written
notice thereof within 20 days after becoming aware of such Third Party
Claim. Any such notice shall describe the Third Party Claim in reasonable
detail. If any Person shall receive notice or otherwise learn of the
assertion of a Third Party Claim which may reasonably be determined to be a
Shared Contingent Liability, ▇▇▇▇▇▇, or ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb, as
appropriate depending on which Group such Person is a member of, shall give
the other party to this Agreement written notice thereof within 20 days
after such Person becomes aware of such Third Party Claim. Any such notice
shall describe the Third Party Claim in reasonable detail. Notwithstanding
the foregoing, the failure of any Indemnitee or other Person to give notice
as provided in this Section 4.05(a) shall not relieve the related
Indemnifying Party of its obligations under this Article IV, except to the
extent that such Indemnifying Party is actually prejudiced by such failure
to give notice.
(b) If ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb or ▇▇▇▇▇▇ receives any notice
relating to a Third Party Claim and such party believes that the relevant
Third Party Claim is or may be a Shared Contingent Liability, such party
may make a Determination Request at any time following receipt of such
notice. Unless the parties have acknowledged that the applicable Third
Party Claim (including any Third Party Claim set forth on Schedule 5.06) is
not a Shared Contingent Liability or unless a determination to such effect
has been made in accordance with Section 5.06, ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb shall
be entitled (but not obligated) to assume the defense of such Third Party
Claim as if it were the Indemnifying Party hereunder. In any such event,
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb shall be entitled to reimbursement of all the costs
and expenses of such defense once a final determination or acknowledgment
is made as to the status of the Third Party Claim; PROVIDED, HOWEVER, that,
if such Third Party Claim is determined to be a Shared Contingent
Liability, such costs and expenses shall be shared as provided in
Section 4.05(c); PROVIDED, FURTHER, that if such Third Party Claim is
determined to be an Exclusive ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Contingent Liability,
such costs and expenses shall be borne by ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb.
(c) ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb shall assume the defense of, and may,
subject to Section 4.05(g), seek to settle or compromise, any Third Party
Claim that is a Shared Contingent Liability, and the costs and expenses
thereof shall be included in the calculation of the amount of the
applicable Shared Contingent Liability in determining the reimbursement
obligations of the other party with respect thereto pursuant to Section
5.04. Any Indemnitee in respect of a Shared Contingent Liability shall have
the right to employ separate counsel and to participate in (but not
control) the defense, compromise, or settlement thereof, but all fees and
expenses of such counsel shall be the expense of such Indemnitee.
(d) Other than in the case of a Shared Contingent Liability, an
Indemnifying Party may elect to defend (and, unless the Indemnifying Party
has specified any reservations or exceptions, to seek to settle or
compromise), at such Indemnifying Party's own expense and by such
Indemnifying Party's own counsel, any Third Party Claim. Within 30 days
after the receipt of notice from an Indemnitee in accordance with Section
4.05(a) (or sooner, if the nature of such Third Party Claim so requires),
the Indemnifying Party shall notify the Indemnitee of its election whether
the Indemnifying Party will assume responsibility for defending such Third
Party Claim, which election shall specify any reservations or exceptions.
After notice from an Indemnifying Party to an Indemnitee of its election to
assume the defense of a Third Party Claim, such Indemnitee shall have the
right to employ separate counsel and to participate in (but not control)
the defense, compromise, or settlement thereof, but the fees and expenses
of such counsel shall be the expense of such Indemnitee except as set forth
in the next sentence. In the event that (i) the Third Party Claim is not a
Shared Contingent Liability and (ii) the Indemnifying Party has elected to
assume the defense of the Third Party Claim but has specified, and
continues to assert, any reservations or exceptions in such notice, then,
in any such case, the reasonable fees and expenses of one separate counsel
for all Indemnitees shall be borne by the Indemnifying Party.
(e) Other than in the case of a Shared Contingent Liability, if
an Indemnifying Party elects not to assume responsibility for defending a
Third Party Claim, or fails to notify an Indemnitee of its election as
provided in Section 4.05(d), such Indemnitee may defend such Third Party
Claim at the cost and expense of the Indemnifying Party.
(f) No Indemnitee may settle or compromise any Third Party Claim
that is not a Shared Contingent Liability without the consent of the
Indemnifying Party, which, if the Indemnifying Party has failed to assume
the defense of the Third Party Claim in accordance with the terms of this
Agreement, shall not be unreasonably withheld. No Indemnitee may settle or
compromise any Third Party Claim that is a Shared Contingent Liability
without the consent of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb.
(g) In the case of a Third Party Claim that is not a Shared
Contingent Liability, no Indemnifying Party shall consent to entry of any
judgment or enter into any settlement of the Third Party Claim without the
consent of the Indemnitee if the effect thereof is to permit any
injunction, declaratory judgment, other order or other nonmonetary relief
to be entered, directly or indirectly against any Indemnitee. In the case
of a Third Party Claim that is a Shared Contingent Liability, ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb shall not consent to entry of any judgment or enter into any
settlement of the Third Party Claim without the consent of the Indemnitee
if the effect thereof is to permit any injunction, declaratory judgment,
other order or other nonmonetary relief to be entered, directly or
indirectly, against any Indemnitee.
(h) The provisions of Section 4.05 and Section 4.06 shall not
apply to Taxes (which are covered by the Tax Sharing Agreement).
SECTION 4.06. ADDITIONAL MATTERS. (a) Any claim on account of a
Liability which does not result from a Third Party Claim shall be asserted
by written notice given by the Indemnitee to the related Indemnifying
Party. Such Indemnifying Party shall have a period of 30 days after the
receipt of such notice within which to respond thereto. If such
Indemnifying Party does not respond within such 30-day period, such
Indemnifying Party shall be deemed to have refused to accept responsibility
to make payment. If such Indemnifying Party does not respond within such
30-day period or rejects such claim in whole or in part, such Indemnitee
shall be free to pursue such remedies as may be available to such party as
contemplated by this Agreement and the Ancillary Agreements.
(b) In the event of payment by or on behalf of any Indemnifying
Party to any Indemnitee in connection with any Third Party Claim, such
Indemnifying Party shall be subrogated to and shall stand in the place of
such Indemnitee as to any events or circumstances in respect of which such
Indemnitee may have any right, defense or claim relating to such Third
Party Claim against any claimant or plaintiff asserting such Third Party
Claim or against any other Person. Such Indemnitee shall cooperate with
such Indemnifying Party in a reasonable manner, and at the cost and expense
of such Indemnifying Party, in prosecuting any subrogated right, defense or
claim.
(c) In the event of an Action in which the Indemnifying Party is
not a named defendant, if either the Indemnitee or Indemnifying Party shall
so request, the parties shall endeavor to substitute the Indemnifying Party
for the named defendant or, in the case of a Shared Contingent Liability,
add the Indemnifying Party as a named defendant, if at all practicable. If
such substitution or addition cannot be achieved for any reason or is not
requested, the named defendant shall allow the Indemnifying Party to manage
the Action as set forth in this Section, subject to Section 5.04 with
respect to Shared Contingent Liabilities, and the Indemnifying Party shall
fully indemnify the named defendant against all costs of defending the
Action (including court costs, sanctions imposed by a court, attorneys'
fees, experts fees and all other external expenses), the costs of any
judgment or settlement, and the cost of any interest or penalties relating
to any judgment or settlement.
SECTION 4.07. REMEDIES CUMULATIVE. The remedies provided in
this Article IV shall be cumulative and, subject to the provisions of
Article VIII, shall not preclude assertion by any Indemnitee of any other
rights or the seeking of any and all other remedies against any
Indemnifying Party.
SECTION 4.08. SURVIVAL OF INDEMNITIES. The rights and
obligations of each of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and ▇▇▇▇▇▇ and their respective
Indemnitees under this Article IV shall survive the sale or other transfer
by any party of any assets or the assignment by it of any Liabilities.
ARTICLE V
CONTINGENT GAINS AND CONTINGENT LIABILITIES
SECTION 5.01. DEFINITIONS RELATING TO CONTINGENT GAINS AND
CONTINGENT LIABILITIES. For the purpose of this Agreement the following
terms shall have the following meanings:
(a) "CONTINGENT CLAIM COMMITTEE" means a committee composed of
one representative designated from time to time by each of ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb and ▇▇▇▇▇▇ that shall be established in accordance with Section
5.06.
(b) "CONTINGENT GAIN" means any claim or other right of
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb, ▇▇▇▇▇▇ or any of their respective Affiliates,
whenever arising, against any Person other than ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb,
▇▇▇▇▇▇ or any of their respective Affiliates, if and to the extent that (i)
such claim or right has accrued as of the Distribution Date (based on then
existing law) and (ii) the existence or scope of the obligation of such
other Person as of the Distribution Date was not acknowledged, fixed or
determined in any material respect, due to a dispute or other uncertainty
as of the Distribution Date or as a result of the failure of such claim or
other right to have been discovered or asserted as of the Distribution
Date. A claim or right meeting the foregoing definition shall be
considered a Contingent Gain regardless of whether there was any Action
pending, threatened or contemplated as of the Distribution Date with
respect thereto. For purposes of the foregoing, a claim or right shall be
deemed to have accrued as of the Distribution Date if all the elements of
the claim necessary for its assertion shall have occurred on or prior to
the Distribution Date, such that the claim or right, were it asserted in an
Action on or prior to the Distribution Date, would not be dismissed by a
court on ripeness or similar grounds. Notwithstanding the foregoing, none
of (i) any Insurance Proceeds, (ii) any Excluded Assets, (iii) any reversal
of any litigation or other reserve, or (iv) any matters relating to Taxes
(which are governed by the Tax Sharing Agreement) shall be deemed to be a
Contingent Gain.
(c) "CONTINGENT LIABILITY" means any Liability, other than
Liabilities for Taxes (which are governed by the Tax Sharing Agreement), of
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb, ▇▇▇▇▇▇ or any of their respective Affiliates,
whenever arising, to any Person other than ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb, ▇▇▇▇▇▇ or
any of their respective Affiliates, if and to the extent that (i) such
Liability has accrued as of the Distribution Date (based on then existing
law) and (ii) the existence or scope of the obligation of ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb, ▇▇▇▇▇▇ or any of their respective Affiliates as of the Distribution
Date with respect to such Liability was not acknowledged, fixed or
determined in any material respect, due to a dispute or other uncertainty
as of the Distribution Date or as a result of the failure of such Liability
to have been discovered or asserted as of the Distribution Date (it being
understood that the existence of a litigation or other reserve with respect
to any Liability shall not be sufficient for such Liability to be
considered acknowledged, fixed or determined). In the case of any
Liability a portion of which had accrued as of the Distribution Date and a
portion of which accrues after the Distribution Date, only that portion
that had accrued as of the Distribution Date shall be considered a
Contingent Liability. For purposes of the foregoing, a Liability shall be
deemed to have accrued as of the Distribution Date if all the elements
necessary for the assertion of a claim with respect to such Liability shall
have occurred on or prior to the Distribution Date, such that the claim,
were it asserted in an Action on or prior to the Distribution Date, would
not be dismissed by a court on ripeness or similar grounds.
Notwithstanding the foregoing, the parties agree that no Liability relating
to, arising out of or resulting from any obligation of any Person to
perform the executory portion of any contract or agreement existing as of
the Distribution Date, or to satisfy any obligation accrued under any Plan
(as defined in the Employee Benefits Agreement) as of the Distribution
Date, shall be deemed to be a Contingent Liability.
(d) "EXCLUSIVE ▇▇▇▇▇▇▇-▇▇▇▇▇ SQUIBB CONTINGENT GAIN" means any
Contingent Gain if such Contingent Gain primarily relates to the
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Business, including the matters listed or described on
Schedule 5.01(d) hereto, or if such Contingent Gain is expressly assigned
to ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb pursuant to this Agreement or any Ancillary
Agreement.
(e) "EXCLUSIVE ▇▇▇▇▇▇▇-▇▇▇▇▇ SQUIBB CONTINGENT LIABILITY" means
any Contingent Liability if such Contingent Liability primarily relates to
the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Business, including the matters listed or
described on Schedule 5.01(e) hereto, or if such Contingent Liability is
expressly assigned to ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb pursuant to this Agreement or
any Ancillary Agreement.
(f) "EXCLUSIVE CONTINGENT GAIN" means any Exclusive ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb Contingent Gain or Exclusive ▇▇▇▇▇▇ Contingent Gain.
(g) "EXCLUSIVE CONTINGENT LIABILITY" means any Exclusive
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Contingent Liability or Exclusive ▇▇▇▇▇▇ Contingent
Liability.
(h) "EXCLUSIVE ▇▇▇▇▇▇ CONTINGENT GAIN" means any Contingent Gain
if such Contingent Gain primarily relates to the ▇▇▇▇▇▇ Business, including
the matters listed or described on Schedule 5.01(h) hereto, or if such
Contingent Gain is expressly assigned to ▇▇▇▇▇▇ pursuant to this Agreement
or any Ancillary Agreement.
(i) "EXCLUSIVE ▇▇▇▇▇▇ CONTINGENT LIABILITY" means any Contingent
Liability if such Contingent Liability primarily relates to the ▇▇▇▇▇▇
Business, including the matters listed or described on Schedule 5.01(i)
hereto, or if such Contingent Liability is expressly assigned to ▇▇▇▇▇▇
pursuant to this Agreement or any Ancillary Agreement.
(j) "SHARED ▇▇▇▇▇▇▇-▇▇▇▇▇ SQUIBB PERCENTAGE" means 95%, unless
the parties shall agree to a different percentage with respect to any
Shared Contingent Gain or Shared Contingent Liability.
(k) "SHARED CONTINGENT GAIN" means any Contingent Gain that is
not an Exclusive ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Contingent Gain or an Exclusive
▇▇▇▇▇▇ Contingent Gain including any Contingent Gain relating to, arising
out of or resulting from the matters set forth on Schedule 5.01(k).
(l) "SHARED CONTINGENT LIABILITY" means, without duplication:
(i) any Contingent Liability that is not an Exclusive
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Contingent Liability or an Exclusive ▇▇▇▇▇▇
Contingent Liability; and
(ii) any Liability (other than Taxes) relating to, arising out of
or resulting from the matters set forth on Schedule 5.01(l).
(m) "SHARED PERCENTAGE" means the Shared ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb
Percentage or the Shared ▇▇▇▇▇▇ Percentage, as the case may be.
(n) "SHARED ▇▇▇▇▇▇ PERCENTAGE" means 5%, unless the parties shall
agree to a different percentage with respect to any Shared Contingent Gain
or Shared Contingent Liability.
SECTION 5.02. CONTINGENT GAINS. (a) Each of ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb and ▇▇▇▇▇▇ shall have sole and exclusive right to any benefit
received with respect to any Exclusive ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Contingent
Gain, or Exclusive ▇▇▇▇▇▇ Contingent Gain, respectively. Each of
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and ▇▇▇▇▇▇ shall have sole and exclusive authority to
commence, prosecute, settle, manage, control, conduct, waive, forego,
release, discharge, forgive and otherwise determine all matters whatsoever
with respect to any Exclusive ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Contingent Gain or
Exclusive ▇▇▇▇▇▇ Contingent Gain, respectively.
(b) Any benefit that may be received from any Shared Contingent
Gain shall be shared among ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and ▇▇▇▇▇▇ in proportion to
the Shared ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Percentage and the Shared ▇▇▇▇▇▇
Percentage, respectively, and shall be paid in accordance with Section
5.05. Notwithstanding the foregoing, ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb shall have sole
and exclusive authority to commence, prosecute, settle, manage, control,
conduct, waive, forgo, release, discharge, forgive and otherwise determine
all matters whatsoever with respect to any Shared Contingent Gain. ▇▇▇▇▇▇
shall not take, or permit any member of its Group to take, any action
(including commencing any claim) that would interfere with such rights and
powers of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb. ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb shall use its
reasonable efforts to notify ▇▇▇▇▇▇ in the event that it commences an
Action with respect to a Shared Contingent Gain; PROVIDED, HOWEVER, that
the failure to provide such notice shall not give rise to any rights on the
part of ▇▇▇▇▇▇ against ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb or affect any other provision
of this Section 5.02. ▇▇▇▇▇▇ acknowledges that ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb may
elect not to pursue any Shared Contingent Gain for any reason whatsoever
(including a different assessment of the merits of any Action, claim or
right than ▇▇▇▇▇▇ or any business reasons that are in the best interests of
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb or a member of the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group, without
regard to the best interests of any member of the ▇▇▇▇▇▇ Group) and that no
member of the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group shall have any liability to any
Person (including any member of the ▇▇▇▇▇▇ Group) as a result of any such
determination.
(c) In the event of any dispute as to whether any claim or right
is a Contingent Gain or whether any Contingent Gain is a Shared Contingent
Gain, an Exclusive ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Contingent Gain or an Exclusive
▇▇▇▇▇▇ Contingent Gain, ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb may, but shall not be
obligated to, commence prosecution or other assertion of such claim or
right pending resolution of such dispute. In the event that ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb commences any such prosecution or assertion and, upon resolution of
the dispute, it is determined hereunder that ▇▇▇▇▇▇ has the exclusive right
to such claim or right, ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb shall, promptly upon the
request of ▇▇▇▇▇▇, discontinue the prosecution or assertion of such right
or claim and transfer the control thereof to ▇▇▇▇▇▇. In such event, ▇▇▇▇▇▇
shall reimburse ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb for all costs and expenses, reasonably
incurred prior to resolution of such dispute in the prosecution or
assertion of such claim or right.
SECTION 5.03. EXCLUSIVE CONTINGENT LIABILITIES. ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb shall be solely responsible for each Exclusive ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb
Contingent Liability and ▇▇▇▇▇▇ shall be solely responsible for each
Exclusive ▇▇▇▇▇▇ Contingent Liability. Each Exclusive Contingent Liability
shall constitute a Liability for which indemnification is provided by
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb or ▇▇▇▇▇▇, as the case may be, pursuant to Article IV
hereof and shall be subject to the procedures set forth in Article IV with
respect thereto.
SECTION 5.04. SHARED CONTINGENT LIABILITIES.
(a) As set forth in Section 4.05(c) and subject to Section 4.05(g),
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb shall assume the defense of, and may seek to settle or
compromise, any Third Party Claim that is a Shared Contingent Liability,
and the costs and expenses thereof shall be included in the calculation of
the amount of the applicable Shared Contingent Liability in determining the
reimbursement obligations of the other parties with respect thereto
pursuant to this Section 5.04.
(b) Each of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and ▇▇▇▇▇▇ shall be responsible
for its Shared Percentage of any Shared Contingent Liability. It shall not
be a defense to any obligation by any party to pay any amount in respect of
any Shared Contingent Liability that such party was not consulted in the
defense thereof, that such party's views or opinions as to the conduct of
such defense were not accepted or adopted, that such party does not approve
of the quality or manner of the defense thereof or that such Shared
Contingent Liability was incurred by reason of a settlement rather than by
a judgment or other determination of liability (even if, subject to Section
4.05(g), such settlement was effected without the consent or over the
objection of such party).
SECTION 5.05. PAYMENTS. (a) Any amount owed in respect of (i)
any Shared Contingent Liabilities, including reimbursement for the cost or
expense of defense, of any Third Party Claim that is a Shared Contingent
Liability, or (ii) any Shared Contingent Gains pursuant to this Article V
shall be remitted promptly after the party entitled to such amount provides
an invoice (including reasonable supporting information with respect
thereto) to the party owing such amount.
(b) In the case of any Shared Contingent Liability, ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb shall be entitled to reimbursement from ▇▇▇▇▇▇ in advance of a final
determination of any Action for amounts paid in respect of costs and
expenses related thereto, from time to time as such costs and expenses are
paid. In the case of any Shared Contingent Gain, ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb
shall be entitled to retain from the amount of the Shared Contingent Gain
otherwise payable to ▇▇▇▇▇▇, ▇▇▇▇▇▇'▇ Shared Percentage of the costs and
expenses paid or incurred by or on behalf of any member of the
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group in connection with such Shared Contingent Gain.
(c) Any amounts billed and properly payable in accordance with
this Article V that are not paid within 30 days of such ▇▇▇▇ shall bear
interest at the Prime Rate plus 2% per annum.
SECTION 5.06. PROCEDURES TO DETERMINE STATUS OF CONTINGENT
LIABILITY OR CONTINGENT GAIN. (a) With respect to the Actions set forth on
Schedule 5.06, and with respect to any other matters not set forth on
Schedules 5.01(d), 5.01(e), 5.01(h), 5.01(i), 5.01(k) or 5.01(l)
(regardless of whether such matters are currently pending but not set forth
on such Schedules or are asserted or filed hereafter), ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb
and ▇▇▇▇▇▇ will form the Contingent Claim Committee for the purpose of
resolving whether:
(i) any claim or right is a Contingent Gain;
(ii) any Contingent Gain is a Shared Contingent Gain, an Exclusive
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Contingent Gain or an Exclusive ▇▇▇▇▇▇ Contingent
Gain;
(iii) any Liability is a Contingent Liability; or
(iv) any Contingent Liability is a Shared Contingent Liability, an
Exclusive ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Contingent Liability or an Exclusive
▇▇▇▇▇▇ Contingent Liability.
(b) Any of the parties may refer any potential Contingent Gains
or Contingent Liabilities to the Contingent Claim Committee for resolution
as described in Section 5.06(a) and if the Contingent Claim Committee
reaches a determination (which shall be made within 30 days of such
referral), then that determination shall be binding on all of the parties
and their respective successors and assigns. In the event that the
Contingent Claim Committee cannot reach a determination as to the nature or
status of any such Liabilities or claims or rights within 30 days after
such referral, then the issue will be submitted to the respective General
Counsels of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and ▇▇▇▇▇▇ for determination. If the
General Counsels cannot reach a determination, then the procedures set
forth in Article VIII of this Agreement shall govern.
(c) In resolving, with respect to any Action set forth on
Schedule 5.06 or any other matter not set forth in Schedules 5.01(d),
5.01(e), 5.01(h), 5.01(i), 5.01(k) or 5.01(l), whether (i) any Contingent
Gain is a Shared Contingent Gain, an Exclusive ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb
Contingent Gain or an Exclusive ▇▇▇▇▇▇ Contingent Gain or (ii) any
Contingent Liability is a Shared Contingent Liability, an Exclusive
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Contingent Liability or an Exclusive ▇▇▇▇▇▇ Contingent
Liability, the categorization of Contingent Gains and Contingent
Liabilities reflected in 5.01(d), 5.01(e), 5.01(h), 5.01(i), 5.01(k) or
5.01(l) shall be considered and used as a presumptive guide.
SECTION 5.07. CERTAIN CASE ALLOCATION MATTERS. The parties
agree that if any Action not set forth on Schedule 5.01(d), 5.01(e),
5.01(h), 5.01(i), 5.01(k) or 5.01(l) involves separate and distinct claims
that, if not joined in a single Action, would constitute separate Exclusive
Contingent Liabilities of two or more parties, they will use their
reasonable efforts to segregate such separate and distinct claims so that
the Liabilities associated with each such claim (including all costs and
expenses) shall be treated as Exclusive Contingent Liabilities of the
appropriate party and so that each party shall have the rights and
obligations with respect to each such claim (including pursuant to Article
V hereof) as would have been applicable had such claims been commenced as
separate Actions. Notwithstanding the foregoing provisions, this Section
5.07 shall not apply to any separate and distinct claim that is de minimis
or frivolous in nature.
SECTION 5.08. TERMINATION OF CERTAIN ARTICLE V PROVISIONS. The
provisions set forth in this Article V related to sharing of Contingent
Gains and Contingent Liabilities shall terminate on the third anniversary
of the Distribution Date except for (a) any claim or action pending or
asserted by either party on or prior to such termination, or (b) any claim
or action related to any matter that has a statute of limitations that
extends beyond such termination date. Any claim or action referred to in
(a) and (b) above shall survive until the later of the final determination
applicable to any such claim or action or, in the case of clause (b) above,
the applicable statute of limitations covering such claim or action.
ARTICLE VI
INTERIM OPERATIONS AND CERTAIN OTHER MATTERS
SECTION 6.01. INSURANCE MATTERS. ▇▇▇▇▇▇ does hereby, for itself
and each other member of the ▇▇▇▇▇▇ Group, agree that no member of the
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group or any ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Indemnitee shall
have any Liability whatsoever as a result of the insurance policies and
practices of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and its Affiliates as in effect at any
time prior to the Distribution Date, including as a result of the level or
scope of any such insurance, the creditworthiness of any insurance carrier,
the terms and conditions of any policy, the adequacy or timeliness of any
notice to any insurance carrier with respect to any claim or potential
claim or otherwise.
SECTION 6.02. CERTAIN BUSINESS MATTERS. No member of any Group
shall have any duty to refrain from (i) engaging in the same or similar
activities or lines of business as any member of the other Group, (ii)
doing business with any potential or actual supplier or customer of any
member of the other Group, or (iii) engaging in, or refraining from, any
other activities whatsoever relating to any of the potential or actual
suppliers or customers of any member of the other Group.
SECTION 6.03. LATE PAYMENTS. Except as expressly provided to
the contrary in this Agreement or in any Ancillary Agreement, any amount
not paid when due pursuant to this Agreement or any Ancillary Agreement
(and any amounts billed or otherwise invoiced or demanded and properly
payable that are not paid within 30 days of such ▇▇▇▇, invoice or other
demand) shall accrue interest at a rate per annum equal to the Prime Rate
plus 2%.
ARTICLE VII
EXCHANGE OF INFORMATION; CONFIDENTIALITY
SECTION 7.01. AGREEMENT FOR EXCHANGE OF INFORMATION; ARCHIVES.
(a) Each of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and ▇▇▇▇▇▇, on behalf of its respective
Group, agrees to provide, or cause to be provided, to the other Group, at
any time before or after the Distribution Date, as soon as reasonably
practicable after written request therefor, any Information in the
possession or under the control of such respective Group which the
requesting party reasonably needs (i) to comply with reporting, disclosure,
filing or other requirements imposed on the requesting party (including
under applicable securities laws) by a Governmental Authority having
jurisdiction over the requesting party, (ii) for use in any other judicial,
regulatory, administrative or other proceeding or in order to satisfy
audit, accounting, claims, regulatory, litigation or other similar
requirements, in each case other than claims or allegations that one party
to this Agreement has against the other or (iii) subject to foregoing
clause (ii) above, to comply with its obligations under this Agreement, or
any Ancillary Agreement; PROVIDED, HOWEVER, that in the event that any
party determines that any such provision of Information could be
commercially detrimental, violate any law or agreement, or waive any
attorney-client privilege, the parties shall take all reasonable measures
to permit the compliance with such obligations in a manner that avoids any
such harm or consequence. The parties acknowledge that the Tax Sharing
Agreement shall govern the exchange of Information with respect to Taxes.
(b) After the Distribution Date, ▇▇▇▇▇▇ shall have access during
regular business hours (as in effect from time to time) to the documents
and objects of historic significance that relate to the ▇▇▇▇▇▇ Business
that are located in archives retained or maintained by ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb. ▇▇▇▇▇▇ may obtain copies (but not originals) of documents for bona
fide business purposes and may obtain objects for exhibition purposes for
commercially reasonable periods of time if required for bona fide business
purposes, provided that ▇▇▇▇▇▇ shall cause any such objects to be returned
promptly in the same condition in which they were delivered to ▇▇▇▇▇▇ and
▇▇▇▇▇▇ shall comply with any rules, procedures or other requirements, and
shall be subject to any restrictions (including prohibitions on removal of
specified objects), that are then applicable to ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb.
▇▇▇▇▇▇ shall pay the applicable fee or rate per hour for archives research
services (subject to increase from time to time to reflect rates then in
effect for ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb generally). Nothing herein shall be deemed
to restrict the access of any member of the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group to
any such documents or objects or to impose any liability on any member of
the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group if any such documents or objects are not
maintained or preserved by ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb.
(c) After the date hereof, each of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and
▇▇▇▇▇▇ (i) shall maintain in effect at its own cost and expense adequate
systems and controls to the extent necessary to enable the members of the
other Group to satisfy their respective reporting, accounting, audit and
other obligations, and (ii) shall provide, or cause to be provided, to the
other party in such form as the requesting party shall request, at no
charge to such requesting party, all financial and other data and
information as such requesting party determines necessary or advisable in
order to prepare its financial statements and reports or filings with any
Governmental Authority.
SECTION 7.02. OWNERSHIP OF INFORMATION. Any Information owned
by one Group that is provided to a requesting party pursuant to
Section 7.01 shall be deemed to remain the property of the providing party.
Unless specifically set forth herein, nothing contained in this Agreement
shall be construed as granting or conferring rights of license or otherwise
in any such Information.
SECTION 7.03. COMPENSATION FOR PROVIDING INFORMATION. Except as
set forth in Section 7.01(c)(ii), the party requesting Information agrees
to reimburse the other party for the reasonable costs, if any, of creating,
gathering and copying such Information, to the extent that such costs are
incurred for the benefit of the requesting party. Except as may be
otherwise specifically provided elsewhere in this Agreement or in any other
agreement between the parties, such costs shall be computed in accordance
with the providing party's standard methodology and procedures.
SECTION 7.04. RECORD RETENTION. To facilitate the possible
exchange of Information pursuant to this Article VII and other provisions
of this Agreement after the Distribution Date, the parties agree to use
their reasonable efforts to retain all Information in their respective
possession or control on the Distribution Date in accordance with the
policies of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb as in effect on the Distribution Date or
such other policies as may be reasonably adopted by the appropriate party
after the Distribution Date. No party will destroy, or permit any of its
Subsidiaries to destroy, any Information which the other party may have the
right to obtain pursuant to this Agreement prior to the third anniversary
of the date hereof without first using its reasonable efforts to notify the
other party of the proposed destruction and giving the other party the
opportunity to take possession of such information prior to such
destruction; PROVIDED, HOWEVER, that in the case of any Information
relating to employee benefits or Environmental Liabilities, such period
shall be extended to the expiration of the applicable statute of
limitations (giving effect to any extensions thereof); PROVIDED, FURTHER,
that in the event that any such Information is also subject to a retention
requirement contained in any Ancillary Agreement that is longer than the
requirement contained in this Section 7.04, then the requirement in such
agreement shall supersede this Section 7.04.
SECTION 7.05. LIMITATIONS OF LIABILITY. No party shall have any
liability to any other party in the event that any Information exchanged or
provided pursuant to this Agreement which is an estimate or forecast, or
which is based on an estimate or forecast, is found to be inaccurate in the
absence of willful misconduct by the party providing such Information. No
party shall have any liability to any other party if any Information is
destroyed after reasonable efforts by such party to comply with the
provisions of Section 7.04.
SECTION 7.06. OTHER AGREEMENTS PROVIDING FOR EXCHANGE OF
INFORMATION. The rights and obligations granted under this Article VII are
subject to any specific limitations, qualifications or additional
provisions on the sharing, exchange, retention or confidential treatment of
Information set forth in any Ancillary Agreement.
SECTION 7.07. PRODUCTION OF WITNESSES; RECORDS; COOPERATION.
(a) After the Distribution Date, except in the case of an adversarial
Action by one party against another party, each party hereto shall use its
reasonable efforts to make available to each other party, upon written
request, the former, current and future directors, officers, employees,
other personnel and agents of the members of its respective Group as
witnesses and any books, records or other documents within its control or
which it otherwise has the ability to make available, to the extent that
any such person (giving consideration to business demands of such
directors, officers, employees, other personnel and agents) or books,
records or other documents may reasonably be required in connection with
any Action in which the requesting party may from time to time be involved,
regardless of whether such Action is a matter with respect to which
indemnification may be sought hereunder. The requesting party shall bear
all costs and expenses in connection therewith.
(b) If an Indemnifying Party or ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb chooses to
defend or to seek to compromise or settle any Third Party Claim, the other
parties shall make available to such Indemnifying Party, ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb or such other party, as the case may be, upon written request, the
former, current and future directors, officers, employees, other personnel
and agents of the members of its respective Group as witnesses and any
books, records or other documents within its control or which it otherwise
has the ability to make available, to the extent that any such person
(giving consideration to business demands of such directors, officers,
employees, other personnel and agents) or books, records or other documents
may reasonably be required in connection with such defense, settlement or
compromise, as the case may be, and shall otherwise cooperate in such
defense, settlement or compromise, as the case may be.
(c) Without limiting the foregoing, the parties shall cooperate
and consult to the extent reasonably necessary with respect to any Actions.
(d) Without limiting any provision of this Section 7.07, each of
the parties agrees to cooperate, and to cause each member of its respective
Group to cooperate, with each other in the defense of any infringement or
similar claim with respect any intellectual property and shall not claim to
acknowledge, or permit any member of its respective Group to claim to
acknowledge, the validity or infringing use of any intellectual property of
a third Person in a manner that would hamper or undermine the defense of
such infringement or similar claim.
(e) The obligation of the parties to provide witnesses pursuant
to this Section 7.07 is intended to be interpreted in a manner so as to
facilitate cooperation and shall include the obligation to provide as
witnesses inventors and other employees without regard to whether the
witness or the employer of the witness could assert a possible business
conflict (subject to the exception set forth in the first sentence of
Section 7.07(a)).
(f) In connection with any matter contemplated by this Section
7.07, the parties will enter into a mutually acceptable joint defense
agreement so as to maintain to the extent practicable any applicable
attorney-client privilege or work product immunity of any member of any
Group.
SECTION 7.08. CONFIDENTIALITY. (a) Subject to Section 7.09,
each of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and ▇▇▇▇▇▇, on behalf of itself and each
member of its respective Group, agrees to hold, and to cause its respective
directors, officers, employees, agents, accountants, counsel and other
advisors and representatives to hold, in strict confidence, with at least
the same degree of care that applies to ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb's confidential
and proprietary information pursuant to policies in effect as of the
Distribution Date, all Information concerning each such other Group that is
either in its possession (including Information in its possession prior to
any of the date hereof or the Distribution Date) or furnished by any such
other Group or its respective directors, officers, employees, agents,
accountants, counsel and other advisors and representatives at any time
pursuant to this Agreement or any Ancillary Agreement, and shall not use
any such Information other than for such purposes as shall be expressly
permitted hereunder or thereunder, except, in each case, to the extent that
such Information has been (i) in the public domain through no fault of such
party or any member of such Group or any of their respective directors,
officers, employees, agents, accountants, counsel and other advisors and
representatives, (ii) later lawfully acquired from other sources by such
party (or any member of such party's Group) which sources are not
themselves bound by a confidentiality obligation, or (iii) independently
generated without reference to any proprietary or confidential Information
of the other party.
(b) Each party agrees not to release or disclose, or permit to be
released or disclosed, any such Information to any other Person, except its
directors, officers, employees, agents, accountants, counsel and other
advisors and representatives who need to know such Information (who shall
be advised of their obligations hereunder with respect to such
Information), except in compliance with Section 7.09. Without limiting the
foregoing, when any Information furnished by the other party after the
Distribution Date pursuant to this Agreement or any Ancillary Agreement is
no longer needed for the purposes contemplated by this Agreement or any
Ancillary Agreement, each party will promptly after request of the other
party either return to the other party all such Information in a tangible
form (including all copies thereof and all notes, extracts or summaries
based thereon) or certify to the other party that it has destroyed such
Information (and such copies thereof and such notes, extracts or summaries
based thereon).
SECTION 7.09. PROTECTIVE ARRANGEMENTS. In the event that any
party or any member of its Group either determines on the advice of its
counsel that it is required to disclose any Information pursuant to
applicable law or receives any demand under lawful process or from any
Governmental Authority to disclose or provide Information of any other
party (or any member of any other party's Group) that is subject to the
confidentiality provisions hereof, such party shall notify the other party
prior to disclosing or providing such Information and shall cooperate at
the expense of the requesting party in seeking any reasonable protective
arrangements requested by such other party. Subject to the foregoing, the
Person that received such request may thereafter disclose or provide
Information to the extent required by such law (as so advised by counsel)
or by lawful process or such Governmental Authority.
ARTICLE VIII
DISPUTE RESOLUTION
SECTION 8.01. DISPUTES. Except as otherwise specifically
provided in any Ancillary Agreement, the procedures for discussion,
negotiation and mediation set forth in this Article VIII shall apply to all
disputes, controversies or claims (whether arising in contract, tort or
otherwise) that may arise out of or relate to, or arise under or in
connection with this Agreement or any Ancillary Agreement, or the
transactions contemplated hereby or thereby (including all actions taken in
furtherance of the transactions contemplated hereby or thereby on or prior
to the date hereof), or the commercial or economic relationship of the
parties relating hereto or thereto, between or among any member of the
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group and the ▇▇▇▇▇▇ Group.
SECTION 8.02. ESCALATION; MEDIATION. (a) It is the intent of
the parties to use their respective reasonable efforts to resolve
expeditiously any dispute, controversy or claim between or among them with
respect to the matters covered hereby that may arise from time to time on a
mutually acceptable negotiated basis. In furtherance of the foregoing, any
party involved in a dispute, controversy or claim may deliver a notice (an
"ESCALATION NOTICE") demanding an in person meeting involving
representatives of the parties at a senior level of management of the
parties (or if the parties agree, of the appropriate strategic business
unit or division within such entity). A copy of any such Escalation Notice
shall be given to the General Counsel, or like officer or official, of each
party involved in the dispute, controversy or claim (which copy shall state
that it is an Escalation Notice pursuant to this Agreement). Any agenda,
location or procedures for such discussions or negotiations between the
parties may be established by the parties from time to time; PROVIDED,
HOWEVER, that the parties shall use their reasonable efforts to meet within
30 days of the Escalation Notice.
(b) If the parties are not able to resolve the dispute,
controversy or claim through the escalation process referred to above, then
the matter shall be referred to mediation. The parties shall retain a
mediator to aid the parties in their discussions and negotiations by
informally providing advice to the parties. Any opinion expressed by the
mediator shall be strictly advisory and shall not be binding on the
parties, nor shall any opinion expressed by the mediator be admissible in
any other proceeding. The mediator may be chosen from a list of mediators
previously selected by the parties or by other agreement of the parties.
Costs of the mediation shall be borne equally by the parties involved in
the matter, except that each party shall be responsible for its own
expenses. Mediation shall be a prerequisite to the commencement of any
action by either party.
SECTION 8.03. COURT ACTIONS. (a) In the event that any party,
after complying with the provisions set forth in Section 8.02 above,
desires to commence an Action, such party may submit the dispute,
controversy or claim (or such series of related disputes, controversies or
claims) to any court of competent jurisdiction.
(b) The parties irrevocably submit to the exclusive jurisdiction
of (a) the Supreme Court of the State of New York, New York County, and
(b) the United States District Court for the Southern District of New York,
for the purposes of any Action arising out of this Agreement, the Ancillary
Agreements or any transaction contemplated hereby or thereby. The parties
agree to commence any Action relating hereto either in the United States
District Court for the Southern District of New York or if such Action may
not be brought in such court for jurisdictional reasons, in the Supreme
Court of the State of New York, New York County. The parties further agree
that service of any process, summons, notice or document by U.S. registered
mail to their respective addresses set forth above shall be effective
service of process for any Action in New York with respect to any matters
to which each party has submitted to jurisdiction in this Section 8.03(b).
Each of the parties irrevocably and unconditionally waives any objection to
the laying of venue of any Action arising out of this Agreement or the
transactions contemplated hereby in (i) the Supreme Court of the State of
New York, New York County, or (ii) the United States District Court for the
Southern District of New York, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court
that any such Action brought in any such court has been brought in an
inconvenient forum.
(c) The parties each hereby waive to the fullest extent permitted
by applicable law, any right it may have to a trial by jury in respect of
any litigation directly or indirectly arising out of, under or in
connection with this Agreement or any of the Ancillary Agreements or any
transaction contemplated hereby or thereby. Each party hereto
(a) certifies that no representative, agent or attorney of any other party
has represented, expressly or otherwise, that such other party would not,
in the event of litigation, seek to enforce that foregoing waiver and
(b) acknowledges that it and the other party hereto have been induced to
enter into this Agreement and the Ancillary Agreements by, among other
things, the mutual waivers and certifications in this Section 8.03.
(d) Unless otherwise agreed in writing, the parties will continue
to provide service and honor all other commitments under this Agreement and
each Ancillary Agreement during the course of dispute resolution pursuant
to the provisions of this Article VIII with respect to all matters not
subject to such dispute, controversy or claim.
ARTICLE IX
FURTHER ASSURANCES
SECTION 9.01. FURTHER ASSURANCES. (a) In addition to the
actions specifically provided for elsewhere in this Agreement, each of the
parties hereto shall use its reasonable efforts, prior to, on and after the
Distribution Date, to take, or cause to be taken, all actions, and to do,
or cause to be done, all things, reasonably necessary, proper or advisable
under applicable laws, regulations and agreements to consummate and make
effective the transactions contemplated by this Agreement and the Ancillary
Agreements.
(b) Without limiting the foregoing, prior to, on and after the
Distribution Date, each party hereto shall cooperate with the other party,
and without any further consideration, but at the expense of the requesting
party, to execute and deliver, or use its reasonable efforts to cause to be
executed and delivered, all instruments, including instruments of
conveyance, assignment and transfer, and to make all filings with, and to
obtain all consents, approvals or authorizations of, any Governmental
Authority or any other Person under any permit, license, agreement,
indenture or other instrument (including any Consents or Governmental
Approvals), and to take all such other actions as such party may reasonably
be requested to take by any other party hereto from time to time,
consistent with the terms of this Agreement and the Ancillary Agreements,
in order to effectuate the provisions and purposes of this Agreement and
the Ancillary Agreements and the transfers of the ▇▇▇▇▇▇ Assets and the
assignment and assumption of the ▇▇▇▇▇▇ Liabilities and the other
transactions contemplated hereby and thereby. Without limiting the
foregoing, each party will, at the reasonable request, cost and expense of
any other party, take such other actions as may be reasonably necessary to
vest in such other party good and marketable title, free and clear of any
Security Interest, if and to the extent it is practicable to do so.
(c) On or prior to the Distribution Date, ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb
and Zimmer in their respective capacities as direct and indirect
stockholders of their respective Subsidiaries, shall each ratify any
actions which are reasonably necessary or desirable to be taken by
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb, Zimmer or any other Subsidiary of ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb or Zimmer, as the case may be, to effectuate the transactions
contemplated by this Agreement. On or prior to the Distribution Date,
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and Zimmer shall take all actions as may be necessary
to approve the stock-based employee benefit plans of Zimmer in order to
satisfy the requirement of Rule 16b-3 under the Exchange Act.
(d) Prior to the Distribution Date, if one or more of the parties
identifies any commercial or other service that is needed to assure a
smooth and orderly transition of the businesses in connection with the
consummation of the transactions contemplated hereby, and that is not
otherwise governed by the provisions of this Agreement or any Ancillary
Agreement, the parties will cooperate in determining whether there is a
mutually acceptable arm's-length basis on which the other party will
provide such service.
ARTICLE X
TERMINATION
SECTION 10.01. TERMINATION. This Agreement and all Ancillary
Agreements may be terminated and the Distribution may be amended, modified
or abandoned at any time prior to the Distribution Date by and in the sole
discretion of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb without the approval of Zimmer or the
stockholders of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb. In the event of such termination, no
party shall have any liability of any kind to any other party or any other
Person. After the Distribution Date, this Agreement may not be terminated
except by an agreement in writing signed by the parties.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. COUNTERPARTS; ENTIRE AGREEMENT; CORPORATE POWER.
(a) This Agreement and each Ancillary Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other party.
(b) This Agreement, and the Ancillary Agreements and the
Exhibits, Schedules and Appendices hereto and thereto contain the entire
agreement between the parties with respect to the subject matter hereof,
supersede all previous agreements, negotiations, discussions, writings,
understandings, commitments and conversations with respect to such subject
matter and there are no agreements or understandings between the parties
other than those set forth or referred to herein or therein.
(c) ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb represents on behalf of itself and each
other member of the ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Group and Zimmer represents on
behalf of itself and each other member of the ▇▇▇▇▇▇ Group as follows:
(i) each such Person has the requisite corporate or other power
and authority and has taken all corporate or other action necessary in
order to execute, deliver and perform each of this Agreement and each
other Ancillary Agreement to which it is a party and to consummate the
transactions contemplated hereby and thereby; and
(ii) this Agreement and each Ancillary Agreement to which it is a
party has been duly executed and delivered by it and constitutes a
valid and binding agreement of it enforceable in accordance with the
terms thereof.
(d) Each party hereto acknowledges that it and each other party
hereto is executing certain of the Ancillary Agreements by facsimile, stamp
or mechanical signature. Each party hereto expressly adopts and confirms
each such facsimile, stamp or mechanical signature made in its respective
name as if it were a manual signature, agrees that it will not assert that
any such signature is not adequate to bind such party to the same extent as
if it were signed manually and agrees that at the reasonable request of any
other party hereto at any time it will as promptly as reasonably
practicable cause each such Ancillary Agreement to be manually executed
(any such execution to be as of the date of the initial date thereof).
SECTION 11.02. GOVERNING LAW. This Agreement and, unless
expressly provided therein, each Ancillary Agreement, shall be governed by
and construed and interpreted in accordance with the laws of the State of
New York irrespective of the choice of laws principles of the State of New
York, as to all matters, including matters of validity, construction,
effect, enforceability, performance and remedies.
SECTION 11.03. ASSIGNABILITY. Except as set forth in any
Ancillary Agreement, this Agreement and each Ancillary Agreement shall be
binding upon and inure to the benefit of the parties hereto and thereto,
respectively, and their respective successors and assigns; PROVIDED,
HOWEVER, that no party hereto or thereto may assign its respective rights
or delegate its respective obligations under this Agreement or any
Ancillary Agreement without the express prior written consent of the other
parties hereto or thereto.
SECTION 11.04. THIRD PARTY BENEFICIARIES. Except for the
indemnification rights under this Agreement of any ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb
Indemnitee or Zimmer Indemnitee in their respective capacities as such and
for the release under Section 4.01 of any Person provided therein, (a) the
provisions of this Agreement and each Ancillary Agreement are solely for
the benefit of the parties and are not intended to confer upon any Person
except the parties any rights or remedies hereunder, and (b) there are no
third party beneficiaries of this Agreement or any Ancillary Agreement and
neither this Agreement nor any Ancillary Agreement shall provide any third
Person with any remedy, claim, liability, reimbursement, claim of action or
other right in excess of those existing without reference to this Agreement
or any Ancillary Agreement.
SECTION 11.05. NOTICES. All notices or other communications
under this Agreement or any Ancillary Agreement shall be in writing and
shall be deemed to be duly given when (a) delivered in person or (b)
deposited in the United States mail or private express mail, postage
prepaid, addressed as follows:
If to ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb, to:
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
If to Zimmer to:
▇▇▇▇▇▇ Holdings, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Any party may, by notice to the other party, change the address
to which such notices are to be given.
SECTION 11.06. SEVERABILITY. If any provision of this Agreement
or any Ancillary Agreement or the application thereof to any Person or
circumstance is determined by a court of competent jurisdiction to be
invalid, void or unenforceable, the remaining provisions hereof or thereof,
or the application of such provision to Persons or circumstances or in
jurisdictions other than those as to which it has been held invalid or
unenforceable, shall remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby, so long as the economic or legal
substance of the transactions contemplated hereby or thereby, as the case
may be, is not affected in any manner adverse to any party. Upon such
determination, the parties shall negotiate in good faith in an effort to
agree upon such a suitable and equitable provision to effect the original
intent of the parties.
SECTION 11.07. FORCE MAJEURE. No party shall be deemed in
default of this Agreement or any Ancillary Agreement to the extent that any
delay or failure in the performance of its obligations under this Agreement
or any Ancillary Agreement results from any cause beyond its reasonable
control and without its fault or negligence, such as acts of God, acts of
civil or military authority, embargoes, epidemics, war, riots,
insurrections, fires, explosions, earthquakes, floods, unusually severe
weather conditions, labor problems or unavailability of parts, or, in the
case of computer systems, any failure in electrical or air conditioning
equipment. In the event of any such excused delay, the time for performance
shall be extended for a period equal to the time lost by reason of the
delay.
SECTION 11.08. PUBLICITY. Prior to the Distribution, each of
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and Zimmer shall consult with each other prior to
issuing any press releases or otherwise making public statements with
respect to the Contribution, the Distribution or any of the other
transactions contemplated hereby and prior to making any filings with any
Governmental Authority with respect thereto.
SECTION 11.09. EXPENSES. Except as expressly set forth in this
Agreement or in any Ancillary Agreement, all third party fees, costs and
expenses paid or incurred in connection with the Distribution will be paid
by Zimmer.
SECTION 11.10. HEADINGS. The article, section and paragraph
headings contained in this Agreement and in the Ancillary Agreements are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement or any Ancillary Agreement.
SECTION 11.11. SURVIVAL OF COVENANTS. Except as expressly set
forth in any Ancillary Agreement, the covenants, representations and
warranties contained in this Agreement and each Ancillary Agreement, and
liability for the breach of any obligations contained herein or therein,
shall survive the Contribution and the Distribution and shall remain in
full force and effect.
SECTION 11.12. WAIVERS OF DEFAULT. Waiver by any party of any
default by the other party of any provision of this Agreement or any
Ancillary Agreement shall not be deemed a waiver by the waiving party of
any subsequent or other default, nor shall it prejudice the rights of the
other party.
SECTION 11.13. AMENDMENTS. No provisions of this Agreement or
any Ancillary Agreement shall be deemed waived, amended, supplemented or
modified by any party, unless such waiver, amendment, supplement or
modification is in writing and signed by the authorized representative of
the party against whom it is sought to enforce such waiver, amendment,
supplement or modification. Prior to the Distribution Date, ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb may amend, supplement and modify this Agreement and the Ancillary
Agreements in its sole discretion, without the consent of Zimmer.
SECTION 11.14. INTERPRETATION. Words in the singular shall be
held to include the plural and vice versa and words of one gender shall be
held to include the other genders as the context requires. The terms
"hereof," "herein," and "herewith" and words of similar import shall,
unless otherwise stated, be construed to refer to this Agreement (or the
applicable Ancillary Agreement) as a whole (including all of the Schedules,
Exhibits and Appendices hereto and thereto) and not to any particular
provision of this Agreement (or such Ancillary Agreement). Article,
Section, Exhibit, Schedule and Appendix references are to the Articles,
Sections, Exhibits, Schedules and Appendices to this Agreement (or the
applicable Ancillary Agreement) unless otherwise specified. The word
"including" and words of similar import when used in this Agreement (or the
applicable Ancillary Agreement) shall mean "including, without limitation,"
unless the context otherwise requires or unless otherwise specified. The
word "or" shall not be exclusive. Unless expressly stated to the contrary
in this Agreement or in any Ancillary Agreement, all references to "the
date hereof," "the date of this Agreement," "hereby" and "hereupon" and
words of similar import shall all be references to June 29, 2001,
regardless of any amendment or restatement hereof.
IN WITNESS WHEREOF, the parties have caused this Contribution and
Distribution Agreement to be executed by their duly authorized
representatives.
▇▇▇▇▇▇▇-▇▇▇▇▇ SQUIBB COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Vice President
▇▇▇▇▇▇ HOLDINGS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President and CEO