EXHIBIT 2
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CONTRIBUTION AND DISTRIBUTION AGREEMENT
by and between
XXXXXXX-XXXXX SQUIBB COMPANY
and
XXXXXX HOLDINGS, INC.
Dated as of [ ], 2001
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions ................................................3
ARTICLE II
THE CONTRIBUTION
SECTION 2.01. Transfer of Zimmer Assets and
Assumption of Zimmer Liabilities...........................12
SECTION 2.02. Zimmer Assets ..............................................15
SECTION 2.03. Zimmer Liabilities...........................................16
SECTION 2.04. Termination of Agreements....................................18
SECTION 2.05. Transfer Documents...........................................19
SECTION 2.06. Ancillary Agreements.........................................19
SECTION 2.07. The Non-U.S. Plan............................................20
SECTION 2.08. Disclaimer of Representations and Warranties.................20
SECTION 2.09. Financing Arrangements.......................................20
SECTION 2.10. Consents and Governmental Approvals..........................21
SECTION 2.11. Novation of Assumed Zimmer Liabilities.......................22
SECTION 2.12. Novation of Liabilities other than Zimmer Liabilities........23
ARTICLE III
THE DISTRIBUTION
SECTION 3.01. The Distribution.............................................24
SECTION 3.02. Actions Prior to the Distribution............................25
SECTION 3.03. Charter; Bylaws; Rights Plan.................................27
SECTION 3.04. Sole Discretion of Xxxxxxx-Xxxxx Squibb......................27
SECTION 3.05. Conditions to Distribution...................................27
SECTION 3.06. Fractional Shares............................................29
SECTION 3.07. The Zimmer Board of Directors................................29
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ARTICLE IV
MUTUAL RELEASES; INDEMNIFICATION
SECTION 4.01. Release of Pre-Distribution Claims...........................30
SECTION 4.02. Indemnification by Zimmer....................................33
SECTION 4.03. Indemnification by Xxxxxxx-Xxxxx
Squibb.....................................................33
SECTION 4.04. Indemnification Obligations Net of
Insurance Proceeds and Other
Amounts....................................................34
SECTION 4.05. Procedures for Indemnification of
Third Party Claims.........................................35
SECTION 4.06. Additional Matters...........................................38
SECTION 4.07. Remedies Cumulative..........................................38
SECTION 4.08. Survival of Indemnities......................................39
ARTICLE V
CONTINGENT GAINS AND CONTINGENT LIABILITIES
SECTION 5.01. Definitions Relating to Contingent
Gains and Contingent Liabilities...........................39
SECTION 5.02. Contingent Gains.............................................42
SECTION 5.03. Exclusive Contingent Liabilities.............................43
SECTION 5.04. Shared Contingent Liabilities................................43
SECTION 5.05. Payments.....................................................44
SECTION 5.06. Procedures to Determine Status of
Contingent Liability or Contingent
Gain.......................................................44
SECTION 5.07. Certain Case Allocation Matters..............................46
SECTION 5.08. Termination of Certain Article V
Provisions.................................................46
ARTICLE VI
INTERIM OPERATIONS AND CERTAIN OTHER MATTERS
SECTION 6.01. Insurance Matters............................................46
SECTION 6.02. Certain Business Matters.....................................47
SECTION 6.03. Late Payments................................................47
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ARTICLE VII
EXCHANGE OF INFORMATION; CONFIDENTIALITY
SECTION 7.01. Agreement for Exchange of
Information; Archives......................................47
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......................................52
ARTICLE VIII
DISPUTE RESOLUTION
SECTION 8.01. Disputes ....................................................53
SECTION 8.02. Escalation; Mediation........................................53
SECTION 8.03. Court Actions ..............................................54
ARTICLE IX
FURTHER ASSURANCES
SECTION 9.01. Further Assurances...........................................55
ARTICLE X
TERMINATION
SECTION 10.01. Termination..................................................57
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Counterparts; Entire Agreement;
Corporate Power............................................57
SECTION 11.02. Governing Law ...............................................58
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SECTION 11.03. Assignability ...............................................58
SECTION 11.04. Third Party Beneficiaries....................................58
SECTION 11.05. Notices......................................................59
SECTION 11.06. Severability.................................................59
SECTION 11.07. Force Majeure ...............................................60
SECTION 11.08. Publicity....................................................60
SECTION 11.09. Expenses.....................................................60
SECTION 11.10. Headings.....................................................60
SECTION 11.11. Survival of Covenants........................................60
SECTION 11.12. Waivers of Default...........................................60
SECTION 11.13. Amendments...................................................61
SECTION 11.14. Interpretation...............................................61
SCHEDULES
Schedule 1.01(a)(i) Combined International Entities
Schedule 1.01(a)(ii) Assets - Combined International Entities
Schedule 1.01(a)(iii) Non-U.S. Plan -- Combined International Entities
Schedule 1.01(b) International Assets/Excluded International Assets
Schedule 1.01(c) International Liabilities/Excluded
International Liabilities
Schedule 1.01(d) Other Assets
Schedule 1.01(e)(i) Zimmer International Entities
Schedule 1.01(e)(ii) Shares -- Zimmer International Entities
Schedule 1.01(e)(iii) Non-U.S. Plan -- Zimmer International Entities
Schedule 1.01(f) List of Oldco Subsidiaries
Schedule 1.01(g) Non-U.S. Plan
Schedule 2.01(c) Delayed Transfer Assets and Liabilities
Schedule 2.02(b)(i) List of Excluded Assets
Schedule 2.03(a)(i) Separation Costs Liabilities
Schedule 2.03(b)(i) List of Excluded Liabilities
Schedule 2.03(b)(vii) Separation Costs Excluded Liabilities
Schedule 2.04(b)(ii) Arrangements not to be Terminated
Schedule 5.01(d) Exclusive Xxxxxxx-Xxxxx Squibb Contingent Gains
Schedule 5.01(e) Exclusive Xxxxxxx-Xxxxx Squibb Contingent Liabilities
Schedule 5.01(h) Exclusive Zimmer Contingent Gains
Schedule 5.01(i) Exclusive Zimmer Contingent Liabilities
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Schedule 5.01(k) Shared Contingent Gains
Schedule 5.01(l) Shared Contingent Liabilities
Schedule 5.06 Pending Claims
EXHIBITS
Exhibit A Restated By-laws of Zimmer
Exhibit B Restated Certificate of Incorporation of Zimmer
Exhibit C Employee Benefits Agreement
Exhibit D Interim Services Agreement
Exhibit E Patent Assignments
Exhibit F Rights Agreement
Exhibit G Tax Sharing Agreement
THIS CONTRIBUTION AND DISTRIBUTION
AGREEMENT, dated as of [ ], 2001, is by and
between XXXXXXX-XXXXX SQUIBB COMPANY, a Delaware
corporation ("XXXXXXX-XXXXX SQUIBB") and XXXXXX
HOLDINGS, INC., a Delaware corporation ("ZIMMER").
Capitalized terms used herein and not otherwise
defined shall have the respective meanings assigned
to them in Article I hereof.
R E C I T A L S:
WHEREAS, the Board of Directors of Xxxxxxx-Xxxxx Squibb has
determined that it is in the best interests of Xxxxxxx-Xxxxx Squibb and its
stockholders to separate Xxxxxxx-Xxxxx Squibb's orthopaedics business from its
other existing businesses;
WHEREAS, Xxxxxxx-Xxxxx Squibb's orthopaedics business is currently
conducted in the United States by Xxxxxx, Inc., a Delaware corporation and a
wholly owned Subsidiary of Xxxxxxx-Xxxxx Squibb ("OLDCO");
WHEREAS, Xxxxxxx-Xxxxx Squibb's orthopaedics business is currently
conducted outside of the United States by (i) Oldco's wholly owned Subsidiaries
(the "OLDCO SUBSIDIARIES"), (ii) certain wholly owned Subsidiaries of
Xxxxxxx-Xxxxx Squibb that only conduct business and operations that relate to
the distribution or sale of Oldco's products ("ZIMMER INTERNATIONAL ENTITIES")
and (iii) certain wholly owned Subsidiaries of Xxxxxxx-Xxxxx Squibb that conduct
business and operations that relate to the distribution or sale of Oldco's
products and Xxxxxxx-Xxxxx Squibb Business ("COMBINED INTERNATIONAL ENTITIES");
WHEREAS, subject to the terms and conditions set forth herein,
Xxxxxxx-Xxxxx Squibb will contribute or transfer, or cause to be contributed or
transferred,
(i) all of the issued and outstanding capital stock of Oldco and the
Zimmer International Entities listed on Schedule 1.01(e)(ii) (the
"SHARES") to Zimmer;
(ii) the assets of the Combined International Entities listed on
Schedule 1.01(a)(ii) related to the
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Zimmer Business to Zimmer or other entities designated by Zimmer;
(iii) all of the assets of the Zimmer International Entities listed
on Schedule 1.01(e)(iii) and the Combined International Entities listed in
Schedule 1.01(a)(iii) to be transferred to Zimmer or other entities
designated by Zimmer pursuant to the Non-U.S. Plan (as defined in Section
1.01); and
(iv) the remaining assets comprising the Zimmer Assets as set forth
in Section 2.02(a) to Zimmer or other entities designated by Xxxxxx;
and Xxxxxx will assume the Zimmer Liabilities as set forth in Section 2.03(a)
(collectively, the "CONTRIBUTION");
WHEREAS, immediately after Oldco becomes a wholly- owned subsidiary
of Zimmer pursuant to the Contribution, (i) Zimmer will contribute all of the
Zimmer Assets received in the Contribution to Oldco and (ii) Zimmer will cause
Oldco or its subsidiaries to assume all of the Zimmer Liabilities assumed by
Zimmer in the Contribution;
WHEREAS, in connection with the Contribution, Xxxxxxx-Xxxxx Squibb
will distribute, on a pro rata basis, to holders of shares of common stock, par
value $0.10 per share, of Xxxxxxx-Xxxxx Squibb ("XXXXXXX-XXXXX SQUIBB COMMON
STOCK") all of the outstanding shares of common stock, par value $0.01 per
share, of Zimmer ("ZIMMER COMMON STOCK") owned directly or indirectly by
Xxxxxxx-Xxxxx Squibb (the "DISTRIBUTION"); and
WHEREAS, the Contribution is intended to qualify as a tax-free
transaction under Section 368(a)(1)(D) of the Internal Revenue Code of 1986, as
amended (the "CODE") and the Distribution is intended to qualify as a tax-free
spin-off under Section 355 of the Code;
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained in this Agreement, the parties, intending to
be legally bound, hereby agree as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. For the purpose of this Agreement the
following terms shall have the following meanings:
"ACTION" means any demand, action, suit, counter suit, arbitration,
inquiry, proceeding or investigation by or before any Federal, state, local,
foreign or international Governmental Authority or any arbitration or mediation
tribunal.
"AFFILIATE" of any Person means a Person that controls, is
controlled by, or is under common control with such Person. As used herein,
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through ownership of voting securities or other interests, by contract or
otherwise.
"AGENT" means the distribution agent to be appointed by
Xxxxxxx-Xxxxx Squibb to distribute to the stockholders of Xxxxxxx-Xxxxx Squibb
pursuant to the Distribution all of the shares of Zimmer Common Stock held by
Xxxxxxx-Xxxxx Squibb.
"AGREEMENT" means this Contribution and Distribution Agreement,
including all of the Schedules and Exhibits hereto.
"ANCILLARY AGREEMENTS" means the Employee Benefits Agreement, the
Interim Services Agreement, the Tax Sharing Agreement, the Patent Assignment,
the agreements and other documents comprising the Non-U.S. Plan, any sublease
entered into on or prior to the Distribution Date between any member of the
Xxxxxx Group, on the one hand, and any member of the Xxxxxxx-Xxxxx Squibb Group,
on the other hand, and the supplemental and other agreements and instruments
related to the any of the foregoing.
"XXXXXXX-XXXXX SQUIBB" has the meaning set forth in the Preamble.
"XXXXXXX-XXXXX SQUIBB BUSINESS" means: (a)(i) the business and
operations of the divisions and Subsidiaries of
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Xxxxxxx-Xxxxx Squibb which produce, distribute and sell (1) pharmaceutical
prescription and consumer medicines, including cardiovascular, anti-cancer,
anti-infective and central nervous drugs and analgesics, skin care products,
cough and cold remedies, deodorants and anti-perspirants, (2) nutritionals,
including infant formula products, (3) medical devices, including osmotic and
wound care products, but excluding the Zimmer Business, and (4) beauty care
products, including haircoloring and hair care preparation products, and (ii)
all other businesses of Xxxxxxx-Xxxxx Squibb as of the date hereof not otherwise
included in the Zimmer Business; and (b) except as otherwise expressly provided
herein, any terminated, divested or discontinued businesses or operations that
at the time of termination, divestiture or discontinuation primarily related to
the Xxxxxxx-Xxxxx Squibb Business (as described in subsection (a) above) as then
conducted.
"XXXXXXX-XXXXX SQUIBB COMMON STOCK" has the meaning set forth in the
Recitals.
"XXXXXXX-XXXXX SQUIBB GROUP" means Xxxxxxx-Xxxxx Squibb and each
Person (other than any member of the Zimmer Group) that is an Affiliate of
Xxxxxxx-Xxxxx Squibb immediately after the Distribution Date.
"XXXXXXX-XXXXX SQUIBB INDEMNITEES" has the meaning set forth in
Section 4.02.
"BYLAWS" means the Restated Bylaws of Zimmer, substantially in the
form attached hereto as Exhibit A.
"CERTIFICATE OF INCORPORATION" means the Restated Certificate of
Incorporation of Zimmer, substantially in the form attached hereto as Exhibit B.
"CODE" has the meaning set forth in the Recitals.
"COMBINED INTERNATIONAL ENTITIES" has the meaning set forth in the
Recitals. A comprehensive list of the Combined International Entities as of the
date of this Agreement is set forth in Schedule 1.01(a)(i) hereto.
"COMMISSION" means the Securities and Exchange Commission.
"CONSENTS" means any consents, waivers or approvals from, or
notification requirements to, any third parties.
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"CONTINGENT CLAIM COMMITTEE" has the meaning set forth in Section
5.01(a).
"CONTINGENT GAIN" has the meaning set forth in Section 5.01(b).
"CONTINGENT LIABILITIES" has the meaning set forth in Section
5.01(c).
"CONTRIBUTION" has the meaning set forth in the Recitals.
"CONTRIBUTION DATE" means the Distribution Date or such other date
as Xxxxxxx-Xxxxx Squibb may determine.
"DELAYED TRANSFER ASSETS" means any Zimmer Assets that are expressly
provided in this Agreement or any Ancillary Agreement to be transferred after
the Distribution Date.
"DELAYED TRANSFER LIABILITIES" means any Zimmer Liabilities that are
expressly provided in this Agreement or any Ancillary Agreement to be assumed
after the Distribution Date.
"DETERMINATION REQUEST" means a written request made to the
Contingent Claim Committee, pursuant to Section 5.06, for a determination as to
whether a Third Party Claim specified in such request constitutes a Shared
Contingent Liability.
"DISTRIBUTION" has the meaning set forth in the Recitals.
"DISTRIBUTION DATE" has the meaning set forth in Section 3.04.
"EMPLOYEE BENEFITS AGREEMENT" means the Employee Benefits Agreement
by and between Xxxxxxx-Xxxxx Squibb and Zimmer, substantially in the form
attached hereto as Exhibit C, as of the Distribution Date and thereafter as
amended.
"ENVIRONMENTAL LAW" means any Federal, state, local, foreign or
international statute, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, common law (including tort and environmental
nuisance law), legal doctrine, order, judgment, decree, injunction, requirement
or agreement with any Governmental Authority, now or hereafter in effect
relating to health,
6
safety, pollution or the environment (including ambient air, surface water,
groundwater, land surface or subsurface strata) or to emissions, discharges,
releases or threatened releases of any substance currently or at any time
hereafter listed, defined designated or classified as hazardous, toxic, waste,
radioactive or dangerous, or otherwise regulated, under any of the foregoing, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of any such substances, including the
Comprehensive Environmental Response, Compensation and Liability Act, the
Superfund Amendments and Reauthorization Act and the Resource Conservation and
Recovery Act and comparable provisions in state, local, foreign or international
law.
"ENVIRONMENTAL LIABILITIES" means all Liabilities relating to,
arising out of or resulting from any Environmental Law or contract or agreement
relating to environmental, health or safety matters (including all removal,
remediation or cleanup costs, investigatory costs, governmental response costs,
natural resources damages, property damages, personal injury damages, costs of
compliance with any product take back requirements or with any settlement,
judgment or other determination of Liability and indemnity, contribution or
similar obligations) and all costs and expenses, interest, fines, penalties or
other monetary sanctions in connection therewith.
"ESCALATION NOTICE" has the meaning set forth in Section 8.02.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, together with the rules and regulations promulgated thereunder.
"EXCLUDED ASSETS" has the meaning set forth in Section 2.02(b).
"EXCLUDED EMPLOYEE LIABILITIES" means the employee-related
liabilities, as set forth in the Employee Benefits Agreement, retained by
Xxxxxxx-Xxxxx Squibb related to
(a) U.S. employees of Zimmer under the Xxxxxxx- Xxxxx Squibb pension
plans and
(b) postretirement medical and life insurance benefits for U.S.
employees of Zimmer who have retired, or who are eligible to retire, as of the
Distribution Date.
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"EXCLUDED INTERNATIONAL ASSETS" has the meaning set forth in
Schedule 1.01(b).
"EXCLUDED INTERNATIONAL LIABILITIES" has the meaning set forth in
Schedule 1.01(c).
"EXCLUDED LIABILITIES" has the meaning set forth in Section 2.03(b).
"EXCLUSIVE XXXXXXX-XXXXX SQUIBB CONTINGENT GAIN" has the meaning set
forth in Section 5.01(d).
"EXCLUSIVE XXXXXXX-XXXXX SQUIBB CONTINGENT LIABILITY" has the
meaning set forth in Section 5.01(e).
"EXCLUSIVE CONTINGENT GAIN" has the meaning set forth in Section
5.01(f).
"EXCLUSIVE CONTINGENT LIABILITY" has the meaning set forth in
Section 5.01(g).
"EXCLUSIVE ZIMMER CONTINGENT GAIN" has the meaning set forth in
Section 5.01(h).
"EXCLUSIVE ZIMMER CONTINGENT LIABILITY" has the meaning set forth in
Section 5.01(i).
"FINANCING FACILITY" means the credit facility to be entered into
prior to the Distribution Date by and among Xxxxxxx-Xxxxx Squibb, Zimmer, and an
agent or co-agents selected by Xxxxxxx-Xxxxx Squibb and Zimmer, pursuant to
which, prior to the Distribution Date, Xxxxxxx-Xxxxx Squibb will borrow an
amount determined by Xxxxxxx-Xxxxx Squibb and, as of the Distribution Date,
Zimmer will become the sole obligor and Xxxxxxx-Xxxxx Squibb will have no
further liability or obligation thereunder.
"GOVERNMENTAL APPROVALS" means any notices, reports or other filings
to be made, or any consents, registrations, approvals, permits or authorizations
to be obtained from, any Governmental Authority.
"GOVERNMENTAL AUTHORITY" shall mean any Federal, state, local,
foreign or international court, government, department, commission, board,
bureau, agency, official or other regulatory, administrative or governmental
authority.
"GROUP" means the Xxxxxxx-Xxxxx Squibb Group or the Zimmer Group, as
the context requires.
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"INDEMNIFYING PARTY" has the meaning set forth in Section 4.04(a).
"INDEMNITEE" has the meaning set forth in Section 4.04(a).
"INDEMNITY PAYMENT" has the meaning set forth in Section 4.04(a).
"INFORMATION" means information, whether or not patentable or
copyrightable, in written, oral, electronic or other tangible or intangible
forms, stored in any medium, including studies, reports, records, books,
contracts, instruments, surveys, discoveries, ideas, concepts, know-how,
techniques, designs, specifications, drawings, blueprints, diagrams, models,
prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes,
computer programs or other software, marketing plans, customer names,
communications by or to attorneys (including attorney-client privileged
communications), memos and other materials prepared by attorneys or under their
direction (including attorney work product), and other technical, financial,
employee or business information or data.
"INFORMATION STATEMENT" means the information statement forming a
part of the Registration Statement.
"INSURANCE POLICIES" means the insurance policies written by any
insurance carrier, pursuant to which Zimmer or one or more of its Subsidiaries
(or their respective officers or directors) will be insured parties after the
Distribution Date.
"INSURANCE PROCEEDS" means those monies:
(a) received by an insured from an insurance carrier; or
(b) paid by an insurance carrier on behalf of the insured, in any
such case net of any applicable premium adjustments (including reserves and
retrospectively rated premium adjustments) and net of any costs or expenses
incurred in the collection thereof.
"INTERIM SERVICES AGREEMENT" means the Interim Services Agreement by
and between Xxxxxxx-Xxxxx Squibb and Zimmer, substantially in the form attached
hereto as Exhibit D, as of the Distribution Date and thereafter as amended.
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"INTERNATIONAL ASSETS" has the meaning set forth in Schedule
1.01(b).
"INTERNATIONAL LIABILITIES" has the meaning set forth in Schedule
1.01(c).
"LIABILITIES" means any and all losses, claims, charges, debts,
demands, actions, causes of action, suits, damages, obligations, payments, costs
and expenses, sums of money, accounts, reckonings, bonds, specialties,
indemnities and similar obligations, exoneration, covenants, contracts,
controversies, agreements, promises, doings, omissions, variances, guarantees,
make whole agreements and similar obligations, and other liabilities and
requirements, including all contractual obligations, whether absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising, and including those arising under
any law, rule, regulation, Action, threatened or contemplated Action (including
the costs and expenses of demands, assessments, judgments, settlements and
compromises relating thereto and attorneys' fees and any and all costs and
expenses, whatsoever reasonably incurred in investigating, preparing or
defending against any such Actions or threatened or contemplated Actions), order
or consent decree of any Governmental Authority or any award of any arbitrator
or mediator of any kind, and those arising under any contract, commitment or
undertaking, including those arising under this Agreement or any Ancillary
Agreement, in each case, whether or not recorded or reflected or required to be
recorded or reflected on the books and records or financial statements of any
Person.
"NON-U.S. PLAN" means the Non-U.S. Plan, comprised of the series of
transactions, agreements and other arrangements, pursuant to which certain of
the non-U.S. Zimmer Assets and Zimmer Liabilities will be transferred between
the parties hereto, which are set forth or described in Schedule 1.01(g) (as
such Schedule may be supplemented by Xxxxxxx-Xxxxx Squibb prior to the
Distribution Date).
"NYSE" means The New York Stock Exchange, Inc.
"OLDCO" has the meaning set forth in the Recitals.
"OLDCO SUBSIDIARIES" has the meaning set forth in the Recitals. A
comprehensive list of the Oldco Subsidiaries as of the date of this Agreement is
set forth in Schedule 1.01(f) hereto.
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"OTHER ASSETS" means the assets listed on Schedule 1.01(d).
"PATENT ASSIGNMENT" means the Patent Assignment, by and between
Xxxxxxx-Xxxxx Squibb and Zimmer, substantially in the form attached hereto as
Exhibit E, as of the Distribution Date and thereafter as amended.
"PERSON" means an individual, a general or limited partnership, a
corporation, a trust, a joint venture, an unincorporated organization, a limited
liability entity, any other entity and any Governmental Authority.
"PRIME RATE" means the rate which The Chase Manhattan Bank (or any
successor thereto or other major money center commercial bank agreed to by the
parties hereto) announces from time to time as its prime lending rate, as in
effect from time to time.
"RECORD DATE" means the close of business on the date to be
determined by the Xxxxxxx-Xxxxx Squibb Board of Directors as the record date for
determining stockholders of Xxxxxxx-Xxxxx Squibb entitled to receive shares of
Zimmer Common Stock in the Distribution.
"REGISTRATION STATEMENT" means the registration statement on Form 10
filed under the Exchange Act on March 26, 2001 pursuant to which the Zimmer
Common Stock to be distributed in the Distribution will be registered, together
with all amendments thereto.
"RIGHTS PLAN" means the Rights Agreement to be entered into between
Zimmer and Xxxxxx Investor Services LLC, as rights agent, substantially in the
form attached hereto as Exhibit F.
"SECURITIES ACT" means the Securities Act of 1933, together with the
rules and regulations promulgated thereunder.
"SECURITY INTEREST" means any mortgage, security interest, pledge,
lien, charge, claim, option, right to acquire, voting or other restriction,
right-of-way, covenant, condition, easement, encroachment, restriction on
transfer, or other encumbrance of any nature whatsoever.
"SHARED XXXXXXX-XXXXX SQUIBB PERCENTAGE" has the meaning set forth
in Section 5.01(j).
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"SHARED CONTINGENT GAIN" has the meaning set forth in Section
5.01(k).
"SHARED CONTINGENT LIABILITY" has the meaning set forth in Section
5.01(l).
"SHARED PERCENTAGE" has the meaning set forth in Section 5.01(m).
"SHARED ZIMMER PERCENTAGE" has the meaning set forth in Section
5.01(n).
"SHARES" has the meaning set forth in the Recitals.
"SUBSIDIARY" of any Person means any corporation or other
organization whether incorporated or unincorporated of which at least a majority
of the securities or interests having by the terms thereof ordinary voting power
to elect at least a majority of the board of directors or others performing
similar functions with respect to such corporation or other organization is
directly or indirectly owned or controlled by such Person or by any one or more
of its Subsidiaries, or by such Person and one or more of its Subsidiaries;
PROVIDED, HOWEVER, that no Person that is not directly or indirectly wholly
owned by any other Person shall be a Subsidiary of such other Person unless such
other Person controls, or has the right, power or ability to control, that
Person.
"TAX SHARING AGREEMENT" means the Tax Sharing Agreement by and
between Xxxxxxx-Xxxxx Squibb and Xxxxxx, substantially in the form attached
hereto as Exhibit G, as of the Distribution Date and thereafter as amended.
"TAXES" has the meaning set forth in the Tax Sharing Agreement.
"THIRD PARTY CLAIM" has the meaning set forth in Section 4.05(a).
"XXXXXX" has the meaning set forth in the Preamble.
"XXXXXX ASSETS" has the meaning set forth in Section 2.02(a).
"XXXXXX BALANCE SHEET" means the unaudited combined balance sheet of
Xxxxxx, including the notes
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thereto, as of March 31, 2001, as presented in the Information Statement.
"XXXXXX BUSINESS" means (a) the business and operations of (i)
Oldco, (ii) the Oldco Subsidiaries, (iii) the Xxxxxx International Entities and
(iv) the Combined International Entities, but only to the extent that such
Combined International Entities' business and operations relate to the
distribution or sale of Oldco's products and (b) except as otherwise expressly
provided herein, any terminated, divested or discontinued businesses or
operations that at the time of termination, divestiture or discontinuation
primarily related to the Xxxxxx Business (as described in subsection (a) above)
as then conducted, but in any event not the businesses and operations related to
the Excluded Assets.
"XXXXXX COMMON STOCK" has the meaning set forth in the Recitals.
"XXXXXX GROUP" means Xxxxxx, each Subsidiary of Xxxxxx and each
other Person that is either controlled directly or indirectly by Xxxxxx
immediately after the Distribution Date or that is contemplated to be controlled
by Xxxxxx pursuant to the terms hereof or the Non-U.S. Plan.
"XXXXXX INDEMNITEES" has the meaning set forth in Section 4.03(a).
"XXXXXX INTERNATIONAL ENTITIES" has the meaning set forth in the
Recitals. A comprehensive list of the Xxxxxx International Entities as of the
date of this Agreement is set forth in Schedule 1.01(e)(i) hereto.
"XXXXXX LIABILITIES" has the meaning set forth in Section 2.03(a).
ARTICLE II
THE CONTRIBUTION
SECTION 2.01. TRANSFER OF XXXXXX ASSETS AND ASSUMPTION OF XXXXXX
LIABILITIES. (a) On the terms and subject to the conditions set forth in this
Agreement and with effect as of the Contribution Date, Xxxxxxx-Xxxxx Squibb
shall contribute, assign, transfer, convey and deliver to Xxxxxx, and agrees to
cause its applicable
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Subsidiaries to contribute, assign, transfer, convey and deliver to Xxxxxx, and
Xxxxxx shall accept from Xxxxxxx- Xxxxx Squibb and its Subsidiaries, all of
Xxxxxxx-Xxxxx Squibb's and its Subsidiaries' respective rights, title and
interest in and to all Xxxxxx Assets, other than the Delayed Transfer Assets.
(b) On the terms and subject to the conditions set forth in this
Agreement and with effect as of the Contribution Date, Xxxxxx shall accept,
assume and shall agree faithfully to perform, discharge and fulfill all the
Xxxxxx Liabilities, other than the Delayed Transfer Liabilities, in accordance
with their respective terms. Xxxxxx shall be responsible for all Xxxxxx
Liabilities, regardless of when or where such Liabilities arose or arise, or
whether the facts on which they are based occurred prior to or subsequent to the
date hereof, regardless of where or against whom such Liabilities are asserted
or determined (including any Xxxxxx Liabilities arising out of claims made by
Xxxxxxx-Xxxxx Squibb's, or Xxxxxx'x respective directors, officers, employees,
agents, Subsidiaries or Affiliates against any member of the Xxxxxxx-Xxxxx
Squibb Group or the Xxxxxx Group) or whether asserted or determined prior to the
date hereof, and regardless of whether arising from or alleged to arise from
negligence, recklessness, violation of law, fraud or misrepresentation by any
member of the Xxxxxxx-Xxxxx Squibb Group or the Xxxxxx Group or any of their
respective directors, officers, employees, agents, Subsidiaries or Affiliates.
(c) Each of the parties hereto agrees that the Delayed Transfer
Assets will be contributed, assigned, transferred, conveyed and delivered, and
the Delayed Transfer Liabilities will be accepted and assumed, in accordance
with the terms of the agreements that provide for such contribution, assignment,
transfer, conveyance and delivery, or such acceptance and assumption, after the
date of this Agreement or as otherwise set forth on Schedule 2.01(c). Following
such contribution, assignment, transfer, conveyance and delivery of any Delayed
Transfer Asset, or the acceptance and assumption of any Delayed Transfer
Liability, the applicable Delayed Transfer Asset or Delayed Transfer Liability
shall be treated for all purposes of this Agreement and the Ancillary Agreements
as a Xxxxxx Asset or a Xxxxxx Liability, as the case may be.
(d) Each of the parties hereto agrees that until any Delayed
Transfer Asset is contributed to Xxxxxx or a Subsidiary of Xxxxxx, Xxxxxxx-Xxxxx
Squibb and Xxxxxx shall
14
cooperate (at their own expense) in any lawful and commercially reasonable
arrangement proposed by Xxxxxxx- Xxxxx Squibb under which Xxxxxx or a Subsidiary
of Xxxxxx designated by Xxxxxx shall obtain the economic claims, rights and
benefits under such Delayed Transfer Asset.
(e) Each of the parties hereto agrees that until any Delayed
Transfer Liability is assumed by Xxxxxx or a Subsidiary of Xxxxxx designated by
Xxxxxx, Xxxxxx will indemnify and hold harmless the Xxxxxxx-Xxxxx Squibb Group
from such Delayed Transfer Liability.
(f) In the event that any Delayed Transfer Asset has not been
contributed to Xxxxxx or a Subsidiary of Xxxxxx designated by Xxxxxx by December
31, 2001, for any reason other than the gross negligence or wilful misconduct of
any member of the Xxxxxxx-Xxxxx Squibb Group, Xxxxxxx-Xxxxx Squibb shall have
the option to liquidate such Delayed Transfer Asset at Xxxxxx'x expense;
PROVIDED, HOWEVER, that any net proceeds of such liquidation shall be for the
account of Xxxxxx.
(g) In the event that at any time or from time to time (whether
prior to or after the Distribution Date), any party hereto (or any member of
such party's respective Group), shall receive or otherwise possess any asset
that is allocated to any other Person pursuant to this Agreement or any
Ancillary Agreement, such party shall promptly transfer, or cause to be
transferred, such asset to the Person so entitled thereto.
(h) On the terms and subject to the conditions set forth in this
Agreement, immediately after Oldco becomes a wholly-owned subsidiary of Xxxxxx
pursuant to the Contribution, Xxxxxx shall contribute to Oldco all of Xxxxxx'x
rights, title and interest in and to all of the Xxxxxx Assets, other than the
capital stock of Oldco and the Delayed Transfer Assets. Xxxxxx shall contribute
all of Xxxxxx'x rights, title and interest in and to Delayed Transfer Assets to
Oldco immediately after such Delayed Transfer Assets are contributed to Xxxxxx
pursuant to the terms of this Agreement.
(i) On the terms and subject to the conditions set forth in this
Agreement, immediately after Oldco becomes a wholly-owned subsidiary of Xxxxxx
pursuant to the Contribution, Xxxxxx shall cause Oldco or its subsidiaries to
assume all of the Xxxxxx Liabilities, other than any Xxxxxx Liabilities that
already are Liabilities of Oldco, a
15
Subsidiary of Oldco or any entity contributed by Xxxxxx to Oldco and other than
the Delayed Transfer Liabilities, in accordance with their respective terms.
Xxxxxx shall cause Oldco or its subsidiaries to assume all of the Delayed
Transfer Liabilities in accordance with their respective terms immediately after
such Delayed Transfer Liabilities are assumed by Xxxxxx pursuant to the terms of
this Agreement.
SECTION 2.02. XXXXXX ASSETS. (a) For purposes of this Agreement,
"XXXXXX ASSETS" shall mean (without duplication):
(i) the Shares;
(ii) the International Assets;
(iii) the Other Assets;
(iv) subject to the terms of Article V, any Exclusive Xxxxxx
Contingent Gain and any Shared Xxxxxx Percentage of any Shared Contingent
Gain; and
(v) except as expressly provided in this Agreement or any Ancillary
Agreement, any and all assets owned or held immediately prior to the
Distribution Date by Xxxxxxx-Xxxxx Squibb or any of its Subsidiaries that
are used primarily in the Xxxxxx Business. The intention of this clause
(v) is only to rectify any inadvertent omission of transfer or conveyance
of any assets that, had the parties given specific consideration to such
asset as of the date hereof, would have otherwise been classified as a
Xxxxxx Asset. No asset shall be deemed to be a Xxxxxx Asset solely as a
result of this clause (v) if such asset is expressly covered by the
subject matter of an Ancillary Agreement or utilized by Xxxxxxx-Xxxxx
Squibb or its Affiliates to provide shared services to the Xxxxxx Business
or the Xxxxxxx-Xxxxx Squibb Business. In addition, no asset shall be
deemed a Xxxxxx Asset solely as a result of this clause (v) unless Xxxxxx
makes a claim with respect thereto on or prior to the first anniversary of
the Distribution Date.
(b) Notwithstanding Section 2.02(a), the Xxxxxx Assets shall not in
any event include the Excluded Assets. For the purposes of this Agreement,
"EXCLUDED ASSETS" shall mean:
16
(i) the assets listed or described on Schedule 2.02(b)(i);
(ii) the Excluded International Assets;
(iii) any and all assets that are expressly contemplated by this
Agreement or any Ancillary Agreement (or the Schedules hereto or thereto)
as assets to be retained by Xxxxxxx-Xxxxx Squibb or any other member of
the Xxxxxxx-Xxxxx Squibb Group; and
(iv) except to the extent expressly set forth in Section
2.02(a)(iv), any Contingent Gains.
SECTION 2.03. XXXXXX LIABILITIES. (a) For purposes of this
Agreement, "XXXXXX LIABILITIES" shall mean (without duplication):
(i) any and all Liabilities of Oldco, the Oldco Subsidiaries and the
Xxxxxx International Entities listed in Schedule 1.01(e)(ii), including
any and all Liabilities relating to the separation costs and expenses set
forth in Schedule 2.03(a)(i);
(ii) any and all International Liabilities;
(iii) all Liabilities (other than federal income Taxes and State
Income Taxes for the Pre-Distribution Period, each as defined in the Tax
Sharing Agreement), including any employee-related Liabilities (other than
Excluded Employee Liabilities) and Environmental Liabilities, primarily
relating to, arising out of or resulting from:
(A) the operation of the Xxxxxx 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 Xxxxxx Group at any time after the Distribution Date (including any
Liability relating to, arising out of or resulting from any act or failure to
act by any director, officer, employee, agent or representative (whether or not
such act or failure to act is or was within such Person's authority)); or
17
(C) any Xxxxxx Assets;
in any such case whether arising before, on or after the Distribution Date;
(iv) subject to the terms of Article V, all Exclusive Xxxxxx
Contingent Liabilities and the Shared Xxxxxx Percentage of any Shared
Contingent Liabilities;
(v) all Liabilities relating to, arising out of or resulting from
the Financing Facility, including any third party costs and expenses
incurred by any member of the Xxxxxxx-Xxxxx Squibb Group;
(vi) all Liabilities relating to, arising out of or resulting from
any of the terminated, divested or discontinued businesses and operations
of the Xxxxxx Business (other than the Liabilities set forth on Schedule
2.03(b)(i); and
(vii) all Liabilities reflected as liabilities or obligations of
Xxxxxx in the Xxxxxx Balance Sheet, subject to any discharge of such
Liabilities subsequent to the date of the Xxxxxx Balance Sheet.
(b) Notwithstanding Section 2.03(a), the Xxxxxx Liabilities shall
not include the Excluded Liabilities. For the purposes of this Agreement,
"EXCLUDED LIABILITIES" shall mean:
(i) any Liabilities listed on Schedule 2.03(b)(i) hereto;
(ii) the Excluded International Liabilities;
(iii) the Excluded Employee Liabilities;
(iv) any and all liabilities relating to, arising out of or
resulting from any Excluded Assets;
(v) subject to the terms of Article V, all Exclusive Xxxxxxx-Xxxxx
Squibb Contingent Liabilities and the Shared Xxxxxxx-Xxxxx Squibb
Percentage of any Shared Contingent Liabilities;
(vi) except as set forth in any Ancillary Agreement, all
Environmental Liabilities accrued as of the date hereof solely relating
to, arising out of or resulting from the existence of any leasehold
interest
18
that is a Xxxxxx Asset if the applicable lessor, sublessor or
sub-sublessor under the applicable lease, sublease or subsublease is a
member of the Xxxxxxx-Xxxxx Squibb Group; and
(vii) any and all Liabilities relating to the separation costs and
expenses set forth in Schedule 2.03(b)(vii).
SECTION 2.04. TERMINATION OF AGREEMENTS. (a) Except as set forth in
Section 2.04(b), in furtherance of the releases and other provisions of Section
4.01 hereof, Xxxxxx and each member of the Xxxxxx Group, on the one hand, and
Xxxxxxx-Xxxxx Squibb and each member of the Xxxxxxx-Xxxxx Squibb Group, on the
other hand, hereby terminate, any and all agreements, arrangements, commitments
or understandings, whether or not in writing, between or among Xxxxxx and/or any
member of the Xxxxxx Group, on the one hand, and Xxxxxxx-Xxxxx Squibb and/or any
member of the Xxxxxxx-Xxxxx Squibb Group, on the other hand, effective as of the
Distribution Date. No such terminated agreement, arrangement, commitment or
understanding (including any provision thereof which purports to survive
termination) shall be of any further force or effect after the Distribution
Date. Each party shall, at the reasonable request of any other party, take, or
cause to be taken, such other actions as may be necessary to effect the
foregoing.
(b) The provisions of Section 2.04(a) shall not apply to any of the
following agreements, arrangements, commitments or understandings (or to any of
the provisions thereof): (i) this Agreement and the Ancillary Agreements (and
each other agreement or instrument expressly contemplated by this Agreement or
any Ancillary Agreement to be entered into by any of the parties hereto or any
of the members of their respective Groups); (ii) any agreements, arrangements,
orders, commitments or understandings listed or described on Schedule
2.04(b)(ii); (iii) any agreements, arrangements, commitments or understandings
to which any Person other than the parties hereto and their respective
Affiliates is a party (it being understood that to the extent that the rights
and obligations of the parties and the members of their respective Groups under
any such agreements, arrangements, commitments or understandings constitute
Xxxxxx Assets or Xxxxxx Liabilities, they shall be assigned pursuant to Section
2.01); (iv) any agreements, arrangements, commitments or understandings to which
any non-wholly owned Subsidiary of Xxxxxxx-Xxxxx Squibb or Xxxxxx, as the case
may be, is a party (it being understood
19
that directors' qualifying shares or similar interests will be disregarded for
purposes of determining whether a Subsidiary is wholly owned); and (v) any other
agreements, arrangements, commitments or understandings that this Agreement or
any Ancillary Agreement expressly contemplates will survive the Distribution
Date.
SECTION 2.05. TRANSFER DOCUMENTS. In furtherance of the
contribution, assignment, transfer and conveyance of Xxxxxx Assets and the
acceptance and assumption of Xxxxxx Liabilities provided for in Sections
2.01(a), 2.01(b), 2.01(h) and 2.01(i), on or prior to the Contribution Date or
as promptly as practicable thereafter, (i) Xxxxxxx-Xxxxx Squibb shall execute
and deliver, and shall cause its Subsidiaries to execute and deliver, such bills
of sale, stock powers, certificates of title, assignments of contracts and other
instruments of transfer, conveyance and assignment as and to the extent
necessary to evidence the transfer, conveyance and assignment of all of
Xxxxxxx-Xxxxx Squibb's and its Subsidiaries' right, title and interest in and to
the Xxxxxx Assets to Oldco with effect (subject to Section 2.10) as of the
Contribution Date and (ii) Xxxxxx shall cause Oldco to execute and deliver, to
Xxxxxxx-Xxxxx Squibb and its Subsidiaries such bills of sale, stock powers,
certificates of title, assumptions of contracts and other instruments of
assumption as and to the extent necessary to evidence the valid and effective
assumption of the Xxxxxx Liabilities by Oldco with effect (subject to Section
2.10) as of the Contribution Date.
SECTION 2.06. ANCILLARY AGREEMENTS. Effective on or prior to the
Contribution Date, the parties shall execute and deliver each of the following
Ancillary Agreements to which it is a party:
(i) the Employee Benefits Agreement;
(ii) the Interim Services Agreement;
(iii) the Tax Sharing Agreement;
(iv) the Patent Assignment;
(v) the agreements and other documents comprising the Non-U.S. Plan;
and
(vi) the supplemental and other agreements and instruments related
to the foregoing.
20
SECTION 2.07. THE NON-U.S. PLAN. Each of Xxxxxxx-Xxxxx Squibb and
Xxxxxx shall take, and shall cause each member of its respective Group to take,
such action as reasonably necessary to consummate the transactions contemplated
by the Non-U.S. Plan (whether prior to or after the Contribution Date).
Notwithstanding anything in this Agreement or in any Ancillary Agreement to the
contrary, no party shall be entitled to receive or retain any asset unless such
party shall have paid any consideration contemplated to be paid in connection
therewith pursuant to the Non-U.S. Plan.
SECTION 2.08. DISCLAIMER OF REPRESENTATIONS AND WARRANTIES. (a) Each
of Xxxxxxx-Xxxxx Squibb (on behalf of itself and each member of the
Xxxxxxx-Xxxxx Squibb Group), and Xxxxxx (on behalf of itself and each member of
the Xxxxxx 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 Xxxxxx Assets or the Xxxxxx Liabilities transferred or assumed as
contemplated hereby or thereby, as to any consents or approvals required in
connection therewith, as to the value or freedom from any Security Interests of,
or any other matter concerning, any Xxxxxx Asset, or as to the absence of any
defenses or right of setoff or freedom from counterclaim with respect to any
claim or other Xxxxxx 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 Xxxxxx Asset or thing of value upon the
execution, delivery and filing hereof or thereof. Except as may expressly be set
forth herein or in any Ancillary Agreement, all such Xxxxxx Assets are being
transferred on an "as is," "where is" basis (and, in the case of any real
property, by means of a quitclaim or similar form deed or conveyance) and the
respective transferees shall bear the economic and legal risks that (i) any
conveyance shall prove to be insufficient to vest in the transferee good and
marketable title, free and clear of any Security Interest, and (ii) any
necessary Consents or Governmental Approvals are not obtained or that any
requirements of laws or judgments are not complied with.
SECTION 2.09. FINANCING ARRANGEMENTS. Prior to the Distribution
Date, Xxxxxxx-Xxxxx Squibb and Xxxxxx will enter into the Financing Facility.
Xxxxxxx-Xxxxx Squibb and Xxxxxx agree to take all such reasonable action as may
be
21
necessary to permit Xxxxxxx-Xxxxx Squibb to borrow such amount as it shall
determine under the Financing Facility prior to the Distribution Date and to
assure the assignment to and the assumption by Xxxxxx of all obligations
thereunder and the full release and discharge of each of Xxxxxxx-Xxxxx Squibb
and any other member of the Xxxxxxx-Xxxxx Squibb Group of all of its obligations
thereunder as of the Distribution Date in accordance with the terms of the
Financing Facility. Xxxxxxx-Xxxxx Squibb and Xxxxxx shall participate in the
preparation of all materials as may be reasonably necessary to secure funding
pursuant to the Financing Facility, including rating agency presentations
necessary to obtain the requisite ratings needed to secure the financing under
the Financing Facility and such assignment, assumption, release and discharge.
As of the time of such assignment, assumption, release and discharge, Xxxxxx
shall pay all third party costs and expenses incurred by any member of the
Xxxxxxx-Xxxxx Squibb Group associated with the Financing Facility.
SECTION 2.10. CONSENTS AND GOVERNMENTAL APPROVALS. (a) To the extent
that the Contribution requires any Consents or Governmental Approvals, the
parties will use their reasonable efforts to obtain any such Consents and
Governmental Approvals.
(b) If and to the extent that the valid, complete and perfected
transfer or assignment to the Xxxxxx Group of any Xxxxxx Assets would be a
material violation of applicable law or require any material Consent or
Governmental Approval in connection with the Contribution or the Distribution,
then, unless Xxxxxxx-Xxxxx Squibb shall otherwise determine, the transfer or
assignment to the Xxxxxx Group of such Xxxxxx Assets shall be automatically
deemed deferred and any such purported transfer or assignment shall be null and
void until such time as all legal impediments are removed and/or such Consents
or Governmental Approvals have been obtained and such asset shall be deemed a
Delayed Transfer Asset. Notwithstanding the foregoing, any such asset shall be
deemed a Xxxxxx Asset for purposes of determining whether any Liability is a
Xxxxxx Liability.
(c) If the transfer or assignment of any Xxxxxx Asset intended to be
transferred or assigned hereunder including pursuant to the Non-U.S. Plan, is
not consummated prior to or at the Distribution Date, whether as a result of the
provisions of Section 2.10(b) or for any other reason, then, subject to Sections
2.01(d), (e) and (f), the Person
22
retaining such Xxxxxx Asset shall thereafter hold such Xxxxxx Asset for the use
and benefit insofar as reasonably possible, of Xxxxxx (at Xxxxxx'x expense). In
addition, subject to Sections 2.01(d), (e) and (f), the Person retaining such
Xxxxxx Asset shall take such other actions as may be reasonably requested by
Xxxxxx in order to place Xxxxxx, insofar as reasonably possible, in the same
position as if such Xxxxxx Asset had been transferred as contemplated hereby and
so that all the benefits and burdens relating to such Xxxxxx Assets, including
possession, use, risk of loss, potential for gain, and dominion, control and
command over such assets, are to inure from and after the Distribution Date to
the Xxxxxx Group.
(d) If and when the Consents and/or Governmental Approvals, the
absence of which caused the deferral of transfer of any Xxxxxx Asset pursuant to
Section 2.10(b), are obtained, subject to Sections 2.01(d), (e) and (f), the
transfer of the applicable Xxxxxx Asset shall be effected in accordance with the
terms of this Agreement and/or the applicable Ancillary Agreement.
(e) The Person retaining any Xxxxxx Asset due to the deferral of the
transfer of such Xxxxxx Asset shall not be obligated, in connection with the
foregoing, to expend any money unless the necessary funds are advanced by
Xxxxxx, other than reasonable out-of-pocket expenses, attorneys' fees and
recording or similar fees, all of which shall be promptly reimbursed by Xxxxxx.
SECTION 2.11. NOVATION OF ASSUMED XXXXXX LIABILITIES. (a) Each of
Xxxxxxx-Xxxxx Squibb and Xxxxxx, at the request of the other, shall use its
reasonable efforts to obtain, or to cause to be obtained, any consent,
substitution, approval or amendment required to novate or assign all obligations
under agreements, leases, licenses and other obligations or Liabilities of any
nature whatsoever that constitute Xxxxxx Liabilities, including any
Xxxxxxx-Xxxxx Squibb Group guarantees of Xxxxxx Liabilities, or to obtain in
writing the unconditional release of all parties to such arrangements other than
any member of the Xxxxxx Group, so that, in any such case, Xxxxxx and its
Subsidiaries will be solely responsible for such Liabilities; PROVIDED, HOWEVER,
that neither Xxxxxxx-Xxxxx Squibb nor Xxxxxx shall be obligated to pay any
consideration therefor to any third party from whom such consents, approvals,
substitutions and amendments are requested.
23
(b) If Xxxxxxx-Xxxxx Squibb or Xxxxxx is unable to obtain, or to
cause to be obtained, any such required consent, approval, release, substitution
or amendment, the applicable member of the Xxxxxxx-Xxxxx Squibb Group shall
continue to be bound by such agreements, leases, licenses and other obligations
and, unless not permitted by law or the terms thereof, Xxxxxx shall, as agent or
subcontractor for Xxxxxxx-Xxxxx Squibb or such other Person and where
appropriate in the name thereof, as the case may be, pay, perform and discharge
fully all the obligations or other Liabilities of Xxxxxxx-Xxxxx Squibb or such
other Person, as the case may be, thereunder from and after the Distribution
Date. Xxxxxx shall indemnify each Xxxxxxx-Xxxxx Squibb Indemnitee and hold each
of them harmless against any Liabilities arising in connection therewith.
Xxxxxxx-Xxxxx Squibb shall, without further consideration, pay and remit, or
cause to be paid or remitted to Xxxxxx 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, Xxxxxxx-Xxxxx Squibb shall thereafter
assign, or cause to be assigned, all its rights, obligations and other
Liabilities thereunder or any rights or obligations of any member of its Group
to Xxxxxx without payment of further consideration and Xxxxxx shall, without the
payment of any further consideration, assume such rights and obligations.
SECTION 2.12. NOVATION OF LIABILITIES OTHER THAN XXXXXX LIABILITIES.
(a) Each of Xxxxxxx-Xxxxx Squibb and Xxxxxx, at the request of the other, shall
use its reasonable efforts to obtain, or to cause to be obtained, any consent,
substitution, approval or amendment required to novate or assign all Excluded
Liabilities, or to obtain in writing the unconditional release from any Excluded
Liability of all members of the Xxxxxx Group, so that, in any such case, the
members of the Xxxxxxx-Xxxxx Squibb Group will be solely responsible for such
Excluded Liabilities; PROVIDED, HOWEVER, that neither Xxxxxxx-Xxxxx Squibb nor
Xxxxxx shall be obligated to pay any consideration therefor to any third party
from whom such consents, approvals, substitutions and amendments are requested.
(b) If Xxxxxxx-Xxxxx Squibb or Xxxxxx is unable to obtain, or to
cause to be obtained, any such required consent, approval, release, substitution
or amendment, the
24
applicable member of the Xxxxxx 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,
Xxxxxxx-Xxxxx Squibb shall cause a member of the Xxxxxxx-Xxxxx Squibb Group, as
agent or subcontractor for such member of the Xxxxxx Group and where appropriate
in the name thereof, to pay, perform and discharge fully all the Excluded
Liabilities of such member of the Xxxxxx Group thereunder from and after the
Distribution Date. Xxxxxxx-Xxxxx Squibb shall indemnify each Xxxxxx Indemnitee
and hold each of them harmless against any Excluded Liabilities arising in
connection therewith. Xxxxxx shall cause each member of the Xxxxxx Group without
further consideration, to pay and remit, or cause to be paid or remitted, to
Xxxxxxx-Xxxxx Squibb or to another member of the Xxxxxxx-Xxxxx Squibb Group
specified by Xxxxxxx-Xxxxx Squibb promptly all money, rights and other
consideration received by it or any member of the Xxxxxx 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, Xxxxxx
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 Xxxxxx Group to Xxxxxxx-Xxxxx Squibb or to another member of
the Xxxxxxx-Xxxxx Squibb Group specified by Xxxxxxx-Xxxxx Squibb without payment
of further consideration and Xxxxxxx-Xxxxx Squibb, without the payment of any
further consideration shall, or shall cause such other member of the
Xxxxxxx-Xxxxx Squibb Group to, assume such rights and Excluded Liabilities.
ARTICLE III
THE DISTRIBUTION
SECTION 3.01. THE DISTRIBUTION. (a) Xxxxxxx-Xxxxx Squibb and Xxxxxx
shall use their reasonable efforts to consummate the Distribution. Such actions
shall include, but not necessarily be limited to, those specified in this
Article III.
(b) Subject to Section 3.05 hereof, on or prior to the Distribution
Date, Xxxxxxx-Xxxxx Squibb will deliver to the Agent for the benefit of holders
of record of
25
Xxxxxxx-Xxxxx Squibb Common Stock on the Record Date, a single stock
certificate, endorsed by Xxxxxxx-Xxxxx Squibb in blank, representing all of the
outstanding shares of Zimmer Common Stock then owned by Xxxxxxx-Xxxxx Squibb or
any member of the Xxxxxxx-Xxxxx Squibb Group, and shall cause the transfer agent
for the shares of Xxxxxxx-Xxxxx Squibb Common Stock to instruct the Agent to
distribute on the Distribution Date the appropriate number of such shares of
Zimmer Common Stock to each such holder or designated transferee or transferees
of such holder. The Distribution shall be effective at 11:59 p.m. Eastern
Standard Time on the Distribution Date.
(c) Subject to Sections 3.05 and 3.06, each holder of Xxxxxxx-Xxxxx
Squibb Common Stock on the Record Date (or such holder's designated transferee
or transferees) will be entitled to receive in the Distribution a number of
shares of Zimmer Common Stock equal to the number of shares of Xxxxxxx-Xxxxx
Squibb Common Stock held by such holder on the Record Date multiplied by the
distribution ratio to be determined by Xxxxxxx-Xxxxx Squibb's Board of Directors
when it declares the Distribution. The distribution ratio to be determined by
Xxxxxxx-Xxxxx Squibb is intended to approximate a fraction the numerator of
which is the number of shares of Zimmer Common Stock beneficially owned by
Xxxxxxx-Xxxxx Squibb or any other member of the Xxxxxxx-Xxxxx Squibb Group on
the Distribution Date and the denominator of which is the number of shares of
Xxxxxxx-Xxxxx Squibb Common Stock outstanding on the Record Date. Xxxxxxx-Xxxxx
Squibb and Zimmer, 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) Xxxxxxx-Xxxxx
Squibb and Zimmer shall cooperate in preparing, and Zimmer shall file, the
Registration Statement, and such amendments or supplements thereto, as may be
necessary in order to cause the same to become and remain effective as required
by law, including filing such amendments to the Registration Statement as may be
required by the Commission or Federal, state or foreign securities laws.
Xxxxxxx-Xxxxx Squibb and Zimmer 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
26
Contribution, the Distribution or the other transactions contemplated by this
Agreement and the Ancillary Agreements.
(b) Zimmer shall participate in the preparation of materials and
presentations as Xxxxxxx-Xxxxx Squibb's financial advisors shall deem necessary
or desirable.
(c) Xxxxxxx-Xxxxx Squibb and Zimmer shall prepare and mail, on or
prior to the Distribution Date, to the holders of Xxxxxxx-Xxxxx Squibb Common
Stock, such information concerning Zimmer, its business, operations and
management, the Distribution and such other matters as Xxxxxxx-Xxxxx Squibb
shall reasonably determine and as may be required by law. Xxxxxxx-Xxxxx Squibb
and Zimmer will prepare, and Zimmer will, to the extent required under
applicable law, file with the Commission any such documentation and any
requisite no action letters which Xxxxxxx-Xxxxx Squibb determines are necessary
or desirable to effectuate the Distribution and Xxxxxxx-Xxxxx Squibb and Zimmer
shall each use its reasonable efforts to obtain all necessary approvals from the
Commission with respect thereto as soon as practicable.
(d) Xxxxxxx-Xxxxx Squibb and Zimmer 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) Xxxxxxx-Xxxxx Squibb and Zimmer shall cooperate and take all
reasonable steps necessary and appropriate to cause the conditions set forth in
Section 3.05 (subject to Section 3.04 and Section 3.05(a)(viii)) to be satisfied
and to effect the Distribution on the Distribution Date.
(f) Xxxxxx shall prepare and file, and shall use its reasonable
efforts to have approved, an application for the listing of the Xxxxxx Common
Stock to be distributed in the Distribution on the NYSE, subject to official
notice of distribution.
(g) Zimmer shall pay all third party costs, fees and expenses
relating to the costs of producing, printing, mailing and otherwise distributing
the Information Statement other than any such costs, fees and expenses that are
Excluded Liabilities.
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SECTION 3.03. CHARTER; BYLAWS; RIGHTS PLAN. At or prior to the
Distribution Date, Xxxxxxx-Xxxxx Squibb and Zimmer shall each take all actions
that may be required to provide for the adoption by Zimmer of the Certificate of
Incorporation, the Bylaws and the Rights Plan.
SECTION 3.04. SOLE DISCRETION OF XXXXXXX-XXXXX SQUIBB. Xxxxxxx-Xxxxx
Squibb shall have the sole and absolute discretion to determine whether to
proceed with all or part of the Distribution and all terms of the Distribution,
including the form, structure and terms of any transaction(s) and/or offering(s)
to effect the Distribution and the timing of and conditions to the consummation
of the Distribution. In addition, Xxxxxxx-Xxxxx Squibb may, in its sole and
absolute discretion, determine the date of consummation of the Distribution
(such date as so determined by Xxxxxxx-Xxxxx Squibb in accordance with this
Article III is referred to herein as the "DISTRIBUTION DATE") and may at any
time and from time to time until the completion of the Distribution modify or
change the terms of the Distribution including by accelerating or delaying the
timing of the consummation of all or part of the Distribution. Zimmer shall
cooperate with Xxxxxxx-Xxxxx Squibb in all respects to accomplish the
Distribution and shall, at Xxxxxxx-Xxxxx Squibb's direction, promptly take any
and all actions necessary or desirable to effect the Distribution, including the
registration under the Securities Act of the common stock of Zimmer on an
appropriate registration form or forms to be designated by Xxxxxxx-Xxxxx Squibb.
Xxxxxxx-Xxxxx Squibb shall select any investment banker(s) and manager(s) in
connection with the Distribution, as well as any financial printer, solicitation
and/or exchange agent and outside counsel for Xxxxxxx-Xxxxx Squibb, which shall
include Cravath, Swaine & Xxxxx and Xxxxxx Xxxxx & Xxxxxxx LLP. Xxxxxx
acknowledges, for itself and the Xxxxxx Group, that Cravath, Swaine & Xxxxx and
Xxxxxx Xxxxx & Xxxxxxx LLP have acted only in the capacity as counsel to
Xxxxxxx-Xxxxx Squibb and the Xxxxxxx-Xxxxx Squibb Group, and not as counsel to
Zimmer or the Xxxxxx Group, in connection with this Agreement and the Ancillary
Agreements and the documents and transactions contemplated herein or therein
(other than the transactions contemplated by Section 2.09).
SECTION 3.05. CONDITIONS TO DISTRIBUTION. (a) Subject to Section
3.04, the following are the conditions, to Xxxxxxx-Xxxxx Squibb's obligation to
effect the Distribution:
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(i) the Registration Statement shall have been filed and declared
effective by the Commission, and there shall be no stop-order in effect
with respect thereto and no proceeding for that purpose shall have been
instituted by the Commission;
(ii) Xxxxxxx-Xxxxx Squibb shall be satisfied in its sole discretion
that as of the Distribution Date it will have no further liability or
obligation whatsoever under the Financing Facility;
(iii) the actions and filings with regard to state securities and
blue sky laws of the United States (and any comparable laws under any
foreign jurisdictions) described in Section 3.02(d) shall have been taken
and, where applicable, have become effective or been accepted;
(iv) the Xxxxxx Common Stock to be distributed in the Distribution
shall have been accepted for listing on the NYSE, on official notice of
distribution;
(v) no order, injunction or decree issued by any court or agency of
competent jurisdiction or other legal restraint or prohibition preventing
the consummation of the Contribution, Distribution or any of the other
transactions contemplated by this Agreement or any Ancillary Agreement
shall be in effect;
(vi) a private letter ruling from the Internal Revenue Service shall
have been obtained, and shall continue in effect, to the effect that,
among other things, the Distribution will qualify as a tax-free
distribution for federal income tax purposes under Section 355 of the Code
and the transfer to Xxxxxx of the Xxxxxx Assets and the assumption by
Xxxxxx of the Zimmer Liabilities in connection with the Contribution will
not result in the recognition of any gain or loss to Xxxxxxx-Xxxxx Squibb,
Zimmer or Xxxxxxx-Xxxxx Squibb's or Xxxxxx'x stockholders for Federal
income tax purposes, and such ruling shall be in form and substance
satisfactory to Xxxxxxx-Xxxxx Squibb in its sole discretion;
(vii) any material Consents and Governmental Approvals necessary to
consummate the Distribution shall have been obtained and be in full force
and effect;
29
(viii) no other events or developments shall have occurred
subsequent to the date hereof that, in the judgment of Xxxxxxx-Xxxxx
Squibb, would result in the Distribution having an adverse effect on
Xxxxxxx-Xxxxx Squibb or on the stockholders of Xxxxxxx-Xxxxx Squibb; and
(ix) this Agreement shall not have been terminated.
(b) The foregoing conditions are for the sole benefit of
Xxxxxxx-Xxxxx Squibb and shall not give rise to or create any duty on the part
of Xxxxxxx-Xxxxx Squibb or Xxxxxxx-Xxxxx Squibb's board of directors to waive or
not waive such conditions or in any way limits Xxxxxxx-Xxxxx Squibb's right to
terminate this Agreement as set forth in Article X or alter the consequences of
any such termination from those specified in such Article. Any determination
made by Xxxxxxx-Xxxxx Squibb prior to the Distribution concerning the
satisfaction or waiver of any or all of the conditions set forth in this Section
3.05 shall be conclusive.
SECTION 3.06. FRACTIONAL SHARES. Xxxxxxx-Xxxxx Squibb shall direct
the Agent to (i) determine the number of whole shares and fractional shares of
Zimmer Common Stock allocable to each holder of record or beneficial owner of
Xxxxxxx-Xxxxx Squibb Common Stock as of the Record Date, (ii) aggregate all such
fractional shares and sell the whole shares obtained thereby in open market
transactions as soon as practicable on or after the Distribution Date at then
prevailing trading prices and (iii) cause to be distributed to each such holder
or for the benefit of each such beneficial owner, in lieu of any fractional
share, such holder's or owner's ratable share of the proceeds of such sale,
after making appropriate deductions of the amount required to be withheld for
federal income tax purposes and after deducting an amount equal to all brokerage
charges, commissions and transfer taxes attributed to such sale.
SECTION 3.07. THE XXXXXX BOARD OF DIRECTORS. Xxxxxxx-Xxxxx Squibb
and Zimmer shall each take all actions which may be required to elect or
otherwise appoint as directors of Zimmer, on or prior to the Distribution Date,
the persons designated as nominees to Xxxxxx'x board of directors in the
Information Statement.
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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, Xxxxxx does
hereby, for itself and each other member of the Xxxxxx Group, their respective
Affiliates (other than any member of the Xxxxxxx-Xxxxx Squibb Group), successors
and assigns, and all Persons who at any time prior to the Distribution Date have
been stockholders, directors, officers, agents or employees of any member of the
Xxxxxx Group (in each case, in their respective capacities as such), remise,
release and forever discharge each of Xxxxxxx-Xxxxx Squibb, the members of the
Xxxxxxx-Xxxxx Squibb Group, their respective Affiliates (other than any member
of the Xxxxxx 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 Xxxxxxx-Xxxxx Squibb Group (in each
case, in their respective capacities as such), and their respective heirs,
executors, administrators, successors and assigns, from any and all Liabilities
whatsoever, whether at law or in equity (including any right of contribution),
whether arising under any contract or agreement, by operation of law or
otherwise, existing or arising from any acts or events occurring or failing to
occur or alleged to have occurred or to have failed to occur or any conditions
existing or alleged to have existed on or before the Distribution Date,
including in connection with the transactions and all other activities to
implement the Contribution and the Distribution.
(b) Except as provided in Section 4.01(c), effective as of the
Distribution Date, Xxxxxxx-Xxxxx Squibb does hereby, for itself and each other
member of the Xxxxxxx-Xxxxx Squibb Group, their respective Affiliates (other
than any member of the Xxxxxx 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 Xxxxxxx-Xxxxx
Squibb Group (in each case, in their respective capacities as such), remise,
release and forever discharge each of Zimmer, the members of the Xxxxxx Group,
their respective Affiliates (other than any member of the Xxxxxxx-Xxxxx Squibb
Group), successors and assigns, and all Persons who at any time prior to the
Distribution Date have been stockholders, directors, officers, agents or
employees
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of any member of the Xxxxxx Group (in each case, in their respective capacities
as such), and their respective heirs, executors, administrators, successors and
assigns, from any and all Liabilities whatsoever, whether at law or in equity
(including any right of contribution), whether arising under any contract or
agreement, by operation of law or otherwise, existing or arising from any acts
or events occurring or failing to occur or alleged to have occurred or to have
failed to occur or any conditions existing or alleged to have existed on or
before the Distribution Date, including in connection with the transactions and
all other activities to implement the Contribution and the Distribution.
(c) Nothing contained in Section 4.01(a) or 4.01(b) shall impair any
right of any Person to enforce this Agreement, any Ancillary Agreement or any
agreements, arrangements, commitments or understandings that are specified in
Section 2.04(b) or the applicable Schedules thereto not to terminate as of the
Distribution Date, in each case in accordance with its terms. Nothing contained
in Section 4.01(a) or 4.01(b) shall release any Person from:
(i) any Liability provided in or resulting from any agreement among
any members of the Xxxxxxx-Xxxxx Squibb Group or the Xxxxxx Group that is
specified in Section 2.04(b) or the applicable Schedules thereto as not to
terminate as of the Distribution Date, or any other Liability specified in
such Section 2.04(b) as not to terminate as of the Distribution Date;
(ii) any Liability, contingent or otherwise, assumed, transferred,
assigned or allocated to the Group of which such Person is a member in
accordance with, or any other Liability of any member of any Group under,
this Agreement or any Ancillary Agreement;
32
(iii) any Liability that the parties may have with respect to
indemnification or contribution pursuant to this Agreement for claims
brought against the parties by third Persons, which Liability shall be
governed by the provisions of this Article IV and Article V and, if
applicable, the appropriate provisions of the Ancillary Agreements; or
(iv) any Liability the release of which would result in the release
of any Person other than a Person released pursuant to this Section 4.01.
In addition, nothing contained in Section 4.01(a) shall release
Xxxxxxx-Xxxxx Squibb from honoring its existing obligations to indemnify any
director, officer or employee of Zimmer who was a director, officer or employee
of Xxxxxxx-Xxxxx Squibb on or prior to the Distribution Date, to the extent such
director, officer or employee becomes a named defendant in any litigation
involving Xxxxxxx-Xxxxx Squibb and was entitled to such indemnification pursuant
to then existing obligations.
(d) Zimmer shall not make, and shall not permit any member of the
Xxxxxx 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 Xxxxxxx-Xxxxx Squibb or any member of the Xxxxxxx-Xxxxx Squibb Group or
any other Person released pursuant to Section 4.01(a), with respect to any
Liabilities released pursuant to Section 4.01(a). Xxxxxxx-Xxxxx Squibb shall
not, and shall not permit any member of the Xxxxxxx-Xxxxx Squibb Group, to make
any claim or demand, or commence any Action asserting any claim or demand,
including any claim of contribution or any indemnification against Xxxxxx or any
member of the Xxxxxx Group, or any other Person released pursuant to Section
4.01(b), with respect to any Liabilities released pursuant to Section 4.0l(b).
(e) It is the intent of Xxxxxxx-Xxxxx Squibb and Zimmer 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,
33
between or among Zimmer or any member of the Xxxxxx Group, on the one hand, and
Xxxxxxx-Xxxxx Squibb or any member of the Xxxxxxx-Xxxxx Squibb Group, on the
other hand (including any contractual agreements or arrangements existing or
alleged to exist between or among any such members on or before the Distribution
Date), except as expressly set forth in Section 4.01(c). At any time, at the
request of any other party, each party shall cause each member of its respective
Group to execute and deliver releases reflecting the provisions hereof.
SECTION 4.02. INDEMNIFICATION BY ZIMMER. Except as provided in
Section 4.04, Zimmer shall indemnify defend and hold harmless Xxxxxxx-Xxxxx
Squibb, each member of the Xxxxxxx-Xxxxx Squibb Group and each of their
respective directors, officers and employees, and each of the heirs, executors,
successors and assigns of any of the foregoing (collectively, the "XXXXXXX-XXXXX
SQUIBB INDEMNITEES") from and against any and all Liabilities of the
Xxxxxxx-Xxxxx Squibb Indemnitees relating to, arising out of or resulting from
any of the following items (without duplication):
(a) the failure of Xxxxxx or any other member of the Xxxxxx Group or
any other Person to pay, perform or otherwise promptly discharge any Xxxxxx
Liability in accordance with its terms, whether prior to or after the
Distribution Date;
(b) the Xxxxxx Business, any Xxxxxx Asset or any Xxxxxx Liability;
(c) any material breach by Xxxxxx or any member of the Xxxxxx Group
of this Agreement or any of the Ancillary Agreements; and
(d) any untrue statement or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, with
respect to all information contained in any Registration Statement or
Information Statement.
SECTION 4.03. INDEMNIFICATION BY XXXXXXX-XXXXX SQUIBB. Except as
provided in Section 4.04, Xxxxxxx-Xxxxx Squibb shall indemnify, defend and hold
harmless Zimmer, each member of the Xxxxxx 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 "XXXXXX INDEMNITEES"),
from and against
34
any and all Liabilities of the Xxxxxx Indemnitees relating to, arising out of or
resulting from any of the following items (without duplication):
(a) the failure of Xxxxxxx-Xxxxx Squibb or any other member of the
Xxxxxxx-Xxxxx Squibb Group or any other Person to pay, perform or otherwise
promptly discharge any Liabilities of the Xxxxxxx-Xxxxx Squibb Group other than
the Zimmer Liabilities, whether prior to or after the Distribution Date;
(b) the Xxxxxxx-Xxxxx Squibb Business or any Liability of the
Xxxxxxx-Xxxxx Squibb Group other than the Zimmer Liabilities; and
(c) any material breach by Xxxxxxx-Xxxxx Squibb or any member of the
Xxxxxxx-Xxxxx Squibb Group of this Agreement or any of the Ancillary Agreements.
SECTION 4.04. INDEMNIFICATION OBLIGATIONS NET OF INSURANCE PROCEEDS
AND OTHER AMOUNTS. (a) The parties intend that any Liability subject to
indemnification or reimbursement pursuant to this Article IV or Article V will
be net of Insurance Proceeds that actually reduce the amount of the Liability.
Accordingly, the amount which any party (an "INDEMNIFYING PARTY") is required to
pay to any Person entitled to indemnification hereunder (an "INDEMNITEE") will
be reduced by any Insurance Proceeds theretofore actually recovered by or on
behalf of the Indemnitee in respect of the related Liability. If an Indemnitee
receives a payment (an "INDEMNITY PAYMENT") required by this Agreement from an
Indemnifying Party in respect of any Liability and subsequently receives
Insurance Proceeds, then the Indemnitee will pay to the Indemnifying Party an
amount equal to the excess of the Indemnity Payment received over the amount of
the Indemnity Payment that would have been due if the Insurance Proceeds had
been received, realized or recovered before the Indemnity Payment was made.
(b) In the case of any Shared Contingent Liability, any Insurance
Proceeds actually received, realized or recovered by any party in respect of the
Shared Contingent Liability will be shared among the parties in such manner as
may be necessary so that the obligations of the parties for such Shared
Contingent Liability, net of such Insurance Proceeds, will remain in proportion
to their respective Shared Percentages, regardless of which party or parties may
actually receive, realize or recover such Insurance Proceeds.
35
(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
Xxxxxxx-Xxxxx Squibb Group or the Xxxxxx Group of any claim or of the
commencement by any such Person of any Action (collectively, a "THIRD PARTY
CLAIM") with respect to which an Indemnifying Party may be obligated to provide
indemnification to such Indemnitee pursuant to Section 4.02 or 4.03, or any
other Section of this Agreement or any Ancillary Agreement, such Indemnitee
shall give such Indemnifying Party written notice thereof within 20 days after
becoming aware of such Third Party Claim. Any such notice shall describe the
Third Party Claim in reasonable detail. If any Person shall receive notice or
otherwise learn of the assertion of a Third Party Claim which may reasonably be
determined to be a Shared Contingent Liability, Zimmer, or Xxxxxxx-Xxxxx Squibb,
as appropriate depending on which Group such Person is a member of, shall give
the other party to this Agreement written notice thereof within 20 days after
such Person becomes aware of such Third Party Claim. Any such notice shall
describe the Third Party Claim in reasonable detail. Notwithstanding the
foregoing, the failure of any Indemnitee or other Person to give notice as
provided in this Section 4.05(a) shall not relieve the related Indemnifying
Party of its obligations under this Article IV, except to the extent that such
Indemnifying Party is actually prejudiced by such failure to give notice.
(b) If Xxxxxxx-Xxxxx Squibb or Zimmer 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
36
applicable Third Party Claim (including any Third Party Claim set forth on
Schedule 5.06) is not a Shared Contingent Liability or unless a determination to
such effect has been made in accordance with Section 5.06, Xxxxxxx-Xxxxx Squibb
shall be entitled (but not obligated) to assume the defense of such Third Party
Claim as if it were the Indemnifying Party hereunder. In any such event,
Xxxxxxx-Xxxxx Squibb shall be entitled to reimbursement of all the costs and
expenses of such defense once a final determination or acknowledgment is made as
to the status of the Third Party Claim; PROVIDED, HOWEVER, that, if such Third
Party Claim is determined to be a Shared Contingent Liability, such costs and
expenses shall be shared as provided in Section 4.05(c); PROVIDED, FURTHER, that
if such Third Party Claim is determined to be an Exclusive Xxxxxxx-Xxxxx Squibb
Contingent Liability, such costs and expenses shall be borne by Xxxxxxx-Xxxxx
Squibb.
(c) Xxxxxxx-Xxxxx Squibb shall assume the defense of, and may,
subject to Section 4.05(g), seek to settle or compromise, any Third Party Claim
that is a Shared Contingent Liability, and the costs and expenses thereof shall
be included in the calculation of the amount of the applicable Shared Contingent
Liability in determining the reimbursement obligations of the other party with
respect thereto pursuant to Section 5.04. Any Indemnitee in respect of a Shared
Contingent Liability shall have the right to employ separate counsel and to
participate in (but not control) the defense, compromise, or settlement thereof,
but all fees and expenses of such counsel shall be the expense of such
Indemnitee.
(d) Other than in the case of a Shared Contingent Liability, an
Indemnifying Party may elect to defend (and, unless the Indemnifying Party has
specified any reservations or exceptions, to seek to settle or compromise), at
such Indemnifying Party's own expense and by such Indemnifying Party's own
counsel, any Third Party Claim. Within 30 days after the receipt of notice from
an Indemnitee in accordance with Section 4.05(a) (or sooner, if the nature of
such Third Party Claim so requires), the Indemnifying Party shall notify the
Indemnitee of its election whether the Indemnifying Party will assume
responsibility for defending such Third Party Claim, which election shall
specify any reservations or exceptions. After notice from an Indemnifying Party
to an Indemnitee of its election to assume the defense of a Third Party Claim,
such Indemnitee shall have the right to employ separate counsel and to
participate in (but not control) the defense, compromise, or
37
settlement thereof, but the fees and expenses of such counsel shall be the
expense of such Indemnitee except as set forth in the next sentence. In the
event that (i) the Third Party Claim is not a Shared Contingent Liability and
(ii) the Indemnifying Party has elected to assume the defense of the Third Party
Claim but has specified, and continues to assert, any reservations or exceptions
in such notice, then, in any such case, the reasonable fees and expenses of one
separate counsel for all Indemnitees shall be borne by the Indemnifying Party.
(e) Other than in the case of a Shared Contingent Liability, if an
Indemnifying Party elects not to assume responsibility for defending a Third
Party Claim, or fails to notify an Indemnitee of its election as provided in
Section 4.05(d), such Indemnitee may defend such Third Party Claim at the cost
and expense of the Indemnifying Party.
(f) No Indemnitee may settle or compromise any Third Party Claim
that is not a Shared Contingent Liability without the consent of the
Indemnifying Party, which, if the Indemnifying Party has failed to assume the
defense of the Third Party Claim in accordance with the terms of this Agreement,
shall not be unreasonably withheld. No Indemnitee may settle or compromise any
Third Party Claim that is a Shared Contingent Liability without the consent of
Xxxxxxx-Xxxxx Squibb.
(g) In the case of a Third Party Claim that is not a Shared
Contingent Liability, no Indemnifying Party shall consent to entry of any
judgment or enter into any settlement of the Third Party Claim without the
consent of the Indemnitee if the effect thereof is to permit any injunction,
declaratory judgment, other order or other nonmonetary relief to be entered,
directly or indirectly against any Indemnitee. In the case of a Third Party
Claim that is a Shared Contingent Liability, Xxxxxxx-Xxxxx Squibb shall not
consent to entry of any judgment or enter into any settlement of the Third Party
Claim without the consent of the Indemnitee if the effect thereof is to permit
any injunction, declaratory judgment, other order or other nonmonetary relief to
be entered, directly or indirectly, against any Indemnitee.
(h) The provisions of Section 4.05 and Section 4.06 shall not apply
to Taxes (which are covered by the Tax Sharing Agreement).
38
SECTION 4.06. ADDITIONAL MATTERS. (a) Any claim on account of a
Liability which does not result from a Third Party Claim shall be asserted by
written notice given by the Indemnitee to the related Indemnifying Party. Such
Indemnifying Party shall have a period of 30 days after the receipt of such
notice within which to respond thereto. If such Indemnifying Party does not
respond within such 30-day period, such Indemnifying Party shall be deemed to
have refused to accept responsibility to make payment. If such Indemnifying
Party does not respond within such 30-day period or rejects such claim in whole
or in part, such Indemnitee shall be free to pursue such remedies as may be
available to such party as contemplated by this Agreement and the Ancillary
Agreements.
(b) In the event of payment by or on behalf of any Indemnifying
Party to any Indemnitee in connection with any Third Party Claim, such
Indemnifying Party shall be subrogated to and shall stand in the place of such
Indemnitee as to any events or circumstances in respect of which such Indemnitee
may have any right, defense or claim relating to such Third Party Claim against
any claimant or plaintiff asserting such Third Party Claim or against any other
Person. Such Indemnitee shall cooperate with such Indemnifying Party in a
reasonable manner, and at the cost and expense of such Indemnifying Party, in
prosecuting any subrogated right, defense or claim.
(c) In the event of an Action in which the Indemnifying Party is not
a named defendant, if either the Indemnitee or Indemnifying Party shall so
request, the parties shall endeavor to substitute the Indemnifying Party for the
named defendant or, in the case of a Shared Contingent Liability, add the
Indemnifying Party as a named defendant, if at all practicable. If such
substitution or addition cannot be achieved for any reason or is not requested,
the named defendant shall allow the Indemnifying Party to manage the Action as
set forth in this Section, subject to Section 5.04 with respect to Shared
Contingent Liabilities, and the Indemnifying Party shall fully indemnify the
named defendant against all costs of defending the Action (including court
costs, sanctions imposed by a court, attorneys' fees, experts fees and all other
external expenses), the costs of any judgment or settlement, and the cost of any
interest or penalties relating to any judgment or settlement.
SECTION 4.07. REMEDIES CUMULATIVE. The remedies provided in this
Article IV shall be cumulative and, subject
39
to the provisions of Article VIII, shall not preclude assertion by any
Indemnitee of any other rights or the seeking of any and all other remedies
against any Indemnifying Party.
SECTION 4.08. SURVIVAL OF INDEMNITIES. The rights and obligations of
each of Xxxxxxx-Xxxxx Squibb and Xxxxxx and their respective Indemnitees under
this Article IV shall survive the sale or other transfer by any party of any
assets or the assignment by it of any Liabilities.
ARTICLE V
CONTINGENT GAINS AND CONTINGENT LIABILITIES
SECTION 5.01. DEFINITIONS RELATING TO CONTINGENT GAINS AND
CONTINGENT LIABILITIES. For the purpose of this Agreement the following terms
shall have the following meanings:
(a) "CONTINGENT CLAIM COMMITTEE" means a committee composed of one
representative designated from time to time by each of Xxxxxxx-Xxxxx Squibb and
Xxxxxx that shall be established in accordance with Section 5.06.
(b) "CONTINGENT GAIN" means any claim or other right of
Xxxxxxx-Xxxxx Squibb, Xxxxxx or any of their respective Affiliates, whenever
arising, against any Person other than Xxxxxxx-Xxxxx Squibb, Xxxxxx 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
40
it asserted in an Action on or prior to the Distribution Date, would not be
dismissed by a court on ripeness or similar grounds. Notwithstanding the
foregoing, none of (i) any Insurance Proceeds, (ii) any Excluded Assets, (iii)
any reversal of any litigation or other reserve, or (iv) any matters relating to
Taxes (which are governed by the Tax Sharing Agreement) shall be deemed to be a
Contingent Gain.
(c) "CONTINGENT LIABILITY" means any Liability, other than
Liabilities for Taxes (which are governed by the Tax Sharing Agreement), of
Xxxxxxx-Xxxxx Squibb, Xxxxxx or any of their respective Affiliates, whenever
arising, to any Person other than Xxxxxxx-Xxxxx Squibb, Xxxxxx 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 Xxxxxxx-Xxxxx Squibb, Xxxxxx or any of their
respective Affiliates as of the Distribution Date with respect to such Liability
was not acknowledged, fixed or determined in any material respect, due to a
dispute or other uncertainty as of the Distribution Date or as a result of the
failure of such Liability to have been discovered or asserted as of the
Distribution Date (it being understood that the existence of a litigation or
other reserve with respect to any Liability shall not be sufficient for such
Liability to be considered acknowledged, fixed or determined). In the case of
any Liability a portion of which had accrued as of the Distribution Date and a
portion of which accrues after the Distribution Date, only that portion that had
accrued as of the Distribution Date shall be considered a Contingent Liability.
For purposes of the foregoing, a Liability shall be deemed to have accrued as of
the Distribution Date if all the elements necessary for the assertion of a claim
with respect to such Liability shall have occurred on or prior to the
Distribution Date, such that the claim, were it asserted in an Action on or
prior to the Distribution Date, would not be dismissed by a court on ripeness or
similar grounds. Notwithstanding the foregoing, the parties agree that no
Liability relating to, arising out of or resulting from any obligation of any
Person to perform the executory portion of any contract or agreement existing as
of the Distribution Date, or to satisfy any obligation accrued under any Plan
(as defined in the Employee Benefits Agreement) as of the Distribution Date,
shall be deemed to be a Contingent Liability.
(d) "EXCLUSIVE XXXXXXX-XXXXX SQUIBB CONTINGENT GAIN" means any
Contingent Gain if such Contingent Gain primarily relates to the Xxxxxxx-Xxxxx
Squibb Business,
41
including the matters listed or described on Schedule 5.01(d) hereto, or if such
Contingent Gain is expressly assigned to Xxxxxxx-Xxxxx Squibb pursuant to this
Agreement or any Ancillary Agreement.
(e) "EXCLUSIVE XXXXXXX-XXXXX SQUIBB CONTINGENT LIABILITY" means any
Contingent Liability if such Contingent Liability primarily relates to the
Xxxxxxx-Xxxxx Squibb Business, including the matters listed or described on
Schedule 5.01(e) hereto, or if such Contingent Liability is expressly assigned
to Xxxxxxx-Xxxxx Squibb pursuant to this Agreement or any Ancillary Agreement.
(f) "EXCLUSIVE CONTINGENT GAIN" means any Exclusive Xxxxxxx-Xxxxx
Squibb Contingent Gain or Exclusive Xxxxxx Contingent Gain.
(g) "EXCLUSIVE CONTINGENT LIABILITY" means any Exclusive
Xxxxxxx-Xxxxx Squibb Contingent Liability or Exclusive Xxxxxx Contingent
Liability.
(h) "EXCLUSIVE XXXXXX CONTINGENT GAIN" means any Contingent Gain if
such Contingent Gain primarily relates to the Xxxxxx Business, including the
matters listed or described on Schedule 5.01(h) hereto, or if such Contingent
Gain is expressly assigned to Xxxxxx pursuant to this Agreement or any Ancillary
Agreement.
(i) "EXCLUSIVE XXXXXX CONTINGENT LIABILITY" means any Contingent
Liability if such Contingent Liability primarily relates to the Xxxxxx Business,
including the matters listed or described on Schedule 5.01(i) hereto, or if such
Contingent Liability is expressly assigned to Xxxxxx pursuant to this Agreement
or any Ancillary Agreement.
(j) "SHARED XXXXXXX-XXXXX SQUIBB PERCENTAGE" means 95%, unless the
parties shall agree to a different percentage with respect to any Shared
Contingent Gain or Shared Contingent Liability.
(k) "SHARED CONTINGENT GAIN" means any Contingent Gain that is not
an Exclusive Xxxxxxx-Xxxxx Squibb Contingent Gain or an Exclusive Xxxxxx
Contingent Gain including any Contingent Gain relating to, arising out of or
resulting from the matters set forth on Schedule 5.01(k).
42
(l) "SHARED CONTINGENT LIABILITY" means, without duplication:
(i) any Contingent Liability that is not an Exclusive Xxxxxxx-Xxxxx
Squibb Contingent Liability or an Exclusive Xxxxxx Contingent Liability;
and
(ii) any Liability (other than Taxes) relating to, arising out of or
resulting from the matters set forth on Schedule 5.01(l).
(m) "SHARED PERCENTAGE" means the Shared Xxxxxxx-Xxxxx Squibb
Percentage or the Shared Xxxxxx Percentage, as the case may be.
(n) "SHARED XXXXXX PERCENTAGE" means 5%, unless the parties shall
agree to a different percentage with respect to any Shared Contingent Gain or
Shared Contingent Liability.
SECTION 5.02. CONTINGENT GAINS. (a) Each of Xxxxxxx-Xxxxx Squibb and
Xxxxxx shall have sole and exclusive right to any benefit received with respect
to any Exclusive Xxxxxxx-Xxxxx Squibb Contingent Gain, or Exclusive Xxxxxx
Contingent Gain, respectively. Each of Xxxxxxx-Xxxxx Squibb and Xxxxxx 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 Xxxxxxx-Xxxxx
Squibb Contingent Gain or Exclusive Xxxxxx Contingent Gain, respectively.
(b) Any benefit that may be received from any Shared Contingent Gain
shall be shared among Xxxxxxx-Xxxxx Squibb and Xxxxxx in proportion to the
Shared Xxxxxxx-Xxxxx Squibb Percentage and the Shared Xxxxxx Percentage,
respectively, and shall be paid in accordance with Section 5.05. Notwithstanding
the foregoing, Xxxxxxx-Xxxxx Squibb shall have sole and exclusive authority to
commence, prosecute, settle, manage, control, conduct, waive, forgo, release,
discharge, forgive and otherwise determine all matters whatsoever with respect
to any Shared Contingent Gain. Xxxxxx 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 Xxxxxxx-Xxxxx Squibb. Xxxxxxx-Xxxxx
Squibb shall use its reasonable efforts to notify Xxxxxx in the event that it
commences an Action with respect to a Shared Contingent Gain; PROVIDED, HOWEVER,
that the failure to provide such
43
notice shall not give rise to any rights on the part of Xxxxxx against
Xxxxxxx-Xxxxx Squibb or affect any other provision of this Section 5.02. Xxxxxx
acknowledges that Xxxxxxx-Xxxxx Squibb may elect not to pursue any Shared
Contingent Gain for any reason whatsoever (including a different assessment of
the merits of any Action, claim or right than Xxxxxx or any business reasons
that are in the best interests of Xxxxxxx-Xxxxx Squibb or a member of the
Xxxxxxx-Xxxxx Squibb Group, without regard to the best interests of any member
of the Xxxxxx Group) and that no member of the Xxxxxxx-Xxxxx Squibb Group shall
have any liability to any Person (including any member of the Xxxxxx 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 Xxxxxxx-Xxxxx Squibb Contingent Gain or an Exclusive Xxxxxx Contingent
Gain, Xxxxxxx-Xxxxx Squibb may, but shall not be obligated to, commence
prosecution or other assertion of such claim or right pending resolution of such
dispute. In the event that Xxxxxxx-Xxxxx Squibb commences any such prosecution
or assertion and, upon resolution of the dispute, it is determined hereunder
that Xxxxxx has the exclusive right to such claim or right, Xxxxxxx-Xxxxx Squibb
shall, promptly upon the request of Xxxxxx, discontinue the prosecution or
assertion of such right or claim and transfer the control thereof to Xxxxxx. In
such event, Xxxxxx shall reimburse Xxxxxxx-Xxxxx Squibb for all costs and
expenses, reasonably incurred prior to resolution of such dispute in the
prosecution or assertion of such claim or right.
SECTION 5.03. EXCLUSIVE CONTINGENT LIABILITIES. Xxxxxxx-Xxxxx Squibb
shall be solely responsible for each Exclusive Xxxxxxx-Xxxxx Squibb Contingent
Liability and Xxxxxx shall be solely responsible for each Exclusive Xxxxxx
Contingent Liability. Each Exclusive Contingent Liability shall constitute a
Liability for which indemnification is provided by Xxxxxxx-Xxxxx Squibb or
Xxxxxx, 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), Xxxxxxx-Xxxxx Squibb shall
assume the defense of, and may seek to settle or compromise, any Third Party
Claim that is a Shared Contingent Liability, and the costs and expenses thereof
shall be included in the calculation of the amount of the applicable Shared
44
Contingent Liability in determining the reimbursement obligations of the other
parties with respect thereto pursuant to this Section 5.04.
(b) Each of Xxxxxxx-Xxxxx Squibb and Xxxxxx 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, Xxxxxxx-Xxxxx
Squibb shall be entitled to reimbursement from Xxxxxx 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, Xxxxxxx-Xxxxx Squibb shall be entitled to
retain from the amount of the Shared Contingent Gain otherwise payable to
Xxxxxx, Xxxxxx'x Shared Percentage of the costs and expenses paid or incurred by
or on behalf of any member of the Xxxxxxx-Xxxxx Squibb Group in connection with
such Shared Contingent Gain.
(c) Any amounts billed and properly payable in accordance with this
Article V that are not paid within 30 days of such xxxx shall bear interest at
the Prime Rate plus 2% per annum.
SECTION 5.06. PROCEDURES TO DETERMINE STATUS OF CONTINGENT LIABILITY
OR CONTINGENT GAIN. (a) With respect
45
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), Xxxxxxx-Xxxxx
Squibb and Xxxxxx 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
Xxxxxxx-Xxxxx Squibb Contingent Gain or an Exclusive Xxxxxx Contingent
Gain;
(iii) any Liability is a Contingent Liability; or
(iv) any Contingent Liability is a Shared Contingent Liability, an
Exclusive Xxxxxxx-Xxxxx Squibb Contingent Liability or an Exclusive Xxxxxx
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 Xxxxxxx-Xxxxx Squibb and Xxxxxx
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 Xxxxxxx-Xxxxx Squibb Contingent Gain or an
Exclusive Xxxxxx Contingent Gain or (ii) any Contingent Liability is a Shared
Contingent Liability, an Exclusive Xxxxxxx-Xxxxx Squibb Contingent Liability or
an Exclusive Xxxxxx Contingent Liability, the categorization of Contingent Gains
and Contingent Liabilities reflected in 5.01(d), 5.01(e), 5.01(h), 5.01(i),
46
5.01(k) or 5.01(l) shall be considered and used as a presumptive guide.
SECTION 5.07. CERTAIN CASE ALLOCATION MATTERS. The parties agree
that if any Action not set forth on Schedule 5.01(d), 5.01(e), 5.01(h), 5.01(i),
5.01(k) or 5.01(l) involves separate and distinct claims that, if not joined in
a single Action, would constitute separate Exclusive Contingent Liabilities of
two or more parties, they will use their reasonable efforts to segregate such
separate and distinct claims so that the Liabilities associated with each such
claim (including all costs and expenses) shall be treated as Exclusive
Contingent Liabilities of the appropriate party and so that each party shall
have the rights and obligations with respect to each such claim (including
pursuant to Article V hereof) as would have been applicable had such claims been
commenced as separate Actions. Notwithstanding the foregoing provisions, this
Section 5.07 shall not apply to any separate and distinct claim that is de
minimis or frivolous in nature.
SECTION 5.08. TERMINATION OF CERTAIN ARTICLE V PROVISIONS. The
provisions set forth in this Article V related to sharing of Contingent Gains
and Contingent Liabilities shall terminate on the third anniversary of the
Distribution Date except for (a) any claim or action pending or asserted by
either party on or prior to such termination, or (b) any claim or action
related to any matter that has a statute of limitations that extends beyond
such termination date. Any claim or action referred to in (a) and (b) above
shall survive until the later of the final determination applicable to any
such claim or action or, in the case of clause (b) above, the applicable
statute of limitations covering such claim or action.
ARTICLE VI
INTERIM OPERATIONS AND CERTAIN OTHER MATTERS
SECTION 6.01. INSURANCE MATTERS. Xxxxxx does hereby, for itself and
each other member of the Xxxxxx Group, agree that no member of the Xxxxxxx-Xxxxx
Squibb Group or any Xxxxxxx-Xxxxx Squibb Indemnitee shall have any Liability
whatsoever as a result of the insurance policies and practices of Xxxxxxx-Xxxxx
Squibb and its Affiliates as in effect at any time prior to the Distribution
Date, including as a result of the level or scope of any such
47
insurance, the creditworthiness of any insurance carrier, the terms and
conditions of any policy, the adequacy or timeliness of any notice to any
insurance carrier with respect to any claim or potential claim or otherwise.
SECTION 6.02. CERTAIN BUSINESS MATTERS. No member of any Group shall
have any duty to refrain from (i) engaging in the same or similar activities or
lines of business as any member of the other Group, (ii) doing business with any
potential or actual supplier or customer of any member of the other Group, or
(iii) engaging in, or refraining from, any other activities whatsoever relating
to any of the potential or actual suppliers or customers of any member of the
other Group.
SECTION 6.03. LATE PAYMENTS. Except as expressly provided to the
contrary in this Agreement or in any Ancillary Agreement, any amount not paid
when due pursuant to this Agreement or any Ancillary Agreement (and any amounts
billed or otherwise invoiced or demanded and properly payable that are not paid
within 30 days of such xxxx, invoice or other demand) shall accrue interest at a
rate per annum equal to the Prime Rate plus 2%.
ARTICLE VII
EXCHANGE OF INFORMATION; CONFIDENTIALITY
SECTION 7.01. AGREEMENT FOR EXCHANGE OF INFORMATION; ARCHIVES. (a)
Each of Xxxxxxx-Xxxxx Squibb and Xxxxxx, on behalf of its respective Group,
agrees to provide, or cause to be provided, to the other Group, at any time
before or after the Distribution Date, as soon as reasonably practicable after
written request therefor, any Information in the possession or under the control
of such respective Group which the requesting party reasonably needs (i) to
comply with reporting, disclosure, filing or other requirements imposed on the
requesting party (including under applicable securities laws) by a Governmental
Authority having jurisdiction over the requesting party, (ii) for use in any
other judicial, regulatory, administrative or other proceeding or in order to
satisfy audit, accounting, claims, regulatory, litigation or other similar
requirements, in each case other than claims or allegations that one party to
this Agreement has against the other or (iii) subject to foregoing clause (ii)
above, to comply with its obligations under this Agreement, or any
48
Ancillary Agreement; PROVIDED, HOWEVER, that in the event that any party
determines that any such provision of Information could be commercially
detrimental, violate any law or agreement, or waive any attorney-client
privilege, the parties shall take all reasonable measures to permit the
compliance with such obligations in a manner that avoids any such harm or
consequence. The parties acknowledge that the Tax Sharing Agreement shall govern
the exchange of Information with respect to Taxes.
(b) After the Distribution Date, Xxxxxx 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 Xxxxxx Business that are
located in archives retained or maintained by Xxxxxxx-Xxxxx Squibb. Xxxxxx 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
Xxxxxx shall cause any such objects to be returned promptly in the same
condition in which they were delivered to Xxxxxx and Xxxxxx 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 Xxxxxxx-Xxxxx Squibb. Xxxxxx 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 Xxxxxxx-Xxxxx Squibb generally).
Nothing herein shall be deemed to restrict the access of any member of the
Xxxxxxx-Xxxxx Squibb Group to any such documents or objects or to impose any
liability on any member of the Xxxxxxx-Xxxxx Squibb Group if any such documents
or objects are not maintained or preserved by Xxxxxxx-Xxxxx Squibb.
(c) After the date hereof, each of Xxxxxxx-Xxxxx Squibb and Xxxxxx
(i) shall maintain in effect at its own cost and expense adequate systems and
controls to the extent necessary to enable the members of the other Group to
satisfy their respective reporting, accounting, audit and other obligations, and
(ii) shall provide, or cause to be provided, to the other party in such form as
the requesting party shall request, at no charge to such requesting party, all
financial and other data and information as such requesting party determines
necessary or advisable in order to prepare its financial statements and reports
or filings with any Governmental Authority.
49
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 Xxxxxxx-Xxxxx Squibb as
in effect on the Distribution Date or such other policies as may be reasonably
adopted by the appropriate party after the Distribution Date. No party will
destroy, or permit any of its Subsidiaries to destroy, any Information which the
other party may have the right to obtain pursuant to this Agreement prior to the
third anniversary of the date hereof without first using its reasonable efforts
to notify the other party of the proposed destruction and giving the other party
the opportunity to take possession of such information prior to such
destruction; PROVIDED, HOWEVER, that in the case of any Information relating to
employee benefits or Environmental Liabilities, such period shall be extended to
the expiration of the applicable statute of limitations (giving effect to any
extensions thereof); PROVIDED, FURTHER, that in the event that any such
Information is also subject to a retention requirement contained in any
Ancillary Agreement that is longer than the requirement contained in this
Section 7.04, then the requirement in such agreement shall supersede this
Section 7.04.
SECTION 7.05. LIMITATIONS OF LIABILITY. No party shall have any
liability to any other party in the event
50
that any Information exchanged or provided pursuant to this Agreement which is
an estimate or forecast, or which is based on an estimate or forecast, is found
to be inaccurate in the absence of willful misconduct by the party providing
such Information. No party shall have any liability to any other party if any
Information is destroyed after reasonable efforts by such party to comply with
the provisions of Section 7.04.
SECTION 7.06. OTHER AGREEMENTS PROVIDING FOR EXCHANGE OF
INFORMATION. The rights and obligations granted under this Article VII are
subject to any specific limitations, qualifications or additional provisions on
the sharing, exchange, retention or confidential treatment of Information set
forth in any Ancillary Agreement.
SECTION 7.07. PRODUCTION OF WITNESSES; RECORDS; COOPERATION. (a)
After the Distribution Date, except in the case of an adversarial Action by one
party against another party, each party hereto shall use its reasonable efforts
to make available to each other party, upon written request, the former, current
and future directors, officers, employees, other personnel and agents of the
members of its respective Group as witnesses and any books, records or other
documents within its control or which it otherwise has the ability to make
available, to the extent that any such person (giving consideration to business
demands of such directors, officers, employees, other personnel and agents) or
books, records or other documents may reasonably be required in connection with
any Action in which the requesting party may from time to time be involved,
regardless of whether such Action is a matter with respect to which
indemnification may be sought hereunder. The requesting party shall bear all
costs and expenses in connection therewith.
(b) If an Indemnifying Party or Xxxxxxx-Xxxxx Squibb chooses to
defend or to seek to compromise or settle any Third Party Claim, the other
parties shall make available to such Indemnifying Party, Xxxxxxx-Xxxxx Squibb or
such other party, as the case may be, upon written request, the former, current
and future directors, officers, employees, other personnel and agents of the
members of its respective Group as witnesses and any books, records or other
documents within its control or which it otherwise has the ability to make
available, to the extent that any such person (giving consideration to business
demands of such directors, officers, employees, other personnel and agents) or
books, records or other documents may reasonably be
51
required in connection with such defense, settlement or compromise, as the case
may be, and shall otherwise cooperate in such defense, settlement or compromise,
as the case may be.
(c) Without limiting the foregoing, the parties shall cooperate and
consult to the extent reasonably necessary with respect to any Actions.
(d) Without limiting any provision of this Section 7.07, each of the
parties agrees to cooperate, and to cause each member of its respective Group to
cooperate, with each other in the defense of any infringement or similar claim
with respect any intellectual property and shall not claim to acknowledge, or
permit any member of its respective Group to claim to acknowledge, the validity
or infringing use of any intellectual property of a third Person in a manner
that would hamper or undermine the defense of such infringement or similar
claim.
(e) The obligation of the parties to provide witnesses pursuant to
this Section 7.07 is intended to be interpreted in a manner so as to facilitate
cooperation and shall include the obligation to provide as witnesses inventors
and other employees without regard to whether the witness or the employer of the
witness could assert a possible business conflict (subject to the exception set
forth in the first sentence of Section 7.07(a)).
(f) In connection with any matter contemplated by this Section 7.07,
the parties will enter into a mutually acceptable joint defense agreement so as
to maintain to the extent practicable any applicable attorney-client privilege
or work product immunity of any member of any Group.
SECTION 7.08. CONFIDENTIALITY. (a) Subject to Section 7.09, each of
Xxxxxxx-Xxxxx Squibb and Zimmer, on behalf of itself and each member of its
respective Group, agrees to hold, and to cause its respective directors,
officers, employees, agents, accountants, counsel and other advisors and
representatives to hold, in strict confidence, with at least the same degree of
care that applies to Xxxxxxx-Xxxxx Squibb's confidential and proprietary
information pursuant to policies in effect as of the Distribution Date, all
Information concerning each such other Group that is either in its possession
(including Information in its possession prior to any of the date hereof or the
Distribution Date) or furnished by any such other Group or its respective
directors, officers,
52
employees, agents, accountants, counsel and other advisors and representatives
at any time pursuant to this Agreement or any Ancillary Agreement, and shall not
use any such Information other than for such purposes as shall be expressly
permitted hereunder or thereunder, except, in each case, to the extent that such
Information has been (i) in the public domain through no fault of such party or
any member of such Group or any of their respective directors, officers,
employees, agents, accountants, counsel and other advisors and representatives,
(ii) later lawfully acquired from other sources by such party (or any member of
such party's Group) which sources are not themselves bound by a confidentiality
obligation, or (iii) independently generated without reference to any
proprietary or confidential Information of the other party.
(b) Each party agrees not to release or disclose, or permit to be
released or disclosed, any such Information to any other Person, except its
directors, officers, employees, agents, accountants, counsel and other advisors
and representatives who need to know such Information (who shall be advised of
their obligations hereunder with respect to such Information), except in
compliance with Section 7.09. Without limiting the foregoing, when any
Information furnished by the other party after the Distribution Date pursuant to
this Agreement or any Ancillary Agreement is no longer needed for the purposes
contemplated by this Agreement or any Ancillary Agreement, each party will
promptly after request of the other party either return to the other party all
such Information in a tangible form (including all copies thereof and all notes,
extracts or summaries based thereon) or certify to the other party that it has
destroyed such Information (and such copies thereof and such notes, extracts or
summaries based thereon).
SECTION 7.09. PROTECTIVE ARRANGEMENTS. In the event that any party
or any member of its Group either determines on the advice of its counsel that
it is required to disclose any Information pursuant to applicable law or
receives any demand under lawful process or from any Governmental Authority to
disclose or provide Information of any other party (or any member of any other
party's Group) that is subject to the confidentiality provisions hereof, such
party shall notify the other party prior to disclosing or providing such
Information and shall cooperate at the expense of the requesting party in
seeking any reasonable protective arrangements requested by such other party.
Subject to the foregoing, the Person that received such
53
request may thereafter disclose or provide Information to the extent required by
such law (as so advised by counsel) or by lawful process or such Governmental
Authority.
ARTICLE VIII
DISPUTE RESOLUTION
SECTION 8.01. DISPUTES. Except as otherwise specifically provided in
any Ancillary Agreement, the procedures for discussion, negotiation and
mediation set forth in this Article VIII shall apply to all disputes,
controversies or claims (whether arising in contract, tort or otherwise) that
may arise out of or relate to, or arise under or in connection with this
Agreement or any Ancillary Agreement, or the transactions contemplated hereby or
thereby (including all actions taken in furtherance of the transactions
contemplated hereby or thereby on or prior to the date hereof), or the
commercial or economic relationship of the parties relating hereto or thereto,
between or among any member of the Xxxxxxx-Xxxxx Squibb Group and the Xxxxxx
Group.
SECTION 8.02. ESCALATION; MEDIATION. (a) It is the intent of the
parties to use their respective reasonable efforts to resolve expeditiously any
dispute, controversy or claim between or among them with respect to the matters
covered hereby that may arise from time to time on a mutually acceptable
negotiated basis. In furtherance of the foregoing, any party involved in a
dispute, controversy or claim may deliver a notice (an "ESCALATION NOTICE")
demanding an in person meeting involving representatives of the parties at a
senior level of management of the parties (or if the parties agree, of the
appropriate strategic business unit or division within such entity). A copy of
any such Escalation Notice shall be given to the General Counsel, or like
officer or official, of each party involved in the dispute, controversy or claim
(which copy shall state that it is an Escalation Notice pursuant to this
Agreement). Any agenda, location or procedures for such discussions or
negotiations between the parties may be established by the parties from time to
time; PROVIDED, HOWEVER, that the parties shall use their reasonable efforts to
meet within 30 days of the Escalation Notice.
(b) If the parties are not able to resolve the dispute, controversy
or claim through the escalation process referred to above, then the matter shall
be referred to
54
mediation. The parties shall retain a mediator to aid the parties in their
discussions and negotiations by informally providing advice to the parties. Any
opinion expressed by the mediator shall be strictly advisory and shall not be
binding on the parties, nor shall any opinion expressed by the mediator be
admissible in any other proceeding. The mediator may be chosen from a list of
mediators previously selected by the parties or by other agreement of the
parties. Costs of the mediation shall be borne equally by the parties involved
in the matter, except that each party shall be responsible for its own expenses.
Mediation shall be a prerequisite to the commencement of any action by either
party.
SECTION 8.03. COURT ACTIONS. (a) In the event that any party, after
complying with the provisions set forth in Section 8.02 above, desires to
commence an Action, such party may submit the dispute, controversy or claim (or
such series of related disputes, controversies or claims) to any court of
competent jurisdiction.
(b) The parties irrevocably submit to the exclusive jurisdiction of
(a) the Supreme Court of the State of New York, New York County, and (b) the
United States District Court for the Southern District of New York, for the
purposes of any Action arising out of this Agreement, the Ancillary Agreements
or any transaction contemplated hereby or thereby. The parties agree to commence
any Action relating hereto either in the United States District Court for the
Southern District of New York or if such Action may not be brought in such court
for jurisdictional reasons, in the Supreme Court of the State of New York, New
York County. The parties further agree that service of any process, summons,
notice or document by U.S. registered mail to their respective addresses set
forth above shall be effective service of process for any Action in New York
with respect to any matters to which each party has submitted to jurisdiction in
this Section 8.03(b). Each of the parties irrevocably and unconditionally waives
any objection to the laying of venue of any Action arising out of this Agreement
or the transactions contemplated hereby in (i) the Supreme Court of the State of
New York, New York County, or (ii) the United States District Court for the
Southern District of New York, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such Action brought in any such court has been brought in an inconvenient
forum.
55
(c) The parties each hereby waive to the fullest extent permitted by
applicable law, any right it may have to a trial by jury in respect of any
litigation directly or indirectly arising out of, under or in connection with
this Agreement or any of the Ancillary Agreements or any transaction
contemplated hereby or thereby. Each party hereto (a) certifies that no
representative, agent or attorney of any other party has represented, expressly
or otherwise, that such other party would not, in the event of litigation, seek
to enforce that foregoing waiver and (b) acknowledges that it and the other
party hereto have been induced to enter into this Agreement and the Ancillary
Agreements by, among other things, the mutual waivers and certifications in this
Section 8.03.
(d) Unless otherwise agreed in writing, the parties will continue to
provide service and honor all other commitments under this Agreement and each
Ancillary Agreement during the course of dispute resolution pursuant to the
provisions of this Article VIII with respect to all matters not subject to such
dispute, controversy or claim.
ARTICLE IX
FURTHER ASSURANCES
SECTION 9.01. FURTHER ASSURANCES. (a) In addition to the actions
specifically provided for elsewhere in this Agreement, each of the parties
hereto shall use its reasonable efforts, prior to, on and after the Distribution
Date, to take, or cause to be taken, all actions, and to do, or cause to be
done, all things, reasonably necessary, proper or advisable under applicable
laws, regulations and agreements to consummate and make effective the
transactions contemplated by this Agreement and the Ancillary Agreements.
(b) Without limiting the foregoing, prior to, on and after the
Distribution Date, each party hereto shall cooperate with the other party, and
without any further consideration, but at the expense of the requesting party,
to execute and deliver, or use its reasonable efforts to cause to be executed
and delivered, all instruments, including instruments of conveyance, assignment
and transfer, and to make all filings with, and to obtain all consents,
approvals or authorizations of, any Governmental Authority or any other Person
under any permit, license, agreement, indenture or other instrument (including
any
56
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 Zimmer Assets and the assignment
and assumption of the Zimmer Liabilities and the other transactions contemplated
hereby and thereby. Without limiting the foregoing, each party will, at the
reasonable request, cost and expense of any other party, take such other actions
as may be reasonably necessary to vest in such other party good and marketable
title, free and clear of any Security Interest, if and to the extent it is
practicable to do so.
(c) On or prior to the Distribution Date, Xxxxxxx-Xxxxx Squibb and
Zimmer in their respective capacities as direct and indirect stockholders of
their respective Subsidiaries, shall each ratify any actions which are
reasonably necessary or desirable to be taken by Xxxxxxx-Xxxxx Squibb, Zimmer or
any other Subsidiary of Xxxxxxx-Xxxxx Squibb or Zimmer, as the case may be, to
effectuate the transactions contemplated by this Agreement. On or prior to the
Distribution Date, Xxxxxxx-Xxxxx Squibb and Zimmer shall take all actions as may
be necessary to approve the stock-based employee benefit plans of Zimmer in
order to satisfy the requirement of Rule 16b-3 under the Exchange Act.
(d) Prior to the Distribution Date, if one or more of the parties
identifies any commercial or other service that is needed to assure a smooth and
orderly transition of the businesses in connection with the consummation of the
transactions contemplated hereby, and that is not otherwise governed by the
provisions of this Agreement or any Ancillary Agreement, the parties will
cooperate in determining whether there is a mutually acceptable arm's-length
basis on which the other party will provide such service.
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ARTICLE X
TERMINATION
SECTION 10.01. TERMINATION. This Agreement and all Ancillary
Agreements may be terminated and the Distribution may be amended, modified or
abandoned at any time prior to the Distribution Date by and in the sole
discretion of Xxxxxxx-Xxxxx Squibb without the approval of Zimmer or the
stockholders of Xxxxxxx-Xxxxx Squibb. In the event of such termination, no party
shall have any liability of any kind to any other party or any other Person.
After the Distribution Date, this Agreement may not be terminated except by an
agreement in writing signed by the parties.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. COUNTERPARTS; ENTIRE AGREEMENT; CORPORATE POWER. (a)
This Agreement and each Ancillary Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party.
(b) This Agreement, and the Ancillary Agreements and the Exhibits,
Schedules and Appendices hereto and thereto contain the entire agreement between
the parties with respect to the subject matter hereof, supersede all previous
agreements, negotiations, discussions, writings, understandings, commitments and
conversations with respect to such subject matter and there are no agreements or
understandings between the parties other than those set forth or referred to
herein or therein.
(c) Xxxxxxx-Xxxxx Squibb represents on behalf of itself and each
other member of the Xxxxxxx-Xxxxx Squibb Group and Zimmer represents on behalf
of itself and each other member of the Xxxxxx Group as follows:
(i) each such Person has the requisite corporate or other power and
authority and has taken all corporate or other action necessary in order
to execute, deliver and perform each of this Agreement and
58
each other Ancillary Agreement to which it is a party and to consummate
the transactions contemplated hereby and thereby; and
(ii) this Agreement and each Ancillary Agreement to which it is a
party has been duly executed and delivered by it and constitutes a valid
and binding agreement of it enforceable in accordance with the terms
thereof.
(d) Each party hereto acknowledges that it and each other party
hereto is executing certain of the Ancillary Agreements by facsimile, stamp or
mechanical signature. Each party hereto expressly adopts and confirms each such
facsimile, stamp or mechanical signature made in its respective name as if it
were a manual signature, agrees that it will not assert that any such signature
is not adequate to bind such party to the same extent as if it were signed
manually and agrees that at the reasonable request of any other party hereto at
any time it will as promptly as reasonably practicable cause each such Ancillary
Agreement to be manually executed (any such execution to be as of the date of
the initial date thereof).
SECTION 11.02. GOVERNING LAW. This Agreement and, unless expressly
provided therein, each Ancillary Agreement, shall be governed by and construed
and interpreted in accordance with the laws of the State of New York
irrespective of the choice of laws principles of the State of New York, as to
all matters, including matters of validity, construction, effect,
enforceability, performance and remedies.
SECTION 11.03. ASSIGNABILITY. Except as set forth in any Ancillary
Agreement, this Agreement and each Ancillary Agreement shall be binding upon and
inure to the benefit of the parties hereto and thereto, respectively, and their
respective successors and assigns; PROVIDED, HOWEVER, that no party hereto or
thereto may assign its respective rights or delegate its respective obligations
under this Agreement or any Ancillary Agreement without the express prior
written consent of the other parties hereto or thereto.
SECTION 11.04. THIRD PARTY BENEFICIARIES. Except for the
indemnification rights under this Agreement of any Xxxxxxx-Xxxxx Squibb
Indemnitee or Zimmer Indemnitee in their respective capacities as such and for
the release under Section 4.01 of any Person provided therein, (a) the
59
provisions of this Agreement and each Ancillary Agreement are solely for the
benefit of the parties and are not intended to confer upon any Person except the
parties any rights or remedies hereunder, and (b) there are no third party
beneficiaries of this Agreement or any Ancillary Agreement and neither this
Agreement nor any Ancillary Agreement shall provide any third Person with any
remedy, claim, liability, reimbursement, claim of action or other right in
excess of those existing without reference to this Agreement or any Ancillary
Agreement.
SECTION 11.05. NOTICES. All notices or other communications under
this Agreement or any Ancillary Agreement shall be in writing and shall be
deemed to be duly given when (a) delivered in person or (b) deposited in the
United States mail or private express mail, postage prepaid, addressed as
follows:
If to Xxxxxxx-Xxxxx Squibb, to:
Xxxxxxx-Xxxxx Squibb Company
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: General Counsel
If to Zimmer to:
Xxxxxx Holdings, Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Attn: General Counsel
Any party may, by notice to the other party, change the address to
which such notices are to be given.
SECTION 11.06. SEVERABILITY. If any provision of this Agreement or
any Ancillary Agreement or the application thereof to any Person or circumstance
is determined by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions hereof or thereof, or the application of
such provision to Persons or circumstances or in jurisdictions other than those
as to which it has been held invalid or unenforceable, shall remain in full
force and effect and shall in no way be affected, impaired or invalidated
thereby, so long as the economic or legal substance of the transactions
contemplated hereby or thereby, as the case may be, is not affected in any
manner adverse to any party. Upon such determination, the parties shall
negotiate in good faith in an effort to
60
agree upon such a suitable and equitable provision to effect the original intent
of the parties.
SECTION 11.07. FORCE MAJEURE. No party shall be deemed in default of
this Agreement or any Ancillary Agreement to the extent that any delay or
failure in the performance of its obligations under this Agreement or any
Ancillary Agreement results from any cause beyond its reasonable control and
without its fault or negligence, such as acts of God, acts of civil or military
authority, embargoes, epidemics, war, riots, insurrections, fires, explosions,
earthquakes, floods, unusually severe weather conditions, labor problems or
unavailability of parts, or, in the case of computer systems, any failure in
electrical or air conditioning equipment. In the event of any such excused
delay, the time for performance shall be extended for a period equal to the time
lost by reason of the delay.
SECTION 11.08. PUBLICITY. Prior to the Distribution, each of
Xxxxxxx-Xxxxx Squibb and Zimmer shall consult with each other prior to issuing
any press releases or otherwise making public statements with respect to the
Contribution, the Distribution or any of the other transactions contemplated
hereby and prior to making any filings with any Governmental Authority with
respect thereto.
SECTION 11.09. EXPENSES. Except as expressly set forth in this
Agreement or in any Ancillary Agreement, all third party fees, costs and
expenses paid or incurred in connection with the Distribution will be paid by
Zimmer.
SECTION 11.10. HEADINGS. The article, section and paragraph headings
contained in this Agreement and in the Ancillary Agreements are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement or any Ancillary Agreement.
SECTION 11.11. SURVIVAL OF COVENANTS. Except as expressly set forth
in any Ancillary Agreement, the covenants, representations and warranties
contained in this Agreement and each Ancillary Agreement, and liability for the
breach of any obligations contained herein or therein, shall survive the
Contribution and the Distribution and shall remain in full force and effect.
SECTION 11.12. WAIVERS OF DEFAULT. Waiver by any party of any
default by the other party of any provision of this Agreement or any Ancillary
Agreement shall not be
61
deemed a waiver by the waiving party of any subsequent or other default, nor
shall it prejudice the rights of the other party.
SECTION 11.13. AMENDMENTS. No provisions of this Agreement or any
Ancillary Agreement shall be deemed waived, amended, supplemented or modified by
any party, unless such waiver, amendment, supplement or modification is in
writing and signed by the authorized representative of the party against whom it
is sought to enforce such waiver, amendment, supplement or modification.
SECTION 11.14. INTERPRETATION. Words in the singular shall be held
to include the plural and vice versa and words of one gender shall be held to
include the other genders as the context requires. The terms "hereof," "herein,"
and "herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement (or the applicable Ancillary Agreement) as
a whole (including all of the Schedules, Exhibits and Appendices hereto and
thereto) and not to any particular provision of this Agreement (or such
Ancillary Agreement). Article, Section, Exhibit, Schedule and Appendix
references are to the Articles, Sections, Exhibits, Schedules and Appendices to
this Agreement (or the applicable Ancillary Agreement) unless otherwise
specified. The word "including" and words of similar import when used in this
Agreement (or the applicable Ancillary Agreement) shall mean "including, without
limitation," unless the context otherwise requires or unless otherwise
specified. The word "or" shall not be exclusive. Unless expressly stated to the
contrary in this Agreement or in any Ancillary Agreement, all references to "the
date hereof," "the date of this Agreement," "hereby"
62
and "hereupon" and words of similar import shall all be references to [ ],
2001, regardless of any amendment or restatement hereof.
IN WITNESS WHEREOF, the parties have caused this Contribution and
Distribution Agreement to be executed by their duly authorized representatives.
XXXXXXX-XXXXX SQUIBB COMPANY
By:___________________________
Name:
Title:
XXXXXX HOLDINGS, INC.
By:___________________________
Name:
Title:
