Exhibit 10.1
DISTRIBUTION AGREEMENT
BY AND BETWEEN
XXXXXX COMMUNICATIONS, INC.,
A DELAWARE CORPORATION
AND
VENTIV HEALTH, INC.,
A DELAWARE CORPORATION
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.......................................... 1
1.01 General................................................ 1
1.02 References to Time..................................... 10
ARTICLE II CERTAIN TRANSACTIONS PRIOR TO THE DISTRIBUTION DATE.. 10
2.01 Certificate of Incorporation; By-laws.................. 10
2.02 Issuance of Stock...................................... 10
2.03 Transfer of Assets and Assumption of Liabilities....... 10
2.04 Conduct of Business Pending the Distribution Date...... 10
2.05 Refinancing............................................ 10
2.06 Registration and Listing............................... 11
ARTICLE III THE DISTRIBUTION..................................... 11
3.01 Record Date and Distribution Date...................... 11
3.02 The Agent.............................................. 11
3.03 Delivery of Share Certificates to the Agent............ 11
3.04 Distribution........................................... 12
3.05 Payment In Lieu of Fractional Shares................... 12
ARTICLE IV SURVIVAL, ASSUMPTION AND INDEMNIFICATION............. 12
4.01 Survival of Agreements................................. 12
4.02 Taxes and Employee-Related Assets and Liabilities...... 12
4.03 Assumption and Indemnification......................... 12
4.04 Procedure for Indemnification.......................... 15
4.05 Remedies Cumulative.................................... 16
ARTICLE V CERTAIN ADDITIONAL COVENANTS......................... 16
5.01 Further Assurances..................................... 16
5.02 Ventiv Board of Directors.............................. 17
5.03 Continuing Contractual Arrangements.................... 17
5.04 Intercompany Accounts.................................. 17
5.05 Cash Accounts.......................................... 17
5.06 Other Agreements....................................... 17
5.07 Transfer Taxes......................................... 17
5.08 Healthcare Services Support Agreements................. 18
ARTICLE VI ACCESS TO INFORMATION................................ 18
6.01 Provision of Corporate Records......................... 18
6.02 Access to Information.................................. 18
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TABLE OF CONTENTS
(continued)
Page
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6.03 Production of Witnesses.................................. 18
6.04 Retention of Records..................................... 19
6.05 Confidentiality.......................................... 19
ARTICLE VII EMPLOYEE BENEFITS....................................... 19
7.01 Qualified Plans.......................................... 19
7.02 [Intentionally Omitted].................................. 22
7.03 Welfare Plans............................................ 22
7.04 [Intentionally Omitted].................................. 22
7.05 [Intentionally Omitted].................................. 22
7.06 Severance Pay............................................ 23
7.07 [Intentionally Omitted].................................. 23
7.08 Post-Distribution Liabilities............................ 23
7.09 Other Balance Sheet Adjustments.......................... 23
7.10 Preservation of Rights to Amend or Terminate Plans....... 23
7.11 Reimbursement; Indemnification........................... 24
7.12 Further Transfers........................................ 24
7.13 Officers and Employees................................... 24
7.14 Employment Agreements.................................... 25
7.15 Other Liabilities........................................ 25
7.16 Compliance............................................... 25
ARTICLE VIII NO REPRESENTATIONS OR WARRANTIES; EXCEPTIONS 25
8.01 No Representations or Warranties; Exceptions............. 25
ARTICLE IX INSURANCE............................................... 26
9.01 Insurance Policies and Rights Included Within Healthcare
Services Assets.......................................... 26
9.02 Post-Distribution Date Claims............................ 26
9.03 Administration and Reserves.............................. 26
9.04 Insurance Premiums....................................... 27
9.05 Allocation of Insurance Proceeds; Cooperation............ 27
9.06 Reimbursement of Expenses................................ 27
9.07 Insurer Insolvency....................................... 28
9.08 Letters of Credit........................................ 28
9.09 No Reduction of Coverage................................. 28
9.10 Future Insurance Coverage................................ 28
9.11 Assistance, Waiver of Conflict and Shared Defense........ 28
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TABLE OF CONTENTS
(continued)
Page
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ARTICLE X MISCELLANEOUS........................................ 28
10.01 Conditions to Obligations............................. 28
10.02 Complete Agreement.................................... 30
10.03 Expenses.............................................. 30
10.04 Governing Law......................................... 30
10.05 Notices............................................... 30
10.06 Amendment and Modification............................ 31
10.07 Successors and Assigns; No Third-Party Beneficiaries.. 31
10.08 Counterparts.......................................... 31
10.09 Interpretation........................................ 31
10.10 Legal Enforceability.................................. 31
10.11 References; Construction.............................. 32
10.12 Termination........................................... 32
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DISTRIBUTION AGREEMENT
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This DISTRIBUTION AGREEMENT, dated as of September __, 1999, between Xxxxxx
Communications, Inc., a Delaware corporation ("Xxxxxx") and Ventiv Health, Inc.
(formerly known as Xxxxxx Healthcare Services, Inc.), a newly formed Delaware
corporation which is a wholly-owned subsidiary of Xxxxxx ("Ventiv").
W I T N E S S E T H:
WHEREAS, the Boards of Directors of Xxxxxx and Ventiv have determined that it is
appropriate and desirable: (i) to consolidate into Ventiv certain of the
businesses currently conducted by Xxxxxx through certain of its subsidiaries;
and (ii) to distribute to the holders of the issued and outstanding shares of
common stock, par value $0.001 per share, of Xxxxxx all of the issued and
outstanding shares of common stock, par value $0.001 per share, of Ventiv in
accordance with Article III hereof (the "Distribution");
WHEREAS, the Distribution is intended to qualify as a tax-free spinoff under
Section 355 of the Internal Revenue Code of 1986, as amended; and
WHEREAS, the parties hereto have determined that it is necessary and desirable
to set forth the principal corporate transactions required to effect the
Distribution and to set forth other agreements that will govern certain other
matters prior to or following the Distribution;
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained and intending to be legally bound thereby, the parties hereto agree as
follows:
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ARTICLE I
DEFINITIONS
1.01 GENERAL. As used in this Agreement, the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined):
Affiliate: with respect to any specified Person, a Person that directly,
or indirectly through one or more intermediaries, controls, is controlled
by, or is under common control with, such specified Person;
provided, however, that for purposes of this Agreement, no member of
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either
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Group shall be deemed to be an Affiliate of any member of the other
Group.
Agent: American Stock Transfer and Trust Company.
Asset: any and all assets and properties, tangible or intangible,
including the following: (1) cash, notes and accounts receivable (whether
current or non-current); (2) certificates of deposit, banker's
acceptances, stock, debentures, evidences of indebtedness, certificates
of interest or participation in profit-sharing agreements, collateral-
trust certificates, preorganization certificates or subscriptions,
transferable shares, investment contracts, voting-trust certificates,
fractional undivided interests in oil, gas or other mineral rights, puts,
calls, straddles, options and other securities of any kind; (3) trade
secrets, confidential information, registered and nonregistered
trademarks, service marks, service names, trade styles and trade names,
product bar codes and associated goodwill; statutory, common law and
registered copyrights; applications for any of the foregoing, rights to
use the foregoing and other rights in, to and under the foregoing; (4)
rights under leases, contracts, licenses, permits, distribution
arrangements, sales and purchase agreements, other agreements and
business arrangements; (5) real estate and buildings and other
improvements thereon; (6) leasehold improvements, fixtures, trade
fixtures, machinery, equipment (including transportation and office
equipment), tools and furniture; (7) office supplies, production
supplies, spare parts, other miscellaneous supplies and other tangible
property of any kind; (8) raw materials, work-in-process, finished goods,
consigned goods and other inventories; (9) prepayments or prepaid
expenses; (10) claims, causes of action, choses in action, rights of
recovery and rights of set-off of any kind; (11) the right to receive
mail, payments on accounts receivable and other communications; (12)
lists of advertisers, records pertaining to advertisers and accounts,
personnel records, lists and records pertaining to suppliers and agents,
and books, ledgers, files and business records of every kind; (13)
advertising materials and other printed or written materials; (14)
goodwill as a
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going concern and other intangible properties; (15) employee contracts,
including any rights thereunder to restrict an employee from competing in
certain respects; and (16) licenses and authorizations issued by any
governmental authority.
Business Day: any day other than a Saturday, a Sunday or a day on which
banking institutions located in the States of Maryland, New York or
Delaware are authorized or obligated by law or executive order to close.
Claims Administration: the processing of claims made under the Insurance
Policies, including the reporting of claims to the insurance carrier,
management and defense of claims and providing for appropriate releases
upon settlement of claims.
Code: the Internal Revenue Code of 1986, as amended, or any successor
legislation and the regulations promulgated thereunder.
Current Plan Year: the plan year or fiscal year, to the extent
applicable with respect to any Plan, during which the Distribution Date
occurs.
DGCL: the Delaware General Corporation Law.
Disclosure Document: the Registration Statement on Form 10 and the
related Information Statement.
Distribution: the distribution to holders of shares of Xxxxxx Common
Stock to be effected pursuant to Article III on the basis of one share of
Ventiv Common Stock for every three shares of Xxxxxx Common Stock held of
record as of the Record Date.
Distribution Date: the date, to be determined by the Board of Directors
of Xxxxxx as of which the Distribution shall be effected.
ERISA: the Employee Retirement Income Security Act of 1974, as amended,
or any successor legislation, and any regulations promulgated thereunder.
Exchange Act: the Securities Exchange Act of 1934, as amended, together
with the rules and regulations promulgated thereunder.
Final Date: the fifteenth (15th) Business Day after the Distribution
Date.
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Foreign Exchange Rate: with respect to any currency other than United States
dollars as of any date, 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 Citibank, N.A., except that, with respect to any Indemnifiable
Loss covered by insurance, the Foreign Exchange Rate for such currency shall
be determined as set forth in Section 4.03(e)(2).
Former Xxxxxx Businesses: all of the businesses and operations (1) heretofore
but not currently conducted by any member of the Xxxxxx Group, or (2)
currently or heretofore conducted by any former Subsidiary of any such
member.
Gains Tax: the applicable foreign, state and local taxes related to any gains
from the transfer of any real property constituting Healthcare Services
Assets.
Group: the Xxxxxx Group or the Healthcare Services Group.
Healthcare Services Assets: subject to the provisions of the Other
Agreements, (1) all of the Assets held by any member of either Group
immediately prior to the Distribution Date, which Assets are used primarily
in, held for use primarily in, or necessary for, the operation of the
Healthcare Services Business, (2) all of the outstanding shares of all
classes of capital stock of the Healthcare Services Subsidiaries and (3) all
of the Assets listed on Schedule 1.01(b)(i).
Healthcare Services Business: all of the businesses conducted immediately
prior to the Distribution Date by any member of either Group and reported by
Xxxxxx in the "Healthcare Services" segment in the footnotes to the Xxxxxx
consolidated financial statements (or which would have been so reported had
it been conducted as of December 31, 1998) in the Annual Report on Form 10-K
for the year ended December 31, 1998.
Healthcare Services Claim: any claim against any Healthcare Services
Employee, Healthcare Services Individual or member of the Healthcare Services
Group with respect to any injury, loss, Liability, damage or expense that (1)
is or was incurred or asserted to have been incurred prior to the
Distribution Date in, or in connection with, the conduct of the Xxxxxx
Assets, the Healthcare Services Assets, the Xxxxxx Business or the Healthcare
Services Business, and (2) arose or may have arisen out of one or more
occurrences or events that are or may be insured or insurable under one or
more of the Xxxxxx Policies.
Healthcare Services Director: any individual who is a director of Ventiv.
Healthcare Services Employee: any individual who (1) immediately prior to
the Distribution Date is an officer or employee of any member of either Group
and (A)
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is primarily employed in the Healthcare Services Business, or (B) will be an
employee of the Healthcare Services Group immediately following the
Distribution, or (2) immediately prior to the Distribution Date is not an
officer or employee of any member of either Group but at any time prior to
the Distribution Date was an officer or employee of any member of either
Group and throughout such period was primarily employed in the Healthcare
Services Business.
Healthcare Services Free-Standing Qualified Plans: the plans listed in
Schedule 7.01(a) hereto.
Healthcare Services Group: Ventiv and the Healthcare Services Subsidiaries.
Healthcare Services Individual: any individual who (1) is a Healthcare
Services Employee or (2) is a beneficiary of any individual specified in
clause (1) above.
Healthcare Services Liabilities: subject to the provisions of the Other
Agreements, all of the Liabilities of any member of either Group (1) which
relate directly to the Healthcare Services Assets or the Healthcare Services
Business as conducted immediately prior to the Distribution Date, whether
incurred or arising prior to, on or after, the Distribution Date, (2) which
are specifically assumed by Ventiv under an express provision of this
Agreement or (3) which are listed on Schedule 1.01(b)(ii).
Healthcare Services Option Plan: a new Plan to be adopted by Ventiv in
connection with the Distribution, pursuant to which, among other things,
options to purchase shares of Ventiv Common Stock, and restricted shares of
Ventiv Common Stock, may be granted to Healthcare Services Employees and
Healthcare Services Directors.
Healthcare Services Plan: any Plan maintained or contributed to by any
member of either Group prior to the Distribution Date primarily for the
benefit of Healthcare Services Employees.
Healthcare Services Policies: all Insurance Policies, current and past,
which relate to the Healthcare Services Business and do not relate to the
Xxxxxx Business, including the Insurance Policies listed on Schedule 1.01(c).
Healthcare Services Qualified Plan: a Qualified Plan that (1) will be
sponsored or maintained by any member of the Healthcare Services Group, (2)
will provide benefits for Healthcare Services Individuals who, immediately
prior to the Distribution Date, are active or inactive participants in or
otherwise entitled to benefits under any Joint Qualified Plan or Healthcare
Services Free-Standing Qualified Plan and (3) is expected to provide benefits
substantially identical to those provided by the Joint Qualified Plan or
Healthcare Services Free-Standing Qualified Plan in which such Healthcare
Services Individual currently participates.
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Healthcare Services Restricted Stock: shares of Ventiv Common Stock issued
to an individual pursuant to the Healthcare Services Option Plan subject to
forfeiture in the event that certain terms and conditions are not satisfied.
Healthcare Services Subsidiaries: all of the corporations listed on Schedule
1.01(d).
Healthcare Services Support Agreements: any obligation or agreement of the
Xxxxxx Group under any guarantee, letter of credit, letter of comfort or
working capital maintenance agreement obtained prior to the Distribution Date
for the benefit of the Healthcare Services Business or any member of the
Healthcare Services Group.
Indemnifiable Losses: all losses, Liabilities, damages, claims, demands,
judgments or settlements of any nature or kind, known or unknown, fixed,
accrued, absolute or contingent, liquidated or unliquidated, including all
reasonable costs and expenses (legal, accounting or otherwise as such costs
are incurred) relating thereto, suffered by an Indemnitee.
Indemnifying Party: a Person who or which is obligated under this Agreement
to provide indemnification.
Indemnitee: a Person who may seek indemnification under this Agreement.
Indemnity Payment: an amount that an Indemnifying Party is required to pay
to an Indemnitee pursuant to Article IV hereof.
Information: all records, books, contracts, instruments, computer data and
other data and information.
Information Statement: the Information Statement to be sent to the holders
of Xxxxxx Common Stock as of the Record Date in connection with the
Distribution.
Insurance Administration: with respect to each Insurance Policy, (1) the
accounting for premiums (including retrospectively-rated premiums), defense
costs, indemnity payments, deductibles and retentions as appropriate under
the terms and conditions of each of the Insurance Policies, (2) the reporting
to excess insurance carriers of any losses or claims which may cause the per-
occurrence or aggregate limits of any Insurance Policy to be exceeded and (3)
the distribution of Insurance Proceeds as contemplated by this Agreement.
Insurance Policy: insurance policies and insurance contracts of any kind
that are owned or maintained by any member of either Group as the insured
interest, including primary and excess policies, comprehensive general
liability policies, automobile, aircraft and workers' compensation insurance
policies, and self-
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insurance and captive insurance company arrangements, together with the
rights, benefits and privileges thereunder.
Insurance Proceeds: those monies received by an insured from an insurance
carrier or paid by an insurance carrier on behalf of the insured, in either
case, net of any applicable premium adjustment, retrospectively- rated
premium, deductible, retention, cost or reserve paid or held by or for the
benefit of such insured.
Insured Claims: those Liabilities that, individually or in the aggregate,
are covered within the terms and conditions of any of the Insurance Policies,
whether or not subject to deductibles, coinsurance, uncollectability or
retrospectively-rated premium adjustments, but only to the extent that such
Liabilities are within applicable Insurance Policy limits, including
aggregates.
Interim Services Agreement: an interim services agreement to be entered into
between Xxxxxx and Ventiv, substantially in the form attached hereto as
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Exhibit A, with such changes as may be satisfactory to Xxxxxx and Ventiv,
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providing for the Xxxxxx Group to make available certain personnel and
services to the Healthcare Services Group for a period of time following the
Distribution Date.
IRS: the Internal Revenue Service.
Joint Qualified Plan: the plans listed in Schedule 7.01(b) hereto.
Joint Savings Plan: the plans listed in Schedule 7.01(c) hereto.
Liabilities: all debts, liabilities and obligations, whether absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising, and whether or not the same
would properly be reflected on a balance sheet, including all costs and
expenses related thereto.
Nasdaq: the Nasdaq National Market.
Ventiv: as defined in the Recitals to this Agreement.
Ventiv Common Stock: the common stock, par value $0.001 per share, of
Ventiv.
NYSE: the New York Stock Exchange, Inc.
Other Agreements: the Interim Services Agreement and the Tax Sharing
Agreement.
Person: an individual, a partnership, a limited liability company, a joint
venture, a corporation, a trust, an unincorporated organization or a
government or any department or agency thereof.
Plan: any plan, policy or arrangement or contract or agreement providing
benefits
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(including bonuses, deferred compensation, incentive compensation, savings,
stock purchases, pensions, profit sharing or retirement or other retiree
benefits, including retiree medical benefits) for any group of employees or
former employees or individual employee or former employee, or the
beneficiary or beneficiaries of any such employee or former employee, whether
formal or informal or written or unwritten and whether or not legally
binding, and including any means, whether or not legally required, pursuant
to which any benefit is provided by an employer to any employee or former
employee or the beneficiary or beneficiaries of any such employee or former
employee.
Prior Plan Year: to the extent applicable with respect to any Plan, any plan
year or fiscal year that ended on or prior to the Distribution Date.
Qualified Plan: a Plan which is an employee pension benefit plan (within the
meaning of Section 3(2) of ERISA) and which constitutes or is intended in
good faith to constitute a qualified plan under Section 401(a) of the Code.
Record Date: the date to be determined by the Board of Directors of Xxxxxx as
the record date for determining stockholders of Xxxxxx Common Stock entitled
to receive the Distribution.
Registration Statement: a registration statement on Form 10 to effect the
registration of the Ventiv Common Stock pursuant to the Exchange Act.
Representative: with respect to any Person, any of such Person's directors,
officers, employees, agents, consultants, advisors, accountants, attorneys
and representatives.
SEC: the Securities and Exchange Commission.
Securities Act: the Securities Act of 1933, as amended, together with the
rules and regulations promulgated thereunder.
Service Agreement: any third-party administrator or claims handling agreement
of any kind or nature to which any member of either Group is directly or
indirectly a party, in effect as of the date hereof, related to the handling
of Healthcare Services Claims.
Xxxxxx: as defined in the recitals to this Agreement.
Xxxxxx Assets: subject to the provisions of the Other Agreements, all of the
Assets, other than the Healthcare Services Assets, held immediately prior to
the Distribution Date by any member of either Group.
Xxxxxx Business: all of the businesses, other than the Healthcare Services
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Business, conducted immediately prior to the Distribution Date by any member of
either Group.
Xxxxxx Common Stock: the common stock, par value $0.001 per share, of Xxxxxx.
Xxxxxx Director: any individual who is a director of Xxxxxx following the
Distribution.
Xxxxxx Employee: any individual who at any time prior to the Distribution Date
is or was an officer or employee of any member of any Group, other than a
Healthcare Services Employee.
Xxxxxx Group: Xxxxxx and its Affiliates, other than members of the Healthcare
Services Group.
Xxxxxx Individual: any individual who (1) is a Xxxxxx employee, (2) at any time
prior to the Distribution Date is or was an officer or employee of any Former
Xxxxxx Business, or (3) is a beneficiary of any individual specified in clause
(1) or (2).
Xxxxxx Liabilities: subject to the provisions of the Other Agreements, all of
the Liabilities, other than the Healthcare Services Liabilities, of any member
of either Group including, without limitation, all liabilities specified on
Schedule 1.01(e).
Xxxxxx Option: an option to purchase shares of Xxxxxx Common Stock granted
pursuant to the Xxxxxx Option Plan, together with any stock appreciation right
or limited stock appreciation right issued in connection therewith.
Xxxxxx Option Plan: the 1996 Stock Incentive Plan of Xxxxxx.
Xxxxxx Plan: any Plan maintained or contributed to by any member of either Group
prior to the Distribution Date, other than a Healthcare Services Plan.
Xxxxxx Policies: all Insurance Policies, current and past, which relate to both
the Xxxxxx Business and the Healthcare Services Business, including the
Insurance Policies listed on Schedule 1.01(g).
Xxxxxx Restricted Stock: shares of Xxxxxx Common Stock issued to an individual
pursuant to the Xxxxxx Option Plan subject to forfeiture in the event that
certain terms and conditions are not satisfied.
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Subsidiary: with respect to any specified Person, any corporation or other legal
entity of which such Person or any of its Subsidiaries controls or owns,
directly or indirectly, more than fifty percent (50%) of the stock or other
equity interest entitled to vote on the election of members to the board of
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directors or similar governing body; provided, however, that for purposes of
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this Agreement, (1) the Healthcare Services Subsidiaries shall be deemed to be
Subsidiaries of Ventiv and (2) the Healthcare Services Subsidiaries shall not be
deemed to be Subsidiaries of Xxxxxx or any of Xxxxxx'x Subsidiaries.
Tax: as defined in the Tax Sharing Agreement.
Tax Sharing Agreement: a tax sharing agreement to be entered into between Xxxxxx
and Ventiv, substantially in the form attached hereto as Ehibit B, with such
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changes as may be mutually satisfactory to Xxxxxx and Ventiv.
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Third-Party Claim: any claim, suit, arbitration, inquiry, proceeding or
investigation by or before any court, any governmental or other regulatory or
administrative agency or commission or any arbitration tribunal asserted by a
Person who is not a party hereto.
Transfer Tax: the applicable foreign, state and local real estate transfer taxes
associated with the transfer of any Assets constituting Healthcare Services
Assets.
Welfare Plan: any Plan, including but not limited to the Plans listed on
Schedule 1.01(h), which is not a Qualified Plan and which provides medical,
health, disability, accident, life insurance, death, dental or other welfare
benefits, including any post-employment benefits or retiree medical benefits.
1.02 REFERENCES TO TIME. All references in this Agreement to times of the day
shall be to Washington, D.C. Time.
ARTICLE II
CERTAIN TRANSACTIONS PRIOR TO THE DISTRIBUTION DATE
2.01 CERTIFICATE OF INCORPORATION; BY-LAWS. Xxxxxx and Ventiv shall take all
action necessary so that, at the Distribution Date, the Amended and Restated
Certificate of Incorporation and By-laws of Ventiv shall be in the forms
attached hereto as Exhibit C and Exhibit D, respectively.
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2.02 ISSUANCE OF STOCK. Prior to or as of the Distribution Date, the parties
hereto shall take all steps necessary to reclassify the outstanding shares of
Ventiv Common Stock so that, except as otherwise contemplated by this Agreement,
immediately prior to
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or as of the Distribution Date the number of shares of Ventiv Common Stock
outstanding and held by Xxxxxx shall be equal to one-third (l/3) the number of
shares of Xxxxxx Common Stock outstanding on the Record Date.
2.03 TRANSFER OF ASSETS AND ASSUMPTION OF LIABILITIES. Prior to the
Distribution Date, the parties hereto shall take all action necessary to
transfer to Ventiv, and to cause Ventiv to assume, as the case may be, effective
as of the Distribution Date, (1) all of the shares of capital stock of the
Healthcare Services Subsidiaries held by the Xxxxxx Group, (2) all of the right,
title and interest of the Xxxxxx Group in the Healthcare Services Assets, and
(3) all of the Healthcare Services Liabilities, as more-fully set forth on
Schedule 2.03 hereto.
2.04 CONDUCT OF BUSINESS PENDING THE DISTRIBUTION DATE. Each of the parties
hereto agrees that from the date hereof until the Distribution Date, except as
otherwise contemplated by this Agreement, it will use its best efforts to carry
on the Healthcare Services 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 Healthcare Services Business
(including using its best efforts to cause its Subsidiaries to take such
actions).
2.05 REFINANCING. Each of the parties hereto agrees that it will use
reasonable efforts to obtain, prior to the Distribution Date, all necessary
consents, waivers or amendments to each bank credit agreement, debt security or
other financing facility to which it and its Subsidiaries is a party or by which
it or any of its Subsidiaries is bound, or to refinance such agreement, security
or facility, in each case on terms satisfactory to Xxxxxx and Ventiv and to the
extent necessary to permit the Distribution to be consummated without any
material breach of the terms of such agreement, security or facility.
2.06 REGISTRATION AND LISTING. Prior to the Distribution Date:
(a) Xxxxxx and Ventiv shall prepare the Information Statement and the
Registration Statement. Ventiv shall file the Registration Statement with
the SEC. Xxxxxx and Ventiv shall use reasonable efforts to cause the
Registration Statement to become effective under the Exchange Act as
promptly as reasonably practicable. Xxxxxx and Ventiv shall prepare the
Information Statement; and after the Registration Statement becomes
effective, Xxxxxx shall cause the Information Statement to be mailed to
the holders of Xxxxxx Common Stock as of the Record Date.
(b) The parties hereto shall use their best efforts to take all such
action as may be necessary or appropriate under state securities and
"blue sky" laws in connection with the transactions contemplated by this
Agreement.
(c) Xxxxxx and Ventiv shall prepare, and Ventiv shall file and seek to
make
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effective, an application for the listing of the Ventiv Common Stock on
Nasdaq, subject to official notice of issuance.
(d) 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 Plans contemplated hereby.
ARTICLE III
THE DISTRIBUTION
3.01 RECORD DATE AND DISTRIBUTION DATE. Subject to the satisfaction of the
conditions set forth in Section 10.01(a) hereof, the Board of Directors of
Xxxxxx shall establish the Record Date and the Distribution Date and any
appropriate procedures in connection with the Distribution.
3.02 THE AGENT. Prior to the Distribution Date, Xxxxxx shall cause the Agent to
make appropriate arrangements for, among other things, the payment of the
Distribution to the holders of Xxxxxx Common Stock in accordance with this
Article III.
3.03 DELIVERY OF SHARE CERTIFICATES TO THE AGENT. Prior to or as of the
Distribution Date, Xxxxxx shall deliver to the Agent a share certificate
representing all of the outstanding shares of Ventiv Common Stock to be
distributed in connection with the payment of the Distribution. After the
Distribution Date, upon the request of the Agent, Ventiv shall provide all
certificates for shares of Ventiv Common Stock that the Agent shall require in
order to effect the Distribution.
3.04 DISTRIBUTION. Except as otherwise contemplated by this Agreement, the
Agent shall distribute, as of the Distribution Date, one (1) share of Ventiv
Common Stock in respect of every three (3) shares of Xxxxxx Common Stock held by
holders of record of Xxxxxx Common Stock on the Record Date. All shares of
Ventiv Common Stock issued in the Distribution shall be duly authorized, validly
issued, fully paid and nonassessable.
3.05 PAYMENT IN LIEU OF FRACTIONAL SHARES. In lieu of the distribution of
fractional shares of Ventiv Common Stock to holders of record of Xxxxxx Common
Stock as of the Record Date, the parties shall cause the Agent to cause all such
fractional shares to be aggregated and the resulting shares sold for the account
of such stockholders. Such sales shall be effected as soon as practicable after
the Distribution Date. Following the sale of the aggregated fractional shares of
Ventiv Common Stock, the parties shall cause the Agent to distribute the
proceeds of the sale of the aggregated fractional shares to such
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stockholders.
ARTICLE IV
SURVIVAL, ASSUMPTION AND INDEMNIFICATION
4.01 SURVIVAL OF AGREEMENTS. All covenants and agreements of the parties hereto
contained in this Agreement shall survive the Distribution Date.
4.02 TAXES AND EMPLOYEE-RELATED ASSETS AND LIABILITIES. This Article IV shall
not be applicable to any Plan Assets or any Indemnifiable Losses or Liabilities
related to (1) Taxes which shall be governed by the Tax Sharing Agreement, or
(2) the current or former employment of any Xxxxxx Individual or Healthcare
Services Individual, or the compensation or benefits for any Xxxxxx Director or
Healthcare Services Director, under any Plan or otherwise, which shall be
governed by Article VII hereof.
4.03 ASSUMPTION AND INDEMNIFICATION.
(a) Subject to Section 4.02 hereof, the Tax Sharing Agreement and
Article VII hereof, from and after the Distribution Date, Xxxxxx shall
retain or assume, as the case may be, and shall indemnify, defend and
hold harmless each Healthcare Services Individual and each member of
the Healthcare Services Group, and each of their Representatives and
Affiliates, from and against, (1) all liabilities for third party
claims relating to, arising out of or due to, directly or indirectly,
the service by any Healthcare Services Individual as an officer,
director or employee of any member of the Xxxxxx Group prior to the
Distribution, except to the extent covered by insurance and provided
such indemnification would be permitted by law if such officer,
director or employee made a claim for indemnification, (2) all
Liabilities of the Xxxxxx Group under this Agreement or any of the
Other Agreements, and (3) all Indemnifiable Losses of any such
Healthcare Services Individual, member of the Healthcare Services
Group, Representative or Affiliate relating to, arising out of or due
to, directly or indirectly, the Xxxxxx Assets, the Xxxxxx Liabilities,
the Xxxxxx Business, the Xxxxxx Individuals or the Xxxxxx Group's
Representatives, whether relating to or arising out of occurrences
prior to, on or after the Distribution Date.
(b) Subject to Section 4.02 hereof, the Tax Sharing Agreement and
Article VII, and except as specifically provided in Section 4.03(a)
hereof, from and after the Distribution Date, Ventiv shall assume, and
shall indemnify, defend and hold harmless each Xxxxxx Individual and
each member of the Xxxxxx Group, and each of their Representatives and
Affiliates, from and against, (1) all Liabilities of the Healthcare
Services Group under this Agreement or any of the Other Agreements and
(2) all Indemnifiable Losses of any such Xxxxxx Individual, member of
the
17
Xxxxxx Group, or any Representative or Affiliate of the Xxxxxx Group
relating to, arising out of or due to, directly or indirectly, the
Healthcare Services Assets, the Healthcare Services Liabilities, the
Healthcare Services Business, the Healthcare Services Employees or the
Healthcare Services Group's Representatives, whether relating to or
arising out of occurrences prior to or after the Distribution Date.
(c) If an Indemnitee realizes a Tax benefit or detriment by reason of
having incurred an Indemnifiable Loss for which such Indemnitee
receives an Indemnity Payment from an Indemnifying Party or by reason
of receiving an Indemnity Payment, then such Indemnitee shall pay to
such Indemnifying Party an amount equal to the Tax benefit, or such
Indemnifying Party shall pay to such Indemnitee an additional amount
equal to the Tax detriment (taking into account any Tax detriment
resulting from the receipt of such additional amounts), as the case
may be. If, in the opinion of counsel to an Indemnifying Party
reasonably satisfactory in form and substance to the affected
Indemnitee, there is a substantial likelihood that the Indemnitee will
be entitled to a Tax benefit by reason of an Indemnifiable Loss, the
Indemnifying Party promptly shall notify the Indemnitee and the
Indemnitee promptly shall take any steps (including the filing of such
returns, amended returns or claims for refunds consistent with the
claiming of such Tax benefit) that, in the reasonable judgment of the
Indemnifying Party, are necessary and appropriate to obtain any such
Tax benefit. If, in the opinion of counsel to an Indemnitee reasonably
satisfactory in form and substance to the affected Indemnifying Party,
there is a substantial likelihood that the Indemnitee will be
subjected to a Tax detriment by reason of an Indemnification Payment,
the Indemnitee promptly shall notify the Indemnifying Party and the
Indemnitee promptly shall take any steps (including the filing of such
returns or amended returns or the payment of Tax underpayments
consistent with the settlement of any Liability for Taxes arising from
such Tax detriment) that, in the reasonable judgment of the
Indemnitee, are necessary and appropriate to settle any Liabilities
for Taxes arising from such Tax detriment. If, following a payment by
an Indemnitee or an Indemnifying Party pursuant to this Section
4.03(c) in respect of a Tax benefit or detriment, there is an
adjustment to the amount of such Tax benefit or detriment, then each
of Xxxxxx and Ventiv shall make appropriate payments to the other,
including the payment of interest thereon at the federal statutory
rate then in effect, to reflect adjustments.
(d) The amount which an Indemnifying Party is required to pay to any
Indemnitee pursuant to this Section 4.03 shall be reduced (including
retroactively) by any Insurance Proceeds and other amounts actually
recovered by such Indemnitee in reduction of the related Indemnifiable
Loss, it being understood and agreed that each of Xxxxxx and Ventiv
shall use its best efforts to collect any such proceeds or other
amounts to which it or any of its Subsidiaries is entitled, without
regard to whether it is the Indemnifying Party hereunder. If an
Indemnitee receives an Indemnity Payment in respect of an
Indemnifiable Loss and subsequently receives Insurance Proceeds or
other amounts in respect of such Indemnifiable Loss, then such
Indemnitee shall pay to such Indemnifying Party an amount equal to
the
18
difference between (1) the sum of the amount of such Indemnity Payment
and the amount of such Insurance Proceeds or other amounts actually
received and (2) the amount of such Indemnifiable Loss, adjusted (at
such time as appropriate adjustment can be determined) in each case to
reflect any premium adjustment attributable to such claim.
(e) If any Indemnity Payment required to be made hereunder or under
any Other Agreement is 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:
(1) with respect to an Indemnifiable 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 is reimbursed;
(2) with respect to an Indemnifiable 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 Indemnifiable Loss with the Indemnifying Party; and
(3) with respect to an Indemnified Loss not described in clause (1) or
(2) of this Section 4.03(e), the Foreign Exchange Rate for such currency
shall be determined as of the date that notice of the claim with respect
to such Indemnifiable Loss is given to the Indemnitee.
4.04 PROCEDURE FOR INDEMNIFICATION.
(a) If any Indemnitee receives notice of the assertion of any Third-
Party Claim with respect to which an Indemnifying Party is obligated
under this Agreement to provide indemnification, such Indemnitee shall
give such Indemnifying Party notice thereof promptly after becoming
aware of such Third-Party Claim; provided, however, that the failure
------------------------------------------------------
of any Indemnitee to give notice as provided in this Section 4.04
--------------------
shall not relieve any Indemnifying Party of its obligations under this
Article IV, except to the extent that such Indemnifying Party is
actually prejudiced by such failure to give notice. Such notice shall
describe such Third-Party Claim in reasonable detail and, if
practicable, shall indicate the estimated amount of the Indemnifiable
Loss that has been or may be sustained by such Indemnitee.
(b) An Indemnifying Party, at such Indemnifying Party's own expense
and through counsel chosen by such Indemnifying Party (which counsel
shall be reasonably satisfactory to the Indemnitee), may elect to
defend any Third-Party Claim; provided, however, that such an election
-----------------------------------------------
by the Indemnifying Party shall be deemed
-------------------
19
an admission of its obligation to Indemnify the Indemnitee with respect to
such Third-Party Claim. If an Indemnifying Party elects to defend a Third-
Party Claim, then, within ten (10) Business Days after receiving notice of
such Third-Party Claim (or sooner, if the nature of such Third-Party Claim so
requires), such Indemnifying party shall notify the Indemnitee of its intent
to do so, and such Indemnitee shall cooperate in the defense of such Third-
Party Claim. Such Indemnifying Party shall pay such Indemnitee's reasonable
out-of-pocket expenses incurred in connection with such cooperation. After
notice from an Indemnifying Party to an Indemnitee of its election to assume
the defense of a Third-Party Claim, such Indemnifying Party shall not be
liable to such Indemnitee under this Article IV for any legal or other
expenses subsequently incurred by such Indemnitee in connection with the
defense thereof; provided, however, that such Indemnitee shall have the right
------------------------------------------------------------
to employ one law firm as counsel to represent such Indemnitee (which firm
-----------------
shall be reasonably acceptable to the Indemnifying Party) if, in such
Indemnitee's reasonable judgment, either a conflict of interest between such
Indemnitee and such Indemnifying Party exists in respect of such claim or
there may be defenses available to such Indemnitee which are different from
or in addition to those available to such Indemnifying Party, and in that
event (1) the reasonable fees and expenses of such separate counsel shall be
paid by such Indemnifying Party and (2) each of such Indemnifying Party and
such Indemnitee shall have the right to run its own defense in respect of
such claim. If an Indemnifying Party elects not to defend against a Third-
Party Claim, or fails to notify an Indemnitee of its election as provided in
this Section 4.04 within the period of ten (10) Business Days described
above, such Indemnitee may defend, compromise and settle such Third- Party
Claim; provided, however, that no such Indemnitee may compromise or settle
-----------------
any such Third-Party Claim without the prior written consent of the
Indemnifying Party, which consent shall not be withheld unreasonably.
Notwithstanding the foregoing, the Indemnifying Party shall not, without the
prior consent of the Indemnitee, (1) settle or compromise any Third- Party
Claim or consent to the entry of any judgment which does not include as an
unconditional term thereof the delivery by the claimant or plaintiff to the
Indemnitee of a written release from all Liability in respect of such Third-
Party Claim or (2) settle or compromise any Third-Party Claim in any manner
that may adversely affect the Indemnitee.
4.05 REMEDIES CUMULATIVE. The remedies provided in this Article IV shall be
cumulative and shall not preclude assertion by any Indemnitee of any other
rights or the seeking of any other remedies against any Indemnifying Party.
ARTICLE V
CERTAIN ADDITIONAL COVENANTS
5.01 FURTHER ASSURANCES.
(a) In addition to the actions specifically provided for elsewhere in
this
20
Agreement, each of the parties hereto shall use its best 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. Without
limiting the foregoing, each party hereto shall cooperate with the
other parties, and execute and deliver, or use its best efforts to
cause to be executed and delivered, all instruments, including
instruments of conveyance, assignment and transfer, and to make all
filings with, and to obtain all consents, approvals or authorizations
of, any governmental or regulatory authority or any other Person under
any permit, license, agreement, indenture or other instrument, and
take all such other actions as such party may reasonably be requested
to take by any other party hereto from time to time, consistent with
the terms of this Agreement, in order to effectuate the provisions and
purposes of this Agreement and the transfers of Assets and Liabilities
and the other transactions contemplated hereby. If any such transfer
of Assets or Liabilities is not consummated prior to or at the
Distribution Date, then the party hereto retaining such Asset or
Liability shall thereafter hold such Asset in trust for the use and
benefit of the party entitled thereto (at the expense of the party
entitled thereto), or shall retain such Liability for the account of
the party by whom such Liability is to be assumed pursuant hereto, as
the case may be, and shall take such other action as may be reasonably
requested by the party to whom such Asset is to be transferred, or by
whom such Liability is to be assumed, as the case may be, in order to
place such party, insofar as reasonably possible, in the same position
as if such Asset or Liability had been transferred as contemplated
hereby. If and when any such Asset or Liability becomes transferable,
such transfer shall be effected forthwith. The parties hereto agree
that, as of the Distribution Date, each party hereto shall be deemed
to have acquired complete and sole beneficial ownership of all of the
Assets, together with all rights, powers and privileges incident
thereto, and shall be deemed to have assumed in accordance with the
terms of this Agreement all of the Liabilities, and all duties,
obligations and responsibilities incident thereto, that such party is
entitled to acquire or required to assume pursuant to the terms of
this Agreement.
(b) Without limiting the generality of Section 5.01(a) hereof, Xxxxxx, as
the sole stockholder of Ventiv, shall ratify any actions which are
reasonably necessary or desirable to be taken by Ventiv to effectuate
the transactions contemplated by this Agreement in a manner consistent
with the terms of this Agreement, including the preparation and
implementation of appropriate Plans for Healthcare Services
Employees.
5.02 VENTIV BOARD OF DIRECTORS. Prior to, or simultaneously with, the
Distribution Date, Ventiv shall take such actions as are necessary such that
its Board of Directors is comprised of those individuals named as directors in
the Information Statement.
21
5.03 CONTINUING CONTRACTUAL ARRANGEMENTS. Notwithstanding anything in this
Agreement to the contrary, except as set forth in Sections 5.04 hereof,
to the extent that any member of either Group is now providing or selling, or in
the future may provide or sell, to any member of the other Group any services,
benefits or products pursuant to any written or oral agreement or understanding
whatsoever, such agreement or understanding shall not be deemed altered, amended
or terminated as a result of this Agreement or the consummation of the
transactions contemplated hereby.
5.04 INTERCOMPANY ACCOUNTS. Effective as of the Distribution Date all
intercompany payables, loans or advances from Xxxxxx to Ventiv shall be deemed
contributed to capital and thereby cancelled without the payment of any cash by
Ventiv to Xxxxxx.
5.05 CASH ACCOUNTS. The cash accounts on the Distribution Date of Xxxxxx and
each Xxxxxx Subsidiary and Ventiv and each Healthcare Services Subsidiary shall
remain the property of each respective company or Subsidiary.
5.06 OTHER AGREEMENTS. Each of Xxxxxx and Ventiv shall use reasonable efforts to
enter into or to cause the appropriate members of its Group to enter into, the
Other Agreements prior to the Distribution Date. If there shall be a conflict
between the provisions of this Agreement and the provisions of the Other
Agreements, the provisions of the Other Agreements shall control.
5.07 TRANSFER TAXES. Ventiv shall pay any Gains Tax, Transfer Tax and similar
transfer Taxes in any jurisdiction (and any penalties and interest with respect
to such Taxes), which become payable in connection with the restructuring of
Ventiv and the transfer of the Healthcare Services Subsidiaries held by the
Xxxxxx Group to Ventiv and the Healthcare Services Assets and Healthcare
Services Liabilities to Ventiv as contemplated in Section 2.03 and the
Distribution on behalf of the stockholders of Xxxxxx or Ventiv. Ventiv shall
indemnify and hold harmless the stockholders of Xxxxxx and Ventiv from and
against any Liability with respect to such Taxes (including any penalties,
interest and reasonable professional fees). Ventiv shall prepare and file any
required returns with respect to such Taxes (including returns on behalf of the
stockholders of Xxxxxx and Ventiv).
5.08 HEALTHCARE SERVICES SUPPORT AGREEMENTS. Effective as of the Distribution
Date, Ventiv shall cause itself or one or more members of the Healthcare
Services Group to be substituted in all respects for the Xxxxxx Group or any
member thereof in respect of all Healthcare Services Support Agreements.
Subsequent to the Distribution Date, with respect to any uncancelled Healthcare
Services Support Agreement for which no substitution has yet been effected,
Ventiv shall indemnify the Xxxxxx Group against Liabilities under any such
Healthcare Services Support Agreement in accordance with the provisions of
Article IV hereof.
22
ARTICLE IV
ACCESS TO INFORMATION
6.01 PROVISION OF CORPORATE RECORDS. Prior to or as promptly as practicable
after the Distribution Date, Xxxxxx shall deliver to Ventiv all corporate books
and records of the Healthcare Services Group and copies of all corporate books
and records of the Xxxxxx Group relating to the Healthcare Services Assets, the
Healthcare Services Liabilities, or the Healthcare Services Business, including
in each case all active agreements, active litigation files and government
filings. From and after the Distribution Date, all books, records and copies so
delivered shall be the property of Ventiv.
6.02 ACCESS TO INFORMATION. From and after the Distribution Date, each of
Xxxxxx and Ventiv shall afford to the other and to the other's Representatives
reasonable access and duplicating rights during normal business hours to all
Information within such party's possession relating to such other party's
businesses, Assets or Liabilities, insofar as such access is reasonably required
by such other party. Without limiting the foregoing, Information may be
requested under this Section 6.02 for audit, accounting, claims, litigation and
Tax purposes, as well as for purposes of fulfilling disclosure and reporting
obligations.
6.03 PRODUCTION OF WITNESSES. After the Distribution Date, each of Xxxxxx and
Ventiv shall use reasonable efforts to make available to the other, upon written
request, its directors, officers, employees and agents as witnesses to the
extent that any such Person may reasonably be required (giving consideration to
business demands of such Person) in connection with any legal, administrative or
other proceedings in which the requesting party may from time to time be
involved.
6.04 RETENTION OF RECORDS. Except as otherwise required by law or agreed in
writing, or as otherwise provided in the Tax Sharing Agreement, each of Xxxxxx
and Ventiv shall retain, for a period of at least ten (10) years following the
Distribution Date, all significant Information in such party's possession or
under its control relating to the business, Assets or Liabilities of the other
party and, after the expiration of such ten-year period, prior to destroying or
disposing of any of such Information, (a) the party proposing to dispose of or
destroy any such Information shall provide no less than thirty (30) days' prior
written notice to the other party, specifying the Information proposed to be
destroyed or disposed of, and (b) if, prior to the scheduled date for such
distribution or disposal, the other party requests in writing that any of the
Information proposed to be destroyed or disposed of be delivered to such other
party, the party proposing to dispose of or destroy such Information shall
promptly arrange for the delivery of the requested Information to a location
specified by, and at the expense of, the requesting party.
6.05 CONFIDENTIALITY. From and after the Distribution Date, each of Xxxxxx and
Ventiv shall hold, and shall use its reasonable best efforts to cause its
Affiliates and Representatives to hold, in strict confidence all Information
concerning the other party obtained by it prior to the Distribution Date or
furnished to it by such other party pursuant
23
to this Agreement or the Other Agreements 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 6.05; provided, however, that Xxxxxx and
-----------------
Ventiv may disclose such Information to the extent that (a) disclosure is
compelled by judicial or administrative process or, in the opinion of such
party's counsel, by other requirements of law, or (b) such party can show that
such Information was (1) available to such party on a nonconfidential basis
prior to its disclosure by the other party, (2) in the public domain through no
fault of such party or (3) lawfully acquired by such party from other sources
after the time that it was furnished to such party pursuant to this Agreement or
the Other Agreements. Notwithstanding the foregoing, each of Xxxxxx and Ventiv
shall be deemed to have satisfied its obligations under this Section 6.05 with
respect to any Information if it exercises the same care with regard to such
Information as it takes to preserve confidentiality for its own similar
Information.
ARTICLE VII
EMPLOYEE BENEFITS
7.01 QUALIFIED PLANS.
(a) As soon as practicable after the date hereof and effective as of
the Distribution Date, Ventiv shall take, or cause to be taken, all
actions necessary and appropriate to establish and administer one or
more Healthcare Services Qualified Plans and to provide benefits
thereunder for all Healthcare Services Individuals who, immediately
prior to the Distribution Date, were participants in or otherwise
entitled to benefits under any Joint Qualified Plan. Ventiv agrees that
each such Healthcare Services Individual shall be, to the extent
applicable, entitled, for all purposes under any applicable Healthcare
Services Qualified Plan, to be credited with the term of service and any
accrued benefit or account balance credited to such Healthcare Services
Individual as of the Distribution Date under the terms of any applicable
Joint Qualified Plan as if such accrued benefit or account balance had
originally been credited to such Healthcare Services Individual under
the Healthcare Services Qualified Plan. Xxxxxx agrees to provide Ventiv,
as soon as practicable after the Distribution Date (with the cooperation
of Ventiv to the extent that relevant information is in the possession
of the Healthcare Services Group), with a list of the Healthcare
Services Individuals who were, to the best knowledge of Xxxxxx,
participants in or otherwise entitled to benefits under each Joint
Qualified Plan immediately prior to the Distribution Date, together with
a listing, if requested by Ventiv, of each such Healthcare Services
Individual's term of service for eligibility and vesting purposes under
such Plan and a listing of each such Healthcare Services Individual's
accrued benefit or account balance thereunder. Xxxxxx shall, as soon as
practicable after the Distribution Date, provide Ventiv with such
additional information (in the possession of the Xxxxxx Group and not
already in the possession of the Healthcare Services
24
Group) as may be reasonably requested by Ventiv and necessary in order
for the Healthcare Services Group to establish and administer
effectively any Healthcare Services Qualified Plan.
(b) Xxxxxx agrees, as soon as practicable following the Distribution Date, to
direct the trustee of the trust funding each Joint Qualified Plan which is a
Joint Savings Plan to transfer to the trustee or other funding agent of any
applicable Healthcare Services Qualified Plan in cash, securities or other
property or a combination thereof, as reasonably determined by Xxxxxx, an
amount equal to the account balances as of the date of transfer attributable
to the participants and beneficiaries in such Joint Savings Plan who are
Healthcare Services Individuals plus the portion of any unallocated
contributions and trust earnings attributable to such participants and
beneficiaries who are Healthcare Services Individuals. To the extent
practicable such transfers shall be effected so as to preserve investment
elections of the participants and beneficiaries in each Joint Savings Plan.
(c) In connection with the transfers described in this Section 7.01, Xxxxxx
and Ventiv shall cooperate in making any and all appropriate filings required
under the Code or ERISA, and the regulations thereunder, and any applicable
securities laws and take all such action as may be necessary and appropriate
to cause such transfers to take place as soon as practicable after the
---------
Distribution Date; provided, however, that each such transfer shall not take
-------------------------------------------------------------
place until as soon as practicable after the later of (1) the expiration of a
thirty (30) day period following the date of filing the required Forms 5310-A
(or any successor form thereto) with the IRS and (2) the earlier of (A) the
receipt of a favorable IRS determination letter with respect to the
qualification of each applicable Healthcare Services Qualified Plan under
Section 401(a) of the Code or (B) the receipt by Xxxxxx of an opinion of
counsel reasonably satisfactory in form and substance to Xxxxxx and Ventiv to
the effect that such counsel believes each applicable Healthcare Services
Qualified Plan is qualified under Section 401(a) of the Code. Xxxxxx and
Ventiv agree to provide to such counsel such information in the possession of
the Xxxxxx Group and the Healthcare Services Group, respectively, as may be
reasonably requested by such counsel in connection with the issuance of such
opinion. Xxxxxx agrees, during the period ending with the date of complete
transfer of assets and liabilities to each such Healthcare Services Qualified
Plan, to cause distributions in respect of terminated or retired participants
who are Healthcare Services Individuals to be made, on behalf of Ventiv, from
the relevant Joint Qualified Plan in accordance with applicable law and
pursuant to plan provisions.
(d) Xxxxxx and Ventiv shall take, or cause to be taken, all such action as
may be necessary or appropriate in order to establish Ventiv or one or more
members of the Healthcare Services Group, as appropriate, as successor to all
rights, assets, duties, Liabilities and obligations as of the Distribution
Date under, or with respect to, each Healthcare Services Free-Standing
Qualified Plan. Xxxxxx agrees that, prior to the Distribution Date or as soon
as practicable thereafter, it shall provide Ventiv with all
25
information (in the possession of the Xxxxxx Group and not already in the
possession of the Healthcare Services Group) as may be reasonably requested by
Ventiv and necessary for the Healthcare Services Group to administer
effectively such Healthcare Services Free-Standing Qualified Plan.
(e) Except as specifically set forth in this Section 7.01, from and after the
Distribution Date, (1) the Xxxxxx Group shall cease to have any liability or
obligation whatsoever with respect to Healthcare Services Individuals under
the Joint Qualified Plans, and Ventiv shall assume or retain, as the case may
be, and shall be solely responsible for, all liabilities and obligations
whatsoever of either Group with respect to Healthcare Services Individuals
under the Joint Qualified Plans and shall be solely responsible for all
liabilities and obligations whatsoever of either Group with respect to
Healthcare Services Individuals under the Joint Qualified Plans and shall be
solely responsible for all liabilities and obligations whatsoever under the
Healthcare Services Qualified Plans and (2) the Xxxxxx Group shall cease to
have any liability or obligation whatsoever under the Healthcare Services
Free-Standing Qualified Plans and Ventiv shall assume or retain, as the case
may be, and shall be solely responsible for, all liabilities and obligations
whatsoever of either group under the Healthcare Services Free-Standing Plans;
-------------------------------------------------
provided, however, that Xxxxxx shall either be responsible for or make all
-----------------------
required contributions, no later than the later of the Distribution Date and
the date such contributions are legally required to be made (A) in respect of
Healthcare Services Individuals with respect to each Joint Qualified Plan and
(B) with respect to all participants in the Healthcare Services Free-Standing
Qualified Plans, in each case, for all Prior Plan Years and for the portion of
the Current Plan Year ending on the Distribution Date, to the extent not
previously made.
7.02 [INTENTIONALLY OMITTED].
7.03 WELFARE PLANS.
(a) As of the Distribution Date, Ventiv shall assume or retain, or cause one
or more members of the Healthcare Services Group to assume or retain, as the
case may be, and shall be solely responsible for, or cause its insurance
carriers to be responsible for all liabilities and obligations whatsoever of
either Group whether or not incurred prior to the Distribution Date, in
connection with claims under any Welfare Plan (including any Welfare Plan
providing for post-retirement or retiree medical benefits) in respect of any
Healthcare Services Individual and the Xxxxxx Group shall cease to have any
liability or obligation with respect thereto.
(b) Ventiv shall take, or cause to be taken, all actions necessary and
appropriate on behalf of itself and the Healthcare Services Group (1) to
assume any existing Welfare Plan of either Group, which Welfare Plan, as of
the Distribution Date, provides benefits solely for Healthcare Services
Individuals or (2) otherwise to
26
adopt such Welfare Plans as necessary to provide welfare benefits, effective
as of the Distribution Date, and to assume the liabilities and obligations to
Healthcare Services Individuals which are or shall become the responsibility
of Ventiv to the extent specified in Section 7.03(a) hereof. For this purpose,
with respect to any Healthcare Services Individual, Ventiv or a member of the
Healthcare Services Group shall, to the extent applicable, credit such
Healthcare Services Individual with any term of service provided to any member
of either Group, and consider such Healthcare Services Individual to have
satisfied any other eligibility criteria (including satisfaction of applicable
deductibles or coinsurance amounts) to the extent so satisfied as of the
Distribution Date, as if such service had been rendered to Ventiv or the
member of the Healthcare Services Group and as if such eligibility criteria
had been satisfied while employed by Ventiv or the member of the Healthcare
Services Group. In connection with the foregoing, Xxxxxx agrees to provide
Ventiv or its designated insurance representative with such information (in
the possession of the Xxxxxx Group and not already in the possession of the
Healthcare Services Group) as may be reasonably requested by Ventiv and
necessary for the Healthcare Services Group to assume or establish any such
Welfare Plan.
(c) The Xxxxxx Group shall assume, or retain, all liabilities and
obligations whatsoever of either Group for benefits under any Welfare Plan
other than as set forth in Section 7.03(a) hereof.
7.04 [INTENTIONALLY OMITTED.]
7.05 [INTENTIONALLY OMITTED.]
7.06 SEVERANCE PAY.
(a) Xxxxxx and Ventiv agree that, with respect to individuals who, in
connection with the Distribution, cease to be employees of the Xxxxxx
Group and become employees of the Healthcare Services Group, such
cessation shall not be deemed a severance of employment from either
Group for purposes of any Plan that provides for the payment of
severance, salary continuation or similar benefits and shall, if and to
the extent appropriate, in connection with the Distribution obtain
waivers from individuals against any such assertion.
(b) The Xxxxxx Group shall assume and be solely responsible for all
liabilities and obligations whatsoever in connection with claims made by
or on behalf of Xxxxxx Individuals and the Healthcare Services Group
shall assume and be solely responsible for all liabilities and
obligations whatsoever in connection with claims made by or on behalf of
Healthcare Services Individuals in respect of severance pay, salary
continuation and similar obligations relating to the termination or
alleged termination of any such person's employment either before, to
the extent unpaid, or on or after the Distribution Date.
27
7.07 [INTENTIONALLY OMITTED].
7.08 POST-DISTRIBUTION LIABILITIES. The Xxxxxx Group shall be solely
responsible for the payment of all liabilities and obligations whatsoever
arising with respect to any Xxxxxx Individual and attributable to any period
subsequent to the Distribution Date and the Healthcare Services Group shall be
solely responsible for the payment of all liabilities and obligations whatsoever
arising with respect to any Healthcare Services Individual and attributable to
any period subsequent to the Distribution Date.
7.09 OTHER BALANCE SHEET ADJUSTMENTS. To the extent not otherwise provided in
this Agreement, Xxxxxx and Ventiv shall take such action as is necessary to
effect an adjustment to the books of Xxxxxx and Ventiv so that, as of the
Distribution Date, the prepaid expense balances and accrued employee liabilities
with respect to any employee liability or obligation assumed or retained as of
the Distribution Date by the Xxxxxx Group and the Healthcare Services Group are
appropriately reflected on the consolidated balance sheets as of the
Distribution Date of Xxxxxx and Ventiv, respectively.
7.10 PRESERVATION OF RIGHTS TO AMEND OR TERMINATE PLANS. No provisions of this
Agreement, including the agreement of Xxxxxx or Ventiv that it, or any member of
the Xxxxxx Group or the Healthcare Services Group, respectively, will make a
contribution or payment to or under any Plan herein referred to for any period,
shall be construed as a limitation on the right of Xxxxxx or Ventiv or any
member of the Xxxxxx Group or the Healthcare Services Group to amend such Plan
or terminate its participation therein which Xxxxxx or Ventiv or any member of
the Xxxxxx Group or the Healthcare Services Group, respectively, would otherwise
have under the terms of such Plan or otherwise, and no provision of this
Agreement shall be construed to create a right in any employee or former
employee or beneficiary of such employee or former employee under a Plan which
such employee or former employee or beneficiary would not otherwise have under
the terms of the Plan itself.
7.11 REIMBURSEMENT; INDEMNIFICATION. Each of the parties hereto acknowledges
that the Xxxxxx Group, on the one hand, and the Healthcare Services Group, on
the other hand, may incur costs and expenses (including contributions to Plans
and the payment of insurance premiums) arising from or related to any of the
Plans which are, as set forth in this Agreement, the responsibility of the other
party hereto. Accordingly, Xxxxxx and Ventiv agree to reimburse each other, as
soon as practicable but in any event within thirty (30) days of receipt from the
other party of appropriate verification, for all such costs and expenses reduced
by the amount of any tax reduction or recovery of tax benefit realized by Xxxxxx
or Ventiv, as the case may be, in respect of
28
the corresponding payment made by it; provided, however, that notwithstanding
-----------------
anything in this Section 7.11 to the contrary, costs and expenses or other
recovery arising from any challenge by the U.S. Government to the allocation of
assets set forth in Section 7.01 shall not be subject to reimbursement, and
indemnification under this Agreement or the Distribution Agreement.
7.12 FURTHER TRANSFERS. Xxxxxx and Ventiv recognize that there may be
Healthcare Services Individuals who will, after the Distribution Date, become
employed by Xxxxxx and there may be Xxxxxx Individuals who become employed,
after the Distribution Date, by Ventiv. If Xxxxxx and Ventiv so agree with
respect to any such individuals, the assets and liabilities with respect to such
employees which are associated with the Plans and programs described in this
Agreement may be transferred and assumed in a manner consistent with this
Agreement. Any such transfers or assumptions will be considered to be governed
by the terms of this Agreement and shall not require the agreement of Xxxxxx and
Ventiv if they occur within three (3) months of the Distribution Date.
7.13 OFFICERS AND EMPLOYEES.
(a) Officers and employees of either Group who are employed in the
Healthcare Services Business immediately prior to the Distribution Date
shall be officers and employees of the Healthcare Services Group
immediately following the Distribution Date; provided, however, that
--------------------------------------------------------
nothing herein shall give to any individual a right of employment, or
--------------
continued employment, by any member of the Healthcare Services Group.
(b) Except as otherwise agreed by the parties hereto, effective as of the
Distribution Date, (1) all officers or employees of the Xxxxxx Group who
are acting as directors or officers of the Healthcare Services Group and
are not employed in the Healthcare Services Business shall resign from
such positions with the Healthcare Services Group and (2) all officers or
employees of the Healthcare Services Group who are acting as directors or
officers of the Xxxxxx Group and are not employed in the Xxxxxx Business
shall resign from such positions with the Xxxxxx Group.
7.14 EMPLOYMENT AGREEMENTS. Prior to the Distribution Date, Xxxxxx and Ventiv
shall use their best efforts to induce such individuals as they mutually agree
to enter into employment agreements with Ventiv on terms which are mutually
agreeable to Xxxxxx and Ventiv; provided, however, that, except as otherwise
-------- -------
provided in this Agreement, Xxxxxx shall have no obligation to make any payments
to such individuals to induce them to enter into such employment agreements.
7.15 OTHER LIABILITIES. As of the Distribution Date: (a) Ventiv shall assume
and be solely responsible for all Liabilities whatsoever of the Xxxxxx Group
with respect to claims made by the Healthcare Services Individuals relating to
any employment-related
29
Liability not otherwise expressly provided for in this Agreement, including
earned salary, wages, severance payments or other compensation and accrued
holiday, vacation, health, dental or retirement benefits, regardless of whether
such employment-related Liability was incurred before, on or after the
Distribution Date, and (b) Xxxxxx shall retain all such Liabilities with respect
to (1) Xxxxxx Individuals and (2) directors of Xxxxxx who served as such prior
to the Distribution Date.
7.16 COMPLIANCE. Notwithstanding anything to the contrary in this Article VII,
to the extent any actions of the parties contemplated in this Article are
determined prior to Distribution to violate applicable law or result in
unintended tax liability for Xxxxxx Individuals or Healthcare Services
Individuals, such action may be modified to avoid such violation of law or
unintended tax liability.
ARTICLE VIII
NO REPRESENTATIONS OR WARRANTIES; EXCEPTIONS
8.01 NO REPRESENTATIONS OR WARRANTIES; EXCEPTIONS. Ventiv understands and
agrees that no member of the Xxxxxx Group is, in this Agreement or in any other
agreement or document, representing or warranting to Ventiv in any way as to the
Healthcare Services Assets, the Healthcare Services Liabilities, or the
Healthcare Services Business or as to any consents or approvals required in
connection with the consummation of the transactions contemplated by this
Agreement, it being agreed and understood that Ventiv shall take all of the
Healthcare Services Assets "as is, where is" and that, except as provided in
Section 5.01 hereof, Ventiv shall bear the economic and legal risk that
conveyances of the Healthcare Services Assets shall prove to be insufficient or
that the title of any member of the Healthcare Services Group to any Healthcare
Services Assets shall be other than good and marketable and free from
encumbrances.
ARTICLE IX
INSURANCE
9.01 INSURANCE POLICIES AND RIGHTS INCLUDED WITHIN HEALTHCARE SERVICES ASSETS.
Without limiting the generality of the definition of Healthcare Services Assets
set forth in Section 1.01 hereof, the Healthcare Services Assets shall include
(a) any and all rights of an insured party under each of the Xxxxxx Policies,
including rights of indemnity and the right to be defended by or at the expense
of the insurer, with respect to all Healthcare Services Claims; provided,
---------
however, that nothing in this clause (a) shall be deemed to constitute (or to
--------
reflect) the assignment of any of the Xxxxxx Policies to Ventiv, and (b) the
Healthcare Services Policies. Ventiv shall be entitled to receive from Xxxxxx
any Insurance Proceeds paid to any member of the Xxxxxx Group with respect to
any third-party Healthcare Services Claim under any Xxxxxx Policy.
30
9.02 POST-DISTRIBUTION DATE CLAIMS. If, subsequent to the Distribution Date,
any Person shall assert a Healthcare Services Claim, then Xxxxxx shall at the
time such Healthcare Services Claim is asserted be deemed to assign, without
need of further documentation, to Ventiv all of the Xxxxxx Group's rights, if
any, as an insured party under the applicable Xxxxxx Policy with respect to such
Healthcare Services Claim, including rights of indemnity and the right to be
defended by or at the expense of the insurer; provided, however, that nothing in
-----------------
this Section 9.02 shall be deemed to (1) constitute (or to reflect) the
assignment of any of the Xxxxxx Policies to Ventiv or (2) affect the Xxxxxx
indemnity set forth in Section 4.03 of this Agreement.
9.03 ADMINISTRATION AND RESERVES. Notwithstanding the provisions of Article IV
hereof, from and after the Distribution Date:
(a) Xxxxxx shall be responsible for (1) Insurance Administration with
respect to the Xxxxxx Policies and (2) Claims Administration with respect
to any Liabilities of Xxxxxx; provided, however, that the retention of
-----------------
the Xxxxxx Policies by Xxxxxx is in no way intended to limit, inhibit or
preclude any right to insurance coverage for any Insured Claim of a named
insured under the Xxxxxx Policies;
(b) Ventiv shall be responsible for (1) Insurance Administration with
respect to the Healthcare Services Policies, and (2) Claims
Administration with respect to any Liabilities of Ventiv; provided,
---------
however, that the retention of the Healthcare Services Policies by Ventiv
--------
is in no way intended to limit, inhibit or preclude any right to
insurance coverage for any Insured Claim of a named insured under the
Healthcare Services Policies;
(c) Xxxxxx shall be entitled to reserves established by any member of
either Group, or the benefit of reserves held by any insurance carrier,
with respect to any Xxxxxx Liabilities; and
(d) Ventiv shall be entitled to reserves established by any member of
either Group, or the benefit of reserves held by any insurance carrier,
with respect to any Healthcare Services Liabilities.
9.04 INSURANCE PREMIUMS. Ventiv shall pay premiums (retrospectively-rated or
otherwise) under the Xxxxxx Policies with respect to Healthcare Services
Liabilities which are Insured Claims under the Xxxxxx Policies. Xxxxxx shall
have the right, but not the obligation, to pay premiums (retrospectively-rated
or otherwise) under the Xxxxxx Policies with respect to Healthcare Services
Liabilities which are Insured Claims under the Xxxxxx Policies to the extent
that Ventiv does not pay such premiums, whereupon Ventiv shall forthwith
reimburse Xxxxxx for any premiums paid by Xxxxxx with respect to such Healthcare
Services Liabilities.
31
9.05 ALLOCATION OF INSURANCE PROCEEDS; COOPERATION. Insurance Proceeds received
with respect to claims, costs and expenses under the Insurance Policies shall be
paid to Xxxxxx with respect to Xxxxxx Liabilities which are Insured Claims under
the Xxxxxx Policies and to Ventiv with respect to the Healthcare Services
Liabilities which are Insured Claims under the Xxxxxx Policies. Payment of the
allocable portions of indemnity costs of Insurance Proceeds resulting from the
Liability Policies will be made to the appropriate party upon receipt from the
insurance carrier. In the event of the exhaustion of coverage under any Xxxxxx
Policy, Xxxxxx and Ventiv shall allocate Insurance Proceeds equitably based upon
the bona fide claims of the Xxxxxx Group and the Healthcare Services Group,
respectively. The parties hereto agree to use their best efforts to cooperate
with respect to insurance matters.
9.06 REIMBURSEMENT OF EXPENSES. Ventiv shall (a) upon the request of Xxxxxx,
reimburse the relevant insurer of the relevant third-party administrator, to the
extent required under any Insurance Policy or Service Agreement with respect to
any and all Healthcare Services Claims which are paid, settled, adjusted,
defended and/or otherwise handled by such insurer or third- party administrator
pursuant to the terms and conditions of such Insurance Policy or Service
Agreement and (b) to the extent the cost incurred exceeds internal charges made
by Xxxxxx to Ventiv prior to the Distribution Date, pay and/or reimburse Xxxxxx,
or such third party as Xxxxxx may require, for any and all costs, premiums,
expenses, losses paid, attorneys' fees and/or charges incurred prior to the
Distribution Date by either Group or after the Distribution Date by the Xxxxxx
Group arising directly or indirectly in connection with the payment, settlement,
adjustment, defense and/or handling of any such Healthcare Services Claim or
under the terms and conditions of any Insurance Policies or Service Agreements
(including any reimbursement paid by Xxxxxx with respect to any such Healthcare
Services Claim to any insurer or third-party administrator pursuant to the terms
of any Insurance Policy or Service Agreement). Ventiv shall make any
reimbursement required by clause (a) of this Section 9.06 at the time required
by the relevant Insurance Policy or Service Agreement. Ventiv shall make any
reimbursement required by clause (b) of this Section 9.06, on a monthly basis.
9.07 INSURER INSOLVENCY. Xxxxxx shall not be obligated to reimburse Ventiv for
any Healthcare Services Claim under any Insurance Policies where such Healthcare
Services Claim would have been paid by the insurer or other third party, but for
the insolvency of such insurer or other third party or the refusal by any
insurer or other third party to pay such Healthcare Services Claim.
9.08 LETTERS OF CREDIT. Ventiv shall post such letters of credit in favor of
such Persons as Xxxxxx may reasonably request for any amounts due or reasonably
expected to
32
come due under Section 9.06 hereof. Ventiv shall make reasonable efforts to
negotiate agreements with any and all insurers or third- party administrators
whereby Ventiv shall assume direct responsibility for any and all Liabilities
related to it under any Insurance Policies and/or Service Agreements and Xxxxxx
shall provide reasonable assistance in this effort.
9.09 NO REDUCTION OF COVERAGE. Xxxxxx shall take no action to eliminate or
materially reduce coverage under any Xxxxxx Policy or Service Agreement for any
Healthcare Services Claim.
9.10 FUTURE INSURANCE COVERAGE. For a period of one (1) year following the
Distribution Date, Xxxxxx shall assist Ventiv, to the extent reasonably
requested by Ventiv, with the efforts of the Healthcare Services Group to secure
alternative insurance coverage or claim handling services.
9.11 ASSISTANCE, WAIVER OF CONFLICT AND SHARED DEFENSE. Each of the parties
hereto agrees to provide reasonable assistance to the other parties hereto as
regards any dispute with any third party (including insurers, third- party
administrators and state guaranty funds) as to any matter related to the
Insurance Policies or Service Agreements, but only insofar as such dispute
arises out of the acts or omissions of any third party with respect to a
Healthcare Services Claim. In the event that Insured Claims of more than one
Group exist relating to the same occurrence, the parties hereto agree to defend
such Insured Claims jointly and to waive any conflict of interest necessary to
the conduct of such joint defense. Nothing in this Section 9.11 shall be
construed to limit or otherwise alter in any way the indemnity obligations of
the parties hereto, including those created by this Agreement or by operation of
law.
ARTICLE X
MISCELLANEOUS
10.01 CONDITIONS TO OBLIGATIONS.
(a) The obligations of the parties hereto to consummate the payment of
the Distribution are subject to the satisfaction of each of the
following conditions:
(1) The transactions contemplated by Sections 2.01, 2.02, 2.03,
2.05 and 2.06 shall have been consummated in all material
respects;
(2) The Ventiv Common Stock shall have been approved for listing
on the Nasdaq, subject to official notice of issuance;
(3) The Registration Statement shall have been filed with the
SEC and shall have become effective, and no stop order with
respect thereto shall
33
be in effect;
(4) All authorizations, consents, approvals and clearances of all
federal, state, local and foreign governmental agencies required to
permit the valid consummation by the parties hereto of the
transactions contemplated by this Agreement shall have been
obtained; and no such authorization, consent, approval or clearance
shall contain any conditions which would have a material adverse
effect on (A) the Xxxxxx Business or the Healthcare Services
Business, (B) the Assets, results of operations or financial
condition of the Xxxxxx Group or the Healthcare Services Group, in
each case taken as a whole, or (C) the ability of Xxxxxx or Ventiv
to perform its obligations under this Agreement; and all statutory
requirements for such valid consummation shall have been fulfilled;
(5) Xxxxxx shall have provided the NYSE with the prior written
notice of the Record Date required by Rule 10b-17 of the Exchange
Act and the rules and regulations of the NYSE;
(6) No preliminary or permanent injunction or other order, decree
or ruling issued by a court of competent jurisdiction or by a
government, regulatory or administrative agency or commission, and
no statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, shall be in effect preventing
the payment of the Distribution;
(7) The Distribution shall be payable in accordance with applicable
law;
(8) All necessary consents, waivers or amendments to each bank
credit agreement, debt security or other financing facility to which
any member of the Xxxxxx Group or the Healthcare Services Group is a
party or by which any such member is bound shall have been obtained,
or each such agreement, security or facility shall have been
refinanced, in each case on terms satisfactory to Xxxxxx and Ventiv
and to the extent necessary to permit the Distribution to be
consummated without any material breach of the terms of such
agreement, security or facility;
(9) Xxxxxx shall have received an opinion from each of Weil,
Gotshal & Xxxxxx LLP, counsel to Xxxxxx, and Xxxxxx Xxxxxxxx LLP,
Xxxxxx'x independent public accountants, that, for federal income
tax purposes, the Distribution should be tax-free to Xxxxxx and to
stockholders of Xxxxxx Common Stock;
(10) One or more of members of the Healthcare Services Group shall
have been substituted, as of the Distribution Date, in all respects
for the
34
Xxxxxx Group in respect of all Healthcare Services Support
Agreements.
(b) Any determination made by the Board of Directors of Xxxxxx in
good faith prior to the Distribution Date concerning the
satisfaction or waiver of any or all of the conditions set forth in
Section 10.01(a) shall be conclusive.
10.02 COMPLETE AGREEMENT. This Agreement, the Exhibits and Schedules hereto and
the agreements and other documents referred to herein shall constitute the
entire agreement between the parties hereto with respect to the subject matter
hereof and shall supersede all previous negotiations, commitments and writings
with respect to such subject matter.
10.03 EXPENSES. Except as otherwise provided in this Agreement and the Other
Agreements, all costs and expenses of any party hereto in connection with the
preparation, execution, delivery and implementation of this Agreement and with
the consummation of the transactions contemplated by this Agreement shall be
paid by the party for whose benefit such costs and expenses are incurred, with
any costs and expenses that cannot be allocated on the foregoing basis to be
divided equally among the parties hereto.
10.04 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (other than the laws regarding
choice of laws and conflicts of laws) as to all matters, including matters of
validity, construction, effect, performance and remedies.
10.05 NOTICES. All notices requests, claims, demands and other communications
hereunder (collectively, "Notices") 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 or other standard form of telecommunications, or by
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
If to Xxxxxx:
Xxxxxx Communications, Inc.
Two Democracy Center
0000 Xxxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
35
If to Ventiv:
Ventiv Health, Inc.
000 Xxxxxxxxxx Xxxx
Xxxxxxx Xxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Chief Executive Officer
or to such other address as any party hereto may have furnished to the
other parties by a notice in writing in accordance with this Section 10.05.
Copies of all notices, requests, claims, demands and other communications
hereunder shall also be given to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
10.06 AMENDMENT AND MODIFICATION. This Agreement may be amended, modified or
supplemented only by a written agreement signed by all of the parties hereto.
10.07 SUCCESSORS AND ASSIGNS; NO THIRD-PARTY BENEFICIARIES. This Agreement and
all of the provisions hereof shall be binding upon and inure to the benefit of
the parties hereto and their successors and permitted assigns, but neither this
Agreement nor any of the rights, interests and obligations hereunder shall be
assigned by any party hereto without the prior written consent of each of the
other parties (which consent shall not be unreasonably withheld). Except for the
provisions of Sections 4.03 and 4.04 hereof relating to Indemnities, which are
also for the benefit of the Indemnitees, this Agreement is solely for the
benefit of the parties hereto and their Subsidiaries and Affiliates and is not
intended to confer upon any other Persons any rights or remedies hereunder.
10.08 COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
10.09 INTERPRETATION. The Article and Section headings contained in this
Agreement are solely for the purpose of reference, are not part of the agreement
of the parties hereto and shall not in any way affect the meaning or
interpretation of this Agreement.
10.10 LEGAL ENFORCEABILITY. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
36
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Each party acknowledges
that money damages would be an inadequate remedy for any breach of the
provisions of this Agreement and agrees that the obligations of the parties
hereunder shall be specifically enforceable.
10.11 REFERENCES; CONSTRUCTION. References to any "Article", "Exhibit",
"Schedule" or "Section", without more, are to Appendices, Articles, Exhibits,
Schedules and Sections to or of this Agreement. Unless otherwise expressly
stated, clauses beginning with the term "including" set forth examples only and
in no way limit the generality of the matters thus exemplified.
10.12 TERMINATION. Notwithstanding any provision hereof this Agreement may be
terminated and the Distribution abandoned at any time prior to the Distribution
Date by and in the sole discretion of the Board of Directors of Xxxxxx without
the approval of any other party thereto or of Xxxxxx'x stockholders. In the
event of such termination, no party hereto shall have any Liability to any
Person by reason of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
XXXXXX COMMUNICATIONS, INC.,
a Delaware corporation
By:
----------------------------
Name:
Title:
VENTIV HEALTH, INC.,
a Delaware corporation
By:
----------------------------
Name:
Title:
37
