EXHIBIT 2
CONTRIBUTION AND DISTRIBUTION AGREEMENT
BY AND BETWEEN
ALLERGAN, INC.
AND
ADVANCED MEDICAL OPTICS, INC.
DATED AS OF [ ], 2002
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS ......................................... 7
ARTICLE II. THE CONTRIBUTION .................................... 18
Section 2.01 Transfer of AMO Assets and Assumption of
AMO Liabilities ........................... 18
Section 2.02 AMO Assets ................................ 20
Section 2.03 AMO Liabilities ........................... 22
Section 2.04 Termination of Agreements ................. 24
Section 2.05 Transfer Documents ........................ 24
Section 2.06 AMO Consideration ......................... 25
Section 2.07 Ancillary Agreements ...................... 25
Section 2.08 The Restructuring Plan .................... 26
Section 2.09 Disclaimer of Representations and
Warranties ................................ 26
Section 2.10 Consents and Governmental Approvals ....... 27
Section 2.11 Novation of Assumed AMO Liabilities ....... 28
Section 2.12 Novation of Liabilities Other than AMO
Liabilities ............................... 29
ARTICLE III. THE DISTRIBUTION .................................... 29
Section 3.01 The Distribution .......................... 29
Section 3.02 Actions Prior to the Distribution ......... 30
Section 3.03 Sole Discretion of Allergan ............... 31
Section 3.04 Conditions to Distribution ................ 31
Section 3.05 Fractional Shares ......................... 33
Section 3.06 The AMO Board of Directors ................ 33
Section 3.07 Termination of Obligations Under this
Article III ............................... 33
ARTICLE IV. MUTUAL RELEASES; INDEMNIFICATION .................... 34
Section 4.01 Release of Pre-Distribution Claims ........ 34
Section 4.02 Indemnification by AMO .................... 37
Section 4.03 Indemnification by Allergan ............... 37
Section 4.04 Indemnification Obligations Net of
Insurance Proceeds and Other Amounts ...... 37
Section 4.05 Procedures for Indemnification of Third
Party Claims .............................. 38
Section 4.06 Additional Matters ........................ 40
Section 4.07 Litigation ................................ 41
Section 4.08 Remedies Cumulative ....................... 41
Section 4.09 Survival of Indemnities ................... 42
ARTICLE V. CONTINGENT GAINS AND CONTINGENT LIABILITIES ......... 42
Section 5.01 Definitions Relating to Contingent Gains
and Contingent Liabilities ................ 42
Section 5.02 Contingent Gains .......................... 44
Section 5.03 Exclusive Contingent Liabilities .......... 44
Section 5.04 Shared Contingent Liabilities ............. 45
Section 5.05 Payments .................................. 45
Section 5.06 Procedures to Determine Status of
Contingent Liability or Contingent Gain ... 46
Section 5.07 Certain Case Allocation Matters ........... 46
Section 5.08 Termination of Certain Article V Provisions 47
ARTICLE VI. INSURANCE ........................................... 47
Section 6.01 Insurance Matters ......................... 47
ARTICLE VII. EXCHANGE OF INFORMATION; CONFIDENTIALITY ............ 48
Section 7.01 Agreement for Exchange of Information;
Archives .................................. 48
Section 7.02 Ownership of Information .................. 49
Section 7.03 Compensation for Providing Information .... 49
Section 7.04 Record Retention .......................... 49
Section 7.05 Limitations of Liability .................. 49
Section 7.06 Other Agreements Providing for Exchange of
Information ............................... 50
Section 7.07 Production of Witnesses; Records;
Cooperation ............................... 50
Section 7.08 Confidentiality ........................... 51
Section 7.09 Protective Arrangements ................... 51
ARTICLE VIII. DISPUTE RESOLUTION .................................. 52
Section 8.01 Disputes .................................. 52
Section 8.02 Escalation; Mediation; Arbitration ........ 52
ARTICLE IX. FURTHER ASSURANCES .................................. 53
Section 9.01 Further Assurances ........................ 53
ARTICLE X. CERTAIN OTHER MATTERS ............................... 54
Section 10.01 Auditors and Audits; Annual and Quarterly
Statements and Accounting ................ 54
Section 10.02 Non-Competition .......................... 56
Section 10.03 Non-Solicitation of Employees ............ 58
Section 10.04 Late Payments ............................ 58
ARTICLE XI. TERMINATION ......................................... 58
ARTICLE XII. MISCELLANEOUS ....................................... 58
Section 12.01 Limitation of Liability .................. 58
Section 12.02 Counterparts ............................. 59
Section 12.03 Entire Agreement ......................... 59
Section 12.04 Corporate Power .......................... 59
Section 12.05 Signatures ............................... 59
Section 12.06 Governing Law ............................ 59
Section 12.07 Assignability ............................ 59
Section 12.08 Third Party Beneficiaries ................ 60
Section 12.09 Notices .................................. 60
Section 12.10 Severability ............................. 60
Section 12.11 Force Majeure ............................ 60
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Section 12.12 Publicity ................................ 61
Section 12.13 Expenses ................................. 61
Section 12.14 Headings ................................. 61
Section 12.15 Survival of Covenants .................... 61
Section 12.16 Waivers of Default ....................... 61
Section 12.17 Amendments ............................... 61
Section 12.18 Controlling Documents .................... 61
Section 12.19 Interpretation ........................... 61
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SCHEDULES
Schedule 1.01(a) Restructuring Plan
Schedule 1.01(b) Other Assets
Schedule 1.01(c) Notes
Schedule 2.01(c) Delayed Transfer 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 4.05 Third Party Claim
Schedule 5.01(d) Exclusive Allergan Contingent Gain
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
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 [ ],
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 $ million 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
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
carboxymethylcellulose sodium, (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.
"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 carboxymethylcellulose sodium,
(iii) any other product indicated, in whole or in part, for the treatment of
"dry eye", (iv) any product indicated, in whole or in part, for the treatment of
conjunctive erythema and (v) any product indicated, in whole or in part, for the
treatment of the symptoms of dry eye if that product is not labeled solely for
use with contact lenses); provided, however, that the AMO Business shall not
include Delivery Devices.
"AMO Claims" has the meaning set forth in Section 4.01(a).
8
"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.
"AMO Liabilities" has the meaning set forth in Section
2.03(a).
9
"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 Transition Services Agreement, the Tax Sharing Agreement, the Intellectual
Property Assignment, 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 the 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 for the manufacture and sale
of products and other contracts, agreements
or commitments;
10
(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.
"Bylaws" means the Restated Bylaws of AMO, substantially in
the form attached hereto as EXHIBIT A.
11
"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 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.
"Employee Matters Agreement" means the Employee Matters
Agreement of even date herewith by and between Allergan and AMO, substantially
in the form attached hereto as EXHIBIT C.
12
"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.Section 7401, et seq.), the Clean Water
Act (33 U.S.C.Section 1251, et seq.), the Resource Conservation and Recovery Act
(42 U.S.C.Section 6901, et seq.), the Comprehensive Environmental Resource
Compensation and Liability Act (42 U.S.C.Section 9601, et seq.), the Safe
Drinking Water Act (42 U.S.C.Section 300f, et seq.), the Toxic Substances
Control Act (15 U.S.C.Section 2601, et seq.), the Rivers and Harbors Act (33
U.S.C.Section 401, et seq.), the Endangered Species Act (15 U.S.C.Section 1531,
et seq.), the Occupational Safety and Health Act (20 U.S.C.Section 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).
"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).
13
"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 Policies" means the insurance policies written by
any insurance carrier, pursuant to which AMO or one or more of its Subsidiaries
(or their respective officers or directors) will be insured parties after the
Distribution Date.
"Insurance Proceeds" means those monies:
(a) received by an insured from an insurance
carrier; or
14
(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" means the Intellectual
Property Assignment, 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.
"Notes" means, collectively, those promissory notes identified
on SCHEDULE 1.01(c) attached hereto.
"Other Financial Liabilities" or "OFLs" mean all liabilities,
obligations, contingencies, instruments and other Liabilities of any member of
the Allergan Group of a
15
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).
"Other Assets" means the assets listed on SCHEDULE 1.01(b).
"Person" means an individual, a general or limited
partnership, a corporation, a trust, a joint venture, an unincorporated
organization, a limited liability entity, any other entity and any Governmental
Authority.
"Prime Rate" means the rate which The Chase Manhattan Bank (or
any successor thereto or other major money center commercial bank agreed to by
the parties hereto) announces from time to time as its prime lending rate in the
United States, as in effect from time to time.
"Record Date" means the close of business on the date to be
determined 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
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.
"Registration Statement" means the registration statement on
Form 10 filed with the Commission under the Exchange Act on March __, 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
16
Liabilities and Excluded Assets and Excluded Liabilities will be transferred
between the parties hereto, which are set forth, described or contemplated in
SCHEDULE 1.01(A) (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.
"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).
"Transition Services Agreement" means the Transition 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.
17
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
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 (u) 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.
18
(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 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,
19
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);
(iii) 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
20
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.
(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
21
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
(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) 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;
22
(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:
(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
23
(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.
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
24
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 Transition Services Agreement;
(iii) the Tax Sharing Agreement;
(iv) the Intellectual Property Assignment;
(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;
25
(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 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
26
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 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
27
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 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.
28
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.
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
29
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 11:59 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 ___ 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 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
30
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:
(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;
31
(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;
(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;
(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;
32
(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 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;
33
(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, ▇▇▇▇▇,
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,
34
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 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;
35
(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 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,
36
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;
(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
37
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 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
38
Claim (including any Third Party Claim set forth on SCHEDULE 4.05) 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 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
39
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 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
40
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 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 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 identified
in SCHEDULE 4.07(a), which consent cannot be unreasonably withheld or delayed.
All other matters relating to such litigation, 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
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. All other matters relating to such
litigation, 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) All Other Litigation. All other litigation served on
Allergan and outstanding as of the Contribution Date but not included in
SCHEDULE 4.07(a) or SCHEDULE 4.07(b) shall remain with Allergan, and AMO shall
have no liability in connection with, or responsibility for defending, such
litigation.
(d) 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 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.
41
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 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,
42
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:
(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).
43
(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 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
44
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.
(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.
45
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
(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
46
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, 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
47
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 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).
48
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.
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
49
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.
(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
50
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 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).
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
51
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 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
52
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 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
53
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 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
54
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 AMO as much prior notice as reasonably practical of any proposed
determination of, or any
55
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 manufacture, market, sell, distribute, promote or
detail any product so long as such product is not
currently in the AMO Business and is labeled
similarly to a product currently in the Allergan
Business, 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 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,
56
and manufacture, market, sell, distribute, promote
and detail, any product or product candidate (other
than a Refresh Product or any other product
containing carboxymethylcellulose sodium) 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 or 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.
(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
Securities and Exchange Commission under the Securities Exchange Act of 1934),
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 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.
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(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.
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.
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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 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.
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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:
_______________________
_______________________
_______________________
Attn: General Counsel
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,
60
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 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 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
61
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]
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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: __________________________________
Name: ________________________________
Title: _______________________________
ADVANCED MEDICAL OPTICS, INC., A
DELAWARE CORPORATION
By: __________________________________
Name: ________________________________
Title: _______________________________
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