UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): May 1, 2008
DR PEPPER SNAPPLE GROUP, INC.
(Exact name of Registrant as specified in its charter)
         
Delaware
(State or other jurisdiction of
incorporation)
  001-33829
(Commission File Number)
  75-3258232
(I.R.S. Employer
Identification No.)
 
5301 Legacy Drive, Plano, Texas 75204
(Address of principal executive offices and zip code)
(972) 673-7000
(Registrant’s telephone number, including area code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 


 

Item 1.01.   Entry into a Material Definitive Agreement.
     Dr Pepper Snapple Group, Inc. (the “ Company ”) entered into the following agreements, each dated as of May 1, 2008, with Cadbury Schweppes plc (“ Cadbury Schweppes ”) (and solely for certain provisions set forth in certain of such agreements, Cadbury plc) to effect the transfer of Cadbury Schweppes’ beverages business in the United States, Canada, Mexico and the Caribbean to the Company in connection with the Company’s separation from Cadbury Schweppes:
    Separation and Distribution Agreement
 
    Transition Services Agreement
 
    Tax Sharing and Indemnification Agreement
 
    Employee Matters Agreement
     A summary of certain material features of the agreements can be found in the section entitled “Our Relationship with Cadbury plc After the Distribution — Description of Various Separation and Transition Arrangements” in the Company’s Information Statement, filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on April 28, 2008, and is incorporated herein by reference. The summary is qualified in its entirety by reference to the complete terms and conditions of the Separation and Distribution Agreement, Transition Services Agreement, Tax Sharing and Indemnification Agreement and Employee Matters Agreement, attached hereto as Exhibits 2.1, 10.1, 10.2 and 10.3, respectively, each of which is incorporated by reference herein.
Item 9.01.   Financial Statements and Exhibits.
     (d) Exhibits:
         
Exhibit    
Number   Description
       
 
  2.1    
Separation and Distribution Agreement between Cadbury Schweppes plc and Dr Pepper Snapple Group, Inc. and, solely for certain provisions set forth therein, Cadbury plc, dated as of May 1, 2008.
       
 
  10.1    
Transition Services Agreement between Cadbury Schweppes plc and Dr Pepper Snapple Group, Inc., dated as of May 1, 2008.
       
 
  10.2    
Tax Sharing and Indemnification Agreement between Cadbury Schweppes plc and Dr Pepper Snapple Group, Inc. and, solely for the certain provision set forth therein, Cadbury plc, dated as of May 1, 2008.
       
 
  10.3    
Employee Matters Agreement between Cadbury Schweppes plc and Dr Pepper Snapple Group, Inc. and, solely for certain provisions set forth therein, Cadbury plc, dated as of May 1, 2008.

 


 

SIGNATURE
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
                 
        DR PEPPER SNAPPLE GROUP, INC.    
 
               
Date: May 2, 2008
  By:   /s/   James L. Baldwin, Jr.    
             
 
      Name:   James L. Baldwin, Jr.    
 
      Title:   Executive Vice President,    
 
          General Counsel and Secretary    

 


 

EXHIBIT INDEX
         
Exhibit    
Number   Description
       
 
  2.1    
Separation and Distribution Agreement between Cadbury Schweppes plc and Dr Pepper Snapple Group, Inc. and, solely for certain provisions set forth therein, Cadbury plc, dated as of May 1, 2008.
       
 
  10.1    
Transition Services Agreement between Cadbury Schweppes plc and Dr Pepper Snapple Group, Inc., dated as of May 1, 2008.
       
 
  10.2    
Tax Sharing and Indemnification Agreement between Cadbury Schweppes plc and Dr Pepper Snapple Group, Inc. and, solely for the certain provision set forth therein, Cadbury plc, dated as of May 1, 2008.
       
 
  10.3    
Employee Matters Agreement between Cadbury Schweppes plc and Dr Pepper Snapple Group, Inc. and, solely for certain provisions set forth therein, Cadbury plc, dated as of May 1, 2008.

 

 

EXECUTION VERSION
SEPARATION AND DISTRIBUTION AGREEMENT
AMONG
CADBURY PLC,
CADBURY SCHWEPPES PLC
AND
DR PEPPER SNAPPLE GROUP, INC.
Dated as of May 1, 2008

 


 

Table of Contents
         
    Page
ARTICLE I DEFINITIONS AND INTERPRETATION
    2  
Section 1.01 Certain Defined Terms
    2  
Section 1.02 Interpretation and Rules of Construction
    16  
 
       
ARTICLE II THE SEPARATION
    17  
Section 2.01 Transfer of Assets
    17  
Section 2.02 Assumption and Satisfaction of Liabilities
    19  
Section 2.03 Intercompany Balances
    19  
Section 2.04 Transfers Not Effected on or Prior to the Demerger Effective Time; Transfers Deemed Effective as of the Demerger Effective Time
    19  
Section 2.05 Transfer Documents
    21  
Section 2.06 Further Assurances
    21  
Section 2.07 Replacement of Guarantors and Obligors
    22  
Section 2.08 Disclaimer of Representations and Warranties
    23  
 
       
ARTICLE III CERTAIN ACTIONS AT OR PRIOR TO THE DISTRIBUTION
    23  
Section 3.01 Certificate of Incorporation; Bylaws
    23  
Section 3.02 Directors
    23  
Section 3.03 Resignations
    24  
Section 3.04 Ancillary Agreements
    24  
 
       
ARTICLE IV THE DISTRIBUTION
    24  
Section 4.01 The Distribution
    24  
Section 4.02 Fractional Shares
    24  
Section 4.03 Actions in Connection with the Distribution
    25  
Section 4.04 Distribution Date
    26  
Section 4.05 Conditions to Distribution
    26  
Section 4.06 Consent to the Reduction
    27  
 
       
ARTICLE V CERTAIN COVENANTS
    27  
Section 5.01 Non-Solicitation of Employees
    27  
Section 5.02 Auditors and Audits; Annual and Quarterly Financial Statements and Accounting
    27  
Section 5.03 CS Obligations
    29  
 
       
ARTICLE VI INTELLECTUAL PROPERTY MATTERS
    30  
Section 6.01 Cadbury Names and Marks
    30  
Section 6.02 Beverages Names and Marks
    31  
Section 6.03 Memorabilia
    33  
Section 6.04 Additional Licenses
    33  
Section 6.05 Know-How Agreement
    34  
Section 6.06 Domain Names Agreement
    34  

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    Page
ARTICLE VII INDEMNIFICATION
    34  
Section 7.01 Release of Pre-Distribution Claims
    34  
Section 7.02 Indemnification by CS
    36  
Section 7.03 Indemnification by DPS
    37  
Section 7.04 Procedures for Indemnification
    37  
Section 7.05 Cooperation in Defense and Settlement
    39  
Section 7.06 Indemnification Obligations Net of Insurance Proceeds and Other Amounts
    39  
Section 7.07 Additional Matters; Survival of Indemnities
    40  
 
       
ARTICLE VIII ACCESS TO RECORDS; ACCESS TO INFORMATION; LEGAL AND OTHER MATTERS
    40  
Section 8.01 Provision of Corporate Records
    40  
Section 8.02 Access to Information
    41  
Section 8.03 Disposition of Information
    41  
Section 8.04 Witness Services
    42  
Section 8.05 Reimbursement; Other Matters
    42  
Section 8.06 Confidentiality
    42  
Section 8.07 Privileged Matters
    43  
Section 8.08 Ownership of Information
    45  
Section 8.09 Other Agreements
    45  
Section 8.10 Control of Legal Matters
    45  
 
       
ARTICLE IX INSURANCE
    47  
Section 9.01 Policies and Rights Included Within Assets
    47  
Section 9.02 Administration; Other Matters
    48  
Section 9.03 Agreement for Waiver of Conflict and Shared Defense
    49  
 
       
ARTICLE X DISPUTE RESOLUTION
    49  
Section 10.01 Disputes
    49  
Section 10.02 Dispute Resolution
    50  
Section 10.03 Continuity of Service and Performance
    51  
 
       
ARTICLE XI TERMINATION
    51  
Section 11.01 Termination
    51  
Section 11.02 Effect of Termination
    51  
Section 11.03 Amendment
    51  
Section 11.04 Waiver
    51  
 
       
ARTICLE XII MISCELLANEOUS
    52  
Section 12.01 Limitation of Liability
    52  
Section 12.02 Expenses
    52  
Section 12.03 Notices
    52  
Section 12.04 Public Announcements
    53  
Section 12.05 Severability
    53  
Section 12.06 Entire Agreement
    53  

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    Page
Section 12.07 Assignment
    54  
Section 12.08 Parties in Interest
    54  
Section 12.09 Currency
    54  
Section 12.10 Tax Matters
    54  
Section 12.11 Employee Matters
    54  
Section 12.12 Governing Law
    54  
Section 12.13 Waiver of Jury Trial
    54  
Section 12.14 Survival of Covenants
    55  
Section 12.15 Counterparts
    55  
     

iii


 

SEPARATION AND DISTRIBUTION AGREEMENT
          SEPARATION AND DISTRIBUTION AGREEMENT (this “ Agreement ”), dated as of May 1, 2008, among Cadbury Schweppes plc, a United Kingdom public limited company incorporated in England and Wales with registered number 0052457 and whose registered office is at 25 Berkeley Square, London W1J 6HB (“ CS ”), Dr Pepper Snapple Group, Inc., a Delaware corporation (“ DPS ”) and, solely for the purposes of Sections 4.01(a) and (b) and Section 5.03 , Cadbury plc, a United Kingdom public limited company incorporated in England and Wales with registered number 06497379 and whose registered office is at 25 Berkeley Square, London W1J 6HB. Each of CS and DPS is sometimes referred to herein as a “ Party ” and together, as the “ Parties ”.
          WHEREAS, CS, directly and through its various Subsidiaries, is engaged in the Cadbury plc Business and the Beverages Business;
          WHEREAS, the board of directors of CS has determined that it is in the best interests of CS and its shareholders to separate CS into two separate, publicly traded companies, which shall operate the Cadbury plc Business and the Beverages Business, respectively;
          WHEREAS, for U.S. federal income tax purposes, the separation and certain related transactions are intended to qualify as a tax-free transaction under Sections 355 and 368 of the Internal Revenue Code of 1986, as amended;
          WHEREAS, in order to effect such separation, the board of directors of CS has determined, among other things, that it is in the best interests of CS and its shareholders to enter into transactions pursuant to which (i) CS will become a wholly-owned subsidiary of Cadbury plc; (ii) CS and/or one or more members of the Cadbury plc Group will, collectively, retain or acquire beneficial ownership of all of the Cadbury plc Assets and Assume all of the Cadbury plc Liabilities and DPS and/or one or more members of the DPS Group will, collectively, retain or acquire beneficial ownership of all of the Beverages Assets and Assume all of the Beverages Liabilities; and (iii) DPS will distribute to the holders of Cadbury plc Beverages Shares on a pro rata basis (in each case without consideration being paid by such shareholders) all of the outstanding shares of common stock, par value $0.01 per share, of DPS (the “ DPS Common Stock ”) (such transactions as they may be amended or modified from time to time, collectively, the “ Plan of Separation ”); and
          WHEREAS, CS and DPS have determined that it is necessary and desirable to set forth the agreements that will effect the Plan of Separation and to set forth certain other agreements that will govern certain other matters following the Demerger Effective Time;
          NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, CS and DPS hereby agree as follows:

 


 

ARTICLE I
DEFINITIONS AND INTERPRETATION
          Section 1.01 Certain Defined Terms . For purposes of this Agreement:
          “ Action ” shall mean any demand, action, claim, suit, countersuit, arbitration, inquiry, subpoena, proceeding or investigation by or before any Governmental Entity or any arbitration or mediation tribunal.
          “ Affiliate ” shall mean, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person. For the purposes of this definition, “control”, when used with respect to any specified Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by Contract or otherwise.
          “ Ancillary Agreements ” shall mean the Transfer Documents, the Transition Services Agreement, the Tax Sharing Agreement, the Employee Matters Agreement, the Domain Names Agreement and the Know-How Agreement.
          “ AsiaPac Territory ” shall mean the countries as set forth in Schedule 1.01(a) .
          “ Assets ” shall mean all assets, properties, claims and rights (including goodwill), wherever located (including in the possession of vendors or other third parties or elsewhere), of every kind, character and description, whether real, personal or mixed, tangible, intangible or contingent, in each case, whether or not recorded or reflected or required to be recorded or reflected on the Records or financial statements of any Person, including the following:
     (i) all accounting and other legal and business books, records, ledgers and files, whether printed, electronic or written;
     (ii) all apparatuses, computers and other electronic data processing and communications equipment, fixtures, machinery, equipment, furniture, office equipment, automobiles, trucks, aircraft and other transportation equipment, special and general tools, test devices, prototypes and models and other tangible personal property;
     (iii) all inventories of products, goods, materials, parts, raw materials, packaging, ingredients and supplies, in each case, whether finished or in process;
     (iv) all interests in real property of whatever nature, including easements, whether as owner, mortgagee or holder of a Security Interest in real property, lessor, sublessor, lessee, sublessee or otherwise;

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     (v) (A) all interests in any capital stock or other equity interests of any Subsidiary or any other Person, (B) all bonds, notes, debentures or other securities issued by any Subsidiary or any other Person, and (C) all loans, advances or other extensions of credit or capital contributions to any Subsidiary or any other Person;
     (vi) all Contracts, including license Contracts, leases of personal property, open purchase orders for raw materials, packaging, ingredients, supplies, parts or services, unfilled orders for the manufacture and sale of products and other Contracts or commitments;
     (vii) all deposits, letters of credit and performance and surety bonds;
     (viii) all written (including in electronic form) technical information, data, specifications, research and development information, engineering drawings and specifications, operating and maintenance manuals, and materials and analyses prepared by consultants and other third parties;
     (ix) all Intellectual Property;
     (x) all Software;
     (xi) all cost information, sales and pricing data, customer prospect lists, supplier records, customer and supplier lists, customer and vendor data, correspondence and lists, product data and literature, artwork, design, development and business process files and data, vendor and customer drawings, specifications, quality records and reports and other books, records, studies, surveys, reports, plans and documents;
     (xii) all prepaid expenses, trade accounts and other accounts and notes receivables;
     (xiii) all claims, rights or benefits against any Person or pursuant to any Action, choses in action or similar rights, whether accrued or contingent;
     (xiv) all rights under insurance policies and all rights in the nature of insurance, indemnification or contribution;
     (xv) all licenses, permits, approvals and authorizations which have been issued by any Governmental Entity;
     (xvi) all cash or cash equivalents, bank accounts, lock boxes and other deposit arrangements; and
     (xvii) all interest rate, currency, commodity or other swap, collar, cap or other hedging or similar Contracts or arrangements.

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          “ Beverages Assets ” shall mean:
     (i) the ownership interests in those Business Entities that are included in the definition of the DPS Group and all of the Assets owned or held by such Business Entities (other than any Assets that constitute Cadbury plc Assets);
     (ii) all Beverages Contracts and any rights or claims arising thereunder;
     (iii) any rights or claims or contingent rights or claims primarily relating to or arising from the Beverages Business;
     (iv) any and all Assets reflected on the Beverages Balance Sheet or the accounting records supporting such balance sheet and any Assets acquired by or for DPS or any member of the DPS Group subsequent to the date of such balance sheet which, had they been so acquired on or before such date and owned as of such date, would have been reflected on such balance sheet if prepared on a consistent basis, subject to any dispositions of any of such Assets subsequent to the date of such balance sheet;
     (v) subject to ARTICLE IX , any rights of any member of the DPS Group under any Policies, including any rights thereunder arising after the Distribution Date in respect of any Policies that are occurrence policies;
     (vi) all Beverages Claims and, to the extent relating to the Beverages Business, Joint Cadbury plc and Beverages Claims; and
     (vii) the Assets set forth in Schedule 1.01(b) and any and all Assets that are expressly contemplated by this Agreement or any Ancillary Agreement as Assets which have been or are to be Transferred to DPS or any other member of the DPS Group.
          Notwithstanding the foregoing, the Beverages Assets shall not include any Assets that are expressly contemplated by this Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as Assets to be retained by or Transferred to any member of the Cadbury plc Group.
          “ Beverages Balance Sheet ” shall mean the combined balance sheet of the DPS Group, including the notes thereto, as of December 31, 2007, prepared to give effect to the Transactions contemplated hereby, as set forth in Schedule 1.01(c) ; provided that to the extent any Assets or Liabilities are Transferred by CS or any member of the Cadbury plc Group to DPS or any member of the DPS Group or vice versa in connection with the Plan of Separation and on or prior to the Distribution Date, such Assets and/or Liabilities shall be deemed to be included or excluded from the Beverages Balance Sheet, as the case may be.
          “ Beverages Business ” shall mean the business of (i) manufacturing, distributing, selling, marketing and promoting carbonated and non-carbonated beverages and other food products throughout the Territory bearing brands owned by or licensed to a member of the DPS Group and (ii) licensing brands owned by or licensed to a member of the DPS Group, including for use with confectionery and other products, to the extent permitted, in the Territory.

4


 

          “ Beverages Contracts ” shall mean the following Contracts to which any member of the Cadbury plc Group or any member of the DPS Group is a party or by which any member of the Cadbury plc Group or any member of the DPS Group or any of their respective Assets is bound, whether or not in writing:
     (i) any Contract that relates primarily to the Beverages Business;
     (ii) any Contract or part thereof that is otherwise expressly contemplated pursuant to this Agreement (including pursuant to Section 2.01(c) ) or any of the Ancillary Agreements to be assigned to any member of the DPS Group; and
     (iii) any Beverages IP Agreement.
          “ Beverages Indemnitees ” shall mean each member of the DPS Group and each of their directors, officers, employees and agents and each of the heirs, executors, successors and assigns of any of the foregoing, other than the Cadbury plc Indemnitees.
          “ Beverages Intellectual Property ” shall mean the Beverages Owned Intellectual Property and the Beverages Licensed Intellectual Property.
          “ Beverages IP Agreements ” shall mean all licenses of Intellectual Property (i) from any member of the DPS Group to any other Person and (ii) to any member of the DPS Group from any other Person.
          “ Beverages Liabilities ” shall mean:
     (i) any Liabilities that are expressly contemplated by this Agreement or any Ancillary Agreement (or the Schedules hereto or thereto, including Schedule 1.01(d) hereto) as Liabilities to be Assumed by any member of the DPS Group, and all obligations and Liabilities expressly Assumed by any member of the DPS Group under this Agreement or any of the Ancillary Agreements;
     (ii) any Liabilities to the extent relating to, arising out of or resulting from:
     (A) the operation or conduct of the Beverages Business prior to, on or after the Demerger Effective Time (including any such Liability to the extent 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) with respect to the Beverages Business);
     (B) the operation or conduct of any business conducted by any member of the DPS Group at any time after the Demerger Effective Time (including any such Liability to the extent 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) with respect to the Beverages Business);

5


 

     (C) any Beverages Assets, whether arising before, on or after the Demerger Effective Time;
     (D) any terminated or divested Business Entity, business or operation formerly and primarily owned or managed by or associated with DPS or any Beverages Business;
     (E) any indebtedness (including debt securities and asset-backed debt) of any member of the DPS Group or indebtedness (regardless of the issuer of such indebtedness) exclusively relating to the Beverages Business or any indebtedness (regardless of the issuer of such indebtedness) secured exclusively by any of the Beverages Assets (including any Liabilities relating to, arising out of or resulting from a claim by a holder of any such indebtedness, in its capacity as such); and
     (F) any Beverages Litigation Matter, Future Beverages Litigation Matter and, to the extent relating to the Beverages Business, any Future Joint Litigation Matter; and
     (iii) all Liabilities reflected as liabilities or obligations on the Beverages Balance Sheet or the accounting records supporting such balance sheet, and all Liabilities arising or Assumed after the date of such balance sheet which, had they arisen or been Assumed on or before such date and been retained as of such date, would have been reflected on such balance sheet or such records if prepared on a consistent basis, subject to any discharge of such Liabilities subsequent to the date of the Beverages Balance Sheet.
          Notwithstanding anything to the contrary herein, the Beverages Liabilities shall not include any Cadbury plc Liabilities.
          “ Beverages Licensed Intellectual Property ” shall mean all Intellectual Property that a member of the DPS Group is licensed to use pursuant to the Beverages IP Agreements.
          “ Beverages Litigation Matters ” means the Actions set forth in Schedule 1.01(e) hereto and any other Actions related to the Beverages Assets or Beverages Liabilities commenced on or before the Distribution Date.
          “ Beverages Owned Intellectual Property ” shall mean all Intellectual Property owned by a member of the DPS Group.
          “ Beverages Policies ” shall mean all Policies, current or past, that are owned or maintained by or on behalf of any member of the Cadbury plc Group or any member of the DPS Group, which relate exclusively to the Beverages Business and are either maintained by DPS or a member of the DPS Group or assignable to DPS or a member of the DPS Group, including as set forth in Schedule 1.01(f) .
          “ Beverages Shared Policies ” shall mean all Policies, current or past, that are owned or maintained by or on behalf of any member of the Cadbury plc Group or any member of the DPS Group which relate to the Beverages Business, other than Beverages Policies, including

6


 

as set forth in Schedule 1.01(g) , and any claims-made Policies entered into after the Distribution Date that are owned or maintained by any member of the Cadbury plc Group which relate to the conduct or operation of the Beverages Business prior to the Distribution Date.
          “ Beverages Shared Policy Insured Claims ” shall mean those Liabilities that, individually or in the aggregate, are covered within the terms and conditions of any of the Beverages Shared Policies, whether or not subject to deductibles, co-insurance, uncollectibility or retrospectively-rated premium adjustments.
          “ Business Day ” shall mean any day that is not a Saturday, a Sunday or any other day on which banks are required or authorized by Law to be closed in The City of New York, United States or London, England.
          “ Business Entity ” shall mean any Person (other than a natural person) which may legally hold title to Assets.
          “ Cadbury plc Assets ” shall mean:
     (i) the ownership interests in those Business Entities that are included in the definition of the Cadbury plc Group and all of the Assets owned or held by such Business Entities (other than any Assets that constitute Beverages Assets);
     (ii) all Cadbury plc Contracts and any rights or claims arising thereunder;
     (iii) any rights or claims or contingent rights or claims primarily relating to or arising from the Cadbury plc Business;
     (iv) any and all Assets reflected on the Cadbury plc Balance Sheet or the accounting records supporting such balance sheet and any Assets acquired by or for CS or any member of the Cadbury plc Group subsequent to the date of such balance sheet which, had they been so acquired on or before such date and owned as of such date, would have been reflected on such balance sheet if prepared on a consistent basis, subject to any dispositions of any of such Assets subsequent to the date of such balance sheet;
     (v) subject to ARTICLE IX , any rights of any member of the Cadbury plc Group under any Policies, including any rights thereunder arising after the Distribution Date in respect of any Policies that are occurrence policies;
     (vi) all Cadbury plc Claims and, to the extent relating to the Cadbury plc Business, Joint Cadbury plc and Beverages Claims; and
     (vii) the Assets set forth in Schedule 1.01(h) and any and all Assets that are expressly contemplated by this Agreement or any Ancillary Agreement as Assets which have been or are to be Transferred to CS or any other member of the Cadbury plc Group.

7


 

          Notwithstanding the foregoing, the Cadbury plc Assets shall not include any Assets that are expressly contemplated by this Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as Assets to be retained by or Transferred to any member of the DPS Group.
          “ Cadbury plc Balance Sheet ” shall mean the unaudited pro forma statement of net assets of the Cadbury plc Group, as of December 31, 2007, prepared to give effect to the transactions contemplated hereby, including the notes thereto, as set forth in Schedule 1.01(i) ; provided that to the extent any Assets or Liabilities are Transferred by DPS or any member of the DPS Group to CS or any member of the Cadbury plc Group or vice versa in connection with the Plan of Separation and on or prior to the Distribution Date, such assets and/or liabilities shall be deemed to be included or excluded from the Cadbury plc Balance Sheet, as the case may be.
          “ Cadbury plc Beverages Shares ” shall mean the issued and outstanding shares of 500 pence each of Cadbury plc.
          “ Cadbury plc Business ” shall mean the business of manufacturing, distributing, selling, marketing and promoting (i) confectionery and other food products throughout the world and (ii) carbonated and non-carbonated beverages outside of the Territory.
          “ Cadbury plc Contracts ” shall mean the following Contracts to which CS or any of its Affiliates is a party as of the date hereof or by which it or any of its Affiliates as of the date hereof or any of their respective Assets is bound, whether or not in writing:
     (i) any Contract that relates primarily to the Cadbury plc Business; and
     (ii) any Contract or part thereof that is otherwise expressly contemplated pursuant to this Agreement (including pursuant to Section 2.01(c) ) or any of the Ancillary Agreements to be assigned to any member of the Cadbury plc Group.
          “ Cadbury plc Group ” shall mean Cadbury plc and each Business Entity that is a Subsidiary of Cadbury plc immediately after the Demerger Effective Time, and each Business Entity that becomes a Subsidiary of Cadbury plc after the Demerger Effective Time, which shall include those entities identified as such in Schedule 1.01(j) .
          “ Cadbury plc Indemnitees ” shall mean each member of the Cadbury plc Group and each of their respective directors, officers, employees and agents and each of the heirs, executors, successors and assigns of any of the foregoing, other than the Beverages Indemnitees.
          “ Cadbury plc Liabilities ” shall mean:
     (i) any and all Liabilities that are expressly contemplated by this Agreement or any Ancillary Agreement (or the Schedules hereto or thereto, including Schedule 1.01(k) hereto) as Liabilities to be Assumed by any member of the Cadbury plc Group, and all obligations and Liabilities expressly Assumed by any member of the Cadbury plc Group under this Agreement or any of the Ancillary Agreements;

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     (ii) any and all Liabilities to the extent relating to, arising out of or resulting from:
     (A) the operation or conduct of the Cadbury plc Business prior to, on or after the Demerger Effective Time (including any such Liability to the extent 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) with respect to the Cadbury plc Business);
     (B) the operation or conduct of any business conducted by any member of the Cadbury plc Group at any time after the Demerger Effective Time (including any such Liability to the extent 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) with respect to the Cadbury plc Business);
     (C) any Cadbury plc Assets, whether arising before, on or after the Demerger Effective Time;
     (D) any terminated or divested Business Entity, business or operation formerly and primarily owned or managed by or associated with CS or any Cadbury plc Business;
     (E) any indebtedness (including debt securities and asset-backed debt) of any member of the Cadbury plc Group or indebtedness (regardless of the issuer of such indebtedness) exclusively relating to the Cadbury plc Business or any indebtedness (regardless of the issuer of such indebtedness) secured exclusively by any of the Cadbury plc Assets (including any Liabilities relating to, arising out of or resulting from a claim by a holder of any such indebtedness, in its capacity as such); and
     (F) any Cadbury plc Litigation Matter, any Future Cadbury plc Litigation Matter and, to the extent relating to the Cadbury plc Business, any Future Joint Litigation Matter; and
     (iii) all Liabilities reflected as liabilities or obligations on the Cadbury plc Balance Sheet or the accounting records supporting such balance sheet, and all Liabilities arising or Assumed after the date of such balance sheet which, had they arisen or been Assumed on or before such date and been retained as of such date, would have been reflected on such balance sheet or such records if prepared on a consistent basis, subject to any discharge of such Liabilities subsequent to the date of the Cadbury plc Balance Sheet.
          Notwithstanding anything to the contrary herein, the Cadbury plc Liabilities shall not include any Beverages Liabilities.

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          “ Cadbury plc Litigation Matters ” means the Actions set forth in Schedule 1.01(l) hereto and any other Actions related to the Cadbury plc Assets or Cadbury plc Liabilities commenced on or before the Distribution Date.
          “ Cadbury plc Ordinary Shares ” shall mean the issued and outstanding ordinary shares of 500 pence each of Cadbury plc.
          “ Circular ” shall mean the circular sent to holders of CS Ordinary Shares containing details of the Plan of Separation.
          “ Claims Administration ” shall mean the processing of claims made under the Beverages Shared Policies, including the reporting of claims to the insurance carriers, management and defense of claims and providing for appropriate releases upon settlement of claims.
          “ Confidential Information ” shall mean confidential or proprietary Information concerning a Party and/or its Subsidiaries which, prior to or following the Demerger Effective Time, has been disclosed by a Party or its Subsidiaries to another Party or its Subsidiaries, in written, oral (including by recording), electronic, or visual form to, or otherwise has come into the possession of, the other Party or its Subsidiaries, including pursuant to the provisions of Section 8.01 , 8.02 or 8.03 or any other provision of this Agreement (except to the extent that such Information can be shown to have been (i) in the public domain through no fault of such Party or its Subsidiaries or (ii) lawfully acquired from other sources by such Party or its Subsidiaries to which it was furnished; provided , however , in the case of clause (ii) that, to the furnished Party’s knowledge, such sources did not provide such Information in breach of any confidentiality obligations).
          “ Consents ” shall mean any consents, waivers or approvals from, or notification requirements to, any Person other than a Governmental Entity, in each case, in connection with the Plan of Separation.
          “ Continuing Arrangements ” shall mean those arrangements set forth in Schedule 1.01(m) and such other commercial arrangements among the Parties that are intended to survive and continue following the Demerger Effective Time.
          “ Contract ” shall mean any agreement, contract, obligation, indenture, instrument, lease, arrangement, commitment or undertaking (whether written or oral and whether express or implied).
          “ CS ADRs ” shall mean the American Depositary Receipts evidencing the American depository shares representing CS Ordinary Shares.
          “ CS Ordinary Shares ” shall mean the issued and outstanding ordinary shares of 12.5 pence each of CS.
          “ Demerger Effective Time ” shall mean the time at which the Plan of Separation becomes effective, expected to be at or around 2:30 p.m. British Summer Time on May 7, 2008 or such other time as the Court Order is registered.

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          “ Disclosure Documents ” shall mean any registration statement or other document (including the Form 10 and the Prospectus) filed with the SEC or the FSA by or on behalf of any Party or any of its controlled Affiliates in connection with the Plan of Separation, and also includes any information statement, prospectus, offering memorandum, offering circular (including the Circular and any franchise offering circular or any similar disclosure statement), or similar disclosure document, whether or not filed with the SEC or the FSA or any other Governmental Entity related to the Plan of Separation, which offers for sale or registers the Transfer or distribution of any security of such Party or any of its controlled Affiliates.
          “ Distribution ” shall mean the distribution by DPS on the Distribution Date to holders of record of shares of Cadbury plc Beverages Shares as of the Distribution Record Date of the issued and outstanding DPS Common Stock on the basis of 12 shares of DPS Common Stock for every 36 outstanding Cadbury plc Beverages Shares.
          “ Distribution Date ” shall mean the date which DPS distributes all of the issued and outstanding shares of DPS Common Stock to the holders of Cadbury plc Beverages Shares.
          “ Distribution Record Date ” shall mean 6:00 p.m. Greenwich Mean Time or British Summer Time, as applicable to the time of year, on the Business Day immediately preceding the date on which the Court Order is registered by the UK Registrar of Companies at Companies House.
          “ DPS Group ” shall mean DPS and each Business Entity that is a Subsidiary of DPS immediately after the Demerger Effective Time, and each Business Entity that becomes a Subsidiary of DPS after the Demerger Effective Time, which shall include those entities identified as such in Schedule 1.01(n) .
          “ DPS Transaction Costs ” shall mean the categories of out-of-pocket transaction costs and expenses incurred by CS, DPS or any member of their respective Groups in connection with the Plan of Separation set forth in Schedule 1.01(o) .
          “ Employee Matters Agreement ” shall mean the Employee Matters Agreement among CS and DPS and, solely for certain limited sections therein, Cadbury plc, substantially in the form of attached hereto as Exhibit 1.01(a) .
          “ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, all as the same shall be in effect at the time that reference is made thereto.
          “ Form 10 ” shall mean the registration statement on Form 10 filed by DPS with the SEC in connection with the Distribution, and all amendments and supplements thereto.
          “ FSA ” shall mean the UK Financial Services Authority.
          “ Governmental Approvals ” shall mean any notice or report to be submitted to, or other filing to be made with, or any consent, registration, approval, permit or authorization to be obtained from, any Governmental Entity, in each case in connection with the Plan of Separation.

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          “ Governmental Entity ” shall mean any nation or government, any state, municipality or other political subdivision thereof and any entity, body, agency, department, board, bureau or court, whether domestic, foreign or multinational, exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any executive official thereof.
          “ Group ” shall mean the Cadbury plc Group or the DPS Group, as the context may require.
          “ Indemnifiable Loss ” shall mean any and all damages, losses, Liabilities, penalties, judgments, settlements, claims, payments, fines, interest, costs and expenses (including the costs and expenses of any and all Actions and demands, assessments, judgments, settlements and compromises relating thereto and the reasonable costs and expenses of attorneys’, accountants’, consultants’ and other professionals’ fees and expenses incurred in the investigation or defense thereof or the enforcement of rights hereunder), excluding special, consequential, indirect, punitive damages (other than special, consequential, indirect and/or punitive damages awarded to any third party against an indemnified party) and excluding Taxes. In addition, an “ Indemnifiable Loss ” shall not include any non-cash costs or charges, except to the extent such non-cash costs or charges result in a cash payment by the applicable Indemnitee.
          “ Information ” shall mean all information, whether or not patentable or copyrightable, in written, oral, electronic, visual or other tangible or intangible form, stored in any medium, including studies, reports, Records, 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), communications and materials otherwise related to or made or prepared in connection with or in preparation for any legal proceeding, and other technical, financial, employee or business information or data.
          “ Information Statement ” shall mean the Information Statement attached as an exhibit to the Form 10 sent to the holders of CS Ordinary Shares in connection with the Distribution, including any amendment or supplement thereto.
          “ Insurance Administration ” shall mean, with respect to each Beverages Shared Policy, the accounting for premiums, retrospectively-rated premiums, defense costs, indemnity payments, deductibles and retentions, as appropriate, under the terms and conditions of each of the Beverages Shared Policies; and the reporting to excess insurance carriers of any losses or claims which may cause the per-occurrence, per claim or aggregate limits of any Beverages Shared Policy to be exceeded, and the distribution of Insurance Proceeds as contemplated by this Agreement.

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          “ Insurance Proceeds ” shall mean those monies (i) received by an insured from an insurance carrier or (ii) paid by an insurance carrier on behalf of an insured, in either case net of any applicable premium adjustment, retrospectively-rated premium, deductible, retention, or cost of reserve paid or held by or for the benefit of such insured.
          “ Intellectual Property ” shall mean (i) patents and patent applications; (ii) Trademarks; (iii) copyrights and design rights, including registrations and applications for registration thereof; (iv) database rights; and (v) confidential and proprietary information, including trade secrets and know-how.
          “ Intercompany Balances ” shall mean all intercompany accounts receivable, accounts payable, loans and corporate cross-charges (other than current intercompany accounts receivables and accounts payable arising out of the ordinary course of business or any balances outstanding under any Continuing Arrangement), including the interest accrued thereon as of the date hereof, between any member of the DPS Group, on the one hand, and any member of the Cadbury plc Group, on the other hand, including those set forth in Schedule 1.01(p) .
          “ Law ” shall mean any applicable U.S., English or other federal, national, supranational, state, provincial, local or similar statute, law, ordinance, regulation, rule, code, order, requirement or rule of law (including common law).
          “ Liabilities ” shall mean any and all debts, liabilities, costs, expenses and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured, reserved or unreserved, or determined or determinable, including those arising under any Law, Action, whether asserted or unasserted, or order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Entity and those arising under any Contract or any fines, damages or equitable relief which may be imposed and including all costs and expenses related thereto.
          “ Listing Rules ” shall mean the Listing Rules of the UKLA.
          “ London Stock Exchange ” shall mean the London Stock Exchange plc.
          “ NYSE ” shall mean the New York Stock Exchange.
          “ Person ” shall mean any natural person, firm, individual, corporation, business trust, joint venture, association, company, limited liability company, partnership or other organization or entity, whether incorporated or unincorporated, or any Governmental Entity.
          “ Policies ” shall mean insurance policies and insurance Contracts of any kind (other than life and benefits policies or Contracts), including primary, excess and umbrella policies, comprehensive general liability policies, director and officer liability, fiduciary liability, automobile, aircraft, property and casualty, workers’ compensation and employee dishonesty insurance policies, bonds and self-insurance and captive insurance company arrangements, together with the rights, benefits and privileges thereunder.

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          “ Prospectus ” shall mean the prospectus issued by Cadbury plc in relation to the admission by the UKLA of the Cadbury plc Ordinary Shares and the admission of the Cadbury plc Ordinary Shares to trading on the main market for listed securities of the London Stock Exchange, prepared, published and approved by, and filed with, the FSA in accordance with the Prospectus Rules.
          “ Prospectus Rules ” shall mean the Prospectus Rules of the FSA made under section 73A of the Financial Services and Markets Act 2000, as amended.
          “ Records ” shall mean any Contracts, documents, books, records or files.
          “ Scheme ” shall mean the scheme of arrangement under Section 425 of the Companies Act 1985 between CS and the CS shareholders, with or subject to any modification, addition or condition approved or imposed by the Court pursuant to which the CS Ordinary Shares will be cancelled, CS will become a wholly-owned subsidiary of Cadbury plc and each holder of CS Ordinary Shares will be entitled to receive 64 Cadbury plc Ordinary Shares and 36 Cadbury plc Beverages Shares for every 100 CS Ordinary Shares that such holder holds as of the Scheme Record Date.
          “ Scheme Record Date ” shall mean 6:00 p.m. Greenwich Mean Time or British Summer Time, as applicable to the time of year, on the date of the Court hearing to confirm the reduction of capital of CS provided under the Scheme.
          “ SEC ” shall mean the United States Securities and Exchange Commission or any successor agency.
          “ Securities Act ” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the SEC thereunder, all as the same shall be in effect at the time that reference is made thereto.
          “ Security Interest ” shall mean any mortgage, security interest, pledge, lien, charge, claim, option, right to acquire, voting or other restriction, right-of-way, easement, encroachment, restriction on transfer, or other encumbrance of any nature whatsoever, excluding (i) restrictions on transfer under securities Laws and (ii) licenses of Intellectual Property.
          “ Software ” shall mean all computer programs, applications and code (including source code and object code), and all media and documentation (including user manuals and training materials) relating to or embodying any of the foregoing or on which any of the foregoing are recorded.
          “ Subsidiary ” shall mean, with respect to any Person, (i) a corporation, 50% or more of the voting or capital stock of which is, as of the time in question, directly or indirectly owned by such Person and (ii) any other partnership, joint venture, association, joint stock company, trust, unincorporated organization or other entity in which such Person, directly or indirectly, owns 50% or more of the equity economic interest thereof or has the power to elect or direct the election of 50% or more of the members of the governing body of such entity or otherwise has control over such entity ( e.g., as the managing partner of a partnership).

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          “ Tax ” shall have the meaning set forth in the Tax Sharing Agreement.
          “ Tax Return ” shall have the meaning set forth in the Tax Sharing Agreement.
          “ Tax Sharing Agreement ” shall mean the Tax Sharing and Indemnification Agreement among CS and DPS and, solely for certain limited sections therein, Cadbury plc, substantially in the form attached hereto as Exhibit 1.01(b) .
          “ Territory ” shall mean the countries listed across from the brands owned by or licensed to a member of the DPS Group as of the Distribution Date or otherwise Transferred to a member of the DPS Group after the Distribution Date pursuant to Section 2.04 , as set forth in Schedule 1.01(q) . For the avoidance of doubt, the Territory is specific as to each brand identified in Schedule 1.01(q) .
          “ Trademarks ” means trademarks, service marks, trade names, trade dress and Internet domain names, and registrations and applications for registration thereof, together with the goodwill associated therewith.
          “ Transaction Costs ” shall mean all out-of-pocket costs and expenses incurred by CS, DPS or any member of their respective Groups in connection with the Plan of Separation other than the DPS Transaction Costs.
          “ Transfer Agent ” shall mean Computershare Trust Company, N.A.
          “ Transfer Documents ” shall mean, collectively, the various Contracts and other documents heretofore entered into and to be entered into to effect the Transfer of Assets and the Assumption of Liabilities in the manner contemplated by this Agreement and the Plan of Separation, or otherwise relating to, arising out of or resulting from the transactions contemplated by this Agreement, which shall be, as applicable, in such form or forms as the applicable Parties thereto agree.
          “ Transition Services Agreement ” shall mean the Transition Services Agreement between CS and DPS, substantially in the form attached hereto as Exhibit 1.01(c) .
          “ UK ” shall mean the United Kingdom of Great Britain and Northern Ireland.
          “ UKLA ” shall mean the FSA acting in its capacity as the competent authority for the purposes of Part VI of the Financial Services and Markets Act 2000, as amended.
          The following terms have the meanings set forth in the Sections set forth below:
     
Definition   Location
“Agreement”  
Preamble
“Agreement Disputes”  
10.01
“American Samoa Business”  
6.02(d)
“AsiaPac Licensed Intellectual Property  
6.04(c)
“Assume” or “Assumed”  
2.02

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Definition   Location
“Audited Party”  
5.02(d)
“Beverages Claims”  
8.10(c)
“Beverages Names and Marks”  
6.02(a)
“Cadbury Names and Marks”  
6.01(a)
“Cadbury plc Claims”  
8.10(c)
“Corporate Name”  
6.01(b)
“Court”  
4.01(a)
“Court Order”  
4.01(b)
“CS”  
Recitals
“Domain Names Agreement”  
6.06
“DPS”  
Preamble
“DPS Common Stock”  
Recitals
“DPS Licensed Intellectual Property  
6.04(b)
“Escalation Notice”  
10.02(a)
“Existing Stock”  
6.01(c)
“Future Beverages Litigation Matter”  
8.10(b)(ii)
“Future Cadbury plc Litigation Matter”  
8.10(b)(i)
“Future Joint Litigation Matters”  
8.10(b)(iii)
“Improvements”  
6.04(b)
“Indemnifying Party”  
7.04(b)
“Indemnitee”  
7.04(b)
“Indemnity Payment”  
7.06(a)
“Interim Financial Statements”  
5.02(c)
“Internal Control Audit and Management Assessments”  
5.02(b)
“Know-How Agreement”  
6.05(a)
“Joint Cadbury plc and Beverages Claims”  
8.10(c)
“Memorabilia”  
6.03
“Other Party’s Auditors”  
5.02(b)
“Party”  
Preamble
“Plan of Separation”  
Recitals
“Reduction”  
4.01(a)
“Shared Contract”  
2.01(c)(i)
“Third Party Claim”  
7.04(b)
“Third Party Proceeds”  
7.06(a)
“Transfer”  
2.01(a)(i)
          Section 1.02 Interpretation and Rules of Construction . In this Agreement, except to the extent otherwise provided or that the context otherwise requires:
     (a) when a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated;
     (b) the table of contents and headings for this Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this Agreement;

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     (c) whenever the words “include,” “includes” or “including” are used in this Agreement, they are deemed to be followed by the words “without limitation”;
     (d) the words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement;
     (e) all terms defined in this Agreement have the defined meanings when used in any Ancillary Agreement, or any certificate or other document made or delivered pursuant hereto, unless otherwise defined therein;
     (f) the definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms; and
     (g) references to a Person are also to its successors and permitted assigns.
ARTICLE II
THE SEPARATION
          Section 2.01 Transfer of Assets .
          (a) On or prior to the Demerger Effective Time and to the extent not already completed:
     (i) CS shall, on behalf of itself and the members of the Cadbury plc Group, as applicable, transfer, contribute, assign and convey or cause to be transferred, contributed, assigned and conveyed (“ Transfer ”) to DPS or another member of the DPS Group all of its and its Subsidiaries’ right, title and interest, if any and to the extent of such right, title and interest, in and to the Beverages Assets owned or held by a member of the Cadbury plc Group as of the Distribution Date, including taking the actions necessary to consummate the transactions set forth in Schedule 2.01(a) ; and
     (ii) DPS shall, on behalf of itself and the members of the DPS Group, as applicable, Transfer to CS or another member of the Cadbury plc Group all of its and its Subsidiaries’ right, title and interest, if any and to the extent of such right, title and interest, in and to the Cadbury plc Assets owned or held by a member of the DPS Group as of the Distribution Date, including taking the actions necessary to consummate the transactions set forth in Schedule 2.01(a) .
          (b) Unless otherwise agreed to by the Parties, each of CS and DPS shall be entitled to designate the Business Entity within such Party’s respective Group to which any Assets are to be Transferred pursuant to this Section 2.01 or Section 2.04 .

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          (c) Without limiting the generality of the obligations set forth in Section 2.01(a) and 2.01(b) :
     (i) Unless the Parties otherwise agree or the benefits of any Contract described in this Section are expressly conveyed to the applicable Party pursuant to an Ancillary Agreement, to the extent any Contract is (1) a Cadbury plc Asset but inures in part to the benefit or burden of any member of the DPS Group or (2) a Beverages Asset but inures in part to the benefit or burden of any member of the Cadbury plc Group, including those contracts listed in Schedule 2.01(c) (each, a “ Shared Contract ”), such Shared Contract shall be assigned in part to the applicable member(s) of the applicable Group, if so assignable, or appropriately amended prior to, on or after the Demerger Effective Time, so that each Party or the members of their respective Groups shall be entitled to the rights and benefits, and shall Assume the related portion of any Liabilities, inuring to their respective businesses; provided , however , that (x) in no event shall any member of any Group be required to assign (or amend) any Shared Contract in its entirety or to assign a portion of any Shared Contract (including any Policy) which is not assignable (or cannot be amended) by its terms (including any terms imposing consents or conditions on an assignment where such consents or conditions have not been obtained or fulfilled) and (y) if any Shared Contract cannot be so partially assigned by its terms or otherwise, or cannot be amended or if such assignment or amendment would impair the benefit the Parties thereto derive from such Shared Contract, the Parties shall, and shall cause each of their respective Subsidiaries to, take such other reasonable and permissible actions to cause a member of the DPS Group or the Cadbury plc Group, as the case may be, to receive the benefit of that portion of each Shared Contract that relates to the Beverages Business or the Cadbury plc Business (to the extent so related) as if such Shared Contract had been assigned to (or amended to allow) a member of the applicable Group pursuant to this Section 2.01 and to bear the burden of the corresponding Liabilities (including any Liabilities that may arise by reason of such arrangement) as if such Liabilities had been Assumed by a member of the applicable Group pursuant to this Section 2.01 .
     (ii) Each of CS and DPS shall, and shall cause the respective members of its Group to, (A) treat for all Tax purposes the portion of each Shared Contract inuring to its respective businesses as Assets owned by, and/or Liabilities of, as applicable, such Party not later than the Demerger Effective Time and (B) neither report nor take any Tax position (on a Tax Return or otherwise) inconsistent with such treatment (in the case of clauses (A) and (B), unless required by Tax Law or any other Law or the good faith resolution of a contest or other proceeding relating to Taxes).
     (iii) Nothing in this Section 2.01(c) shall require any member of any Group to make any payment (except to the extent advanced, Assumed or agreed in advance to be reimbursed by any member of the other Group), incur any obligation or grant any concession for the benefit of any member of any other Group in order to effect any transaction contemplated by this Section 2.01(c) , in each case, other than an incidental payment, obligation or concession.

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          Section 2.02 Assumption and Satisfaction of Liabilities . Except as otherwise specifically set forth in any Ancillary Agreement, from and after the Demerger Effective Time, (a) CS shall, or shall cause a member of the Cadbury plc Group to, accept, assume (or, as applicable, retain), perform, discharge and fulfill, in accordance with their respective terms (“ Assume ”), all of the Cadbury plc Liabilities and (b) DPS shall, or shall cause a member of the DPS Group to, Assume all the Beverages Liabilities, in each case, regardless of (i) when or where such Liabilities arose or arise, (ii) whether the facts upon which they are based occurred prior to, on or subsequent to the Demerger Effective Time, (iii) where or against whom such Liabilities are asserted or determined and (iv) whether arising from or alleged to arise from negligence, recklessness, violation of Law, fraud or misrepresentation by any member of the Cadbury plc Group or the DPS Group, as the case may be, or any of their past or present respective directors, officers, employees, agents, Subsidiaries or Affiliates.
          Section 2.03 Intercompany Balances .
          (a) All of the Intercompany Balances, including those set forth on Schedule 1.01(p) shall, prior to or at the Demerger Effective Time, be repaid, settled or otherwise eliminated, by means of cash payments, a dividend, capital contribution, a combination of the foregoing or otherwise, as determined by CS.
          (b) Except as may be contemplated by this Agreement or any Ancillary Agreement and the transactions contemplated hereby and thereby, from May 1, 2008 until the Distribution Date, DPS shall, and shall cause each member of the DPS Group to, manage its working capital in the ordinary course of business consistent with past practice.
          (c) As between the Parties (and the members of their respective Groups), all payments and reimbursements received after the Demerger Effective Time by any Party (or member of its Group) that relate to a Business, Asset or Liability of the other Party (or member of its Group) shall be held by such Party in trust for the use and benefit of the Party entitled thereto (at the expense of the Party entitled thereto) and, promptly upon receipt by such Party of any such payment or reimbursement, such Party shall pay or shall cause the applicable member of its Group to pay over to the applicable Party the amount of such payment or reimbursement without right of set-off, net of any costs, including Tax costs, to the Party making the payment.
          Section 2.04 Transfers Not Effected on or Prior to the Demerger Effective Time; Transfers Deemed Effective as of the Demerger Effective Time .
          (a) To the extent that any Transfers contemplated by this Agreement (other than any Transfer contemplated by Section 2.01(c) ) shall not have been consummated on or prior to the Demerger Effective Time, the Parties shall cooperate to effect such Transfers as promptly as practicable following the Demerger Effective Time. Nothing herein shall be deemed to require the Transfer of any Assets or the Assumption of any Liabilities which by their terms or operation of Law cannot be Transferred; provided , however , that the Parties and their respective Subsidiaries shall cooperate and use commercially reasonable efforts following the Distribution Date to seek to obtain any necessary Consents or Governmental Approvals for the Transfer of all Assets and the Assumption of all Liabilities contemplated to be Transferred and Assumed pursuant to this Agreement.

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          (b) In the event that any such Transfer of Assets or Assumption of Liabilities has not been consummated, from and after the Demerger Effective Time (i) to the extent permitted by applicable Law, the Party whose Group retains such Asset shall thereafter hold, or cause the applicable member of its Group to hold, such Asset (at no net Tax cost to such Party or such member) for the use and benefit of the member of the other Group entitled thereto (at the expense of the member entitled thereto) to the extent related to such other Party’s business and (ii) to the extent permitted by applicable Law, the Party intended to Assume such Liability shall, or shall cause the applicable member of its Group to, pay or reimburse the member of the other Group retaining such Liability (at no net Tax cost to such retaining member) for all amounts paid or incurred in connection with the retention of such Liability to the extent related to such other Party’s business. In addition, the Party whose Group retains such Asset or Liability shall, insofar as reasonably possible and to the extent permitted by applicable Law, treat such Asset or Liability in the ordinary course of business in accordance with past practice and take such other actions as may be reasonably requested by the Party to whose Group such Asset is to be Transferred or by the Party whose Group will Assume such Liability in order to place such Party, insofar as reasonably possible, in the same position as if such Asset or Liability had been Transferred or Assumed as contemplated hereby and so that all the benefits and burdens relating to such Asset or Liability, including possession, use, risk of loss, potential for gain, and dominion, control and command over such Asset or Liability, are to inure from and after the Demerger Effective Time to the member or members of the Cadbury plc Group or the DPS Group entitled to the receipt of such Asset or required to Assume such Liability. In furtherance of the foregoing, the Parties agree that, as of the Demerger Effective Time, each Party shall be deemed to have acquired complete and sole beneficial ownership over all of the Assets, together with all rights, powers and privileges incident thereto, and shall be deemed to have Assumed in accordance with the terms of this Agreement all of the Liabilities, and all duties, obligations and responsibilities incident thereto, which such Party is entitled to acquire or required to Assume pursuant to the terms of this Agreement.
          (c) If and when the Consents, Governmental Approvals and/or conditions, the absence or non-satisfaction of which caused the deferral of Transfer of any Asset or deferral of the Assumption of any Liability pursuant to Section 2.04(a) , are obtained or satisfied, the Transfer, assignment, Assumption or novation of the applicable Asset or Liability shall be effected in accordance with and subject to the terms of this Agreement and/or the applicable Ancillary Agreement.
          (d) The Person retaining any Asset or Liability due to the deferral of the Transfer of such Asset or the deferral of the Assumption of such Liability pursuant to Section 2.04(a) or otherwise shall not be obligated, in connection with the foregoing, to expend any money unless the necessary funds are advanced, assumed, or agreed in advance to be reimbursed by the Person entitled to such Asset or the Person intended to be subject to such Liability and at no net Tax cost to such retaining Person, other than reasonable attorneys’ fees and recording or similar fees, all of which shall be promptly reimbursed by the Person entitled to such Asset or the Person intended to be subject to such Liability.
          (e) Each of CS and DPS shall, and shall cause the members of its respective Group to, (i) treat for all Tax purposes (A) the deferred Assets as Assets having been Transferred to and owned by the Party entitled to such Assets not later than the Demerger Effective Time and

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(B) the deferred Liabilities as Liabilities having been Assumed and owed by the Person intended to be subject to such Liabilities not later than the Demerger Effective Time and (ii) neither report nor take any Tax position (on a Tax Return or otherwise) inconsistent with such treatment (in the case of clauses (i) and (ii), unless required by a Tax Law or any other Law or good faith resolution of a contest or proceeding relating to Taxes).
          (f) Nothing in this Section 2.04 shall be deemed to modify the terms of any Beverages IP Agreement entered into between any member of the DPS Group, on the one hand, and any member of the Cadbury plc Group on the other.
          Section 2.05 Transfer Documents . In connection with, and in furtherance of, the Transfer of Assets and the acceptance and Assumption of Liabilities contemplated by this Agreement, to the extent necessary, the Parties shall execute or cause to be executed, on or prior to the Demerger Effective Time, the Transfer Documents reasonably necessary to evidence the valid and effective Assumption by the applicable Party or the members of its Group of the Cadbury plc Liabilities or Beverages Liabilities, as applicable, and the valid Transfer to the applicable Party or member of such Party’s Group of all right, title and interest in and to the Cadbury plc Assets or the Beverages Asset, as applicable, to be Transferred hereunder.
          Section 2.06 Further Assurances .
          (a) In addition to and without limiting the actions specifically provided for elsewhere in this Agreement, including Section 2.04 , each of the Parties shall cooperate with each other and use (and will cause their respective Subsidiaries and Affiliates to use) commercially reasonable efforts, on and after the Demerger Effective Time, to take, or to cause to be taken, all actions, and to do, or to cause to be done, all things reasonably necessary on its part under applicable Law or contractual obligations to consummate and make effective the transactions contemplated by this Agreement and the Ancillary Agreements.
          (b) Without limiting the foregoing, on and after the Demerger Effective Time, each Party shall cooperate with the other Parties, and without any further consideration, but at the expense of the requesting Party from and after the Demerger Effective Time, to execute and deliver, or use commercially reasonable efforts to cause to be executed and delivered, all instruments, including instruments of Transfer, and to make all filings with, and to obtain all Consents and/or Governmental Approvals, any permit, license, Contract, indenture or other instrument (including any Consents or Governmental Approvals), and to take all such other actions as such Party may reasonably be requested to take by the other Party 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 applicable Assets and the assignment and Assumption of the applicable Liabilities and the other transactions contemplated hereby and thereby.

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          Section 2.07 Replacement of Guarantors and Obligors .
          (a) DPS shall (with the reasonable cooperation of CS) use its commercially reasonable efforts to have any member of the Cadbury plc Group removed as guarantor of or obligor for any Beverages Liability, including in respect of those guarantees and obligations set forth in Schedule 2.07(a) , to the extent that they relate to Beverages Liabilities.
          (b) On or prior to the Demerger Effective Time, to the extent required to obtain a release from a guaranty or obligation for any Beverages Liability of any member of the Cadbury plc Group, a member of the DPS Group, as applicable, shall either (i) execute a guaranty agreement in the form of the existing guaranty or such other form as is agreed to by the relevant Parties to such guaranty agreement or (ii) execute an amendment to the agreement giving rise to such obligation in such form as is necessary to obtain such release, except to the extent that such existing guaranty or amendment contains representations, covenants or other terms or provisions either (1) with which DPS would be reasonably unable to comply or (2) which would be reasonably expected to be breached.
          (c) If DPS is unable to obtain, or to cause to be obtained, any such required removal as set forth in clause (a) and (b) of this Section 2.07 , (i) the relevant DPS Group beneficiary and DPS shall, and shall cause the members of the DPS Group to, indemnify and hold harmless the Cadbury plc Group guarantor or obligor for any Indemnifiable Loss arising from or relating thereto (in accordance with the provisions of ARTICLE VII ) and shall or shall cause one of its Affiliates, as agent or subcontractor for such guarantor or obligor to pay, perform and discharge fully all the obligations or other Liabilities of such guarantor or obligor thereunder.
          (d) CS shall (with the reasonable cooperation of DPS) use its commercially reasonable efforts to have any member of the DPS Group removed as guarantor of or obligor for any Cadbury plc Liability, including in respect of the guarantees or obligations set forth in Schedule 2.07(d) , to the extent that they relate to Cadbury plc Liabilities.
          (e) On or prior to the Demerger Effective Time, to the extent required to obtain a release from a guaranty or obligation for any Cadbury plc Liability of any member of the DPS Group, a member of the Cadbury plc Group, as applicable, shall either (i) execute a guaranty agreement in the form of the existing guaranty or such other form as is agreed to by the relevant Parties to such guaranty agreement or (ii) execute an amendment to the agreement giving rise to such obligation in such form as is necessary to obtain such release, except to the extent that such guaranty or amendment contains representations, covenants or other terms or provisions either (1) with which CS would be reasonably unable to comply or (2) which would be reasonably expected to be breached.
          (f) If CS is unable to obtain, or to cause to be obtained, any such required removal as set forth in clause (d) and (e) of this Section 2.07 , (i) the relevant Cadbury plc Group beneficiary and CS shall, and shall cause the other members of the Cadbury plc Group to, indemnify and hold harmless the DPS Group guarantor or obligor for any Indemnifiable Loss arising from or relating thereto (in accordance with the provisions of ARTICLE VII ) and shall or shall cause one of its Affiliates, as agent or subcontractor for such guarantor or obligor to pay,

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perform and discharge fully all the obligations or other Liabilities of such guarantor or obligor thereunder.
          Section 2.08 Disclaimer of Representations and Warranties . EACH OF CS (ON BEHALF OF ITSELF AND EACH MEMBER OF THE CADBURY PLC GROUP) AND DPS (ON BEHALF OF ITSELF AND EACH MEMBER OF THE DPS GROUP) UNDERSTANDS AND AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN, IN ANY ANCILLARY AGREEMENT OR IN ANY CONTINUING ARRANGEMENT, NO PARTY TO THIS AGREEMENT, ANY ANCILLARY AGREEMENT, ANY CONTINUING ARRANGEMENT OR ANY OTHER AGREEMENT OR DOCUMENT CONTEMPLATED BY THIS AGREEMENT, ANY ANCILLARY AGREEMENTS, ANY CONTINUING ARRANGEMENTS OR OTHERWISE, IS REPRESENTING OR WARRANTING IN ANY WAY AS TO THE ASSETS, BUSINESSES, INFORMATION OR LIABILITIES CONTRIBUTED, TRANSFERRED OR ASSUMED AS CONTEMPLATED HEREBY OR THEREBY, AS TO ANY CONSENTS OR GOVERNMENTAL APPROVALS REQUIRED IN CONNECTION HEREWITH OR THEREWITH, AS TO THE VALUE OR FREEDOM FROM ANY SECURITY INTERESTS OF, OR ANY OTHER MATTER CONCERNING, ANY ASSETS OF SUCH PARTY, OR AS TO THE ABSENCE OF ANY DEFENSES OR RIGHT OF SET-OFF OR FREEDOM FROM COUNTERCLAIM WITH RESPECT TO ANY ACTION OR OTHER ASSET, INCLUDING ACCOUNTS RECEIVABLE, OF ANY PARTY, OR AS TO THE LEGAL SUFFICIENCY OF ANY CONTRIBUTION, ASSIGNMENT, DOCUMENT, CERTIFICATE OR INSTRUMENT DELIVERED HEREUNDER TO CONVEY TITLE TO ANY ASSET OR THING OF VALUE UPON THE EXECUTION, DELIVERY AND FILING HEREOF OR THEREOF. EXCEPT AS MAY EXPRESSLY BE SET FORTH HEREIN OR IN ANY ANCILLARY AGREEMENT OR CONTINUING ARRANGEMENT, ALL SUCH ASSETS ARE BEING TRANSFERRED ON AN “AS IS,” “WHERE IS” BASIS (AND, IN THE CASE OF ANY REAL PROPERTY, BY MEANS OF A QUITCLAIM OR SIMILAR FORM DEED OR CONVEYANCE) AND THE RESPECTIVE TRANSFEREES SHALL BEAR THE ECONOMIC AND LEGAL RISKS THAT (I) ANY CONVEYANCE SHALL PROVE TO BE INSUFFICIENT TO VEST IN THE TRANSFEREE GOOD 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.
ARTICLE III
CERTAIN ACTIONS AT OR PRIOR TO THE DISTRIBUTION
          Section 3.01 Certificate of Incorporation; Bylaws . On or prior to the Distribution Date, all necessary actions shall be taken to adopt the form of Certificate of Incorporation and Bylaws filed by DPS with the SEC as exhibits to the Form 10.
          Section 3.02 Directors . On or prior to the Distribution Date, CS shall take all necessary actions to cause the board of directors of DPS to consist of the individuals identified in the Information Statement as directors of DPS.

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          Section 3.03 Resignations . On or prior to the Distribution Date, (i) CS shall cause all its employees and any employees of any member of the Cadbury plc Group (excluding any employees of any member of the DPS Group) to resign, effective as of the Distribution Date, from all positions as officers or directors of any member of the DPS Group in which they serve and (ii) DPS shall cause all its employees and any employees of any member of the DPS Group to resign, effective as of the Distribution Date, from all positions as officers or directors of any members of the Cadbury plc Group.
          Section 3.04 Ancillary Agreements . On or prior to the Distribution Date, each of CS and DPS shall enter into, and/or (where applicable) shall cause a member or members of their respective Group to enter into, the Ancillary Agreements and any other Contracts in respect of the Distribution reasonably necessary or appropriate in connection with the transactions contemplated hereby and thereby.
ARTICLE IV
THE DISTRIBUTION
          Section 4.01 The Distribution . Subject to Sections 4.04 and 4.05 :
          (a) Promptly following the sanction by the High Court of Justice of England and Wales (the “ Court ”) of the Scheme, Cadbury plc shall apply to the Court to approve a reduction in capital pursuant to Section 135 of the Companies Act 1985 (the “ Reduction ”) under which the share capital of Cadbury plc shall be reduced by decreasing the nominal value of each Cadbury plc Ordinary Share from 500 to 10 pence and the Cadbury plc Beverages Shares will be cancelled in their entirety.
          (b) Promptly after receipt of the order (the “ Court Order ”) from the Court approving the Reduction, Cadbury plc shall file the Court Order at Companies House.
          (c) On the Distribution Date, DPS shall issue to each holder of a Cadbury plc Beverages Share 12 shares of DPS Common Stock for every 36 Cadbury plc Beverages Shares held by such shareholder and the shares of DPS Common Stock held by CS shall be cancelled. No action by any such shareholder shall be necessary for such shareholder (or such shareholder’s designated transferee or transferees) to receive the applicable number of shares of (and, if applicable, cash in lieu of any fractional shares) DPS Common Stock such shareholder is entitled to in the Distribution. The Transfer Agent shall credit the appropriate class and number of such shares of DPS Common Stock to book entry accounts for each such holder or designated transferee or transferees of such holder of DPS Common Stock.
          Section 4.02 Fractional Shares . Shareholders holding a number of shares of Cadbury plc Beverages Shares, on the Distribution Record Date, which would entitle such shareholders to receive less than one whole share of DPS Common Stock in the applicable Distribution will receive cash in lieu of fractional shares. Fractional shares of DPS Common Stock will not be distributed in the Distribution nor credited to book-entry accounts. The Transfer Agent shall, as soon as practicable after the applicable Distribution Date, (a) determine

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the number of whole shares and fractional shares of DPS Common Stock allocable to each holder of record or beneficial owner of Cadbury plc Beverages Shares as of close of business on the Distribution Record Date, (b) aggregate all such fractional shares into whole shares and sell the whole shares obtained thereby in open market transactions, in each case, at then prevailing trading prices on behalf of holders who would otherwise be entitled to fractional share interests and (c) distribute to each such holder, or for the benefit of each such beneficial owner, such holder or owner’s ratable share of the net proceeds of such sale, based upon the average gross selling price per share of DPS Common Stock after making appropriate deductions for any amount required to be withheld for United States federal income tax purposes. DPS shall bear the cost of brokerage fees incurred in connection with these sales of fractional shares, which sales shall occur as soon after the applicable Distribution Date as practicable and as determined by the Transfer Agent. Neither CS nor DPS or the Transfer Agent will guarantee any minimum sale price for the fractional shares of DPS Common Stock. Neither CS nor DPS will pay any interest on the proceeds from the sale of fractional shares. The Transfer Agent will have the sole discretion to select the broker-dealers through which to sell the aggregated fractional shares and to determine when, how and at what price to sell such shares. Neither the Transfer Agent nor the broker-dealers through which the aggregated fractional shares are sold will be Affiliates of CS or DPS.
          Section 4.03 Actions in Connection with the Distribution .
          (a) DPS shall file such amendments and supplements to the Form 10 as CS may reasonably request and such amendments as may be necessary in order to cause the same to become and remain effective as required by Law, including filing such amendments and supplements to the Form 10 as may be required by the SEC or federal, state or foreign securities Laws. A member of the Cadbury plc Group, on behalf of DPS, shall mail to the holders of CS Ordinary Shares and CS ADRs, at such time on or prior to the applicable Distribution Date as CS shall determine, the Information Statement included in the Form 10, as well as any other information concerning DPS, its business, operations and management, the Plan of Separation and such other matters as CS shall reasonably determine are necessary and as may be required by Law.
          (b) DPS shall cooperate with CS in preparing, filing with the SEC and causing to become effective a registration statement 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 Plan of Separation or other transactions contemplated by this Agreement and the Ancillary Agreements. Promptly after receiving a request from CS, to the extent requested, DPS shall prepare and, in accordance with applicable Law, file with the SEC any such documentation that CS determines is necessary or desirable to effectuate the Distribution, and CS and DPS shall each use commercially reasonable efforts to obtain all necessary approvals from the SEC with respect thereto as soon as practicable.
          (c) DPS shall prepare and file, and shall use commercially reasonable efforts to have approved and made effective, an application for the original listing of the DPS Common Stock to be distributed in the Distribution on the NYSE, subject to official notice of distribution.

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          Section 4.04 Distribution Date . CS shall, in its sole discretion, determine the Distribution Date and all terms of the Distribution, including the form, structure and terms of any transactions and/or offerings to effect the Distribution and the timing of and conditions to the consummation thereof. In addition, regardless of whether the conditions to the consummation of the Distribution set forth in Section 4.05 have been satisfied or waived, CS may, in accordance with Section 11.01 , at any time and from time to time until the completion of the Distribution, decide to 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.
          Section 4.05 Conditions to Distribution . Subject to Section 4.04 , the consummation of the Distribution shall be subject to the satisfaction or waiver of the following conditions which satisfaction or waiver shall be determined by CS in its sole discretion and which conditions are for the sole benefit of the Cadbury plc Group and shall not give rise to or create any duty on the part of CS or the board of directors of CS to waive or not waive any such condition:
          (a) The Form 10 shall have been declared effective by the SEC, with no stop order in effect with respect thereto, and the Information Statement shall have been mailed to the holders of CS Ordinary Shares;
          (b) The DPS Common Stock to be delivered in the Distribution shall have been approved for listing on the NYSE, subject to official notice of issuance;
          (c) Any Governmental Approvals shall have been obtained and be in full force and effect;
          (d) The Scheme shall have been sanctioned by the Court and office copies of the Scheme Court Orders shall have been registered by the UK Registrar of Companies at Companies House;
          (e) The Cadbury plc Ordinary Shares shall have been (i) admitted to the official list of the UKLA and (ii) admitted to trading on the London Stock Exchange’s main market for listed Securities;
          (f) Cadbury plc shall have received the Court Order approving the Reduction and such Court Order shall have been delivered to the UK Registrar of Companies and been registered by him;
          (g) No order, injunction or decree issued by any Governmental Entity of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Distribution or any of the transactions related thereto, including the transfers of Assets and Assumption of Liabilities contemplated by this Agreement, shall be in effect;
          (h) CS shall have completed the contribution/transfer of the Beverages Business to DPS;

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          (i) The financing transactions described in the Information Statement as having occurred prior to the Distribution shall have been consummated on or prior to the Distribution;
          (j) There shall not have occurred an event or development that, in the opinion of the board of directors of CS, in its sole and absolute discretion, would result in the Distribution having a material adverse effect on CS or any of its Subsidiaries or CS’ shareholders; and
          (k) The Ancillary Agreements shall have been entered into by the applicable Parties.
          Section 4.06 Consent to the Reduction . DPS acknowledges that Cadbury plc is proposing to undertake the Reduction and DPS, on behalf of itself and each member of the DPS Group, (i) shall as soon as reasonably practicable after the date of this Agreement provide Cadbury plc with an executed letter of consent to the Reduction in the form attached as Exhibit 4.06 and agrees that a copy of this letter may be presented to the Court as part of Cadbury plc’s application for confirmation by the Court of the Reduction; and (ii) undertakes that to the extent further consent is requested by Cadbury plc in order to effect the Reduction, DPS shall (and shall procure that any member of the DPS Group shall) give consent promptly on terms reasonably acceptable to Cadbury plc and, for the avoidance of doubt, such consents shall not be conditional on the provision of any third party guarantee or the deposit of any funds in any bank or escrow account or any other security, fact, event or thing. This consent is (and any consent given after the date of this letter shall be) irrevocable.
ARTICLE V
CERTAIN COVENANTS
          Section 5.01 Non-Solicitation of Employees . During the period ending on the 18-month anniversary of the Distribution Date, none of the Parties or any member of their respective Groups shall solicit for employment or interfere with or attempt to interfere with any officers, employees, representatives or agents of any member of the other Group, or induce or attempt to induce any of them to leave the employ of the other Group or violate the terms of their contracts, or any employment arrangements, with the other Group; provided , however , that the foregoing will not prohibit (x) any advertising in publication or media of general circulation including trade journals or similar media or hiring any officer, employee, representative or agent who responds to such advertisement or (y) the soliciting or hiring of any officers, employees, representatives or agents of any member of the other Group who are offered a position following the termination of employment by the other Group.
          Section 5.02 Auditors and Audits; Annual and Quarterly Financial Statements and Accounting .
          (a) DPS shall use its commercially reasonable efforts to cause its auditors to complete its audit for the year ending December 31, 2008 such that the auditor will date its

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opinion of the audited 2008 annual financial statements on the same date that Cadbury plc’s auditors date their opinion on Cadbury plc’s audited annual financial statements, such that Cadbury plc is able to meet its timetable for the printing, filing and public dissemination of Cadbury plc’s 2008 annual financial statements. In addition, DPS shall use its commercially reasonable efforts to cause its auditors to comply with the processes and procedures required by Cadbury plc Group’s auditors to permit Cadbury plc Group’s auditors to opine on the 2008 audited financial statements of Cadbury plc.
          (b) Each Party shall provide, or provide access to the other Party on a timely basis, all information reasonably required to meet its schedule for the preparation, printing, filing, and public dissemination of its 2008 annual financial statements and for management’s assessment of the effectiveness of its disclosure controls and procedures and its internal control over financial reporting in accordance with Items 307 and 308, respectively, of Regulation S-K and, to the extent applicable to such Party, its auditor’s audit of its internal control over financial reporting and management’s assessment thereof in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 and the SEC’s and Public Company Accounting Oversight Board’s rules and auditing standards thereunder, if required (such assessments and audit being referred to as the “ Internal Control Audit and Management Assessments ”). Such information shall be provided in the form, time and manner reasonably requested by CS, which shall not be materially different than the form, time and manner required by CS prior to the Distribution Date pursuant to the CS Group Reporting Manual in effect as of the Distribution Date. Without limiting the generality of the foregoing, each Party will provide all required financial and other information with respect to itself and its Subsidiaries to its auditors in a sufficient and reasonable time and in sufficient detail to permit its auditors to take all steps and perform all reviews necessary to provide sufficient assistance to the other Party’s auditors (each such other Party’s auditors, collectively, the “ Other Party’s Auditors ”) with respect to information to be included or contained in such other Party’s annual financial statements and to permit the Other Party’s Auditors and management to complete the Internal Control Audit and Management Assessments, if required.
          (c) Each Party shall provide, or provide access to the other Party on a timely basis, all information reasonably required to meet its schedule for the preparation, printing, filing, and public dissemination of its financial results for the period ending June 30, 2008 (the “ Interim Financial Statements ”) and for its Internal Control Audit and Management Assessments, if required. Such information shall be provided in the form, time and manner reasonably requested by CS, which shall not be materially different than the form, time and manner required by CS prior to the Distribution Date pursuant to the CS Group Reporting Manual in effect as of the Distribution Date. Without limiting the generality of the foregoing, each Party will provide all required financial and other information with respect to itself and its Subsidiaries to its auditors in a sufficient and reasonable time and in sufficient detail to permit its auditors to take all steps and perform all reviews necessary to provide sufficient assistance to the Other Party’s Auditors with respect to information to be included or contained in the Interim Financial Statements and to permit the Other Party’s Auditors and management to complete the Internal Control Audit and Management Assessments, if required.
          (d) Each Party shall authorize its respective auditors to make reasonably available to the Other Party’s Auditors both the personnel who performed or are performing the annual audits of such audited Party (each such Party with respect to its own audit, the “ Audited

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Party ”) and work papers related to the annual audits of such Audited Party, in all cases within a reasonable time prior to such Audited Party’s auditors’ opinion date, so that the Other Party’s Auditors are able to perform the procedures they reasonably consider necessary to take responsibility for the work of the Audited Party’s auditors as it relates to their auditors’ report on such other Party’s financial statements, all within sufficient time to enable such other Party to meet its timetable for the printing, filing and public dissemination of its annual financial statements. Each Party shall make reasonably available to the Other Party’s Auditors and management its personnel and Records in a reasonable time prior to the Other Party’s Auditors’ opinion date and other Party’s management’s assessment date so that the Other Party’s Auditors and other Party’s management are able to perform the procedures they reasonably consider necessary to conduct the Internal Control Audit and Management Assessments.
          (e) To the extent it relates to a pre-Distribution Date period, (i) each of the Parties hereto shall give the other Party hereto as much prior notice as is reasonably practicable of any changes in, or proposed determination of, its accounting estimates from those in effect as of immediately prior to the Distribution Date or of any other action with regard to its accounting estimates or previously reported financial results which may affect the other Party’s financial results, (ii) each of the Parties hereto will consult with the other and, if requested by the Party contemplating such changes, with the Other Party’s Auditors and (iii) unless required by generally accepted accounting principles or a reasonable interpretation thereof by either Party’s auditors, Law or a Governmental Entity, neither party shall make such determination or changes which would affect the other Party’s previously reported financial results without prior consent, which shall not be unreasonably withheld. Further, each Party will give the other Party prompt notice of any amendments or restatements of accounting statements with respect to pre-Distribution Date periods, and will provide the other Party with access as provided in Section 5.02(c) hereof as promptly as possible such that the other Party will be able to satisfy its financial reporting requirements.
          (f) In the event either Cadbury plc or DPS is the subject of any SEC, FSA or other Governmental Entity’s comment, review or investigation (formal or informal) relating to a period prior to the Distribution Date and which in any way relates to the other Party or the other Party’s public filings, such Party shall provide the other Party with a copy of any comment or notice of such review or investigation and shall give the other Party a reasonable opportunity to be involved in responding to such comment, review or investigation, and such other Party shall cooperate with such Party in connection with responding to such comment, review or investigation.
          (g) Any Information exchanged pursuant to this Section 5.02 is subject to Section 8.06 .
          Section 5.03 CS Obligations . DPS and Cadbury plc agree that Cadbury plc shall not, and shall cause CS not to, take any actions that would materially and adversely impact the ability of CS to fulfill its obligations under this Agreement; provided that Cadbury plc may at any time following the Distribution Date require CS to assign to Cadbury plc all of CS’ rights and obligations under this Agreement in substitution for compliance by Cadbury plc and CS with the aforementioned obligation in this Section 5.03, and upon such assignment, Cadbury plc shall assume all of CS’ obligations under this Agreement.

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ARTICLE VI
INTELLECTUAL PROPERTY MATTERS
          Section 6.01 Cadbury Names and Marks .
          (a) DPS hereby acknowledges that all right, title and interest in and to the “Cadbury” name, together with all variations and acronyms thereof and all Trademarks and other identifiers of source or goodwill containing or incorporating any of the foregoing (the “ Cadbury Names and Marks ”), are owned exclusively by the Cadbury plc Group, and that, except as expressly provided below, any and all right of the DPS Group to use the Cadbury Names and Marks shall terminate as of the Demerger Effective Time and shall immediately revert to the Cadbury plc Group, along with any and all goodwill associated therewith. DPS acknowledges that (i) the Beverages Assets shall not include any Cadbury Names and Marks, and (ii) it has no rights, and is not acquiring any rights, to use the Cadbury Names and Marks, except as expressly provided herein.
          (b) DPS shall, as soon as practicable after the Distribution Date, but in no event later than 10 Business Days thereafter, cause each member of the DPS Group to file amended certificates of incorporation with the appropriate Governmental Entities changing its corporate name, “doing business as” name, trade name and any other similar corporate identifier (each, a “ Corporate Name ”) to a Corporate Name that does not contain any Cadbury Names and Marks and to supply promptly any additional information, documents and materials that may be requested by CS with respect to such filings.
          (c) The DPS Group shall, for a period of 15 months after the Distribution Date, be entitled to use, solely in connection with the operation of the Beverages Business as operated immediately prior to the Demerger Effective Time, all of their existing stocks of product packaging, signs, letterheads, business cards, invoice stock, advertisements and promotional materials (other than Internet or intranet websites and web pages), inventory and other documents and materials (“ Existing Stock ”) containing the Cadbury Names and Marks, after which 15-month period DPS shall cause each member of the DPS Group to remove or obliterate all Cadbury Names and Marks from such Existing Stock or cease using such Existing Stock; provided that the Cadbury Names and Marks shall be removed from (i) all of the DPS Group’s Internet websites and web pages within three months following the Distribution Date and (ii) all of the DPS Group’s intranet websites and web pages within three months following the Distribution Date.
          (d) Following the Distribution Date, except as expressly provided in this Agreement, (i) no other right to use the Cadbury Names and Marks is granted by the Cadbury plc Group to DPS or the DPS Group, whether by implication or otherwise, and (ii) nothing hereunder permits DPS or any member of the DPS Group to use the Cadbury Names and Marks on or in connection with any documents, materials, products or services. DPS shall ensure that all use of the Cadbury Names and Marks by the DPS Group as provided in this Section 6.01 shall be only with respect to goods and services of a level of quality equal to or greater than the quality of goods and services with respect to which the Cadbury Names and Marks were used in the Beverages Business prior to the Distribution Date. Any and all goodwill generated by the

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use of the Cadbury Names and Marks under this Section 6.01 shall inure solely to the benefit of the Cadbury plc Group. In no event shall DPS or any member of the DPS Group use the Cadbury Names and Marks in any manner that may damage or tarnish the reputation of the Cadbury plc Group, or the goodwill associated with the Cadbury Names and Marks.
          (e) DPS agrees that the Cadbury plc Group shall not have any responsibility for claims by third parties arising out of, or relating to, the use by the DPS Group of any Cadbury Names and Marks after the Distribution Date. DPS shall indemnify and hold harmless CS and its Affiliates, and their respective officers, directors, employees, agents, successors and assigns from any and all such claims that may arise out of the use of any Cadbury Names and Marks by DPS or any member of the DPS Group (i) in accordance with the terms and conditions of this Section 6.01 , other than such claims that the Cadbury Names and Marks infringe the Intellectual Property rights of any third party, or (ii) in violation of or outside the scope permitted by this Section 6.01 . Notwithstanding anything in this Agreement to the contrary, including Section 10.02(f) , DPS hereby acknowledges that CS, in addition to any other remedies available to it for any breach or threatened breach of this Section 6.01 , shall be entitled to seek a preliminary injunction, temporary restraining order or other equivalent relief restraining DPS and any member of the DPS Group from any such breach or threatened breach.
          (f) Notwithstanding anything in this Agreement to the contrary, and without limiting the rights otherwise granted in this Section 6.01 , DPS and the DPS Group shall have the right, at all times after the Distribution Date, to (i) keep records and other historical or archived documents containing or referencing the Cadbury Names and Marks, (ii) use the Cadbury Names and Marks to the extent required by or permitted as a fair use under applicable Law, and (iii) refer to the historical fact that the DPS Group previously conducted the Beverages Business under the Cadbury Names and Marks.
          Section 6.02 Beverages Names and Marks .
          (a) For a period of 15 months after the Distribution Date, the Cadbury plc Group shall be entitled to use, solely in connection with the continued operation of the Cadbury plc Business, all of their Existing Stock containing any Trademark included in the Beverages Intellectual Property and/or Beverages Assets, any variation or acronym thereof, or any Trademark or other identifier of source or goodwill containing, incorporating or associated with any such Trademark (collectively, the “ Beverages Names and Marks ”); provided that the Beverages Names and Marks shall be removed from (i) all of the Cadbury plc Group’s Internet websites and web pages within three months following the Distribution Date and (ii) all of the Cadbury plc Group’s intranet websites and web pages within three months following the Distribution Date. For the avoidance of doubt, (i) “Beverages Names and Marks” does not include any Trademark owned by or licensed to the Cadbury plc Group as of or following the Distribution Date and (ii) nothing in this Section 6.02 shall be deemed to limit or modify in any way any rights of the Cadbury plc Group in or to any Intellectual Property (other than the Beverages Names and Marks) or under any agreement relating to Intellectual Property to which any member of the Cadbury plc Group is or becomes a party or beneficiary.

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          (b) Following the Distribution Date, except as expressly provided in this Agreement, (i) no other right to use the Beverages Names and Marks is granted by DPS or the DPS Group to the Cadbury plc Group, whether by implication or otherwise, and (ii) nothing hereunder permits the Cadbury plc Group to use the Beverages Names and Marks on or in connection with any documents, materials, products or services. CS shall ensure that all use of the Beverages Names and Marks as provided in this Section 6.02 shall be only with respect to goods and services of a level of quality equal to or greater than the quality of goods and services with respect to which the Beverages Names and Marks were used in the businesses of the Cadbury plc Group prior to the Distribution Date. Any and all goodwill generated by the use of the Beverages Names and Marks under this Section 6.02 shall inure solely to the benefit of the DPS Group following the Distribution Date. In no event shall the Cadbury plc Group use the Beverages Names and Marks in any manner that may damage or tarnish the reputation of DPS or the DPS Group or the goodwill associated with the Beverages Names and Marks.
          (c) CS agrees that DPS and the DPS Group shall not have any responsibility for claims by third parties arising out of, or relating to, the use by the Cadbury plc Group of any Beverages Names and Marks after the Distribution Date. CS shall, and shall cause each of the members of the Cadbury plc Group to, indemnify and hold harmless DPS and the DPS Group, and their respective Affiliates, officers, directors, employees, agents, successors and assigns, from any and all such claims that may arise out of the Cadbury plc Group’s use of any Beverages Names and Marks after the Distribution Date (i) in accordance with the terms and conditions of this Section 6.02 , other than such claims that the Beverages Names and Marks infringe the Intellectual Property rights of any third party or (ii) in violation of or outside the scope permitted by this Section 6.02 . Notwithstanding anything in this Agreement to the contrary, including Section 10.02(f) , CS hereby acknowledges that DPS, in addition to any other remedies available to it for any breach or threatened breach of this Section 6.02 , shall be entitled to seek a preliminary injunction, temporary restraining order or other equivalent relief restraining the Cadbury plc Group from any such breach or threatened breach.
          (d) Notwithstanding anything in this Agreement to the contrary, and without limiting the rights otherwise granted in this Section 6.02 , the Cadbury plc Group shall have the right, at all times after the Distribution Date, to (i) keep records and other historical or archived documents containing or referencing the Beverages Names and Marks, (ii) use the Beverages Names and Marks to the extent required by or permitted as a fair use under applicable Law, (iii) refer to the historical fact that the members of the Cadbury plc Group previously conducted their respective businesses under the Beverages Names and Marks, (iv) use and sublicense the Beverages Names and Marks in connection with the Cadbury plc Group’s business of manufacturing, distributing, selling, marketing and promoting carbonated and non-carbonated beverages and other food products throughout American Samoa (the “ American Samoa Business ”), (v) use their Existing Stock, web pages and Internet and intranet websites containing any Beverages Names and Marks in connection with the Cadbury plc Group’s business of manufacturing, distributing, selling, marketing and promoting carbonated and non-carbonated beverages and other food products throughout the AsiaPac Territory and (vi) use the “Schweppes” name in any and all jurisdictions outside of the United States, Canada and Mexico as or as part of any Corporate Name; provided that, no later than 10 Business Days after the Distribution Date, CS shall use commercially reasonable efforts to file amended organizational documents with the appropriate Governmental Entities changing the Corporate Name of any

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Affiliate organized in any jurisdiction in the United States, Canada and Mexico to a Corporate Name that does not contain the “Schweppes” name and to supply promptly any additional information, documents and materials that may be requested by DPS with respect to such filings.
          Section 6.03 Memorabilia . As of the Distribution Date, any and all photographs, artwork and similar objects and other physical assets owned by the DPS Group or the Cadbury plc Group that relate to the history or historical activities of the Beverages Business (“ Memorabilia ”) shall be deemed to be owned, as between CS and DPS, by (i) CS to the extent located on the premises of any member of the Cadbury plc Group and (ii) DPS to the extent located on the premises of any member of the DPS Group. DPS hereby grants the Cadbury plc Group from the Distribution Date a worldwide, transferable, perpetual, royalty-free, irrevocable (with right to sub-license) license to use any Memorabilia: (a) in documenting, memorializing and (if desired) use in marketing its history; and (b) to the extent necessary to comply with the obligations of the Cadbury plc Group under Section 18.14 of that certain Amended and Restated Sale and Purchase Agreement by and between CS and Sapphire European Beverages Limited (among others), dated as of January 30, 2006.
          Section 6.04 Additional Licenses .
          (a) Effective as of the Distribution Date, CS hereby grants to DPS, solely for the benefit of each member of the DPS Group, an exclusive, perpetual, irrevocable, royalty-free license (with the right to grant sub-licenses) of the design known as the “modern egg” bottle design for use solely in the Territory; provided that DPS shall, and shall procure that each member of the DPS Group shall, only use such design in relation to beverages sold under the “Schweppes” brand and for no other purpose. DPS shall indemnify and hold harmless CS and its Affiliates, officers, directors, employees, agents, successors and assigns from any and all claims that may arise out of the DPS’ or the DPS Group’s exercise of any rights granted under, or breach of, this Section 6.04(a) .
          (b) Effective as of the Distribution Date, DPS hereby grants, and shall cause the DPS Group to grant, to the Cadbury plc Group a perpetual, non-exclusive, transferable, royalty-free right and license (with the right to grant sublicenses) in, to and under any and all copyrights and design rights owned by or licensed to, to the extent permitted, the DPS Group as of the Distribution Date in product packaging (including bottles), signs, business cards, letterheads, invoice stock, advertisements and promotional materials and inventory (the “ DPS Licensed Intellectual Property ”), to use the DPS Licensed Intellectual Property in connection with the operation following the Distribution Date of the Cadbury plc Group’s business of manufacturing, distributing, selling, marketing and promoting carbonated and non-carbonated beverages and other food products throughout the AsiaPac Territory and American Samoa, to the extent of any existing use or good faith plans to use as of February 1, 2008 in the AsiaPac Territory or American Samoa. The foregoing license includes the right for the Cadbury plc Group to make, and have made on their behalf, modifications, enhancements, derivative works and improvements (“ Improvements ”) to the DPS Licensed Intellectual Property, and as between the Parties to this Agreement, any and all such Improvements shall be owned by a member of the Cadbury plc Group without a duty of accounting or disclosure to DPS or the DPS Group.

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          (c) Effective as of the Distribution Date, CS hereby grants, and shall cause the Cadbury plc Group to grant, to the DPS Group a perpetual, non-exclusive, transferable, royalty-free right and license (with the right to grant sublicenses) in, to and under any and all copyrights and design rights owned by or licensed to, to the extent permitted, the Cadbury plc Group conducting its beverages business in the AsiaPac Territory and American Samoa as of the Distribution Date in product packaging (including bottles), signs, business cards, letterheads, invoice stock, advertisements and promotional materials and inventory (the “ AsiaPac Licensed Intellectual Property ”), to use the AsiaPac Licensed Intellectual Property in connection with the operation of the Beverages Business by the DPS Group following the Distribution Date, to the extent of any existing use or good faith plans to use as of February 1, 2008 in the Territory. The foregoing license includes the right for the DPS Group to make, and have made on their behalf, Improvements to the AsiaPac Licensed Intellectual Property, and as between the Parties to this Agreement, any and all such Improvements shall be owned by DPS without a duty of accounting or disclosure to a member of the Cadbury plc Group.
          Section 6.05 Know-How Agreement .
          (a) Effective as of the Distribution Date, CS, DPS and the DPS Group shall enter into a know-how agreement substantially in the form attached hereto as Exhibit 6.06(a) (the “ Know-How Agreement ”).
          (b) At CS’ request, following the Distribution Date, DPS shall reasonably cooperate with CS and negotiate in good faith to obtain an assignment and novation in favor of DPS of CS’ rights and obligations under (i) that certain know-how agreement entered into by and among CS, The Coca-Cola Company and Atlantic Industries, dated as of July 29, 1999, as amended, and (ii) that certain know-how agreement entered into by and among CS and Sapphire European Beverages Limited (among others), dated as of February 2, 2006.
          Section 6.06 Domain Names Agreement . Effective as of the Distribution Date, CS and DPS shall enter into a domain names agreement substantially in the form attached hereto as Exhibit 6.07 (the “ Domain Names Agreement ”).
ARTICLE VII
INDEMNIFICATION
          Section 7.01 Release of Pre-Distribution Claims .
          (a) Except (i) as provided in Section 7.01(b) , (ii) as may be otherwise expressly provided in this Agreement or any Ancillary Agreement and (iii) for any matter with respect to which any Party is entitled to indemnification or contribution pursuant to this ARTICLE VII , each Party, on behalf of itself and each member of its respective Group, its and their respective Affiliates and all Persons who at any time prior to the Demerger Effective Time were shareholders (other than the public shareholders of CS), directors, officers, agents or employees of it or any member of its Group (in their respective capacities as such), in each case do hereby remise, release and forever discharge the other Party and the other members of such

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other Party’s Group, their respective Affiliates and all Persons who at any time prior to the Demerger Effective Time were shareholders, directors, officers, agents or employees of any member of such other Party (in their respective capacities as such), in each case from any and all Liabilities whatsoever, whether at Law or in equity (including any right of contribution), whether arising under any Contract, 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 alleged to have failed to occur or any conditions, in each case, existing on or before the Demerger Effective Time, including in connection with the Plan of Separation and all other activities to implement the Distribution and any of the other transactions contemplated hereunder and under the Ancillary Agreements.
          (b) Nothing contained in Section 7.01(a) shall release any Person from:
     (i) any Liability Assumed, Transferred or allocated to a Party or a member of such Party’s Group pursuant to or contemplated by, or any other Liability of any member of such Group arising under, this Agreement or any Ancillary Agreement;
     (ii) any Liability for the sale or receipt of goods or property or services purchased, obtained or used in the ordinary course of business by a member of one Group from a member of the other Group prior to the Demerger Effective Time;
     (iii) any Liability (other than the Intercompany Balances settled pursuant to Section 2.03 ) for unpaid amounts for products or services or refunds owing on products or services due for work done by a member of one Group at the request or on behalf of a member of the other Group;
     (iv) any Liability provided in or resulting from any other Contract or understanding that is entered into after the Demerger Effective Time between a Party (and/or a member of such Party’s Group), on the one hand, and the other Party (and/or a member of such Party’s Group), on the other hand;
     (v) any Liability with respect to the Continuing Arrangements;
     (vi) any Liability that the Parties have with respect to indemnification or contribution pursuant to this Agreement or otherwise for claims brought against the Parties by third Persons, which Liability shall be governed by the provisions of this ARTICLE VII and, if applicable, the appropriate provisions of the Ancillary Agreements;
     (vii) any Liability relating to any agreements, arrangements, commitments or understandings to which any Person other than the Parties 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 Contracts constitute Beverages Assets or Beverages Liabilities or Cadbury plc Assets or Cadbury plc Liabilities, such Contracts shall be assigned or retained pursuant to ARTICLE II ); or
     (viii) any Liability relating to agreements, arrangements, commitments or understandings to which any non-wholly-owned Subsidiary of CS or DPS, as the case may be, is a Party.

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          (c) Neither Party shall permit any member of its 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 the other Party or any member of the other Party’s Group, or any other Person released pursuant to Section 7.01(a) , with respect to any Liabilities released pursuant to Section 7.01(a) .
          (d) It is the intent of each Party, pursuant to the provisions of this Section 7.01 , to provide for a full and complete release and discharge of all Liabilities existing or arising from all acts and events occurring and all conditions existing on or before the Demerger Effective Time, whether known or unknown, between or among any Party (and/or a member of such Party’s Group), on the one hand, and the other Party (and/or a member of such Party’s 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 Demerger Effective Time), except as specifically set forth in Section 7.01(a) and Section 7.01(b) . At any time, at the reasonable request of the other Party, each Party shall cause each member of its respective Group to execute and deliver releases reflecting the provisions hereof.
          (e) For the avoidance of doubt, neither Party shall have any Liability to the other Party in the event that any information exchanged or provided to the other Party pursuant to this Agreement (but excluding any such information included in a Disclosure Document) which is an estimate or forecast, or which is based on an estimate or forecast, is found to be inaccurate.
          Section 7.02 Indemnification by CS . Except as otherwise set forth in any provision of this Agreement or any Ancillary Agreement or Continuing Arrangement, following the Demerger Effective Time, CS shall and shall cause the other members of the Cadbury plc Group to indemnify, defend and hold harmless the Beverages Indemnitees from and against any and all Indemnifiable Losses of the Beverages Indemnitees to the extent arising out of, by reason of or otherwise in connection with (i) the Cadbury plc Liabilities or alleged Cadbury plc Liabilities, (ii) any breach by any member of the Cadbury plc Group of any of the Shared Contracts, (iii) with respect to statements or omissions made or occurring after the Demerger Effective Time, any misstatement or alleged misstatement of a material fact contained in any document filed with the SEC or the FSA by any member of the DPS Group pursuant to the Securities Act, the Exchange Act, the Prospectus Rules or the Listing Rules, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, in each case to the extent, but only (A) to the extent that those Liabilities are caused by any misstatement or omission or alleged misstatement or omission in any information that is furnished in writing to any member of the DPS Group by any member of the Cadbury plc Group after the Demerger Effective Time, (B) if such member of the Cadbury plc Group has been informed in writing in advance that such information will be used in such filing and (C) if the information used by a member of the DPS Group in any such filing is not materially different to the information furnished by a member of the Cadbury plc Group, or (iv) any breach by CS or any member of the Cadbury plc Group of any provision of this Agreement or any Ancillary Agreement or Continuing Arrangement unless such Ancillary Agreement or Continuing Arrangement expressly provides for separate indemnification therein, in which case any such indemnification claims shall be made thereunder.

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          Section 7.03 Indemnification by DPS . Except as otherwise specifically set forth in any provision of this Agreement or any Ancillary Agreement, following the Demerger Effective Time, DPS shall and shall cause the other members of the DPS Group to indemnify, defend and hold harmless the Cadbury plc Indemnitees from and against any and all Indemnifiable Losses of the Cadbury plc Indemnitees to the extent arising out of, by reason of or otherwise in connection with (i) the Beverages Liabilities or any alleged Beverages Liabilities, (ii) any breach by any member of the DPS Group of any of the Shared Contracts, (iii) with respect to statements or omissions made or occurring after the Demerger Effective Time, any misstatement or alleged misstatement of a material fact contained in any document filed with the SEC or the FSA by any member of the Cadbury plc Group pursuant to the Securities Act, the Exchange Act, the Prospectus Rules or the Listing Rules, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, in each case to the extent, but only (A) to the extent that those Liabilities are caused by any misstatement or omission or alleged misstatement or omission in any information that is furnished in writing to any member of the Cadbury plc Group by any member of the DPS Group after the Demerger Effective Time, (B) if such member of the DPS Group has been informed in writing in advance that such information will be used in such filing and (C) if the information used by a member of the Cadbury plc Group in any such filing is not materially different to the information furnished by a member of the DPS Group, or (iv) any breach by DPS or any member of the DPS Group of any provision of this Agreement or any Ancillary Agreement or Continuing Arrangement unless such Ancillary Agreement or Continuing Arrangement expressly provides for separate indemnification therein, in which case any such indemnification claims shall be made thereunder.
          Section 7.04 Procedures for Indemnification .
          (a) An Indemnitee shall give the Indemnifying Party notice of any matter that an Indemnitee has determined has given, or reasonably anticipates could give rise to, a right of indemnification under this Agreement (other than a Third Party Claim which shall be governed by Section 7.04(b) ), within 30 days of such determination, stating the amount of the Indemnifiable Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement in respect of which such right of indemnification is claimed by such Indemnitee or arises; provided , however , that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except to the extent the Indemnifying Party shall have been actually materially prejudiced as a result of such failure.
          (b) If an Action is made against a Cadbury plc Indemnitee or a Beverages Indemnitee (each, an “ Indemnitee ”) by any Person who is not a Party or a member of a Group of a Party (a “ Third Party Claim ”) as to which such Indemnitee is or may be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the other Party which is or may be required pursuant to this ARTICLE VII or pursuant to any Ancillary Agreement or Continuing Arrangement to make such indemnification (the “ Indemnifying Party ”) in writing, and in reasonable detail, of the Third Party Claim promptly (and in any event within 30 days) after receipt by such Indemnitee of written notice of the Third Party Claim; provided , however , that the failure to provide notice of any such Third Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except to the extent the

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Indemnifying Party shall have been actually materially prejudiced as a result of such failure. Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly after the Indemnitee’s receipt thereof (and in any event within 10 Business Days), copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third Party Claim.
          (c) An Indemnifying Party shall be entitled (but shall not be required) to assume and control the defense of any Third Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel that is reasonably acceptable to the applicable Indemnitees, if it gives notice of its intention to do so to the applicable Indemnitees within 30 days of the receipt of notice of the Third Party Claim from such Indemnitees. After notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise, or settlement thereof, at its own expense and, in any event, shall cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party, at the Indemnifying Party’s expense, all witnesses, pertinent Information and materials in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party.
          (d) 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 7.04(c) , such Indemnitee may defend such Third Party Claim at the cost and expense of the Indemnifying Party. If the Indemnitee is conducting the defense against any such Third Party Claim, the Indemnifying Party shall cooperate with the Indemnitee in such defense and make available to the Indemnitee, at the Indemnifying Party’s expense, all witnesses, pertinent Information, material in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee.
          (e) If the Indemnifying Party has assumed the defense of the Third Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third Party Claim without the consent of the Indemnifying Party.
          (f) In the case of a Third Party Claim, 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; provided that consent from the Indemnitee shall not be required if such settlement contains a full and unconditional release of the Indemnitee and does not permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee.
          (g) Except as may otherwise be specifically provided for in the Ancillary Agreements and except as set forth in of Sections 10.02(d) and (f) hereof, the indemnification provisions of this ARTICLE VII shall be the sole and exclusive remedy of the Parties for any failure by the other Party to perform and comply with any covenants and agreements in this Agreement and any other dispute, controversy or claim (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 Continuing Arrangement, or the transactions contemplated

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hereby or thereby (including all actions taken in furtherance of the transactions contemplated hereby or thereby on or prior to the Demerger Effective Time), between or among any member of the Cadbury plc Group, on the one hand, and any member of the DPS Group, on the other hand.
          Section 7.05 Cooperation in Defense and Settlement . CS and DPS agree that, from and after the Demerger Effective Time, if an Action is commenced by a third party (or any member of either Party’s respective Group) with respect to which one or both Parties (or any member of either Party’s respective Group) is a nominal defendant and/or such Action is otherwise not a Liability allocated to such named Party under this Agreement or any Ancillary Agreement or Continuing Arrangement, then the other Party shall use commercially reasonable efforts to cause such nominal defendant to be removed from such Action.
          Section 7.06 Indemnification Obligations Net of Insurance Proceeds and Other Amounts .
          (a) Any Indemnifiable Loss subject to indemnification or contribution pursuant to this ARTICLE VII will be calculated (i) net of Insurance Proceeds received by the Indemnitee that actually reduce the amount of the Indemnifiable Loss, and (ii) net of any proceeds received by the Indemnitee from any third party for indemnification for such Liability that actually reduce the amount of the Indemnifiable Loss (“ Third Party Proceeds ”). If an Indemnitee receives a payment required by this Agreement from an Indemnifying Party in respect of any Indemnifiable Loss (an “ Indemnity Payment ”) and subsequently receives Insurance Proceeds or Third Party 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 or Third Party Proceeds had been received, realized or recovered before the Indemnity Payment was made.
          (b) Any insurer that 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 and contributions provisions hereof, have any subrogation rights with respect thereto. The Indemnitee shall use reasonable best efforts to seek to collect or recover any third party Insurance Proceeds and any Third Party Proceeds (other than Insurance Proceeds under an arrangement where future premiums are adjusted to reflect prior claims in excess of prior premiums) to which the Indemnitee is entitled in connection with any Indemnifiable Loss for which the Indemnitee seeks contribution or indemnification pursuant to this ARTICLE VII (it being understood that the obligation to use reasonable best efforts to collect or recover any third party Insurance Proceeds or Third Party Proceeds shall not require the Indemnitee to commence any litigation proceedings against any such third party); provided that the Indemnitee’s inability to collect or recover any such Insurance Proceeds or Third Party Proceeds shall not limit the Indemnifying Party’s obligations hereunder.
          (c) CS and DPS agree that any indemnification payment made pursuant to this ARTICLE VII shall be paid free and clear of any Tax deduction or withholding. If any deduction or withholding is required by applicable Law to be made from any indemnification payment made pursuant to this ARTICLE VII , the amount of the payment will be increased by such additional amount as is necessary to ensure that the net amount received by the Indemnitee (after taking account of all such deductions and withholdings) is equal to the amount which it

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would have received had the payment in question not been subject to any deductions or withholdings. Notwithstanding the foregoing, the Parties agree to use commercially reasonable efforts (to the extent such efforts will not result in materially adverse consequences to a Party) to mitigate or avoid such deductions and withholdings.
          (d) Any indemnification payment made under this ARTICLE VII will be subject to adjustment for certain net Tax benefits and net Tax costs attributable to such indemnification payment (including gross-up) and to amounts indemnified against as provided in the Tax Sharing Agreement.
          Section 7.07 Additional Matters; Survival of Indemnities .
          (a) The indemnity and contribution agreements contained in this ARTICLE VII shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of any Indemnitee; (ii) any knowledge prior to the date hereof by the Indemnitee of Indemnifiable Losses for which it might be entitled to indemnification or contribution hereunder; and (iii) any termination of this Agreement.
          (b) The rights and obligations of each Party and their respective Indemnitees under this ARTICLE VII shall survive the sale or other Transfer by any Party or its respective Subsidiaries of any Assets or businesses or the assignment by it of any Liabilities.
ARTICLE VIII
ACCESS TO RECORDS; ACCESS TO INFORMATION; LEGAL AND OTHER MATTERS
          Section 8.01 Provision of Corporate Records . Other than in circumstances in which indemnification is or may be sought pursuant to ARTICLE VII (in which event the provisions of such Article will govern), and subject to appropriate restrictions for privileged or Confidential Information:
          (a)  After the Distribution Date until the earlier of (i) the seventh anniversary of the Distribution Date or (ii) the date on which CS is entitled to destroy Information related to the period prior to the Distribution Date pursuant to its record retention policies, upon the prior written request by DPS for specific and identified Information which relates to (i) DPS (or a member of its Group) or the conduct of the Beverages Business prior to the Distribution Date, or (ii) any Ancillary Agreement or Continuing Arrangement to which CS and DPS (or any member of their respective Groups) are parties, CS shall provide, as soon as reasonably practicable following the receipt of such request, appropriate copies of such documents (or the originals thereof if the Party making the request has a reasonable need for such originals) in the possession or control of CS or any of its Affiliates or Subsidiaries, but only to the extent such items so relate and are not already in the possession or control of the requesting Party. CS shall notify DPS at least 90 days in advance of destroying any such Information in order to provide DPS the opportunity to access such Information in accordance with this Section 8.01(a) and if DPS fails

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to request that such Information be delivered to them, at their expense, within 90 days after receipt of such notice, CS may destroy such Information.
          (b) After the Distribution Date until the earlier of (i) the seventh anniversary of the Distribution Date or (ii) the date on which DPS is entitled to destroy Information related to the period prior to the Distribution Date pursuant to its record retention policies, upon the prior written request by CS for specific and identified Information which relates to (i) CS (or a member of its Group) or the conduct of the Cadbury plc Business, prior to the Distribution Date, or (ii) any Ancillary Agreement or Continuing Arrangement to which DPS and CS (or a member of their respective Groups) are parties, as applicable, DPS shall provide, as soon as reasonably practicable following the receipt of such request, appropriate copies of such documents (or the originals thereof if the Party making the request has a reasonable need for such originals) in the possession or control of DPS or any of its Subsidiaries, but only to the extent such items so relate and are not already in the possession or control of the requesting Party. DPS shall notify CS at least 90 days in advance of destroying any such Information in order to provide CS the opportunity to access such Information in accordance with this Section 8.01(b) and if CS fails to request that such Information be delivered to them, at their expense, within 90 days after receipt of such notice, DPS may destroy such Information.
          Section 8.02 Access to Information . Other than in circumstances in which indemnification is sought pursuant to ARTICLE VII (in which event the provisions of such Article will govern), from the Distribution Date and for so long as any access is required pursuant to Section 8.01 , each of CS and DPS shall afford to the other and its authorized accountants, counsel and other designated representatives reasonable access during normal business hours, subject to appropriate restrictions for privileged or Confidential Information and to preserve the completeness and integrity of the Information, to the personnel, properties, and Information of such Party and its Subsidiaries insofar as such access is reasonably required by the other Party and relates to (x) such other Party or the conduct of its business prior to the Demerger Effective Time or (y) any Ancillary Agreement or Continuing Arrangement. Nothing in this Section 8.02 shall require any Party to violate any agreement with any third party regarding the confidentiality of Confidential Information relating to that third party or its business; provided , however , that in the event that a Party is required to disclose any such Information, such Party shall use commercially reasonable efforts to seek to obtain such third party Consent to the disclosure of such Information.
          Section 8.03 Disposition of Information .
          (a) Each Party acknowledges that Information in its or in a member of its Group’s possession, custody or control as of the Demerger Effective Time may include Information owned by the other Party or a member of such Party’s Group and not related to (i) its Group or its business or (ii) any Ancillary Agreement to which it or any member of its Group is a Party.
          (b) Notwithstanding such possession, custody or control, such Information shall remain the property of such other Party or member of such other Party’s Group. Each Party agrees (i) that any such Information is to be treated as Confidential Information of the Party or Parties to which it relates and handled in accordance with Section 8.07 (except that such

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Information will not be used for any purpose other than a purpose permitted under this Agreement) and (ii) following a reasonable request from the other Party, subject to applicable Law, use commercially reasonable efforts within a reasonable time to (1) purge such Information from its databases, files and other systems and not retain any copy of such Information (including, if applicable, by transferring such Information to the Party to which such Information belongs), or (2) if such purging is not practicable, to encrypt or otherwise make unreadable or inaccessible such Information.
          Section 8.04 Witness Services . At all times from and after the Distribution Date, each of CS and DPS shall use its commercially reasonable efforts to make available to the other, upon reasonable written request, its and any member of its Group’s officers, directors, employees and agents as witnesses to the extent that (i) such Persons may reasonably be required to testify in connection with the prosecution or defense of any Action in which the requesting Party may from time to time be involved (except for claims, demands or Actions between members of each Group) and (ii) there is no conflict of interest in the underlying Action between the requesting Party and CS and DPS, as applicable; provided that the existence of a claim for indemnification under ARTICLE VII shall not in and of itself be deemed a conflict of interest. A Party providing a witness to the other Party under this Section shall be entitled to receive from the recipient of such services, upon the presentation of invoices therefor, payments for such amounts, relating to disbursements and other out-of-pocket expenses (which shall not include the costs of salaries and benefits of employees who are witnesses or any pro rata portion of overhead or other costs of employing such employees which would have been incurred by such employees’ employer regardless of the employees’ service as witnesses), as may be reasonably incurred and properly paid under applicable Law.
          Section 8.05 Reimbursement; Other Matters . Except to the extent otherwise contemplated by this Agreement, any Ancillary Agreement or any Continuing Arrangement, a Party providing Information or access to Information to the other Party under this ARTICLE VIII shall be entitled to receive from the recipient, upon the presentation of invoices therefor, payments for such amounts, relating to supplies, disbursements and other out-of-pocket expenses, as may be reasonably incurred in providing such Information or access to such Information.
          Section 8.06 Confidentiality . Notwithstanding any termination of this Agreement, the Parties shall hold, and shall cause each of the members of their respective Groups to hold, and shall each cause their respective officers, employees, agents, consultants, representatives and advisors to hold, in strict confidence, and not to disclose or release or use, without the prior written consent of the other Party, any and all Confidential Information concerning the other Party; provided that the Parties may disclose, or may permit disclosure of, Confidential Information (i) to their respective auditors, attorneys, financial advisors, bankers and other appropriate consultants and advisors who have a need to know such Information and are informed of their obligation to hold such Information confidential to the same extent as is applicable to the Parties and in respect of whose failure to comply with such obligations, the applicable Party will be responsible, (ii) if the Parties or any member of their respective Groups are required or compelled to disclose any such Confidential Information by judicial or administrative process or by other requirements of Law or stock exchange rule, (iii) as required in connection with any legal or other proceeding by one Party against the other Party, or (iv) as

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necessary in order to permit a Party to prepare and disclose its financial statements, Tax Returns or other required disclosures. Notwithstanding the foregoing, in the event that any demand or request for disclosure of Confidential Information is made pursuant to clause (ii) above, each Party, shall promptly notify the other of the existence of such request or demand and shall provide the other a reasonable opportunity to seek an appropriate protective order or other remedy, which such Parties will cooperate in obtaining. In the event that such appropriate protective order or other remedy is not obtained, the Party whose Confidential Information is required to be disclosed shall or shall cause the other Party to furnish, or cause to be furnished, only that portion of the Confidential Information that is legally required to be disclosed and shall take commercially reasonable steps to ensure that confidential treatment is accorded such Information.
          Section 8.07 Privileged Matters .
          (a) The Parties recognize that certain legal and other professional services (both internal and external) have been and will be provided prior to and after the Distribution Date and have been and will be rendered for the collective benefit of each of the members of the Cadbury plc Group and the DPS Group, and that each of the members of the Cadbury plc Group and the DPS Group should be deemed to be the client with respect to such services for the purposes of asserting all privileges which may be asserted under applicable Law; provided that with respect to such services the Parties agree as follows:
     (i) the Parties shall not be entitled to assert privilege with respect to such legal and other professional services provided prior to the Distribution Date against the other Party or any member of the other Party’s Group;
     (ii) CS shall be entitled, on behalf of itself or any member of the Cadbury plc Group, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information to the extent relating to the Cadbury plc Business, whether or not the privileged information is in the possession of or under the control of CS or DPS. CS shall also be entitled, on behalf of itself or any member of the Cadbury plc Group, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information that relates solely to the subject matter of any claims constituting Cadbury plc Liabilities, now pending or which may be asserted in the future, in any lawsuits or other proceedings initiated against or by any member of the Cadbury plc Group, whether or not the privileged information is in the possession of or under the control of CS or DPS;
     (iii) DPS shall be entitled, on behalf of itself or any member of the DPS Group, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information to the extent relating to the Beverages Business, whether or not the privileged information is in the possession of or under the control of CS or DPS. DPS shall also be entitled, on behalf of itself or any member of the DPS Group, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information that relates solely to the subject matter of any claims constituting Beverages Liabilities, now pending or which may be asserted in the future, in any lawsuits or other

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proceedings initiated against or by any member of the DPS Group, whether or not the privileged information is in the possession of or under the control of CS or DPS; and
     (iv) the Parties shall have a shared privilege, with equal right to assert or waive, subject to the restrictions in this Section 8.07 , with respect to all privileges not allocated pursuant to the terms of Section 8.07(a)(ii) and (iii) . All privileges relating to any claims, proceedings, litigation, disputes, or other matters which involve members of both the Cadbury plc Group and the DPS Group in respect of which such Parties retain any responsibility or Liability under this Agreement, shall be subject to a shared privilege among them.
          (b) No Party may waive any privilege which could be asserted under any applicable Law, and in which the other Party has a shared privilege, without the consent of the other Party, which shall not be unreasonably withheld or delayed or as provided in Section 8.07(c) or Section 8.07(d) below. Consent shall be in writing, or shall be deemed to be granted unless written objection is made within 10 Business Days after notice upon the other Party requesting such consent.
          (c) In the event of any litigation or dispute between or among the Parties, or any members of their respective Groups, either Party may waive a privilege in which the other Party or member of such Group has a shared privilege, without obtaining the consent of the other Party; provided that such waiver of a shared privilege shall be effective only as to the use of Information with respect to the litigation or dispute between the relevant Parties and/or the applicable members of their respective Group’s, and shall not operate as a waiver of the shared privilege with respect to third parties.
          (d) If a dispute arises between or among the Parties or any member of their respective Groups regarding whether a privilege should be waived to protect or advance the interest of any Party, each Party agrees that it shall negotiate in good faith, shall endeavor to minimize any prejudice to the rights of the other Party, and shall not unreasonably withhold consent to any request for waiver by another Party. Each Party specifically agrees that it will not withhold consent to waiver for any purpose except to protect its own legitimate interests.
          (e) Upon receipt by any Party or by any member of a Party’s Group of any subpoena, discovery, court order or other request which arguably calls for the production or disclosure of Information subject to a shared privilege or as to which another Party has the sole right hereunder to assert a privilege, or if any Party obtains knowledge that any of its or any member of its Group’s current or former directors, officers, agents or employees have received any subpoena, discovery or other requests which arguably calls for the production or disclosure of such privileged Information, such Party shall promptly notify the other Party of the existence of the request and shall provide the other Party a reasonable opportunity to review the Information and to assert any rights it or they may have under this Section 8.07 or otherwise to prevent the production or disclosure of such privileged Information.

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          Section 8.08 Ownership of Information .
          (a) Any information owned by one Party or any of its Subsidiaries that is provided to a requesting Party pursuant to this ARTICLE VIII 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.
          (b) Any Information provided by or on behalf of or made available by or on behalf of the other Party hereto pursuant to this ARTICLE VIII shall be on an “as is,” “where is” basis and no Party is making any representation or warranty with respect to such Information or the completeness thereof.
          Section 8.09 Other Agreements . Except as otherwise provided in Section 8.06 , Sections 8.01 through 8.08 and 8.10 shall not apply with respect to Information, Records, actions and other matters relating to Tax matters, all of which shall be governed by the Tax Sharing Agreement.
          Section 8.10 Control of Legal Matters .
          (a)  General. (i) On or prior to the Distribution Date, CS shall assume (or, as applicable, retain), or cause the applicable member of the Cadbury plc Group to assume (or, as applicable, retain) control of each of the Cadbury plc Litigation Matters, and CS shall use its reasonable best efforts to have a member of the Cadbury plc Group substituted for any member of the DPS Group named as a defendant in any such Cadbury plc Litigation Matters; provided , however , that no member of the Cadbury plc Group shall be required to make any such effort if the removal of any member of the DPS Group would jeopardize insurance coverage or rights to indemnification from third parties applicable to such Cadbury plc Litigation Matters.
     (ii) On or prior to the Distribution Date, DPS shall assume (or, as applicable, retain), or cause the applicable member of the DPS Group to assume (or, as applicable, retain) control of each of the Beverages Litigation Matters, and DPS shall use its reasonable best efforts to have a member of the DPS Group substituted for any member of the Cadbury plc Group named as a defendant in any such Beverages Litigation Matters; provided , however , that no member of the DPS Group shall be required to make any such effort if the removal of any member of the Cadbury plc Group would jeopardize insurance coverage or rights to indemnification from third parties applicable to such Beverages Litigation Matters.
          (b) Except as provided in Section 8.10(a) , after the Distribution Date, the Parties hereto agree that with respect to all Actions commenced against any member of the Cadbury plc Group, any member of the DPS Group or members of both Groups relating to events that take place before, on or after the Distribution Date, such demands, claims or Actions shall be controlled by:
     (i) A member of the Cadbury plc Group, if such Action relates solely to the Cadbury plc Assets, Cadbury plc Liabilities or Cadbury plc Business (as the Cadbury plc Business is conducted after the Distribution Date) (a “ Future Cadbury plc Litigation

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Matter ”), and CS shall use its reasonable best efforts to have a member of the Cadbury plc Group substituted for any member of the DPS Group which may be named as a defendant in such Future Cadbury plc Litigation Matter; provided , however , that no member of the Cadbury plc Group shall be required to make any such effort if the removal of any member of the DPS Group would jeopardize insurance coverage or rights to indemnification from third parties applicable to such Future Cadbury plc Litigation Matter;
     (ii) A member of the DPS Group, if such claim, demand or Action relates solely to the Beverages Assets, Beverages Liabilities or Beverages Business (as the Beverages Business is conducted after the Distribution Date) (a “ Future Beverages Litigation Matter ”), and DPS shall use its reasonable best efforts to have a member of the DPS Group substituted for any member of the Cadbury plc Group which may be named as a defendant in such Future Beverages Litigation Matter; provided , however , that no member of the DPS Group shall be required to make any such effort if the removal of any member of the Cadbury plc Group would jeopardize insurance coverage or rights to indemnification from third parties applicable to such Future Beverages Litigation Matter; and
     (iii) Except as provided in subparagraphs (i) or (ii) above, or as may be otherwise agreed by DPS and CS, a member of each of the DPS Group and the Cadbury plc Group jointly if (A) members of both Groups jointly operate or operated at the relevant time the Business to which such Action relates or such Action relates to both the Cadbury plc Assets, Cadbury plc Liabilities or Cadbury plc Business and the Beverages Assets, Beverages Liabilities or Beverages Business, (B) an Action arises from or relates to any Disclosure Document or any other document filed with any Governmental Authority (including the SEC or the FSA) at or prior to the Distribution Date by CS, Cadbury plc or DPS in connection with the Distribution, (C) an Action is brought by or on behalf of the current or former stockholders of CS, Cadbury plc or DPS and relates to any filing by CS, Cadbury plc or DPS with the SEC or the FSA other than those described in clause (B), (D) an Action is brought by any person against CS, Cadbury plc or DPS with respect to the Distribution, (the matters in clauses (A) through (D) being “ Future Joint Litigation Matters ”); provided , however , that no member of either Group may settle a Future Joint Litigation Matter without the prior written consent of the members of the other Group named or involved in such Future Joint Litigation Matter, which consent shall not be unreasonably withheld or delayed; provided further that either party may settle a Future Joint Litigation matter if such settlement is for money only and provides a full release from any liability under such Future Joint Litigation Matter for the other party and, as applicable, the members of the other party’s Group.
          (c)  Claims Against Third Parties. Actions by any member of either Group against third parties, and any proceeds or other benefits that may be received as a result of such Actions and any Liabilities arising out of or resulting from such Actions, that are (i) listed in Schedule 8.10(c)(i) or that relate to the Cadbury plc Business and not to the Beverages Business shall be the property of the applicable member of the Cadbury plc Group (“ Cadbury plc Claims ”), (ii) listed in Schedule 8.10(c)(ii) or that relate to the Beverages Business and not to the Cadbury plc Business shall be the property of the applicable member of the DPS Group

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(“ Beverages Claims ”), and (iii) listed in Schedule 8.10(c)(iii) or that relate to both the Cadbury plc Business and the Beverages Business shall be the property of, and shall be shared by, CS and DPS in proportion to their respective interests (“ Joint Cadbury plc and Beverages Claims ”).
          (d)  Retention of Counsel. The parties hereto agree that attorneys who have worked for any member of the Cadbury plc Group or any member of the DPS Group prior to the Distribution Date are not conflicted from representing any members of the Cadbury plc Group or the DPS Group, except to the extent such representation is adverse to a member of the other Group.
          (e)  Notice to Third Parties; Service of Process; Cooperation.
     (i) To the extent necessary, to effectuate the provisions in this Agreement, CS and DPS shall cause the members of their respective Groups to promptly notify their respective agents for service of process and all other necessary parties, including plaintiffs and courts and shall provide instructions for proper service of legal process and other documents.
     (ii) Each Party shall, and shall cause the members of its respective Groups to, attempt in good faith to not accept service on behalf of any member of the other Party’s Group, and shall, and shall cause the members of their respective Groups to, use their reasonable best efforts to deliver to each other any legal process or other documents incorrectly delivered to them or their agents as soon as possible following receipt.
          (f) Nothing in this Section 8.10 shall effect in any way the indemnification provisions in ARTICLE VII or the allocation of Liabilities between the Parties under this Agreement.
ARTICLE IX
INSURANCE
          Section 9.01 Policies and Rights Included Within Assets . The Beverages Assets shall include (i) any and all rights of an insured Party under each of the Beverages Shared Policies, subject to the terms of such Beverages Shared Policies and any limitations or obligations of DPS contemplated by this ARTICLE IX , specifically including rights of indemnity and the right to be defended by or at the expense of the insurer, with respect to all alleged wrongful acts, claims, suits, actions, proceedings, injuries, losses, liabilities, damages and expenses incurred or claimed to have been incurred prior to the Distribution Date by any Party in connection with the conduct of the Beverages Business or, to the extent any claim is made against DPS or any of its Subsidiaries or conduct of the Cadbury plc Business, and which alleged wrongful acts, claims, suits, actions, proceedings, injuries, losses, liabilities, damages and expenses may arise out of an insured or insurable event, occurrence or wrongful act under one or more of such Beverages Shared Policies; provided , however , that nothing in this clause shall be deemed to constitute (or to reflect) an assignment of such Beverages Shared Policies, or any of them, to DPS, and (ii) the Beverages Policies.

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          Section 9.02 Administration; Other Matters .
           (a) Administration. Except as otherwise provided in Section 9.02 hereof, from and after the Demerger Effective Time, CS shall be responsible for (i) Insurance Administration of the Beverages Shared Policies; and (ii) Claims Administration under such Beverages Shared Policies with respect to Cadbury plc Liabilities and (iii) reasonable oversight of Claims Administration by DPS under such Beverages Shared Policies with respect to Beverages Liabilities; provided that the retention of such responsibilities by CS is in no way intended to limit, inhibit or preclude any right to insurance coverage for any Beverages Shared Policy Insured Claim of a named insured under such Policies as contemplated by the terms of this Agreement; provided further that CS’ retention of the administrative responsibilities for the Beverages Shared Policies shall not relieve the Party submitting any Beverages Shared Policy Insured Claim of the primary responsibility for reporting such Beverages Shared Policy Insured Claim accurately, completely and in a timely manner or of such Party’s authority to settle any such Beverages Shared Policy Insured Claim within any period permitted or required by the relevant Policy. CS may discharge its administrative responsibilities under this Section 9.02 by contracting for the provision of services by independent parties. Each of the applicable Parties shall pay any costs relating to defending its respective Beverages Shared Policy Insured Claims under Beverages Shared Policies to the extent such costs including defense, out-of-pocket expenses, and direct and indirect costs of employees or agents of CS related to Claims Administration and Insurance Administration are not covered under such Policies.
           (b) Claims Under Beverages Shared Policies. Where Beverages Liabilities are specifically covered under the same Beverages Shared Policy for periods prior to the Distribution Date, or where such Beverages Shared Policies cover claims made after the Distribution Date with respect to an occurrence or wrongful act prior to the Distribution Date, then from and after the Distribution Date, DPS may claim coverage for Beverages Shared Policy Insured Claims under such Beverages Shared Policy as and to the extent that such insurance is available up to the full extent of the applicable limits of liability of such Beverages Shared Policy (and may receive any Insurance Proceeds with respect thereto as contemplated by Section 9.02(c) hereof), subject to the terms of this Section 9.02 . Except as set forth in this Section 9.02 , no member of the Cadbury plc Group or the DPS Group, as applicable, shall be liable to a member of the other Party’s Group for claims not reimbursed by insurers for any reason not within the control of a member of the Cadbury plc Group or the DPS Group, as the case may be, including coinsurance provisions, deductibles, quota share deductibles, self-insured retentions, bankruptcy or insolvency of an insurance carrier, Beverages Shared Policy limitations or restrictions, any coverage disputes, any failure to timely claim by a member of the Cadbury plc Group or the DPS Group or any defect in such claim or its processing. It is expressly understood that the foregoing shall not limit any Party’s liability to the other Party for indemnification pursuant to ARTICLE VII .
           (c) Allocation of Insurance Proceeds. Except as otherwise provided in Section 9.02 , Insurance Proceeds received with respect to claims, costs and expenses under the Beverages Shared Policies shall be paid to or on behalf of CS, which shall thereafter administer the Beverages Shared Policies by paying the Insurance Proceeds, as appropriate, to CS with respect to Cadbury plc Liabilities and to DPS with respect to Beverages Liabilities, net of the reasonable, documented out-of-pocket costs incurred by CS in administering the applicable claim

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(it being understood that such costs shall fairly reflect the costs to CS of providing such administrative services, including the costs incurred by CS in respects of any increased premiums resulting from any such claims on such Beverages Shared Policy and a reasonable allocation for salary, wages, benefits, Taxes and other expenses directly attributable thereto and without any markup for profit). CS will provide documentation of any reasonable out-of-pocket costs incurred at the time of payment of the allocable portions of the indemnity costs and Insurance Proceeds to DPS. Payment of the allocable portions of indemnity costs of Insurance Proceeds resulting from such Policies will be made by CS to the appropriate Party upon receipt from the insurance carrier. Each Party agrees to obtain for itself and each member of its Group insurance policies (in forms and amounts determined by that Party), which shall be effective as of the Distribution Date, to cover any Cadbury plc Liabilities or Beverages Liabilities, as applicable, that exceed the Insurance Proceeds available from such Beverages Shared Policies. Each of the Parties agrees to use commercially reasonable efforts to maximize available coverage under those Beverages Shared Policies applicable to it, and to take all commercially reasonable steps to recover from all other responsible parties in respect of an Beverages Shared Policy Insured Claim to the extent coverage limits under a Beverages Shared Policy have been exceeded or would be exceeded as a result of such Beverages Shared Policy Insured Claim (it being understood that the obligation to use commercially reasonable efforts to recover from all other responsible parties in respect of a Beverages Shared Policy Insured Claim shall not require any Party to commence any litigation proceedings against any such other responsible party).
          Section 9.03 Agreement for Waiver of Conflict and Shared Defense . In the event that Beverages Shared Policy Insured Claims of both Parties exist relating to the same occurrence, the Parties shall jointly defend and waive any conflict of interest necessary to the conduct of the joint defense. Nothing in this ARTICLE IX shall be construed to limit or otherwise alter in any way the obligations of the Parties to this Agreement, including those created by this Agreement, by operation of Law or otherwise.
 
ARTICLE X
DISPUTE RESOLUTION
          Section 10.01 Disputes . Except as otherwise specifically provided in any Ancillary Agreement or Continuing Arrangement (the terms of which, to the extent so provided therein, shall govern the resolution of disputes, controversies or claims that are the subject of such Ancillary Agreement or Continuing Arrangement), the procedures for discussion, negotiation and arbitration set forth in this ARTICLE X 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 Continuing Arrangement, 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 Demerger Effective Time), between or among any member of the Cadbury plc Group, on the one hand, and any member of the DPS Group, on the other hand (collectively, “ Agreement Disputes ”).

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          Section 10.02 Dispute Resolution .
          (a) CS and DPS will use their respective commercially reasonable efforts to resolve expeditiously any Agreement Dispute on a mutually acceptable negotiated basis. In furtherance of the foregoing, any member of the DPS Group or the Cadbury plc Group involved in an Agreement Dispute may deliver a notice (an “ Escalation Notice ”) demanding an in-person meeting involving senior level management representatives of Cadbury plc and DPS (or, if CS and DPS agree, of the appropriate strategic business unit or division within each such entity). A copy of any such Escalation Notice shall be given to the Chief Legal Officer of each of Cadbury plc and DPS (which copy shall state that it is an Escalation Notice pursuant to this Section 10.02 ). Any agenda, location or procedures for such discussions or negotiations between CS and DPS may be established by CS and DPS from time to time; provided , however , that the representatives of Cadbury plc and DPS shall use their reasonable efforts to meet within 30 days of the Escalation Notice.
          (b) If the senior level management representatives of Cadbury plc and DPS are not able to resolve the Agreement Dispute within 30 days after the date of receipt of the Escalation Notice (or such shorter time as is necessary to avoid immediate irreparable injury), then the Agreement Dispute shall be submitted to the chief executive officers of both Cadbury plc and DPS.
          (c) If CS and DPS are not able to resolve the Agreement Dispute through the processes set forth in subsections (a) and (b) of this Section 10.02 within 60 days after the date of the Escalation Notice, such Agreement Dispute shall be determined, at the request of either CS or DPS by arbitration, which shall be conducted (i) by three arbitrators, consisting of one arbitrator appointed by CS, one arbitrator appointed by DPS and a third arbitrator appointed by the two arbitrators appointed by CS and DPS or, if the arbitrators appointed by Cadbury plc and DPS cannot agree on a third arbitrator, the third arbitrator shall be appointed by the chief executive officers of both CS and DPS, and (ii) in accordance with the Commercial Rules of the American Arbitration Association (except with respect to the selection of arbitrators) in effect at the time of filing of the demand for arbitration.
          (d) The decision of the arbitrators (which, notwithstanding any other provision of this Agreement to the contrary, may include an order to specifically perform any provision of this Agreement) shall be final and binding upon the Parties hereto, and the expense of the arbitration (including the award of attorneys’ fees to the prevailing party) shall be paid as the arbitrators determine. The decision of the arbitrators shall be executory, and judgment thereon may be entered by any court of competent jurisdiction. The seat of the arbitration shall be New York, New York.
          (e) The existence of, and any discussions, negotiations, arbitrations or other proceedings relating to, any Agreement Dispute shall be considered by each Party hereto as Confidential Information until such time as a judgment thereon is entered in a court of competent jurisdiction.

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          (f) Notwithstanding anything contained in this Agreement to the contrary, no member of the DPS Group and no member of the Cadbury plc Group shall have the right to institute judicial proceedings against the other Party or any Person acting by, through or under such other Party, in order to enforce the instituting Party’s rights hereunder, except that any such member shall be permitted to seek an injunction in aid of arbitration with respect to an Agreement Dispute to preserve the status quo during the pendency of any arbitration proceeding pursuant to paragraph (c) of this Section 10.02 . All judicial proceedings arising out of or relating to this Agreement shall be heard and determined exclusively in any New York state or federal court sitting in the Borough of Manhattan in The City of New York.
          Section 10.03 Continuity of Service and Performance . 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 X with respect to all matters not subject to such Agreement Dispute.
ARTICLE XI
TERMINATION
          Section 11.01 Termination . This Agreement may be terminated and the Distribution may be abandoned at any time prior to the Distribution Date by and in the sole discretion of CS.
          Section 11.02 Effect of Termination . In the event of termination of this Agreement in accordance with Section 11.01 , this Agreement shall forthwith become void and there shall be no Liability on the part of either Party hereto.
          Section 11.03 Amendment . This Agreement may not be amended or modified except (a) by an instrument in writing signed by, or on behalf of, the Parties hereto or (b) by a waiver in accordance with Section 11.04 .
          Section 11.04 Waiver . Either Party to this Agreement may (a) extend the time for the performance of any of the obligations or other acts of the other Party and (b) waive compliance with any of the agreements of the other Party or conditions to such Party’s obligations contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the Party to be bound thereby. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition of this Agreement. The failure of either Party hereto to assert any of its rights hereunder shall not constitute a waiver of any of such rights.

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ARTICLE XII
MISCELLANEOUS
          Section 12.01 Limitation of Liability . IN NO EVENT SHALL ANY MEMBER OF THE CADBURY PLC GROUP OR THE DPS GROUP BE LIABLE TO ANY MEMBER OF THE DPS GROUP OR THE CADBURY PLC GROUP, RESPECTIVELY, FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT, INCIDENTAL OR PUNITIVE DAMAGES OR LOST PROFITS, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE) ARISING IN ANY WAY OUT OF THIS AGREEMENT OR ANY ANCILLARY AGREEMENT, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED , HOWEVER , THAT THE FOREGOING LIMITATIONS SHALL NOT LIMIT EACH PARTY’S INDEMNIFICATION OBLIGATIONS FOR LIABILITIES TO THIRD PARTIES AS SET FORTH IN ARTICLE VII .
          Section 12.02 Expenses . Notwithstanding anything in this Agreement or in any Ancillary Agreement to the contrary, all DPS Transaction Costs shall be borne by DPS and all Transaction Costs shall be borne by CS.
          Section 12.03 Notices . All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by an internationally recognized overnight courier service, by facsimile or registered or certified mail (postage prepaid, return receipt requested) to the respective Parties hereto at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 12.03 ):
  (a)   if to Cadbury plc or CS:
 
      Cadbury plc
25 Berkeley Square
London W1J 6HB
Facsimile: 44-20-7830-5015
Attention: Henry Udow, Esq.
                    Chief Legal Officer
 
      with a copies to:
 
      Shearman & Sterling LLP
599 Lexington Avenue
New York, NY 10022-6069
Telecopy: (212) 848-7179
Attention: Creighton O’M. Condon, Esq.
                    Scott Petepiece, Esq.

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      and
 
      Slaughter and May
One Bunhill Row
London EC1Y 8YY
Facsimile: 44-20-7090-5000
Attention: Tim Boxell
 
  (b)   if to DPS:
 
      5301 Legacy Drive
Plano, TX 75024
Facsimile: (972) 673-8130
Attention: James L. Baldwin, Jr.
                    General Counsel
          Section 12.04 Public Announcements . Following the Demerger Effective Time, neither Party to this Agreement shall make, or cause to be made, any press release or public announcement in respect of this Agreement or the transactions contemplated by this Agreement without the prior written consent of the other Party unless otherwise required by Law or applicable stock exchange regulation, and the Parties to this Agreement shall cooperate as to the timing and contents of any such press release or public announcement. The Parties shall use commercially reasonable efforts to agree on the timing and content of any announcement or communication relating to the financial results and/or results of operations of the quarters ending March 31, 2008 and June 30, 2008 for DPS and the period ending June 30, 2008 for Cadbury plc.
          Section 12.05 Severability . If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect for so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to either Party hereto. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner in order that the transactions contemplated by this Agreement are consummated as originally contemplated to the greatest extent possible.
          Section 12.06 Entire Agreement . This Agreement, the Ancillary Agreements and the Continuing Arrangements constitute the entire agreement of the Parties hereto and their Affiliates with respect to the subject matter hereof and thereof and supersede all prior agreements and undertakings, both written and oral, between the Parties hereto with respect to the subject matter hereof and thereof.

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          Section 12.07 Assignment . This Agreement may not be assigned by a Party hereto without the consent of the other Party hereto; provided that a merger shall not be deemed to be an assignment under this Agreement; and provided further , that any Party may assign this Agreement or any of its rights and obligations hereunder to one or more Affiliates of such Party without the consent of the other Party provided that no such assignment shall relieve the assignor of any of its obligations hereunder.
          Section 12.08 Parties in Interest . This Agreement shall be binding upon and inure solely to the benefit of the Parties hereto and their respective successors and permitted assigns, and nothing herein, express or implied (including the provisions of ARTICLE VII relating to indemnified parties), is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
          Section 12.09 Currency . Unless otherwise specified in this Agreement, all references to currency, monetary values and dollars set forth herein means United States dollars and all payments hereunder shall be made in United States dollars unless otherwise mutually agreed upon by the Parties.
          Section 12.10 Tax Matters . Except as otherwise specifically provided herein, this Agreement (including ARTICLE VII (other than Section 7.06 )) shall not govern Tax matters, which shall be governed by the Tax Sharing Agreement.
          Section 12.11 Employee Matters . Except as otherwise provided herein and not inconsistent with the Employee Matters Agreement, this Agreement shall not govern any employee matters, which shall be exclusively governed by the Employee Matters Agreement.
          Section 12.12 Governing Law . This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.
          Section 12.13 Waiver of Jury Trial . EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH OF THE PARTIES HERETO HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 12.13 .

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          Section 12.14 Survival of Covenants . Except as expressly set forth in any Ancillary Agreement, the covenants and agreements contained in this Agreement and each Ancillary Agreement, and Liability for the breach of any obligations contained herein or therein, shall survive the Distribution Date and shall remain in full force and effect.
          Section 12.15 Counterparts . This Agreement may be executed and delivered (including by facsimile transmission or portable document format (“ .pdf ”)) in counterparts, and by the different Parties hereto in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.
[ Remainder of page intentionally left blank ]

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          IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.
         
  CADBURY SCHWEPPES PLC
 
 
  By:   /s/ Henry Udow  
    Name:  Henry Udow  
    Title:  Chief Legal Officer and Group Secretary  
 
  DR PEPPER SNAPPLE GROUP, INC.
 
 
  By:   /s/ James L. Baldwin  
    Name:  James L. Baldwin  
    Title:  Executive Vice President and Secretary  
 
  CADBURY PLC, solely for the purposes of Sections
4.01(a) and (b) and Section 5.03
 
 
  By:   /s/ Henry Udow  
    Name:  Henry Udow  
    Title:  Chief Legal Officer and Group Secretary  
 

 

 

EXECUTION VERSION
TRANSITION SERVICES AGREEMENT
          This Transition Services Agreement (“ Agreement ”) is dated as of May 1, 2008, between Cadbury Schweppes plc, a United Kingdom public limited company (“ Cadbury ”), and Dr Pepper Snapple Group, Inc., a Delaware corporation (“ DPS ”).
RECITALS
          WHEREAS, the board of directors of Cadbury has determined that it is in the best interests of Cadbury and its shareholders to separate Cadbury into two separate, publicly traded companies, which shall operate the Cadbury plc Business and the Beverages Business, respectively (the “ Separation ”); and
          WHEREAS, Cadbury plc, a United Kingdom public limited company, and DPS have entered into a Separation and Distribution Agreement (the “ Separation Agreement ”), dated as of May 1, 2008, which sets forth, among other things, the assets, liabilities, rights and obligations of each of the parties thereto following the Separation; and
          WHEREAS, in connection with the Separation, Cadbury will continue to provide, or cause to be provided, to DPS, and DPS will continue to provide, or cause to be provided, to Cadbury, certain services for a limited period of time after the Separation pursuant to this Agreement.
          NOW, THEREFORE, in consideration of the mutual covenants contained herein, the signatories covenant and agree as follows:
ARTICLE I
DEFINITIONS
           Section 1.1 . Capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the Separation Agreement. The following terms used herein shall have the following meanings:
          “ Affiliate ” shall have the meaning set forth in the Separation Agreement and for purposes of this Agreement, shall refer to Cadbury’s Affiliates or DPS’ Affiliates, as the case may be, post-Separation.
          “ Cadbury Providing Party ” shall have the meaning set forth in Section 5.2.
          “ Cadbury Receiving Party ” shall have the meaning set forth in Section 5.6.
          “ Cadbury Services ” shall have the meaning set forth in Section 2.1.
          “ Confidential Information ” shall have the meaning set forth in Section 2.5(a).
          “ Consents ” shall have the meaning set forth in Section 2.3.

 


 

          “ Disclosing Party ” shall have the meaning set forth in Section 2.5(a).
          “ DPS Providing Party” shall have the meaning set forth in Section 5.5.
          “ DPS Receiving Party ” shall have the meaning set forth in Section 5.3.
          “ DPS Services ” shall have the meaning set forth in Section 2.2.
          “ Force Majeure Event ” shall have the meaning set forth in Section 9.1.
          “ Incoming Service Fee ” shall have the meaning set forth in Section 4.1.
          “ Indemnified Party ” shall have the meaning set forth in Section 7.3.
          “ Indemnifying Party ” shall have the meaning set forth in Section 7.3.
          “ Outgoing Service Fee ” shall have the meaning set forth in Section 4.1.
          “ Providing Party ” shall have the meaning set forth in Section 3.2.
          “ Receiving Party ” shall have the meaning set forth in Section 3.2.
          “ Recipient ” shall have the meaning set forth in Section 2.5(a).
          “ Representatives ” shall have the meaning set forth in Section 2.5(a).
          “ SAS ” shall have the meaning set forth in Section 5.3.
          “ Senior Managers ” shall mean the individuals appointed by the Chief Legal Officers of each party hereto.
          “ Services ” shall have the meaning set forth in Section 2.2.
          “ Transition Representative ” shall mean Thomas Whitten, in the case of Cadbury, and Angie Wallander, in the case of DPS, or their respective replacements or designees.
          “ VAT ” shall have the meaning set forth in Section 4.1(c).
ARTICLE II
DESCRIPTION OF SERVICES; STANDARD OF PERFORMANCE
           Section 2.1 On the terms and subject to the conditions contained herein, Cadbury shall provide, or cause to be provided, to DPS and its Affiliates the services identified in Schedule A hereto, as such Schedule A may be from time to time supplemented or modified in accordance with the provisions of this Agreement (the “ Cadbury Services ”).

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           Section 2.2 On the terms and subject to the conditions contained herein, DPS shall provide, or cause to be provided, to Cadbury and its Affiliates the services identified in Schedule B hereto, as such Schedule B may be from time to time supplemented or modified in accordance with the provisions of this Agreement (the “ DPS Services ”, and together with Cadbury Services, the “ Services ”).
           Section 2.3 . Each party shall, and shall cause its respective Affiliates to, provide the Services in a commercially reasonable manner and with reasonable skill and care. Notwithstanding the foregoing, the standard of care for provision of the Services shall in all material respects be no less than the level of care, skill and quality as are currently being provided to and by such party and its Affiliates and have been provided in the preceding twelve months, provided that, in the case where the Services are not currently being provided, each party shall provide the Services in a commercially reasonable manner and with reasonable skill and care. The relevant measurement of performance of the Services shall be the measurement metrics, if any, currently used by DPS and its Affiliates or by Cadbury and its Affiliates, as the case may be. Cadbury and DPS shall, and shall cause each of its Affiliates that is a Providing Party to, use commercially reasonable efforts to cooperate with each other in all matters relating to the provision of the Services. With respect to actions taken by the Receiving Party in connection with the Services received, the Receiving Party shall use the Services in a commercially reasonable manner in compliance with all applicable Laws. The Providing Party hereby grants the Receiving Party a license under all of its Intellectual Property used in the performance of Services solely to the extent required for the Receiving Party to receive the Services hereunder.
           Section 2.4 . Cadbury and DPS shall each use its (and shall cause its applicable Affiliates to use their) reasonable best efforts to obtain all required consents, licenses or approvals necessary to perform the Services (the “ Consents ”) (that have not already been procured prior to the Distribution Date) as soon as reasonably practicable following the date hereof; provided that, each party shall notify the other in writing of any terms to which a proposed Consent is to be subject and shall use its reasonable best efforts to agree with the relevant third party any reasonable amendments to a proposed Consent requested by Cadbury or DPS, as the case may be. If the parties are unable to obtain any required Consents, the parties shall negotiate in good faith reasonable modifications of the Services so that such Consents are not required.
           Section 2.5 . (a) Each party recognizes that in the performance of its obligations under this Agreement, or as a result of the parties’ ongoing relationship pursuant to this Agreement, non-public, confidential and/or proprietary information (“ Confidential Information ”) belonging or relating to the other party or its Affiliates (each, a “ Disclosing Party ”), including Confidential Information regarding the Services may be disclosed or become known to the other party or its Affiliates or its officers, directors, controlling persons, employees, lenders, agents, representatives, accountants and counsel (collectively, “ Representatives ”) (each, a “ Recipient ”). Each party acknowledges that all Confidential Information disclosed in connection with the provision of Services remains the property of the Disclosing Party. Unless otherwise expressed in writing to the other party, information, including any information expressed orally, that is exchanged between the parties or their respective Affiliates in connection with the performance of their respective obligations under this Agreement shall be

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presumed to be Confidential Information. Each party shall, and shall cause its Affiliates and Representatives to, keep the Disclosing Party’s Confidential Information confidential and take such precautions with respect to the Disclosing Party’s Confidential Information as it normally takes with its own non-public, confidential and/or proprietary information, which shall be no less than a reasonable standard of care under the circumstances. This obligation shall not apply to:
     (i) information that, at the time of disclosure, is in the public domain or generally known in the industry, other than as a result of a breach by the other party or its Affiliates or Representatives of any of the provisions of this Agreement or of any other duty of confidentiality owed to the other party or its Recipients;
     (ii) information that, after disclosure to the Recipient hereunder, is published or otherwise becomes part of the public domain or generally known in the industry through no fault of the party (or such party’s Recipients) to whom the information was disclosed;
     (iii) information that a party can demonstrate through its records was in its lawful possession or the lawful possession of a Recipient at the time such party received such information (except for Confidential Information regarding DPS or its Affiliates in Cadbury’s possession or Confidential Information regarding Cadbury or its Affiliates in the possession of Representatives that are transferred to DPS or its Affiliates, each of which shall continue to be confidential); and
     (iv) information that may be received by a Recipient in good faith from a source other than the Disclosing Party, which source either has no duty of confidentiality to such other party or, if such source does have a duty of confidentiality, the Recipient of such Confidential Information was unaware of or had no reasonable basis for knowing thereof (provided that, if a Recipient later becomes aware or reasonably should know of such duty, this exception shall no longer apply).
          (b) Each party shall inform any and all of its Recipients that receive Confidential Information of a Disclosing Party of the confidential and proprietary nature of such Confidential Information and shall inform such Recipients that such Confidential Information is to be kept strictly proprietary and confidential pursuant to the terms of this Agreement. Each party shall explain to each such Recipient his or her responsibilities and obligations under this Section 2.5, and shall establish commercially reasonable procedures to ensure that the Confidential Information is properly protected and monitored for purposes of adhering to the terms of this Section 2.5. Except to the extent otherwise specifically provided in this Section 2.5, the Confidential Information will be kept confidential by each party and its Recipients. Each party agrees to be responsible for any breach of this Section 2.5 by any of its Recipients.
          (c) Each party and its Recipients shall maintain, however, the right to disclose the Confidential Information of a Disclosing Party if required to do so by Law, subpoena or other legal process, provided that, in the case of any such potential disclosure pursuant to this Section 2.5(c), the Recipient shall provide the Disclosing Party with prompt notice of such requirement and shall use its reasonable best efforts to keep and assist the Disclosing Party in keeping it confidential by all appropriate means, and shall, to the extent reasonably practical, afford the

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Disclosing Party the opportunity to contest the disclosure obligation and cooperate with any Recipients in seeking any such protective order or other appropriate legal remedy, in each case, at the Disclosing Party’s request and expense. If a Recipient finds it necessary to disclose any Confidential Information, such Person will disclose only that portion of the Confidential Information that it is advised in writing by counsel is legally required to be disclosed and will use its reasonable best efforts, at the Disclosing Party’s request and expense, to ensure that all Confidential Information so disclosed will be accorded confidential treatment.
          (d) Upon termination of this Agreement for any reason, no Recipient shall disclose nor make any further use of a Disclosing Party’s Confidential Information and upon written request shall immediately return or destroy all such Confidential Information as shall be in written or other tangible form (including all copies thereof), provided , however , that each party shall be entitled to retain one record copy in its legal department, to be held in strict confidence, subject to the above exceptions; and provided , further , that if such Confidential Information is destroyed, upon written request, shall certify the same to the Disclosing Party.
          (e) The parties acknowledge that in the event of any breach or threatened breach of this Agreement pertaining to Confidential Information, the non-breaching party will not have an adequate remedy at law and may suffer irreparable injury as a result of any such breach. Therefore, in the event of any such breach or threatened breach, the non-breaching party shall, in addition to any other remedies available at law or in equity, be entitled to specific performance, without posting bond or other security.
           Section 2.6 . The Transition Representatives shall meet regularly in person, telephonically, or as they otherwise agree at least monthly for the first year following the date hereof, to discuss any issues arising under this Agreement and the need for any modifications or additions hereto.
           Section 2.7 . Subject to Section 2.8, except with respect to any services of the type described on Schedule D , if either party can demonstrate that, by virtue of the transactions contemplated by the Separation Agreement, either party requires a service not currently provided for under this Agreement that was provided by or to a member of the Cadbury and its Affiliates by or to DPS and its Affiliates, as the case may be, in the twenty-four (24) month period prior to the Distribution Date, the parties shall cooperate and endeavor in good faith to modify and supplement the schedules to this Agreement (including any other attachments thereto, if any) to accurately identify those services, and to specify the manner and term in which such services shall be performed and, as appropriate, to enter into ancillary transition services agreements addressing the provision of certain critical services or the provision of the Services in certain jurisdictions (including price calculated pursuant to Section 4), in order to refine and further effect the understandings set forth in this Agreement. Unless otherwise so agreed, in no event shall any such modification or supplement to the schedules (other than the election by a party to identify a Service which it does not elect to receive and for which service fees shall not be payable) or the execution of any ancillary agreements result in any change in the fees for the Services.

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           Section 2.8 . Where a service that was provided by a third party to Cadbury or its Affiliates (including DPS and its Affiliates) prior to the Distribution Date is not otherwise provided for in this Agreement and is reasonably required by DPS or Cadbury to continue DPS’ or Cadbury’s remaining businesses, as applicable, in substantially the same manner as that carried on in the twenty-four month period prior to the Distribution Date, Cadbury or DPS, as applicable, will provide such assistance as is reasonable under the circumstances so as to enable the other party to put in place similar arrangements with such third party.
           Section 2.9 . Except as otherwise specified in this Agreement, all costs and expenses, including fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated by this Agreement shall be paid by the party incurring such costs and expenses.
           Section 2.10 . Subject to Section 2.3 of this Agreement, the Cadbury Providing Party and DPS Providing Party (each, as defined below), as applicable, shall be responsible for selecting and supervising in good faith the personnel who will perform any particular Cadbury Service or DPS Service, respectively, and performing all administrative services with respect to such personnel, including establishing compensation structure and work load balancing.
           Section 2.11 . Cadbury and DPS shall, or shall cause their respective Affiliates to, make available on a timely basis to the Providing Party all information reasonably requested by such Providing Party to enable it to provide the Services and provide reasonable access to the Providing Party of such party’s premises to the extent necessary for the purpose of providing the Services.
ARTICLE III
PERIOD OF SERVICES: TERM
           Section 3.1 . The parties agree that, except as otherwise designated in this Agreement, all services covered by this Agreement shall terminate on the date indicated on Schedule A or Schedule B , as applicable, unless earlier terminated by the Receiving Party upon such prior written notice as set forth on Schedule A or Schedule B , as applicable, or pursuant to Section 3.2(c) of this Agreement or extended by the mutual written agreement of the Providing Party and Receiving Party. This Agreement shall terminate when the terms for all Services have terminated; provided, however, that Sections 2.5, 2.9 and Articles 5, 7, 8 and 9 shall survive any such termination; provided further that Sections 5.4 and 5.7 shall continue for one year only.
           Section 3.2 . (a) Each party shall, or shall cause its Affiliate that is providing the Services hereunder (a “ Providing Party ”) to, cooperate in a commercially reasonable manner with the party receiving the Services hereunder (a “ Receiving Party ”) to facilitate the transfer of responsibility for the Services to the Receiving Party or its designee. Each party shall use its commercially reasonable efforts to: (i) assume performance of the Services within shorter time periods than those specified on Schedule A or Schedule B , as applicable, and (ii) make or obtain any approvals, permits and licenses and implement such systems as may be necessary for

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such party to provide the Services independently as soon as reasonably practicable following the Distribution Date.
          (b) As soon as reasonably practicable following the termination of this Agreement or the discontinuation of any Services, the Providing Party shall deliver to the Receiving Party, at the Receiving Party’s expense, copies of any books, records, data and reports reasonably requested by the Receiving Party in connection with such Services. Subject to the requirements of any applicable Laws, each Receiving Party agrees to keep any information it receives pursuant to this Section 3.2(b) that relates to a Disclosing Party confidential in accordance with Section 2.5.
          (c) Notwithstanding anything to the contrary in this Agreement, a party may terminate any Service or all Services immediately upon notice to the other party in the event of a material breach of this Agreement by the breaching party that is not cured within thirty (30) days following written notice from the non-breaching party.
ARTICLE IV
COMPENSATION; PAYMENT TERMS
           Section 4.1 . (a) DPS shall pay to Cadbury a fee for each Service that is provided to DPS and its Affiliates hereunder (collectively, the “ Incoming Service Fee ”) and Cadbury shall pay to DPS a fee for each Service that is provided to Cadbury and its Affiliates hereunder (collectively, the “ Outgoing Service Fee ”). The costs for each Service (the “ Costs ”) shall be the actual direct cost incurred by the Providing Party in performing such Service, calculated as set forth on Schedule C , which shall include a reasonable allocation for overhead salary, wages, benefits, taxes and other expenses attributable thereto (but shall exclude, for the avoidance of doubt, any overhead expenses for branding, marketing and other similar expenses) and without any markup for profit, calculated in a manner consistent with past custom and practice of the Providing Party with respect to such Service (or Cadbury Schweppes SBS, Inc. in the case of the Services which were not historically provided by the Providing Party); provided , however , that such Costs shall be adjusted to reflect any termination or expiration of any Transition Service pursuant to Article 3 of this Agreement.
          (b) The Incoming Service Fee and the Outgoing Service Fee shall include all out-of-pocket charges and costs of performing the Services hereunder, including, without limitation, license fees, royalties or provider services fees.
          (c) The fees payable by a Receiving Party to a Providing Party shall, in each case, be taken to be exclusive of any value added Taxes, sales Taxes, or similar Taxes (“ VAT ”) properly chargeable in respect of the transactions hereunder, and an amount equal to such Taxes so chargeable shall, subject to receipt of a valid VAT receipt or invoice in accordance with Section 4.1(f) below, be paid by the Receiving Party to the Providing Party in addition to the fees otherwise payable under this Agreement.
          (d) In the event that applicable Law requires that any amount in respect of Taxes be withheld from any payment by a Receiving Party to a Providing Party under this Agreement,

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the Receiving Party shall withhold the required amounts and pay such withheld amounts over to the applicable Governmental Authority in accordance with the requirements of the applicable Law, and any amount so withheld and paid over shall be treated as having been paid to the Providing Party, and the Receiving Party shall not be required to pay any additional amount as a result of or in respect of such withholding.
          (e) In each case where an amount in respect of VAT is payable by the Receiving Party in respect of a service provided by the Providing Party, DPS or Cadbury (as the case may be) shall ensure that the Providing Party shall furnish in a timely manner a valid VAT receipt or invoice to the Receiving Party in the form and manner required by Law to allow the Receiving Party or, as the case may be, any of its affiliates to recover such Tax to the extent allowable by Law.
          (f) Except in the event the Receiving Party disputes a charge, the Receiving Party shall pay, or cause payment to be made to, the Providing Party, within 30 days of receipt of a reasonably detailed written invoice from the Providing Party, for the Cost of each Service rendered hereunder, which invoice shall be delivered by the Providing Party to Cadbury or DPS, as applicable, by the 30th day of each month for the Services provided during the preceding month. Payments shall be made by wire transfer to an account designated in writing from time to time by Cadbury or DPS, as applicable.
ARTICLE V
ACCESS TO RECORDS
           Section 5.1 . During the term of this Agreement, each party shall, for the lesser of a period of seven years after the Distribution Date or a period specified by such party’s record retention policies, retain the books and records of each party and their respective Affiliates relating to the Services provided hereunder in accordance with the record retention policies of such party; provided , however , that each party shall notify the other party at least 60 days in advance of destroying any such books and records in order to provide the other party the opportunity to access such books and records and if the other party fails to request that such books and records be delivered to them at the requesting party’s expense, within 60 days after receipt of such notice, each party may destroy such books and records.
           Section 5.2 . Subject to Section 2.5 above, Cadbury shall provide, or cause to be provided, to DPS and its Representatives reasonable access to the books, records (including, but not limited to, records and documentation referred to in Section 5.1), premises, systems and personnel of each Providing Party of Cadbury (a “ Cadbury Providing Party ”) to permit DPS to audit Cadbury’s or a Cadbury Providing Party’s compliance with this Agreement, provided that this right of access is exercised with reasonable prior notice and DPS uses its reasonable efforts to cause as little disruption as is reasonably possible to the performance of the Services and Cadbury Providing Party’s other businesses, provided further that DPS may only undertake two such audits per calendar year.
           Section 5.3 . In addition to the rights set out in Section 5.2, Cadbury shall comply and shall cause each Cadbury Providing Party to comply with any reasonable request of

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DPS, including any review in accordance with the Statement of Auditing Standards No. 70 (Type 11) (the “ SAS ”), of any third party service provider of Cadbury for information relating to the Services that may be required by DPS or any Receiving Party of DPS (a “ DPS Receiving Party ”) to enable them to comply with the Sarbanes-Oxley Act of 2002 (and any resultant, similar or replacement legislation, rules or guidance).
           Section 5.4 . If, based upon any audit performed in accordance with Sections 5.2 or 5.3, there has been either an overcharge or undercharge for the costs of the Services, then Cadbury Providing Party or DPS, as the case may be, will promptly reimburse or pay to the other Party such difference. All the costs of any audit conducted under Sections 5.2 or 5.3 shall be borne by DPS.
           Section 5.5 . Subject to Section 2.5 above, DPS shall provide, or cause to be provided, to Cadbury and its Representatives reasonable access to the books, records (including, but not limited to, records and documentation referred to in Section 5.1), premises, systems and personnel of the Providing Party of DPS (the “ DPS Providing Party ”) to permit Cadbury to audit DPS’ or a DPS Providing Party’s compliance with this Agreement, provided that this right of access is exercised with reasonable prior notice and Cadbury uses its reasonable efforts to cause as little disruption as is reasonably possible to the performance of the Services and DPS Providing Party’s other businesses, provided further that Cadbury may only undertake two such audits per calendar year.
           Section 5.6 . In addition to the rights set out in Section 5.5, DPS shall comply and shall cause each relevant DPS Providing Party to comply with any reasonable request of Cadbury, including any review in accordance with the SAS, of any third party service provider of DPS for information relating to the Services that may be required by Cadbury or any Receiving Party of Cadbury (a “ Cadbury Receiving Party ”) to enable them to comply with the Sarbanes-Oxley Act of 2002 (and any resultant, similar or replacement legislation, rules or guidance).
           Section 5.7 . If, based upon any audit performed in accordance with Sections 5.5 or 5.6, there has been either an overcharge or undercharge for the costs of the Services, then DPS Providing Party or Cadbury, as the case may be, will promptly reimburse or pay to the other Party such difference. All the costs of any audit conducted under Sections 5.5 and 5.6 shall be borne by Cadbury.
ARTICLE VI
ASSIGNMENT
           Section 6.1 . Except as otherwise provided in this Article 6, neither party shall assign its rights or obligations under this Agreement, or any part hereof, without the prior written consent of the other party (which consent shall not be unreasonably withheld). Either party may, at its election, assign its rights and corresponding obligations under this Agreement in whole or in one or more parts to any one or more of its Affiliates so long as such assigning party agrees to remain fully obligated for the performance of the terms and provisions of this Agreement as they relate to the Services being assigned.

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           Section 6.2 . Notwithstanding anything to the contrary in this Agreement, a party shall be entitled to assign its rights and/or obligations under this Agreement in whole or in part to an unrelated party in one or more locations in connection with the sale, transfer or other disposal by it or any of its Affiliates of its business or operations that receives and/or provides the Services under this Agreement in such location and this Agreement shall thereafter be read and construed as if it were a separate and independent contract between the unrelated party and the party hereto as regarding the services and facilities to be received and/or provided under this Agreement in such locations. Notwithstanding the foregoing, in the event a party assigns its rights and/or obligations hereunder upon a sale or transfer to an unrelated party as set forth above, (a) such transferor shall be entitled to continue to receive the Services (other than the Services that are the subject of such assignment) from the other party in accordance with the terms of this Agreement following any such assignment, and the other party shall have no right to terminate this Agreement as a result of such assignment, and (b) no such assignment shall relieve the transferor of any obligations hereunder in the event that such transferee fails to perform in any manner or breaches this Agreement.
           Section 6.3 . Any attempted or purported assignment in violation of this Section 6 shall be null and void ab initio. In the event of a permitted assignment hereunder, this Agreement shall be binding upon and shall inure to the benefit of the parties and their respective successors and permitted assigns.
ARTICLE VII
LIMITATION ON LIABILITY; THIRD PARTY CLAIMS
           Section 7.1 . Except with respect to damages included in an award against an Indemnified Party (as defined herein) resulting from a Third Party Claim for which such party is indemnified hereunder, in no event shall either party or its respective Representatives and Affiliates have any liability whether in contract or tort (including negligence and strict liability) or otherwise, at law or equity, for loss of profit, diminution in value, loss of goodwill, claims of customers, or consequential, incidental or punitive damages or other special damages as a result of, provision of or failure to provide the services under the terms of this Agreement. Subject to such other remedies permitted by Section 2.5 above and except as specifically provided in the previous sentence or in the event of bad faith or willful misconduct of such party, the maximum liability of each party and its Representatives and Affiliates to, and the sole remedy of, the other party or its Affiliates or Representatives for any act or failure to act in connection herewith (including but not limited to, the performance or breach of this Agreement) shall be the greater of (i) a refund of price paid for the particular Service, (ii) such other party’s incremental cost of performing the Service itself or (iii) such other party’s incremental cost of obtaining the Service from a third party.
           Section 7.2 . EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT (INCLUDING SECTION 2.3), AND WITHOUT LIMITING ANY REPRESENTATIONS OR WARRANTIES IN THE SEPARATION AGREEMENT, THE PARTIES MAKE NO EXPRESS REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SERVICES, AND NO REPRESENTATION OR WARRANTY SHALL BE IMPLIED UNDER THIS AGREEMENT OR AT LAW, INCLUDING, WITHOUT LIMITATION,

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RELIABILITY, ACCURACY, SUITABILITY, COMPLETENESS, WARRANTY OF MERCHANTABILITY OR WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, AS TO THE SERVICES TO BE PERFORMED HEREUNDER.
           Section 7.3 . Subject to the limitations set forth in Section 7.1, each party (the “ Indemnifying Party ”) agrees that it shall protect, indemnify and hold the other party and its Affiliates and their Representatives (each, the “ Indemnified Party ”) harmless from and against all Indemnifiable Losses and shall defend such party at the Indemnifying Party’s expense (to the extent of any Third Party Claims) in any Action for injuries to or death of any Person or Persons or loss of or damage to the property of any Person or Persons whomsoever (including without limitation the agents and employees of the Indemnified Party) or infringement of any Person’s or Persons’ Intellectual Property arising out of the actions of the Indemnifying Party, or its Representatives, in connection with or as a result of this Agreement or the performance of the Indemnifying Party’s Services, the unauthorized use by the Indemnifying Party of the Services or other obligations hereunder.
           Section 7.4 . The Indemnified Party shall give the Indemnifying Party prompt notice of any indemnifiable Action asserted against it.
           Section 7.5 . Except with respect to any Third Party Claims, the receipt by a Receiving Party or its Affiliates of the Services shall be an unqualified acceptance of, and a waiver by, the Receiving Party and its Affiliates of their rights to make any claim (other than based on gross negligence or fraud) with respect to such Services unless the Receiving Party gives written notice of the claim to the Providing Party within the later of (i) sixty (60) days after receipt of the Service by the Receiving Party or its Affiliates or (ii) thirty (30) days after the date on which the Receiving Party became, or should have become, aware of the facts, events, occurrences or circumstances underlying such claim; provided , that, in no event shall the Receiving Party be entitled to give notice of a claim more than one (1) year after receipt of the Service by the Receiving Party or its Affiliates.
ARTICLE VIII
DISPUTE RESOLUTION
           Section 8.1 . Prior to the initiation of formal dispute resolution procedures, the parties shall first attempt to resolve any dispute arising out of or in connection with this Agreement or the transactions contemplated hereby informally, as follows:
          (a) The parties shall first attempt in good faith to resolve all disputes on a local level and shall attempt to initiate such efforts within two Business Days after receipt of notice of any such dispute. If the parties are unable to resolve a dispute in an amount of time that either party deems reasonable under the circumstances, such party may refer the dispute for resolution to the Senior Managers pursuant to the provisions of Section 8.1(b).
          (b) Within five Business Days of a notice under Section 8.1(a) referring a dispute for resolution by Senior Managers, the Transition Representatives (or other employees of the parties) shall each prepare and provide to the Senior Managers of each party summaries of the

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relevant information and background of the dispute, along with any appropriate supporting documentation. The designated Senior Managers will confer as often as they deem reasonably necessary in order to gather and exchange information, discuss the dispute and negotiate in good faith, in an effort to resolve the dispute without the need for any formal proceedings.
          (c) Formal proceedings for the resolution of a dispute pursuant to Section 8.2 may not be initiated until at least ten Business Days after the receipt by a party of a notice under Section 8.1(a) referring a dispute to Senior Managers.
           Section 8.2 . All disputes arising out of or in connection with this Agreement and the transactions contemplated hereby which cannot be resolved through the procedures described herein or therein shall be finally resolved solely and exclusively by means of arbitration to be conducted in English in the City of New York. The arbitration shall be conducted by a sole arbitrator appointed by agreement of the parties, or failing such agreement, under the Commercial Rules of the American Arbitration Association and the arbitration will proceed under such Rules. The decision of the arbitrator shall be final, conclusive and binding upon the parties, and a judgment upon the award may be obtained and entered in any federal or state court of competent jurisdiction. The parties agree that any arbitration shall be kept confidential and any element of such arbitration (including but not limited to any pleadings, briefs or other documents submitted or exchanged, any testimony or other oral submissions, and any awards) shall not be disclosed beyond the arbitral tribunal, the parties, their counsel and any Person necessary to conduct the arbitration, except as may be required in recognition and enforcement proceedings, if any, or in order to satisfy disclosure obligations imposed by any applicable Law. The parties agree to cooperate in providing each other with all discovery, including but not limited to the exchange of documents and depositions of parties and non-parties, reasonably related to the issues in the arbitration. If the parties are unable to agree on any matter relating to such discovery, any such difference shall be determined by the arbitrator. The parties also agree to submit to the non-exclusive personal jurisdiction of the federal and state courts sitting in New York, New York, for the limited purpose of enforcing this arbitration agreement (including, where appropriate, issuing injunctive relief) or any award resulting from arbitration pursuant to this Section 8.2. The parties agree that the arbitration proceeding described in this Section 8.2 is the sole and exclusive manner in which the parties may resolve disputes arising out of or in connection with this Agreement; provided , however , that the parties expressly agree that nothing herein shall prevent the parties from applying to a court having jurisdiction over any of the parties hereto for provisional, injunctive or interim relief to preserve the status quo or otherwise to prevent irreparable harm to a party pending the outcome of arbitration. The prevailing party in any arbitration shall be entitled to attorneys’ fees and costs and the non-prevailing party shall be responsible for all expenses of the arbitration.
           Section 8.3 . If there is a dispute between the parties, each party shall continue to perform all of their obligations under this Agreement (including the obligations in dispute).

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ARTICLE IX
MISCELLANEOUS
           Section 9.1 Force Majeure . (a) The obligations of Cadbury or DPS and their respective Affiliates, as the Providing Party, shall be suspended during the period, but only to the extent that Cadbury or DPS and their respective Affiliates, as the case may be, is prevented or hindered from complying therewith by any of the following causes beyond its reasonable control: (i) acts of God, (ii) weather, fire or explosion, (iii) war, invasion, riot, domestic insurrection, acts of terrorism or other civil unrest, (iv) national or regional emergency, (v) shortage of adequate power or transportation facilities, or (vi) any other event which is beyond the reasonable control of the Providing Party (each, a “ Force Majeure Event ”). In such event, the Providing Party shall give notice of suspension as soon as reasonably practicable to the other stating the date and extent of such suspension and the cause thereof, and such Providing Party shall resume the performance of such obligations as soon as reasonably practicable after the removal of the cause.
          (b) During the duration of a Force Majeure Event, the affected party shall use commercially reasonable efforts to avoid, mitigate, remedy or remove such Force Majeure Event (including the expenditure of reasonable sums), and shall use commercially reasonable efforts to resume its performance under this Agreement with the least practicable delay.
           Section 9.2 Independent Contractor . The parties and each of their respective Affiliates shall each be an independent contractor in the performance of its obligations hereunder and not as the agent of the Receiving Party in performing Services, and no employee of a Providing Party performing Services shall be considered an employee of the Receiving Party. No third party, including any employee of any party or any of such party’s Affiliates, shall have or acquire any rights by reason of this Agreement.
           Section 9.3 Public Announcement . None of the parties hereto shall make, or cause to be made, any press release or public announcement in respect of this Agreement or the services contemplated hereby or otherwise communicate with any news media without the prior written consent of the other party (unless otherwise required by Law or applicable stock exchange regulation), and the parties hereto shall cooperate as to the timing and contents of any such press release, public announcement or communication.
           Section 9.4 Notices . All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by an internationally recognized overnight courier service, by facsimile or registered or certified mail (postage prepaid, return receipt requested) to the respective parties hereto at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 9.4):

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if to Cadbury:
Cadbury Schweppes plc
25 Berkeley Square
London W1J 6HB
Facsimile: 44-20-7830-5015
Attention: Henry Udow, Esq.
                    Chief Legal Officer
with a copy to:
Cadbury Adams USA
389 Interpace Parkway
Parsippany, NJ 07054
Facsimile: (973) 909-3976
Attention: Thomas Whitten
if to DPS:
5301 Legacy Drive, 3 rd Floor
Plano, TX 75024
Facsimile: (972) 673-8130
Attention: James L. Baldwin, Jr.
                    General Counsel
with a copy to:
Dr Pepper Snapple Group, Inc.
5301 Legacy Drive
Plano, TX 75024
Facsimile: (972) 673-8130
Attention: Angie Wallander
           Section 9.5 Governing Law . This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to the choice of law or conflicts of law principles that would cause the application of the laws of any other jurisdiction.
           Section 9.6 Counterparts . This Agreement may be executed and delivered (including by facsimile transmission or portable document format (“.pdf”)) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.

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           Section 9.7 Headings . The headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.
           Section 9.8 Modifications . This Agreement contains the entire understanding and agreement between the parties hereto as to the services being performed hereunder. It may not be amended or modified except by a written instrument executed by the parties hereto.
           Section 9.9 Cumulative Effect . The rights and obligations of the parties under this Agreement shall be cumulative to and not exclusive of the rights and obligations of the parties contained in the Separation Agreement.
           Section 9.10 Interpretation . All references in this Agreement to “ Cadbury ” or “ DPS ” or a “ party ” shall be deemed to include such party’s Affiliates unless the context requires otherwise. All references in this Agreement to “services to be supplied” or similar language shall be defined to include “facilities to be provided” unless the context requires otherwise. To the extent that this Agreement purports to impose any obligation on the Affiliates of a party, such party shall cause its Affiliates to fulfill such obligation.
           Section 9.11 Insurance . As regards employees, agents or representatives of a Providing Party who shall be performing the Services on or at properties of a Receiving Party, the Receiving Party will be designated as an additional insured under the Providing Party’s liability insurance.
           Section 9.12 Amendment . This Agreement may not be amended or modified except (a) by an instrument in writing signed by, or on behalf of, Cadbury and DPS or (b) by a waiver in accordance with Section 9.13.
           Section 9.13 Waiver . Either party to this Agreement may (a) extend the time for the performance of any of the obligations or other acts of the other party, (b) waive any inaccuracies in the representations and warranties of the other party contained herein or in any document delivered by the other party pursuant hereto or (c) waive compliance with any of the agreements of the other party or conditions to such party’s obligations contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the party to be bound thereby. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition of this Agreement. The failure of either party hereto to assert any of its rights hereunder shall not constitute a waiver of any of such rights.
           Section 9.14 Severability . If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect for so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to either party hereto. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties

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as closely as possible in an acceptable manner in order that the transactions contemplated by this Agreement are consummated as originally contemplated to the greatest extent possible.
           Section 9.15 No Additional Rights . Except as expressly provided in this Agreement, the parties agree that this Agreement shall not grant to either party any additional rights to the other party’s proprietary information, technology or know-how.
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          IN WITNESS WHEREOF, Cadbury and DPS have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.
         
  CADBURY SCHWEPPES PLC
 
 
  By:    /s/ Henry Udow  
    Name:   Henry Udow  
    Title:   Chief Legal Officer and Group Secretary  
 
  DR PEPPER SNAPPLE GROUP, INC.
 
 
  By:   /s/ James L. Baldwin  
    Name:   James L. Baldwin  
    Title:   Executive Vice President and Secretary  
 

 

 

EXECUTION VERSION
TAX SHARING AND INDEMNIFICATION AGREEMENT
          This Tax Sharing and Indemnification Agreement (this “Agreement”), dated as of May 1, 2008, among Cadbury Schweppes plc (“CS”), a United Kingdom public limited company, on behalf of itself and the members of the Cadbury Group, as defined below (other than Cadbury plc (“Cadbury”), a United Kingdom public limited company), and Dr Pepper Snapple Group, Inc. (“DPS”), a Delaware corporation, on behalf of itself and the members of the DPS Group, as defined below, and, solely for purposes of Section 20, Cadbury.
WITNESSETH:
          WHEREAS, CS and DPS have entered into a Separation and Distribution Agreement, dated as of May 1, 2008 (the “Separation Agreement”), relating to the demerger by Cadbury of Cadbury Schweppes Americas, Inc., a Delaware corporation, that along with its subsidiaries and various affiliated companies operates the Cadbury beverages business in North America (“CSAI”), and certain related transactions (collectively, the “Demerger”);
          WHEREAS, pursuant to the Demerger, (i) CS, will become a wholly-owned subsidiary of Cadbury, (ii) the stock of CSAI will be transferred by Cadbury or CS to DPS, and (iii) DPS will issue its common stock to Cadbury shareholders (collectively, the “Principal Separation Transactions”);
          WHEREAS, prior to, and in contemplation of, the Demerger, (i) the Cadbury Group will sell, distribute or otherwise transfer certain assets relating to (or comprising part of) the beverages business, including the Beverage Entities, as defined below, to the DPS Group, and (ii) the DPS Group will sell, distribute or otherwise transfer certain assets relating to (or comprising part of) the confectionery business, including the Confectionery Entities, as defined below, to the Cadbury Group;
          WHEREAS, for U.S. federal income tax purposes, the substance of the Principal Separation Transactions is intended to be characterized as follows: (a) Cadbury is formed and all of the outstanding ordinary shares of CS are exchanged by the CS shareholders for all of the Cadbury ordinary shares after which CS elects, pursuant to Treasury regulation section 301.7701-3, to be a treated as a disregarded entity in a transaction qualifying as a reorganization under 368(a)(1)(F) of the United States Internal Revenue Code of 1986, as amended (the “Code”); (b) Cadbury distributes the shares of CSAI to Cadbury shareholders in a transaction qualifying under Code section 355; and (c) the CSAI shareholders exchange all of their CSAI shares for DPS shares, immediately after which CSAI is converted to a limited liability company and a disregarded entity, in a transaction qualifying as a reorganization under Code section 368(a)(1)(F);
          WHEREAS, CS has received from the United States Internal Revenue Service (“IRS”) a private letter ruling providing that, subject to the representations and information submitted by CS, the Principal Separation Transactions will be treated for U.S. federal income tax purposes in the manner set forth above in the foregoing whereas clause (the “Ruling”), which Ruling was received pursuant to a private letter ruling request submitted by CS (together with all

 


 

attachments, exhibits and supplements to the private letter ruling request, in each case, that were submitted by CS to the IRS, the “Ruling Request”);
          WHEREAS, in connection with the Demerger, CS and DPS desire to set forth their agreement on the rights and obligations of CS, DPS and the members of the Cadbury Group and the DPS Group, respectively, with respect to certain Tax matters as set forth below;
          NOW, THEREFORE, in consideration of the foregoing and the terms, conditions, covenants and provisions of this Agreement, the parties mutually covenant and agree as follows:
      1. Definitions .
          (a) As used in this Agreement:
     “ Active Business ” shall mean an active trade or business relied upon in the Ruling Request and the Ruling for Code section 355 treatment in connection with the Demerger.
     “ Affiliate ” shall have the meaning set forth in the Separation Agreement.
     “ ATOB DPS Entity ” shall mean Dr Pepper/Seven Up, Inc., a Delaware corporation and the member of the DPS Group conducting an Active Business.
     “ Beverage Assets ” shall mean those assets, as set forth on Schedule A, relating to (or comprising part of) the beverages business that are sold, distributed or otherwise transferred by the Cadbury Group to the DPS Group prior to, and in contemplation of, the Demerger, including any equity interests in the Beverage Entities.
     “ Beverage Entities ” shall mean those entities, as set forth on Schedule B, relating to (or comprising part of) the beverages business the equity of which is sold, distributed or otherwise transferred (in whole or in part) by the Cadbury Group to the DPS Group and that become wholly-owned by the DPS Group prior to, and in contemplation of, the Demerger.
     “ C Election ” shall mean a joint election by CS (or one or more of its Subsidiaries) and DPS (or one or more of its subsidiaries) to have the provisions of subsection 85(1) of the Income Tax Act (Canada) (and any equivalent or corresponding provision under applicable Canadian provincial or territorial Tax law) apply with respect to the transfer of assets of Cadbury Beverages Canada Inc., a Canadian corporation (”CBCI”), to Canada Dry Mott’s Inc., a Canadian corporation (“CDMI”).
     “ Cadbury Group ” shall mean Cadbury and any Person that is a Subsidiary of Cadbury immediately after the Demerger Date (for the avoidance of doubt, including the Confectionery Entities but excluding the Beverage Entities), and each Person that becomes a Subsidiary of Cadbury after the Demerger Date.
     “ Cadbury Group Taxes ” shall mean any Taxes of the Cadbury Group (including Taxes for which any member of the Cadbury Group is primarily liable under applicable Tax law but excluding Taxes for which any such member is secondarily liable under such law) for any Pre-

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Demerger Period, Straddle Period or Post-Demerger Period. For the avoidance of doubt, Cadbury Group Taxes shall (a) include any Taxes (i) shown as due on Tax Returns of the Cadbury Group for Pre-Demerger Periods and Straddle Periods (including Taxes imposed in respect of the sale, distribution or other transfer of the Beverage Assets by the Cadbury Group to the DPS Group but excluding Taxes of the Beverage Entities), (ii) imposed in respect of the Beverage Assets while owned by the Cadbury Group prior to the sale, distribution or other transfer of the Beverage Assets to the DPS Group, and (iii) of the Confectionery Entities for all taxable periods; and (b) exclude Taxes (i) of the Beverage Entities for all taxable periods, (ii) of a member of the DPS Group for which a member of the Cadbury Group is responsible for (A) under Treasury Regulation 1.1502-6 (or similar provision of U.S. state or local or non-U.S. Tax law) solely as a result of such Cadbury Group member being or having been included in a Tax Return with any member of the DPS Group or otherwise joining in a fiscal unity or other combined group or (B) as a consequence of the failure of any member of the DPS Group to discharge a liability for Tax for which a member of the DPS Group is primarily liable under applicable Tax law or (C) because such member of the Cadbury Group acted as a representative of a group of companies to the extent that the Cadbury Group Tax liability would have been a liability of a member of the DPS Group if such member of the Cadbury Group did not act as a representative, and (iii) Taxes described in Section 6(b)(iv).
     “ CFC Legislation ” means (i) that legislation contained in Chapter IV of Part XVII of the Income and Corporation Taxes Act 1988 of the United Kingdom (or any comparable successor or additional legislation), together with all related statutory instruments, orders, judgments (including of the European Court of Justice or the Courts of England and Wales), enactments, laws, directives and Taxing Authority practice relating to the same, and (ii) any provision of any taxation statute in the Netherlands of similar effect to the United Kingdom Legislation referred to in clause (i) above, together with all Taxing Authority practice relating to the same.
     “ CFC Questions ” means any information required by the Cadbury Group in order to comply with any obligations under any CFC Legislation.
     “ Confectionery Assets ” shall mean those assets, as set forth on Schedule C, relating to (or comprising part of) the confectionery business that are sold, distributed or otherwise transferred by the DPS Group to the Cadbury Group prior to, and in contemplation of, the Demerger, including any equity interests in the Confectionery Entities.
     “ Confectionery Entities ” shall mean those entities, as set forth on Schedule D, relating to (or comprising part of) the confectionery business the equity of which is sold, distributed or otherwise transferred (in whole or in part) by the DPS Group to the Cadbury Group and that become wholly-owned by the Cadbury Group prior to, and in contemplation of, the Demerger.
     “ Confectionery Transactions ” shall mean (i) the sales, distributions or other transfers, as set forth on Schedule E, which include sales, distributions or other transfers of the Confectionery Assets or of the Confectionery Entities by a member of the DPS Group to the Cadbury Group prior to, and in contemplation of, the Demerger, (ii) the Cross-Border Financing Transactions, and (iii) the transfer of assets of CBCI to CDMI.

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     “ Cross-Border Financing Transactions ” shall mean the transactions entered into prior to the Demerger Date, involving an amount loaned or other financing (including a preferred equity investment), directly or indirectly, by a borrower (or issuer of the debt or preferred equity investment) which is a member of the CSAB Group or a Subsidiary of the CSAB Group and the lending party (or the holder of the debt or preferred equity investment) is a Subsidiary of Cadbury other than a member of the CSAB Group or a Subsidiary of the CSAB Group. For the avoidance of doubt, Cross-Border Financing Transactions shall not include any amount loaned or other financing (including a preferred equity investment), directly or indirectly, between the members of the CSAB Group or a U.S. Subsidiary thereof.
     “ CSAB Group ” shall mean the affiliated group, within the meaning of Code section 1504(a), the common parent of which was either CSAI or Cadbury Schweppes Holdings (US) (“CSH”) and the common parent of which upon the Demerger will be DPS, treating for such purposes, the stock of CSAI, CSH and DPS as widely held by the public.
     “ Damages ” shall mean any damage, liability, loss, cost, charge, assessments, settlements, judgments or expense (including, without limitation, reasonable expenses of investigation and attorneys’ and accountants’ fees and expenses).
     “ Demerger Date ” shall mean May 7, 2008, the date on which the Demerger is effected and the stock of DPS is issued by DPS to Cadbury shareholders.
     “ DPS Group ” shall mean DPS and any Person that is a Subsidiary of DPS immediately after the Demerger Date (for the avoidance of doubt, including the Beverage Entities and any CSAB Group members but excluding the Confectionery Entities), and each Person that becomes a Subsidiary of DPS after the Demerger Date.
     “ DPS Group Taxes ” shall mean any Taxes of the DPS Group (including Taxes for which any member of the DPS Group is primarily liable under applicable Tax law but excluding Taxes for which any such member is secondarily liable under such law) for any Pre-Demerger Period, Straddle Period or Post-Demerger Period. For the avoidance of doubt, DPS Group Taxes shall (a) include any Taxes (i) shown as due on the DPS Transition Returns and Tax Returns of the DPS Group described in Section 3(b)(i) (excluding Income Taxes imposed in respect of the Confectionery Transactions in excess of $22,194,000 and excluding Taxes of the Confectionery Entities), (ii) imposed in respect of the Confectionery Assets while owned by the DPS Group prior to the sale, distribution or other transfer of the Confectionery Assets to the Cadbury Group, and (iii) of the Beverage Entities for all taxable periods; and (b) exclude (i) Income Taxes imposed in respect of the Confectionery Transactions in excess of $22,194,000, (ii) Taxes of the Confectionery Entities for all taxable periods, and (iii) Taxes of a member of the Cadbury Group for which a member of the DPS Group is responsible for (A) under Treasury Regulation 1.1502-6 (or similar provision of U.S. state, local or Non-U.S. Tax law) solely as a result of such DPS Group member being or having been included in a Tax Return with any member of the Cadbury Group or otherwise joining in a fiscal unity or other combined group or (B) as a consequence of the failure of any member of the Cadbury Group to discharge a liability for Tax for which a member of the Cadbury Group is primarily liable under applicable Tax law or (C) because such member of the DPS Group acted as a representative of a group of companies to the extent that

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the DPS Group Tax liability would have been a liability of a member of the Cadbury Group if such member of the DPS Group did not act as a representative.
     “ DPS Transaction Costs ” shall have the meaning set forth in the Separation Agreement but excluding rating agency costs set forth on Schedule 1.01(o) of the Separation Agreement.
     “ Final Determination ” shall mean any final determination of a liability in respect of Taxes that, under applicable Tax law, is no longer subject to further appeal, review or modification through proceedings or otherwise (including the expiration of the statute of limitations or a period for the filing of claims for refunds, amended Tax Returns or appeals from adverse determinations).
     “ Income Taxes ” shall mean Taxes based upon, measured by, or calculated with respect to (i) net income or net profits (including any capital gains, minimum taxes and any Taxes on items of Tax preference, but not including sales, use, real or personal property transfer, value added or other similar Taxes), (ii) multiple bases (including corporate franchise, doing business or occupation Taxes imposed by a jurisdiction in lieu of Taxes on net income or net profits) if one or more of the bases upon which such Tax may be imposed on, measured by, or calculated with respect to, is net income or net profits and (iii) withholding Taxes imposed under Code section 1442, 1445 or 1446 (or comparable provisions of non-U.S. Tax law) on any payments or distributions (except for wages or other remuneration for services).
     “ Income Tax Return ” shall mean Tax Returns that relate to Income Taxes.
     “ Incremental DPS Group Taxes ” shall mean (i) the amount of Income Taxes in respect of the Confectionery Transactions that are imposed on the DPS Group, determined in accordance with the Tax Return preparation provisions set forth in Section 3 and computed as if the relevant taxable year of the DPS Group closed on the Demerger Date, in excess of $22,194,000, plus (ii) the amount of Income Taxes in respect of the Confectionery Transactions in excess of the sum of (A) the amount computed pursuant to clause (i), and (B) $22,194,000, to the extent that, in accordance with Section 3(d)(ii), there is a confirmed material change in applicable Tax law after the Demerger Date but prior to the due date for timely filing of the applicable Tax Return of the DPS Group (including valid extensions obtained), and, as a result, the Income Tax reporting position for such Confectionery Transaction that was based on the opinions (or substantially equivalent written advice) described in Section 3(d)(ii) is no longer applicable or otherwise not followed or adopted, plus (iii) without duplication in respect of clauses (i) and (ii), the amount of Income Taxes, as determined pursuant to a Final Determination, in respect of the Confectionery Transactions imposed on the DPS Group (or any member thereof) in excess of the sum of (A) the amount of Income Taxes for such Confectionery Transactions that were computed pursuant to clauses (i) and (ii), and (B) $22,194,000.
     “ Person ” shall mean any natural person, corporation, limited liability company, trust, estate, joint venture, association, company, partnership, governmental authority or other entity.
     “ Post-Demerger Period ” shall mean any taxable period beginning after the Demerger Date.

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     “ Pre-Demerger Period ” shall mean any taxable period ending on or before the Demerger Date.
     “ Specified Entity ” shall mean each of the entities as set forth on Schedule F.
     “ Straddle Period ” shall mean any taxable period that begins on or before and ends after the Demerger Date. For avoidance of doubt, the term Straddle Period shall include the Tax year of the affiliated group within the meaning of Code section 1504(a) that includes CSAI and the ATOB DPS Entity as members that begins in January 2008 and ends in December 2008 or otherwise after the Demerger Date.
     “ Subsidiary ” shall have the meaning set forth in the Separation Agreement.
     “ Tax ” or “ Taxes ” shall mean any and all federal, state, local, foreign duties or other taxes imposed by a Taxing Authority in the United States, United Kingdom, Canada, the Netherlands or Mexico or any other jurisdiction, including any net income, gross income, gross receipts, alternative or add-on minimum, sales, use, business and occupation, value-added, trade, goods and services, ad valorem, franchise, profits, license, business royalty, withholding, payroll, employment, capital, excise, transfer, recording, severance, stamp, occupation, premium, property, asset, real estate acquisition, environmental or other tax or duty, together with any interest, penalty, addition to tax or other additional amount imposed by a Taxing Authority.
     “ Taxing Authority ” shall mean any governmental authority (domestic or foreign), including, without limitation, any state, municipality, political subdivision or governmental agency, responsible for the imposition of any Tax.
     “ Tax Benefit Attribute ” shall mean any net operating loss (including carrybacks and carryforwards), credit, refund, deduction, depreciation, amortization, allowance or other item that can be used to reduce or offset a Tax liability.
     “ Tax Proceeding ” shall mean any Tax audit, examination, dispute or proceeding (whether administrative, judicial or contractual).
     “ Tax Return ” shall mean any Tax return, statement, report, form, election, claim or surrender (including estimated Tax returns and reports, extension requests and forms, and information returns and reports) required to be filed with any Taxing Authority.
     “ Transition Services Agreement ” shall mean the agreement entered into by Cadbury and DPS, dated as of May 1, 2008, in respect of certain services (including Tax, accounting and legal services) to be provided by the Cadbury Group to the DPS Group for an interim period beginning after the Demerger Date.
     “ Underpayment Rate ” shall mean the underpayment rate as set forth in Code section 6621.
          (b) Any term used in this Agreement which is not defined in this Agreement shall, to the extent the context requires, have the meaning assigned to it in the Code or the applicable

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Treasury regulations thereunder (as interpreted in administrative pronouncements and judicial decisions), in comparable provisions of applicable Tax law or in the Ruling or Separation Agreement. In this Agreement, except to the extent otherwise provided or that the context otherwise requires: (i) when a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated; (ii) the table of contents and headings for this Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this Agreement; (iii) whenever the words “include,” “includes” or “including” are used in this Agreement, they are deemed to be followed by the words “without limitation”; (iv) the words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement; and (v) the definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms.
      2. Sole Tax Sharing Agreement . Any and all existing Tax sharing agreements or arrangements, written or unwritten, between any member of the Cadbury Group and any member of the DPS Group shall be or shall have been terminated upon the consummation of the Demerger. Upon the consummation of the Demerger, neither the members of the DPS Group nor the members of the Cadbury Group shall have any further rights or liabilities with respect to such Tax agreements or arrangements, and this Agreement shall be the sole Tax sharing agreement and arrangement between the members of the DPS Group and the members of the Cadbury Group. CS and DPS shall act in good faith in the performance of this Agreement.
      3. Tax Return Filing .
          (a) (i) For Pre-Demerger Periods, to the extent the Income Tax Returns have not been filed on or before the Demerger Date, and, to the extent provided in this Section 3(a)(i), for Straddle Periods, CS shall prepare or cause to be prepared and shall deliver to DPS for timely filing and DPS shall timely file (or review if a member of the Cadbury Group is permitted under applicable Tax law to file the relevant Income Tax Return) the following Income Tax Returns for the DPS Group and its members: (A) U.S. federal, state and local Income Tax Returns (separate and consolidated, combined, unitary or other group Income Tax Returns) other than for Straddle Periods, and (B) all other non-U.S. Income Tax Returns for the DPS Group (including the Netherlands) except for Income Tax Returns of any subsidiary organized in Mexico of Bebidas Americas Investments B.V., a Dutch entity (“BAI BV”) and Canadian federal and provincial Income Tax Returns for CDMI (collectively, those Income Tax Returns prepared by CS are referred to as “DPS Transition Returns”). For the avoidance of doubt, the preparation of any consolidated, combined, unitary or other group Tax Return of the Cadbury Group that includes or reflects a Beverage Entity as a member shall be governed by Section 3(c). Any and all out-of-pocket expenses incurred in preparing a DPS Transition Return for a Pre-Demerger Period shall be for the account of CS. Any and all out-of-pocket expenses incurred by CS in preparing a DPS Transition Return for a Straddle Period shall be for the account of DPS and DPS shall reimburse CS within 45 days of DPS’ receipt of a written invoice from CS setting forth the amount of such expenses.

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               (ii) CS shall provide DPS with a copy of any completed DPS Transition Return at least 30 days prior to the due date (including any extensions) for the filing of such DPS Transition Return, in the case of a Pre-Demerger Period, and at least 45 days prior to the due date (including any extensions) for the filing of such DPS Transition Return, in the case of a Straddle Period. DPS shall have the right to review, comment on and propose amending any items set forth on such DPS Transition Return except to the extent relating to a Confectionery Entity or Confectionery Transaction or other transaction or item that is the subject of a previously issued opinion (or substantially equivalent written advice) described in Section 3(d); provided that DPS will notify CS in writing of any proposed changes to such DPS Transition Return at least 20 days prior to the due date of such DPS Transition Return. In the event that, subject to Section 3(d), DPS disputes the treatment by CS on a DPS Transition Return of a Confectionery Entity or Confectionery Transaction that is not the subject of a previously issued opinion (or substantially equivalent written advice) described in Section 3(d) or CS disputes any other proposed change by DPS to any such DPS Transition Return, CS or DPS, as the case may be, will provide the disputing party with an opinion (or substantially equivalent written advice) of a law firm or accounting firm of internationally recognized standing and expert in the Tax matters at issue, reasonably acceptable to the disputing party, supporting the treatment by CS or the proposed change by DPS, as the case may be, on no less than a “more likely than not” basis. The fees and expenses of such law firm or accounting firm, as well as the fees and expenses of the accounting firm for revising the applicable DPS Transition Return(s) to reflect such proposed change, shall be borne by the disputing party. For the avoidance of doubt, no changes to a DPS Transition Return may be made or proposed by DPS with respect to any Confectionery Entity or any Confectionery Transaction so long as DPS has been provided with an opinion (or substantially equivalent written advice) of a law firm or accounting firm pursuant to this Section 3(a) or Section 3(d).
               (iii) DPS shall prepare or cause the relevant members of the DPS Group to prepare, in a manner consistent with the past practices of the relevant members of the DPS Group, Tax work paper preparation packages necessary to enable CS to prepare the DPS Transition Returns described in this Section 3(a) and such packages shall be delivered to CS (i) at least 90 days prior to the due date of DPS Transition Returns for Pre-Demerger Periods, (ii) no later than 10 days prior to the due date for estimated and other periodic Income Tax Returns filed during or within 30 days after the Straddle Periods, and (iii) within 90 days of the end of the relevant taxable year of the relevant members of the DPS Group with respect to other DPS Transition Returns for Straddle Periods.
               (iv) DPS shall pay, or cause to be paid, and shall be responsible for, any and all Taxes shown as due or otherwise reported on, any DPS Transition Return; provided that CS shall pay, or cause to be paid, and shall be responsible for (A) Incremental DPS Group Taxes, and (B) Taxes imposed on a Confectionery Entity, in each case, shown as due or otherwise reported on any DPS Transition Return; provided further that such Confectionery Entity is not a pass-through or other fiscally transparent entity for Tax purposes.
          (b) (i) DPS shall, at its expense, prepare or cause to be prepared and file or cause to be filed all Tax Returns of the DPS Group (or any member thereof) for Pre-Demerger and Straddle Periods that are not filed as of the Demerger Date and that are not described in Section 3(a), including, for the avoidance of doubt, any (A) U.S. federal, state and local Income Tax

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Returns (separate and consolidated, combined, unitary or other group Income Tax Returns) for Straddle Periods, (B) Canadian federal and provincial Income Tax Returns for CDMI, and (C) Income Tax Returns of any subsidiary of BAI BV; provided that in the case of Income Tax Returns described in clause (A) of this Section 3(b)(i), DPS shall engage and employ the same accounting firm to prepare such Tax Returns that CS uses for the preparation of the DPS Transition Returns. With respect to a Confectionery Entity or a Confectionery Transaction or other transaction or item that is the subject of a previously issued opinion (or substantially equivalent written advice) described in Section 3(d), or to the extent that the treatment of a Confectionery Entity or a Confectionery Transaction or other transaction or item was determined pursuant to the dispute resolution procedures involving obtaining an opinion (or substantially equivalent written advice) of a law firm or accounting firm of internationally recognized standing and expert in the Tax matters at issue set forth in Section 3(a), the DPS Group shall prepare the Tax Returns described in this Section 3(b) consistently with the conclusions set forth in such opinions (or substantially equivalent written advice).
               (ii) DPS shall provide CS with a copy of any completed Tax Return described in this Section 3(b) for CS’ review, comment and approval at least 30 days prior to the due date (including any extensions) for the filing of such Tax Return, in the case of a Pre-Demerger Period, and at least 45 days prior to the due date (including any extensions) for the filing of such Tax Return, in the case of a Straddle Period. DPS shall reflect on such Tax Return any comments provided by CS (including in respect of the treatment of any Confectionery Entity or Confectionery Transaction) within 10 days following CS’ receipt of the Tax Return; provided that, except to the extent relating to a Confectionery Entity or Confectionery Transaction or other transaction or item that is the subject of a previously issued opinion (or substantially equivalent written advice) described in Section 3(a) or Section 3(d), if DPS disputes any comments provided by CS, the dispute resolution procedures involving obtaining an opinion (or substantially equivalent written advice) set forth in Section 3(a) shall apply; provided, further, that, for the avoidance of doubt, DPS shall not make any changes to a Tax Return described in this Section 3(b) with respect to any Confectionery Entity or Confectionery Transaction or other transaction or item so long as DPS has been provided with an opinion (or substantially equivalent written advice) of a law firm or accounting firm pursuant to Section 3(a) or Section 3(d) unless there has been a material change in applicable Tax law as described in Section 3(d).
               (iii) DPS shall pay, or cause to be paid, and shall be responsible for, any and all Taxes due or required to be paid with respect to, or required to be reported on, any Tax Returns described in this Section 3(b); provided that CS shall pay, or cause to be paid, and shall be responsible for (A) Incremental DPS Group Taxes, and (B) Taxes imposed on a Confectionery Entity, in each case, shown as due or otherwise reported on any Tax Returns described in this Section 3(b); provided further that such Confectionery Entity is not a pass-through or other fiscally transparent entity for Tax purposes.
               (iv) The parties acknowledge and agree that to the extent that the aggregate Income Taxes of the DPS Group in respect of the Confectionery Transactions shown as due on the DPS Transition Returns and the Tax Returns described in this Section 3(b), as prepared in accordance with this Section 3 (including Section 3(d)(ii)) and originally filed, is less than $22 million, DPS shall pay to CS an amount equal to such difference within 5 days of the

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latest due date for timely filing of the Tax Returns of the DPS Group described in this Section 3(b)(iv) (including valid extensions obtained).
          (c) CS shall prepare or cause to be prepared and file or cause to be filed any Tax Returns for the Cadbury Group that are filed after the Demerger Date, including Tax Returns for the Confectionery Entities other than Tax Returns that include the Confectionery Entities and that are prepared pursuant to Section 3(a) or 3(b). CS shall pay, or cause to be paid, and shall be responsible for, any Taxes shown as due or otherwise reported on, any Tax Returns described in this Section 3(c); provided that DPS shall pay, or cause to be paid, and shall be responsible for, Taxes imposed on a Beverage Entity shown as due or otherwise reported on any Tax Returns described in this Section 3(c); provided further that such Beverage Entity is not a pass-through or other fiscally transparent entity for Tax purposes.
          (d) (i) Tax Returns referred to in this Section 3 shall be prepared in a manner consistent with past Tax accounting practices used with respect to prior Tax Returns (taking into account any changes in applicable Tax law), in each case, as reasonably determined by the party preparing the Tax Return. All Tax Returns and Taxes referred to in this Section 3 shall be timely filed with and timely paid to the applicable Taxing Authority, and
               (ii) Notwithstanding anything to the contrary set forth in this agreement, the parties acknowledge and agree that, with respect to Confectionery Transactions and other transactions and items supported by the issuance to CS and/or one of its Subsidiaries by a law firm or accounting firm prior to the Demerger Date, of a no less than “more likely than not” opinion (or substantially equivalent written advice) supporting the Tax treatment thereof, the DPS Group will follow, adopt and fully support Income Tax reporting positions that are consistent with the conclusions in those opinions (or substantially equivalent written advice), in each case absent a material change in applicable Tax law after the Demerger Date, which change invalidates one or more of such conclusions and which change is confirmed in writing by independent, nationally recognized Tax counsel selected by CS and reasonably acceptable to DPS. Without limiting the foregoing, each member of the DPS Group will file (and support the filing by the Cadbury Group of) Tax Returns consistently with such positions and opinions (or substantially equivalent written advice), which Tax Returns do not include either (x) a Form 8275 (or the substantial equivalent form for state, local or foreign purposes) with respect to any such Confectionery Transaction or other transaction or item or (y) a Form 8886 (or the substantial equivalent form for state, local or foreign purposes) with respect to any such transaction or item. The DPS Group will promptly notify CS in writing of any legislation or other item that may represent such a material change in applicable Tax law. For the avoidance of doubt, the DPS Group acknowledges and agrees that, absent such a material change in applicable Tax law that is confirmed pursuant to this Section 3(d)(ii), with respect to any Confectionery Transaction or other transaction or item supported by the issuance to CS of a no less than “more likely than not” opinion (or substantially equivalent written advice), the DPS Group shall not procure the services of any law firm or accounting firm to issue an opinion (or substantially equivalent written advice) in respect of such Confectionery Transaction or other transaction or item that is inconsistent with the conclusions set forth in such opinion (or substantially equivalent written advice) or otherwise challenge the treatment of such Confectionery Transaction or other transaction or item.

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          (e) The filing of any Tax Return not otherwise expressly dealt with in this Section 3 shall be filed by the Person who is responsible for filing such Tax Return under applicable Tax law and the payment of any Taxes shown as due or otherwise required to be reported on such Tax Returns shall be the responsibility of the Person who is primarily liable for such Taxes under applicable Tax law. In the case of a consolidated, combined, unitary or other group Tax Return, the member or other entity whose activity or operations generate the Taxes for which payment is due (computed on a stand alone basis) shall be treated as the Person who is primarily liable for such Taxes under applicable Tax Law for purposes of this Agreement.
      4. Carrybacks; Amended Tax Returns; Refunds; Transaction Costs; CDMI.
          (a) Notwithstanding anything to the contrary contained in this Agreement, (i) to the extent permitted under applicable Tax law, each member of the DPS Group shall take all actions required to waive any carryback period with respect to any Tax Benefit Attribute that arises or otherwise becomes available after the Demerger, and (ii) no member of the DPS Group shall amend any Income Tax Return for a Pre-Demerger Period or a Straddle Period (including, for the avoidance of doubt, for purposes of carrying back any Tax Benefit Attribute from a Post-Demerger Period to a Pre-Demerger Period or Straddle Period) without the prior written consent of CS (which consent shall not be unreasonably withheld). In the event that (A) CS consents to amending an Income Tax Return of the DPS Group, (B) a member of the DPS Group is not permitted under applicable Tax law to waive a carryback period in respect of a Tax Benefit Attribute and is required to carry back the Tax Benefit Attribute to a Pre-Demerger Period or Straddle Period, or (C) in the case of a Straddle Period, a Tax Benefit Attribute generated during the portion of the Straddle Period beginning after the Demerger Date reduces Taxes that were imposed during the portion of the Straddle Period ending on the Demerger Date (for this purpose, treating the two portions of the Straddle Period as separate taxable years), CS shall be entitled to any refund, credit or similar benefit (including by way of being allowable as an offset and any interest with respect thereto) that results from the actions referred to in clauses (A), (B) or (C) to the extent that any incremental Taxes or other costs are incurred by any member of the Cadbury Group and the excess, if any, shall be the property of the DPS Group; provided, however, that DPS will indemnify the Cadbury Group to the extent that the incremental Taxes or other costs incurred by the Cadbury Group pursuant to the CFC Legislation or otherwise exceeds the amount of the refund, credit or similar benefit.
          (b) Except as provided in Section 4(a), any refund of DPS Group Taxes (including by way of being allowable as an offset and any interest with respect thereto) shall be the property of the DPS Group and, if received by a member of the Cadbury Group, such refund shall promptly be paid over to DPS. Any refund of Cadbury Group Taxes and Incremental DPS Group Taxes (including by way of being allowable as an offset and any interest with respect thereto) shall be the property of the Cadbury Group and, if received by a member of the DPS Group, such refund shall promptly be paid over to CS. In the event of a subsequent disallowance by a Tax Authority of any refund that has been paid over to CS or DPS pursuant to this Section 4(b), CS or DPS, as the case may be, shall return such payment together with any applicable interest.
          (c) (i) Notwithstanding anything contained in Section 3 to the contrary, no later

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than 45 days following the Demerger Date, CS shall consult with DPS in respect of the Tax treatment by any member of the DPS Group of DPS Transaction Costs to be reflected on the IRS Form 1120 for CSAI and its U.S. Subsidiaries for the taxable year ending on December 31, 2007, and no later than 90 days prior to the timely filing of the IRS Form 1120 for the DPS Group for the taxable year that includes the Demerger Date and each taxable year thereafter, DPS shall consult with CS in respect of the Tax treatment by any member of the DPS Group of DPS Transaction Costs to be reflected in such IRS Form 1120 and subsequent IRS Form 1120s of the DPS Group. In the event that DPS disputes the proposed Tax treatment by CS of DPS Transaction Costs, CS, at the joint expense of DPS and CS, will provide DPS with an opinion (or substantially equivalent written advice) of a law firm or accounting firm of internationally recognized standing and expert in the Tax matters at issue, reasonably acceptable to DPS, supporting the Tax treatment of such DPS Transaction Costs on no less than a should basis. In respect of the taxable year ending on December 31, 2007, and each taxable year thereafter, DPS shall, in accordance with Section 4(c)(ii), make a payment to CS in an amount, if any, equal to 50% of the actual reduction in Taxes of, in the case of the taxable year ending on December 31, 2007, CSAI and its U.S. Subsidiaries and, in the case of the taxable year that includes the Demerger Date and each taxable year thereafter, the DPS Group (or any member thereof), in each case, determined on a with and without basis, for such taxable year resulting from the use of any Tax Benefit Attributes related to one or more DPS Transaction Costs.
               (ii) Within 10 days of the timely filing of the IRS Form 1120 for CSAI and its U.S. Subsidiaries for the taxable year that ends on December 31, 2007, and within 10 days of the timely filing of the IRS Form 1120 for the DPS Group (or corresponding successor Tax Return) for the taxable year that includes the Demerger Date and each taxable year thereafter, DPS shall (A) provide CS with an executed officer’s certificate setting forth in reasonable detail the amount of any actual reduction in Taxes described in Section 4(c)(i) for such taxable year, and (B) pay to CS the amount of such reduction in Taxes; provided that the DPS Group shall provide CS, in accordance with Section 8, access to any documents or other information that CS reasonably determines is necessary to confirm the statements set forth in the officer’s certificate and the amount of such payment. Any amount paid by DPS to CS pursuant to this Section 4(c)(ii) shall be adjusted to reflect any Final Determination with respect to the Tax treatment of DPS Transaction Costs and payments between CS and DPS to reflect any such adjustment shall be made as necessary within 10 days of such determination.
          (d) (i) If, on or prior to June 30, 2009, CS (or one or more of its Subsidiaries) notifies DPS (or one or more of its Subsidiaries) that a C Election will be made in respect of eligible capital property, DPS agrees to pay CS an amount equal to C$7,000,000 per year (each, an “Initial Tax Benefit Amount”) in respect of the calendar year that includes the Demerger Date and each of the next 9 succeeding calendar years, and an amount equal to C$20,250,000 (the “Final Tax Benefit Amount”) in respect of the 10th succeeding calendar year (such 10th succeeding calendar year, the “Final Year”) following the calendar year that includes the Demerger Date (such calendar years, in the aggregate, the “Applicable Period”) in accordance with the provisions of this Section 4(d). DPS and CS acknowledge and agree that the Initial Tax Benefit Amounts and the Final Tax Benefit Amount are based on a C Election that results in a cumulative eligible capital amount of C$420,000,000; provided that, to the extent that the actual amount of the resulting cumulative eligible capital amount is greater than or less than

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C$420,000,000, the Initial Tax Benefit Amounts and the Final Tax Benefit Amount shall be proportionately adjusted (e.g., if the actual amount of the cumulative eligible capital amount is C$210,000,000, the Initial Tax Benefit Amounts and the Final Tax Benefit Amount would each be reduced by 50%); provided further that, to the extent that, pursuant to a Final Determination, the amount of the cumulative eligible capital amount is determined to be greater than or less than C$420,000,000, the Initial Tax Benefit Amounts and the Final Tax Benefit Amount shall be proportionately adjusted in a similar manner. Subject to this Section 4(d), an amount equal to each Initial Tax Benefit Amount, in the case of a calendar year in the Applicable Period (other than the Final Year), and, in the case of the Final Year, the Final Tax Benefit Amount, shall be paid by DPS to CS (or a Subsidiary of CS pursuant to Section 4(e)) within 30 days of the due date for the timely filing of the Canadian federal Income Tax Return for CDMI (or its successors) or, if no longer CDMI, that of the principal Subsidiary of DPS organized or doing business in Canada, for the taxable year that ends on the close of or in such calendar year (the “Canadian Tax Return”) but in no event shall the payment by DPS to CS of each Initial Tax Benefit Amount and, in the case of the Final Year, the Final Tax Benefit Amount, be made later than September 1st of the each succeeding calendar year beginning in 2009.
               (ii) Notwithstanding Section 4(d)(i), the full amount of the Initial Tax Benefit Amount in respect of a calendar year in the Applicable Period (other than the Final Year) and, in the case of the Final Year, the Final Tax Benefit Amount shall be paid by DPS only if the gross revenues (computed without taking into account discounts) of CDMI (or its successors) and any other Subsidiaries of DPS organized or doing business in Canada (including their branches) for such calendar year or Final Year, as applicable, determined in accordance with Canadian generally accepted accounting principles (the “Actual Gross Revenues Amount”) equals or exceeds C$200,000,000 (the “Threshold Gross Revenues Amount”); provided that the Actual Gross Revenues Amount for the Final Year shall be increased by an amount equal to the Excess Actual Gross Revenues Amount (as defined below); provided, further, that if CDMI (or its successors) or one or more such Subsidiaries of DPS (including their branches) sells or otherwise transfers a substantial portion of its assets to any Person (other than another Subsidiary of the DPS Group), CS and DPS shall negotiate in good faith to proportionately adjust the Threshold Gross Receipts Amount for the calendar year in which the sale or transfer occurs and subsequent calendar years to reflect such sale or transfer. The “Excess Actual Gross Revenues Amount” shall be an aggregate amount equal to the total amount, if any, by which the Actual Gross Revenues Amount for each calendar year during the Applicable Period (other than the Final Year) exceeds C$200,000,000, less any Actual Gross Revenues Amount in excess of C$200,000,000 for a calendar year that was used in calendar years prior to the Final Year to increase the amount payable to CS pursuant to Section 4(d)(iii) in respect of any carryforwards of Initial Tax Benefit Amounts.
               (iii) In respect of each of the 11 calendar years included in the Applicable Period, DPS shall, within 10 days of the timely filing of the Canadian Tax Return for the taxable year that ends on the close of or in each such calendar year but in no event later than August 1st of the next succeeding calendar year, provide CS with an executed officer’s certificate (A) stating the Actual Gross Revenues Amount and (B) setting forth in reasonable detail the determination that the Actual Gross Revenues Amount is either greater than or less than the Threshold Gross Receipts Amount; provided that, DPS shall provide CS, in accordance with

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Section 8, access to any documents or other information that CS reasonably determines is necessary to confirm the statements set forth in the officer’s certificate. If the Actual Gross Revenues Amount is less than the Threshold Gross Revenues Amount for a calendar year in the Applicable Period other than the Final Year, (A) the amount of the Initial Tax Benefit Amount payable by DPS for such calendar year shall be proportionately reduced (e.g., if the Actual Gross Revenues Amount for a calendar year is C$100,000,000, the amount of the Initial Tax Benefit Amount currently required to be paid by DPS to CS in respect of such calendar year would be reduced by 50%), and (B) the portion of the Initial Tax Benefit Amount not required to currently be paid shall be carried forwarded and added to the Initial Tax Benefit Amount or the Final Tax Benefit Amount, as applicable, that is due in respect of the next succeeding calendar year in the Applicable Period and shall be payable in accordance with this Section 4(d)(iii). Any remaining amount of an Initial Tax Benefit Amount not paid pursuant to the limitation described in the preceding sentence shall be carried forward and shall be paid in respect of the first succeeding calendar year in the Applicable Period in which the Actual Gross Revenues Amount is more than C$200,000,000 but, except with respect to the Final Year, only to the extent of the excess Initial Tax Benefit Amount for such calendar year determined on a proportionate basis to the Actual Gross Revenues Amount (e.g., if the Actual Gross Revenues Amount is C$400,000,000 for a calendar year and the Initial Tax Benefit Amount (not including carryforwards) is C$7,000,000, then up to C$7,000,000 of carried forward Initial Tax Benefit Amounts shall be due and payable along with the amount of the Initial Tax Benefit Amount for such calendar year). With respect to the Final Year, (A) if the Actual Gross Revenues Amount plus any Excess Actual Gross Revenues Amount exceed the Threshold Gross Revenues Amount, the Final Tax Benefit Amount and any carried forward Initial Tax Benefit Amounts shall be paid in full by DPS to CS, and (B) if the Actual Gross Revenues Amount plus any Excess Actual Gross Revenues Amount is less than the Threshold Gross Revenues Amount the amount of the aggregate of the Final Tax Benefit Amount and any carried forward Initial Tax Benefit Amounts that is required to be paid in full by DPS to CS shall be reduced on a proportionate basis and the amount of the reduction shall be ratably allocated over the next 5 succeeding calendar years and shall be computed on a present value basis using a discount rate equal to the rate on 5-year U.S. Treasury securities (in effect at the time of the computation) plus 4% and the aggregate amount so computed shall be paid by DPS to CS on the payment date for the Final Year (as set forth in Section 4(d)(i)) (e.g., if, in the Final Year, the Actual Gross Revenues Amount plus any Excess Actual Gross Revenues Amount is C$100,000,000 and the total amount of the Final Tax Benefit Amount and the carried forward Initial Tax Benefit Amounts are C$40,000,000, then C$20,000,000 is required to be paid in full and the remaining C$20,000,000 would be ratably allocated over the next five years and subject to the net present value computation described above and such computed amount, together with the C$20,000,000, would be paid by DPS and CS in respect of the Final Year).
               (iv) Notwithstanding Sections 4(d)(i), (ii) and (iii), to the extent that (A) a substantial portion of the assets of CDMI (or its successors) or one or more other Subsidiaries of DPS organized or doing business in Canada (including their branches) is sold or otherwise transferred to any Person (other than another Subsidiary of the DPS Group) during the Applicable Period and the proceeds of such sale or transfer (or a portion thereof) are applied to reduce the cumulative eligible capital account that is created by the C Election described in this Section 4(d), an amount equal to the reduction in such capital account multiplied by the

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applicable Canadian tax rate in effect for the calendar year in which the sale or transfer occurs shall be paid by DPS to CS within 30 days of the closing of the sale or transfer and the parties shall negotiate in good faith to determine the appropriate reductions in the Initial Tax Benefit Amount for such calendar year and subsequent calendar years and the Final Tax Benefit Amount, or (B) the stock, or substantially all of the assets, of CDMI (or its successors) or one or more other Subsidiaries of DPS organized or doing business in Canada (including their branches) is sold or otherwise transferred to any Person (other than another Subsidiary of the DPS Group) during the Applicable Period, the remaining Initial Tax Benefit Amounts and the Final Tax Benefit Amount shall be computed on a present value basis using a discount rate equal to the rate on 5-year U.S. Treasury securities (in effect at the time of the computation) plus 4% and the aggregate computed amount shall be paid by DPS to CS within 30 days of the closing of the sale or transfer.
               (v) CS and DPS acknowledge and agree that on or before each of the 5th and 7th anniversaries of the Demerger Date, CS and DPS shall negotiate in good faith to determine a payment by DPS to CS that terminates any remaining Initial Tax Benefit Amounts and the Final Tax Benefit Amount that would be payable by DPS pursuant to and subject to the limitations of this Section 4(d); provided that, for the avoidance of doubt, if an agreement is not reached by CS and DPS, the provisions of this Section 4(d) shall continue to apply in accordance with their terms.
               (vi) DPS acknowledges and agrees that the DPS Group (and any member thereof as required by applicable Tax law) shall make a timely election pursuant to Code section 338(g) in respect of the acquisition of stock of CDMI from the Cadbury Group and shall timely file all corresponding IRS Forms required to be filed with the IRS in connection with the Code section 338(g) election and, except pursuant to a Final Determination, the DPS Group shall not take any action inconsistent with the Code section 338(g) election and the step-up in Tax basis of the assets of CDMI in respect of any Tax Return, audit or other proceeding or otherwise. For the avoidance of doubt, the treatment and reporting of the Code section 338(g) election in respect of CDMI on the IRS Form 1120 for the DPS Group for the taxable year that includes the Demerger Date shall be governed by this Section 4(d)(vi) and Section 3(b)(ii).
               (vii) In the event that, pursuant to a Final Determination, it is determined that CDMI was not entitled, pursuant to the Code section 338(g) election described in Section 4(d)(vi) or otherwise, to step-up the Tax basis of its assets to their respective values at the time of their acquisition by CDMI for U.S. federal income tax purposes in connection with the transfer of such assets from CBCI to CDMI and/or the various transactions pursuant to which the stock of CDMI was sold to the DPS Group prior to, and in connection with the Demerger, CS shall (i) repay to DPS the actual amounts of any Initial Tax Benefit Amounts or Final Tax Benefit Amount previously paid to CS pursuant to Section 4(d) and, for the avoidance of doubt, no further Initial Tax Benefit Amounts or Final Tax Benefit Amount shall be required to be paid by DPS to CS pursuant to this Section 4(d), and (ii) indemnify and hold the DPS Group harmless against any interest and penalties charged by the IRS pursuant to the Final Determination that are attributable to incremental U.S. federal income taxes, if any, that the DPS Group is required to pay in respect of previous distributions from CDMI as a result of recomputing the earnings and profits of CDMI for U.S. federal income tax purposes to reflect the disallowance of the step-up

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adjustment of the Tax basis of the assets of CDMI; provided that, for the avoidance of doubt, CS, pursuant to and in accordance with the provisions of Section 9(b), shall have full control over any Tax Proceeding relating to or involving the Tax basis step-up or adjustment thereto in respect of the assets of CDMI for U.S. federal income tax purposes.
          (e) If requested by CS, DPS agrees to make any payment due under Section 4(c) or 4(d) to a Subsidiary of CS. In the event that a payment from DPS to CS (or one or more of its Subsidiaries) pursuant to Section 4(c) or 4(d) is subject to Tax deductions or withholdings under applicable Tax law or any Taxes are imposed on CS (or one or more of its Subsidiaries) in respect of such payment, DPS shall not be required to increase the payment or otherwise provide a gross-up to CS (or one or more of its Subsidiaries); provided that DPS agrees to cooperate with CS and to use commercially reasonable efforts (to the extent such efforts will not result in materially adverse consequences to the DPS Group (or any member thereof)) to mitigate or avoid any applicable Tax deductions or withholdings or other Taxes imposed.
      5. Representations and Covenants of DPS .
          (a) DPS, on behalf of the DPS Group, represents that as of the date hereof, and covenants that on the Demerger Date, there is no plan or intention by the DPS Group to:
               (i) liquidate DPS or merge or consolidate DPS or the ATOB DPS Entity with any other Person or sell, issue or otherwise dispose of, directly or indirectly, the ATOB DPS Entity or any equity interest, or an instrument convertible into an equity interest, in the ATOB DPS Entity;
               (ii) take any action inconsistent with the written statements and representations furnished to the IRS in connection with the Ruling Request or set forth by the IRS in the Ruling;
               (iii) repurchase stock of DPS in a manner contrary to the requirements of IRS Revenue Procedure 96-30, as modified by IRS Revenue Procedure 2003-48, or in a manner contrary to the representations set forth by the IRS in the Ruling;
               (iv) issue any class of nonvoting stock of DPS; and
               (v) fail to preserve and maintain the separate legal existence, entity classification for Tax purposes and ownership structure of the Specified Entities (other than a Specified Entity that is listed as the predecessor of another Specified Entity on Schedule F), in each case, as in effect on the Demerger Date.
          (b) DPS covenants to CS that, without either (i) the prior written consent of CS, (ii) a supplemental private letter ruling issued by the IRS with respect to the Ruling Request, based upon a request for supplemental private letter ruling filed with the prior written consent of CS, or (iii) an unqualified written opinion of nationally recognized Tax counsel selected by DPS and acceptable to CS in its sole discretion exercised in good faith (in the case of (iii), such opinion shall be satisfactory to CS in its sole discretion exercised in good faith):

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               (i) throughout the twelve-month period following the Demerger Date, neither DPS nor the ATOB DPS Entity will liquidate, merge or consolidate with any other Person, DPS will continue to wholly-own the ATOB DPS Entity and no member of the DPS Group will sell, issue or otherwise dispose of, directly or indirectly, any equity interest, or an instrument convertible into an equity interest, in the ATOB DPS Entity;
               (ii) following the Demerger, the DPS Group will, for a minimum of twelve months, continue the conduct of Active Business;
               (iii) throughout the twelve-month period following the Demerger Date, DPS will not issue any class of nonvoting stock of DPS;
               (iv) DPS will not, nor will it permit any member of the DPS Group to, take any action inconsistent with the written statements and representations furnished to the IRS in connection with the Ruling Request or set forth by the IRS in the Ruling;
               (v) throughout the two-year period following the Demerger Date, DPS will not repurchase stock of DPS in a manner contrary to the requirements of IRS Revenue Procedure 96-30, as modified by IRS Revenue Procedure 2003-48, or in a manner contrary to the representations set forth in the Ruling;
               (vi) on or after the Demerger Date, except as otherwise provided by this Agreement and except for the transactions listed on Schedule G, DPS will not, nor will it permit any member of the DPS Group to (A) make or change any accounting method or amend any Tax Return, or (B) take any Tax position on an Income Tax Return that is outside the ordinary course of business or inconsistent with past practice, in each case, that results in an increased Tax liability or a reduction of Tax Benefit Attributes of the Cadbury Group or any member thereof in respect of any Pre-Demerger Period or Straddle Period including pursuant to the CFC Legislation; and
               (vii) DPS will preserve and maintain the separate legal existence, entity classification for Tax purposes and ownership structure of the Specified Entities (other than a Specified Entity that is listed as the predecessor of another Specified Entity on Schedule F), in each case, as in effect on the Demerger Date, until after the calendar year that includes the second anniversary of the Demerger Date.
          (c) DPS agrees that, regardless of whether CS consents to, or DPS receives a private letter ruling from the IRS or an opinion of Tax counsel with respect to, any action referred to in Section 5(b), CS is to have no liability for any Taxes or Damages (including pursuant to any indemnification obligations under this Agreement) resulting from any such action and DPS agrees to indemnify and hold harmless the Cadbury Group against any such Taxes or Damages including Damages of the Cadbury Group relating to Taxes of shareholders of Cadbury and/or DPS incurred as a result of such actions. DPS shall also bear all reasonable out-of-pocket costs incurred by CS in connection with obtaining any private letter ruling from the IRS or an opinion of Tax counsel or in connection with CS’ determination of whether or not to grant any written consent required under Section 5(b).

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      6. Indemnities .
          (a) Subject to the provisions of this Section 6, CS and each member of the Cadbury Group will jointly and severally indemnify DPS and the members of the DPS Group against, and hold them harmless from and shall pay any:
               (i) Cadbury Group Taxes;
               (ii) Incremental DPS Group Taxes (except for any Incremental DPS Group Taxes that are attributable to actions taken by a member of the DPS Group after the Demerger Date other than actions that CS has expressly consented to in writing or actions taken pursuant to a Final Determination or required by this Agreement);
               (iii) Taxes of a member of the Cadbury Group for which a member of the DPS Group is responsible for (A) under Treasury Regulation 1.1502-6 (or similar provision of U.S. state or local or non-U.S. Tax law) solely as a result of such member of the DPS Group being or having been included in a Tax Return with any member of the Cadbury Group or otherwise joining in a fiscal unity or other combined group, or (B) as a consequence of the failure of any member of the Cadbury Group to discharge a liability for Tax for which a member of the Cadbury Group is primarily liable under applicable Tax law or (C) because a member of the DPS Group acted as a representative of a group of companies to the extent that the DPS Group Tax liability would have been a liability of a member of the Cadbury Group if the relevant member of the DPS Group did not act as representative;
               (iv) Damages resulting from or that are otherwise attributable to a breach by CS or any member of the Cadbury Group of any covenant made by CS in this Agreement; and
               (v) Out-of-pocket legal, accounting or similar expenses resulting from the imposition, assessment or assertion of any Taxes or Damages indemnified against and described in (i), (ii), (iii) or (iv), including those incurred in the contest in good faith in appropriate proceedings relating to the imposition, assessment or assertion of any such Taxes or Damages.
          (b) Subject to the provisions of this Section 6, DPS and each member of the DPS Group will jointly and severally indemnify CS and the members of the Cadbury Group against, and hold them harmless from and shall pay any:
               (i) DPS Group Taxes (other than Incremental DPS Group Taxes);
               (ii) Taxes of a member of the DPS Group for which a member of the Cadbury Group is responsible for (A) under Treasury Regulation 1.1502-6 (or similar provision of U.S. state or local or non-U.S. Tax law) solely as a result of such member of the Cadbury Group being or having been included in a Tax Return with any member of the DPS Group or otherwise joining in a fiscal unity or other combined group, or (B) as a consequence of the failure of any member of the DPS Group to discharge a liability for Tax for which a member of the DPS Group is primarily liable under applicable Tax law or (C) because a member of the Cadbury Group acted as a representative of a group of companies to the extent that the Cadbury

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Group Tax liability would have been a liability of a member of the DPS Group if the relevant member of the Cadbury Group did not act as a representative;
               (iii) Damages resulting from or that are otherwise attributable to a breach by DPS or any member of the DPS Group of any representation set forth in Section 5 or any covenant made by DPS in this Agreement (including Section 5), including Damages of the Cadbury Group relating to Taxes of shareholders of Cadbury and/or DPS incurred as a result of such breach;
               (iv) Taxes of or otherwise imposed on CBCI in respect of transactions or operations in the ordinary course of business for taxable periods (or portions thereof) ending on or prior to December 31, 2007; and
               (v) Out-of-pocket legal, accounting or similar expenses resulting from the imposition, assessment or assertion of any Taxes or Damages indemnified against and described in (i), (ii), (iii) or (iv), including those incurred in the contest in good faith in appropriate proceedings relating to the imposition, assessment or assertion of any such Taxes or Damages.
          (c) (i) For purposes of this Section 6, (A) to the extent that a Confectionery Entity was included in a Tax Return of the DPS Group or a Beverage Entity was included in a Tax Return of the Cadbury Group, as the case may be, the Taxes of the Confectionery Entity or the Beverage Entity shall be computed on a stand-alone basis taking into account as an offset any Taxes (including estimated) paid on account of such Confectionery Entity or Beverage Entity prior to the Demerger Date, and (B) in the case of a Confectionery Entity or Beverage Entity that is a pass-through or other fiscally transparent entity for Tax purposes, the pass-through or other fiscally transparent status of such entity shall be respected so that the Taxes, including Taxes resulting from a Tax adjustment or other change in respect of such entity shall, pursuant to applicable Tax law, be treated as imposed on the members (or other equityholders) of the Confectionery Entity or Beverage Entity and nothing in this Agreement shall be read to require indemnification of such entity on account of such Taxes (including an adjustment to such Taxes) on the grounds that such Taxes (or adjustment) are Taxes of such entity (as opposed to its members).
               (ii) As a supplement to, but without duplication of the rights and obligations provided in Section 6(a), if, pursuant to a Final Determination in respect of a Pre-Demerger Period of Cadbury Adams USA LLC, there is an adjustment in respect of Cadbury Adams USA LLC that results in (A) an increase to DPS Group Taxes, computed on a with and without basis in respect of such adjustment, CS shall pay to DPS an amount equal to such increase in DPS Group Taxes, or (B) a decrease to DPS Group Taxes, computed on a with and without basis in respect of such adjustment, DPS shall pay to CS an amount equal to such decrease in DPS Group Taxes. Any payment required to be made pursuant to this Section 6(c)(ii) shall be made within 10 days of the Final Determination in respect of the adjustment.
               (iii) Notwithstanding Sections 6(a) and 6(b), except as provided in Section 6(c)(ii), neither the DPS Group nor the Cadbury Group shall be required to indemnify the other party against a loss or reduction of a Tax Benefit Attribute arising as a result of an amended Tax Return, audit, agreed determination or other adjustment, claim or decision in respect of a Pre-

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Demerger Period or a Straddle Period. For the avoidance of doubt, the parties acknowledge and agree that the Cadbury Group is not representing or warranting to the amount of any Tax basis in respect of the DPS Group or its members or assets.
          (d) Notwithstanding anything to the contrary contained in this Agreement, the DPS Group or the Cadbury Group, as the case may be, shall not be liable for any Taxes or Damages pursuant to this Section 6 if the Damages and Taxes for which indemnification is being claimed pursuant to this Section 6 do not exceed the amount of $350,000 for (i) a single claim, or (ii) related claims involving one or more jurisdictions and arising out of the same or similar facts.
          (e) The DPS Group and the Cadbury Group shall discharge their respective obligations under Section 6, by paying the relevant amount no later than 5 days after (i) the due date of the applicable estimated or final Tax Return of the Cadbury Group or the DPS Group for a Pre-Demerger Period or Straddle Period, as the case may be, that reports an amount of Tax that is indemnified against under this Agreement, (ii) an agreement between CS and DPS that a payment is due or (iii) a Final Determination in respect of the relevant Tax matter or a final decision in respect of another amount indemnified against; provided that, in the case of a written Tax assessment or other similar written claim from a Taxing Authority that is required to be paid prior to contesting such Tax assessment or claim, payment under this Section 6(e) shall be due no later than 5 days prior to the due date for payment of such Tax assessment. Any indemnification payment for Taxes pursuant to this Agreement shall be made in the currency of the jurisdiction that imposes the Taxes indemnified against. Any indemnification payment made pursuant to this Section 6 will be treated as a contribution to DPS or CSAI, or as a distribution from DPS or CSAI to CS or Cadbury or other type of payment as is consistent with applicable Tax law, occurring immediately prior to and in connection with the Demerger, and shall be paid free and clear of any Tax deduction or withholding. The parties agree to use commercially reasonable efforts (to the extent such efforts will not result in materially adverse consequences to a party) to mitigate or avoid such Tax deductions or withholdings.
          (f) (i) Any indemnification payment made pursuant to this Section 6 or Article VII of the Separation Agreement shall, subject to this Section 6(f), be (A) decreased by the amount of any net Tax benefit (including, to the extent provided in Section 6(f)(ii), an increase to Tax basis) realized by the indemnified party (including the consolidated, combined, unitary or other Tax group of which the indemnified party is a member) arising in connection with the accrual, incurrence or payment of the amount indemnified against, and (B) increased by the amount of any net Tax cost incurred (including a gross-up for any amounts required to be deducted or withheld from the indemnity payment under applicable Tax law) by the indemnified party (including the consolidated, combined, unitary or other Tax group of which the indemnified party is a member) arising in connection with the accrual or receipt of any indemnification payment pursuant to this Section 6 or such Article VII.
               (ii) In computing the amount of any net Tax benefit or net Tax cost, the indemnified party shall be deemed to recognize all other items of income, gain, loss, deduction or credit before recognizing any item arising in connection with the accrual, incurrence or payment of any indemnifiable amount or arising in connection with the accrual or receipt of any indemnification payment pursuant to this Section 6 or Article VII of the Separation Agreement.

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For these purposes, an indemnified party shall be deemed to have “realized” a net Tax benefit or “incurred” a net Tax cost to the extent that, and at such time as, the amount of Taxes payable by such indemnified party is reduced below or increased above, as the case may be, the amount of Taxes that such indemnified party would be required to pay but for incurrence or payment of the indemnifiable amount or the receipt of the indemnity payment; provided that the parties acknowledge and agree that in the event that the net Tax benefit includes an increase in Tax basis (A) in respect of an asset for which amortization, depreciation or similar deductions are allowable, the parties shall compute such net Tax benefit on a present value basis using a discount rate equal to the rate on 5-year U.S. Treasury securities (in effect at the time the parties are computing the applicable net Tax benefit) plus 4%; provided, however, that if the present value of the net Tax benefit exceeds $20 million then until the net present value of the unrealized net Tax benefit does not exceed $20 million, the indemnified party shall make periodic reimbursements to the indemnifying party in respect of such net Tax benefit to the extent that such net Tax benefit is “realized” by the indemnified party (as determined pursuant to the general principles of this Section 6(f)(ii)), or (B) in respect of an equity interest or other asset for which amortization, depreciation or similar deductions are not allowable, the amount of the indemnification payment shall be subject to adjustment on account of such increase in Tax basis only if a net Tax benefit in respect of such increase to Tax basis is realized prior to or within the 5-year period following the later of the end of the calendar year in which the indemnity payment is made or in which there is a Final Determination with respect to the matter indemnified against in accordance with Section 6(f)(iii). The parties shall make any adjusting payment between each other as is required pursuant this Section 6(f) within 10 days of the date an indemnified party is deemed to have realized a net Tax benefit or incurred a net Tax cost. The amount of any increase or reduction hereunder shall be adjusted to reflect any Final Determination with respect to the indemnified party’s liability for Taxes. Payments between the indemnified party and the indemnifying party to reflect any such adjustment shall be made as necessary within 10 days of such determination. For the avoidance of doubt, in computing the amount of Incremental DPS Group Taxes indemnified against, any Tax Benefit Attribute that becomes available to the DPS Group (or any member thereof) as a result of the additional Income Taxes imposed in respect of a Confectionery Transaction shall be taken into account when realized (as determined pursuant to the principles of this Section 6(f)) and shall reduce the amount of Incremental DPS Group Taxes indemnified against under Section 6(a).
               (iii) The parties acknowledge and agree that in the event that, pursuant to this Section 6(f), there is a net Tax benefit that includes an increase in Tax basis in respect of an equity interest or other asset for which amortization, depreciation or similar deductions are not allowable, DPS shall, on an annual basis during the applicable 5-year period set forth in Section 6(f)(ii), provide CS with an executed officer’s certificate, satisfactory to CS in its reasonable discretion, specifying in reasonable detail whether or not the DPS Group realized a net Tax benefit in respect of such increase in Tax basis; provided that if the asset disposition occurs, or the Tax basis benefit is otherwise realized in respect of a taxable period, prior to such 5-year period, DPS shall provide CS with such an executed officer’s certificate within 10 days of the event (including a Final Determination) in respect of which the Tax basis was increased and the net Tax benefit was realized; provided further that the DPS Group shall provide CS, in accordance with Section 8, access to any documents or other information that CS reasonably determines is necessary to confirm the statements set forth in any officer’s certificate provided

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pursuant to this Section 6(f)(iii). In the event that the DPS Group realizes a net Tax benefit in respect of such an increase in Tax basis in respect of a taxable period prior to or during the first year of the applicable 5-year period, DPS shall pay to CS an amount equal to 50% of such net Tax benefit and, if such a net Tax benefit is realized during any succeeding year of such 5-year period, the amount that DPS is required to pay CS shall decrease by 5% each year so that the payment would be 30% of the next Tax benefit if realized during the fifth year of the 5-year period. For the avoidance of doubt, the parties acknowledge and agree that in the event that a payment from DPS to CS pursuant to Section 6(f)(ii) or this Section 6(f)(iii) is subject to Tax deductions or withholdings under applicable Tax law or any Taxes are imposed on CS in respect of such payment, DPS shall not be required to increase the payment or otherwise provide a gross-up to CS; provided that DPS agrees to cooperate with CS and to use commercially reasonable efforts (to the extent such efforts will not result in materially adverse consequences to the DPS Group (or any member thereof)) to mitigate or avoid any applicable Tax deductions or withholdings or other Taxes imposed.
               (iv) Without duplication, if, as a result of an amended Tax Return, claim for refund, audit, agreed determination or other adjustment, claim or decision, the amounts indemnified against by the Cadbury Group pursuant to Section 6(a) or DPS Group pursuant to Section 6(b), as the case may be, is increased and there is a Tax benefit (including an adjustment to the Tax basis of an asset) that is realized by the other party, such other party shall promptly pay to CS or DPS, as the case may be, the amount of the Tax benefit less any incremental Tax or other cost of such other party, computed in accordance with the provisions of this Section 6(f).
          (g) Each member of the DPS Group shall act in a commercially reasonable manner in respect of their Tax matters and shall not proactively disclose to any person any material information regarding the Income Tax reporting positions or Income Tax Returns of any member of the DPS Group in respect of a Pre-Demerger or Straddle Period except (i) to any of its legal, accounting and tax personnel, outside legal and tax advisors, and auditors, but only to the extent necessary for tax and financial reporting purposes, provided that such persons are instructed to keep such information confidential, or to such other persons as is otherwise required to comply with applicable law; or (ii) in response to a request by a Taxing Authority (in connection with an audit or other proceeding), to the extent that the DPS Group determines, in its good faith discretion, which shall be presumed, that such information should be disclosed. If any member of the DPS Group makes any such disclosure to any person (including a Taxing Authority) in circumstances other than permitted above, the Cadbury Group shall not be required to indemnify the DPS Group for any associated Taxes that the Cadbury Group otherwise would be required to indemnify the DPS Group against pursuant to this Section 6.
          (h) For purposes of this Agreement (taking into account the responsibility for Taxes under this Agreement), in computing amounts indemnified against and for purposes of preparing DPS Transition Returns and other Tax Returns, if an allocation of Taxes is required for a member of the Cadbury Group or the DPS Group (or a Subsidiary thereof) for a Straddle Period or other taxable period then the amount of such Tax that is allocable to the portion of such taxable period ending on the Demerger Date or other date for which the allocation is relevant shall be: (i) in the case of income Taxes, sales Taxes, employment Taxes and other Taxes that are readily apportionable based on an actual or deemed closing of the books, the portion of any

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such Tax equal to the amount that would be payable if the taxable year (including, for the avoidance of doubt, the taxable year of any entity that is a partnership for U.S. federal income tax purposes) ended on the Demerger Date or other relevant date, and (ii) in the case of property and other Taxes that are imposed on a periodic basis, the portion of any such Tax equal to the amount of such Tax for the entire taxable period multiplied by a fraction, the numerator of which is the number of days in the portion of the taxable period ending on the Demerger Date or other relevant date, and the denominator of which is the number of days in the entire taxable period. Any Tax Benefit Attribute for a Straddle Period or other taxable period for which an allocation is required for a member of the Cadbury Group or the DPS Group (or a Subsidiary thereof) shall be allocated in the same manner as provided in this Section 6(h) as the Tax to which the Tax Benefit Attribute relates.
          (i) The indemnification obligations contained in this Section 6 or otherwise in this Agreement shall remain in effect until 30 days after the expiration of all applicable statutes of limitation (giving effect to any extension, waiver or mitigation thereof) and, with respect to any claim hereunder initiated prior to the end of such period, until such claim has been satisfied or otherwise resolved.
      7. Guarantees. CS shall guarantee or otherwise perform the obligations of each member of the Cadbury Group under this Agreement. DPS shall guarantee or otherwise perform the obligations of each member of the DPS Group under this Agreement.
      8. Cooperation.
          (a) CS and DPS shall each, at their own expense, cooperate with each other (and shall cause each member of the Cadbury Group and the DPS Group, respectively, to cooperate) and make available to each other, their officers, agents and personnel and such Tax and accounting data and other information as may be reasonably required in connection with (i) the preparation or filing of any Tax Return, election, consent, certification, declaration or authorization of representative, or any claim for refund, including executing such items where required, (ii) any determinations of liability for Taxes, or (iii) any audit or other proceeding in respect of Taxes including cooperating in connection with the exercise of contest rights under Section 9. Without limiting the foregoing, the members of the DPS Group and the Cadbury Group, as the case may be, shall not be entitled to assert privilege or any similar argument against the members of the other group with respect to legal and other professional services or documents (both internal and external), in each case, in respect of Tax matters of the Cadbury Group and the DPS Group for Pre-Demerger Periods or Straddle Periods. At the request of CS and in connection with a Confectionery Transaction, DPS shall make (or cause to be made or permit CS to make) one or more Tax elections, as directed by CS (for the avoidance of doubt, nothing in this sentence shall limit the obligations of the Cadbury Group to indemnify the DPS Group for Confectionery Transactions pursuant to Section 6 of this Agreement). The Cadbury Group and the DPS Group shall retain all Tax Returns, work papers and all Tax and accounting records or other documents in their possession relating to material Tax and accounting matters of the DPS Group for any Pre-Demerger Period or Straddle Period until the later of (i) seven years after the Demerger Date or (ii) one year after the expiration of all applicable statutes of limitations (including extensions thereof). After such time, before the Cadbury Group or the

23


 

DPS Group shall dispose of any such documents in their possession, the other party shall be given an opportunity, after 90 days prior written notice, to remove and retain all or any part of such documents as such other party may select (at such other party’s expense). The parties agree to use their best efforts to maintain privilege or other protection in respect of third parties regarding any documents or other information relating to Tax matters provided by the Cadbury Group or the DPS Group, as the case may be, to the other group.
          (b) (i) (A) Without limiting Section 8(a), the DPS Group shall provide the Cadbury Group and its officers, agents and personnel with access to and the right to copy such documents, and shall provide such other information, as are reasonably necessary to allow the Cadbury Group to determine and report their Taxes for any Pre-Demerger Period or Straddle Period and to prepare any applicable Tax Return or other required filings of the Cadbury Group. The DPS Group acknowledges and agrees that the rights afforded to the Cadbury Group under this Section 8(b)(i) are, among other things, intended to enable the Cadbury Group to prepare, at its expense, profit and loss statements, balance sheets and other financial statements or accounting information with respect to each member of the DPS Group on a stand-alone or legal entity basis as of or prior to the Demerger Date and, in the case of a jurisdiction in which the Taxable year of a DPS Group member does not end on the Demerger Date, as of the end of the Taxable year in which the Demerger Date occurs.
                    (B) DPS shall deliver or cause to be delivered to CS, or otherwise make available to CS, information in respect of the accounting systems of the DPS Group for Pre-Demerger Periods and Straddle Periods to enable CS to create the DPS Statements (as defined below) no later than 45 days after the Demerger Date. Based on the information in respect of the accounting systems of the DPS Group for Pre-Demerger Periods and Straddle Periods (the “DPS Information”) that CS is entitled to download or otherwise acquire pursuant to this Section 8, CS will create profits and loss statements and balance sheets for each legal entity of the DPS Group for the period beginning on January 1, 2008 and ending on the Demerger Date in accordance with the accounting policies of the DPS Group as of, and prior to, the Demerger Date (the “DPS Statements”) and shall deliver the DPS Information and DPS Statements to DPS within 90 days of the Demerger Date (or such other time as CS shall determine and notify DPS in writing); provided that DPS, at its expense, shall provide any reasonable cooperation requested by CS in preparing the DPS Statements, including the provision of any other information that CS determines is reasonably necessary to prepare the DPS Statements in accordance with such accounting policies of the DPS Group. Within 45 days of the receipt of the DPS Information and DPS Statements by DPS, DPS shall confirm in writing to CS that (A) the DPS Information downloaded or otherwise acquired by DPS was properly extracted from the DPS accounting systems, is accurate and complete in all material respects and is properly identified on an entity-by-entity basis, and (B) the accounting policies used by CS in preparing the DPS Statements are consistent in all material respects with the accounting policies of the DPS Group as of, and prior to, the Demerger Date; provided that if DPS is unable to provide such written confirmation, (X) DPS shall provide CS, within 45 days of the receipt of the DPS Information and DPS Statements by DPS, with a written statement setting forth in detail the reasons that such confirmation could not be made, (Y) DPS shall, at its expense, cooperate with CS to correct the DPS Information or DPS Statements, including any improper extraction of the DPS Information or any inconsistencies in the accounting policies used by CS to prepare the

24


 

DPS Statements, and (Z) within 20 days of the receipt of revised DPS Information and DPS Statements, DPS shall provide the written confirmation contemplated by this Section 8(b)(iii) to CS; provided, further, that the principles of the preceding proviso shall continue to apply until CS receives such written confirmation.
               (ii) Without limiting Sections 8(a) and 8(b)(i), the DPS Group shall provide the Cadbury Group and its officers, agents and personnel all such cooperation, access and assistance, as may reasonably be necessary for the Cadbury Group to comply with any CFC Legislation, including causing the DPS Group to, as soon as reasonably practicable, (i) respond to any CFC Questions asked by CS and its officers, agents and personnel, and (ii) provide CS with copies of any accounts or financial statements or other information in respect of the members of the DPS Group that may be reasonably required or reasonably necessary to enable the Cadbury Group to comply with any CFC Legislation in relation to the DPS Group in respect of any Pre-Demerger Period or Straddle Period (including permitting the Cadbury Group to download any information in respect of accounting systems of the DPS Group for Pre-Demerger Periods and Straddle Periods).
               (iii) With respect to Controladora de Marcas Internacionales, S.A. de C.V. and Adams Mecca B.V., DPS shall deliver to CS, in the case of a Pre-Demerger Period within 45 days following the Demerger Date and in the case of a Straddle Period within 45 days following the end of such Straddle Period, copies or originals of all Tax and accounting data and other information or documents relating to Tax matters of the applicable company for the applicable taxable period. With respect to the prior ownership of preferred shares of Cadbury Aguas Minerales, S.A. de C.V. (“CAMSA”) by Cadbury Adams Canada, Inc., DPS agrees to provide CS, within 45 days of a request by CS, with any Tax and accounting data and other information or documents relating to Tax matters of CAMSA that may be reasonably required or reasonably necessary to enable the Cadbury Group to satisfy its Tax compliance obligations or in respect of a Tax Proceeding, including, for the avoidance of doubt, any information that is required to be reported (or used to calculate items that are required to be reported) or otherwise disclosed to a Taxing Authority or other governmental entity.
               (iv) DPS agrees to provide CS, within 45 days of a request by CS, with any Tax and accounting data and other information or documents relating to Tax matters of CBCI that may be reasonably required or reasonably necessary to enable the Cadbury Group to satisfy its Tax compliance obligations or in respect of a Tax Proceeding, including, for the avoidance of doubt, any information that is required to be reported (or used to calculate items that are required to be reported) or otherwise disclosed to a Taxing Authority or other governmental entity. CS agrees to provide DPS, within 45 days of a request by DPS, with any Tax and accounting data and other information or documents relating to Tax matters of CDMI that may be reasonably required or reasonably necessary to enable the DPS Group to satisfy its Tax compliance obligations or in respect of a Tax Proceeding, including, for the avoidance of doubt, any information that is required to be reported (or used to calculate items that are required to be reported) or otherwise disclosed to a Taxing Authority or other governmental entity.

25


 

      9. Audits and Contest .
          (a) CS or DPS shall notify the other in writing upon the receipt of any notice of a Tax Proceeding that could reasonably result in a right to indemnification of a party under this Agreement together with a description in reasonable detail of the Tax Proceeding and the underlying claim within 30 days of the receipt of such notice or such earlier time that would allow the indemnifying party to timely respond to such notice; provided, that a party’s right to indemnification under this Agreement shall not be limited in any way by a failure to so notify, except to the extent that the indemnifying party is materially prejudiced by such failure.
          (b) Notwithstanding anything in this Agreement to the contrary, except as otherwise provided in this Section 9(b), CS shall have full control over any Tax Proceeding in respect of Cadbury Group Taxes and Taxes indemnified against by CS pursuant to this Agreement including any Tax Proceeding involving the DPS Group or any of its members relating to a Confectionery Transaction or a Specified Entity. CS shall have absolute discretion with respect to any decisions to be made (including choice of counsel, venue or judicial forum), or the nature of any action to be taken, with respect to such Tax Proceeding and the contest thereof (including whether to litigate, compromise or otherwise settle the dispute or contest and the amount of any settlement) and DPS shall cooperate with CS in accordance with the provisions of Section 8 and this Section 9; provided that DPS may, at its own expense, participate in any such Tax Proceeding and CS shall consult with and take reasonable direction from DPS in respect of any decisions to be made or actions to be taken in respect of Tax matters of the DPS Group other than with respect to Cadbury Group Taxes, Confectionery Transactions, one or more Specified Entities or other matters relating to Taxes indemnified against by CS pursuant to this Agreement.
          (c) With respect to Tax Proceedings not described in Section 9(b) but that could result in a right to indemnification for Taxes or Damages by the DPS Group or the Cadbury Group, as the case may be, under this Agreement, the indemnified party shall control the Tax Proceeding and contest the claim indemnified against in good faith as directed by the indemnifying party; provided further that to the extent relating to the claim indemnified against, (i) the indemnified party shall keep the indemnifying party informed of the status and progress of the Tax Proceeding and shall consult with the indemnified party regarding decisions relating to the Tax Proceeding, and (ii) the indemnified party shall not settle or compromise any such Tax Proceeding without the prior written consent of the indemnified party (such consent not to be unreasonably withheld or delayed).
          (d) With respect to any Tax Proceeding involving issues relating solely to a Tax Return or Taxes of one or more members of the DPS Group for which the DPS Group has no right to indemnification under this Agreement or Taxes indemnified against by DPS under Section 6(b)(iv), DPS shall have control over such Tax Proceeding and shall have discretion with respect to any decisions to be made, or the nature of any action to be taken, with respect to such Tax Proceeding; provided that to the extent that the outcome of the Tax Proceeding can affect the Taxes of the Cadbury Group under the CFC Legislation or otherwise, (i) CS shall have the right, at its own expense, to participate and DPS shall keep CS informed of the status and progress of the Tax Proceeding and shall consult with CS regarding decisions relating to the Tax Proceeding,

26


 

and (ii) DPS shall not settle or compromise any such Tax Proceeding without the prior written consent of CS (such consent not to be unreasonably withheld or delayed).
          (e) The DPS Group acknowledges and agrees that with respect to any Tax Proceeding including or involving the DPS Group that CS controls pursuant to this Section 9, (i) the DPS Group shall cooperate fully with CS, (ii) the DPS Group shall act in good faith and use its best efforts to support the defense of the Tax Proceeding, and (iii) in no event shall the DPS Group interfere with CS’ control of the Tax Proceeding or otherwise fail to support, or take any action that is inconsistent with, the Tax reporting positions for the relevant transaction or item unless otherwise directed by CS in writing.
      10. Notices . All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by an internationally recognized overnight courier service, by facsimile or registered or certified mail (postage prepaid, return receipt requested) to the respective parties hereto at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 10):
  (a)   If to CS or Cadbury:
 
      Cadbury plc
25 Berkeley Square
London W1J 6HB
Facsimile: 44-20-7830-5015
Attention: Henry Udow, Esq. – Chief Legal Officer
                  Lisa M. Longo – Senior Vice President of Tax
 
      with a copy to:
 
      Shearman & Sterling LLP
599 Lexington Avenue
New York, NY 10022-6069
Facsimile: (212) 848-7179
Attention: Laurence M. Bambino, Esq.
                  Creighton O’M. Condon, Esq.
 
      and
 
      Slaughter and May
One Bunhill Row
London EC1Y 8YY
Facsimile: 44-20-7090-5000
Attention: Tim Boxell
 
  (b)   If to DPS:
 
      Dr Pepper Snapple Group, Inc.

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    5301 Legacy Drive
3 rd Floor
Plano, TX 75024
Facsimile:
Attention: James L. Baldwin, Jr. – General Counsel
                  Taun Dimatteo – Senior Vice President of Tax
 
      with a copy to:
 
      Sullivan & Cromwell LLP
125 Broad Street
New York, New York 10004-2498
Facsimile: (212) 558-3588
Attention: Ronald E. Creamer, Jr., Esq.
      11. Costs and Expenses . Except as expressly set forth in this Agreement or the Transition Services Agreement, each of the Cadbury Group and the DPS Group shall bear its own costs and expenses (including reasonable attorneys’ fees, accountant fees and other related professional fees and disbursements) incurred in preparing and filing any Tax Return, in complying with the provisions of this Agreement and in connection with any Tax Proceeding.
      12. Interest . Any payment required to be made pursuant to this Agreement that is not paid when due shall bear interest at the Underpayment Rate.
      13. Effectiveness; Termination; Survival and Change of Control .
          (a) This Agreement shall become effective upon the consummation of the Demerger. All rights and obligations arising hereunder shall survive until they are fully effectuated or performed in accordance with the terms thereof. The rights and obligations of the Cadbury Group and the DPS Group under this Agreement shall survive the sale or other transfer by any member of the Cadbury Group or the DPS Group, as the case may be, of any assets or businesses or the assignment by such member of any liabilities.
          (b) Notwithstanding anything to the contrary contained in this Agreement, upon the occurrence of (i) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities Exchange Commission thereunder as in effect on the date hereof), of capital stock (whether denominated as common stock or preferred stock) of DPS representing more than 35% of the aggregate ordinary voting power represented by the issued and outstanding capital stock of DPS, (ii) the occupation of a majority of the seats (other than vacant seats) on the board of directors of DPS by Persons who were neither (A) nominated by the board of directors of DPS nor (B) appointed by directors so nominated, or (iii) DPS consolidating with, or merging with or into, any Person (other than another member of the DPS Group), or any Person (other than a member of the DPS Group) consolidating with, or merging with or into, DPS, in any such event pursuant to a transaction in which any of the outstanding voting capital stock (whether denominated as common stock or preferred stock) of DPS or such other Person is converted into or exchanged for cash, securities or other property, other than any such transaction where the

28


 

shares of the voting capital stock (whether denominated as common stock or preferred stock) of DPS outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the voting capital stock (whether denominated as common stock or preferred stock) of the surviving Person immediately after giving effect to such transaction, the indemnification obligations of the Cadbury Group to indemnify against Incremental DPS Group Taxes, and the right of the DPS Group to be so indemnified, shall terminate without any action of the parties hereto and none of the members of the Cadbury Group shall have any further liabilities or obligations, and none of the members of the DPS Group shall have any further rights, with respect to Incremental DPS Group Taxes. Unless otherwise prohibited by this Agreement, any member of the DPS Group shall be permitted to undertake wholly internal reorganizations, consolidations, or mergers involving DPS and any Person that is a Subsidiary of DPS after the Demerger Date.
      14. Entire Agreement; Amendments and Waivers .
          (a) This Agreement contains the entire understanding of the parties hereto with respect to the subject matter contained herein.
          (b) This Agreement may not be amended or modified except (i) by an instrument in writing signed by, or on behalf of, the parties hereto or (ii) by a waiver in accordance with Section 14(c).
          (c) Either party to this Agreement may (i) extend the time for the performance of any of the obligations or other acts of the other party and (ii) waive compliance with any of the agreements of the other party or conditions to such party’s obligations contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the party to be bound thereby. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition of this Agreement. The failure of either party hereto to assert any of its rights hereunder shall not constitute a waiver of any of such rights
      15. Governing law . This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.
      16. Dispute Resolution . (a) The procedures for discussion, negotiation and arbitration set forth in this Section 16 shall apply to all disputes, controversies or claims that may arise out of or relate to, or arise under or in connection with, this Agreement between or among any member of the Cadbury Group, on the one hand, and any member of the DPS Group, on the other hand (collectively, “ Agreement Disputes ”).
          (b) CS and DPS will use their respective commercially reasonable efforts to resolve expeditiously any Agreement Dispute on a mutually acceptable negotiated basis. In furtherance of the foregoing, any member of the DPS Group or the Cadbury Group involved in an Agreement Dispute may deliver a notice (an “ Escalation Notice ”) demanding an in-person meeting involving the senior tax director of each CS and DPS. A copy of any such Escalation Notice shall be given to the chief legal officer of each of CS and of DPS (which copy shall state that it is an Escalation Notice pursuant to this Section 16(b)). Any agenda, location or

29


 

procedures for such discussions or negotiations between CS and DPS may be established by CS and DPS from time to time; provided, however, that the representatives of CS and DPS shall use their reasonable efforts to meet within 30 days of the Escalation Notice.
          (c) If the senior tax director of each CS and DPS are not able to resolve the Agreement Dispute within 30 days after the date of the Escalation Notice (or such shorter time as is necessary to avoid immediate irreparable injury), then the Agreement Dispute shall be submitted to the chief financial officer of each of CS and DPS.
          (d) If CS and DPS are not able to resolve the Agreement Dispute through the processes set forth in subsections (b) and (c) of this Section 16 within 60 days after the date of the Escalation Notice, such Agreement Dispute shall be determined, at the request of either CS or DPS by arbitration, which shall be conducted (i) by three arbitrators, consisting of one arbitrator appointed by CS, one arbitrator appointed by DPS and a third arbitrator appointed by the two arbitrators appointed by CS and DPS or, if the arbitrators appointed by CS and DPS cannot agree on a third arbitrator, the third arbitrator shall be appointed by the chief financial officer of each CS and DPS, and (ii) in accordance with the Commercial Rules of the American Arbitration Association (except with respect to the selection of arbitrators) in effect at the time of filing of the demand for arbitration.
          (e) The decision of the arbitrators shall be final and binding upon the parties hereto, and the expense of the arbitration (including the award of attorneys’ fees to the prevailing party) shall be paid as the arbitrators determine. The decision of the arbitrators shall be executory, and judgment thereon may be entered by any court of competent jurisdiction. The seat of the arbitration shall be New York, New York.
          (f) The existence of, and any discussions, negotiations, arbitrations or other proceedings relating to, any Agreement Dispute shall be considered by each party hereto as confidential information until such time as a judgment thereon is entered in a court of competent jurisdiction.
          (g) Notwithstanding anything contained in this Agreement to the contrary, no member of the DPS Group and no member of the Cadbury Group shall have the right to institute judicial proceedings against the other party or any Person acting by, through or under such other party, in order to enforce the instituting party’s rights hereunder, except that any such member shall be permitted to seek an injunction in aid of arbitration with respect to an Agreement Dispute to preserve the status quo during the pendency of any arbitration proceeding pursuant to paragraph (d) of this Section 16. All judicial proceedings arising out of or relating to this Agreement shall be heard and determined exclusively in any New York state or federal court sitting in the Borough of Manhattan in The City of New York.
          (h) Unless otherwise agreed in writing, the parties will continue to provide service and honor all other commitments under this Agreement during the course of dispute resolution pursuant to the provisions of this Section 16 with respect to all matters not subject to such Agreement Dispute.

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      17. Counterparts . This Agreement may be executed and delivered (including by facsimile transmission or portable document format (“ .pdf ”)) in counterparts, and by the different Parties hereto in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.
      18. Assignments; Third Party Beneficiaries . This Agreement may not be assigned by a party hereto without the consent of the other party hereto; provided that a merger shall not be deemed to be an assignment under this Agreement; and provided further, that any party may assign this Agreement or any of its rights and obligations hereunder to one or more Affiliates of such party without the consent of the other party provided that no such assignment shall relieve the assignor of any of its obligations hereunder. This Agreement shall be binding upon and inure solely to the benefit of the parties hereto (including the members of the Cadbury Group and the DPS Group as the case may be) and their respective successors and permitted assigns, and nothing herein, express or implied (including the provisions of Section 6 relating to indemnified parties), is intended to or shall confer upon any other Person (including any shareholders of Cadbury and/or DPS) any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. If, during the period beginning on the Demerger Date and ending upon the expiration of the survival period set forth in Section 13, any Person becomes an Affiliate of CS or DPS, such Affiliate shall be bound by the terms of this Agreement and CS or DPS, as the case may be, shall provide evidence to the other party of such Affiliate’s agreement to be bound by the terms of this Agreement upon the request of such other party.
      19. Severability . If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect for so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to either party hereto. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated by this Agreement are consummated as originally contemplated to the greatest extent possible.
      20. CS Obligations . DPS and Cadbury agree that Cadbury shall not, and shall cause CS not to, take any actions that would materially and adversely impact the ability of CS to fulfill its obligations under this Agreement; provided that Cadbury may at any time following the Demerger Date require CS to assign to Cadbury all of CS’ rights and obligations under this Agreement in substitution for compliance by Cadbury and CS with the aforementioned obligation in this Section 20, and upon such assignment, Cadbury shall assume all of CS’ obligations under this Agreement.
      21. Authorization, etc . Each of the parties hereto hereby represents and warrants that it has the power and authority to execute, deliver and perform this Agreement, that this Agreement has been duly authorized by all necessary corporate action on the part of such party, that this Agreement constitutes a legal, valid and binding obligation of each such party, and that the execution, delivery and performance of this Agreement by such party does not contravene or

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conflict with any provision or law or of its charter or bylaws or any agreement, instrument or order binding on such party.
*           *           *

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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement on the day and year first written above.
     CADBURY SCHWEPPES PLC on its own behalf and on behalf of the members of the Cadbury Group (other than Cadbury)
By: /s/ Henry Udow
Name: Henry Udow
Title: Chief Legal Officer and Group Secretary
     DR PEPPER SNAPPLE GROUP, INC. on its own behalf and on behalf of the members of the DPS Group
By: /s/ John O. Stewart
Name: John O. Stewart
Title: Executive Vice President and Chief Financial Officer
     CADBURY PLC, solely for purposes of Section 20
By: /s/ Henry Udow
Name: Henry Udow
Title: Chief Legal Officer and Group Secretary

33

 

EXECUTION VERSION
EMPLOYEE MATTERS AGREEMENT
among
CADBURY PLC
CADBURY SCHWEPPES, PLC
and
DR PEPPER SNAPPLE GROUP, INC.
Dated as of May 1, 2008

 


 

TABLE OF CONTENTS
         
    PAGE  
ARTICLE 1
 
       
SCOPE AND DEFINITIONS
 
       
Section 1.01 Scope
    1  
Section 1.02 Definitions
    2  
Section 1.03 Interpretation
    5  
 
       
ARTICLE 2
 
       
ASSIGNMENT OF EMPLOYEES
 
       
Section 2.01 Active Employees
    6  
Section 2.02 Former Employees
    6  
Section 2.03 Employment Law Obligations
    7  
Section 2.04 Employee Records
    7  
 
       
ARTICLE 3
 
       
EQUITY COMPENSATION PLANS
 
       
Section 3.02 Share Option Plans
    9  
Section 3.03 Long Term Incentive Plan
    10  
Section 3.04 Bonus Share Retention Plan
    10  
Section 3.05 International Share Award Plan
    11  
Section 3.06 Employee Share Option Plans
    11  
Section 3.07 Responsibility for Tax Withholding, Reporting, and Social Insurance Contributions
    12  
Section 3.08 No Change of Control
    12  
Section 3.09 Compliance with Section 409A
    12  
 
       
ARTICLE 4
 
       
GENERAL PRINCIPLES FOR ALLOCATION OF LIABILITIES
 
       
Section 4.01 General Principle
    12  
Section 4.02 Establishment of DPSG Plans
    14  
Section 4.03 Transfer of Assets and Liabilities
    14  
Section 4.04 Service Credit
    14  
Section 4.05 Plan Administration
    15  
 i 

 


 

         
    PAGE  
ARTICLE 5
 
       
U.S. PENSION PLAN SPIN-OFF
 
       
Section 5.01 General Principle
    16  
Section 5.02 Determination and Transfer of Initial Transfer Amount
    16  
Section 5.03 Determination of the Final Pension Transfer Amount
    17  
Section 5.04 True-Up Adjustment
    18  
Section 5.05 Form and Selection of Assets to be Transferred
    18  
 
       
ARTICLE 6
 
       
U.S. 401(K) PLAN
 
       
Section 6.01 General Principle
    18  
Section 6.02 Transfer of Accounts
    19  
Section 6.03 Funding of 2008 Matching Contribution
    19  
 
       
ARTICLE 7
 
       
U.S. WELFARE BENEFIT PLANS
 
       
Section 7.01 General Principle.
    20  
Section 7.02 Establishment of DPSG Plans
    20  
Section 7.03 Insurance Contracts
    21  
Section 7.04 Third Party Vendors
    21  
 
       
ARTICLE 8
 
       
FRINGE BENEFIT AND OTHER U.S. PLANS AND PROGRAMS
 
       
ARTICLE 9
 
       
WORKERS COMPENSATION AND UNEMPLOYMENT COMPENSATION
 
       
ARTICLE 10
 
       
COMPENSATION MATTERS AND GENERAL BENEFIT AND EMPLOYEE MATTERS
 
       
Section 10.01 Restrictive Covenants in Employment and Other Agreements
    22  
Section 10.02 Severance
    22  
Section 10.03 Accrued Vacation Days Off
    23  
Section 10.04 Leaves of Absence
    23  
Section 10.05 Cadbury Obligations
    23  
Section 10.06 Collective Bargaining Agreements
    23  
ii

 


 

         
    PAGE  
ARTICLE 11
 
       
CANADIAN EMPLOYEE MATTERS
 
       
ARTICLE 12
 
       
GENERAL PROVISIONS
 
       
Section 12.01 Preservation of Rights to Amend
    24  
Section 12.02 Confidentiality
    24  
Section 12.03 Administrative Complaints/Litigation
    24  
Section 12.04 Reimbursement and Indemnification
    24  
Section 12.05 Costs of Compliance with Agreement
    25  
 
       
ARTICLE 13
 
       
MISCELLANEOUS
 
       
Section 13.01 Notices
    25  
Section 13.02 Amendments; No Waivers
    26  
Section 13.03 Successors and Assigns
    26  
Section 13.04 Governing Law
    26  
Section 13.05 Counterparts; Effectiveness; Third-Party Beneficiaries
    26  
Section 13.06 Entire Agreement
    27  
Section 13.07 Jurisdiction
    27  
Section 13.08 Waiver of Jury Trial
    27  
Section 13.09 Severability
    27  
Section 13.10 Survival
    27  
Section 13.11 Captions
    28  
Section 13.12 Specific Performance
    28  
Section 13.13 Mutual Drafting
    28  
Section 13.14 Operating Committee
    28  
Section 13.15 Effect if Distribution Does Not Occur
    29  
Section 13.16 Corporate Authorization
    29  
iii

 


 

EMPLOYEE MATTERS AGREEMENT
          THIS EMPLOYEE MATTERS AGREEMENT dated as of May 1, 2008 among Cadbury Schweppes, plc, a United Kingdom public limited company incorporated in England and Wales with the registered number 0052457 and whose registered office is at 25 Berkley Square, London W1J 6HB (“ Cadbury ”), Dr Pepper Snapple Group, Inc., a Delaware corporation (“ DPSG ”) and, solely for the purposes of Section 10.05, Cadbury plc, a United Kingdom public limited company incorporated in England and Wales with the registered number 0052457 and whose registered office is at 25 Berkley Square, London W1J 6HB (“ Cadbury plc ”). Each of Cadbury and DPSG is sometimes referred to herein as a “ Party ” and together, as the “ Parties ”.
RECITALS
          WHEREAS, Cadbury, Cadbury plc and DPSG have entered into a Separation and Distribution Agreement as of the date hereof (the “ Separation Agreement ”) pursuant to which (i) Cadbury will become a wholly-owned subsidiary of Cadbury plc; (ii) Cadbury and/or one or more members of the Cadbury plc Group will, collectively, retain or acquire beneficial ownership of all of the Cadbury plc Assets and Assume all of the Cadbury plc Liabilities and DPSG and/or one or more members of the DPSG Group will, collectively, retain or acquire beneficial ownership of all of the Beverages Assets and Assume all of the Beverages Liabilities (as such terms are defined in the Separation Agreement); and (iii) DPSG will distribute to the holders of Cadbury plc Ordinary Shares on a pro rata basis, without any consideration being paid by such holders, all of the outstanding shares of Common Stock, par value $0.01 per share, of DPSG..
          WHEREAS, in connection with the Distribution, Cadbury, Cadbury plc and DPSG desire to enter into this Employee Matters Agreement as a complement to the Separation Agreement.
          NOW THEREFORE, in consideration of the mutual covenants contained herein and in the Separation Agreement, Cadbury, Cadbury plc and DPSG hereto agree as follows:
ARTICLE 1
SCOPE AND DEFINITIONS
          Section 1.01 Scope . Notwithstanding anything to the contrary contained herein (i) this Agreement shall not apply with respect to any Employee whose primary employer within the Cadbury Group or DPSG Group is or was an entity domiciled in Mexico and (ii) the terms of this Agreement shall apply only to the extent relevant with respect to the appropriate treatment of any Employee whose primary employer within the Cadbury Group or DPSG Group is or was an entity domiciled in a country other than Canada or the U.S. (including Puerto Rico). For the avoidance of doubt, any relevant portions of this Agreement shall apply with respect to the Employees listed on Schedule 1.01(i) hereof (who are Employees who are or have been located

1


 

outside the U.S., but are or have been covered under U.S. compensation and benefit plans and arrangements).
          Section 1.02 Definitions . Unless otherwise defined herein, each capitalized term shall have the meaning specified for such term in the Separation Agreement. As used in this Agreement:
          “ Agreement ” means this Employee Matters Agreement together with those parts of the Separation Agreement referenced herein, all Schedules hereto and all amendments, modifications and changes hereto and thereto.
          “ BSRP ” means the Cadbury Schweppes Bonus Share Retention Plan 2004.
          “ Business Day ” means any day, other than a Saturday, a Sunday or a day on which banks in New York, New York are authorized or obligated by law to close.
          “ Cadbury 401(k) Plan ” means the Cadbury Adams Holdings LLC Employees’ Savings Incentive Plan.
          “ Cadbury Business Employee ” means any individual who is, immediately prior to the Distribution, employed by Cadbury or any of its Subsidiaries or Affiliates and is not a DPSG Business Employee.
          “ Cadbury Committee ” shall mean the Remuneration Committee of the Board of Directors of Cadbury or another duly authorized committee of the Board.
          “ Cadbury Employee Share Schemes ” means the BSRP, the LTIP, the ISAP, the Share Option Plans and the Employees Share Option Plans.
          “ Cadbury Initial Price ” shall mean the market value (within the meaning of section 272(3) of the UK Taxation of Chargeable Gains Act 1992) of Cadbury plc Ordinary Shares on the first day of dealings in Cadbury plc Ordinary Shares on the London Stock Exchange following the Scheme becoming effective or such other value of a Cadbury plc Ordinary Share on or about that date as the Cadbury Committee may agree with HMRC for the purposes of determining the number of Cadbury plc Ordinary Shares over which replacement options may be granted as referred to in clause (i) of the definition of Exchange Ratio.
          “ Cadbury Final Price ” shall mean the market value (within the meaning of section 272(3) of the UK Taxation of Chargeable Gains Act 1992) of Cadbury Ordinary Shares on the last day of dealings in Cadbury Ordinary Shares immediately prior to the Scheme becoming effective or such other value of a Cadbury Ordinary Share on or about that date as the Cadbury Committee may agree with HMRC for the purposes of determining the number of Cadbury Ordinary Shares over which a replacement option may be granted as referred to in clause (i) of the definition of Exchange Ratio.
          “ Cadbury Non-ERISA U.S. Benefit Arrangement ” means any Non-ERISA U.S. Benefit Arrangement sponsored or maintained by Cadbury.

 


 

          “ Cadbury Ordinary Shares ” means the ordinary shares of 12.5 pence each in the capital of Cadbury.
          “ Cadbury Pension Plan ” means the Cadbury Adams Holdings LLC Personal Pension Account Plan, the Cadbury Adams Holdings LLC Supplemental Executive Retirement Plan and the Cadbury Adams Holdings LLC Pension Equalization Plan.
          “ Cadbury Pension and Welfare Benefit Plan ” means any Pension Plan or Welfare Plan sponsored or maintained by Cadbury or a Cadbury Subsidiary.
          “ Cadbury plc Ordinary Shares ” means the ordinary shares of Cadbury plc.
          “ Cadbury Retiree Medical Plan ” means that portion of the Cadbury Health and Welfare Benefits Plan that provides post-employment medical benefits beyond those required to be provided pursuant to COBRA. This includes the Cadbury Schweppes $25,000 Retiree Health Plan and the Cadbury Schweppes Retiree Health Plan.
          “ Cadbury Subsidiary ” means any entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are expected to be directly or indirectly owned by Cadbury immediately after the Distribution.
          “ Circular ” means the circular and explanatory statement dated March 19, 2008 to the holders of Cadbury Ordinary Shares.
          “ COBRA ” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as codified at Part 6 of Subtitle B of Title I of ERISA and at IRS Code Section 4980B, as amended.
          “ Code ” means the U.S. Internal Revenue Code of 1986, as amended.
          “ Distribution ” shall have the meaning set forth in Section 1.01 of the Separation Agreement.
          “ Distribution Date ” shall have the meaning set forth in Section 1.01 of the Separation Agreement.
          “ DPSG Business Employee ” means any individual who is, immediately prior to the Distribution, employed by DPSG or any of their respective Subsidiaries. A DPSG Business Employee may not be a Cadbury Business Employee.
          “ DPSG Legacy Equity Plans ” shall mean one or more plans adopted by DPSG and approved by Cadbury, as sole shareholder of DPSG, under the authority of which the DPSG equity awards described in Article 3 shall be issued.
          “ DPSG Non-ERISA U.S. Benefit Arrangement ” means any Non-ERISA U.S. Benefit Arrangement sponsored or maintained by DPSG.

 


 

          “ DPSG Pension and Welfare Benefit Plan ” means any Pension Plan or Welfare Plan sponsored or maintained by DPSG or a DPSG Subsidiary.
          “ DPSG Subsidiary ” means any entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are expected to be directly or indirectly owned by DPSG immediately after the Distribution.
          “ Employee ” means any Cadbury Business Employee or Former Cadbury Employee or DPSG Business Employee or Former DPSG Employee.
          “ Employees Share Option Plans ” means the Cadbury Schweppes plc US Employees Share Option Plan 2005 and the Cadbury Schweppes plc Americas Employees Share Option Plan 2005.
          “ ERISA ” means the U.S. Employee Retirement Income Security Act of 1974, as amended.
          “ Exchange Ratio ” means:
  (i)   where an option granted under a Cadbury Employee Share Scheme, or a part thereof, which is approved by HMRC, is exchanged for an option over Cadbury plc Ordinary Shares, the ratio agreed by HMRC for determining the number of Cadbury plc Ordinary Shares over which the replacement option is granted; and
 
  (ii)   where an option or award granted under any other Cadbury Employee Share Scheme, or a part thereof, is exchanged or converted into an option or award over Cadbury plc Ordinary Shares or DPSG Common Stock, such ratio as is determined by the Cadbury Committee which is, in its opinion, consistent with the ratio referred to in clause (i) or the basis for determining the ratio in clause (i).
          “ FMLA ” means the U.S. Family Medical Leave Act, as amended.
          “ Former DPSG Employees ” has the meaning set forth in Section 2.02(c).
          “ Former Cadbury Employees ” has the meaning set forth in Section 2.02(b).
          “ HMRC ” means HM Revenue & Customs.
          “ IRS ” means the U.S. Internal Revenue Service.
          “ ISAP ” means the Cadbury Schweppes International Share Award Plan.
          “ LTIP ” means the Cadbury Schweppes Long Term Incentive Plans 1997 and 2004.

 


 

          “ Non-ERISA U.S. Benefit Arrangement ” means any contract, agreement, policy, practice, program, plan, trust or arrangement, other than a Pension Plan or Welfare Plan, providing for benefits, perquisites or compensation of any nature to any Employee, or to any family member, dependent or beneficiary of any such Employee, including, without limitation, disability, severance, health, dental, life, accidental death and dismemberment, travel and accident, tuition reimbursement, vacation, sick, personal or bereavement days, holidays, retirement, deferred compensation, profit sharing, bonus, stock-based compensation or other forms of incentive compensation.
          “ Pension Plan ” means any pension plan as defined in Section 3(2) of ERISA, without regard to Section 4(b)(4) or 4(b)(5) of ERISA.
          “ Scheme ” means the proposed scheme of arrangement under Section 425 of the United Kingdom Companies Act 1985 between Cadbury and its shareholders as set forth in the Circular.
          “ Share Option Plans ” means the Cadbury Schweppes Share Option Plan 2004 and the Cadbury Schweppes (New Issue) Share Option Plan 2004.
          “ Welfare Plan ” means any employee welfare plan as defined in Section 3(1) of ERISA, without regard to Section 4(b)(4) of ERISA.
          “ WARN ” means the U.S. Workers Adjustment Retraining and Notification Act, as amended and any applicable state or local law equivalent.
          Section 1.03 Interpretation . In this Agreement, unless the context clearly indicates otherwise:
     (a) words used in the singular include the plural and words used in the plural include the singular;
     (b) references to any Person include such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement, and a reference to such Person’s “Affiliates” shall be deemed to mean such Person’s Affiliates following the Distribution;
     (c) references to any gender include the other gender;
     (d) accounting terms used herein shall have the meanings historically ascribed to them by Cadbury and its Subsidiaries, including DPSG, in its and their internal accounting and financial policies and procedures in effect prior to the date of this Agreement;
     (e) if there is any conflict between the provisions of the Separation Agreement and this Agreement, the provisions of this Agreement shall control with respect to the subject matter hereof; if there is any conflict between the provisions of the body of this Agreement and the Schedules hereto, the provisions of the body of this Agreement shall control unless explicitly stated otherwise in such Schedule;

 


 

     (f) the titles to Articles and headings of Sections contained in this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of or to affect the meaning or interpretation of this Agreement; and
     (g) unless otherwise specified in this Agreement, all references to dollar amounts herein shall be in respect of lawful currency of the United States.
ARTICLE 2
ASSIGNMENT OF EMPLOYEES
          Section 2.01 Active Employees .
     (a)  DPSG Business Employees . Except as otherwise set forth in this Agreement, effective not later than the Distribution Date, the employment of each DPSG Business Employee who is employed by Cadbury or a Cadbury Subsidiary shall be assigned and transferred to DPSG or a DPSG Subsidiary. As of the Distribution Date, DPSG shall and shall cause each DPSG Subsidiary to continue the employment of each DPSG Business Employee who is employed by DPSG or a DPSG Subsidiary.
     (b)  Cadbury Business Employees . Effective not later than the Distribution Date, the employment of each Cadbury Business Employee who is employed by DPSG or a DPSG Subsidiary shall be assigned and transferred to Cadbury or a Cadbury Subsidiary. As of the Distribution Date, Cadbury shall and shall cause each Cadbury Subsidiary to continue the employment of each Cadbury Business Employee who is employed by Cadbury or a Cadbury Subsidiary.
     (c)  At-Will Status . Notwithstanding the above or any other provision of this Agreement, nothing in this Agreement shall create any obligation on the part of Cadbury, DPSG or any of their respective Affiliates to continue the employment of any employee for any definite period following the Distribution Date or to change the employment status of any employee from “ at will, ” to the extent such employee is an “ at will ” employee under applicable law.
     (d)  Severance . The Distribution and the assignment, transfer or continuation of the employment of employees in connection therewith shall not be deemed a severance of employment of any employee for purposes of any plan, policy, practice or arrangement of Cadbury, DPSG or any of their respective Subsidiaries, except as otherwise provided herein.
          Section 2.02 Former Employees .
     (a)  General Principal . Except as otherwise provided in this Agreement, each former employee of Cadbury or any Cadbury Subsidiary or DPSG or any DPSG Subsidiary as of the Distribution Date will be considered a former employee of the business as to which his or her duties were primarily related immediately prior to his or her termination of employment with all of Cadbury, DPSG and their respective Affiliates.
     (b)  Former Cadbury Employees . For these purposes, former employees of Cadbury and the Cadbury Subsidiaries shall be deemed to include all employees who, as of their last day

 


 

of employment with all of Cadbury, DPSG and their respective Affiliates, had employment duties primarily related to the Cadbury Business (collectively, the “ Former Cadbury Employees ”).
     (c)  Former DPSG Employees . Except with respect to those individuals set forth on Schedule 2.02(c), former employees of DPSG and the DPSG Subsidiaries shall be deemed to include all employees who, as of their last day of employment with all of Cadbury, DPSG and their respective Affiliates, had employment duties primarily related to the DPSG Business (collectively, the “ Former DPSG Employees ”).
          Section 2.03 Employment Law Obligations .
     (a)  WARN Act . Cadbury and the Cadbury Subsidiaries shall be responsible for providing any necessary WARN notice (and meeting any similar state law notice requirements) with respect to any termination of any Cadbury Business Employee. DPSG and the DPSG Subsidiaries shall be responsible for providing any necessary WARN notice (and meeting any similar state law notice requirements) with respect to any termination of any DPSG Business Employee; provided , however , that Cadbury and the Cadbury Subsidiaries shall be responsible for providing any necessary WARN notice (and any similar state law notice requirements) to any DPSG Business Employee or any governmental authority in connection with any transfer of the employment of any DPSG Business Employee from a Cadbury Group entity to a DPSG Group entity in contemplation of the Distribution.
     (b)  Compliance With Employment Laws . On and after the Distribution Date (i) Cadbury and the Cadbury Subsidiaries shall be responsible for adopting and maintaining any policies or practices, and for all other actions and inactions, necessary to comply with employment-related laws and requirements relating to the employment of the Cadbury Business Employees and the treatment of the Former Cadbury Employees in respect of their former employment with Cadbury and its Affiliates and (ii) DPSG and the DPSG Subsidiaries shall be responsible for adopting and maintaining any policies or practices, and for all other actions and inactions, necessary to comply with employment-related laws and requirements relating to the employment of the DPSG Business Employees and the treatment of the Former DPSG Employees in respect of their former employment with DPSG and their respective Affiliates.
          Section 2.04 Employee Records .
     (a)  Records Relating to Cadbury Business Employees and Former Cadbury Employees . All records and data in any form relating to Cadbury Business Employees and Former Cadbury Employees shall be the property of Cadbury, except that data pertaining to such an employee and relating to any period that such employee was employed by DPSG or a DPSG Subsidiary prior to the Distribution shall be jointly owned by Cadbury and DPSG.
     (b)  Records Relating to DPSG Business Employees and Former DPSG Employees . All records and data in any form relating to DPSG Business Employees and Former DPSG Employees shall be the property of DPSG, except that data pertaining to such an employee and relating to any period that such employee was employed by Cadbury, DPSG or any of their respective Subsidiaries prior to the Distribution shall be jointly owned by Cadbury and DPSG.

 


 

     (c)  Sharing of Records . The Parties shall use their respective reasonable commercial efforts to provide each other such records and information only as necessary or appropriate to carry out their obligations under applicable law (including, without limitation, any relevant privacy protection laws or regulations in any applicable jurisdictions), this Agreement or the Separation Agreement or the Transition Services Agreement, or for the purposes of administering their respective employee benefit plans and policies. Subject to applicable law, all information and records regarding employment and personnel matters of DPSG Business Employees and Former DPSG Employees shall be accessed, retained, held, used, copied and transmitted after the Distribution Date by DPSG in accordance with all laws and policies relating to the collection, storage, retention, use, transmittal, disclosure and destruction of such records. The Parties shall reimburse each other for any reasonable costs incurred in copying or transmitting any records requested pursuant to this Section 2.04.
     (d)  Access to Records . To the extent consistent with this Agreement and any applicable privacy protection laws or regulations, access to such records after the Distribution Date will be provided to Cadbury and DPSG in accordance with the Separation Agreement. In addition, notwithstanding anything to the contrary, Cadbury shall retain reasonable access to those records necessary for Cadbury’s continued administration of any plans or programs on behalf of Employees after the Distribution Date, provided that such access shall be limited to individuals who have a job-related need to access such records. Cadbury shall also retain copies of all restrictive covenant agreements with any DPSG Business Employee or Former DPSG Employee in which Cadbury has a valid business interest.
     (e)  Maintenance of Records . With respect to retaining, destroying, transferring, sharing, copying and permitting access to all such information, Cadbury and DPSG shall each comply with all applicable laws, regulations and internal policies, and each Party shall indemnify and hold harmless the other Party from and against any and all liability, claims, actions, and damages that arise from a failure (by the indemnifying party or its agents) to so comply with all applicable laws, regulations and internal policies applicable to such information.
     (f)  No Access to Computer Systems or Files . Except as set forth in the Separation Agreement or the Transition Services Agreement, no provision of this Agreement shall give either Party direct access to the computer systems or other files, records or databases of the other Party, unless specifically permitted by the owner of such systems, files, records or databases.
     (g)  Relation to Separation Agreement . The provisions of this Section 2.04 shall be in addition to, and not in derogation of, the provisions of the Separation Agreement governing Confidential Information and access to and use of employees, information and records, including Sections of the Separation Agreement.
     (h)  Confidentiality . Except as otherwise set forth in this Agreement, all records and data relating to Employees shall, in each case, be subject to the confidentiality provisions of the Separation Agreement.
     (i)  Cooperation . DPSG and Cadbury and their respective Affiliates shall use reasonable commercial efforts to cooperate to share, retain and maintain data and records that are necessary or appropriate to further the purposes of this Section 2.04 and for each other to

 


 

administer their respective benefit plans to the extent consistent with this Agreement and applicable law. Except as provided under the Transition Services Agreement, neither DPSG nor Cadbury shall charge the other any fee for such cooperation. The parties agree to cooperate as long as is reasonably necessary to further the purposes of this Section 2.04.
ARTICLE 3
EQUITY COMPENSATION PLANS
          Section 3.01 General Principles .
     (a) For the avoidance of doubt, the provisions of this Article 3 shall not apply unless the Distribution takes place. Cadbury and DPSG shall take any and all action as shall be necessary and appropriate to further the provisions of Article 3.
     (b) Each DPSG Business Employee shall be treated for the purposes of the Cadbury Employee Share Schemes as having ceased to be an employee of Cadbury at the Distribution Date.
     (c) Where an award granted under the DPSG Legacy Equity Plans replaces an award under the Cadbury Employee Share Schemes in accordance with the provisions of this Article 3, such award shall be on terms which are in all material respects identical to the terms of the award which it replaces having regard to the fact that those terms are the terms which are applicable to a good leaver under the relevant Cadbury Employee Share Scheme but subject to any necessary changes to take into account that (i) the award relates to DPSG Common Stock, (ii) the DPSG Legacy Equity Plan is administered by DPSG and (iii) the award is not subject to any performance conditions.
     Section 3.02 Share Option Plans . Each unexercised option of a DPSG Business Employee on the Distribution Date shall be converted in accordance with the rules of the applicable Share Option Plan into an option over Cadbury plc Ordinary Shares. The number of Cadbury plc Ordinary Shares shall be determined based on the Exchange Ratio. The aggregate exercise price of the substitute option shall be the same as the aggregate exercise price of the option that it replaces except (i) that it shall be in US dollars and (ii) for any adjustments that the Cadbury Committee determines to be appropriate if the Exchange Ratio does not result in a whole number of Cadbury plc Ordinary Shares. Such substituted options shall, in the sole discretion of the Cadbury Committee, preserve the aggregate intrinsic value of the original options for which they are substituted and the ratio in the original option of the exercise price to the fair market value of the stock by adjusting the number of shares purchasable and the exercise price, based on the a comparison of the Cadbury Final Price and the Cadbury Initial Price. Such substitute options shall:
          (i) if they represent options granted before May 2005, be fully vested and exercisable for a period of 12 months after the Distribution Date; and
          (ii) if they represent options granted after April 2005, be fully vested and exercisable for a period of 12 months starting on the third anniversary of the grant date of the options that they represent.

 


 

          Section 3.03 Long Term Incentive Plan .
     (a)  Contingent Share Awards . Subject to the Scheme becoming effective, each Contingent Share Award (as defined in the rules of the relevant LTIP) of a DPSG Business Employee shall be converted based on the Exchange Ratio into a Contingent Share Award over Cadbury plc Ordinary Shares in accordance with the rules of the relevant LTIP and those shares shall be released to the DPSG Business Employee in accordance with the rules of the relevant LTIP within sixty (60) days following the Distribution Date.
     (b)  Basic Awards .
     (i) The performance conditions applying to Basic Awards (as defined in the rules of the relevant LTIP) of each DPSG Business Employee participating in the LTIPs shall be measured using the fair value methodology basis described in paragraph 16 of Part I of the Circular to determine the number of Cadbury Ordinary Shares that shall (subject to the following provisions) become payable under those awards at the end of the relevant performance periods.
     (ii) The number of Cadbury Ordinary Shares subject to each Basic Award held by each DPSG Business Employee, as determined in accordance with Section 3.03(a), shall then be reduced on a time pro-rated basis having regard to the proportion of the relevant performance period applicable to that Basic Award completed prior to the Distribution Date and converted based on the Exchange Ratio into an award over DPSG Common Stock to be granted by DPSG under the applicable DPSG Legacy Equity Plan. The DPSG Common Stock subject to the replacement award shall be released to the DPSG Business Employee within sixty (60) days following the end of the performance period originally applicable to the relevant Basic Award.
          Section 3.04 Bonus Share Retention Plan .
     (a) Each Matching Award (as defined in the rules of the BSRP) consists of a service-related element and a performance-related element. The performance conditions applying to the performance-related element of the Matching Award of each DPSG Business Employee shall be measured using the fair value methodology basis described in paragraph 16 of Part I of the Circular to determine the number of Cadbury Ordinary Shares that shall (subject to the following provisions) become due under that performance-related element of those awards at the end of the relevant performance period.
     (b) The number of Cadbury Ordinary Shares subject to each Matching Award held by each DPSG Business Employee, (being the aggregate of the Cadbury Ordinary Shares subject to the service-related element and the Cadbury Ordinary Shares subject to the performance-related element as determined in accordance with Section 3.04(a), shall then be reduced on a pro-rated basis having regard to the proportion of the relevant performance period applicable to that Matching Award completed prior to the Distribution Date and converted based on the Exchange Ratio into an award over DPSG Common Stock to be granted by DPSG under the applicable DPSG Legacy Equity Plan. The DPSG Common Stock shall be released to the DPSG Business

 


 

Employee within sixty (60) days following the end of the original performance period applicable to the relevant Matching Award.
     (c) Each Basic Award held by a DPSG Business Employee shall be converted based on the Exchange Ratio into an award over DPSG Common Stock to be granted by DPSG under the applicable DPSG Legacy Equity Plan. The DPSG Common Stock shall be released to the DPSG Business Employee within sixty (60) days following the end of the original performance period applicable to the Matching Award that is related to that Basic Award.
     Section 3.05 International Share Award Plan .
     (a)  Awards with Performance Conditions . This Section 3.05(a) shall apply to Conditional Awards (as each is defined in the rules of the ISAP) which are subject to performance conditions.
     (i) The performance conditions applicable to the Conditional Awards shall be measured using the fair value methodology basis described in paragraph 16 of Part I of the Circular to determine the number of Cadbury Ordinary Shares that shall (subject to the following provisions) become payable under those awards at the end of the relevant performance period.
     (ii) The number of Cadbury Ordinary Shares subject to each award held by a DPSG Business Employee, as determined in accordance with Section 3.05(b), shall then be reduced on a pro-rated basis having regard to the proportion of the relevant performance period applicable to that award completed prior to the Distribution Date and converted based on the Exchange Ratio into an award over DPSG Common Stock to be granted by DPSG under the applicable DPSG Legacy Equity Plan. The DPSG Common Stock shall be distributed to the DPSG Business Employee within sixty (60) days following the end of the original performance period applicable to the relevant Conditional Award.
     (b)  Awards without Performance Conditions . This Section 3.05(b) shall apply to Conditional Awards (as each is defined in the rules of the ISAP) which are not subject to performance conditions. Each award held by a DPSG Business Employee shall be converted based on the Exchange Ratio into an award over DPSG Common Stock to be granted by DPSG under the applicable DPSG Legacy Equity Plan. The DPSG Common Stock shall be released to the DPSG Business Employee within sixty (60) days following the date on which the Conditional Award would otherwise have vested under the ISAP but for the Distribution.
     (c)  Restricted Awards . All restrictions applicable to the Cadbury Ordinary Shares subject to the Restricted Awards (as defined in the rules of the ISAP) of each DPSG Business Employee shall lapse on the date on which the Scheme is sanctioned by the Court and such shares shall be subject to the terms of the Scheme.
          Section 3.06 Employee Share Option Plans . Each unexercised option of a DPSG Business Employee on the Distribution Date shall be converted in accordance with the rules of the applicable Share Option Plan into an option over Cadbury plc Ordinary Shares. The number of Cadbury plc Ordinary Shares shall be determined based on the Exchange Ratio. The

 


 

aggregate exercise price of the substitute option shall be the same as the aggregate exercise price of the option that it replaces except (i) that it shall be in US dollars and (ii) for any adjustments that the Cadbury Committee determines to be appropriate if the Exchange Ratio does not result in a whole number of Cadbury plc Ordinary Shares. Such substituted options shall, in the sole discretion of the Cadbury Committee, preserve the aggregate intrinsic value of the original options for which they are substituted and the ratio in the original option of the exercise price to the fair market value of the stock by adjusting the number of shares purchasable and the exercise price, based on a comparison of the Cadbury Final Price and the Cadbury Initial Price. Such substitute options shall be exercisable in accordance with the rules of the relevant Employee Share Option Plan.
          Section 3.07 Responsibility for Tax Withholding, Reporting, and Social Insurance Contributions . Cadbury and DPSG agree that, unless prohibited by applicable law, DPSG shall be responsible for all tax withholding and reporting obligations and shall pay the employer’s share of any social insurance tax obligations that arise in connection with the vesting, exercise, transfer or other settlement of the adjusted awards held by DPSG Business Employees. Cadbury and DPSG further agree that, unless prohibited by applicable law, Cadbury shall be responsible for all tax withholding and reporting obligations and shall pay the employer’s share of any social insurance tax obligations that arise in connection with the vesting, exercise, transfer or other settlement of the equity awards held by Cadbury Business Employees, Former Cadbury Business Employees and Former DPSG Business Employees. Cadbury and DPSG agree to enter into any necessary agreements regarding the subject matter of this Section 3.07 to enable them to fulfill their respective obligations hereunder, including but not limited to compliance with all applicable laws and regulations regarding the reporting, withholding or remitting of income and social insurance taxes.
          Section 3.08 No Change of Control . For the avoidance of doubt, the Distribution shall not constitute a “change of ownership” or a “change in control” for purposes of Cadbury equity awards which are outstanding as of the Distribution Date.
          Section 3.09 Compliance with Section 409A . Notwithstanding any provision in this Agreement, if any provision of this Article 3 contravenes any regulations or guidance promulgated under Code Section 409A or could cause the awards subject to this Article 3 to be subject to additional taxes, accelerated taxation, interest or penalties under Code Section 409A, the parties will make reasonable commercial efforts to agree how to modify this Article 3: (i) to comply with, or avoid being subject to, Code Section 409A, or to avoid the imposition of any taxes, accelerated taxation, interest or penalties under Code Section 409A, and (ii) to maintain, to the maximum extent practicable, the original intent of the applicable provision without contravening the provisions of Code Section 409A.

 


 

ARTICLE 4
GENERAL PRINCIPLES FOR ALLOCATION OF LIABILITIES
          Section 4.01 General Principle .
     (a)  Cessation of Participation in Cadbury Pension and Welfare Benefit Plans and Non-ERISA U.S. Benefit Arrangements . Cadbury and DPSG shall take any and all action as shall be necessary or appropriate so that participation in Cadbury Pension and Welfare Benefit Plans and Cadbury Non-ERISA U.S. Benefit Arrangements by all DPSG Business Employees and Former DPSG Employees shall terminate in connection with the Distribution as and when provided under this Agreement (or if not specifically provided under this Agreement, as of the close of business on the Distribution Date) and DPSG and each DPSG Subsidiary shall cease to be a participating employer under the terms of such Cadbury Pension and Welfare Benefit Plans and Cadbury Non-ERISA U.S. Benefit Arrangements as of such time.
          Except as otherwise agreed below, DPSG shall have all liabilities and their share of assets relating to employee benefits for DPSG Business Employees and Former DPSG Employees and Cadbury shall have all liabilities and their share of assets relating to employee benefits for Cadbury Business Employees and Former Cadbury Employees.
     (b)  Assumption of Certain Obligations by DPSG Group . Except as otherwise provided in this Agreement, effective on or before the Distribution Date, DPSG shall assume or continue the sponsorship of, and none of Cadbury or any Cadbury Subsidiary shall have any further liability for or under, the following agreements, obligations and liabilities, and DPSG shall indemnify Cadbury and the Cadbury Subsidiaries, and the officers, directors, and employees of each, and hold them harmless with respect to such agreements, obligations or liabilities:
     (i) Agreements entered into between Cadbury, its Subsidiaries or Affiliates and DPSG Business Employees and Former DPSG Employees;
     (ii) Agreements entered into between Cadbury, its Subsidiaries or Affiliates and independent contractors providing services primarily to the DPSG Business;
     (iii) All collective bargaining agreements, collective agreements, trade union, or works council agreements entered into between Cadbury, its Subsidiaries or Affiliates and any union, works council, or other body representing only DPSG Business Employees and Former DPSG Employees;
     (iv) All wages, salary, incentive compensation, commissions and bonuses payable to DPSG Business Employees and Former DPSG Employees on or after the Distribution Date, without regard to when such wages, salary, incentive compensation, commissions and bonuses are or may have been earned;
     (v) All moving expenses and obligations related to relocation, repatriation, transfers, or similar items incurred by or owed to DPSG Business Employees and Former DPSG Employees;
     (vi) All immigration-related, visa, work application, or similar rights, obligations and liabilities related to DPSG Business Employees; and
     (vii) All liabilities and obligations whatsoever of the DPSG Business with respect to claims made by or with respect to DPSG Business Employees and Former

 


 

DPSG Employees or any other persons who at any time prior to the Distribution Date had employment duties primarily related to the DPSG Business relating to any employee benefit plan, program or policy not otherwise retained or assumed by Cadbury pursuant to this Agreement, including such liabilities relating to actions or omissions of or by DPSG or any officer, director, employee or agent thereof prior to the Distribution Date.
          Section 4.02 Establishment of DPSG Plans . Except as otherwise provided in this Agreement, sponsorship of Cadbury benefit plans that cover solely DPSG Business Employees and Former DPSG Employees shall be transferred to DPSG on or before the Distribution Date. Cadbury benefit plans that cover DPSG Business Employees and Former DPSG Employees and that also cover Cadbury Business Employees and/or Former Cadbury Employees shall be split into two separate plans, one covering DPSG Business Employees and Former DPSG Employees and one covering Cadbury Business Employees and/or Former Cadbury Employees, and sponsorship of the plans covering DPSG Business Employees and Former DPSG Employees shall be transferred to DPSG on or before the Distribution Date.
          Section 4.03 Transfer of Assets and Liabilities . To the extent necessary to effectuate the foregoing, on or before the Distribution Date, DPSG and Cadbury shall, in compliance with applicable law, transfer assets (if any) and liabilities of any such benefit plans to each other, including under the following plans:
CBI Holdings Inc. Health & Welfare Benefits Plan
CBI Holdings Inc. Premium Payment Plan
CBI Holdings Inc. Flexible Spending Account Plan
CBI Holdings Inc. Dependent Care Spending Account Plan
CBI Holdings Inc. Severance Pay Plan
Dr Pepper Bottling Company of Texas, ETAL Occupational Injury Benefit Plan
Cadbury Adams Holdings LLC Personal Pension Account Plan
Cadbury Adams Holdings LLC Pension Equalization Plan
Cadbury Adams Holdings LLC Supplemental Savings Plan
Cadbury Adams Holdings LLC Supplemental Executive Retirement Plan
Cadbury Adams Holdings LLC Supplemental Incentive Plan
          Section 4.04 Service Credit .
     (a)  Service for Eligibility and Vesting . Except as otherwise provided in any other provision of this Agreement (i) for purposes of participation, eligibility and vesting under the DPSG Pension and Welfare Benefit Plans, DPSG shall, and shall cause the DPSG Subsidiaries to, give to each DPSG Business Employee and Former DPSG Employee service credit for any employment with Cadbury or any Cadbury Affiliate prior to the Distribution Date to the extent that such service is taken into account pursuant to the terms of the comparable Cadbury plan and (ii) for purposes of participation, eligibility and vesting under the Cadbury Pension and Welfare Benefit Plans, Cadbury shall, and shall cause the Cadbury Subsidiaries to, give to each Cadbury Business Employee and Former Cadbury Employee service credit for any employment with DPSG or any DPSG Affiliate prior to the Distribution Date (to the extent available to employees generally).

 


 

     (b)  Service for Benefit Purposes . Except as otherwise provided in any other provision of this Agreement (i) for purposes of benefit levels and accruals, post-retirement welfare benefit contribution rates and benefit commencement entitlements under the DPSG Pension and Welfare Benefit Plans, DPSG shall, and shall cause the DPSG Subsidiaries to, give to each DPSG Business Employee and Former DPSG Employee service credit for any employment with Cadbury or any Cadbury Affiliate prior to the Distribution Date to the extent that such service is taken into account pursuant to the terms of the comparable Cadbury plan and (ii) for purposes of benefit levels and accruals, post-retirement welfare benefit contribution rates and benefit commencement entitlements under the Cadbury Pension and Welfare Benefit Plans, Cadbury shall, and shall cause the Cadbury Subsidiaries to, give to each Cadbury Business Employee and Former Cadbury Employee service credit for any employment with DPSG or any DPSG Affiliate prior to the Distribution Date (to the extent available to employees generally).
     (c)  Evidence of Prior Service . Notwithstanding anything to the contrary, but subject to applicable law, upon reasonable request by one Party to the other Party, the first Party will provide to the other copies of any records available to the first Party to document such service, plan participation and membership and cooperate with the first Party to resolve any discrepancies or obtain any missing data for purposes of determining benefit eligibility, participation, vesting and calculation of benefits with respect to such DPSG Business Employees and Former DPSG Employees.
          Section 4.05 Plan Administration .
     (a)  Transition Services . DPSG will administer Cadbury’s benefit programs for a transitional period under the terms of the Transition Services Agreement. The Parties agree to enter into a business associate agreement in connection with such Transition Services Agreement, which shall be set forth substantially in the form of Appendix 1 to this Agreement.
     (b)  Administration . DPSG shall, and shall cause the DPSG Subsidiaries to, administer its benefit plans in a manner that does not jeopardize the tax favored status of the tax favored benefit plans maintained by Cadbury and the Cadbury Subsidiaries. Cadbury shall, and shall cause the Cadbury Subsidiaries to, administer its benefit plans in a manner that does not jeopardize the tax favored status of the tax favored benefit plans maintained by DPSG and the DPSG Subsidiaries.
     (c)  Participant Elections and Beneficiary Designations . All participant elections and beneficiary designations made under any Cadbury benefit plan prior to the date as of which assets or liabilities relating to that plan are transferred to DPSG shall continue in effect under any plan maintained by DPSG or any DPSG Subsidiary to which liabilities are transferred pursuant to this Agreement until such time as the participant changes his or her elections or beneficiary designations in accordance with the procedures of the relevant plan, as the case may be.

 


 

ARTICLE 5
U.S. PENSION PLAN SPIN-OFF
          Section 5.01 General Principle . Effective on or before the Distribution Date, DPSG shall establish and adopt a defined benefit pension benefit plan and trust (the “ DPSG Pension Plan ”) intended to be qualified under IRS Code Section 401(a) and containing provisions that will provide to each DPSG Business Employee and Former DPSG Employee (and each alternate payee or beneficiary of such person) (the “ DPSG Pension Beneficiaries ”) benefits identical to those accrued with respect to such person under the Cadbury Pension Plan as of December 31, 2007 (the “ Pension Measurement Date ”). On or before the Distribution Date, Cadbury shall (i) determine the Initial Transfer Amount (as defined below) and (ii) cause assets equal to the Initial Transfer Amount (adjusted as provided below) to be transferred to the trust under the DPSG Pension Plan in the form described below (the “ Initial Transfer ”). As of the date of such transfer of the Initial Transfer Amount (the “ Initial Transfer Date ”), DPSG shall commence making the required benefit payments under the terms of the DPSG Pension Plan and shall assume all liabilities with respect to the payment of benefits previously accrued by the DPSG Pension Beneficiaries under the Cadbury Pension Plan. A DPSG Business Employee shall not accrue benefits under the Cadbury Pension Plan after the date on which such employee becomes eligible to participate under the DPSG Pension Plan, unless such DPSG Pension Beneficiary shall become employed by Cadbury or a Cadbury Subsidiary after such date. A Cadbury Business Employee shall not accrue benefits under the DPSG Pension Plan, unless such Cadbury Business Employee shall become employed by DPSG or a DPSG Subsidiary. Following the Initial Transfer Date (i) an enrolled actuary appointed by Cadbury (the “ Cadbury Actuary ”) shall determine the Final Pension Transfer Amount (as defined below) and (ii) a True-Up Adjustment shall be made with respect to the Cadbury Pension Plan and the DPSG Pension Plan, as provided below. The Parties shall use reasonable commercial efforts to cause the determination of the Final Pension Transfer Amount and the True-Up Adjustment to be completed as reasonably promptly as practicable, subject to the time frames established under Section 5.03, but in no event later than December 31, 2008. Before or promptly after the date hereof, Cadbury and DPSG shall file requests with the IRS for qualification determination letters under IRS Code Section 401(a) with respect to the Cadbury Pension Plan and the DPSG Pension Plan and shall take any and all reasonable action, including the adoption of any amendments requested by the IRS, as shall be necessary to obtain such determination letters. The transfers hereunder shall occur prior to, but subject to the subsequent receipt of, favorable determination letters issued by the IRS with respect to the Cadbury Pension Plan and DPSG Pension Plan, copies of which shall be shared among Cadbury and DPSG promptly upon issuance.
          Section 5.02 Determination and Transfer of Initial Transfer Amount . On or before the Distribution Date, with the assistance of the Cadbury Actuary, Cadbury shall establish and communicate to DPSG the amount equal to 90% of the estimated asset transfer amount calculated as of January 1, 2008 in accordance with IRS Code Section 414(l) but based on January 1, 2007 census data and November 30, 2007 trust assets as attributable to benefits accrued by DPSG Pension Beneficiaries under the Cadbury Pension Plan as of the Pension Measurement Date, adjusted for contributions, distributions, trust gains and losses, payments and other appropriate items occurring between the Pension Measurement Date and the Initial Transfer Date, all as estimated in good faith by Cadbury (the “ Initial Transfer Amount ”).

 


 

Following the determination of the Initial Transfer Amount by Cadbury, Cadbury shall cause to be transferred from the trust under the Cadbury Pension Plan to the trust under the DPSG Pension Plan assets having an aggregate Value (as defined below) equal to the Initial Transfer Amount. Such assets shall be in the form of cash, securities and other property, determined in accordance with the provisions below.
          Section 5.03 Determination of the Final Pension Transfer Amount .
     (a)  Calculation of the Cadbury Actuary . Following the Distribution Date, the Cadbury Actuary shall determine the Final Pension Transfer Amount, which shall be equal to the amount required to be transferred from the Cadbury Pension Plan to the DPSG Pension Plan in respect of the assumption by the DPSG Pension Plan of the benefit obligations of the Cadbury Pension Plan of benefits accrued by the DPSG Pension Beneficiaries as of the Pension Measurement Date, as determined in accordance with IRS Code Section 414(l) and the regulations thereunder and the actuarial assumptions and methods set forth in Schedule 6.03 hereof, as appropriately adjusted to reflect the following amounts arising after the Pension Measurement Date and before the True-Up Adjustment: (A) any distributions and contributions made in respect of the DPSG Pension Beneficiaries, (B) administrative expenses of the Cadbury Pension Plan reasonably allocable to the DPSG Pension Beneficiaries, (C) earnings realized by the Cadbury Pension Plan allocable to the DPSG Pension Beneficiaries, (D) the net gain or loss (realized and unrealized) of the Cadbury Pension Plan allocable to the DPSG Pension Beneficiaries and (E) other appropriate items. Cadbury and DPSG shall each be responsible for the funding of their respective pension plans. It is anticipated that each pension plan will have underfunding under ERISA Section 4044. Each party shall be responsible for funding such underfunding under their respective pension plan. Promptly upon determination of the Final Pension Transfer Amount, Cadbury shall cause the Cadbury Actuary to provide to DPSG a written statement of the Final Pension Transfer Amount, a summary of the calculation of such amount (the “ Pension Statement ”) and a written statement that the sum of the Initial Transfer Amount and the Final Pension Transfer Amount satisfies the requirements of IRS Code Section 414(l).
     (b)  Resolution of Differences . Cadbury shall provide DPSG with all information reasonably necessary to review the calculation of the Final Pension Transfer Amount in all material respects and to verify that such calculations have been performed in a manner consistent with the terms of this Agreement. The determination of the Final Pension Transfer Amount by the Cadbury Actuary shall be final, conclusive and binding for all purposes under this Agreement, unless DPSG provides to Cadbury, within thirty (30) days after receipt of the Pension Statement, a written objection prepared by an enrolled actuary retained by DPSG setting forth in detail a reasonable basis for the conclusion that the Final Pension Transfer Amount set forth in the Pension Statement is understated by an amount in excess of 5%. Upon receipt of such objection, Cadbury and DPSG shall make a good faith attempt to resolve their dispute as to the Final Pension Transfer Amount. Should such dispute remain unresolved for more than thirty (30) days, Cadbury and DPSG shall promptly select and appoint a third enrolled actuary who is mutually satisfactory to both Parties. The third actuary shall recalculate the Final Pension Transfer Amount and if such recalculated amount exceeds the Final Pension Transfer Amount set forth in the Pension Statement by more than 5%, then such recalculated amount shall serve as the Final Pension Transfer Amount for all purposes under this Agreement. If such recalculated

 


 

amount does not exceed the Final Pension Transfer Amount set forth in the Pension Statement by more than 5%, then for all purposes under this Agreement the Final Pension Transfer Amount shall be the Final Pension Transfer Amount as set forth in the Pension Statement. The recalculation of such third party actuary shall be completed within thirty (30) days of the retention of such third party actuary and shall be conclusive as to any dispute with respect to the Final Pension Transfer Amount, except as set forth in Section 5.05 below. The cost of such third party actuary shall be divided equally between Cadbury and DPSG. Each Party shall be responsible for the cost of its own actuary.
          Section 5.04 True-Up Adjustment . The following transfer shall be made promptly after the date that the Final Pension Transfer Amount is determined as set forth above: (A) if the Final Pension Transfer Amount exceeds the Initial Transfer Amount, Cadbury shall promptly cause to be transferred from the Cadbury Pension Plan trust to the DPSG Pension Plan trust assets having a Value equal to such excess and (B) if the Initial Transfer Amount exceeds the Final Pension Transfer Amount, DPSG shall promptly cause to be transferred from the DPSG Pension Plan trust to the Cadbury Pension Plan trust assets having a Value equal to such excess.
          Section 5.05 Form and Selection of Assets to be Transferred . The assets to be transferred in the Initial Transfer and the True-Up Adjustment Assets will be transferred in-kind or in cash pro rata from each investment manager under the transferring plan in a manner that represents, as closely as commercially practical, a pro rata portion of each asset and position held by the manager as of the date of such transfer, except that reasonable adjustments shall be made where Cadbury determines such transfers cannot reasonably be made by the Cadbury Pension Plan due to investment manager account minimums or where other considerations prevent such pro rata transfers or render such pro rata transfers impractical. For purposes of the Agreement, the " Value ” of all pension assets shall be the value of such assets as determined in good faith by Cadbury based on all relevant information known to Cadbury at the time of such determination, including the most recent account statements or schedules of asset values provided to Cadbury by any service providers maintaining or overseeing any such assets or any investment vehicles which represent or hold the relevant plan assets. Cadbury shall select the assets to be transferred and provide a schedule of such assets to DPSG 14 days prior to the transfer of such assets. DPSG shall communicate to Cadbury any objection to the schedule of the assets to be transferred promptly, and upon receipt by Cadbury of such objection, Cadbury and DPSG shall make a good faith attempt to resolve their dispute as to the assets to be transferred within the period remaining prior to the transfer of the assets. Should such dispute remain unresolved upon the asset transfer date, the assets shall be transferred in accordance with the schedule provided by Cadbury. Any assets that are liquidated prior to transfer shall be reduced by the asset liquidation expenses actually incurred.
ARTICLE 6
U.S. 401(K) PLAN
          Section 6.01 General Principle . Effective on or before the Distribution Date, DPSG shall establish and adopt a qualified employee cash or deferred arrangement under IRS Code Section 401(k) (the “ DPSG 401(k) Plan ”) intended to be qualified under IRS Code Section 401(a) and containing provisions that will provide benefits for each DPSG Business

 


 

Employee and Former DPSG Employee (and each beneficiary and alternate payee of such person) (the “ DPSG DC Plan Beneficiaries ”) identical to those in effect for the DPSG DC Plan Beneficiaries as of the date of transfer of assets and liabilities with respect to such plan (as described below). Before or as soon as reasonably practicable after the Distribution Date, the assets and liabilities relating to the DPSG DC Plan Beneficiaries under the Cadbury 401(k) Plan and shall be transferred to the DPSG 401(k) Plan. DPSG Business Employees shall not make or receive additional contributions under the Cadbury 401(k) Plan after the effective date of the DPSG 401(k) Plan, unless such DPSG Business Employee shall become employed by Cadbury or a Cadbury Subsidiary after such date. A Cadbury Business Employee shall not participate in the DPSG 401(k) Plan after the effective date of the DPSG 401(k) Plan, unless such Cadbury Business Employee shall become employed by DPSG or a DPSG Subsidiary after such date.
          Section 6.02 Transfer of Accounts . Effective before or as soon as practical following the Distribution Date, but in no event later than six months following the Distribution Date, Cadbury shall cause to be transferred from trusts under the Cadbury 401(k) Plan to the trust under the DPSG 401(k) Plan the aggregate amount that is credited to the accounts of the DPSG DC Plan Beneficiaries (disregarding any participant loans from the plans) as of the date of transfer, but not less than or more than permitted by law, as determined by Cadbury. The transfer shall be an in-kind transfer, subject to the reasonable consent of the trustee of the DPSG 401(k) Plan and shall include the transfer of the aggregate assets held in the accounts relating to each DPSG DC Plan Beneficiary under the Cadbury 401(k) Plan and any participant loan notes held under such plans. Any assets that are liquidated prior to transfer shall be reduced by the asset liquidation expenses, such as commissions or early withdrawal penalties, actually incurred. Cadbury shall cause the DPSG 401(k) Plan to allocate the portion of any forfeiture account under the Cadbury 401(k) Plan that relates to forfeiture by Former DPSG Employees consistent with Cadbury’s past practice regarding allocation of forfeitures under the Cadbury 401(k) Plan. Before or promptly after the date hereof, Cadbury and DPSG shall file requests with the IRS for qualification determination letters under IRS Code Section 401(a) and 401(k) (as applicable) with respect to the Cadbury 401(k) Plan and DPSG 401(k) Plan and shall take any and all reasonable actions, including the adoption of amendments requested by the IRS, as shall be necessary to obtain such determination letters. The transfers under this Section 6.02 shall occur prior to, but subject to the subsequent receipt of favorable determination letters issued by the IRS with respect to the Cadbury 401(k) Plan and DPSG 401(k) Plan, copies of which shall be shared among Cadbury and DPSG promptly upon issuance.
          Section 6.03 Funding of 2008 Matching Contribution . DPSG shall fund and allocate the full amount of any 2008 matching contribution accrued under the terms of the Cadbury 401(k) Plan to eligible DPSG DC Plan Beneficiaries under the DPSG 401(k) Plan within the time permitted by law (determined based on the terms of the Cadbury 401(k) Plan immediately prior to the transfer to the DPSG 401(k) Plan as if the transfer to the DPSG 401(k) Plan did not occur, but paid and contributed by DPSG to the DPSG 401(k) Plan).

 


 

ARTICLE 7
U.S. WELFARE BENEFIT PLANS
          Section 7.01 General Principle . Except as provided below, on or about the Distribution Date, liabilities relating to DPSG Business Employees and Former DPSG Employees shall be transferred to newly established DPSG welfare benefit plans that shall contain the same benefit provisions as in effect for DPSG Business Employees and Former DPSG Employees immediately prior to such date, and DPSG Business Employees and Former DPSG Employees shall cease to participate in the Cadbury welfare benefit plans. Welfare benefit plans include health, welfare, and wellness benefits plans (including, medical, dental, prescription drug and vision benefits, life insurance, accidental death and disability insurance, business travel accident insurance, disability (STD and LTD), long term care, flexible spending accounts, severance, Employee Assistance Plan, and similar types of plans). DPSG Business Employees and Former DPSG Employees shall not participate in Cadbury welfare benefit plans following the effective date of the DPSG plans described in this Section 7.01, unless they shall become employed by Cadbury after such date. Cadbury Business Employees and Former Cadbury Employees shall not participate in any DPSG welfare benefit plans following the effective date of such plans, unless they shall become employed by DPSG after such date.
          Section 7.02 Establishment of DPSG Plans .
     (a)  General Rule . DPSG Business Employees and Former DPSG Employees shall cease to participate in the Cadbury welfare benefit plans on or about the Distribution Date.
     (b)  Treatment of Claims Incurred . DPSG shall assume and shall be responsible for the liability for payment of all covered claims (including medical, dental, life insurance and long-term disability) and eligible expenses incurred by any DPSG Business Employee and beneficiaries thereof under the Cadbury Welfare Plans and Cadbury Non-ERISA U.S. Benefit Arrangements prior to the Distribution Date, and Cadbury shall not be responsible for any liability with respect to any such claims or expenses.
     (c)  Credit for Deductibles and Other Limits . With respect to each DPSG Business Employee and Former DPSG Employee, and each covered dependent, beneficiary, or other related party of such individual (the “ DPSG Welfare Plan Participants ”), the DPSG welfare benefit plans will give credit in the year of the Distribution Date for any amount paid under the comparable type Cadbury plan by such DPSG Welfare Plan Participant in the year of the Distribution Date toward deductibles, out-of-pocket maximum, or other, similar limitations to the extent such amounts are taken into account under the comparable type Cadbury plan. For purposes of any life-time maximum out-of-pocket limit on expenses paid by a covered participant, the DPSG welfare plans will recognize any expenses incurred by a DPSG Welfare Plan Participant prior to the Distribution to the same extent such expenses would be recognized in respect of an active plan participant under the comparable type Cadbury plan.
     (d)  COBRA . Effective as of the date of cessation of participation in the Cadbury welfare benefit plans by the DPSG Business Employees and Former DPSG Employees (as provided above), DPSG shall assume and satisfy all requirements under COBRA with respect to

 


 

all DPSG Business Employees and Former DPSG Employees and their qualified beneficiaries, including for individuals who are already receiving benefits as of such date under COBRA.
     (e)  Disabled Persons . The Parties intend that any Employee who has, prior to the Distribution Date, become eligible to receive any long-term disability benefits pursuant to any third-party insurance policy applicable under any welfare benefit plan shall continue to be eligible to receive such benefits in accordance with the terms of such plan and policy.
          Section 7.03 Insurance Contracts . To the extent any Cadbury welfare benefit plan is funded through the purchase of an insurance contract or is subject to any stop loss contract, Cadbury and DPSG will cooperate and use their reasonable commercial efforts to “ clone ” such insurance contracts for DPSG and to maintain any pricing discounts or other preferential terms for both Cadbury and DPSG through the end of the term of the Transition Services Agreement. Neither party shall be liable for failure to obtain such pricing discounts or other preferential terms for DPSG. The cost of “ cloning ”, including any increases in premiums, charges or administrative fees relating to DPSG Business Employees and Former DPSG Employees shall be the obligation of DPSG. Each party shall be responsible for any additional premiums, charges or administrative fees that such party may incur pursuant to this Section 7.03.
          Section 7.04 Third Party Vendors . Except as provided below, to the extent any Cadbury welfare benefit plan is administered by a third-party vendor, Cadbury and DPSG will cooperate and use their reasonable commercial efforts to “ clone ” any contract with such third-party vendor for DPSG and to maintain any pricing discounts or other preferential terms for both Cadbury and DPSG. Neither party shall be liable for failure to obtain such pricing discounts or other preferential terms for DPSG. The cost of “ cloning ”, including any increases in premiums, charges or administrative fees relating to DPSG Business Employees and Former DPSG Employees shall be the obligation of DPSG. Each party shall be responsible for any additional premiums, charges or administrative fees that such party may incur pursuant to this Section 7.04.
ARTICLE 8
FRINGE BENEFIT AND OTHER U.S. PLANS AND PROGRAMS
          Except as otherwise provided under this Agreement, effective as of the Distribution Date, DPSG Business Employees and Former DPSG Employees shall not be eligible to participate in any plan, policy or arrangement of Cadbury or a Cadbury Subsidiary providing fringe benefits to employees or former employees.
ARTICLE 9
WORKERS COMPENSATION AND UNEMPLOYMENT COMPENSATION
          DPSG shall have and assume the obligations for all claims and liabilities relating to workers compensation and unemployment compensation benefits for all DPSG Business Employees and Former DPSG Employees. Cadbury shall have and assume the obligations for all claims and liabilities relating to workers compensation and unemployment compensation benefits for all Cadbury Business Employees and Former Cadbury Employees. DPSG and

 


 

Cadbury shall make reasonable commercial efforts to provide that workers compensation and unemployment insurance costs are not adversely affected for either of them by reason of the Distribution.
ARTICLE 10
COMPENSATION MATTERS AND GENERAL BENEFIT AND EMPLOYEE MATTERS
          Section 10.01 Restrictive Covenants in Employment and Other Agreements . To the fullest extent permitted by the agreements and applicable law, Cadbury shall assign, or cause its Affiliates to assign, to DPSG or one of its Affiliates as designated by DPSG all agreements containing restrictive covenants (including but not limited to confidentiality and non-competition provisions) between Cadbury (or a Cadbury Affiliate) and a DPSG Business Employee, with such assignment to be effective no later than the Distribution Date. To the extent that assignment of such agreements is not permitted, following the Distribution, DPSG and its Subsidiaries and Affiliates shall be considered to be successors to Cadbury and its Subsidiaries and Affiliates for purposes of, and third-party beneficiaries with respect to, all agreements containing restrictive covenants (including but not limited to confidentiality and non-competition provisions) between Cadbury (or a Cadbury Subsidiary or Affiliate) and DPSG Business Employees and between Cadbury (or a Cadbury Subsidiary or Affiliate) and Cadbury Employees whom DPSG reasonably determines have substantial knowledge of the DPSG Business, such that each of Cadbury, DPSG and their respective Subsidiaries and Affiliates shall all enjoy the rights and benefits under such agreements (including, without limitation, rights and benefits as a third-party beneficiary), with respect to such Party’s and its respective Subsidiaries’ and Affiliates’ business operations; provided , however , that (a) in no event shall Cadbury be permitted to enforce the restrictive covenant agreements against DPSG Business Employees for action taken in their capacity as employees of DPSG or its Subsidiaries, and (b) in no event shall DPSG be permitted to enforce the restrictive covenants agreements of Cadbury Business Employees for action taken in their capacity as employees of Cadbury or its Subsidiaries.
          Section 10.02 Severance .
     (a) Effective as of the Distribution Date, DPSG may establish one or more severance plans and policies with respect to DPSG Business Employees as DPSG deems appropriate in its discretion. Cadbury shall have no liability or obligation under any Cadbury severance plan or policy with respect to DPSG Business Employees who remain employed or whose employment terminates on or after the Distribution Date.
     (b) Following the Distribution Date, DPSG shall assume and shall be responsible for administering all payments and benefits under the applicable Cadbury severance policies or any termination agreements with Former DPSG Employees whose employment has terminated prior to the Distribution Date for an eligible reason under such policies or in accordance with such agreements.
     (c) It is not intended that any DPSG Business Employee will be eligible for termination or severance payments or benefits from Cadbury or its Subsidiaries or Affiliates as a

 


 

result of the transfer or change of employment from Cadbury to DPSG or their respective Subsidiaries or Affiliates. Notwithstanding the preceding sentence, in the event that any such termination or severance payments or benefits become payable on account of such transfer, change or the refusal of a DPSG Business Employee to accept employment with DPSG, DPSG shall indemnify Cadbury, and its Subsidiaries and Affiliates, for the amount of such termination or severance payments or benefits.
          Section 10.03 Accrued Vacation Days Off . DPSG shall recognize and assume all liability for all vacation, holiday, sick leave, flex days, personal days and Paid-Time Off, including banked time accrued by DPSG Business Employees as of the Distribution Date and DPSG shall credit each DPSG Business Employee with such accrual.
          Section 10.04 Leaves of Absence . DPSG will continue to apply the leave of absence policies maintained by Cadbury to inactive DPSG Business Employees who are on an approved leave of absence as of the Distribution Date. Leaves of absence taken by DPSG Business Employees prior to the Distribution Date shall be deemed to have been taken as employees of DPSG.
          Section 10.05 Cadbury Obligations . DPSG and Cadbury plc agree that Cadbury plc shall not, and shall cause Cadbury not to, take any actions that would materially and adversely impact the ability of Cadbury to fulfill its obligations under this Agreement; provided that Cadbury plc may at any time following the Distribution Date require Cadbury to assign to Cadbury plc all of Cadbury’s rights and obligations under this Agreement in substitution for compliance by Cadbury plc and Cadbury with the aforementioned obligation in this Section 10.05, and upon such assignment, Cadbury plc shall assume all of Cadbury’s obligations under this Agreement.
          Section 10.06 Collective Bargaining Agreements . Except as otherwise provided in this Agreement, effective as of the close of business on the Distribution Date, DPSG shall assume, and Cadbury shall have no further liability for, all collective bargaining agreements, collective agreements, multiemployer plans, pension and welfare plans and arrangements, trade union or works council agreements entered into with Cadbury, any union, works council, or other body representing only DPSG Business Employees.
ARTICLE 11
CANADIAN EMPLOYEE MATTERS
          The treatment of employee matters with respect to an Employee whose primary employer within the Cadbury Group or the DPSG Group is or was an entity domiciled in Canada shall be set forth as Appendix 2 to this Agreement.

 


 

ARTICLE 12
GENERAL PROVISIONS
          Section 12.01 Preservation of Rights to Amend . The rights of Cadbury or DPSG to amend or terminate any plan, program, or policy referred to herein shall not be limited in any way by this Agreement.
          Section 12.02 Confidentiality . Each Party agrees that any information conveyed or otherwise received by or on behalf of a Party in conjunction herewith is confidential and is subject to the terms of the confidentiality provisions set forth in the Separation Agreement.
          Section 12.03 Administrative Complaints/Litigation . Except as otherwise provided in this Agreement, as of and after the Distribution Date, DPSG shall assume, and be solely liable for, the handling, administration, investigation and defense of actions, including, without limitation, ERISA, occupational safety and health, employment standards, union grievances, wrongful dismissal, discrimination or human rights and unemployment compensation claims, asserted at any time against Cadbury, or DPSG or their respective Affiliates by any DPSG Business Employee or Former DPSG Employee (including any dependent or beneficiary of any such Employee) or any other person, to the extent such actions or claims arise out of or relate to employment or the provision of services (whether as an employee, contractor, consultant, or otherwise) to or with the DPSG Business. To the extent that any legal action relates to a putative or certified class of plaintiffs, which includes both Cadbury Business Employees (or Former Cadbury Employees) and DPSG Business Employees (or Former DPSG Employees) and such action involves employment or benefit plan related claims, reasonable costs and expenses incurred by the Parties in responding to such legal action shall be allocated among the Parties equitably in proportion to a reasonable assessment of the relative proportion of Cadbury Business Employees (or Former Cadbury Employees) and DPSG Business Employees (or Former DPSG Employees) included in or represented by the putative or certified plaintiff class. The procedures contained in the indemnification and related litigation cooperation provisions of the Separation Agreement shall apply with respect to each Party’s indemnification obligations under this Section 12.03.
          Section 12.04 Reimbursement and Indemnification . The Parties hereto agree to reimburse each other, within 60 days of receipt from the other Party of reasonable verification, for all costs and expenses which each may incur on behalf of the other as a result of any of the Welfare Plans, Pension Plans and Non-ERISA U.S. Benefit Arrangements and, as contemplated by Section 10.02, any termination or severance payments or benefits. All liabilities retained, assumed or indemnified against by DPSG pursuant to this Agreement, and all liabilities retained, assumed or indemnified against by Cadbury pursuant to this Agreement, shall in each case be subject to the indemnification provisions of the Separation Agreement. Notwithstanding anything to the contrary, no provision of this Agreement shall require DPSG or any DPSG Subsidiary to pay or reimburse to Cadbury or any Cadbury Affiliate any benefit-related cost item that DPSG or any DPSG Subsidiary has previously paid or reimbursed to Cadbury or any Cadbury Affiliate.

 


 

          Section 12.05 Costs of Compliance with Agreement . Except as otherwise provided in this Agreement or any other Distribution document, each Party shall pay its own expenses in fulfilling its obligations under this Agreement.
ARTICLE 13
MISCELLANEOUS
          Section 13.01 Notices . Any notice, instruction, direction or demand under the terms of this Agreement required to be in writing shall be duly given upon delivery, if delivered by hand, facsimile transmission, or mail, to the following addresses:
  (a)   If to Cadbury
 
      25 Berkeley Square
London W1J 6HB
Facsimile: 44-20-7830-5015
Attention: Henry Udow, Esq.
                   Chief Legal Officer
 
      With a copy to:
 
      Shearman & Sterling LLP
599 Lexington Avenue
New York, NY 10022-6069
Telecopy: 212-848-6069
Attention: Creighton O’M. Condon, Esq.
 
  (b)   If to Cadbury plc:
 
      25 Berkeley Square
London W1J 6HB
Facsimile: 44-20-7830-5015
Attention: Henry Udow, Esq.
                   Chief Legal Officer
 
      With a copy to:
 
      Shearman & Sterling LLP
599 Lexington Avenue
New York, NY 10022-6069
Telecopy: 212-848-6069
Attention: Creighton O’M. Condon, Esq.

 


 

  (b)   If to DPSG to:
 
      5301 Legacy Drive
Plano, TX 75024
Facsimile: 972-673-8130
Attention: James. L. Baldwin, Jr.
                   General Counsel
          or to such other addresses or telecopy numbers as may be specified by like notice to the other Party. All such notices, requests and other communications shall be deemed given, (a) when delivered in person or by courier or a courier services, (b) if sent by facsimile transmission (receipt confirmed) on a Business Day prior to 5 p.m. in the place of receipt, on the date of transmission (or, if sent after 5 p.m., on the following Business Day) or (c) if mailed by certified mail (return receipt requested), on the date specified on the return receipt.
          Section 13.02 Amendments; No Waivers . From and after the Distribution, any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by Cadbury and DPSG, or in the case of a waiver, by the Party against whom the waiver is to be effective.
     (a) No failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
          Section 13.03 Successors and Assigns . The provisions of this Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns; provided that neither Party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of the other Party hereto. If any Party or any of its successors or permitted assigns (i) shall consolidate with or merge into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) shall transfer all or substantially all of its properties and assets to any Person, then, and in each such case, proper provisions shall be made so that the successors and assigns of such Party shall assume all of the obligations of such Party under the Separation Agreement.
          Section 13.04 Governing Law . This Agreement shall be construed in accordance with and governed by the law of the State of New York, without regard to the conflicts of laws rules thereof.
          Section 13.05 Counterparts; Effectiveness; Third-Party Beneficiaries . This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other party hereto. Neither this Agreement nor any provision hereof is intended to confer any rights, benefits, remedies, obligations, or liabilities hereunder upon any

 


 

Person other than the parties hereto and their respective successors and permitted assigns. No Employee or other current or former employee of Cadbury or DPSG or any Subsidiary or Affiliate of either (or his/her spouse, dependent or beneficiary), or any other person not a party to this Agreement, shall be entitled to assert any claim hereunder. Without limiting the foregoing, the provisions of this Agreement are not intended to, nor shall they confer upon any Person other than the Parties hereto any right or expectation as to the adoption, amendment, maintenance, continuation, operation or funding of any employee benefit plan, policy or arrangement.
          Section 13.06 Entire Agreement . This Agreement and the other Distribution documents constitute the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements, understandings and negotiations, both written and oral, between the parties with respect to the subject matter hereof and thereof. Regardless of anything else contained herein, the parties do not intend for this Agreement to amend any employee benefit plans or arrangements.
          Section 13.07 Jurisdiction . Any Action seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby may be brought in the United States District Court for the Southern District of New York or any other New York State court sitting in New York County, and each of the Parties hereby consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any Party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each Party agrees that service of process on such Party as provided in Section 13.01 shall be deemed effective service of process on such Party.
          Section 13.08 Waiver of Jury Trial . The parties hereto hereby irrevocably waive any and all right to trial by jury in any legal proceeding arising out of or related to this Agreement or the transactions hereby contemplated.
          Section 13.09 Severability . If any one or more of the provisions contained in this Agreement should be declared invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained in this Agreement shall not in any way be affected or impaired thereby so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such a declaration, the Parties shall modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner so that the transactions contemplated hereby are consummated as originally contemplated to the fullest extent possible.
          Section 13.10 Survival . All covenants and agreements of the Parties contained in this Agreement shall survive the Distribution Date indefinitely, unless a specific survival or other applicable period is expressly set forth herein.

 


 

          Section 13.11 Captions . The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.
          Section 13.12 Specific Performance . Each Party to this Agreement acknowledges and agrees that damages for a breach or threatened breach of any of the provisions of this Agreement would be inadequate and irreparable harm would occur. In recognition of this fact, each Party agrees that, if there is a breach or threatened breach, in addition to any damages, the other nonbreaching Party to this Agreement, without posting any bond, shall be entitled to seek and obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction, attachment, or any other equitable remedy which may then be available to obligate the breaching Party (i) to perform its obligations under this Agreement or (ii) if the breaching Party is unable, for whatever reason, to perform those obligations, to take any other actions as are necessary, advisable or appropriate to give the other Party to this Agreement the economic effect which comes as close as possible to the performance of those obligations (including, but not limited to, transferring, or granting liens on, the assets of the breaching Party to secure the performance by the breaching Party of those obligations).
          Section 13.13 Mutual Drafting . This Agreement shall be deemed to be the joint work product of Cadbury and DPSG and any rule of construction that a document shall be interpreted or construed against a drafter of such document shall not be applicable.
          Section 13.14 Operating Committee .
     (a) The parties shall use an operating committee (the “ Operating Committee ”) to implement the terms of this Agreement. Each of Cadbury and DPSG shall appoint two employees to the Operating Committee and designate one of such employees to be such party’s lead representative (each, a “ Lead Representative ”) for the purpose of fielding queries from representatives of the relevant Group concerning the implementation and ongoing operation of this Agreement. In addition, the Lead Representatives shall have such other functions and responsibilities as may be determined by the Operating Committee from time to time. The Operating Committee will oversee the implementation and ongoing operation of this Agreement and shall attempt in good faith to resolve disputes between the parties. Each of the parties shall have the right to (i) replace one or more of its Operating Committee members at any time with employees or officers with comparable knowledge, expertise and decision-making authority and (ii) designate an alternative Lead Representative.
     (b) The Operating Committee shall act by a majority vote of its members. If the Operating Committee fails to make a decision, resolve a dispute or agree upon any necessary action, the unresolved matters shall be handled by the dispute resolution procedures contained in the Separation Agreement.
     (c) During the term of this Agreement, the full Operating Committee shall meet at such times as may be required by either Lead Representative. Meetings of the Operating Committee may be in person or via teleconference and shall be convened and held in accordance with such procedures as the Operating Committee may determine from time to time.

 


 

          Section 13.15 Effect if Distribution Does Not Occur . Notwithstanding anything in this Agreement to the contrary, if the Separation Agreement or Transition Services Agreement is terminated prior to the Distribution Date, this Agreement shall be of no further force and effect.
          Section 13.16 Corporate Authorization . The officers of Cadbury and DPSG are hereby authorized, empowered and directed, in the name and on behalf of each of Cadbury and DPSG, respectively, to take or cause to be taken all such further action, to execute and deliver or cause to be executed and delivered all such further agreements, certificates, instruments and documents, to make or cause to be made all such filings with governmental or regulatory authorities, and to pay or cause to be paid all such fees and expenses, in each case which shall in such officers’ judgment be deemed necessary, proper or advisable to effect and carry out the intent of this Agreement, such determination to be evidenced conclusively by such officers’ execution and delivery thereof or taking of action in respect thereto.
     IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in their names by a duly authorized officer as of the date first written above.
         
  CADBURY SCHWEPPES, PLC
 
 
  By:   /s/ Henry Udow  
    Name:  Henry Udow  
    Title:  Chief Legal Officer and Group Secretary  
 
  DR PEPPER SNAPPLE GROUP, INC.
 
 
  By:   /s/ James L. Baldwin  
    Name:  James L. Baldwin  
    Title:  Executive Vice President and Secretary  
 
  CADBURY PLC, solely for the purposes of Section 10.05
 
 
  By:   /s/ Henry Udow  
    Name:  Henry Udow  
    Title:  Chief Legal Officer and Group Secretary