Exhibit 10.17
OPTION AGREEMENT
Dated As Of
March 31, 2000
RELATING TO
JAPANESE XXXXXXX BUSINESS
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ARTICLE I DEFINITIONS.........................................................1
1.1. Definitions...........................................................1
ARTICLE II GRANT OF OPTION....................................................6
2.1. Grant of Option.......................................................6
2.2. Exercise Period.......................................................6
2.3. Manner of Exercise....................................................6
2.4. Transfer of Purchased Business........................................6
ARTICLE III DETERMINATION OF STRIKE PRICE.....................................7
3.1. Strike Price..........................................................7
3.2. Opening Net Worth.....................................................7
3.3. Closing Date Net Worth ...............................................8
3.4. Access to Information.................................................9
ARTICLE IV PURCHASE AND SALE..................................................9
4.1. Purchased Business....................................................9
4.2. Excluded Assets......................................................10
4.3. Assumed Liabilities..................................................11
4.4. Excluded Liabilities.................................................12
ARTICLE V CLOSING; POST-CLOSING ADJUSTMENT...................................12
5.1. Conditions to Closing................................................12
5.2. Closing Date.........................................................13
5.3. Xxxxxxx Optionholder's Deliveries at Closing........................13
5.4. Xxxxxx Japan's Deliveries at Closing.................................13
5.5. Post Closing Adjustment..............................................13
5.6. Non-Assignable Contracts.............................................14
5.7. Further Assurances...................................................14
5.8. Novation of Assumed Liabilities......................................15
ARTICLE VI REPRESENTATIONS AND WARRANTIES....................................16
6.1. Organization, Good Standing and Authority of Xxxxxx Japan............16
6.2. Organization, Good Standing and Authority of Xxxxxxx Optionholder....16
6.3. No Other Representations or Warranties...............................16
ARTICLE VII PRE-CLOSING COVENANTS............................................17
7.1. Operation of Japanese Xxxxxxx Business...............................17
7.2. Consents of Third Parties; Governmental Approvals....................18
7.3. Services.............................................................19
7.4. Financial Statements.................................................19
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ARTICLE VIII POST-CLOSING COVENANTS..........................................19
8.1. Collection of Accounts Receivable....................................19
8.2. Agreements Relating to Xxxxxxx Optionholder and Xxxxxx Japan.........20
8.3. Informal, Nondocumented Real Estate Leases...........................21
ARTICLE IX [INTENTIONALLY OMITTED]...........................................21
ARTICLE X EMPLOYEES AND EMPLOYEE BENEFIT MATTERS.............................21
10.1. Employment of Xxxxxxx Employees......................................21
10.2. Terminations/Layoff/Severance........................................22
10.3. Employee Benefit Plans...............................................22
10.4. Transfer of Account Balances and Accrued Benefits....................22
10.5. Stock Purchase Plans.................................................23
10.6. Workers' Compensation................................................23
10.7. Vacation Pay Policy..................................................23
10.8. Information to be Provided to Xxxxxx Japan...........................23
10.9. Transfer of Employee Files...........................................23
10.10. Employment Solicitation..............................................23
ARTICLE XI INSURANCE MATTERS.................................................24
11.1. Insurance Prior to the Closing Date..................................24
11.2. Ownership of Existing Policies and Programs..........................24
11.3. Procurement of Insurance for Xxxxxxx Optionholder....................24
11.4. Acquisition and Maintenance of Post-Closing Xxxxxxx Optionholder's
Insurance Policies and Programs......................................24
11.5. Xxxxxxx Optionholder Directors' and Officers' Insurance..............25
11.6. Pre-Closing Insurance Claims Administration..........................25
11.7. Post-Closing Insurance Claims Administration.........................25
11.8. Non-Waiver of Rights to Coverage.....................................26
11.9. Scope of Affected Policies of Insurance..............................26
ARTICLE XII INDEMNIFICATION..................................................27
12.1. Indemnification by Xxxxxxx Optionholder..............................27
12.2. Indemnification by Xxxxxx Japan......................................27
12.3. Applicability of and Limitation on Indemnification...................28
12.4. Adjustment of Indemnifiable Losses...................................28
12.5. Procedures for Indemnification of Third Party Claims.................29
12.6. Procedures for Indemnification of Direct Claims......................31
12.7. Remedies Cumulative..................................................31
ARTICLE XIII DISPUTE RESOLUTION..............................................31
13.1. General..............................................................31
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13.2. Escalation...........................................................31
13.3. Arbitration..........................................................32
13.4. Procedures...........................................................32
13.5. Injunctive Relief....................................................33
ARTICLE XIV GENERAL PROVISIONS...............................................33
14.1. Notices..............................................................33
14.2. Successors and Assigns...............................................34
14.3. Access to Records after Closing......................................34
14.4. Entire Agreement; Amendments.........................................35
14.5. Interpretation.......................................................35
14.6. Waivers..............................................................35
14.7. Expenses.............................................................35
14.8. Partial Invalidity...................................................35
14.9. Execution in Counterparts............................................35
14.10. Governing Law........................................................36
14.11. Submission to Jurisdiction...........................................36
14.12. Termination..........................................................36
14.13. Survival of Obligations..............................................36
14.14. Currency.............................................................36
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EXHIBITS
A Description of Japanese Xxxxxxx Business
B Form of Instrument of Assignment
C Form of Instrument of Assumption
D Valuation Date Balance Sheet
E Description of IV Business
SCHEDULES
1.1 Agreed Accounting Policies and Allocation Methodology
4.1(iv) Governmental Permits
4.1(v) Real Estate Leases
4.1(vi) Personal Property
4.1(vii) Contracts
7.3 Services/Facilities
10.4 Allocation of Pension Plan Assets
OPTION AGREEMENT
OPTION AGREEMENT, dated as of March 31, 2000 (this "Agreement"),
between Xxxxxx Limited, a Japanese corporation ("Baxter Japan"), and Xxxxxxx
Lifesciences (Japan) Limited, a Japanese corporation ("Xxxxxxx Optionholder").
WHEREAS, Baxter Japan currently conducts all of the business of the
Cardiovascular Group of Xxxxxx International Inc. in Japan, all as more
specifically described in Exhibit A hereto (the "Japanese Xxxxxxx Business");
and
WHEREAS, Xxxxxx Japan desires to grant to Xxxxxxx Optionholder, and
Xxxxxxx Optionholder desires to acquire from Xxxxxx Japan, an irrevocable option
to purchase, on a going concern basis, the Japanese Xxxxxxx Business, all on the
terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, it is hereby agreed between Xxxxxx Japan and
Xxxxxxx Optionholder as follows:
ARTICLE I
DEFINITIONS
1.1. Definitions. In this Agreement, the following terms have the
meanings specified or referred to in this Section 1.1 and shall be equally
applicable to both the singular and plural forms. Any agreement referred to
below shall mean such agreement as amended, supplemented and modified from time
to time to the extent permitted by the applicable provisions thereof and by this
Agreement.
"Action" means any action, claim, suit, arbitration, inquiry,
subpoena, discovery request, proceeding or investigation by or before any court
or grand jury, any governmental or other regulatory or administrative entity,
agency or commission or any arbitration tribunal.
"Affiliate" means, with respect to any Person, any other Person which
directly or indirectly controls, is controlled by or is under common control
with such Person.
"Agreed Accounting Policies and Allocation Methodology" means Japanese
generally accepted accounting principles consistently applied, provided that,
with respect to any matter as to which there is more than one Japanese generally
accepted accounting principle, Agreed Accounting Policies and Allocation
Methodology means the generally accepted accounting principles applied in the
preparation of the Valuation Date Balance Sheet; provided further that,
notwithstanding the foregoing, Agreed Accounting Policies and Allocation
Methodology shall include the accounting policies and be subject to the
allocation methodology and direct accounts described in Schedule 1.1; and
provided further that, for purposes of the Agreed Accounting Policies and
Allocation Methodology, no known adjustments for items or matters, regardless of
the amount thereof, shall be deemed to be immaterial.
"Agreed Interest Rate" means, for any date, the sum of (i) the average
rate at which overnight deposits in Yen are offered to prime banks in the Tokyo
interbank market, as determined by reference to a mutually agreed-upon source,
plus (ii) 2.00%.
"Assumed Liabilities" has the meaning specified in Section 4.3.
"Baxter" means Xxxxxx International Inc., a Delaware corporation.
"Xxxxxx Japan" has the meaning specified in the first paragraph of
this Agreement.
"Baxter Japan Change in Control" shall mean (i) the acquisition,
directly or indirectly, by any Person or Persons of more than 30% of the voting
stock of Xxxxxx Japan or any Person that controls Xxxxxx Japan, other than an
acquisition by Baxter of, or a Person or Persons that are controlled by Baxter
of, Xxxxxx Japan, (ii) any merger or consolidation involving Baxter or any
Affiliate of Baxter that requires a vote of the stockholders of Baxter, or (iii)
the sale, assignment, transfer or other disposition (including any disposition
through a merger) of all or substantially all of the business and assets of any
Person that controls Xxxxxx Japan.
"Xxxxxx Japan Group Member" means Xxxxxx Japan and its Affiliates and
their respective successors and assigns.
"Xxxxxx Japan Pension Plan" has the meaning specified in Section 10.4.
"Baxter Plans" has the meaning specified in Section 10.3(a).
"Closing" has the meaning specified in Section 5.2.
"Closing Date" has the meaning specified in Section 5.2.
"Closing Date Balance Sheet" means the balance sheet established
pursuant to the provisions of Section 3.3.
"Contracts" means all contracts, agreements, arrangements, leases
(other than Real Estate Leases), manufacturers' warranties, memoranda,
understandings and offers open for acceptance of any nature, whether written or
oral.
"Divested Business" means any portion of the Japanese Xxxxxxx Business
that is divested by Baxter Japan between the date hereof and the Closing Date.
"Xxxxxxx" means Xxxxxxx Lifesciences Corporation, a Delaware
corporation.
"Xxxxxxx Lifesciences Division President" means any person appointed
as President of the Xxxxxxx Lifesciences division of Baxter Japan and approved
in writing by Xxxxxxx.
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"Xxxxxxx Employees" means the employees of Baxter Japan who are
assigned to the Xxxxxxx Lifesciences division of Baxter Japan, including those
employees of the Xxxxxxx Lifesciences division at the Miyazaki plant.
"Xxxxxxx Japan Pension Plan" has the meaning specified in Section
10.3(b).
"Xxxxxxx Optionholder" has the meaning specified in the first
paragraph of this Agreement.
"Xxxxxxx Optionholder Change in Control" shall mean (i) the
acquisition, directly or indirectly, by any Person or Persons of more than 30%
of the voting stock of Xxxxxxx Optionholder or any Person that controls Xxxxxxx
Optionholder, other than an acquisition by Xxxxxxx of, or a Person or Persons
that are controlled by Xxxxxxx of, Xxxxxxx Optionholder, (ii) any merger or
consolidation involving Xxxxxxx or any Affiliate of Xxxxxxx that requires a vote
of the stockholders of Xxxxxxx, or (iii) the sale, assignment, transfer or other
disposition (including any disposition through a merger) of all or substantially
all of the business and assets of any Person that controls Xxxxxxx Optionholder.
"Xxxxxxx Optionholder Group Member" means Xxxxxxx Optionholder and its
Affiliates and their respective successors and assigns.
"Xxxxxxx Products" means the products referred to in Exhibit A,
together with any additional products manufactured, imported or distributed by
the Japanese Xxxxxxx Business after the date hereof.
"Encumbrance" means any lien, claim, charge, security interest,
mortgage, pledge, easement, conditional sale or other title retention agreement,
defect in title, covenant or other restriction of any kind.
"Estimated Strike Price" shall mean an amount equal to (Yen)26.41
billion.
"Excluded Assets" has the meaning specified in Section 4.2.
"Excluded Liabilities" has the meaning specified in Section 4.4.
"Exercise Period" shall mean the period during which the Option is
exercisable, as specified in Section 2.2.
"Expense" means any and all expenses incurred in connection with
investigating, defending or asserting any claim, action, suit or proceeding
incident to any matter indemnified against hereunder (including, without
limitation, court filing fees, court costs, arbitration fees or costs, witness
fees, and reasonable fees and disbursements of legal counsel, investigators,
expert witnesses, consultants, accountants and other professionals).
"Final TK Balance Sheet" shall mean the balance sheet delivered by
Xxxxxx Japan as part of its full accounting as of the date of expiration or
termination of the TK Agreement.
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"Governmental Body" means any foreign, federal, state, local or other
governmental authority or regulatory body.
"Governmental Permits" means all licenses, franchises, permits,
privileges, immunities, approvals and other authorizations from a Governmental
Body.
"Indemnified Party" shall have the meaning specified in Section 12.4.
"Indemnifying Party" shall have the meaning specified in Section 12.4.
"Indemnity Payment" shall have the meaning specified in Section 12.5.
"Instrument of Assignment" means an Instrument of Assignment in the
form of Exhibit B.
"Instrument of Assumption" means an Instrument of Assumption in the
form of Exhibit C.
"Insurance Amount" has the meaning specified in Section 11.5.
"Insurance Charges" has the meaning specified in Section 11.7.
"IV Business" has the meaning specified in Exhibit E hereto.
"Japan Distribution Agreement" means the Japan Distribution Agreement
to be dated as of April 1, 2000 between Baxter Japan and Xxxxxxx Lifesciences
LLC.
"Japanese Xxxxxxx Business" has the meaning specified in the first
recital and shall include, after the date hereof, all activities conducted by
Xxxxxx Japan pursuant to the Japan Distribution Agreement.
"Liability" means any and all debts, liabilities and obligations,
absolute or contingent, matured or unmatured, liquidated or unliquidated,
accrued or unaccrued, known or unknown, whenever arising (unless otherwise
specified in this Agreement), including all costs and expenses relating thereto,
and including, without limitation, those debts, liabilities and obligations
arising under any law, rule, regulation, Action, threatened Action, order or
consent decree of any Governmental Body or any award of any arbitrator of any
kind, and those arising under any contract, commitment or undertaking.
"Loss" means any and all losses, costs, obligations, liabilities,
settlement payments, awards, judgments, fines, penalties, damages, expenses,
deficiencies or other charges.
"Net Worth Adjustment" means (i) the Closing Date Net Worth (as
defined in Section 3.3) minus (ii) the Opening Net Worth (as defined in Section
3.2).
"New Subsidiary" has the meaning specified in Section 2.4.
"Notice of Exercise" has the meaning specified in Section 2.3.
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"Opening Balance Sheet" means the balance sheet established pursuant
to the provisions of Section 3.2.
"Operating Agreements" shall mean the agreements referred to in
Section 7.3.
"Option" has the meaning specified in Section 2.1.
"Owned Real Property" means each parcel of real property owned by
Xxxxxx Japan and used in or relating to the Japanese Xxxxxxx Business.
"Permitted Encumbrances" means (a) liens for taxes and other
governmental charges and assessments which are not yet due and payable, (b)
liens of landlords and liens of carriers, warehousemen, mechanics and
materialmen and other like liens arising in the ordinary course of business for
sums not yet due and payable and (c) other liens or imperfections on property
which are not material in amount or do not materially detract from the value or
materially impair the existing use of the property affected by such lien or
imperfection.
"Person" means any individual, corporation, partnership, joint
venture, limited liability company, association, joint-stock company, trust,
unincorporated organization or Governmental Body.
"Pre-Closing Claims Administration" has the meaning specified in
Section 11.6.
"Purchased Business" has the meaning specified in Section 4.1.
"Real Estate Leases" has the meaning specified in Section 4.1(v).
"Retained Business" means all businesses of Xxxxxx Japan other than
the Japanese Xxxxxxx Business.
"Shared Agreements" has the meaning specified in Section 8.2(a).
"Software" means computer software programs and software systems,
including, without limitation, all databases, compilations, tool sets,
compilers, higher level or "proprietary" languages, related documentation and
materials, whether in source code, object code or human readable form.
"Strike Price" has the meaning specified in Section 3.1.
"Subsidiary" means, when used with reference to any Person, any
corporation or other organization whether incorporated or unincorporated of
which at least a majority of the securities or interests having by the terms
thereof ordinary voting power to elect at least a majority of the board of
directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or controlled
by such Person or by any one or more of its Subsidiaries, or by such Person and
one or more of its Subsidiaries; provided, however, that no Person that is not
directly or indirectly wholly-owned by any other
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Person shall be a Subsidiary of such other Person unless such other Person
controls, or has the right, power or ability to control, that Person.
"Tax" means any net income, alternative or add-on minimum, gross
income, gross receipts, consumption, property, sales, use, transfer, gains,
license, excise, employment, payroll, withholding or minimum tax, or any other
tax custom, duty, governmental fee or other like assessment or charge of any
kind whatsoever, together with any interest or any penalty, addition to tax or
additional amount imposed by any Governmental Body.
"TK Agreement" means a Tokumei Kumiai Agreement to be dated April 1,
2000, between Baxter Japan and Xxxxxxx Lifesciences Finance Limited.
"Transferred Employee" has the meaning specified in Section 10.1.
"Valuation Date Balance Sheet" means the December 31, 1999 balance
sheet of the Japanese Xxxxxxx Business attached as Exhibit D hereto.
ARTICLE II
GRANT OF OPTION
2.1. Grant of Option. In consideration of the payment by Xxxxxxx
Optionholder of (Yen)1,337,500,000 and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Xxxxxx Japan hereby grants and issues to Xxxxxxx Optionholder, upon the terms
and conditions set forth herein, an irrevocable option (the "Option") to
purchase all, but not less than all, of the Purchased Business in exchange for
(i) cash in an amount equal to the Strike Price, and (ii) the assumption by
Xxxxxxx Optionholder of the Assumed Liabilities.
2.2. Exercise Period. The Option may be exercised at any time (i)
from and including August 1, 2002 through and including the earlier of (x) March
31, 2005 and (y) 180 days after the occurrence of an Xxxxxxx Optionholder Change
in Control, (ii) in the event of a Xxxxxx Japan Change in Control, during a
period of 180 days thereafter, and (iii) in the event Xxxxxx Japan provides a
notice of termination under Article 12(4) of the TK Agreement, during a period
of 180 days after such notice is given; provided, however, that if Xxxxxxx
provides a notice of termination under Article 12(1) of the TK Agreement, the
Option may be exercised only during a period of 180 days after such notice is
given, and clauses (i), (ii) and (iii) above shall no longer apply.
2.3. Manner of Exercise. Xxxxxxx Optionholder may exercise the
Option at any time during the Exercise Period by delivering a written notice of
exercise (the "Notice of Exercise") to Xxxxxx Japan.
2.4. Transfer of Purchased Business. Xxxxxxx Optionholder agrees
that Xxxxxx Japan may, at its option, at any time prior to the exercise of the
Option, transfer all of the Purchased Business and Assumed Liabilities,
determined as of the date of transfer, to a subsidiary of Xxxxxx Japan (the "New
Subsidiary"). If so, the parties will amend this Agreement
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to provide for Xxxxxxx Optionholder to have the option to purchase all of the
capital stock of the New Subsidiary in exchange for cash in an amount equal to
the Strike Price, and the remainder of this Agreement shall be amended to the
extent necessary or advisable as a result of such change in structure.
ARTICLE III
DETERMINATION OF STRIKE PRICE
3.1. Strike Price. (a) The "Strike Price" shall be an amount equal
to (i) (Yen)26.41 billion plus (ii) the Net Worth Adjustment.
3.2. Opening Net Worth.
(a) The term "Opening Net Worth" shall mean (i) the sum of all assets
reflected in the Opening Balance Sheet minus (ii) the sum of all liabilities
reflected in the Opening Balance Sheet.
(b) As promptly as practicable following the date hereof, Xxxxxx
Japan shall prepare, in accordance with the Agreed Accounting Policies and
Allocation Methodology, a balance sheet as of the date hereof with respect to
the Purchased Business and the Assumed Liabilities, as if the Closing Date were
March 31, 2000 (the "Preliminary Opening Balance Sheet"), and shall deliver same
to Xxxxxxx Optionholder.
(c) Promptly following receipt of the Preliminary Opening Balance
Sheet, Xxxxxxx Optionholder may review the same and, within 30 days after the
date of such receipt, may deliver to Xxxxxx Japan a certificate (signed by its
chief financial officer or its chief accounting officer) setting forth its
objections to the Preliminary Opening Balance Sheet, together with a summary of
the reasons therefor and calculations which, in its view, are necessary to
eliminate such objections. In the event Xxxxxxx Optionholder does not so object
within such 30-day period, the Preliminary Opening Balance Sheet shall be final
and binding as the Opening Balance Sheet for purposes of this Agreement.
(d) In the event Xxxxxxx Optionholder so objects within such 30-day
period, Xxxxxxx Optionholder and Xxxxxx Japan shall use their reasonable efforts
to resolve by written agreement (the "Opening Agreed Adjustments") any
differences as to the Opening Balance Sheet and, in the event Xxxxxx Japan and
Xxxxxxx Optionholder so resolve all such differences, the Preliminary Opening
Balance Sheet, as adjusted by the Opening Agreed Adjustments, shall be final and
binding as the Opening Balance Sheet for purposes of this Agreement.
(e) If all such differences are not resolved by Opening Agreed
Adjustments within the 30-day period next following such 30-day objection
period, then Xxxxxxx Optionholder and Xxxxxx Japan shall submit the objections
that are then unresolved to an international accounting firm acceptable to both
Xxxxxx Japan and Xxxxxxx Optionholder and such firm (the "Accounting Firm")
shall be directed by Xxxxxxx Optionholder and Xxxxxx Japan to resolve the
unresolved objections (based solely on the presentations by Xxxxxxx Optionholder
and by Xxxxxx Japan as to whether any disputed matter had been determined in a
manner
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consistent with the Agreed Accounting Policies and Allocation Methodology) as
promptly as reasonable practicable and to deliver written notice to each of
Xxxxxxx Optionholder and Xxxxxx Japan setting forth its resolution of the
disputed matters. The Preliminary Opening Balance Sheet, after giving effect to
any Opening Agreed Adjustments and to the resolution of disputed matters by the
Accounting Firm, shall be final and binding as the Opening Balance Sheet for
purposes of this Agreement.
3.3. Closing Date Net Worth.
(a) The term "Closing Date Net Worth" shall mean (i) the sum of all
assets reflected in the Closing Date Balance Sheet minus (ii) the sum of all
liabilities reflected in the Closing Date Balance Sheet.
(b) As promptly as practicable following the Closing Date (but not
later than 30 days after the Closing Date), Xxxxxx Japan shall prepare, in
accordance with the Agreed Accounting Policies and Allocation Methodology, a
balance sheet as of the Closing Date with respect to the Purchased Business and
the Assumed Liabilities (the "Preliminary Closing Date Balance Sheet") and shall
deliver same to Xxxxxxx Optionholder.
(c) Promptly following receipt of the Preliminary Closing Date
Balance Sheet, Xxxxxxx Optionholder may review the same and, within 30 days
after the date of such receipt, may deliver to Xxxxxx Japan a certificate
(signed by its chief financial officer or its chief accounting officer) setting
forth its objections to the Preliminary Closing Date Balance Sheet, together
with a summary of the reasons therefor and calculations which, in its view, are
necessary to eliminate such objections. In the event Xxxxxxx Optionholder does
not so object within such 30-day period, the Preliminary Closing Date Balance
Sheet shall be final and binding as the Closing Date Balance Sheet for purposes
of this Agreement.
(d) In the event Xxxxxxx Optionholder so objects within such 30-day
objection period, Xxxxxxx Optionholder and Xxxxxx Japan shall use their
reasonable efforts to resolve by written agreement (the "Closing Agreed
Adjustments") any differences as to the Preliminary Closing Date Balance Sheet
and, in the event Xxxxxx Japan and Xxxxxxx Optionholder so resolve all such
differences, the Preliminary Closing Date Balance Sheet as adjusted by the
Closing Agreed Adjustments shall be final and binding as the Closing Date
Balance Sheet for purposes of this Agreement.
(e) If all such differences are not resolved by the Closing Agreed
Adjustments within the 30-day period next following such 30-day period, then
Xxxxxxx Optionholder and Xxxxxx Japan shall submit the objections that are then
unresolved to the Accounting Firm and such firm shall be directed by Xxxxxxx
Optionholder and Xxxxxx Japan to resolve the unresolved objections (based solely
on the presentations by Xxxxxxx Optionholder and by Xxxxxx Japan as to whether
any disputed matter had been determined in a manner consistent with the Agreed
Accounting Policies and Allocation Methodology) as promptly as reasonably
practicable and to deliver written notice to each of Xxxxxxx Optionholder and
Xxxxxx Japan setting forth its resolution of the disputed matters. The
Preliminary Closing Date Balance Sheet, after giving effect to any Closing
Agreed Adjustments and to the resolution of disputed matters by the
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Accounting Firm, shall be final and binding as the Closing Date Balance Sheet
for purposes of this Agreement.
3.4. Access to Information. The parties hereto shall make available
to each other and, if applicable, the Accounting Firm, such books, records and
other information (including work papers) as any of the foregoing may reasonably
request to prepare or review the Preliminary Opening Balance Sheet, the
Preliminary Closing Date Balance Sheet or any matters submitted to the
Accounting Firm pursuant to the terms hereof. The fees and expenses of the
Accounting Firm hereunder shall be paid 50% by Xxxxxxx Optionholder and 50% by
Xxxxxx Japan.
ARTICLE IV
PURCHASE AND SALE
4.1. Purchased Business. In the event that Xxxxxxx Optionholder
exercises the Option, upon the terms and subject to the conditions of this
Agreement, on the Closing Date, Xxxxxx Japan shall sell, transfer, assign,
convey and deliver to Xxxxxxx Optionholder, and Xxxxxxx Optionholder shall
purchase from Xxxxxx Japan, on a going concern basis, all of Xxxxxx Japan's
right, title and interest in and under the Japanese Xxxxxxx Business and all of
the assets and properties of Xxxxxx Japan of every kind and description,
wherever located, real, personal or mixed, tangible or intangible, relating
exclusively to the Japanese Xxxxxxx Business as the same shall exist on the
Closing Date (herein collectively called the "Purchased Business"), including,
without limitation, all right, title and interest of Xxxxxx Japan in, to and
under:
(i) all notes, accounts and other receivables generated by the
Japanese Xxxxxxx Business;
(ii) all prepayments relating exclusively to the Japanese Xxxxxxx
Business;
(iii) all raw materials, supplies, work-in-process, spare parts and
other materials relating exclusively to the Japanese Xxxxxxx Business,
other than items of inventory relating to products to be supplied by Xxxxxx
Japan to Xxxxxxx Optionholder after the Closing under Operating Agreements
entered into pursuant to Section 7.3;
(iv) all Governmental Permits, including all product registrations
and import licenses, that relate exclusively to the Japanese Xxxxxxx
Business, including those listed or described in Schedule 4.1(iv);
(v) the real estate leases and leasehold improvements that relate
exclusively to the Japanese Xxxxxxx Business including those listed or
described in Schedule 4.1(v) (the "Real Estate Leases");
(vi) all machinery, equipment, vehicles, furniture and other personal
property that relate exclusively to the Japanese Xxxxxxx Business including
those listed or described in Schedule 4.1(vi);
9
(vii) all Contracts that relate exclusively to the Japanese Xxxxxxx
Business, including the Japan Distribution Agreement and the Contracts
listed or described in Schedule 4.1(vii);
(viii) all trade secrets and other proprietary or confidential
information used exclusively in connection with the Japanese Xxxxxxx
Business;
(ix) all (x) Software that relates exclusively to the Japanese
Xxxxxxx Business, (y) PC-based Software located on hardware included in the
assets of the Purchased Business and (z) Contracts related to the
aforementioned Software;
(x) all of Xxxxxx Japan's rights, claims or causes of action
against third parties relating exclusively to the Japanese Xxxxxxx
Business;
(xi) all books and records (including all data and other information
stored on discs, tapes or other media) of Xxxxxx Japan relating exclusively
to the Japanese Xxxxxxx Business;
(xii) all office supplies, production supplies, purchase orders,
forms, labels, shipping material, art work, catalogues, sales brochures,
operating manuals and advertising and promotional material and all other
printed or written material that relate exclusively to the Japanese Xxxxxxx
Business;
(xiii) Xxxxxx Japan's interest in and to all telephone, telex and
telephone facsimile numbers, domain names and other directory listings
utilized exclusively in connection with the Japanese Xxxxxxx Business; and
(xiv) all other assets, tangible or intangible, including all
goodwill and all deposits or other security from customers of the Japanese
Xxxxxxx Business, that are exclusive to the operations of, or otherwise
relate exclusively to, the Japanese Xxxxxxx Business;
provided, however, that the Purchased Business shall not include any assets
listed in Schedules 4.1(iv), 4.1(v), 4.1(vi) or 4.1(vii) that are disposed of or
converted into cash after the date hereof.
4.2. Excluded Assets. Notwithstanding the provisions of Section 4.1,
the Purchased Business shall not include the following (herein referred to as
the "Excluded Assets"):
(i) all cash, bank deposits and cash equivalents, except for (i) all
deposits or other security from customers of the Japanese Xxxxxxx Business,
(ii) deposits securing bonds, letters of credit, leases and all other
obligations related exclusively to the Japanese Xxxxxxx Business and (iii)
xxxxx cash and impressed funds related exclusively to the Japanese Xxxxxxx
Business;
(ii) the name "Xxxxxx" or any related or similar trade names,
trademarks, service marks or logos to the extent the same incorporate the
name "Xxxxxx" or any variation thereof;
10
(iii) Xxxxxx Japan's rights, claims or causes of action against third
parties relating to the Japanese Xxxxxxx Business which may arise in
connection with the discharge by Xxxxxx Japan of the Excluded Liabilities;
(iv) all contracts of insurance;
(v) all corporate minute books, stock transfer books, the
corporate seal and all xxxxx of Xxxxxx Japan;
(vi) any right, title or interest of Xxxxxx Japan in any tax refund,
credit or benefit (including any income with respect thereto) relating to
the operations of the Japanese Xxxxxxx Business prior to the Closing Date;
(vii) all assets relating to all employee benefit plans of Xxxxxx
Japan, other than as provided in Article X;
(viii) all real estate owned or leased by Xxxxxx Japan at its Miyazaki
plant and all leasehold improvements thereon except for those leasehold
improvements specifically listed or described in Schedule 4.1(v);
(ix) the IV Business; and
(x) All other assets, properties and rights of Xxxxxx Japan not
used exclusively in the conduct of the Japanese Xxxxxxx Business and not
specifically included in the Purchased Business.
4.3. Assumed Liabilities. On the Closing Date, Xxxxxxx Optionholder
shall assume and agree to discharge, in accordance with their respective terms
and subject to the respective conditions thereof, all contractual and other
Liabilities of Xxxxxx Japan arising out of or related to the Japanese Xxxxxxx
Business, any Divested Business and/or any of the past or present facilities of
Xxxxxx Japan used primarily in connection with the Japanese Xxxxxxx Business or
any Divested Business, including, without limitation:
(i) All Liabilities in respect of Taxes except income Taxes;
(ii) All accounts payable and accrued liabilities of the Japanese
Xxxxxxx Business;
(iii) All Liabilities of Xxxxxx Japan under the Contracts and Real
Estate Leases included in the Purchased Business;
(iv) All Liabilities of Xxxxxx Japan under the TK Agreement, other
than payment obligations under Articles 5, 11 and 13 of the TK Agreement;
(v) All warranty, performance and similar obligations entered into
or made prior to the Closing Date with respect to the products or services
of the Japanese Xxxxxxx Business;
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(vi) All Liabilities related to any and all Actions asserting a
violation of any law, rule or regulation related to or arising out of the
operations of the Japanese Xxxxxxx Business, whether before or after the
Closing Date;
(vii) All Liabilities arising under any laws regarding the
management, control and clean-up of hazardous materials (including off-site
waste disposal liabilities) relating to or arising out of the operations of
the Japanese Xxxxxxx Business, whether before or after the Closing Date;
(viii) All Liabilities in connection with workers' compensation claims
of past, current or prospective employees of the Japanese Xxxxxxx Business,
whether incurred prior to, on or after the Closing Date;
(ix) All Liabilities relating to severance or termination of any
Xxxxxxx Employees whether before or after the Closing Date, and including
any Xxxxxxx Employees who do not accept employment by Xxxxxxx Optionholder
at the Closing Date;
(x) All Liabilities associated with the transfer of assets from the
Xxxxxx Japan Pension Plan to the Xxxxxxx Japan Pension Plan; and
(xi) All other Liabilities relating to the Japanese Xxxxxxx
Business, whether existing on the Closing Date or arising at any time or
from time to time after the Closing Date, and whether based on
circumstances, events or actions arising before or after the Closing Date,
whether or not such Liabilities shall have been disclosed herein, and
whether or not reflected on the books and records of Xxxxxx Japan.
All of the foregoing liabilities and obligations to be assumed by Xxxxxxx
Optionholder hereunder (excluding any Excluded Liabilities) are referred to
herein as the "Assumed Liabilities."
4.4. Excluded Liabilities. Xxxxxxx Optionholder shall not assume or
be obligated to pay, perform or otherwise discharge any Liability of Xxxxxx
Japan not expressly assumed by Xxxxxxx Optionholder pursuant to Section 4.3 (all
such liabilities and obligations not being assumed being herein called the
"Excluded Liabilities") and, notwithstanding anything to the contrary in Section
4.3, none of the following shall be Assumed Liabilities for purposes of this
Agreement:
(i) any Liabilities in respect of income Taxes; and
(ii) any Liabilities or obligations in respect of any Excluded
Assets.
ARTICLE V
CLOSING; POST-CLOSING ADJUSTMENT
5.1. Conditions to Closing. (a) Following exercise of the Option, the
obligation of Xxxxxx Japan to close the transactions contemplated hereby is
subject to the satisfaction or the waiver by Xxxxxx Japan of each of the
following conditions:
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(i) The absence of any material statutory, regulatory or
judicial prohibition to the consummation of the transactions
contemplated hereby; and
(ii) The completion of the transfer from Xxxxxx Japan to Xxxxxxx
Optionholder of all material Japanese import approvals and product
registrations for the Xxxxxxx Products or the receipt by Xxxxxx Japan
of an agreement by Xxxxxxx, in form and substance satisfactory to
Xxxxxx Japan in its sole discretion, to indemnify Xxxxxx Japan and its
Affiliates for any failure to complete such transfer.
(b) Following exercise of the Option, the obligation of Xxxxxxx
Optionholder to close the transactions contemplated hereby is subject to the
satisfaction or the waiver by Xxxxxxx Optionholder of each of the following
conditions:
(i) The absence of any material statutory, regulatory or
judicial prohibition to the consummation of the transactions
contemplated hereby; and
(ii) The completion of the transfer of all material Japanese
import approvals and product registrations for the Xxxxxxx Products
from Xxxxxx Japan to Xxxxxxx Optionholder.
5.2. Closing Date. The closing of the transactions contemplated by
this Agreement (the "Closing") shall be consummated at 10:00 A.M., local time,
as soon as practicable after satisfaction or waiver of the conditions set forth
in Section 5.1(a) (ii) and 5.1(b)(ii), or at such other date and time as may be
agreed upon by Xxxxxxx Optionholder and Xxxxxx Japan, at the offices of Baxter,
Xxx Xxxxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, XXX, or at such other place or at
such other time as shall be agreed upon by Xxxxxxx Optionholder and Xxxxxx
Japan. The time and date on which the Closing is actually held are sometimes
referred to herein as the "Closing Date".
5.3. Xxxxxxx Optionholder's Deliveries at Closing. Subject to
fulfillment or waiver by Xxxxxxx Optionholder of the conditions set forth in
Section 5.1(b), at Closing Xxxxxxx Optionholder shall (i) pay Xxxxxx Japan an
amount equal to the Estimated Strike Price by wire transfer of immediately
available funds to the account designated in writing by Xxxxxx Japan and (ii)
deliver to Xxxxxx Japan a duly executed Instrument of Assumption and duly
executed counterparts of the Operating Agreements.
5.4. Xxxxxx Japan's Deliveries at Closing. Subject to fulfillment or
waiver by Xxxxxx Japan of the conditions set forth in Section 5.1(a), at Closing
Xxxxxx Japan shall deliver to Xxxxxxx Optionholder (i) a duly executed
Instrument of Assignment and duly executed counterparts of the Operating
Agreements and (ii) such other certificates and documents of title, assignment,
transfer and conveyance as the parties shall reasonably deem necessary to
transfer title in and to the Purchased Business.
5.5. Post Closing Adjustment. Promptly (but not later than five
days) after the Closing Date Balance Sheet becomes final and binding pursuant to
Section 3.3:
(a) if the Strike Price exceeds the Estimated Strike Price,
Xxxxxxx
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Optionholder shall pay to Xxxxxx Japan, by wire transfer of
immediately available funds to such bank account of Xxxxxx Japan as
Xxxxxx Japan shall designate in writing to Xxxxxxx Optionholder, the
amount of such excess, plus interest on such amount from the Closing
Date to the date of payment thereof at a floating rate equal to the
Agreed Interest Rate in effect from time to time; or
(b) if the Estimated Strike Price exceeds the Strike Price,
Xxxxxx Japan shall pay to Xxxxxxx Optionholder, by wire transfer of
immediately available funds to such bank account of Xxxxxxx
Optionholder as Xxxxxxx Optionholder shall designate in writing to
Xxxxxx Japan, the amount of such excess, plus interest on such excess
from the Closing Date to the date of payment thereof at a floating
rate equal to the Agreed Interest Rate in effect from time to time.
5.6. Non-Assignable Contracts. In the event and to the extent that
the parties are unable to obtain any consent, approval or amendment to any
Contract, lease, license or other rights relating to the Japanese Xxxxxxx
Business that otherwise would be transferred or assigned to Xxxxxxx Optionholder
or one of its Subsidiaries as contemplated by this Agreement or any other
agreement or document contemplated hereby, (i) Xxxxxx Japan shall continue to be
bound thereby and the purported transfer or assignment to Xxxxxxx Optionholder
shall automatically be deemed deferred until such time as all legal impediments
are removed and/or all necessary consents have been obtained, and (ii) unless
not permitted by the terms thereof or by law, Xxxxxxx Optionholder shall pay,
perform and discharge fully all the obligations of Xxxxxx Japan thereunder from
and after the Closing Date, and indemnify Xxxxxx Japan and its Affiliates for
all indemnifiable Losses arising out of such performance by Xxxxxxx
Optionholder. Xxxxxx Japan shall, without further consideration therefor, pay
and remit to Xxxxxxx Optionholder promptly all monies, rights and other
considerations received in respect of such performance. Xxxxxx Japan shall
exercise or exploit its rights and options under all such Contracts, leases,
licenses and other rights and commitments referred to in this Section 5.6 only
as reasonably directed by Xxxxxxx Optionholder and at Xxxxxxx Optionholder's
expense. If and when any such consent shall be obtained or such Contract, lease,
license or other right shall otherwise become assignable or be able to be
novated, Xxxxxx Japan shall promptly assign and novate (to the extent
permissible) all of its rights and obligations thereunder to Xxxxxxx
Optionholder without payment of further consideration, and Xxxxxxx Optionholder
shall, without the payment of any further consideration therefor, assume such
rights and obligations. To the extent that the assignment of any Contract,
lease, license or other right (or the proceeds thereof) pursuant to this Section
5.6 is prohibited by law, the assignment provisions of this Section 5.6 shall
operate to create a subcontract with Xxxxxxx Optionholder to perform each
relevant unassignable Contract, lease or license of Xxxxxx Japan at a
subcontract price equal to the monies, rights and other considerations received
by Xxxxxx Japan with respect to the performance by Xxxxxxx Optionholder under
such subcontract.
5.7. Further Assurances. (a) In addition to the actions specifically
provided for elsewhere in this Agreement, each of the parties shall use
commercially reasonable efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all things reasonably necessary, proper or advisable
under applicable laws, regulations and agreements to consummate and make
effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement and the other agreements and documents
contemplated hereby. Without limiting the generality of the foregoing, each
party shall cooperate with the other party to execute and
14
deliver, or use commercially reasonable efforts to cause to be executed and
delivered, all instruments, including instruments of conveyance, assignment and
transfer, and to make all filings with, and to obtain all consents, approvals or
authorizations of, any Governmental Body or any other Person under any permit,
license, Contract or other instrument, and to take all such other actions as
such party may reasonably be requested to take by the other party from time to
time, consistent with the terms of this Agreement, in order to confirm the title
of Xxxxxxx Optionholder to all of the Japanese Xxxxxxx Business, to put Xxxxxxx
Optionholder in actual possession and operating control of the Purchased
Business and to permit Xxxxxxx Optionholder to exercise all rights with respect
thereto and to effectuate the provisions and purposes of this Agreement, and the
other agreements and documents contemplated hereby; provided, however, that
Xxxxxxx Optionholder shall be solely liable for the payment of any costs
associated with transferring any import approvals and product registrations for
the Xxxxxxx Products; and provided further, that except as stated in the
previous proviso, neither party shall be obligated to pay any consideration to
any third party in connection with any of the foregoing. In addition, Xxxxxx
Japan shall use reasonable efforts to remove or cause to be removed any liens
for borrowed money existing on the Purchased Business immediately prior to the
Closing Date other than liens securing Assumed Liabilities or liens incurred in
connection with the transactions contemplated by this Agreement.
(b) If, as a result of mistake, oversight or otherwise, any asset
reasonably necessary to the conduct of the Japanese Xxxxxxx Business is not
transferred to Xxxxxxx Optionholder, or any asset reasonably necessary to the
conduct of the Retained Business is transferred to Xxxxxxx Optionholder, Xxxxxxx
Optionholder and Xxxxxx Japan shall negotiate in good faith after the Closing
Date to determine whether such asset should be transferred to Xxxxxxx
Optionholder or Xxxxxx Japan, as the case may be, and/or the terms and
conditions upon which such asset shall be made available to Xxxxxxx Optionholder
or Xxxxxx Japan, as the case may be. Unless expressly provided to the contrary
in this Agreement and the other agreements and documents contemplated hereby, if
as a result of mistake, oversight or otherwise, any Liability arising out of or
relating to the Japanese Xxxxxxx Business is retained by Xxxxxx Japan, or any
Liability arising out of or relating to the Retained Business is assumed by
Xxxxxxx Optionholder, Xxxxxxx Optionholder and Xxxxxx Japan shall negotiate in
good faith after the Closing Date to determine whether such Liability should be
transferred to Xxxxxxx Optionholder or Xxxxxx Japan, as the case may be, and/or
the terms and conditions upon which any such Liability shall be transferred.
(c) If either party identifies any commercial or other service that
is needed to assure a smooth and orderly transition of the Japanese Xxxxxxx
Business in connection with the consummation of the transactions contemplated
hereby, and that is not otherwise governed by the provisions of this Agreement
or the Operating Agreements, the parties will cooperate in determining whether
there is a mutually acceptable arm's-length basis on which one party will
provide such service to the other party.
5.8. Novation of Assumed Liabilities. (a) It is expressly understood
and agreed to by the parties that upon the assumption by Xxxxxxx Optionholder of
the Assumed Liabilities, Xxxxxx Japan and its officers, directors, and employees
shall be released unconditionally by Xxxxxxx Optionholder from any and all
Liability, whether joint, several or
15
joint and several, for the discharge, performance or observance of any of the
Assumed Liabilities, so that Xxxxxxx Optionholder will be solely responsible for
such Assumed Liabilities.
(b) Xxxxxxx Optionholder shall, at the request of Xxxxxx Japan, use
commercially reasonable efforts to obtain, or cause to be obtained, any consent,
approval, release, substitution or amendment required to novate (including with
respect to any government contract) or assume all obligations under the Assumed
Liabilities, or to obtain in writing the unconditional release of all parties to
such arrangements other than Xxxxxxx Optionholder and its Affiliates; provided,
however, that Xxxxxxx Optionholder shall not be obligated to pay any
consideration therefor to any third party from whom such consents, approvals,
releases, substitutions or amendments are requested.
(c) In the event that the Parties are unable to obtain a novation or
assignment and release with respect to a particular Contract included in the
Purchased Business, at the expiration of the base term of such Contract, Xxxxxxx
Optionholder agrees that it will not exercise any option to renew such Contract
or, to the extent such Contract provides for automatic renewal, Xxxxxxx
Optionholder agrees that it will not allow such Contract to enter an auto-
renewal period unless Xxxxxxx Optionholder obtains the prior written consent of
Xxxxxx Japan to such extension or auto-renewal.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1. Organization, Good Standing and Authority of Xxxxxx Japan.
Xxxxxx Japan hereby represents and warrants to Xxxxxxx Optionholder as follows:
Xxxxxx Japan is a corporation duly organized and validly existing and in good
standing under the laws of Japan. Xxxxxx Japan has full power and authority to
execute, deliver and perform this Agreement. The execution, delivery and
performance of this Agreement by Xxxxxx Japan have been duly authorized and
approved by Xxxxxx Japan's board of directors and stockholders. This Agreement
has been duly authorized, executed and delivered by Xxxxxx Japan.
6.2. Organization, Good Standing and Authority of Xxxxxxx
Optionholder. Xxxxxxx Optionholder represents and warrants to Xxxxxx Japan as
follows: Xxxxxxx Optionholder is a corporation duly organized and validly
existing under the laws of Japan. Xxxxxxx Optionholder has full power and
authority to execute, deliver and perform this Agreement. The execution,
delivery and performance of this Agreement by Xxxxxxx Optionholder has been duly
authorized and approved by Xxxxxxx Optionholder's board of directors and do not
require the further authorization or consent of Xxxxxxx Optionholder or its
stockholder. This Agreement has been duly authorized, executed and delivered by
Xxxxxxx Optionholder.
6.3. No Other Representations or Warranties. Xxxxxx Japan does not
represent or warrant in any way (i) as to the value or freedom from encumbrance
of, or any other matter concerning, any of the Purchased Business or (ii) as to
the legal sufficiency to convey title to any part of the Purchased Business on
the execution, delivery and filing of the Instrument of Assignment. ALL ASSETS
INCLUDED IN THE PURCHASED BUSINESS ARE BEING TRANSFERRED ON AN "AS IS, WHERE IS"
BASIS WITHOUT ANY REPRESENTATION
16
OR WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, MARKETABILITY,
TITLE, VALUE, FREEDOM FROM ENCUMBRANCE OR ANY OTHER REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, and Xxxxxxx Optionholder shall bear the economic and legal
risks that any conveyances of such assets shall prove to be insufficient or that
Xxxxxxx Optionholder's title to any such assets shall be other than good and
marketable and free of encumbrances. Xxxxxx Japan does not make any
representation or warranty with respect to whether the consents, approvals, or
filings and applications obtained or made prior to consummation of the
transactions contemplated by this Agreement shall satisfy the provisions of all
applicable agreements or the requirements of all applicable laws or judgments,
and, subject to Section 5.6, Xxxxxxx Optionholder shall bear the economic and
legal risk that any necessary consents or approvals are not obtained or that any
requirements of law or judgments are not complied with.
ARTICLE VII
PRE-CLOSING COVENANTS
7.1. Operation of Japanese Xxxxxxx Business. (a) Until either (i) the
Closing Date (if the Option is exercised) or (ii) the end of the Exercise Period
(if the Option is not exercised), Xxxxxx Japan shall operate and carry on the
Japanese Xxxxxxx Business (pursuant to the terms of the TK Agreement (if
applicable)) only in the ordinary course and substantially as presently operated
and shall not, without the express written approval of Xxxxxxx Optionholder:
(i) change the primary line of business of the Japanese Xxxxxxx
Business; or
(ii) sell, lease (as lessor), transfer or otherwise dispose of, or
mortgage or pledge, any of the assets of the Japanese Xxxxxxx Business
that, upon exercise of the Option, would constitute part of the Purchased
Business (including, without limitation, Xxxxxx Japan's rights under the
Distribution Agreement), other than accounts receivable, inventory and
other property sold or otherwise disposed of for fair value in the ordinary
course of the Japanese Xxxxxxx Business consistent with past practice;
provided, however, that this clause (ii) shall not apply to any transfer of
all of the assets of the Japanese Xxxxxxx Business to an Affiliate of
Xxxxxx Japan in which case all of such transferred assets shall remain
subject to the Option.
(b) If the Option is exercised, then from and after the date it
receives the Notice of Exercise through and including the Closing Date, Xxxxxx
Japan shall not, without the approval of the Xxxxxxx Lifesciences Division
President:
(i) make any change in the Japanese Xxxxxxx Business or its
operations or make any capital expenditure in respect of the Japanese
Xxxxxxx Business which shall exceed the amount budgeted therefor;
(ii) enter into any contract for the purchase or sale of real
property that would be included in the Purchased Business or exercise any
option to extend a Real Estate Lease;
(iii) sell, lease (as lessor), transfer or otherwise dispose of (other
than to an Affiliate of Xxxxxx Japan), or mortgage or pledge, or impose or
suffer to be imposed any
17
lien, charge, security interest, mortgage, pledge or other defect in title
on, any part of the Purchased Business, other than accounts receivable,
inventory and minor amounts of personal property sold or otherwise disposed
of for fair value in the ordinary course of the Japanese Xxxxxxx Business
consistent with past practice and other than Permitted Encumbrances;
provided, however, that this clause (iii) shall not apply to any transfer
of all of the assets of the Japanese Xxxxxxx Business to an Affiliate of
Xxxxxx Japan in which case all of such transferred assets shall remain
subject to the Option;
(iv) cancel any debts owed to or claims held by Japanese Xxxxxxx
Business (including the settlement of any claims or litigation) other than
in the ordinary course of the Japanese Xxxxxxx Business consistent with
past practice;
(v) create, incur or assume, or agree to create, incur or assume,
any indebtedness for borrowed money in respect of the Japanese Xxxxxxx
Business or enter into, as lessee, any capitalized lease obligations (as
defined in Statement of Financial Accounting Standards No. 13) in respect
of the Japanese Xxxxxxx Business;
(vi) accelerate or delay collection of any notes or accounts
receivable generated by the Japanese Xxxxxxx Business in advance of or
beyond their regular due dates or the dates when the same would have been
collected in the ordinary course of the Japanese Xxxxxxx Business
consistent with past practice;
(vii) delay or accelerate payment of any account payable or other
liability of the Japanese Xxxxxxx Business beyond or in advance of its due
date or the date when such liability would have been paid in the ordinary
course of the Japanese Xxxxxxx Business consistent with past practice;
(viii) allow the levels of raw materials, supplies, work-in-process or
other materials included in the inventory of the Japanese Xxxxxxx Business
to vary in any material respect from the levels customarily maintained;
(ix) institute any increase in any profit-sharing, bonus, incentive,
deferred compensation, insurance, pension, retirement, medical, hospital,
disability, welfare or other employee benefit plan with respect to
employees of the Japanese Xxxxxxx Business; or
(x) make any change in the compensation of the employees of the
Japanese Xxxxxxx Business other than changes made in accordance with normal
compensation practices and consistent with past compensation practices.
7.2. Consents of Third Parties; Governmental Approvals. (a) If the
Option is exercised, Xxxxxx Japan and Xxxxxxx Optionholder will act diligently
and reasonably to secure the consent, approval or waiver of any third party that
is reasonably required for the consummation of transactions contemplated by this
Agreement; provided, however, that neither party shall have any obligation to
offer or pay any consideration in order to obtain any such consents, approvals
or waivers; and provided further, that Xxxxxx Japan shall not make any agreement
or understanding affecting the Purchased Business or the Japanese Xxxxxxx
Business
18
as a condition for obtaining any such consents, approvals or waivers except with
the prior written consent of Xxxxxxx Optionholder.
(b) If the Option is exercised, Xxxxxx Japan and Xxxxxxx Optionholder
shall act diligently and reasonably, and shall cooperate with each other, to
secure any consents and approvals of any Governmental Body required to be
obtained by them in order to assign or transfer any Governmental Permits to
Xxxxxxx Optionholder or to permit the consummation of the transactions
contemplated by this Agreement; provided, however, that Xxxxxxx Optionholder
shall be solely liable for the payment of any costs associated with transferring
any import approvals and product registrations for the Xxxxxxx Products; and
provided further, that except as stated in the previous proviso, neither party
shall have any obligation to offer or pay any consideration in order to obtain
any such consents or approvals; and provided further, that Xxxxxx Japan shall
not make any agreement or understanding affecting the Purchased Business or the
Japanese Xxxxxxx Business as a condition for obtaining any such consents or
approvals except with the prior written consent of Xxxxxxx Optionholder.
7.3. Services. If the Option is exercised, Xxxxxxx Optionholder and
Xxxxxx Japan will work together to identify any services (including those
relating to occupation and use of facilities) that are needed to assure a smooth
and orderly transition of the Japanese Xxxxxxx Business and, to the extent
practicable, negotiate and prepare mutually acceptable agreements to govern the
provision of such services after the Closing Date (the "Operating Agreements").
Schedule 7.3 sets forth a non-exclusive list of services and facilities for
which Operating Agreements may be required.
7.4. Financial Statements. Until either (i) the Closing Date (if the
Option is exercised) or (ii) the end of the Exercise Period (if the Option is
not exercised), Xxxxxx Japan will deliver to Xxxxxxx Optionholder, within 25
days after the end of each fiscal quarter, an unaudited balance sheet, income
statement with respect to the Japanese Xxxxxxx Business, all prepared in
accordance with the Agreed Accounting Policies and Allocation Methodology.
ARTICLE VIII
POST-CLOSING COVENANTS
The following covenants shall apply from and after the Closing Date:
8.1. Collection of Accounts Receivable.
(a) Xxxxxx Japan shall be entitled to control all collection actions
related to the Retained Business, including the determination of what actions
are necessary or appropriate and when and how to take any such action.
(b) Xxxxxxx and its Subsidiaries shall be entitled to control all
collection actions related to the Purchased Business, including the
determination of what actions are necessary or appropriate and when and how to
take any such action.
(c) If, after the Closing Date, Xxxxxxx Optionholder or any of its
Affiliates shall receive any remittance from any account debtors with respect to
the accounts receivable arising out of the Retained Business or other amounts
due Xxxxxx Japan in respect of services
19
rendered or products sold by Xxxxxx Japan after the Closing Date, or Xxxxxx
Japan or any of its Affiliates shall receive any remittance from any account
debtors with respect to the accounts receivable arising out of the Purchased
Business or other amounts due Xxxxxxx Optionholder or its Affiliates in respect
of services rendered or products sold by Xxxxxxx Optionholder or its Affiliates
after the Closing Date, such party shall receive and deposit such remittance and
deliver cash in an amount equal thereto to the other party as soon as
practicable. In the absence of any designation of the specific invoice being
paid by a customer thereby, payments from account debtors shall be applied to
the earliest invoice outstanding with respect to indebtedness of such account
debtor owing to either Xxxxxxx Optionholder or Xxxxxx Japan.
(d) Each party shall deliver to the other such schedules and other
information with respect to the accounts receivable included in the Purchased
Business and those not included therein as each shall reasonably request from
time to time in order to permit such parties to reconcile their respective
records and to monitor the collection of all accounts receivable (whether or not
included in the Purchased Business). Each party shall afford the other
reasonable access to its books and records relating to any accounts receivable.
8.2. Agreements Relating to Xxxxxxx Optionholder and Xxxxxx Japan.
(a) Each of Xxxxxxx Optionholder and Xxxxxx Japan shall use commercially
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, all things, reasonably necessary, proper or advisable under
applicable laws, regulations and agreements to consummate, make effective and
perform its or its Subsidiaries' allocable portion of all purchase, distribution
and other obligations under all Contracts with customers, suppliers, vendors or
other third parties relating to both the Japanese Xxxxxxx Business and the
Retained Business (the "Shared Agreements"). Each of Xxxxxx Japan and Xxxxxxx
Optionholder shall be entitled to the rights and privileges of its allocable
portion of the Shared Agreements.
(b) Each of Xxxxxxx Optionholder and Xxxxxx Japan shall use
commercially reasonable efforts to take, or cause to be taken, all actions, and
to do, or cause to be done, all things reasonably necessary, proper or advisable
under applicable laws, regulations and agreements to afford the rights and
privileges of the allocable portion of the Shared Agreements to the other.
(c) Liabilities pursuant to, arising under or relating to Shared
Agreements shall be allocated between Xxxxxx Japan, on the one hand, and Xxxxxxx
Optionholder on the other hand, as follows:
(i) First, if a Liability is incurred exclusively in respect of
a benefit received by one party, the party receiving such benefit
shall be responsible for such Liability; and
(ii) Second, if a Liability cannot be so allocated under clause
(i), such Liability shall be allocated between the parties based on
the relative proportions of total benefit received (based upon the
performance under such Shared Agreement during the twelve-month period
immediately prior to the Closing Date) under the relevant Shared
Agreement. Notwithstanding the foregoing, each party shall be
responsible for any and all Liabilities arising out of or resulting
20
from a breach of the relevant Shared Agreement attributable to the
Japanese Xxxxxxx Business, in the case of Xxxxxxx Optionholder, or the
Retained Business, in the case of Xxxxxx Japan.
(d) If either Xxxxxx Japan, on the one hand, or Xxxxxxx Optionholder,
on the other hand, improperly receives any benefit or payment under any Shared
Agreement that was intended for the other, the party receiving such benefit or
payment will use commercially reasonable efforts to deliver, transfer or
otherwise afford such benefit or payment to the other party.
8.3. Informal, Nondocumented Real Estate Leases. Each party may
continue to occupy, from and after the Closing Date, such space in the
facilities of the other party as is occupied immediately prior to the Closing
Date, or such other space therein as may be mutually agreed to from time to time
by Xxxxxxx Optionholder and Xxxxxx Japan, and which occupancy is otherwise not
documented by any written leasing agreement or otherwise provided for in the
Operating Agreements, on the following terms and conditions:
(a) The occupying party shall pay to the other party rent with
respect to such occupied space for the period from and after the Closing Date
during which such space is so occupied, which rent shall be determined by the
other party on the same basis on which the other party allocates rent with
respect to the occupancy of space by business units of the other party or as the
occupying party presently is paying, whichever is lower. Such rent shall be
payable from time to time by the occupying party (but not more frequently than
monthly) promptly following delivery by the other party to the occupying party
of a statement therefor.
(b) The occupying party may, at any time, upon not less than 15 days'
prior written notice to Xxxxxx Japan, with a copy to Xxxxxxx Optionholder,
terminate its occupancy of any or all of such space.
(c) The other party may, at any time, upon not less than 30 days'
prior written notice to the occupying party, require the occupying party to
cease occupancy of any or all of such space as designated in a notice sent to
the occupying party.
ARTICLE IX
[INTENTIONALLY OMITTED]
ARTICLE X
EMPLOYEES AND EMPLOYEE BENEFIT MATTERS
10.1. Employment of Xxxxxxx Employees. On the Closing Date, Xxxxxxx
Optionholder shall make an offer to employ each Xxxxxxx Employee at the same
salary and wage rate levels (including bonus programs) paid by Xxxxxx Japan as
in effect on the Closing Date; provided, however, that Xxxxxxx Optionholder and
its Affiliates retain the right to determine the compensation of all such
Xxxxxxx Employees after the Closing Date. Xxxxxxx Optionholder and Xxxxxx Japan
shall use commercially reasonable efforts to accomplish any
21
transfers of employment required by this Section 10.1 in a timely manner. Each
Xxxxxxx Employee who accepts this offer of employment is referred to as a
"Transferred Employee".
10.2. Terminations/Layoff/Severance. Xxxxxxx Employees shall not be
eligible for any severance benefits from Xxxxxx Japan as a result of either
their employment by Xxxxxxx Optionholder or its Affiliates or any subsequent
termination of employment with Xxxxxxx Optionholder or its Affiliates.
10.3. Employee Benefit Plans. (a) Except as otherwise specifically
provided in this Article X, all Transferred Employees shall cease to participate
in the Xxxxxx Japan employee benefit plans and programs (the "Xxxxxx Plans") as
of the Closing Date.
(b) No later than the Closing Date, Xxxxxxx Optionholder and/or its
Affiliates shall establish its own employee benefit plans and programs for the
benefit of eligible Transferred Employees including, but not limited to, a
pension plan (the "Xxxxxxx Japan Pension Plan"), a long-term disability plan, a
group life insurance plan and an overseas travel insurance plan (collectively,
the "Xxxxxxx Plans"). Additionally, Xxxxxxx Optionholder shall continue to
contribute to the "Kosei Nenkin" Old Age Employees' Pension Plan and the "Tokyo
Yakugyo" Health Insurance on behalf of Transferred Employees. Notwithstanding
the foregoing, Xxxxxxx Optionholder shall not contribute on behalf of the
Transferred Employees to the multiemployer fund entitled the Employee Pension
Fund ("EPF"); provided, however, that Xxxxxxx Optionholder shall pay cash or
stock allowances similar to premiums paid under EPF to the Transferred Employees
until Xxxxxxx Optionholder establishes or contributes to a program to replace
EPF for such Transferred Employees.
(c) Each Transferred Employee who becomes eligible to participate in
the Xxxxxxx Plans shall be credited under such plans with periods of service
with any Xxxxxx Japan Group Member for all purposes under such plans.
(d) Xxxxxx Japan shall pay all costs associated with the provision of
disability benefits to any Xxxxxxx Employee or former Xxxxxxx Employee who as of
the Closing Date is receiving disability benefits from Xxxxxx Japan.
10.4. Transfer of Account Balances and Accrued Benefits. Subject to
applicable law and the provisions of the Xxxxxx Tax Qualified Pension Plan (the
"Xxxxxx Japan Pension Plan"), as soon as administratively practicable following
the Closing Date, or effective as of any other date as agreed to in writing by
the plan administrator for the Xxxxxx Japan Pension Plan and the plan
administrator for the Xxxxxxx Japan Pension Plan, the accrued benefits (the
"Transferred Accrued Benefits") of all Xxxxxx Japan Pension Plan participants
who are Transferred Employees shall be transferred from the Xxxxxx Japan Pension
Plan to the Xxxxxxx Japan Pension Plan. The amount of Transferred Accrued
Benefits shall be determined by the actuaries for the respective plans by the
Closing Date in accordance with the methodology described in Schedule 10.4. Each
Transferred Employee shall receive credit for all purposes under the Xxxxxxx
Japan Pension Plan for the periods of service with Xxxxxx Japan or any of its
Subsidiaries or Affiliates. The plan administrator for the Xxxxxxx Japan Pension
Plan shall take any other action reasonably requested by the plan administrator
for the Xxxxxx Japan Pension Plan that is necessary or advisable, in the opinion
of the plan administrator for the Xxxxxx
22
Pension Plan, to maintain the tax-qualified status of the Xxxxxx Japan Pension
Plan or to avoid the imposition of any penalties with respect to such plan.
10.5. Stock Purchase Plans. Except as otherwise provided in the
Xxxxxx Stock Purchase Plan, on the Closing Date, all Transferred Employees shall
cease to be eligible to purchase Xxxxxx Common Stock under the terms of the
Xxxxxx International Inc. Employees Stock Purchase Plan for International
Employees.
10.6. Workers' Compensation. As soon as administratively practicable
following the Closing Date, a risk management representative for each of the
parties shall agree upon the allocation between the parties of responsibility
and liability for workers' compensation claims and expenses relating to current
and former Xxxxxxx Employees.
10.7. Vacation Pay Policy. After the Closing Date, it is expected
that Xxxxxxx Optionholder shall maintain for its employees a vacation pay
policy, and Xxxxxxx Optionholder shall be responsible for costs incurred to
provide vacation pay to Transferred Employees following such date. Xxxxxxx
Optionholder shall assume any and all Xxxxxx Japan Liabilities to provide to
Transferred Employees vacation that such persons accrued under the Xxxxxx Japan
vacation pay policy as of the Closing Date, and no payment of such accrued
vacation pay shall be made by Xxxxxx Japan on the Closing Date.
10.8. Information to be Provided to Xxxxxx Japan. Xxxxxxx
Optionholder (or its applicable Affiliate) shall provide any information that
Xxxxxx Japan may reasonably request, including information relating to dates of
termination of employment, in order to provide benefits to any eligible
Transferred Employee under the terms and conditions described herein or under
the applicable Xxxxxx Plans. Any information relating to an employee's
termination of employment shall be provided by Xxxxxxx Optionholder to Xxxxxx
Japan as soon as available to Xxxxxxx Optionholder or any of its Affiliates, but
in any event no later than 30 days after such information is made available to
Xxxxxxx Optionholder or any such Affiliates.
10.9. Transfer of Employee Files. By a specified date as agreed upon
by Xxxxxxx Optionholder and Xxxxxx Japan following the Closing Date, Xxxxxx
Japan shall transfer to Xxxxxxx Optionholder complete copies of the personnel
files relating to all Transferred Employees.
10.10. Employment Solicitation. During the period beginning on the
Closing Date and ending one year after the Closing Date, neither Xxxxxx Japan
nor Xxxxxxx Optionholder shall, nor shall they permit any of their respective
Subsidiaries, Affiliates or agents to, directly or indirectly, except as
provided in the following sentence, actively solicit or recruit for employment
any then current employee of the other or of any of the other's Subsidiaries.
Nothing contained in this Section 10.10 shall (i) prohibit the hiring of any
employee who in good faith is believed to be actively seeking employment on his
or her own initiative without prior contact initiated by any employee or agent
of the company where employment is sought, or any of such company's Affiliates;
provided, however, that such employee or the hiring company has obtained
authorization from the Department Manager of Human Resources of his or her
current employer; or (ii) prohibit Xxxxxx Japan or Xxxxxxx Optionholder or any
of their respective
23
Subsidiaries from hiring any person who has terminated employment with the other
company. The foregoing restriction shall cease to apply one year after the
Closing Date.
ARTICLE XI
INSURANCE MATTERS
11.1. Insurance Prior to the Closing Date. Xxxxxxx Optionholder does
hereby agree that neither Xxxxxx nor Xxxxxx Japan shall have any Liability
whatsoever as a result of the insurance policies and practices of Xxxxxx or
Xxxxxx Japan in effect at any time prior to the Closing Date, including any
assistance rendered to Xxxxxxx Optionholder by Xxxxxx or Xxxxxx Japan in the
placement of its insurance program, including as a result of the level or scope
of any such insurance, the creditworthiness of any insurance carrier, the terms
and conditions of any policy and the adequacy or timeliness of any notice to any
insurance carrier with respect to any claim or potential claim or otherwise.
11.2. Ownership of Existing Policies and Programs. Unless otherwise
agreed by the parties, Xxxxxx or Xxxxxx Japan, as the case may be, shall
continue to own all property, casualty and liability insurance policies and
programs, including primary and excess general liability, errors and omissions,
automobile, workers' compensation, property, fire, crime, surety and other
similar insurance policies, in effect on or before the Closing Date relating to
the Japanese Xxxxxxx Business (collectively, the "Xxxxxx Policies" and
individually, a "Xxxxxx Policy"). Between the date hereof and the Closing Date,
Xxxxxx shall not discriminate between the insurance coverage applicable to the
Japanese Xxxxxxx Business and similar coverage applicable to Xxxxxx Japan's
other businesses. Nothing contained herein shall be construed to be an attempt
to assign or to change the ownership of the Xxxxxx Policies.
11.3. Procurement of Insurance for Xxxxxxx Optionholder. To the
extent not already provided for by the terms of the Xxxxxx Policies, Xxxxxx
shall use commercially reasonable efforts to cause Xxxxxxx Optionholder and its
Affiliates to be named as additional insureds under Xxxxxx Policies whose
effective policy periods include the Closing Date, in respect of claims for
which coverage is available under the terms and conditions of the Xxxxxx
Policies, arising out of or relating to periods prior to the Closing Date;
provided, however, that nothing contained herein shall be construed to require
Xxxxxx to pay any additional premium or other charges in respect to, or waive or
otherwise limit any of its rights, benefits or privileges under, any Xxxxxx
Policy in order to effect the naming of Xxxxxxx Optionholder or its Affiliates
as such additional insureds.
11.4. Acquisition and Maintenance of Post-Closing Xxxxxxx
Optionholder's Insurance Policies and Programs. Commencing on and as of the
Closing Date, Xxxxxxx Optionholder shall be responsible for establishing and
maintaining separate property, casualty and liability insurance policies and
programs (including primary and excess general liability, errors and omissions,
automobile, workers' compensation, property, fire, crime, surety and other
similar insurance policies) for activities and claims involving Xxxxxxx
Optionholder and the Japanese Xxxxxxx Business. Xxxxxxx Optionholder will
exercise commercially reasonable efforts to secure liability insurance to avoid
potential gaps in coverage for claims arising from events prior to the Closing
Date, which gap would not exist had the Japanese Xxxxxxx Business continued to
be covered with the same retroactive dates existing in the Xxxxxx Policies in
effect
24
on the Closing Date. Xxxxxxx Optionholder shall be responsible for all
administrative and financial matters relating to insurance policies established
and maintained by Xxxxxxx Optionholder for claims relating to any period on or
after the Closing Date involving Xxxxxxx Optionholder. Notwithstanding any other
agreement or understanding to the contrary, except as set forth in Section 11.7
with respect to claims administration and financial administration of the Xxxxxx
Policies, neither Xxxxxx nor Xxxxxx Japan shall have any responsibility for or
obligation to Xxxxxxx or any of its Affiliates relating to property and casualty
insurance matters for any period, whether prior to, on or after the Closing
Date.
11.5. Xxxxxxx Optionholder Directors' and Officers' Insurance.
Xxxxxx shall use commercially reasonable efforts to cause the persons serving as
officers and/or directors of Xxxxxx Japan at the Closing Date to be covered for
a period of six (6) years from the Closing Date by the directors' and officers'
liability insurance policy maintained by Xxxxxx as of the Closing Date
(including corporate reimbursement) (provided that Baxter may substitute
therefor policies of at least the same coverage and amounts containing terms and
conditions that are not less advantageous than such policy) with respect to
matters covered under the existing policy occurring prior to the Closing Date
that were committed by such officers and/or directors in their capacity as such;
provided, however, that in no event shall Xxxxxx be required to expend with
respect to any year more than 200% of the current annual premium expended by
Xxxxxx (the "Insurance Amount") to maintain or procure insurance coverage
pursuant hereto; and provided, further, that if Xxxxxx is unable to maintain or
obtain the insurance called for by this Section 11.5, Xxxxxx shall use
commercially reasonable efforts to obtain as much comparable insurance as
available for the Insurance Amount. In the event Xxxxxx or any of its successors
or assigns (i) consolidates with or merges into any other Person and shall not
be the continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers or conveys all or substantially all of its properties
and assets to any Person, then, and in each such case, to the extent necessary,
proper provision shall be made so that the successors and assigns of Xxxxxx
assume the obligations set forth in this Section 11.5. The provisions of this
Section 11.5 are intended to be for the benefit of, and shall be enforceable by,
each such officer and director and his or her heirs and representatives. As
provided in Section 12.4, any amount Xxxxxxx Optionholder is required to pay to
Xxxxxx as an indemnity under this Agreement is reduced to the extent Baxter
receives insurance proceeds from the above coverage, but only to the extent such
proceeds are actually received by Xxxxxx.
11.6. Pre-Closing Insurance Claims Administration. Xxxxxxx
Optionholder acknowledges that Xxxxxx has and will continue to experience losses
and receive claims that are, or might be, covered by one or more Xxxxxx
Policies, and prior to the Closing Date will make decisions and commitments
regarding administration of such claims, including reaching agreements and
stipulations regarding such claims (collectively, "Pre-Closing Claims
Administration"). Xxxxxxx Optionholder covenants not to contest or challenge in
any manner any action taken by Xxxxxx prior to the Closing Date in connection
with or relating to Pre-Closing Claims Administration, or to interfere with the
performance of any agreement, commitment or stipulation so made by Xxxxxx in
connection with or relating to Pre-Closing Claims Administration.
11.7. Post-Closing Insurance Claims Administration. Xxxxxx shall
have the primary right, responsibility and authority for claims administration
and financial administration
25
of claims that relate to or affect the Xxxxxx Policies. Upon notification by
Xxxxxxx Optionholder of a claim relating to Xxxxxxx Optionholder or an Affiliate
thereof under one or more of the Xxxxxx Policies, Xxxxxx shall cooperate with
Xxxxxxx Optionholder in asserting and pursuing coverage and payment for such
claim by the appropriate insurance carrier(s). In asserting and pursuing such
coverage and payment, Xxxxxx shall have sole power and authority to make binding
decisions, determinations, commitments and stipulations on its own behalf and on
behalf of Xxxxxxx Optionholder, which decisions, determinations, commitments and
stipulations shall be final and conclusive if made to maximize the overall
economic benefit of the Xxxxxx Policies. Xxxxxxx Optionholder assumes
responsibility for, and shall pay to the appropriate insurance carriers or
otherwise, any premiums, retrospectively-rated premiums, defense costs,
indemnity payments, deductibles, retentions or other charges (collectively,
"Insurance Charges") whenever arising, which shall become due and payable under
the terms and conditions of any applicable Xxxxxx Policy in respect of any
liabilities, losses, claims, actions or occurrences, whenever arising or
becoming known, involving or relating to any of the assets, businesses,
operations or liabilities of the Japanese Xxxxxxx Business, whether the same
relate to the period prior to, on or after the Closing Date. To the extent that
the terms of any applicable Xxxxxx Policy provide that Xxxxxx shall have an
obligation to pay or guarantee the payment of any Insurance Charges relating to
Xxxxxxx Optionholder, Xxxxxx shall be entitled to demand that Xxxxxxx
Optionholder make such payment directly to the Person or any of its Affiliates
entitled thereto. In connection with any such demand, Xxxxxx shall submit to
Xxxxxxx Optionholder a copy of any invoice received by Xxxxxx pertaining to such
Insurance Charges together with appropriate supporting documentation, to the
extent available. In the event that Xxxxxxx Optionholder fails to pay any such
Insurance Charges when due and payable, whether at the request of the party
entitled to payment or upon demand by Xxxxxx, Xxxxxx may (but shall not be
required to) pay such insurance charges for and on behalf of Xxxxxxx
Optionholder and, thereafter, Xxxxxxx Optionholder shall forthwith reimburse
Xxxxxx for such payment. Subject to the other provisions of this Article XI, the
retention by Xxxxxx of the Xxxxxx Policies and the responsibility for claims
administration and financial administration of such policies are in no way
intended to limit, inhibit or preclude any right of Xxxxxxx Optionholder, Xxxxxx
or any other insured to insurance coverage for any Insured Claims under the
Xxxxxx Policies.
11.8. Non-Waiver of Rights to Coverage. An insurance carrier that
otherwise would be obligated to pay any claim shall not be relieved of the
responsibility with respect thereto, or, solely by virtue of the provisions of
this Article XI, have any subrogation rights with respect thereto, it being
expressly understood and agreed that no insurance carrier or any third-party
shall be entitled to a windfall (i.e., a benefit they would not be entitled to
receive had the Closing not occurred or in the absence of the provisions of this
Article XI) by virtue of the provisions hereof.
11.9. Scope of Affected Policies of Insurance. The provisions of
this Article XI relate solely to matters involving liability, casualty and
workers' compensation insurance, and shall not be construed to affect any
obligation of or impose any obligation on the parties with respect to any life,
health and accident, dental or medical insurance policies applicable to any of
the officers, directors, employees or other representatives of the parties or
their Affiliates.
26
ARTICLE XII
INDEMNIFICATION
12.1. Indemnification by Xxxxxxx Optionholder. From and after the
Closing Date, Xxxxxxx Optionholder shall indemnify and hold harmless each Xxxxxx
Japan Group Member from and against any and all Loss and Expense incurred or
suffered by such Xxxxxx Japan Group Member in connection with, relating to,
arising out of or due to, directly or indirectly, any of the following items:
(a) the Japanese Xxxxxxx Business as conducted on or at any time
prior to the Closing Date (other than Excluded Liabilities);
(b) the Purchased Business;
(c) the Assumed Liabilities;
(d) the breach by Xxxxxxx Optionholder of any covenant or agreement
set forth in this Agreement or the Instrument of Assumption, regardless of when
or where the loss, claim, accident, occurrence, event or happening giving rise
to the Expense or Loss took place, or whether any such loss, claim, accident,
occurrence, event or happening is known or unknown, or reported or unreported;
(e) the employee benefits provided or the actions taken or omitted to
be taken with respect thereto in connection with this Agreement or otherwise
relating to the provision of employee benefits to Xxxxxxx Employees, their
beneficiaries, alternate payees or any other person claiming benefits through
them (except to the extent such Expenses or Losses are specifically allocated to
Xxxxxx Japan pursuant to Section 12.2(e)), including Expenses or Losses arising
in connection with (i) Xxxxxxx Optionholders' reduction, elimination or failure
to provide any benefit accrued by its employees (including benefits accrued
prior to the Closing Date) and (ii) the transfer of account balances and accrued
benefits as described in Section 10.4 where such Expenses or Losses are incurred
as a result of any act or omission by Xxxxxxx Optionholder (or a representative
of Xxxxxxx Optionholder);
(f) the indemnifiable matters set forth in Section 5.6 and Article X;
and
(g) Xxxxxx Japan's inability to terminate the employment of any
Xxxxxxx Employees following the termination or expiration of this Agreement.
12.2. Indemnification by Xxxxxx Japan. From and after the Closing
Date, Xxxxxx Japan shall indemnify and hold harmless each Xxxxxxx Optionholder
Group Member from and against any and all Loss and Expense incurred or suffered
by such Xxxxxxx Optionholder Group Member in connection with, relating to,
arising out of or due to, directly or indirectly, any of the following items:
(a) the business (other than the Japanese Xxxxxxx Business) conducted
by Xxxxxx Japan on or at any time prior to the Closing Date;
27
(b) the assets owned by Xxxxxx Japan (other than assets included in
the Purchased Business and the Shared Agreements);
(c) the Liabilities (including the Excluded Liabilities) of Xxxxxx
Japan other than the Assumed Liabilities;
(d) the breach by Xxxxxx Japan of any covenant or agreement set forth
in this Agreement or the Instrument of Assignment, regardless of when or where
the loss, claim, accident, occurrence, event or happening giving rise to the
Expense or Loss took place, or whether any such loss, claim, accident,
occurrence, event or happening is known or unknown, or reported or unreported;
and
(e) any act or omission by Xxxxxx Japan in connection with the
transfer of assets and liabilities as described in Section 10.4.
12.3. Applicability of and Limitation on Indemnification.
(a) EXCEPT AS EXPRESSLY PROVIDED HEREIN, THE INDEMNITY OBLIGATIONS
UNDER THIS ARTICLE XII SHALL APPLY NOTWITHSTANDING ANY INVESTIGATION MADE BY OR
ON BEHALF OF ANY INDEMNIFIED PARTY AND SHALL APPLY WITHOUT REGARD TO WHETHER THE
LOSS, LIABILITY, CLAIM, DAMAGE, COST OR EXPENSE FOR WHICH INDEMNITY IS CLAIMED
HEREUNDER IS BASED ON STRICT LIABILITY, ABSOLUTE LIABILITY OR ARISES AS AN
OBLIGATION FOR CONTRIBUTION.
(b) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN
NO EVENT SHALL XXXXXX JAPAN BE LIABLE TO ANY XXXXXXX OPTIONHOLDER GROUP MEMBER,
OR XXXXXXX OPTIONHOLDER BE LIABLE TO ANY XXXXXX JAPAN GROUP MEMBER, UNDER THIS
AGREEMENT FOR ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE
DAMAGES, INCLUDING LOSS OF ANTICIPATED PROFITS OR LOSS OR DIMINUTION OF
REVENUES, REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT OR
OTHERWISE, EXCEPT TO THE EXTENT THAT SUCH LIABILITY HAS BEEN ASSERTED BY A THIRD
PARTY AGAINST A PARTY ENTITLED TO INDEMNIFICATION HEREUNDER.
12.4. Adjustment of Indemnifiable Losses.
(a) The amount that either party (an "Indemnifying Party") is
required to pay to any Person entitled to indemnification hereunder (an
"Indemnified Party") shall be reduced (including retroactively) by any Insurance
Proceeds and other amounts actually recovered by or on behalf of such
Indemnified Party in reduction of the related Expense or Loss. If an Indemnified
Party receives a payment (an "Indemnity Payment") required by this Agreement
from an Indemnifying Party in respect of any Expense or Loss and subsequently
actually receives Insurance Proceeds or other amounts in respect of such Expense
or Loss, then such Indemnified Party shall pay to the Indemnifying Party a sum
equal to the lesser of (i) the amount of
28
such Insurance Proceeds or other amounts actually received or (ii) the net
amount of Indemnity Payments actually received previously. The Indemnified Party
agrees that the Indemnifying Party shall be subrogated to such Indemnified Party
under any insurance policy.
(b) An insurer who otherwise would be obligated to pay any claim
shall not be relieved of the responsibility with respect thereto, or, solely by
virtue of the indemnification provisions hereof, have any subrogation rights
with respect thereto, it being expressly understood and agreed that no insurer
or any other third-party shall be entitled to a "windfall" (i.e., a benefit he
or she would not be entitled to receive in the absence of the indemnification
provisions) by virtue of the indemnification provisions hereof.
(c) If any Indemnified Party realizes a Tax benefit or detriment in
one or more Tax periods by reason of having incurred an Expense or a Loss for
which such Indemnified Party receives an Indemnity Payment from an Indemnifying
Party (or by reason of the receipt of any Indemnity Payment), then such
Indemnified Party shall pay to such Indemnifying Party an amount equal to the
Tax benefit or such Indemnifying Party shall pay to such Indemnified Party an
additional amount equal to the Tax detriment (taking into account, without
limitation, any Tax detriment resulting from the receipt of such additional
amounts), as the case may be. The amount of any Tax benefit or any Tax detriment
for a Tax period realized by an Indemnified Party by reason of having incurred
an Expense or a Loss (or by reason of the receipt of any Indemnity Payment)
shall be deemed to equal the product obtained by multiplying (i) the amount of
any deduction or loss or inclusion in income for such period resulting from such
Expense or Loss (or the receipt of any Indemnity Payment or additional amount),
as the case may be (without regard to whether such deduction or loss or such
inclusion in income results in any actual decrease or increase in Tax liability
for such period), by (ii) the highest applicable marginal Tax rate for such
period (provided, however, that the amount of any Tax benefit attributable to an
amount that is creditable shall be deemed to equal the amount of such creditable
item). Any payment due under this Section 12.4(c) with respect to a Tax benefit
or Tax detriment realized by an Indemnified Party in a Tax period shall be due
and payable within 30 days from the time the return for such Tax period is due,
without taking into account any extension of time granted to the party filing
such return.
12.5. Procedures for Indemnification of Third Party Claims.
(a) If any third-party shall make any claim or commence any
arbitration proceeding or suit (collectively, a "Third Party Claim") against any
one or more of the Indemnified Parties with respect to which an Indemnified
Party intends to make any claim for indemnification against Xxxxxxx Optionholder
under Section 12.1 or against Xxxxxx Japan under Section 12.2, such Indemnified
Party shall promptly give written notice to the Indemnifying Party describing
such Third Party Claim in reasonable detail, and the following provisions shall
apply. Notwithstanding the foregoing, the failure of any Indemnified Party to
provide notice in accordance with this Section 12.5(a) shall not relieve the
related Indemnifying Party of its obligations under this Article XII, except to
the extent that such Indemnifying Party is actually prejudiced by such failure
to provide notice.
(b) The Indemnifying Party shall have the right to assume the defense
of any such Third Party Claim. If the Indemnifying Party elects not to conduct
and control the defense of such Third Party Claim, the Indemnified Party shall
have the right to defend, contest, settle or
29
compromise such Third Party Claim in the exercise of its exclusive discretion
subject to the provisions of Section 12.5(c), and the Indemnifying Party shall,
upon request from any of the Indemnified Parties, promptly pay to such
Indemnified Parties in accordance with the other terms of this Section 12.5(b)
the amount of any Expense or Loss resulting from their liability to the third-
party claimant. If the Indemnifying Party assumes the defense of the Third Party
Claim, the Indemnifying Party shall have the right to undertake, conduct and
control, through counsel reasonably acceptable to the Indemnified Party, and at
its sole expense, the conduct and settlement of such Third Party Claim, and the
Indemnified Party shall cooperate with the Indemnifying Party in connection
therewith, provided that (i) the Indemnifying Party shall not thereby permit any
lien, encumbrance or other adverse charge to thereafter attach to any asset of
any Indemnified Party; (ii) the Indemnifying Party shall not thereby permit any
injunction against any Indemnified Party; (iii) the Indemnifying Party shall
permit the Indemnified Party and counsel chosen by the Indemnified Party and
reasonably acceptable to the Indemnifying Party to monitor such conduct or
settlement and shall provide the Indemnified Party and such counsel with such
information regarding such Third Party Claim as either of them may reasonably
request (which request may be general or specific), but the fees and expenses of
such counsel (including allocated costs of in-house counsel and other personnel)
shall be borne by the Indemnified Party unless (A) the Indemnifying Party and
the Indemnified Party shall have mutually agreed to the retention of such
counsel or (B) the named parties to any such Third Party Claim include the
Indemnified Party and the Indemnifying Party and in the reasonable opinion of
counsel to the Indemnified Party representation of both parties by the same
counsel would be inappropriate due to actual or likely conflicts of interest
between them, in either of which cases the reasonable fees and disbursements of
counsel for such Indemnified Party (including allocated costs of in-house
counsel and other personnel) shall be reimbursed by the Indemnifying Party to
the Indemnified Party; and (iv) the Indemnifying Party shall agree promptly to
reimburse to the extent required under this Article XII the Indemnified Party
for the full amount of any Expense or Loss resulting from such Third Party Claim
and all related expenses incurred by the Indemnified Party. In no event shall
the Indemnifying Party, without the prior written consent of the Indemnified
Party, settle or compromise any claim or consent to the entry of any judgment
that does not include as an unconditional term thereof the giving by the
claimant or the plaintiff to the Indemnified Party a release from all Liability
in respect of such claim.
If the Indemnifying Party shall not have undertaken the conduct and
control of the defense of the Third Party Claim as provided above, the
Indemnifying Party shall nevertheless be entitled through counsel chosen by the
Indemnifying Party and reasonably acceptable to the Indemnified Party to monitor
the conduct or settlement of such claim by the Indemnified Party, and the
Indemnified Party shall provide the Indemnifying Party and such counsel with
such information regarding such Third Party Claim as either of them may
reasonably request (which request may be general or specific), but all costs and
expenses incurred in connection with such monitoring shall be borne by the
Indemnifying Party.
(c) So long as the Indemnifying Party is contesting any such Third
Party Claim in good faith, the Indemnified Party shall not pay or settle any
such Third Party Claim. Notwithstanding the foregoing, the Indemnified Party
shall have the right to pay or settle any such Third Party Claim, provided that
in such event the Indemnified Party shall waive any right to indemnity therefor
by the Indemnifying Party, and no amount in respect thereof shall be claimed as
an Expense or a Loss under this Section 12.5(c).
30
If the Indemnifying Party shall have undertaken the conduct and
control of the defense of any Third Party Claim as provided above, the
Indemnified Party, on not less than 30 days prior written notice to the
Indemnifying Party, may make settlement (including payment in full) of such
Third Party Claim, and such settlement shall be binding upon the parties for the
purposes hereof, unless within said 30-day period the Indemnifying Party shall
have requested the Indemnified Party to contest such Third Party Claim at the
expense of the Indemnifying Party. In such event, the Indemnified Party shall
promptly comply with such request and the Indemnifying Party shall have the
right to direct the defense of such claim or any litigation based thereon
subject to all the conditions of Section 12.5(b). Notwithstanding anything in
this Section 12.5(c) to the contrary, if the Indemnified Party, in the belief
that a claim may materially and adversely affect it other than as a result of
money damages or other money payments, advises the Indemnifying Party that it
has determined to settle a claim, the Indemnified Party shall have the right to
do so at its own cost and expense, without any requirement to contest such claim
at the request of the Indemnifying Party, but without any right under the
provisions of this Section 12.5(c) for indemnification by the Indemnifying
Party.
12.6. Procedures for Indemnification of Direct Claims. Any claim for
indemnification on account of an Expense or a Loss made directly by the
Indemnified Party against the Indemnifying Party and that does not result from a
Third Party Claim shall be asserted by written notice from the Indemnified Party
to the Indemnifying Party specifically claiming indemnification hereunder. Such
Indemnifying Party shall have a period of 30 business days after the receipt of
such notice within which to respond thereto. If such Indemnifying Party does
not respond within such 30 business day period, such Indemnifying Party shall be
deemed to have accepted responsibility to make payment and shall have no further
right to contest the validity of such claim. If such Indemnifying Party does
respond within such 30 business-day period and rejects such claim in whole or in
part, such Indemnified Party shall be free to pursue resolution as provided in
Article XIII.
12.7. Remedies Cumulative. The remedies provided in this Article XII
shall be cumulative and, subject to the provisions of Article XIII below, shall
not preclude assertion by an Indemnified Party of any other rights or the
seeking of any and all other remedies against any Indemnifying Party.
ARTICLE XIII
DISPUTE RESOLUTION
13.1. General. Any dispute arising out of or relating to this
Agreement, the Instrument of Assignment or the Instrument of Assumption shall be
solved in accordance with the procedures specified in this Article XIII which
shall be the sole and exclusive procedures for the resolution of any such
disputes.
13.2. Escalation. The parties will attempt in good faith to resolve
expeditiously any dispute, claim or controversy arising out of or relating to
the execution, interpretation and performance of this Agreement (including the
validity, scope and enforceability of this arbitration provision) promptly by
negotiations between executives who have authority to settle the controversy and
who are at a higher level of management than the persons with direct
responsibility for the administration of this Agreement. Either party may give
the other party
31
written notice (an "Escalation Notice") of any dispute not resolved in the
normal course of business. Within fifteen days after delivery of the Escalation
Notice, the receiving party shall submit to the other a written response. The
Escalation Notice and the response thereto shall include (a) a statement of each
party's position and a summary of arguments supporting that position, and (b)
the name and title of the executive who will represent that party and of any
other person who will accompany the executive. Within 30 days after delivery of
the Escalation Notice, the executives of both parties shall meet at a mutually
acceptable time and place, and thereafter as often as they reasonably deem
necessary, to attempt to resolve the dispute. All reasonable requests for
information made by one party to the other will be honored. All negotiations
pursuant to this clause are confidential and shall be treated as compromise and
settlement negotiations for purposes of applicable rules of evidence.
13.3. Arbitration. Any dispute, claim or controversy arising out of
or relating to this Agreement or its breach, termination or validity which has
not been resolved by the specified non-binding procedure set forth in Section
13.2 within 90 days of the date of delivery of the Escalation Notice shall be
settled by binding arbitration in accordance with the CPR Non-Administered
Arbitration Rules in effect on the date of this Agreement, by three independent
and impartial arbitrators, none of whom shall be appointed by either party. The
arbitration shall be governed by the United States Arbitration Act, 9 U. S. C.
(S) (S) 1- 16, as the same may be amended from time to time, and judgment upon
the award rendered by the arbitrators may be entered by any court having
jurisdiction thereof. The place of the arbitration shall be Lake County,
Illinois or Orange County, California, and shall be determined by the party that
initiated the dispute resolution process. The arbitrators may award attorneys'
fees in their discretion. Otherwise, the arbitrators are not empowered to award
damages in excess of compensatory damages, and each party hereby irrevocably
waives any right to recover such damages.
13.4. Procedures. The parties may request limited discovery in
accordance with the Federal Rules of Civil Procedure of the United States (the
"F.R.C.P.") for a period of 120 days after the initiation of the arbitration
process. All issues regarding compliance with discovery requests shall be
decided by the arbitrators pursuant to the F.R.C.P. The parties agree that the
recipient of a discovery request shall have 10 business days after the receipt
of such request to object to any or all portions of such request and shall
respond to any portions of such request not so objected within 30 business days
of the receipt of such request. All objections shall be in writing and shall
indicate the reasons for such objections. The objecting party shall ensure that
all objections and responses are received by the other party within the above
time periods; failure to comply with the specified time period shall be
addressed as set forth in F.R.C.P. 37. Any party seeking to compel discovery
following receipt of an objection shall file with the other party and the
arbitrators a motion to compel, including a copy of the initial request and the
objection. The arbitrators shall allow 10 business days for the responses to the
motion to compel before ruling. Claims of privilege and other objections shall
be determined as they would be in United States federal court in a case applying
Illinois law. The arbitrators may grant or deny the motion to compel, in whole
or in part, concluding that the discovery request is or is not appropriate under
the circumstances, taking into account the needs of the parties and the
desirability of making discovery expeditious and cost-effective. The statute of
limitations of the State of Illinois applicable to the commencement of a lawsuit
shall apply to the date of initial written notification of a dispute and shall
be extended until commencement of arbitration if all interim deadlines have been
complied with by the notifying party.
32
13.5. Injunctive Relief. Nothing contained in this Article XIII
shall prevent either party from resorting to judicial process if injunctive or
other equitable relief from a court is necessary to prevent serious and
irreparable injury to one party or to others. The use of arbitration procedures
will not be construed under the doctrine of laches, waiver or estoppel to affect
adversely either party's right to assert any claim or defense.
ARTICLE XIV
GENERAL PROVISIONS
14.1. Notices. All notices or other communications required or
permitted hereunder shall be in writing and shall be deemed given or delivered
when delivered personally, or when sent by registered or certified mail or by
private courier or facsimile transmission (provided that in the case of
facsimile transmission, a confirmation copy of the notice shall be delivered by
hand or sent by courier within two days of transmission) addressed as follows:
If to Xxxxxxx Optionholder, to:
Xxxxxxx Lifesciences (Japan) Limited
Rokubancho 0-0, Xxxxxxx-xx
Xxxxx 000-0000 Xxxxx
Attention: Chairman and Representative Director
Facsimile: 00-0-0000-0000
with a copy to:
Xxxxxxx Lifesciences Corporation
00000 Xxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
XXX
Attention: International Counsel
Facsimile: 000-000-0000
If to Baxter Japan, to:
Xxxxxx Limited
0, Xxxxxxxxxx, Xxxxxxx-xx
Xxxxx 000-0000 Xxxxx
Attention: President and Representative Director
Facsimile: 00-0-0000-0000
33
with a copy to:
Xxxxxx International Inc.
Xxx Xxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
XXX
Attention: International Counsel
Facsimile: 000-000-0000
or to such other address as such party may indicate by a notice delivered to the
other party hereto.
14.2. Successors and Assigns. (a) Either party may assign any of its
rights under this Agreement, but no such assignment shall relieve such party of
its obligations hereunder.
(b) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their successors and permitted assigns. The successors
and permitted assigns hereunder shall include without limitation, in the case of
Xxxxxxx Optionholder, any permitted assignee as well as the successors in
interest to such permitted assignee (whether by merger, liquidation (including
successive mergers or liquidations) or otherwise). Except to the extent
otherwise provided in Section 11.5 or Article XII, nothing in this Agreement,
expressed or implied, is intended or shall be construed to confer upon any
Person other than the parties and successors and assigns permitted by this
Section 14.2 any right, remedy or claim under or by reason of this Agreement.
14.3. Access to Records after Closing. (a) For a period of ten years
after the Closing Date, Xxxxxx Japan and its representatives shall have
reasonable access to all of the books and records of the Japanese Xxxxxxx
Business transferred to Xxxxxxx Optionholder hereunder to the extent that such
access may reasonably be required by Xxxxxx Japan in connection with matters
relating to or affected by the operations of the Japanese Xxxxxxx Business prior
to the Closing Date. Such access shall be afforded by Xxxxxxx Optionholder upon
receipt of reasonable advance notice and during normal business hours. Xxxxxx
Japan shall be solely responsible for any costs or expenses incurred by it
pursuant to this Section 14.3(a). If Xxxxxxx Optionholder shall desire to
dispose of any of such books and records prior to the expiration of such ten-
year period, Xxxxxxx Optionholder shall, prior to such disposition, give Xxxxxx
Japan a reasonable opportunity, at Xxxxxx Japan's expense, to segregate and
remove such books and records as Xxxxxx Japan may select.
(b) For a period of ten years after the Closing Date, Xxxxxxx
Optionholder and its representatives shall have reasonable access to all of the
books and records relating to the Japanese Xxxxxxx Business which Xxxxxx Japan
or any of its Affiliates may retain after the Closing Date. Such access shall be
afforded by Xxxxxx Japan and its Affiliates upon receipt of reasonable advance
notice and during normal business hours. Xxxxxxx Optionholder shall be solely
responsible for any costs and expenses incurred by it pursuant to this Section
14.3(b). If Xxxxxx Japan or any of its Affiliates shall desire to dispose of any
of such books and records prior
34
to the expiration of such ten-year period, Xxxxxx Japan shall, prior to such
disposition, give Xxxxxxx Optionholder a reasonable opportunity, at Xxxxxxx
Optionholder's expense, to segregate and remove such books and records as
Xxxxxxx Optionholder may select.
14.4. Entire Agreement; Amendments. This Agreement and the Exhibits
and Schedules referred to herein and the documents delivered pursuant hereto
contain the entire understanding of the parties hereto with regard to the
subject matter contained herein or therein, and supersede all prior agreements,
understandings or letters of intent between or among any of the parties hereto.
This Agreement shall not be amended, modified or supplemented except by a
written instrument signed by an authorized representative of Xxxxxxx
Optionholder and by the President of Xxxxxx Japan.
14.5. Interpretation. Article titles and headings to sections herein
are inserted for convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement. The Schedules
and Exhibits referred to herein shall be construed with and as an integral part
of this Agreement to the same extent as if they were set forth verbatim herein.
14.6. Waivers. Any term or provision of this Agreement may be
waived, or the time for its performance may be extended, by the party or parties
entitled to the benefit thereof. Any such waiver shall be validly and
sufficiently authorized for the purposes of this Agreement if, as to any party,
it is authorized in writing by an authorized representative of such party. The
failure of any party hereto to enforce at any time any provision of this
Agreement shall not be construed to be a waiver of such provision, nor in any
way to affect the validity of this Agreement or any part hereof or the right of
any party thereafter to enforce each and every such provision. No waiver of any
breach of this Agreement shall be held to constitute a waiver of any other or
subsequent breach.
14.7. Expenses. All costs and expenses incident to its negotiation
and preparation of this Agreement will be paid by Xxxxxx Japan. Each party will
pay all costs and expenses incident to its performance and compliance with all
agreements and conditions contained herein on its part to be performed or
complied with.
14.8. Partial Invalidity. Wherever possible, each provision hereof
shall be interpreted in such manner as to be effective and valid under
applicable law, but in case any one or more of the provisions contained herein
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such provision shall be ineffective to the extent, but only to the
extent, of such invalidity, illegality or unenforceability without invalidating
the remainder of such invalid, illegal or unenforceable provision or provisions
or any other provisions hereof, unless such a construction would be
unreasonable.
14.9. Execution in Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be considered an original
instrument, but all of which shall be considered one and the same agreement, and
shall become binding when one or more counterparts have been signed by each of
the parties hereto and delivered to each of Xxxxxx Japan and Xxxxxxx
Optionholder.
35
14.10. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws (as opposed to the conflicts of
law provisions) of the State of Illinois.
14.11. Submission to Jurisdiction. Xxxxxx Japan and Xxxxxxx
Optionholder hereby irrevocably submit in any suit, action or proceeding arising
out of or related to this Agreement or any of the transactions contemplated
hereby or thereby to the jurisdiction of the United States District Court for
the Northern District of Illinois and the jurisdiction of any court of the State
of Illinois located in Chicago and waive any and all objections to jurisdiction
that they may have under the laws of the State of Illinois or the United States.
14.12. Termination. (a) Anything contained in this Agreement to the
contrary notwithstanding, this Agreement may be terminated at any time by mutual
written consent of Xxxxxxx Optionholder and Xxxxxx Japan. This Agreement shall
terminate automatically if the Exercise Period expires prior to exercise of the
Option.
(b) If this Agreement is terminated pursuant to this Section 14.12,
all further obligations of the parties under this Agreement shall be terminated
without further liability of any party to the other, provided that nothing
herein shall relieve any party from liability for its willful breach of this
Agreement.
14.13. Survival of Obligations. All representations, warranties,
covenants and obligations contained in this Agreement shall survive the
consummation of the transactions contemplated by this Agreement.
14.14. Currency. All payments under this Agreement shall be
denominated in Yen.
******
36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed the day and year first above written.
XXXXXX LIMITED
By: /s/ Xxxxx Xxxxxx Xxxxxx
------------------------
Name: Xxxxx Xxxxxx Xxxxxx
Title: President and
Representative Director
XXXXXXX LIFESCIENCES (JAPAN)
LIMITED
By: /s/ Takashi Tsumori
-------------------
Name: Takashi Tsumori
Title: Chairman and
Representative Director
For purposes of Article XI only:
XXXXXX INTERNATIONAL INC.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
----------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: General Counsel and
Corporate Vice President
37
Exhibit A
---------
Japanese Xxxxxxx Business
The Cardiovascular Group sells or is engaged in the development of following
product categories in Japan through its three business units (Cardiovascular
Surgery, or CVS, Anesthesia and Medication Delivery, or AMD, and Vascular and
Interventional Cardiology, or VIC):
. Tissue and mechanical heart valves and rings, pericardial patches,
oxygenators, and cardiopulmonary bypass circuits including reservoirs and
arterial filters, cardioplegia devices, heart-lung machines, centrifugal
pumps, arterial and venous cannulae, CDI oxygen monitor cells, Novacor left
ventricular assist devices
. Thermo-dilution (Xxxx-Xxxx) catheters, pacing catheters, central venous
catheters, venous introducers, Invos cerebral tissue oxygen monitor devices,
VIA continuous arterial blood gas monitor devices, Lifespan PTFE endovascular
grafts, Xxxxxxx atraumatic occlusion clips and clamps, Intramed angioscopy
equipment, Thrombex PMT clot extraction catheters
. Direct blood pressure monitor kit, disposable pressure transducers,
Embolectomy (Xxxxxxx) catheters, Lifepath abdominal aortic aneurysm
endovascular graft system, Datascope intra-aortic balloon pumps and
catheters, VasoSeal collagen hemostasis devices, UniCath percutaneous
transluminal coronary angioplasty balloon catheters and stents, Medtronic
pacemakers
The Cardiovascular Group in Japan also manufacturers Custom Pac cardiopulmonary
circuits and direct blood pressure monitor kits at the Miyazaki plant.
Exhibit B
---------
XXXX OF SALE AND ASSIGNMENT
Pursuant to that certain Option Agreement dated as of March 31, 2000
(the "Option Agreement") by and between Baxter Limited, a Japanese corporation
("Baxter Japan"), and Xxxxxxx Lifesciences (Japan) Limited, a Japanese
corporation ("Xxxxxxx Optionholder"), for good and valuable consideration paid
to Baxter Japan by or on behalf of Xxxxxxx Optionholder, the receipt of which is
hereby acknowledged by Xxxxxx Japan, Xxxxxx Japan does hereby sell, transfer,
assign, convey and deliver to Xxxxxxx Optionholder the Purchased Business (all
capitalized terms not defined herein shall have the meanings specified in the
Option Agreement); provided, however, as to any lease, contract, agreement,
permit or other authorization or rights included in the Purchased Business that
cannot be conveyed, assigned, transferred, contributed, set over or delivered
effectively without the consent of a third party, which consent has not been
obtained, this Xxxx of Sale and Assignment shall be of no force or effect until
such requisite consent is obtained, whereupon this Xxxx of Sale and Assignment
shall become of full force and effect with respect thereto.
EXCEPT FOR THE REPRESENTATIONS, WARRANTIES AND OTHER AGREEMENTS
SPECIFICALLY PROVIDED FOR IN THE OPTION AGREEMENT, ALL OF THE ASSETS SOLD
HEREUNDER ARE SOLD TO XXXXXXX OPTIONHOLDER "AS IS" WITHOUT ANY IMPLIED WARRANTY
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, MARKETABILITY, TITLE,
VALUE, FREEDOM FROM ENCUMBRANCE OR ANY REPRESENTATION OR WARRANTY, EXPRESSED OR
IMPLIED.
This Xxxx of Sale and Assignment shall be binding upon Xxxxxx Japan,
its successors and assigns, and shall inure to the benefit of Xxxxxxx
Optionholder, its successors and assigns.
IN WITNESS WHEREOF, Xxxxxx Japan has caused this instrument to be duly
executed and delivered as of ____________________.
XXXXXX LIMITED
By: _____________________________
Name:
Title:
Exhibit C
---------
INSTRUMENT OF ASSUMPTION
------------------------
Pursuant to that certain Option Agreement dated as of March 31, 2000
(the "Option Agreement") by and between Xxxxxx Limited, a Japanese corporation
("Xxxxxx Japan"), and Xxxxxxx Lifesciences (Japan) Limited, a Japanese
corporation ("Xxxxxxx Optionholder"), for good and valuable consideration paid
to Xxxxxxx Optionholder by or on behalf of Xxxxxx Japan, the receipt of which is
hereby acknowledged by Xxxxxxx Optionholder, Xxxxxxx Optionholder does hereby
assume and agree to pay, perform or otherwise discharge, in accordance with
their terms and subject to the respective conditions thereof, the Assumed
Liabilities (all capitalized terms not defined herein shall have the meanings
specified in the Option Agreement).
This Instrument of Assumption shall be binding upon the successors and
assigns of Xxxxxxx Optionholder and shall inure to the benefit of the successors
and assigns of Xxxxxx Japan.
IN WITNESS WHEREOF, Xxxxxxx Optionholder has caused this instrument to
be duly executed and delivered as of ____________.
XXXXXXX LIFESCIENCES (JAPAN) LIMITED
By:__________________________
Name:
Title:
Exhibit D
---------
VALUATION DATE BALANCE SHEET
----------------------------
See attached.
Exhibit E
---------
DESCRIPTION OF IV BUSINESS
--------------------------
The IV Business consists of the importation and distribution of the products
that Operator currently sells or plans to sell in Japan in the following
product categories:
. Infusors, TUR solutions and sets, EIS infusion pumps and Interlink
products, epidural trays and Sabratek pumps,
together with any improved versions of such products introduced after date
hereof. For the avoidance of doubt, the IV Business shall not include any
products subsequently acquired by Operator or its Affiliates as a result of an
acquisition or similar transaction that closes after date hereof.
