EXHIBIT 10.2
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INTERIM SERVICES AGREEMENT
BETWEEN
▇▇▇▇▇▇▇-▇▇▇▇▇ SQUIBB COMPANY
and
▇▇▇▇▇▇ HOLDINGS, INC.
____________________________________________
Dated as of [ ], 2001
____________________________________________
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TABLE OF CONTENTS
PAGE
Section 1. Definitions.......................................................1
Section 2. Services..........................................................3
(a) Initial Services................................................3
(b) Additional Services.............................................3
(c) Scope of Services...............................................3
(d) Certain Limits on Services......................................4
(e) Standard of Performance; Standard of Care.......................4
(f) Prices for Services.............................................4
(g) Transitional Nature of Services; Changes........................4
(h) Cooperation.....................................................5
Section 3. Billing...........................................................5
(a) Procedure.......................................................5
(b) Late Payments...................................................5
Section 4. Term and Termination..............................................5
(a) Termination Dates...............................................5
(b) Early Termination...............................................5
(c) Data Transmission...............................................6
Section 5. Miscellaneous.....................................................6
(a) Mutual Cooperation..............................................6
(b) Liability.......................................................6
(c) Third Party Claims..............................................7
(d) Force Majeure...................................................7
(e) Independent Contractors.........................................7
(f) No Third Party Beneficiaries....................................8
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(g) Interpretation..................................................8
(h) Tax Matters.....................................................8
INTERIM SERVICES AGREEMENT
INTERIM SERVICES AGREEMENT, dated as of [ ], 2001 (this
"AGREEMENT"), among ▇▇▇▇▇▇▇-▇▇▇▇▇ SQUIBB COMPANY, a Delaware corporation
("▇▇▇▇▇▇▇-▇▇▇▇▇ SQUIBB"), and ▇▇▇▇▇▇ HOLDINGS, INC., a Delaware corporation
("ZIMMER").
W I T N E S S E T H
WHEREAS, the Board of Directors of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb has
determined that it is in the best interests of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and its
stockholders to separate ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb's orthopaedics business from its
other existing businesses;
WHEREAS, in order to effectuate the foregoing, ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb and Zimmer have entered into a Contribution and Distribution Agreement,
dated as of [ ], 2001 (the "CONTRIBUTION AND DISTRIBUTION AGREEMENT"),
which provides, among other things, subject to the terms and conditions set
forth therein, for the Contribution and the Distribution (each as defined in the
Contribution and Distribution Agreement) and for the execution and delivery of
certain other agreements in order to facilitate and provide for the foregoing;
and
WHEREAS, in order to ensure an orderly transition under the
Contribution and Distribution Agreement it will be necessary for each of the
parties to provide to the other the Services described herein for a transitional
period.
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, and subject to and on the terms and conditions
herein set forth, the parties hereto agree as follows:
Section 1. DEFINITIONS.
Capitalized terms used and not otherwise defined herein shall
have the meanings given such terms in the Contribution and Distribution
Agreement. For purpose of this Agreement the following words and phrases shall
have the following meanings:
"ADDITIONAL SERVICES" shall have the meaning set forth in
Section 2(b).
"▇▇▇▇▇▇▇-▇▇▇▇▇ SQUIBB" shall have the meaning set forth in the
preamble of this Agreement.
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"CONTRIBUTION AND DISTRIBUTION AGREEMENT" shall have the
meaning set forth in the recitals of this Agreement.
"INITIAL SERVICES" shall have the meaning set forth in Section
2(a).
"PROVIDER" means, with respect to any Service, the entity or
entities identified on the applicable Schedule as the party to provide such
Service.
"PROVIDING PARTY" means, with respect to any Service, (i)
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb, if the entity or entities identified on the Schedule
applicable to such Service as the Provider(s) of such Service is or are
member(s) of the ▇▇▇▇▇▇▇-▇▇▇▇▇ Group and (ii) Zimmer, if the entity or entities
identified on the Schedule applicable to such Service as the Provider(s) of such
Service is or are member(s) of the ▇▇▇▇▇▇ Group.
"RECEIVING PARTY" means, with respect to any Service, (i)
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb, if the entity or entities identified on the Schedule
applicable to such Service as the Recipient(s) of such Service is or are
member(s) of the ▇▇▇▇▇▇▇-▇▇▇▇▇ Group and (ii) Zimmer, if the entity or entities
identified on the Schedule applicable to such Service as the Recipient(s) of
such Service is or are member(s) of the ▇▇▇▇▇▇ Group.
"RECIPIENT" means, with respect to any Service, the entity or
entities identified on the Schedule applicable to such Service as the party to
receive such Service.
"SCHEDULE" shall have the meaning set forth in Section 2(a).
"SERVICE PERIOD" means, with respect to any Service, the
period commencing on the Contribution Date and ending on the earlier of (i) the
date the Receiving Party terminates the provision of such Service pursuant to
Section 4(b), and (ii) the termination date (measured as the number of days from
the Contribution Date or indicated by reference to a specific date) specified
with respect to such Service on the Schedule applicable to such Service.
"SERVICES" shall have the meaning set forth in Section 2(b).
"TAXES" means all forms of taxation or duties imposed, or
required to be collected or withheld, including
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charges, together with any related interest, penalties or other additional
amounts.
"TAX RETURN" means any return, filing, report, questionnaire,
information statement or other document required to be filed, including amended
returns that may be filed, for any taxable period with any Taxing Authority
(whether or not a payment is required to be made with respect to such filing).
"TAXING AUTHORITY" means any governmental authority imposing
Taxes.
"TAX SHARING AGREEMENT" means the Tax Sharing Agreement dated
as of [ ], 2001, between ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and Zimmer.
"ZIMMER" shall have the meaning set forth in the preamble of
this Agreement.
Section 2. SERVICES.
(a) INITIAL SERVICES. Each Providing Party agrees to provide,
or with respect to any service to be provided by an Affiliate of the Providing
Party, to cause such Affiliate to provide, to the Receiving Party, or with
respect to any service to be provided to an Affiliate of the Receiving Party, to
such Affiliate, the applicable services (the "INITIAL SERVICES") set forth on
Schedule 1 through Schedule [ ] hereto (each, a "SCHEDULE").
(b) ADDITIONAL SERVICES. From time to time after the
Contribution Date, the parties may identify additional services that one party
will provide to the other party in accordance with the terms of this Agreement
(the "ADDITIONAL SERVICES" and, together with the Initial Services, the
"SERVICES"). The parties shall cooperate and act in good faith to create a
Schedule for each Additional Service setting forth the identities of the
Provider and Recipient, a description of the Service, the time period during
which the Service will be provided, the charge, if any, for the Service and any
other terms applicable thereto. Notwithstanding the foregoing, neither party
shall have any obligation to agree to provide Additional Services.
(c) SCOPE OF SERVICES. Notwithstanding anything to the
contrary herein, (i) neither the Providing Party nor any of its Affiliates will
be required to perform or to cause to be performed any of the Services for the
benefit of any third party or any other person other than the
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applicable Recipient, and (ii) the Providing Party makes no warranties,
expressed or implied, with respect to the Services, except as provided in
Section 2(e).
(d) CERTAIN LIMITS ON SERVICES. Except as expressly
contemplated in the Schedules, neither the Providing Party nor any of its
Affiliates shall be obligated to perform or to cause to be performed any Service
in a volume or quantity which exceeds the historical volumes or quantities of
Services performed for the applicable Recipients during 2000 or 2001 to date or
anticipated to be performed during the remainder of 2001, without reference to
the transactions contemplated by the Contribution and Distribution Agreement.
(e) STANDARD OF PERFORMANCE; STANDARD OF CARE.
(i) The Providing Party shall perform and cause its Affiliates
to perform all Services in a manner which is substantially similar in
nature, quality and timeliness to the services provided by the
applicable Provider to the applicable Recipient prior to Contribution
Date.
(ii) The Providing Party shall, and shall cause its Affiliates
to, perform its duties and responsibilities hereunder in good faith
based on their past practices. No member of the Providing Party's Group
shall be liable or held accountable, in damages or otherwise, for any
error of judgment or any mistake of fact or law or for anything that
any member of the Providing Party's Group does or refrains from doing,
except in the case of their gross negligence or wilful misconduct.
(iii) Nothing in this Agreement shall require the Providing
Party to perform or cause to be performed any Service in a manner that
would constitute a violation of applicable laws, including the Foreign
Corrupt Practices Act.
(f) PRICES FOR SERVICES. Services provided pursuant to the
terms of this Agreement shall be charged at the prices set forth for the
applicable Service on the applicable Schedule.
(g) TRANSITIONAL NATURE OF SERVICES; CHANGES. The parties
acknowledge the transitional nature of the Services and that any Provider may
make changes from time to time in the manner of performing the Services if such
Provider is making similar changes in performing similar
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services for members of its own Group and if such Provider furnishes to the
applicable Recipient substantially the same notice (in content and timing) as
such Provider shall furnish to the members of its own Group respecting such
changes.
(h) COOPERATION. In the event that (i) there is nonperformance
of any Service as a result of a Force Majeure Event (as defined in Section
5(d)), (ii) the provision of a Service would violate applicable law or (iii) the
provision of a Service requires the consent of a third party, the parties agree
to work together in good faith to arrange for an alternative means by which the
applicable Recipient may obtain, at the Receiving Party's sole cost, the
Services so affected.
Section 3. BILLING.
(a) PROCEDURE. Charges for the Services shall be charged to
and payable by the Receiving Party, or a Recipient, provided that the Receiving
Party shall remain responsible for prompt payment. Amounts payable pursuant to
the terms of this Agreement shall be paid to the Providing Party or a Provider,
as directed by the Providing Party, at the time provided in the applicable
Schedule.
(b) LATE PAYMENTS. Charges not paid within 15 days after the
date when payable shall bear interest at the rate of 10% per annum from such
15th day until the date paid.
Section 4. TERM AND TERMINATION.
(a) TERMINATION DATES. Unless otherwise terminated pursuant to
Section 4(b), this Agreement will terminate with respect to any Service at the
close of business on the last day of the Service Period for such Service, unless
the parties have agreed in writing to an extension of the Service Period.
(b) EARLY TERMINATION. The Receiving Party shall have the
right at any time during the term of this Agreement to terminate its obligation
to purchase any individual Service, upon the giving of an advance written notice
to the Providing Party of not less than the number of days set forth on the
applicable Schedule, a copy of which shall also be delivered to the relevant
Affiliate of the Providing Party, which the Providing Party has designated to
provide such Service set forth in the applicable Schedule, if any.
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(c) DATA TRANSMISSION. On or prior to the last day of each
relevant Service Period, the Providing Party shall cooperate fully and shall
cause its Affiliates to cooperate fully to support any transfer of data
concerning the relevant Services to the applicable Recipient. If requested by
the Receiving Party, the Providing Party shall deliver and shall cause its
Affiliates to deliver to the applicable Recipient, within such time periods as
the parties may reasonably agree, all records, data, files and other information
received or computed for the benefit of such Recipient during the Service
Period, in electronic and/or hard copy form; PROVIDED, HOWEVER, that (i) the
Providing Party shall not have any obligation to provide or cause to provide
data in any non-standard format and (ii) the Providing Party and its Affiliates
shall be reimbursed for their reasonable out-of-pocket costs for providing data
electronically in any format other than its standard format, unless expressly
provided otherwise in the applicable Schedule.
Section 5. MISCELLANEOUS.
(a) MUTUAL COOPERATION. ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb, Zimmer and their
respective Affiliates shall cooperate with each other in connection with the
performance of the Services hereunder, including producing on a timely basis all
information that is reasonably requested with respect to the performance of
Services and the transition at the end of the term of this Agreement; PROVIDED,
HOWEVER, that such cooperation shall not unreasonably disrupt the normal
operations of ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb, Zimmer and their respective Affiliates;
PROVIDED, FURTHER, that the party requesting cooperation shall pay all
reasonable out-of- pocket costs and expenses incurred by the party furnishing
cooperation, unless otherwise expressly provided in this Agreement or the
Contribution and Distribution Agreement.
(b) LIABILITY. The maximum liability of the Providing Party
and its Affiliates to, and the sole remedy of, the Receiving Party and any of
its Affiliates for breach of this Agreement shall be, indemnity under Article IV
of the Contribution Agreement, in an amount not to exceed the lesser of (i) the
price paid for the particular Service, (ii) the Receiving Party's or its
Affiliate's cost of performing the Service itself during the remainder of the
applicable Service Period or (iii) the Receiving Party's cost of obtaining the
Service from a third party during the remainder of the applicable Service
Period; PROVIDED, that the Receiving Party and its Affiliates shall exercise all
reasonable efforts to minimize the cost of any such alternatives to the Services
by selecting the most cost
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effective alternatives which provide the functional equivalent of the Services
replaced. In no event shall the Providing Party, its Affiliates or their
respective directors, officers, employees or agents be liable to any other party
for indirect, exemplary, consequential or punitive damages in connection with
the performance of this Agreement, even if it has been advised of the
possibility of such damages, and the Receiving Party hereby waives on behalf of
itself and its Affiliates any claim for such damages, including any claim for
property damage or lost profits, whether arising in contract, tort or otherwise.
(c) The Receiving Party shall indemnify, defend and hold
harmless the Providing Party, each member of the Providing Party's Group and
each of their respective directors, officers and employees, and each of the
successors and assigns of any of the foregoing (collectively, the "PROVIDING
PARTY INDEMNITEES"), from and against any and all third party claims relating
to, arising out of or resulting from the Providing Party's furnishing or
failing to furnish the Services provided for in this Agreement, other than
third party claims arising out of gross negligence or willful misconduct of
any Provider Indemnitee.
(d) FORCE MAJEURE. In case performance of any terms or
provisions hereof shall be delayed or prevented, in whole or in part, because of
or related to compliance with any law, decree, request or order of any
governmental agency or authority, either local, state, federal or foreign, or
because of riots, war, public disturbance, strike, labor dispute, fire,
explosion, storm, flood, acts of God, major breakdown or failure of
transportation, manufacturing, distribution or storage facilities, or for any
other reason which is not within the control of the party whose performance is
interfered with and which by the exercise of reasonable diligence such party is
unable to prevent (each, a "FORCE MAJEURE EVENT"), then upon prompt notice by
the party so suffering to the other party, the party suffering shall be excused
from its obligations hereunder during the period such Force Majeure Event
continues, and no liability shall attach against either party on account
thereof. No party shall be excused from performance if such party fails to use
reasonable diligence to remedy the situation and remove the cause and effect of
the Force Majeure Event.
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(e) INDEPENDENT CONTRACTORS. ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb and Zimmer
each acknowledge that they are separate entities, each of which has entered into
this Agreement for independent business reasons. The relationships of ▇▇▇▇▇▇▇-
▇▇▇▇▇ Squibb to Zimmer and of Zimmer to ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb hereunder are those
of independent contractors and nothing contained herein shall be deemed to
create a joint venture, partnership or any other relationship.
(f) NO THIRD PARTY BENEFICIARIES. Except as expressly
provided in Section 5(c), the provisions of this Agreement are solely for the
benefit of the parties and are not intended to confer upon any Person except
the parties any rights or remedies hereunder. Except for the Providing Party
Indemnities, there are no third party beneficiaries of this Agreement and
this Agreement shall not 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.
(g) INTERPRETATION. The headings contained in this Agreement
or in any Schedule hereto and in the table of contents to this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. All Schedules annexed hereto or referred to
herein are hereby incorporated in and
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made a part of this Agreement as if set forth in full herein. Any capitalized
terms used in any Schedule but not otherwise defined therein, shall have the
meaning as defined in this Agreement. When a reference is made in this Agreement
to a Section, Article or Schedule, such reference shall be to a Section or
Article of, or a Schedule to, this Agreement unless otherwise indicated. For all
purposes hereof, the terms "include", "includes" and "including" shall be deemed
followed by the words "without limitation".
(h) TAX MATTERS. The Tax Sharing Agreement embodies the
entire understanding between the parties to this Agreement relating to (i)
the responsibility for the preparation and filing of Tax Returns, and (ii)
the liability for Taxes, all or a portion of which Taxes and Tax Returns may
arise as a result of or in connection with the transactions contemplated by
this Agreement. This Agreement is not intended to, and does not, modify,
amend or supercede either the Tax Sharing Agreement, or the understanding
embodied in it.
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IN WITNESS WHEREOF, the parties have executed this Agreement
to be executed as of the date first written above.
▇▇▇▇▇▇▇-▇▇▇▇▇ SQUIBB COMPANY,
by________________________________
Name:
Title:
▇▇▇▇▇▇ HOLDINGS, INC.,
by________________________________
Name:
Title: