Exhibit 1.1
Form Version
Bristol-Myers Squibb Company
5.450% Notes due 2018
6.125% Notes due 2038
Underwriting Agreement
New York, New York
April 28, 2008
To the Representatives
named in Schedule I
hereto of the Under-
writers named in
Schedule II hereto
Ladies and Gentlemen:
Bristol-Myers Squibb Company, a
corporation organized under the laws of Delaware (the “Company”), proposes to sell to the several underwriters named in Schedule II hereto (the “Underwriters”), for whom you (the “Representatives”) are acting as
representatives, the principal amount of its securities identified in Schedule I hereto (the “Securities”), to be issued under an indenture (the “Indenture”) dated as of June 1, 1993, as supplemented by a supplemental
indenture, to be dated as of May 1, 2008 (collectively, the “Indenture”), between the Company and The Bank of New York (as successor to JPMorgan Chase Bank, N.A. (formerly JPMorgan Chase Bank, formerly The Chase Manhattan Bank
(successor to The Chase Manhattan Bank (National Association)))), as Trustee (the “Trustee”). To the extent there are no additional Underwriters listed on Schedule II other than you, the term Representatives as used herein shall mean
you, as Underwriters, and the terms Representatives and Underwriters shall mean either the singular or plural as the context requires. Certain terms used herein are defined in Section 24 hereof.
1.
Representations and Warranties.
The Company represents and warrants to, and agrees with, each Underwriter that:
(a) An “automatic shelf registration statement” as defined under Rule 405 of the Act on Form S-3 (File No. 333-150471)
in respect of the Securities has been filed with the Commission not earlier than three years prior to the date hereof; such registration statement and any post-effective amendment thereto, each in the form heretofore delivered or to be delivered to
the Representatives and, excluding exhibits to such registration statement, but including all documents incorporated by reference in the prospectus included therein, became effective in such form; no other document with
respect to such registration statement (including all documents incorporated by reference therein) has heretofore been filed or transmitted for filing with
the Commission (other than the documents heretofore incorporated by reference therein and the prospectuses filed pursuant to Rule 424(b) of the rules and regulations of the Commission under the Act, each in the form heretofore delivered to the
Representatives); and no stop order suspending the effectiveness of such registration statement, or any part thereof, has been issued and no proceeding for that purpose has been initiated or threatened by the Commission, and no notice of objection
of the Commission to the use of such registration statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Act has been received by the Company (the base prospectus filed as part of such registration statement, in the
form in which it has most recently been filed with the Commission on or prior to the date of this Agreement relating to the Securities, is hereinafter called the “Basic Prospectus”; any preliminary prospectus (including any preliminary
prospectus supplement) relating to the Securities filed with the Commission pursuant to Rule 424(b) under the Act is hereinafter called a “Preliminary Prospectus”; the various parts of such registration statement, including all exhibits
thereto and including any prospectus supplement relating to the Securities that is filed with the Commission and deemed by virtue of Rule 430B under the Act to be part of such registration statement, each as amended at the time such part of such
registration statement became effective, are hereinafter collectively called the “Registration Statement”; the Basic Prospectus, as amended and supplemented (including by any Preliminary Prospectus) immediately prior to the Applicable Time
(as defined in Section 1(c) hereof), is hereinafter called the “Pricing Prospectus”; the form of the final prospectus relating to the Securities filed with Commission pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) hereof is hereinafter called the “Prospectus”; any reference herein to the Basic Prospectus, the Pricing Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3, as of the date of such prospectus; any reference to any amendment or supplement to the Basic Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include any post-effective amendment to the Registration Statement, any prospectus supplement relating to the Securities filed with the Commission pursuant to Rule 424(b) under the Act and any documents filed under the Exchange Act, and
incorporated therein, in each case after the date of the Basic Prospectus, such Preliminary Prospectus or the Prospectus, as the case may be; any reference to any amendment to
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the Registration Statement shall be deemed to refer to and include any annual report of the Company filed pursuant to Section 13(a) or 15(d) of the
Exchange Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement; and any “issuer free writing prospectus” as defined in Rule 433 under the Act relating to the Securities
is hereinafter called an “Issuer Free Writing Prospectus”);
(b) No order preventing or suspending the use of any
Preliminary Prospectus or any Issuer Free Writing Prospectus has been issued by the Commission, and each Preliminary Prospectus, at the time of filing thereof, conformed in all material respects to the requirements of the Act and the Trust Indenture
Act, and the rules and regulations of the Commission thereunder, and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to
the Company by an Underwriter through the Representatives expressly for use therein;
(c) For the purposes of this
Agreement, the “Applicable Time” is 4:45 p.m. (Eastern time) on the date of this Agreement; the Pricing Prospectus as supplemented by the final term sheet prepared (and to be subsequently filed) pursuant to Section 5(a) hereof, taken
together (collectively, the “Pricing Disclosure Package”) as of the Applicable Time, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; and each Issuer Free Writing Prospectus listed on Schedule III(a) hereto does not conflict with the information contained in the Registration Statement or the Pricing Prospectus
and will not conflict with the information to be contained in the Prospectus and each such Issuer Free Writing Prospectus, as supplemented by and taken together with the Pricing Disclosure Package as of the Applicable Time, did not include any
untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and
warranty shall not apply to statements or omissions made in an Issuer Free Writing Prospectus in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter through the Representatives expressly for use
therein;
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(d) The documents incorporated by reference in the Pricing Prospectus and Prospectus,
when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder, and
none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and any further documents so filed and incorporated
by reference in the Prospectus or any further amendment or supplement thereto, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter through
the Representatives expressly for use therein; and no such documents were filed with the Commission since the Commission’s close of business on the Business Day immediately prior to the date of this Agreement and prior to the execution of this
Agreement, except as set forth on Schedule III(b) hereto;
(e) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement and the Prospectus will conform, in all material respects to the requirements of the Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder and
do not and will not, as of the applicable effective date as to each part of the Registration Statement and as of the applicable filing date as to the Prospectus and any amendment or supplement thereto, contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company by an Underwriter through the Representatives for use therein;
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(f) Neither the Company nor any of its Significant Subsidiaries, as defined in Rule 1-02
(w) of Regulation S-X under the Act (the “Significant Subsidiaries”), has sustained since the date of the latest audited financial statements included or incorporated by reference in the Pricing Prospectus any material loss or
interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Pricing
Prospectus; and, since the respective dates as of which information is given in the Registration Statement and the Pricing Prospectus, there has not been any change in the capital stock or long-term debt of the Company or any of its Significant
Subsidiaries or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, stockholders’ equity or results of operations of the Company
and its subsidiaries, otherwise than as set forth or contemplated in the Pricing Prospectus;
(g) The Company has been duly
incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with power and authority (corporate and other) to own its properties and conduct its business as described in the Pricing Prospectus;
(h) The Company has an authorized capitalization as set forth in the Pricing Prospectus, and all of the issued shares of
capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable;
(i)
The Securities have been duly authorized, and, when issued, duly authenticated pursuant to the Indenture and delivered to and paid for by the Underwriters pursuant to this Agreement, will have been duly executed, authenticated, issued and delivered
and will constitute valid and legally binding obligations of the Company enforceable against the Company and entitled to the benefits provided by the Indenture, which is substantially in the form filed as an exhibit to the Registration Statement;
the Indenture has been duly authorized, executed and delivered and duly qualified under the Trust Indenture Act and, at the Closing Date (as defined in Section 3), the Indenture will constitute a valid and legally binding instrument,
enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles; and the
Indenture conforms, and the Securities will conform, to the descriptions thereof contained in the Pricing Disclosure Package and the Prospectus as amended or supplemented;
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(j) This Agreement has been duly authorized, executed and delivered by the Company;
(k) The issue and sale of the Securities and the compliance by the Company with all of the provisions of the Securities,
the Indenture and this Agreement, and the consummation of the transactions herein and therein contemplated will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject, except for such breaches,
violations and defaults that individually and in the aggregate would not reasonably be expected to have a Material Adverse Effect on the current or future consolidated financial position, stockholders’ equity or results of operations of the
Company and its subsidiaries (a “Material Adverse Effect”), (ii) result in any violation of the provisions of the Certificate of Incorporation or By-laws of the Company, or (iii) result in any violation of any law, statute or any
order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its properties, except for such breaches, violations and defaults that individually and in the aggregate would not reasonably be
expected to have a Material Adverse Effect; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Securities or the
consummation by the Company of the transactions contemplated by this Agreement or the Indenture except such as have been, or will have been prior to the Closing Date, obtained under the Act and the Trust Indenture Act, or which if not obtained would
not have a Material Adverse Effect on the consummation by the Company of the transactions contemplated by this Agreement, and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue
Sky laws in connection with the purchase and distribution of the Securities by the Underwriters;
(l) The statements set
forth in the Pricing Disclosure Package and the Prospectus under the caption “Description of the Notes” and “Description of the Debt Securities” insofar as they purport to constitute a summary of the terms of the Indenture and
the Securities, and under the captions “Plan of Distribution” and “Underwriting”, insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate, complete and fair;
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(m) Neither the Company nor any of its Significant Subsidiaries is in violation of its
Certificate of Incorporation or By-laws (or equivalent organizational documents) or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement,
lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound, except for such violations that individually and in the aggregate would not reasonably be expected to have a Material Adverse Effect;
(n) Other than as set forth in the Pricing Prospectus, there are no legal or governmental proceedings pending to which the
Company or any of its Significant Subsidiaries is a party or of which any property of the Company or any of its Significant Subsidiaries is the subject which, if determined adversely to the Company or any of its Significant Subsidiaries, could
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; and, to the best of the Company’s knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others;
(o) Except as described in the Pricing Prospectus, to the Company’s knowledge, the Company and its Significant
Subsidiaries own, possess or have the right to employ sufficient patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, software,
systems or procedures), trademarks, service marks and trade names, inventions, computer programs, technical data and information (collectively, the “Intellectual Property Rights”) reasonably necessary to conduct their businesses as now
conducted. Neither the Company nor any of its Significant Subsidiaries has received any notice of infringement of or conflict with asserted rights of others with respect to any of the Intellectual Property Rights except as would not reasonably be
expected to, individually or in the aggregate, result in a Material Adverse Effect, whether or not arising from transactions in the ordinary course of business. Except as described in the Pricing Prospectus, to the Company’s knowledge the use
of the Intellectual Property Rights in connection with the business and operations of the Company and its subsidiaries does not infringe on the rights of any person, except as could not reasonably be expected to individually or in the aggregate
result in a Material Adverse Effect;
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(p) Neither the Company nor any of its Significant Subsidiaries (i) is in violation
of any law, statute, or any rule, regulation, decision or order of any governmental agency or body or any court relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment
or human exposure to hazardous or toxic substances (collectively, “environmental laws”), (ii) owns or operates any real property which, to its knowledge, is contaminated with any substance that is subject to any environmental laws,
(iii) is, to its knowledge, liable for any off-site disposal or contamination pursuant to any environmental laws, or (iv) has received any written notice of any claim under any environmental laws and the Company is not aware of any pending
investigation which could reasonably be expected to lead to such a claim, in each such case, which violation, contamination, liability or claim would have, individually or in the aggregate, a Material Adverse Effect;
(q) The Company is not and, after giving effect to the offering and sale of the Securities and the application of the proceeds thereof,
will not be an “investment company”, as such term is defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”);
(r) (i) (A) At the time of filing the Registration Statement, (B) at the time of the most recent amendment thereto for the
purposes of complying with Section 10(a)(3) of the Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus), and (C) at the time
the Company or any person acting on its behalf (within the meaning, for this clause only, of Rule 163(c) under the Act) made any offer relating to the Securities in reliance on the exemption of Rule 163 under the Act, the Company was a
“well-known seasoned issuer” as defined in Rule 405 under the Act; and (ii) at the earliest time after the filing of the Registration Statement that the Company or another offering participant made a bona fide offer (within the
meaning of Rule 164(h)(2) under the Act) of the Securities, the Company was not an “ineligible issuer” as defined in Rule 405 under the Act;
(s) Each of PricewaterhouseCoopers LLP and Deloitte & Touche LLP, who have audited certain financial statements of the Company and its subsidiaries contained or incorporated by reference in the Registration
Statement, Pricing Prospectus and Prospectus and, in the case of Deloitte & Touche LLP, audited the Company’s internal
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control over financial reporting, is an independent registered public accounting firm as required by the Act and the rules and regulations of the Commission
thereunder;
(t) The Company maintains a system of internal control over financial reporting (as such term is defined in
Rule 13a-15(f) under the Exchange Act) that complies with the requirements of the Exchange Act and has been designed by the Company’s principal executive officer and principal financial officer, or under their supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. As of March 31, 2008, the Company’s internal control
over financial reporting was effective. The Company is not aware of any material weaknesses in its internal control over financial reporting;
(u) Since the date of the latest audited financial statements included or incorporated by reference in the Pricing Prospectus and the Prospectus, other than as disclosed in the Pricing Prospectus, there has been no
change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and
(v) The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) that
comply with the requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure that material information relating to the Company and its subsidiaries is made known to the Company’s principal executive
officer and principal financial officer by others within those entities; and, as of March 31, 2008, such disclosure controls and procedures were effective; and
(w) The Registration Statement, at the Applicable Time, meets the requirements set forth in Rule 415(a)(1)(x).
Any certificate signed by any officer of the Company and delivered to the Representatives or counsel for the Underwriters in connection with the offering
of the Securities shall be deemed a representation and warranty by the Company, as to matters covered thereby, to each Underwriter.
2.
Purchase and Sale.
Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company agrees to issue and sell to each Underwriter, and each Underwriter agrees, severally and not
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jointly, to purchase from the Company, at the purchase price set forth in Schedule I hereto the principal amount of Securities set forth opposite such
Underwriter’s name in Schedule II hereto.
3.
Delivery and Payment.
Delivery of, and payment for, the Securities shall be made
on the date and at the time specified in Schedule I hereto or at such time on such later date not more than three Business Days after the foregoing date as the Representatives shall designate, which date and time may be postponed by agreement
between the Representatives and the Company or as provided in Section 10 hereof (such date and time of delivery and payment for the Securities being herein called the “Closing Date”). The Securities to be purchased by each Underwriter
hereunder will be represented by one or more definitive global Securities in book-entry form which will be deposited by or on behalf of the Company with The Depository Trust Company (“DTC”) or its designated custodian. The Company will
deliver the Securities to the Representatives, for the account of each Underwriter, against payment by or on behalf of such Underwriter of the purchase price therefor by wire transfer of Federal (same-day) funds to the account specified by the
Company to the Representatives at least forty-eight hours in advance, by causing DTC to credit the Securities to the account of the Representatives at DTC. The Company will cause the certificates representing the Securities to be made available to
Representatives for checking at least twenty-four hours prior to the Closing Date at the office of DTC or its designated custodian (the “Designated Office”).
4.
Offering by Underwriters.
It is understood that the several Underwriters propose to offer the Securities for sale to the public as set forth in the Pricing Disclosure Package.
5.
Agreements.
The Company agrees with the several Underwriters:
(a) To prepare the Prospectus in a form approved by the Representatives and to file such Prospectus pursuant to Rule 424(b) under the Act
not later than the Commission’s close of business on the second Business Day following the execution and delivery of this Agreement or such earlier time as may be required under the Act; to make no further amendment or any supplement to the
Registration Statement, the Basic Prospectus or the Prospectus prior to the Closing Date which shall be disapproved by the Representatives promptly after reasonable notice thereof; to advise the Representatives, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any amendment or supplement to the Prospectus has been filed and to furnish the Representatives with copies thereof; to prepare a final term
sheet in a form approved by the Representatives and to file such term sheet pursuant to Rule 433(d) under the Act (the “Final Term Sheet”);
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to file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for so long as the delivery of a prospectus (or in lieu thereof, the notice referred to in Rule 173 under the Act) is required in connection with
the offering or sale of the Securities, and during such same period to advise the Representatives, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any
supplement to the Pricing Prospectus or any amended Pricing Prospectus has been filed with the Commission, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any prospectus relating to the
Securities, of any notice of objection of the Commission to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Act, of the suspension of the qualification of such Securities for
offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or Pricing Prospectus or for
additional information; and, in the event of the issuance of any such stop order or of any such order preventing or suspending the use of any prospectus relating to the Securities or suspending any such qualification, to promptly use its best
efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the Representatives
may reasonably request to qualify such Securities for offering and sale under the securities laws of such jurisdictions as the Representatives may reasonably request and to comply with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete the distribution of such Securities, provided that in connection therewith the Company shall not be required to qualify as a foreign corporation or to file a general consent
to service of process in any jurisdiction;
(c) Prior to 5:00 p.m., New York City time, on the Business Day next succeeding
the date of this Agreement and from time to time thereafter, to furnish the Underwriters with written and electronic copies of the Prospectus in New York City in such quantities as the Representatives may reasonably request, and, if the delivery of
a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) is required at any time in connection with the offering or sale of the Securities and if at such time any event shall have
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occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) is delivered, not
misleading, or, if for any other reason it shall be necessary during such period to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Act, the
Exchange Act or the Trust Indenture Act, to notify the Representatives and upon their request to file such document and to prepare and furnish without charge to each Underwriter and to any dealer in securities as many written and electronic copies
as the Representatives may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect such compliance;
(d) To make generally available to its security holders as soon as practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c) under the Act), an earnings statement of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including, at the option of the Company, Rule 158);
(e) During the period beginning from the
date hereof and continuing to and including the Closing Date, not to offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose, except as provided hereunder, of any debt securities of the Company
which mature more than one year after such Closing Date and which are substantially similar to such Securities, without the prior written consent of the Representatives;
(f) To pay the required Commission filing fees relating to the Securities within the time required by Rule 456(b)(1) under the Act
and otherwise in accordance with Rules 456(b) and 457(r) under the Act; provided, however, that any such required filing fees shall be paid prior to the Closing Date.
(g) To use the net proceeds received by it from the sale of the Securities pursuant to this Agreement in the manner specified in the
Pricing Prospectus under the caption “Use of Proceeds”;
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(h) To comply with all applicable securities and other applicable laws, rules and
regulations, including, without limitation, the Sarbanes Oxley Act, and to use its best efforts to cause the Company’s directors and officers, in their capacities as such, to comply with such laws, rules and regulations, including, without
limitation, the provisions of the Sarbanes Oxley Act;
(i) Not to take, directly or indirectly, any action designed to or
that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities; and
(j) Upon request of any Underwriter, to furnish, or cause to be furnished, to such Underwriter an electronic version of the
Company’s corporate trademarks, corporate servicemarks and corporate logo for use on the website, if any, operated by such Underwriter for the purpose of facilitating the on-line offering of the Securities (the “License”); provided,
however, that the License shall be used solely for the purpose described above, is granted without any fee and may not be assigned or transferred.
6.
(a) (i) The Company represents and agrees that, other than the Final Term Sheet prepared and filed
pursuant to Section 5(a) hereof, without the prior consent of the Representatives, it has not made and will not make any offer relating to the Securities that would constitute a “free writing prospectus” as defined in Rule 405 under
the Act;
(ii) each Underwriter represents and agrees that, without the prior consent of the Company and the
Representatives, it has not made and will not make any offer relating to the Securities that would constitute a free writing prospectus, other than one or more term sheets relating to the Securities that do not require the Company to file any
material with the Commission other than the filing of the Final Term Sheet within two days as provided in Rule 433(d)(5)(ii); and
(iii) any such free writing prospectus the use of which has been consented to by the Company and the Representatives (including the Final Term Sheet prepared and filed pursuant to Section 5(a) hereof and any other filing relating to
the Securities made in reliance on the exemption of Rule 163 under the Act) is listed on Schedule III(a) hereto;
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(b) The Company has complied and will comply with the requirements of Rule 433 under the
Act applicable to any Issuer Free Writing Prospectus, including timely filing with the Commission or retention where required and legending; and
(c) The Company agrees that if at any time following issuance of an Issuer Free Writing Prospectus any event occurred or occurs as a result of which such Issuer Free Writing Prospectus would conflict with the
information in the Registration Statement, the Pricing Prospectus or the Prospectus or would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the
circumstances then prevailing, not misleading, the Company will give prompt notice thereof to the Representatives and, if requested by the Representatives, will prepare and furnish without charge to each Underwriter an Issuer Free Writing Prospectus
or other document which will correct such conflict, statement or omission; provided, however, that this representation and warranty shall not apply to any statements or omissions in an Issuer Free Writing Prospectus made in reliance upon and in
conformity with information furnished in writing to the Company by an Underwriter through the Representatives expressly for use therein.
7.
Expenses
. The Company covenants and agrees with the several Underwriters that the Company will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Company’s counsel and accountants in
connection with the registration of the Securities under the Act and all other expenses in connection with the preparation, printing, reproduction and filing of the Registration Statement, the Basic Prospectus, any Preliminary Prospectus, any Issuer
Free Writing Prospectus and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers; (ii) the cost of printing or producing any Agreement among Underwriters, this
Agreement, any indenture, any Blue Sky and Legal Investment Memoranda, closing documents (including any compilations thereof) and any other documents in connection with the offering, purchase, sale and delivery of the Securities; (iii) all
expenses in connection with the qualification of the Securities for offering and sale under state securities laws as provided in Section 5(b) hereof, including the fees and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky and Legal Investment Surveys; (iv) any fees charged by securities rating services for rating the Securities; (v) any filing fees incident to, and the fees and disbursements of counsel for
the Underwriters in connection with, any required review by the Financial Industry Regulatory Authority of the terms of the sale of the Securities; (vi) the cost of preparing certificates for the Securities; (vii) the fees and expenses of
any Trustee and any agent of any Trustee
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and the fees and disbursements of counsel for any Trustee in connection with any indenture and the Securities; and (viii) all other costs and expenses
incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section. It is understood, however, that, except as provided in this Section, and Sections 9 and 10 hereof, the Underwriters will pay
all of their own costs and expenses, including the fees of their counsel, transfer taxes on resale of any of the Securities by them, and any advertising expenses connected with any offers they may make.
8.
Conditions to the Obligations of the Underwriters.
The obligations of the Underwriters to purchase the Securities shall be subject to the
accuracy of the representations and warranties on the part of the Company contained herein as of the Closing Date, to the accuracy of the statements of the Company made in any certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) The Prospectus shall have been filed
with the Commission pursuant to Rule 424(b) under the Act within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 5(a) hereof; the Final Term Sheet contemplated by
Section 5(a) hereof and any other material required to be filed by the Company pursuant to Rule 433(d) under the Act shall have been filed with the Commission within the applicable time period prescribed for such filings by Rule 433; no stop
order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission and no notice of objection of the Commission to
the use of the Registration Statement or an post-effective amendment thereto pursuant to Rule 401(g)(2) under the Act shall have been received; no stop order suspending or preventing the use of the Prospectus or any Issuer Free Writing Prospectus
shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to the Representatives’ reasonable satisfaction;
(b) The Company shall have requested and caused Cravath, Swaine & Moore LLP, special counsel for the Company, to have furnished
to the Representatives their opinion (with respect to the matters enumerated in (i) through (vi)) and letter (with respect to the matters enumerated in (vii) and (viii)), dated the Closing Date and addressed to the Representatives, to the
effect that:
(i) Based solely on its review of a certificate from the Secretary of State of Delaware, the Company is
validly existing as
15
a corporation in good standing under the laws of the State of Delaware, with corporate power and authority to own its properties and conduct its business as
described in the Prospectus;
(ii) This Agreement has been duly authorized, executed and delivered by the Company;
(iii) The Securities have been duly authorized by the Company, and, when duly executed and authenticated in accordance
with the terms of the Indenture and delivered to and paid for by the Underwriters in accordance with the terms of this Agreement, will constitute valid and legally binding obligations of the Company, enforceable against the Company and entitled to
the benefits provided by the Indenture subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar laws affecting creditors’ rights generally from time to time in effect and to general
principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether considered in a proceeding in equity or at law;
(iv) The Indenture has been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding instrument
of the Company, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar laws affecting creditors’ rights generally from time to time in effect and
to general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether considered in a proceeding in equity or at law; and the Indenture has been duly qualified
under the Trust Indenture Act;
(v) The statements set forth in the Prospectus under the caption “Description of
Notes” and “Description of the Debt Securities” insofar as they purport to constitute a summary of the terms of the Indenture and the Securities fairly summarize in all material respects the matters therein described;
(vi) The Company is not required, and, after giving effect to the offering and sale of the Securities and the application of the proceeds
thereof, will not be required, to register as an “investment company”, as such term is defined in the Investment Company Act (for purposes of this opinion, such counsel may rely on a certificate of an officer of the Company in a form
satisfactory to the Representatives);
16
(vii) Each of the Registration Statement at the time it was last amended or deemed to be
amended and the Prospectus, as of the date of such opinion (other than the financial statements and other information of a financial or accounting nature and the statement of eligibility (Form T-1) , as to which such counsel need express no opinion)
appeared or appears on its face to be appropriately responsive in all material respects to the requirements of the Act and the Trust Indenture Act and the rules and regulations thereunder; and
(viii) Although they do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the
Registration Statement, the Pricing Prospectus or the Prospectus, except for those referred to in the opinion in subsection (v) of this Section 8(b), they have no reason to believe (i) that the Registration Statement (insofar as
related to the offering contemplated by the Prospectus) on April 28, 2008 (other than the financial statements and other information of a financial or accounting nature, as to which such counsel need express no opinion), contained an untrue
statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) that the Pricing Disclosure Package, considered together, as of the Applicable Time
(other than the financial statements and other information of a financial or accounting nature, as to which such counsel need express no opinion), contained any untrue statement of a material fact or omitted to stated 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; (iii) that, as of its date, the Prospectus (other than the financial statements and other information of a
financial or accounting nature, as to which such counsel need express no opinion) contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading or (iv) that, as of the Closing Date, the Prospectus (other than the financial statements and other information of a financial or accounting nature, as to which such counsel need express no opinion) contains
an untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were
17
made, not misleading; and they do not know of any contracts or other documents of a character required to be filed as an exhibit to the Registration
Statement or required to be described in the Registration Statement or the Prospectus which are not filed or described as required;
(c) Sandra Leung, general counsel for the Company, shall have furnished to the Representatives her written opinion (with respect to the matters enumerated in (i) through (vi)) and letter (with respect to the matters enumerated in
(vii) and (viii)), dated the Closing Date, in form and substance satisfactory to the Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with power and authority (corporate and other) to own its properties and conduct its business as
described in the Prospectus;
(ii) The Company has an authorized capitalization as set forth in the Prospectus as amended
or supplemented and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable;
(iii) To such counsel’s knowledge and other than as set forth in the Prospectus, there are no legal or governmental proceedings
pending to which the Company or any of its Significant Subsidiaries is a party or of which any property of the Company or any of its Significant Subsidiaries is the subject which, if determined adversely to the Company or any of its Significant
Subsidiaries, would individually or in the aggregate have a material adverse effect on the consolidated financial position, stockholders’ equity or results of operations of the Company and its Significant Subsidiaries; and, to such
counsel’s knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others;
(iv) Neither the Company nor any of its Significant Subsidiaries is in violation of its By-laws or Certificate of Incorporation or, to the best of such counsel’s knowledge, in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which it is a party or by which it or any of its properties may be bound, except for such violations and defaults
that individually and in the aggregate would not reasonably be expected to have a Material Adverse Effect;
18
(v) The issue and sale of the Securities and the compliance by the Company with all of
the provisions of the Securities, the Indenture and this Agreement and the consummation of the transactions herein and therein contemplated will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument known to such counsel to which the Company is a party or by which the Company is bound or to which any of the property or assets of
the Company is subject, except for such breaches, violations and defaults that individually and in the aggregate would not reasonably be expected to have a Material Adverse Effect, (ii) result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company or (iii) result in any violation of any law, statute or any order, rule or regulation known to such counsel of any court or governmental agency or body having jurisdiction over the Company
or any of its properties, except for such breaches, violations and defaults that individually and in the aggregate would not reasonably be expected to have a Material Adverse Effect;
(vi) No consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body
is required for the issue and sale of the Securities or the consummation by the Company of the transactions contemplated by this Agreement or the Indenture, except such as have been obtained under the Act and the Trust Indenture Act, or which if not
obtained would not have a Material Adverse Effect on the consummation by the Company of the transactions contemplated by this Agreement, and such consents, approvals, authorizations, orders, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and distribution of the Securities by the Underwriters;
(vii) The documents incorporated by reference in the Prospectus or any further amendment or supplement thereto, made by the Company prior to the Closing Date (other than the financial statements and other information of a financial or
accounting nature, as to which such counsel need express no opinion), when they became effective or were filed with the Commission, as the case may be, each appeared on its face to be appropriately
19
responsive in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder; although such counsel does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in such documents, such counsel has no reason to believe that any of such documents (other than the financial
statements and other information of a financial or accounting nature, as to which such counsel need express no opinion), when they became effective or were so filed, as the case may be, contained, in the case of a registration statement which became
effective under the Act, an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or, in the case of other documents which were filed under
the Act or the Exchange Act with the Commission, an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such
documents were so filed, not misleading; and
(viii) The Registration Statement, the Prospectus and any further amendments
and supplements thereto, as applicable, made by the Company prior to the Closing Date (other than the financial statements and other information of a financial or accounting nature, as to which such counsel need express no opinion) comply as to form
in all material respects with the requirements of the Act and the Trust Indenture Act and the rules and regulations thereunder; although such counsel does not assume any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement, the Pricing Prospectus or the Prospectus, such counsel has no reason to believe (i) that the Registration Statement (insofar as related to the offering contemplated by the Prospectus) on April 28,
2008 (other than the financial statements and related schedules therein, as to which such counsel need express no opinion), contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; (ii) that the Pricing Disclosure Package, considered together, as of the Applicable Time (other than the financial statements and other information of a financial or accounting nature, as
to which such counsel need express no opinion), contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not
20
misleading; or (iii) that, as of its date and as of the Closing Date, the Prospectus (other than the financial statements and other information of a
financial or accounting nature, as to which such counsel need express no opinion) contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and such counsel does not know of any contracts or other documents of a character required to be filed as an exhibit to the Registration Statement or required to be described in the
Registration Statement or the Prospectus which are not filed or described as required;
(d) The Representatives shall have
received from Sullivan & Cromwell LLP, counsel for the Underwriters, such opinion or opinions, dated the Closing Date and addressed to the Representatives, with respect to the issuance and sale of the Securities, the Indenture, the
Registration Statement, the Pricing Prospectus (together with any supplement thereto) and other related matters as the Representatives may reasonably require, and the Company shall have furnished to such counsel such documents as they request for
the purpose of enabling them to pass upon such matters.
(e) On the date of the Prospectus at a time prior to the execution
of this Agreement, at 9:30 a.m., New York City time, on the effective date of any post effective amendment to the Registration Statement filed subsequent to the date of this Agreement and also at the Closing Date, Deloitte & Touche LLP
shall have furnished to the Representatives a letter or letters, dated the respective dates of delivery thereof, in form and substance satisfactory to the Representatives, to the effect set forth in Annex I hereto;
(f) (i) Neither the Company nor any of its Significant Subsidiaries shall have sustained since the date of the latest audited
financial statements included or incorporated by reference in the Pricing Prospectus any significant loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Pricing Prospectus, and (ii) since the respective dates as of which information is given in the Pricing Prospectus there shall not have been
any change in the capital stock or long-term debt of the Company or any of its Significant Subsidiaries or any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position,
stockholders’ equity
21
or results of operations of the Company and its subsidiaries, otherwise than as set forth or contemplated in the Pricing Prospectus, the effect of which, in
any such case described in clause (i) or (ii), is in the judgment of the Representatives so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Securities on the terms and
in the manner contemplated in the Prospectus and this Agreement;
(g) On or after the Applicable Time (i) no
downgrading shall have occurred in the rating accorded the Company’s debt securities or preferred stock by any “nationally recognized statistical rating organization”, as that term is defined by the Commission for purposes of Rule
436(g)(2) under the Act, and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company’s debt securities or preferred stock;
(h) On or after the Applicable Time there shall not have occurred any of the following: (i) a suspension or material
limitation in trading in securities generally on the New York Stock Exchange; (ii) a suspension or material limitation in trading in the Company’s securities on the New York Stock Exchange; (iii) a general moratorium on commercial
banking activities declared by either Federal or New York State authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States or with respect to the Clearstream or Euroclear systems in
Europe; (iv) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war or the occurrence of any other calamity or crisis involving the United States; or
(v) any change in national or international financial, political or economic conditions, if the effect of any such event specified in clause (iv) or (v) in the judgment of the Representatives makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Securities on the terms and in the manner contemplated in the Prospectus;
(i) The Company shall have complied with the provisions of Section 5(c) hereof with respect to the furnishing of prospectuses on the Business Day next succeeding the date of this Agreement; and
(j) The Company shall have furnished or caused to be furnished to the Representatives at the Closing Date certificates of officers of the
Company on behalf of the Company, reasonably satisfactory to the Representatives as to the accuracy of the
22
representations and warranties of the Company herein at and as of such Closing Date, as to the performance by the Company of all of its obligations hereunder
to be performed at or prior to such Closing Date, as to the matters set forth in subsections (a) and (f)(i) and (ii) of this Section.
If any of the conditions specified in this Section 8 shall not have been fulfilled when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Representatives and counsel for the Underwriters, this Agreement and all obligations of the Underwriters hereunder may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancelation shall be given to the Company in writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 8 shall be delivered to the offices of Sullivan & Cromwell LLP, counsel for the Underwriters, at 125 Broad Street, New York, NY 10004 (the “Closing Location”),
on the Closing Date.
9.
Reimbursement of Underwriters’ Expenses.
If this Agreement shall be terminated pursuant to
Section 11 hereof, the Company shall not then be under any liability to any Underwriter except as provided in Sections 7 and 10 hereof; but, if for any other reason Securities are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Underwriters through the Representatives for all out-of-pocket expenses approved in writing by the Representatives, including fees and disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of such Securities, but the Company shall then be under no further liability to any Underwriter with respect to such Securities except as provided in Sections 7 and 10 hereof.
10.
Indemnification and Contribution.
(a) The Company will indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Basic Prospectus, any
Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, any Issuer Free Writing Prospectus or any “issuer information” filed or required to be filed pursuant to
23
Rule 433(d) under the Act (otherwise than as a result of a breach by an Underwriter of Section 6(a) hereof with respect to any “issuer
information” filed or required to be filed pursuant to Rule 433(d) under the Act) or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such action or claim as such expenses are incurred;
provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made
in the Registration Statement, the Basic Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the Representatives expressly for use therein.
(b) Each
Underwriter, severally and not jointly, will indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which the Company may become subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Basic Prospectus, any Preliminary Prospectus, the Pricing
Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, the Basic
Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, in reliance upon and in conformity with written information furnished to the Company by
such Underwriter through the Representatives expressly for use therein; and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such
expenses are incurred.
24
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection. In case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. Notwithstanding the foregoing, if the indemnified party has determined, in its reasonable judgment, that there may be one or
more defenses available to the indemnified party which may be different from or additional to those available to the indemnifying party and that the existence of such different or additional defenses creates, in the reasonable judgment of such
indemnified party, a conflict in connection with the joint representation of the indemnified party and the indemnifying party, then the indemnified party shall have the right to employ separate counsel and in that event the reasonable fees and
expenses of such separate counsel for the indemnified party shall be paid by the indemnifying party; provided, however, that the indemnifying party shall only be obligated to pay the reasonable fees and expenses of a single law firm (and any
reasonably necessary local counsel) employed by all of the indemnified parties unless any indemnified party has determined, in its reasonable judgment, that there may be one or more defenses available to it which may be different from or additional
to those available to another indemnified party and that the existence of such different or additional defense creates, in its reasonable judgment, a conflict in connection with the joint representation of the indemnified parties, in which case the
indemnifying party shall be obligated to pay the reasonable fees and expenses of a separate single law firm (and any reasonably necessary local counsel) employed by each such indemnified party to which such
25
conflict relates. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or
claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of
fault, culpability or a failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for
in this Section 10 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters on the other from the offering of the Securities to which such loss, claim, damage or liability (or action in respect thereof) relates. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and such Underwriters on
the other shall be deemed to be in the same proportion as the total net proceeds from such offering (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by such Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company on the one hand or such Underwriters on the other and the parties’ relative intent, knowledge, access to information and
26
opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The obligations of the Underwriters in this subsection (d) to contribute are several in proportion to their respective underwriting obligations with respect to such Securities and
not joint.
(e) The obligations of the Company under this Section 10 shall be in addition to any liability which the
Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act; and the obligations of the Underwriters under this Section 10 shall be in
addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer of the Company who signed the Registration Statement and each director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
11.
Default by an Underwriter.
If any one or more
Underwriters shall fail to purchase and pay for any of the Securities agreed to be purchased by such Underwriter or Underwriters hereunder and such failure to purchase shall constitute a default in the performance of its or their obligations under
this Agreement, the remaining Underwriters shall be obligated severally to take up and pay for (in the respective proportions which the principal amount of Securities set forth opposite their names in Schedule II hereto bears to the aggregate
principal amount of Securities set forth opposite the names of all the remaining Underwriters) the
27
Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase;
provided
,
however
, that in the event that the
aggregate principal amount of Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate principal amount of Securities set forth in Schedule II hereto, the remaining Underwriters
shall have the right to purchase all, but shall not be under any obligation to purchase any, of the Securities, and if such nondefaulting Underwriters do not purchase all the Securities, this Agreement will terminate without liability to any
nondefaulting Underwriter or the Company. In the event of a default by any Underwriter as set forth in this Section 11, the Closing Date shall be postponed for such period, not exceeding five Business Days, as the Representatives shall
determine in order that the required changes in the Registration Statement and the Pricing Prospectus or in any other documents or arrangements may be effected. Nothing contained in this Agreement shall relieve any defaulting Underwriter of its
liability, if any, to the Company and any nondefaulting Underwriter for damages occasioned by its default hereunder.
12.
Representations and Indemnities to Survive
. The respective agreements, representations, warranties, indemnities and other statements of the Company or its officers and of the several Underwriters, as set forth in this Agreement or made by or
on behalf of them, respectively, pursuant to this Agreement, will remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or the Company or any of the
officers, directors, employees, agents or controlling persons referred to in Section 10 hereof, and will survive delivery of and payment for the Securities. The provisions of Sections 7, 9 and 10 hereof shall survive the termination or
cancelation of this Agreement.
13.
Disclosure Authorization
. The Company is authorized, subject to applicable law, to disclose any
and all aspects of this potential transaction that are necessary to support any U.S. federal income tax benefits expected to be claimed with respect to such transaction, without the Underwriters imposing any limitation of any kind.
14. In all dealings hereunder, the Representatives shall act on behalf of each of the Underwriters, and the parties hereto shall be entitled to act and
rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by the Representatives jointly or by Banc of America Securities LLC on behalf of the Representatives.
15.
Notices.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, or facsimile transmission to the Representatives at Banc of America Securities LLC, 40 West 27
th
Street, 47
th
Floor, New York, NY 10019, Attention: High Grade Debt Capital Markets Transaction Management; J.P.
Morgan Securities Inc., 270 Park
28
Avenue, 8
th
Floor, New York, NY 10017; and Morgan
Stanley & Co. Incorporated, 1585 Broadway, New York, New York 10036, Attention: Syndicate Desk, with a copy to the Legal Department; and if to the Company shall be delivered or sent by mail, telex or facsimile transmission to the address of
the Company set forth in the Registration Statement, Attention: Secretary; provided, however, that any notice to an Underwriter pursuant to Section 10(c) hereof shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriters’ Questionnaire, or telex constituting such Questionnaire, which address will be supplied to the Company by the Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
16.
Successors.
This Agreement will inure to the benefit of and be binding upon
the parties hereto and their respective successors and the officers, directors, employees, agents and controlling persons referred to in Section 10 hereof, and no other person will have any right or obligation hereunder. No purchaser of any of
the Securities from any Underwriter shall be deemed a successor or assign by reason merely of such purchase.
17. Time shall be of the
essence of this Agreement.
18. The Company acknowledges and agrees that (i) the purchase and sale of the Securities pursuant to this
Agreement is an arm’s-length commercial transaction between the Company, on the one hand, and the several Underwriters, on the other, (ii) in connection therewith and with the process leading to such transaction each Underwriter is acting
solely as a principal and not the agent or fiduciary of the Company, (iii) no Underwriter has assumed an advisory or fiduciary responsibility in favor of the Company with respect to the offering contemplated hereby or the process leading
thereto (irrespective of whether such Underwriter has advised or is currently advising the Company on other matters) or any other obligation to the Company except the obligations expressly set forth in this Agreement and (iv) the Company has
consulted its own legal and financial advisors to the extent it deemed appropriate. The Company agrees that it will not claim that the Underwriters, or any of them, has rendered advisory services of any nature or respect, or owes a fiduciary or
similar duty to the Company, in connection with such transaction or the process leading thereto.
19. This Agreement supersedes all prior
agreements and understandings (whether written or oral) between the Company and the Underwriters, or any of them, with respect to the subject matter hereof.
20.
Applicable Law.
This Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed within the State of New York.
29
21. The Company and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted
by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
22.
Counterparts
. This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which together shall constitute one and the same agreement.
23.
Headings.
The section headings used herein are for convenience only and shall not affect the construction hereof.
24.
Definitions.
The terms which follow, when used in this Agreement, shall have the meanings indicated.
“Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.
“Business Day” shall mean any day other than a Saturday, a Sunday or a legal holiday or a day on which banking
institutions or trust companies are authorized or obligated by law to close in New York City.
“Commission” shall
mean the Securities and Exchange Commission.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
“Execution Time” shall mean the
date and time that this Agreement is executed and delivered by the parties hereto.
“Rule 415”,
“Rule 424” and “Rule 433” refer to such rules under the Act.
“Trust Indenture Act”
shall mean the Trust Indenture Act of 1939, as amended, and the rules and regulations of the Commission promulgated thereunder.
30
If the foregoing is in accordance with your understanding, please sign and return to us seven
counterparts hereof, and upon the acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof shall represent a binding agreement among the Company and the several Underwriters. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall be submitted to the Company for examination upon request, but without warranty
on your part as to the authority of the signers thereof.
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Very truly yours,
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Bristol-Myers Squibb Company
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By:
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Name:
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Title:
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31
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The foregoing Agreement is hereby confirmed and accepted as of the date specified in Schedule I hereto.
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Banc of America Securities LLC
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By:
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Name:
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Title:
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J.P. Morgan Securities Inc.
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By:
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Name:
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Title:
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Morgan Stanley & Co. Incorporated
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By:
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Name:
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Title:
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For themselves and the other several Underwriters, if any, named in Schedule II to the foregoing Agreement.
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32
SCHEDULE I
Underwriting Agreement dated April 28, 2008
Registration Statement No. 333-150471
Representative(s):
Banc of America Securities LLC, J.P. Morgan Securities
Inc. and Morgan Stanley & Co. Incorporated
Title, Purchase Price and Description of Securities:
|
|
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Title:
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5.450% Notes due 2018 (the “2018 Notes”)
|
|
|
|
6.125% Notes due 2038 (the “2038 Notes”)
|
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|
|
|
|
|
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|
|
Principal amount:
|
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$600,000,000 with respect to the 2018 Notes
|
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|
|
$1,000,000,000 with respect to the 2038 Notes
|
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|
|
|
|
|
|
|
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Purchase price to Underwriters:
|
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99.375% with respect to the 2018 Notes
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98.365% with respect to the 2038 Notes
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|
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|
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|
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Sinking fund provisions: None.
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|
Redemption provisions: Optional Redemption: Make Whole Treasury Rate plus 30 bps, in the case of
each of the 2018 Notes and the 2038 Notes
Closing Date, Time and Location: May 1, 2008 at 9:30 a.m. (Eastern time) at Sullivan &
Cromwell LLP, 125 Broad Street, New York, NY 10004
Type of Offering: Non-delayed
Date referred to in Section 5(e) after which the Company may offer or sell debt securities issued or guaranteed by the Company without the consent of the Representative(s): Closing Date.
SCHEDULE II
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Underwriters
|
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Principal Amount
of 2018 Notes to
be Purchased
|
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Principal Amount
of 2038 Notes to
be Purchased
|
|
Banc of America Securities LLC
|
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$
|
180,000,000
|
|
$
|
300,000,000
|
|
J.P. Morgan Securities Inc.
|
|
$
|
180,000,000
|
|
$
|
300,000,000
|
|
Morgan Stanley & Co. Incorporated
|
|
$
|
180,000,000
|
|
$
|
300,000,000
|
|
Citigroup Global Markets Inc.
|
|
$
|
15,000,000
|
|
$
|
25,000,000
|
|
Goldman, Sachs & Co.
|
|
$
|
15,000,000
|
|
$
|
25,000,000
|
|
Greenwich Capital Markets, Inc
|
|
$
|
15,000,000
|
|
$
|
25,000,000
|
|
UBS Securities LLC
|
|
$
|
15,000,000
|
|
$
|
25,000,000
|
|
|
|
|
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|
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|
Total
|
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$
|
600,000,000
|
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$
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1,000,000,000
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SCHEDULE III
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(a)
|
Issuer Free Writing Prospectuses not included in the Pricing Disclosure Package:
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None.
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(b)
|
Additional Documents Incorporated by Reference:
|
None.
ANNEX I
Pursuant to Section 8(e) of the Underwriting Agreement, Deloitte & Touche LLP shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the Company and its subsidiaries within the meaning of the Act and
the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable, financial forecasts and/or pro forma financial information) examined by them and included or incorporated by reference in the Registration Statement or the Prospectus comply as
to form in all material respects with the applicable accounting requirements of the Act or the Exchange Act, as applicable, and the related published rules and regulations thereunder; and, if applicable, they have made a review in accordance with
standards established by the American Institute of Certified Public Accountants of the consolidated interim financial statements, selected financial data, pro forma financial information, financial forecasts and/or condensed financial statements
derived from audited financial statements of the Company for the periods specified in such letter, as indicated in their reports thereon, copies of which have been furnished to the representatives of the Underwriters (the
“Representatives”) such term to include an Underwriter or Underwriters who act without any firm being designated as its or their representatives and are attached to such letters;
(iii) They have made a review in accordance with standards established by the American Institute of Certified Public Accountants of the
unaudited condensed consolidated statements of income, consolidated balance sheets and consolidated statements of cash flows included in the Pricing Prospectus and the Prospectus and/or included in the Company’s quarterly reports on Form 10-Q
incorporated by reference into the Pricing Prospectus and the Prospectus as indicated in their reports thereon copies of which have been separately furnished to the Representatives; and on the basis of specified procedures including inquiries of
officials of the Company who have responsibility for financial and accounting matters regarding whether the unaudited condensed consolidated financial statements referred to in paragraph (vi)(A)(i) below comply as to form in all material respects
with the applicable accounting requirements of the Act and the Exchange Act and the related published rules and regulations, nothing came to their attention that caused them to believe that the unaudited condensed consolidated financial statements
do not comply as to form in all material respects with the applicable accounting requirements of the Act and the Exchange Act and the related published rules and regulations;
(iv) The unaudited selected financial information with respect to the consolidated
results of operations and financial position of the Company for the three most recent fiscal years included in the Prospectus and included or incorporated by reference in Item 6 of the Company’s Annual Report on Form 10-K for the most
recent fiscal year agrees with the corresponding amounts (after restatement where applicable) in the audited consolidated financial statements for such three fiscal years which were included or incorporated by reference in the Company’s Annual
Reports on Form 10-K for such fiscal years;
(v) On the basis of limited procedures, not constituting an examination in
accordance with generally accepted auditing standards, consisting of a reading of the unaudited financial statements and other information referred to below, a reading of the latest available interim financial statements of the Company and its
subsidiaries, inspection of the minute books of the Company and its subsidiaries since the date of the latest audited financial statements included or incorporated by reference in the Pricing Prospectus and the Prospectus, inquiries of officials of
the Company and its subsidiaries responsible for financial and accounting matters and such other inquiries and procedures as may be specified in such letter, nothing came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of income, consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included or incorporated by reference in the Company’s Quarterly Reports on Form 10-Q incorporated by reference in the Pricing Prospectus and the Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the Exchange Act and the related published rules and regulations, or (ii) any material modifications should be made to the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the Prospectus or included in the Company’s Quarterly Reports on Form 10-Q incorporated by reference in the Pricing Prospectus and the Prospectus, for them to be in conformity
with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet items
included in or incorporated by reference in the Prospectus do not agree with the corresponding items in the unaudited consolidated financial statements from which such data and items were derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis for the corresponding amounts in the audited consolidated financial statements included or incorporated by reference in the Company’s Annual Report on Form 10-K for the most recent
fiscal year;
(C) the unaudited financial statements which were not included in the Pricing Prospectus
and the Prospectus but from which were derived the unaudited condensed financial statements referred to in clause (A) and any unaudited income statement data and balance sheet items included in the Pricing Prospectus and the Prospectus and
referred to in clause (B) were not determined on a basis substantially consistent with the basis for the audited financial statements included or incorporated by reference in the Company’s Annual Report on Form 10-K for the most recent
fiscal year;
(D) any unaudited pro forma consolidated condensed financial statements included or incorporated by reference
in the Prospectus do not comply as to form in all material respects with the applicable accounting requirements of the Act and the published rules and regulations thereunder or the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated common stock (other than issuances of common stock upon exercise of options and stock appreciation rights or from the Company’s purchase of its common stock, upon earn-outs of
performance shares and upon conversions of convertible securities, in each case which were outstanding on the date of the latest balance sheet included or incorporated by reference in the Pricing Prospectus and the Prospectus) or any increase in the
consolidated long-term debt of the Company and its subsidiaries, or any decreases in consolidated net current assets or stockholders’ equity or other items specified by the Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in the latest balance sheet included or incorporated by reference in the Pricing Prospectus and the Prospectus, except in each case for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such letter; and
(F) for the period from the date of the
latest financial statements included or incorporated by reference in the Prospectus to the specified date referred to in clause (E) there were any decreases in consolidated net sales or the total or per share amounts of consolidated net income
or other items specified by the Representatives, or any increases in any items specified by the Representatives, in each case as compared with the comparable period of the preceding year and with any other period of corresponding length specified by
the Representatives, except in each case for increases or decreases which the Pricing Prospectus and the Prospectus discloses have occurred or may occur or which are described in such letter; and
In addition to the examination referred to in their report(s) included or incorporated by reference in
the Pricing Prospectus and the Prospectus and the limited procedures, inspection of minute books, inquiries and other procedures referred to in paragraphs (iii) and (vi) above, they have carried out certain specified procedures, not
constituting an examination in accordance with generally accepted auditing standards, with respect to certain amounts, percentages and financial information specified by the Representatives which are derived from the general accounting records of
the Company and its subsidiaries, which appear in the Pricing Prospectus and the Prospectus (excluding documents incorporated by reference) or in Part II of, or in exhibits and schedules to, the Registration Statement specified by the
Representatives or in documents incorporated by reference in the Pricing Prospectus and the Prospectus specified by the Representatives, and have compared certain of such amounts, percentages and financial information with the accounting records of
the Company and its subsidiaries and have found them to be in agreement.
Exhibit 4.1
Form Version
BRISTOL-MYERS SQUIBB COMPANY
and
THE BANK OF NEW YORK,
Trustee
FIFTH SUPPLEMENTAL INDENTURE
Dated as of May 1, 2008
to
INDENTURE
Dated
as of June 1, 1993
5.450% Notes due 2018
6.125% Notes due 2038
TABLE OF CONTENTS
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Page
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ARTICLE ONE DEFINITIONS
|
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2
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Section 101.
|
|
Definition of Terms.
|
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2
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|
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ARTICLE TWO GENERAL TERMS AND CONDITIONS OF THE 2018 NOTES
|
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2
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Section 201.
|
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Designation and Principal Amount.
|
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2
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Section 202.
|
|
Maturity.
|
|
2
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Section 203.
|
|
Further Issues.
|
|
2
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Section 204.
|
|
Payment.
|
|
3
|
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Section 205.
|
|
Global Notes.
|
|
3
|
|
Section 206.
|
|
Notes in Definitive Form
|
|
3
|
|
Section 207.
|
|
Interest.
|
|
3
|
|
Section 208.
|
|
Authorized Denominations.
|
|
3
|
|
Section 209.
|
|
Redemption.
|
|
4
|
|
Section 210.
|
|
Appointment of Agents.
|
|
4
|
|
|
|
|
ARTICLE THREE GENERAL TERMS AND CONDITION OF THE 2038 NOTES
|
|
4
|
|
|
|
|
|
Section 301.
|
|
Designation and Principal Amount.
|
|
4
|
|
Section 302.
|
|
Maturity.
|
|
4
|
|
Section 303.
|
|
Further Issues.
|
|
4
|
|
Section 304.
|
|
Payment.
|
|
4
|
|
Section 305.
|
|
Global Notes.
|
|
4
|
|
Section 306.
|
|
Notes in Definitive Form
|
|
5
|
|
Section 307.
|
|
Interest.
|
|
5
|
|
Section 308.
|
|
Authorized Denominations.
|
|
5
|
|
Section 309.
|
|
Redemption.
|
|
5
|
|
Section 310.
|
|
Appointment of Agents.
|
|
5
|
|
|
|
|
ARTICLE FOUR REDEMPTION OF THE NOTES
|
|
6
|
|
|
|
|
|
Section 401.
|
|
Optional Redemption by Company.
|
|
6
|
|
Section 402.
|
|
Redemption Upon a Tax Event; Additional Amounts.
|
|
7
|
|
Section 403.
|
|
No Sinking Fund.
|
|
8
|
|
|
|
|
ARTICLE FIVE FORMS OF NOTES
|
|
9
|
|
|
|
|
|
Section 501.
|
|
Form of 2018 Note.
|
|
9
|
|
Section 502.
|
|
Form of 2038 Note.
|
|
9
|
|
|
|
|
ARTICLE SIX ORIGINAL ISSUE OF NOTES
|
|
9
|
|
|
|
|
|
Section 601.
|
|
Original Issue of the 2018 Notes.
|
|
9
|
i
|
|
|
|
|
|
|
|
|
|
|
Page
|
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Section 602.
|
|
Original Issue of the 2038 Notes.
|
|
9
|
|
|
|
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ARTICLE SEVEN MISCELLANEOUS
|
|
9
|
|
|
|
|
|
Section 701.
|
|
Ratification of Indenture.
|
|
9
|
|
Section 702.
|
|
Trustee Not Responsible for Recitals.
|
|
10
|
|
Section 703.
|
|
Governing Law.
|
|
10
|
|
Section 704.
|
|
Separability.
|
|
10
|
|
Section 705.
|
|
Counterparts.
|
|
10
|
|
|
|
|
|
EXHIBIT A
|
|
FORM OF 2018 NOTE
|
|
13
|
|
EXHIBIT B
|
|
FORM OF 2038 NOTE
|
|
24
|
-ii-
FIFTH SUPPLEMENTAL INDENTURE, dated as of May 1, 2008 (the “Fifth Supplemental
Indenture”), between Bristol-Myers Squibb Company, a corporation duly organized and existing under the laws of the State of Delaware, having its principal office at 345 Park Avenue, New York, New York, 10154 (the “Company”), and The
Bank of New York, a New York banking corporation (successor to JPMorgan Chase Bank, N.A. (formerly JPMorgan Chase Bank, formerly The Chase Manhattan Bank (successor to The Chase Manhattan Bank (National Association)))), as trustee (the
“Trustee”).
WHEREAS, the Company executed and delivered the indenture, dated as of June 1, 1993, to The Bank of New York
(successor to JPMorgan Chase Bank, N.A. (formerly JPMorgan Chase Bank, formerly The Chase Manhattan Bank (successor to The Chase Manhattan Bank (National Association)))), as trustee (as heretofore supplemented, the “Indenture”), to provide
for the issuance of the Company’s notes, bonds, debentures or any other evidences of indebtedness (the “Securities”), in one or more fully registered series;
WHEREAS, pursuant to Section 901 of the Indenture, the Company desires to provide for the issuance of (i) a new series of its Securities to be
known as its 5.450% Notes due 2018 (the “2018 Notes”) and (ii) a new series of its Securities to be known as its 6.125% Notes due 2038 (the “2038 Notes” and, together with the 2018 Notes, the “Notes”), and to
establish the forms of the 2018 Notes and the 2038 Notes thereof, as in Section 202 of the Indenture provided, and to set forth the terms thereof, as in Section 301 of the Indenture provided;
WHEREAS, the Board of Directors of the Company, pursuant to a resolution duly adopted on March 4, 2008, has duly authorized the issuance of up to
$2,200,000,000 of the Company’s securities and the Securities Issuance Committee of the Board of Directors, pursuant to its Written Consent in Lieu of a Meeting, dated April 28, 2008, has duly authorized the issuance of $600,000,000
aggregate principal amount of the 2018 Notes and $1,000,000,000 aggregate principal amount of the 2038 Notes, and has authorized the proper officers of the Company to execute any and all appropriate documents necessary or appropriate to effect such
issuance;
WHEREAS, the Company has requested that the Trustee execute and deliver this Fifth Supplemental Indenture; and
WHEREAS, all things necessary to make this Fifth Supplemental Indenture a valid agreement of the Company, in accordance with its terms, and to make the
Notes, when executed by the Company and authenticated and delivered by the Trustee, the valid obligations of the Company, have been done;
NOW THEREFORE, in consideration of the premises and the purchase and acceptance of the Notes by the Holders thereof, and for the purpose of setting forth, as provided in the Indenture, the forms and terms of the Notes, it is mutually
covenanted and agreed, for the equal and proportionate benefit of all Holders of the Notes, as follows:
-1-
ARTICLE ONE
DEFINITIONS
Section 101.
Definition of Terms
.
Unless the context otherwise requires:
(a)
each term defined in the Indenture has the same meaning when used in this Fifth Supplemental Indenture;
(b) each term defined anywhere in
this Fifth Supplemental Indenture has the same meaning throughout;
(c) the singular includes the plural and vice versa; and
(d) headings are for convenience of reference only and do not affect interpretation.
ARTICLE TWO
GENERAL TERMS AND CONDITIONS OF THE 2018 NOTES
Section 201.
Designation and Principal Amount
.
There is hereby authorized and established a series of Securities under the Indenture, designated as the “5.450% Notes due 2018,” which is not limited in aggregate principal amount. The aggregate principal amount of 2018 Notes to
be issued shall be as set forth in any Company Order for the authentication and delivery of the 2018 Notes, pursuant to Section 303 of the Indenture.
Section 202.
Maturity
.
The Stated Maturity of principal of the 2018 Notes is May 1, 2018.
Section 203.
Further Issues
.
The Company may
from time to time, without the consent of the Holders of the 2018 Notes, issue additional 2018 Notes. Any such additional 2018 Notes will have the same ranking, interest rate, maturity date and other terms as the 2018 Notes herein provided for. Any
such additional 2018 Notes, together with the 2018 Notes herein provided for, will constitute a single series of Securities under the Indenture.
-2-
Section 204.
Payment
.
Principal of, premium, if any, and interest on the 2018 Notes shall be payable in U.S. dollars.
Section 205.
Global Notes
.
Upon their original issuance, the 2018 Notes will be represented by one or more Global Securities registered in the
name of Cede & Co., the nominee of The Depository Trust Company (“DTC”). The Company will issue the 2018 Notes in denominations of $2,000 and integral multiples of $1,000 in excess thereof and will deposit the Global Securities
with DTC or its custodian and register the Global Securities in the name of Cede & Co.
Section 206.
Notes in Definitive Form
If (1) the depositary is at any time unwilling or unable to continue as depositary and a successor depositary is not appointed by the
Company within 90 days of notice thereof, (2) an Event of Default has occurred with regard to the 2018 Notes and has not been cured or waived, or (3) the Company at any time and in its sole discretion determines not to have the 2018 Notes
represented by Global Securities, the Company may issue 2018 Notes in definitive form in exchange for 2018 Notes issued in the form of Global Securities. In any such instance, an owner of a beneficial interest in the 2018 Notes will be entitled to
physical delivery in definitive form of 2018 Notes, equal in principal amount to such beneficial interest and to have such 2018 Notes registered in its name as shall be established in a Company Order.
Section 207.
Interest
.
The 2018 Notes will bear
interest (computed on the basis of a 360-day year consisting of twelve 30-day months) from May 1, 2008 at the rate of 5.450% per annum, payable semiannually; interest payable on each Interest Payment Date (as defined in the Indenture) will
include interest accrued from May 1, 2008, or from the most recent Interest Payment Date to which interest has been paid or duly provided for; the Interest Payment Dates on which such interest shall be payable are May 1 and
November 1, commencing on November 1, 2008; and the Record Date for the interest payable on any Interest Payment Date is the close of business on April 15 or October 15, as the case may be, next preceding the relevant Interest
Payment Date. If any Interest Payment Date falls on a day that is not a Business Day, the required payment on that day will be due on the next succeeding Business Day as if made on the date the payment was due, and no interest will accrue on that
payment for the period from and after that Interest Payment Date to the date of payment on the next succeeding Business Day.
Section 208.
Authorized Denominations
.
The 2018 Notes shall be issuable in denominations of $2,000 and integral multiples of $1,000 in excess
thereof.
-3-
Section 209.
Redemption
.
The 2018 Notes are subject to redemption at the option of the Company as described in Article Four hereof.
Section 210.
Appointment of Agents
.
The Trustee will initially be the Security Registrar and Paying Agent for the
Notes and will act as such only at its offices in New York, New York.
ARTICLE THREE
GENERAL TERMS AND CONDITION OF THE 2038 NOTES
Section 301.
Designation and Principal
Amount
.
There is hereby authorized and established a series of Securities under the Indenture, designated as the “6.125% Notes
due 2038,” which is not limited in aggregate principal amount. The aggregate principal amount of 2038 Notes to be issued shall be as set forth in any Company Order for the authentication and delivery of the 2038 Notes, pursuant to
Section 303 of the Indenture.
Section 302.
Maturity
.
The Stated Maturity of principal of the 2038 Notes is May 1, 2038.
Section 303.
Further Issues
.
The Company may from time to time, without the consent of the Holders of the 2038 Notes, issue additional 2038 Notes. Any such additional
2038 Notes will have the same ranking, interest rate, maturity date and other terms as the 2038 Notes herein provided for. Any such additional 2038 Notes, together with the 2038 Notes herein provided for, will constitute a single series of
Securities under the Indenture.
Section 304.
Payment
.
Principal of, premium, if any, and interest on the 2038 Notes shall be payable in U.S. dollars.
Section 305.
Global Notes
.
Upon their original issuance, the 2038 Notes will be represented by one or more Global Securities registered in the
name of Cede & Co., the nominee of The Depository Trust Company (“DTC”). The Company will issue the 2038 Notes in denominations of $2,000 and integral multiples of $1,000 in excess thereof and will deposit the Global Securities
with DTC or its custodian and register the Global Securities in the name of Cede & Co.
-4-
Section 306.
Notes in Definitive Form
If (1) the depositary is at any time unwilling or unable to continue as depositary and a successor depositary is not appointed by the Company within
90 days of notice thereof, (2) an Event of Default has occurred with regard to the 2038 Notes and has not been cured or waived, or (3) the Company at any time and in its sole discretion determines not to have the 2038 Notes represented by
Global Securities, the Company may issue 2038 Notes in definitive form in exchange for 2038 Notes issued in the form of Global Securities. In any such instance, an owner of a beneficial interest in the 2038 Notes will be entitled to physical
delivery in definitive form of 2038 Notes, equal in principal amount to such beneficial interest and to have such 2038 Notes registered in its name as shall be established in a Company Order.
Section 307.
Interest
.
The 2038 Notes will bear
interest (computed on the basis of a 360-day year consisting of twelve 30-day months) from May 1, 2008 at the rate of 6.125% per annum, payable semiannually; interest payable on each Interest Payment Date (as defined in the Indenture) will
include interest accrued from May 1, 2008, or from the most recent Interest Payment Date to which interest has been paid or duly provided for; the Interest Payment Dates on which such interest shall be payable are May 1 and
November 1, commencing on November 1, 2008; and the Record Date for the interest payable on any Interest Payment Date is the close of business on April 15 or October 15, as the case may be, next preceding the relevant Interest
Payment Date. If any Interest Payment Date falls on a day that is not a Business Day, the required payment on that day will be due on the next succeeding Business Day as if made on the date the payment was due, and no interest will accrue on that
payment for the period from and after that Interest Payment Date to the date of payment on the next succeeding Business Day.
Section 308.
Authorized Denominations
.
The 2038 Notes shall be issuable in denominations of $2,000 and integral multiples of $1,000 in excess
thereof.
Section 309.
Redemption
.
The 2038 Notes are subject to redemption at the option of the Company as described in Article Four hereof.
Section 310.
Appointment of
Agents
.
The Trustee will initially be the Security Registrar and Paying Agent for the Notes and will act as such only at its offices in
New York, New York.
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ARTICLE FOUR
REDEMPTION OF THE NOTES
Section 401.
Optional Redemption by Company
.
(a) The 2018 Notes may be redeemed at any time (the “2018 Redemption Date”) at the Company’s option in whole or from time to time in part
at a redemption price (the “2018 Redemption Price”) equal to the greater of:
(i) 100% of the principal amount of the 2018 Notes
being redeemed, or
(ii) as calculated by the Quotation Agent, the sum of the present values of the remaining scheduled payments for
principal and interest on the 2018 Notes to be redeemed (not including any portion of such payments of interest accrued as of the 2018 Redemption Date) discounted to the 2018 Redemption Date on a semiannual basis (assuming a 360 day year consisting
of twelve 30-day months) using a discount rate equal to the sum of the Reference Dealer Rate plus 30 basis points;
plus, in each of the cases (i) and
(ii) above, accrued and unpaid interest on the 2018 Notes to be redeemed to, but not including, the 2018 Redemption Date.
(b) The
2038 Notes may be redeemed at any time (the “2038 Redemption Date”) at the Company’s option in whole or from time to time in part at a redemption price (the “2038 Redemption Price”) equal to the greater of:
(i) 100% of the principal amount of the 2038 Notes being redeemed, or
(ii) as calculated by the Quotation Agent, the sum of the present values of the remaining scheduled payments for principal and interest on the 2038 Notes to be redeemed (not including any portion of such payments of
interest accrued as of the 2038 Redemption Date) discounted to the 2038 Redemption Date on a semiannual basis (assuming a 360 day year consisting of twelve 30-day months) using a discount rate equal to the sum of the Reference Dealer Rate plus 30
basis points;
plus, in each of the cases (i) and (ii) above, accrued and unpaid interest on the 2038 Notes to be redeemed to, but not including,
the 2038 Redemption Date.
(c) Notice of any redemption of the Notes of either series shall be given in the manner and otherwise in
accordance with the provisions of Section 1104 of the Indenture; provided, however, that any such notice in lieu of stating the applicable Redemption Price, shall state the manner in which such Redemption Price shall be calculated. If the
Company has given notice of redemption as provided in the Indenture and funds for the redemption of any Notes of a series called for redemption have been made available on the Redemption Date referred to in that notice, such Notes will cease to bear
interest on such Redemption Date. Any interest accrued to such Redemption Date will be paid as specified in such notice.
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(d) The following defined terms used in this Article Four shall, unless the context otherwise requires,
have the meanings specified below.
“Quotation Agent” means one of the Reference Dealers selected by the Company.
“Reference Dealer” means (a) each of Banc of America Securities LLC, J.P. Morgan Securities Inc. and Morgan Stanley & Co.
Incorporated and their respective successors, unless any of them ceases to be a primary U.S. Government securities dealer in New York City (a “Primary Treasury Dealer”), in which case the Company will substitute another Primary Treasury
Dealer and (b) any other Primary Treasury Dealer selected by the Company.
“Reference Dealer Rate” means (i) with
respect to any 2018 Redemption Date, the arithmetic average of the quotations quoted in writing to the Company by each Reference Dealer of the average midmarket annual yield to maturity of the 3.500% U.S. Treasury Notes due February 15, 2018
or, if such security is no longer outstanding, a similar security in the reasonable judgment of each Reference Dealer, at 5:00 p.m., New York City time, on the third Business Day preceding such 2018 Redemption Date; and (ii) with respect to any
2038 Redemption Date, the arithmetic average of the quotations quoted in writing to the Company by each Reference Dealer of the average midmarket annual yield to maturity of the 5.000% U.S. Treasury Notes due May 15, 2037 or, if such security
is no longer outstanding, a similar security in the reasonable judgment of each Reference Dealer, at 5:00 p.m., New York City time, on the third Business Day preceding such 2038 Redemption Date.
(e) At or prior to the time of giving of any notice of redemption to the Holders of any 2018 Notes or 2038 Notes to be redeemed, the Company shall
deliver an Officers’ Certificate to the Trustee setting forth the calculation of the 2018 Redemption Price or the 2038 Redemption Price applicable to such redemption. The Trustee shall be under no duty to inquire into, may conclusively presume
the correctness of, and shall be fully protected in relying upon the 2018 Redemption Price or 2038 Redemption Price, as applicable, as so calculated and set forth in such Officers’ Certificate.
Section 402.
Redemption Upon a Tax Event; Additional Amounts
.
(a) If the Company becomes or will become obligated to pay Additional Amounts (as defined in the form of the 2018 Notes) in respect of the 2018 Notes as a result of (i) any change in, or amendment to, the laws
(or any regulations or rulings promulgated thereunder) of the United States (or any political subdivision or taxing authority thereof or therein), or any change in, or amendment to, any official position regarding the application or interpretation
of such laws, regulations or rulings, which change or amendment is announced or becomes effective on or after May 1, 2008, or (ii) a taxing authority of the United States takes an action on or after
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May 1, 2008, whether or not with respect to the Company or any of its affiliates, that results in a substantial probability that the Company will or may
be required to pay such Additional Amounts, in either case, with respect to the 2018 Notes for reasons outside the Company’s control and after taking reasonable measures available to the Company to avoid such obligation, the Company may, at its
option, redeem, as a whole, but not in part, the 2018 Notes at any time prior to maturity on not less than 30 nor more than 60 calendar days’ prior notice to the Holders, at a 2018 Redemption Price equal to 100% of their principal amount
together with interest accrued thereon to the date fixed for redemption.
(b) If the Company becomes or will become obligated to pay
Additional Amounts (as defined in the form of the 2038 Notes) in respect of the 2038 Notes as a result of (i) any change in, or amendment to, the laws (or any regulations or rulings promulgated thereunder) of the United States (or any political
subdivision or taxing authority thereof or therein), or any change in, or amendment to, any official position regarding the application or interpretation of such laws, regulations or rulings, which change or amendment is announced or becomes
effective on or after May 1, 2008, or (ii) a taxing authority of the United States takes an action on or after May 1, 2008, whether or not with respect to the Company or any of its affiliates, that results in a substantial probability
that the Company will or may be required to pay such Additional Amounts, in either case, with respect to the 2038 Notes for reasons outside the Company’s control and after taking reasonable measures available to the Company to avoid such
obligation, the Company may, at its option, redeem, as a whole, but not in part, the 2038 Notes at any time prior to maturity on not less than 30 nor more than 60 calendar days’ prior notice to the Holders, at a 2038 Redemption Price equal to
100% of their principal amount together with interest accrued thereon to the date fixed for redemption.
(c) No redemption pursuant to
clause (a)(ii) or (b)(ii) above may be made unless the Company shall have received an opinion of independent counsel to the effect that an act taken by a taxing authority of the United States results in a substantial probability that the Company
will or may be required to pay the Additional Amounts described in subsection (d) below and the Company shall have delivered to the Trustee a certificate, signed by an officer of the Company duly authorized in or pursuant to a Board Resolution,
stating that based on such opinion, the Company is entitled to redeem such 2018 Notes or 2038 Notes, as applicable, pursuant to their terms.
(d) The Company will, subject to the exceptions and limitations set forth in the terms of the 2018 Notes and the 2038 Notes, pay on the 2018 Notes or the 2038 Notes the Additional Amounts as are specified in the respective forms of the 2018
Notes or the 2038 Notes, as applicable.
Section 403.
No Sinking Fund
.
Neither the 2018 Notes nor the 2038 Notes are entitled to the benefit of any sinking fund.
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ARTICLE FIVE
FORMS OF NOTES
Section 501.
Form of 2018 Note
.
The 2018 Notes and the Trustee’s Certificate of Authentication to be endorsed thereon are to be substantially in the forms set forth in Exhibit A
hereto.
Section 502.
Form of 2038 Note
.
The 2038 Notes and the Trustee’s Certificate of Authentication to be endorsed thereon are to be substantially in the forms set forth in Exhibit B hereto.
ARTICLE SIX
ORIGINAL ISSUE OF NOTES
Section 601.
Original Issue of the 2018 Notes
.
2018 Notes in the aggregate principal amount of
$600,000,000 may, upon execution of this Fifth Supplemental Indenture, be executed by the Company and delivered to the Trustee for authentication, and the Trustee shall, upon receipt of a Company Order, authenticate and deliver said 2018 Notes as in
said Company Order provided.
Section 602.
Original Issue of the 2038 Notes
.
2038 Notes in the aggregate principal amount of $1,000,000,000 may, upon execution of this Fifth Supplemental Indenture, be executed by the Company and
delivered to the Trustee for authentication, and the Trustee shall, upon receipt of a Company Order, authenticate and deliver said 2038 Notes as in said Company Order provided.
ARTICLE SEVEN
MISCELLANEOUS
Section 701.
Ratification of Indenture
.
The
Indenture, as supplemented by this Fifth Supplemental Indenture, is in all respects ratified and confirmed, and this Fifth Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided.
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Section 702.
Trustee Not Responsible for Recitals
.
The recitals herein contained are made by the Company and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof. The
Trustee makes no representation as to the validity or sufficiency of this Fifth Supplemental Indenture.
Section 703.
Governing Law
.
This Fifth Supplemental Indenture and each Note shall be governed by and construed in accordance with the laws of the State of New York.
Section 704.
Separability
.
In
case any one or more of the provisions contained in this Fifth Supplemental Indenture or in the Notes shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not
affect any other provisions of this Fifth Supplemental Indenture or of the Notes, but this Fifth Supplemental Indenture and the Notes shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or
therein.
Section 705.
Counterparts
.
This Fifth Supplemental Indenture may be executed in any number of counterparts each of which shall be an original; but such counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Fifth Supplemental Indenture to be duly executed,
all as of the day and year first above written.
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BRISTOL-MYERS SQUIBB COMPANY
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By:
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Name:
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Title:
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THE BANK OF NEW YORK, as Trustee
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By:
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Name:
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Title:
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EXHIBIT A
(FACE OF NOTE)
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM IN ACCORDANCE WITH THE PROVISIONS OF THE INDENTURE AND THE TERMS OF THE SECURITIES,
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
UNLESS THIS CERTIFICATE IS PRESENTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO BRISTOL-MYERS SQUIBB COMPANY, OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
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BRISTOL-MYERS SQUIBB COMPANY
5.450% Notes due 2018
CUSIP NO. 110122AR9
ISIN NO. US110122AR90
No.
R-
$[ ]
BRISTOL-MYERS SQUIBB COMPANY, a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company”, which term includes any successor under the Indenture hereinafter
referred to), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of
($[ ])
on at the office or agency of the Company in New York, New York designated for such purpose by the Company (on the date hereof, the principal Corporate Trust Office of the Trustee mentioned
below, located at 101 Barclay Street, Floor 8 West, New York, NY 10286), in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, and to pay interest on
said principal sum semiannually on May 1 and November 1 of each year, commencing November 1, 2008, at said office or agency (except as provided below), in like coin or currency, at the rate per annum specified in the title hereof,
such interest to accrue from the date of this Note until payment of said principal sum has been made or duly provided for. The interest so payable, and punctually paid or duly provided for, on any May 1 or November 1 will, except as
provided in the Indenture, dated as of June 1, 1993, as supplemented by the First Supplemental Indenture, dated as of February 4, 1998, the Second Supplemental Indenture, dated as of September 28, 2001, the Third Supplemental
Indenture, dated as of August 18, 2003, the Fourth Supplemental Indenture, dated as of November 20, 2006 and the Fifth Supplemental Indenture, dated as of May 1, 2008 (collectively, herein called the “Indenture”; capitalized
terms used and not defined herein shall have the meanings ascribed to such terms in the Indenture), duly executed and delivered by the Company to The Bank of New York, a New York banking corporation (successor to JPMorgan Chase Bank, N.A. (formerly
JPMorgan Chase Bank, formerly The Chase Manhattan Bank (successor to The Chase Manhattan Bank (National Association)))), as trustee (herein called the “Trustee”), be paid to the Person in whose name this Note (or one or more Predecessor
Securities) is registered at the close of business on the next preceding April 15 or October 15, respectively (herein called the “Regular Record Date”), whether or not a Business Day, and may, at the option of the Company, be
paid by check mailed to the registered address of such Person. Any such interest which is payable, but is not so punctually paid or duly provided for, shall forthwith cease to be payable to the registered Holder on such Regular Record Date and may
be paid either to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, as described in the
Indenture, notice whereof shall be given to Holders of Notes not less than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful
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manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed and upon such notice as may be required by such
exchange, if such manner of payment shall be deemed practical by the Trustee, all as more fully provided in the Indenture.
The Securities
may be issued in one or more series, which different series may be issued in various aggregate principal amounts, may mature at different times, may bear interest (if any) at different rates, may be subject to different redemption provisions (if
any), may be subject to different sinking, purchase or analogous funds (if any), may be subject to different covenants and Events of Default and may otherwise vary as provided or permitted in the Indenture. This Note is one of the series of
Securities of the Company issued pursuant to the Indenture designated as the 5.450% Notes due 2018 (herein called the “Notes”), unlimited in aggregate principal amount.
Upon due presentment for registration of transfer of this Note at the office or agency of the Company in New York, New York, designated for such purpose
by the Company (on the date hereof, the principal Corporate Trust Office of the Trustee, located at 101 Barclay Street, Floor 8 West, New York, NY 10286), duly endorsed or accompanied by a written instrument of transfer in form satisfactory to the
Company, the Trustee and the Security Registrar duly executed by the Holder thereof or his attorney duly authorized in writing, a new Note or Notes of authorized denominations for a like aggregate principal amount and Stated Maturity will be issued
to the transferee in exchange therefor, subject to the limitations provided in the Indenture.
No charge shall be made for any such
transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge imposed in connection therewith.
Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been manually executed by or on behalf of the Trustee under the Indenture, this Note shall not be
entitled to any benefits under the Indenture, or be valid or obligatory for any purpose.
-3-
IN WITNESS WHEREOF, BRISTOL-MYERS SQUIBB COMPANY has caused this Note to be duly executed.
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Dated: May [ ], 2008
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BRISTOL-MYERS SQUIBB COMPANY
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By:
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Name:
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Title:
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Trustee’s Certificate of Authentication
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This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
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THE BANK OF NEW YORK, as Trustee
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By:
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Authorized Signatory
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REVERSE OF NOTE
This Note is one of the duly authorized issue of debt securities (hereinafter called the “Securities”) of the Company, of the series specified on the face hereof, all issued or to be issued under and
pursuant to the Indenture, to which Indenture and all indentures supplemental thereto (collectively, the “Indenture”) reference is hereby made for a statement of the rights and limitations of rights, obligations, duties and immunities
thereunder of the Trustee, and any agent of the Trustee, any Paying Agent, the Company and the Holders of the Securities and the terms upon which the Securities are issued and are to be authenticated and delivered.
The Indenture permits, with certain exceptions as therein provided, the Company and the Trustee to enter into supplemental indentures to the Indenture
for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of modifying in any manner the rights of the Holders of the Securities of each series under the Indenture with the consent
of the Holders of not less than a majority in principal amount of the Securities at the time Outstanding of each series to be affected thereby on behalf of the Holders of all Securities of such series. The Indenture also permits the Holders of a
majority in principal amount of the Securities at the time Outstanding of each series on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults
and their consequences with respect to such series under the Indenture. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note or such other Note.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or currency, herein prescribed.
Registrar and Paying Agent
The Company shall maintain in the Borough of Manhattan, The City of New York, an office or agency where Notes may be surrendered for registration of
transfer or exchange and an office or agency where Notes may be presented for payment or for exchange. The Company has initially appointed the Trustee, The Bank of New York, as its Security Registrar and Paying Agent. The Company reserves the right
at any time to vary or terminate the appointment of any Paying Agent or Security Registrar, to appoint additional or other Paying Agents or other Security Registrars and to approve any change in the office through which any Paying Agent or Security
Registrar acts.
-5-
Optional Redemption of the Notes
The Notes may be redeemed at any time (the “Redemption Date”) at the Company’s option in whole or from time to time in part at a redemption
price (the “Redemption Price”) equal to the greater of:
(a) 100% of the principal amount of the Notes being redeemed, or
(b) as calculated by the Quotation Agent, the sum of the present values of the remaining scheduled payments for principal and interest on
the Notes to be redeemed (not including any portion of such payments of interest accrued as of the Redemption Date) discounted to the Redemption Date on a semiannual basis (assuming a 360 day year consisting of twelve 30-day months) using a discount
rate equal to the sum of the Reference Dealer Rate plus 30 basis points;
plus, in each of the cases (a) and (b) above, accrued and unpaid
interest on the Notes to be redeemed to, but not including, the Redemption Date.
Notice of any redemption of the Notes shall be given in
the manner and otherwise in accordance with the provisions of Section 1104 of the Indenture; provided, however, that any such notice in lieu of stating the applicable Redemption Price shall state the manner in which the Redemption Price shall
be calculated. If the Company has given notice of redemption as provided in the Indenture and funds for the redemption of any Notes called for redemption have been made available on the Redemption Date referred to in that notice, such Notes will
cease to bear interest on such Redemption Date. Any interest accrued to the Redemption Date will be paid as specified in such notice.
“Quotation Agent” means one of the Reference Dealers selected by the Company.
“Reference Dealer” means
(a) each of Banc of America Securities LLC, J.P. Morgan Securities Inc. and Morgan Stanley & Co. Incorporated and their respective successors, unless any of them ceases to be a primary U.S. Government securities dealer in New York City
(a “Primary Treasury Dealer”), in which case the Company will substitute another Primary Treasury Dealer and (b) any other Primary Treasury Dealer selected by the Company.
“Reference Dealer Rate” means, with respect to any Redemption Date, the arithmetic average of the quotations quoted in writing to the Company
by each Reference Dealer of the average midmarket annual yield to maturity of the 3.500% U.S. Treasury Notes due February 15, 2018 or, if such security is no longer outstanding, a similar security in the reasonable judgment of each Reference
Dealer, at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date.
At or prior to the time of giving any
notice of redemption to the Holders of any Notes to be redeemed, the Company shall deliver an Officers’ Certificate to the Trustee setting forth the calculation of the Redemption Price applicable to such redemption. The Trustee shall be under
no duty to inquire into, may conclusively presume the correctness of, and shall be fully protected in relying upon the Redemption Price as so calculated and set forth in such Officers’ Certificate.
-6-
Payment of Additional Amounts
The Company will, subject to certain exceptions and limitations set forth below, pay as additional interest on the Notes such additional amounts
(“Additional Amounts”) as are necessary so that the net payment by the Company or a Paying Agent of the principal of and interest on this Note to a person who is a Non-U.S. Holder, after deduction for any present or future tax, assessment
or governmental charge of the United States or a political subdivision or taxing authority thereof or therein, imposed by withholding with respect to the payment, will not be less than the amount that would have been payable in respect of the Notes
had no withholding or deduction been required;
provided
,
however
, that the foregoing obligation to pay Additional Amounts shall not apply:
(1) to any tax, assessment or governmental charge that is imposed or withheld solely because the beneficial owner, or a fiduciary, settlor, beneficiary or member of the beneficial owner if the beneficial owner is an
estate, trust or partnership, or a person holding a power over an estate or trust administered by a fiduciary Holder:
(a)
is or was present or engaged in trade or business in the United States or has or had a permanent establishment in the United States;
(b) is or was a citizen or resident or is or was treated as a resident of the United States;
(c) is or was a
foreign or domestic personal holding company, a passive foreign investment company or a controlled foreign corporation with respect to the United States, is or was a corporation that has accumulated earnings to avoid United States federal income tax
or is or was a private foundation or other tax-exempt organization; or
(d) is or was an actual or constructive
“10-percent shareholder” of the Company, as defined in Section 871(h)(3) of the U.S. Internal Revenue Code of 1986, as amended;
(2) to any Holder that is not the sole beneficial owner of the Notes, or that is a fiduciary or partnership, but only to the extent that the beneficial owner, a beneficiary or settlor with respect to the fiduciary, or
a member of the partnership would not have been entitled to the payment of an additional amount had such beneficial owner, beneficiary, settlor or member received directly its beneficial or distributive share of the payment;
(3) to any tax, assessment or governmental charge that is imposed or withheld solely because the beneficial owner or any other person
failed to comply with
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certification, identification or information reporting requirements concerning the nationality, residence, identity or connection with the United States of
the Holder or beneficial owner of the Notes, if compliance is required by statute, by regulation of the United States Treasury Department or by an applicable income tax treaty to which the United States is a party as a precondition to exemption from
such tax, assessment or other governmental charge;
(4) to any tax, assessment or governmental charge that is imposed other
than by deduction or withholding by the Company or a Paying Agent from the payment;
(5) to any tax, assessment or
governmental charge that is imposed or withheld solely because of a change in law, regulation, or administrative or judicial interpretation that becomes effective after the day on which the payment becomes due or is duly provided for, whichever
occurs later;
(6) to any estate, inheritance, gift, sales, excise, transfer, wealth or personal property tax or any similar
tax, assessment or governmental charge;
(7) to any tax, assessment or other governmental charge any paying agent (which
term may include the Company) must withhold from any payment of principal of or interest on any note, if such payment can be made without such withholding by any other paying agent;
(8) to any tax, assessment or governmental charge that would not have been so imposed or withheld but for the presentation by the Holder
of a Note for payment on a date more than 30 days after the date on which such payment became due and payable or the date on which payment thereof is duly provided for, whichever occurs later; or
(9) in the case of any combination of the above items.
Except as specifically provided herein, the Company shall not be required to make any payment with respect to any tax, assessment or governmental charge imposed by any government or a political subdivision or taxing
authority thereof or therein.
In particular, the Company will not be obligated to pay Additional Amounts on any Note (a) where
withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to European Council Directive 2003/48/EC or any law implementing or complying with, or introduced in order to conform to, that Directive, or
(b) presented for payment by or on behalf of a beneficial owner who would have been able to avoid the withholding or deduction by presenting the relevant Note to another paying agent in a Member State of the EU.
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“Non-U.S. Holder” means (a) an individual that is a nonresident alien, (b) a
corporation organized or created under non-U.S. law, or (c) an estate or trust that is not taxable in the U.S. on its worldwide income.
Redemption Upon a Tax Event
If (a) the Company becomes or will become obligated to pay Additional Amounts as a result
of any change in, or amendment to, the laws (or any regulations or rulings promulgated thereunder) of the United States (or any political subdivision or taxing authority thereof or therein), or any change in, or amendment to, any official position
regarding the application or interpretation of such laws, regulations or rulings, which change or amendment is announced or becomes effective on or after May 1, 2008, or (b) a taxing authority of the United States takes an action on or
after May 1, 2008, whether or not with respect to the Company or any of its affiliates, that results in a substantial probability that the Company will or may be required to pay such Additional Amounts, in either case, with respect to this
series of Notes for reasons outside the Company’s control and after taking reasonable measures available to the Company to avoid such obligation, then the Company may, at its option, redeem, as a whole, but not in part, the Notes at any time
prior to maturity on not less than 30 nor more than 60 calendar days’ prior notice to the Holders, at a redemption price equal to 100% of their principal amount, together with interest accrued thereon to the Redemption Date. No redemption
pursuant to (b) above may be made unless the Company shall have received an opinion of independent counsel to the effect that an act taken by a taxing authority of the United States results in a substantial probability that the Company will or
may be required to pay the Additional Amounts and the Company shall have delivered to the Trustee a certificate, signed by an officer of the Company duly authorized in or pursuant to a Board Resolution stating, that based on such opinion, the
Company is entitled to redeem the Notes pursuant to their terms.
Further Issues
The Company may from time to time, without notice to or the consent of the Holders of the Notes, create and issue further Notes ranking equally and
ratably with the Notes in all respects, or in all respects except for the issue date, the payment of interest accruing prior to the issue date or except for the first payment of interest following the issue date of those further Notes. Any further
Notes will be consolidated and form a single series with the Notes and will have the same terms as to status, redemption or otherwise as the Notes. Any further Notes may be issued by or pursuant to a resolution of the Board of Directors of the
Company or a supplement to the Indenture.
Notes in Definitive Form
If (1) the depositary is at any time unwilling or unable to continue as depositary and a successor depositary is not appointed by the Company within
90 days of notice thereof, (2) an Event of Default has occurred with regard to the Notes and has not been cured or waived, or (3)
-9-
the Company at any time and in its sole discretion determines not to have the Notes represented by Global Securities, the Company may issue Notes in
definitive form in exchange for Notes issued in the form of Global Securities. In any such instance, an owner of a beneficial interest in the Notes will be entitled to physical delivery in definitive form of Notes represented by this Note, equal in
principal amount to such beneficial interest and to have such Notes registered in its name as shall be established in a Company Order.
Sinking Fund
The Notes will not be subject to any sinking fund.
Default
If an Event of Default with
respect to the Notes shall occur and be continuing, the principal of all the Notes may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture.
Miscellaneous
Any money that the
Company deposits with the Trustee or any Paying Agent for the payment of principal or any interest on this Note that remains unclaimed for two years after the date upon which the principal and interest are due and payable, will be repaid to the
Company upon the Company’s request unless otherwise required by mandatory provisions of any applicable unclaimed property law. After that time, unless otherwise required by mandatory provisions of any unclaimed property law, the Holder of this
Note will be able to seek any payment to which such Holder may be entitled to collect only from the Company.
No reference herein to the
Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and any premium and any interest on, this Note at the place, rate and
respective times and in the coin or currency herein and in the Indenture prescribed.
As provided in the Indenture and subject to the
satisfaction of certain conditions therein set forth, including the deposit of certain trust funds in trust, at the Company’s option, either the Company shall be deemed to have paid and discharged the entire indebtedness represented by, and the
obligations under, the Securities of any series and to have satisfied all the obligations (with certain exceptions) under the Indenture relating to the Securities of such series or the Company shall cease to be under any obligation to comply with
any term, provision or condition of certain restrictive covenants or provisions with respect to the Securities of such series.
The Notes
are issuable in registered form without coupons in denominations of $2,000 and any integral multiple of $1,000. Notes may be exchanged for a like aggregate principal amount and Stated Maturity of Notes of other authorized denominations at the office
or agency of the Company in New York, New York, designated for such purpose by the Company (on the
-10 -
date hereof, the principal Corporate Trust Office of the Trustee, located at 101 Barclay Street, Floor 8 West, New York, New York 10286), and in the manner
and subject to the limitations provided in the Indenture.
Prior to due presentment for registration of transfer of this Note, the Company,
the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note is overdue, and neither the Company, the Trustee nor any agent shall be
affected by notice to the contrary.
This Note shall be construed in accordance with and governed by the laws of the State of New York.
-11-
EXHIBIT B
(FACE OF NOTE)
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM IN ACCORDANCE WITH THE PROVISIONS OF THE INDENTURE AND THE TERMS OF THE SECURITIES,
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
UNLESS THIS CERTIFICATE IS PRESENTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO BRISTOL-MYERS SQUIBB COMPANY, OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
-1-
BRISTOL-MYERS SQUIBB COMPANY
6.125% Notes due 2038
CUSIP NO. 110122AQ1
ISIN NO. US110122AQ18
No.
R-
$[ ]
BRISTOL-MYERS SQUIBB COMPANY, a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company”, which term includes any successor under the Indenture hereinafter
referred to), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of
($[ ]) on at the office or agency of the Company in New York, New York designated
for such purpose by the Company (on the date hereof, the principal Corporate Trust Office of the Trustee mentioned below, located at 101 Barclay Street, Floor 8 West, New York, NY 10286), in such coin or currency of the United States of America as
at the time of payment shall be legal tender for the payment of public and private debts, and to pay interest on said principal sum semiannually on May 1 and November 1 of each year, commencing November 1, 2008, at said office or
agency (except as provided below), in like coin or currency, at the rate per annum specified in the title hereof, such interest to accrue from the date of this Note until payment of said principal sum has been made or duly provided for. The interest
so payable, and punctually paid or duly provided for, on any May 1 or November 1 will, except as provided in the Indenture dated as of June 1, 1993, as supplemented by the First Supplemental Indenture, dated as of February 4,
1998, the Second Supplemental Indenture, dated as of September 28, 2001, the Third Supplemental Indenture, dated as of August 18, 2003, the Fourth Supplemental Indenture, dated as of November 20, 2006 and the Fifth Supplemental
Indenture, dated as of May 1, 2008 (collectively, herein called the “Indenture”; capitalized terms used and not defined herein shall have the meanings ascribed to such terms in the Indenture), duly executed and delivered by the
Company to The Bank of New York, a New York banking corporation (successor to JPMorgan Chase Bank, N.A. (formerly JPMorgan Chase Bank, formerly The Chase Manhattan Bank (successor to The Chase Manhattan Bank (National Association)))), as trustee
(herein called the “Trustee”), be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on the next preceding April 15 or October 15, respectively (herein called
the “Regular Record Date”), whether or not a Business Day, and may, at the option of the Company, be paid by check mailed to the registered address of such Person. Any such interest which is payable, but is not so punctually paid or duly
provided for, shall forthwith cease to be payable to the registered Holder on such Regular Record Date and may be paid either to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, as described in the Indenture, notice whereof shall be given to Holders of Notes not less than 10 days prior to such Special Record Date, or may be paid at
any time in any other
-2-
lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed and upon such notice as may be required by
such exchange, if such manner of payment shall be deemed practical by the Trustee, all as more fully provided in the Indenture.
The
Securities may be issued in one or more series, which different series may be issued in various aggregate principal amounts, may mature at different times, may bear interest (if any) at different rates, may be subject to different redemption
provisions (if any), may be subject to different sinking, purchase or analogous funds (if any), may be subject to different covenants and Events of Default and may otherwise vary as provided or permitted in the Indenture. This Note is one of the
series of Securities of the Company issued pursuant to the Indenture designated as the 6.125% Notes due 2038 (herein called the “Notes”), unlimited in aggregate principal amount.
Upon due presentment for registration of transfer of this Note at the office or agency of the Company in New York, New York, designated for such purpose
by the Company (on the date hereof, the principal Corporate Trust Office of the Trustee, located at 101 Barclay Street, Floor 8 West, New York, NY 10286), duly endorsed or accompanied by a written instrument of transfer in form satisfactory to the
Company, the Trustee and the Security Registrar duly executed by the Holder thereof or his attorney duly authorized in writing, a new Note or Notes of authorized denominations for a like aggregate principal amount and Stated Maturity will be issued
to the transferee in exchange therefor, subject to the limitations provided in the Indenture.
No charge shall be made for any such
transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge imposed in connection therewith.
Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been manually executed by or on behalf of the Trustee under the Indenture, this Note shall not be
entitled to any benefits under the Indenture, or be valid or obligatory for any purpose.
-3-
IN WITNESS WHEREOF, BRISTOL-MYERS SQUIBB COMPANY has caused this Note to be duly executed.
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Dated: May [ ], 2008
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BRISTOL-MYERS SQUIBB COMPANY
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By:
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Name:
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Title:
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Trustee’s Certificate of Authentication
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This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
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THE BANK OF NEW YORK, as Trustee
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By:
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Authorized Signatory
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-4-
REVERSE OF NOTE
This Note is one of the duly authorized issue of debt securities (hereinafter called the “Securities”) of the Company, of the series specified on the face hereof, all issued or to be issued under and
pursuant to the Indenture, to which Indenture and all indentures supplemental thereto (collectively, the “Indenture”) reference is hereby made for a statement of the rights and limitations of rights, obligations, duties and immunities
thereunder of the Trustee, and any agent of the Trustee, any Paying Agent, the Company and the Holders of the Securities and the terms upon which the Securities are issued and are to be authenticated and delivered.
The Indenture permits, with certain exceptions as therein provided, the Company and the Trustee to enter into supplemental indentures to the Indenture
for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of modifying in any manner the rights of the Holders of the Securities of each series under the Indenture with the consent
of the Holders of not less than a majority in principal amount of the Securities at the time Outstanding of each series to be affected thereby on behalf of the Holders of all Securities of such series. The Indenture also permits the Holders of a
majority in principal amount of the Securities at the time Outstanding of each series on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults
and their consequences with respect to such series under the Indenture. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note or such other Note.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or currency, herein prescribed.
Registrar and Paying Agent
The Company shall maintain in the Borough of Manhattan, The City of New York, an office or agency where Notes may be surrendered for registration of
transfer or exchange and an office or agency where Notes may be presented for payment or for exchange. The Company has initially appointed the Trustee, The Bank of New York, as its Security Registrar and Paying Agent. The Company reserves the right
at any time to vary or terminate the appointment of any Paying Agent or Security Registrar, to appoint additional or other Paying Agents or other Security Registrars and to approve any change in the office through which any Paying Agent or Security
Registrar acts.
-5-
Optional Redemption of the Notes
The Notes may be redeemed at any time (the “Redemption Date”) at the Company’s option in whole or from time to time in part at a redemption
price (the “Redemption Price”) equal to the greater of:
(a) 100% of the principal amount of the Notes being redeemed, or
(b) as calculated by the Quotation Agent, the sum of the present values of the remaining scheduled payments for principal and interest on
the Notes to be redeemed (not including any portion of such payments of interest accrued as of the Redemption Date) discounted to the Redemption Date on a semiannual basis (assuming a 360 day year consisting of twelve 30-day months) using a discount
rate equal to the sum of the Reference Dealer Rate plus 30 basis points;
plus, in each of the cases (a) and (b) above, accrued and unpaid
interest on the Notes to be redeemed to, but not including, the Redemption Date.
Notice of any redemption of the Notes shall be given in
the manner and otherwise in accordance with the provisions of Section 1104 of the Indenture; provided, however, that any such notice in lieu of stating the applicable Redemption Price shall state the manner in which the Redemption Price shall
be calculated. If the Company has given notice of redemption as provided in the Indenture and funds for the redemption of any Notes called for redemption have been made available on the Redemption Date referred to in that notice, such Notes will
cease to bear interest on such Redemption Date. Any interest accrued to the Redemption Date will be paid as specified in such notice.
“Quotation Agent” means one of the Reference Dealers selected by the Company.
“Reference Dealer” means
(a) each of Banc of America Securities LLC, J.P. Morgan Securities Inc. and Morgan Stanley & Co. Incorporated and their respective successors, unless any of them ceases to be a primary U.S. Government securities dealer in New York City
(a “Primary Treasury Dealer”), in which case the Company will substitute another Primary Treasury Dealer and (b) any other Primary Treasury Dealer selected by the Company.
“Reference Dealer Rate” means, with respect to any Redemption Date, the arithmetic average of the quotations quoted in writing to the Company
by each Reference Dealer of the average midmarket annual yield to maturity of the 5.000% U.S. Treasury Notes due May 15, 2037 or, if such security is no longer outstanding, a similar security in the reasonable judgment of each Reference Dealer,
at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date.
At or prior to the time of giving any notice
of redemption to the Holders of any Notes to be redeemed, the Company shall deliver an Officers’ Certificate to the Trustee setting forth the calculation of the Redemption Price applicable to such redemption. The Trustee shall be under no duty
to inquire into, may conclusively presume the correctness of, and shall be fully protected in relying upon the Redemption Price as so calculated and set forth in such Officers’ Certificate.
-6-
Payment of Additional Amounts
The Company will, subject to certain exceptions and limitations set forth below, pay as additional interest on the Notes such additional amounts
(“Additional Amounts”) as are necessary so that the net payment by the Company or a Paying Agent of the principal of and interest on this Note to a person who is a Non-U.S. Holder, after deduction for any present or future tax, assessment
or governmental charge of the United States or a political subdivision or taxing authority thereof or therein, imposed by withholding with respect to the payment, will not be less than the amount that would have been payable in respect of the Notes
had no withholding or deduction been required;
provided
,
however
, that the foregoing obligation to pay Additional Amounts shall not apply:
(1) to any tax, assessment or governmental charge that is imposed or withheld solely because the beneficial owner, or a fiduciary, settlor, beneficiary or member of the beneficial owner if the beneficial owner is an
estate, trust or partnership, or a person holding a power over an estate or trust administered by a fiduciary Holder:
(a)
is or was present or engaged in trade or business in the United States or has or had a permanent establishment in the United States;
(b) is or was a citizen or resident or is or was treated as a resident of the United States;
(c) is or was a
foreign or domestic personal holding company, a passive foreign investment company or a controlled foreign corporation with respect to the United States, is or was a corporation that has accumulated earnings to avoid United States federal income tax
or is or was a private foundation or other tax-exempt organization; or
(d) is or was an actual or constructive
“10-percent shareholder” of the Company, as defined in Section 871(h)(3) of the U.S. Internal Revenue Code of 1986, as amended;
(2) to any Holder that is not the sole beneficial owner of the Notes, or that is a fiduciary or partnership, but only to the extent that the beneficial owner, a beneficiary or settlor with respect to the fiduciary, or
a member of the partnership would not have been entitled to the payment of an additional amount had such beneficial owner, beneficiary, settlor or member received directly its beneficial or distributive share of the payment;
(3) to any tax, assessment or governmental charge that is imposed or withheld solely because the beneficial owner or any other person
failed to comply with
-7-
certification, identification or information reporting requirements concerning the nationality, residence, identity or connection with the United States of
the Holder or beneficial owner of the Notes, if compliance is required by statute, by regulation of the United States Treasury Department or by an applicable income tax treaty to which the United States is a party as a precondition to exemption from
such tax, assessment or other governmental charge;
(4) to any tax, assessment or governmental charge that is imposed other
than by deduction or withholding by the Company or a Paying Agent from the payment;
(5) to any tax, assessment or
governmental charge that is imposed or withheld solely because of a change in law, regulation, or administrative or judicial interpretation that becomes effective after the day on which the payment becomes due or is duly provided for, whichever
occurs later;
(6) to any estate, inheritance, gift, sales, excise, transfer, wealth or personal property tax or any similar
tax, assessment or governmental charge;
(7) to any tax, assessment or other governmental charge any paying agent (which
term may include the Company) must withhold from any payment of principal of or interest on any note, if such payment can be made without such withholding by any other paying agent;
(8) to any tax, assessment or governmental charge that would not have been so imposed or withheld but for the presentation by the Holder
of a Note for payment on a date more than 30 days after the date on which such payment became due and payable or the date on which payment thereof is duly provided for, whichever occurs later; or
(9) in the case of any combination of the above items.
Except as specifically provided herein, the Company shall not be required to make any payment with respect to any tax, assessment or governmental charge imposed by any government or a political subdivision or taxing
authority thereof or therein.
In particular, the Company will not be obligated to pay Additional Amounts on any Note (a) where
withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to European Council Directive 2003/48/EC or any law implementing or complying with, or introduced in order to conform to, that Directive, or
(b) presented for payment by or on behalf of a beneficial owner who would have been able to avoid the withholding or deduction by presenting the relevant Note to another paying agent in a Member State of the EU.
-8-
“Non-U.S. Holder” means (a) an individual that is a nonresident alien, (b) a
corporation organized or created under non-U.S. law, or (c) an estate or trust that is not taxable in the U.S. on its worldwide income.
Redemption Upon a Tax Event
If (a) the Company becomes or will become obligated to pay Additional Amounts as a result
of any change in, or amendment to, the laws (or any regulations or rulings promulgated thereunder) of the United States (or any political subdivision or taxing authority thereof or therein), or any change in, or amendment to, any official position
regarding the application or interpretation of such laws, regulations or rulings, which change or amendment is announced or becomes effective on or after May 1, 2008, or (b) a taxing authority of the United States takes an action on or
after May 1, 2008, whether or not with respect to the Company or any of its affiliates, that results in a substantial probability that the Company will or may be required to pay such Additional Amounts, in either case, with respect to this
series of Notes for reasons outside the Company’s control and after taking reasonable measures available to the Company to avoid such obligation, then the Company may, at its option, redeem, as a whole, but not in part, the Notes at any time
prior to maturity on not less than 30 nor more than 60 calendar days’ prior notice to the Holders, at a redemption price equal to 100% of their principal amount, together with interest accrued thereon to the Redemption Date. No redemption
pursuant to (b) above may be made unless the Company shall have received an opinion of independent counsel to the effect that an act taken by a taxing authority of the United States results in a substantial probability that the Company will or
may be required to pay the Additional Amounts and the Company shall have delivered to the Trustee a certificate, signed by an officer of the Company duly authorized in or pursuant to a Board Resolution stating, that based on such opinion, the
Company is entitled to redeem the Notes pursuant to their terms.
Further Issues
The Company may from time to time, without notice to or the consent of the Holders of the Notes, create and issue further Notes ranking equally and
ratably with the Notes in all respects, or in all respects except for the issue date, the payment of interest accruing prior to the issue date or except for the first payment of interest following the issue date of those further Notes. Any further
Notes will be consolidated and form a single series with the Notes and will have the same terms as to status, redemption or otherwise as the Notes. Any further Notes may be issued by or pursuant to a resolution of the Board of Directors of the
Company or a supplement to the Indenture.
Notes in Definitive Form
If (1) the depositary is at any time unwilling or unable to continue as depositary and a successor depositary is not appointed by the Company within
90 days of notice thereof, (2) an Event of Default has occurred with regard to the Notes and has not been cured or waived, or (3)
-9-
the Company at any time and in its sole discretion determines not to have the Notes represented by Global Securities, the Company may issue Notes in
definitive form in exchange for Notes issued in the form of Global Securities. In any such instance, an owner of a beneficial interest in the Notes will be entitled to physical delivery in definitive form of Notes represented by this Note, equal in
principal amount to such beneficial interest and to have such Notes registered in its name as shall be established in a Company Order.
Sinking Fund
The Notes will not be subject to any sinking fund.
Default
If an Event of Default with
respect to the Notes shall occur and be continuing, the principal of all the Notes may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture.
Miscellaneous
Any money that the
Company deposits with the Trustee or any Paying Agent for the payment of principal or any interest on this Note that remains unclaimed for two years after the date upon which the principal and interest are due and payable, will be repaid to the
Company upon the Company’s request unless otherwise required by mandatory provisions of any applicable unclaimed property law. After that time, unless otherwise required by mandatory provisions of any unclaimed property law, the Holder of this
Note will be able to seek any payment to which such Holder may be entitled to collect only from the Company.
No reference herein to the
Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and any premium and any interest on, this Note at the place, rate and
respective times and in the coin or currency herein and in the Indenture prescribed.
As provided in the Indenture and subject to the
satisfaction of certain conditions therein set forth, including the deposit of certain trust funds in trust, at the Company’s option, either the Company shall be deemed to have paid and discharged the entire indebtedness represented by, and the
obligations under, the Securities of any series and to have satisfied all the obligations (with certain exceptions) under the Indenture relating to the Securities of such series or the Company shall cease to be under any obligation to comply with
any term, provision or condition of certain restrictive covenants or provisions with respect to the Securities of such series.
The Notes
are issuable in registered form without coupons in denominations of $2,000 and any integral multiple of $1,000. Notes may be exchanged for a like aggregate principal amount and Stated Maturity of Notes of other authorized denominations at the office
or agency of the Company in New York, New York, designated for such purpose by the Company (on the
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date hereof, the principal Corporate Trust Office of the Trustee, located at 101 Barclay Street, Floor 8 West, New York, New York 10286), and in the manner
and subject to the limitations provided in the Indenture.
Prior to due presentment for registration of transfer of this Note, the Company,
the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note is overdue, and neither the Company, the Trustee nor any agent shall be
affected by notice to the contrary.
This Note shall be construed in accordance with and governed by the laws of the State of New York.
-11-
Exhibit 10.1
Form Version
STOCK AND ASSET PURCHASE AGREEMENT
between
BRISTOL-MYERS SQUIBB COMPANY
and
CIDRON HEALTHCARE LIMITED
Dated as of May 2, 2008
TABLE OF CONTENTS
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Page
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ARTICLE I
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Purchase and Sale of the Purchased Companies’ Equity Interests and the Acquired Assets
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SECTION 1.01. Purchase and Sale
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2
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SECTION 1.02. Acquired Assets
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3
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SECTION 1.03. Assumed Liabilities
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7
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SECTION 1.04. Risk of Loss
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9
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SECTION 1.05. Consents of Third Parties
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9
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SECTION 1.06. Refunds and Remittances
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10
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ARTICLE II
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Closing; Purchase Price Adjustment
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SECTION 2.01. Closing
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11
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SECTION 2.02. Post-Closing Purchase Price Adjustment
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13
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ARTICLE III
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Conditions to Closing
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SECTION 3.01. Conditions to Obligations of Purchaser
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16
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SECTION 3.02. Conditions to Obligation of Seller
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18
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SECTION 3.03. Frustration of Closing Conditions
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18
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ARTICLE IV
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Representations and Warranties of Seller
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SECTION 4.01. Organization, Standing and Authority; Execution and Delivery; Enforceability
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19
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SECTION 4.02. No Conflicts; Consents
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19
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SECTION 4.03. Transferred Equity Interests
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20
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SECTION 4.04. Organization, Standing and Documents of Transferred Entities
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20
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SECTION 4.05. Equity Interests in the Transferred Entities
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21
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SECTION 4.06. Financial Statements
|
|
22
|
|
SECTION 4.07. Taxes
|
|
23
|
|
SECTION 4.08. Good and Valid Title to Assets Other Than Transferred Equity Interests, Real Property and Intellectual Property
|
|
24
|
|
SECTION 4.09. Real Property
|
|
25
|
|
SECTION 4.10. Intellectual Property
|
|
26
|
|
SECTION 4.11. Contracts
|
|
27
|
i
|
|
|
|
|
|
|
Page
|
|
SECTION 4.12. Permits
|
|
30
|
|
SECTION 4.13. Litigation
|
|
30
|
|
SECTION 4.14. Benefit Plans
|
|
31
|
|
SECTION 4.15. Absence of Changes or Events
|
|
33
|
|
SECTION 4.16. Compliance with Applicable Laws
|
|
33
|
|
SECTION 4.17. Environmental Matters
|
|
34
|
|
SECTION 4.18. Employee and Labor Matters
|
|
34
|
|
SECTION 4.19. Sufficiency of Assets
|
|
35
|
|
SECTION 4.20. Insurance
|
|
35
|
|
SECTION 4.21. DISCLAIMER
|
|
36
|
|
|
|
|
ARTICLE V
|
|
|
|
|
|
|
Covenants of Seller
|
|
|
|
|
|
|
SECTION 5.01. Access
|
|
36
|
|
SECTION 5.02. Ordinary Conduct
|
|
37
|
|
SECTION 5.03. Intercompany Arrangements and Accounts
|
|
40
|
|
SECTION 5.04. Resignations
|
|
40
|
|
SECTION 5.05. Confidentiality
|
|
40
|
|
SECTION 5.06. Non-Competition
|
|
41
|
|
SECTION 5.07. Non-Solicitation; No Hire or Employ
|
|
42
|
|
SECTION 5.08. Financial Statements
|
|
42
|
|
SECTION 5.09. Financing Related Cooperation
|
|
42
|
|
SECTION 5.10. Enforcement of Confidentiality Agreements
|
|
43
|
|
|
|
|
ARTICLE VI
|
|
|
|
|
|
|
Representations and Warranties of Purchaser
|
|
|
|
|
|
|
SECTION 6.01. Organization, Standing and Authority; Execution and Delivery; Enforceability
|
|
44
|
|
SECTION 6.02. No Conflicts; Consents
|
|
44
|
|
SECTION 6.03. Actions and Proceedings
|
|
45
|
|
SECTION 6.04. Securities Act
|
|
45
|
|
SECTION 6.05. Financing
|
|
45
|
|
SECTION 6.06. Activities of Purchaser
|
|
46
|
|
SECTION 6.07. Solvency
|
|
46
|
|
SECTION 6.08. Going Concern
|
|
46
|
|
SECTION 6.09. Sponsor Guarantee
|
|
46
|
|
SECTION 6.10. Exclusivity of Representations
|
|
46
|
ii
|
|
|
|
|
|
|
Page
|
|
|
|
|
ARTICLE VII
|
|
|
|
|
|
|
Covenants of Purchaser
|
|
|
|
|
|
|
SECTION 7.01. Confidentiality
|
|
47
|
|
SECTION 7.02. No Additional Representations
|
|
47
|
|
SECTION 7.03. No Use of Certain Names; Transitional License
|
|
48
|
|
SECTION 7.04. FDA Reporting; NDC
|
|
49
|
|
SECTION 7.05. Litigation Matters
|
|
49
|
|
SECTION 7.06. Bulk Transfer Laws
|
|
50
|
|
SECTION 7.07. Recordation of Transfer of Intellectual Property
|
|
50
|
|
SECTION 7.08. Debt Financing
|
|
50
|
|
SECTION 7.09. Benefits and Payroll Transition
|
|
51
|
|
SECTION 7.10. Joint Tender Contracts
|
|
52
|
|
|
|
|
ARTICLE VIII
|
|
|
|
|
|
|
Mutual Covenants
|
|
|
|
|
|
|
SECTION 8.01. Consents
|
|
52
|
|
SECTION 8.02. Transition; Cooperation
|
|
52
|
|
SECTION 8.03. Publicity
|
|
54
|
|
SECTION 8.04. Reasonable Best Efforts
|
|
54
|
|
SECTION 8.05. Antitrust Notification and Other Regulatory Filings
|
|
54
|
|
SECTION 8.06. Support Services
|
|
55
|
|
SECTION 8.07. Tax Matters
|
|
55
|
|
SECTION 8.08. Customer Databases
|
|
58
|
|
SECTION 8.09. Treasury, Payroll and Employee Benefit Transitional Services
|
|
59
|
|
|
|
|
ARTICLE IX
|
|
|
|
|
|
|
Employee Matters
|
|
|
|
|
|
|
SECTION 9.01. Employees; Assumption of Terms and Conditions of Employment; Continuation of Employment; General Principles
|
|
60
|
|
SECTION 9.02. Assumption of Liabilities
|
|
63
|
|
SECTION 9.03. Independent Contractors
|
|
65
|
|
SECTION 9.04. Credited Service
|
|
65
|
|
SECTION 9.05. Continuation of Compensation and Benefits
|
|
66
|
|
SECTION 9.06. U.S. and Puerto Rico Savings and Investment Plans; Vesting
|
|
67
|
|
SECTION 9.07. U.S. Medical and Dental Plans
|
|
68
|
|
SECTION 9.08. U.S. Short-Term Disability and Long-Term Disability
|
|
70
|
|
SECTION 9.09. U.S. Life and Accident Insurance
|
|
70
|
|
SECTION 9.10. Performance Bonuses
|
|
71
|
|
SECTION 9.11. Relocation Benefits
|
|
71
|
iii
|
|
|
|
|
|
|
Page
|
|
SECTION 9.12. Vacation Benefits
|
|
71
|
|
SECTION 9.13. Employment and Other Agreements
|
|
72
|
|
SECTION 9.14. Retention Arrangements
|
|
72
|
|
SECTION 9.15. Other Programs and Benefits
|
|
72
|
|
SECTION 9.16. U.S. WARN Act and Other Notices
|
|
72
|
|
SECTION 9.17. Special Provisions for Foreign Transferred Employees
|
|
72
|
|
SECTION 9.18. Personnel Records
|
|
73
|
|
SECTION 9.19. No Third Party Remedies
|
|
74
|
|
SECTION 9.20. Cooperation
|
|
74
|
|
|
|
|
ARTICLE X
|
|
|
|
|
|
|
Indemnification
|
|
|
|
|
|
|
SECTION 10.01. Indemnification by Seller
|
|
74
|
|
SECTION 10.02. Indemnification by Purchaser
|
|
76
|
|
SECTION 10.03. Tax Indemnification
|
|
76
|
|
SECTION 10.04. Limitations on Liability; Cooperation
|
|
77
|
|
SECTION 10.05. Indemnity Net; Losses Net of Insurance, Etc
|
|
77
|
|
SECTION 10.06. Termination of Indemnification
|
|
78
|
|
SECTION 10.07. Procedures Relating to Indemnification for Third Party Claims
|
|
78
|
|
SECTION 10.08. Procedures Related to Indemnification for Other Claims
|
|
80
|
|
SECTION 10.09. Procedures Relating to Indemnification of Tax Claims
|
|
80
|
|
|
|
|
ARTICLE XI
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
|
SECTION 11.01. Termination
|
|
81
|
|
SECTION 11.02. Return of Confidential Information
|
|
81
|
|
SECTION 11.03. Consequences of Termination
|
|
82
|
|
|
|
|
ARTICLE XII
|
|
|
|
|
|
|
Miscellaneous
|
|
|
|
|
|
|
SECTION 12.01. Assignment
|
|
82
|
|
SECTION 12.02. No Third-Party Beneficiaries
|
|
83
|
|
SECTION 12.03. Expenses
|
|
83
|
|
SECTION 12.04. Attorney Fees
|
|
83
|
|
SECTION 12.05. Amendments
|
|
83
|
|
SECTION 12.06. Notices
|
|
83
|
|
SECTION 12.07. Interpretation; Exhibits and Seller Disclosure Schedule; Certain Definitions
|
|
84
|
|
SECTION 12.08. Counterparts
|
|
97
|
|
SECTION 12.09. Entire Agreement
|
|
97
|
iv
|
|
|
|
|
|
|
Page
|
|
SECTION 12.10. Fees
|
|
97
|
|
SECTION 12.11. Severability
|
|
97
|
|
SECTION 12.12. Enforcement
|
|
98
|
|
SECTION 12.13. Consent to Jurisdiction
|
|
98
|
|
SECTION 12.14. Waiver of Jury Trial
|
|
98
|
|
SECTION 12.15. GOVERNING LAW
|
|
99
|
|
|
|
|
|
Exhibit A
|
|
Form of International Asset Purchase Agreement
|
|
Exhibit B
|
|
Form of International Stock Purchase Agreement
|
|
Exhibit C
|
|
Form of Transitional Services Agreement
|
|
Exhibit D
|
|
Form of Technology License Agreement
|
|
Exhibit E
|
|
2007 Balance Sheet Working Capital Amount
|
|
Exhibit F
|
|
Form of Plastibase License Agreement
|
|
Exhibit G
|
|
Form of Plastibase Supply Agreement
|
|
Exhibit H
|
|
Form of Plastibase Trademark License Agreement
|
|
Exhibit I
|
|
Form of ITO Services Agreement
|
v
STOCK AND ASSET PURCHASE AGREEMENT dated as of May 2, 2008 (this
“
Agreement
”), between BRISTOL-MYERS SQUIBB COMPANY, a Delaware corporation (“
Seller
”), and CIDRON HEALTHCARE LIMITED, a Jersey limited company (“
Purchaser
”).
Seller desires to sell, and Purchaser desires to purchase, the ConvaTec business of Seller, the Selling Affiliates (such term and each other defined term
used but not otherwise defined in this Agreement having the meaning given it in Section 12.07(b)) and the Transferred Entities, as conducted on the date hereof consisting of (i) the manufacture, distribution, marketing and sale of the
Products (and any other products resulting from the research, development, products design and related activities described in clause (ii) below) and (ii) the research, development, products design and related activities of Seller, the
Selling Affiliates and the Transferred Entities to the extent related solely to the Products and such other wound and professional skin care products for wound care (excluding any pharmaceutical, over-the-counter or other dermatological or skin care
products manufactured, distributed, marketed or sold in connection with any business of Seller and its controlled Affiliates other than the ConvaTec business) and related supplies and accessories, ostomy systems and devices and related supplies and
accessories and acute fecal incontinence systems and devices and related supplies and accessories (including, in each case, any adjacent technologies) as are in development as of the date hereof or on the Closing Date (the
“
Business
”).
Seller or a Selling Affiliate is the direct owner of the equity interests set forth opposite its name in
each of the entities set forth above Seller or such Selling Affiliate’s name in Section B of the Seller Disclosure Schedule (such entities are collectively referred to as the “
Purchased Companies
” and such equity interests
are collectively referred to as the “
Purchased Companies’ Equity Interests
”).
Each applicable Purchased Company is
directly the owner of the equity interests set forth opposite its name in each of the entities listed above such Purchased Company’s name in Section B of the Seller Disclosure Schedule (such entities are collectively referred to as the
“
Purchased Company Subsidiaries
” and such equity interests are collectively referred to as the “
Purchased Company Subsidiaries’ Equity Interests
”).
Seller, the Selling Affiliates, the Purchased Companies and the Purchased Company Subsidiaries conduct the Business (the Purchased Companies and the
Purchased Company Subsidiaries are collectively referred to as the “
Transferred Entities
”).
At the Closing, upon the
terms and subject to the conditions set forth in this Agreement, Seller and each of the Selling Affiliates desire to sell and transfer to Purchaser, and Purchaser desires to purchase and accept from Seller and the Selling Affiliates, the Purchased
Companies’ Equity Interests, the Acquired Assets and the Acquired Liabilities (the “
Acquisition
”).
Immediately after
the Closing, Purchaser will (a) directly or indirectly own the Purchased Companies’ Equity Interests and the Acquired Assets, (b) be responsible for the Assumed Liabilities and (c) indirectly own the Purchased Company
Subsidiaries’ Equity Interests (the Purchased Companies’ Equity Interests and the Purchased Company Subsidiaries’ Equity Interests are collectively referred to as the “
Transferred Equity Interests
”).
Accordingly, the parties hereby agree as follows:
ARTICLE I
Purchase and Sale of the
Purchased Companies’ Equity Interests and the Acquired Assets
SECTION 1.01.
Purchase and Sale.
(a) Upon the terms and
subject to the conditions set forth in this Agreement, at the Closing, Seller shall, and shall cause the Selling Affiliates to, sell, assign, transfer, convey and deliver to Purchaser, and Purchaser shall purchase, acquire and accept from Seller and
the Selling Affiliates all the right, title and interest of Seller and the Selling Affiliates in, to and under the Purchased Companies’ Equity Interests and the Acquired Assets for (i) the Purchase Price, payable and subject to adjustment
as set forth in Article II, and (ii) Purchaser’s assumption of the Acquired Liabilities and its agreement to cause all Assumed Liabilities (including Assumed Liabilities that are not Acquired Liabilities) to be paid, performed and
discharged when due, in each case in a manner consistent with Section 1.03 and without further recourse to Seller or its Affiliates (other than the Transferred Entities).
(b) The sale, transfer, assignment and delivery of the International Acquired Assets and the assumption of the International Assumed Liabilities of each
International Selling Affiliate will be effected pursuant to a short-form asset purchase agreement (each, an “
International Asset Purchase Agreement
”). Each International Asset Purchase Agreement shall be in substantially the same
form as the form of International Asset Purchase Agreement attached as Exhibit A, except (as Purchaser and Seller shall reasonably agree) for (i) the deletion of provisions which are inapplicable to such Selling Affiliate, or the International
Acquired Assets and the International Assumed Liabilities covered by such International Asset Purchase Agreement, (ii) such changes as may be necessary to satisfy the requirements of applicable local Law, (iii) such changes as may be
reasonably agreed upon by Seller and Purchaser regarding employees and employee benefits matters in order to adapt such International Asset Purchase Agreement to the particular circumstances of the relevant Selling Affiliate and country;
provided
that such changes shall be consistent with the principles underlying the corresponding provisions of this Agreement and (iv) such other changes as may be reasonably agreed by Seller and Purchaser.
(c) The purchase and sale of the International Transferred Shares of each International Purchased Company will be effected, if required under applicable
Law, pursuant to a short-form stock purchase agreement (each, an “
International Stock Purchase Agreement
”) in substantially the same form as the form of International Stock Purchase Agreement attached as Exhibit B, except (as
Purchaser and Seller shall reasonably agree) for (i) the deletion of provisions which are inapplicable to the relevant Selling Affiliate or Transferred Equity Interests, (ii) such changes as may be necessary to satisfy the requirements of
applicable local Law, (iii) such changes as may be reasonably agreed upon by Seller and Purchaser regarding employees and employee benefits matters in order to adapt such agreement to the particular circumstances of the relevant Selling
Affiliate, Transferred Entity and country or countries in which they operate;
provided
that such changes shall be consistent with the principles underlying the corresponding provisions of this Agreement and (iv) such other changes as may
be reasonably agreed by Seller and Purchaser.
2
(d) Upon the terms and subject to the conditions set forth in this Agreement, between the date hereof and
immediately prior to the Closing, at Seller’s sole cost and expense, Seller shall, and shall cause its Affiliates (including the Transferred Entities) to, make such contributions, transfers, assignments and acceptances, such that, upon the
consummation of such contributions, transfers, assignments and acceptances, Seller or its designees shall own the Excluded Assets and shall be solely responsible for the Excluded Liabilities, without further recourse to or any Liability of Purchaser
or its Affiliates (including any Transferred Entity);
provided
that Seller shall provide Purchaser with notice and a description with reasonable particularity of any material contributions, transfers, assignments and acceptances. In
furtherance of the foregoing, (i) Seller shall retain, and neither Purchaser nor any of its Affiliates (including any Transferred Entity) shall acquire, and no Transferred Entity shall retain, any interest in the Excluded Assets and
(ii) Seller shall retain, and neither Purchaser nor any of its Affiliates (including any Transferred Entity) shall assume, and no Transferred Entity shall retain, any Excluded Liability.
SECTION 1.02.
Acquired Assets.
(a) The term “
Acquired Assets
” means all of Seller’s and the Selling Affiliates’
right, title and interest in, to and under those certain assets set forth below:
(i) (A) the fee-owned real property,
leaseholds, subleaseholds and other interests in real property of Seller and the Selling Affiliates that are used solely in, or that relate solely to, the operation or conduct of the Business, including the real property, leaseholds, sublease holds
and other interests listed in Section 1.02(a)(i)(A) of the Seller Disclosure Schedule, in each case together with the right, title and interest in all buildings, improvements and fixtures thereon and all other appurtenances thereto (the
“
Transferred Real Property
”) and (B) all Contracts (including any options to purchase or renew any Transferred Real Property) relating solely to the Transferred Real Property to which Seller or any such Selling Affiliate is a
party or by which the Transferred Real Property is bound, including those set forth in Section 1.02(a)(i)(B) of the Seller Disclosure Schedule (the “
Transferred Real Property Contracts
”);
(ii) all tangible personal property and interests therein, including machinery, equipment, furnishings and vehicles (“
Personal
Property
”), of Seller and the Selling Affiliates listed in Section 1.02(a)(ii) of the Seller Disclosure Schedule and all other Personal Property that on the Closing Date is located on the Transferred Real Property (including all
laptops, desktops and associated computer hardware, including any external storage devices and storage media, held by Seller or the Selling Affiliates that on the Closing Date are used solely in the operation or conduct of the Business), and all
other Personal Property of Seller and the Selling Affiliates that on the Closing Date is used or held for use solely in the operation or conduct of the Business, in each case excluding the Excluded Personal Property (the “
Transferred
Personal Property
”);
(iii) the following Intellectual Property (the “
Transferred Intellectual
Property
”):
(A) the Patents of Seller and the Selling Affiliates used solely in the operation or conduct of the
Business, including those identified in Section 1.02(a)(iii)(A) of the Seller Disclosure Schedule;
3
(B) the Trademarks of Seller and the Selling Affiliates used solely in the operation or
conduct of the Business, including those identified in Section 1.02(a)(iii)(B) of the Seller Disclosure Schedule;
(C)
the Copyrights of Seller and the Selling Affiliates used solely in the operation or conduct of the Business, including those identified in Section 1.02(a)(iii)(C) of the Seller Disclosure Schedule;
(D) all Unregistered Intellectual Property of Seller and the Selling Affiliates that is used solely in the operation or conduct of the
Business; and
(E) all Technology of Seller and the Selling Affiliates that is used solely in, or that arises solely out of,
the operation or conduct of the Business, including the Technology identified in Section 1.02(a)(iii)(E) of the Seller Disclosure Schedule, to the extent transferable in light of practical (but not legal or contractual) considerations;
(iv) all Inventory of Seller and the Selling Affiliates that is used or held for use solely in, or that arises solely out
of, the operation or conduct of the Business (collectively, the “
Transferred Inventory
”);
(v) all Accounts
Receivable of Seller and the Selling Affiliates to the extent arising solely out of the operation or conduct of the Business (the “
Transferred Accounts Receivable
”);
(vi) all credits, prepaid expenses, deferred charges, deposits and prepaid items (including any prepaid rents and security deposits
related to Transferred Real Property) (“
Miscellaneous Rights
”) of Seller and the Selling Affiliates that are used solely in, or that arise solely out of, the operation or conduct of the Business (the “
Transferred
Miscellaneous Rights
”);
(vii) all contracts, leases or subleases, indentures, licenses, agreements, commitments,
and all other legally binding arrangements, whether written or oral (each, a “
Contract
”), other than Transferred Real Property Contracts, to which Seller or any of the Selling Affiliates is a party or by which any Acquired Asset is
bound that are used solely in, or that relate solely to, the operation or conduct of the Business, including the Contracts set forth in Section 4.11(a) of the Seller Disclosure Schedule (the “
Transferred Contracts
”);
(viii) the Cash and other assets of the Benefit Plans expressly required to be transferred to Purchaser pursuant to Article
IX, or of the Benefit Plans sponsored or maintained by any Transferred Entity and whose assets are held by such Transferred Entity (the “
Transferred Plan Assets
”);
4
(ix) all Permits of Seller and the Selling Affiliates that are used solely in the
operation or conduct of the Business (the “
Transferred Permits
”);
(x) all Environmental Permits of Seller
and the Selling Affiliates that are used solely in the operation or conduct of the Business (other than the Excluded Environmental Permits listed on Section 4.17(ii) of the Seller Disclosure Schedule and identified under the heading
“Excluded Environmental Permits”) (the “
Transferred Environmental Permits
”);
(xi) all rights,
claims, counter-claims, defenses and credits, including and in respect of all guarantees, warranties, indemnities and similar rights (“
Other Rights
”), in favor of Seller and the Selling Affiliates, to the extent relating solely to
the Business or solely to any Assumed Liability (the “
Transferred Other Rights
”);
(xii) all books of
account, ledgers, general, financial and accounting records, files, invoices, customers’ and suppliers’ lists, other distribution lists, billing records, sales and promotional literature, manuals, laboratory books, batch records and
stability studies, preclinical, clinical and marketing studies and customer and supplier correspondence and all other historical records and data (in all cases, in any form or medium) (“
Records
”) of Seller and the Selling Affiliates
that are used solely in, or that arise solely out of, the operation or conduct of the Business in each case to the extent transferable in light of legal and practical considerations (the “
Transferred Records
”);
(xiii) all goodwill to the extent solely related to the Business, the Acquired Assets, the Transferred Entities, the Brands and the
Products;
(xiv) to the fullest extent permitted by applicable Law, all Personnel Records (or copies of Personnel Records)
of the Transferred Employees; and
(xv) all other assets used solely in the operation or conduct of the Business and not
enumerated in clauses (i) through (xiv) above.
Notwithstanding anything to the contrary set forth herein, the Acquired Assets shall not include
(i) any properties, assets, goodwill and rights of Seller and its Affiliates of whatever kind and nature, real, personal or mixed, tangible or intangible that are not used solely in, or that do not arise solely out of, the operation or conduct
of the Business, including the BMS Names or (ii) any Excluded Assets.
(b) The term “
Excluded Assets
”
means:
(i) all Cash of Seller and its Affiliates (other than the Transferred Entities);
(ii) all Accounts Receivable other than the Transferred Accounts Receivable;
(iii) all Cash and other assets of or relating to any employee benefit plan, program or arrangement or related trust in which any
employees of Seller or its Affiliates participate (including the Benefit Plans and related trusts), other than the Transferred Plan Assets;
5
(iv) all Other Rights of Seller or any of its Affiliates to the extent relating to any
Excluded Asset or any Excluded Liability, including any such Other Rights arising under insurance policies in favor of Seller and its Affiliates in respect of any other Excluded Asset or any Excluded Liability;
(v) any refund or credit of Taxes attributable to any Pre-Closing Tax Period;
(vi) all insurance policies and insurance contracts insuring the Business, the Acquired Assets or the Transferred Entities, together with
any claim, action or other right Seller or any of its Affiliates may have for insurance coverage under any past and present policies and insurance contracts insuring the Business, the Acquired Assets or the Transferred Entities, in each case
including any proceeds received from any such policy or contract prior to, on or after the Closing Date;
(vii) any assets
used by Seller or any of its Affiliates (other than those owned by the Transferred Entities) to provide services to Purchaser and its Affiliates pursuant to the Transitional Services Agreement;
provided
that following the termination of the
Transitional Services Agreement, any such assets that would be Acquired Assets but for this Section 1.02(b)(vii) shall be deemed thereafter to be Acquired Assets and shall be transferred to Purchaser;
(viii) all rights of Seller and its Affiliates under this Agreement and the other agreements and instruments executed and delivered in
connection with this Agreement;
(ix) the Personal Property listed on Section 1.02(b)(ix) of the Seller Disclosure
Schedule (the “
Excluded Personal Property
”);
(x) all proprietary materials used for Seller’s and its
Affiliates’ human resource program and supporting documentation thereto; and
(xi) the following Records:
(A) Records to the extent relating to any Excluded Asset or Excluded Liability;
(B) original Tax Returns or work papers relating to Tax;
(C) copies of Tax Returns or work papers relating to Tax to the extent they do not relate to the Acquired Assets or the Assumed
Liabilities;
(D) Records prepared in connection with the transactions contemplated by this Agreement, including bids
received from other parties and analyses relating to the Business; and
(E) file copies of the Records retained by Seller.
(c) To the extent that (i) Technology of Seller and the Selling Affiliates is not Transferred Intellectual Property solely to the
extent it is not transferred to Purchaser pursuant to
6
Section 1.02(a)(iii)(E) due to practical considerations, Seller shall not, and shall cause its Affiliates not to, object to Purchaser or its Affiliates
use of such Technology or (ii) Records of Seller and the Selling Affiliates are not Transferred Records solely to the extent it is not transferred to Purchaser pursuant to Section 1.02(a)(xii) due to legal or practical considerations, upon
Purchaser’s request, Seller shall, or shall cause its Affiliates to, provide Purchaser reasonable access to such Records to the extent permitted under applicable Law.
SECTION 1.03.
Assumed Liabilities.
(a) Upon the terms and subject to the conditions of this Agreement, Purchaser shall (i) from and
after the Closing cause the Transferred Entities to pay, perform and discharge when due, any and all of their liabilities, obligations and commitments of whatever kind and nature, primary or secondary, direct or indirect, absolute or contingent,
known or unknown, whether or not accrued (collectively, “
Liabilities
”) and (ii) assume, effective as of the Closing, and from and after the Closing Purchaser shall pay, perform and discharge, or cause to be paid, performed and
discharged when due, all of the following Liabilities of Seller and its Affiliates (other than the Transferred Entities), excluding the Excluded Liabilities (all the foregoing, collectively, the “
Assumed Liabilities
”), in each case,
except to the extent (and only to the extent) provided in Article X, without further recourse to Seller or its Affiliates (other than the Transferred Entities):
(i) all Liabilities to the extent (and only to the extent) arising out of or relating to Seller and its Affiliates (including the
Transferred Entities) at any time being the owner or occupant of, or the operator of the activities conducted at, any Owned Property or any Leased Property, whether arising prior to, on or after the Closing Date;
(ii) all Environmental Liabilities to the extent (and only to the extent) arising out of or relating to the operation or conduct of the
Business, the Transferred Entities or the Acquired Assets or the ownership, sale or lease of any of the Acquired Assets or the ownership or sale of the Transferred Entities, whether arising prior to, on or after the Closing Date;
(iii) all Liabilities under or otherwise to the extent (and only to the extent) arising out of or relating to the Transferred Real
Property Contracts or the Transferred Contracts or any Contract to which a Transferred Entity is a party or by which its assets are bound (including all Liabilities arising out of or relating to any termination or announcement or notification of an
intent to terminate any such Contract), whether arising prior to, on or after the Closing Date;
(iv) all Accounts Payable
to the extent (and only to the extent) arising out of or relating to the operation or conduct of the Business, the Transferred Entities or the Acquired Assets or the ownership, sale or lease of any of the Acquired Assets or the ownership or sale of
the Transferred Entities, whether arising prior to, on or after the Closing Date (the “
Assumed Accounts Payable
”);
(v) all Liabilities under or otherwise to the extent (and only to the extent) arising out of or relating to the Transferred Permits, the Transferred Environmental Permits or any Permit or Environmental Permit held by a Transferred Entity,
whether arising prior to, on or after the Closing Date;
7
(vi) all Liabilities in respect of any lawsuits, claims, actions or proceedings to the
extent (and only to the extent) arising out of or relating to the operation or conduct of the Business, the Transferred Entities or the Acquired Assets or the ownership, sale or lease of any of the Acquired Assets or the ownership or sale of the
Transferred Entities, whether arising prior to, on or after the Closing Date (including any Liabilities to the extent (and only to the extent) relating to any product liability, consumer protection, consumer fraud, breach of warranty or similar
claim for injury to person or property, but excluding the Retained Litigation Liabilities);
(vii) all Liabilities to the
extent (and only to the extent) arising out of or relating to the return (including any return based on breach of warranty) of, or refund, adjustment, allowance, rebate or exchange in respect of, the Products or any other products marketed and/or
sold under the Brands, whether arising prior to, on or after the Closing Date;
(viii) all Taxes to the extent (and only to
the extent) arising out of, relating to or in respect of the Acquired Assets for any Post-Closing Tax Period other than Taxes for which Seller is liable under Section 10.03(a);
(ix) all Liabilities (other than any Liabilities to the extent (and only to the extent) arising out of or relating to exposure prior to,
on or after the Closing of any Business Employee, Former Business Employee, Transferred Employee or former employee or independent contractor of the Transferred Entities or the Business to Hazardous Materials) to the extent (and only to the extent)
arising out of or relating to employment, compensation, employee benefits, severance or termination of any Business Employee, Former Business Employee or Transferred Employee and their respective dependents and beneficiaries, whether arising prior
to, on or after the Closing Date and including any Liabilities that Purchaser is expressly required to assume under Article IX, except any Liabilities that Seller is expressly required to retain under Article IX;
(x) all Liabilities to the extent (and only to the extent) arising from the sale from and after the Closing of (i) Products or
(ii) any other products incorporating the Brands, in each case as a result of such Products or other products bearing the Seller’s National Drug Code number; and
(xi) all other Liabilities of whatever kind and nature, primary or secondary, direct or indirect, absolute or contingent, known or
unknown, whether or not accrued, to the extent (and only to the extent) arising out of or relating to the operation or conduct of the Business, the Transferred Entities or the Acquired Assets or the ownership, sale or lease of any of the Acquired
Assets or the ownership or sale of the Transferred Entities, whether arising prior to, on or after the Closing Date, including any Liabilities arising out of or relating to any claim, action, suit, arbitration, inquiry, proceeding or investigation
by or before any Governmental Entity.
(b) Notwithstanding any other provision of this Agreement, Purchaser shall not assume any Excluded
Liability, each of which shall be retained and paid, performed and discharged when due by Seller and its Affiliates (other than the Transferred Entities). The term “
Excluded Liability
” means the following Liabilities of Seller and
its Affiliates (other than the Transferred Entities):
(i) all Liabilities to the extent (and only to the extent) arising
out of or relating to any Excluded Asset;
8
(ii) any Tax (A) to the extent (and only to the extent) arising out of, relating to
or in respect of the Acquired Assets for any Pre-Closing Tax Period or (B) of Seller or any Selling Affiliates, other than any Tax for which Purchaser is responsible pursuant to Section 10.03(b);
(iii) any Liabilities to the extent (and only to the extent) arising out of or relating to the litigation identified on
Section 1.03(b)(iii) of the Seller Disclosure Schedule (the “
Retained Litigation Liabilities
”);
(iv)
any Indebtedness of Seller or any Selling Affiliate; and
(v) all Liabilities that Seller is expressly required to retain
under Article IX.
(c) Each of Purchaser’s and Seller’s obligations under this Section 1.03 (and related rights to
indemnification under Article X) shall not be subject to offset or reduction by reason of any actual or alleged breach of any representation, warranty or covenant contained in this Agreement or any Other Transaction Document or any right or alleged
right to indemnification hereunder. It is expressly understood and agreed that notwithstanding the foregoing or anything in this Agreement or in any Other Transaction Document to the contrary, the parties’ right to indemnification under Article
X or elsewhere in this Agreement or in any Other Transaction Document shall in no way be limited, impaired or superceded because a Liability that gives rise to a claim for indemnification under Article X or elsewhere in this Agreement or in any
Other Transaction Document may otherwise constitute an Assumed Liability or a Retained Liability, as the case may be, and that Purchaser or Seller, as the case may be, shall be entitled to pursue all rights and remedies in respect of any such
Liability as set forth in this Agreement or any applicable Other Transaction Document.
SECTION 1.04.
Risk of Loss.
Until the
Closing, any loss of or damage to the assets of the Transferred Entities or the Acquired Assets from fire, casualty or any other occurrence shall be the sole responsibility of Seller or the Selling Affiliates, as applicable. At the Closing, title to
the Purchased Companies’ Equity Interests and the Acquired Assets shall be transferred to Purchaser, and Purchaser shall thereafter bear all risk of loss associated with the assets of the Transferred Entities and the Acquired Assets and be
solely responsible for procuring adequate insurance to protect the assets of the Transferred Entities and the Acquired Assets against any such loss.
SECTION 1.05.
Consents of Third Parties.
(a) Notwithstanding anything in this Agreement to the contrary, this Agreement shall not constitute an agreement to assign, directly or indirectly, any asset
(including any Contract, Permit or Environmental Permit), claim or right, or any benefit arising under or resulting from such asset, claim or right, if an attempted direct or indirect assignment thereof, without the consent of a third party, would
constitute a breach or other contravention of the rights of such third party, would be ineffective with respect to any
9
party to an agreement concerning such asset, claim or right or would in any way adversely affect the contractual rights of Seller, any Selling Affiliate or
the Transferred Entities or, upon transfer, Purchaser under such asset, claim or right. If any direct or indirect transfer or assignment by Seller, any Selling Affiliate or any Transferred Entity to, or any direct or indirect assumption by Purchaser
of, any interest in, or liability, obligation or commitment under, any asset, claim or right requires the consent of a third party, then such transfer, assignment or assumption shall be made subject to such consent being obtained.
(b) If any such consent referred to in Section 1.05(a) (including any such consent necessary or required in order for Seller and its Affiliates to
comply with and be able to perform in accordance with the terms of the Transitional Services Agreement and any consent required by any Governmental Entity to the transfer of Business Employees to Purchaser or an Affiliate of Purchaser) is not
obtained prior to the Closing, the Closing shall nonetheless take place and, thereafter, Seller and the Selling Affiliates, on the one hand, and Purchaser, on the other hand, shall cooperate in any lawful and reasonable arrangement reasonably
proposed by Purchaser (not including the payment of any consideration) under which Purchaser shall obtain the economic claims, rights and benefits under, and shall bear all the costs, liabilities and burdens with respect to, the asset, claim or
right with respect to which the consent has not been obtained in accordance with this Agreement;
provided
that Purchaser shall pay or satisfy all the costs, expenses, obligations and liabilities incurred by Seller or the Selling Affiliates in
connection with any such alternative arrangements (other than legal fees incurred by Seller and the Selling Affiliates in connection with documenting and negotiating such arrangement, which shall be borne by Seller). This Section 1.05(b) does
not relate to the transfer of Permits and Environmental Permits, which are addressed solely by Section 8.02(c).
SECTION 1.06.
Refunds and Remittances.
(a)
Received by Seller or the Selling Affiliates.
After the Closing, if Seller or any of its Affiliates receives (i) any refund or other amount which is an Acquired Asset or is otherwise properly due
and owing to Purchaser or any of its Affiliates (including the Transferred Entities) in accordance with the terms of this Agreement or (ii) any refund or other amount which is related to claims or other matters for which Purchaser or any of its
Affiliates (including the Transferred Entities) is responsible hereunder, and which amount is not an Excluded Asset, or is otherwise properly due and owing to Purchaser or any of its Affiliates (including the Transferred Entities) in accordance with
the terms of this Agreement, Seller promptly shall remit, or shall cause to be remitted, such amount to Purchaser at the address set forth in Section 12.06(a).
(b)
Received by Purchaser or its Affiliates.
After the Closing, if Purchaser or any of its Affiliates receives (i) any refund or other amount which is an Excluded Asset or is otherwise properly due and
owing to Seller or any of the Selling Affiliates in accordance with the terms of this Agreement or (ii) any refund or other amount which is related to claims or other matters for which Seller is responsible hereunder, and which amount is not an
Acquired Asset, or is otherwise properly due and owing to Seller or any of the Selling Affiliates in accordance with the terms of this Agreement, Purchaser promptly shall remit, or shall cause to be remitted, such amount to Seller at the address set
forth in Section 12.06(b).
10
ARTICLE II
Closing; Purchase Price Adjustment
SECTION 2.01.
Closing.
(a) The closing of the
Acquisition (the “
Closing
”) shall be held at the offices of Cravath, Swaine & Moore LLP, Worldwide Plaza, 825 Eighth Avenue, New York, New York, at 10:00 a.m., New York City time, on the date specified by the parties, which
shall be no later than the third (3rd) business day following the satisfaction (or, to the extent permitted by applicable Law, waiver) of the conditions set forth in Article III (other than satisfaction or, to the extent permitted by applicable
Law, waiver of conditions that by their nature are to be satisfied at Closing, it being understood that the occurrence of the Closing shall remain subject to the delivery of such items and the satisfaction or, to the extent permitted by applicable
Law, waiver of such conditions at the Closing), or at such other place, time and date as shall be agreed between Purchaser and Seller. The date on which the Closing takes place is referred to in this Agreement as the “
Closing Date
”.
The Closing shall be deemed to be effective as of 12:01 a.m. on the Closing Date;
provided
that with respect to determining Closing Working Capital, Retained Cash and Closing Indebtedness, the Closing in each legal jurisdiction shall be
deemed to be effective as of 12:01 a.m. in such jurisdiction on the Closing Date.
(b) At the Closing, Seller shall deliver or cause to be
delivered to Purchaser:
(i) a certificate or certificates representing the Purchased Companies’ Equity Interests, duly
endorsed by Seller or the applicable Selling Affiliate for transfer to Purchaser (or one or more wholly-owned subsidiaries of Purchaser), with appropriate transfer stamps, if any, affixed, and its counterpart of each International Stock Purchase
Agreement for each International Purchased Company, duly executed by an authorized officer of Seller or the applicable Selling Affiliate;
(ii) such instruments of sale, assignment, transfer and conveyance (including a counterpart of each International Asset Purchase Agreement) as may be reasonably requested by Purchaser (or one or more wholly-owned
subsidiaries of Purchaser) to effect or evidence the transfer of the Acquired Assets and the Assumed Liabilities to Purchaser, in each case duly executed by an authorized officer of Seller or the applicable Selling Affiliate;
(iii) a counterpart of each IP Assignment Document, duly executed by an authorized officer of Seller or the applicable Selling Affiliate;
(iv) a counterpart of the Transitional Services Agreement, duly executed by an authorized officer of Seller;
(v) a counterpart of the Technology License Agreement, duly executed by an authorized officer of Seller;
(vi) a counterpart of the Plastibase License Agreement, duly executed by an authorized officer of Seller;
11
(vii) a counterpart of the Plastibase Supply Agreement, duly executed by an authorized
officer of Seller;
(viii) a counterpart of the Plastibase Trademark License Agreement, duly executed by an authorized
officer of Seller;
(ix) a counterpart of the ITO Services Agreement, duly executed by an authorized officer of Seller; and
(x) the certificate required to be delivered under Section 3.01(a); and
(xi) all stock record books and minute books of each of the Transferred Entities to the extent not in the possession of any such
Transferred Entity.
(c) At the Closing, Purchaser shall deliver or cause to be delivered to Seller:
(i) by wire transfer to a bank account or accounts designated in writing by Seller at least two (2) business days prior to the
Closing Date, immediately available funds in an amount equal to the Purchase Price plus or minus an estimate, prepared by Seller in good faith and delivered to Purchaser at least two (2) business days prior to the Closing Date, of any
adjustment to the Purchase Price under Section 2.02(c) (the Purchase Price plus or minus such estimate of any such adjustment under Section 2.02(c) is hereinafter referred to as the “
Closing Date Amount
”);
(ii) a counterpart of each International Stock Purchase Agreement, duly executed by an authorized officer of Purchaser;
(iii) such instruments of sale, assignment, transfer and conveyance (including its counterpart of each applicable International Asset
Purchase Agreement) as Seller or the Selling Affiliates may reasonably request to effect or evidence the purchase of the Acquired Assets and the assumption of the Acquired Liabilities by Purchaser, in each case duly executed by an authorized officer
of Purchaser;
(iv) a counterpart of each IP Assignment Document, duly executed by an authorized officer of Purchaser;
(v) a counterpart of the Transitional Services Agreement, duly executed by an authorized officer of Purchaser;
(vi) a counterpart of the Technology License Agreement, duly executed by an authorized officer of Purchaser;
(vii) a counterpart of the Plastibase License Agreement, duly executed by an authorized officer of Purchaser;
(viii) a counterpart of the Plastibase Supply Agreement, duly executed by an authorized officer of Purchaser;
12
(ix) a counterpart of the Plastibase Trademark License Agreement, duly executed by an
authorized officer of Purchaser;
(x) a counterpart of the ITO Services Agreement, duly executed by an authorized officer of
Purchaser; and
(xi) the certificate required to be delivered under Section 3.02(a).
SECTION 2.02.
Post-Closing Purchase Price Adjustment.
(a) Within ninety (90) days after the Closing Date, Seller shall prepare and
deliver to Purchaser a statement (the “
Statement
”) setting forth (i) Working Capital as of the effective time of the Closing on the Closing Date (“
Closing Working Capital
”) determined in a manner consistent and
in accordance with the Working Capital Principles, (ii) Retained Cash and (iii) Indebtedness of the Transferred Entities as of the effective time of the Closing on the Closing Date (“
Closing Indebtedness
”). For purposes of
preparing the Statement, the determination of Inventory shall be based on the amounts recorded in the books and records of the Business as of such time in accordance with the Working Capital Principles.
(b) During the forty-five (45)-day period following Purchaser’s receipt of the Statement, Purchaser and its independent auditors shall be permitted
to review the working papers of Seller relating to the Statement. The Statement shall become final and binding upon the parties on the forty-fifth (45th) day following delivery thereof, unless Purchaser gives written notice to Seller of its
disagreement with the Statement (a “
Notice of Disagreement
”) prior to such date. Any Notice of Disagreement shall (i) specify in reasonable detail the nature of any disagreement so asserted, (ii) include only disagreements
based on mathematical errors or based on Closing Working Capital not being calculated in accordance with this Section 2.02 or Retained Cash or Closing Indebtedness not being calculated in accordance with the provisions of this Agreement and
(iii) specify the amount that Purchaser reasonably believes is the correct amount of the Closing Working Capital, Retained Cash and/or Closing Indebtedness based on the disagreements set forth in the Notice of Disagreement, including a
reasonably detailed description of the adjustments applied to the Statement in calculating such amount. If the Notice of Disagreement is received by Seller in a timely manner, then the Statement (as revised in accordance with this Section 2.02)
shall become final and binding on the parties on the earlier of (i) the date Seller and Purchaser resolve in writing all differences they have with respect to the matters specified in the Notice of Disagreement and (ii) the date all
disputed matters are finally resolved in writing by the Accounting Firm. During the forty-five (45)-day period following the delivery of a Notice of Disagreement, Seller and Purchaser shall seek in good faith to resolve in writing any differences
that they may have with respect to the matters specified in the Notice of Disagreement and agree on a final determination of Closing Working Capital, Retained Cash and/or Closing Indebtedness. During such period, Seller and its independent auditors
shall be permitted to review the working papers of Purchaser and its independent auditors relating to the Notice of Disagreement;
provided
that Seller and its advisors, including its independent auditors, shall have executed all release
letters reasonably requested by Purchaser’s independent auditors in connection therewith. At the end of such forty-five (45)-day period, if no agreement on Closing Working Capital, Retained Cash and Closing Indebtedness has been reached, Seller
and Purchaser shall submit to a nationally recognized independent accounting firm (the “
Accounting Firm
”) for arbitration any and all matters that remain in dispute and that were properly included
13
in the Notice of Disagreement. The Accounting Firm shall be the New York office of Ernst & Young LLP or, if such firm is unable or unwilling to act,
such other nationally recognized independent public accounting firm as shall be agreed upon by the parties hereto in writing or, if the parties are unable to so agree in writing within ten (10) days after the end of such forty-five (45)-day
period, then Purchaser and Seller shall each select such a firm and such firms shall jointly select a third nationally recognized independent public accounting firm to resolve the disputed matters. The parties shall jointly instruct the Accounting
Firm that it (i) shall review only the matters that were properly included in the Notice of Disagreement and which remain in dispute, (ii) shall make its determination in accordance with the requirements of this Section 2.02 and
(iii) shall render its written decision as promptly as practicable but in no event later than forty-five (45) days after submission to the Accounting Firm of all matters in dispute. Judgment may be entered upon the determination of the
Accounting Firm in any court having jurisdiction over the party against which such determination is to be enforced. The Accounting Firm’s determination shall be accompanied by a certificate of the Accounting Firm that it reached its decision in
accordance with the provisions of this Section 2.02(b). The cost of any arbitration (including the fees and expenses of the Accounting Firm and reasonable attorney fees and expenses of the parties) pursuant to this Section 2.02 shall be
borne by Purchaser and Seller in inverse proportion as they may prevail on matters resolved by the Accounting Firm, which proportionate allocations also shall be determined by the Accounting Firm at the time the determination of the Accounting Firm
is rendered on the merits of the matters submitted. The fees, costs and expenses of Seller incurred in connection with its preparation of the Statement, its review of any Notice of Disagreement and its preparation of its written brief submitted to
the Accounting Firm shall be borne by Seller, and the fees, costs and expenses of Purchaser incurred in connection with its review of the Statement, its preparation, review and certification of the Notice of Disagreement and its preparation of its
written brief submitted to the Accounting Firm shall be borne by Purchaser.
(c) The Purchase Price shall be (i) increased by the
amount by which (A) Closing Working Capital exceeds (B) the sum of $156,900,000 (the “
2007 Balance Sheet Working Capital Amount
”) and $40,000,000 (such sum, the “
Target Working Capital
”), and the Purchase
Price shall be decreased by the amount by which Closing Working Capital is less than the Target Working Capital, (ii) increased by the amount of Retained Cash, if any, and (iii) decreased by the amount of the Closing Indebtedness, if any.
Notwithstanding the foregoing provisions of this Section 2.02(c), no adjustment to the Purchase Price pursuant to this Section 2.02(c) shall be made unless such adjustment would exceed $1,000,000;
provided
,
however
, that if
such payment would exceed $1,000,000, then the full amount of such adjustment shall be made. The Purchase Price as adjusted pursuant to this Section 2.02(c) shall hereinafter be referred to as the “
Final Purchase Price
”. If the
Closing Date Amount is less than the Final Purchase Price, Purchaser shall, and if the Final Purchase Price is less than the Closing Date Amount, Seller shall, within ten (10) business days after the Statement becomes final and binding on the
parties, make payment by wire transfer in immediately available funds of the amount of such difference, together with interest thereon at a rate equal to the Prime Rate from (and including) the Closing Date to (but not including) the date of
payment.
(d) The term “
Working Capital
” means Current Assets minus Current Liabilities. The term “
Current
Assets
” means without duplication (i) the receivables (net of allowances), net inventories, prepaid expenses and other current assets of the Transferred Entities and (ii)(A) the
14
receivables, net of allowances, of Seller and its Affiliates arising out of or related to the Business (but only to the extent included in the Transferred
Accounts Receivable), (B) the inventories, net of reserves of Seller and its Affiliates arising out of or related to the Business (but only to the extent included in Transferred Inventory), (C) the prepaid expenses of Seller and its
Affiliates arising out of or related to the Business (but only to the extent included in the Transferred Miscellaneous Rights) and (D) the other current assets of Seller and its Affiliates arising out of or related to the Business (but only to
the extent included in the Acquired Assets), in each case calculated in the same manner, using the same methods and, to the extent applicable, the same foreign currency exchange rates, as the corresponding line item from the 2007 Balance Sheet
Working Capital Amount set forth on Exhibit E hereto. The term “
Current Liabilities
” means (i) the accounts payable, accrued expenses, accrued compensation, and accrued rebates and returns of the Transferred Entities, and
(ii)(A) the accounts payable of Seller and its Affiliates arising out of or related to the Business (but only to the extent included in the Assumed Accounts Payable), (B) the accrued expenses of Seller and its Affiliates arising out of or
related to the Business (but only to the extent included in the Assumed Liabilities), (C) the accrued compensation of Seller and its Affiliates arising out of or related to the Business (but only to the extent included in the Assumed
Liabilities), and (D) the accrued rebates and returns of Seller and its Affiliates arising out of or related to the Business (but only to the extent included in the Assumed Liabilities), in each case calculated in the same manner, using the
same methods and, to the extent applicable, the same foreign currency exchange rates, as the corresponding line item from the 2007 Balance Sheet Working Capital Amount set forth on Exhibit E hereto. For the avoidance of doubt, (i) current
assets and current liabilities relating to Cash other than Retained Cash, (ii) any assets or liabilities related to Taxes, (iii) any assets or liabilities to the extent related to intercompany receivables or payables, including
intercompany interest, and (iv) any liabilities related to accrued restructuring expenses shall not be taken into account in determining Working Capital.
(e) Each line item of the Closing Working Capital (including any items excluded from Closing Working Capital) shall be calculated in the same manner, using the same methods and, to the extent applicable, the same
foreign currency exchange rates, as the corresponding line item of the calculation of 2007 Balance Sheet Working Capital Amount (or item excluded from 2007 Balance Sheet Working Capital Amount) set forth on Exhibit E hereto was calculated, whether
or not doing so is in accordance with U.S. GAAP, except as otherwise provided in Exhibit E hereto. The foregoing principles are referred to in this Agreement as the “
Working Capital Principles
”. The Purchase Price adjustment
contemplated by this Section 2.02 can only be effected as intended by the parties if the calculation of the 2007 Balance Sheet Working Capital Amount and the Closing Working Capital is done in the same manner, using the same methods and, to the
extent applicable, the same foreign currency exchange rates, except as otherwise provided in Exhibit E hereto. The scope of the disputes to be resolved by the Accounting Firm shall be limited to whether there were mathematical errors in the
Statement, whether the calculation of the Closing Working Capital was done in accordance with the Working Capital Principles and whether Retained Cash or Closing Indebtedness were determined in accordance with their respective definitions, and the
Accounting Firm is not to make any other determination, including any determination as to whether U.S. GAAP was followed in calculating the 2007 Balance Sheet Working Capital Amount, the Closing Working Capital, Retained Cash, Closing Indebtedness
or the Statement or as to whether the 2007 Balance Sheet Working Capital Amount is correct. Any determinations by the Accounting Firm, and any
15
work or analyses performed by the Accounting Firm in connection with its resolution of any dispute under this Section 2.02 shall not be admissible in
evidence in any suit, action or other proceeding between the parties, other than to the extent necessary to enforce payment obligations under Section 2.02(c). Any items on or omissions from the 2007 Balance Sheet Working Capital Amount that are
based upon errors of fact or mathematical errors shall be carried forward for purposes of calculating Closing Working Capital.
(f) Until
the date on which the Statement shall become final and binding on the parties pursuant to Section 2.02(b), Purchaser agrees that following the Closing it shall preserve the accounting books and records of the Business on which the Statement is
to be based and shall not take any actions with respect to such books and records that would obstruct, prevent or otherwise affect the procedures or the results of the procedures set forth in this Section 2.02 (including the amount of Closing
Working Capital, Retained Cash or Closing Indebtedness or any amount included in the 2007 Balance Sheet Working Capital Amount or the Statement or the preparation of the Statement). Without limiting the generality of the foregoing no changes shall
be made during such period in any reserve or other account existing as of the date of the Financial Statements, except as a result of events occurring after the date of the Financial Statements and, in such event, only in a manner consistent with
the past practice of the Business.
(g) Until the date on which the Statement shall become final and binding on the parties pursuant to
Section 2.02(b), Purchaser agrees that following the Closing it shall afford and cause to be afforded to Seller and any accountants, counsel or financial advisors retained by Seller in connection with the preparation of the Statement and any
adjustment to the Purchase Price contemplated by this Section 2.02, access upon reasonable notice during normal business hours to the properties, books, contracts, personnel and records of the Business and Purchaser’s and its
accountant’s work papers (
provided
that Seller and its advisors, including its independent auditors, have executed all release letters reasonably requested by Purchaser’s independent auditors in connection therewith) relevant to the
preparation of the Statement and the adjustment contemplated by this Section 2.02, including any Notice of Disagreement, and shall provide Seller, upon Seller’s reasonable request and at Seller’s expense, with copies of any such
books, contracts, records and work papers;
provided
,
however
, that such access shall not unreasonably disrupt the normal operations of Purchaser, its Affiliates, the Transferred Entities or the Business.
ARTICLE III
Conditions to Closing
SECTION 3.01.
Conditions to Obligations of Purchaser.
The obligation of Purchaser to effect the transactions contemplated by this
Agreement is subject to the satisfaction (or, to the extent permitted by applicable Law, waiver by Purchaser) as of the Closing of the following conditions:
(a)
Representations and Warranties; Covenants.
(i) Each of the Fundamental Representations (other than the representations and warranties contained in Section 4.05(a)) and the representations and
warranties contained in Section 4.15(a) to the extent not qualified as to “materiality” or “Seller Material Adverse Effect” shall be true and correct in all material respects
16
and each of the Fundamental Representations to the extent so qualified by “materiality” or “Seller Material Adverse Effect” or contained
in Section 4.05(a) shall be true and correct, in each case as of the effective time of the Closing as though made as of such time except to the extent such representations and warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct in all material respects or true and correct, as applicable, as of such earlier date) and (ii) all other representations and warranties of Seller made in this Agreement shall be true and
correct (without giving effect to any “materiality”, “Seller Material Adverse Effect” or similar qualification) as of the effective time of the Closing as though made as of such time, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct as of such earlier date), except for breaches as to matters that, individually or in the aggregate, would not be reasonably
likely to have a Seller Material Adverse Effect. Seller shall have performed or complied in all material respects with all obligations and covenants required by this Agreement to be performed or complied with by Seller by the time of the Closing.
Seller shall have delivered to Purchaser a certificate dated the Closing Date and signed by an authorized officer of Seller confirming the foregoing.
(b)
No Injunctions or Restraints.
No law (including common law), statute, rule, ordinance or regulation of a Governmental Entity (each, a “
Law
”), or judgment, executive order, stipulation,
decree, legally binding agreement, temporary restraining order, preliminary or permanent injunction or other order (each, an “
Injunction
”) enacted, entered, promulgated, enforced or issued by, or executed with, any Federal, state,
foreign, province, prefect, municipal or local government or any court of competent jurisdiction, administrative agency or commission or other governmental authority, subdivision, or instrumentality, or any quasi-governmental or private body
exercising any regulatory, taxing, importing or other regulatory, governmental or quasi-governmental authority (each, a “
Governmental Entity
”), or other legal restraint or prohibition preventing the Acquisition shall be in effect.
(c)
Antitrust Approvals.
The waiting period (and any extension thereof) applicable to the consummation of the Acquisition under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “
HSR Act
”) shall have expired or been terminated, the European Commission shall have issued a decision under Article 6(1)(b) or 8(2) of the EC Merger Regulation (or shall be
deemed to have done so under Article 10(6) of the EC Merger Regulation) declaring the Acquisition compatible with the EC Common Market and all other material filings and approvals under applicable foreign merger control or competition Laws shall
have been made or obtained;
provided
that Seller and Purchaser agree that the approvals listed on Schedule 3.01(c) are not material.
(d)
Other Transaction Documents.
Seller shall have executed and delivered to Purchaser the Other Transaction Documents to which Seller is a party and each Affiliate of Seller shall have executed and delivered to Purchaser the Other
Transaction Documents to which such Affiliate is specified to be a party.
(e)
Withholding Tax Certificate.
Seller and each Selling
Affiliate shall have delivered to Purchaser a certificate in form and substance reasonably satisfactory to Purchaser, duly executed and acknowledged, certifying any facts that would exempt the transactions contemplated hereby from withholding under
Section 1445 of the Code.
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SECTION 3.02.
Conditions to Obligation of Seller.
The obligation of Seller to, or to cause its
Affiliates to, effect the transactions contemplated by this Agreement is subject to the satisfaction (or, to the extent permitted by applicable Law, waiver by Seller) as of the Closing of the following conditions:
(a)
Representations and Warranties; Covenants.
The representations and warranties of Purchaser made in this Agreement shall be true and correct
(without giving effect to any “materiality”, “Purchaser Material Adverse Effect” or similar qualification) as of the effective time of the Closing as though made as of such time, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct as of such earlier date), in each case except for breaches as to matters that, individually or in the aggregate, would not be
reasonably likely to have a Purchaser Material Adverse Effect. Purchaser shall have performed or complied in all material respects with all obligations and covenants required by this Agreement to be performed or complied with by Purchaser by the
time of the Closing. Purchaser shall have delivered to Seller a certificate dated the Closing Date and signed by an authorized officer of Purchaser confirming the foregoing.
(b)
No Injunctions or Restraints.
No Law or Injunction enacted, entered, promulgated, enforced or issued by, or executed with, any Governmental
Entity, or other legal restraint or prohibition preventing the Acquisition, shall be in effect.
(c)
Antitrust Approvals.
The
waiting period (and any extension thereof) applicable to the consummation of the Acquisition under the HSR Act shall have expired or been terminated, the European Commission shall have issued a decision under Article 6(1)(b) or 8(2) of the EC Merger
Regulation (or shall be deemed to have done so under Article 10(6) of the EC Merger Regulation) declaring the Acquisition compatible with the EC Common Market and all other material filings and approvals under applicable foreign merger control or
competition Laws shall have been made or obtained;
provided
that Seller and Purchaser agree that the approvals listed on Schedule 3.01(c) are not material.
(d)
Other Transaction Documents.
Purchaser shall have executed and delivered to Seller the Other Transaction Documents to which Purchaser is a party.
SECTION 3.03.
Frustration of Closing Conditions.
Neither Purchaser nor Seller may rely on the failure of any condition set forth in this Article
III to be satisfied if such failure was caused by such party’s material breach of this Agreement or such party’s failure to act in good faith or to use its reasonable best efforts to cause the Closing to occur, as required by
Section 8.04.
ARTICLE IV
Representations and Warranties of Seller
Except as set forth in the Seller Disclosure Schedule attached hereto (the
“
Seller Disclosure Schedule
”) (
provided
that the disclosure of an item in one section of the Seller Disclosure Schedule shall be deemed to be a disclosure in each section of the Seller Disclosure
18
Schedule and to apply to any other representation and warranty of Seller contained in this Agreement to the extent the relevance and applicability of such
disclosure to such other section of the Seller Disclosure Schedule is reasonably apparent), Seller hereby represents and warrants to Purchaser as follows:
SECTION 4.01.
Organization, Standing and Authority; Execution and Delivery; Enforceability.
(a) Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of
Delaware. Each Selling Affiliate is a legal entity, duly organized, validly existing and, where applicable, in good standing under the laws of the jurisdiction of its organization. Seller has all requisite corporate and/or shareholder power and
authority to (i) enter into this Agreement and the Other Transaction Documents to which it is, or is specified to be, a party and to consummate the transactions contemplated hereby and thereby and (ii) cause the Selling Affiliates to
convey the Transferred Equity Interests and Acquired Assets, as applicable. Each Selling Affiliate has all requisite corporate power and authority to enter into this Agreement and the Other Transaction Documents to which it is, or is specified to
be, a party and to consummate the transactions contemplated hereby and thereby. All corporate acts and other proceedings required to be taken by Seller to authorize the execution, delivery and performance of this Agreement and to consummate the
transactions contemplated hereby have been, and all corporate acts and other proceedings required to be taken by Seller and each of the Selling Affiliates to authorize the execution, delivery and performance of the Other Transaction Documents to
which it is, or is specified to be, a party and to consummate the transactions contemplated thereby will be, prior to Closing, duly and properly taken.
(b) This Agreement has been duly executed and delivered by Seller and, prior to Closing, Seller and the Selling Affiliates will have duly executed and delivered each Other Transaction Document to which it is, or is
specified to be, a party. Assuming that this Agreement has been duly authorized, executed and delivered by Purchaser, this Agreement constitutes, and, upon the due authorization, execution and delivery of the Other Transaction Documents by
Purchaser, each Other Transaction Document will constitute, a legal, valid and binding obligation of Seller or the Selling Affiliates, as the case may be, enforceable against such person in accordance with its terms.
SECTION 4.02.
No Conflicts; Consents.
(a) The execution and delivery of this Agreement by Seller do not, and the execution and delivery of
the Other Transaction Documents by Seller and the Selling Affiliates specified to be parties thereto will not, and the consummation of the transactions contemplated hereby and thereby and compliance by Seller and the Selling Affiliates with the
terms and conditions hereof and thereof will not, conflict with, or result in any violation of, breach or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancelation, payment or acceleration
of any obligation or to loss of a benefit under, or result in the creation of any liens, claims, encumbrances, security interests, options, charges, right of first refusal, easements, mortgages, deeds of trust, rights of way, restrictions on the use
of real property, encroachments, licenses to third parties or other restrictions of any kind (“
Liens
”) (other than Permitted Liens or Liens arising from acts of Purchaser or its Affiliates) upon any of the Acquired Assets or any
properties or assets of any of the Transferred Entities under, any provision of (i) the Certificate of Incorporation or By-laws (or the comparable governing instruments) of Seller, any Selling Affiliate or any of the Transferred Entities,
(ii) any Transferred Contract, Transferred Real Property Contract,
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Transferred Entity Contract or any Contract set forth on Section 4.11 of the Seller Disclosure Schedule or (iii) any Injunction, or, subject to the
matters referred to in paragraph (b) below, applicable Law, other than, in the case of clauses (ii) and (iii) above, any such items that, individually or in the aggregate, would not be reasonably likely to have a Seller Material
Adverse Effect (without giving effect to clause (vii) of the definition thereof).
(b) No consent, waiver, approval, license, Permit,
order or authorization of, or registration, declaration or filing with, any Governmental Entity is required to be obtained or made by or with respect to Seller, any Selling Affiliate or any Transferred Entity in connection with the execution,
delivery and performance of this Agreement, the Other Transaction Documents or the consummation of the transactions contemplated hereby or thereby, other than (i) compliance with and filings under the HSR Act and compliance with and filings and
approvals under applicable foreign merger control or competition Laws, (ii) compliance with and such filings and notifications as may be required under applicable state property transfer Laws or Environmental Laws, including the New Jersey
Industrial Site Recovery Act, (iii) those that may be required solely by reason of Purchaser’s or any Affiliate of Purchaser’s (as opposed to any other third party’s) participation in the transactions contemplated hereby or by
the Other Transaction Documents, (iv) compliance with and filings under the Securities Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder, (v) compliance with and filings or notices required by the rules
and regulations of the New York Stock Exchange and (vi) such consents, waivers, approvals, licenses, permits, orders, authorizations, registrations, declarations and filings the absence of which, or the failure to make or obtain which,
individually or in the aggregate, would not be reasonably likely to have a Seller Material Adverse Effect (without giving effect to clause (vii) of the definition thereof).
SECTION 4.03.
Transferred Equity Interests.
Seller or a Selling Affiliate has good and valid title to the applicable Purchased Companies’
Equity Interests set forth opposite Seller’s or such Selling Affiliate’s name in Section B of the Seller Disclosure Schedule, in each case free and clear of any Liens, and is the record and beneficial owner thereof. Each Purchased
Company has good and valid title to the Purchased Company Subsidiaries’ Equity Interests set forth opposite such Purchased Company’s name in Section B of the Seller Disclosure Schedule, free and clear of all Liens, and is the record
and beneficial owner thereof. Assuming Purchaser has the requisite power and authority to be the lawful owner of the Purchased Companies’ Equity Interests, upon delivery to Purchaser at the Closing of certificates representing the Purchased
Companies’ Equity Interests, duly endorsed by Seller or the applicable Selling Affiliate for transfer to Purchaser, and upon Seller’s receipt of the Closing Date Amount, good and valid title to the Purchased Companies’ Equity
Interests will pass to Purchaser, free and clear of any Liens, other than those arising from acts of Purchaser or its Affiliates.
SECTION
4.04.
Organization, Standing and Documents of Transferred Entities.
Section 4.04 of the Seller Disclosure Schedule sets forth the name and the jurisdiction of organization of each Transferred Entity. Each Transferred Entity is a legal
entity duly organized, validly existing and, where applicable, in good standing under the Laws of its jurisdiction of organization. Each Transferred Entity has all requisite corporate power and authority and possesses all governmental franchises,
licenses, permits, authorizations and approvals necessary to enable it to own, lease or otherwise hold its properties and assets and to carry on its business as presently conducted, other than such franchises, licenses, permits, authorizations and
20
approvals the lack of which, individually or in the aggregate, would not be reasonably likely to have a Seller Material Adverse Effect. Each Transferred
Entity is in good standing and duly qualified to do business in each jurisdiction in which the conduct or nature of its business or the ownership, leasing or holding of its properties makes such qualification necessary, except such jurisdictions
where the failure to be in good standing or so qualified, individually or in the aggregate, would not be reasonably likely to have a Seller Material Adverse Effect. Seller has, prior to the date hereof, delivered or otherwise made available to
Purchaser true and complete copies of the certificate of incorporation or bylaws (or similar organizational documents), each as amended to the date hereof, of each Transferred Entity. As of the Closing, none of the Fundamental Transferred Entities
is in violation of the provisions of its certificate of incorporation or bylaws (or similar organizational documents). Any copies of minutes of meetings or written consents of stockholders (or other equityholders), board of directors (or similar
body) and any committee thereof of each Fundamental Transferred Entity that has been provided by or on behalf of Seller to Purchaser accurately reflect in all material respects the substance of the applicable meetings or consents.
SECTION 4.05.
Equity Interests in the Transferred Entities.
(a) As of the date of this Agreement, there are not any outstanding bonds,
debentures, notes or other indebtedness of any Transferred Entity having the right to vote (or that are convertible into, or exercisable or exchangeable for, securities having the right to vote) on any matters on which holders of the Transferred
Equity Interests may vote (“
Transferred Entity Voting Debt
”). As of the date of this Agreement, there are not any outstanding (i) warrants, options, convertible or exchangeable securities or other commitments or undertakings
(other than this Agreement) (x) pursuant to which Seller, any Selling Affiliate or any Transferred Entity is or may become obligated to issue, deliver or sell any additional units of its equity interests or any security convertible into, or
exchangeable for, any equity interest in any Transferred Entity or any Transferred Entity Voting Debt, or (y) pursuant to which Seller, any Selling Affiliate or any Transferred Entity is or may become obligated to issue, grant, extend or enter
into any such warrant, option, right, unit, security, arrangement, commitment or undertaking.
(b) Section 4.05(b) of the Seller
Disclosure Schedule sets forth, as of the date of this Agreement and for each Transferred Entity, the number of authorized equity interests in such Transferred Entity, the number of outstanding equity interests in such Transferred Entity and the
record and beneficial owners thereof. Except for the Transferred Equity Interests, as of the date of this Agreement, there are no shares of capital stock or other equity securities of the applicable Transferred Entity issued, reserved for issuance
or outstanding. The Transferred Equity Interests have been duly authorized and validly issued and are fully paid and non-assessable. The Transferred Equity Interests have not been issued in violation of, and are not subject to, any preemptive,
subscription or similar rights under any provision of applicable Law, the Certificate of Incorporation or By-Laws (or comparable governing instruments) of the applicable Transferred Entity, or any Contract to which the applicable Transferred Entity
is subject, bound or a party or otherwise. As of the date of this Agreement, there are not any outstanding “phantom” stock rights, stock appreciation rights, stock based performance units or arrangements or commitments that give any person
the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of the Transferred Equity Interests.
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(c) Except for equity interests in another Transferred Entity, as of the date of this Agreement, no
Transferred Entity owns, directly or indirectly, any equity interests in any other person.
(d) Other than this Agreement, the Transferred
Equity Interests are not subject to any voting trust agreement or other Contract, including any such Contract restricting or otherwise relating to the voting, dividend rights or disposition of the Transferred Equity Interests.
SECTION 4.06.
Financial Statements.
(a) Section 4.06(a) of the Seller Disclosure Schedule sets forth complete and correct copies of the
following financial statements of the Business: (i) the audited carve-out Balance Sheets as of December 31, 2006 and 2005, the audited carve-out Statements of Earnings for the years ended December 31, 2006, 2005 and 2004, the audited
carve-out Statements of Changes in Divisional Equity for the years ended December 31, 2006, 2005 and 2004 and the audited carve-out Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004 (collectively, the
“
Audited 2004-2006 Financial Statements
”) and (ii) the unaudited carve-out Balance Sheets as of December 31, 2007 and 2006, the unaudited carve-out Statements of Earnings for the years ended December 31, 2007, 2006
and 2005, the unaudited carve-out Statements of Changes in Divisional Equity for the years ended December 31, 2007, 2006 and 2005 and the unaudited carve-out Statements of Cash Flows for the years ended December 31, 2007, 2006 and 2005
(collectively, the “
Unaudited 2007 Financial Statements
”);
provided
that the Unaudited 2007 Financial Statements do not include final amounts or any amounts related to Taxes (including the Excluded Tax Items).
(b) The Audited 2004-2006 Financial Statements and the Unaudited 2007 Financial Statements have been prepared in accordance with U.S. GAAP consistently
applied (except that the Unaudited 2007 Financial Statements do not include the Excluded Tax Items) and on that basis present fairly in all material respects the net assets of the Business as of the respective dates thereof and the results of
operations, changes in divisional equity and cash flows of the Business for the respective periods indicated therein (except, in the case of the Unaudited 2007 Financial Statements, for the Excluded Tax Items). The Audited 2007 Financial Statements,
when delivered pursuant to Section 5.08, will be prepared in accordance with U.S. GAAP consistently applied and on that basis will present fairly in all material respects the net assets of the Business as of the respective dates thereof and the
results of operations, changes in divisional equity and cash flows of the Business for the respective periods indicated therein.
(c)
Neither the Business nor any Transferred Entity has any liability or obligation of any nature (whether accrued, absolute, contingent, unasserted or otherwise) required by U.S. GAAP to be reflected on a carve-out balance sheet of the Business or in
the notes thereto, except (i) as disclosed or reserved against on the face of the Balance Sheet and the notes thereto, (ii) for liabilities and obligations relating to Taxes, (iii) for liabilities and obligations incurred in
connection with the transactions contemplated by this Agreement, (iv) for future executory liabilities or obligations arising under any Transferred Real Property Contract, Transferred Contract or any Transferred Entity Contract, (v) for
Excluded Liabilities and (vi) other liabilities and obligations incurred in the ordinary course of business since the date of the Balance Sheet which, individually and in the aggregate, would not be reasonably likely to have a Seller Material
Adverse Effect.
22
(d) Except as set forth in Section 4.06(d) of the Seller Disclosure Schedule, the assets reflected
on the Balance Sheet are either Acquired Assets or assets of the Transferred Entities, except for any such assets reflected on the Balance Sheet that are not, in the aggregate, material to the Business.
SECTION 4.07.
Taxes.
(a) For purposes of this Agreement, (i) “
Taxes
” means all Federal, state, local and foreign taxes,
charges, duties, fees, levies and similar assessments imposed by a Governmental Entity, including all interest, penalties and additions imposed with respect to such amounts (whether payable directly or by withholding and whether or not requiring the
filing of a Tax Return), (ii) “
Pre-Closing Tax Period
” means all taxable periods ending on or before the Closing Date and with respect to a Straddle Period, the portion of such taxable year or period ending on and including the
Closing Date, (iii) “
Post-Closing Tax Period
” means all taxable periods beginning after the Closing Date and with respect to a Straddle Period, the portion of such taxable year or period beginning after the Closing Date,
(iv) “
Straddle Period
” means any taxable period that includes (but does not end on) the Closing Date, (v) “
Code
” means the U.S. Internal Revenue Code of 1986, as amended, (vi) “
Tax
Return
” means all returns, reports, elections, forms or similar statements required to be filed with any Government Entity with respect to Taxes (including any estimated Tax Returns, schedules or attachments thereto and amendments thereof)
and (v) “
Transfer Taxes
” means all transfer, documentary, stamp duty, sales, use, registration, commodities and other similar Taxes (including all applicable real estate transfer Taxes and real property transfer gains Taxes)
and related amounts (including any penalties, interest and additions to Tax) incurred in connection with this Agreement, the Other Transaction Documents, the Acquisition and the other transactions contemplated hereby and thereby.
(b) All material Tax Returns required to be filed by or with respect to the Transferred Entities or any Acquired Assets have been duly and timely filed
and all such Tax Returns are true, correct and complete in all material respects.
(c) All material amounts of Taxes required to be paid by
or with respect to the income, assets or operations of the Transferred Entities or any Acquired Assets have been timely paid.
(d) There
are no material Tax Liens on the Transferred Equity Interests, any of the assets of the Transferred Entities or the Acquired Assets, except for Liens described in clause (iii) of Section 4.08.
(e) The Transferred Entities do not have in force any waiver of any statute of limitations in respect of Taxes or any extension of time with respect to a
Tax assessment or deficiency.
(f) There are no pending or active audits or written proposed deficiencies or other written claims, actions,
assessments or proceedings for a material amount of unpaid Taxes asserted against the Transferred Entities or with respect to the Acquired Assets.
(g) None of the Transferred Entities has constituted either a “distributing corporation” or a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock qualifying
for tax-free treatment under Section 355 of the Code in the two years prior to the date of this Agreement.
23
(h) None of the Transferred Entities has entered into any “listed transaction” within the
meaning of Treasury Regulation Section 1.6011-4(b).
(i) For any period of time during which a Transferred Entity was owned by Seller
or a Selling Affiliate, none of the Transferred Entities is or has ever been a member of an affiliated group of corporations filing a consolidated federal income Tax Return (other than the group of which they are currently members and the common
parent of which is Seller).
(j) For all taxable periods for which the statute of limitations has not expired, all Taxes which any
Transferred Entity is (or was) required by Law to withhold or collect in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party have been duly withheld or collected, and have been
timely paid over to the proper authorities to the extent due and payable.
(k) No written claim has ever been made by any taxing authority
in a jurisdiction where Seller or any Selling Affiliate (with respect to the Business and the Acquired Assets) or any Transferred Entity does not file Tax Returns that any of the Transferred Entities is or may become subject to taxation by that
jurisdiction.
(l) There are no tax sharing, allocation, indemnification or similar agreements in effect as between any Transferred Entity
or any predecessor or Affiliate thereof and any other party (including Seller, any Selling Affiliate or any predecessors or Affiliates thereof) under which Purchaser or any Transferred Entity could be liable for any Taxes or other claims of any
party after the Closing Date.
(m) ConvaTec Dominican Republic, Inc. has not been a “United States real property holding
corporation” within the meaning of Section 897(c)(2) of the Code at any time during the five-year period ending on the date hereof and no Acquired Asset has been a “United States Real Property Interest” within the meaning of
Section 897(c)(1) of the Code.
(n) None of the Transferred Entities will be required to include amounts in income, or exclude
material items of deduction, in a taxable period beginning after the Closing Date as a result of a: (i) change in method of accounting for a taxable period ending on or prior to the Closing Date, (ii) installment sale, (iii) open
transaction or (iv) closing agreement pursuant to Section 7121 of the Code (or similar provisions of state, local or foreign Tax Law) executed on or prior to the Closing Date.
SECTION 4.08.
Good and Valid Title to Assets Other Than Transferred Equity Interests, Real Property and Intellectual Property.
Seller or a Selling
Affiliate, as applicable, has, or, in the case of assets acquired, leased or licensed after the date of this Agreement not in violation of this Agreement, as of the Closing Date will have, good and valid title to, or a valid leasehold interest in,
or a valid license to use, all material Acquired Assets, and the Transferred Entities have, or, in the case of assets acquired, lease or licensed after the date of this Agreement not in violation of this Agreement, as of the Closing Date will have,
good and valid title to, or a valid leasehold interest in, or a valid license to use, their respective material assets reflected on
24
the audited carve-out balance sheet of the Business as of December 31, 2007 or thereafter acquired by such Transferred Entity (except, in the case of
each of Seller, such Selling Affiliate and such Transferred Entity, those sold or otherwise disposed of in the ordinary course of business consistent with past practice since the date of the Balance Sheet), in each case free and clear of all Liens,
except (i) such as are set forth in Section 4.08 of the Seller Disclosure Schedule, (ii) mechanics’, carriers’, workmen’s, repairmen’s or other like Liens arising or incurred in the ordinary course of business,
(iii) Liens arising under original purchase price conditional sales contracts and equipment leases with third parties entered into in the ordinary course of business, (iv) Liens for Taxes and other governmental charges which are not yet
due and payable or which may thereafter be paid without penalty and (v) other imperfections of title or encumbrances, if any, which do not, individually or in the aggregate, materially impair the continued use and operation of the Acquired
Assets or such assets of the Transferred Entities to which they relate in the conduct of the Business as presently conducted (the Liens described in clauses (i) through (v) above, together with the Liens referred to in clauses
(ii) through (viii) of Section 4.09(c), are hereinafter referred to collectively as “
Permitted Liens
”). This Section 4.08 does not relate to the Transferred Equity Interests, real property or interests in real
property, Intellectual Property or Contracts, such items being the subjects of Section 4.03, Section 4.09, Section 4.10 and Section 4.11, respectively.
SECTION 4.09.
Real Property.
(a) Section 4.09(a) of the Seller Disclosure Schedule sets forth a true and complete list, as of the date
of this Agreement, of (i) all real property and interests in real property owned by Seller or any Affiliate of Seller (other than a Transferred Entity) and used solely in the operation or conduct of the Business or otherwise included in the
Acquired Assets, (ii) all real property and interests in real property owned by a Transferred Entity and (iii) the name of the record title holder and a list of all Indebtedness secured by a Lien on each such real property or interest in
real property in clause (i) or (ii) above (each such real property or interest in real property in clause (i) or (ii), individually, an “
Owned Property
”), except for such Owned Property that would not, in the
aggregate, be material to the Business.
(b) Section 4.09(b) of the Seller Disclosure Schedule sets forth a true and complete list, as
of the date of this Agreement, of (i) all material real property and material interests in real property in which Seller or any Affiliate of Seller (other than a Transferred Entity) is a lessee, sublessee, licensee or occupant and that are used
solely in the operation or conduct of the Business or otherwise included in the Acquired Assets and (ii) all material real property and material interests in real property leased by a Transferred Entity (each such real property or interest in
real property in clause (i) or (ii), individually, a “
Leased Property
”), except for such Leased Property that would not, in the aggregate, be material to the Business.
(c) Seller, a Selling Affiliate or a Transferred Entity has good and insurable fee title to all Owned Property and good and valid title to the leasehold
estates in all Leased Property, in each case free and clear of all Liens, except (i) Liens described in clauses (ii) through (iv) of Section 4.08, (ii) such Liens as are identified in Section 4.09(c) of the Seller
Disclosure Schedule, (iii) leases, subleases and similar agreements set forth in Section 4.11(a)(v)(B) of the Seller Disclosure Schedule, (iv) Liens that may have been placed by any developer or other third party on Leased Property or
on property over which Seller, a Selling Affiliate or a Transferred Entity has easement rights, together with any subordination or similar
25
agreements relating thereto, (v) zoning and building codes and other similar Laws, orders, rules and regulations, (vi) any conditions that would be
shown by a current, accurate survey, previously made available to Purchaser, of any Owned Property, (vii) recorded and/or unrecorded easements, covenants, rights-of-way and other similar restrictions and (viii) other imperfections of title
or encumbrances, if any, which do not, individually or in the aggregate, materially impair the continued use and operation of the Transferred Real Property to which they relate as currently used or operated. None of the items set forth in clause
(iii), (iv), (v) or (vi), individually or in the aggregate, materially impairs the continued use and operation of the Owned Property to which they relate in the operation or conduct of the Business as presently conducted.
(d) Seller has made available to Purchaser for review true and complete copies of each written lease, sublease, license or occupancy agreement in respect
of a Leased Property (each, a “
Lease
”). Except for subleases or similar agreements identified in Section 4.11(a)(v)(B) of the Seller Disclosure Schedule, none of Seller, any Selling Affiliate or any Transferred Entity has
subleased or granted any right to use and occupy all or any portion of the premises demised by any Lease to a third party. None of Seller, any Selling Affiliate or any Transferred Entity has collaterally assigned or granted a Lien (other than a
Permitted Lien) in any Lease.
SECTION 4.10.
Intellectual Property.
(a) Seller or a Selling Affiliate owns, or as of the
Closing Date will own, free and clear of all Liens (in each case, except to the extent the Transferred Intellectual Property may be licensed from third parties), all right, title and interest in and to the material Transferred Intellectual Property,
and the consummation of the transactions contemplated hereby will not conflict with, alter or impair any such rights in any material respect. The Transferred Intellectual Property constitutes all material Intellectual Property owned by Seller or any
Affiliate of Seller (other than a Transferred Entity) and used in the operation or conduct of the Business.
(b) The Transferred Entities
own, or as of the Closing Date will own, free and clear of all Liens (in each case, except to the extent the Transferred Intellectual Property may be licensed from third parties), all right, title and interest in and to all material Intellectual
Property owned, used, filed by or licensed to the Transferred Entities with respect to the Business (the “
Transferred Entity Intellectual Property
”), and the consummation of the transactions contemplated hereby will not conflict
with, alter or impair any such rights in any material respect. Section 4.10(b) of the Seller Disclosure Schedule sets forth a true and complete list, as of the date of this Agreement, of all registered or filed, as applicable, Transferred
Entity Intellectual Property.
(c) As of the date of this Agreement, no claims are currently pending or, to the knowledge of Seller, the
subject of a written threat received since January 1, 2007, against Seller or any of its Affiliates by any person (i) with respect to the ownership, validity, enforceability, effectiveness or use of any material Transferred Intellectual
Property or Transferred Entity Intellectual Property or (ii) with respect to infringement, misappropriation, violation or misuse of any third-party Intellectual Property in the operation or conduct of the Business other than as disclosed in
Section 4.10(c) of the Seller Disclosure Schedule.
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(d) None of Seller, any Selling Affiliate or any Transferred Entity has granted any material options,
licenses or agreements relating to the Transferred Intellectual Property or Transferred Entity Intellectual Property, except non-exclusive implied licenses to end-users in the ordinary course of business. As of the date of this Agreement, none of
Seller, any Selling Affiliate or any Transferred Entity is bound by or a party to any material options, licenses or agreements of any kind relating to the Intellectual Property of any other person, except for Transferred Intellectual Property that
may be licensed from third parties and agreements relating to computer software licensed to Seller or its Affiliates in the ordinary course of business.
(e) For purposes of this Agreement, “
Intellectual Property
” means, without any geographic limitation, collectively:
(i) patents, patent applications and statutory invention registrations, together with all counterparts, reissues, divisions/divisionals,
continuations, continuations-in-part, extensions, provisional or supplemental protection certificates, renewals and reexaminations thereof (collectively, “
Patents
”);
(ii) trademark registrations, trademark applications, servicemark registrations, servicemark applications and domain name registrations,
together with all extensions and renewals thereof and all goodwill associated therewith (collectively, “
Trademarks
”);
(iii) copyright registrations and copyright applications, together with all extensions and renewals thereof (collectively, “
Copyrights
”);
(iv) unregistered service marks, brand names, trade names, trade dress, copyrights, logos, slogans, trade secrets and other proprietary
information (collectively, “
Unregistered Intellectual Property
”); and
(v) Product Formulae, Manufacturing
Knowhow and packaging specifications (collectively, the “
Technology
”);
provided
that “Intellectual
Property” shall not include the BMS Names.
SECTION 4.11.
Contracts.
(a) Section 4.11(a) of the Disclosure Schedule
sets forth each Transferred Real Property Contract, each Transferred Contract and each Contract to which a Transferred Entity is a party or by which its assets or properties are bound, including Leases (a “
Transferred Entity
Contract
”), in each case as of the date of this Agreement, that is:
(i) an employment agreement or employment
contract that has an aggregate future liability in excess of $250,000 and is not terminable by Seller, such Selling Affiliate or such Transferred Entity, as applicable, by notice of not more than one hundred and eighty (180) days for a cost of
less than $250,000 (excluding, for this purpose, any such employment agreement or contract which is required to be provided or is imposed under applicable Law);
(ii) an employee collective bargaining agreement or a written works council agreement, trade union agreement or other Contract with any
labor organization, union or association;
27
(iii) following Closing, (A) restrictive of the ability of the Business to engage in
any line of business or to compete in any business or with any person in any geographic area, (B) a Contract that contains a provision for exclusivity or any similar requirement, (C) a Contract that contains a requirement of the Business
to grant “most favored nation” pricing or terms or (D) restrictive of the ability of the Business to solicit or hire any person, in each case that materially impairs the operation of the Business as it is currently conducted;
(iv) a Contract with (A) either Seller or any Affiliate of Seller (other than another Transferred Entity) or
(B) with any current or former officer, director or employee of Seller or any Affiliate of Seller (other than employment agreements, employment contracts and Benefit Plans);
provided
,
however
, that the foregoing shall be deemed
not to include any Other Transaction Document or any Contract that will expire or be terminated at or prior to Closing that does not require after the Closing the payment of any money or performance of any obligation by Purchaser or any of its
Affiliates (including, after the Closing, the Transferred Entities);
(v) (A) a Transferred Real Property Contract or a
Lease which has an aggregate future liability to any person in excess of $1,000,000 and is not terminable by Seller, such Selling Affiliate or such Transferred Entity, as applicable, by notice of not more than one hundred and eighty (180) days
for a cost of less than $1,000,000 or (B) a lease, sublease, license, occupancy agreement or similar agreement with any person under which Seller, a Selling Affiliate or a Transferred Entity is a lessor or sublessor of, or makes available for
use by any person, any Owned Property or any Leased Property;
(vi) a lease, sublease, license or similar agreement with any
person under which (A) Seller, a Selling Affiliate or a Transferred Entity is lessee of, or holds or uses, any machinery, equipment, vehicle, spare parts, furniture or other tangible personal property owned by any person or (B) Seller, a
Selling Affiliate or a Transferred Entity is a lessor or sublessor of, or makes available for use by any person, any tangible personal property owned or leased by Seller, such Selling Affiliate or such Transferred Entity, in any such case which has
an aggregate future liability or receivable, as the case may be, in excess of $1,000,000 and is not terminable by Seller, such Selling Affiliate or such Transferred Entity, as applicable, by notice of not more than one hundred and eighty
(180) days for a cost of less than $1,000,000;
(vii) (A) a continuing Contract for the future purchase of
materials, supplies or equipment or other assets or properties (other than purchase contracts and orders for inventory in the ordinary course of business) or (B) a management service, consulting, financial advisory or other similar type of
Contract (including a financial advisory agreement with an investment bank) (other than Contracts for services in the ordinary course of business), in any such case which has an aggregate future liability to any person in excess of $1,000,000 and is
not terminable by Seller, such Selling Affiliate or such Transferred Entity, as applicable, by notice of not more than one hundred and eighty (180) days for a cost of less than $1,000,000;
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(viii) a material license, option or other similar Contract relating in whole or in part
to the Transferred Intellectual Property or Transferred Entity Intellectual Property (including any license or other agreement under which Seller, a Selling Affiliate or a Transferred Entity is licensee or licensor of any such Transferred
Intellectual Property or Transferred Entity Intellectual Property);
(ix) a Contract under which Seller, a Selling Affiliate
or a Transferred Entity has incurred any Indebtedness which, individually, is in excess of $1,000,000;
(x) a Contract under
which Seller, a Selling Affiliate or a Transferred Entity has, directly or indirectly, made any advance, loan, extension of credit or capital contribution to, or other investment in, any person, in any such case which, individually, is in excess of
$1,000,000;
(xi) a material mortgage, pledge, security agreement, deed of trust or other instrument granting a Lien (other
than a Permitted Lien) upon any Owned Property or Leased Property, which Lien is not set forth in Section 4.09(c) of the Seller Disclosure Schedule;
(xii) any other Contract to which Seller, a Selling Affiliate or a Transferred Entity is a party or by or to which it or any of its assets or business is bound or subject which has an aggregate future liability to any
person in excess of $1,000,000 and is not terminable by Seller, such Selling Affiliate or a Transferred Entity, as applicable, by notice of not more than one hundred and eighty (180) days for a cost of less than $1,000,000;
(xiii) a Contract (including letters of intent) involving the future disposition or acquisition of material assets or properties of the
Business in excess of $10,000,000 (other than sales or purchases of Inventory in the ordinary course of business), or any merger, consolidation or similar business combination transaction relating to the Business with a purchase price in excess of
$10,000,000;
(xiv) a Contract involving a material joint venture, partnership, strategic alliance, co-marketing,
co-promotion, co-packaging, joint development or similar agreement; or
(xv) a Contract involving a resolution or settlement
of any actual or threatened litigation, arbitration, claim or other dispute in excess of $1,000,000.
(b) Each Contract set forth in
Section 4.11(a) of the Seller Disclosure Schedule (or required to be set forth in Section 4.11(a) of the Seller Disclosure Schedule) is, as of the date of this Agreement, and will be as of the Closing Date (except for any such Contract
that expires or is terminated at or prior to the Closing not in violation of this Agreement), valid, binding and in full force and effect and enforceable against Seller, the applicable Selling Affiliate, the applicable Transferred Entity and, to the
knowledge of Seller, any other party to any such Contract with respect to any material term or provision of any such Contract, in accordance with its terms, subject, as to enforcement, to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws affecting creditors’ rights generally, general principles of equity and the discretion of courts in granting equitable remedies and except to the
29
extent that the failure of such Contract to be valid, binding and in full force and effect, individually or in the aggregate, would not be reasonably likely
to have a Seller Material Adverse Effect. Seller, the Selling Affiliates and the Transferred Entities have performed all material obligations required to be performed by them under each Contract set forth in Section 4.11(a) of the Seller
Disclosure Schedule (or required to be set forth in Section 4.11(a) of the Seller Disclosure Schedule) and are not (with or without the lapse of time or the giving of notice, or both) in breach or default in any material respect thereunder
except to the extent that such failure to perform, breach or default, individually or in the aggregate, would not be reasonably likely to have a Seller Material Adverse Effect. To the knowledge of Seller, no other party to any Contract set forth in
Section 4.11(a) of the Seller Disclosure Schedule (or required to be set forth in Section 4.11(a) of the Seller Disclosure Schedule) is (with or without the lapse of time or the giving of notice, or both) in breach or default in any
material respect thereunder, except to the extent that such breach or default, individually or in the aggregate, would not be reasonably likely to have a Seller Material Adverse Effect.
SECTION 4.12.
Permits.
(a) Section 4.12(a) of the Seller Disclosure Schedule sets forth, as of the date of this Agreement, a true and
complete list of (i) all material Transferred Permits and (ii) all material Permits held by the Transferred Entities for use in the operation or conduct of the Business (the “
Transferred Entity Permits
”). Seller or a
Selling Affiliate, as applicable, validly holds and has complied with all the terms and conditions of each Transferred Permit, and each Transferred Entity validly holds and has complied with all the terms and conditions of each Transferred Entity
Permit, except, in each case, for any such invalidity or non-compliance that, individually or in the aggregate, would not be reasonably likely to have a Seller Material Adverse Effect. Seller has delivered or made available to Purchaser for
inspection a true and correct copy of each Transferred Permit and each Transferred Entity Permit. Each material Transferred Permit and each Transferred Entity Permit are in full force and effect. Any applications for the renewal of any such
Transferred Permit or Transferred Entity Permit which are due prior to the Closing Date will be timely made or filed by Seller or the appropriate Selling Affiliate or Transferred Entity prior to the Closing Date. Since January 1, 2007, none of
Seller, any Selling Affiliate or any Transferred Entity has received written notice of any suit, action or proceeding relating to the revocation, withdrawal, termination, modification or limitation of any Transferred Permit or Transferred Entity
Permit the loss of which, individually or in the aggregate, would be reasonably likely to have a Seller Material Adverse Effect.
(b)
Section 4.12(b) of the Seller Disclosure Schedule sets forth, as of the date of this Agreement, a true and complete list of all Permits that are material for use solely in the operation or conduct of the Business but that are not held by
Seller, a Selling Affiliate or any Transferred Entity.
SECTION 4.13.
Litigation.
Section 4.13 of the Seller Disclosure
Schedule sets forth a list of all lawsuits, actions, arbitrations, claims, complaints or other proceedings (or, to the knowledge of Seller, any investigation) pending or, to the knowledge of Seller, threatened, as of the date of this Agreement, at
Law or in equity, by or before any Governmental Entity or any other person in any way affecting or arising out of the operation of the Business or against a Transferred Entity or any of its properties, assets or rights or any Acquired Assets and
which (a) involve a claim of, or which involve an unspecified amount which would reasonably be expected to result in a Liability of, more than $1,000,000, (b) seek any material injunctive relief
30
affecting the Business or (c) seek to prohibit the Acquisition. To the knowledge of Seller, as of the date of this Agreement, none of Seller, any
Affiliate of Seller or any Transferred Entity is a party or subject to or in default under any material Injunction of any Governmental Entity or arbitration tribunal applicable to the operation of the Business, a Transferred Entity or any Acquired
Asset. This Section 4.13 does not relate to employee benefits or ERISA matters, which are the subject of Section 4.14, or employee or labor matters, which are the subject of Section 4.18.
SECTION 4.14.
Benefit Plans.
(a) Section 4.14(a) of the Seller Disclosure Schedule sets forth a list of each Benefit Plan that covers
any Business Employee primarily based in the United States or Puerto Rico (the “
U.S. Benefit Plans
”). “
Benefit Plan
” means any of the following: an “employee pension benefit plan” (as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended (“
ERISA
”)), an “employee welfare benefit plan” (as defined in Section 3(1) of ERISA), and any other plan, program, arrangement or
agreement providing for severance or retention benefits, profit-sharing, fees, bonuses, stock options, stock appreciation, stock purchase or other stock-related rights, current compensation, incentive or deferred compensation, change-in-control
benefits, vacation benefits, insurance, health or medical benefits, dental benefits, employee assistance programs, disability benefits, workers’ compensation benefits or post-employment or retirement benefits and any material fringe benefits
(excluding any plans, programs or arrangements mandated by applicable Law) that is sponsored, maintained or contributed to, or required to be maintained or contributed to, or with respect to which Liability is borne, by Seller or its Affiliates for
the benefit of any Business Employee. Seller has made available to Purchaser true and complete copies of the U.S. Benefit Plans (or, to the extent no such copy exists, a description of the material terms), summary plan descriptions and summaries of
material modification for the U.S. Benefit Plans (if applicable) and the most recent Internal Revenue Service or Puerto Rico Department of Treasury (as applicable) determination letter or opinion letter related to the U.S. Benefit Plans (if
applicable). Except as set forth in Section 4.14(a) of the Seller Disclosure Schedule, no U.S. Benefit Plan is sponsored or maintained by a Transferred Entity.
(b) Neither Seller nor any ERISA Affiliate of Seller has incurred any unsatisfied liability (other than Pension Benefit Guaranty Corporation (“
PBGC
”) premiums) to the PBGC or the Internal Revenue
Service under Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA that could result in the imposition of any liability on Purchaser or any of its ERISA Affiliates.
(c) Each U.S. Benefit Plan with respect to which Purchaser or any Affiliate of Purchaser could have any material Liability hereunder, including, without
limitation, under Article IX, that covers any Business Employee has been and is being administered in all material respects in accordance with its terms and ERISA, the Code and all other applicable Laws. All the U.S. Benefit Plans that are intended
to be qualified under Section 401(a) of the Code and/or Section 1165 of the Puerto Rico Internal Revenue Code of 1994, as amended (the “
PR Code
”), have received determination letters from the IRS and/or the Puerto Rico
Department of Treasury to the effect that such U.S. Benefit Plans are qualified and the plans and trusts related thereto are exempt from federal income taxes under Sections 401(a) and 501(a), respectively, of the Code and/or Sections 1101 and
1165 of the PR Code, respectively, and no condition exists and no event has occurred that would reasonably be expected to result in the revocation of such letters.
31
(d) Neither Seller nor any ERISA Affiliate of Seller nor any person appointed or otherwise designated to
act on behalf of Seller or any ERISA Affiliate of Seller has engaged in any transactions in connection with any U.S. Benefit Plan that are reasonably expected to result in the imposition of material penalties pursuant to Section 502(i) of
ERISA, material damages pursuant to Section 409 of ERISA or a material tax pursuant to Section 4975(a) of the Code that could result in the imposition of any material Liability on Purchaser or any of its ERISA Affiliates.
(e) Neither Seller nor any ERISA Affiliate of Seller has incurred any “withdrawal liability” within the meaning of Section 4201 of ERISA
to any multiemployer plan within the meaning of Section 3(37) of ERISA.
(f) No compensation payable by Seller, any ERISA Affiliate of
Seller or Purchaser or its Affiliates pursuant to Article IX to any employee, officer or director of the Transferred Entities or the Business under any existing contract, agreement or U.S. Benefit Plan (including by reason of the transactions
contemplated hereby) would be nondeductible under Section 280G of the Code.
(g) Neither the execution of, nor consummation of, the
transactions contemplated by this Agreement will (either alone or upon the occurrence of any additional or subsequent event) constitute an event under any U.S. Benefit Plan that will or may result in any payment or provision of, acceleration of,
vesting or increase in, any benefits (whether of severance pay or otherwise), with respect to any current or former employee, independent contractor, consultant, agent or director of the Seller or any Affiliate thereof, or any beneficiary thereof,
with respect to which the Purchaser or its Affiliates may have any obligations or material Liability.
(h) No claim, litigation or
administrative or other action, proceeding, audit, examination or investigation is pending or asserted, or, to the knowledge of Seller, threatened, anticipated or expected to be asserted with respect to any U.S. Benefit Plan or the assets of any
such plan (other than routine claims for benefits arising in the ordinary course) that could result in the imposition of any material Liability on Purchaser or its ERISA Affiliates.
(i) Section 4.14(i) of the Seller Disclosure Schedule sets forth a list of each Benefit Plan maintained, or contributed to, by Seller or its
Affiliates for the benefit of Business Employees primarily based outside of the United States and Puerto Rico (the “
Foreign Benefit Plans
”). Each Foreign Benefit Plan with respect to which Purchaser or its Affiliates (including the
Transferred Entities) could have any material Liability has been operated in all material respects in compliance with its terms and with applicable Laws of the relevant jurisdiction in which such Foreign Benefit Plan is maintained. Each Foreign
Benefit Plan with respect to which the Purchaser or its Affiliates may have any obligations or material liability that is intended to qualify for favorable tax benefits under the Laws of any jurisdiction is so qualified, and, to the knowledge of
Seller, no condition exists and no event has occurred that would reasonably be expected to result in the loss or revocation of such status. All benefits, contributions and premiums relating to each Foreign Benefit Plan with respect to which the
Purchaser or its Affiliates may have any obligations or material liability have been timely paid or made in material compliance with its terms and with applicable Laws and any related Contract. Seller has made available to Purchaser true and
complete copies of the Foreign Benefit Plans. There
32
are no pending promised or committed, whether legally binding or not, undertakings to create or terminate any new Foreign Benefit Plan or to make material
improvements, increases or changes to any Foreign Benefit Plan, nor is there any pattern of
ad hoc
benefit increases under any Foreign Benefit Plan that may be enforceable against Purchaser or its Affiliates. All Foreign Benefit Plans with
respect to which Purchaser or its Affiliates may have any Liability which provide benefits after termination of employment of a Transferred Employee, other than any pension plan, can be terminated upon reasonable notice without material Liability to
Purchaser or its Affiliates. Neither the execution of, nor consummation of, the transactions contemplated by this Agreement will (either alone or upon the occurrence of any additional or subsequent event) constitute an event under any Foreign
Benefit Plan that will or may result in any payment or provision of, acceleration of, or vesting or increase in, any benefits (whether of severance pay or otherwise), with respect to any current or former employee, independent contractor,
consultant, agent or director of Seller or any Affiliate thereof, or any beneficiary thereof, with respect to which the Purchaser or its Affiliates may have any obligations or material Liability. No claim, litigation or administrative or other
action, proceeding, audit, examination or investigation is pending or asserted, or, to the knowledge of Seller, threatened, anticipated or expected to be asserted with respect to any Foreign Benefit Plan or the assets of any such plan (other than
routine claims for benefits arising in the ordinary course) that could result in the imposition of any material Liability on Purchaser or any of its Affiliates.
SECTION 4.15.
Absence of Changes or Events.
(a) Since December 31, 2007, there have not been any facts, changes, developments, conditions, effects, events or occurrences that, individually or in the
aggregate, have had or would reasonably be likely to have a Seller Material Adverse Effect.
(b) During the period since December 31,
2007 until the date of this Agreement, Seller has caused the Business to be conducted in all material respects in the ordinary course and none of Seller, any Selling Affiliate or any Transferred Entity has taken any action that, if taken after the
date of this Agreement, would constitute a breach of any of the covenants set forth in Section 5.02(b) (other than clauses (vi), (ix), (xi), (xii), (xv) and (xvi) and other than clause (vii) solely with respect to Business
Employees with a base salary less than $200,000) other than any actions that are permitted by this Agreement.
SECTION 4.16.
Compliance
with Applicable Laws.
The Business is in compliance with all applicable Laws, including those relating to data integrity, human research subject protection, privacy of individually identifiable information, healthcare fraud and abuse prevention,
occupational health and safety and the Act, and their state and foreign equivalents, except for instances of noncompliance that, individually or in the aggregate, would not be reasonably likely to have a Seller Material Adverse Effect. Since
January 1, 2007, none of Seller, any Selling Affiliate or any Transferred Entity has received any written communication from a Governmental Entity that alleges that the Business or any Transferred Entity is in violation of any applicable Laws,
except for any such violations that, individually or in the aggregate, would not be reasonably likely to have a Seller Material Adverse Effect. This Section 4.16 does not relate to matters with respect to Taxes, which are the subject of
Section 4.07, employee benefit or ERISA matters, which are the subject of Section 4.14, or employee or labor matters, which are the subject of Section 4.18.
33
SECTION 4.17.
Environmental Matters.
Seller has provided or otherwise made available to Purchaser
certain environmental reports and other documents relating to the facilities and operations of Seller and its Affiliates (solely to the extent such reports relate to the Acquired Assets or to the Transferred Entities) which are identified in
Section 4.17(i) of the Seller Disclosure Schedule (the “
Environmental Reports
”). Except as set forth in the Environmental Reports, and except, individually or in the aggregate, as would not be reasonably likely to have a Seller
Material Adverse Effect, (a) Seller and the Selling Affiliates (in each case solely to the extent related to the Business and the Acquired Assets), the Acquired Assets and the Transferred Entities are in compliance with all applicable
Environmental Laws, (b) Seller and the Selling Affiliates (in each case solely to the extent related to the Business and the Acquired Assets) and the Transferred Entities possess and are in compliance with all Transferred Environmental Permits
required for the lawful operation and conduct of the Business as currently conducted (each of which is listed on Section 4.17(ii) of the Seller Disclosure Schedule and identified under the heading “Transferred Environmental Permits”),
(c) none of Seller, any Selling Affiliate or any Transferred Entity has received since January 1, 2007, and prior to the date hereof, any written communication from a Governmental Entity that alleges that Seller, any Selling Affiliate or
any Transferred Entity is in violation of any applicable Environmental Law in connection with the operation or conduct of the Business, the substance of which communication has not been resolved, or that it is a potentially responsible party under
the Federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (“
CERCLA
”) (in each case, solely to the extent related to the Acquired Assets or the Transferred Entities), and (d) there are
no pending or, to the knowledge of Seller, threatened lawsuits, actions, arbitrations, claims, complaints or other proceedings against Seller, any Selling Affiliate or any Transferred Entity relating to non-compliance with applicable Environmental
Laws or Transferred Environmental Permits, to exposure to Hazardous Materials (including any exposure of any Business Employee, Former Business Employee or former employee or independent contractor of the Transferred Entities or the Business to
Hazardous Materials) or to a Release of Hazardous Material (in each case, solely to the extent related to the Acquired Assets or the Transferred Entities). Except as specifically provided in Section 4.02, the representations and warranties made
in this Section 4.17 are Seller’s exclusive representations and warranties relating to environmental matters.
SECTION 4.18.
Employee and Labor Matters.
With respect to the Business and Business Employees, (a) there is not, and since January 1, 2007 there has not been, any material labor strike, work stoppage or lockout pending, or, to the knowledge of
Seller, threatened, against Seller, any Selling Affiliate or any Transferred Entity, (b) to the knowledge of Seller, no material union organizational campaign is in progress and no question concerning representation exists respecting such
Business Employees, (c) there are no pending material charges against Seller, any Selling Affiliate or any Transferred Entity or any Business Employee or former employee of Seller, any Selling Affiliate or any Transferred Entity before the
Equal Employment Opportunity Commission or any state, local or foreign agency or other Governmental Entity responsible for the prevention of unlawful employment practices, (d) Seller has not received written notice of the intent of any
Governmental Entity responsible for the enforcement of labor or employment laws to conduct any material investigation and, to the knowledge of Seller, no such investigation is in progress, (e) Seller, the Selling Affiliates and the Transferred
Entities are, and since January 1, 2007 have been, in compliance with all labor and employment Laws, rules and regulations applicable to Seller’s, any Selling Affiliate’s or any Transferred
34
Entity’s Business or any Business Employee, including those relating to wages, hours, affirmative action, workplace safety or health, immigration,
drug testing, equal employment opportunity, retaliation, whistleblowers and discrimination in employment, except for instances of noncompliance that, individually or in the aggregate, would not be reasonably likely to have a Seller Material Adverse
Effect, (f) there is no unfair labor practice charge or complaint against Seller, any Selling Affiliate or any Transferred Entity in respect of Seller, any Selling Affiliate or any Transferred Entities’ Business pending or, to the
knowledge of Seller, threatened before the National Labor Relations Board, any state or foreign labor relations board or any court or tribunal, except for any such charge or complaint that, individually or in the aggregate, would not be reasonably
likely to have a Seller Material Adverse Effect, (g) except as set forth in Section 4.18 of the Seller Disclosure Schedule, there are no pending, or to the knowledge of Seller, threatened actions, arbitrations, administrative proceedings,
charges, complaints or investigations that (A) in any way affect or arise out of the operations of the Business or against or affecting a Transferred Entity or any of its properties, assets or rights or any Acquired Assets, (B) involve the
labor or employment relations of Seller, any Selling Affiliate or any Transferred Entity, and (C) individually or in the aggregate, have had or would reasonably be likely to have a Seller Material Adverse Effect, and (h) none of Seller,
any Selling Affiliate or any Transferred Entity has been affected by any transaction or engaged in mass layoffs or employment terminations sufficient in number to trigger application of WARN or any similar foreign, state or local Law during the
last one (1) year, and none of the Business Employees has suffered an “employment loss” (as defined in WARN and any similar Law) during the six (6) months prior to the date hereof.
SECTION 4.19.
Sufficiency of Assets
. Assuming (a) all consents, waivers, approvals, licenses, permits, orders, authorizations, registrations,
declarations, filings or notifications required to be made or obtained in connection with the execution, delivery and performance of this Agreement, the Other Transaction Documents and the transactions contemplated hereby and thereby are so made or
obtained and (b) Purchaser owns or forms legal entities in any necessary jurisdictions outside of the jurisdictions in which the Transferred Entities are organized and that such legal entities obtain such necessary corporate qualifications to
do business in such jurisdictions, the Acquired Assets, the assets, rights and properties that will be owned or held by the Transferred Entities immediately following the Closing, and the assets and properties of which any Transferred Entity will be
a lessee, sublessee or licensee immediately following the Closing, taken as a whole, will be sufficient in all material respects for the conduct of the Business immediately following the Closing in substantially the same manner as conducted
immediately prior to the Closing, except that (x) Purchaser will not acquire any assets, rights or properties that are necessary for the provision of the services to be provided to Purchaser and the Transferred Entities hereunder and pursuant
to the Other Transaction Documents or the provision of any other services provided by Seller or any of its Affiliates to the Business immediately prior to the Closing that will terminate as of the Closing, (y) Purchaser will not acquire the
Excluded Assets and the Transferred Entities will not have Cash immediately following the Closing Date and (z) Purchaser will not acquire the BMS Names.
SECTION 4.20.
Insurance
. Seller maintains no third-party insurance policies with respect to the Business.
35
SECTION 4.21.
DISCLAIMER.
PURCHASER ACKNOWLEDGES THAT (A) EXCEPT AS EXPRESSLY SET FORTH IN
THIS ARTICLE IV OR IN ANY EXHIBIT, SCHEDULE OR CERTIFICATE DELIVERED BY SELLER OR ANY OF ITS AFFILIATES PURSUANT TO THIS AGREEMENT, NEITHER SELLER NOR ANY OTHER PERSON HAS MADE ANY REPRESENTATION OR WARRANTY, EXPRESSED OR IMPLIED, AS TO THE
BUSINESS, THE TRANSFERRED ENTITIES, THE ACQUIRED ASSETS, THE MANUFACTURE, DISTRIBUTION, MARKETING OR SALE OF THE PRODUCTS BY SELLER, THE SELLING AFFILIATES OR THE TRANSFERRED ENTITIES, ANY OTHER ASPECT OF THE RESPECTIVE BUSINESSES OF SELLER, THE
SELLING AFFILIATES AND THE TRANSFERRED ENTITIES OR THE ACCURACY OR COMPLETENESS OF ANY INFORMATION REGARDING THE BUSINESS, THE TRANSFERRED ENTITIES OR THE ACQUIRED ASSETS FURNISHED OR MADE AVAILABLE TO PURCHASER AND ITS REPRESENTATIVES AND
(B) PURCHASER HAS NOT RELIED ON ANY REPRESENTATION OR WARRANTY FROM SELLER OR ANY OTHER PERSON WITH RESPECT TO THE BUSINESS, THE TRANSFERRED ENTITIES, THE ACQUIRED ASSETS, THE MANUFACTURE, DISTRIBUTION, MARKETING OR SALE OF THE PRODUCTS BY
SELLER, THE SELLING AFFILIATES AND THE TRANSFERRED ENTITIES, ANY OTHER ASPECT OF THE RESPECTIVE BUSINESSES OF SELLER, THE SELLING AFFILIATES AND THE TRANSFERRED ENTITIES OR THE ACCURACY OR COMPLETENESS OF ANY INFORMATION REGARDING THE BUSINESS, THE
TRANSFERRED ENTITIES OR THE ACQUIRED ASSETS FURNISHED OR MADE AVAILABLE TO PURCHASER AND ITS REPRESENTATIVES IN DETERMINING TO ENTER INTO THIS AGREEMENT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS ARTICLE IV OR IN ANY
EXHIBIT, SCHEDULE OR CERTIFICATE DELIVERED BY SELLER OR ANY OF ITS AFFILIATES PURSUANT TO THIS AGREEMENT. PURCHASER ACKNOWLEDGES THAT, SHOULD THE CLOSING OCCUR, PURCHASER SHALL ACQUIRE THE TRANSFERRED ENTITIES AND THE ACQUIRED ASSETS WITHOUT ANY
REPRESENTATION OR WARRANTY AS TO MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, IN AN “AS IS” CONDITION AND ON A “WHERE IS” BASIS, EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE IV OR IN ANY EXHIBIT, SCHEDULE OR
CERTIFICATE DELIVERED BY SELLER OR ANY OF ITS AFFILIATES PURSUANT TO THIS AGREEMENT.
ARTICLE V
Covenants of Seller
Seller covenants
and agrees as follows:
SECTION 5.01.
Access.
From the date hereof to the Closing, Seller shall, and shall cause the Selling
Affiliates and the Transferred Entities and each of their respective Representatives to, give Purchaser and its Representatives access, during normal business hours and upon reasonable advance notice, to personnel, Representatives, properties, books
and records relating to the Business (other than the Excluded Assets and the Excluded Liabilities) and Seller shall, and shall cause the Selling Affiliates and the Transferred Entities and each of their respective Representatives to, furnish to
Purchaser or its Representatives such financial and
36
operating data and other information, as well as all information relating to commitments, contracts, titles and financial position, or otherwise pertaining
to the Business, including inspection of properties, as such persons may reasonably request;
provided
,
however
, that such access (a) does not unreasonably disrupt the normal operations of Seller, the Selling Affiliates, the
Transferred Entities or the Business; (b) would not be reasonably expected to violate any attorney-client privilege of Seller, the Selling Affiliates or the Transferred Entities or violate any applicable Law and (c) would not reasonably be
expected to breach any duty of confidentiality owed to any person. whether the duty arises contractually, statutorily or otherwise;
provided
that Seller shall, and shall cause the Selling Affiliates and the Transferred Entities to, use
commercially reasonable efforts to make reasonable and appropriate substitute disclosure arrangements under circumstances in which the restrictions on access set forth in clause (b) and this clause (c) apply. Such rights of access
explicitly exclude any Phase II environmental investigations or any other intrusive or invasive sampling, including subsurface testing of soil, surfacewater or groundwater at any Owned Property or Leased Property. Any evaluation or investigation by
Purchaser or its Representatives shall not affect the representations and warranties or covenants made by Seller in this Agreement, any Other Transaction Documents or in any certificate delivered pursuant to this Agreement or the remedies of
Purchaser for breaches of those representations and warranties or covenants.
SECTION 5.02.
Ordinary Conduct.
(a) From the date
hereof to the Closing, except as set forth in Section 5.02 of the Seller Disclosure Schedule or otherwise permitted by or not in violation of the terms of this Agreement, Seller shall, and shall cause the Selling Affiliates and the Transferred
Entities to, cause the operations of the Business (including the working capital and capital expenditures) to be conducted in all material respects in the ordinary course in substantially the same manner as currently conducted and use commercially
reasonable efforts to preserve in all material respects intact the present business organizations and preserve in all material respects its relationships with customers, suppliers and others having business dealings with the Business.
(b) From the date hereof to the Closing, except as set forth in Section 5.02 of the Seller Disclosure Schedule or otherwise expressly permitted by
the terms of this Agreement, Seller shall not, and shall not permit any Selling Affiliate or any Transferred Entity to, do any of the following in connection with the Business or the Transferred Entities without the prior written consent of
Purchaser (which consent shall not be unreasonably withheld or delayed):
(i) amend the Certificate of Incorporation,
By-laws or other comparable governing documents of any Transferred Entity;
(ii) declare or pay or set aside any dividend or
make any other distribution to the holders of equity interests in any Transferred Entity whether or not upon or in respect of any shares of its capital stock;
provided
,
however
, that (A) Purchaser acknowledges that the Transferred
Entities may not maintain cash balances and, from time to time between the date hereof and the Closing Date, Seller and the Selling Affiliates may withdraw any cash balances of the Transferred Entities, (B) dividends and distributions of Cash
may be made by the Transferred Entity to Seller and its Affiliates or to another Transferred Entity and (C) all intercompany balances owed by or to any Transferred Entities to or by Seller or any of its Affiliates (other than the Transferred
Entities) may be satisfied;
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(iii) redeem or otherwise acquire, directly or indirectly, any equity interests in, or
any other securities of, a Transferred Entity, or make any other change in the capital structure of any Transferred Entity or issue, authorize for issuance, sell or deliver (A) any equity interests in, or any other security or voting interest
in, a Transferred Entity, (B) any option or warrant for, or any security convertible into, or exercisable or exchangeable for or evidencing the right to subscribe for or acquire, any equity interests in, or any other security or voting interest
in, a Transferred Entity, (C) “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings to which any Transferred Entity is a party or by which any of them is
bound (1) obligating any Transferred Entity to issue, deliver or sell, or cause to be issued, delivered or sold, additional units of its equity interests or any security convertible into, or exercisable or exchangeable for, any equity interest
in any Transferred Entity or any Transferred Entity Voting Debt, or any other security or voting interest in any Transferred Entity, (2) obligating any Transferred Entity to issue, grant, extend or enter into any such option, warrant, security,
right, unit, commitment, Contract, arrangement or undertaking or (3) that give any person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of the Transferred Equity Interests or
(D) any Transferred Entity Voting Debt;
(iv) split, combine or reclassify any of the equity interests or any other
security or voting interest in any Transferred Entity, or issue any other security in respect of, in lieu of or in substitution for the equity interests or any other security or voting interest in any Transferred Entity;
(v) loan, advance, invest or make any capital contribution to or in any person, other than (A) advances in the ordinary course of
business or (B) loans, advances, investments or capital contributions to or in a Transferred Entity (which loans and advances will be cancelled prior to the Closing);
(vi) establish, adopt, amend or terminate any U.S. Benefit Plan or Foreign Benefit Plan or employee collective bargaining agreement,
thrift, compensation or other plan, agreement, trust, fund, policy or arrangement covering any Business Employee if such adoption or amendment would result in new or increased costs to Purchaser on or after the Closing Date, except in the ordinary
course of business or as required by applicable Law;
(vii) grant to any Business Employee any increase in base salary,
wages, bonuses, incentive compensation, pension, severance or termination pay, except (A) in the ordinary course of business consistent with past practice, not exceeding the increases described in Section 5.02(b)(vii) of the Seller
Disclosure Schedule, which sets forth the budgeted percentage increases in compensation and timing thereof by jurisdiction, (B) as may be required under Contracts, U.S. Benefit Plans, Foreign Benefit Plans, in each case, existing as of the date
hereof, or applicable Law or (C) any increases for which Seller or its Affiliates shall be solely obligated, including providing Rule of 70 benefits under the Bristol-Myers Squibb Company Retirement Income Plan, the Bristol-Myers Squibb Puerto
Rico, Inc. Retirement Income Plan and the Bristol-Myers Squibb Company Comprehensive Medical Plan;
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(viii) sell, lease or otherwise dispose of any Acquired Assets or any assets of the
Transferred Entities which are material, individually or in the aggregate, to the Business, except for sales of raw materials, work-in-process, finished goods, supplies, parts, spare parts and other inventories in the ordinary course of business
consistent with past practice or assets that are obsolete or no longer used in the Business;
(ix) (A) make, change or
revoke any Tax election, (B) file any amendment to a Tax Return, (C) adopt or change in any material respect any Tax accounting method, (D) prepare any Tax Returns which include the income or assets of any Transferred Entity in a
manner which is not consistent in all material respects with the past practice of the treatment of the items relating to the Transferred Entities, or (E) enter into any settlement or closing agreement with a taxing authority, in each case
except to the extent (1) required by applicable Law, (2) such item does not relate to any of the Transferred Entities or Acquired Assets, or (3) as would not affect the amount of Tax for which Purchaser is responsible under
Section 1.03(a)(viii) or 10.03;
(x) permit or allow any Acquired Assets or any assets of the Transferred Entities or
any capital stock, or other equity or voting interests of the Transferred Entities, to become subject to any Lien that would have been required to be set forth in Section 4.08, 4.09(c), 4.09(d) or 4.10 of the Seller Disclosure Schedule if
existing on the date of this Agreement;
(xi) make any bonus, profit sharing, pension, retirement or insurance payment,
distribution or arrangement to or with any Business Employee except for payments that were already accrued prior to the date hereof or are required by the terms of any U.S. Benefit Plan or Foreign Benefit Plan;
(xii) other than in connection with documenting any action permitted under this Agreement (including this Section 5.02(b)), enter
into, materially amend, waive any material right under, become subject to, or terminate any Contract of a type described in Section 4.11(a);
(xiii) as it relates to the Business, acquire any business or person, by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a single transaction or a series of
related transactions, other than any acquisition which is not reasonably expected to impair in any material respect the operating cash flows of the Business;
(xiv) make any material change in any method of accounting or accounting policy or practice used in preparation of the Financial
Statements other than those required by U.S. GAAP or applicable Law;
provided
, that, for purposes of calculating Working Capital, such changes shall not be taken into account;
(xv) plan, announce, implement or effect any reduction in force, lay-off, early retirement program, severance program or other program or
effort concerning the termination of employment of Business Employees (other than routine employee terminations for cause or due to poor performance); or
39
(xvi) hire any new Business Employee in the U.S. with an annual base salary and annual
target bonus opportunity in excess of $200,000 in the aggregate, or hire any new Business Employee outside the U.S. at grade level D8 or above.
(c) Seller shall, and shall cause the Selling Affiliates and the Transferred Entities to, keep all self-insurance programs currently maintained with respect to the Business, the Transferred Entities, the Business Employees or the Acquired
Assets (or which insures against or covers any Assumed Liability), in each case in the ordinary course of business consistent with past practice, and continue to process all new and pending claims in the ordinary course of business consistent with
past practice, through the close of business on the Closing Date;
provided
that none of the Seller, the Selling Affiliates or the Transferred Entities shall be required to pay any claims pending and not paid prior to the close of business on
the Closing Date.
SECTION 5.03.
Intercompany Arrangements and Accounts.
Except as expressly set forth in this Agreement and the
Transitional Services Agreement, on or prior to the Closing Date, Seller shall, and shall cause its Affiliates (including the Transferred Entities) to, (i) cancel and terminate all Contracts or other arrangements between Seller or its
Affiliates (other than the Transferred Entities), on the one hand, and the Transferred Entities, on the other hand, that were entered into on or prior to the Closing and (ii) settle or extinguish all intercompany receivables and payables
between Seller or its Affiliates (other than the Transferred Entities), on the one hand, and the Transferred Entities, on the other hand, that were incurred on or prior to the Closing, in each case without further recourse to or any Liability of any
Transferred Entity.
SECTION 5.04.
Resignations.
On the Closing Date, Seller shall cause to be delivered to Purchaser duly signed
resignations, effective immediately after the Closing, of all directors of the Transferred Entities or shall take such other action as is necessary to cause such persons to no longer be directors of any Transferred Entity immediately after the
Closing.
SECTION 5.05.
Confidentiality.
Seller acknowledges that it and its Affiliates and each of their respective Representatives
are and will be at the Closing in possession of proprietary information relating to the Business that is not generally available to the public (to the extent solely related to the Business, the “
Confidential Information
”);
provided
that Confidential Information shall not include any information that (i) at the time of disclosure or thereafter is generally available to and known by the public (other than as a result of a disclosure directly or indirectly by
Seller, its Affiliates or their respective Representatives), (ii) after Closing becomes available to Seller, its Affiliates or their respective Representatives from a source other than Purchaser or its Representatives, or (iii) Seller can
demonstrate it was independently acquired or developed by Seller, its Affiliates or their respective Representatives without reference to, or incorporation of, other Confidential Information. Seller acknowledges and agrees that such Confidential
Information is proprietary and confidential in nature and that Seller shall be responsible for any breach of these confidentiality provisions by its Representatives and the Selling Affiliates and any of their Representatives. For a period of three
(3) years following the Closing, Seller shall, and shall cause the Selling Affiliates and shall direct each of their respective Representatives to, keep all Confidential Information strictly confidential. If Seller, any of the Selling
Affiliates or any of their respective Representatives are legally required to disclose (after such person has used its commercially reasonable efforts to
40
avoid such disclosure and after promptly advising and consulting with Purchaser about its intention to make, and the proposed contents of, such disclosure)
any Confidential Information (whether by deposition, interrogatory, request for documents, subpoena, civil investigative demand or similar process), such person shall or shall cause such Representatives to (in each case unless prohibited by
applicable Law) provide Purchaser with prompt written notice of such request so that Purchaser may seek an appropriate protective order or other appropriate remedy. If such protective order or remedy is not obtained, such person may disclose only
that portion of the Confidential Information which such person is legally required to disclose, and such person shall exercise its commercially reasonable efforts to obtain assurance that confidential treatment will be accorded to such Confidential
Information so disclosed. For the avoidance of doubt, Seller agrees to redact any Confidential Information to the extent reasonably practicable prior to disclosing any information which contains Confidential Information.
SECTION 5.06.
Non-Competition.
(a) From the Closing until the earlier to occur of the third anniversary of the Closing and a Seller Change of
Control Event (the “
Non-Compete Period
”), Seller shall not, and shall cause its controlled Affiliates not to, directly or indirectly, engage in any Competing Business, or own, manage, operate or control any person engaged in a
Competing Business. For purposes of this Section, (x) “
Competing Business
” shall mean the marketing and/or sale, or manufacturing for sale, of any Competing Product; (y) “
Competing Product
” shall mean any
wound care dressing or professional non-pharmaceutical skin care product for wound care, ostomy system or device, or acute fecal incontinence system or device;
provided
that none of the following shall be a Competing Product: (A) any
product that is targeted for pediatric use marketed, sold, developed and/or manufactured by Seller’s Mead Johnson division including, but not limited to, pediatric use; (B) any professional skin care products manufactured, distributed,
marketed or sold in connection with any business of Seller and its controlled Affiliates other than the ConvaTec business and (C) any pharmaceutical, over-the-counter or other product (including, but not limited to, dermatological products and
any device, active pharmaceutical ingredient, excipient, intermediate or any other ingredient) sold and/or developed (or in development) and/or manufactured for sale as of the date of this Agreement by Seller or any Affiliate of Seller other than
any Product or any other product marketed and/or sold as of the Closing Date under a Brand name; and (z) “
Seller Change of Control Event
” shall mean any tender offer, merger, consolidation or other transaction, as a result of
which Seller becomes a subsidiary of any person or the shareholders of Seller as of immediately prior to such transaction hold, in the aggregate, less than fifty percent (50%) of the outstanding shares of Seller (or the successor in such
transaction, if applicable) entitled to vote on matters to be determined by the shareholders of Seller (or such successor, if applicable).
(b) Section 5.06(a) shall be deemed not breached as a result of the ownership by Seller or any of its Affiliates of: (i) less than ten percent (10%) in the aggregate of any class of stock of a person engaged, directly or
indirectly, in any Competing Business;
provided
that neither Seller nor any Affiliates of Seller shall have the right to appoint a member of the board of directors of such Competing Business or (ii) an interest otherwise proscribed by
this Section 5.06 if such interest arises as a result of the acquisition following the Closing Date of a person that engages, directly or indirectly, in a Competing Business;
provided
that (A) such acquisition is not undertaken for
the primary purpose of evading the obligations of Seller or any of its controlled Affiliates under Section 5.06(a) and (B) either (1) at the time of such acquisition, such
41
Competing Business (x) accounts for less than fifteen percent (15%) of such person’s consolidated annual revenues or (y) has annual
revenues not in excess of $25 million or (2) Seller complies with Section 5.06(c).
(c) In the event that Seller or any of its
controlled Affiliates acquires during the Non-Compete Period any interest in a person that engages, directly or indirectly, in a Competing Business that constitutes more than fifteen percent (15%) of such person’s consolidated annual
revenues and has annual revenues in excess of $25 million, then Seller shall, or shall cause any such acquiring controlled Affiliate to, divest such interest as promptly as practicable (but in any event within twelve (12) months of such
acquisition).
SECTION 5.07.
Non-Solicitation; No Hire or Employ.
For one (1) year after the Closing, Seller will not, and will
cause its Affiliates not to, directly or indirectly solicit for employment or hire or employ or seek to entice away from Purchaser or its Affiliates, any Transferred Employee listed on Section 5.07 of the Seller Disclosure Schedule (such
Transferred Employees, the “
Restricted Transferred Employees
”);
provided
,
however
, that notwithstanding anything in this Section 5.07 to the contrary, Seller and its Affiliates may (A) engage in general
solicitations of employment not specifically directed toward any Restricted Transferred Employees;
provided
that they may not hire any Restricted Transferred Employee that responds to such a solicitation unless such Restricted Transferred
Employee has been terminated by Purchaser or its Affiliates without cause, (B) solicit for employment, hire or employ any Restricted Transferred Employees who are no longer employed by the Business at the time of Seller’s or its
Affiliates’ first contact with them and who have been terminated by Purchaser or its Affiliates without cause and (C) rehire any such Restricted Transferred Employee where required by applicable Law, a collective bargaining agreement or a
works council agreement.
SECTION 5.08.
Financial Statements.
No later than ten (10) business days prior to the Closing Date,
Seller shall deliver to Purchaser the audited carve-out Balance Sheets of the Business as of December 31, 2007 and 2006, the audited carve-out Statements of Earnings of the Business for the years ended December 31, 2007, 2006 and 2005, the
audited carve-out Statements of Changes in Divisional Equity of the Business for the years ended December 31, 2007, 2006 and 2005 and the audited carve-out Statements of Cash Flows of the Business for the years ended December 31, 2007,
2006 and 2005 (together, the “
Audited 2007 Financial Statements
”). Notwithstanding anything to the contrary contained in this Agreement, Purchaser’s sole and exclusive rights and remedies in the event of any difference between
the Audited 2007 Financial Statements and the Unaudited 2007 Financial Statements to the extent such difference impacts EBITDA or the components thereof shall be a reduction of the Purchase Price by the Audited 2007 EBITDA Reduction Amount and the
termination right provided in Section 11.01(b), and, for the avoidance of doubt, Purchaser shall not have any right to seek indemnification pursuant to Article X for any Loss to the extent arising from any breach of any representation or
warranty of Seller (including Section 4.06) to the extent such breach is related to EBITDA or the components thereof as reflected in the Unaudited 2007 Financial Statements.
SECTION 5.09.
Financing Related Cooperation
. Without prejudice to Section 8.04, on or prior to the Closing Date, Seller shall use
commercially reasonable efforts to assist, and shall cause its Affiliates to use commercially reasonable efforts to assist, in connection with the arrangement of the Debt Financing as may be reasonably requested by
42
Purchaser, including by making senior management of the Business and the Transferred Entities reasonably available to (a) participate in meetings
(including lender meetings), presentations, road shows, due diligence and drafting sessions and sessions with rating agencies, in each case, as necessary to consummate the Debt Financing; (b) assist with the preparation of materials for rating
agency presentations, offering documents, private placement memoranda, bank information memoranda, prospectuses and similar documents necessary in connection with the Debt Financing; (c) subject to Section 5.01 of this Agreement, furnish
Purchaser and its financing sources financial and other pertinent information regarding the Business and the Transferred Entities as may be reasonably requested by Purchaser to consummate the Debt Financing; (d) request from the appropriate
person, and use commercially reasonable efforts to obtain, such consents, legal opinions, surveys and title insurance as reasonably requested by Purchaser, and in each case, as required to consummate the Debt Financing; (e) subject to
Section 5.01 of this Agreement, cooperate with prospective lenders involved in the Debt Financing to provide access to the Business’ and the Transferred Entities’ respective properties, assets, and cash management and accounting
systems (including cooperating in and facilitating the completion of field examinations, collateral audits, asset appraisals, surveys, and engineering/property condition reports); and (f) execute and deliver at Closing any customary pledge and
security documents, other definitive financing documents or other customary documents, in each case as may be reasonably requested by Purchaser to the extent necessary to consummate the Debt Financing, and to cause the Business and the Transferred
Entities to establish bank and other accounts and blocked account agreements and lock-box arrangements in connection with the Debt Financing;
provided
, that Seller shall not be required to provide, or cause any of the Transferred Entities to
provide, cooperation under this Section 5.09 that: (i) unreasonably interferes with the ongoing business of the Transferred Entities or the Business; (ii) causes any representation, warranty or covenant in this Agreement to be
breached; or (iii) causes any closing condition set forth in Article III to fail to be satisfied or otherwise causes the breach of this Agreement. Purchaser shall (A) promptly after the earlier of Closing and the date this Agreement is
terminated in accordance with Section 11.01, reimburse Seller for all reasonable, documented out-of-pocket costs and expenses incurred by Seller or any of its Affiliates in connection with their compliance with this Section 5.09 and
(B) indemnify and hold Seller and its Affiliates harmless against any Losses suffered by Seller or any of its Affiliates as a result of or in connection with its cooperation under this Section 5.09.
SECTION 5.10.
Enforcement of Confidentiality Agreements
. Following the Closing, upon Purchaser’s written request specifying in reasonable
detail a breach of a confidentiality agreement entered into in connection with the sale process of the Business, Seller shall use commercially reasonable efforts to enforce the provisions of such confidentiality agreement against the applicable
counterparty thereto and provide Purchaser with a copy of such confidentiality agreement.
ARTICLE VI
Representations and Warranties of Purchaser
Purchaser hereby represents and warrants to Seller as follows:
43
SECTION 6.01.
Organization, Standing and Authority; Execution and Delivery; Enforceability.
(a) Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized. Purchaser has all requisite corporate power and authority to enter into this Agreement and the
Other Transaction Documents to which it is, or is specified to be, a party and to consummate the transactions contemplated hereby and thereby. All corporate acts and other proceedings required to be taken by Purchaser to authorize the execution,
delivery and performance of this Agreement and the Other Transaction Documents to which it is, or is specified to be, a party and to consummate the transactions contemplated hereby and thereby have been duly and properly taken.
(b) This Agreement has been duly executed and delivered by Purchaser and, prior to Closing, Purchaser will have duly executed and delivered each Other
Transaction Document to which it is, or is specified to be, a party. Assuming that this Agreement has been duly authorized, executed and delivered by Seller, this Agreement constitutes, and, upon the due authorization, execution and delivery of the
Other Transaction Documents by each other party thereto, each Other Transaction Document will constitute, a legal, valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms.
SECTION 6.02.
No Conflicts; Consents.
(a) The execution and delivery of this Agreement by Purchaser does not, and the execution and delivery
by Purchaser of each Other Transaction Document to which it is, or is specified to be, a party will not, and the consummation of the transactions contemplated hereby and thereby and compliance by Purchaser with the terms and conditions hereof and
thereof will not, conflict with, or result in any violation of, breach or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancelation or acceleration of any obligation or to loss of a benefit
under, or result in the creation of any Lien upon any of the properties or assets of Purchaser under, any provision of (i) its certificate of incorporation or by-laws, (ii) any Contract to which Purchaser is a party or by which any of its
properties or assets are bound or (iii) any Injunction, or, subject to the matters referred to in paragraph (b) below, Law applicable to Purchaser or its properties or assets, other than, in the case of clauses (ii) and
(iii) above, any such items that, individually or in the aggregate, would not be reasonably likely to have a Purchaser Material Adverse Effect.
(b) No consent, waiver, approval, license, permit, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required to be obtained or made by or with respect to Purchaser in
connection with the execution, delivery and performance of this Agreement, the Other Transaction Documents or the consummation of the transactions contemplated hereby or thereby, other than (i) compliance with and filings under the HSR Act, if
applicable, and compliance with and filings and approvals under applicable foreign merger control or competition laws, (ii) those that may be required solely by reason of Seller’s or any Affiliate of Seller’s (as opposed to any other
third party’s) participation in the transactions contemplated hereby or by the Other Transaction Documents and (iii) such consents, waivers, approvals, licenses, permits, orders, authorizations, registrations, declarations and filings the
absence of which, or the failure to make or obtain which, individually or in the aggregate, would not be reasonably likely to have a Purchaser Material Adverse Effect.
44
SECTION 6.03.
Actions and Proceedings.
There are no (a) outstanding Injunctions of any
Governmental Entity or arbitration tribunal against Purchaser, (b) lawsuits, actions or other proceedings pending or, to the knowledge of Purchaser, threatened against Purchaser or any of its Affiliates, or (c) investigations by any
Governmental Entity which are pending or, to the knowledge of Purchaser, threatened against Purchaser, other than, in the case of each of clauses (a), (b) and (c), any such items that, individually or in the aggregate, would not be reasonably
likely to have a Purchaser Material Adverse Effect.
SECTION 6.04.
Securities Act.
The Transferred Equity Interests are being
acquired for investment only and not with a view to any public distribution thereof, and Purchaser shall not offer to sell or otherwise dispose of the Transferred Equity Interests so acquired by it in violation of any of the registration
requirements of the United States Securities Act of 1933.
SECTION 6.05.
Financing
. Concurrently with the execution of this
Agreement, Purchaser has delivered correct and complete copies of (a) executed commitment letters addressed to Purchaser, dated the date hereof (the “
Equity Commitment Letters
”), from Avista Capital Partners, LP and Avista
Capital Partners II, LP and from each of Nordic Capital VII Alpha, L.P. and Nordic Capital VII Beta, L.P. (each, an “
Equity Fund
”) to provide equity financing in an aggregate amount of up to $2,156,000,000 to fund a portion of the
Purchase Price (the “
Equity Financing
”) and (b) an executed commitment letter, dated the date hereof (the “
Debt Commitment Letter
”, and together with the Equity Commitment Letters, the “
Financing
Letters
”), from the lenders party thereto to provide Purchaser, subject to the terms and conditions thereof, with up to $2,430,000,000 in debt financing (the “
Debt Financing
”, and together with the Equity Financing, the
“
Financing
” (it being understood and agreed that the term “Debt Financing” shall include any financing to be provided pursuant to replacement commitments obtained by Purchaser in compliance with Section 7.08)). In
addition, concurrently with the execution of this Agreement, Purchaser has delivered a correct and complete copy of the Interim Facility Letter dated as of the date hereof (the “
Interim Facility Letter
”), from the arrangers, interim
lenders, facility agent, security agent and other finance parties named therein to Purchaser, to provide Purchaser, subject to the terms and conditions thereof, with up to $2,170,000,000 in debt financing in the event that the definitive facilities
contemplated by the Debt Commitment Letter have not been executed on or prior to the date that is three Business Days prior to Closing (it being understood and agreed that the term “Debt Financing” shall include the financing to be
provided under the Interim Facility Letter). The Equity Commitment Letters in the form so delivered are valid and in full force and effect, the Debt Commitment Letter in the form so delivered is valid and in full force and effect with respect to
Purchaser and (to the knowledge of Purchaser) each other party thereto, the Interim Facility Letter in the form so delivered is valid and in full force and effect with respect to Purchaser and (to the knowledge of Purchaser) each other party
thereto, such commitments (or any replacement commitments obtained by Purchaser in compliance with Section 7.08) have not been withdrawn, terminated or otherwise amended or modified in any respect, and, subject to the accuracy of the
representations and warranties of Seller set forth in Article IV, no event has occurred that, with or without notice, lapse of time or both, would constitute a default or breach on the part of Purchaser under any term or condition of the Equity
Commitment Letters or, as of the date hereof, the Debt Commitment Letter or the Interim Facility Letter. The Equity Commitment Letters, the Debt Commitment Letter (together with the fee letter referred to therein) and the Interim Facility
45
Letter constitute, as of the date hereof, the entire and complete agreement between the parties thereto with respect to the financing contemplated thereby,
and, except as set forth, described or provided for in the Equity Commitment Letters, the Debt Commitment Letter and the Interim Facility Letter (or in replacement commitments obtained by Purchaser in compliance with Section 7.08),
(i) there are no (A) conditions precedent to the obligations of the Equity Funds to fund the Equity Financing, or (B) conditions precedent to the respective obligations of the lenders to provide the Debt Financing, and (ii) there
are no contractual contingencies or other provisions under any agreement (including any side letters) relating to the transactions contemplated by this Agreement to which Purchaser or any of its Affiliates is a party that would permit the Equity
Funds or any of the lenders to reduce the total amount of the Financing or impose any additional condition precedent to the availability of the Equity Financing or any additional condition precedent to the availability of the Debt Financing. Subject
to the satisfaction of the conditions of the Financing, and subject to the satisfaction of the conditions of this Agreement, the Financing would provide Purchaser with acquisition financing at the Closing sufficient to consummate the Acquisition
upon the terms contemplated by this Agreement and to pay all related fees and expenses associated therewith. Purchaser has fully paid any and all commitment fees, if any, or other fees required by the Debt Commitment Letter that have become due and
payable.
SECTION 6.06.
Activities of Purchaser.
Purchaser was formed solely for the purpose of engaging in the transactions
contemplated by this Agreement, has not engaged in any business activities or conducted any operations (other than in connection with the transactions contemplated by this Agreement) and, prior to the Closing, will not have incurred liabilities or
obligations of any nature (other than in connection with the transactions contemplated by this Agreement).
SECTION 6.07.
Solvency.
Immediately after the Closing and after giving effect to the transactions contemplated by this Agreement, the payment of the Closing Date Amount and the payment of all fees and expenses related to the transactions contemplated by this Agreement,
each of Purchaser and the Transferred Entities will be Solvent.
SECTION 6.08.
Going Concern.
Purchaser is acquiring the Business as
a going concern for the purpose of carrying out a business that is similar to the Business following the Closing and as of the date hereof does not currently anticipate the cessation of operations at any of the facilities of the Business.
SECTION 6.09.
Sponsor Guarantee.
Concurrently with the execution of this Agreement, Purchaser has delivered to Seller a guarantee,
dated the date hereof, of each of the Equity Funds guaranteeing certain of Purchaser’s obligations hereunder (the “
Sponsor Guarantees
”). Each Sponsor Guarantee is valid and in full force and effect and constitutes the valid and
binding obligation of the applicable Equity Fund, enforceable in accordance with its terms.
SECTION 6.10.
Exclusivity of
Representations.
The representations and warranties made by Purchaser in this Article VI are the exclusive representations and warranties made by Purchaser to Seller. Purchaser hereby disclaims any other express or implied representations or
warranties by Purchaser to Seller with respect to itself or the Equity Funds or any of their respective Affiliates.
46
ARTICLE VII
Covenants of Purchaser
Purchaser covenants and agrees as follows:
SECTION 7.01.
Confidentiality.
Purchaser acknowledges that the information being provided to it in connection with the Acquisition and the
consummation of the other transactions contemplated hereby and by the Other Transaction Documents (including the terms and conditions of this Agreement and the Other Transaction Documents) is subject to the terms of a confidentiality agreement
between Nordic Capital VI Limited and Seller dated as of December 31, 2007 (the “
Confidentiality Agreement
”), the terms of which are incorporated herein by reference. Effective upon, and only upon, the Closing, the
confidentiality provisions of the Confidentiality Agreement shall terminate with respect to information relating solely to the Business;
provided
,
however
, that Purchaser acknowledges that any and all information of a proprietary
nature not relating solely to the Business provided to it by or on behalf of Seller, any Selling Affiliate, any Transferred Entity or Seller’s Representatives concerning Seller, the Selling Affiliates, the Transferred Entities or any other
Affiliate of Seller and the terms and conditions of this Agreement and the Other Transaction Documents shall remain subject to the terms and conditions of the Confidentiality Agreement for a period of three (3) years after the Closing Date.
SECTION 7.02.
No Additional Representations.
Purchaser acknowledges that it and its Representatives have received or been afforded
the opportunity to review prior to the date hereof all written materials that Seller was required to deliver or make available, as the case may be, to Purchaser pursuant to this Agreement on or prior to the date hereof. Purchaser acknowledges that
it and its Representatives have been permitted satisfactory access to the books and records, facilities, equipment, Contracts, insurance policies (or summaries thereof) and other properties and assets of Seller and its Affiliates to the extent
relating to the Business, the Transferred Entities and the Acquired Assets that it and its Representatives have desired or requested to see and/or review, and that it and its Representatives have had satisfactory opportunity to meet with the
officers and employees of Seller and its Affiliates to discuss the Business, the Transferred Entities, the Acquired Assets and the Assumed Liabilities. Purchaser acknowledges and agrees that, (a) other than the representations and warranties of
Seller expressly set forth in this Agreement, there are no representations or warranties of Seller, any Selling Affiliate, the Transferred Entities or any other person either expressed or implied with respect to the transactions contemplated hereby,
the Business, the Transferred Entities, the Acquired Assets or the Assumed Liabilities, including with respect to the accuracy or completeness of any information regarding the Business, the Transferred Entities, the Acquired Assets or the Assumed
Liabilities furnished or made available to Purchaser and its representatives and (b) other than in the case of fraud, none of Seller, any Selling Affiliate or any other person shall have or be subject to any liability to or claim to
indemnification (whether pursuant to Section 10.01 or otherwise) by Purchaser or any other person resulting from the distribution to Purchaser, or Purchaser’s use of, any such information, including the Confidential
47
Information Memorandum with respect to the Business dated December 2007, and any information, documents or material made available to Purchaser and its
representatives in certain virtual or physical “data rooms”, management presentations, visits of physical premises (including third party manufacturers anywhere in the world) or in any other form in expectation of the transactions
contemplated hereby.
SECTION 7.03.
No Use of Certain Names; Transitional License.
(a) Purchaser shall as soon as reasonably
practicable, and in any event within one hundred eighty (180) days after the Closing Date, revise sales and product literature, packaging and labeling to (i) delete all references to the BMS Names and (ii) delete all references to
Seller’s or any Selling Affiliates’ customer service address or phone number;
provided
,
however
, that, for a period of eighteen (18) months from the Closing Date, Purchaser may continue to distribute sales and product
literature, Transferred Inventory and any Inventory of the Transferred Entities that uses any of the BMS Names, addresses or phone numbers to the extent that such sales and product literature, Transferred Inventory and Inventory of the Transferred
Entities exists on the Closing Date or is manufactured within the ninety (90)-day period after the Closing Date, and Seller hereby grants to Purchaser the limited right and a royalty-free paid-up license to use Seller’s trademarks, trade dress,
copyrights and other Intellectual Property owned by Seller (and covenants to cause each of its Affiliates to grant Purchaser the limited right and a royalty-free paid-up license to use such Affiliate’s trademarks, trade dress and copyrights
under any copyrights and other Intellectual Property owned by such Affiliate) that have been used in connection with the manufacture, distribution, marketing and sale of the Products, to the extent necessary to allow Purchaser to use such sales and
product literature, Transferred Inventory and Inventory of the Transferred Entities. In no event shall Purchaser use any BMS Names, addresses or phone numbers after the Closing Date in any manner or for any purpose different from the use of such BMS
Names, addresses or phone numbers by the Business during the ninety (90)-day period preceding the Closing Date. “
BMS Names
” means “Bristol-Myers”, “Bristol-Myers Squibb”, “Bristol-Myers Squibb Company”,
“E.R. Squibb & Sons”, “E.R. Squibb”, and “Squibb”, any variations and derivatives thereof and proprietary UPC codes relating thereto and any other logos or trademarks of Seller or its Affiliates not included in
the Transferred Intellectual Property.
(b) As soon as reasonably practicable, and in any event within ten (10) business days
following the Closing, to the extent necessary, Purchaser shall cause each Transferred Entity to change its corporate name to a name not including, or, in the reasonable judgment of Seller, not confusingly similar to, any of the BMS Names. As soon
as reasonably practicable, and in any event within ten (10) business days following the Closing, to the extent necessary, Purchaser shall cause each Transferred Entity to amend or terminate any certificate of assumed name or d/b/a filing by
such Transferred Entity so as to eliminate their right to use any of the BMS Names or any name that, in the reasonable judgment of Seller. is confusingly similar to any of the BMS Names.
(c) Notwithstanding Sections 7.03(a) and 7.03(b), Purchaser shall be entitled to use BMS Names to accurately reference entities and products which
historically bore such names in historical descriptions of the Business and its operations;
provided
that Seller shall have the right to review and approve any such use prior to its use, such approval not to be unreasonably withheld.
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SECTION 7.04.
FDA Reporting; NDC.
(a) Purchaser shall take any and all actions, as soon as
practicable following the date hereof so that as soon as practicable following the Closing (but in no event later than ninety (90) business days following the Closing) Seller’s National Drug Code number or Labeler Code on the packaging for
the Products shall be replaced with Purchaser’s National Drug Code number or Labeler Code;
provided
that Purchaser’s obligation pursuant to this sentence shall not apply with respect to any finished goods and packaging included in
the Transferred Inventory or any Inventories of the Transferred Entities as of the Closing Date or manufactured within the ninety (90)-day period after the Closing Date. For the avoidance of doubt, such action shall include Purchaser’s
obtaining a new National Drug Code number or Labeler Code, if it does not already have one. From and after the Closing, Purchaser shall be solely responsible for all obligations with respect to annual or adverse event reporting to the United States
Food and Drug Administration (the “
FDA
”) with respect to the Brands and Purchaser shall promptly submit any and all such reports as may be required by the FDA.
(b) Purchaser shall communicate to the Centers for Medicare and Medicaid Services (“
CMS
”), with a copy to Seller, the expiration dates
for the last manufactured lots (“
Last Lot Expiration Dates
”) of each of the Products manufactured by or on behalf of Purchaser that bears Seller’s National Drug Code number or Labeler Code as soon as each such Last Lot
Expiration Date is available. Seller shall maintain with the FDA Seller’s National Drug Code number or Labeler Code for each Product as required for the manufacture and distribution of the Products until the latest expiry of lots of Products
included in the Transferred Inventory.
SECTION 7.05.
Litigation Matters.
Following the Closing, Purchaser shall, and shall cause
its Affiliates (including, in the case of Purchaser, the Transferred Entities) to, cooperate fully with Seller and its Affiliates in the prosecution, defense and/or settlement and all other aspects of the administration of the litigation listed in
Section 1.03(b)(iii) of the Seller Disclosure Schedule or such other lawsuit, action, other proceeding, claim or investigation against Seller or any of its Affiliates as Seller in its sole discretion determines is necessary, to the extent such
cooperation does not unreasonably disrupt the normal operations of Purchaser and its Affiliates. Such cooperation shall include (i) affording Seller, its Affiliates, its counsel and its other representatives full and complete access, upon
reasonable written notice during normal business hours, to all relevant personnel, properties, books, contracts, commitments and records, (ii) furnishing promptly to Seller, its Affiliates, its counsel and its other representatives any
information reasonably requested by it, such Affiliates, such counsel or such other representatives and (iii) providing any other assistance to Seller, its Affiliates, its counsel and its other representatives reasonably requested by Seller,
such Affiliates, such counsel or such other representatives, in each case to the extent such cooperation would not be reasonably expected to result in the forfeiture of any attorney-client privilege of Purchaser or its Affiliates or violate any
Contract or applicable Law;
provided
that Seller shall, and shall cause the Selling Affiliates to, use commercially reasonable efforts to make reasonable and appropriate substitute cooperation arrangements under circumstances in which such
cooperation restrictions apply. Seller shall reimburse Purchaser for documented out-of-pocket costs and expenses incurred in assisting Seller pursuant to this Section 7.05.
49
SECTION 7.06.
Bulk Transfer Laws.
Purchaser hereby waives compliance by Seller and its Affiliates
with the provisions of any so-called “bulk transfer law” of any jurisdiction in connection with the sale of the Acquired Assets to Purchaser.
SECTION 7.07.
Recordation of Transfer of Intellectual Property.
Purchaser shall be responsible, at its sole cost and expense, for all applicable recordations of the assignment of the Transferred Intellectual
Property from the title owner of such Intellectual Property to Purchaser or a Purchaser designee.
SECTION 7.08.
Debt Financing
.
(a) Purchaser shall, and shall cause its Affiliates to, use reasonable best efforts to take, or cause to be taken, all appropriate action, do, or cause to be done, all things necessary, proper or advisable under applicable Laws, and to execute
and deliver, or cause to be executed and delivered, such instruments and documents as may be required, to arrange the Financing as promptly as reasonably practicable on the terms and subject only to the conditions contained in the Financing Letters
and, if applicable, the Interim Facility Letter (or any replacement commitments obtained by Purchaser in compliance with this Section 7.08), including, in the case of the Debt Financing, to (i) satisfy, and cause its Affiliates to satisfy,
on a timely basis all conditions applicable to Purchaser or its Affiliates contained in the Debt Commitment Letter or, if applicable, the Interim Facility Letter (or any replacement commitments obtained by Purchaser in compliance with this
Section 7.08) and (ii) consummate the Debt Financing contemplated by the Debt Commitment Letter or, if applicable, the Interim Facility Letter (or any replacement commitments obtained by Purchaser in compliance with this Section 7.08)
at the Closing, including using its reasonable best efforts to cause the financial institutions providing the Debt Financing to fund the Debt Financing (including by taking enforcement action to cause such financial institutions to fund the Debt
Financing). Purchaser shall, and shall cause its Affiliates to, refrain from taking, directly or indirectly, any action that is reasonably likely to result in the failure of any of the conditions contained in the Financing Letters and the Interim
Facility Letter (or any replacement commitments obtained by Purchaser in compliance with this Section 7.08) or in any definitive agreement related to the Financing. Purchaser shall draw, and shall use its reasonable best efforts to cause the
Financing Lenders to fund at Closing, the Interim Facility Letter in the event that the definitive facilities contemplated by the Debt Commitment Letter have not been executed by the Purchaser and the Financing lenders on or prior to the date that
is three (3) business days prior to the Closing. Purchaser shall cause the Equity Funds to fund the Equity Financing at Closing.
(b)
Purchaser shall not agree to or permit any amendment, supplement or other modification of, or waive any of its rights under, any Financing Letter or the Interim Facility Letter (or any replacement commitments obtained by Purchaser in compliance with
this Section 7.08) or the definitive agreements relating to the Financing without Seller’s prior written consent, except that Purchaser may amend, supplement or otherwise modify the Debt Commitment Letter or the Interim Facility Letter (or
any replacement commitments obtained by Purchaser in compliance with this Section 7.08) if such amendment, supplement or other modification (i) does not reduce the aggregate amount of the Debt Financings, (ii) does not contain
additional or modified conditions or other contingencies to the funding of the Debt Financing relative to those contained in the Debt Commitment Letter or the Interim Facility Letter, as the case may be (or any replacement commitments obtained by
Purchaser in compliance with this Section 7.08) and (iii) is otherwise not reasonably likely to impair or delay
50
the funding of the Debt Financing or the Closing (it being understood that, subject to the requirements of this clause (b), such amendment, supplement or
other modification of the Debt Commitment Letter or the Interim Facility Letter, as the case may be (or any replacement commitments obtained by Purchaser in compliance with this Section 7.08), may provide for the assignment of a portion of the
commitments under the Debt Commitment Letter or the Interim Facility Letter, as the case may be (or any replacement commitments obtained by Purchaser in compliance with this Section 7.08), to additional agents or arrangers and grant such
persons approval rights with respect to certain matters as are customarily granted to additional agents or arrangers).
(c) If any portion
of the Financing becomes unavailable on the terms and conditions contained in the Financing Letters or the Interim Facility Letter (or any replacement commitments obtained by Purchaser in compliance with this Section 7.08), Purchaser shall
promptly notify Seller, and Purchaser shall use its reasonable best efforts to obtain, as promptly as practicable following the occurrence of such event, replacement commitments on terms that will enable Purchaser to consummate the transactions
contemplated by this Agreement and that are not less favorable in the aggregate (as determined by Purchaser in its reasonable judgment) to Purchaser and Seller than those contained in the Financing Letters and/or the Interim Facility Letter, as the
case may be (or any replacement commitments obtained by Purchaser in compliance with this Section 7.08);
provided
that such replacement commitments shall not (i) be subject to any additional or modified conditions or other
contingencies to the funding of the Financing than those contained in the Financing Letters and/or the Interim Facility Letter, as the case may be (or any replacement commitments obtained by Purchaser in compliance with this Section 7.08) or
(ii) otherwise be reasonably likely to impair or delay the funding of the Financing or the Closing. Purchaser shall deliver to Seller complete and correct copies of all amendments, supplements, other modifications or agreements pursuant to
which any amended, supplemented, modified or replacement commitments shall provide Purchaser with any portion of the Financing;
provided
that Purchaser may redact from any such copies the fee amounts payable to their Financing sources.
(d) Purchaser shall keep Seller informed on a timely basis of the status of the Financing and any material developments relating to the
Financing.
(e) For the avoidance of doubt and notwithstanding anything to the contrary in this Section 7.08, Purchaser acknowledges
and agrees that its obligations to consummate the transactions contemplated by this Agreement on the terms and subject to the conditions set forth herein are not conditioned upon the availability or consummation of the Debt Financing or receipt of
the proceeds therefrom.
SECTION 7.09.
Benefits and Payroll Transition
. Purchaser shall use its reasonable best efforts to put in
place the necessary personnel and systems to enable Purchaser to administer its own benefit plans and payroll systems on the Closing Date or as soon as reasonably practicable thereafter, with a view to reducing both the extent and the duration of
the transitional services with respect to such matters to be provided to Purchaser pursuant to the Transitional Services Agreement.
51
SECTION 7.10.
Joint Tender Contracts
. Purchaser acknowledges that, in certain international
jurisdictions, Seller is a party to certain joint tender contracts with third parties relating to the Business. Purchaser shall use its reasonable best efforts to cause the Business to (a) comply with its obligations to supply Products to
Seller in connection with each such joint tender contract and (b) otherwise cooperate with Seller in the administration of, compliance with the terms of, and performance under, each such joint tender contract, in each case, until the scheduled
expiration of the term of such contract (or, if earlier, the termination of such contract). Each of Seller and Purchaser acknowledges and agrees that, upon the expiration of the term of each such joint tender contract (or, if earlier, the
termination of such contract), the parties will not have any obligation to renew such joint tender contract.
ARTICLE VIII
Mutual Covenants
SECTION 8.01.
Consents.
Purchaser acknowledges that certain consents and waivers with respect to the transactions contemplated by this Agreement may be required from parties to the Transferred Real Property Contracts, the Transferred Contracts and the
Transferred Entity Contracts and issuers of the Transferred Permits, the Transferred Entity Permits and the Transferred Environmental Permits in order to transfer such Transferred Real Property Contracts, Transferred Contracts, Transferred Entity
Contracts, Transferred Permits, Transferred Entity Permits or Transferred Environmental Permits to Purchaser and that such consents and waivers have not been obtained. Purchaser agrees that, except as provided in Section 1.05(b), Seller and its
Affiliates shall not have any liability or obligation whatsoever to Purchaser arising out of or relating to the failure to obtain any consents or waivers that may be required in connection with the transactions contemplated by this Agreement or
because of the termination of any Transferred Real Property Contract, Transferred Contract, Transferred Entity Contract, Transferred Permit, Transferred Entity Permit or Transferred Environmental Permit as a result thereof. Purchaser further agrees
that no representation, warranty or covenant of Seller contained herein shall be breached or deemed breached, and no condition shall be deemed not satisfied, as a result of (a) the failure to obtain any such consent or waiver, (b) any such
termination or (c) any lawsuit, action, proceeding or investigation commenced or threatened by or on behalf of any person arising out of or relating to the failure to obtain any such consent or waiver or any such termination except to the
extent Seller’s representations in Section 4.02 are untrue. Prior to the Closing, Seller shall, and shall cause the Selling Affiliates and the Transferred Entities to, (i) make the initial request for such consent or waiver from the
applicable third party and (ii) otherwise cooperate with Purchaser upon its reasonable request in any reasonable manner in connection with Purchaser obtaining any such consents and waivers;
provided
,
however
, that in each case
such cooperation shall not include any requirement of Seller or any of its Affiliates (including the Selling Affiliates and the Transferred Entities) to expend money, commence, defend or participate in any litigation, incur any obligation in favor
of, or offer or grant any accommodation (financial or otherwise) to, any third party.
SECTION 8.02.
Transition; Cooperation.
(a) Purchaser and Seller shall cooperate with each other, and shall cause their respective Representatives to cooperate with each other, for a period of ninety (90) days after the Closing to ensure the orderly transition of the Business
from Seller to Purchaser and to minimize any disruption to the respective
52
businesses of Seller, the Selling Affiliates, the Transferred Entities and Purchaser that might result from the transactions contemplated hereby. After the
Closing, upon reasonable written notice, Purchaser and Seller shall furnish or cause to be furnished to each other and their respective Representatives reasonable access, during normal business hours, to such information and assistance relating to
the Business, the Transferred Entities, the Acquired Assets and the Assumed Liabilities as is reasonably necessary for financial reporting and accounting matters, the preparation and filing of any Tax Returns, reports or forms or the defense of any
Tax claim, assessment or inquiry. Each party shall use commercially reasonable efforts to avail itself of any available exemptions from any Transfer Taxes or fees applicable to the Acquisition, and to cooperate with the other party in providing any
information and documentation that may be necessary to obtain such exemptions. The obligation to cooperate pursuant to the preceding sentence insofar as it concerns Taxes shall terminate at the time the relevant applicable statute of limitations
expires (giving effect to any extension thereof). Each party shall reimburse the other for reasonable out-of-pocket costs and expenses incurred in assisting the other pursuant to this Section 8.02. Neither party shall be required by this
Section 8.02 to take any action that would (i) unreasonably interfere with the conduct of its business or unreasonably disrupt its normal operations, (ii) result in its forfeiture of any attorney-client privilege or (iii) violate
any Contract or applicable Law;
provided
that Seller shall, and shall cause the Selling Affiliates and the Transferred Entities to, use commercially reasonable efforts to make reasonable and appropriate substitute disclosure arrangements
under circumstances in which the restrictions on access set forth in clauses (ii) or (iii) apply.
(b) From time to time, as and
when requested by either party hereto, the other party shall execute and deliver, or cause to be executed and delivered, all such documents and instruments and shall take, or cause to be taken, all such further or other actions (subject to the
provisions of Sections 8.01 and 8.04), as such other party may reasonably deem necessary or desirable to consummate the transactions contemplated by this Agreement.
(c) Without limiting Sections 1.05(b) or 8.01(a), Purchaser, Seller and the Selling Affiliates shall cooperate using their commercially reasonable efforts to transfer, obtain, or to cause to be transferred or
obtained, prior to the Closing or as soon as practicable thereafter, any Permit or Environmental Permit necessary for Purchaser to own or operate the Business, the Transferred Entities or the Acquired Assets. During the period commencing on the date
hereof and continuing until one hundred eighty (180) days after the Closing, (i) each of Seller, the Selling Affiliates and Purchaser shall provide or cause to be provided to the other parties all commercially reasonable assistance as is
reasonably requested in connection with securing (and/or terminating, if required by applicable Law or Environmental Law) any such Permits or Environmental Permits and (ii) if any Permits or Environmental Permits are not secured prior to the
Closing, Seller, the Selling Affiliates and Purchaser shall cooperate in good faith in any lawful and reasonable arrangement reasonably proposed by either party under which Purchaser shall obtain the benefit of Permits or Environmental Permits held
by Seller or the Selling Affiliates in connection with the ownership or operation of the Business, the Transferred Entities or the Acquired Assets following the Closing;
provided
that such assistance and cooperation shall not include any
obligation to expend money to any third party or Governmental Entity from whom such Permits or Environmental Permits are requested under this Section 8.02(c), or to commence, defend or participate in any litigation or offer or grant any
accommodation (financial or otherwise) to any third party.
53
SECTION 8.03.
Publicity.
Seller and Purchaser agree that, from and after the date hereof, no
public release or announcement concerning this Agreement or the transactions contemplated hereby shall be issued by either party or its Affiliates without the prior written consent of the other party (which consent shall not be unreasonably withheld
or delayed), except as such release or announcement may be required by applicable Law or the rules or regulations of any United States or foreign securities exchange, in which case the party required to make the release or announcement shall allow
the other party reasonable time to comment on such release or announcement in advance of such issuance. The parties agree that the initial press release to be issued with respect to the transactions contemplated by this Agreement shall be in the
form agreed by the parties.
SECTION 8.04.
Reasonable Best Efforts.
Subject to the terms and conditions set forth in this Agreement
(including the provisions set forth in Sections 1.05(b) and 8.05), each party hereto shall use its reasonable best efforts to cause the Closing to occur. Without limiting the foregoing, Seller and Purchaser shall use their respective reasonable best
efforts to cause the Closing to occur on or prior to July 1, 2008, or as soon as practicable thereafter. Each of Seller and Purchaser shall not, and shall not permit any of their respective Affiliates to, take any action that would, or that
would reasonably be expected to, result in any of the conditions set forth in Article III not being satisfied.
SECTION 8.05.
Antitrust
Notification and Other Regulatory Filings.
(a) Purchaser and Seller shall, as promptly as reasonably practicable, file with all applicable U.S. and foreign Governmental Entities any notices and applications necessary to obtain merger
control or competition Law approval for the Acquisition;
provided
that Seller shall have the right to review and provide comments on any such notices and applications prior to their filing, consistent with applicable Law. Without limiting the
foregoing, Purchaser and Seller shall, as promptly as reasonably practicable, but in no event later than fifteen (15) business days after the date of this Agreement, file with the United States Federal Trade Commission (the
“
FTC
”) and the United States Department of Justice (the “
DOJ
”) the notification and report form, if any, required under the HSR Act for the transactions contemplated by this Agreement. Any such notices and
applications, including such HSR Act notification and report form, shall be in substantial compliance with the requirements of the HSR Act or the applicable foreign merger control or competition Law. Each of Seller and Purchaser shall furnish to the
other such necessary information and reasonable assistance as the other may request in connection with its preparation of any filing or submission which is necessary under the HSR Act or any such foreign merger control or competition Law. Each of
Seller and Purchaser shall keep each other apprised of the status of any communications with, and any inquiries or requests for additional information from, the FTC, the DOJ and any other Governmental Entity and shall comply with any such inquiry or
request as promptly as practicable, but in no event later than five (5) business days after receipt of such inquiry or request. Any such additional information shall be in substantial compliance with the requirements of the HSR Act or the
applicable foreign merger control or competition Law. Purchaser agrees not to extend directly any waiting period under the HSR Act or any foreign merger control or competition Law or enter into any agreement with a Governmental Entity to delay or
not to consummate the transactions contemplated by this Agreement, except with the prior written consent of Seller. Each of Seller and Purchaser shall use its best efforts to obtain any clearance required under the HSR Act and any such foreign
merger control or competition Law for the consummation of the Acquisition.
54
(b) Without limiting the generality of Purchaser’s obligations pursuant to Section 8.05(a), if
any administrative or judicial action or proceeding is instituted (or threatened to be instituted) challenging any transaction contemplated by this Agreement as violative of any competition or antitrust Law, or if any Law or Injunction is enacted,
entered, promulgated or enforced by a Governmental Entity that would make the transactions contemplated by this Agreement illegal or would otherwise prohibit or materially impair or delay the consummation of the transactions contemplated by this
Agreement, Purchaser shall use its best efforts to resolve, contest or resist any such action or proceeding and to have vacated, lifted, reversed or overturned any Injunction, whether temporary, preliminary or permanent, that is in effect and that
prohibits, prevents or restricts consummation of the transactions contemplated by this Agreement and to have such Law or Injunction repealed, rescinded or made inapplicable so as to permit consummation of the transactions contemplated by this
Agreement, including (i) selling, holding separate or otherwise disposing of, or proposing and agreeing to sell, hold separate or otherwise dispose of, or permitting the sale, holding separate or other disposition of, any assets of Purchaser or
its subsidiaries, or after the Closing, the Business and (ii) conducting its business in a specified manner, or proposing and agreeing or permitting to conduct its business in a specified manner. Solely with respect to the Business, the
Acquired Assets and the Transferred Entities, Seller will cooperate with Purchaser in all respects in Purchaser’s implementation of any of the measures described in the preceding sentence that is undertaken in order to permit consummation of
the transactions contemplated by this Agreement.
(c) If any approval or clearance required under an applicable merger control or
competition law in China is not obtained prior to the Closing, the Closing shall nonetheless take place and, thereafter, Seller and the Selling Affiliates, on the one hand, and Purchaser, on the other hand, shall cooperate in any lawful and
reasonable arrangement reasonably proposed by Purchaser (not including the payment of any consideration) under which Purchaser shall obtain the economic claims, rights and benefits under, and shall bear all the costs, liabilities and burdens with
respect to, the Business conducted in China (which shall not be transferred to Purchaser at Closing and shall be held separate by Seller until such approval is obtained at which time it shall be transferred to Purchaser);
provided
that
Purchaser shall pay or satisfy all the costs, expenses, obligations and liabilities incurred by Seller or the Selling Affiliates in connection with any such alternative arrangements (other than legal fees incurred by Seller and the Selling
Affiliates in connection with documenting and negotiating such arrangement, which shall be borne by Seller).
SECTION 8.06.
Support
Services.
Seller and its Affiliates (other than the Transferred Entities) provide certain support services (“
Support Services
”) to the Business and employees of the Business in connection with the operation of the Business as
conducted as of the date of this Agreement. Purchaser acknowledges that, except to the extent provided in the Transitional Services Agreement, all Support Services will be terminated as of the Closing Date. Seller and its Affiliates shall use
commercially reasonable efforts to take the actions necessary to enable Seller and its Affiliates to perform in all material respects as of and following Closing all services to be provided under the Transitional Services Agreement.
SECTION 8.07.
Tax Matters.
(a) Seller and Purchaser agree in principle on an allocation of the Final Purchase Price among (i) the
Transferred Entities, (ii) the portion of the Acquired Assets that relates to property, plant and equipment and (iii) the portion of the Acquired Assets that relates to inventory, working capital and accounts receivable on a
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jurisdiction-by-jurisdiction basis of 40% to the U.S., 45% to the U.K. and 15% to all other countries (the “
Initial Purchase Price
Allocation
”). For purposes of this provision, the U.S. includes the Dominican Republic. Each of Seller and Purchaser shall (i) further allocate the Initial Purchase Price Allocation among the Transferred Entities and Acquired Assets in
accordance with Section 1060 of the Code and relevant provisions of local Law and (ii) use its best efforts and work together in good faith to agree on such further allocation prior to the Closing and to agree on any allocation of
post-Closing adjustments in a timely manner;
provided
,
however
, that the Seller and Purchaser agree that the amount to be allocated to the Purchaser’s purchase of the stock of ConvaTec Dominican Republic, Inc. shall be
approximately $10,400,000. Each of Seller and Purchaser shall (i) report the sale and purchase of the Transferred Entities and Acquired Assets for United States and other Tax purposes in accordance with such allocations determined in accordance
with this Section 8.07(a), including as required on Internal Revenue Service Form 8594 and (ii) not take any position inconsistent with such allocations on any of its respective United States and other Tax Returns except as otherwise
required by Law.
(b) Seller and Purchaser shall be entitled to any refunds or credits relating to Taxes arising out of, relating to or in
respect of the Acquired Assets as determined in Article I. The amount or economic benefit of any refunds or credits of Taxes of the Transferred Entities, or of any affiliated, consolidated, combined or unitary group of which a Transferred Entity is
or has been a member, for any Pre-Closing Tax Period shall be for the account of Seller. The amount or economic benefit of any refunds or credits of Taxes of the Transferred Entities for any Post-Closing Tax Period shall be for the account of
Purchaser unless such item relates to a carryforward in a Pre-Closing Tax Period, in which case such item is for the account of Seller.
(i) Each party shall forward, or cause to be forwarded, to the party entitled pursuant to this Section 8.07(b) to receive the amount or economic benefit of a refund or credit of Taxes the amount of such refund or
credit within ten (10) days after such refund is received or after such credit is allowed or applied against another Tax liability, as the case may be.
(ii) Purchaser shall waive any carrybacks to any Pre-Closing Tax Period to the extent permitted by Law.
(iii) If, subsequent to a taxing authority’s allowance of a refund or credit, such taxing authority reduces or eliminates such
allowance, any refund or credit, plus any interest received thereon, forwarded or reimbursed under this Section 8.07 shall be returned to the party who had forwarded or reimbursed such refund or credit and interest, upon the request of such
forwarding party, in an amount equal to the applicable reduction, including any interest received thereon.
(c) To the extent permitted by
Law or administrative practice, the taxable years of the Transferred Entities shall end at the close of business on the Closing Date.
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(d) Purchaser and Seller agree that:
(i) Seller shall timely prepare and file, or cause to be prepared and filed, on a basis consistent with past practice, (A)(I) the
United States consolidated federal income Tax Returns that include the Transferred Entities and (II) where applicable, all other Tax Returns of the Transferred Entities filed on a consolidated, combined or unitary basis with Seller or any of
its Affiliates, in each case for taxable periods beginning on or before the Closing Date, and (B) all other Tax Returns with respect to the Transferred Entities that are required to be filed on or before the Closing Date. Seller shall timely
pay, or cause to be paid, any Taxes due with respect to such Tax Returns. Seller shall provide the Purchaser with copies of such completed Tax Returns (or, in the case of Tax Returns referred to in clause (A) of this Section 8.07(d)(i),
the portion of such Tax Returns relating to the Transferred Entities) at least twenty (20) days before such Tax Returns are due and consider in good faith any comments provided by the Purchaser. Purchaser shall pay Seller for the amount of
Taxes shown on such Tax Return to the extent the Taxes shown on the Tax Return are an obligation of the Purchaser under Section 10.03(b) at least three (3) days before the last day of the Tax shown on the Tax Return is due and payable.
(ii) Purchaser shall timely prepare and file, or cause to be prepared and filed, on a basis consistent with past practice
(to the extent consistent with applicable Law), all Tax Returns with respect to the Transferred Entities that are required to be filed after the Closing Date and that relate to a taxable period or portion thereof beginning on or before the Closing
Date (other than any Tax Return described in Section 8.07(d)(i)(A)). With respect to Tax Returns for a Straddle Period, Purchaser shall provide Seller with a draft of any such Tax Returns at least twenty (20) days before such Tax Return is
due for approval (which approval shall not be unreasonably withheld or delayed) and the Purchaser will consider in good faith any comments provided by the Seller (and reasonably accept any such comments to the extent relating to Taxes that are an
obligation of the Seller under Section 10.03(a)). The Purchaser shall timely pay, or cause to be paid, any Taxes due with respect to such Tax Returns. Seller shall pay the Purchaser for the amount of Taxes shown on such Tax Return to the extent
the Taxes shown on the Tax Return are an obligation of the Seller under Section 10.03(a) at least three (3) days before the last day that the Tax shown on the Tax Return is due and payable.
(iii) Notwithstanding anything herein to the contrary, any Tax Returns that must be filed in connection with Transfer Taxes shall be
prepared and filed when due by the party primarily or customarily responsible under the applicable local Law for filing such Tax Returns, and such party will use its commercially reasonable efforts to provide such Tax Returns to the other party at
least ten (10) days prior to the due date for such Tax Returns.
(e) For all Tax purposes, Purchaser, Seller and each of their
respective Affiliates agree to treat any indemnity payment under this Agreement as an adjustment to the Purchase Price received by Seller for the transactions contemplated by this Agreement unless a final determination (as defined in
Section 1313 of the Code) provides otherwise.
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(f) Upon Purchaser’s request, Seller and Purchaser (or its relevant Affiliate) shall timely make an
election under Section 338(h)(10) of the Code (and similar provision of state or local law) with respect to ConvaTec Dominican Republic, Inc.
(g) All tax sharing agreements or similar agreements with respect to or involving Seller or the Selling Affiliates, on the one hand, and the Transferred Entities, on the other hand, shall be terminated as of the
Closing Date and, after the Closing Date, the Transferred Entities shall not be bound thereby or have any liability thereunder.
(h) All
amounts expressed in this Agreement as being payable by Purchaser with respect to the Business and/or Acquired Assets are expressed to be exclusive of any value added Tax (or similar Taxes) which may be chargeable and Purchaser will pay to Seller in
addition to such amounts, an amount equal to any value added Tax (or similar Tax) for which Seller is liable to account to the applicable Taxing authority in respect of any supply made to Purchaser under or in connection with this Agreement upon
production to Purchaser of a valid value added Tax (or other similar Tax) invoice in respect of the sale of the Business and/or Acquired Assets.
SECTION 8.08.
Customer Databases.
(a) At least twenty (20) business days prior to the Closing Date, Seller shall, or shall cause a Selling Affiliate to, use its commercially reasonable efforts to contact by letter or email
(i) each customer of Products in the United States that has not previously consented to have its personal information transferred to a third party in connection with a sale, disposition or other transfer of the Business (each such
non-consenting customer to be specifically identified on the master list, maintained by Seller and its Affiliates, of customers of the Business within the United States (the “
U.S. Customer List
”)) and (ii) each customer of
Products in jurisdictions other than the United States and Japan, the laws of which require the consent of a customer for the transfer of such customer’s personal information to a third party (each such customer to be specifically identified on
the master list, maintained by Seller and its Affiliates, of customers of the Business outside the United States and Japan (the “
Non-U.S. Customer List
”)), in each case, to allow each such person ten (10) business days to
decline (or, in the case of customers on the Non-U.S. Customer List, to the extent required by Law, to permit or decline) to have such person’s identity and other personal information provided to Purchaser (and, in the case of customers on the
Non-U.S. Customer List, to be transferred to a country designated by Purchaser), which election shall be made by a reply letter, email or registration on a website designated by Seller (or the applicable Selling Affiliate). Any person that Seller
reasonably determines it was unable to contact (
e.g.
, if Seller does not have a postal or an email address for such person or if Seller or the applicable Selling Affiliate received an “undeliverable” response to a letter or an email
addressed to such person) or any person who did not reply to the communication sent by Seller will be deemed to have declined to have such person’s identity and personal information provided to Purchaser.
(b) Notwithstanding any provision of Section 1.02 to the contrary, upon the Closing, Seller’s sole obligation with respect to each of the U.S.
Customer List and the Non-U.S. Customer List shall be to deliver to Purchaser a single electronic copy of such list;
provided
that Seller shall, to the extent necessary to comply with applicable Law, delete the identity and other personal
information of each person that declined (or was deemed to decline) to have such information provided to Purchaser from the copy of the applicable list to be delivered to Purchaser prior to delivery thereof. Subsequent to such delivery, Seller shall
delete and/or destroy any other copies of such lists and provide written verification thereof.
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(c) At all times following the Closing, Purchaser shall have in place and strictly observe a privacy
policy with respect to the copy of U.S. Customer List and the Non-U.S. Customer List that is at least as protective of the interests of the persons identified on such customer lists in the privacy of their respective identities and personal
information as the privacy policy of Seller as in effect on the date of this Agreement, a copy of which is included in Section 8.08(c) of the Seller Disclosure Schedule.
(d) In the event a Selling Affiliate remains a “Data Controller,” as that term is defined by the EU Data Protection Directive, in an EU member
state after the Closing, the provisions of Section 8.08(a) and (b) shall not apply and such Selling Affiliate shall be permitted to retain its entire Non-U.S. Customer List, without any deletion.
SECTION 8.09.
Treasury, Payroll and Employee Benefit Transitional Services
. (a) From the date hereof through Closing, Purchaser shall use its
reasonable best efforts to acquire, lease, license, hire or otherwise put in place all personnel, Contracts, assets and services necessary for Purchaser to perform without assistance from Seller or any of its Affiliates, the Treasury Services, the
Payroll Services and the Benefit Services (each, a “
Service
” and, collectively, the “
Services
”) on the Closing Date or as soon practicable thereafter with a view to reducing the scope of each such Service to be
provided by Seller following the Closing (including the jurisdictions in which each such Service is to be provided and the duration of each such Service), and Seller shall cooperate with such efforts by Purchaser;
provided
that none of Seller
or any of its Affiliates shall be obligated to hire any personnel, independent contractors or consultants, to incur any out-of-pocket costs or expenses, or to enter into any binding Contract or other arrangement under which Seller or such Affiliate
will incur any Liability other than a Liability of a Transferred Entity arising after the Closing. To the extent that Seller determines (in consultation with Purchaser) that it is reasonably necessary to hire any personnel, independent contractors
or consultants, incur any out-of-pocket costs or expenses, or to enter into any binding Contract or other arrangement (the “
Set-Up and Administrative Costs
”) in order to provide any Payroll Service or Benefit Service, all such
Set-Up and Administrative Costs (including the cost of legal, IT and other services) and such costs incurred by Seller after such Services are no longer required and which are necessary in order to return its payroll and benefits administrative
function to its pre-provision of Services status (the “
Post-Services Costs
”) shall be borne solely by Purchaser, and Purchaser shall fully indemnify Seller for such Set-Up and Administrative Costs and such Post-Services Costs
incurred prior to, on and after the Closing Date, whether or not such Services are actually needed or utilized post-Closing. The payment of such Set-Up and Administrative Costs and such post-services costs shall be in addition to the $20,000,000
payment by Purchaser specified in Section 3(c) of the Transitional Services Agreement. For the avoidance of doubt, no termination, amendment or modification of any Benefit Plan, program or arrangement shall be required to be made by Seller or
any of its Affiliates in order to provide any Benefit Service. Furthermore, nothing herein shall prevent Seller or any of its Affiliates from making changes to its Benefit Plans, programs and arrangements following the Closing Date;
provided
that (i) such change does not apply exclusively to Business Employees but generally to all participants in such Benefit Plan, regardless of whether such participants are Business Employees and (ii) such change does not cause Purchaser to
Breach its covenant under Section 9.05(a).
59
(b) If Purchaser shall have complied in all material respects with its obligations under
Section 8.09(a), and Purchaser shall not have in place all such personnel, Contracts, assets and services necessary for Purchaser to provide all the Services to the Business at the effective time of Closing without receiving any portion of or
all of one or more of the Services from Seller, then (i) with respect to each Service, Seller shall provide, or cause one or more of its controlled Affiliates to provide, subject to applicable Law, the portion of each such Service (as shall be
mutually agreed by Seller and Purchaser) that Purchaser is not yet able to provide in each such jurisdiction as may still be required on the terms and conditions set forth in the Transitional Services Agreement for such Service for a period of up to
three (3) months at a cost payable monthly at a fixed amount equal to (i) one hundred fifteen percent (115%) of the Seller’s or such Affiliate’s fully allocated costs of providing such Service and (ii) where Purchaser
requests with sixty (60) days’ prior written notice to Seller or such Affiliate an extension of the term of the relevant Service (up to a maximum of an additional three (3) months), one hundred and fifty percent (150%) of
Seller’s or such Affiliate’s fully allocated costs of providing such services, plus a percent allocation of related overhead expenses, including supplies, mailing, telecommunications, occupancy depreciation insurance and system support.
Any significant efforts related to non-routine activities shall be billed at a rate per hour to be agreed by the parties;
provided
,
however
, that Seller or such Affiliate may not bill Purchaser for such efforts unless Purchaser has
received notification thereof in advance and consented in writing to the undertaking of such effort, such notification not to be unreasonably withheld or delayed (it being understood that Seller or such Affiliate shall not be obligated to utilize
any such significant efforts related to activities outside of what is routine unless Purchaser shall have provided such consent).
(c) For
purposes of this Section 8.09, the following terms shall have the following meanings:
“
Payroll Services
” means the services currently
provided to the Business by Seller or one or more of its Affiliates related to the compensation and reimbursement of Business Employees.
“
Benefits
Services
” means benefit administration support services currently provided to the Business by Seller or one or more of its Affiliates with respect to the Benefits Plans currently in place for Business Employees.
“
Treasury Services
” means treasury services related to the management and monitoring of cash transactions and bank accounts currently provided to the
Business by Seller or one or more of its Affiliates, which, for the avoidance of doubt, shall not include funding of any cash disbursements.
ARTICLE IX
Employee Matters
SECTION 9.01.
Employees; Assumption of Terms and Conditions of Employment; Continuation of Employment; General Principles.
(a) For purposes of this Article
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IX, Business Employees (as defined) shall also include such other employees who may be hired by Seller or its Affiliates for the Business between the date
hereof and the Closing Date and whose services primarily relate to the Business, in each case whether employed within or outside the United States, whether active or on vacation, holiday, jury duty, bereavement or other leave of absence or on
short-term disability or long-term disability, but excluding, in each case, employees whose services primarily relate to the Excluded Assets.
(b) With respect to those Business Employees (other than Business Employees of any Transferred Entity or except as required by applicable Law) who are not actively at work on the Closing Date because they are on approved long-term
disability or short-term disability leave in accordance with the applicable Benefit Plan (“
Inactive Business Employees
”), from and after the Closing Date, Seller shall continue to provide such Inactive Business Employees with
disability coverage under the applicable Benefit Plan to the extent consistent with the terms of the applicable Benefit Plan;
provided
that if any such Inactive Business Employee returns to active work at the conclusion of such leave (and it
being understood that Purchaser and its Affiliates shall offer employment to each such Inactive Business Employee who becomes ready, willing and able to return to active work within twelve (12) months after the Closing Date or as otherwise
required by applicable Law), such Inactive Business Employee shall become a “Transferred Employee” for purposes hereunder as of the date of such individual’s return to active employment with the Business (such date, the
“
Commencement Date
”).
(c) Where applicable Law or rules provide for the transfer of employment of any Business Employee
upon a sale of the Business, Purchaser and Seller shall take or cause to be taken such actions as are required under applicable Law to accomplish such transfer of employment of such Business Employee to Purchaser or an Affiliate of Purchaser as a
matter of Law as of the Closing. Where applicable Law or rules do not provide for the transfer of employment of any Business Employee upon the sale of the Business to Purchaser or any of its Affiliates, Purchaser shall, or shall cause one of its
Affiliates to, make offers of at-will (to the extent permitted by applicable Law) employment in accordance with the provisions of this Article IX, to be effective as of the Closing, to all such Business Employees.
(d) To the extent not provided for by operation of Law, Purchaser shall, and shall cause its Affiliates to, make offers of at-will (to the extent
permitted by applicable Law) employment to the Business Employees (subject to Section 9.01(b)), in accordance with the provisions of this Article IX, at least fifteen (15) days prior to the Closing Date (or such longer period required
by applicable Law, collective bargaining agreement, trade union agreement or works council agreement), to be effective as of the Closing. Except as otherwise provided in this Article IX, each offer of employment by Purchaser or its Affiliate to each
Business Employee shall in each case provide a base salary (or wages) and bonus target no less favorable than the base salary and bonus target provided to such Business Employee immediately prior to the Closing Date and such other terms and
conditions (including, but not limited to, pension and welfare benefits, but excluding stock-based compensation) that are no less favorable in the aggregate than those provided to such Business Employee immediately prior to the Closing Date;
provided
,
however
, that Purchaser and its Affiliates shall not be obligated to offer or to provide any defined benefit pension plan except where required by applicable Law, collective bargaining agreement, trade union agreement or
works council agreement. Prior to the Closing, Purchaser shall set forth in a Purchaser Disclosure Letter the employee benefits that shall be provided to
61
Transferred Employees on the Closing Date and through the Continuation Period set forth in Section 9.05(a) on a country by country basis.
Section 9.01(d) of the Seller Disclosure Schedule sets forth the name, title or job position, base salary (or wages) and target bonus, as in effect as of the Closing Date, with respect to each Business Employee (which Schedule is attached to
the document entitled “Confidential—Employee Benefit Matter Information” (the “
Confidential Employee Benefit Letter
”)). Each Business Employee whose employment transfers from Seller or an Affiliate of Seller to any
Purchaser or an Affiliate of Purchaser on the Closing by operation of Law, and each Business Employee who accepts the offer of employment from Purchaser or an Affiliate of Purchaser, is referred to herein as a “
Transferred
Employee
”. Transferred Employees who are employed primarily within the United States or Puerto Rico immediately prior to the Closing are referred to herein as “
U.S. Transferred Employees
”. Transferred Employees who are
employed primarily outside of the United States and Puerto Rico immediately prior to the Closing are referred to herein as “
Foreign Transferred Employees
”. If any Transferred Employee requires a work permit or an employment pass or
other approval for his or her employment to continue with Purchaser or an Affiliate of Purchaser following the Closing or the Commencement Date, as applicable, Purchaser shall use its, or shall cause its Affiliate to use its, commercially reasonable
efforts to ensure that any necessary applications are promptly made and to secure prior to Closing or the Commencement Date, as applicable, the necessary permit, pass or other approval.
(e) Without limiting Purchaser’s obligations under Section 9.01(d), Purchaser or an Affiliate of Purchaser, as the case may be, shall use
commercially reasonable efforts to make the offers of employment described in Section 9.01(d) on terms and conditions sufficient to avoid statutory severance or similar obligations under applicable Law, except to the extent such severance or
similar obligations arise without regard to such terms. Notwithstanding any other provision of this Article IX to the contrary, if applicable Law requires Seller or its Affiliates to make any payment or provide any benefit to any Business Employee
in the event Purchaser and its Affiliates do not offer to provide such Business Employee with a specified level of compensation or benefits, then Purchaser and its Affiliates shall offer to provide such level of compensation or benefits to the
extent necessary to prevent Seller and its Affiliates from being so obligated to such Business Employee. Seller and Purchaser intend that for purposes of any severance or termination benefit plan, program, policy, agreement or arrangement of Seller
and its Affiliates, the transactions contemplated by this Agreement shall not constitute a severance of employment of any Transferred Employee prior to or upon the consummation of the transactions contemplated hereby, and that Transferred Employees
will have continuous and uninterrupted employment immediately before, during and immediately following the Closing. Purchaser shall assume and be solely responsible for all obligations, liabilities and commitments in respect of claims made by any
Business Employee for severance or other termination pay or other benefits (including, but not limited to, claims for wrongful dismissal, constructive dismissal, notice of termination of employment, pay in lieu of notice or termination, termination
indemnities or other indemnities, any damages arising from a breach of a Business Employee’s employment contract, and any payments required to be made under any Law of any jurisdiction or the applicable collective bargaining agreement in
respect of the termination of the Business Employee’s employment, including payments in respect of accrued wages, vacation, overtime, bonuses and other plans, programs or obligations) arising out of, relating to or in connection with
(i) Purchaser’s failure to offer employment to any Business Employee (or failure to continue the employment of any Business Employee of a Transferred Entity) or failure to offer or continue
62
employment on terms and conditions which would preclude any claims of constructive dismissal or similar claims under any applicable Law or other failure to
comply with the terms of this Agreement or (ii) where any such severance or termination benefits are required to be paid under applicable Law upon the Closing without regard to such terms and conditions or such continuation of employment. From
and after the Closing, Purchaser shall indemnify and hold harmless Seller and its Affiliates against all Losses which Seller may suffer or incur as a result of any claim, action or any proceeding made by any Business Employee against Seller or its
Affiliates from and after the Closing Date or arising from any breach of Purchaser’s obligations under Section 9.01.
(f) Seller
and Purchaser and its Affiliates acknowledge and agree that under the provisions implementing Council Directive 2001/23/EC (the “
Acquired Rights Directive
”), the contracts of employment between Seller and/or its Affiliates and the
Foreign Transferred Employees and, subject to applicable Law, any labor or collective bargaining agreement or works council agreement shall have effect for the Foreign Transferred Employees employed primarily in Europe as if originally made between
Purchaser or any of its Affiliates and the Foreign Transferred Employees or between Purchaser or any of its Affiliates and the other parties to the labor or collective bargaining agreements or works council agreements (as the case may be).
(g) As of the Closing, Purchaser shall assume, or shall cause an Affiliate of Purchaser to assume, any labor or collective bargaining
agreements, works council agreements or trade union agreements in effect with respect to any Foreign Transferred Employee.
SECTION 9.02.
Assumption of Liabilities.
(a) Unless otherwise expressly provided in this Article IX, Seller and its Affiliates shall retain liability and responsibility for all employment, compensation, severance and employee benefit-related
Liabilities, obligations and commitments (including, but not limited to, claims for wrongful dismissal, constructive dismissal, unfair dismissal, notice of termination of employment, pay in lieu of notice or termination, termination indemnities or
other indemnities, any damages arising from a breach of a Business Employee’s or Former Business Employee’s employment contract, and any payments required to be made under any Law of any jurisdiction or the applicable collective bargaining
agreement in respect of the termination of a Business Employee’s or Former Business Employee’s employment, including payments in respect of accrued wages, vacation, overtime, bonuses and other plans, programs or obligations)
(i) arising prior to the Closing Date that relate to any current or former officer, director, employee or independent contractor of the Business including any Former Business Employee or any Business Employee (or any dependent or beneficiary
thereof); (ii) or arising on or after the Closing Date that relate to any Business Employee to whom Seller and its Affiliates offer employment between the date hereof and the Closing; or (iii) arising between the Closing Date and the
Commencement Date that relate to any Inactive Business Employee.
(b) (i) Unless otherwise expressly provided in this Article IX,
effective as of the Closing Date, Purchaser shall, or shall cause an Affiliate of Purchaser to, assume and be solely responsible and liable for all employment, compensation, severance and employee benefit-related Liabilities, obligations and
commitments arising on or after the Closing Date (including, but not limited to, claims for wrongful dismissal, constructive dismissal, unfair dismissal, notice
63
of termination of employment, pay in lieu of notice of termination, termination indemnities or other indemnities, any damages arising from a breach of a
Transferred Employee’s, Business Employee’s or Former Business Employee of a Transferred Entity’s employment contract, and any payments required to be made under any Law of any jurisdiction or the applicable collective bargaining
agreement in respect of the termination of a Transferred Employee, or Former Business Employee of a Transferred Entity’s employment including payments in respect of accrued wages, vacation, overtime, bonuses and other plans, programs or
obligations) that relate to any Transferred Employee or such Former Business Employee; (ii) Seller and its Affiliates shall, solely in relation to obligations triggered by the sale of the Business, including the sale of any Transferred Entity,
retain all Liabilities and responsibilities arising from Seller’s and its Affiliates’ failure to perform and discharge any obligation and requirement of Seller or its Affiliates to inform and consult with any works council or union or
employee representatives and under the Acquired Rights Directive or under transfer of undertakings in the applicable foreign jurisdiction prior to the Closing that relate to any Former Business Employee, Business Employee or Transferred Employee (or
any dependent or beneficiary thereof) incurred prior to, on or after the Closing Date. Purchaser shall, or shall cause an Affiliate of Purchaser to, solely in relation to obligations triggered by the sale of the Business, including the sale of any
Transferred Entity, assume all Liabilities and responsibilities arising from Purchaser’s or its Affiliate’s failure to perform and discharge any obligation or requirement of Purchaser or its Affiliate to inform and consult with any works
council or union or employee representatives and under the Acquired Rights Directive or under transfer of undertakings in the applicable foreign jurisdiction prior to Closing that relate to any Former Business Employee, Business Employee of a
Transferred Entity or Transferred Employee (or any dependent or beneficiary thereof) incurred prior to, on or after the Closing Date.
(c)
Purchaser and its Affiliates shall be liable for Liabilities relating to the litigations and claims set forth in Section 9.02(c) of the Seller Disclosure Schedule.
(d) Seller and its Affiliates shall retain all liabilities and obligations for all workers’ compensation, short- and long-term disability, medical, prescription drug, dental, vision, life insurance, accidental
death and dismemberment and other welfare benefit claims incurred by Business Employees (other than Business Employees of any Transferred Entity) prior to the Closing Date or incurred by Inactive Business Employees prior to becoming Transferred
Employees that are covered under the terms of the applicable plans of Seller or its Affiliates. With respect to claims incurred prior to the Closing with respect to Business Employees of the Transferred Entities and with respect to claims incurred
on or after the Closing Date or the Commencement Date, as applicable, by the Transferred Employees and their eligible dependents for workers’ compensation, short- and long-term disability, medical, prescription drug, dental, vision, life
insurance, accidental death and dismemberment and other welfare benefit claims, Purchaser, or its Affiliates, shall be responsible. For these purposes, a claim shall be deemed to be incurred: (i) in the case of workers’ compensation and
short- or long-term disability benefits (including related health benefits), at the time of the injury, sickness or other event giving rise to the claim for such benefits; (ii) in the case of medical, prescription drug, dental or vision
benefits, at the time professional services, equipment or prescription drugs covered by the applicable plan are obtained; (iii) in the case of life insurance benefits, upon death; and (iv) in the case of accidental death and dismemberment
benefits, at the time of the accident. For the avoidance of doubt and notwithstanding anything to the contrary set forth
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herein, this Section 9.02(d) shall not apply to any claims, Liabilities or obligations arising out of or relating to exposure of any Business Employee,
Former Business Employee, Transferred Employee or former employee or independent contractor of the Transferred Entities or the Business to Hazardous Materials, which matters shall be addressed exclusively by the provisions of Sections 1.03(a)(ii)
and 4.17 herein.
(e) Except as specifically set forth in this Article IX or required by applicable Law, collective bargaining agreement,
trade union agreement or works council agreement: (i) none of Purchaser nor its Affiliates shall be obligated to assume, continue or maintain any of the Benefit Plans that are sponsored or maintained by Seller or any Affiliate of Seller (other
than a Transferred Entity); (ii) no assets or Liabilities of any such Benefit Plans shall be transferred to, or assumed by, Purchaser or its Affiliates or their respective benefit plans; and (iii) Seller and its Affiliates (other than the
Transferred Entities) shall be solely responsible for funding and/or paying any benefits under such Benefit Plans, including any termination benefits and other employee entitlements accrued under such plans by or attributable to employees of any of
the Seller or its Affiliates.
(f) Seller shall indemnify and keep indemnified each of Purchaser and its Affiliates against any Liability
relating to: (i) any Liability which may be treated as due from Purchaser or its Affiliates in relation to the trustees of any occupational pension scheme operated for the benefit of Transferred Employees who are employed primarily in the
United Kingdom (the “
UK Transferred Employees
”), including the Bristol-Myers Squibb Pension Plan (the “
Seller’s UK DB Pension Plan
”) and the Seller’s supplemental pension and ancillary benefits provision
as described in the December 13, 2007 letter to certain UK Transferred Employees (the “
Seller’s UK Supplemental Pension Program
”) under section 75 or section 75A of the United Kingdom Pensions Act 1995 (as amended) to the
extent that the Liability arises out of or in connection with an employment cessation event (within the meaning of the Occupational Pension Schemes (Employer Debt) Regulations 2005 (as amended)) as a result of the transactions contemplated by this
Agreement; and (ii) any contribution notice or financial support direction that may be issued pursuant to the Pensions Act 2004 in relation to any occupational pension scheme operated prior to Closing for the benefit of the UK Transferred
Employees, including Seller’s UK DB Pension Plan and Seller’s UK Supplemental Pension Program.
SECTION 9.03.
Independent
Contractors.
Effective as of the Closing, (i) Purchaser shall, or shall cause its Affiliates to, assume all contracts, obligations and liabilities with respect to independent contractors working for the Business on the Closing Date and
(ii) Purchaser shall indemnify and hold Seller and its Affiliates harmless against any such contracts, liabilities, obligations or any and all Losses which Seller or its Affiliates may suffer or incur as a result of any claim, action or other
proceeding made by such independent contractor against Seller or its Affiliates from and after the Closing Date or arising from any breach of Purchaser’s obligations under this Section 9.03.
SECTION 9.04.
Credited Service.
Purchaser shall, or shall cause its Affiliates to, credit service accrued by Transferred Employees with, or
otherwise recognized for purposes of benefit plans, programs, policies or arrangements by, Seller or its Affiliates as of the Closing (the “
Pre-Closing Service
”) for all purposes (other than for benefit accrual purposes under any
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defined benefit pension plan of Purchaser or its Affiliates unless required by applicable Law) under the benefit plans, programs, policies and arrangements
(including any pension, 401(k), savings, profit-sharing, medical, dental, life insurance, vacation, vacation bonus, seniority payment, post-retirement health and life insurance, equity, severance, indemnification or separation pay plans and benefits
under the applicable collective bargaining agreement) of Purchaser and its Affiliates.
SECTION 9.05.
Continuation of Compensation and
Benefits.
(a) Without limiting the generality of Section 9.01, from the Closing Date through at least December 31, 2009 (the “
Continuation Period
”), Purchaser or an Affiliate of Purchaser shall (except as
otherwise required by applicable Law, collective bargaining agreement, trade union agreement or works council agreement) provide each Transferred Employee with base salary (or wages) and bonus target that in each case is no less favorable than the
base salary (or wages) and bonus target provided to such Transferred Employee immediately prior to the Closing Date. During the Continuation Period, Purchaser shall maintain, or cause an Affiliate of Purchaser to maintain, employee benefits and
compensation plans (excluding equity compensation plans), programs, arrangements, and perquisites for the Transferred Employees that are no less favorable in the aggregate than those provided to such Transferred Employees immediately prior to the
Closing Date;
provided
,
however
, that Purchaser and its Affiliates shall not be obligated to maintain any defined benefit pension plan except where required by applicable Law, collective bargaining agreement, trade union agreement or
works council agreement.
(b) Purchaser shall provide, or cause an Affiliate of Purchaser to provide, to each U.S. Transferred Employee
whose employment terminates during the Continuation Period, cash severance benefits equal to the greater of (x) the cash severance payable, if any, under the applicable severance plan of Purchaser or an Affiliate of Purchaser (the
“
Purchaser’s Severance Plan
”) based on the eligibility criteria applicable under Purchaser’s Severance Plan as then in effect, and subject to the terms and conditions of Purchaser’s Severance Plan, or (y) the
cash severance payable, if any, under the terms and conditions set forth in Section 9.05(b) of the Seller Disclosure Schedule, based on the eligibility criteria, and subject to the terms and conditions set forth in Section 9.05(b) of the
Seller Disclosure Schedule. With respect to any U.S. Transferred Employee whose employment is terminated during the Continuation Period, Purchaser shall further provide, or cause an Affiliate of Purchaser to provide, to U.S. Transferred Employees
who are entitled to cash severance pursuant to the preceding sentence payment for all medical and dental coverage to which such U.S. Transferred Employees are eligible pursuant to the Consolidated Omnibus Budget Reconciliation Act
(“
COBRA
”) for the number of weeks corresponding to the number of weeks of base salary (or wages) covered by their cash severance payments and at an employee cost no greater than the then-current cost of such medical and dental
coverage for active employees of Purchaser or its Affiliates. Purchaser shall, and shall cause its Affiliates to, refrain from enticing, encouraging or requiring any U.S. Transferred Employee to elect to receive COBRA coverage from Seller on or
following the Closing Date.
(c) Purchaser shall provide, or cause an Affiliate of Purchaser to provide, to each Foreign Transferred
Employee whose employment is terminated by Purchaser or its Affiliates during the Continuation Period severance and other separation benefits that are no less favorable than the severance and other separation benefits described in
Section 9.05(c) of the Seller Disclosure Schedule. Purchaser shall also assume and be solely responsible for paying any other
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severance obligations that are payable under applicable Law, collective bargaining agreement, trade union agreement or works council agreement as a result of
termination of a Foreign Transferred Employee’s employment with Purchaser or its Affiliates after the Closing Date. Nothing herein shall be construed as giving any Foreign Transferred Employee any right to continued employment with Purchaser or
its Affiliates following the Closing other than as required by applicable Law, employment contracts, collective bargaining agreements, trade union agreements or works council agreements, or as expressly provided in this Article IX.
SECTION 9.06.
U.S. and Puerto Rico Savings and Investment Plans; Vesting.
(a) Without limiting the generality of Section 9.05,
effective as of the Closing Date, Purchaser or an Affiliate of Purchaser shall have in effect (i) a defined contribution plan that includes a qualified cash or deferred arrangement within the meaning of Section 401(k) of the Code intended
to be qualified pursuant to Section 401(a) of the Code (the “
Purchaser’s U.S. 401(k) Plan
”) and (ii) a defined contribution plan that includes a qualified cash or deferred arrangement within the meaning of
Section 401(k) of the Code intended to be qualified pursuant to both Section 401(a) of the Code and the PR Code (the “
Purchaser’s PR 401(k) Plan
”), which will provide during the Continuation Period benefits, rights
and features to U.S. Transferred Employees, who immediately prior to the Closing are participants or who would be permitted during the Continuation Period to become participants in the Bristol-Myers Squibb Company Savings and Investment Program
(“
U.S. SIP
”) or the Bristol-Myers Squibb Puerto Rico, Inc. Savings and Investment Program (“
PR SIP
”), that pursuant to the terms thereof are substantially identical in all material respects (except for such changes
as may be required by Law or as provided below) to those provided by the U.S. SIP and the PR SIP immediately prior to the Closing. Each U.S. Transferred Employee participating in the U.S. SIP or the PR SIP immediately prior to the Closing shall
become a participant in Purchaser’s U.S. 401(k) Plan or Purchaser’s PR 401(k) Plan (as applicable) as of the Closing. U.S. Transferred Employees shall receive credit for all service with Seller and its Affiliates for purposes of
eligibility and vesting under Purchaser’s U.S. 401(k) Plan and Purchaser’s PR 401(k) Plan (as applicable).
(b) At such time as
Seller is reasonably satisfied that Purchaser’s 401(k) Plan meets the requirements for qualification under Section 401(a) of the Code and that Purchaser’s PR 401(k) Plan meets the requirements for qualification under both
Section 401(a) of the Code and the PR Code, Seller shall cause the U.S. SIP and the PR SIP to transfer to the trusts that form a part of Purchaser’s 401(k) Plan and Purchaser’s PR 401(k) Plan (as applicable) cash, assets (including
shares of Seller common stock, to the extent U.S. Transferred Employees’ accounts are invested in Seller common stock) or a combination thereof (the “
Asset Transfer
”) in an amount equal to the account balances of the U.S.
Transferred Employees (including any promissory notes evidencing outstanding loan balances under the U.S. SIP and the PR SIP) as of the valuation date for the U.S. SIP and the PR SIP next preceding such transfer, and Purchaser shall cause
Purchaser’s 401(k) Plan and Purchaser’s PR 401(k) Plan (as applicable) to accept such transfer. Seller shall debit the accounts of each U.S. Transferred Employee under the U.S. SIP and the PR SIP by the amount transferred to
Purchaser’s 401(k) Plan and Purchaser’s PR 401(k) Plan, and Purchaser shall allocate the cash and property transferred to Purchaser’s 401(k) Plan and Purchaser’s PR 401(k) Plan to the accounts of U.S. Transferred Employees by
crediting such accounts in relative proportion to the amount debited from the U.S. Transferred Employees’ accounts under the U.S. SIP and the PR SIP. To the extent permitted by applicable Law, Purchaser’s 401(k) Plan and Purchaser’s
PR 401(k) Plan shall maintain an investment option
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consisting primarily of investments in Seller’s common stock (the “
Seller’s Stock Fund
”) for a period of no fewer than twelve
(12) months following the Closing Date;
provided
,
however
, that U.S. Transferred Employees participating in Purchaser’s 401(k) Plan and Purchaser’s PR 401(k) Plan will be permitted to transfer amounts out of
Seller’s Stock Fund, but no additional amounts will be permitted to be invested in or transferred into Seller’s Stock Fund.
(c)
Following such Asset Transfer, Purchaser and/or Purchaser’s 401(k) Plan and Purchaser’s PR 401(k) Plan shall assume all liabilities and obligations of Seller and its Affiliates under the U.S. SIP and the PR SIP with respect to U.S.
Transferred Employees and their beneficiaries, and Seller and its Affiliates shall have no further liability to Purchaser or any U.S. Transferred Employees with respect thereto. Purchaser shall indemnify and hold Seller and its Affiliates and the
U.S. SIP and the PR SIP harmless against any such liabilities, obligations, benefits, acts, omissions and transactions.
(d) Purchaser
shall assume all liability with respect to benefits under Seller’s Benefit Equalization Plan – Savings and Investment Program that are accrued prior to the Closing Date with respect to U.S. Transferred Employees who participate in such
plan.
(e) Seller shall take all action necessary to provide that all U.S. Transferred Employees who participate in the U.S. SIP or the PR
SIP or the Bristol-Myers Squibb Company Retirement Income Plan or the Bristol-Myers Squibb Puerto Rico, Inc. Retirement Income Plan have a fully vested and non-forfeitable right to their entire account balances or entire accrued benefit, as
applicable, under such plans as of the Closing Date.
SECTION 9.07.
U.S. Medical and Dental Plans.
(a) Without limiting the
generality of Section 9.05, effective as of the Closing, Purchaser shall make available to each U.S. Transferred Employee (and his or her eligible dependents) who is enrolled immediately prior to the Closing in the medical, dental and
prescription drug benefit plans and programs of Seller and its Affiliates (collectively, “
Seller’s Health Plans
”) participation in medical, dental and prescription drug plans and programs maintained or contributed to by
Purchaser or its Affiliates (collectively, “
Purchaser’s Health Plans
”). Purchaser’s Health Plans shall provide, during the Continuation Period, benefits to each U.S. Transferred Employee that are substantially comparable
in the aggregate to those provided under Seller’s Health Plans. Any and all waiting periods and pre-existing condition exclusions and actively-at-work requirements shall be waived under Purchaser’s Health Plans with respect to the U.S.
Transferred Employees and their eligible dependents, to the extent such employee or dependent was not subject to any such waiting periods, exclusions or requirements under a similar Seller’s Health Plan in which such employee or dependent
participated immediately prior to the Closing Date. In addition, Purchaser shall cause Purchaser’s Health Plans to recognize any out-of-pocket medical and dental expenses incurred by the U.S. Transferred Employees and their eligible dependents
prior to the Closing and during the calendar year in which the Closing occurs for purposes of satisfying any applicable deductibles and out-of-pocket maximums under Purchaser’s Health Plans, to the same extent so recognized under a similar
Seller’s Health Plan prior to the Closing Date.
(b) Notwithstanding any other provision of this Agreement to the contrary,
(A) Seller agrees to provide or cause to be provided to each individual who retires on or after the Closing Date and who was, immediately prior to the Closing Date, formerly employed by Seller
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or its Affiliates in connection with the Business and each Business Employee who is eligible to retire on or immediately prior to the Closing (and such
employee’s eligible dependents) retiree health care benefits and coverage set forth in the Comprehensive Medical Summary Plan Description of Bristol-Myers Squibb Company, or such other retiree benefit plan or arrangement of Seller or its
Affiliates that is applicable to such individual or employee immediately prior to the Closing ( “
Seller’s Retiree Health Plan
”) with such retiree health care benefits and coverage set forth in the Seller’s Retiree Health
Plan; and (B) Purchaser shall provide or cause to be provided under Purchaser’s Health Plans to each U.S. Transferred Employee (and his or her eligible dependents) who is not described in the immediately preceding clause (A), but who would
have satisfied the eligibility requirements for retiree health care benefits and coverage set forth in Seller’s Retiree Health Plan within the Continuation Period had such Transferred Employee’s service as an employee of Purchaser or its
Affiliate during the Continuation Period been service as an employee of Seller or its Affiliate, and who retires on or after the Closing Date and during the Continuation Period either (i) health care benefits and coverage that are substantially
comparable in the aggregate to those set forth in Seller’s Retiree Health Plan (or that would have been applicable had such U.S. Transferred Employee been eligible to retire immediately prior to the Closing) without regard to any Rule of 70
benefit, or (ii) if more favorable to such U.S. Transferred Employee than the foregoing, the health care benefits and coverage that are provided to similarly situated retirees of Purchaser and its Affiliates;
provided
that such U.S.
Transferred Employee’s participation cost shall be taken into account for purposes of determining whether benefits and coverage are no less favorable or more favorable. Nothing herein shall prevent Seller from amending Seller’s Retiree
Health Plan (subject to Section 5.02), or Purchaser from amending its retiree health plans (subject to Section 9.05) at any time in its sole discretion.
(c) As of the Closing Date, Purchaser shall have in effect health care and dependent care flexible spending reimbursement accounts under a cafeteria plan qualifying under Section 125 of the Code
(“
Purchaser’s Cafeteria Plan
”), which will provide, during the Continuation Period, benefits, rights and features to U.S. Transferred Employees that are substantially comparable in the aggregate to those provided under the
health care and dependent care flexible spending reimbursement account plans of Seller and its Affiliates (“
Seller’s Cafeteria Plan
”) immediately prior to the Closing. Purchaser shall cause Purchaser’s Cafeteria Plan to
accept a spin-off of the flexible spending reimbursement accounts of each U.S. Transferred Employee who participates in Seller’s Cafeteria Plan immediately prior to the Closing (each, an “
FSA Participant
”) and to honor and
continue through December 31 of the year in which the Closing occurs (the “
FSA Participation Period
”) the elections made by each FSA Participant under Seller’s Cafeteria Plan in respect of such flexible spending
reimbursement accounts that are in effect immediately prior to the Closing. As soon as practicable following the Closing Date, Seller and its Affiliates shall cause to be transferred in cash from Seller’s Cafeteria Plan to Purchaser’s
Cafeteria Plan the excess, if any, of the aggregate accumulated contributions to the flexible spending reimbursement accounts made by FSA Participants prior to the Closing during the year in which the Closing occurs over the aggregate reimbursement
payouts made to the FSA Participants prior to the Closing for such year from such accounts. From and after the Closing, Purchaser shall assume and be solely responsible for all claims by FSA Participants under Seller’s Cafeteria Plan incurred
at any time during the calendar year in which the Closing occurs, whether incurred prior to, on or after the Closing Date, that have not been paid in full as of the Closing Date. For purposes of this paragraph, a claim for reimbursement shall be
deemed to have been incurred on the date on which the charge or expense giving rise to such claim is incurred.
69
(d) Effective as of the Closing, Purchaser shall assume and be solely responsible for all liabilities and
obligations under COBRA with respect to each U.S. Transferred Employee, and his or her qualified beneficiaries, who is eligible to elect “continuation coverage” (as such term is defined under Section 602 of ERISA) or any similar
benefit under any state Law. Without limiting the foregoing, Purchaser and its Affiliates shall assume and be solely responsible for the provision of health care coverage after the Closing to U.S. Transferred Employees and their beneficiaries that
satisfies the continuation coverage requirements imposed in connection with the transactions contemplated by this Agreement by Section 4980B of the Code.
SECTION 9.08.
U.S. Short-Term Disability and Long-Term Disability.
Without limiting the generality of Section 9.05, effective as of the Closing, Purchaser shall make available to each U.S. Transferred
Employee who is enrolled immediately prior to the Closing in the short-term disability plans and long-term disability plans of Seller and its Affiliates (collectively, “
Seller’s Disability Plans
”) participation in short-term
disability plans and long-term disability plans maintained or established by Purchaser (collectively, “
Purchaser’s Disability Plans
”). Purchaser’s Disability Plans shall provide, during the Continuation Period, benefits to
each U.S. Transferred Employee that are substantially comparable in the aggregate to those provided under Seller’s Disability Plans.
SECTION 9.09.
U.S. Life and Accident Insurance.
(a) Without limiting the generality of Section 9.05, effective as of the Closing, Purchaser shall make available to each U.S. Transferred Employee who is enrolled immediately
prior to the Closing in the life insurance and accident insurance plans of Seller and its Affiliates (collectively, “
Seller’s Life and Accident Insurance Plans
”) participation in life insurance and accident insurance plans
maintained or established by Purchaser (collectively, “
Purchaser’s Life and Accident Insurance Plans
”). Purchaser’s Life and Accident Insurance Plans shall provide, during the Continuation Period, benefits to each U.S.
Transferred Employee that are substantially comparable in the aggregate to those provided under Seller’s Life and Accident Insurance Plans.
(b) Notwithstanding any other provision of this Agreement to the contrary, (A) Seller agrees to provide or cause to be provided to each individual who retires on or after the Closing Date and who was, immediately prior to the Closing
Date, formerly employed by Seller or its Affiliates in connection with the Business and each Business Employee who is eligible to retire on or immediately prior to the Closing (and such employee’s eligible dependents) retiree life insurance
benefits and coverage under Seller’s Life and Accident Insurance Plans, or such other retiree benefit plan or arrangement of Seller or its Affiliates that is applicable to such individual or employee immediately prior to the Closing (
“
Seller’s Retiree Life and Accident Insurance Plan
”) with retiree life insurance benefits and coverage under Seller’s Retiree Life and Accident Insurance Plans; and (B) Purchaser agrees to provide or cause to be
provided under Purchaser’s Life and Accident Insurance Plans to each U.S. Transferred Employee (and his or her eligible dependents) who is not described in the immediately preceding clause (A), but who would have satisfied the eligibility
requirements for retiree insurance coverage set forth in the Seller’s Retiree Life and Accident Insurance Plan within the Continuation Period had such
70
Transferred Employee’s service as an employee of Purchaser or its Affiliate during the Continuation Period been service as an employee of Seller or its
Affiliate, and who retires on or after the Closing Date and during the Continuation Period either (i) life insurance benefits and coverage that are substantially comparable in the aggregate to those under Seller’s Retiree Life and Accident
Insurance Plans (or that would have been applicable had such U.S. Transferred Employee been eligible to retire immediately prior to the Closing) or (ii) if more favorable to such Employee than the foregoing, the life insurance benefits and
coverage that are provided to similarly situated retirees of Purchaser and its Affiliates;
provided
that such U.S. Transferred Employee’s participation cost shall be taken into account for purposes of determining whether benefits and
coverage are no less favorable or more favorable. Nothing herein shall prevent Seller from amending Seller’s Retiree Life and Accident Insurance Plan (subject to Section 5.02), or Purchaser from amending its retiree life and accident
insurance plans (subject to Section 9.05), at any time in its sole discretion.
SECTION 9.10.
Performance Bonuses.
Purchaser
shall, to the extent accrued therefor in the Financial Statements, assume and be solely responsible for all liabilities under, and shall make any and all payments required to be made pursuant to, the cash performance and incentive plans and related
administrative guidelines and procedures of Seller and its Affiliates (“
Seller’s Incentive Plans
”) with respect to the Transferred Employees where such liabilities and/or payments relate to performance periods in which the
Closing Date occurs or that have ended but have not been paid prior to the Closing, to the extent true and complete copies of all Seller’s Incentive Plans have been provided to Purchaser prior to the date hereof. Purchaser agrees to calculate
and make such payments pursuant to the terms and conditions of such Seller’s Incentive Plans. Section 9.10 of the Seller Disclosure Schedule sets forth the threshold target and maximum bonus for each Business Employee under such
Seller’s Incentive Plans for the calendar year 2008 (which Schedule is attached to the Confidential Employee Benefit Letter).
SECTION
9.11.
Relocation Benefits.
With respect to each Transferred Employee who, as of the Closing, is in the process of undergoing a relocation and who is identified in Section 9.11 of the Seller Disclosure Schedule (which Schedule is attached
to the Confidential Employee Benefit Letter), Purchaser shall, or shall cause an Affiliate of Purchaser to, provide relocation benefits that are identical, in all material respects, to Seller’s relocation benefits, at the expense of Purchaser
or its Affiliates;
provided
,
however
, that nothing in this Section 9.11 shall require Purchaser or its Affiliates to be liable for any relocation costs incurred prior to the Closing Date. With respect to each Transferred Employee
who is on expatriate assignment as of the Closing and who is identified in Section 9.11 of the Seller Disclosure Schedule, Purchaser shall, or shall cause its Affiliates to, provide repatriation benefits that are no less favorable in the
aggregate than Seller’s repatriation benefits in effect immediately prior to the Closing.
SECTION 9.12.
Vacation Benefits.
Upon termination of employment with Purchaser or an Affiliate of Purchaser on or after the Closing Date, Purchaser shall pay each Transferred Employee (other than a Transferred Employee of a Transferred Entity) for any vacation days banked (but
excluding any vacation days taken) through the Closing and, to the extent required by applicable Law, or the terms of the applicable vacation policy, any vacation days accrued (but excluding any vacation days taken) through the Closing. To the
extent the payment of accrued vacation described in the immediately preceding sentence is not required to
71
be made, Purchaser shall assume and honor all vacation days accrued but not yet taken by Transferred Employees as of the Closing, to the extent of the
liabilities accrued therefor in the Financial Statement (it being understood that Purchaser and its Affiliates may deduct from the number of vacation days made available to any Transferred Employee the number of days of vacation previously taken by
such Transferred Employee in the applicable year). In the event that any Transferred Employee has taken more vacation days than he or she has accrued as of the Closing, neither Purchaser nor its Affiliates shall have any obligation to reimburse
Seller in respect thereof.
SECTION 9.13.
Employment and Other Agreements.
Effective as of the Closing, Purchaser shall
(i) assume all Liabilities arising in accordance with all employment agreements, supplemental benefit agreements and other agreements which have been entered into between a Transferred Employee, on the one hand, and Seller or its Affiliates, on
the other hand, (which agreements not required to be assumed under applicable Law, collective bargaining agreement, trade union agreement or works council agreement are set forth in Section 9.13 of the Seller Disclosure Schedule), and
(ii) indemnify and hold harmless Seller and its Affiliates against any such liabilities.
SECTION 9.14.
Retention Arrangements.
Seller shall retain the economic obligations under the retention bonus arrangements of Seller and its Affiliates that are payable before the Closing Date and are identified in Section 9.14 of the Seller Disclosure Schedule. Purchaser shall
retain the economic obligations under retention bonus arrangements of Seller and/or Purchaser and their respective Affiliates that are payable at any time on or following the Closing Date and are identified in Section 9.14 of the Seller
Disclosure Schedule.
SECTION 9.15.
Other Programs and Benefits.
Effective as of the Closing, Purchaser shall assume and be solely
responsible for all Liabilities with respect to (a) tuition assistance programs, (b) automobile policies, (c) statutory benefits and (d) expatriate allowances, including foreign or U.S. tax payments and tax equalization payments,
in each case provided to Transferred Employees and their beneficiaries by Seller and its Affiliates immediately prior to the Closing and, except for statutory benefits, are listed on Section 9.15 of the Seller Disclosure Schedule.
SECTION 9.16.
U.S. WARN Act and Other Notices.
Purchaser agrees to provide any required notice under the Worker Adjustment and Retraining
Notification Act (“
WARN
”) and any similar state or other applicable Law and to otherwise comply with any such requirement with respect to any “plant closing” or “mass layoff” (as defined in WARN) or similar event
affecting Employees and occurring on or after the Closing Date. With regard to applicable Laws other than those of the United States, Purchaser agrees to provide notice and to inform and consult with workers, their representative bodies and any
relevant Governmental Entities as required by applicable Law in relation to the transactions contemplated herein. Purchaser shall indemnify and hold harmless Seller and its Affiliates against any such liabilities relating to Purchaser and its
Affiliates’ obligations under this Section 9.16.
SECTION 9.17.
Special Provisions for Foreign Transferred Employees.
(a)
Foreign Health and Welfare Plans.
Without limiting the generality of Section 9.05, effective as of the Closing, Purchaser shall have in effect health and welfare plans for the benefit of
72
Foreign Transferred Employees (“
Purchaser’s Foreign Health and Welfare Plans
”). Purchaser’s Foreign Health and Welfare Plans shall
provide benefits, during the Continuation Period to each Foreign Transferred Employee, that (i) are no less favorable in the aggregate than those provided under the health and welfare plans and programs maintained or contributed to by Seller
and its Affiliates that are applicable to such Foreign Transferred Employee immediately prior to the Closing and (ii) meet the requirements of applicable Law with respect to continuity of benefits. With respect to any of Purchaser’s
Foreign Health and Welfare Plans, any and all waiting periods and pre-existing condition exclusions and actively-at-work requirements shall be waived with respect to the Foreign Transferred Employees, to the extent such employee was not subject to
any such waiting periods, exclusions or requirements under a similar plan or program of Seller or its Affiliates in which such employee participated immediately prior to the Closing Date.
(b)
Foreign Pension Plans.
Without limiting the generality of Section 9.05, effective as of the Closing, Purchaser shall have in effect
retirement plans for the benefit of Foreign Transferred Employees (“
Purchaser’s Foreign Retirement Plans
”) that provide benefits, during the Continuation Period to each Foreign Transferred Employee, that (i) are no less
favorable in the aggregate than those provided under the pension plans and programs maintained or contributed to by Seller and its Affiliates (“
Seller’s Foreign Retirement Plans
”) that are applicable to such Foreign Transferred
Employee immediately prior to the Closing subject to the Foreign Transferred Employees paying contributions under Purchaser’s Foreign Retirement Plans at no greater rate than under Seller’s Foreign Retirement Plans and (ii) meet the
requirements of applicable Law with respect to continuity of benefits. Purchaser shall indemnify and hold harmless Seller and its Affiliates against all Losses incurred by Seller in respect of any claims by Foreign Transferred Employees relating to
any changes in their pension benefits as of the Closing.
SECTION 9.18.
Personnel Records.
To the extent permitted by applicable
Law, the originals of all records created prior to the Closing Date (or such later date of transfer of employment, as applicable) set forth in the Transferred Employees’ personnel files shall remain with the Transferred Entity or be transferred
to Purchaser or Purchaser’s Affiliates (as of the Closing Date or such later date of transfer of employment, as applicable), as the case may be (the “
Personnel Records
”). The originals of all personnel records of all Former
Business Employees and all Business Employees who are not Transferred Employees shall remain with Seller and its Affiliates;
provided
that Purchaser shall be provided with a copy of all employee health and safety records required by
applicable Law to be maintained by the Transferred Entities and Seller shall permit Purchaser or its Affiliates or successors and their authorized representatives to have full access to all such personnel records to the extent reasonably necessary
in order for Purchaser or any of its Affiliates or successors to respond to a subpoena, court order, audit, investigation or otherwise as required by applicable Law or in connection with any pending or threatened lawsuits, actions, arbitrations,
claims, complaints, investigations or other proceedings. Purchaser or Purchaser’s Affiliates (or their respective successors) shall retain the Personnel Records for a period of at least ten (10) years following the Closing Date (the
“
Retention Period
”). Purchaser and its Affiliates shall permit Seller and its authorized representatives to have full access upon reasonable notice during normal business hours to all the Personnel Records during the Retention
Period in order for Seller or any of its Affiliates to respond to a subpoena, court order, audit, investigation, to obtain data for pension or other benefits, or otherwise as required by applicable Law (such determination by the parties of access
shall be reasonable and shall not be unreasonably delayed) and Purchaser and its Affiliates shall provide Seller, upon Seller’s reasonable request and at Seller’s expense, with copies of such Personnel records.
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SECTION 9.19.
No Third Party Remedies.
Nothing in this Article IX is intended or shall be intended
to entitle any person other than the parties hereto and their respective transferees and permitted assigns to any claim, cause of action, remedy or right of any kind.
SECTION 9.20.
Cooperation.
Following the Closing, Purchaser shall, and shall cause its Affiliates (including, in the case of Purchaser, the Transferred Entities) to, cooperate reasonably fully with Seller and
its Affiliates in the prosecution, defense, and/or settlement of any claims for which Seller and its Affiliates retains liability under this Article IX. Such cooperation shall include (i) affording Seller, its Affiliates, its counsel and its
other representatives reasonable access, upon reasonable written notice during normal business hours, to all relevant personnel, properties, books, contracts, commitments and records, (ii) furnishing promptly to Seller, its Affiliates, its
counsel and its other representatives any information reasonably requested by it, such Affiliates, such counsel or such other representatives and (iii) providing any other assistance to Seller, its Affiliates, its counsel and its other
representatives reasonably requested by such other party, such Affiliates, such counsel or such other representatives. Seller shall reimburse Purchaser for reasonable costs and expenses incurred in assisting Seller pursuant to this
Section 9.20. Following the Closing, Seller shall, and shall cause its Affiliates to, cooperate reasonably fully with Purchaser and its Affiliates in the prosecution, defense, and/or settlement of any claims for which Purchaser and its
Affiliates assumes liability under this Article IX. Such cooperation shall include (i) affording Purchaser, its Affiliates, its counsel and its other representatives reasonable access, upon reasonable written notice during normal business
hours, to all relevant personnel, properties, books, contracts, commitments and records, (ii) furnishing promptly to Purchaser, its Affiliates, its counsel and its other representatives any information reasonably requested by it, such
Affiliates, such counsel or such other representatives and (iii) providing any other assistance to Purchaser, its Affiliates, its counsel and its other representatives reasonably requested by such other party, such Affiliates, such counsel or
such other representatives. Purchaser shall reimburse Seller for reasonable costs and expenses incurred in assisting Purchaser pursuant to this Section 9.20.
ARTICLE X
Indemnification
SECTION 10.01.
Indemnification by Seller.
(a) From and after the Closing, Seller shall indemnify Purchaser and its Affiliates (including the
Transferred Entities) and each of their respective officers, directors, employees, agents and representatives, and their respective permitted successors and assigns (the “
Purchaser Indemnitees
”) against and hold them harmless from
any loss, Liability, claim, damage, interest, fine or expense (including reasonable legal fees and expenses) (“
Losses
”) suffered or incurred by any such Purchaser Indemnitee to the extent arising from:
(i) (i) any breach of (A) any representation or warranty of Seller contained in this Agreement or any certificate delivered
pursuant to this Agreement which survives the Closing (other than with respect to the representations and warranties contained in
74
Sections 4.11(b) and 4.16), (B) any representation or warranty of Seller contained in Sections 4.11(b) and 4.16 or in a certificate delivered pursuant
to this Agreement which survives the Closing solely to the extent and only to the extent relating to such representations;
provided
that the phrase “have a Seller Material Adverse Effect” as used in Sections 4.11(b) and 4.16 (and in
any such certificate solely to the extent and only to the extent relating to such representations) shall be deemed to be replaced by the words “be material to the Business in the aggregate” or (C) any covenant of Seller contained in
this Agreement requiring performance on or prior to the Closing Date;
(ii) any breach of any covenant of Seller contained
in this Agreement requiring performance after the Closing Date; and
(iii) any Excluded Liability;
provided
,
however
, that this Section 10.01 shall not provide for any indemnification arising out of or relating to Taxes (which are the subject of Section 10.03).
(b) Notwithstanding the foregoing, Seller shall not be required to indemnify any Purchaser Indemnitee and Seller shall not have any liability:
(i) (x) under Section 10.01(a)(i) (A) unless the aggregate of all Losses for which Seller would be liable, but for this
clause (i), exceeds on a cumulative basis an amount equal to one percent (1%) of the Final Purchase Price, and then only to the extent of any such excess, and (y) under Section 10.01(a)(i)(B) unless the aggregate of all Losses
for which Seller would be liable, but for this clause (i), exceeds on a cumulative basis an amount equal to one and one-half percent (1.5%) of the Final Purchase Price, and then only to the extent of any such excess;
(ii) (x) under Section 10.01(a)(i)(A) for any individual item (or series of related items) where the Loss relating thereto is
less than $50,000 and such items under this clause (x) shall not be aggregated for purposes of the foregoing clause (i) of this Section 10.01(b), (y) under Section 10.01(a)(i)(B) for any individual item (or series of related
items) where the Loss relating thereto is less than $100,000 and such items under this clause (y) shall not be aggregated for purposes of the foregoing clause (i) of this Section 10.01(b), and (z) under
Section 10.01(a)(i)(C) for any individual item (or series of related items) where the Loss relating thereto is less than $250,000 and such items under this clause (z) shall not be aggregated for purposes of the foregoing clause (i) of
this Section 10.01(b); and
(iii) under Section 10.01(a)(i), (A) other than with respect to the breach of any
of the Fundamental Representations, in excess of ten percent (10%) of the Final Purchase Price and (B) with respect to a breach of any Fundamental Representations, in excess of twenty-five percent (25%) of the Final Purchase Price.
(c) In no event shall Seller be obligated to indemnify Purchaser or any Purchaser Indemnitee with respect to any matter to the extent that
such matter was reflected in the calculation of the adjustment to the Purchase Price, if any, pursuant to Section 2.02.
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SECTION 10.02.
Indemnification by Purchaser.
From and after the Closing, Purchaser and the
Transferred Entities shall, jointly and severally, indemnify Seller and its Affiliates (other than any Transferred Entity) and each of their respective officers, directors, employees, agents and representatives and permitted successors and assigns
(the “
Seller Indemnitees
”) against and hold them harmless from any Loss suffered or incurred by any such Seller Indemnitee to the extent arising from (a) any breach of any representation or warranty of Purchaser contained in
this Agreement which survives the Closing or any covenant of Purchaser contained in this Agreement requiring performance on or prior to the Closing Date, (b) any breach of any covenant of Purchaser contained in this Agreement requiring
performance after the Closing Date and (c) any Assumed Liability;
provided
,
however
, that this Section 10.02 shall not provide for any indemnification arising out of or relating to Taxes (which are the subject of
Section 10.03).
SECTION 10.03.
Tax Indemnification.
(a) From and after the Closing, Seller shall indemnify Purchaser
Indemnitees against and hold them harmless from (i) any Taxes imposed on or with respect to the Transferred Entities for any Pre-Closing Tax Period, (ii) any Taxes imposed on a Transferred Entity as a result of, at any time prior to the
Closing, being a member of a consolidated, combined, unitary or similar group of companies, (iii) the breach of any covenant or other agreement of Seller contained in Section 8.07, (iv) any Taxes relating to the Acquired Assets
allocated to Seller or Selling Affiliates under Section 1.03(b)(ii), (v) any Taxes imposed on a Transferred Entity as a result of: (A) change in method of accounting; (B) installment sale; (C) open transaction or
(D) closing agreement pursuant to Section 7121 of the Code (or any similar provision of state, local or foreign Tax Law), in each case ((A) – (D)), occurring, entered into, or executed, as the case may be, on or prior to the Closing
Date; (vi) any Transfer Taxes applicable to the Acquisition to the extent such Taxes exceed $10,000,000 and (viii) any legal fees and other reasonable out-of-pocket expenses directly relating to clauses (i)-(v) of this section
10.03(a).
(b) From and after the Closing, Purchaser shall indemnify Seller against (i) any Taxes imposed on or with respect to the
Transferred Entities for any Post-Closing Tax Period, (ii) any Taxes imposed on a Transferred Entity as a result of being a member of a consolidated, combined, unitary or similar group of companies at any time after the Closing, (iii) all
Transfer Taxes, value added Taxes (or similar Taxes) to the extent such Taxes are not paid by Purchaser as required by Section 8.07(h) and filing or recording fees applicable to the Acquisition, (iv) the breach of any covenant or other
agreement of Purchaser contained in Section 8.07 and (v) any Taxes relating to the Acquired Assets allocated to Purchaser under Section 1.03(a)(viii). The Purchaser’s liability for Transfer Taxes under this clause 10.03(b)
shall be limited to the first $10,000,000 of Transfer Taxes. For the avoidance of doubt, amounts paid by Purchaser pursuant to Section 8.07(h) shall be credited against Purchaser’s obligation to indemnify for any value added Taxes (or
similar Taxes) under this Section 10.03(b).
(c) Any indemnity payment to be made hereunder shall be paid within ten (10) days
after the indemnified party makes written demand upon the indemnifying party, but in no case earlier than five (5) business days prior to the date on which the relevant Taxes (including any estimated Tax payments) are required to be paid to the
relevant taxing authority. Estimated Tax payments made by or on behalf of a Transferred Entity on or prior to the Closing Date shall be credited to any indemnity obligation under Section 10.03(a)(i).
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(d) Any Taxes for a Straddle Period shall be allocated between the Pre-Closing Tax Period and the
Post-Closing Tax Period on a closing of the books basis, except that in the case of Taxes, deductions or credits determined on a periodic basis, the amount of Tax, deduction or credit shall be allocated on a daily pro rata basis. These principles
shall apply for the purposes of allocating any Taxes applicable to the Acquired Assets for the purposes of Article I and for allocating any refunds or credits of Tax.
(e) Seller shall have no liability under Section 10.03(a)(i) to the extent that liability is also a liability of Purchaser under Section 10.03(b)(ii)-(v). Purchaser shall have no liability under
Section 10.03(b)(i) to the extent that liability is also a liability of Seller under Section 10.03(a)(ii)-(v).
SECTION 10.04.
Limitations on Liability; Cooperation.
(a) Notwithstanding any provision herein, neither Seller nor Purchaser shall in any event be liable to the other party or its Affiliates or Representatives on account of any indemnity obligation set
forth in Section 10.01 or Section 10.02 for any indirect, consequential, special, incidental or punitive damages (including lost profits, loss of use, damage to goodwill or loss of business), other than to the extent such damages arise out
of a breach of Section 4.06 and result in a diminution of value that is proximate and reasonably foreseeable.
(b) Purchaser and
Seller shall cooperate with each other with respect to resolving any claim or liability with respect to which one party is obligated to indemnify the other party hereunder, including by making commercially reasonable efforts to mitigate or resolve
any such claim or liability.
(c) Purchaser further acknowledges and agrees that, should the Closing occur, its sole and exclusive remedy
with respect to any and all claims relating to this Agreement, any Other Transaction Document, the Acquisition, any document or certificate delivered in connection herewith, the Business, the Transferred Entities, the Acquired Assets and the Assumed
Liabilities or any Federal, state, local or foreign Law or otherwise (other than claims of, or causes of action arising from, fraud) or Environmental Law (including CERCLA) shall be pursuant to the indemnification provisions set forth in this
Article X. In furtherance of the foregoing, Purchaser hereby waives, from and after the Closing, to the fullest extent permitted under applicable Law or Environmental Law (including CERCLA), any and all rights, claims and causes of action
(other than claims of, or causes of action arising from, fraud) it or any of its Affiliates may have against Seller and its Affiliates arising under or based upon this Agreement, any Other Transaction Document, the Acquisition, any document or
certificate delivered in connection herewith, the Business, the Transferred Entities, the Acquired Assets and the Assumed Liabilities or any Federal, state, local or foreign Law or otherwise or Environmental Law (including CERCLA) (except pursuant
to the indemnification provisions set forth in this Article X). Notwithstanding the foregoing, this Section 10.04 shall not preclude the Purchaser Indemnitees from pursuing the remedies of specific performance, injunctive relief,
non-monetary declaratory judgment or any other non-monetary equitable remedies available to the Purchaser Indemnitees under applicable Law or Environmental Law.
SECTION 10.05.
Indemnity Net; Losses Net of Insurance, Etc.
(a) For the purposes of the indemnification provisions set forth in this Article X, any Losses or amounts
77
otherwise payable hereunder (including amounts relating to Taxes pursuant to Section 10.03) as reduced under Section 10.05(b) shall be determined
on the basis of the net effect after giving effect to any actual cash payments, setoffs or recoupment or any payments in each case actually received, realized or retained by the indemnified party (including any amounts recovered or recoverable by
the indemnified party under insurance policies) as a result of any event giving rise to a claim for such indemnification.
(b) The amount
of any Loss or amount relating to Taxes pursuant to Section 10.03 for which indemnification is provided under this Article X shall be reduced to take account of any net Tax benefit (including as a result of any basis adjustment) actually
realized by the indemnified party on or before the taxable year to which the indemnification relates arising from the incurrence or payment of any such Loss or amount relating to Taxes pursuant to Section 10.03. In computing the amount of any
Loss or amount relating to Taxes pursuant to Section 10.03, the indemnified party shall be deemed to recognize all other items of income, gain, loss, deduction or credit before recognizing any item arising from the incurrence or payment of any
indemnified Loss or amount relating to Taxes pursuant to Section 10.03.
SECTION 10.06.
Termination of Indemnification.
(a) The obligations to indemnify and hold harmless a party hereto pursuant to (i) Sections 10.01(a)(i) and 10.02(a), as each relates to breaches of representations and warranties, shall terminate when the applicable representation or
warranty terminates pursuant to paragraph (b) below, (ii) Section 10.01(a)(i) and 10.02(a), as each relates to breaches of covenants, shall terminate at the close of business on the first anniversary of the Closing Date and
(iii) the other clauses of Sections 10.01 and 10.02 shall not terminate;
provided
,
however
, that as to clause (i) and (ii) of this sentence such obligations to indemnify and hold harmless shall not terminate with
respect to any item as to which the person to be indemnified or the related party thereto shall have, before the expiration of the applicable period, previously made a claim by delivering a notice of such claim (stating in reasonable detail the
basis of such claim) to the indemnifying party.
(b) The representations and
warranties in this Agreement and in any certificate delivered pursuant to this Agreement shall survive the Closing solely for purposes of Sections 10.01 and 10.02 and shall terminate at the close of business on the first (1
st
) anniversary of the Closing Date;
provided
that (i) the representations in relation to Tax contained in Section 4.07 shall terminate at
Closing and (ii) the Fundamental Representations shall terminate on the fifth (5
th
) anniversary of the Closing Date.
SECTION 10.07.
Procedures Relating to Indemnification for Third Party Claims.
(a) In order for a party (the “
indemnified
party
”) to be entitled to any indemnification provided for under this Agreement in respect of, arising out of or involving a claim or demand made by any person against the indemnified party other than claims for Taxes which are addressed by
Section 10.09 (a “
Third Party Claim
”), such indemnified party must notify the indemnifying party in writing, and in reasonable detail, of the Third Party Claim within ten (10) business days after receipt by such
indemnified party of written notice of the Third Party Claim;
provided
,
however
, that failure to give such notification shall not affect the indemnification provided hereunder except to the extent the indemnifying party shall have been
prejudiced as a result of such failure (except that the indemnifying party shall not be liable for any expenses incurred during the period in which the indemnified party failed to give such notice). Thereafter, the
78
indemnified party shall deliver to the indemnifying party, promptly after the indemnified party’s receipt thereof, copies of all notices and documents
(including court papers) received by the indemnified party relating to the Third Party Claim.
(b) If a Third Party Claim is made against
an indemnified party, the indemnifying party shall be entitled to participate in the defense thereof and, if it so chooses, to assume the defense thereof with counsel selected by the indemnifying party;
provided
,
however
, that such
counsel is not reasonably objected to by the indemnified party. Should the indemnifying party so elect to assume the defense of a Third Party Claim, the indemnifying party shall not be liable to the indemnified party for legal expenses subsequently
incurred by the indemnified party in connection with the defense thereof. If the indemnifying party assumes such defense, the indemnified party shall have the right to participate in the defense thereof and to employ counsel (not reasonably objected
to by the indemnifying party), at its own expense, separate from the counsel employed by the indemnifying party, it being understood that the indemnifying party shall control such defense. The indemnifying party shall be liable for the fees and
expenses of counsel employed by the indemnified party for any period during which the indemnifying party has failed to assume the defense thereof (other than during the period prior to the time the indemnified party shall have given notice of the
Third Party Claim as provided above). Notwithstanding anything in this Section 10.07 to the contrary, (i) if such Third Party Claim would give rise to Losses that are more than 250% the amount indemnifiable by such indemnifying party
pursuant to this Article X, then the indemnified party may elect to retain control of such defense, provided its legal fees and expenses shall be at its own expense and shall not be indemnified pursuant to this Article X, and the indemnifying party
shall be entitled to participate in the defense thereof and (ii) if the claim for indemnification with respect to a Third Party Claim relates to or arises in connection with any criminal proceeding, action, indictment or investigation, the
indemnified party shall be entitled to jointly control the defense thereof with the indemnifying party (and to employ counsel reasonably acceptable to the indemnifying party, at its own expense) for so long as such criminal proceeding, action,
indictment or investigation is continuing.
(c) If the indemnifying party so elects to assume the defense of any Third Party Claim, all of
the indemnified parties shall cooperate with the indemnifying party in the defense or prosecution thereof. Such cooperation shall include the retention and (upon the indemnifying party’s request) the provision to the indemnifying party of
records and information which are reasonably relevant to such Third Party Claim, and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. Whether or not the
indemnifying party shall have assumed the defense of a Third Party Claim, the indemnified party shall not admit any liability with respect to, or settle, compromise or discharge such Third Party Claim without the indemnifying party’s prior
written consent, not to be unreasonably withheld. If the indemnifying party assumes the defense of a Third Party Claim, the indemnified party shall agree to any settlement, compromise or discharge of a Third Party Claim that the indemnifying party
may recommend and that by its terms obligates the indemnifying party to pay the full amount of the liability in connection with such Third Party Claim and which releases the indemnified party completely in connection with such Third Party Claim.
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SECTION 10.08.
Procedures Related to Indemnification for Other Claims.
In the event any
indemnified party should have a claim against any indemnifying party under Section 10.01 or 10.02 that does not involve a Third Party Claim being asserted against or sought to be collected from such indemnified party or does not otherwise
involve a Tax claim, the resolution of which is governed by Section 10.09, the indemnified party shall deliver notice of such claim to the indemnifying party promptly after obtaining knowledge of such claim. The failure by any indemnified party
so to notify the indemnifying party shall not relieve the indemnifying party from any liability which it may have to such indemnified party under Section 10.01 or 10.02, except to the extent that the indemnifying party demonstrates that it has
been prejudiced by such failure. If the indemnifying party disputes its liability with respect to such claim, the indemnifying party and the indemnified party shall proceed in good faith to negotiate a resolution of such dispute and, if not resolved
through negotiations, such dispute shall be resolved by litigation in an appropriate court of competent jurisdiction.
SECTION 10.09.
Procedures Relating to Indemnification of Tax Claims.
(a) If a claim relating to Taxes shall be made against any indemnified party (the “
tax indemnified party
”) by any taxing authority, which, if successful, might result
in an indemnity payment to any tax indemnified party pursuant to Article X, the tax indemnified party shall promptly notify the other party (the “
tax indemnifying party
”) in writing of such claim (a “
Tax Claim
”). If
notice of a Tax Claim is not given to the tax indemnifying party within a sufficient period of time to allow the tax indemnifying party to effectively contest such Tax Claim, or in reasonable detail to apprise the tax indemnifying party of the
nature of the Tax Claim, in each case taking into account the facts and circumstances with respect to such Tax Claim, the tax indemnifying party shall remain liable to the tax indemnified party;
provided
,
however
, that the tax
indemnifying party shall have no liability under Section 10.03 to the extent that it has been actually and materially prejudiced by such failure.
(b) With respect to any Tax Claim that relates to a Pre-Closing Tax Period, the tax indemnifying party shall control all proceedings taken in connection with such Tax Claim (including selection of counsel reasonably
acceptable to the tax indemnified party) and, without limiting the foregoing, may in its sole discretion pursue or forego any and all administrative appeals, proceedings, hearings and conferences with any taxing authority with respect thereto, and
may, in its sole discretion, either pay the Tax claimed and sue for a refund where applicable Law permits such refund suits or contest the Tax Claim in any permissible manner. In no case shall any tax indemnified party settle or otherwise compromise
any such Tax Claim without the tax indemnifying party’s prior written consent nor shall any tax indemnifying party settle or otherwise compromise any such Tax Claim that may adversely affect the Tax liability of the tax indemnified party or any
Affiliate thereof without the tax indemnified party’s prior written consent (not to be unreasonably withheld). However, in the case of a Tax Claim with respect to amounts for which Seller could be liable under Section 10.03(a) and that
relate to a Straddle Period or a Post-Closing Tax Period, (i) neither party shall control the proceedings and each party shall have the right to participate fully in all aspects of the prosecution or defense of such Tax Claim and
(ii) neither party shall settle any such Tax Claim without prior written consent of the other.
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ARTICLE XI
Termination
SECTION 11.01.
Termination.
This Agreement may be terminated and the
transactions contemplated hereby abandoned at any time prior to the Closing by:
(a) mutual written consent of Seller and
Purchaser;
(b) Purchaser, if Audited 2007 EBITDA is less than Unaudited 2007 EBITDA by more than $10,000,000;
(c) Seller, if any of the conditions set forth in Section 3.02 shall have become incapable of fulfillment, and shall not have been
waived by Seller;
(d) Purchaser, if any of the conditions set forth in Section 3.01 shall have become incapable of
fulfillment, and shall not have been waived by Purchaser; or
(e) either party hereto, if the Closing does not occur on or
prior to August 30, 2008 (the “
Termination Date
”);
provided
,
however
, that if as of such date the only conditions to the Closing which have not been satisfied or waived are the conditions to Closing set forth in
Sections 3.01(c) and 3.02(c), then Purchaser shall not be permitted to terminate this Agreement pursuant to this Section 11.01(e) until December 28, 2008;
provided further
,
however
, that to the extent all the conditions to
Closing have been; satisfied except that Seller has failed to deliver the Audited 2007 Financial Statements on or prior to such date, Purchaser shall have the right, but not the obligation, to elect in writing (the “
Extension
Election
”) to extend such date to no earlier than September 29, 2008 and no later than December 28, 2008 (such date, the “
Extended Termination Date
”), in which case neither Seller nor Purchaser shall be permitted
to terminate this Agreement pursuant to this 11.01(e) until the Extended Termination Date;
provided
,
however
, that the party seeking
termination pursuant to clause (c), (d) or (e) is not in breach in any material respect of any of its representations, warranties, covenants or agreements contained in this Agreement.
SECTION 11.02.
Return of Confidential Information.
If the transactions contemplated by this Agreement are terminated as provided herein:
(a) notwithstanding anything in the Confidentiality Agreement to the contrary, Purchaser shall return to Seller or destroy
all documents and other material received by Purchaser, its Affiliates and their respective Representatives from Seller, any Selling Affiliate or any of their respective Affiliates, any Transferred Entity or Representatives relating to the
transactions contemplated hereby and by the Other Transaction Documents, whether so obtained before or after the execution hereof; and
(b) all confidential information received by Purchaser, its Affiliates and their respective Representatives with respect to Seller, any Selling Affiliate, the Transferred Entities or any of their respective
Affiliates, the Business, the Acquired Assets and the
81
Assumed Liabilities shall be treated in accordance with the Confidentiality Agreement, which shall remain in full force and effect in accordance with its
terms notwithstanding the termination of this Agreement.
SECTION 11.03.
Consequences of Termination.
(a) In the event of
termination by Seller or Purchaser pursuant to this Article XI, written notice thereof shall forthwith be given to the other party and the transactions contemplated by this Agreement shall be terminated, without further action by either party. If
this Agreement is terminated and the transactions contemplated hereby are abandoned as described in this Article XI, this Agreement shall become void and of no further force or effect, except for the provisions of (a) Section 7.01 relating
to the obligation of Purchaser to keep confidential certain information and data obtained by it, (b) Section 8.03 relating to publicity, (c) this Article XI, (d) Section 12.03 relating to certain expenses,
(e) Section 12.04 relating to attorney fees and expenses, (f) Section 12.10 relating to finder’s fees and broker’s fees and (g) the last sentence of Section 5.09. Nothing in this Article XI shall be deemed to
release either party from any liability for any intentional and material breach by such party of the terms and provisions of this Agreement prior to such termination or to impair the right of either party to compel specific performance by the other
party of its obligations under this Agreement.
(b) If (i) Seller has failed to deliver the Audited 2007 Financial Statements on or
prior to the Termination Date, or to the extent Purchaser has made an Extension Election, the Extended Termination Date and Purchaser thereafter terminates this Agreement pursuant to Section 11.01(e) or (ii) Purchaser terminates this
Agreement pursuant to Section 11.01(b), then in either such case Seller shall reimburse Purchaser for all fees in connection with the Financing and otherwise for all reasonable out-of-pocket costs and expenses incurred by Purchaser and the
Equity Funds in connection with this Agreement and the transactions contemplated hereby up to an amount not to exceed $30,000,000.
ARTICLE
XII
Miscellaneous
SECTION 12.01.
Assignment.
This Agreement and the rights and obligations hereunder shall not be assignable or transferable by Purchaser or Seller (including by operation of Law in connection with a merger, consolidation or sale of
all or substantially all the assets of Purchaser or Seller) without the prior written consent of the other party hereto;
provided
that (a) Seller may assign its rights and obligations hereunder to (i) any wholly-owned subsidiary of
Seller or (ii) any transferee of all or substantially all of the assets of Seller, in each case without the consent of Purchaser and (b) Purchaser may assign its rights, in whole or in part, (i) to one or more of its wholly-owned
subsidiaries or (ii) by way of security to the Lenders and any permitted assigns thereof under the definitive documentation in respect of the Debt Financing, but in the case of clauses (a)(i) and (b), no such assignment will relieve Seller
or Purchaser of its respective obligations under this Agreement. In respect of clause (b)(ii) in the preceding sentence, Purchaser acknowledges and agrees that the rights conferred on any such assignee shall only be exercisable at the same time
as it exercises its security under such finance arrangements and Seller acknowledges that such assignee shall have the right to freely transfer the benefit of this Agreement to any party to which the Business is sold. Any attempted assignment in
violation of this Section 12.01 shall be void.
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SECTION 12.02.
No Third-Party Beneficiaries.
Except as provided in Article X, this Agreement is
for the sole benefit of the parties hereto and their permitted assigns and nothing herein expressed or implied shall give or be construed to give to any person, other than the parties hereto and such assigns, any legal or equitable rights hereunder.
SECTION 12.03.
Expenses.
Whether or not the transactions contemplated hereby are consummated, and except as otherwise specifically
provided in this Agreement (including in Sections 1.05(b), 2.02(b), 5.09 (the last sentence thereof), 7.05, 7.07, 8.02(a), 8.09, 10.07, 11.03 and 12.04), all costs and expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such costs or expenses.
SECTION 12.04.
Attorney Fees.
A party in breach of
this Agreement shall, on demand, indemnify and hold harmless the other party for and against all reasonable out-of-pocket expenses, including legal fees, incurred by such other party by reason of the enforcement and protection of its rights under
this Agreement. The payment of such expenses is in addition to any other relief to which such other party may be entitled.
SECTION 12.05.
Amendments.
This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto. By an instrument in writing, Purchaser, on the one hand, or Seller, on the other hand, may waive compliance by
the other with any term or provision of this Agreement that such other party was or is obligated to comply with or perform. Any such waiver shall only be effective in the specific instance and for the specific and limited purpose for which it was
given and shall not be deemed a waiver of any other provision of this Agreement or of the same breach or default upon any recurrence thereof. No failure on the part of any party to exercise and no delay in exercising any right hereunder shall
operate as a waiver thereof nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right.
SECTION 12.06.
Notices.
All notices or other communications required or permitted to be given hereunder shall be in writing and shall be delivered
by hand or sent by facsimile (with confirmation of receipt) or sent by prepaid telex, cable or telecopy or sent, postage prepaid, by registered, certified or express mail or reputable overnight courier service and shall be deemed given when so
delivered by hand, telexed, cabled or telecopied, or if by facsimile, when receipt is so confirmed, or if mailed, three (3) days after mailing (one (1) business day in the case of overnight mail or overnight courier service), as follows
(or at such other address for a party as shall be specified by like notice):
(a) if to Purchaser,
Cidron Healthcare Limited
26 Esplanade
St Helier Jersey JE2 3QA
Attention: Director
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with a copy to (such copy not to constitute notice hereunder):
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White & Case LLP
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1155 Avenue of the Americas
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New York, NY 10036
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Attention: Oliver C. Brahmst, Esq.
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Daniel M. Latham,
Esq.
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White & Case Advokat AB
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Biblioteksgatan 12
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Box 5573
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SE-114 85 Stockholm
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Sweden
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Attention: Claes Zettermarck, Esq.; and
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(b) if to Seller,
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Bristol-Myers Squibb Company
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345 Park Avenue
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New York, NY 10154
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Facsimile: (212) 546-9562
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Attention: General Counsel
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with a copy to (such copy not to constitute notice hereunder):
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Bristol-Myers Squibb Pharmaceutical Group
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Route 206 & Province Line Road
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Princeton, NJ 08540
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Facsimile: (609) 252-7680
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Attention: P. Joseph Campisi, Jr., Esq.
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Cravath, Swaine & Moore LLP
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Worldwide Plaza
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825 Eighth Avenue
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New York, NY 10019
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Facsimile: (212) 474-3700
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Attention: Susan Webster, Esq.
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Thomas E. Dunn, Esq.
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SECTION 12.07. Interpretation; Exhibits and Seller Disclosure Schedule; Certain Definitions.
(a) The definitions of the terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words
“include”, “includes” and
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“including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the
same meaning and effect as the word “shall”. The word “or” when used in this Agreement is not exclusive. The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing
extends, and such phrase shall not mean simply “if”. All terms defined in this Agreement shall have their defined meanings when used in any certificate or other document made or delivered pursuant hereto, unless otherwise defined therein.
Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth therein), (ii) the words “herein”, “hereof” and “hereunder”, and words of similar import,
shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (iii) all references herein to Articles, Sections or Exhibits shall be construed to refer to Articles, Sections or Exhibits of this
Agreement and (iv) the headings contained in this Agreement, the Seller Disclosure Schedule or any Exhibit and in the table of contents to this Agreement are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Any matter set forth in any provision, subprovision, section or subsection of the Seller Disclosure Schedule shall be deemed set forth for all purposes of the Seller Disclosure Schedule to the extent the relevance
and applicability of such disclosure to such other subprovision, Section or subsection is reasonably apparent. The Seller Disclosure Schedule and all Exhibits annexed hereto or referred to herein are hereby incorporated in and made a part of
this Agreement as if set forth in full herein. Any capitalized terms used in the Seller Disclosure Schedule or any Exhibit annexed hereto but not otherwise defined therein, shall have the meaning as defined in this Agreement. In the event of an
ambiguity or a question of intent or interpretation, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any
provisions of this Agreement.
(b) For all purposes hereof:
“
Accounts Payable
” means all accounts payable and liabilities, obligations and commitments, regardless of when asserted, billed or imposed, of Seller and its Affiliates.
“
Accounts Receivable
” means all accounts receivable, notes receivable and other indebtedness due and owed by any third party to Seller
or the Selling Affiliates as of the effective time of the Closing on the Closing Date, including all trade accounts receivable representing amounts receivable in respect of goods shipped, products sold or services rendered prior to the effective
time of the Closing and the full benefit of any security for such accounts or debts.
“
Acquired Liabilities
” means the
Assumed Liabilities that are not Liabilities of Transferred Entities as of the effective time of the Closing Date.
“
Act
”
means the Federal Food, Drug and Cosmetics Act, 21 U.S.C. 321
et. seq.
, as amended, and the rules, regulations and guidance documents promulgated thereunder.
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“
Affiliate
” means, with respect to any specified person, any other person directly or
indirectly controlling or controlled by or under direct or indirect common control with such specified person. For purposes of this definition, “
control
” when used with respect to any specified person means the power to direct the
management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise and the terms “
controlling
” and “
controlled
” have meanings correlative to
the foregoing.
“
Audited 2007 EBITDA
” means EBITDA for the year ended December 31, 2007, as derived from the Audited
Financial Statements for such fiscal year.
“
Audited 2007 EBITDA Reduction Amount
” means (i) if Audited 2007 EBITDA
is less than Unaudited 2007 EBITDA by more than $1,500,000, the lesser of (x) the amount of such deficiency multiplied by 11.5 and (y) $115,000,000 (which amount shall, for the avoidance of doubt, reduce the Purchase Price in accordance
with the definition thereof notwithstanding that Purchaser was entitled to terminate this Agreement pursuant to Section 11.01(b)), and (ii) if Audited 2007 EBITDA equals, exceeds or is not less than Unaudited 2007 EBITDA by more than
$1,500,000, zero.
“
Balance Sheet
” means the unaudited carve-out balance sheet of the Business as of December 31,
2007.
“
Brands
” means the brands listed in Section 12.07(b)(i) of the Seller Disclosure Schedule.
“
business day
” means any day, other than a Saturday or Sunday, on which commercial banks are not required or authorized to close in the
City of New York or Stockholm, Sweden.
“
Business Employee
” means any employee who is employed by Seller or its Affiliates
in connection with the Business, and whose services are primarily related to the Business and who is listed (by name or by category and number) in the Confidential Employee Benefit Letter, but excluding, in each case, employees whose services
primarily relate to the Excluded Assets.
“
Cash
” means the sum of cash, cash equivalents and liquid investments as
determined under U.S. GAAP.
“
dollars
” or “$” means lawful money of the United States of America.
“
EBITDA
” means, for any period, the sum of (i) operating income, (ii) depreciation and (iii) amortization for such period
as set forth in the Financial Statements for such period.
“
Environmental Law
” means any notice of liability, inquiry or
violation, Law or Injunction issued by or entered into with any Governmental Entity, relating to pollution, protection of the environment or human health or the preservation or restoration of natural resources.
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“
Environmental Liability
” means any Liability, loss, demand, claim or cost, contingent
or otherwise (including any Liability for judgments, orders, damages, costs of investigation, remediation or monitoring, medical monitoring, natural resources damages, fines, penalties, professional fees, or settlements), and relating to, arising
under or resulting from (a) any actual or alleged (i) compliance or noncompliance with any Environmental Law or Environmental Permit, (ii) generation, use, storage, management, treatment, transportation or disposal of any Hazardous
Material or (iii) presence, Release or threatened Release of, or exposure to, any Hazardous Material (including any exposure of any Business Employee, Former Business Employee, Transferred Employee or former employee or independent contractor
of the Transferred Entities or the Business to Hazardous Materials) or (b) any contract, agreement, or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“
Environmental Permit
” means any certificate, consent, permit, license, registration, approval or other authorization issued under or
pursuant to Environmental Laws or otherwise relating to the use, emission or discharge of Hazardous Materials.
“
ERISA
Affiliate
” means, with respect to any entity, any other entity (whether or not incorporated) that, together with such entity, would be treated as a single employer under Section 414 of the Code or Section 4001 of ERISA.
“
Excluded Tax Items
” includes the following: Current Assets—Deferred income taxes; net of valuation allowances;
Total Assets; Current Liabilities—Deferred income taxes payable; Current Liabilities—U.S. and foreign income taxes payable; Total Current Liabilities; Total Liabilities; Deferred income taxes – long term; Divisional
Equity—Parent’s investment; Divisional Equity—Accumulated other comprehensive income (net of tax); Total Divisional Equity; provision for income taxes; Statement of Earnings—net earnings; Statement of Earning—Comprehensive
Income; deferred income tax (benefit)/expense; U.S. and foreign income taxes payable; net cash provided by operating activities; income tax paid; and any footnote disclosure related to Tax matters.
“
Financial Statements
” means, collectively, the Audited 2004-2006 Financial Statements, the Unaudited 2007 Financial Statements and the
Audited 2007 Financial Statements.
“
Former Business Employee
” means any individual who, as of his or her termination
date, was an employee who was employed by Seller or its Affiliates in connection with the Business, and whose services are primarily related to the Business and whose services did not primarily relate to the Excluded Assets.
“
Fundamental Representations
” means the representations in Sections 4.03 and 4.05(a), and 4.05(b) (in each case solely to the extent
related to the Fundamental Transferred Entities) and Section 4.01.
“
Fundamental Transferred Entities
” means ConvaTec
Dominican Republic, Inc., ConvaTec Limited, AMCARE Limited, ConvaTec Specialty Fibres Limited and Laboratories ConvaTec SAS.
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“
Hazardous Material
” means any hazardous, toxic or deleterious chemical, material,
substance or waste, including radioactive, explosive, medical or biohazardous materials or wastes, petroleum and its byproducts and distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, or urea formaldehyde
foam insulation.
“
Indebtedness
” means, with respect to any person, without duplication: (i) the principal of and any
premium in respect of indebtedness for borrowed money, including any accrued interest and any cost or penalty associated with prepaying any such indebtedness, and including any such obligations evidenced by bonds, debentures, notes or similar
obligations or any guarantee of the foregoing; (ii) obligations under or with respect to (A) acceptances, letters of credit or similar arrangements and (B) bank guarantees and surety bonds (other than those issued for the benefit of
the Transferred Entities); (iii) amounts owing as deferred purchase price for property or services, including all seller notes and “earn out” payments; (iv) guarantees with respect to any Indebtedness of any other person; and
(v) any lease obligations that are properly characterized as capitalized leases under GAAP;
provided
, that Indebtedness shall not include any Current Liability to the extent it is reflected in the calculation of the adjustment to the
Purchase Price, if any, pursuant to Section 2.02 Closing Working Capital.
“
International Acquired Assets
” means all
the Acquired Assets that are owned by any International Selling Affiliate as of the effective time of the Closing Date.
“
International Assumed Liabilities
” means all the Assumed Liabilities that are Liabilities of any International Selling Affiliate as of the effective time of the Closing Date.
“
International Purchased Company
” means any Purchased Company that is a legal entity organized under the laws of a jurisdiction outside
the United States.
“
International Selling Affiliate
” means any Selling Affiliate that is a legal entity organized under
the laws of a jurisdiction outside the United States.
“
International Transferred Shares
” means the Transferred Equity
Interests that are equity interests in an International Purchased Company.
“
Inventory
” means all raw materials,
work-in-process, packaging, labels, supplies and finished goods (including in transit, on consignment or in the possession of any third party) and other inventories.
“
IP Assignment Documents
” means with respect to any Transferred Intellectual Property, intellectual property (patent, trademark, copyright and domain name) assignments of such Transferred Intellectual
Property.
“
ITO Services Agreement
” means the ITO Services Agreement between Mead Johnson & Company and Purchaser
in substantially the form of Exhibit I.
“
knowledge of Seller
” means the current actual knowledge of the persons
identified in Section 12.07(b)(ii) of the Seller Disclosure Schedule.
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“
Manufacturing Knowhow
” means knowhow, technology, data, designs, process and methods
relating to the manufacture and production of products.
“
Other Transaction Documents
” means the Transaction Documents
other than this Agreement.
“
Permits
” means all certificates, licenses, consents, permits (including occupancy permits),
authorizations, registrations and approvals (including 510(k) clearances and foreign equivalents and any marketing or pricing approvals granted by any regulatory entity and all materials and Intellectual Property related thereto) from any
Governmental Entity but excluding any and all Environmental Permits.
“
person
” means any individual, firm, corporation,
partnership, limited liability company, trust, joint venture, Governmental Entity or other entity.
“
Plastibase License
Agreement
” means the Plastibase License Agreement between Seller and Purchaser in substantially the form of Exhibit F.
“
Plastibase Supply Agreement
” means the Plastibase Supply Agreement between E.R. Squibb & Sons, L.L.C. and Purchaser in substantially the form of Exhibit G.
“
Plastibase Trademark License Agreement
” means the Plastibase Trademark License Agreement between Mead Johnson & Company and
Purchaser in substantially the form of Exhibit H.
“
Prime Rate
” means the rate of interest from time to time publicly
announced by Citibank, N.A., in its New York City office as its prime or base rate, calculated on the basis of the actual number of days elapsed over 365.
“
Product Formulae
” means the specific percentages and specifications for the mixing and preparation of the ingredients and/or the specific quantities, volumes, dimensions or weights and associated
specifications of components, materials and/or subassemblies used in the manufacture or assembly of a specific Product, taken as a whole and not in part. For the avoidance of doubt, (a) a Product Formulae does not include Manufacturing Knowhow
associated with the manufacture of the Product to which such Product Formulae relates and (b) does not refer separately to a particular ingredient or specification or combination of ingredients and/or specifications that do not comprise the
entire, specific Product Formulae.
“
Products
” means with respect to the Brands, the products represented by the SKUs for
such Brands listed in Section 12.07(b)(i) of the Seller Disclosure Schedule.
“
Purchase Price
” means $4,080,000,000
minus the Audited 2007 EBITDA Reduction Amount, if any.
“
Purchaser Material Adverse Effect
” means any state of facts,
change, development, condition, effect, event or occurrence that (a) prevents or materially impedes or delays the consummation of the Acquisition or the other transactions contemplated by this Agreement or (b) has a material adverse effect
on the ability of Purchaser to perform its obligations under this Agreement and the Other Transaction Documents.
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“
Release
” means any release, spill, emission, leaking, dumping, injection, pouring,
deposit, disposal, discharge, dispersal, leaching or migration into or through the environment (including ambient air, surface water, groundwater, land surface or subsurface strata).
“
Representatives
” of any person shall mean such person’s directors, managers, members, officers, employees, agents, advisors and
representatives (including, without limitation, attorneys, accountants, consultants, financial advisors, financing sources and any representatives of such advisors or financing sources).
“
Retained Cash
” means the excess of the amount of Cash held by the Transferred Entities at 12:01 a.m. on the Closing Date in the
jurisdiction in which such Cash is held
minus
the amount of Cash distributed to Seller or its Affiliates from the Transferred Entities on the Closing Date.
“
Seller Material Adverse Effect
” means any state of facts, change, development, condition, effect, event or occurrence that, (a) has a material adverse effect on the assets, liabilities,
financial condition or operating results of the Business (including the Transferred Entities), taken as a whole, (b) prevents or materially impedes or delays the consummation of the Acquisition or the other transactions contemplated by this
Agreement or (c) has a material adverse effect on the ability of Seller to perform its obligations under this Agreement and the Other Transaction Documents. For purposes of this Agreement, “Seller Material Adverse Effect” shall
exclude any effects to the extent resulting from (i) changes in the United States or foreign economies in general that do not have a disproportionately negative effect on the Business (including the Transferred Entities), taken as a whole, as
compared to other companies or businesses in the industries in which the Business operates, (ii) changes in applicable Law or applicable accounting regulations or principles or interpretations thereof that do not have a disproportionately
negative effect on the Business (including the Transferred Entities), taken as a whole, as compared to other companies or businesses in the industries in which the Business operates, (iii) changes in industries relating to the Business in
general and not specifically relating to the Business that do not have a disproportionately negative effect on the Business (including the Transferred Entities), taken as a whole, as compared to other companies or businesses in the industries in
which the Business operates, (iv) one (1) or more Business Employees voluntarily or involuntarily due to cause ceasing to be employed by the Business, (v) the announcement by Seller of its intention to sell the Business, (vi) the
execution and delivery of this Agreement (including the disclosure of the identity of Purchaser) or any Other Transaction Document or (vii) the consummation of the transactions contemplated hereby or thereby.
“
Selling Affiliate
” means each Affiliate of Seller identified in Section A of the Seller Disclosure Schedule.
“
Solvent
”, when used with respect to any person, means that, as of any date of determination, (a) the amount of the “fair
saleable value” of the assets of such person on a going
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concern basis will, as of such date, exceed (i) the value of all “liabilities of such person, including contingent and other liabilities” as
of such date, as such quoted terms are generally determined in accordance with applicable Federal laws governing determinations of the insolvency of debtors and (ii) the amount that will be required to pay the probable liabilities of such
person on its existing debts (including contingent liabilities) as such debts become absolute and matured, (b) such person will not have, as of such date, an unreasonably small amount of capital for the operation of the businesses in which it
is engaged or proposed to be engaged following such date and (c) such person will be able to pay its liabilities, including contingent and other liabilities, as they mature. For purposes of this definition, each of the phrases “not have an
unreasonably small amount of capital for the operation of the businesses in which it is engaged or proposed to be engaged” and “able to pay its liabilities, including contingent and other liabilities, as they mature” means that such
person will be able to generate enough cash from operations, asset dispositions or refinancing, or a combination thereof, to meet its obligations as they become due.
“
subsidiary
” of any person means another person, an amount of the voting securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its
Board of Directors or other governing body (or, if there are no such voting interests, fifty percent (50%) or more of the equity interests of which) is owned directly or indirectly by such first person or by another subsidiary of such person.
“
Technology License Agreement
” means the Technology License Agreement between Seller and Purchaser in substantially the
form of Exhibit D.
“
Transaction Documents
” means (a) this Agreement, (b) the Transitional Services Agreement,
(c) the Technology License Agreement, (d) the Transfer Documents, (e) the Plastibase License Agreement, (f) the Plastibase Supply Agreement, (g) the Plastibase Trademark License Agreement and (h) the ITO Services
Agreement.
“
Transfer Documents
” means the documents that are executed and delivered pursuant to Sections 2.01(b)(i),
2.01(b)(ii), 2.01(b)(iii), 2.01(c)(ii), 2.01(c)(iii) and 2.01(c)(iv).
“
Transitional Services Agreement
” means the
transitional services agreement between Seller and Purchaser in substantially the form of Exhibit C.
“
Unaudited 2007
EBITDA
” means $333,300,000.
“
U.S. GAAP
” means generally accepted accounting principles in the United States, as
in effect as of the date hereof.
(c) The following terms have the meanings given such terms in the Sections set forth below:
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Term
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Section
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2007 Balance Sheet Working Capital
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2.02(c)
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Accounting Firm
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2.02(b)
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Term
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Section
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Accounts Payable
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12.07(b)
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Accounts Receivable
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12.07(b)
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Acquired Assets
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1.02(a)
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Acquired Liabilities
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12.07(b)
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Acquired Rights Directive
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9.01(f)
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Acquisition
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Preamble
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Act
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12.07(b)
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Affiliate
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12.07(b)
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Agreement
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Preamble
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Asset Transfer
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9.06(b)
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Assumed Accounts Payable
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1.03(a)(iv)
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Assumed Liabilities
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1.03(a)
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Audited 2004-2006 Financial Statements
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4.06(a)
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Audited 2007 EBITDA
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12.07(b)
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Audited 2007 EBITDA Reduction Amount
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12.07(b)
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Audited 2007 Financial Statements
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5.08
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Balance Sheet
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12.07(b)
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Benefit Plan
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4.14(a)
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Benefits Services
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8.09(c)
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BMS Names
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7.03(a)
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Brands
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12.07(b)
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Business
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Preamble
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business day
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12.07(b)
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Business Employee
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12.07(b)
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Cash
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12.07(b)
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CERCLA
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4.17
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Closing
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2.01(a)
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Closing Date
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2.01(a)
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Closing Date Amount
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2.01(c)(i)
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Closing Indebtedness
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2.02(a)
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Closing Working Capital
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2.02(a)
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CMS
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7.04(b)
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COBRA
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9.05(b)
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Code
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4.07(a)
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Commencement Date
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9.01(b)
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Competing Business
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5.06(a)
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Competing Product
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5.06(a)
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Confidential Employee Benefit Letter
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9.01(c)
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Confidential Information
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5.05
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Confidentiality Agreement
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7.01
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Contracts
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1.02(a)(vii)
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control
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12.07(b)
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Continuation Period
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9.05(a)
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Term
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Section
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Copyrights
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4.10(e)(iii)
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Current Assets
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2.02(d)
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Current Liabilities
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2.02(d)
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Debt Commitment Letter
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6.05
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Debt Financing
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6.05
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DOJ
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8.04(a)
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dollars
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12.07(b)
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EBITDA
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12.07(b)
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Environmental Law
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12.07(b)
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Environmental Liability
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12.07(b)
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Environmental Permit
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12.07(b)
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Environmental Reports
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4.17
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Equity Commitment Letters
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|
6.05
|
|
|
|
Equity Financing
|
|
6.05
|
|
|
|
Equity Fund
|
|
6.05
|
|
|
|
ERISA
|
|
4.14(a)
|
|
|
|
ERISA Affiliate
|
|
12.07(b)
|
|
|
|
Excluded Assets
|
|
1.02(b)
|
|
|
|
Excluded Liability
|
|
1.03(b)
|
|
|
|
Excluded Personal Property
|
|
1.02(b)(ix)
|
|
|
|
Excluded Tax Item
|
|
4.06(a)
|
|
|
|
Extended Termination Date
|
|
11.01(e)
|
|
|
|
Extension Election
|
|
11.01(e)
|
|
|
|
FDA
|
|
7.04(a)
|
|
|
|
Final Purchase Price
|
|
2.02(c)
|
|
|
|
Financial Statements
|
|
12.07(b)
|
|
|
|
Financing
|
|
6.05
|
|
|
|
Financing Letters
|
|
6.05
|
|
|
|
Foreign Benefit Plans
|
|
4.14(i)
|
|
|
|
Foreign Transferred Employees
|
|
9.01(d)
|
|
|
|
Former Business Employee
|
|
12.07(b)
|
|
|
|
FSA Participant
|
|
9.07(c)
|
|
|
|
FSA Participation Period
|
|
9.07(c)
|
|
|
|
FTC
|
|
8.05(a)
|
|
|
|
Fundamental Representations
|
|
12.07(b)
|
|
|
|
Fundamental Transferred Entities
|
|
12.07(b)
|
|
|
|
Governmental Entity
|
|
3.01(b)
|
|
|
|
Hazardous Material
|
|
12.07(b)
|
|
|
|
HSR Act
|
|
3.01(c)
|
|
|
|
Inactive Business Employee
|
|
9.01(b)
|
|
|
|
including
|
|
12.07(a)
|
|
|
|
Indebtedness
|
|
12.07(b)
|
|
|
|
indemnified party
|
|
10.07(a)
|
|
|
93
|
|
|
|
|
|
|
Term
|
|
Section
|
|
|
|
Initial Purchase Price Allocation
|
|
8.07(a)
|
|
|
|
Injunction
|
|
3.01(b)
|
|
|
|
Intellectual Property
|
|
4.10(e)
|
|
|
|
Interim Facility Letter
|
|
6.05
|
|
|
|
International Acquired Assets
|
|
12.07(b)
|
|
|
|
International Asset Purchase Agreement
|
|
1.01(b)
|
|
|
|
International Assumed Liabilities
|
|
12.07(b)
|
|
|
|
International Purchased Company
|
|
12.07(b)
|
|
|
|
International Selling Affiliate
|
|
12.07(b)
|
|
|
|
International Stock Purchase Agreement
|
|
1.01(c)
|
|
|
|
International Transferred Shares
|
|
12.07(b)
|
|
|
|
Inventory
|
|
12.07(b)
|
|
|
|
IP Assignment Documents
|
|
12.07(b)
|
|
|
|
knowledge of Seller
|
|
12.07(b)
|
|
|
|
Last Lot Expiration Dates
|
|
7.04
|
|
|
|
Law
|
|
3.01(b)
|
|
|
|
Lease
|
|
4.09(d)
|
|
|
|
Leased Property
|
|
4.09(b)
|
|
|
|
Liabilities
|
|
1.03(a)
|
|
|
|
Liens
|
|
4.02(a)
|
|
|
|
Losses
|
|
10.01(a)
|
|
|
|
Manufacturing Knowhow
|
|
12.07(b)
|
|
|
|
Miscellaneous Rights
|
|
1.02(a)(vi)
|
|
|
|
Non-Compete Period
|
|
5.06(a)
|
|
|
|
Non-U.S. Customer List
|
|
8.08
|
|
|
|
Notice of Disagreement
|
|
2.02(b)
|
|
|
|
Other Rights
|
|
1.02(a)(xi)
|
|
|
|
Other Transaction Documents
|
|
12.07(b)
|
|
|
|
Owned Property
|
|
4.09(a)
|
|
|
|
Patents
|
|
4.10(e)(i)
|
|
|
|
Payroll Services
|
|
8.09(c)
|
|
|
|
PBGC
|
|
4.14(b)
|
|
|
|
Permits
|
|
12.07(b)
|
|
|
|
Permitted Liens
|
|
4.08
|
|
|
|
person
|
|
12.07(b)
|
|
|
|
Personal Property
|
|
1.02(a)(ii)
|
|
|
|
Personnel Records
|
|
9.18
|
|
|
|
Post-Closing Tax Period
|
|
4.07(a)
|
|
|
|
Post-Services Costs
|
|
8.09(a)
|
|
|
|
PR Code
|
|
4.14(c)
|
|
|
|
Pre-Closing Service
|
|
9.04
|
|
|
|
Pre-Closing Tax Period
|
|
4.07(a)
|
|
|
|
Prime Rate
|
|
12.07(b)
|
|
|
94
|
|
|
|
|
|
|
Term
|
|
Section
|
|
|
|
Product Formulae
|
|
12.07(b)
|
|
|
|
Products
|
|
12.07(b)
|
|
|
|
PR SIP
|
|
9.06(a)
|
|
|
|
Purchase Price
|
|
12.07(b)
|
|
|
|
Purchased Companies
|
|
Preamble
|
|
|
|
Purchased Companies’ Equity Interests
|
|
Preamble
|
|
|
|
Purchased Company Subsidiaries
|
|
Preamble
|
|
|
|
Purchased Company Subsidiaries’ Equity Interests
|
|
Preamble
|
|
|
|
Purchaser
|
|
Preamble
|
|
|
|
Purchaser Indemnitees
|
|
10.01(a)
|
|
|
|
Purchaser Material Adverse Effect
|
|
12.07(b)
|
|
|
|
Purchaser’s Cafeteria Plan
|
|
9.07(c)
|
|
|
|
Purchaser’s Disability Plans
|
|
9.08
|
|
|
|
Purchaser’s Foreign Health and Welfare Plans
|
|
9.17
|
|
|
|
Purchaser’s Foreign Retirement Plans
|
|
9.17(b)
|
|
|
|
Purchaser’s Health Plans
|
|
9.06(a)
|
|
|
|
Purchaser’s Life and Accident Insurance Plans
|
|
9.09(a)
|
|
|
|
Purchaser’s PR 401(k) Plan
|
|
9.06(a)
|
|
|
|
Purchaser’s Severance Plan
|
|
9.05(b)
|
|
|
|
Purchaser’s U.S. 401(k) Plan
|
|
9.06(a)
|
|
|
|
Records
|
|
1.02(a)(xii)
|
|
|
|
Release
|
|
12.07(b)
|
|
|
|
Representatives
|
|
12.07(b)
|
|
|
|
Restricted Transferred Employees
|
|
5.07
|
|
|
|
Retained Cash
|
|
12.07(b)
|
|
|
|
Retained Litigation Liabilities
|
|
1.03(b)(iii)
|
|
|
|
Retention Period
|
|
9.18
|
|
|
|
Seller
|
|
Preamble
|
|
|
|
Seller Change of Control Event
|
|
5.06(a)
|
|
|
|
Seller Disclosure Schedule
|
|
Article IV
|
|
|
|
Seller Indemnitees
|
|
10.02
|
|
|
|
Seller Material Adverse Effect
|
|
12.07(b)
|
|
|
|
Seller’s Cafeteria Plan
|
|
9.07(c)
|
|
|
|
Seller’s Disability Plans
|
|
9.08
|
|
|
|
Seller’s Foreign Retirement Plans
|
|
9.17(b)
|
|
|
|
Seller’s Health Plans
|
|
9.07(a)
|
|
|
|
Seller’s Incentive Plans
|
|
9.10
|
|
|
|
Seller’s Life and Accident Insurance Plans
|
|
9.09(a)
|
|
|
|
Seller’s Retiree Health Plans
|
|
9.07(b)
|
|
|
|
Seller’s Retiree Life and Accident Insurance Plans
|
|
9.09(b)
|
|
|
|
Seller’s Stock Fund
|
|
9.06
|
|
|
|
Seller’s UK DB Pension Plan
|
|
9.02(f)
|
|
|
|
Seller’s UK Supplemental Pension Program
|
|
9.02(f)
|
|
|
95
|
|
|
|
|
|
|
Term
|
|
Section
|
|
|
|
Selling Affiliate
|
|
12.07(b)
|
|
|
|
Service
|
|
8.09(a)
|
|
|
|
Set-Up and Administrative Costs
|
|
8.09(a)
|
|
|
|
Solvent
|
|
12.07(b)
|
|
|
|
Sponsor Guarantees
|
|
6.09
|
|
|
|
Statement
|
|
2.02(a)
|
|
|
|
Straddle Period
|
|
4.07(a)
|
|
|
|
subsidiary
|
|
12.07(b)
|
|
|
|
Support Services
|
|
8.05
|
|
|
|
Target Working Capital
|
|
2.02(c)
|
|
|
|
Tax Claim
|
|
10.09(a)
|
|
|
|
Taxes
|
|
4.07(a)
|
|
|
|
tax indemnified party
|
|
10.09(a)
|
|
|
|
tax indemnifying party
|
|
10.09(a)
|
|
|
|
Tax Return
|
|
4.07(a)
|
|
|
|
Technology
|
|
4.10(e)(v)
|
|
|
|
Technology License Agreement
|
|
12.07(b)
|
|
|
|
Termination Date
|
|
11.01(e)
|
|
|
|
Third Party Claim
|
|
10.07(a)
|
|
|
|
Trademarks
|
|
4.10(e)(ii)
|
|
|
|
Transaction Documents
|
|
12.07(b)
|
|
|
|
Transfer Documents
|
|
12.07(b)
|
|
|
|
Transfer Taxes
|
|
4.07(a)
|
|
|
|
Transferred Accounts Receivable
|
|
1.02(a)(v)
|
|
|
|
Transferred Contracts
|
|
1.02(a)(vii)
|
|
|
|
Transferred Employee
|
|
9.01(c)
|
|
|
|
Transferred Entities
|
|
Preamble
|
|
|
|
Transferred Entity Contract
|
|
4.11
|
|
|
|
Transferred Entity Intellectual Property
|
|
4.10(b)
|
|
|
|
Transferred Entity Permits
|
|
4.12(a)
|
|
|
|
Transferred Entity Voting Debt
|
|
4.05(a)
|
|
|
|
Transferred Environmental Permits
|
|
1.02(a)(x)
|
|
|
|
Transferred Equity Interests
|
|
Preamble
|
|
|
|
Transferred Intellectual Property
|
|
1.02(a)(iii)
|
|
|
|
Transferred Inventory
|
|
1.02(a)(iv)
|
|
|
|
Transferred Miscellaneous Rights
|
|
1.02(a)(vi)
|
|
|
|
Transferred Other Rights
|
|
1.02(a)(xi)
|
|
|
|
Transferred Permits
|
|
1.02(a)(ix)
|
|
|
|
Transferred Personal Property
|
|
1.02(a)(ii)
|
|
|
|
Transferred Plan Assets
|
|
1.02(a)(viii)
|
|
|
|
Transferred Real Property
|
|
1.02(a)(i)
|
|
|
|
Transferred Real Property Contracts
|
|
1.02(a)(i)
|
|
|
|
Transferred Records
|
|
1.02(a)(xii)
|
|
|
96
|
|
|
|
|
|
|
Term
|
|
Section
|
|
|
|
Transitional Services Agreement
|
|
12.07(b)
|
|
|
|
Treasury Services
|
|
8.09(c)
|
|
|
|
UK Transferred Employees
|
|
9.02(f)
|
|
|
|
Unaudited 2007 EBITDA
|
|
12.07(b)
|
|
|
|
Unaudited 2007 Financial Statements
|
|
4.06(a)
|
|
|
|
Unregistered Intellectual Property
|
|
4.10(e)(iv)
|
|
|
|
U.S. Benefit Plans
|
|
4.14(a)
|
|
|
|
U.S. Customer List
|
|
8.08(a)
|
|
|
|
U.S. GAAP
|
|
12.07(b)
|
|
|
|
U.S. SIP
|
|
9.06(a)
|
|
|
|
U.S. Transferred Employees
|
|
9.01(c)
|
|
|
|
WARN
|
|
9.16
|
|
|
|
Working Capital
|
|
2.02(d)
|
|
|
|
Working Capital Principles
|
|
2.02(e)
|
|
|
SECTION 12.08.
Counterparts.
This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the parties and delivered to the other party. Delivery of an executed counterpart of a signature
page of this Agreement by facsimile or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Agreement.
SECTION 12.09.
Entire Agreement.
This Agreement, the Other Transaction Documents and the Confidentiality Agreement contain the entire agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersede all prior agreements and understandings relating to such subject matter.
SECTION 12.10.
Fees.
Each party hereto hereby represents and warrants that (a) the only brokers or finders that have acted for such party (and, in the case of Seller, each Affiliate of Seller and each Transferred Entity) in connection with this Agreement or the
transactions contemplated hereby or that may be entitled to any brokerage fee, finder’s fee or commission in respect thereof are Citigroup Global Markets Inc. and Morgan Stanley & Co. Incorporated with respect to Seller, its Affiliates
and the Transferred Entities and Bear Stearns International Limited with respect to Purchaser and (b) each party shall pay all fees or commissions which may be payable to the firm so named with respect to such party.
SECTION 12.11.
Severability.
If any term or provision of this Agreement is invalid, illegal or incapable of being enforced by any applicable Law
or public policy, all other conditions and provisions of this Agreement shall nonetheless remain in full force and effect so long as the economic and legal substance of the transactions contemplated by this Agreement is not affected in any manner
materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of
the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated by this Agreement are consummated as originally contemplated to the fullest extent possible.
97
SECTION 12.12.
Enforcement.
The parties agree that irreparable damage would result and that the
parties would not have any adequate remedy at law if any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached or threatened to be breached. It is accordingly agreed that the
parties shall be entitled to equitable relief, without the proof of actual damages, including in the form of an injunction or injunctions or orders for specific performance (including causing Purchaser to enforce its rights under any of the
Financing Letters), in addition to all other remedies available to the parties at law or in equity as a remedy for any such breach or threatened breach. Each party agrees to (a) cooperate fully in any attempt by the other party in obtaining any
such equitable remedy and (b) waive any requirement for the security or posting of any bond in connection with any such equitable remedy. Each party further agrees that the only permitted objection that it may raise in response to any action
for equitable relief is that it contests the existence of a breach or threatened breach of the provisions of this Agreement. Such equitable remedies may be sought in the Supreme Court of the State of New York sitting in New York County (and, if such
Supreme Court of the State of New York shall be unavailable, in any other New York State court or in the United States District Court for the Southern District of New York), and any appellate court from any thereof.
SECTION 12.13.
Consent to Jurisdiction.
Each of Purchaser and Seller irrevocably submits to the exclusive jurisdiction of (a) the Supreme
Court of the State of New York, New York County, and (b) the United States District Court for the Southern District of New York, and any appellate court from any thereof, for the purposes of any suit, action or other proceeding arising out of
this Agreement, the Other Transaction Documents or any transaction contemplated hereby or thereby, or for recognition or enforcement of any judgment, and each party irrevocably and unconditionally agrees that all claims in respect of any such suit,
action or other proceeding may be heard and determined in such New York State or, to the extent permitted by applicable Law, in such Federal court. Each of Purchaser and Seller agrees to commence any such action, suit or proceeding either in the
United States District Court for the Southern District of New York or if such suit, action or other proceeding may not be brought in such court for jurisdictional reasons, in the Supreme Court of the State of New York, New York County. Each of
Purchaser and Seller further agrees that service of any process, summons, notice or document by U.S. registered mail to such party’s respective address set forth above shall be effective service of process for any action, suit or proceeding in
New York with respect to any matters to which it has submitted to jurisdiction in this Section 12.13. Each of Purchaser and Seller irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding
arising out of this Agreement, the Other Transaction Documents or the transactions contemplated hereby or thereby in any court referred to in the first sentence of this Section 12.13 and hereby further irrevocably and unconditionally waives and
agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.
SECTION 12.14.
Waiver of Jury Trial.
Each party hereto hereby waives to the fullest extent permitted by applicable Law, any right it may have to a trial by jury in respect of any litigation directly or
indirectly arising out of, under or in connection with this Agreement,
98
any of the Other Transaction Documents or any transaction contemplated hereby or thereby. Each party hereto (a) certifies that no representative, agent
or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce that foregoing waiver and (b) acknowledges that it and the other parties hereto have been
induced to enter into this Agreement and the Other Transaction Documents, as applicable, by, among other things, the mutual waivers and certifications in this Section 12.14.
SECTION 12.15.
GOVERNING LAW
.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES OF SUCH STATE OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
99
IN WITNESS WHEREOF, Seller and Purchaser have duly executed this Agreement as of the date first written
above.
|
|
|
|
|
BRISTOL-MYERS SQUIBB COMPANY,
|
|
|
|
|
by
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
|
|
|
CIDRON HEALTHCARE LIMITED,
|
|
|
|
|
by
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
100
