EXECUTION COPY
AGREEMENT AND PLAN OF REORGANIZATION
DATED AS OF SEPTEMBER 15, 1996
BY AND BETWEEN
XXXXXX INTERNATIONAL INC.
AND
ALLEGIANCE CORPORATION
TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS AND INTERPRETATIONS.................................. 2
Section 1.1 Definitions................................................. 2
Section 1.2 Rules of Construction.......................................12
ARTICLE II. THE SPIN-OFF....................................................13
Section 2.1 Issuance and Delivery of Allegiance
Shares....................................................13
Section 2.2 Spin-Off of Allegiance Shares...............................13
Section 2.3 Treatment of Fractional Shares..............................13
Section 2.4 Baxter Board Action.........................................14
Section 2.5 Additional Approvals........................................14
ARTICLE III. TRANSFERS TO AHII..............................................14
Section 3.1 General.....................................................14
Section 3.2 Malaysian Glove Factory.....................................14
Section 3.3 Euromedical.................................................15
Section 3.4 France......................................................16
Section 3.5 Germany.....................................................16
Section 3.6 Malta.......................................................16
Section 3.7 Mexico......................................................17
Section 3.8 Canada......................................................18
Section 3.9 Restrictions on Intercompany Debt...........................19
Section 3.10 Transfer of Assets.........................................20
Section 3.11 Transfer of Liabilities....................................20
ARTICLE IV. TRANSFERS TO AHC................................................20
Section 4.1 Organization of AHC.........................................20
Section 4.2 Transferred Assets..........................................20
Section 4.3 Assumed Liabilities.........................................26
ARTICLE V. ORGANIZATION OF ALLEGIANCE CORPORATION...........................28
Section 5.1 Organization of Allegiance..................................28
Section 5.2 Transfer of Certain Subsidiaries............................28
Section 5.3 Transfer of Assets..........................................29
Section 5.4 Transfer of Liabilities.....................................30
ARTICLE VI. OTHER CLOSING MATTERS...........................................31
Section 6.1 Instruments of Conveyance...................................31
Section 6.2 No Representations or Warranties............................31
Section 6.3 Non-Assignable Contracts....................................32
Section 6.4 Further Assurances..........................................33
Section 6.5 Excluded Assets.............................................34
Section 6.6 Excluded Liabilities........................................35
Section 6.7 Release of Baxter...........................................35
Section 6.8 Nominee Shares..............................................35
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ARTICLE VII. CERTAIN COVENANTS..............................................35
Section 7.1 Conduct of Allegiance Business
Pending the Spin-Off Date.................................35
Section 7.2 Registration and Listing....................................35
Section 7.3 Funds Distributed to Baxter.................................36
Section 7.4 Post-Spin-Off Tax-Related
Restrictions..............................................36
Section 7.5 Insurance Policies and Claims
Administration............................................37
Section 7.6 Intercompany Receivables and
Payables and Cash Management..............................41
Section 7.7 Intercompany Debt True-Up...................................43
Section 7.8 Agreements Relating to Baxter and
Allegiance................................................45
Section 7.9 Certain Releases............................................45
Section 7.10 Litigation.................................................45
Section 7.11 Liability for Previously Delivered
Products.................................................46
Section 7.12 Allegiance Bank Accounts...................................48
Section 7.13 Unassigned Indemnifiable Contracts.........................48
Section 7.14 Ad Now Program.............................................48
Section 7.15 Products at Cost to Dade...................................48
Section 7.16 Informal, Nondocumented Real Estate
Leases...................................................49
Section 7.17 Rexam Payment..............................................49
Section 7.18 Clintec Receivables........................................49
ARTICLE VIII. INTELLECTUAL PROPERTY.........................................50
Section 8.1 License of Allegiance Intellectual
Property to Baxter........................................50
Section 8.2 License of Baxter Intellectual
Property to Allegiance....................................53
Section 8.3 Use of Baxter Trade Names and
Trademarks................................................55
ARTICLE IX. EMPLOYEES AND EMPLOYEE BENEFITS.................................56
Section 9.1 Allegiance Employee.........................................56
Section 9.2 Employment of Allegiance Employees..........................56
Section 9.3 Terminations/Layoff/Severance...............................57
Section 9.4 International Allegiance Employees..........................57
Section 9.5 Employment Solicitation.....................................58
Section 9.6 WARN Act....................................................58
Section 9.7 Leave of Absence Policies...................................58
Section 9.8 Withdrawal From Participation in
Baxter Plans and Establishment
of Allegiance Plans.......................................59
Section 9.9 Transfer of Savings Plan Account
Balances..................................................59
Section 9.10 Entitlement to Distributions Under
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Pension Plan..............................................60
Section 9.11 Welfare Benefits Provided Under
Allegiance Plans.........................................60
Section 9.12 Stock Purchase Plan........................................61
Section 9.13 Workers' Compensation......................................61
Section 9.14 Vacation Pay Policy........................................62
Section 9.15 Non-Qualified Deferred Compensation
Plans....................................................62
Section 9.16 Information to Be Provided to
Baxter...................................................62
Section 9.17 Corporate Action; Delegation of
Authority................................................62
Section 9.18 Split-Dollar Life Insurance................................63
ARTICLE X. ACCESS TO INFORMATION............................................63
Section 10.1 Access to Information......................................63
Section 10.2 Production of Witnesses....................................65
Section 10.3 Provision of Corporate Records.............................65
Section 10.4 Confidentiality............................................65
Section 10.5 Privileged Matters.........................................66
ARTICLE XI. CONDITIONS PRECEDENT TO SPIN-OFF................................67
Section 11.1 Tax Ruling.................................................67
Section 11.2 No Actions.................................................67
Section 11.3 NYSE Listing...............................................68
Section 11.4 Opinions of Financial Advisor..............................68
Section 11.5 Consents...................................................68
Section 11.6 Registration Statement.....................................68
Section 11.7 New Credit Facility........................................68
Section 11.8 Pre-Spin-Off Transactions..................................68
Section 11.9 Ancillary Agreements.......................................68
Section 11.10 Resignations..............................................68
Section 11.11 Board Approval............................................68
Section 11.12 Election of Allegiance Board..............................68
Section 11.13 Satisfaction of Conditions................................68
ARTICLE XII. EXPENSES; TAXES................................................69
Section 12.1 Allocation of Expenses.....................................69
Section 12.2 Taxes......................................................70
Section 12.3 Directors' and Officers' Insurance.........................70
ARTICLE XIII. SURVIVAL, INDEMNIFICATION,CLAIMS AND OTHER MATTERS............71
Section 13.1 Survival...................................................71
Section 13.2 Indemnification............................................71
Section 13.3 Procedure for Indemnification..............................74
Section 13.4 Direct Claims..............................................76
Section 13.5 Adjustment of Indemnifiable Losses.........................76
Section 13.6 Contribution...............................................78
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Section 13.7 No Third Party Beneficiaries...............................78
Section 13.8 Release of Pre-Divestiture
Liabilities..............................................78
ARTICLE XIV. DISPUTE RESOLUTION.............................................79
Section 14.1 Escalation.................................................79
Section 14.2 Arbitration................................................80
Section 14.3 Injunctive Relief..........................................80
ARTICLE XV. MISCELLANEOUS PROVISIONS........................................80
Section 15.1 Entire Agreement...........................................80
Section 15.2 Choice of Law..............................................80
Section 15.3 Amendment; Waiver..........................................81
Section 15.4 Severability...............................................81
Section 15.5 Counterparts...............................................81
Section 15.6 Records Retention..........................................81
Section 15.7 Beneficiaries..............................................81
Section 15.8 Notices....................................................82
Section 15.9 Termination................................................82
Section 15.10 Performance...............................................82
List of Exhibits
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Exhibit A - The Transferred Business
Exhibit B - The Transferred Services
Exhibit C - Transferred Subsidiaries
Exhibit D - Operating Agreements
Exhibit E - Tax Sharing Agreement
Exhibit F - June 30, 1996 Balance Sheet
Exhibit G - Certificate of Incorporation of Allegiance
Exhibit H - By-Laws of Allegiance
Exhibit I - Allegiance Preferred Share Purchase Rights Plan
Exhibit J - Allegiance Board of Directors
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AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement"), dated as of
September 15, 1996, by and between Xxxxxx International Inc., a Delaware
corporation ("Baxter"), and Allegiance Corporation, a Delaware corporation
("Allegiance"), and, prior to the Spin-Off (as hereinafter defined), a wholly-
owned Subsidiary (as hereinafter defined) of Baxter.
W I T N E S S E T H
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WHEREAS, Baxter through its Subsidiaries is engaged, INTER ALIA, in
the health care distribution, surgical and respiratory therapy products and
health care cost management business (as more fully described in EXHIBIT A
hereto, the "Transferred Business");
WHEREAS, the Board of Directors of Baxter has determined that it would
be advisable and in the best interests of Baxter and its stockholders for Baxter
(i) to transfer to Allegiance and/or one or more of its Subsidiaries the
business, operations, assets and liabilities related to the Transferred
Business, and (ii) to transfer to Allegiance or one or more of its Subsidiaries,
the employees and certain liabilities related to the provision of the
administrative services and functions set forth in EXHIBIT B hereto (the
"Transferred Services") (the Transferred Business and the Transferred Services
are hereinafter referred to together as the "Allegiance Business");
WHEREAS, Baxter has agreed to transfer and assign, or cause to be
transferred and assigned, to Allegiance or one or more of its Subsidiaries (i)
substantially all of the assets and properties of the Allegiance Business held
by Xxxxxx, Xxxxxx Healthcare Corporation, a Delaware corporation ("BHC"), and
certain other Subsidiaries of Baxter, and (ii) all of the issued and outstanding
shares owned by Baxter and its Subsidiaries of certain of its Subsidiaries as
set forth in EXHIBIT C hereto (the "Transferred Subsidiaries"), and Allegiance
has agreed to assume, or cause to be assumed by one or more of its Subsidiaries,
certain liabilities and obligations arising out of or relating to the Allegiance
Business;
WHEREAS, the Board of Directors of Baxter has determined that it would
be advisable and in the best interests of Baxter and its stockholders for Baxter
to distribute all of the outstanding shares of Allegiance common stock, par
value $1.00 per share (together with the preferred share purchase rights
associated therewith, the "Allegiance Common Stock"), on a pro rata basis to the
holders of Xxxxxx'x common stock, par value $1.00 per share ("Baxter Common
Stock"); and
WHEREAS, on the Spin-Off Date (as hereinafter defined), Baxter will
cause the Agent (as hereinafter defined) to distribute in the manner described
herein to all holders of record of Baxter Common Stock as of the Record Date (as
hereinafter defined), without any consideration being paid by such holders,
outstanding shares of Allegiance Common Stock.
NOW, THEREFORE, in consideration of the mutual undertakings contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Baxter and Allegiance agree as
follows:
ARTICLE I. DEFINITIONS AND INTERPRETATIONS
Section 1.1 DEFINITIONS. As used in this Agreement, the following
terms shall have the meanings set forth below.
"Actions" means any action, claim, suit, arbitration, inquiry,
subpoena, discovery request, proceeding or investigation by or before any court
or grand jury, any governmental or other regulatory or administrative entity,
agency or commission or any arbitration tribunal.
"Active Allegiance Employee" means any regular full-time or part-time
employee of Baxter or one of its Subsidiaries who commences employment with
Allegiance or one of its Subsidiaries on the Spin-Off Date.
"Affiliate" shall mean any Person controlling, controlled by, or under
direct or indirect common control with a party hereto. For the purpose of this
definition, the term "control" means the power to direct the management of an
entity, 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. After the Spin-Off
Date, Allegiance and Baxter shall not be deemed to be under common control for
purposes hereof due solely to the fact that Allegiance and Baxter have common
shareholders.
"Agent" means First Chicago Trust Company of New York, the
distribution agent appointed by Baxter to distribute shares of Allegiance Common
Stock pursuant to the Spin-Off.
"AHC" has the meaning set forth in SECTION 4.1.
"AHC Contracts" has the meaning set forth in SECTION 4.2(viii).
"AHFI" has the meaning set forth in SECTION 3.3.
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"AHII" has the meaning set forth in SECTION 3.1.
"AHSB" has the meaning set forth in SECTION 3.2(i).
"Allegiance Assigned Intellectual Property" has the meaning set forth
in SECTION 5.3(i).
"Allegiance Business" has the meaning set forth in the recitals of
this Agreement.
"Allegiance Canada" has the meaning set forth in SECTION 3.8(iv).
"Allegiance Common Stock" has the meaning set forth in the recitals of
this Agreement.
"Allegiance Credit Facility" has the meaning set forth in SECTION 7.3.
"Allegiance Distributable Share" means 0.20 Allegiance Shares.
"Allegiance Employee" has the meaning set forth in SECTION 9.1.
"Allegiance Foreign Entity" means any Subsidiary of Baxter that is
located or incorporated in a jurisdiction outside of the United States and will,
upon consummation of the transactions contemplated by this Agreement, become a
Subsidiary of Allegiance.
"Allegiance France" has the meaning set forth in SECTION 3.4(i).
"Allegiance Germany" has the meaning set forth in SECTION 3.5(i).
"Allegiance Indemnified Parties" has the meaning set forth in SECTION
13.2(a).
"Allegiance Party" has the meaning set forth in SECTION 13.6.
"Allegiance Products" means those products manufactured by Allegiance
or its Subsidiaries (as they would exist immediately following the Spin-Off
Date) (except for products manufactured for Baxter or its Subsidiaries by
Allegiance or its Subsidiaries pursuant to the Manufacturing Contracts but
including those products manufactured for Allegiance and its Subsidiaries by
Baxter or its Subsidiaries pursuant to the Manufacturing Contracts).
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"Allegiance Retirement Plan" means the defined contribution plan which
shall be established by Allegiance after the Spin-Off Date for the benefit of
certain eligible employees.
"Allegiance Share" means one share of Allegiance Common Stock.
"Allegiance Welfare Plans" means the welfare benefit plans established
by Allegiance following the Spin-Off, which provide benefits that correspond to
benefits provided under the Baxter Welfare Plans.
"Assumed Actions" has the meaning set forth in SECTION 7.10(a).
"Assumed BHC Liabilities" has the meaning set forth in SECTION 4.3.
"Assumed Liabilities" means any liability or obligation assumed by
Allegiance or its Subsidiaries as contemplated by ARTICLES III, IV or V hereof.
"Balance Sheet" has the meaning set forth in SECTION 4.2(i).
"Xxxxxx Belgium" has the meaning set forth in SECTION 3.6.
"Baxter Cafeteria Plans" means the Xxxxxx Healthcare and Dependent Day
Care Reimbursement Accounts.
"Xxxxxx Canada" has the meaning set forth in SECTION 3.8.
"Baxter Common Stock" has the meaning set forth in the recitals of
this Agreement.
"Baxter Deutschland" has the meaning set forth in SECTION 3.5.
"Xxxxxx France" has the meaning set forth in SECTION 3.4.
"Baxter Group" means Baxter and (a) any corporation which is a member
of the same controlled group of corporations (within the meaning of Section
414(b) of the Code) as Baxter, (b) a trade or business (whether or not
incorporated) under common control (within the meaning of Section 414(c) of the
Code) with Baxter, (c) any organization (whether or not incorporated) which is a
member of an affiliated service group (within the meaning of Section 414(m) of
the Code) which includes Baxter, a corporation
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described in clause (a) of this definition or a trade or business described in
clause (b) of this definition, or (d) any other entity which is required to be
aggregated with Baxter pursuant to regulations promulgated under Section 414(o)
of the Code.
"Baxter Indemnified Parties" has the meaning set forth in SECTION
13.2(b).
"Xxxxxx Xxxxx" has the meaning set forth in SECTION 8.3(a).
"Baxter Panama" has the meaning set forth in SECTION 3.2.
"Baxter Party" has the meaning set forth in SECTION 13.6.
"Baxter Pension Plan" means the Xxxxxx International Inc. and
Subsidiaries Pension Plan.
"Baxter Plan" means any employee benefit plan or program maintained by
Baxter.
"Baxter Policy" and "Baxter Policies" have the meanings set forth in
SECTION 7.5(a).
"Baxter Products" means those products manufactured by Baxter or its
Subsidiaries (as they would exist immediately following the Spin-Off Date)
(except for products manufactured for Allegiance or its Subsidiaries by Baxter
or its Subsidiaries pursuant to the Manufacturing Contracts but including those
products manufactured for Baxter and its Subsidiaries by Allegiance or its
Subsidiaries pursuant to the Manufacturing Contracts).
"Baxter Retiree Welfare Plan" means the post-retirement medical
portion of the Xxxxxx International Inc. and Subsidiaries Medical Plan and the
post-retirement life insurance portion of the Baxter Employee Group Term Life
Insurance Plan.
"Baxter Savings Plan" means the Xxxxxx International Inc. and
Subsidiaries Incentive Investment Plan.
"Baxter Welfare Plans" means the Xxxxxx Medical Plan, the Baxter Long-
Term Disability Insurance Plan, the Baxter Personal Accident Insurance Plan, the
Baxter Business Travel Accident Insurance Plan, the Group Universal Life
Insurance Plan and the Wellness Reimbursement Account.
"BHC" has the meaning set forth in the recitals of this Agreement.
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"Biologics" has the meaning set forth in SECTION 8.3(a)(iii).
"Board of Directors" means the board of directors of the referenced
corporation or any duly authorized committee thereof.
"BPS" has the meaning set forth in SECTION 3.6(iv).
"BWT" has the meaning set forth in SECTION 3.1.
"BWTSA" has the meaning set forth in SECTION 3.4(ii).
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act, as amended.
"Chateaubriant Plant" has the meaning set forth in SECTION 3.4.
"Cirpro" has the meaning set forth in SECTION 3.7(ii).
"Claims or Losses" means all losses, liabilities, claims, demands,
settlements, penalties, fines, damages, costs and expenses of whatever kind or
nature, known or unknown, contingent or otherwise (including reasonable
attorneys' fees and expenses, reasonable consultants' fees and expenses, court
costs, any and all expenses reasonably incurred in investigating, preparing for
or responding to or defending against any litigation or claim), commenced, made
or threatened, and any environmental clean-up or remediation claims and
expenses, including any requirements or obligations under CERCLA and any other
federal, state or local laws relating to cleanup of hazardous materials.
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, and any applicable state law requiring continuation coverage
under a medical plan.
"Code" means the Internal Revenue Code of 1986, as amended, and except
where the context otherwise requires, the regulations promulgated thereunder.
"Commonly Used Business Information" has the meaning set forth in
SECTION 4.2(vii)(B).
"Contracts" has the meaning set forth in SECTION 4.2(viii).
"Convertors" has the meaning set forth in SECTION 3.7(ii).
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"Conveyancing Instruments" has the meaning set forth in SECTION 6.1.
"Cost Management Business" has the meaning set forth in Exhibit A.
"CUBI" has the meaning set forth in SECTION 4.2(vii)(B).
"Dade" has the meaning set forth in SECTION 7.14.
"Dade Distribution Agreement" has the meaning set forth in SECTION
7.14.
"Disabled Employee" means each employee who would have been a Domestic
Allegiance Employee had he or she not been on a long-term disability leave of
absence on the Spin-Off Date.
"Distribution Business" has the meaning set forth in EXHIBIT A.
"Divested Businesses" means the businesses previously divested by
Baxter or any of its Subsidiaries pursuant to any of the agreements listed on
SCHEDULE 4.2(viii)(A) as "Divestitures."
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Euromedical" has the meaning set forth in SECTION 3.3.
"Euromedical Loan" has the meaning set forth in SECTION 3.2(iii).
"Eurovac" has the meaning set forth in SECTION 3.6.
"Exchange Act" has the meaning set forth in SECTION 7.2(i).
"Excluded Assets" has the meaning set forth in SECTION 6.5.
"Excluded Liabilities" has the meaning set forth in SECTION 6.6.
"First Party" has the meaning set forth in SECTION 10.4(b).
"Foreign Exchange Rate" means, with respect to any currency other than
United States dollars, as of any date of determination, the average of the
opening bid and asked rates on such date at which such currency may be exchanged
for United States dollars as quoted by Bank of America, N.A.
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"German Business" has the meaning set forth in SECTION 3.5.
"Inactive Employee" means any employee of Baxter or one of its
Subsidiaries who immediately prior to the Spin-Off Date is on an approved
medical leave of absence or short-term disability leave or is absent from active
employment due to occupational illness or injury covered by workers'
compensation, but excluding any employee who is classified by Baxter or any of
its Subsidiaries as totally and permanently disabled on the Spin-Off Date who is
not on workers' compensation.
"Indemnified Party" means any party who is entitled to receive payment
from an Indemnifying Party pursuant to ARTICLE XIII hereof.
"Indemnifying Party" means any party who is required to pay any other
person pursuant to ARTICLE XIII hereof.
"Indemnity Payment" means the amount an Indemnifying Party is required
to pay an Indemnified Party pursuant to ARTICLE XIII hereof.
"Information" has the meaning set forth in SECTION 10.1(a).
"Information Statement" has the meaning set forth in SECTION 7.2(i).
"Insurance Amount" has the meaning set forth in SECTION 12.3.
"Insurance Charges" has the meaning set forth in SECTION 7.5(d)(i).
"Insured Claims" means those liabilities that, individually or in the
aggregate, are covered within the terms and conditions of any of the Policies,
whether or not subject to deductibles, co-insurance, uncollectability, premium
adjustments (including reserves), retrospectively-rated premium adjustments or
retentions, but only to the extent that such liabilities are within applicable
Policy limits, including aggregates and deductibles.
"Intellectual Property Rights" means any and all United States and
foreign copyrights, copyright applications and registrations; nonpatented
inventions; discoveries; processes; formulations; trade secrets; know-how;
technical data; all patent
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applications and issued patents, including continuations, continuations-in-part,
divisionals, reissues, and extensions thereof; and trade names, trademarks,
service marks and service names, whether or not registered.
"Intercompany Receivables or Payables" means any intercompany
receivables or payables (other than Loans) arising in the ordinary course of
business.
"IRS" means the Internal Revenue Service.
"Kit" means an aggregation by Allegiance or Baxter of Baxter,
Allegiance and/or third-party products packaged together or repackaged for
specific uses and procedures.
"Lag Adjustment" has the meaning set forth in SECTION 7.7(a).
"Liability" has the meaning set forth in SECTION 13.8.
"Licensed Allegiance Intellectual Property" has the meaning set forth
in SECTION 8.1(a).
"Loan" means any intercompany indebtedness for borrowed money.
"Malaysian Glove Branch" has the meaning set forth in SECTION 3.2.
"Managed Capital" has the meaning set forth in SECTION 7.7(b).
"Manufacturing Contracts" means the agreements set forth in EXHIBIT D
under the caption "Contract Manufacturing Agreements."
"Mexicali" has the meaning set forth in SECTION 3.7(i).
"Mexican BHC Subsidiaries" has the meaning set forth in SECTION
3.7(ii).
"MTR" has the meaning set forth in SECTION 10.1(b).
"New Sub" has the meaning set forth in SECTION 3.8(i).
"NYSE" means the New York Stock Exchange, Inc.
"Operating Agreements" means the agreements listed on EXHIBIT D hereto
regarding the ongoing business and service relationships between Baxter and
Allegiance and their respective Affiliates following the Spin-Off.
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"Party" means Baxter or Allegiance.
"Person" shall mean an individual, corporation, partnership, limited
liability company, unincorporated syndicate, unincorporated organization, trust,
trustee, executor, administrator or other legal representative, governmental
authority or agency, or any group of Persons acting in concert.
"Policies" has the meaning set forth in SECTION 7.5.
"Pre Spin-Off Claims Administration" has the meaning set forth in
SECTION 7.5(e).
"Privilege" and "Privileges" have the meanings set forth in SECTION
10.5(a).
"Privileged Information" has the meaning set forth in SECTION 10.5(a).
"Products" has the meaning set forth in SECTION 7.11.
"Quiroproductos" has the meaning set forth in SECTION 3.7(ii).
"Real Estate Leases" has the meaning set forth in SECTION 4.2(v).
"Receivables" has the meaning set forth in SECTION 4.2(ii)(A).
"Record Date" means the date determined by the Board of Directors of
Baxter as the record date for the Spin-Off.
"Registration Statement" has the meaning set forth in SECTION 7.2(i).
"Repair or Replacement Period" has the meaning set forth in SECTION
7.11(i).
"Retained Business" means those portions of the business of Baxter and
its current Subsidiaries which are not part of the Allegiance Business.
"Rexam" has the meaning set forth in SECTION 7.17.
"SEC" means the United States Securities and Exchange Commission.
"Shared Agreements" has the meaning set forth in
SECTION 7.8(a).
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"Spin-Off" means the distribution of Allegiance Common Stock as a
dividend to holders of Baxter Common Stock on the basis provided for in ARTICLE
II hereof, which shall be effective as of the Spin-Off Date.
"Spin-Off Date" means the date determined by the Board of Directors of
Baxter as the date on which the Allegiance Shares are payable to holders of
Baxter Common Stock as of the Record Date.
"Subsidiary" means, when used with reference to any entity, any
corporation a majority of the outstanding voting securities of which are owned
directly or indirectly by such entity.
"Surgical Business" has the meaning set forth in EXHIBIT A.
"Tax Sharing Agreement" means the Tax Sharing Agreement in
substantially the form attached as EXHIBIT E hereto.
"Taxes" means any federal, state, local or foreign net income, gross
income, gross receipts, windfall profit, severance, property, production, sales,
use, license, excise, franchise, employment, payroll, withholding, alternative
or add-on minimum, ad valorem, value-added, transfer, stamp, or environmental
tax, or any other tax, custom, duty, governmental fee or other like assessment
or charge of any kind.
"Transferred Accounts" has the meaning set forth in SECTION 9.9.
"Transferred Actions" has the meaning set forth in SECTION 7.10(b).
"Transferred Assets" means any of the assets transferred to
Allegiance, AHC, AHII or any of their Subsidiaries as contemplated by ARTICLES
III, IV and V hereof.
"Transferred BHC Assets" has the meaning set forth in SECTION 4.2.
"Transferred Business" has the meaning set forth in the recitals of
this Agreement and in EXHIBIT A.
"Transferred Services" has the meaning set forth in the recitals of
this Agreement.
"Transferred Subsidiaries" has the meaning set forth in the recitals
of this Agreement.
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"Unassigned Indemnifiable Contracts" has the meaning set forth in
SECTION 7.13(a).
"Unbudgeted Transfer Adjustment" has the meaning set forth in SECTION
7.7(a).
"WARN Act" has the meaning set forth in SECTION 9.6.
Section 1.2 RULES OF CONSTRUCTION. (a) In This Agreement, unless a
clear contrary intention appears:
(i) the singular number includes the plural number and vice versa;
(ii) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are
permitted by This Agreement;
(iii) reference to any gender includes the other gender;
(iv) reference to any Section or Exhibit or Schedule means such
Section of this Agreement or such Exhibit or Schedule to this Agreement, as
the case may be, and references in any Section or definition to any clause
means such clause of such Section or definition;
(v) "herein", "hereunder", "hereof", "hereto", and words of similar
import shall be deemed references to this Agreement as a whole and not to
any particular Section or other provision hereof or thereof;
(vi) "including" (and with correlative meaning "include") means
including without limiting the generality of any description preceding such
term;
(vii) relative to the determination of any period of time, "from"
means "from and including", "to" means "to but excluding" and "through"
means "through and including";
(viii) accounting terms used herein shall have the meanings
historically attributed to them by Baxter and its Subsidiaries prior to the
Spin-Off;
(ix) in the event of any conflict between the provisions of the body
of this Agreement and the Exhibits (other than Exhibit E) or Schedules
hereto, the provisions of the body of this Agreement shall control; and
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(x) the headings contained in this Agreement have been inserted for
convenience of reference only and are not to be used in construing this
Agreement.
(b) This Agreement was negotiated by the Parties with the benefit of
legal representation, and any rule of construction or interpretation otherwise
requiring this Agreement to be construed or interpreted against either Party
shall not apply to any construction or interpretation hereof.
ARTICLE II. THE SPIN-OFF
On the Spin-Off Date, the Allegiance Shares shall be distributed as
follows:
Section 2.1 ISSUANCE AND DELIVERY OF ALLEGIANCE SHARES. Allegiance
shall issue to Baxter the number of Allegiance Shares required so that the total
number of Allegiance Shares held by Baxter on the Spin-Off Date is equal to the
total number of Allegiance Shares distributable pursuant to SECTION 2.2. Baxter
shall deliver to the Agent one or more stock certificates representing all of
the Allegiance Shares then issued and outstanding, together with one or more
stock power(s) duly endorsed in blank. In its capacity as Allegiance's transfer
agent, the Agent will transfer and distribute such shares in the manner
described in SECTION 2.2 below.
Section 2.2 SPIN-OFF OF ALLEGIANCE SHARES. Allegiance shall provide
to the Agent sufficient certificates in such denominations as the Agent may
request in order to effect the Spin-Off. Baxter shall instruct the Agent (i) to
distribute to all holders of record of Baxter Common Stock as of the Record Date
the Allegiance Distributable Share for each share of Baxter Common Stock
outstanding and held of record by such holder as of the Record Date, and (ii) to
deliver to Allegiance, as a contribution to Allegiance, all of the remaining
Allegiance Shares, if any, then held by the Agent. Any such returned Allegiance
Shares shall be canceled immediately by Allegiance, and the Board of Directors
of Allegiance shall take appropriate action so that such returned shares shall
not constitute treasury shares. All of the distributed Allegiance Shares shall
be validly issued, fully paid and nonassessable and shall be free of any
preemptive rights.
Section 2.3 TREATMENT OF FRACTIONAL SHARES. No certificates or scrip
representing fractional Allegiance Shares shall be issued in the Spin-Off. In
lieu of receiving fractional shares, each holder of Baxter Common Stock who
would otherwise be entitled to receive a fractional Allegiance Share pursuant to
the Spin-Off will receive cash for such fractional share. Baxter and
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Allegiance shall instruct the Agent to determine the number of whole Allegiance
Shares and fractional Allegiance Shares allocable to each holder of record of
Baxter Common Stock as of the Record Date, to aggregate all such fractional
shares into whole shares and sell the whole shares obtained thereby in the open
market at the then prevailing prices on behalf of holders who would otherwise be
entitled to receive fractional share interests, and the Agent shall distribute
to each such holder such holder's ratable share of the total proceeds of such
sale after making appropriate deductions of any amounts required for Federal tax
withholding purposes and after deducting any taxes attributable to the sale of
such fractional share interests. Baxter shall bear the costs of commissions
incurred in connection with such sales.
Section 2.4 BAXTER BOARD ACTION. The Board of Directors of Baxter
shall, in its discretion, determine the Record Date and the Spin-Off Date and
all appropriate procedures in connection with the Spin-Off. The Board of
Directors of Baxter shall also have the right to adjust at any time prior to the
Spin-Off Date the Allegiance Distributable Share. The consummation of the
transactions provided for in this ARTICLE II shall only be effected after the
Spin-Off has been declared by the Board of Directors of Baxter and after all of
the conditions set forth in ARTICLE XI hereof shall have been satisfied or
waived by Baxter.
Section 2.5 ADDITIONAL APPROVALS. Baxter shall cooperate with
Allegiance in effecting, and if so requested by Allegiance, Baxter shall, as the
sole stockholder of Allegiance prior to the Spin-Off, ratify any actions which
are reasonably necessary or desirable to be taken by Allegiance to effectuate,
the transactions referenced in or contemplated by this Agreement in a manner
consistent with the terms of this Agreement.
ARTICLE III. TRANSFERS TO AHII
Section 3.1 GENERAL. Prior to or promptly following the execution of
this Agreement, Baxter shall cause to be incorporated, under the General
Corporation Law of Delaware, Allegiance Healthcare International Inc. ("AHII")
as a wholly owned Subsidiary of Xxxxxx World Trade Corporation, a Delaware
corporation ("BWT") and a wholly-owned Subsidiary of Baxter. AHII shall be
qualified as a foreign corporation under the Business Corporation Act of
Illinois. Subject to the terms and conditions of this Agreement, Baxter and
Allegiance hereby agree to take or cause to be taken any and all actions
necessary to effect the transactions described in this ARTICLE III, with each
transaction occurring at the approximate times and in the order described in
SCHEDULE 3.1.
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Section 3.2 MALAYSIAN GLOVE FACTORY. Baxter and Allegiance hereby
agree to take any and all actions necessary to effect the transfer to AHII of
all of the right, title and interest of Panama Healthcare S.A. (Panama), a
Panamanian corporation and a wholly-owned Subsidiary of BWT ("Baxter Panama"),
in the Baxter Panama branch in Malaysia that produces gloves and all of the
assets and liabilities related thereto (the "Malaysian Glove Branch"), as
follows:
(i) Allegiance Healthcare Sdn. Bhd. ("AHSB") shall be
incorporated as a Subsidiary of Baxter Panama;
(ii) Baxter Panama shall declare a U.S.$100,000,000 dividend,
U.S.$50,000,000 of which shall be payable on the Spin-Off Date and the
remainder of which shall be payable to BWT on or before January 31,
1997;
(iii) AHSB shall borrow 10 million Malaysian ringgits (the
"Euromedical Loan") from Euromedical Industries Senderihan Berhad, a
Malaysia corporation ("Euromedical");
(iv) Baxter Panama shall transfer to AHSB all of its right,
title and interest in and to the Malaysian Glove Branch in return for
AHSB stock and the agreement by AHSB to pay to Baxter Panama on the
Spin-Off Date U.S.$90,000,000;
(v) AHII shall borrow U.S.$1,000 from BWT;
(vi) Baxter Panama shall transfer to BWT all of its right, title
and interest in and to the capital stock of AHSB;
(vii) BWT shall transfer to AHII all of its right, title and
interest in and to the capital stock of AHSB in exchange for 84 shares
of AHII voting common stock and 84 shares of AHII non-voting preferred
stock and U.S.$1,000 in cash; and
(viii) Contemporaneously with or immediately before the Spin-Off
(1) AHII shall repay U.S.$1,000 to BWT, and (2) AHSB shall borrow from
Allegiance U.S.$90,000,000 and use the proceeds of such indebtedness
towards the repayment of all debt owed to Baxter Panama.
Section 3.3 EUROMEDICAL. Baxter and Allegiance hereby agree to take
any and all actions necessary to effect the transfer to AHII of all the right,
title and interest in
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Euromedical Industries Senderihan Berhad, a Malaysian corporation
("Euromedical"), held by AHFI/Netherlands B.V., a Dutch corporation and a
wholly-owned Subsidiary of BWT ("AHFI"), as follows:
(i) AHFI shall be liquidated into BWT;
(ii) Xxxxxx World Trade, S.A., a Belgium corporation ("BWTSA"),
shall pay 10,123,410.96 ringgits to Euromedical in satisfaction of
existing intercompany debt;
(iii) BWT shall transfer to AHII all of BWT's right, title and
interest in and to the capital stock of Euromedical in exchange for four
shares of AHII voting common stock and four shares of AHII nonvoting
preferred stock; and
(iv) Euromedical makes the Euromedical Loan.
Section 3.4 FRANCE. Baxter and Allegiance hereby agree to take any
and all actions necessary to effect the transfer to AHII of all of the right,
title and interest of Xxxxxx X.X. (France) ("Baxter France") in the
Chateaubriant manufacturing facility and all of the assets and liabilities
related thereto (the "Chateaubriant Plant") as follows:
(i) AHII shall form Allegiance Sante S.A. ("Allegiance France")
as a French corporation and a wholly-owned Subsidiary of AHII;
(ii) BWT shall contribute U.S.$3,912,828.13 to AHII as equity;
(iii) AHII shall contribute 19,750,000 FF to Allegiance France
as equity; and
(iv) Allegiance France shall pay 17,710,000 FF to Xxxxxx France
to purchase the Chateaubriant Plant.
Section 3.5 GERMANY. Baxter and Allegiance hereby agree to take any
and all actions necessary to effect the transfer to AHII of all of the right,
title and interest of Xxxxxx Deutschland GmbH ("Baxter Deutschland") in certain
German assets and liabilities related to the Allegiance Business (the "German
Business") as follows:
(i) AHII shall incorporate Allegiance Healthcare Deutschland
GmbH ("Allegiance Germany") with 56,000 DM as equity;
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(ii) BWT shall contribute U.S.$83,919.73 to AHII as equity;
(iii) AHII shall contribute 123,790 DM to Allegiance Germany as
equity; and
(iv) Allegiance Germany shall acquire from Baxter Deutschland
the German Business and 100,000 DM in cash.
Section 3.6 MALTA. Baxter and Allegiance hereby agree to take any
and all actions necessary to effect the transfer to AHII of all of the right,
title and interest in Eurovac Ltd., a Malta corporation ("Eurovac") held by
Xxxxxx X.X., a Belgium corporation ("Baxter Belgium"), as follows:
(i) BWT shall loan U.S.$3,691,258.76 to AHII, which shall be due on
the Spin-Off Date;
(ii) AHII shall loan 17,147,331.67 FF to Eurovac;
(iii) Eurovac shall pay 17,147,331.67 FF to Baxter Limited, a
Malta corporation, in satisfaction of an existing loan;
(iv) Xxxxxx Belgium shall distribute as a dividend all of the
capital stock of Eurovac to its two stockholders (BWT and Baxter
Pharmacy Services, a Delaware corporation and a wholly owned
Subsidiary of BWT ("BPS"));
(v) BPS shall distribute as a dividend to BWT all of the capital
stock of Eurovac held by it;
(vi) BWT shall transfer to AHII all of its right, title and
interest in and to the capital stock of Eurovac in exchange for one
share of AHII voting common stock and one share of AHII non-voting
preferred stock and U.S.$1,000 in cash; and
(vii) AHII shall repay U.S.$3,691,258.76, plus accrued interest
of U.S.$17,225, to Baxter.
Section 3.7 MEXICO. Baxter and Allegiance hereby agree to take any
and all actions necessary to effect the transfer to AHII of all of the right,
title and interest in certain Mexican corporations held by BHC and BWT as
follows:
(i) BWT shall transfer all of its right, title and interest in
the capital stock in Productos Urologos de Mexico S.A. de C.V., a
Mexico corporation and a
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wholly-owned Subsidiary of BWT ("Mexicali"), to AHII in exchange for four
shares of AHII voting common stock, four shares of AHII non-voting
preferred stock and $1,000 in cash (and for Mexican tax purposes the value
of the stock of Mexicali shall be considered equal to its Mexican tax
basis);
(ii) BHC shall distribute all of its rights, title and interest
in the capital stock in Cirpro de Delicias S.A. de C.V., a Mexico
corporation and a wholly owned Subsidiary of BHC ("Cirpro"),
Quiroproductos de Xxxxxxxxxx, S.A. de C.V., a Mexico corporation and a
wholly owned Subsidiary of BHC ("Quiroproductos"), Convertors de
Mexico S.A. de C.V., a Mexico corporation and a wholly owned
Subsidiary of BHC ("Convertors"), and Cirmex de Chihuahua S.A. de
C.V., a Mexico corporation and a wholly owned Subsidiary of BHC
(together with Cirpro, Quiroproductos and Convertors, the "Mexican BHC
Subsidiaries"), to Baxter (and for Mexican tax purposes the value of
the stock of the Mexican BHC Subsidiaries shall be considered equal to
their Mexican tax bases);
(iii) Baxter shall transfer all of its right, title and interest
in the capital stock of the Mexican BHC Subsidiaries to AHII in
exchange for four shares of AHII voting common stock, four shares of
AHII non-voting preferred stock and U.S.$4,000 in cash (and for
Mexican tax purposes the value of the stock of the Mexican BHC
Subsidiaries shall be considered equal to their Mexican tax bases);
and
(iv) The documentation with respect to the stock transfers
contemplated by this SECTION 3.7 provide or will provide that requests to
exempt such transfers from certain Mexican taxes are pending and that in
the event that confirmation of such exemption is not received that such
initial transfer will be deemed null and void. In such event, such
transfers will be redocumented in the most appropriate manner to accomplish
the purposes of this SECTION 3.7 and Baxter and Allegiance shall take or
cause to be taken any and all actions necessary to provide to Allegiance
all of the benefits of beneficial ownership of the stock referred to in
this SECTION 3.7 from the intended date of transfer through the date upon
which such transfer is finally consummated.
Section 3.8 CANADA. Baxter and Allegiance hereby agree to take any
and all actions necessary to effect the transfer to AHII of all of the right,
title and interest in the Allegiance Business held by Xxxxxx Corporation, a
Canada
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corporation and a wholly owned Subsidiary of BWT ("Xxxxxx Canada"), as follows:
(i) Xxxxxx Canada shall form Allegiance Healthcare Canada Inc.
("New Sub") under the laws of Canada and shall contribute to it all of
the right, title and interest of Xxxxxx Canada in the Allegiance
Business plus Can $38,000,000 of intercompany indebtedness owed by
Xxxxxx Canada to BWTSA in exchange for 1,000 Common Shares of New Sub
and the assumption of certain liabilities;
(ii) Xxxxxx Canada shall adopt a new charter pursuant to which
Xxxxxx Canada will exchange all of its outstanding capital stock held
by BWT for 1,000 Class A Shares and 10,000 Class B Shares;
(iii) BWT shall transfer to AHII all of BWT's holdings of Class
B Shares in exchange for four shares of AHII voting common stock and
four shares of AHII non-voting preferred stock;
(iv) AHII shall form 3289559 Canada Inc. under the laws of
Canada ("Allegiance Canada") and shall transfer to Allegiance Canada
all of the Class B Shares in exchange for 1,000 shares of Allegiance
Canada common stock;
(v) Xxxxxx Canada shall transfer to Allegiance Canada all of the
outstanding capital stock of New Sub in exchange for 10,000 Preference
Shares of Allegiance Canada;
(vi) Allegiance Canada shall redeem all of its outstanding
Preference Shares in exchange for its promissory note in the principal
amount of Can$19,000,000;
(vii) Xxxxxx Canada shall redeem all of its outstanding Class B
Shares from Allegiance Canada in exchange for its promissory note in
the principal amount of Can$19,000,000;
(viii) Xxxxxx Canada and Allegiance Canada shall exchange each
other's promissory notes, and such promissory notes shall be canceled;
(ix) New Sub shall amalgamate with Allegiance Canada;
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(x) AHII shall borrow the U.S. dollar equivalent of Can$38,000,000
from Baxter;
(xi) Allegiance Canada shall borrow Can$38,000,000 from AHII and
use the proceeds of such indebtedness to repay the intercompany
indebtedness of New Sub to BWTSA assumed by Allegiance Canada pursuant
to the amalgamation; and
(xii) AHII shall repay to Baxter the U.S. dollar equivalent of
Can$38,000,000.
Section 3.9 RESTRICTIONS ON INTERCOMPANY DEBT. Neither Baxter nor
any Affiliate of Baxter shall make any Loan, other than in the ordinary course
of business, to any Allegiance Foreign Entity from August 26, 1996 through the
Spin-Off Date, except as specifically contemplated by this Agreement.
Section 3.10 TRANSFER OF ASSETS. Subject to the terms and conditions
of this Agreement, Baxter hereby agrees to convey, assign, transfer, contribute
and set over, or cause to be conveyed, assigned, transferred, contributed and
set over, to AHII on or prior to the Spin-Off Date, all of BWT's right, title
and interest in and to all assets, tangible or intangible, including all
goodwill, which are exclusive to the operations of the Allegiance Business.
Section 3.11 TRANSFER OF LIABILITIES. Subject to the terms and
conditions of this Agreement, Allegiance shall cause AHII to assume, effective
as of the Spin-Off Date, and pay, comply with and discharge all contractual and
other obligations of BWT arising out of or relating to the Allegiance Business
or any Divested Business and/or any past or present facilities used primarily in
connection with the Allegiance Business or any Divested Business, whether
accrued, absolute, contingent or otherwise, and whether due or to become due,
whether existing on the date hereof or arising at any time or from time to time
after the date hereof, and whether based on circumstances, events or actions
arising heretofore or hereafter, whether or not such obligations shall have been
disclosed herein, and whether or not reflected on the books and records or
Balance Sheet of Allegiance.
ARTICLE IV. TRANSFERS TO AHC
Section 4.1 ORGANIZATION OF AHC. Prior to or promptly following the
execution of this Agreement, Baxter shall cause to be incorporated, under the
General Corporation Law of Delaware, Allegiance Healthcare Corporation ("AHC")
as a wholly owned Subsidiary of BHC. AHC shall be qualified as a foreign
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corporation under the corporation laws of each state where the ownership of its
assets or conduct of its business makes such qualification necessary.
Section 4.2 TRANSFERRED ASSETS. Subject to the terms and conditions
of this Agreement, Baxter shall cause to be conveyed, assigned, transferred,
contributed and set over to AHC on or prior to the Spin-Off Date, and Allegiance
shall cause AHC to accept and receive on or prior to the Spin-Off Date all
right, title and interest (except as noted in SECTION 4.2(vii)(B) below) of BHC
in and to the tangible and intangible assets, properties, rights and interests
of the Allegiance Business (all of such assets being hereinafter referred to as
the "Transferred BHC Assets"), including the following:
(i) BALANCE SHEET ASSETS. All assets reflected or disclosed on
the unaudited balance sheet of the Allegiance Business as of June 30,
1996 attached as EXHIBIT F hereto, (the "Balance Sheet"), including
all machinery, equipment, furniture and other tangible personal
property, whether owned or leased, used primarily in the operation of
the Allegiance Business, subject to acquisitions, dispositions and
adjustments in the ordinary course of the Allegiance Business,
consistent with past practice, after such date;
(ii) RECEIVABLES.
(A) All accounts receivable, notes receivable, lease receivables,
prepayments (other than prepaid insurance), advances and other
receivables arising out of or produced by the Allegiance Business and
owing by any persons (the "Receivables");
(B) all cash payments received after the Spin-Off Date on account
of the Receivables;
(C) all manufacturers' warranties or guarantees related to the
Transferred BHC Assets or related to any of the Assumed BHC
Liabilities; and
(D) any and all manufacturers' or third party service replacement
programs relating to the Transferred BHC Assets;
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(iii) INVENTORIES.
(A) All work-in-process, finished goods and spare parts inventory
of Allegiance Products, other than (x) Allegiance Products transferred
to BWT or one of its Subsidiaries for distribution outside the United
States and (y) Allegiance Products manufactured by Baxter or one of
its Subsidiaries pursuant to the Manufacturing Contracts and with
respect to which title has not yet passed to Allegiance pursuant to
the terms of the Manufacturing Contracts;
(B) all raw materials inventory related to Allegiance Products
other than Allegiance Products manufactured by Baxter or one of its
Subsidiaries pursuant to the Manufacturing Contracts; and
(C) all supplies, packaging and other inventories related to the
Allegiance Business but excluding any such items in the possession of
Baxter or its Subsidiaries that relate to Allegiance Products
manufactured by Baxter or one of its Subsidiaries pursuant to the
Manufacturing Contracts.
(iv) OWNED REAL PROPERTY. Those certain parcels of land set forth on
SCHEDULE 4.2(iv) hereto, together with any and all buildings, plants and
other structures and improvements thereon, any and all rights and
privileges pertaining thereto or to any of such buildings, plants or other
structures or improvements, including, without limitation, ownership
interests, easements, permits, licenses, rights of way, leases, purchase
and option agreements with respect to real property, and, to the extent
constituting real property, any and all fixtures, machinery, equipment and
other property attached thereto or located thereon (other than equipment
and furniture located in property to be retained by Baxter or its
Subsidiaries hereunder) and all other rights and interests of any nature in
and to any other real estate of the Allegiance Business;
(v) REAL PROPERTY LEASES. Those certain real estate leases set forth
on SCHEDULE 4.2(v) hereto (the "Real Estate Leases") and any and all
improvements, fixtures, machinery, equipment and other property located on
the premises demised under such Real Estate Leases (other than equipment
and furniture located in property to be retained by Baxter or its
Subsidiaries hereunder);
(vi) VEHICLES. All vehicles used primarily in connection with the
Allegiance Business, including those set forth on SCHEDULE 4.2(vi) hereto,
whether owned or leased;
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(vii) TRADE SECRETS AND KNOW-HOW.
(A) All business and technical information, nonpatented
inventions, copyrights, discoveries, processes, formulations, trade
secrets, know-how and technical data to the extent used exclusively in
connection with the Allegiance Business including those set forth on
SCHEDULE 4.2(vii) hereto and the trade secrets and technical
documentation listed in SCHEDULE 8.1(a), and all rights which are
associated with the foregoing, including, without limitation: (1) the
right to xxx, recover and retain such recoveries for infringement of
the foregoing prior to the Spin-Off Date; (2) the right to continue in
the name of Baxter and its Subsidiaries any pending actions relating
to the foregoing, and to recover and retain any damages therefrom,
provided, however, that to the extent that such recoveries relate to
infringements of both Baxter Products and Allegiance Products, such
recoveries shall be apportioned between Baxter and Allegiance on a
pro-rata basis based on the relative damages suffered by each, after
reimbursement of each Parties' costs and expenses incurred in
obtaining such recoveries; (3) the assignment of all business and
technical information, nonpatented inventions, discoveries, processes,
formulations, trade secrets, know-how and technical data made or
conceived by employees, consultants or contractors of Baxter or its
Subsidiaries as to which BHC or its Subsidiaries have rights under any
agreement or otherwise relating to the foregoing; (4) the assignment
of all business and technical information, nonpatented inventions,
discoveries, processes, formulations, trade secrets, know-how and
technical data made or conceived by third parties as to which BHC or
its Subsidiaries have rights pursuant to executory agreements with
said third parties relating to the foregoing; and (5) all permits,
grants, contracts, agreements and licenses running to or from BHC or
its Subsidiaries relating to the foregoing. As of the Spin-Off Date,
and except as permitted pursuant to the terms and conditions of
SECTION 8.1 herein, Baxter and its Subsidiaries shall cease all use of
the foregoing, and Baxter agrees to terminate any license granted to
its Subsidiaries with respect to the foregoing.
(B) An undivided joint ownership interest, without a right of
accounting, in all business and technical information, nonpatented
inventions, copyrights, discoveries, processes, formulations, trade
secrets, know-how and technical data to the extent used in connection
with the Allegiance Business, with the
- 23 -
exception of the Licensed Allegiance Intellectual Property and the
Licensed Baxter Intellectual Property (hereinafter, the "Commonly Used
Business Information" or "CUBI"), including those set forth on
Schedule 4.2(vii) hereto (with the exception of those intellectual
property rights subject to SECTION 4.2(vii)(A)), and all rights which
are associated with the foregoing, including, without limitation: (1)
the right to xxx, recover and retain such recoveries for infringement
in respect of the Allegiance Business of the foregoing prior to the
Spin-Off Date; (2) the right to continue in the name of Baxter and its
Subsidiaries any pending actions relating to the foregoing, and to
recover and retain any damages therefrom in respect of the Allegiance
Business, provided, however, that to the extent that such recoveries
relate to infringements of both Baxter Products and Allegiance
Products, such recoveries shall be apportioned between Xxxxxx and
Allegiance on a pro-rata basis based on the relative damages suffered
by each, after reimbursement of each Parties' costs and expenses
incurred in obtaining such recoveries; (3) the assignment of an
undivided joint ownership interest, without a right of accounting, in
inventions and all business and technical information, nonpatented
inventions, discoveries, processes, formulations, trade secrets, know-
how and technical data made or conceived by employees, consultants or
contractors of Xxxxxx or its Subsidiaries as to which BHC or its
Subsidiaries have rights under any agreement or otherwise relating to
the foregoing; (4) the assignment of an undivided joint ownership
interest, without a right of accounting, in all business and technical
information, nonpatented inventions, discoveries, processes,
formulations, trade secrets, know-how and technical data made or
conceived by third parties in connection with the Allegiance Business
as to which BHC or its Subsidiaries have rights pursuant to executory
agreements with said third parties; and (5) all permits, grants,
contracts, agreements and licenses running to or from BHC or its
Subsidiaries in connection with the Allegiance Business relating to
the foregoing. Because the CUBI is also used by Xxxxxx or its
Subsidiaries in connection with businesses other than the Allegiance
Business, Allegiance acknowledges that Xxxxxx retains an undivided
joint ownership interest, without a right of accounting, in the CUBI
to the extent such CUBI relates to businesses other than the
Allegiance Business.
(viii) CONTRACTS. All of the following contracts, agreements,
arrangements, leases (other than Real Estate
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Leases), manufacturers' warranties, memoranda, understandings and offers
open for acceptance of any nature, whether written or oral (the
"Contracts") (such Contracts being referred to as the "AHC Contracts"):
(A) all Contracts related to acquisitions or divestitures of
assets or stock related primarily to the Allegiance Business,
including Contracts related to the transactions set forth on
SCHEDULE 4.2(viii)(A) hereto, except to the extent any such
Contracts relate to the Retained Business and except to the
extent indicated on SCHEDULE 4.2(viii)(A);
(B) all Contracts with customers exclusive to the Allegiance
Business and all Contracts with customers in the categories set
forth on SCHEDULE 4.2(viii)(B) hereto;
(C) all customer leases under which the underlying equipment
is the primary marketing responsibility of Allegiance, including
those equipment categories set forth on SCHEDULE 4.2(viii)(C)
hereto;
(D) all government Contracts exclusive to the Allegiance
Business, including those set forth on SCHEDULE 4.2(viii)(D)
hereto;
(E) all supplier Contracts exclusive to the Allegiance
Business relating either to raw materials or distributed
products, including those in the categories set forth on SCHEDULE
4.2(viii)(E) hereto;
(F) all joint development and confidentiality Contracts
exclusive to the Allegiance Business, including those set forth
on SCHEDULE 4.2(viii)(F) hereto;
(G) all consulting Contracts exclusive to the Allegiance
Business;
(H) all dealer management Contracts and alternate
distribution Contracts, including those set forth on
SCHEDULE 4.2(viii)(H);
(I) all manufacturing Contracts exclusive to the Allegiance
Business;
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(J) the telecommunications Contracts exclusive to the Allegiance
Business, including those set forth on SCHEDULE 4.2(viii)(J) hereto;
(K) the Shared Contracts set forth on SCHEDULE 7.8 hereto that
are designated as being assigned to Allegiance; and
(L) all other Contracts exclusive to the Allegiance
Business.
(ix) PERMITS AND LICENSES. All permits, approvals, licenses,
franchises, authorizations or other rights granted by any federal, state,
local or foreign governmental authority held or applied for by Xxxxxx and
its Subsidiaries and which are exclusively used in the Allegiance Business
or which relate exclusively to the Transferred BHC Assets or any of the
Transferred Subsidiaries, and all other consents, grants, and other rights
that are used exclusively, for the lawful ownership of the Transferred BHC
Assets or the operation of the Allegiance Business and that are legally
transferable to AHC;
(x) CLAIMS AND INDEMNITIES. All rights, claims, demands, causes of
action, judgments, decrees and rights to indemnity or contribution, whether
contractual or otherwise, in favor of BHC arising out of the Allegiance
Business, including those set forth on SCHEDULE 4.2(x) hereto;
(xi) SUBSIDIARIES, JOINT VENTURES AND MINORITY INTERESTS. All shares
of capital stock or equity or debt or other interests owned by Xxxxxx or
its Subsidiaries in the Subsidiaries, joint ventures and minority
investments set forth on SCHEDULE 4.2(xi) hereto;
(xii) BOOKS AND RECORDS. All books and records (including all
records pertaining to customers, suppliers and personnel) wherever located,
that relate primarily to the operation of the Allegiance Business;
(xiii) SUPPLIES. All office supplies, production supplies, spare
parts, purchase orders, forms, labels, shipping material, art work,
catalogues, sales brochures, operating manuals and advertising and
promotional material and all other printed or written material that relate
primarily to the operation of the Allegiance Business;
(xiv) SOFTWARE. All (A) software installed on the mainframe computer
located in Building G at XxXxx Park, Illinois, except for the software set
forth on SCHEDULE 4.2(xiv) hereto, (B) software based on AS400 and other
mid-
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range hardware included in the Transferred BHC Assets, (C) PC-based
software located on hardware included in the Transferred BHC Assets, (D)
Restrac software and the scanning equipment related thereto, (E) Compliance
Systems Software, and (F) any Contracts related to the aforementioned
software; and
(xv) OTHER ASSETS. All other assets, tangible or intangible,
including all goodwill, which are exclusive to the operations of, or
otherwise relate exclusively to, the Allegiance Business.
Section 4.3 ASSUMED LIABILITIES. Except as expressly limited in this
ARTICLE IV, Allegiance shall cause AHC to assume, effective as of the Spin-Off
Date, and pay, comply with and discharge all contractual and other obligations
and liabilities of BHC arising out of or relating to the Allegiance Business or
any Divested Business and/or any of the past or present facilities of BHC used
primarily in connection with the Allegiance Business or any Divested Business,
whether accrued, unrecorded, absolute, contingent or otherwise, and whether due
or to become due, including:
(i) All of the liabilities of BHC (excluding, except as provided in
SECTION 4.3(ii), Loans owed to Xxxxxx or any of its Subsidiaries) which are
reflected, disclosed or reserved for on the Balance Sheet, as such
liabilities may be increased or reduced in the operation of the Allegiance
Business from the date of the Balance Sheet through the Spin-Off Date in
the ordinary course of business consistent with past practice;
(ii) The Loans of BHC held by BWT and the Loans of BHC held by Xxxxxx
set forth on SCHEDULE 4.3(ii) hereto;
(iii) All liabilities and obligations of BHC in connection with
workers compensation claims relating to facilities transferred to AHC;
(iv) All liabilities and obligations of BHC under or related to the
Real Estate Leases and the AHC Contracts, such assumption to occur as (i)
assignee if such Real Estate Leases and AHC Contracts are assignable and
are assigned or otherwise transferred to AHC, or (ii) subcontractor,
sublessee or sublicensee as provided in SECTION 6.3 below if assignment of
such Real Estate Leases and AHC Contracts and/or the proceeds thereof is
prohibited by law, by the terms thereof or not permitted by the other
contracting party;
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(v) All warranty, performance and similar obligations entered into or
made by BHC prior to the Spin-Off Date with respect to the products or
services of the Allegiance Business;
(vi) All liabilities and obligations of BHC related to any and all
Actions asserting a violation of any law, rule or regulation related to or
arising out of the operations of the Allegiance Business, whether before or
after the Spin-Off Date and the liabilities relating to any Assumed
Actions;
(vii) All liabilities and obligations of BHC arising under (A) CERCLA
and any other federal, state or local laws regarding the management,
control and cleanup of hazardous materials (including off-site waste
disposal liabilities) or (B) the Occupational Safety and Health Act or
similar state laws or regulations, in either case relating to or arising
out of the operations of the Allegiance Business, whether before or after
the Spin-Off Date, including those set forth on SCHEDULE 4.3(vii) hereto;
(viii) All liabilities and obligations of BHC under any mortgage
interest subsidy program on behalf of any Allegiance Employee;
(ix) All liabilities associated with the transfer of assets from the
Xxxxxx Savings Plan to the Allegiance Savings Plan;
(x) The inventory payables from Xxxxxx'x U.S. Distribution business
to Xxxxxx'x Cardiovascular Group and IV Systems division existing on the
Spin-Off Date; and
(xi) All other liabilities and obligations of BHC relating to the
Allegiance Business or any Divested Business, whether existing on the date
hereof or arising at any time or from time to time after the date hereof,
and whether based on circumstances, events or actions arising heretofore or
hereafter, whether or not such obligations shall have been disclosed
herein, and whether or not reflected on the books and records or Balance
Sheet.
The liabilities and obligations described in this SECTION 4.3 are
referred to in this Agreement collectively as the "Assumed BHC Liabilities."
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ARTICLE V. ORGANIZATION OF ALLEGIANCE CORPORATION
Section 5.1 ORGANIZATION OF ALLEGIANCE. Xxxxxx and Allegiance shall
take any and all action necessary so that, at the Spin-Off Date, the Certificate
of Incorporation and By-laws of Allegiance shall be in the forms attached hereto
as EXHIBITS G and H, respectively. Prior to the Spin-Off Date, the Board of
Directors of Allegiance shall adopt a preferred share purchase rights plan in
substantially the form attached hereto as EXHIBIT I. At the Spin-Off Date, the
Allegiance Board of Directors shall consist of, and Xxxxxx and Allegiance shall
take all actions which may be required to elect or otherwise appoint as
directors of Allegiance on or prior to the Spin-Off Date, the persons named on
EXHIBIT J. Following the transfers of Subsidiaries contemplated by SECTION 5.2,
Allegiance shall take appropriate action to be qualified as a foreign
corporation under the Business Corporation Act of Illinois.
Section 5.2 TRANSFER OF CERTAIN SUBSIDIARIES. Xxxxxx and Allegiance
hereby agree to take, or cause to be taken, any and all actions necessary to
effect the following transactions, on or prior to the Spin-Off Date and at the
approximate times described in SCHEDULE 3.1:
(i) BWT shall distribute as a dividend to Xxxxxx all of BWT's right,
title and interest in and to the common stock of AHII;
(ii) Xxxxxx shall transfer to Allegiance all of Xxxxxx'x right, title
and interest in and to the common stock of AHII; and
(iii) BHC shall distribute as a dividend to Xxxxxx all of BHC's right,
title and interest in and to the common stock of AHC; and
(iv) Xxxxxx shall contribute to Allegiance all of Xxxxxx'x right,
title and interest in and to the common stock of AHC.
Section 5.3 TRANSFER OF ASSETS. Subject to the terms and conditions
of this Agreement, Xxxxxx hereby agrees to convey, assign, transfer, contribute
and set over, or cause to be conveyed, assigned, transferred, contributed and
set over, to Allegiance on or prior to the Spin-Off Date, all of Xxxxxx'x right,
title and interest in and to the following assets:
(i) INTELLECTUAL PROPERTY. (A) The foreign and domestic Intellectual
Property Rights relating primarily to or used exclusively in the Allegiance
Business including the Intellectual Property Rights set forth below:
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(1) the patents and patent applications and invention
records set -forth on SCHEDULE 5.3(i)(A)(1) hereto, including any
continuations, continuations-in-part, divisions, renewals,
reissues and extensions thereof;
(2) the unregistered copyrights and copyright applications
and registrations set forth on SCHEDULE 5.3(i)(A)(2) hereto; and
(3) the trade names, trademarks, service marks and service
names, whether or not registered, including those set forth on
SCHEDULE 5.3(i)(A)(3) hereto and the goodwill associated with
each of the foregoing.
For completeness, the Parties recognize that certain items included on
SCHEDULES 5.3(i)(A)(1)-(3) have been transferred to third parties pursuant
to various divestitures. The inclusion of such items on such Schedules
does not imply that Xxxxxx has retained any interest therein and reference
is made to SECTION 6.2 hereof.
All of the rights described in SECTION 4.2(vii)(A) and this SECTION
5.3(i)(A) are referred to collectively as the "Allegiance Assigned
Intellectual Property".
(B) The Allegiance Assigned Intellectual Property shall include,
without limitation: (1) the right to xxx, recover and retain such
recoveries for infringement of the Allegiance Assigned Intellectual
Property prior to the Spin-Off Date; (2) the right to continue in the
name of Xxxxxx any pending actions relating to the Allegiance Assigned
Intellectual Property, and to recover and retain any damages
therefrom; PROVIDED, HOWEVER, that to the extent that such recoveries
relate to infringements of both Xxxxxx Products and Allegiance
Products, such recoveries shall be apportioned between Xxxxxx and
Allegiance on a pro rata basis based on the relative damages suffered
by each, after reimbursement of each Parties' costs and expenses
incurred in obtaining such recoveries; (3) the assignment of
inventions and other Intellectual Property Rights made or conceived by
employees, consultants or contractors of Xxxxxx or its Subsidiaries as
to which Xxxxxx or its Subsidiaries have rights under any agreement or
otherwise relating to the Allegiance Assigned Intellectual Property;
(4) the assignment of inventions and other Intellectual Property
Rights made or conceived by third parties as to which Xxxxxx or its
Subsidiaries have rights
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pursuant to executory agreements with said third parties relating to
the Allegiance Assigned Intellectual Property; and (5) all permits,
grants, contracts, agreements and licenses running to or from Xxxxxx
or its Subsidiaries relating to the Allegiance Assigned Intellectual
Property. As of the Spin-Off Date, and except as permitted pursuant
to the terms and conditions of SECTION 8.1 herein, Xxxxxx and its
Subsidiaries shall cease all use of the Allegiance Assigned
Intellectual Property, and Xxxxxx agrees to terminate any licenses
granted to its Subsidiaries with respect to the Allegiance Assigned
Intellectual Property.
(ii) BALANCE SHEET ASSETS. All assets reflected or disclosed on the
Balance Sheet, subject to acquisitions, dispositions and adjustments in the
ordinary course of the Allegiance Business, consistent with past practice,
after June 30, 1996; and
(iii) OTHER ASSETS. All other assets, tangible or intangible,
including all goodwill, which are exclusive to the operations of the
Allegiance Business.
Section 5.4 TRANSFER OF LIABILITIES. Subject to the terms and
conditions of this Agreement, Allegiance shall assume, effective as of the Spin-
Off Date, and pay, comply with and discharge all contractual and other
obligations and liabilities of Xxxxxx arising out of or relating to the
Allegiance Business or any Divested Business, and/or any of the past or present
facilities of Xxxxxx relating to the Allegiance Business or any Divested
Business, whether accrued, absolute, contingent or otherwise, and whether due or
to become due, including:
(i) all liabilities and obligations under each of the guarantees and
letters of credit set forth on SCHEDULE 5.4(i) hereto; and
(ii) all other liabilities and obligations of the Allegiance Business
or any Divested Business, whether existing on the date hereof or arising at
any time or from time to time after the date hereof, and whether based on
circumstances, events or actions arising heretofore or hereafter, whether
or not such obligations shall have been disclosed herein, and whether or
not reflected on the books and records of the Balance Sheet of Allegiance.
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ARTICLE VI. OTHER CLOSING MATTERS
Section 6.1 INSTRUMENTS OF CONVEYANCE. In order to effectuate the
transactions contemplated by ARTICLES III, IV and V, the Parties shall cause to
be executed and delivered prior to or as of the Spin-Off Date such deeds, bills
of sale, instruments of assumption, trademark and patent assignments, stock
powers, certificates of title and other documents of assignment, transfer,
assumption and conveyance (collectively, the "Conveyancing Instruments") as the
Parties shall reasonably deem necessary or appropriate to effect such
transactions.
Section 6.2 NO REPRESENTATIONS OR WARRANTIES. Subject to the
Operating Agreements, neither Xxxxxx nor any of its Subsidiaries is, in this
Agreement or in any other agreement or document contemplated by this Agreement,
representing or warranting (a) as to the value or freedom from encumbrance of,
or any other matter concerning, any Transferred Assets or Transferred
Subsidiaries or (b) as to the legal sufficiency to convey title to any
Transferred Assets or Transferred Subsidiaries on the execution, delivery and
filing of the Conveyancing Instruments. SUBJECT TO SECTION 7.11 HEREOF AND THE
OPERATING AGREEMENTS, ALL SUCH ASSETS AND SUBSIDIARIES ARE BEING TRANSFERRED "AS
IS, WHERE IS" WITHOUT ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, MARKETABILITY, TITLE, VALUE, FREEDOM FROM ENCUMBRANCE
OR ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, and Allegiance and
its Subsidiaries shall bear the economic and legal risk that any conveyances of
such assets and Subsidiaries shall prove to be insufficient or that Allegiance's
and its Subsidiaries' title to any such assets and Subsidiaries shall be other
than good and marketable and free of encumbrances. Neither Xxxxxx nor any of
its Subsidiaries is, in this Agreement or in any other agreement or document
contemplated by this Agreement, representing or warranting that the obtaining of
the consents or approvals, the execution and delivery of any amendatory
agreements and the making of the filings and applications contemplated by this
Agreement shall satisfy the provisions of all applicable agreements or the
requirements of all applicable laws or judgments and, subject to SECTION 6.3,
Allegiance and its Subsidiaries shall bear the economic and legal risk that any
necessary consents or approvals are not obtained or that any requirements of law
or judgments are not complied with. Notwithstanding the foregoing, the Parties
shall fully cooperate and use reasonable efforts to obtain all consents and
approvals, to enter into all amendatory agreements and to make all filings and
applications which may be required for the consummation of the transactions
contemplated by this Agreement, including, without limitation, all applicable
regulatory filings or consents under federal or state environmental laws.
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Section 6.3 NON-ASSIGNABLE CONTRACTS. In the event and to the extent
that Xxxxxx and its Subsidiaries are unable to obtain any consent, approval or
amendment to any Contract, lease, license, or other rights relating to the
Allegiance Business that would otherwise be transferred to Allegiance or one of
its Subsidiaries as contemplated by this Agreement or any other agreement or
document contemplated hereby, (i) Xxxxxx and its Subsidiaries shall continue to
be bound thereby, and (ii) unless not permitted by the terms thereof or by law,
Allegiance or its Subsidiaries shall pay, perform and discharge fully all the
obligations of Xxxxxx or its Subsidiaries thereunder from and after the Spin-Off
Date, or such earlier date as such transfer would otherwise have taken place,
and indemnify Xxxxxx and its Subsidiaries for all Indemnifiable Losses arising
out of such performance by Allegiance or its Subsidiaries. Xxxxxx and its
Subsidiaries shall, without further consideration therefor, pay and remit to
Allegiance or its Subsidiaries promptly all monies, rights and other
considerations received in respect of such performance. Xxxxxx and its
Subsidiaries shall exercise or exploit its rights and options under all such
Contracts, leases, licenses and other rights and commitments referred to in this
SECTION 6.3 only as reasonably directed by Allegiance and at Allegiance's
expense. If and when any such consent shall be obtained or such Contract,
lease, license or other right shall otherwise become assignable or able to be
novated, Xxxxxx or its Subsidiaries shall promptly assign and novate (to the
extent permissible) all its rights and obligations thereunder to Allegiance or
its Subsidiaries without payment of further consideration, and Allegiance or its
Subsidiaries shall, without the payment of any further consideration therefor,
assume such rights and obligations. To the extent that the assignment of any
Contract, lease, license or other right (or the proceeds thereof) pursuant to
this SECTION 6.3 is prohibited by law, the assignment provisions of this SECTION
6.3 shall operate to create a subcontract with Allegiance or its Subsidiaries to
perform each relevant unassignable Xxxxxx Contract at a subcontract price equal
to the monies, rights and other considerations received by Xxxxxx or its
Subsidiaries with respect to the performance by Allegiance or its Subsidiaries
under such subcontract.
Section 6.4 FURTHER ASSURANCES. (a) In addition to the actions
specifically provided for elsewhere in this Agreement, each of the Parties shall
use reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, all things, reasonably necessary, proper or advisable under
applicable laws, regulations and agreements to consummate and make effective the
transactions contemplated by this Agreement and the other agreements and
documents contemplated hereby. Without limiting the foregoing, each Party shall
cooperate with the other Party, and execute and deliver, or use reasonable
efforts to cause to be executed and delivered, all
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instruments, including instruments of conveyance, assignment and transfer, and
to make all filings with, and to obtain all consents, approvals or
authorizations of, any governmental or regulatory authority or any other Person
under any permit, license, Contract or other instrument, and to take all such
other actions as such Party may reasonably be requested to take by the other
Party from time to time, consistent with the terms of this Agreement, in order
to confirm the title of Allegiance and its Subsidiaries to all of the Allegiance
Business, to put Allegiance or its Subsidiaries in actual possession and
operating control thereof and to permit Allegiance or its Subsidiaries to
exercise all rights with respect thereto and to effectuate the provisions and
purposes of this Agreement, the Tax Sharing Agreement, the Operating Agreements
and the other agreements and documents contemplated hereby or thereby.
(b) If as a result of mistake or oversight, any asset reasonably
necessary to the conduct of the Allegiance Business is not transferred to
Allegiance or one of its Subsidiaries, or any asset reasonably necessary to the
conduct of the Retained Business is transferred to Allegiance or one of its
Subsidiaries, Xxxxxx and Allegiance shall negotiate in good faith after the
Spin-Off Date to determine whether such asset should be transferred to
Allegiance or one of its Subsidiaries or to Xxxxxx or one of its Subsidiaries,
as the case may be, and/or the terms and conditions upon which such asset shall
be made available to Allegiance or one of its Subsidiaries or to Xxxxxx or one
of its Subsidiaries, as the case may be. Unless expressly provided to the
contrary in this Agreement, the Tax Sharing Agreement or the Operating
Agreements, if as a result of a mistake or oversight, any liability or
obligation arising out of or relating to the Allegiance Business is retained by
Xxxxxx or its Subsidiaries, or any liability or obligation arising out of or
relating to the Retained Business is assumed by Allegiance or its Subsidiaries,
Xxxxxx and Allegiance shall negotiate in good faith after the Spin-Off Date to
determine whether such liability or obligation should be transferred to
Allegiance or one of its Subsidiaries or to Xxxxxx or one of its Subsidiaries,
as the case may be, and/or the terms and conditions upon which any such
liability or obligation shall be transferred.
Section 6.5 EXCLUDED ASSETS. Notwithstanding anything to the
contrary herein, the following assets (the "Excluded Assets") are not, and shall
not be deemed to be, Transferred Assets;
(i) Cash and cash equivalents, any cash on hand or in bank accounts,
certificates of deposit, commercial paper and similar securities except for
(A) cash and cash equivalents of the Transferred Subsidiaries, (B) deposits
securing bonds, letters of credit, leases and all other obligations
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related to the Allegiance Business, and (C) xxxxx cash and impressed funds
related to the Allegiance Business;
(ii) Except as otherwise provided in the Tax Sharing Agreement, any
right, title or interest of Xxxxxx and its Subsidiaries in any U.S.
federal, state or local tax refund, credit or benefit (including any income
with respect thereto) relating to the U.S. operations of the Allegiance
Business prior to the Spin-Off Date;
(iii) Any amounts accrued on the books and records of Xxxxxx and its
Subsidiaries or the Allegiance Business with respect to any Excluded
Liabilities;
(iv) Assets relating to the provision of pensions and benefits to
present or former employees of the Allegiance Business, but excluding
assets transferred from the Xxxxxx Savings Plan to the Allegiance
Retirement Plan as described in ARTICLE IX;
(v) Any corporate allocations of non-Allegiance Business-related
assets heretofore made by Xxxxxx or its Subsidiaries to the Allegiance
Business for internal management responsibility reporting purposes;
(vi) Any intellectual property rights in and to the name "Xxxxxx" and
the related emblem design, and any variants thereof, and the trademarks and
trade names used by Xxxxxx or its Subsidiaries in relation to the Retained
Business except as provided in ARTICLE VIII; and
(vii) The preferred stock of Dade International Inc. which is
restricted by agreement from transfer, exchange, assignment, pledge or
other disposal prior to December 20, 1996.
Section 6.6 EXCLUDED LIABILITIES. Notwithstanding anything to the
contrary in this Agreement, neither Allegiance nor any of its Subsidiaries shall
assume any of the liabilities of Xxxxxx of its Subsidiaries set forth on
SCHEDULE 6.6 hereto (the "Excluded Liabilities").
Section 6.7 RELEASE OF XXXXXX. It is expressly understood and agreed
by the parties hereto that upon the assumption by Allegiance or its appropriate
Subsidiaries of the Assumed Liabilities, Xxxxxx, its Subsidiaries, and their
respective officers, directors and employees shall be released by Allegiance and
its Subsidiaries from any and all liability, whether joint, several or joint and
several, for the discharge, performance or observance of any of the Assumed
Liabilities.
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Section 6.8 NOMINEE SHARES. Xxxxxx agrees to use reasonable efforts
to cause to be transferred to, or as directed by, Allegiance all directors'
qualifying or other shares of capital stock of any of the Transferred
Subsidiaries (other than Euromedical) held as of the Spin-Off Date by persons
who are not Allegiance Employees. Allegiance agrees to use reasonable efforts
to cause to be transferred to, or as directed by, Xxxxxx all director's
qualifying or other shares of capital stock of any Xxxxxx Subsidiary other than
Allegiance and the Transferred Subsidiaries held as of the Spin-Off Date by
Allegiance Employees.
ARTICLE VII. CERTAIN COVENANTS
Section 7.1 CONDUCT OF ALLEGIANCE BUSINESS PENDING THE SPIN-OFF DATE.
Each of the Parties agrees that, from the date hereof until the Spin-Off Date,
except as otherwise expressly contemplated by this Agreement, it will take, or
cause to be taken, all reasonable efforts to carry on the Allegiance Business
diligently in the ordinary course and substantially in the same manner as
heretofore conducted and to preserve intact the business organization and
goodwill of the Allegiance Business.
Section 7.2 REGISTRATION AND LISTING. Prior to the Spin-Off Date:
(i) Xxxxxx and Allegiance shall prepare a registration statement on
Form 10 (the "Registration Statement") to effect the registration of the
Allegiance Common Stock under the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder (the
"Exchange Act"), which Registration Statement shall include an information
statement to be sent by Xxxxxx to its stockholders in connection with the
Spin-Off (the "Information Statement"). Allegiance shall file the
Registration Statement with the SEC and shall use reasonable efforts to
cause the Registration Statement to become effective under the Exchange Act
as soon as reasonably practicable. After the Registration Statement
becomes effective, Xxxxxx shall mail the Information Statement to the
holders of Xxxxxx Common Stock as of the Record Date.
(ii) The Parties shall use their reasonable efforts to take all such
action as may be necessary or appropriate under state and foreign
securities and "Blue Sky" laws in connection with the transactions
contemplated by this Agreement.
(iii) Xxxxxx and Allegiance shall prepare, and Allegiance shall file
and seek to make effective, an
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application for the listing of the Allegiance Common Stock on the NYSE,
subject to official notice of issuance.
(iv) The Parties hereto shall cooperate in preparing, filing with the
SEC and causing to become effective any registration statements or
amendments thereto which are necessary or appropriate in order to effect
the transactions contemplated hereby or to reflect the establishment of, or
amendments to, any employee benefit plans contemplated hereby.
Section 7.3 FUNDS DISTRIBUTED TO XXXXXX. On or prior to the Spin-Off
Date, Allegiance shall enter into a new credit facility or facilities with
commercial lenders (the "Allegiance Credit Facility") and use the proceeds of
the indebtedness incurred under the Allegiance Credit Facility to purchase ten
year debentures in the aggregate principal amount of $1,025.2 million from AHC
and $27.8 million from AHII. On the Spin-Off Date, (i) Allegiance shall cause
(1) AHC to use the proceeds from the sale of its ten year debentures to
Allegiance to pay its $1 billion and its $25.2 million intercompany debt to
Xxxxxx and (ii) BWT shall repay $25.2 million of its intercompany indebtedness
to Xxxxxx. The calculation of the amounts set forth in this SECTION 7.3 is set
forth on SCHEDULE 7.3.
Section 7.4 POST-SPIN-OFF TAX-RELATED RESTRICTIONS. (a) In order
to avoid potentially adverse tax consequences relating to the Spin-Off, for a
period of two years after the Spin-Off Date Allegiance shall not:
(i) cease to engage in the active conduct of a trade or business
within the meaning of Section 355 of the Code;
(ii) issue or redeem any share of stock of Allegiance, except for
issuances and redemptions
(1) for the benefit of Allegiance's employees or
(2) to effect acquisitions by Allegiance in the ordinary course
of business, or
(3) in connection with the issuance of any convertible debt by
Allegiance, or
(4) in accordance with the requirements for permitted purchases
of Allegiance stock as set forth in Section 4.05(l)(b) of Revenue
Procedure 96-30 issued by the IRS; or
(iii) liquidate or merge with any other corporation;
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unless, with respect to (i), (ii) or (iii) above, either (a) an opinion is
obtained from counsel to Xxxxxx, or (b) a ruling is obtained from the IRS, in
either case to the effect that such act or event will not adversely affect the
federal income tax consequences of the Spin-Off to Xxxxxx, its stockholders who
receive Allegiance Shares, or Allegiance.
(b) If, as a result of any transaction occurring after the Spin-Off
Date involving either the stock or assets of either Allegiance or any of its
Subsidiaries, or any combination thereof, the Spin-Off fails to qualify as tax
free under the provisions of Section 355 of the Code, Allegiance shall indemnify
Xxxxxx for all taxes, liabilities and associated expenses, including penalties
and interest, incurred as a result of such failure of the Spin-Off to qualify
under Section 355 of the Code. If the Spin-Off fails to qualify as tax free
under the provisions of Section 355 of the Code other than as a result of a
transaction occurring after the Spin-Off Date involving either the stock or
assets of Allegiance or any of its Subsidiaries, or any combination thereof,
then Allegiance shall not be liable for such taxes, liabilities or expenses.
Section 7.5 INSURANCE POLICIES AND CLAIMS ADMINISTRATION.
(a) OWNERSHIP OF INSURANCE POLICIES AND PROGRAMS. Xxxxxx or one or
more of its Subsidiaries shall continue to own all property, casualty and
liability insurance programs, including, without limitation, primary and excess
general liability, automobile, workers' compensation, property and crime
insurance policies in effect on or before the Spin-Off Date (collectively, the
"Xxxxxx Policies" and individually, a "Xxxxxx Policy"). Xxxxxx shall use
reasonable efforts to maintain the Xxxxxx Policies in full force and effect up
to and including the Spin-Off Date, and, subject to the provisions of this
Agreement, Xxxxxx and its Subsidiaries shall retain all of their respective
rights, benefits and privileges, if any, under the Xxxxxx Policies. Nothing
contained herein shall be construed to change the ownership of the Xxxxxx
Policies.
(b) PROCUREMENT OF INSURANCE FOR ALLEGIANCE. To the extent not
already provided for by the terms of a Xxxxxx Policy, Xxxxxx shall use
reasonable efforts to cause Allegiance and the appropriate Allegiance
Subsidiaries to be named as additional insureds under Xxxxxx Policies whose
effective policy periods include the Spin-Off Date, in respect of claims arising
or relating to periods prior to the Spin-Off Date; PROVIDED, HOWEVER, that
nothing contained herein shall be construed to require Xxxxxx or any of its
Subsidiaries to pay any additional premium or other charges in respect to, or
waive or otherwise limit any of its rights, benefits or privileges under, any
Xxxxxx
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Policy in order to effect the naming of Allegiance and its Subsidiaries as such
additional insureds.
(c) ACQUISITION AND MAINTENANCE OF POST SPIN-OFF ALLEGIANCE INSURANCE
POLICIES AND PROGRAMS. Commencing on and as of the Spin-Off Date, Allegiance
shall be responsible for establishing and maintaining separate property,
casualty and liability insurance policies and programs (including, primary and
excess general liability, automobile, workers' compensation, property, fire,
crime, surety and other similar insurance policies) for activities and claims
involving Allegiance or any of its Subsidiaries or Affiliates. Allegiance will
exercise reasonable efforts in securing liability insurance to avoid potential
gaps in coverage for claims arising from events prior to the Spin-Off Date which
gap would not exist had the Allegiance Business continued to be covered with the
same retroactive dates existing in the Xxxxxx Policies in effect on the Spin-Off
Date. Allegiance and each of its Subsidiaries, as appropriate, shall be
responsible for all administrative and financial matters relating to insurance
policies established and maintained by Allegiance and its Subsidiaries or
Affiliates for claims relating to any period on or after the Spin-Off Date
involving Allegiance or any of its Subsidiaries or Affiliates. Notwithstanding
any other agreement or understanding to the contrary, except as set forth in
this SECTION 7.5 with respect to claims administration and financial
administration of the Xxxxxx Policies, neither Xxxxxx nor any of its
Subsidiaries shall have any responsibility for or obligation to Allegiance or
any of its Subsidiaries and Affiliates relating to property and casualty
insurance matters for any period, whether prior to, on or after the Spin-Off
Date.
(d) POST SPIN-OFF CLAIMS ADMINISTRATION. (i) Except as provided in
SECTION 7.5(d)(ii) concerning 1995-96 excess liability insurance policies,
Xxxxxx and its Subsidiaries shall have the primary right, responsibility and
authority for claims and financial administration for claims that relate to or
affect the Xxxxxx Policies. Upon notification by Allegiance or one of its
Subsidiaries of a claim relating to Allegiance or a Subsidiary or Affiliate
thereof under one or more of the Xxxxxx Policies, Xxxxxx shall cooperate with
Allegiance in asserting and pursuing coverage and payment for such claim by the
appropriate insurance carrier(s). In asserting and pursuing such coverage and
payment, Xxxxxx shall have sole power and authority to make binding decisions,
determinations, commitments and stipulations on its own behalf and on behalf of
Allegiance and its Subsidiaries and Affiliates, which decisions, determinations,
commitments and stipulations shall be final and conclusive if made to maximize
the overall economic benefit of the Xxxxxx Policies. Allegiance, and its
Subsidiaries and Affiliates, assume responsibility for, and shall pay to the
appropriate insurance carriers or otherwise, any premiums, retrospectively-
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rated premiums, defense costs, indemnity payments, deductibles, retentions or
other charges, as appropriate (collectively, "Insurance Charges"), whenever
arising, which shall become due and payable under the terms and conditions of
any applicable Xxxxxx Policy in respect of any liabilities, losses, claims,
actions or occurrences, whenever arising or becoming known, involving or
relating to any of the assets, businesses, operations or liabilities of
Allegiance or any of its Subsidiaries or Affiliates, whether the same relate to
the period prior to, on or after the Spin-Off Date. To the extent that the
terms of any applicable Xxxxxx Policy provide that Xxxxxx or any of its
Subsidiaries shall have an obligation to pay or guarantee the payment of any
Insurance Charges relating to Allegiance or any of its Subsidiaries, Xxxxxx
shall be entitled to demand that Allegiance make such payment directly to the
Person or entity entitled thereto. In connection with any such demand, Xxxxxx
shall submit to Allegiance a copy of any invoice received by Xxxxxx pertaining
to such Insurance Charges together with appropriate supporting documentation, to
the extent available. In the event that Allegiance fails to pay any such
Insurance Charges when due and payable, whether at the request of the party
entitled to payment or upon demand by Xxxxxx, Xxxxxx and its Subsidiaries may
(but shall not be required to) pay such insurance charges for and on behalf of
Allegiance and, thereafter, Allegiance shall forthwith reimburse Xxxxxx for such
payment. Subject to the other provisions of this SECTION 7.5, the retention by
Xxxxxx of the Xxxxxx Policies and the responsibility for claims administration
and financial administration of the Policies are in no way intended to limit,
inhibit or preclude any right of Allegiance, Xxxxxx or any other insured to
insurance coverage for any Insured Claims under the Xxxxxx Policies.
(ii) Notwithstanding the foregoing SECTION 7.5(d)(i), Xxxxxx grants
to Allegiance and its Subsidiaries the primary right and responsibility for
asserting and pursuing for its benefit (as an insured, successor or otherwise)
and for the benefit of Xxxxxx, coverage under, and payment from the underwriters
of, the 1995 excess liability policies issued by Lexington Insurance Company,
Zurich Re (U.K.) Ltd., Xxxxxxx/Konzern Allegneine Versicherungs-
Aktiengesellschaft, American Excess Insurance Association, A.C.E. Insurance
Company (Bermuda) Ltd., X.L. Insurance Company, Ltd., and Starr Excess Liability
Insurance Company, Ltd., for claims concerning or arising from the use of
natural rubber latex gloves. Xxxxxx and its Subsidiaries shall cooperate with
Allegiance and its Subsidiaries in asserting and pursuing such coverage and
payment. In asserting and pursuing such coverage and payment, Allegiance and
its Subsidiaries shall have sole power and authority to make binding decisions,
determinations, commitments and stipulations on its own behalf and on behalf of
Xxxxxx and its Subsidiaries;
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provided, however, that Allegiance shall not affect, prejudice, limit, inhibit
or narrow any rights Xxxxxx or its Subsidiaries may have under (a) the policies
issued by the foregoing identified underwriters for any periods other than the
1995-96 Policy Period, or relating to any claims or occurrences other than those
concerning natural rubber latex gloves, or (b) the other Xxxxxx Policies. The
cost of claims administration pursuant to this SECTION 7.5(d)(ii) shall be borne
entirely by Allegiance and its Subsidiaries.
(e) PRE SPIN-OFF INSURANCE CLAIMS ADMINISTRATION. Allegiance and its
Subsidiaries and Affiliates acknowledge that Xxxxxx has previously experienced
losses and received claims which were, or might have been, covered by one or
more Xxxxxx Policies, and prior to the Spin-Off Date will have made decisions
and commitments regarding administration of such claims, and including reaching
agreements and stipulations regarding such claims (collectively "Pre Spin-Off
Claims Administration"). Allegiance and its Subsidiaries and Affiliates
covenant not to contest or challenge in any manner any action taken by Xxxxxx
prior to the Spin-Off Date in connection with or relating to Pre Spin-Off Claims
Administration, or to interfere with the performance of any agreement,
commitment or stipulation so made by Xxxxxx in connection with or relating to
Pre-Spin-Off Claims Administration.
(f) NON-WAIVER OF RIGHTS TO COVERAGE. An insurance carrier which
would otherwise be obligated to pay any claim shall not be relieved of the
responsibility with respect thereto, or, solely by virtue of the provisions of
this SECTION 7.5, have any subrogation rights with respect thereto, it being
expressly understood and agreed that no insurance carrier or any third party
shall be entitled to a windfall (I.E., a benefit they would not be entitled to
receive had no Spin-Off occurred, or in the absence of the provisions of this
SECTION 7.5) by virtue of the provisions hereof.
(g) SCOPE OF AFFECTED POLICIES OF INSURANCE. The provisions of this
SECTION 7.5 relate solely to matters involving liability, casualty and workers'
compensation insurance, and shall not be construed to affect any obligation of
or impose any obligation on the parties hereto with respect to any life, health
and accident, dental or medical insurance policies applicable to any of the
officers, directors, employees or other representatives of the Parties hereto or
their Affiliates.
Section 7.6 INTERCOMPANY RECEIVABLES AND PAYABLES AND CASH
MANAGEMENT.
(a) (i) All Intercompany Receivables and Payables between Xxxxxx or
any of its Subsidiaries as they will exist
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after the Spin-Off, on the one hand, and any of Euromedical, Eurovac or the
Malaysia Silicath unit, on the other hand, shall be settled (A) as of 3:00
p.m., Chicago time, on August 26, 1996 if such Intercompany Receivables and
Payables are subject to Xxxxxx'x netting process and (B) as of August 28,
1996 if such Intercompany Receivables and Payables are not subject to
Xxxxxx'x netting process, in each case, in cash with such cash settlement
occurring on August 29, 1996. Commencing from the opening of business on
August 27, 1996, in the case of transactions subject to the netting
process, and August 29, 1996 in the case of transactions not subject to the
netting process, Intercompany Receivables and Payables between Xxxxxx or
any of its Subsidiaries, on the one hand, and any of Euromedical, Eurovac
or the Malaysia Silicath unit shall be recorded for accounting purposes as
third party trade account receivables and payables.
(ii) All Intercompany Receivables and Payables between Xxxxxx or any
of its Subsidiaries, on the one hand (except for Intercompany Receivables
and Payables owed by the Surgical Division of BHC to the Malaysian Glove
Branch) and the Malaysian Glove Branch, on the other hand, shall be settled
(A) as of 3:00 p.m., Chicago time, on September 23, 1996 if such
Intercompany Receivables and Payables are subject to Xxxxxx'x netting
process and (B) as of September 25, 1996 if such Intercompany Receivables
and Payables are not subject to Xxxxxx'x netting process, in each case, in
cash with such cash settlement occurring on September 26, 1996. Commencing
from the opening of business on September 24, 1996, in the case of
transactions subject to the netting process, and September 26, 1996 in the
case of transactions not subject to the netting process, Intercompany
Receivables and Payables between Xxxxxx and its Subsidiaries, on the one
hand, and the Malaysian Glove Branch, on the other hand, shall be recorded
for accounting purposes as third party trade account receivables and
payables.
(iii) All Intercompany Receivables and Payables between any
Subsidiary of Xxxxxx, on the one hand, and any Subsidiary of Allegiance
(other than any entity referred to in SECTION 7.6(a)(i) or SECTION
7.6(a)(ii) and other than Allegiance France and Allegiance Germany), on the
other hand, shall be settled (A) as of 3:00 p.m., Chicago time, on
September 23, 1996 if such Intercompany Receivables and Payables are
subject to Xxxxxx'x netting process and (B) as of September 25, 1996 if
such Intercompany Receivables and Payables are not subject to Xxxxxx'x
netting process, in each case, in cash with such cash settlement occurring
on September 26, 1996. Commencing from the opening of business on
September 24, 1996, in the case of transactions subject
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to the netting process, and September 26, 1996, in the case of transactions
not subject to the netting process, Intercompany Receivables and Payables
between any Subsidiary of Xxxxxx, on the one hand, and any Subsidiary of
Allegiance (other than any entity referred to in SECTION 7.6(a)(i) or
SECTION 7.6(a)(ii) and other than Allegiance France and Allegiance
Germany), on the other hand, shall be recorded for accounting purposes as
third party trade account receivables and payables.
(b) As provided in SECTION 4.3(i), Xxxxxx shall be entitled to all
cash bank balances (other than cash and cash equivalents of the Transferred
Subsidiaries) existing immediately prior to the Spin-Off Date relating to the
Allegiance Business, or otherwise utilized or maintained in connection with the
Allegiance Business, including, without limitation, cash balances representing
deposited checks or drafts for which only a provisional credit has been allowed
in depository accounts, which are to be transferred to Allegiance or any of its
Subsidiaries on or prior to the Spin-Off Date. Any such cash balances as of the
Spin-Off Date which have not been transferred to Xxxxxx shall be paid to Xxxxxx.
(c) All Loans owing by Allegiance or any of its Subsidiaries to
Xxxxxx or any of its Subsidiaries after giving effect to the transactions
contemplated by ARTICLES III, IV, and V, shall be repaid no later than the Spin-
Off Date.
(d) Allegiance or an appropriate Subsidiary thereof shall be
responsible for payment of all checks or drafts issued up to the Spin-Off Date
against disbursement accounts transferred to Allegiance or such Subsidiary,
which checks or drafts have not been charged against such disbursement accounts
on or prior to the Spin-Off Date (other than with respect to payroll accounts,
which will be assumed by Xxxxxx or its Subsidiaries).
(e) Xxxxxx shall assist Allegiance and each of its Subsidiaries in
establishing a separate cash management system effective as of and immediately
after the Spin-Off Date.
(f) Each Party shall, and shall cause its respective Subsidiaries to,
promptly remit to the other any cash or other payment received by such Party or
its Subsidiaries in respect of accounts or notes receivables of the other Party.
Section 7.7 INTERCOMPANY DEBT TRUE-UP.
(a) CALCULATION OF OPERATIONAL CASH FLOW. As soon as practicable,
but in any event within 60 days after the Spin-Off Date, Xxxxxx shall prepare a
statement of operational cash flow for its U.S. healthcare business excluding
the IV Systems
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Division (but including the respiratory therapy business unit within the IV
Systems Division), for the period January 1, 1996 through the Spin-Off Date.
The operational cash flow statement shall be prepared from the books and records
of Xxxxxx relating to its U.S. healthcare business in a manner consistent with
the definition of operational cash flow. The statement shall also be consistent
with Xxxxxx'x historical cash flow allocation among its various business units,
except for the elimination of the one-month lag period in recording the payment
of certain liabilities such as payroll, payroll taxes, sales and use taxes, on
the Division's books. The effect of the elimination of this lag on operational
cash flow (the "lag adjustment") shall be included as a separate schedule
accompanying the statement of operational cash flow. The statement of
operational cash flow will also be adjusted (the "Unbudgeted Transfer
Adjustment") to eliminate the operational cash flow impact of any assets,
liabilities and reserves transferred to Allegiance pursuant to the Spin-Off but
that were not taken into account in the initial budgeting process upon which
this SECTION 7.7 was based. Any such adjustment shall be as mutually agreed by
the Parties. The Unbudgeted Transfer Adjustments shall not include the impact
of any expenses that Allegiance is required to pay under the terms of Section
12.1 or Section 12.2. The effect of these unbudgeted transfers on operational
cash flow shall be included as a separate schedule accompanying the statement of
operational cash flow. Subject to SECTION 7.7(c), the statement of operational
cash flow delivered by Xxxxxx to Allegiance shall be final, binding and
conclusive on the Parties for all purposes of this Agreement and shall provide
the basis for determining the adjustments (if any) specified in SECTION 7.7(d).
(b) DEFINITION OF OPERATIONAL CASH FLOW. Operational cash flow for
each Xxxxxx operating unit consists of net income plus depreciation and
amortization, increased or decreased, as appropriate, by cash restructuring
utilization and the net change in "managed capital" (as defined in Xxxxxx
Finance Policy #1402) during the period, but excluding the effects of any non-
cash restructuring utilization and acquisitions and divestitures on managed
capital. The operational cash flow shall be computed in the same manner as
reflected in the Consco Management Report, "Cash Flow Trends", except for the
elimination of the one month lag for certain items, as described in SECTION
7.7(a).
(c) CASH FLOW TRUE-UP. In the event that the final determination of
the cash flow statement indicates that the operational cash flow is less than
$147 million plus or minus the lag adjustment and the Unbudgeted Transfer
Adjustment, the amount of the difference shall be paid by Allegiance to Xxxxxx,
as an adjustment to intercompany debt assumed by Allegiance or its Subsidiaries
pursuant to SECTION 4.3(ii), within 10 days of the final determination of such
adjustment. In the event that the
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final determination of the cash flow statement indicates that the operational
cash flow is greater than $147 million plus or minus the lag adjustment and the
Unbudgeted Transfer Adjustment, the amount of the difference shall be paid by
Xxxxxx to Allegiance, as an adjustment to intercompany debt assumed by
Allegiance pursuant to SECTION 4.3(ii), within 10 days of the final
determination of such adjustment.
(d) OFFSHORE CASH TRUE-UP. Within 30 days of the Spin-Off Date,
Xxxxxx shall calculate the following and shall provide Allegiance prompt written
notice of such calculation:
(i) the amount by which U.S.$3,912,828.13 exceeds the U.S. dollar
equivalent of the purchase price paid by Allegiance France to Xxxxxx France
to purchase the Chateaubriant Plant; plus
(ii) the amount by which US$83,919.73 exceeds the U.S. dollar
equivalent of the purchase price paid by Allegiance Germany to Xxxxxx
Deutschland to purchase the German Business plus 100,000 DM; plus
(iii) the amount of any cash or cash equivalents of AHSB as of the
Spin-Off Date excluding the proceeds of the Euromedical Loan; plus
(iv) any amounts owing by Xxxxxx or any of its Subsidiaries to
Allegiance or any of its Subsidiaries that were required to be settled
pursuant to SECTION 7.6(a)(i), (ii) or (iii) but which were legally
prohibited from being settled; minus
(v) any amounts owing by Allegiance or any of its Subsidiaries to
Xxxxxx or any of its Subsidiaries that were required to be settled pursuant
to SECTION 7.6(a)(i), (ii) or (iii) but were legally prohibited from being
settled.
If the sum of the amounts in (i) through (v) above is a positive number,
Allegiance shall pay such amount to Xxxxxx as an adjustment to intercompany debt
assumed by Allegiance pursuant to SECTION 4.3(ii) within 10 days of the final
determination of such amount. If the sum of the amounts in (i) through (v)
above is a negative number, Xxxxxx shall pay such amount to Allegiance as an
adjustment to intercompany debt assumed by Allegiance or its Subsidiaries
pursuant to SECTION 4.3(ii) within 10 days of the final determination of such
amount.
(e) DISPUTES. Any disputes regarding the computation of operational
cash flow or the offshore cash true-up shall be resolved in accordance with
ARTICLE XIV of this Agreement.
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Section 7.8 AGREEMENTS RELATING TO XXXXXX AND ALLEGIANCE. (a) Each
of Xxxxxx and Allegiance shall use its reasonable efforts to take, or cause to
be taken, all actions, and to do, or cause to be done, all things, reasonably
necessary, proper or advisable under applicable laws, regulations and agreements
to consummate, make effective and perform its or its Subsidiaries' allocable
portion of all purchase, distribution, and other obligations under all Contracts
with customers, suppliers, vendors or other third parties relating to both the
Allegiance Business and the Retained Business (the "Shared Agreements"),
including those Shared Agreements set forth on SCHEDULE 7.8 hereto. Each of
Xxxxxx and its Subsidiaries and Allegiance and its Subsidiaries shall be
entitled to the rights and privileges of its allocable portion of the Shared
Agreements.
(b) Each of Xxxxxx and Allegiance shall use its reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, all
things reasonably necessary, proper or advisable under applicable laws,
regulations, and agreements to afford the rights and privileges of the allocable
portion of the Shared Agreements to the other.
(c) For purposes of this SECTION 7.8, the allocable portion shall be
the pro rata portion of the agreement of each party based on performance under
the agreement during the twelve-month period immediately prior to the Spin-Off
Date.
Section 7.9 CERTAIN RELEASES. Xxxxxx or one or more of its
Subsidiaries is a guarantor of certain obligations of the Allegiance Business,
including those obligations set forth on SCHEDULE 5.4(i). Allegiance shall use
its reasonable efforts to release Xxxxxx and its Subsidiaries from such
guarantees prior to the Spin-Off Date and shall indemnity Xxxxxx and its
Subsidiaries and save it harmless from any liabilities relating to such
guarantees.
Section 7.10 LITIGATION. (a) On or as of the Spin-Off Date,
Allegiance or its Subsidiaries, as appropriate, shall assume and pay all
liabilities which may result from the Assumed Actions and all fees and costs
relating to the defense of the Assumed Actions, including attorneys' fees and
costs incurred after the Spin-Off Date. "Assumed Actions" shall mean those
cases, claims and investigations (on which Xxxxxx or its Subsidiaries, other
than Allegiance and its Subsidiaries, is a defendant or the party against which
the claim or investigation is directed) related to the Allegiance Business,
including those listed on SCHEDULE 7.10(a).
(b) Xxxxxx and its Subsidiaries shall transfer the Transferred
Actions to Allegiance and its Subsidiaries, and Allegiance and its Subsidiaries
shall receive and have the
- 46 -
benefit of all of the proceeds of such Transferred Actions. "Transferred
Actions" shall mean those cases and claims (on which Xxxxxx or its Subsidiaries
are plaintiffs or claimants) relating to the Allegiance Business and listed on
SCHEDULE 4.2(x).
Section 7.11 LIABILITY FOR PREVIOUSLY DELIVERED PRODUCTS. The
following provisions shall apply to all Xxxxxx Products sold or transferred to
the Allegiance Business prior to the Spin-Off Date for distribution and to all
Allegiance Products sold or transferred to the Retained Business prior to the
Spin-Off Date for distribution (in each case, the "Products"):
(i) Each Party warrants to the other Party that, at the time of
delivery to the other Party or its Subsidiaries, the Products were not at
the time of delivery (A) adulterated or misbranded within the meaning of
the Federal Food, Drug and Cosmetic Act, as amended, and the regulations
issued thereunder, or (B) products that may not under the provisions of
SECTIONS 404, 505, 514 or 515 of said Act be introduced into interstate
commerce, or (C) banned devices under Section 516 of said Act. THE
FOREGOING WARRANTY IS EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES OF ANY
KIND WITH RESPECT TO THE PRODUCTS, WHETHER STATUTORY, WRITTEN, ORAL,
EXPRESS OR IMPLIED, INCLUDING ANY WARRANTIES OF FITNESS FOR A PARTICULAR
PURPOSE AND MERCHANTABILITY. ANY LIABILITY OF A PARTY AND ITS SUBSIDIARIES
TO THE OTHER PARTY AND ITS SUBSIDIARIES UNDER THE FOREGOING WARRANTY SHALL
BE LIMITED TO THE TOTAL PRICE PAID BY SUCH PARTY AND ITS SUBSIDIARIES FOR
THE PRODUCTS WHICH ARE THE SUBJECT OF SUCH LIABILITY PLUS ALL COSTS FOR
TRANSPORTATION AND OTHER DIRECT EXPENSES INCURRED BY ALLEGIANCE AND ITS
SUBSIDIARIES WITH RESPECT TO SUCH PRODUCTS. A Party's and its
Subsidiaries' exclusive remedy against the other Party and its Subsidiaries
for any breach of the foregoing warranty shall be the right to require the
other Party or its Subsidiaries to repair or replace (at the other Party's
option and expense) any Product which proves not to be in conformity with
applicable labeling or specifications. The other Party or its Subsidiaries
shall pay the transportation and other costs incurred by a Party or its
Subsidiaries with respect to any Products returned to the other Party or
its Subsidiaries for repair or replacement under this Section, or, at the
other Party's option, reimburse a Party or its Subsidiaries for any such
costs. The foregoing right to require repair or replacement shall commence
on the date of receipt by a Party or its Subsidiaries of each Product from
the other Party or its Subsidiaries and expire six months after receipt by
the end-user customer (the "Repair or Replacement Period"), except that the
Repair or Replacement Period for each Product the use of which is subject
to an
- 47 -
expiration date shall expire on the applicable expiration date, if sooner.
(ii) Each Party and its Subsidiaries warrants to the other Party and
its Subsidiaries that, at the time of delivery to the other Party or its
Subsidiaries, the Party or its Subsidiaries shall have good and marketable
title to all such Products free and clear of all liens or encumbrances
(other than any created by the other Party or its Subsidiaries).
(iii) Each Party and its Subsidiaries shall indemnify and hold the
Allegiance Indemnified Parties or the Baxter Indemnified Parties, as the
case may be, harmless from and against, and in respect of, any and all
Claims and Losses by any of the Allegiance Indemnified Parties or the
Baxter Indemnified Parties, as the case may be, which result from a third
party claim and which arise out of or relate to: (A) any actual or alleged
patent, copyright or trademark infringement, or violation of any other
proprietary right, arising out of the purchase, sale or use of the
Products; (B) defects in Products; (C) any actual or alleged breach of
warranty or obligation, if any, accompanying the Product or Products,
subject to the limitations in SECTION 7.11(i) to the extent provided
therein; and (D) any claim for personal injury, wrongful death or property
damage arising out of the use of a Product; PROVIDED that this SECTION
7.11(iii) shall not apply to any Claim or Loss (x) to the extent that the
Parties agree; (y) to any tort claim, including claims for personal injury,
wrongful death or property damage, to the extent such claims are based upon
any wrongful or negligent act or omission by the other Party or its
Subsidiaries or business units (but excluding Subsidiaries or business
units that become Subsidiaries or business units of the Party claiming
indemnification as a result of the Spin-Off), or their employees or other
agents, including, but not limited to, any Claims or Losses caused by any
such wrongful or negligent act or omission constituting a representation
concerning the characteristics or method of usage of Products, or relating
to the storage, handling, or delivery of Products or selection of Products
for use in Kits; or (z) to any actual or alleged patent, copyright or
trademark infringement, or violation of any other proprietary right,
arising out of any act or omission of the other Party, its Subsidiaries or
any of their Affiliates or business units (but excluding Subsidiaries of
business units that become Subsidiaries or business units of the Party
claiming indemnification as a result of the Spin-Off), in connection with
the sale of Kits or relating to any intellectual property owned by a Party,
its Subsidiaries or any of their Affiliates and used in connection with the
sale of Kits.
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Section 7.12 ALLEGIANCE BANK ACCOUNTS. On or prior to the Spin-Off
Date, Baxter and its Subsidiaries shall transfer the bank accounts set forth on
SCHEDULE 7.12 hereto to Allegiance or one of its Subsidiaries, as directed by
Allegiance. Allegiance shall cause any amounts received, by mistake or
otherwise, in such accounts after the Spin-Off Date on account of the Retained
Business to be promptly transferred to Baxter and its Subsidiaries, as
appropriate. Baxter shall cause any amounts received, by mistake or otherwise,
after the Spin-Off Date on account of the Allegiance Business to be promptly
transferred to Allegiance and its Subsidiaries, as appropriate.
Section 7.13 UNASSIGNED INDEMNIFIABLE CONTRACTS. (a) SCHEDULE
4.2(viii)(A) sets forth certain contracts noted as not being assigned to AHC but
subject to indemnity by Allegiance (the "UNASSIGNED INDEMNIFIABLE CONTRACTS").
(b) Allegiance or one of its Subsidiaries shall pay, perform and
discharge fully all the obligations of Baxter or its Subsidiaries under the
Unassigned Indemnifiable Contracts from and after the Spin-Off Date and
indemnify Baxter and its Subsidiaries for all Claims and Losses arising out of
such performance by Allegiance or its Subsidiaries. Baxter and its Subsidiaries
shall, without further consideration therefor, pay and remit to Allegiance or
its Subsidiaries promptly all monies, rights and other considerations received
with respect to the Unassigned Indemnifiable Contracts or otherwise received in
respect of performance thereunder.
(c) Xxxxxx and its Subsidiaries shall perform and exploit their
rights and options and otherwise take action under the Unassigned Indemnifiable
Contracts as and only as reasonably directed by Allegiance.
Section 7.14 AD NOW PROGRAM. Baxter hereby agrees to cause BHC to
offer and administer the "Advantage Now" program for Baxter Products to the full
extent necessary to comply with Section 5(e)(12) of the Amended and Restated
Exclusive Distribution Agreement, dated as of September 15, 1995, by and between
Dade International Inc., a Delaware corporation ("Dade"), and BHC (the "Dade
Distribution Agreement").
Section 7.15 PRODUCTS AT COST TO DADE. (a) Baxter hereby agrees to,
and to cause its appropriate Subsidiaries to, provide laboratory supply products
manufactured by Baxter and its Subsidiaries at actual cost to Dade for Dade's
internal use only and not for resale in accordance with Section 5(r) of the Dade
Distribution Agreement.
(b) Allegiance hereby agrees to, and to cause its appropriate
Subsidiaries to, provide laboratory supply products
- 49 -
manufactured by Allegiance and its Subsidiaries at actual cost to Dade for
Dade's internal use only and not for resale in accordance with the Amended and
Restated Exclusive Distribution Agreement, dated as of September 15, 1995, by
and between Dade and Xxxxxx Sales and Distribution Corp., a Delaware
corporation.
Section 7.16 INFORMAL, NONDOCUMENTED REAL ESTATE LEASES. Each Party
and its Subsidiaries may continue to occupy, from and after the Spin-Off Date,
such space in the facilities of the other Party and its Subsidiaries as is
occupied immediately prior to the Spin-Off Date, or such other space therein as
may be mutually agreed to from time to time by Baxter and Allegiance, and which
occupancy is otherwise not documented by written leasing agreements, on the
following terms and conditions:
(a) The occupying Party shall pay to the other Party rent with
respect to such occupied space for the period from and after the Spin-Off Date
during which such space is so occupied, which rent shall be determined by the
other Party on the same basis on which the other Party allocates rent with
respect to the occupancy of space by business units of the other Party or as the
occupying Party presently is paying, whichever is lower. Such rent shall be
payable from time to time by the occupying Party (but not more frequently than
monthly) promptly following delivery by the other Party to the occupying Party
of a statement therefor.
(b) The occupying Party may, at any time, upon not less than 15 days'
prior written notice to Xxxxxx'x Director of Corporate Real Estate, with a copy
to Allegiance, terminate its occupancy of any or all of such space.
(c) The other Party may, at any time, upon not less than 30 days'
prior written notice to the occupying Party, require the occupying Party to
cease occupancy of any or all of such space as designated in such notice;
provided, however, that Allegiance shall not be required to cease occupancy of
any of the space at BHC's Deerfield facility prior to July 1, 1997.
Section 7.17 REXAM PAYMENT. Allegiance hereby agrees to cause AHC to
distribute to BHC promptly upon receipt by AHC fifty-two percent (52%) of the
payment to be received from Rexam Medical Packaging Inc. ("Rexam") on or about
January 1, 1997, pursuant to Section 2.5.2 of the Asset Purchase Agreement,
dated April 22, 1993 between Rexam and BHC. As soon as practical after May 1,
1997, Baxter and Allegiance agree to adjust this payment to reflect actual
purchases by BHC and AHC, respectively, from Rexam, consistent with the
methodology used to calculate the 52% set forth above and past practices for
allocating similar payments received from Rexam among operating units.
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Section 7.18 CLINTEC RECEIVABLES. From time to time after the Spin-
Off Date as accounts receivable held by AHC as of October 1, 1996 and which
arose from the sale of Clintec products are determined (consistent with past
practice) to be uncollectible, Allegiance shall give notice to Baxter of such
uncollectible accounts. Promptly following receipt of any such notice, Baxter
shall pay to Allegiance the amount of such accounts receivable so determined to
be uncollectible in the same manner in which uncollectible accounts receivable
were charged to Clintec Nutrition Company prior to the Spin-Off Date.
ARTICLE VIII. INTELLECTUAL PROPERTY
Section 8.1 LICENSE OF ALLEGIANCE INTELLECTUAL PROPERTY TO BAXTER.
(a) GRANT OF LICENSE. Allegiance and its Subsidiaries hereby grant,
and Baxter and its Subsidiaries hereby accept and retain, a perpetual,
nonexclusive, fully paid-up, worldwide right and license to use, manufacture,
make, have made for Baxter (provided that any disclosure to a third party
contract manufacturer of proprietary or confidential information of Allegiance
shall be pursuant to a confidentiality agreement in a form consistent with the
terms of SECTION 10.4 herein), sell and otherwise practice the patents, patent
applications, nonpatented inventions, copyrights, trade secrets, technical data,
know-how, and other Intellectual Property Rights set forth on SCHEDULE 8.1(a),
attached hereto and incorporated herein (hereinafter, the "Licensed Allegiance
Intellectual Property"), in connection with the Baxter Products Actually Using
the Licensed Allegiance Intellectual Property as of the Spin-Off Date, including
new products which are substitutes for, or line extensions of, such products.
For the purposes of this SECTION 8.1, Baxter will be deemed to be "Actually
Using" Licensed Allegiance Intellectual Property if as of the Spin-Off Date: (i)
it is manufacturing a product incorporating the Licensed Allegiance Intellectual
Property; or (ii) a product incorporating the Licensed Allegiance Intellectual
Property is under development and the use of other Intellectual Property Rights
by Baxter would require substantial additional expense; provided, however, that
Baxter will not be deemed to be "Actually Using" Licensed Allegiance
Intellectual Property if the sole use thereof is to manufacture a product for
Allegiance.
(b) OWNERSHIP OF THE LICENSED ALLEGIANCE INTELLECTUAL PROPERTY.
Baxter and its Subsidiaries acknowledge that, subject to the foregoing license,
Allegiance and its Subsidiaries, as the case may be, are the sole and exclusive
owner of all of right, title and interest in and to the Licensed Allegiance
Intellectual Property. Baxter and its Subsidiaries agree that they will do
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nothing inconsistent with Allegiance's or its Subsidiaries' ownership of, or
rights in, the Licensed Allegiance Intellectual Property. Allegiance and its
Subsidiaries, at their expense, agree to take all steps reasonably necessary to
protect, enforce or otherwise maintain in full force and effect the Licensed
Allegiance Intellectual Property, including, without limitation, the filing of
any required renewals and the payment of any required fees, taxes or other
payments that may become due. Baxter and its Subsidiaries shall cooperate with
Allegiance and its Subsidiaries in connection with such steps at Allegiance's
reasonable request and at Allegiance's expense, including, without limitation,
by obtaining execution by Xxxxxx'x and Xxxxxx'x Subsidiaries' employees,
consultants and agents of any papers Allegiance or its Subsidiaries consider
necessary to enable Allegiance and its Subsidiaries to protect the Licensed
Allegiance Intellectual Property. Baxter and its Subsidiaries shall make their
employees, consultants and agents, who have direct knowledge of facts pertaining
to an invention that is the subject of a patent application or another
Intellectual Property Right that is the subject of intellectual property
protection, available at Allegiance's expense to Allegiance and its Subsidiaries
for the purpose of disclosing sufficient facts for the preparation of necessary
documentation required for patent applications and other protection. At
Allegiance's or its Subsidiaries' reasonable request and expense, Baxter and its
Subsidiaries will assist Allegiance and its Subsidiaries in the preparation and
review of patent documents related to the Licensed Allegiance Intellectual
Property to the extent that such assistance is necessary for such preparation.
Baxter and its Subsidiaries do not represent that they are qualified to provide
any legal or other professional services, the providers of which must be
licensed or are otherwise subject to requirements of law establishing
educational, professional or similar qualifications for providers of such
service, and nothing contained in this Section shall be construed as requiring
Baxter and its Subsidiaries to provide any such services. Allegiance and its
Subsidiaries will procure all such professional service from its own employees
or third parties. Except to the extent provided otherwise in SECTION 6.4
herein, all reasonable expenses, including, without limitation, charges for
staff costs, including approved travel and other expenses incurred in connection
with any assistance requested by Allegiance or its Subsidiaries in the
preparation or prosecution of a patent will be reimbursed by Allegiance and will
not constitute a part of the payments for research and development work.
Allegiance and its Subsidiaries shall not allow the protection for any Licensed
Allegiance Intellectual Property to lapse without not less than three months'
prior written notice to Baxter. If Allegiance so notifies Baxter, (a) Baxter
and its Subsidiaries shall have the right, but not the obligation, to take such
steps to prevent such a lapse, at Xxxxxx'x expense and in Allegiance's and its
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Subsidiaries' names, if necessary, and (b) Allegiance and its Subsidiaries shall
cooperate with Baxter and its Subsidiaries at Xxxxxx'x or its Subsidiaries'
reasonable request and at Xxxxxx'x expense.
(c) MARKING AND NOTICES. Baxter and its Subsidiaries agree that any
products which are manufactured, made, offered, sold or otherwise distributed by
them pursuant to the license(s) granted hereunder shall bear a legal or
proprietary rights notice in such form as may be reasonably requested by and to
the extent directed by Allegiance from time to time.
(d) TERMINATION OF LICENSES. The licenses granted in SECTION 8.1 may
be terminated by Allegiance only under the following conditions:
(i) BREACH. If Baxter or its Subsidiaries are in breach or default
of a material term of this SECTION 8.1 which breach or default continues
for sixty (60) days after written notice thereof by Allegiance, Allegiance
may terminate the license granted pursuant to this SECTION 8.1, PROVIDED
that such termination shall be limited to those Licensed Allegiance
Intellectual Property rights that relate to the uncured breach.
(ii) DIVESTITURE. If Baxter or its Subsidiaries sell, assign,
transfer or otherwise divest themselves of ownership of any business units
or product lines that use or are manufactured under the Licensed Allegiance
Intellectual Property, the licenses granted in this SECTION 8.1 may be
assigned, but only with respect to the divested products or new products
that are substitutes for or line extensions of such products, and only with
the written consent of Allegiance, which consent shall not be unreasonably
withheld. Allegiance shall have no obligation to consent to the transfer
of such license to any entity that is a competitor of Allegiance or any of
its Subsidiaries in the field in which Allegiance uses the Intellectual
Property that is the subject of the license.
(iii) CHANGE OF CONTROL. If more than 30% of the voting stock of
Baxter or any Affiliate thereof is acquired, directly or indirectly, by a
competitor of Allegiance in the field in which Allegiance or its
Subsidiaries are then using the Licensed Allegiance Intellectual Property,
then by written notice to Baxter Allegiance may (A) in the case of the
acquisition of the voting stock of Baxter, terminate the license granted
pursuant to this SECTION 8.1 in its entirety, or (B) in the case of the
acquisition of the voting stock of an Affiliate terminate the license
granted
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pursuant to this SECTION 8.1 only with respect to such Affiliate.
Section 8.2 LICENSE OF BAXTER INTELLECTUAL PROPERTY TO ALLEGIANCE.
(a) GRANT OF LICENSE. Baxter and its Subsidiaries hereby grant, and
Allegiance and its Subsidiaries hereby accept and retain, a perpetual,
nonexclusive, fully paid-up, worldwide right and license to use, manufacture,
make, have made for Allegiance (provided that any disclosure to a third party
contract manufacturer of proprietary or confidential information of Baxter shall
be pursuant to a confidentiality agreement in a form consistent with the terms
of SECTION 10.4 herein), sell and otherwise practice the patents, patent
applications, nonpatented inventions, copyrights, trade secrets, technical data,
know-how, and other Intellectual Property Rights set forth on SCHEDULE 8.2(a),
attached hereto and incorporated herein (hereinafter, the "Licensed Baxter
Intellectual Property") in connection with the Allegiance Products Actually
Using the Licensed Baxter Intellectual Property as of the Spin-Off Date,
including new products which are substitutes for, or line extensions of, such
products. For the purposes of this SECTION 8.2, Allegiance will be deemed to be
"Actually Using" Licensed Baxter Intellectual Property if as of the Spin-Off
Date: (i) it is manufacturing a product incorporating the Licensed Baxter
Intellectual Property; or (ii) a product incorporating the Licensed Baxter
Intellectual Property is under development and the use of other Intellectual
Property Rights by Allegiance would require substantial additional expense;
provided, however, that Allegiance will not be deemed to be "Actually Using"
Licensed Baxter Intellectual Property if the sole use thereof is to manufacture
a product for Baxter.
(b) OWNERSHIP OF THE LICENSED BAXTER INTELLECTUAL PROPERTY.
Allegiance and its Subsidiaries acknowledge that, subject to the foregoing
license, Baxter and its Subsidiaries are the sole and exclusive owner of all of
right, title and interest in and to the Licensed Baxter Intellectual Property.
Allegiance and its Subsidiaries agree that they will do nothing inconsistent
with Xxxxxx'x and its Subsidiaries' ownership of, or rights in, the Licensed
Baxter Intellectual Property. Baxter and its Subsidiaries, at their expense,
agree to take all steps reasonably necessary to protect, enforce or otherwise
maintain in full force and effect the Licensed Baxter Intellectual Property,
including, without limitation, the filing of any required renewals and the
payment of any required fees, taxes or other payments that may become due.
Allegiance and its Subsidiaries shall cooperate with Baxter and its Subsidiaries
in connection with such steps at Xxxxxx'x reasonable request and at Xxxxxx'x
expense, including, without limitation, by obtaining execution by
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Allegiance's and its Subsidiaries' employees, consultants and agents of any
papers Baxter or its Subsidiaries consider necessary to enable Baxter and its
Subsidiaries to protect the Licensed Baxter Intellectual Property. Allegiance
and its Subsidiaries shall make their employees, consultants and agents, who
have direct knowledge of facts pertaining to an invention that is the subject of
a patent application or another Intellectual Property Right that is the subject
of intellectual property protection, available to Baxter and its Subsidiaries at
Xxxxxx'x expense for the purpose of disclosing sufficient facts for the
preparation of necessary documentation required for patent applications and
other protection. At Xxxxxx'x or its Subsidiaries' reasonable request and
expense, Allegiance and its Subsidiaries will assist Baxter and its Subsidiaries
in the preparation and review of patent documents related to the Licensed Baxter
Intellectual Property to the extent that such assistance is necessary for such
preparation. Allegiance and its Subsidiaries do not represent that they are
qualified to provide any legal or other professional services, the providers of
which must be licensed or are otherwise subject to requirements of law
establishing educational, professional or similar qualifications for providers
of such service. Nothing contained in this Section shall be construed as
requiring Allegiance and its Subsidiaries to provide any such services. Baxter
and its Subsidiaries will procure all such professional service from its own
employees or third parties. Except to the extent provided otherwise in SECTION
6.4 herein, all reasonable expenses, including, without limitation, charges for
staff costs, including approved travel and other expenses incurred in connection
with any assistance requested by Baxter or its Subsidiaries in the preparation
or prosecution of a patent will be reimbursed by Baxter and will not constitute
a part of the payments for research and development work. Baxter and its
Subsidiaries shall not allow the protection for any Licensed Baxter Intellectual
Property to lapse without not less than three months' prior written notice to
Allegiance. If Baxter so notifies Allegiance, (a) Allegiance shall have the
right, but not the obligation, to take such steps to prevent such a lapse, at
Allegiance's expense and in Xxxxxx'x and its Subsidiaries' name, if necessary,
and (b) Baxter and its Subsidiaries shall cooperate with Allegiance and its
Subsidiaries at Allegiance's and its Subsidiaries' reasonable request and at
Allegiance's expense.
(c) MARKING AND NOTICES. Allegiance and its Subsidiaries agree that
any products which are manufactured, made, offered, sold or otherwise
distributed by them pursuant to the license(s) granted hereunder shall bear a
legal or proprietary rights notice in such form as may be reasonably requested
by and to the extent directed by Baxter from time to time.
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(d) TERMINATION OF LICENSES. The licenses granted in SECTION 8.2 may
be terminated by Baxter only under the following conditions:
(i) BREACH. If Allegiance or its Subsidiaries are in breach or
default of a material term of this SECTION 8.2 which breach or default
continues for sixty (60) days after written notice thereof by Xxxxxx,
Xxxxxx may terminate this Agreement, PROVIDED that such termination shall
be limited to those Licensed Baxter Intellectual Property rights that
relate to the uncured breach.
(ii) DIVESTITURE. If Allegiance or its Subsidiaries sell, assign,
transfer or otherwise divest themselves of ownership of any business units
or product lines that use the Licensed Baxter Intellectual Property, the
licenses granted in this SECTION 8.2 may be assigned, but only with respect
to the divested products or new products that are substitutes for or line
extensions of such products, and only with the written consent of Baxter,
which consent shall not be unreasonably withheld. Baxter shall have no
obligation to consent to the transfer of such license to any entity that is
a competitor of Baxter or any of its Subsidiaries in the field in which
Baxter uses the Intellectual Property that is the subject of the license.
(iii) CHANGE OF CONTROL. If more than 30% of the voting stock of
Allegiance or any Affiliate thereof is acquired, directly or indirectly, by
a competitor of Baxter in the field in which Baxter or its Subsidiaries are
then using the Licensed Baxter Intellectual Property, then by written
notice to Allegiance Baxter may (A) in the case of the acquisition of the
voting stock of Allegiance, terminate the license granted pursuant to this
SECTION 8.2 in its entirety, or (B) in the case of the acquisition of the
voting stock of an Affiliate, terminate the license granted pursuant to
this SECTION 8.2 only with respect to such Affiliate.
Section 8.3 USE OF BAXTER TRADE NAMES AND TRADEMARKS. (a) Allegiance
and its Subsidiaries shall discontinue use of the names "Baxter," "Xxxxxx
Healthcare," "Xxxxxx International Inc." and all other trademarks, service marks
and trade names owned by or licensed to Baxter (the "Xxxxxx Xxxxx") as follows:
(i) Allegiance and its Subsidiaries will cease use of the Xxxxxx
Xxxxx on or in connection with materials other than labels of Allegiance
Products, including, by way of example and not limitation, signs,
stationery, trucks, and customer brochures, on or before December 31, 1997.
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(ii) Allegiance and its Subsidiaries will cease use of the Xxxxxx
Xxxxx on or in connection with Allegiance Products containing latex as soon
as practical, but in no event later than March 31, 1997 with respect to
gloves manufactured after that date and June 30, 1997 with respect to other
products containing, as a significant component, natural rubber latex
manufactured after that date.
(iii) Allegiance and its Subsidiaries will cease use of the Xxxxxx
Xxxxx on or in connection with products of the type subject to regulation
under Section 351 of the Public Health Service Act ("Biologics"), if any,
as soon as practical, but in no event later than March 31, 1997 with
respect such products manufactured after that date.
(iv) Allegiance and its Subsidiaries will cease use of the Xxxxxx
Xxxxx on or in connection with high volume products, namely, those products
which constitute 80% of Allegiance's product volume and a minimum of 80% of
the total number of product code product labels, as of December 31, 1997.
(v) Allegiance and its Subsidiaries will cease use of the Xxxxxx
xxxxx on or in connection with all other products as of June 30, 1998, in
that neither Allegiance nor its Subsidiaries shall quality control release
any products bearing any of the Xxxxxx Xxxxx after such date.
(b) Any use of the Xxxxxx Xxxxx by Allegiance or its Subsidiaries
pursuant to the above terms and conditions shall be in the same form as existed
prior to the Spin-Off Date and any products or processes offered by Allegiance
or its Subsidiaries for sale under the Xxxxxx Xxxxx shall meet the same product
specifications and quality assurance standards as existed prior to the Spin-Off
Date. Any new label copy created after the Spin-Off Date or the development of
which is in progress as of the Spin-Off Date, shall not bear any of the Xxxxxx
Xxxxx.
ARTICLE IX. EMPLOYEES AND EMPLOYEE BENEFITS
Section 9.1 ALLEGIANCE EMPLOYEES. SCHEDULE 9.1 describes or
otherwise identifies all Allegiance Employees. The Parties recognize that
SCHEDULE 9.1 includes Inactive Employees other than persons with a "PD" status
code.
Section 9.2 EMPLOYMENT OF ALLEGIANCE EMPLOYEES. On the Spin-Off
Date, Allegiance shall, or shall cause its Subsidiaries to, employ or continue
to employ each Allegiance Employee. Allegiance and Baxter (and their
Subsidiaries) shall use their reasonable efforts to accomplish any transfers of
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employment required by this SECTION 9.2 in a timely manner. Active Allegiance
Employees shall be paid by Allegiance or one of its Subsidiaries at the salary
and wage rate levels (including but not limited to bonus programs) paid by
Baxter or its Subsidiaries as of the Spin-Off Date; PROVIDED, HOWEVER, that
Allegiance (or the applicable Allegiance Subsidiary) retains the right to
determine the compensation of Allegiance Employees after the Spin-Off Date.
Section 9.3 TERMINATIONS/LAYOFF/SEVERANCE. (a) Allegiance
Employees shall not be eligible for any severance benefits from Baxter or its
Subsidiaries or Affiliates as a result of either their employment by Allegiance
or its Subsidiaries or Affiliates or their subsequent termination of employment
with Allegiance or its Subsidiaries or Affiliates. Notwithstanding the
foregoing, Baxter and Allegiance have agreed on the payment of certain severance
costs as provided in SECTION 9.3(d).
(b) Any Allegiance Employee who receives a written notice prior to
the Spin-Off Date regarding such employee's termination of employment on a fixed
date between the Spin-Off Date and January 31, 1997 from Allegiance or any of
its Subsidiaries shall be eligible to receive from Allegiance (or the applicable
Allegiance Subsidiary) severance pay which is calculated with the formula used
under the Xxxxxx Xxxxxxxxx Pay Plan. No Allegiance business unit shall notify
any Allegiance Employee prior to the Spin-Off Date that such person shall
terminate employment with Allegiance or any of its Subsidiaries on a fixed date
which is after January 31, 1997. The manner in which this SECTION 9.3(b) is
implemented shall be governed by the terms of the Allegiance Severance Pay Plan.
(c) Effective as of the Spin-Off Date, Allegiance (or the applicable
Allegiance Subsidiary) shall have the obligation to reimburse Baxter for the
severance benefits paid by Baxter under the Xxxxxx Xxxxxxxxx Pay Plan to any
employee who was terminated by Baxter prior to the Spin-Off Date while employed
in any Allegiance Business unit who is receiving severance benefits under the
Xxxxxx Xxxxxxxxx Pay Plan as of the Spin-Off Date. Allegiance (or the applicable
Allegiance Subsidiary) shall have the obligation to pay severance benefits to
any employee terminated by Allegiance after the Spin-Off Date who is eligible to
receive severance benefits under the Allegiance Severance Pay Plan.
(d) Baxter and Allegiance shall each be responsible for the payment
of one-half of the severance of Allegiance Employees who currently provide IV
customer service functions in field locations who are terminated without cause
within six months following the Spin-Off Date.
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Section 9.4 INTERNATIONAL ALLEGIANCE EMPLOYEES. All issues relating
to any person who, immediately prior to the Spin-Off Date, is employed by a
Transferred Subsidiary in a foreign jurisdiction shall be addressed in
connection with the transactions applicable to such Transferred Subsidiary and
are outside the scope of this Agreement.
Section 9.5 EMPLOYMENT SOLICITATION. During the period beginning on
the Spin-Off Date and ending one year after the Spin-Off Date, neither Baxter
nor Allegiance shall, or shall permit any of their respective Subsidiaries or
agents to, directly or indirectly, without the prior written consent of the
other, actively solicit or recruit for employment any then current employee of
the other or of any of the other's Subsidiaries. However, nothing contained in
this clause shall (a) prohibit the hiring of any employee who in good faith is
believed to be actively seeking employment on his or her own initiative without
prior contact initiated by any employee or agent of the company where employment
is sought, or any of such company's Affiliates, provided that such employee has
obtained authorization from an officer (or a direct report to a current officer)
of his or her current employer; or (b) prohibit Baxter or Allegiance or any of
their respective Subsidiaries from hiring any person who has terminated
employment with the other company. After one year after the Spin-Off Date, the
foregoing restriction shall not apply.
Section 9.6 WARN ACT. Allegiance and its Subsidiaries agree that
they shall not, at any time during the 90-day period following the Spin-Off
Date, effectuate (i) a "plant closing" as defined in the Worker Adjustment and
Retraining Notification Act of 1988 (the "WARN Act") affecting any site of
employment or operating units within any site of employment of the Allegiance
Business or (ii) take any action to precipitate a "mass layoff" as defined in
the WARN Act affecting any site of employment of the Allegiance Business,
except, in either case, after complying fully with the notice and other
requirements of the WARN Act. Allegiance agrees to indemnify Xxxxxx and its
Subsidiaries and to defend and hold Xxxxxx and its Subsidiaries harmless from
and against any and all claims, losses, damages, expenses, obligations and
liabilities (including attorney's fees and other costs of defense) which Xxxxxx
and its Subsidiaries may incur in connection with any suit or claim of violation
brought against Xxxxxx under the WARN Act, which relate in whole or in part to
actions taken by Allegiance or its Subsidiaries with regard to any site of
employment of Allegiance or operating units within any site of employment of the
Allegiance Business.
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Section 9.7 LEAVE OF ABSENCE POLICIES. (a) Through the Spin-Off
Date, Xxxxxx and its Subsidiaries shall be responsible for administering
compliance with the Xxxxxx leave of absence policies with respect to Allegiance
Employees.
(b) Effective immediately after the Spin-Off Date: (i) Allegiance
shall adopt, and shall cause each Allegiance Subsidiary to adopt, its own leave
of absence policies; (ii) Allegiance shall honor, and shall cause each
Allegiance Subsidiary to honor, all terms and conditions of leaves of absence
which have been granted to any Allegiance Employee under a Xxxxxx leave of
absence policy before the Spin-Off Date by Xxxxxx or any of its Subsidiaries,
including such leaves that are to commence after the Spin-Off Date where Xxxxxx
or any of its Subsidiaries has approved such leave or where an employee has
submitted appropriate paperwork to Xxxxxx or any of its Subsidiaries for such
leave prior to the Spin-Off Date; (iii) Allegiance and its Subsidiaries shall be
solely responsible for administering leaves of absence policies and compliance
with all applicable laws with respect to their employees; and (iv) Allegiance
and its Subsidiaries shall recognize all periods of service of Allegiance
Employees with Xxxxxx or any of its Subsidiaries, as applicable, to the extent
such service is recognized by Xxxxxx or its Subsidiaries for the purpose of
eligibility for leave entitlement under the Xxxxxx leave of absence policies;
PROVIDED, HOWEVER, that no duplication of benefits shall be required by the
foregoing.
(c) As soon as administratively possible after the Spin-Off Date and
upon request to Xxxxxx'x Senior Vice President of Human Resources, Xxxxxx shall
provide to Allegiance copies of all records pertaining to the Xxxxxx leave of
absence policies with respect to all Allegiance Employees to the extent such
records have not been provided previously to Allegiance or one of its
Subsidiaries.
Section 9.8 WITHDRAWAL FROM PARTICIPATION IN XXXXXX PLANS AND
ESTABLISHMENT OF ALLEGIANCE PLANS. (a) Effective as of the Spin-Off Date,
Allegiance and its Subsidiaries shall cease to be participating employers in the
Xxxxxx Plans and shall take any and all action necessary to effectuate their
withdrawal as participating employers under the terms of such plans. Each
Allegiance Employee shall cease accruing benefits under the Xxxxxx Plans as of
the Spin-Off Date (other than imputed compensation taken into account under the
Xxxxxx Pension Plan from the Spin-Off Date through December 31, 1996).
(b) Effective as of the Spin-Off Date, Allegiance or any Allegiance
Subsidiary shall establish its own employee benefit plans for the benefit of
eligible employees of Allegiance and its Subsidiaries, including but not limited
to the Allegiance
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Retirement Plan, the Allegiance Welfare Plans and the Allegiance 1996 Incentive
Compensation Program, as described in the Registration Statement.
Section 9.9 TRANSFER OF SAVINGS PLAN ACCOUNT BALANCES. Subject to
applicable law and the provisions of the Xxxxxx Savings Plan, effective as of
the first day of the first calendar month following the Spin-Off, or effective
as of any other date as agreed to in writing by the plan administrator for the
Xxxxxx Savings Plan and the plan administrator for the Allegiance Retirement
Plan, the account balances (including outstanding loans) of all Xxxxxx Savings
Plan participants who are Allegiance Employees shall be spun off from the Xxxxxx
Savings Plan and merged into the Allegiance Retirement Plan (the "Transferred
Accounts"). The plan administrator for the Allegiance Retirement Plan shall
distribute any amounts from such Transferred Accounts which may be necessary in
order for the Xxxxxx Savings Plan to satisfy any requirements of applicable law
(including, but not limited to, nondiscrimination rules) as instructed by the
plan administrator for the Xxxxxx Savings Plan. The plan administrator for the
Allegiance Retirement Plan shall take any other action reasonably requested by
the plan administrator for the Xxxxxx Savings Plan which is necessary or
advisable, in the opinion of the plan administrator for the Xxxxxx Savings Plan,
to maintain the tax-qualified status of the Xxxxxx Savings Plan or to avoid the
imposition of any penalties with respect to such plan.
Section 9.10 ENTITLEMENT TO DISTRIBUTIONS UNDER PENSION PLAN. Each
Allegiance Employee shall be treated as having terminated employment with an
"Employer" as defined in the Xxxxxx Pension Plan effective as of the Spin-Off
Date and shall be fully vested in his or her accrued benefit under the Xxxxxx
Pension Plan as of such date; PROVIDED, HOWEVER, that no such employee shall be
treated as terminated for purposes of eligibility to receive plan distributions
until such employee is no longer eligible to have compensation with Allegiance
(or the applicable Allegiance Subsidiary) count for purposes of determining
benefits under the Xxxxxx Pension Plan.
Section 9.11 WELFARE BENEFITS PROVIDED UNDER ALLEGIANCE PLANS. (a)
Each employee of Allegiance or any of its Subsidiaries who is eligible to
participate in the Allegiance Welfare Plans shall be credited with (1)
deductibles and co-payments paid by such employee during the plan year
commencing April 1, 1996 under the Xxxxxx Medical Plan (including dental
benefits) and (2) periods of service with any Xxxxxx Group member for all
purposes under such plan. Amounts paid under the Xxxxxx Medical Plan which are
taken into account for purposes of determining each Allegiance Employee's
lifetime maximum under such plan shall be taken into account for purposes of
determining
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such Allegiance Employee's lifetime maximum benefits under the Allegiance
Medical Plan.
(b) Xxxxxx (or the applicable Xxxxxx Subsidiary) shall pay all costs
associated with the provision of disability benefits to any employee or former
employee of Allegiance or any of its Subsidiaries who as of the Spin-Off Date is
totally and permanently disabled. Allegiance (or the applicable Allegiance
Subsidiary) shall pay all costs associated with the provision of disability
benefits to any employee or former employee of Allegiance or any of its
Subsidiaries other than the persons described in the first sentence of this
SECTION 9.11(b); Allegiance (or the applicable Allegiance Subsidiary) shall
provide benefits to any such persons who on the Spin-Off Date are entitled to
receive disability benefits in an amount equal to the benefits such persons
would have received if they had remained covered under the Xxxxxx Plans during
the period of such disability leave. Notwithstanding the foregoing, any
Allegiance Employee receiving benefits under the Baxter Long-Term Disability
Insurance Plan on the Spin-Off Date shall continue to receive benefits under the
terms of such plan and the insurance contract used to fund such plan, and
neither Allegiance nor any Allegiance Subsidiary shall be charged for the
payment of such benefits. As of the Spin-Off Date, Allegiance (or the
applicable Allegiance Subsidiary) shall assume all liabilities determined under
FAS 112 relating to all Allegiance Employees.
(c) Xxxxxx (or the applicable Xxxxxx Subsidiary) shall pay all claims
under the Xxxxxx Medical Plan (including dental benefits) which as of the Spin-
Off Date have been incurred but not paid relating to employees of Allegiance and
its Subsidiaries, but only if claims for such costs are submitted in written
form to the authorized agents of Xxxxxx (or the applicable Xxxxxx Subsidiary)
during the nine-month period beginning on the Spin-Off Date.
(d) Xxxxxx (or the applicable Xxxxxx Subsidiary) shall pay all costs
associated with the provision of benefits under the terms of the Xxxxxx Retiree
Welfare Plan for all persons who as of the Spin-Off Date have satisfied the age
and service eligibility requirements for receiving benefits under such plan.
Allegiance (or the applicable Allegiance Subsidiary) shall assume and pay all
costs associated with the provision of retiree welfare benefits for all
employees of Allegiance and its Subsidiaries who after the Spin-Off Date satisfy
the age and service eligibility requirements under the corresponding Allegiance
plan, if any, for receiving such benefits.
(e) Effective as of the Spin-Off Date, the account balances
(including assets and liabilities) of all participants in the Xxxxxx Cafeteria
Plans who are Allegiance Employees shall
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be spun off from the Xxxxxx Cafeteria Plans and merged into the corresponding
cafeteria plans which are established by Allegiance or the applicable Allegiance
Subsidiary.
Section 9.12 STOCK PURCHASE PLAN. Except as otherwise provided in
the plan, on the Spin-Off Date, employees of Allegiance and its Subsidiaries
shall not be eligible to purchase Xxxxxx Common Stock under the terms of the
Xxxxxx Stock Purchase Plan.
Section 9.13 WORKERS' COMPENSATION. As soon as administratively
practicable following the Spin-Off Date but in no event later than December 31,
1996, a Senior Vice President of each of the Parties shall agree upon the
allocation between the Parties of responsibility and liability for workers'
compensation claims and expenses relating to employees and former employees of
the Parties and their respective Subsidiaries.
Section 9.14 VACATION PAY POLICY. After the Spin-Off Date, it is
expected that Allegiance shall maintain for its employees and employees of its
Subsidiaries a vacation pay policy and Allegiance (or the applicable Allegiance
Subsidiary) shall be responsible for costs incurred to provide vacation pay to
employees of Allegiance and its Subsidiaries following such date. Allegiance
(or the applicable Allegiance Subsidiary) shall assume any and all Xxxxxx
liabilities to provide to Allegiance Employees vacation which such persons
accrued under the Xxxxxx vacation pay policy as of the Spin-Off Date, and no
payment of such accrued vacation pay shall be made by Xxxxxx (or the applicable
subsidiary) on the Spin-Off Date.
Section 9.15 NON-QUALIFIED DEFERRED COMPENSATION PLANS. Xxxxxx (or
the applicable Xxxxxx Subsidiary) shall assume the liability to provide benefits
accrued as of the Spin-Off Date under the Xxxxxx and Subsidiaries Supplemental
Pension Plan with respect to all Allegiance Employees. Allegiance (or the
applicable Subsidiary) shall assume the liability to provide benefits accrued
under the Xxxxxx and Subsidiaries Incentive Investment Excess Plan and the
Xxxxxx and Subsidiaries Deferred Compensation Plan with respect to Allegiance
Employees. No assets shall be transferred between the Parties with respect to
the plans listed in this SECTION 9.16; PROVIDED, HOWEVER, that Xxxxxx shall
receive a balance sheet credit for the amounts assumed in the first sentence of
this Section.
Section 9.16 INFORMATION TO BE PROVIDED TO XXXXXX. Allegiance (or
the applicable Allegiance Subsidiary) shall provide any information which Xxxxxx
(or any Xxxxxx Subsidiary) may reasonably request, including but not limited to
information relating to dates of termination of employment, in order to provide
benefits to any eligible employee of Allegiance or any of
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its Subsidiaries under the terms and conditions described herein or under the
applicable Xxxxxx Plans. Any information relating to an employee's termination
of employment shall be provided by Allegiance (or the applicable Allegiance
Subsidiary) to Xxxxxx as soon as available to Allegiance or any of its
Subsidiaries, but in any event no later than 30 days after such information is
made available to Allegiance or any such Subsidiaries. Allegiance (or the
applicable Allegiance Subsidiary) shall, as necessary, update the system used to
keep such information in such timely manner as is required to administer the
Xxxxxx Plans.
Section 9.17 CORPORATE ACTION; DELEGATION OF AUTHORITY. Any action
taken by the Senior Vice President of Human Resources shall be considered to be
action taken by either Xxxxxx or Allegiance or their respective Subsidiaries for
purposes of this ARTICLE IX. Without limiting the foregoing, the Chief
Executive Officer of Xxxxxx or Allegiance or their respective Subsidiaries may
delegate in writing to any other person the authority to act on behalf of Xxxxxx
or Allegiance, respectively, or their respective Subsidiaries, with respect to
actions required under the terms of this ARTICLE IX.
Section 9.18 SPLIT-DOLLAR LIFE INSURANCE. Effective as of the Spin-
Off Date, Xxxxxx (or the applicable Xxxxxx Subsidiary) shall transfer to
Allegiance (or the applicable Allegiance Subsidiary) all split-dollar life
insurance policies relating to, and Allegiance (or the applicable Allegiance
Subsidiary) shall assume all liabilities associated with the provision of such
split-dollar life insurance to, any Allegiance Employee who as of such date had
met the eligibility requirements under such policies (I.E., any Allegiance
Employee who has accumulated 65 points for purposes of determining the amount of
benefits accrued under the Xxxxxx Pension Plan).
ARTICLE X. ACCESS TO INFORMATION
Section 10.1 ACCESS TO INFORMATION.
(a) ACCESS TO FINANCIAL INFORMATION. At all times from and after the
Spin-Off Date for a period of ten years, (1) Xxxxxx, upon reasonable notice,
shall afford Allegiance, its Subsidiaries and their authorized accountants,
counsel and other designated representatives reasonable access during normal
business hours to, or, at Allegiance's expense, provide copies of, all records,
books, contracts, instruments, data, documents and other information
(collectively, "Information") relating to Allegiance or any of its Subsidiaries,
the Allegiance Business or the Allegiance Employees within Xxxxxx'x possession
or control immediately following the Spin-Off Date, insofar as such access or
copies are required by Allegiance, and (2) Allegiance, upon
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reasonable notice, shall afford to Xxxxxx, its Subsidiaries and their authorized
accountants, counsel and other designated representatives reasonable access
during normal business hours to, or, at Xxxxxx'x expense, provide copies of,
Information relating to Xxxxxx or any of its Subsidiaries, the Retained Business
or any employees of Xxxxxx or any of its Subsidiaries within Allegiance's
possession or control immediately following the Spin-Off Date insofar as such
access or copies are required by Xxxxxx. Information may be requested under
this SECTION 10.1(a) for audit, accounting, claims defense, regulatory filings,
litigation and tax purposes, for purposes of fulfilling disclosure and reporting
obligations, for compensation, benefit or welfare plan administration and for
other proper business purposes but not for competitive purposes. Xxxxxx and
Allegiance shall maintain the Information in the same way that Xxxxxx maintains
similar material relating to the ongoing business of Xxxxxx. The provisions of
this ARTICLE X shall not prejudice the rights or obligations of the Parties
under the Tax Sharing Agreement or any of the Operating Agreements.
(b) ACCESS TO TECHNICAL INFORMATION AND DATA. Prior to the Spin-Off
Date, Allegiance and its Subsidiaries had access to technical information and
data compilations including, without limitation, the materials testing registry
("MTR"), the Chemical and Toxicology data and the Xxxxxx Materials Database,
concerning, INTER ALIA, materials and formulations accumulated and maintained by
Xxxxxx and its Subsidiaries. For the period beginning on the Spin-Off Date and
ending on the earlier to occur of the tenth anniversary of the Spin-Off Date or
the termination of the license granted pursuant to SECTION 8.2(d), Allegiance
and its Subsidiaries shall have reasonable access to the technical information
and data compilations of Xxxxxx and its Subsidiaries in existence on the Spin-
Off Date, and services available therethrough, reasonably necessary for the
Allegiance Products and products under development by Allegiance or its
Subsidiaries, including the right to make copies and abstracts thereof for its
business purposes in relation to such products.
(c) LIMITATIONS. Xxxxxx makes no representations or warranties,
express or implied, about the accuracy, completeness, adequacy or sufficiency of
the financial and technical information and data compilations and EXPRESSLY
DISCLAIMS ALL WARRANTIES WHATSOEVER, WHETHER STATUTORY, WRITTEN, ORAL, EXPRESS
OR IMPLIED, AND EXPRESSLY DISCLAIMS EACH SUCH WARRANTY, INCLUDING ANY WARRANTY
OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSES. The rights of access
pursuant to this SECTION 10.1 shall not include, however, such information of
Xxxxxx and its Subsidiaries relating to (1) products, materials and components
under development by Xxxxxx and its Subsidiaries; (2) information pertaining to
potential acquisitions, divestitures and other business arrangements of Xxxxxx
and its Subsidiaries; (3) studies
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and investigations being undertaken by Xxxxxx and its Subsidiaries for its or
their own benefit or for the benefit of a third party; and (4) information and
data Xxxxxx and its Subsidiaries are obligated to a third-party to maintain in
confidence. Allegiance and its Subsidiaries agree to abide by and adhere to all
reasonable requirements and limitations imposed by Xxxxxx and its Subsidiaries
in respect of the information and data compilations and access thereto and
utilization of services available through such compilations. Neither Allegiance
nor any of its Subsidiaries shall have any right to, and Allegiance agrees and
agrees to cause of each of its Subsidiaries not to, make, have made, use or sell
any products incorporating the technical information and data accessible to
Allegiance and its Subsidiaries pursuant to SECTION 10.1(b) hereof, unless
expressly conveyed pursuant to SECTION 4.2(vii), 5.3(i) or 8.2(a).
Section 10.2 PRODUCTION OF WITNESSES. At all times from and after
the Spin-Off Date, each Party shall use its reasonable efforts to make available
to the other Party (without cost (other than reimbursement of actual out-of-
pocket expenses) to, and upon prior written request of, the other Party) its
officers, directors, employees and agents as witnesses to the extent that the
same may reasonably be required by the other Party in connection with any legal,
administrative or other proceedings in which the requesting Party may from time
to time be involved with respect to the Allegiance Business, the Retained
Business, the Spin-Off or any related transactions.
Section 10.3 PROVISION OF CORPORATE RECORDS. Prior to or as promptly
as practicable after the Spin-Off Date, Xxxxxx shall deliver to Allegiance or
one or more of its Subsidiaries all corporate books and records of Allegiance
and its Subsidiaries and copies of all corporate books and records of Xxxxxx
relating to the Allegiance Business, including in each case all active
agreements, litigation files and government filings. From and after the Spin-
Off Date, all books, records and copies so delivered shall be the property of
Allegiance or such Subsidiaries.
Section 10.4 CONFIDENTIALITY. (a) From and after the Spin-Off Date,
each of Xxxxxx and Allegiance shall hold, and shall cause its Subsidiaries and
its and their officers, employees, agents, consultants, advisors and other
representatives to hold, in strict confidence all non-public information
concerning the other Party or any of its Subsidiaries or Affiliates obtained by
it prior to the Spin-Off Date, accessed by it pursuant to SECTION 10.1 hereof,
or furnished to it by the other Party or any of its Subsidiaries or Affiliates
pursuant to this Agreement or any agreement or document contemplated hereby,
including, without limitation, any trade secrets, technology, know-how-and other
non-public, proprietary intellectual property
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rights licensed pursuant to SECTIONS 8.1 and 8.2 herein, and shall not release
or disclose such information to any other Person, except its representatives,
who shall be bound by the provisions of this SECTION 10.4; PROVIDED, HOWEVER,
that Xxxxxx and Allegiance and their respective Subsidiaries, officers,
employees, agents, consultants, advisors and representatives may disclose such
information if, and only to the extent that, (a) a disclosure of such
information is compelled by judicial or administrative process or, in the
opinion of such Party's counsel, by other requirements of law (in which case the
disclosing party will provide, to the extent practicable under the
circumstances, advance written notice to the other Party of its intent to make
such disclosure), or (b) such Party can show that such information (i) is
published or is or otherwise becomes available to the general public as part of
the public domain without breach of this Agreement; (ii) has been furnished or
made known to the recipient without any obligation to keep it confidential by a
third party under circumstances which are not known to the recipient to involve
a breach of the third party's obligations to a Party hereto; (iii) was developed
independently of information furnished to the recipient under this Agreement; or
(iv) in the case of information furnished after the Spin-Off Date, was known to
the recipient at the time of receipt thereof from the other Party.
(b) Each Party (the "first Party") acknowledges that the other Party
would not have an adequate remedy at law for the breach by the first Party of
any one or more of the covenants contained in this SECTION 10.4 and agrees that,
in the event of such breach, the other Party may, in addition to the other
remedies which may be available to it, apply to a court for an injunction to
prevent breaches of this SECTION 10.4 and to enforce specifically the terms and
provisions of this Section. Notwithstanding SECTION 13.1 hereof, the provisions
of this SECTION 10.4 shall survive the Spin-Off Date indefinitely.
Section 10.5 PRIVILEGED MATTERS. (a) Each of Xxxxxx and Allegiance
agree to maintain, preserve and assert all privileges, including, without
limitation, privileges arising under or relating to the attorney-client
relationship (which shall include without limitation the attorney-client and
work product privileges), not heretofore waived, that relate to the Allegiance
Business and the Transferred Services for any period prior to the Spin-Off Date
("Privilege" or "Privileges"). Each Party agrees that it shall not waive any
Privilege that could be asserted under applicable law without the prior written
consent of the other Party. The rights and obligations created by this SECTION
10.5 shall apply to all information relating to the Allegiance Business as to
which, but for the Spin-Off, either Party would have been entitled to assert or
did assert the protection of a Privilege ("Privileged Information"), including
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without limitation, any and all information generated prior to the Spin-Off Date
but which, after the Spin-Off, is in the possession of either Party; and (2) all
information generated, received or arising after the Spin-Off Date that refers
to or relates to Privileged Information generated, received or arising prior to
the Spin-Off Date.
(b) Upon receipt by either Party of any subpoena, discovery or other
request that may call for the production or disclosure of Privileged Information
or if either Party obtains knowledge that any current or former employee of
Xxxxxx or Allegiance has received any subpoena, discovery or other request that
may call for the production or disclosure of Privileged Information, such Party
shall notify promptly the other Party of the existence of the request and shall
provide the other Party a reasonable opportunity to review the information and
to assert any rights it may have under this SECTION 10.5 or otherwise to prevent
the production or disclosure of Privileged Information. Each Party agrees that
it will not produce or disclose any information that may be covered by a
Privilege under this SECTION 10.5 unless (1) the other Party has provided its
written consent to such production or disclosure (which consent will not be
unreasonably withheld), or (2) a court of competent jurisdiction has entered a
final, nonappealable order finding that the information is not entitled to
protection under any applicable Privilege.
(c) Xxxxxx'x transfer of books and records and other information to
Allegiance, and Xxxxxx'x agreement to permit Allegiance to possess Privileged
Information occurring or generated prior to the Spin-Off Date, are made in
reliance on Allegiance's agreement, as set forth in this SECTION 10.5, to
maintain the confidentiality of Privileged Information and to assert and
maintain all applicable Privileges. The access to information being granted
pursuant to SECTION 10.1, the agreement to provide witnesses and individuals
pursuant to SECTION 10.2 and the transfer of Privileged Information to
Allegiance pursuant to this Agreement shall not be deemed a waiver of any
Privilege that has been or may be asserted under this SECTION 10.5 or otherwise.
Nothing in this Agreement shall operate to reduce, minimize or condition the
rights granted to Xxxxxx in, or the obligations imposed upon Allegiance by, this
SECTION 10.5.
ARTICLE XI. CONDITIONS PRECEDENT TO SPIN-OFF
The obligation of Xxxxxx to effect the Spin-Off is subject to the
satisfaction or the waiver by Xxxxxx (if permissible) at or prior to the Spin-
Off Date of each of the following conditions:
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Section 11.1 TAX RULING. Xxxxxx shall have received a ruling from
the United States Internal Revenue Service or, at Xxxxxx'x discretion, an
opinion of tax counsel, substantially to the effect that no income, gain or loss
will be recognized by Xxxxxx or its stockholders (other than with respect to
cash received in lieu of fractional shares) upon the distribution to Xxxxxx'x
stockholders of shares of Allegiance Common Stock.
Section 11.2 NO ACTIONS. No action shall have been instituted or
threatened by or before any court or administrative body to restrain, enjoin or
otherwise prevent the Spin-Off or the other transactions contemplated hereby
(including but not limited to a stop order with respect to the effectiveness of
the Registration Statement), and no order, injunction or decree issued by any
court of competent jurisdiction shall be in effect restraining the Spin-Off or
such other transactions.
Section 11.3 NYSE LISTING. The Allegiance Shares shall have been
approved for listing on the NYSE, subject to official notice of issuance.
Section 11.4 OPINIONS OF FINANCIAL ADVISOR. The Board of Directors
of Xxxxxx shall have received written opinions of CS First Boston Corporation to
the effect that (i) the Spin-Off will not have a material adverse effect on the
financial viability of Xxxxxx after the Spin-Off or of Allegiance through the
period ending December 31, 1998 and (ii) the Spin-Off is fair to the
stockholders of Xxxxxx from a financial point of view, which opinions shall not
have been withdrawn or modified.
Section 11.5 CONSENTS. All material authorizations, consents,
approvals and clearances of all federal, state, local and foreign governmental
agencies required to permit the valid consummation of the transactions
contemplated herein shall have been obtained without any conditions being
imposed that would have a material adverse effect on Allegiance.
Section 11.6 REGISTRATION STATEMENT. The Registration Statement
shall have become effective and no stop order shall have been issued or
threatened.
Section 11.7 NEW CREDIT FACILITY. The definitive agreements
governing the Allegiance Credit Facility shall have been executed.
Section 11.8 PRE-SPIN-OFF TRANSACTIONS. The pre-Spin-Off
transactions contemplated by ARTICLES III, IV and V of this Agreement shall have
been consummated in all material respects.
Section 11.9 ANCILLARY AGREEMENTS. Each of the Tax Sharing Agreement
and the Operating Agreements shall have been
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executed and each of such agreements shall be in full force and effect.
Section 11.10 RESIGNATIONS. Xxxxxx shall cause all of its designees
to resign or to be removed as officers and from all Boards of Directors or
similar governing bodies of Allegiance and its Affiliates and any Transferred
Subsidiary on which they serve.
Section 11.11 BOARD APPROVAL. The Board of Directors of Xxxxxx shall
have approved the declaration of the Spin-Off.
Section 11.12 ELECTION OF ALLEGIANCE BOARD. The Board of Directors
of Allegiance as set forth on EXHIBIT J shall have been duly elected.
Section 11.13 SATISFACTION OF CONDITIONS. The satisfaction of such
conditions shall not create any obligations on the part of Xxxxxx or any other
party hereto to effect the Spin-Off or in any way limit Xxxxxx'x power of
termination set forth in SECTION 15.9.
ARTICLE XII. EXPENSES; TAXES
Section 12.1 ALLOCATION OF EXPENSES. (a) Except as otherwise
provided in this Agreement or any other agreement contemplated hereby, or as
otherwise agreed to in writing by the Parties, all fees and expenses incurred in
connection with the transactions contemplated hereby or thereby shall be paid by
Xxxxxx. Specifically, (i) Xxxxxx shall absorb all costs associated with the
dedication of internal resources and personnel to such transactions at all times
prior to the Spin-Off Date, (ii) Xxxxxx will pay all fees and expenses which are
directly related to the implementation of the Spin-Off transactions on or prior
to the Spin-Off Date, and certain agreed software contractor fees and expenses
after the Spin-Off, and (iii) Allegiance will pay all fees and expenses with
respect to services for which Allegiance procures and receives the primary
benefit prior to and after the Spin-Off Date.
(b) Notwithstanding SECTION 12.1(a) above, Xxxxxx shall be solely
responsible for the following costs incurred in connection with the transactions
contemplated hereby: (i) the reasonable fees and expenses of Sidley & Austin in
connection with its representation of Xxxxxx; (ii) the reasonable fees and
expenses of Skadden, Arps, Slate, Xxxxxxx & Xxxx in connection with its
representation of Xxxxxx relating to the tax ruling and the opinion of counsel
on tax matters; (iii) the reasonable fees and expenses of Xxxxxxx Xxxxx & Co.,
First Chicago Bank and Bank of America, N.A. relating to their financial
advisory services
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rendered to Xxxxxx; (iv) the reasonable fees and expenses of CS First Boston
Corporation and Xxxxxx Brothers Inc. relating to their financial advisory
services rendered to Xxxxxx; (v) the reasonable fees and expenses of Price
Waterhouse LLP in connection with its audit and tax services rendered to Xxxxxx;
(vi) the reasonable fees and expenses of Towers, Xxxxxx and Xxxxxx Associates in
connection with their consulting services relating to benefits plans rendered to
Xxxxxx; (vii) all SEC registration and "blue sky" filing fees associated with
the Registration Statement; (viii) the printing, mailing and distributing the
Information Statement to Xxxxxx'x stockholders; (ix) the reasonable fees and
expenses of Allegiance's transfer agent and registrar relating to the initial
issuance of Allegiance Shares as a dividend to Xxxxxx'x stockholders, (x) the
NYSE listing fees for the Allegiance Shares; (xi) the design and initial
printing of certificates of the Allegiance Shares; (xii) the initial
distribution of the certificates of Allegiance Common Stock as a dividend to
Xxxxxx stockholders; (xiii) the development, search and registration of the name
"Allegiance"; (xiv) third party vendors for software licenses; (xv) retention
bonuses to employees in the amount of $5,271,174; (xvi) employee relocation
expenses in an amount not to exceed $3,500,000; and (xvii) various international
professional services directly related to the Spin-Off transactions.
(c) Notwithstanding SECTION 12(a)(i) above, Allegiance shall be
solely responsible for all fees, expenses and other costs incurred in connection
with the transactions contemplated hereby related to: (i) the reasonable fees
and expenses of XxXxxxxxx, Will & Xxxxx in connection with its representation of
Allegiance relating to the creation of benefits plans; (ii) the reasonable fees
and expenses of Bank of America, N.A. relating to their syndication and
arrangement of revolving credit facilities for Allegiance; (iii) the reasonable
fees and expenses of Xxxxxxx Sachs & Co. for advisory services rendered to
Allegiance; and (iv) the reasonable fees or expenses of any financial advisors
retained by Allegiance in connection with any "road shows" or presentations to
investors.
Section 12.2 TAXES. Xxxxxx will determine the amount of sales,
transfer, V.A.T. or other similar taxes or fees (including, without limitation,
all real estate, patent, copyright and trademark transfer taxes and real estate
recording fees but not patent, copyright and trademark recording fees) payable
in connection with the transactions contemplated by this Agreement (the
"Transaction Taxes"). Xxxxxx and/or Allegiance as the case may be, agree to
file promptly and timely the returns for such Transaction Taxes with the
appropriate taxing authorities and remit payment of the Transaction Taxes.
Subject to exceptions, if any, agreed to in the Tax Sharing Agreement,
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Xxxxxx shall be responsible for the payment of the Transaction Taxes.
Section 12.3 DIRECTORS' AND OFFICERS' INSURANCE. Xxxxxx shall use
reasonable efforts to cause the persons currently serving as officers and/or
directors of Xxxxxx or any of its Subsidiaries to be covered for a period of six
years from the Spin-Off Date by the directors' and officers' liability insurance
policy maintained by Xxxxxx (including corporate reimbursement) (PROVIDED that
Xxxxxx may substitute therefor policies of at least the same coverage and
amounts containing terms and conditions which are not less advantageous than
such policy) with respect to matters covered under the existing policy occurring
prior to the Spin-Off Date which were committed by such officers and/or
directors in their capacity as such; PROVIDED, HOWEVER, that in no event shall
Xxxxxx be required to expend with respect to any year more than 200% of the
current annual premium expended by Xxxxxx (the "Insurance Amount") to maintain
or procure insurance coverage pursuant hereto; and PROVIDED, FURTHER, that if
Xxxxxx is unable to maintain or obtain the insurance called for by this SECTION
12.3, Xxxxxx shall use reasonable efforts to obtain as much comparable insurance
as available for the Insurance Amount. In the event Xxxxxx or any of its
successors or assigns (i) consolidates with or merges into any other Person and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger, or (ii) transfers or conveys all or substantially all
of its properties and assets to any Person, then, and in each such case, to the
extent necessary, proper provision shall be made so that the successors and
assigns of Xxxxxx assume the obligations set forth in this SECTION 12.3. The
provisions of this SECTION 12.3 are intended to be for the benefit of, and shall
be enforceable by, each such officer and director and his or her heirs and
representatives. As provided in SECTION 13.5, any amount Allegiance is required
to pay to Xxxxxx as an indemnity under this Agreement is reduced to the extent
Xxxxxx receives insurance proceeds from the above coverage, but only to the
extent such proceeds are actually received by Xxxxxx.
ARTICLE XIII. SURVIVAL, INDEMNIFICATION,
CLAIMS AND OTHER MATTERS
Section 13.1 SURVIVAL. All covenants and agreements of Xxxxxx and
Allegiance contained in this Agreement shall survive the Spin-Off Date
indefinitely, unless a specific survival or other applicable period is expressly
set forth therein.
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Section 13.2 INDEMNIFICATION. (a) Xxxxxx shall indemnify, defend
and hold harmless Allegiance and each of its Affiliates, directors, officers,
employees and agents (collectively, "Allegiance Indemnified Parties") from and
against any and all Claims and Losses incurred or suffered by Allegiance (and/or
one or more of the Allegiance Indemnified Parties) in connection with or arising
out of or due to, directly or indirectly:
(i) any claim that the information included in the Registration
Statement or the Information Statement which relates to Xxxxxx or the
Retained Business is false or misleading with respect to any material fact
or omits to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, regardless of
whether the occurrence, action or other event giving rise to the applicable
matter took place prior or subsequent to the Spin-Off;
(ii) the business (other than the Allegiance Business) conducted by
Xxxxxx or its Subsidiaries, Affiliates or predecessors on or at any time
prior to the Spin-Off Date (including, but not limited to, any
environmental liabilities associated with such business);
(iii) the assets owned by Xxxxxx or its Subsidiaries other than the
Transferred Assets;
(iv) the liabilities and obligations (including the Excluded
Liabilities) of Xxxxxx or its Subsidiaries other than the Assumed
Liabilities;
(v) the breach by Xxxxxx or any of its Subsidiaries of any covenant
or agreement set forth in this Agreement or any Conveyancing Instruments,
regardless of when or where the loss, claim, accident, occurrence, event or
happening giving rise to the Claim or Loss took place, or whether any such
loss, claim, accident, or occurrence, event or happening is known or
unknown, or reported or unreported;
(vi) Xxxxxx'x reduction, elimination or failure to provide any
benefit previously provided to its employees (or employees of its
Subsidiaries) and any act or omission by Xxxxxx in connection with the
transfer of assets and liabilities from the Xxxxxx Savings Plan to the
Allegiance Retirement Plan;
(vii) the indemnifiable matters set forth in SECTION 7.11(iii).
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(b) Allegiance shall indemnify, defend and hold harmless Xxxxxx and
each of its Affiliates, directors, officers, employees and agents (collectively,
"Xxxxxx Indemnified Parties") from and against any and all Claims and Losses
incurred or suffered by Xxxxxx (and/or one or more of the Xxxxxx Indemnified
Parties) in connection with or arising out of or due to, directly or indirectly:
(i) any claim that the information included in the Registration
Statement or Information Statement which relates to the Allegiance Business
is false or misleading with respect to any material fact or omits to state
any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading, regardless or whether the occurrence, action or
other event giving rise to the applicable matter took place prior to or
subsequent to the Spin-Off Date;
(ii) the Allegiance Business as conducted by Xxxxxx or its
Subsidiaries, Affiliates or predecessors on or at any time prior to the
Spin-Off Date;
(iii) the Transferred Assets;
(iv) the Assumed Liabilities;
(v) the Transferred Subsidiaries;
(vi) the breach by Allegiance or any of its Subsidiaries of any
covenant or agreement set forth in this Agreement or any Conveyancing
Instrument, regardless of when or where the loss, claim, accident,
occurrence, event or happening giving rise to the Claim or Loss took place,
or whether any such loss, claim, accident, occurrence, event or happening
is known or unknown, or reported or unreported;
(vii) the employee benefits provided or the actions taken or omitted
to be taken with respect thereto in connection with this Agreement or
otherwise relating to the provision of employee benefits to employees or
former employees of Allegiance (or its Subsidiaries), their beneficiaries,
alternate payees or any other person claiming benefits through them (except
to the extent such Claims or Losses are specifically allocated to Xxxxxx
pursuant to SECTION 13.2(a)(vi)), including without limitation Claims or
Losses arising in connection with (1) Allegiance's reduction, elimination
or failure to provide any benefit previously provided to its employees or
employees of any of its Subsidiaries and (2) the transfer of account
balances from the Xxxxxx Savings Plan to the Allegiance Retirement
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Plan where such Claims or Losses are incurred as a result of (1) any act or
omission by Allegiance (or Allegiance's representative) or (2) a
determination by the Internal Revenue Service that the Allegiance
Retirement Plan is not a tax-qualified plan;
(viii) the indemnifiable matters set forth in SECTIONS 6.3, 7.4 and
7.11(iii);
(ix) any use of, access to or reliance upon the technical information
or data made available to Allegiance or its Subsidiaries pursuant to
SECTION 10.1(b); or
(x) the Unassigned Indemnifiable Contracts.
(c) EXCEPT AS EXPRESSLY PROVIDED HEREIN, THE INDEMNITY OBLIGATION
UNDER THIS SECTION 13.2 SHALL APPLY NOTWITHSTANDING ANY INVESTIGATION MADE BY OR
ON BEHALF OF ANY INDEMNIFIED PARTY AND SHALL APPLY WITHOUT REGARD TO WHETHER THE
LOSS, LIABILITY, CLAIM, DAMAGE, COST OR EXPENSE FOR WHICH INDEMNITY IS CLAIMED
HEREUNDER IS BASED ON STRICT LIABILITY, ABSOLUTE LIABILITY OR ARISES AS AN
OBLIGATION FOR CONTRIBUTION.
(d) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO
EVENT SHALL XXXXXX BE LIABLE TO ALLEGIANCE (OR ANY ALLEGIANCE INDEMNIFIED
PARTY), OR ALLEGIANCE BE LIABLE TO XXXXXX (OR ANY XXXXXX INDEMNIFIED PARTY),
UNDER THIS AGREEMENT FOR ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL
(EXCEPT WITH RESPECT TO LIABILITY UNDER SECTION 7.11 HEREOF) OR PUNITIVE
DAMAGES, INCLUDING, WITHOUT LIMITATION, LOSS OF ANTICIPATED PROFITS OR LOSS OR
DIMINUTION OF REVENUES, REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT,
TORT OR OTHERWISE, EXCEPT TO THE EXTENT THAT SUCH LIABILITY HAS BEEN ASSERTED BY
A THIRD PARTY AGAINST A PARTY ENTITLED TO INDEMNIFICATION HEREUNDER.
Section 13.3 PROCEDURE FOR INDEMNIFICATION. (a) If any third party
shall make any claim or commence any arbitration proceeding or suit against any
one or more of the Indemnified Parties with respect to which an Indemnified
Party intends to make any claim for indemnification against Allegiance under
SECTION 13.2(b) or against Xxxxxx under SECTION 13.2(a), such Indemnified
Parties shall promptly give written notice to the Indemnifying Party of such
third party claim, arbitration proceeding or suit and the following provisions
shall apply.
(b) The Indemnifying Party shall have 20 business days after receipt
of the notice referred to in SECTION 13.3(a) to notify the Indemnified Party
that it elects to conduct and control the defense of such claim, proceeding or
suit. If the Indemnifying Party does not give the foregoing notice, the
Indemnified Party shall have the right to defend, contest, settle
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or compromise such claim, proceeding or suit in the exercise of its exclusive
discretion subject to the provisions of SECTION 13.3(c), and the Indemnifying
Party shall, upon request from any of the Indemnified Parties, promptly pay to
such Indemnified Parties in accordance with the other terms of this SECTION
13.3(b) the amount of any Claim or Loss resulting from their liability to the
third party claimant. If the Indemnifying Party gives the foregoing notice, the
Indemnifying Party shall have the right to undertake, conduct and control,
through counsel reasonably acceptable to the Indemnified Party, and at its sole
expense, the conduct and settlement of such claim, proceeding or suit, and the
Indemnified Party shall cooperate with the Indemnifying Party in connection
therewith, PROVIDED that (i) the Indemnifying Party shall not thereby permit any
lien, encumbrance or other adverse charge to thereafter attach to any asset of
any Indemnified Party; (ii) the Indemnifying Party shall not thereby permit any
injunction against any Indemnified Party; (iii) the Indemnifying Party shall
permit the Indemnified Party and counsel chosen by the Indemnified Party and
reasonably acceptable to the Indemnifying Party to monitor such conduct or
settlement and shall provide the Indemnified Party and such counsel with such
information regarding such claim, proceeding or suit as either of them may
reasonably request (which request may be general or specific), but the fees and
expenses of such counsel shall be borne by the Indemnified Party unless (1) the
Indemnifying Party and the Indemnified Party shall have mutually agreed to the
retention of such counsel or (2) the named parties to any such claim, proceeding
or suit include the Indemnified Party and the Indemnifying Party and in the
reasonable opinion of counsel to the Indemnified Party representation of both
parties by the same counsel would be inappropriate due to actual or likely
conflicts of interest between them, in either of which cases the reasonable fees
and disbursements of counsel for such Indemnified Party shall be reimbursed by
the Indemnifying Party to the Indemnified Party); and (iv) the Indemnifying
Party shall agree promptly to reimburse to the extent required under this
ARTICLE XIII the Indemnified Party for the full amount of any Claim or Loss
resulting from such claim, proceeding or suit and all related expenses incurred
by the Indemnified Party. In no event shall the Indemnifying Party without the
prior written consent of the Indemnified Party, settle or comprise any claim or
consent to the entry of any judgment that does not include as an unconditional
term thereof the giving by the claimant or the plaintiff to the Indemnified
Party a release from all liability in respect of such claim.
If the Indemnifying Party shall not have undertaken the conduct and
control of the defense of any claim, suit or proceeding as provided above, the
Indemnifying Party shall nevertheless be entitled through counsel chosen by the
Indemnifying Party and reasonably acceptable to the Indemnified
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Party to monitor the conduct or settlement of such claim by the Indemnified
Party, and the Indemnified Party shall provide the Indemnifying Party and such
counsel with such information regarding such action or suit as either of them
may reasonably request (which request may be general or specific), but all costs
and expenses incurred in connection with such monitoring shall be borne by the
Indemnifying Party.
(c) So long as the Indemnifying Party is contesting any such claim,
suit or proceeding in good faith, the Indemnified Party shall not pay or settle
any such claim, proceeding or suit. Notwithstanding the foregoing, the
Indemnified Party shall have the right to pay or settle any such claim,
proceeding or suit, PROVIDED that in such event the Indemnified Party shall
waive any right to indemnity therefor by the Indemnifying Party, and no amount
in respect thereof shall be claimed as a Claim or Loss under this SECTION
13.3(c).
If the Indemnifying Party shall have undertaken the conduct and
control of the defense of any claim, suit or proceeding as provided above, the
Indemnified Party, on not less than 30 days' prior written notice to the
Indemnifying Party, may make settlement (including payment in full) of such
claim and such settlement shall be binding upon the Parties hereto for the
purposes hereof, unless within said 30-day period the Indemnifying Party shall
have requested the Indemnified Party to contest such claim at the expense of the
Indemnifying Party. In such event, the Indemnified Party shall promptly comply
with such request and the Indemnifying Party shall have the right to direct the
defense of such claim or any litigation based thereon subject to all of the
conditions of SECTION 13.3(b). Anything in this SECTION 13.3(c) to the contrary
notwithstanding, if the Indemnified Party, in the belief that a claim may
materially and adversely affect it other than as a result of money damages or
other money payments, advises the Indemnifying Party that it has determined to
make settlement of a claim, the Indemnified Party shall have the right to do so
at its own cost and expense, without any requirement to contest such claim at
the request of the Indemnifying Party, but without any right under the
provisions of this SECTION 13.3(c) for indemnification by the Indemnifying
Party.
Section 13.4 DIRECT CLAIMS. Any claim for indemnity on account of a
Claim or Loss made directly by the Indemnified Party against the Indemnifying
Party and which does not result from a third party claim shall be asserted by
written notice from the Indemnified Party to the Indemnifying Party specifically
claiming indemnification hereunder. Such Indemnifying Party shall have a period
of 30 business days within which to respond thereto. If such Indemnifying Party
does not respond within such 30 business-day period, such Indemnifying Party
shall be deemed
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to have accepted responsibility to make payment and shall have no further right
to contest the validity of such claim. If such Indemnifying Party does respond
within such 30 business-day period and rejects such claim in whole or in part,
such Indemnified Party shall be free to pursue resolution as provided in ARTICLE
XIV.
Section 13.5 ADJUSTMENT OF INDEMNIFIABLE LOSSES. (a) The amount
which an Indemnifying Party is required to pay to an Indemnified Party shall be
reduced (including, without limitation, retroactively) by any insurance proceeds
and other amounts actually recovered by such Indemnified Party in reduction of
the related Claim or Loss. If an Indemnified Party shall have received an
Indemnity Payment in respect of a Claim or Loss and shall subsequently actually
receive insurance proceeds or the other amounts in respect of such Claim or
Loss, then such Indemnified Party shall pay to such Indemnifying Party a sum
equal to the lesser of (1) the amount of such insurance proceeds or other
amounts actually received and (2) the net amount of Indemnity Payments actually
received previously. The Indemnified Party agrees that the Indemnifying Party
shall be subrogated to such Indemnified Party under any insurance policy. An
insurer who would otherwise be obligated to pay any claim shall not be relieved
of the responsibility with respect thereto, or, solely by virtue of the
indemnification provisions hereof, have any subrogation rights with respect
thereto, it being expressly understood and agreed that no insurer or any other
third party shall be entitled to a "windfall" (I.E., a benefit they would not be
entitled to receive in the absence of the indemnification provisions) by virtue
of the indemnification provisions hereof.
(b) If any Indemnified Party realizes a Tax benefit or detriment in
one or more Tax periods by reason of having incurred a Claim or Loss for which
such Indemnified Party receives an Indemnity Payment from an Indemnifying Party
(or by reason of the receipt of any Indemnity Payment), then such Indemnified
Party shall pay to such Indemnifying Party an amount equal to the Tax benefit or
such Indemnifying Party shall pay to such Indemnified Party an additional amount
equal to the Tax detriment (taking into account, without limitation, any Tax
detriment resulting from the receipt of such additional amounts), as the case
may be. The amount of any Tax benefit or any Tax detriment for a Tax period
realized by an Indemnified Party by reason of having incurred a Claim or Loss
(or by reason of the receipt of any Indemnity Payment) shall be deemed to equal
the product obtained by multiplying (i) the amount of any deduction or loss or
inclusion in income for such period resulting from such Claim or Loss (or the
receipt of any Indemnity Payment or additional amount), as the case may be
(without regard to whether such deduction or loss or such inclusion in income
results in any actual decrease or increase in Tax liability for such period), by
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(ii) the highest applicable marginal Tax rate for such period (PROVIDED,
HOWEVER, that the amount of any Tax benefit attributable to an amount that is
creditable shall be deemed to equal the amount of such creditable item). Any
payment due under this SECTION 13.5(b) with respect to a Tax benefit or Tax
detriment realized by an Indemnified Party in a Tax period shall be due and
payable within 30 days from the time the return for such Tax period is due,
without taking into account any extension of time granted to the Party filing
such return.
(c) In the event that an Indemnity Payment shall be denominated in a
currency other than United States dollars, the amount of such payment shall be
translated into United States dollars using the Foreign Exchange Rate for such
currency determined in accordance with the following rules:
(i) with respect to a Claim or Loss arising from payment by a
financial institution under a guarantee, comfort letter, letter of credit,
foreign exchange contract or similar instrument, the Foreign Exchange Rate
for such currency shall be determined as of the date on which such
financial institution shall have been reimbursed;
(ii) with respect to a Claim or Loss covered by insurance, the
Foreign Exchange Rate for such currency shall be the Foreign Exchange Rate
employed by the insurance company providing such insurance in settling such
Claim or Loss with the Indemnifying Party; and
(iii) with respect to a Claim or Loss not covered by clause (i) or
(ii) above, the Foreign Exchange Rate for such currency shall be determined
as of the date that notice of the claim with respect to such Claim or Loss
shall be given to the Indemnified Party.
Section 13.6 CONTRIBUTION. If the indemnification provided for in
SECTION 13.2 is unavailable to an Indemnified Party in respect of any Claim or
Loss arising out of or related to information contained in the Registration
Statement or the Information Statement, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Claim or Loss in such
proportion as is appropriate to reflect the relative fault of Allegiance or the
Allegiance Indemnified Parties (an "Allegiance Party"), on the one hand, or
Xxxxxx or the Xxxxxx Indemnified Parties (a "Xxxxxx Party"), on the other hand,
in connection with the statements or omissions which resulted in such Claim or
Loss. The relative fault of any Allegiance Party, on the one hand, and of any
Xxxxxx Party, on the other hand, shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a
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material fact or the omission or alleged omission of a material fact or the
omission or alleged omission of a material fact relates to information about or
supplied by the Allegiance Business or an Allegiance Party, on the one hand, or
about or by the Retained Business or a Xxxxxx Party, on the other hand.
Section 13.7 NO THIRD PARTY BENEFICIARIES. Except to the extent
expressly provided otherwise in this ARTICLE XIII, the indemnification provided
for in this Agreement, the Tax Sharing Agreement or any Operating Agreement
shall not inure to the benefit of any third party or parties and shall not
relieve any insurer or other third party who would otherwise be obligated to pay
any claim or the responsibility with respect thereto or, solely by virtue of the
indemnification provisions hereof, provide any subrogation rights with respect
thereto, and each Party agrees to waive such rights against the other to the
fullest extent permitted.
Section 13.8 RELEASE OF PRE-DIVESTITURE LIABILITIES. Each of Xxxxxx
and Allegiance does hereby for itself, its Affiliates, successors and assigns,
remise, release and forever discharge each other Party, its Affiliates,
successors and assigns and all Persons who at any time prior to the Spin-Off
Date have been shareholders, directors, officers, agents or employees of any
such other Party or Affiliate, their heirs, executors, administrators and
assigns, any and all claims, debts, demands, actions, causes of action, suits,
sum or sums of money, accounts, reckonings, bonds, specialties, indemnities,
exonerations, covenants, contracts, controversies, agreements, obligations,
promises, doings, omissions, variances, damages, executions and liabilities
whatsoever, both at law and in equity, arising from any events in the ordinary
course of business on or prior to the Spin-Off Date and relating to the
operations of the Retained Business or the Allegiance Business, including the
transactions and all other activities to implement the Spin-Off (each of the
foregoing being hereinafter referred to as a "liability"), PROVIDED, HOWEVER,
that nothing in this SECTION 13.8 shall release (a) any Party from (i) any
liability, contingent or otherwise, transferred, assigned or allocated and
assumed, or retained in accordance with this Agreement, the Tax Sharing
Agreement or any Operating Agreement, or (ii) any liability provided in or
resulting from this Agreement, the Tax Sharing Agreement, any Operating
Agreement or any agreement between any of Xxxxxx and its Subsidiaries, on the
one hand, and Allegiance and its Subsidiaries, on the other hand, not terminated
pursuant to the Spin-Off or any other agreement between any of the Parties
entered into in contemplation that such agreement would remain in effect after
the Spin-Off, or (b) any Party from any liability for unpaid amounts for the
sale, lease, construction or receipt of goods, property or services purchased,
obtained or used by it in the ordinary course of
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business prior to the Spin-Off Date, or (c) any Party from any liability for
unpaid amounts for products or services or refunds owing on products or services
due on a value-received basis for work done at one Party's request or done on
such Party's behalf, or (d) any Party from any liability the release of which
would result in the release of any party other than a Person released pursuant
to this SECTION 13.8.
ARTICLE XIV. DISPUTE RESOLUTION
Section 14.1 ESCALATION. The Parties agree that they will attempt to
settle any claim or controversy arising out of this Agreement through good faith
negotiations in the spirit of mutual cooperation between business executives
with authority to resolve the controversy. Subject to the provisions set forth
in SECTION 7.7, prior to taking action as provided in SECTION 14.2, the Parties
first shall submit such claim or controversy to an appropriate corporate officer
of each Party for resolution, and if such corporate officers are unable to
resolve such claim or controversy, either Party may request that their
respective chief executive officers, or their respective delegees, attempt to
resolve the dispute. The officers or delegees to whom any such claim or
controversy is submitted shall attempt to resolve the dispute through good faith
negotiations over a reasonable period, not to exceed 30 days in the aggregate
unless otherwise agreed. Such 30 day period shall be deemed to commence on the
date of a notice from either Party describing the particular claim or
controversy. If any claim or controversy relates to invoiced services and
products, a late payment fee equal to 1% per month will accrue on all
outstanding balances. The late payment fee shall accrue from date when such
services and products are due for payment until the time when such payment is
actually made or settled upon resolution of the dispute.
Section 14.2 ARBITRATION. Subject to the provisions set forth in
SECTION 7.7, any dispute that is not resolved by negotiations pursuant to
SECTION 14.1 will, upon the written request of either Party, be resolved by
binding arbitration conducted in accordance with the Rules of the CPR Institute
for Dispute Resolution by a sole arbitrator who is a former federal judge or
other mutually agreed upon individual. Such arbitrator shall set a schedule for
determination of such dispute that is reasonable under the circumstances. Such
arbitrator shall determine the dispute in accordance with this Agreement and the
substantive rules of law (but not the rules of procedure) that would be applied
by a federal court sitting in Illinois. The arbitration shall take place in
Lake County, Illinois. The arbitration will be governed by the United States
Arbitration Act, 9 U.S.C. Sections 1-16 and the Patent Arbitration Act, 35
U.S.C. Section 294. Judgment upon the award rendered by the arbitrator may be
- 81 -
entered by any court having jurisdiction. Where this Agreement provides for
future agreement by the parties, failure to reach such agreement shall not
constitute a dispute subject to the provisions of this SECTION 14.2 except as
expressly provided otherwise.
Section 14.3 INJUNCTIVE RELIEF. Nothing contained in this ARTICLE
XIV shall prevent either Party from resorting to judicial process if injunctive
or other equitable relief from a court is necessary to prevent serious and
irreparable injury to one Party or to others. The use of arbitration procedures
will not be construed under the doctrine of laches, waiver or estoppel to affect
adversely either Party's right to assert any claim or defense.
ARTICLE XV. MISCELLANEOUS PROVISIONS
Section 15.1 ENTIRE AGREEMENT. This Agreement, the Tax Sharing
Agreement, the Operating Agreements and the Conveyancing Instruments constitute
the only agreements between the Parties with respect to the subject matter
hereof, there being no prior written or oral promises or representations not
incorporated herein or therein.
Section 15.2 CHOICE OF LAW. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Illinois and
the federal laws of the United States of America applicable therein, as though
all acts and omissions related hereto occurred in Illinois. Any lawsuit arising
from or related to this Agreement shall only be brought in the United States
District Court for the Northern District of Illinois or the Circuit Court of
Lake County, Illinois. To the extent permissible by law, the Parties hereby
consent to the jurisdiction and venue of such courts. Each Party hereby waives,
releases and agrees not to assert, and agrees to cause its Affiliates to waive,
release and not assert, any rights such Party or its Affiliates may have under
any foreign law or regulation that would be inconsistent with the terms of this
Agreement as governed by Illinois law.
Section 15.3 AMENDMENT; WAIVER. No amendment or modification of the
terms of this Agreement shall be binding on either Party unless reduced to
writing and signed by an authorized representative of the Party to be bound.
The waiver by either Party of any particular default by the other Party shall
not affect or impair the rights of the Party so waiving with respect to any
subsequent default of the same or a different kind; nor shall any delay or
omission by either Party to exercise any right arising from any default by the
other affect or impair
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any rights which the nondefaulting Party may have with respect to the same or
any future default.
Section 15.4 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall be ineffective in such
jurisdiction to the extent of such prohibition or unenforceability without
affecting, impairing or invalidating the remaining provisions or the
enforceability of this Agreement.
Section 15.5 COUNTERPARTS. For convenience of the Parties, this
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original for all purposes.
Section 15.6 RECORDS RETENTION. Each Party will retain all
information obtained or created in the course of performance hereunder in
accordance with the records retention guidelines of the other Party existing
from time to time; PROVIDED, HOWEVER, that such information shall be retained
for a period of at least ten years following the date hereof. Each Party has
advised the other of its respective guidelines as in effect on the Spin-Off Date
and will advise the other Party of any subsequent changes therein. Each Party
shall provide 30 days' prior notice to the other Party before destroying any
such information. The provisions of this SECTION 15.6 shall not prejudice the
rights or alter the obligations of the Parties under the Tax Sharing Agreement
or any of the Operating Agreements with respect to records retention.
Section 15.7 BENEFICIARIES. Except for the provisions of SECTIONS
12.3 and 13.2 hereof, this Agreement is solely for the benefit of the Parties
and their respective Affiliates, successors and permitted assigns and shall not
confer upon any other Person any remedy, claim, liability, reimbursement or
other right in excess of those existing without reference to this Agreement.
Nothing in this Agreement shall obligate Baxter, Allegiance or any of their
respective direct or indirect Subsidiaries to assist any Allegiance Employee to
enforce any rights such employee may have with respect to any of the employee
benefits described in this Agreement.
Section 15.8 NOTICES. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly given upon receipt) by delivery in person, by cable,
telegram, telex, facsimile or other standard form of telecommunications, or by
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
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If to Baxter:
Xxxxxx International Inc.
Xxx Xxxxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
If to Allegiance:
Allegiance Corporation
0000 Xxxxxxxx Xxxx
XxXxx Xxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
Section 15.9 TERMINATION. Notwithstanding any provision hereof, this
Agreement may be terminated and the Spin-Off abandoned at any time prior to the
Spin-Off Date by and in the sole discretion of the Board of Directors of Baxter
without the approval of any Person. In the event of such termination, no Party
shall have any liability to any Person by reason of this Agreement, except that
Baxter shall be liable for any costs and expenses, including attorneys' fees,
incurred by Allegiance or its Subsidiaries prior to or arising out of such
termination.
Section 15.10 PERFORMANCE. Each Party shall cause to be performed,
and hereby guarantee the performance of, all actions, agreements and obligations
set forth herein to be performed by any Subsidiary or Affiliate of such Party.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to
be signed by their authorized representatives as of the date first above
written.
XXXXXX INTERNATIONAL INC.
By:
--------------------------------------
Xxxxxx X. Xxxxxx Xx.
Chairman and Chief Executive Officer
ALLEGIANCE CORPORATION
By:
--------------------------------------
Xxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
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EXHIBIT A
THE TRANSFERRED BUSINESS
The marketing, sales and distribution of healthcare, surgical,
patient-care and clinical laboratory products for various manufacturers to
hospitals and non-hospital customers in the United States, including without
limitation Hospital Supply/Scientific Products, Hospitex, network sales and
support services and specialized distribution (the "Distribution Business").
The research, development, testing and manufacture of surgical and
medical products of the type manufactured by the following Baxter business
units: Converters/Custom Sterile, Respiratory, Gloves, Medi-Vac, Special
Procedures, Thermal, X. Xxxxxxx and Urology (the "Surgical Business").
Health care cost-containment and management programs for medical and
related supplies and services, including without limitation ValueLink-Registered
Trademark- services, risk sharing, PBDS Service, sterile processing, textile
cost management and clinical consulting (the "Cost Management Business").
The Surgical Business, the Cost Management Business and the
Distribution Business shall be known as the "Transferred Business."
EXHIBIT B
TRANSFERRED SERVICES
The services provided by Allegiance or its Subsidiaries under the
agreements listed as items A1, A2 and A3 in EXHIBIT D hereto.
EXHIBIT C
TRANSFERRED SUBSIDIARIES
Alco, Inc.
Eurovac Ltd.
Euromedical Industries Senderihan Berhad
Cirmex de Chihuahua S.A. de C.V.
Cirpro de Delicios S.A. de C.V.
Convertors de Mexico S.A. de C.V.
Quiroproductos de Xxxxxxxxxx S.A. de C.V.
Productos Urologos de Mexico S.A. de C.V.
Allegiance Healthcare Sdn. Bhd.
Allegiance Sante , S.A.
Allegiance Healthcare Deutschland Gmbh
Allegiance Healthcare Canada Inc.
Allegiance Healthcare Corporation
Allegiance Healthcare International Inc.
EXHIBIT D
OPERATING AGREEMENTS
I. SERVICES AGREEMENTS
A. ALLEGIANCE PROVIDED SERVICES
1. Administrative Services Agreement (Albuquerque U.S.)
2. Communication and Information Services Agreement
X. XXXXXX PROVIDED SERVICES
1. Transition Services Agreement (U.S.)
2. Transition Services Agreement (International)
3. Research and Development Agreement
4. Information Services Agreement
C. INTERNATIONAL SERVICES
1. France Services Agreement
2. Germany Services Agreement
3. Administrative Services Agreement (Albuquerque Canada)
4. Malta Services Agreement
II. DISTRIBUTION AGREEMENTS
A. DOMESTIC DISTRIBUTION AGREEMENTS
1. Agency, Services and Distribution Agreement (IV Systems)
2. Agency, Services and Distribution Agreement (Renal)
3. Services and Distribution Agreement (CVG)
4. Agency, Services and Distribution Agreement (Biotech)
5. Sales Services Agreement (Flip)
6. Replenishment Center Distribution Agreement
7. Agency Model Fixed Fee Cost Management Letter
8. Replenishment Center Letter Agreement
B. INTERNATIONAL DISTRIBUTION AGREEMENTS
1. International Distribution Agreement (Distribution)
2. International Distribution Agreement ("Profit Split")
3. International Distribution Agreement (France)
4. International Distribution Agreement (Germany)
5. International Distribution Agreement (Canada)
6. International Sales Promotion Agreement (France)
7. International Sales Promotion Agreement (Germany)
C. OPERATING AGREEMENT: CANADA
III. CONTRACT MANUFACTURING AGREEMENTS
1. Manufacturing Agreement (Baxter Manufactured Products/Baxter
Owned Specifications-Domestic)
2. Manufacturing Agreement (Baxter Manufactured Products/Allegiance
Owned Specifications-Domestic)
3. Manufacturing Agreement (Allegiance Manufactured
Products/Allegiance Owned Specifications)
4. Manufacturing Agreement (Allegiance Manufactured Products/Baxter
Owned Specifications)
5. Manufacturing Agreement (Baxter Manufactured Products/Allegiance
Owned Specifications-Puerto Rico)
6. Manufacturing Agreement (Baxter Manufactured Products/Allegiance
Owned Specifications-Moscow)
IV. LEASES
1. Sublease by BHC to AHC of space at Lake-Cook Road facility.
2. Sublease by AHC to BHC of space in Romulus, Michigan facility.
3. Lease by AHC to BHC of Building R in XxXxx Park.
4. Lease by BHC to AHC of 00000 Xxx Xxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx
(leased premises to be transferred to AHC upon municipal approval
of subdivision).
EXHIBIT E
TAX SHARING AGREEMENT
See attached.
EXHIBIT F
JUNE 30, 1996 BALANCE SHEET
See attached.
EXHIBIT G
CERTIFICATE OF INCORPORATION OF ALLEGIANCE
See attached.
EXHIBIT H
BY-LAWS OF ALLEGIANCE
See attached.
EXHIBIT I
ALLEGIANCE PREFERRED SHARE
PURCHASE RIGHTS PLAN
See attached.
EXHIBIT J
ALLEGIANCE BOARD OF DIRECTORS
Xxxxxxx X. Xxxxx
Xxxxx X. Xxxxxxxx
Xxxxxx Xxxxxx, Ph.D.
Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. X'Xxxxxxxx
ANNEX A
GLOBE BUILDING MATERIALS, INC.
"Miscellaneous" Stockholders
Common Stock Preferred Stock
------------ ---------------
Xxxxxx Xxxxxxx 75 shares (3%)
Xxxxxx Xxxxxxxxx 12 shares (Greater than 1%)
Xxxxxx Xxxxxxx 34 shares (1%)
Xxxxx Xxxxxxx 41 shares (2%)
Xxxx XxXxxxx 6 shares (Greater than 1%)
Xxxxx Xxxxxx 18 shares (1%) 5,748 shares (23.5%)
Xxx and Xxxx Xxxxxx 16 shares (1%)
Xxxx Xxxxxxxx 2 shares (Greater than 1%)
Xxxxxxx Xxxxxxxx 5 shares (Greater than 1%)
Xxxxx Xxxxxxxx 1,534 shares (6.3%)
Xxxx Xxxxxxx 34 shares (1%)
North Atlantic Life 17 shares (1%) 2,199 shares (9.0%)
Insurance Company of
America
Northwest National 48 shares (2%) 4,398 shares (18.0%)
Life Insurance
Company
Northern Life 28 shares (1%) 3,665 shares (15.0%)
Insurance Co.
Northwest National 18 shares (1%) 4,398 shares (18.0%)
Life Insurance Co.
(#5)
Xxxxxx Xxxxxxxxx 9 shares (Greater than 1%)
Xxxxxx Xxxxxxxxx 9 shares (Greater than 1%)
Xxxxx Xxxxxxxxx 1 share (Greater than 1%) 236 shares (1.0%)
Xxx Xxxx 1 share (Greater than 1%)
Xxxxxx Xxxxxx 119 shares (5%)
Xxxxxx Xxxxxx
----------------- ---------------------
491 shares (20%) 22,178 shares (90.8%)
ANNEX B
GLOBE BUILDING MATERIALS, INC.
"Miscellaneous" Stockholders
Class A (Nonvoting)
Common Stock Preferred Stock
------------ ---------------
Xxxxxxx Xxxxx 177 shares (6.7%)
Xxxxxx Xxxxxx 260 shares (9.9%)
Xxxxxx Xxxxxxx 173 shares (6.6%)
Xxxxxx Xxxxxxxxx 60 shares (2.3%)
Xxxxxx Xxxxx 60 shares (2.3%)
PJR Associates 1,684.44 shares (38.5%)
Defined Benefit
Plan No. 1
Xxxxx Xxxxx IRS 1,684.44 shares (38.5%)
------------------ -----------------------
730 shares (27.8%) 3,368.88 shares (77.0%)
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