EXHIBIT 10.1
CONTRIBUTION AND DISTRIBUTION AGREEMENT
BY AND BETWEEN
ALLERGAN, INC.
AND
ADVANCED MEDICAL OPTICS, INC.
Dated as of June 24, 2002
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS..................................................................................2
ARTICLE II. THE CONTRIBUTION...........................................................................13
Section 2.01 Transfer of AMO Assets and Assumption of AMO Liabilities....................13
Section 2.02 AMO Assets..................................................................15
Section 2.03 AMO Liabilities.............................................................17
Section 2.04 Termination of Agreements...................................................19
Section 2.05 Transfer Documents..........................................................20
Section 2.06 AMO Consideration...........................................................20
Section 2.07 Ancillary Agreements........................................................20
Section 2.08 The Restructuring Plan......................................................21
Section 2.09 Disclaimer of Representations and Warranties................................21
Section 2.10 Consents and Governmental Approvals.........................................22
Section 2.11 Novation of Assumed AMO Liabilities.........................................23
Section 2.12 Novation of Liabilities Other than AMO Liabilities..........................24
ARTICLE III. THE DISTRIBUTION..........................................................................25
Section 3.01 The Distribution............................................................25
Section 3.02 Actions Prior to the Distribution...........................................25
Section 3.03 Sole Discretion of Allergan.................................................26
Section 3.04 Conditions to Distribution..................................................26
Section 3.05 Fractional Shares...........................................................28
Section 3.06 The AMO Board of Directors..................................................29
Section 3.07 Termination of Obligations Under this Article III...........................29
ARTICLE IV. MUTUAL RELEASES; INDEMNIFICATION...........................................................29
Section 4.01 Release of Pre-Distribution Claims..........................................29
Section 4.02 Indemnification by AMO......................................................32
Section 4.03 Indemnification by Allergan.................................................32
Section 4.04 Indemnification Obligations Net of Insurance Proceeds and Other Amounts.....33
Section 4.05 Procedures for Indemnification of Third Party Claims........................33
Section 4.06 Additional Matters..........................................................35
Section 4.07 Litigation..................................................................36
Section 4.08 Remedies Cumulative.........................................................37
Section 4.09 Survival of Indemnities.....................................................37
ARTICLE V. CONTINGENT GAINS AND CONTINGENT LIABILITIES.................................................37
Section 5.01 Definitions Relating to Contingent Gains and Contingent Liabilities.........37
Section 5.02 Contingent Gains............................................................39
Section 5.03 Exclusive Contingent Liabilities............................................40
Section 5.04 Shared Contingent Liabilities...............................................40
Section 5.05 Payments....................................................................40
Section 5.06 Procedures to Determine Status of Contingent Liability or Contingent Gain...41
Section 5.07 Certain Case Allocation Matters.............................................41
Section 5.08 Termination of Certain Article V Provisions.................................42
ARTICLE VI. INSURANCE..................................................................................42
Section 6.01 Insurance Matters...........................................................42
ARTICLE VII. EXCHANGE OF INFORMATION; CONFIDENTIALITY..................................................43
Section 7.01 Agreement for Exchange of Information; Archives.............................43
Section 7.02 Ownership of Information....................................................44
Section 7.03 Compensation for Providing Information......................................44
Section 7.04 Record Retention............................................................44
Section 7.05 Limitations of Liability....................................................45
Section 7.06 Other Agreements Providing for Exchange of Information......................45
Section 7.07 Production of Witnesses; Records; Cooperation...............................45
Section 7.08 Confidentiality.............................................................46
Section 7.09 Protective Arrangements.....................................................47
ARTICLE VIII. DISPUTE RESOLUTION.......................................................................47
Section 8.01 Disputes....................................................................47
Section 8.02 Escalation; Mediation; Arbitration..........................................47
ARTICLE IX. FURTHER ASSURANCES.........................................................................48
Section 9.01 Further Assurances..........................................................48
ARTICLE X. CERTAIN OTHER MATTERS.......................................................................49
Section 10.01 Auditors and Audits; Annual and Quarterly Statements and Accounting.........49
Section 10.02 Non-Competition.............................................................51
Section 10.03 Non-Solicitation of Employees...............................................53
Section 10.04 Late Payments...............................................................53
ARTICLE XI. TERMINATION................................................................................53
ARTICLE XII. MISCELLANEOUS.............................................................................54
Section 12.01 Limitation of Liability.....................................................54
Section 12.02 Counterparts................................................................54
Section 12.03 Entire Agreement............................................................54
Section 12.04 Corporate Power.............................................................54
Section 12.05 Signatures..................................................................54
Section 12.06 Governing Law...............................................................55
Section 12.07 Assignability...............................................................55
Section 12.08 Third Party Beneficiaries...................................................55
Section 12.09 Notices.....................................................................55
Section 12.10 Severability................................................................56
Section 12.11 Force Majeure...............................................................56
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Section 12.12 Publicity...................................................................56
Section 12.13 Expenses....................................................................56
Section 12.14 Headings....................................................................56
Section 12.15 Survival of Covenants.......................................................56
Section 12.16 Waivers of Default..........................................................57
Section 12.17 Amendments..................................................................57
Section 12.18 Controlling Documents.......................................................57
Section 12.19 Interpretation..............................................................57
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SCHEDULES
Schedule 1.01(a) AMO International Notes
Schedule 1.01(b) Restructuring Plan
Schedule 2.01(c) Delayed Transfer Assets
Schedule 2.02(a)(i) Specified AMO Assets
Schedule 2.02(a)(ii) Subsidiary Stock Transfers
Schedule 2.02(b)(i) Excluded Assets
Schedule 2.03(a)(i) AMO Liabilities
Schedule 2.03(b)(i) Allergan Assumed Liabilities
Schedule 2.04(b)(ii) Retained Agreements
Schedule 4.07(a) Litigation to be Transferred to AMO
Schedule 4.07(b) Litigation to be Defended by Allergan
Schedule 5.01(e) Exclusive Allergan Contingent Liability
Schedule 5.01(h) Exclusive AMO Contingent Gain
Schedule 5.01(i) Exclusive AMO Contingent Liability
Schedule 5.01(k) Shared Contingent Gain
Schedule 5.01(l) Shared Contingent Liability
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EXHIBITS
Exhibit A Restated By-laws of AMO
Exhibit B Restated Certificate of Incorporation of AMO
Exhibit C Employee Matters Agreement
Exhibit D Intellectual Property Assignment and License Agreement
Exhibit E Manufacturing Agreement
Exhibit F Tax Sharing Agreement
Exhibit G Transitional Services Agreement
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CONTRIBUTION AND DISTRIBUTION AGREEMENT
THIS CONTRIBUTION AND DISTRIBUTION AGREEMENT, dated as of June 24,
2002, is by and between ALLERGAN, INC., a Delaware corporation ("Allergan") and
ADVANCED MEDICAL OPTICS, INC., a Delaware corporation ("AMO"). 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, Allergan, directly and through Subsidiaries (as defined
herein), owns, operates and develops the AMO Business (as defined herein) and
also owns, operates and develops the Allergan Business (as defined herein);
WHEREAS, the Board of Directors of Allergan and AMO have each
determined that it would be appropriate and desirable for Allergan to separate,
contribute and transfer to AMO, and for AMO to receive and assume, directly or
indirectly, substantially all of the Assets and Liabilities currently associated
with the AMO Business and the stock, investments or similar interests currently
held by Allergan and its Subsidiaries that conduct the AMO Business;
WHEREAS, in order to effect such separation and contribution, Allergan
and its Subsidiaries will contribute to AMO and its Subsidiaries all of the
operations, ownership interests, assets and liabilities of Allergan and
Allergan's Subsidiaries that comprise the AMO Business and such other ownership
interests, assets, liabilities and operations as are described below (the
"Contribution");
WHEREAS, it is anticipated that, following the Contribution but prior
to the Distribution, AMO shall distribute $50,142,014 to Allergan in exchange
for various assets contributed to AMO in connection with the Contribution (the
"Distributable Cash"), which amount will be used by Allergan to repay existing
borrowings;
WHEREAS, following the Contribution, Allergan will distribute, on a
pro rata basis, to all holders of outstanding shares of Allergan Common Stock
all of the outstanding shares of AMO Common Stock owned directly or indirectly
by Allergan (the "Distribution");
WHEREAS, the Contribution and the Distribution is intended to qualify
as a tax-free reorganization under Sections 368(a)(1)(D) and 355 of the Code,
and that this Agreement is intended to be, and is hereby adopted as, a plan of
reorganization under Section 368 of the Code; and
WHEREAS, Allergan and AMO have determined that it is necessary and
desirable to set forth the principal corporate transactions required to effect
the Contribution and Distribution, and to set forth the agreements that will
govern certain matters following the Distribution;
A G R E E M E N T
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
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 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 Allergan to
distribute to the stockholders of Allergan pursuant to the Distribution all of
the shares of AMO Common Stock held by Allergan.
"Agreement" means this Contribution and Distribution Agreement,
including all of the Schedules and Exhibits hereto.
"Allergan" has the meaning set forth in the Preamble.
"Allergan's Auditors" has the meaning set forth in Section 10.01(b).
"Allergan Business" means (a) the business and operations of the
divisions and Subsidiaries of Allergan to the extent they relate to the research
and development, manufacturing, marketing and sale of (i) prescription and
non-prescription products designed to treat diseases and disorders of the eye,
including, but not limited to, glaucoma, inflammation, infection and allergy,
(ii) Delivery Devices, (iii) product lines designed to treat ocular surface
disease and other ocular surface conditions, including, but not limited to,
ocular tears, ocular decongestants, vasoconstrictors, any products indicated for
conjunctive erythema, Refresh Products and any product that contains (A)
carboxymethylcellulose or (B) castor oil, Pemulin(R) and polysorbate 80, (iv)
prescription and over-the-counter product lines designed for skin care and (v)
biologics, including Botox Purified Neurotoxin Complex, which is used to treat
neuromuscular disorders characterized by involuntary muscle contractions; and
(b) all other businesses of Allergan as of the date hereof not otherwise
included in the AMO Business.
"Allergan Claims" has the meaning set forth in Section 4.01(b).
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"Allergan Common Stock" means the common stock, par value $0.01 per
share, of Allergan, excluding any shares held as treasury stock by Allergan.
"Allergan Delayed Transfer Assets" means any Excluded Assets, the
legal title to which is expressly provided in this Agreement or any Ancillary
Agreement to be transferred after the Distribution Date, but the beneficial
ownership of which is transferred by this Agreement or any Ancillary Agreement
on or prior to the Distribution Date.
"Allergan Delayed Transfer Liabilities" means any Excluded
Liabilities, the legal obligation under which is expressly provided in this
Agreement or any Ancillary Agreement to be assumed after the Distribution Date,
but the burden of which is transferred by this Agreement or any Ancillary
Agreement on or prior to the Distribution Date.
"Allergan Group" means Allergan, each Subsidiary of Allergan and each
Person (other than any member of the AMO Group) that is either controlled
directly or indirectly by Allergan immediately after the Distribution Date or
that is contemplated to be controlled by Allergan immediately after the
Distribution Date pursuant to the terms hereof or the Restructuring Plan.
"Allergan Indemnitees" has the meaning set forth in Section 4.02.
"Allergan Parties" has the meaning set forth in Section 4.01(a).
"Allergan Releasors" has the meaning set forth in Section 4.01(b).
"AMO" has the meaning set forth in the Preamble.
"AMO Assets" has the meaning set forth in Section 2.02(a).
"AMO's Auditors" has the meaning set forth in Section 10.01(a).
"AMO Balance Sheet" means the unaudited combined balance sheet of AMO,
including the notes thereto, as of March 31, 2002.
"AMO Business" means the business and operations of the divisions and
Subsidiaries of Allergan to the extent that, prior to the Distribution Date,
they relate to the research and development, manufacturing, marketing and sale
of (a) intraocular lenses, contact lenses, phacoemulsification equipment and
other ophthalmic surgical products, and (b) disinfecting solutions, daily
cleaners, enzymatic cleaners and lens rewetting drops labeled for use with
contact lenses (but excluding (i) any Refresh Product, (ii) any other product
that contains (A) carboxymethylcellulose or (B) castor oil, Pemulin(R) and
polysorbate 80, (iii) any other product labeled, advertised, marketed, promoted
or otherwise indicated, in whole or in part, for the treatment of "dry eye",
(iv) any product labeled, advertised, marketed, promoted or otherwise indicated,
in whole or in part, for the treatment of conjunctive erythema and (v) any
product labeled, advertised, marketed, promoted or otherwise indicated, in whole
or in part, for the treatment of the symptoms of dry eye if that product is not
labeled, advertised, marketed, promoted or otherwise indicated solely for use
with contact lenses); provided, however, that the AMO Business shall not include
Delivery Devices.
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"AMO Claims" has the meaning set forth in Section 4.01(a).
"AMO Common Stock" means the common stock, par value $0.01 per share,
of AMO.
"AMO Contracts" means the following contracts and agreements to which
Allergan is a party or by which it or any of its Assets is bound, whether or not
in writing, except for any such contract or agreement that is contemplated to be
retained by Allergan or any member of the Allergan Group pursuant to any
provision of this Agreement or any other Ancillary Agreement:
(a) any Contract entered into in the name of, or expressly on
behalf of, any division or business unit of AMO;
(b) any Contract that relates primarily to the AMO Business;
(c) any Contract that is otherwise expressly contemplated
pursuant to this Agreement or any of the Ancillary
Agreements to be assigned to AMO;
(d) any guarantee, indemnity, representation, warranty or other
Liability of any member of the AMO Group or the Allergan
Group in respect of any other AMO Contract, any AMO
Liability or the AMO Business (including guarantees of
financing incurred by customers or other third parties in
connection with purchases of products or services from the
AMO Business); and
(e) any OFLs relating to the AMO Business.
"AMO Delayed Transfer Asset" means any AMO Assets, the legal title to
which is expressly provided in this Agreement or any Ancillary Agreement to be
transferred after the Distribution Date, but the beneficial ownership of which
is transferred by this Agreement or any Ancillary Agreement on or prior to the
Distribution Date.
"AMO Delayed Transfer Liabilities" means any AMO Liabilities, the
legal obligation under which is expressly provided in this Agreement or any
Ancillary Agreement to be assumed after the Distribution Date, but the burden of
which is transferred by this Agreement or any Ancillary Agreement on or prior to
the Distribution Date.
"AMO Group" means AMO, each Subsidiary of AMO and each other Person
that is either controlled directly or indirectly by AMO immediately after the
Distribution Date or that is contemplated to be controlled by AMO immediately
after the Distribution Date pursuant to the terms hereof or the Restructuring
Plan.
"AMO Indemnitees" has the meaning set forth in Section 4.03.
"AMO International" means AMO International Holdings, an Ireland
corporation.
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"AMO Liabilities" has the meaning set forth in Section 2.03(a).
"AMO Parties" has the meaning set forth in Section 4.01(b).
"AMO Releasors" has the meaning set forth in Section 4.01(a).
"Ancillary Agreements" means the Employee Matters Agreement, the
Transitional Services Agreement, the Tax Sharing Agreement, the Intellectual
Property Assignment and License Agreement, the Manufacturing Agreement, the
Implementation Agreements, any sublease entered into on or prior to the
Distribution Date between any member of the AMO Group, on the one hand, and any
member of the Allergan Group, on the other hand, and the supplemental and other
agreements and instruments related to any of the foregoing.
"Assets" means assets, properties and rights (including goodwill),
wherever located (including in the possession of vendors or other third parties
or elsewhere), whether real, personal or mixed, tangible or contingent, 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,
including the following:
(a) all accounting and other books, records and files whether in
paper, microfilm, microfiche, computer tape or disc,
magnetic tape or any other form;
(b) all apparatus, computers and other electronic data
processing equipment, fixtures, machinery, equipment,
furniture, office equipment, automobiles, trucks, aircraft,
rolling stock, vessels, motor vehicles and other
transportation equipment, special and general tools, test
devices, prototypes and models and other tangible personal
property;
(c) all inventories of materials, parts, raw materials,
supplies, work-in-process and finished goods and products;
(d) all interests in real property of whatever nature, including
easements, whether as owner, mortgagee or holder of a
Security Interest in real property, lessor, sublessor,
lessee, sublessee or otherwise;
(e) all interests in any capital stock or other equity interests
of any Subsidiary or any other Person, all bonds, notes,
debentures or other securities issued by any Subsidiary or
any other Person, all loans, advances or other extensions of
credit or capital contributions to any Subsidiary or any
other Person and all other investments in securities of any
Person;
(f) all license agreements, leases of personal property, open
purchase orders for raw materials, supplies, parts or
services, unfilled orders
5
for the manufacture and sale of products and other
contracts, agreements or commitments;
(g) all deposits, letters of credit and performance and surety
bonds;
(h) all written technical information, data, specifications,
research and development information, engineering drawings,
operating and maintenance manuals, and materials and
analyses prepared by consultants and other third parties;
(i) all domestic and foreign patents, patent applications,
records of inventions, discoveries, copyrights, trade names,
trademarks (including all goodwill associated therewith),
service marks and registrations and applications for any of
the foregoing, trade secrets, other proprietary information,
intellectual property and licenses from third Persons
granting the right to use any of the foregoing;
(j) all computer applications, programs and other software,
including operating software, network software, systems
documentation and instructions;
(k) all cost information, sales and pricing data, customer
prospect lists, supplier records, customer and supplier
lists, customer and vender data, correspondence and lists,
product literature, artwork, design, development and
manufacturing files, vendor and customer drawings,
formulations and specifications, quality records and reports
and other books, records, studies, surveys, reports, plans
and documents;
(l) all prepaid expenses, trade accounts and other accounts and
notes receivables;
(m) all rights under contracts or agreements, all claims or
rights against any Person, choses in action or similar
rights, whether accrued or contingent;
(n) all rights under insurance policies and all rights in the
nature of insurance, indemnification or contribution;
(o) all licenses, permits, approvals and authorizations which
have been issued by any Governmental Authority;
(p) all cash or cash equivalents, bank accounts, lock boxes and
other deposit arrangements; and
(q) all interest rate, currency, commodity or other swap,
collar, cap or other hedging or similar agreements or
arrangements.
6
"Bylaws" means the Restated Bylaws of AMO, substantially in the form
attached hereto as Exhibit A.
"Certificate of Incorporation" means the Restated Certificate of
Incorporation of AMO, substantially in the form attached hereto as Exhibit B.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission.
"Confidential Information" has the meaning set forth in Section
7.08(a).
"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 Liability" has the meaning set forth in Section 5.01(c).
"Contracts" means any contract, agreement, lease, license, sales
order, purchase order, instrument or other commitment that is binding on any
Person or any part of its property under applicable law.
"Contribution" has the meaning set forth in the Recitals.
"Contribution Date" means the Distribution Date or such other date or
dates prior to the Distribution Date as the Board of Directors of Allergan may
determine.
"Delayed Transfer Assets" means any Allergan Delayed Transfer Assets
or any AMO Delayed Transfer Assets.
"Delayed Transfer Liabilities" means any Allergan Delayed Transfer
Liability or any AMO Delayed Transfer Liability.
"Delivery Devices" means any device when used for the delivery of, or
for the activation of, a Pharmaceutical or biological.
"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.
"Distributable Cash" has the meaning set forth in the Recitals.
"Distribution" has the meaning set forth in the Recitals.
"Distribution Date" has the meaning set forth in Section 3.03.
7
"Employee Matters Agreement" means the Employee Matters Agreement by
and between Allergan and AMO, 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 Clean Air Act (42 U.S.C.(S).7401, et seq.), the Clean Water Act
(33 U.S.C.(S).1251, et seq.), the Resource Conservation and Recovery Act (42
U.S.C.(S).6901, et seq.), the Comprehensive Environmental Resource Compensation
and Liability Act (42 U.S.C.(S).9601, et seq.), the Safe Drinking Water Act (42
U.S.C.(S).300f, et seq.), the Toxic Substances Control Act (15 U.S.C.(S).2601,
et seq.), the Rivers and Harbors Act (33 U.S.C.(S).401, et seq.), the Endangered
Species Act (15 U.S.C.(S).1531, et seq.), the Occupational Safety and Health Act
(20 U.S.C.(S).651, et seq.) 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 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 Liabilities" has the meaning set forth in Section 2.03(b).
"Exclusive Allergan Contingent Gain" has the meaning set forth in
Section 5.01(d).
"Exclusive Allergan Contingent Liability" has the meaning set forth in
Section 5.01(e).
"Exclusive AMO Contingent Gain" has the meaning set forth in Section
5.01(h).
8
"Exclusive AMO Contingent Liability" has the meaning set forth in
Section 5.01(i).
"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).
"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 Allergan Group or the AMO Group, as the context
requires.
"Implementation Agreements" means the agreements necessary to effect
the Restructuring Plan.
"Incumbent Directors" means, with respect to any measurement period,
members of the board of directors of a Person at the beginning of such
measurement period, provided that any new members of such board of directors who
are approved by a majority of the Incumbent Directors then in office shall be
deemed to become Incumbent Directors.
"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 Proceeds" means those monies:
(a) received by an insured from an insurance carrier; or
9
(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.
"Intellectual Property Assignment and License Agreement" means the
Intellectual Property Assignment and License Agreement, by and between Allergan
and AMO, substantially in the form attached hereto as Exhibit D, as of the
Distribution Date and thereafter as amended.
"Letter Ruling" means a private letter ruling from the Internal
Revenue Service in form and substance satisfactory to Allergan (in its sole
discretion), which ruling shall not have been revoked as of the Distribution
Date, to the effect that (i) the transfer by the Allergan Group to the AMO Group
of the AMO Assets, subject to Liabilities and AMO's assumption of liabilities,
followed by the Distribution, will qualify as a reorganization under Sections
368(a)(1)(D) and 355 of the Code; (ii) no gain or loss will be recognized by
Allergan on its transfer of the AMO Assets and AMO Liabilities to AMO (iii) no
gain or loss will be recognized by AMO on its receipt and assumption of the AMO
Assets and AMO Liabilities from Allergan in exchange for the issuance of AMO
common stock and the Distributable Cash; and (iv) no gain or loss will be
recognized by (and no amount will otherwise be included in the income of) the
stockholders of Allergan upon their receipt of AMO common stock pursuant to the
Distribution (except in respect of cash received in lieu of fractional shares of
AMO).
"Liabilities" means any and all losses, charges, debts, damages
payable, obligations, commitments, costs and expenses, indemnities and similar
obligations, exoneration, covenants, promises, guarantees, make whole agreements
and similar obligations, and other liabilities and requirements, whether
absolute or contingent, matured or unmatured, liquidated or unliquidated,
accrued or unaccrued, known or unknown, whenever arising, and including
Environmental Liabilities and 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.
"Manufacturing Agreement" means the Manufacturing Agreement between
Allergan and AMO in substantially the form attached hereto as Exhibit E, as of
the Distribution Date and thereafter as amended.
"Notes" means, collectively, those promissory notes issued by AMO
International Holdings identified on Schedule 1.01(a) attached hereto.
"Optical Medical Device" means any product classified as a medical
device by the United States Food and Drug Administration under the Federal Food,
Drug, and Cosmetic
10
Act (or any product that would be classified as such if it were sold in the
United States, regardless of how it is classified in other countries) and
associated with the human eye.
"Other Financial Liabilities" or "OFLs" mean all liabilities,
obligations, contingencies, instruments and other Liabilities of any member of
the Allergan Group of a financial nature with third parties existing on the date
hereof or entered into or established between the date hereof and the
Distribution Date, including any of the following:
(a) foreign exchange contracts;
(b) letters of credit;
(c) guarantees of third party loans to customers;
(d) surety bonds (excluding surety for workers' compensation
self-insurance);
(e) interest support agreements on third-party loans to
customers;
(f) performance bonds or guarantees issued by third parties;
(g) swaps or other derivatives contracts; and
(h) recourse arrangements on the sale of receivables or notes.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"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.
"Pharmaceutical" means any product classified as a drug or biological
by the United States Food and Drug Administration under the Federal Food, Drug,
and Cosmetic Act (or any product that would be classified as such if it were
sold in the United States, regardless of how it is classified in the other
countries).
"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 in the
United States, as in effect from time to time.
"Record Date" means the close of business on June 14, 2002, the date
identified by the Allergan Board of Directors as the record date for determining
which stockholders of Allergan are entitled to receive shares of AMO Common
Stock in the Distribution.
"Refresh Product" means any product and formulation thereof developed
or under development for sale, or marketed or sold as of the Distribution Date
under the Refresh(R) brand, regardless of the brand name used to market the
product after the Distribution Date; provided,
11
however, notwithstanding the foregoing or anything to the contrary set forth in
any Implementation Agreement, the product sold under the trademark "Refresh
Instant Revival" shall be considered a "Refresh Product" only to the extent it
is within the scope of rights granted to Allergan with respect to that product
pursuant to the Intellectual Property Assignment and License Agreement.
"Registration Statement" means the registration statement on Form 10
filed with the Commission under the Exchange Act on March 1, 2002, as amended,
pursuant to which the AMO Common Stock to be distributed in the Distribution
will be registered, together with all amendments thereto.
"Restructuring Plan" means the restructuring plan comprised of the
series of transactions, agreements and other arrangements, pursuant to which the
AMO Assets and AMO Liabilities and Excluded Assets and Excluded Liabilities will
be transferred between the parties hereto and their respective Subsidiaries,
which are set forth, described or contemplated in Schedule 1.01(b) (as such
Schedule may be supplemented by Allergan prior to the Distribution Date).
"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 Allergan Percentage" has the meaning set forth in Section
5.01(j).
"Shared AMO Percentage" has the meaning set forth in Section 5.01(m).
"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(n).
"Subsidiary" of any Person means any corporation, partnership, limited
liability entity, joint venture or other organization, whether incorporated or
unincorporated, of which such Person or a Subsidiary of such Person, or such
Person and one or more of its Subsidiaries (i) directly or indirectly owns or
controls 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, partnership, limited liability entity, joint venture or other
organization or (ii) has control, whether contractual or otherwise; (iii) is a
general partner, manager or managing member or (iv) holds a majority of the
equity interest; 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.
12
"Tax Sharing Agreement" means the Tax Sharing Agreement by and between
Allergan and AMO, substantially in the form attached hereto as Exhibit F, 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).
"Transitional Services Agreement" means the Transitional Services
Agreement by and between Allergan and AMO, substantially in the form attached
hereto as Exhibit G, as of the Distribution Date and thereafter as amended.
ARTICLE II.
THE CONTRIBUTION
Section 2.01 Transfer of AMO Assets and Assumption of AMO Liabilities.
(a) On the terms and subject to the conditions set forth in this
Agreement, pursuant to the Implementation Agreements and with effect as of the
Contribution Date, (i) Allergan hereby contributes, assigns, transfers, conveys
and delivers to AMO, and shall cause its applicable Subsidiaries to, contribute,
assign, transfer, convey and deliver to AMO or a member of the AMO Group, and
AMO, or the appropriate member of the AMO Group, hereby accepts from Allergan
and its Subsidiaries, all of Allergan's and its Subsidiaries' respective rights,
title and interest in and to all AMO Assets, other than the AMO Delayed Transfer
Assets and (ii) AMO hereby contributes, assigns, transfers, conveys and delivers
to Allergan, and shall cause its applicable Subsidiaries to, contribute, assign,
transfer, convey and deliver to Allergan or a member of the Allergan Group, and
Allergan, or the appropriate member of the Allergan Group, hereby accepts from
AMO and its Subsidiaries, all of AMO's and its Subsidiaries' respective rights,
title and interest in and to all Excluded Assets, other than the Allergan
Delayed Transfer Assets; provided, in each case, however, that any AMO Assets or
Excluded Assets that are specifically contributed, assigned, transferred,
conveyed or delivered pursuant to another Ancillary Agreement shall not be
contributed, assigned, transferred, conveyed or delivered pursuant to this
Section 2.01.
(b) On the terms and subject to the conditions set forth in this
Agreement, pursuant to the Implementation Agreements and with effect as of the
Contribution Date, (i) AMO hereby accepts, assumes and agrees faithfully to
perform, discharge and fulfill all the AMO Liabilities, other than the AMO
Delayed Transfer Liabilities, in accordance with their respective terms, and
agrees to cause its applicable Subsidiaries to accept, assume, perform,
discharge and fulfill all the AMO Liabilities to be held by its Subsidiaries
(other than AMO Delayed Transfer Liabilities), in accordance with their
respective terms and (ii) Allergan hereby accepts and assumes (or, as
applicable, retains) and agrees faithfully to perform, discharge and fulfill all
the Excluded Liabilities, other than the Allergan Delayed Transfer Liabilities,
in accordance with their respective terms, and agrees to cause its applicable
Subsidiaries to accept and assume (or, as applicable, retain) and to perform,
discharge and fulfill all the Allergan Liabilities to be held by its
Subsidiaries (other than Allergan Delayed Transfer Liabilities), in accordance
with their respective terms. AMO shall thereafter be responsible for all AMO
13
Liabilities other than the AMO Delayed Transfer Liabilities, and Allergan shall
thereafter be responsible for all Allergan Liabilities other than the Allergan
Delayed Transfer Liabilities, regardless of (v) when or where such Liabilities
arose or arise, (w) whether the facts on which they are based occurred prior to
or subsequent to the date hereof, (x) where or against whom such Liabilities are
asserted or determined (including any Liabilities arising out of claims made by
Allergan's or AMO's respective directors, officers, employees, agents,
Subsidiaries or Affiliates against any member of the Allergan Group or the AMO
Group), (y) whether such Liabilities were asserted or determined prior to the
date hereof, and (z) whether such Liabilities arise from or are alleged to arise
from negligence, recklessness, violation of law, fraud or misrepresentation by
any member of the Allergan Group or the AMO 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 to the
appropriate Group, 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, by the Allergan Group (with respect to Allergan Delayed Transfer
Assets or Allergan Delayed Transfer Liabilities) or the AMO Group (with respect
to AMO Delayed Transfer Assets or AMO Delayed Transfer Liabilities) 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 (i) any AMO
Delayed Transfer Asset, or the acceptance and assumption of any AMO Delayed
Transfer Liability, the applicable AMO Delayed Transfer Asset or AMO Delayed
Transfer Liability shall be treated for all purposes of this Agreement and the
Ancillary Agreements as an AMO Asset or an AMO Liability, as the case may be or
(ii) any Allergan Delayed Transfer Asset, or the acceptance and assumption of
any Allergan Delayed Transfer Liability, the applicable Allergan Delayed
Transfer Asset or Allergan Delayed Transfer Liability shall be treated for all
purposes of this Agreement and the Ancillary Agreements as an Allergan Asset or
an Allergan Liability, as the case may be.
(d) Prior to the actual contribution and delivery of a Delayed
Transfer Asset pursuant to the foregoing, the Person retaining a Delayed
Transfer Asset shall take such actions with respect to such Delayed Transfer
Asset as may be reasonably requested by the Person entitled to the Delayed
Transfer Asset so retained, so that the Person entitled to the Delayed Transfer
Asset may obtain the benefits of such Asset, provided that the Person retaining
the Delayed Transfer Asset shall not be obligated, in connection with fulfilling
the request of the other Person, to expend any money unless the necessary funds
are advanced by the Person entitled to the Delayed Transfer Asset, other than
reasonable out-of-pocket expenses, attorney's fees and recording or similar
fees, all of which shall be promptly reimbursed by the Person entitled to the
Delayed Transfer Asset.
(e) Each of the parties hereto agrees that (i) until any AMO
Delayed Transfer Asset is contributed and delivered to AMO or a Subsidiary of
AMO, AMO shall be deemed to have acquired complete and sole beneficial ownership
of such AMO Delayed Transfer Asset, together with rights, powers and privileges
incidental thereto; (ii) until any AMO Delayed Transfer Liability is assigned
to, accepted and assumed by AMO or a Subsidiary of AMO, AMO shall be deemed to
have assumed in accordance with the terms of this Agreement such AMO Delayed
Transfer Liability, and all duties, obligations and responsibilities incidental
14
thereto, (iii) until any Allergan Delayed Transfer Asset is contributed and
delivered to Allergan or a Subsidiary of Allergan, Allergan shall be deemed to
have acquired complete and sole beneficial ownership of such Allergan Delayed
Transfer Asset and (iv) until any Allergan Delayed Transfer Liability is
assigned to, accepted and assumed by Allergan or a Subsidiary of Allergan,
Allergan shall be deemed to have assumed in accordance with the terms of this
Agreement the Allergan Delayed Transfer Liability, and all duties, obligations
and responsibilities incidental thereto.
(f) Each of the parties hereto agrees that (i) until any AMO
Delayed Transfer Liability is assumed by AMO or its designated Subsidiary, AMO
will indemnify and hold harmless the Allergan Group from such AMO Delayed
Transfer Liability and (ii) until any Allergan Delayed Transfer Liability is
assumed by Allergan or its designated Subsidiary, Allergan will indemnify and
hold harmless the AMO Group from such Allergan Delayed Transfer Liability.
(g) In the event that (i) any AMO Delayed Transfer Asset has not
been contributed to AMO or a Subsidiary of AMO designated by AMO by June 30,
2007, for any reason other than the gross negligence or willful misconduct of
any member of the Allergan Group, Allergan shall have the option to liquidate
such AMO Delayed Transfer Asset at AMO's expense; provided, however, that any
net proceeds of such liquidation shall be for the account of AMO and (ii) any
Allergan Delayed Transfer Asset has not been contributed to Allergan or a
Subsidiary of Allergan designated by Allergan by June 30, 2007, for any reason
other than the gross negligence or willful misconduct of any member of the AMO
Group, AMO shall have the option to liquidate such Allergan Delayed Transfer
Asset at Allergan's expense; provided, however, that any net proceeds of such
liquidation shall be for the account of Allergan.
(h) In the event that at any time or from time to time (whether
prior to or after the Contribution 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. Prior to any such
transfer, the Person possessing such Asset shall hold such Asset in trust for
any such other Person, and upon such transfer each party shall reimburse the
other or make financial or other adjustments to remedy any Liabilities resulting
from such transfer or possession.
Section 2.02 AMO Assets.
(a) For purposes of this Agreement, "AMO Assets" shall mean
(without duplication):
(i) any and all Assets that are set forth in this Agreement
(including, without limitation, those Assets listed on Schedule
2.02(a)(i) or any other schedule hereto) or any Ancillary Agreement as
Assets to be transferred to AMO or any other member of the AMO Group;
(ii) all issued and outstanding shares of capital stock of
the Subsidiaries listed on Schedule 2.02(a)(ii);
15
(iii) except to the extent transferred or retained pursuant
to an Implementation Agreement or subsections (i) or (ii) above, any
and all Assets reflected in the AMO Balance Sheet, subject to any
disposition of such Assets in the Ordinary Course of Business
subsequent to the date of the AMO Balance Sheet;
(iv) any and all Assets that have been written off, expensed
or fully depreciated that, had they not been written off, expensed or
fully depreciated, would have been reflected in the AMO Balance Sheet
in accordance with the same principles and accounting policies under
which the AMO Balance Sheet was prepared;
(v) all Assets acquired by Allergan or its Subsidiaries
after the date of the AMO Balance Sheet that would be reflected in the
balance sheet of AMO as of the Contribution Date if such balance sheet
was prepared using the same principles and accounting policies under
which the AMO Balance Sheet was prepared;
(vi) subject to the terms of Article V, any Exclusive AMO
Contingent Gain and any Shared AMO Percentage of any Shared Contingent
Gain;
(vii) all AMO Contracts;
(viii) all equipment that is specifically designed for use
in the AMO Business, but excluding all computers, desks and other
general office equipment and furniture that is not specifically
identified on Schedule 2.02(a)(i);
(ix) to the extent permitted by law and subject to the
express indemnification terms of this Agreement, all rights of any
member of the AMO Group under any of Allergan's insurance policies;
and
(x) 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 Allergan or any of its Subsidiaries
that are used primarily in the AMO Business and are not otherwise
reflected on the AMO Balance Sheet. The intention of this clause (x)
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 an AMO Asset. No Asset shall be deemed to be an AMO Asset solely as
a result of this clause (x) if such Asset is expressly covered by the
subject matter of an Ancillary Agreement or utilized by Allergan or
its Affiliates to provide shared services to the AMO Business or the
Allergan Business. In addition, no Asset shall be deemed an AMO Asset
solely as a result of this clause (x) unless AMO makes a claim with
respect thereto on or prior to the fifth anniversary of the
Distribution Date.
16
(b) Notwithstanding Section 2.02(a), the AMO 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) 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 Allergan or any other member of
the Allergan Group;
(iii) except to the extent expressly set forth in Section
2.02(a)(v), any Contingent Gains; and
(iv) any insurance proceeds recoverable by any member of the
Allergan Group to the extent that (A) the Liability for which such
proceeds are payable is covered under the terms of Allergan's
insurance policies in effect immediately prior to the Distribution
Date and (B) AMO is not a named insured under, or otherwise entitled
to the benefits of, Allergan's insurance policies in effect
immediately prior to the Distribution Date.
Section 2.03 AMO Liabilities.
(a) For purposes of this Agreement, "AMO Liabilities" shall mean
(without duplication):
(i) any and all Liabilities that are set forth in this
Agreement or any Ancillary Agreement as Liabilities to be assumed by
AMO or any member of the AMO Group, including without limitation the
Liabilities set forth on Schedule 2.03(a)(i), and all agreements,
obligations and Liabilities of any member of the AMO Group under this
Agreement or any of the Ancillary Agreements;
(ii) all Liabilities (other than for Taxes as provided for
in the Tax Sharing Agreement and other than for employee-related
Liabilities as provided for in the Employee Matters Agreement)
primarily relating to, arising out of or resulting from:
(A) the operation of the AMO 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 AMO 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
17
(C) any AMO Assets;
in any such case whether arising before, on or after the Distribution
Date;
(iii) subject to the terms of Article V, all Exclusive AMO
Contingent Liabilities and the Shared AMO Percentage of any Shared
Contingent Liabilities;
(iv) except to the extent assumed or retained pursuant to an
Implementation Agreement or subsections (i), (ii) or (iii) above all
other Liabilities of any member of the AMO Group, including those
Liabilities reflected as liabilities or obligations of AMO in the AMO
Balance Sheet, subject to any discharge of such Liabilities subsequent
to the date of the AMO Balance Sheet;
(v) all Liabilities acquired by Allergan or its Subsidiaries
after the date of the AMO Balance Sheet that would be reflected in the
balance sheet of AMO as of the Contribution Date if such balance sheet
was prepared using the same principles and accounting policies under
which the AMO Balance Sheet was prepared; and
(vi) except as expressly provided for in this Agreement or
any Ancillary Agreement, any and all Liabilities that are related
primarily to the AMO Business at the Contribution Date and are not
otherwise reflected on the AMO Balance Sheet. The intention of this
clause (vi) is only to rectify any inadvertent omission of transfer or
conveyance of any Liabilities that, had the parties given specific
consideration to such asset as of the date hereof, would have
otherwise been classified as an AMO Liability. No Liability shall be
deemed to be an AMO Liability solely as a result of this clause (vi)
if such Liability is expressly covered by the subject matter of an
Ancillary Agreement. In addition, no Liability shall be deemed an AMO
Liability solely as a result of this clause (vi) unless Allergan makes
a claim with respect thereto on or prior to the fifth anniversary of
the Distribution Date.
(b) Notwithstanding Section 2.03(a), the AMO Liabilities shall
not include the Excluded Liabilities. For the purposes of this Agreement,
"Excluded Liabilities" shall mean:
(i) any and all Liabilities that are set forth in this
Agreement or any Ancillary Agreement (or the Schedules hereto or
thereto) as Liabilities to be retained or assumed by Allergan or any
other member of the Allergan Group, including without limitation,
those Liabilities listed on Schedule 2.03(b)(i) hereto;
(ii) any and all Liabilities (other than for Taxes as
provided for in the Tax Sharing Agreement and other than for
employee-related Liabilities as provided for in the Employee Matters
Agreement) primarily relating to, arising out of or resulting from:
18
(A) any Excluded Assets; and
(B) the Allergan Business;
(iii) any known Liability that would otherwise be an AMO
Liability but for the provisions of this Section 2.03(b)(iii) to the
extent that each of the following conditions are met: (A) it is
covered under the terms of Allergan's insurance policies in effect
immediately prior to the Distribution Date, (B) AMO is not a named
insured under, or otherwise entitled to the benefits of, Allergan's
insurance policies in effect immediately prior to the Distribution
Date and (C) Allergan will be entitled to recovery after the
Distribution Date for such AMO Liability under its insurance policies;
and
(iv) subject to the terms of Article V, all Exclusive
Allergan Contingent Liabilities and the Shared Allergan Percentage of
any Shared Contingent Liabilities.
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, AMO and each member of the
AMO Group, on the one hand, and Allergan and each member of the Allergan Group,
on the other hand, hereby terminate, any and all agreements, arrangements,
commitments or understandings, whether or not in writing, between or among AMO
and/or any member of the AMO Group, on the one hand, and Allergan and/or any
member of the Allergan Group, on the other hand, effective as of the
Distribution Date; provided, however, that to the extent any such agreement,
arrangement, commitment or understanding is inconsistent with any Ancillary
Agreement, such termination shall be effective as of the date of effectiveness
of the applicable Ancillary Agreement. 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 AMO Assets or
AMO Liabilities, they shall be assigned pursuant to Section 2.01); and (iv) any
other agreements, arrangements, commitments or understandings that this
Agreement or any Ancillary Agreement expressly contemplates will survive the
Distribution Date.
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Section 2.05 Transfer Documents.
(a) In furtherance of the contribution, assignment, transfer and
conveyance of AMO Assets and the acceptance and assumption of AMO Liabilities
provided for in Sections 2.01(a) and 2.01(b), on or prior to the Contribution
Date or as promptly as practicable thereafter, (i) Allergan shall execute and
deliver, and shall cause its Subsidiaries to execute and deliver, the
Implementation Agreements, 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 Allergan's and its Subsidiaries' right,
title and interest in and to the AMO Assets to AMO and (ii) AMO shall execute
and deliver to Allergan and its Subsidiaries the Implementation Agreements, 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 AMO Liabilities by AMO.
(b) In furtherance of the assignment, transfer and conveyance of
Excluded Assets and Excluded Liabilities provided for in Sections 2.02(b) and
2.03(c), on or prior to the Contribution Date or as promptly as practicable
thereafter, (i) AMO shall execute and deliver, and shall cause its Subsidiaries
to execute and deliver, the Implementation Agreements, 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 Allergan's and its
Subsidiaries' right, title and interest in and to the Excluded Assets to
Allergan and (ii) Allergan shall execute and deliver to AMO and its Subsidiaries
the Implementation Agreements, 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
Excluded Liabilities by Allergan.
Section 2.06 AMO Consideration. In consideration of the contribution
and delivery of the AMO Assets by Allergan, and Allergan's other obligations
pursuant hereto and pursuant to the Ancillary Agreements, in addition to the
other consideration described herein (including, without limitation, AMO's
obligations pursuant hereto and pursuant to the Ancillary Agreements), AMO shall
issue, grant or transfer to Allergan, as appropriate, prior to the Distribution
Date, the Distributable Cash and such number of shares of AMO Common Stock as is
necessary to effect the Distribution.
Section 2.07 Ancillary Agreements.
(a) 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 Matters Agreement;
(ii) the Transitional Services Agreement;
(iii) the Tax Sharing Agreement;
20
(iv) the Intellectual Property Assignment and License
Agreement;
(v) the Manufacturing Agreement;
(vi) the Implementation Agreements and the other agreements
and documents comprising the Restructuring Plan;
(vii) any supplemental and other agreements and instruments
related to the foregoing;
(b) On or before the Distribution Date:
(i) Allergan shall deliver to AMO the resignation of each
Person who is an officer or director of any member of the AMO Group
immediately prior to the Distribution Date and who will be an employee
of any member of the Allergan Group immediately after the Distribution
Date, provided that Allergan will not be required to deliver the
resignation of ▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇▇▇▇▇ as a member of the AMO
board of directors.
(ii) AMO shall deliver to Allergan the resignation of each
Person who is an officer or director of any member of the Allergan
Group immediately prior to the Distribution Date and who will be an
employee of any member of the AMO Group immediately after the
Distribution Date, provided that AMO will not be required to deliver
the resignation of ▇▇▇▇▇ ▇▇▇▇▇ as an officer or member of the board of
directors of Allergan or the resignation of ▇▇▇▇▇▇▇ ▇▇▇▇▇ as a member
of the board of directors of Allergan.
Section 2.08 The Restructuring Plan. Each of Allergan and AMO 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
Restructuring Plan (on or prior to the Distribution 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 Restructuring Plan.
Section 2.09 Disclaimer of Representations and Warranties.
(a) AMO (on behalf of itself and each member of the AMO 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 AMO
Assets or the AMO Liabilities transferred, assumed or retained 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 AMO Asset, or as to the absence of any defenses or
right of setoff or freedom from counterclaim with respect to any claim or other
AMO Asset, including any accounts receivable of any party, or as to the legal
sufficiency of any assignment, document or
21
instrument delivered hereunder to convey title to any AMO Asset or thing of
value upon the execution, delivery and filing hereof or thereof.
(b) Allergan (on behalf of itself and each member of the Allergan
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
Excluded Assets or the Excluded Liabilities transferred, assumed or retained 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 Excluded Asset, or as to the absence of any
defenses or right of setoff or freedom from counterclaim with respect to any
claim or other Excluded 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 Excluded Asset or thing of value upon
the execution, delivery and filing hereof or thereof.
(c) Except as may expressly be set forth herein or in any
Ancillary Agreement, all such AMO Assets and Excluded 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 2.10 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, assignment or novation to the AMO Group of any AMO Assets or to the
Allergan Group of any Excluded Asset or Excluded Liability 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, (i)
unless Allergan shall otherwise determine, the transfer, assignment or novation
to the AMO Group of such AMO Assets, or (ii) unless AMO shall otherwise
determine, the transfer, assignment or novation to the Allergan Group of such
Excluded Asset, 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 Asset identified in clause (i) shall be
deemed an AMO Asset for purposes of determining whether any Liability is an AMO
Liability, and any Asset identified in clause (ii) shall be deemed an Excluded
Asset for purposes of determining whether any Liability is an Excluded
Liability.
(c) If the transfer or assignment of any Asset intended to be
transferred or assigned hereunder including pursuant to the Restructuring Plan,
is not
22
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), (f) and (g), the Person retaining such Asset shall thereafter hold
such Asset for the use and benefit, insofar as reasonably possible, of the
Person entitled thereto (at the expense of the Person entitled thereto). In
addition, subject to Sections 2.01(d), (e), (f) and (g), the Person retaining
such Asset shall take such other actions as may be reasonably requested by the
Person to whom such Asset is to be transferred in order to place such Person,
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 AMO Assets or Excluded 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 member or members of
the AMO Group or the Allergan Group entitled to the receipt of such Assets, as
the case may be.
(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), (f) and (g),
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 pursuant to Section 2.10 or otherwise shall not be
obligated, in connection with the foregoing, to expend any money unless the
necessary funds are advanced by the Person entitled to such Asset, other than
reasonable attorneys' fees and recording or similar fees, all of which shall be
promptly reimbursed by the Person entitled to such Asset.
Section 2.11 Novation of Assumed AMO Liabilities.
(a) Each of Allergan and AMO, 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 rights and
obligations under agreements, leases, licenses and other obligations (including
AMO OFLs) of any nature whatsoever that constitute AMO Liabilities, including
any Allergan Group guarantees of AMO Liabilities, or to obtain in writing the
unconditional release from the AMO Liabilities of all members of the Allergan
Group, so that, in any such case, no member of the Allergan Group will be
responsible for such Liabilities; provided, however, that neither Allergan nor
AMO shall be obligated to pay any consideration therefore to any third party
from whom such consents, approvals, substitutions and amendments are requested.
(b) If Allergan or AMO is unable to obtain, or to cause to be
obtained, any such required consent, approval, release, substitution or
amendment, the applicable member of the Allergan Group shall continue to be
bound by such agreement, lease, license and other obligation or Liability and,
unless not permitted by law or the terms thereof, AMO shall, as agent or
subcontractor for Allergan 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 Allergan or such other Person, as the case
may be, thereunder from and after the Distribution Date. AMO shall indemnify
each Allergan Indemnitee and hold each of them harmless against any Liabilities
arising in connection therewith. Allergan shall, without further consideration,
pay
23
and remit, or cause to be paid or remitted to AMO 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, Allergan 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 AMO
without payment of further consideration and AMO shall, without the payment of
any further consideration, assume such rights and obligations.
Section 2.12 Novation of Liabilities Other than AMO Liabilities.
(a) Each of Allergan and AMO, 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 rights and
obligations under agreements, leases, licenses and other obligations (including
Allergan OFLs) of any nature whatsoever that constitute Excluded Liabilities, or
to obtain in writing the unconditional release from any Excluded Liability of
all members of the AMO Group, so that, in any such case, no member of the AMO
Group will be responsible for such Excluded Liabilities; provided, however, that
neither Allergan nor AMO shall be obligated to pay any consideration therefore
to any third party from whom such consents, approvals, substitutions and
amendments are requested.
(b) If Allergan or AMO is unable to obtain, or to cause to be
obtained, any such required consent, approval, release, substitution or
amendment, the applicable member of the AMO 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, Allergan shall cause a member of the Allergan Group, as agent or
subcontractor for such member of the AMO Group and where appropriate in the name
thereof, to pay, perform and discharge fully all the Excluded Liabilities of
such member of the AMO Group thereunder from and after the Distribution Date.
Allergan shall indemnify each AMO Indemnitee and hold each of them harmless
against any Excluded Liabilities arising in connection therewith. AMO shall
cause each member of the AMO Group without further consideration, to pay and
remit, or cause to be paid or remitted, to Allergan or to another member of the
Allergan Group specified by Allergan promptly all money, rights and other
consideration received by it or any member of the AMO 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, AMO 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 AMO Group to Allergan or to another member of the Allergan Group
specified by Allergan without payment of further consideration and Allergan,
without the payment of any further consideration shall, or shall cause such
other member of the Allergan Group to, assume such rights and Excluded
Liabilities.
24
ARTICLE III.
THE DISTRIBUTION
Section 3.01 The Distribution.
(a) Allergan and AMO 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 3.04 hereof, on or prior to the
Distribution Date, Allergan will deliver to the Agent for the benefit of holders
of record of Allergan Common Stock on the Record Date, a single stock
certificate, endorsed by Allergan in blank, representing all of the outstanding
shares of AMO Common Stock then owned by Allergan or any member of the Allergan
Group, and shall cause the transfer agent for the shares of Allergan Common
Stock to instruct the Agent to distribute on the Distribution Date the
appropriate number of such shares of AMO Common Stock to each such holder or
designated transferee or transferees of such holder. The Distribution shall be
effective at 3:00 p.m. Pacific Time on the Distribution Date.
(c) Subject to Sections 3.04 and 3.05, each holder of Allergan
Common Stock on the Record Date (or such holder's designated transferee or
transferees) will be entitled to receive in the Distribution one share of AMO
Common Stock for each 4.5 shares of Allergan Common Stock held by such holder on
the Record Date. Allergan and AMO, 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) Allergan and AMO shall cooperate in preparing, and AMO shall
file with the Commission, 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. AMO shall use its reasonable efforts to cause the
Registration Statement to become effective under the Exchange Act as soon as
practicable within the one month period prior to the Distribution Date. Allergan
and AMO 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, including the Employee Matters
Agreement.
(b) Representatives of AMO shall participate in the preparation
of materials and presentations as Allergan's legal and financial advisors shall
deem necessary or desirable.
(c) Allergan and AMO shall prepare and mail, on or prior to the
Distribution Date, to the holders of Allergan Common Stock, such information
concerning AMO, its business, operations and management, the Distribution and
such other matters as
25
Allergan shall reasonably determine and as may be required by law. Allergan and
AMO will prepare, and AMO will, to the extent required under applicable law,
file with the Commission any such documentation which Allergan determines are
necessary or desirable to effectuate the Distribution and Allergan and AMO shall
each use its reasonable efforts to obtain all necessary approvals from the
Commission with respect thereto as soon as practicable.
(d) Allergan and AMO 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) Allergan and AMO shall cooperate and take all reasonable
steps necessary and appropriate to cause the conditions set forth in Section
3.04 (subject to Section 3.03 and Section 3.04(a)(viii)) to be satisfied and to
effect the Distribution on the Distribution Date.
(f) AMO shall prepare and file, and shall use its reasonable
efforts to have approved, an application for the listing of the AMO Common Stock
to be distributed in the Distribution on the New York Stock Exchange, subject to
official notice of distribution.
(g) Allergan shall pay all third party costs, fees and expenses
relating to the costs of producing and filing the Registration Statement, and
printing, mailing and otherwise distributing the Information Statement.
(h) The parties agree to comply with the provisions of the Tax
Sharing Agreement relating to the taking of actions or inactions that may affect
the Section 355 Tax Treatment (as defined in the Tax Sharing Agreement).
Section 3.03 Sole Discretion of Allergan. Allergan 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, Allergan may, in its sole and absolute discretion, determine the date
of consummation of the Distribution (such date as so determined by Allergan 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. AMO shall cooperate with Allergan in all respects to accomplish
the Distribution and shall, at Allergan's direction, promptly take any and all
actions necessary or desirable to effect the Distribution. Allergan 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 Allergan and AMO.
Section 3.04 Conditions to Distribution.
(a) Subject to Section 3.03, the following are the conditions to
Allergan's obligation to effect the Distribution:
26
(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 or threatened by the Commission;
(ii) 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;
(iii) the AMO Common Stock to be distributed in the
Distribution shall have been accepted for listing on the New York
Stock Exchange, on official notice of distribution;
(iv) no order, injunction or decree issued by any Government
Authority 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 threatened, pending or in effect;
(v) the Letter Ruling shall have been issued and shall not
have been revoked;
(vi) any material Consents and Governmental Approvals
necessary to consummate the Distribution shall have been obtained and
be in full force and effect;
(vii) Allergan's Board of Directors shall be satisfied that
the Distribution will be made out of surplus within the meaning of
Section 170 of the General Corporation Law of the State of Delaware;
(viii) Allergan's Board of Directors shall have approved the
Distribution and shall not have abandoned, deferred or modified the
Distribution at any time prior to the Record Date;
(ix) Allergan's Board of Directors shall be satisfied that
the Distribution does not constitute the conveyance of all or
substantially all of the properties or assets of Allergan immediately
prior to the Distribution, as contemplated in Section 271 of the
Delaware General Corporate Law;
(x) the separation of Assets and Liabilities referred to in
Sections 2.01 and 2.02 shall have been effected;
(xi) AMO's Certificate of Incorporation and Bylaws shall be
in effect;
(xii) each of the Ancillary Agreements shall have been duly
executed and delivered by the parties thereto and shall be in effect;
27
(xiii) Allergan's Board of Directors shall be satisfied that
each of Allergan and AMO will be solvent following the Distribution;
(xiv) AMO shall have completed a financing that provides AMO
with sufficient capital to pay the Distributable Cash to Allergan and
to consummate the transactions contemplated in the Ancillary
Agreements and the Restructuring Plan and have consummated the
transactions contemplated in the Restructuring Plan;
(xv) Allergan's Board of Directors shall have received an
opinion from an investment advisor of national standing that the
Distribution is fair, from a financial point of view, to the
stockholders of Allergan, which opinion shall not have been withdrawn
or modified;
(xvi) AMO shall have paid the Distributable Cash to
Allergan;
(xvii) AMO International shall have paid, in full
satisfaction thereof, all amounts outstanding under the Notes;
(xviii) Allergan KK, a Japan corporation, shall have
redeemed all of its outstanding shares of preferred stock from
Allergan pursuant to that certain Series A Stock Subscription
Agreement between Allergan KK and Allergan, Inc.;
(xix) no other events or developments shall have occurred
subsequent to the date hereof that, in the judgment of Allergan, would
result in the Distribution having an adverse effect on Allergan or on
the stockholders of Allergan; and
(xx) this Agreement shall not have been terminated.
(b) The foregoing conditions are for the sole benefit of Allergan
and shall not give rise to or create any duty on the part of Allergan or
Allergan's Board of Directors to waive or not waive such conditions or in any
way limit Allergan's right to terminate this Agreement as set forth in Article
XI or alter the consequences of any such termination from those specified in
such Article. Any determination made by Allergan prior to the Distribution
concerning the satisfaction or waiver of any or all of the conditions set forth
in this Section 3.04 shall be conclusive.
Section 3.05 Fractional Shares. Allergan shall direct the Agent to (i)
determine the number of whole shares and fractional shares of AMO Common Stock
allocable to each holder of record or beneficial owner of Allergan 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 such holder's or owner's ratable
28
share of the aggregate amount of all brokerage charges, commissions and transfer
taxes attributed to such sale or sales.
Section 3.06 The AMO Board of Directors. Allergan and AMO shall each
take all actions which may be required to elect or otherwise appoint as
directors of AMO, on or prior to the Distribution Date, the persons designated
as nominees to AMO's Board of Directors in the Information Statement.
Section 3.07 Termination of Obligations Under this Article III. Except
as provided in Article XI, the obligations of AMO and Allergan under this
Article III, or under any other provision of this Agreement relating to the
Distribution or the Letter Ruling shall terminate on the earliest occurrence of
any of the following:
(a) the revocation of the Letter Ruling;
(b) action taken or omitted by Allergan, AMO or an Affiliate of
either Allergan or AMO that would prevent the Contribution from qualifying as a
reorganization under Section 368(a)(1)(D) of the Code or a distribution of the
AMO Common Stock from qualifying as a tax-free distribution to Allergan and
Allergan's stockholders and AMO under Section 355 of the Code;
(c) the mutual consent of Allergan and AMO;
(d) a determination by Allergan to terminate the transactions
that comprise the Distribution, as provided in Section 3.03; and
(e) the failure of the Distribution Date to occur on or prior to
December 31, 2002.
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, AMO does hereby, for itself and each other member of the AMO
Group, their respective Affiliates (other than any member of the Allergan
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 AMO Group (in each case, in their respective
capacities as such) (the "AMO Releasors"), unequivocally, unconditionally and
irrevocably release and discharge each of Allergan, the members of the Allergan
Group, their respective Affiliates (other than any member of the AMO 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 Allergan Group (in each case, in their respective
capacities as such), and their respective heirs, executors, administrators,
successors and assigns (the "Allergan Parties"), from any and all actions,
causes of action, choses in action, cases, claims, suits, debts, dues, sums of
money, accounts, guarantees, bonds, covenants, contracts, controversies,
agreements, promises, indemnities, variances, trespasses, injuries,
29
▇▇▇▇▇, damages, judgments, remedies, demands, liens and liabilities, of any
nature whatsoever, in law, at equity or otherwise, whether direct, derivative or
otherwise, which have been asserted against an Allergan Party or which, whether
currently known or unknown, suspected or unsuspected, fixed or contingent, and
whether or not concealed or hidden, the AMO Releasors ever could have asserted
or ever could assert, in any capacity, whether as partner, employer, agent or
otherwise, either for itself or as an assignee, heir, executor, trustee, or
otherwise for or on behalf of any other person, against the Allergan Parties,
relating to any claims or transactions or occurrences whatsoever, up to but
excluding the Distribution Date (the "AMO Claims"); and the AMO Releasors hereby
unequivocally, unconditionally and irrevocably agree not to initiate proceedings
with respect to, institute, assert or threaten to assert any AMO Claim.
(b) Except as provided in Section 4.01(c), effective as of the
Distribution Date, Allergan does hereby, for itself and each other member of the
Allergan Group, their respective Affiliates (other than any member of the AMO
Group), successors and assigns, and all Persons who at any time prior to the
Distribution Date have been stockholders (other than stockholders of Allergan),
directors, officers, agents or employees of any member of the Allergan Group (in
each case, in their respective capacities as such) (the "Allergan Releasors"),
unequivocally, unconditionally and irrevocably release and discharge each of
AMO, the members of the AMO Group, their respective Affiliates (other than any
member of the Allergan 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 AMO Group (in each case, in
their respective capacities as such), and their respective heirs, executors,
administrators, successors and assigns (the "AMO Parties"), from any and all
actions, causes of action, choses in action, cases, claims, suits, debts, dues,
sums of money, accounts, guarantees, bonds, covenants, contracts, controversies,
agreements, promises, indemnities, variances, trespasses, injuries, ▇▇▇▇▇,
damages, judgments, remedies, demands, liens and liabilities, of any nature
whatsoever, in law, at equity or otherwise, whether direct, derivative or
otherwise, which have been asserted against an AMO Party or which, whether
currently known or unknown, suspected or unsuspected, fixed or contingent, and
whether or not concealed or hidden, the Allergan Releasors ever could have
asserted or ever could assert, in any capacity, whether as partner, employer,
agent or otherwise, either for itself or as an assignee, heir, executor,
trustee, or otherwise for or on behalf of any other person, against the AMO
Parties, relating to any claims or transactions or occurrences whatsoever, up to
but excluding the Distribution Date (the "Allergan Claims"); and the Allergan
Releasors hereby unequivocally, unconditionally and irrevocably agree not to
initiate proceedings with respect to, institute, assert or threaten to assert
any Allergan Claim.
(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 Allergan Group or the AMO 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
30
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 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
Third Party Claims, 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;
(iv) any Liability for the sale, lease, construction or
receipt of goods, property or services purchased, obtained or used in
the Ordinary Course of Business by a member of one Group from a member
of any other Group prior to the Distribution Date;
(v) any Liability for unpaid amounts for products or
services or refunds owing on products or services due on a
value-received basis for work done by a member of one Group at the
request of a member of any other Group prior to the Distribution Date;
or
(vi) 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 Allergan from
honoring its existing obligations to indemnify any director, officer or employee
of AMO who was a director, officer or employee of Allergan on or prior to the
Distribution Date, to the extent such director, officer or employee becomes a
named defendant in any litigation involving Allergan and was entitled to such
indemnification pursuant to then existing obligations.
(d) AMO shall not make, and shall not permit any member of the
AMO 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 Allergan or any member of the Allergan Group or any other Person
released pursuant to Section 4.01(a), with respect to, subject to Section
4.01(c), any Liabilities released pursuant to Section 4.01(a). Allergan shall
not, and shall not permit any member of the Allergan 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 AMO or any member of the
AMO Group, or any other Person released pursuant to Section 4.01(b), with
respect to, subject to Section 4.01(c), any Liabilities released pursuant to
Section 4.0l(b).
(e) It is the intent of Allergan and AMO 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
31
before the Distribution Date, between or among AMO or any member of the AMO
Group, on the one hand, and Allergan or any member of the Allergan 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. In
addition, each of Allergan and AMO acknowledge that it has been advised by legal
counsel and is familiar with the provisions of California Civil Code Section
1542, which provides as follows:
"A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the
release, which if known by him, must have materially affected his
settlement with the debtor."
(f) Each of Allergan and AMO, being aware of this Code section,
hereby expressly waive any rights they may have thereunder, as well as under any
other statutes or common law principles of similar effect.
Section 4.02 Indemnification by AMO. Except as provided in Section
4.04, AMO shall indemnify defend and hold harmless Allergan, each member of the
Allergan 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 "Allergan Indemnitees") from and against any and all
Liabilities of the Allergan Indemnitees relating to, arising out of or resulting
from any of the following items (without duplication):
(a) the failure of AMO or any other member of the AMO Group or
any other Person to pay, perform or otherwise promptly discharge any AMO
Liability in accordance with its terms, whether prior to or after the
Distribution Date;
(b) the AMO Business, any AMO Asset or any AMO Liability; and
(c) any material breach by AMO or any member of the AMO Group of
this Agreement or any of the Ancillary Agreements.
Section 4.03 Indemnification by Allergan. Except as provided in
Section 4.04, Allergan shall indemnify, defend and hold harmless AMO, each
member of the AMO 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 "AMO Indemnitees"), from and against any and
all Liabilities of the AMO Indemnitees relating to, arising out of or resulting
from any of the following items (without duplication):
(a) the failure of Allergan or any other member of the Allergan
Group or any other Person to pay, perform or otherwise promptly discharge any
Liabilities of the Allergan Group other than the AMO Liabilities, whether prior
to or after the Distribution Date;
32
(b) the Allergan Business or any Liability of the Allergan Group
other than the AMO Liabilities; and
(c) any material breach by Allergan or any member of the Allergan
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 Allergan Group or the AMO 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 30 days after
becoming aware of such Third Party Claim. Any such notice shall describe the
Third Party Claim in reasonable detail. If
33
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, AMO, or Allergan, as appropriate depending on which Group such Person
is a member of, shall give the other party to this Agreement written notice
thereof within 30 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 Allergan or AMO 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 Schedules 4.07(a) or 4.07(b)) is not a Shared Contingent
Liability or unless a determination to such effect has been made in accordance
with Section 5.06, Allergan 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, Allergan 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 Allergan Contingent Liability, such costs and expenses shall be
borne by Allergan.
(c) Allergan 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 to 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
34
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
Allergan.
(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, Allergan 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 Liabilities or Third Party Claims to the extent such Liabilities or
Third Party Claims relate to the payment of or obligation for Taxes (which are
governed 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
35
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 Litigation.
(a) Litigation to Be Transferred to AMO. Notwithstanding anything
to the contrary of this Article IV, on the Contribution Date, the
responsibilities for management of the litigation or claims identified in
Schedule 4.07(a), which will be updated by Allergan on or prior to the
Contribution Date, shall be transferred in their entirety from Allergan and its
Subsidiaries to AMO and its Subsidiaries. As of the Contribution Date and
thereafter, AMO shall manage the defense of this litigation or claim and shall
cause its applicable Subsidiaries to do the same. Allergan and its Subsidiaries
must first obtain the prior consent of AMO or its applicable Subsidiary for any
action taken subsequent to the Contribution Date in connection with the
litigation or claims identified in Schedule 4.07(a), which consent cannot be
unreasonably withheld or delayed. All other matters relating to such litigation
or claims, including but not limited to indemnification for such claims, shall
be governed by the provisions of Sections 4.01 through 4.06, 4.08 and 4.09.
(b) Litigation to be Defended by Allergan at AMO's Expense.
Notwithstanding any contrary provisions of this Article IV, Allergan shall
defend, and shall cause its applicable Subsidiaries to defend, the litigation or
claims identified in Schedule 4.07(b) at the cost and expense of AMO. AMO shall
be responsible for promptly reimbursing to Allergan, or upon the request of
Allergan advancing to Allergan, any of its costs, including attorneys' fees,
incurred in defending such litigation or claims. All other matters relating to
such litigation or claims, including but not limited to indemnification for such
claims, shall be governed by the provisions of Sections 4.01 through 4.06, 4.08
and 4.09.
(c) Cooperation. Allergan and AMO and their respective
Subsidiaries shall cooperate with each other in the defense of any litigation
covered under this Section 4.07 and afford to each other reasonable access upon
reasonable advance notice to witnesses and information (other than information
protected from disclosure by applicable privileges) that is reasonably required
to defend this litigation as set forth in Article VII. The foregoing agreement
to cooperate includes, but is not limited to, an obligation to provide access to
qualified assistance to provide information, witnesses and documents to respond
to discovery requests in specific
36
lawsuits. In such cases, cooperation shall be timely so that the party
responding to discovery may meet all court-imposed deadlines. The party
requesting information shall promptly reimburse the party providing information
upon request.
Section 4.08 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 4.09 Survival of Indemnities. The rights and obligations of
each of Allergan and AMO and their respective Indemnitees under this Article IV
shall survive the distribution, 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 Allergan and AMO that
shall be established in accordance with Section 5.06.
(b) "Contingent Gain" means any claim or other right of Allergan,
AMO or any of their respective Affiliates, whenever arising, against any Person
other than Allergan, AMO 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.
(c) "Contingent Liability" means any Liability, other than
Liabilities for Taxes (which are governed by the Tax Sharing Agreement), of
Allergan, AMO or any of their respective Affiliates, whenever arising, to any
Person other than Allergan, AMO 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 Allergan, AMO 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
37
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.
(d) "Exclusive Allergan Contingent Gain" means any Contingent
Gain if such Contingent Gain primarily relates to the Allergan Business,
including the matters listed or described on Schedule 5.01(d) hereto, or if such
Contingent Gain is expressly assigned to Allergan pursuant to this Agreement or
any Ancillary Agreement.
(e) "Exclusive Allergan Contingent Liability" means any
Contingent Liability if such Contingent Liability primarily relates to the
Allergan Business, including the matters listed or described on Schedule 5.01(e)
hereto, or if such Contingent Liability is expressly assigned to Allergan
pursuant to this Agreement or any Ancillary Agreement.
(f) "Exclusive Contingent Gain" means any Exclusive Allergan
Contingent Gain or Exclusive AMO Contingent Gain.
(g) "Exclusive Contingent Liability" means any Exclusive Allergan
Contingent Liability or Exclusive AMO Contingent Liability.
(h) "Exclusive AMO Contingent Gain" means any Contingent Gain if
such Contingent Gain primarily relates to the AMO Business, including the
matters listed or described on Schedule 5.01(h) hereto, or if such Contingent
Gain is expressly assigned to AMO pursuant to this Agreement or any Ancillary
Agreement.
(i) "Exclusive AMO Contingent Liability" means any Contingent
Liability if such Contingent Liability primarily relates to the AMO Business,
including the matters listed or described on Schedule 5.01(i) hereto, or if such
Contingent Liability is expressly assigned to AMO pursuant to this Agreement or
any Ancillary Agreement.
(j) "Shared Allergan Percentage" means 66 2/3%, 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 Allergan Contingent Gain or an Exclusive AMO 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:
38
(i) any Contingent Liability that is not an Exclusive
Allergan Contingent Liability or an Exclusive AMO Contingent
Liability; and
(ii) any Liability (other than Taxes which are governed by
the Tax Sharing Agreement) relating to, arising out of or resulting
from the matters set forth on Schedule 5.01(l).
(m) "Shared AMO Percentage" means 33 1/3%, unless the parties
shall agree to a different percentage with respect to any Shared Contingent Gain
or Shared Contingent Liability.
(n) "Shared Percentage" means the Shared Allergan Percentage or
the Shared AMO Percentage, as the case may be.
Section 5.02 Contingent Gains.
(a) Each of Allergan and AMO shall have sole and exclusive right
to any benefit received with respect to any Exclusive Allergan Contingent Gain,
or Exclusive AMO Contingent Gain, respectively. Each of Allergan and AMO 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 Allergan
Contingent Gain or Exclusive AMO Contingent Gain, respectively.
(b) Any benefit that may be received from any Shared Contingent
Gain shall be shared among Allergan and AMO in proportion to the Shared Allergan
Percentage and the Shared AMO Percentage, respectively, and shall be paid in
accordance with Section 5.05. Notwithstanding the foregoing, Allergan 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. AMO 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
Allergan. Allergan shall use its reasonable efforts to notify AMO 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 AMO against Allergan or affect any other provision of this
Section 5.02. AMO acknowledges that Allergan 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 AMO or any business reasons that
are in the best interests of Allergan or a member of the Allergan Group, without
regard to the best interests of any member of the AMO Group) and that no member
of the Allergan Group shall have any liability to any Person (including any
member of the AMO 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 Allergan Contingent Gain or an Exclusive AMO Contingent Gain,
Allergan 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 Allergan commences any such prosecution or assertion and, upon
resolution of the dispute, it is determined hereunder that AMO has the exclusive
right to
39
such claim or right, Allergan shall, promptly upon the request of AMO,
discontinue the prosecution or assertion of such right or claim and transfer the
control thereof to AMO. In such event, AMO shall reimburse Allergan 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. Allergan shall be
solely responsible for each Exclusive Allergan Contingent Liability and AMO
shall be solely responsible for each Exclusive AMO Contingent Liability. Each
Exclusive Contingent Liability shall constitute a Liability for which
indemnification is provided by Allergan or AMO, 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), Allergan 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 Allergan and AMO 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, Allergan
shall be entitled to reimbursement from AMO 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, Allergan shall be entitled to retain from the amount of the
Shared Contingent Gain otherwise payable to AMO, AMO's Shared Percentage of the
costs and expenses paid or incurred by or on behalf of any member of the
Allergan Group in connection with such Shared Contingent Gain.
40
(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), Allergan and AMO 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 Allergan Contingent Gain or an Exclusive AMO Contingent
Gain;
(iii) any Liability is a Contingent Liability; or
(iv) any Contingent Liability is a Shared Contingent
Liability, an Exclusive Allergan Contingent Liability or an Exclusive
AMO 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 Allergan and AMO 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 Allergan Contingent Gain or an Exclusive
AMO Contingent Gain or (ii) any Contingent Liability is a Shared Contingent
Liability, an Exclusive Allergan Contingent Liability or an Exclusive AMO
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
41
(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.
INSURANCE
Section 6.01 Insurance Matters.
(a) AMO does hereby, for itself and each other member of the AMO
Group, agree that no member of the Allergan Group or any Allergan Indemnitee
shall have any Liability whatsoever as a result of the insurance policies and
practices of Allergan 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.
(b) Except as otherwise provided in any Ancillary Agreement, the
parties intend by this Agreement that AMO and each other member of the AMO Group
be successors-in-interest to all rights that any member of the AMO Group may
have as of the Distribution Date as a subsidiary, affiliate, division or
department of Allergan prior to the Distribution Date under any policy of
insurance issued to Allergan by any insurance carrier unaffiliated with Allergan
or under any agreements related to such policies executed and delivered prior to
the Distribution Date, including any rights such member of the AMO Group may
have, as an insured or additional named insured, subsidiary, affiliate, division
or department, to avail itself of any such policy of insurance or any such
agreements related to such policies as in effect prior to the Distribution Date.
At the request of AMO, Allergan shall take all reasonable steps, including the
execution and delivery of any instruments, to effect the foregoing; provided,
however, that Allergan shall not be required to pay any amounts, waive any
rights or incur any Liabilities in connection therewith.
(c) Except as otherwise contemplated by any Ancillary Agreement,
after the Distribution Date, none of Allergan or AMO or any member of their
respective Groups shall, without the consent of the other, provide any such
insurance carrier with a release, or amend, modify or waive any rights under any
such policy or agreement, if such release,
42
amendment, modification or waiver would adversely affect any rights or potential
rights of any member of the other Group thereunder; provided, however, that the
foregoing shall not (i) preclude any member of any Group from presenting any
claim or from exhausting any policy limit, (ii) require any member of any Group
to pay any premium or other amount or to incur any Liability, or (iii) require
any member of any Group to renew, extend or continue any policy in force. Each
of AMO and Allergan will share such information as is reasonably necessary in
order to permit the other to manage and conduct its insurance matters in an
orderly fashion.
(d) This agreement is not intended as an attempted assignment of
any policy of insurance or as a contract of insurance and shall not be construed
to waive any right or remedy of any member of the Allergan Group in respect of
any insurance policy or any other contract or policy of insurance.
(e) Nothing in this Agreement shall be deemed to restrict any
member of the AMO Group from acquiring at its own expense any other insurance
policy in respect of any Liabilities or covering any period.
ARTICLE VII.
EXCHANGE OF INFORMATION; CONFIDENTIALITY
Section 7.01 Agreement for Exchange of Information; Archives.
(a) Each of Allergan and AMO, 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 therefore, 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 agree that the provisions of the Tax Sharing Agreement
shall govern with respect to the sharing of Tax Information and to the extent
governed thereby, the provisions of this Article VII shall not apply.
(b) After the Distribution Date, AMO 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 AMO Business that are
located in archives retained or maintained by Allergan. AMO 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 AMO shall cause any such
objects to be returned promptly in the same condition in which they were
delivered to AMO and AMO
43
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 Allergan. AMO 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 Allergan generally). Nothing herein
shall be deemed to restrict the access of any member of the Allergan Group to
any such documents or objects or to impose any liability on any member of the
Allergan Group if any such documents or objects are not maintained or preserved
by Allergan.
(c) After the date hereof, each of Allergan and AMO (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 regulatory, 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 Allergan 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, however, 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.
44
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 Allergan chooses to defend or to
seek to compromise or settle any Third Party Claim, the other parties shall make
available to such Indemnifying Party, Allergan 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.
45
(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 Allergan and AMO, on behalf
of itself and each member of its respective Group, agrees to hold, and to cause
its respective Affiliates and the respective directors, officers, employees,
agents, accountants, counsel and other advisors and representatives of itself
and its Affiliates to hold, in strict confidence, with at least the same degree
of care that applies to Allergan'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 (any such Information referred to herein as "Confidential
Information"), and shall not use any such Confidential Information other than
for such purposes as shall be expressly permitted hereunder or thereunder.
Notwithstanding the foregoing, Confidential Information shall not include
Information that 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) 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 Confidential Information to any other Person, except
its directors, officers, employees, agents, accountants, counsel and other
advisors and representatives who need to know such Confidential Information (who
shall be advised of their obligations hereunder with respect to such
Confidential 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 (or
which was in possession of the party as of the Distribution Date) 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 and at the
election of the party receiving such request, 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).
46
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 Confidential Information pursuant to applicable law
or receives any demand under lawful process or from any Governmental Authority
to disclose or provide Confidential Information of any other party (or any
member of any other party's Group), such party shall notify the other party
prior to disclosing or providing such Confidential 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 such
Confidential 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 terms of which Ancillary Agreement shall govern
with respect to the resolution of disputes, controversies or claims that are the
subject of that Ancillary Agreement, to the extent so provided therein) or for
claims that are to be submitted to the Contingent Claims Committee, 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 Allergan Group
and the AMO Group.
Section 8.02 Escalation; Mediation; Arbitration.
(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 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 within 30
days after the date of the respective Escalation Notice, then matter shall be
referred to the Orange County, California office of JAMS for an informal,
non-binding mediation consisting of one or more conferences between the parties
in which a retired judge will seek to guide the parties to a resolution of the
dispute, controversy or claim. The parties shall select a mutually acceptable
neutral arbitrator
47
from among the JAMS panel of mediators. In the event the parties cannot agree on
a mediator, the Administrator of JAMS will appoint a mediator. The mediation
process shall continue until the earliest to occur of the following: (i) the
dispute, controversy or claim is resolved, (ii) the mediator makes a finding
that there is no possibility of resolution through mediation, or (iii) 60 days
have elapsed since the dispute, controversy or claim was first scheduled for
mediation.
(c) Should any dispute, controversy or claim remain after the
completion of the mediation process described above, the parties agree to submit
the remaining dispute, controversy or claim to final and binding arbitration
administered by JAMS in accordance with the then existing JAMS Arbitration
Rules. Neither the parties nor the arbitrator shall disclose the existence,
content, or results of any arbitration hereunder without the prior written
consent of the parties. Except as provided herein, the California Arbitration
Act shall govern the interpretation, enforcement and all proceedings pursuant to
this subparagraph. The arbitrator is without jurisdiction to apply any
substantive law other than the laws selected or otherwise expressly provided in
this Agreement. The arbitrator shall render an award and a written, reasoned
opinion in support thereof. Such award may include reasonable attorneys' fees to
the prevailing party. Judgment upon the award may be entered in any court having
jurisdiction thereof.
(d) THE PARTIES HERETO UNDERSTAND AND AGREE THAT BY ENTERING INTO
THIS AGREEMENT THEY ARE WAIVING THEIR RIGHT TO A JURY OR COURT TRIAL.
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 AMO Assets and the
assignment and assumption of the AMO Liabilities and the other transactions
contemplated
48
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, Allergan and AMO 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 Allergan, AMO or any other Subsidiary of
Allergan or AMO, as the case may be, to effectuate the transactions contemplated
by this Agreement. On or prior to the Distribution Date, Allergan and AMO shall
take all actions as may be necessary to approve the stock-based employee benefit
plans of AMO 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.
CERTAIN OTHER MATTERS
Section 10.01 Auditors and Audits; Annual and Quarterly Statements and
Accounting. Each party agrees that, for so long as Allergan is required in
accordance with United States generally accepted accounting principles to
consolidate AMO's results of operations and financial position:
(a) Selection of Auditors. AMO shall not select a different
accounting firm than KPMG, LLP to serve as its (and its Subsidiaries')
independent certified public accountants ("AMO's Auditors") for purposes of
providing an opinion on its consolidated financial statements without Allergan's
prior written consent (which shall not be unreasonably withheld).
(b) Date of Auditors' Opinion and Quarterly Reviews. AMO shall
use its reasonable commercial efforts to enable AMO's Auditors to complete their
audit such that they will date their opinion on AMO's audited annual financial
statements on the same date that Allergan's independent certified public
accountants ("Allergan's Auditors") date their opinion on Allergan's audited
annual financial statements, and to enable Allergan to meet its timetable for
the printing, filing and public dissemination of Allergan's annual financial
statements. AMO shall use its reasonable commercial efforts to enable AMO's
Auditors to complete their quarterly review procedures such that they will
provide clearance on AMO's quarterly financial statements on the same date that
Allergan's Auditors provide clearance on Allergan's quarterly financial
statements.
(c) Annual and Quarterly Financial Statements. AMO shall provide
to Allergan on a timely basis all Information that Allergan reasonably requires
to meet its
49
schedule for the preparation, printing, filing, and public dissemination of
Allergan's annual and quarterly financial statements. Without limiting the
generality of the foregoing, AMO will provide all required financial Information
with respect to AMO and its Subsidiaries to AMO's Auditors in a sufficient and
reasonable time and in sufficient detail to permit AMO's Auditors to take all
steps and perform all reviews necessary to provide sufficient assistance to
Allergan's Auditors with respect to Information to be included or contained in
Allergan's annual and quarterly financial statements. Similarly, Allergan shall
provide to AMO on a timely basis all Information that AMO reasonably requires to
meet its schedule for the preparation, printing, filing, and public
dissemination of AMO's annual and quarterly financial statements. Without
limiting the generality of the foregoing, Allergan will provide all required
financial Information with respect to Allergan and its Subsidiaries to
Allergan's Auditors in a sufficient and reasonable time and in sufficient detail
to permit Allergan's Auditors to take all steps and perform all reviews
necessary to provide sufficient assistance to AMO's Auditors with respect to
Information to be included or contained in AMO's annual and quarterly financial
statements.
(d) Identity of Personnel Performing the Annual Audit and
Quarterly Reviews. AMO shall authorize AMO's Auditors to make available to
Allergan's Auditors both the personnel who performed or are performing the
annual audits and quarterly reviews of AMO and work papers related to the annual
audits and quarterly reviews of AMO, in all cases within a reasonable time prior
to AMO's Auditors' opinion date, so that Allergan's Auditors are able to perform
the procedures they consider necessary to take responsibility for the work of
AMO's Auditors as it relates to Allergan's Auditors' report on Allergan's
financial statements, all within sufficient time to enable Allergan to meet its
timetable for the printing, filing and public dissemination of Allergan's annual
and quarterly statements. Similarly, Allergan shall authorize Allergan's
Auditors to make available to AMO's Auditors both the personnel who performed or
are performing the annual audits and quarterly reviews of Allergan and work
papers related to the annual audits and quarterly reviews of Allergan, in all
cases within a reasonable time prior to Allergan's Auditors' opinion date, so
that AMO's Auditors are able to perform the procedures they consider necessary
to take responsibility for the work of Allergan's Auditors as it relates to
AMO's Auditors' report on AMO's statements, all within sufficient time to enable
AMO to meet its timetable for the printing, filing and public dissemination of
AMO's annual and quarterly financial statements.
(e) Access to Books and Records. AMO shall provide Allergan's
internal auditors and their designees access to AMO's and its Subsidiaries'
books and records so that Allergan may conduct reasonable audits relating to the
financial statements provided by AMO pursuant hereto as well as to the internal
accounting controls and operations of AMO and its Subsidiaries. Similarly,
Allergan shall provide AMO's internal auditors and their designees access to
Allergan's and its Subsidiaries' books and records so that AMO may conduct
reasonable audits relating to the financial statements provided by Allergan
pursuant hereto as well as to the internal accounting controls and operations of
Allergan and its Subsidiaries
(f) Notice of Change in Accounting Principles. AMO shall give
Allergan as much prior notice as reasonably practical of any proposed
determination of, or any significant changes in, its accounting estimates or
accounting principles from those in effect on the Distribution Date. AMO will
consult with Allergan and, if requested by Allergan, AMO will consult with
Allergan's independent public accountants with respect thereto. Allergan shall
give
50
AMO as much prior notice as reasonably practical of any proposed determination
of, or any significant changes in, its accounting estimates or accounting
principles from those in effect on the Distribution Date.
(g) Conflict with Third-Party Agreements. Nothing in this Section
10.01 shall require AMO to violate any agreement with any third parties
regarding the confidentiality of confidential and proprietary information
relating to that third party or its business; provided, however, that in the
event that AMO is required under this Section 10.01 to disclose any such
information, AMO shall use all commercially reasonable efforts to seek to obtain
such customer's consent to the disclosure of such information.
Section 10.02 Non-Competition.
(a) Each of AMO and Allergan recognize that it possesses
significant Confidential Information regarding the other party's research and
development, business, customers and existing business practices, and that if
AMO or Allergan were to compete with the other, it would inevitably and unfairly
exploit, rely on, or misappropriate the other party's Confidential Information.
Accordingly, except as otherwise set forth in this Agreement or any of the
Ancillary Agreements, AMO and Allergan agree that for a period of three years
from the Distribution Date:
(i) no member of the Allergan Group or any Affiliate thereof
shall:
(A) engage in research and development regarding, nor
shall it manufacture, market, sell, distribute, promote or
detail, any Optical Medical Device (other than a Delivery
Device) or any product or product candidate in any of the
same lines of business as those comprising the AMO Business;
provided, however, that Allergan shall be permitted to
research, develop, manufacture, market, sell, distribute,
promote or detail any product so long as such product is not
in the AMO Business as of the Distribution Date and is
indicated for a use similar to a product in the Allergan
Business as of the Distribution Date, or
(B) except pursuant to a change of control described in
Section 10.02(b), acquire a joint venture or equity interest
in any entity that engages in research and development
regarding, or manufactures, markets, sells, distributes,
promotes or details, any Optical Medical Device (other than
a Delivery Device) or any product or product candidate in
any of the same lines of business as those comprising the
AMO Business; and
(ii) no member of the AMO Group or any Affiliate thereof
shall:
(A) engage in research and development regarding, nor
shall it manufacture, market, sell, distribute, promote or
detail, any Pharmaceutical or biological or any product or
product candidate in any of
51
the same lines of business as those comprising the Allergan
Business, including without limitation, any Delivery
Devices; provided, however, that AMO may continue to engage
in research and development regarding, and manufacture,
market, sell, distribute, promote and detail, any product or
product candidate (other than a Refresh Product or any other
product containing (1) carboxymethylcellulose or (2) castor
oil, Pemulin(R)and polysorbate 80) which is a contact lens
lubricant or rewetting drop, even though the product is
indicated for irritation, discomfort, dryness, blurring,
itchiness and other similar symptoms associated with
contacts lens wear, so long as the product is labeled solely
for use with contact lenses and so long as the product is
only detailed, marketed, sold, promoted and distributed for
use with contact lenses, or
(B) except pursuant to a change of control described in
Section 10.02(b), acquire a joint venture or equity interest
in any entity that engages in research and development
regarding, or manufactures, markets, sells, distributes,
promotes or details, any Pharmaceutical or biological or any
product or product candidate in any of the same lines of
business as those comprising the Allergan Business.
Notwithstanding the definition of "Pharmaceutical" and "Optical
Medical Device", AMO will not be prohibited from selling a product that was part
of the AMO Business as of the Distribution Date, and Allergan will not be
prohibited from selling a product that was part of the Allergan Business as of
the Distribution Date. By way of example only, AMO may continue to sell
intraocular irrigating solutions such as balanced salt solutions even if such
products would be classified as Pharmaceuticals, and Allergan may continue to
sell contact lens rewetting solutions, even if such products would be classified
as Optical Medical Devices.
(b) The restrictions set forth in Section 10.2(a) shall cease to
apply upon the occurrence of a "change of control" of Allergan or AMO in the
event that such change in control is effected by a Person who, immediately prior
to such change of control conducted a business involving the research and
development, sale, marketing or distribution of a product that was substantially
similar to a product or products used in the AMO Business or Allergan Business,
respectively, immediately after the Distribution Date. For purposes of this
Agreement, "change of control" means a transaction or series of transactions
whereby (i) any Person or two or more Persons acting in concert shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Commission under the Exchange Act), directly or indirectly, of voting stock (or
other securities convertible into such voting stock) representing 45% or more of
the combined voting power of all voting stock of Allergan or AMO (as the case
may be); or (ii) during any period of up to 18 consecutive months commencing
after the date of this Agreement, Incumbent Directors shall cease for any reason
to constitute a majority of the board of directors of Allergan or AMO (as the
case may be); (iii) any Person or two or more Persons acting in concert shall
have acquired by contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation, will result in its or their acquisition of
the power to exercise, directly or indirectly, a controlling influence over the
management or policies of Allergan or AMO (as the case may be); or (iv) either
Allergan or AMO (in either case, the "Merging Entity") shall have consummated a
merger or other similar combination with another
52
Person, as a result of which the stockholders of the Merging Entity immediately
prior to the transaction own less than 55% of the outstanding stock of the
surviving entity immediately following such transaction, or the members of the
board of directors of the Merging Entity immediately prior to the transaction
cease to comprise at least one third of the board of directors of the surviving
entity immediately following such transaction.
(c) If any restriction set forth in Section 10.2(a) is found by a
court of competent jurisdiction to be unenforceable because it extends for too
long a period of time or over too great a range of activities or in too broad a
geographic area, it shall be interpreted to extend only over the maximum period
of time, range of activities or geographic area as to which it may be
enforceable.
(d) The restrictions set forth in Section 10.2(a) are necessary
for the protection of the respective business and goodwill of Allergan and AMO
and are considered by the two parties to be reasonable for such purpose.
Allergan and AMO agree that any breach of this Section 10.2 is likely to cause
Allergan or AMO (as the case may be) substantial and irrevocable damage and
therefore, in the event of such breach, Allergan and AMO (as the case may be) in
addition to such other remedies that may be available, shall be entitled to
specific performance and other injunctive relief.
Section 10.03 Non-Solicitation of Employees. Each party agrees not to
directly or indirectly solicit or recruit the other party's employees, or induce
or attempt to induce any employee of the other party to terminate or cease his
or her relationship with such other party for a period of three years following
the Distribution Date. This prohibition on solicitation and inducement does not
apply to actions taken by a party (i) as a result of an employee's affirmative
response to a general recruitment effort carried out through a public
solicitation or a general solicitation or (ii) as a result of an employee's
initiative.
Section 10.04 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 (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 XI.
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 Allergan without the approval
of AMO or the stockholders of Allergan. 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.
53
ARTICLE XII.
MISCELLANEOUS
Section 12.01 Limitation of Liability. IN NO EVENT SHALL ANY MEMBER OF
THE ALLERGAN GROUP OR AMO GROUP BE LIABLE TO ANY MEMBER OF THE AMO GROUP OR
ALLERGAN GROUP, RESPECTIVELY, FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT,
INCIDENTAL OR PUNITIVE DAMAGES OR LOST PROFITS, HOWEVER CAUSED AND ON ANY THEORY
OF LIABILITY (INCLUDING NEGLIGENCE) ARISING IN ANY WAY OUT OF THIS AGREEMENT,
WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES;
PROVIDED, HOWEVER, THAT THE FOREGOING LIMITATIONS SHALL NOT LIMIT EACH PARTY'S
INDEMNIFICATION OBLIGATIONS FOR LIABILITIES TO THIRD PARTIES AS SET FORTH IN
ARTICLE IV.
Section 12.02 Counterparts. 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.
Section 12.03 Entire Agreement. This Agreement, the Ancillary
Agreements, the Exhibits, Schedules and Appendices hereto and thereto and the
specific agreements contemplated herein or thereby contain the entire agreement
between the parties with respect to the subject matter hereof and supersede all
previous agreements, negotiations, discussions, writings, understandings,
commitments and conversations with respect to such subject matter. No agreements
or understandings exist between the parties other than those set forth or
referred to herein or therein.
Section 12.04 Corporate Power. Allergan represents on behalf of itself
and each other member of the Allergan Group, and AMO represents on behalf of
itself and each other member of the AMO Group, as follows:
(a) 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
(b) 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.
Section 12.05 Signatures. 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
54
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 12.06 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 California
irrespective of the choice of laws principles of the State of California, as to
all matters, including matters of validity, construction, effect,
enforceability, performance and remedies.
Section 12.07 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 12.08 Third Party Beneficiaries. Except for the
indemnification rights under this Agreement of any Allergan Indemnitee or AMO
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 hereto, 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 12.09 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 Allergan, to:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
If to AMO, to:
Prior to September 1, 2002:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
55
After August 31, 2002:
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Any party may, by notice to the other party, change the address to which such
notices are to be given.
Section 12.10 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 12.11 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, acts of terrorism, 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 12.12 Publicity. Prior to the Distribution, Allergan shall be
responsible for 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 12.13 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
Allergan, to the extent they are incurred prior to the Distribution Date, and by
AMO to the extent they are incurred subsequent to the Distribution Date.
Section 12.14 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 12.15 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
56
therein, shall survive the Contribution and the Distribution and shall remain in
full force and effect.
Section 12.16 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 12.17 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.
Section 12.18 Controlling Documents. To the extent that the provisions
of the Tax Sharing Agreement, Employee Matters Agreement, Transitional Services
Agreement, Manufacturing Agreement or Intellectual Property Assignment and
License Agreement conflict with the provisions of this Agreement, the provisions
of such other agreement shall govern.
Section 12.19 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). 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.
[Signature page follows]
57
IN WITNESS WHEREOF, the parties have caused this Contribution and
Distribution Agreement to be executed by their duly authorized representatives.
ALLERGAN, INC., a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇
Title: Chairman of the Board, President and Chief
Executive Officer
ADVANCED MEDICAL OPTICS, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President And Chief Executive Officer
58
