Exhibit 10.1


 


FINAL FORM


 






 


PURCHASE AGREEMENT


 






 


Between 


 


GUIDANT CORPORATION


 


and 


 


ABBOTT LABORATORIES


 


Dated as of April 21, 2006


 

















 


TABLE OF CONTENTS


 


	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE
  I

  
	
  DEFINITIONS

  
	
   

  	
   

  
	
  SECTION 1.01. Certain
  Defined Terms

  	
  2

  
	
  SECTION 1.02. Definitions

  	
  9

  
	
   

  	
   

  
	
  ARTICLE
  II

  
	
  PURCHASE
  AND SALE

  
	
   

  	
   

  
	
  SECTION 2.01. Purchase and
  Sale of the Shares

  	
  11

  
	
  SECTION 2.02. Purchase and
  Sale of Assets

  	
  11

  
	
  SECTION 2.03. Assumption
  and Exclusion of Liabilities

  	
  15

  
	
  SECTION 2.04. Purchase
  Price; Allocation of Purchase Price

  	
  16

  
	
  SECTION 2.05. Milestone
  Payments

  	
  17

  
	
  SECTION 2.06. Closing

  	
  17

  
	
  SECTION 2.07. Closing
  Deliveries by Guidant

  	
  18

  
	
  SECTION 2.08. Closing
  Deliveries by Abbott

  	
  19

  



 


ARTICLE III 


REPRESENTATIONS AND WARRANTIES OF GUIDANT


 


	
  SECTION 3.01.
  Organization, Authority and Qualification

  	
  19

  
	
  SECTION 3.02.
  Organization, Authority and Qualification of the Transferred Subsidiaries

  	
  20

  
	
  SECTION 3.03.
  Capitalization; Ownership of Shares

  	
  20

  
	
  SECTION 3.04. No Conflict

  	
  21

  
	
  SECTION 3.05. Governmental
  Consents and Approvals

  	
  21

  
	
  SECTION 3.06. Conduct in
  the Ordinary Course

  	
  22

  
	
  SECTION 3.07. Litigation

  	
  23

  
	
  SECTION 3.08. Compliance
  with Laws

  	
  23

  
	
  SECTION 3.09.
  Environmental Matters

  	
  23

  
	
  SECTION 3.10. Intellectual
  Property

  	
  24

  
	
  SECTION 3.11. Title

  	
  26

  
	
  SECTION 3.12. Employee
  Benefit Matters

  	
  26

  
	
  SECTION 3.13. Taxes

  	
  30

  
	
  SECTION 3.14. Material
  Contracts

  	
  31

  
	
  SECTION 3.15. Regulatory
  Matters

  	
  32

  
	
  SECTION 3.16. Assets

  	
  34

  
	
  SECTION 3.17. Brokers

  	
  34

  
	
  SECTION 3.18. Disclaimer

  	
  34

  



 


ARTICLE IV 


REPRESENTATIONS AND WARRANTIES OF ABBOTT


 


	
  SECTION 4.01. Organization
  and Authority

  	
  34

  



 


 


i

















 


	
  SECTION 4.02. No Conflict

  	
  35

  
	
  SECTION 4.03. Governmental
  Consents and Approvals

  	
  35

  
	
  SECTION 4.04. Litigation

  	
  35

  
	
  SECTION 4.05. Brokers

  	
  36

  
	
  SECTION 4.06. Disclaimer

  	
  36

  



 


ARTICLE V 


ADDITIONAL AGREEMENTS


 


	
  SECTION 5.01.
  Acknowledgment

  	
  36

  
	
  SECTION 5.02. Access to
  Information; Confidentiality

  	
  36

  
	
  SECTION 5.03. Regulatory
  and Other Authorizations; Notices and Consents

  	
  37

  
	
  SECTION 5.04.
  Notifications

  	
  38

  
	
  SECTION 5.05. Release of
  Indemnity Obligations

  	
  39

  
	
  SECTION 5.06. Tax Election

  	
  39

  
	
  SECTION 5.07. Insurance

  	
  41

  
	
  SECTION 5.08. Trademarks

  	
  41

  
	
  SECTION 5.09. Further
  Action

  	
  43

  
	
  SECTION 5.10. Mixed
  Contracts and Accounts

  	
  44

  
	
  SECTION 5.1l. Intercompany
  Arrangements

  	
  45

  
	
  SECTION 5.12. Restructuring

  	
  45

  
	
  SECTION 5.13. Books,
  Records and Files

  	
  45

  
	
  SECTION 5.14. Other
  Agreements

  	
  45

  
	
  SECTION 5.15. Third Party
  Claims Against Both the Business and the Excluded Business

  	
  46

  



 


ARTICLE VI 


EMPLOYEE MATTERS


 


	
  SECTION 6.01. Transferred
  Employees

  	
  47

  
	
  SECTION 6.02. Employee
  Benefits

  	
  47

  
	
  SECTION 6.03. General
  Matters

  	
  50

  
	
  SECTION 6.04. Mutual
  Non-Solicitation

  	
  51

  



 


ARTICLE VII 


TAXES


 


	
  SECTION 7.01.
  Apportionment

  	
  52

  
	
  SECTION 7.02. Tax Return
  Filing and Amendment

  	
  52

  
	
  SECTION 7.03. Refunds

  	
  52

  
	
  SECTION 7.04. Resolution
  of Tax Controversies

  	
  53

  
	
  SECTION 7.05. Tax
  Cooperation

  	
  53

  
	
  SECTION 7.06. Conveyance
  Taxes

  	
  53

  



 


ARTICLE VIII 


CONDITIONS TO CLOSING


 


	
  SECTION 8.01. Conditions
  to Obligation of Guidant

  	
  54

  
	
  SECTION 8.02. Conditions
  to Obligation of Abbott

  	
  55

  



 


ii

















 


ARTICLE IX 


TERMINATION


 


	
  SECTION 9.01. Termination

  	
  56

  
	
  SECTION 9.02. Effect of
  Termination

  	
  56

  



 


ARTICLE X 


INDEMNIFICATION


 


	
  SECTION 10.01. Survival of
  Representations and Warranties

  	
  56

  
	
  SECTION 10.02.
  Indemnification by Guidant

  	
  56

  
	
  SECTION 10.03.
  Indemnification by Abbott

  	
  57

  
	
  SECTION 10.04. Limits on
  Indemnification

  	
  57

  
	
  SECTION 10.05. Notice of
  Loss; Third Party Claims

  	
  58

  
	
  SECTION 10.06. Tax
  Treatment of Indemnity Payments

  	
  58

  



 


ARTICLE XI 


GENERAL PROVISIONS


 


	
  SECTION 11.01. Expenses

  	
  59

  
	
  SECTION 11.02. Notices

  	
  59

  
	
  SECTION 11.03. Public
  Announcements

  	
  60

  
	
  SECTION 11.04.
  Severability

  	
  60

  
	
  SECTION 11.05. Entire
  Agreement

  	
  60

  
	
  SECTION 11.06. Assignment

  	
  61

  
	
  SECTION 11.07. Amendment

  	
  61

  
	
  SECTION 11.08. Waiver

  	
  61

  
	
  SECTION 11.09. No Third
  Party Beneficiaries

  	
  61

  
	
  SECTION 11.10. Other
  Remedies; Specific Performance

  	
  61

  
	
  SECTION 11.11.
  Interpretive Rules

  	
  62

  
	
  SECTION 11.12. Guarantees
  of Performance

  	
  62

  
	
  SECTION 11.13. Governing
  Law

  	
  62

  
	
  SECTION 11.14. Waiver of
  Jury Trial

  	
  63

  
	
  SECTION 11.15. Exchange
  Rate

  	
  63

  
	
  SECTION 11.16.
  Counterparts

  	
  63

  



 


iii

















 


EXHIBITS:


 


	
  Exhibit A

  	
  –

  	
  Form of Assumption
  Agreement

  
	
  Exhibit B

  	
  –

  	
  Form of Bill of Sale

  
	
  Exhibit C

  	
  –

  	
  Form of Business Transfer
  Agreement

  
	
  Exhibit D

  	
  –

  	
  Form of Equity Purchase
  Agreement

  
	
  Exhibit E

  	
  –

  	
  Form of Intellectual
  Property Transfer Agreement

  
	
  Exhibit F

  	
  –

  	
  Form of License and
  Technology Transfer Agreement

  
	
  Exhibit G

  	
  –

  	
  Form of Note

  
	
  Exhibit H

  	
  –

  	
  Form of Release

  
	
  Exhibit I

  	
  –

  	
  Form of Supply Agreement

  
	
  Exhibit J

  	
  –

  	
  Form of Transition
  Services Agreement

  



 


SCHEDULES:


 


	
  Schedule 1.01(a)

  	
  –

  	
  Asset Purchasers &
  Asset Sellers

  
	
  Schedule 1.01(b)

  	
  –

  	
  Leased Business Real
  Property

  
	
  Schedule 1.01(c)

  	
  –

  	
  Owned Business Real
  Property

  
	
  Schedule 1.01(d)

  	
  –

  	
  Share Sellers, Share
  Purchasers & Transferred Subsidiaries

  
	
  Schedule 2.02(a)(i)

  	
  –

  	
  Clonmel – Purchased Assets

  
	
  Schedule 2.02(a)(ii)

  	
  –

  	
  Leased Business Real
  Property – Purchased Assets

  
	
  Schedule 2.02(a)(iii)

  	
  –

  	
  Guidelines for Tangible
  Personal Property

  
	
  Schedule 2.02(a)(xv)

  	
  –

  	
  Guidelines for Permits,
  Licenses, Certifications & Approvals

  
	
  Schedule 2.02(a)(xvi)

  	
  –

  	
  Guidelines for Computer
  Software Data and Information

  
	
  Schedule 2.02(a)(xxi)

  	
  –

  	
  Assets

  
	
  Schedule 2.02(c)(iv)

  	
  –

  	
  Real Property – Excluded
  Assets

  
	
  Schedule 2.02(d)

  	
  –

  	
  Investments

  
	
  Schedule 2.02(e)

  	
  –

  	
  Intellectual Property
  Transfers

  
	
  Schedule 2.04(a)

  	
  –

  	
  Withholding Taxes

  
	
  Schedule 2.06

  	
  –

  	
  Required Consent
  Jurisdictions & Deferred Local Closings

  
	
  Schedule 5.12

  	
  –

  	
  Restructuring Actions

  
	
  Schedule 6.01(a)

  	
  –

  	
  U.S. Business Employees

  
	
  Schedule 6.01(b)

  	
  –

  	
  Non-U.S. Business
  Employees

  
	
  Schedule 6.02(f)

  	
  –

  	
  Payment Principles

  



 


i

















 


PURCHASE AGREEMENT, dated as of April 21, 2006 (this “Agreement”),
between GUIDANT CORPORATION, an Indiana corporation (“Guidant”), and
ABBOTT LABORATORIES, an Illinois corporation (“Abbott”).


 


WHEREAS, Boston Scientific Corporation, a Delaware corporation (“Boston
Scientific”), Galaxy Merger Sub, Inc., an Indiana corporation and a wholly
owned subsidiary of the Boston Scientific (“Sub”), and Guidant have
entered into an Agreement and Plan of Merger (the “Merger Agreement”),
dated as of January 25, 2006, pursuant to which, upon consummation of the
Merger (as defined in the Merger Agreement), Sub will be merged with and into
Guidant and Guidant will become a wholly owned subsidiary of Boston Scientific;


 


WHEREAS, Guidant, directly and through its various Affiliates (as
defined below), including the Transferred Subsidiaries (as defined below) and
the Asset Sellers (as defined below), is engaged in, among other things, the
vascular intervention and endovascular solutions businesses at various
locations around the world (such businesses of Guidant and its Affiliates,
collectively, the “Business”);


 


WHEREAS, certain assets of the Transferred Subsidiaries that are not
primarily used in the Business will be transferred by the Transferred
Subsidiaries to Guidant, Boston Scientific or one of their respective
Affiliates prior to the Closing, the Excluded Liabilities (as defined below) of
the Transferred Subsidiaries will be assumed by Guidant, Boston Scientific or
one of their respective Affiliates prior to the Closing, and the Shares (as
defined below) and the Purchased Assets (as defined below) will be sold by
Guidant or the applicable Seller (as defined below) to the applicable Purchaser
(as defined below) at the Closing, all as more fully set forth herein;


 


WHEREAS, for purposes of this Agreement, references to the Business
shall be deemed to include the Assets (as defined below) and the Shares if the
context so requires;


 


WHEREAS, subject to the satisfaction or (to the extent permitted by
Law) waiver of the conditions to the parties’ obligations to close the
transactions contemplated by the Merger Agreement, Guidant wishes to sell, or
cause to be sold, to the Purchasers, and the Purchasers wish to purchase from
Guidant and the Sellers, the Transferred Subsidiaries and all right, title and
interest in and to all assets of the Business, and in connection therewith the
Purchasers are willing to assume certain liabilities relating thereto, all upon
the terms and subject to the conditions set forth herein; and


 


WHEREAS, simultaneously with the execution of this Agreement, Boston
Scientific has executed that certain Guarantee of Performance (the “Guarantee
of Performance”), pursuant to which Boston Scientific unconditionally
guarantees to Abbott the prompt and complete performance of all the obligations
required to be performed by Guidant and its Affiliates pursuant to this
Agreement.


 


NOW, THEREFORE, in consideration of the promises and the mutual
agreements and covenants hereinafter set forth, and intending to be legally
bound, the parties hereby agree as follows:


 

















 


ARTICLE I 


 


DEFINITIONS 


 


SECTION
1.01. Certain Defined Terms. For purposes of this Agreement:


 


“Action”
means any claim, action, suit, arbitration, inquiry, proceeding or
investigation by or before any Governmental Authority or arbitral or similar
forum.


 


“Affiliate”
means, with respect to any specified Person, any other Person that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or
is under common control with, such specified Person; provided, however
that TAP Pharmaceutical Products, Inc. (“TAP”) and its subsidiaries
shall be deemed not to be Affiliates of Abbott, but only for so long as Abbott
(either directly or indirectly) owns fifty percent or less of the voting stock
of TAP (or its subsidiaries) or does not otherwise have control of TAP (or its
subsidiaries). For purposes of this Agreement, with respect to all periods
following consummation of the Merger or the transactions contemplated by this
Agreement, as applicable, “Affiliate” shall include, (a) with respect to Boston
Scientific, Guidant and its Affiliates following the Merger, (b) with respect
to Guidant, Boston Scientific and its Affiliates following the Merger, (c) with
respect to Abbott, any Person to be acquired pursuant to this Agreement, and
(d) with respect to each party hereto, any Person resulting from any internal
reorganization, provided such resulting Person is an Affiliate.


 


“Ancillary
Agreements” means the Assumption Agreements, the Equity Purchase Agreement,
the Bills of Sale, the Transfer Agreements, the Supply Agreements, the License
and Technology Transfer Agreement, the Transition Services Agreement, the Note,
the Release and any other agreements that the parties may mutually agree.


 


“Assets”
means (i) the Purchased Assets and (ii) the assets, rights, properties and
businesses of every kind and description (wherever located, whether tangible or
intangible, real, personal or mixed) of the Transferred Subsidiaries, in each
case that (except as otherwise expressly set forth in this Agreement or the
Ancillary Agreements) are used primarily in, or related primarily to (with
“primarily” being determined by taking into account revenues, assets,
personnel, registrations and other relevant factors), the Business.


 


“Asset Purchasers” means, individually or
collectively, the Affiliates of Abbott that are identified on Schedule 1.01(a)
attached hereto.


 


“Asset Sellers” means, individually or collectively, the
Affiliates of Guidant that are identified on Schedule 1.01(a) attached hereto.


 


“Assumption
Agreements” means the Assumption Agreements to be executed by the
applicable Asset Purchasers and Guidant and/or the applicable Asset Sellers at
the Closing, substantially in the form of Exhibit A.


 


“Bills
of Sale” means the Bills of Sale and Assignment to be executed by Guidant
and/or the applicable Asset Sellers at the Closing, substantially in the form
of Exhibit B.


 


2

















 


“Books,
Records and Files” means any studies, reports, records (including shipping
and personnel records), books of account, invoices, contracts, instruments,
surveys, data (including financial, sales, purchasing and operating data),
computer data, disks, diskettes, tapes, marketing plans, customer lists,
supplier lists, distributor lists, correspondence and other documents.


 


“Business Day” means any day that is not a
Saturday, a Sunday or other day on which banks are required or authorized by
Law to be closed in The City of New York.


 


“Business
Intellectual Property” means all Intellectual Property used primarily in,
or related primarily to, the Business and (a) owned by Guidant or any of its
Affiliates or (b) licensed to or by, or controlled by, Guidant or any of its
Affiliates.


 


“Business
Transfer Agreements” means the Business Transfer Agreements with respect to
the relevant jurisdiction to be executed by the applicable Asset Sellers and
the applicable Asset Purchasers at the Closing, substantially in the form of Exhibit C.


 


“Carotid
Stent Assets” means the Assets related to the research, development,
manufacture, distribution, marketing and sale of carotid stent systems, including
embolic protection devices.


 


“Code” means the Internal Revenue Code of
1986, as amended through the date hereof.


 


“Contract” means any loan or credit
agreement, bond, debenture, note, mortgage, indenture, lease, supply agreement,
license agreement, development agreement or other contract, agreement,
obligation, commitment or instrument that is intended by Guidant or any of its
Affiliates to be legally binding, including all amendments thereto.


 


“control”
(including the terms “controlled by” and “under common control with”),
with respect to the relationship between or among two or more Persons, means
the possession, directly or indirectly or as trustee, personal representative
or executor, of the power to direct or cause the direction of the affairs or
management of a Person, whether through the ownership of voting securities, as
trustee, personal representative or executor, by contract, credit arrangement
or otherwise.


 


“Credit Agreement” means the principal credit
agreement of Boston Scientific, as amended, restated, modified, renewed,
refunded, replaced or refinanced, in whole or in part from time to time.


 


“Disclosure Schedule” means the Disclosure Schedule attached
hereto, dated as of the date hereof, delivered by Guidant to Abbott in
connection with this Agreement.


 


“Encumbrance” means (a) with respect to the
Shares, or any other shares of capital stock of a Transferred Subsidiary, any
voting trusts, shareholders’ agreement, proxy or other similar restriction, and
(b) with respect to the Assets and the Shares, any security interest, pledge,
hypothecation, mortgage, lien, adverse ownership claim, title defect or other


 


3

















 


encumbrance
of any kind or nature whatsoever, other than, with respect to Intellectual Property
included in the Assets, any licenses of Intellectual Property.


 


“Environmental Laws” means any United States
Federal, state or local or any foreign Laws (including the common law),
Governmental Orders, notices, Permits or binding Contracts issued, promulgated
or entered into by any Governmental Authority, relating in any way to the
environment, preservation or reclamation of natural resources or the presence,
management, Environmental Release of, or exposure to, Hazardous Materials, or
to human health and safety.


 


“Environmental Release” means any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping, disposing or migrating into or through the environment or any natural
or man-made structure.


 


“Equity Purchase Agreement” means the
Subscription and Stockholders Agreement, to be executed at the Closing between
Boston Scientific and Abbott in the form of Exhibit D.


 


“FDA”
means the United States Food and Drug Administration.


 


“GAAP”
means United States generally accepted accounting principles and practices in
effect from time to time applied consistently throughout the periods involved.


 


“Governmental
Authority” means any United States federal, state or local or any
non-United States government, governmental, regulatory or administrative
authority, agency or commission or any court, tribunal, or judicial or arbitral
body.


 


“Governmental
Order” means any order, writ, judgment, injunction, decree, stipulation,
determination or award entered by or with any Governmental Authority.


 


“Hazardous
Materials” means (a) petroleum products and by-products, asbestos and
asbestos-containing materials, urea formaldehyde foam insulation, medical or
infectious wastes, polychlorinated byphenyls, radon gas, radioactive substances,
chloroflurocarbons and all other ozone-depleting substances, and (b) any other
chemical, material, substance, waste, pollutant or contaminant that is
prohibited, limited or regulated by or pursuant to any Environmental Law.


 


“HSR
Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations thereunder.


 


“Indebtedness”
means, with respect to any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade payables incurred in the ordinary course of such Person’s
business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (e) all


 


4

















 


capital
lease obligations of such Person, (f) all obligations of such Person,
contingent or otherwise, as an account party or applicant under or in respect
of acceptances, letters of credit, surety bonds or similar arrangements, (g)
all guarantee obligations of such Person in respect of obligations of the kind
referred to in clauses (a) through (f) above and (h) all obligations of the
kind referred to in clauses (a) through (g) above secured by (or for which the
holder of such obligation has an existing right, contingent or otherwise, to be
secured by) any lien on property (including accounts and contract rights) owned
by such Person, whether or not such Person has assumed or become liable for the
payment of such obligation. The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person’s ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness expressly provide
that such Person is not liable therefor.


 


“Intellectual
Property” means all intellectual property rights of any kind, including
rights in, to and concerning (a) patents, patent applications and statutory
invention registrations, including divisionals, continuations,
continuations-in-part, re-issues and re-examinations thereof, (b) Trademarks,
(c) published and unpublished works of authorship and copyrights therein, and
copyright registrations and applications for registration thereof and all
renewals, extensions, restorations and reversions thereof, (d) software, code,
data, databases and compilations of information, and (e) confidential and
proprietary information, inventions, formulas, processes, developments,
technology, research, trade secrets and know-how.


 


“Intellectual
Property Transfer Agreement” means the Intellectual Property Transfer
Agreements with respect to the relevant jurisdictions to be executed by
Advanced Cardiovascular Systems, Inc., its subsidiaries or Guidant Endovascular
Solutions, Inc. and the applicable Asset Purchaser immediately prior to the
Closing, substantially in the form of Exhibit E.


 


“IRS”
means the Internal Revenue Service of the United States.


 


“Knowledge”
means, when used in connection with (a) a Purchaser with respect to any matter
in question, the actual knowledge of Abbott’s executive officers after making
due inquiry of the current employees having primary responsibility for such
matter, and (b) Guidant with respect to any matter in question, the actual
knowledge of Guidant’s executive officers after making due inquiry of the
current employees of Guidant or any of its Affiliates having primary
responsibility for such matter who are treated as a Tier I Employee and Tier II
Employee for purposes of the Guidant CIC Plans.


 


“Law”
means any United States federal, state, local or foreign statute, law,
ordinance, regulation, rule, code, order, other requirement or rule of law.


 


“Leased
Business Real Property” means all the Real Property leased by Guidant, any
Asset Seller or any Transferred Subsidiary, as tenant and described on Schedule
1.01(b) that are acquired, directly or indirectly, by the Purchasers by the way
of a Share purchase or as a Purchased Asset pursuant to the transactions
contemplated by this Agreement.


 


5

















 


“Liabilities”
means any and all debts, liabilities and obligations, whether accrued or fixed,
absolute or contingent, matured or unmatured or determined or determinable,
including those arising under any Law, Action or Governmental Order and those
arising under any contract, agreement, arrangement or undertaking (but
excluding any performance obligations under any such contracts, agreements,
arrangements or undertakings).


 


“License
and Technology Transfer Agreement” means the License and Technology
Transfer Agreement dated as of                    ,
2006, among Boston Scientific, Guidant and Abbott, in the form of Exhibit F.


 


“Material
Adverse Effect” means any change, effect, event, occurrence, state of facts
or development which individually or in the aggregate would reasonably be
expected to result in any change or effect, that is materially adverse to the
business, financial condition or results of operations of the Business, taken
as a whole; provided, however, that none of the following shall
be deemed, either alone or in combination, to constitute, and none of the
following shall be taken into account in determining whether there has been or
will be, a Material Adverse Effect: (a) any change, effect, event, occurrence,
state of facts or development (i) in the financial or securities markets or the
economy in general, (ii) in the industries in which the Business operates in
general, to the extent that such change, effect, event, occurrence, state of
facts or development does not disproportionately impact the Business, or (iii)
resulting from any divestiture that may be required to be effected pursuant to
the terms of this Agreement, or (b) any failure, in and of itself, by the
Business to meet any internal or published projections, forecasts or revenue or
earnings predictions (it being understood that the facts or occurrences giving
rise or contributing to such failure may be deemed to constitute, or be taken
into account in determining whether there has been or would reasonably be
expected to be, a Material Adverse Effect).


 


“Merger”
means the merger pursuant to the Merger Agreement.


 


“Note”
means the Promissory Note to be executed by BCS International Holding, Limited,
as Borrower (as defined in the Note), Boston Scientific as guarantor, and
Abbott at the Closing, in the form of Exhibit G.


 


“Owned
Business Real Property” means all the Real Property in which Guidant, any
Asset Seller or Transferred Subsidiary has fee title (or equivalent) interest
described on Schedule 1.01(c) that are acquired, directly or indirectly, by the
Purchasers by the way of a Share purchase or as a Purchased Asset pursuant to
the transactions contemplated by this Agreement.


 


“Permitted
Encumbrances” means liens, charges and Encumbrances for current Taxes not
yet due and payable.


 


“Person”
means any individual, partnership, firm, corporation, limited liability
company, association, trust, unincorporated organization, joint venture or
other entity.


 


“Pre-Closing
Tax Period” means any taxable period (or portion thereof) ending on or
prior to the Closing, including such portion of any Straddle Period up to and
including the date of Closing.


 


6

















 


“Principal
Indebtedness” means the amounts owing in respect of the Credit Agreement
and any Public Indebtedness.


 


“Post-Closing Tax Period” means any taxable period (or portion
thereof) commencing after the Closing, including such portion of any Straddle
Period commencing after the Closing.


 


“Public Indebtedness” means Indebtedness of Boston Scientific or
any of its Affiliates issued in a public offering.


 


“Purchasers”
means, individually or collectively, Abbott, the Asset Purchasers and the Share
Purchasers.


 


“Real
Property” means all land, buildings and other structures, facilities or
improvements located thereon and all easements, licenses, rights and
appurtenances relating to the foregoing.


 


“Registrations”
means authorizations and/or approvals issued by any Governmental Authority
(including premarket approval applications, premarket notifications, investigational
device exemptions, manufacturing approvals or authorizations, CE Marks, pricing
and reimbursement approvals, labeling approvals or their foreign equivalent)
held by Guidant or its Affiliates as of the Closing, that are required for the
manufacture, distribution, marketing, storage, transportation, use and sale of
the products of the Business.


 


“Regulations”
means the Treasury Regulations (including temporary regulations) promulgated by
the United States Department of Treasury with respect to the Code or other
federal Tax statutes.


 


“Release”
means the Release to be executed by Abbott and Boston Scientific at the Closing,
in the form of Exhibit H.


 


“SEC”
means the United States Securities and Exchange Commission.


 


“Sellers”
means, individually or collectively, the Asset Sellers and the Share Sellers.


 


“Share
Purchasers” means, individually or collectively, Abbott and the Affiliates
of Abbott that are identified on Schedule 1.01(d) attached hereto.


 


“Share
Sellers” means, individually or collectively, the Affiliates of Guidant
that are identified on Schedule 1.01(d) attached hereto.


 


“Shares”
means all the issued and outstanding shares of capital stock and other equity
interests of the Transferred Subsidiaries.


 


“Straddle
Period” means any taxable period beginning on or before the date of the
Closing and ending after the date of the Closing.


 


7

















 


“Supply
Agreements” means the interim Supply Agreements for DES Stents (as defined
in the Supply Agreements) and components thereof, dated as of                 ,
2006, between Boston Scientific or certain of its Affiliates and Abbott or
certain of its Affiliates, in the form of Exhibit I.


 


“Tax”
or “Taxes” means any and all taxes, levies, duties, tariffs and similar
charges in the nature of a tax (together with any and all interest, penalties,
additions to tax and additional amounts imposed with respect thereto) imposed
by any Governmental Authority or taxing authority, including taxes on or with
respect to income, franchises, windfall or other profits, gross receipts,
property, sales, use, share capital, capital stock, payroll, employment, social
security, workers’ compensation, unemployment compensation, or net worth; taxes
in the nature of excise, withholding, ad valorem, stamp, transfer, value added,
or gains taxes; license, registration and documentation fees; and customs’
duties, and tariffs.


 


“Tax
Returns” means any report, return, document, declaration or other information
or filing required to be filed with a Governmental Authority or taxing
authority with respect to Taxes (whether or not a payment is required to be
made with respect to such filing), including information returns, any documents
with respect to or accompanying payments of estimated Taxes, or with respect to
or accompanying requests for the extension of time in which to file any such
report, return, document, declaration or other information.


 


“Trademarks”
means trademarks, service marks, trade dress, logos, trade names, corporate
names, domain names and other source identifiers and all goodwill associated
with any of the foregoing, registrations and applications for registration
thereof, including all extensions, modifications and renewals of same.


 


“Transaction
Agreement” means the Transaction Agreement dated as of January 8, 2006, as
amended, between Boston Scientific and Abbott.


 


“Transfer
Agreements” means (a) with respect to the Purchased Assets and Assumed
Liabilities, the Bills of Sale, the Assumption Agreements, the Business
Transfer Agreements, the Intellectual Property Transfer Agreements, and such
deeds, endorsements, assignments, instruments of assumption, affidavits and
other instruments of sale, conveyance, transfer and assignment for the Asset
Sellers, in form and substance reasonably satisfactory to Abbott and Guidant,
as shall be necessary under Law in order to transfer all right, title and
interest of the applicable Asset Sellers in, to and under such Purchased Assets
and Assumed Liabilities in accordance with the terms hereof, and (b) with
respect to the Shares, such instruments of sale, conveyance, transfer and
assignment, and such other agreements or documents, if any, in each case in
form and substance reasonably satisfactory to Abbott and Guidant, as shall be
necessary under Law in order to transfer all right, title and interest of the
applicable Share Seller in the Shares in accordance with the terms hereof.


 


“Transferred
Subsidiary” means, individually or collectively, the Affiliates of Guidant
set forth on Schedule 1.01(d) and acquired, directly or indirectly, by way of a
Share purchase pursuant to this Agreement.


 


8

















 


“Transition
Services Agreement” means the Transition Services Agreement dated as of                ,
2006, between Boston Scientific and certain of its Affiliates and Abbott and
certain of its Affiliates, in the form of Exhibit J.


 


SECTION
1.02. Definitions. The following terms have the meanings set forth in
the Sections set forth below:


 


	
  Definition

  	
   

  	
  Location

  
	
   

  	
   

  	
   

  
	
  “Abbott”

  	
   

  	
  Preamble

  
	
  “Abbott Indemnified
  Parties”

  	
   

  	
  10.02(a)

  
	
  “Agreement”

  	
   

  	
  Preamble

  
	
  “Assumed Liabilities”

  	
   

  	
  2.03(a)

  
	
  “Boston Scientific”

  	
   

  	
  Recitals

  
	
  “Business”

  	
   

  	
  Recitals

  
	
  “Closing”

  	
   

  	
  2.06

  
	
  “Commonly Controlled
  Entity”

  	
   

  	
  3.12(a)

  
	
  “Company Restricted
  Stock”

  	
   

  	
  3.12(k)

  
	
  “Company Stock Based
  Awards”

  	
   

  	
  3.12(k)

  
	
  “Company Stock Options”

  	
   

  	
  3.12(k)

  
	
  “Company Stock Plans”

  	
   

  	
  3.12(k)

  
	
  “Confidentiality
  Agreement”

  	
   

  	
  5.02(b)

  
	
  “Conveyance Taxes”

  	
   

  	
  7.06

  
	
  “Country Allocation”

  	
   

  	
  2.04(b)

  
	
  “Country Allocation
  Accounting Firm”

  	
   

  	
  2.04(b)

  
	
  “Deferred Local Closing”

  	
   

  	
  2.06

  
	
  “ERISA”

  	
   

  	
  3.08

  
	
  “ESSP”

  	
   

  	
  3.12(k)

  
	
  “Estimated Country
  Allocation”

  	
   

  	
  2.04(b)

  
	
  “EU Merger Regulation”

  	
   

  	
  3.05

  
	
  “EVT”

  	
   

  	
  2.02(c)(v)

  
	
  “Excluded Assets”

  	
   

  	
  2.02(c)

  
	
  “Excluded Businesses”

  	
   

  	
  2.02(c)(v)

  
	
  “Excluded Liabilities”

  	
   

  	
  2.03(b)

  
	
  “FDCA”

  	
   

  	
  3.08

  
	
  “Guarantee of
  Performance”

  	
   

  	
  Recitals

  
	
  “Guidant”

  	
   

  	
  Preamble

  
	
  “Guidant Benefit
  Agreements”

  	
   

  	
  3.06

  
	
  “Guidant Benefit Plans”

  	
   

  	
  3.13(a)

  
	
  “Guidant CIC Plans”

  	
   

  	
  6.03(c)

  
	
  “Guidant Licensed Marks”

  	
   

  	
  5.08(c)

  
	
  “In-Country Allocation”

  	
   

  	
  2.04(b)

  
	
  “Initial Purchase Price”

  	
   

  	
  2.04(a)

  
	
  “Intellectual Property
  Rights”

  	
   

  	
  3.10(a)

  
	
  “IP Purchaser”

  	
   

  	
  2.02(e)

  
	
  “IP Seller”

  	
   

  	
  2.02(e)

  
	
  “Key Personnel”

  	
   

  	
  3.06

  



 


9

















 


	
  Definition

  	
   

  	
  Location

  
	
   

  	
   

  	
   

  
	
  “Licensed
  Marks”

  	
   

  	
  5.08(c)

  
	
  “Loss”

  	
   

  	
  10.02(a)

  
	
  “Materials”

  	
   

  	
  5.08(c)(ii)

  
	
  “Medical
  Device”

  	
   

  	
  3.15(a)

  
	
  “Merger
  Agreement”

  	
   

  	
  Recitals

  
	
  “Milestone
  Payment”

  	
   

  	
  2.05

  
	
  “Mixed
  Account”

  	
   

  	
  5.10(b)

  
	
  “Mixed
  Action”

  	
   

  	
  5.15(a)

  
	
  “Mixed
  Contract”

  	
   

  	
  5.10(a)

  
	
  “Non-Guidant
  Licensed Marks”

  	
   

  	
  5.08(b)

  
	
  “Non-U.S.
  Business Employee”

  	
   

  	
  6.01(b)

  
	
  “Non-U.S.
  Transferred Employee”

  	
   

  	
  6.01(b)

  
	
  “Occurrence
  Based Policy”

  	
   

  	
  5.07(d)

  
	
  “Permits”

  	
   

  	
  3.08

  
	
  “Purchased
  Assets”

  	
   

  	
  2.02(a)

  
	
  “Purchase
  Price”

  	
   

  	
  2.04(a)

  
	
  “Required
  Consent Jurisdictions”

  	
   

  	
  2.06

  
	
  “Settle”

  	
   

  	
  5.15(c)

  
	
  “Shared
  Asset”

  	
   

  	
  2.02(c)(iii)

  
	
  “Social
  Security Act”

  	
   

  	
  3.15(f)

  
	
  “Sub”

  	
   

  	
  Recitals

  
	
  “Third
  Party Claim”

  	
   

  	
  10.05(b)

  
	
  “Tier
  I Employee”

  	
   

  	
  3.06

  
	
  “Tier
  II Employee”

  	
   

  	
  3.06

  
	
  “Transferred
  Employees”

  	
   

  	
  6.01(b)

  
	
  “Transferred
  Subsidiary Tax Attributes”

  	
   

  	
  5.06(d)

  
	
  “U.S.
  Business Employee”

  	
   

  	
  6.01(a)

  
	
  “U.S.
  Transferred Employee”

  	
   

  	
  6.01(a)

  



 


10

















 


ARTICLE II 


PURCHASE AND SALE


 


SECTION
2.01. Purchase and Sale of the Shares. Upon the terms and subject to the
conditions of this Agreement, at the Closing, Guidant shall, or shall cause the
applicable Share Seller set forth on Schedule 1.01(d) to, sell, convey, assign
and transfer to the applicable Share Purchaser set forth on Schedule 1.01(d)
the Shares of the Transferred Subsidiaries set forth on Schedule 1.01(d),
and the applicable Share Purchaser shall purchase all of Guidant’s or such
Share Seller’s right, title and interest in and to such Shares, free and clear
of all Encumbrances. Prior to the Closing, the Excluded Assets and any
employees who are not Transferred Employees shall be transferred by the
Transferred Subsidiaries to Guidant, Boston Scientific or one of their
respective Affiliates, and the Excluded Liabilities of the Transferred
Subsidiaries shall be assumed by Guidant, Boston Scientific or one of their
respective Affiliates, each in the manner described in Schedule 5.12.


 


SECTION
2.02. Purchase and Sale of Assets. (a) Upon the terms and subject to the
conditions of this Agreement, at the Closing, Guidant shall sell, convey,
assign and transfer, and shall cause each Asset Seller set forth on Schedule
1.01(a) to sell, convey, assign and transfer, to the applicable Asset Purchaser
set forth on Schedule 1.01(a) all the assets, rights, properties and businesses
of Guidant and its Affiliates, of every kind and description and wherever
located, whether tangible or intangible, real, personal or mixed, that (except
as otherwise expressly set forth in this Agreement or the Ancillary Agreements)
are used primarily in, or related primarily to (with “primarily” being
determined by taking into account revenues, assets, personnel, registrations
and other relevant factors), the Business (the “Purchased Assets”), and
the applicable Purchaser shall purchase the Purchased Assets, including the
following:


 


(i)                                     that portion of the Owned Business Real
Property located at Clonmel, Ireland described on Schedule 2.02(a)(i);


 


(ii)                                  the Leased Business Real Property listed on
Schedule 2.02(a)(ii);


 


(iii)                               all tangible personal property, including
machinery, equipment, training materials and equipment, mechanical and spare
parts, supplies, owned and leased motor vehicles, mobile telephones, PC
equipment, PDA bar code readers, fixtures, trade fixtures, tools, tooling,
dyes, cap and component molds, stores, furniture, furnishings, office equipment
and supplies, production supplies, other miscellaneous supplies and other
tangible property of any kind, in each case in accordance with the guidelines
set forth on Schedule 2.02(a)(iii);


 


(iv)                              the benefit and use of any Shared Asset
pursuant to this Agreement, the Transition Services Agreement, the License and
Technology Transfer Agreement, or a lease or similar arrangement entered into
by the parties or their respective Affiliates;


 


(v)                                 the Business Intellectual Property;


 


(vi)                              the Registrations supported by and including:
(A) the original documents under the possession of Guidant or the Asset Sellers
(or that are accessible to Guidant or


 


11

















 


the
Asset Sellers using commercially reasonable efforts) evidencing the Registrations
issued to Guidant or the Asset Sellers by a Governmental Authority, in each
case to the extent assignable with or without the consent of the issuing
Governmental Authority; and (B) all related Registration applications, clinical
research and trial agreements, data results and records of clinical trials and
marketing research, design history files, technical files, drawings,
manufacturing, packaging and labeling specifications, validation documentation,
packaging specifications, quality control standards and other documentation,
research tools, laboratory notebooks, files and correspondence with regulatory
agencies and quality reports and all relevant pricing information and
correspondence with Governmental Authorities with respect to such pricing matters;


 


(vii)                           all advertising, marketing and promotional
materials and all other printed or written materials, including website content
and the design of such websites protected by applicable Law, in each case to
the extent used primarily in, or related primarily to, the Business;


 


(viii)                        subject to Section 5.10 and except as set
forth in Sections 2.02(c) and 2.03(b), any Contract related to the Business;


 


(ix)                                subject to Section 5.10 and except for
intercompany receivables between Guidant and any of its Affiliates, or between
any Affiliate of Guidant and any other Affiliate of Guidant, all accounts,
notes and other receivables resulting from sales by Guidant or its Affiliates
of products to the extent generated by, or related to, the Business, whether
current or noncurrent, including all file documentation related to such
accounts, notes and other receivables, including invoices, shipping documents,
communications and correspondence submitted to or received from customers
related to such sales;


 


(x)                                   all inventories, including raw materials,
works in process, semi-finished and finished products, stores, replacement and
spare parts, packaging materials, operating supplies and inventory on
consignment, in transit or deposited in a warehouse, in each case to the extent
used in, or related to, the Business;


 


(xi)                                all prepayments, security deposits, refunds
(other than refunds described in Section 2.02(c)(viii)) and prepaid expenses,
in each case to the extent used primarily in, or related primarily to, the
Business;


 


(xii)                             all claims, causes of action, choses in
action, rights of recovery and rights of set-off of any kind (including all
damages and payments for past, present or future infringement or
misappropriation of Business Intellectual Property, the right to use and
recover for past infringements or misappropriations of Business Intellectual
Property, and any and all corresponding rights that have been, now or hereafter
may be secured throughout the world with respect to any Business Intellectual
Property), except to the extent any of the foregoing relate to (x) Excluded
Assets or Excluded Liabilities or (y) intercompany receivables between Guidant
and any of its Affiliates, or between any Affiliate of Guidant and any other
Affiliate of Guidant;


 


12

















 


(xiii)                          all income, royalties and payments receivable
in respect of any Business Intellectual Property;


 


(xiv)                         all Books, Records and Files (other than
income and similar Tax Returns and related books, records and files), to the
extent used in, or related to, the Business;


 


(xv)                            all permits, licenses, certifications and
approvals from all permitting, licensing, accrediting and certifying agencies,
and the rights to all data and records held by such permitting, licensing and
certifying agencies, in each case to the extent transferable and used in, or
related to, the Business, in each case in accordance with the guidelines set
forth in Schedule 2.02(a)(xv);


 


(xvi)                         all computer software data and information,
and all related hardware, in each case in accordance with the guidelines set
forth in Schedule 2.02(a)(xvi);


 


(xvii)                      subject to Section 5.07, all claims under
insurance policies and claims or benefits in, to or under any express or
implied warranties from suppliers of goods or services relating to inventory
sold or delivered to Guidant or any Asset Seller prior to the Closing, in each
case to the extent related to the Business;


 


(xviii)                   copies of any Tax Returns to the extent
related primarily to the Assets, the Transferred Subsidiaries or the Business;


 


(xix)                           all goodwill of the Business as a going
concern;


 


(xx)                              all rights of Abbott and its Affiliates
arising under this Agreement or from the consummation of the transactions
contemplated hereby; and


 


(xxi)                           the assets described on Schedule
2.02(a)(xxi).


 


(b)                                 Guidant may redact any information related to
the Excluded Businesses from any Books, Records and Files and similar materials
conveyed pursuant to Section 2.02(a); provided, however, that
such redaction shall not impair any information related to the Business contained
in such Books, Records and Files and similar materials.


 


(c)                                  Notwithstanding anything in Sections 2.01 and
2.02(a) to the contrary, the Purchasers shall not purchase, and the Assets
shall not include, any right, title and interest in or to any of the following
assets (the “Excluded Assets”):


 


(i)                                     subject to Section 2.02(d), all cash and cash
equivalents, securities (other than the Shares, if any) and negotiable
instruments on hand, in lock boxes, in financial institutions or elsewhere,
including any cash residing in any collateral cash account securing any
obligation or contingent obligation;


 


(ii)                                  all intercompany receivables between Guidant
and any of its Affiliates, or between any Affiliate of Guidant and any other
Affiliate of Guidant;


 


13

















 


(iii)                               except as otherwise expressly set forth in
this Agreement or the Ancillary Agreements, the ownership right in any property
or asset (but expressly excluding all Intellectual Property) that is used both
in the Business and in any other businesses of Guidant; provided, however,
that such property or asset is not used primarily in, or related primarily to,
the Business (a “Shared Asset”):


 


(iv)                              the Real Property listed on Schedule
2.02(c)(iv);


 


(v)                                 all businesses of Guidant and its Affiliates
not included in the Business, including the cardiac rhythm management,
endovascular repair and cardiac surgery businesses, the capital stock and
equity interests of EndoVascular Technologies, Inc., a Delaware corporation (“EVT”),
or any subsidiary thereof or any assets of EVT or any subsidiary thereof, and
including all rights of Guidant, EVT and any other Guidant subsidiary with
respect to the ANCURE ENDOGRAFT System (collectively, the “Excluded
Businesses”);


 


(vi)                              subject to Section 5.08(c), the Licensed
Marks;


 


(vii)                           all assets of any employee or independent
contractor compensation or benefit plan, program or arrangement that is
maintained or contributed to by Guidant or any of its Affiliates (other than a
stand-alone plan, program or arrangement that is sponsored by a Transferred
Subsidiary and covers primarily employees of the Business) and that is not
transferred to a Purchaser or its Affiliate pursuant to Article VI;


 


(viii)                        subject to the provisions of Article VII, any
right to any refund or credit with respect to Taxes relating to any Pre-Closing
Tax Period; and


 


(ix)                                all rights of Guidant and its Affiliates
arising under this Agreement or from the consummation of the transactions
contemplated hereby.


 


(d)                                 Guidant shall transfer, or Guidant and Abbott
will share, the rights, benefits and obligations associated with investments by
Guidant or any of its Affiliates in other Persons (other than Affiliates of
Guidant) engaged in the vascular interventional or endovascular solutions
businesses in the manner described on Schedule 2.02(d).


 


(e)                                  Immediately prior to the Closing, specified
Assets of the Transferred Subsidiaries may be transferred pursuant to the
Intellectual Property Transfer Agreements by the applicable Transferred
Subsidiary (each, an “IP Seller”) to certain Asset Purchasers (each, an
“IP Purchaser”). No later than five days prior to the Closing, Abbott
shall provide Guidant with Schedule 2.02(e) which shall set forth the specified
Assets to be transferred pursuant to this Section 2.02(e), the identity of the
IP Purchaser and the corresponding IP Seller, and the portion of the Purchase
Price to be paid by the relevant IP Purchaser under each Intellectual Property
Transfer Agreement. Abbott shall cause each relevant IP Purchaser, and Guidant
shall cause each relevant IP Seller, to execute the applicable Intellectual
Property Transfer Agreement immediately prior to the Closing.


 


(f)                                    Abbott and Guidant hereby covenant that the
transactions to be effected immediately prior to the Closing and described in
Section 2.02(e) shall occur in the following


 


14

















 


sequence: (i) first, the
transfer to be effected pursuant to the Intellectual Property Transfer
Agreements, (ii) second, the distribution by the IP Sellers set forth on
Schedule 2.02(e) to Guidant of the proceeds to be paid by the applicable IP
Purchasers under the Intellectual Property Transfer Agreements, and (iii)
third, the transfer of the Shares and the Purchased Assets other than the
Purchased Assets transferred pursuant to Section 2.02(e).


 


SECTION
2.03. Assumption and Exclusion of Liabilities. (a) Upon the terms and
subject to the conditions and exclusions set forth in this Agreement, at the
Closing, Abbott shall, or shall cause the applicable Asset Purchaser to, assume
and agree to pay, perform and discharge when due, any and all of the
Liabilities of Guidant and its Affiliates to the extent relating to or arising
out of the Business or the Purchased Assets, other than the Excluded
Liabilities set forth in Section 2.03(b) below (the “Assumed Liabilities”).


 


(b) After the Closing, Guidant and/or its Affiliates shall retain (or,
if necessary, expressly assume), and shall be responsible for paying,
performing and discharging when due, and none of Abbott, the Purchasers or
their Affiliates shall assume (by succession, transfer or assignment or
otherwise) or have any responsibility for, any of the following Liabilities
(the “Excluded Liabilities”):


 


(i)                                    all Liabilities to the extent relating to or
arising out of the Excluded Assets;


 


(ii)                                  all Liabilities to the extent relating to or
arising out of assets or businesses of Guidant or any of its Affiliates that
are not included in the Assets or related to the Business;


 


(iii)                               all Liabilities (1) (A) arising from death or
personal injury relating to, resulting from, caused by or arising out of,
directly or indirectly, the ANCURE ENDOGRAFT System used in the treatment of
abdominal aortic aneurysms, including any such Liabilities for negligence,
strict liability, design or manufacturing defect, conspiracy, failure to warn,
or breach of express or implied warranties of merchantability or fitness for
any purpose or use, or (B) otherwise relating to such System, (2) arising from
defibrillator product recalls and any related litigation, or (3) arising from
any Guidant shareholder litigation with respect to or arising out of the
transactions pursuant hereto or the Amended and Restated Agreement and Plan of
Merger, dated as of November 14, 2005, among Johnson & Johnson, Shelby
Merger Sub, Inc. and Guidant or any amendment or successor agreement thereof;


 


(iv)                              except as provided in Section 6.02(f), all
Liabilities (including all claims arising out of any death, accident, disease
or injury occurring on or before the Closing, whether asserted before or after
the Closing) relating to or arising from any employee or independent contractor
compensation or benefit plan, program or arrangement that is maintained or
contributed to by Guidant or any of its Affiliates (other than a stand-alone
plan, program or arrangement that is sponsored by a Transferred Subsidiary and
covers primarily employees of the Business) and that is not transferred to a
Purchaser or its Affiliate pursuant to Article VI;


 


15

















 


(v)                                 all indebtedness for borrowed money; and


 


(vi)                              all intercompany payables and loans between
Guidant and any of its Affiliates, or between any Affiliate of Guidant and any
other Affiliate of Guidant.


 


SECTION
2.04. Purchase Price; Allocation of Purchase Price. (a) Subject to the
terms and conditions of this Agreement, at the Closing, Abbott, on behalf of
itself and the other Purchasers, shall pay to Guidant, on behalf of itself and
the Sellers (except (i) as required by applicable Law, in which case the
applicable Asset Purchaser shall pay locally to the applicable Asset Seller,
(ii) as set forth in Schedule 2.02(e), in which case the applicable IP
Purchaser shall pay to Guidant on behalf of the applicable IP Seller, or (iii)
as set forth in Section 2.06 with respect to a Deferred Local Closing), an
aggregate purchase price for the Purchased Assets and the Shares in an amount
in cash equal to $4,100,000,000 (the “Initial Purchase Price”). At the
Closing, the Purchasers shall assume the Assumed Liabilities. The Initial
Purchase Price, the Assumed Liabilities and the Milestone Payments are
collectively referred to herein as the “Purchase Price”. Except as
otherwise provided in the parenthetical of Section 2.08(a), the Initial
Purchase Price shall be paid at the Closing by wire transfer in immediately
available funds to a bank account designated in writing by Guidant no later
than three Business Days prior to the Closing. Abbott shall make any required
withholding of Taxes from the Purchase Price and shall pay Guidant the Purchase
Price net of any such withholding. Abbott shall have no obligation to gross-up,
indemnify or otherwise compensate Guidant for any withholding Tax due or
imposed with respect to the Purchase Price. No later than five days prior to
the Closing, Abbott shall provide Schedule 2.04(a) to Guidant which shall set
forth the jurisdictions in which Abbott or the other applicable Purchasers
intend to withhold Taxes on payment of the Purchase Price.


 


(b)
No later than five days prior to the Closing, Abbott shall provide Guidant with
an allocation of the Purchase Price by country based on an estimate of the fair
market values of the Shares and Purchased Assets (the “Estimated Country
Allocation”). As soon as practicable, and in any event not later than five
days prior to (i) the latest date required by applicable Law and (ii) seventy
days after the Closing, Abbott shall provide for Guidant’s review and comments
(A) an allocation of the Purchase Price among the Shares and the Purchased
Assets by country based on the fair market values of such Shares and Purchased
Assets (the “Country Allocation”), and (B) if required by applicable
Law, an allocation by asset category within a particular country (the “In-Country
Allocation”). Guidant shall have the right to consent to the Estimated
Country Allocation and the In-Country Allocation, which consent shall not be
unreasonably withheld or delayed. If Guidant and Abbott are unable to reach
agreement on the Country Allocation within five days following the relevant
date provided in Section 2.04(b)(ii), the Country Allocation shall be
determined by an internationally-recognized independent accounting firm
mutually selected by Abbott and Guidant (the “Country Allocation Accounting
Firm”) using customary valuation methodologies; provided, however, that the
Country Allocation Accounting Firm shall make its determination within thirty
days following the date provided in Section 2.04(b)(ii). The determination made
by the Country Allocation Accounting Firm shall be, absent manifest error,
final and binding on Guidant, on behalf of itself and the Sellers, and Abbott,
on behalf of itself and the other Purchasers. The fees and expenses of the Country
Allocation Accounting Firm shall be shared equally between Guidant and Abbott.
Guidant, on behalf of itself and the Sellers, and Abbott, on behalf of itself
and the other Purchasers, shall acknowledge that the Country


 


16

















 


Allocation
and In-Country Allocation will be done at arm’s length based upon a good faith
determination of fair market values.


 


(c)
Each of Guidant, Abbott and each of their respective Affiliates shall (i) be
bound by the Country Allocation and the In-Country Allocation for purposes of
determining any Taxes, and (ii) prepare and file, and cause its Affiliates to
prepare and file, its Tax Returns on a basis consistent with the Country
Allocation and the In-Country Allocation. None of Guidant, Abbott or their
respective Affiliates shall take any position inconsistent with the Country
Allocation or the In-Country Allocation in any Tax Return, in any refund claim,
in any litigation, or otherwise unless required by final determination by an applicable
taxing authority. In the event that the Country Allocation or the In-Country
Allocation is disputed by any taxing authority, the party receiving notice of
the dispute shall promptly notify the other party hereto, and Abbott and
Guidant agree to use their best efforts to defend such Country Allocation or
such In-Country Allocation in any audit or similar proceeding.


 


SECTION
2.05. Milestone Payments. In addition to the Initial Purchase Price,
within three Business Days following the first date of the achievement of the
following events, Abbott or any Purchaser shall pay to Guidant or, subject to
the prior written consent of Abbott (not to be unreasonably withheld or
delayed), its designee the following payments (each, a “Milestone Payment”)
by wire transfer in immediately available funds to a bank account designated by
Guidant (or, if notice of such designation is received by Abbott later than
three Business Days following such first date, the applicable payment shall be
made within three Business Days following receipt of such designation): (a) a
single, one-time payment in cash equal to $250,000,000, upon and subject to the
condition that Abbott or any of its Affiliates or designees has received
approval from the FDA to market and sell an everolimus eluting stent in the
United States on or before the tenth anniversary of the Closing, and (b) a
single, one-time payment in cash equal to $250,000,000, upon and subject to the
condition that Abbott or any of its Affiliates or designees has received approval
from the Ministry of Health, Labour and Welfare of Japan to market and sell an
everolimus eluting stent in Japan on or before the tenth anniversary of the
Closing; provided, however, that in the event of a failure by Boston Scientific
or any of its Affiliates to pay any principal or interest when due (by
operation of Law or otherwise) on the Note or on Principal Indebtedness, any
proceeds Guidant or its designee receives or is entitled to receive with
respect to the Milestone Payments pursuant to this Section 2.05 will be
immediately applied upon receipt thereof (or, in the case of any such Milestone
Payments which shall be due but not have been paid at such time, may be applied
by Abbott directly), by set-off or recoupment, to prepay any amounts then outstanding
under the Note. Total Milestone Payments shall not exceed $500,000,000. As a
condition to any sale, assignment or transfer of any of the Milestone Payments
by Guidant to any Person (other than an Affiliate of Guidant), Guidant shall
cause any such Person to acknowledge in writing (with a copy of such
acknowledgement to be delivered to Abbott) its agreement to the provisions of
this Section 2.05.


 


SECTION
2.06. Closing. Subject to the terms and conditions of this Agreement,
the sale and purchase of the Shares and the Purchased Assets and the assumption
of the Assumed Liabilities contemplated by this Agreement shall take place at a
closing (the “Closing”) to be held immediately prior to the consummation
of the Merger at the offices of Shearman & Sterling LLP, 599 Lexington
Avenue, New York, New York at 10:00 a.m., New York time, on the


 


17

















 


second Business Day
following the satisfaction or waiver of the conditions to the obligations of
the parties hereto set forth in Article VIII, or at such other place or at such
other time or on such other date as Guidant and Abbott may mutually agree upon
in writing; provided, however, that if the approvals described on
Schedule 2.06 required in one or more of the jurisdictions listed on Schedule
2.06 (“Required Consent Jurisdictions”) have not been obtained at the
time of the Closing, then the parties shall defer the Closing solely with
respect to the Shares or Purchased Assets related to such Required Consent
Jurisdictions as described on Schedule 2.06 (each, a “Deferred Local Closing”).
In such event, (a) the legal interest in and to the relevant Shares or
Purchased Assets shall not be assigned, transferred or conveyed to the
applicable Purchaser unless and until the Deferred Local Closing occurs, (b) to
the extent permitted under applicable Law, the applicable Purchaser shall
acquire a beneficial interest in and to the relevant Shares or Purchased Assets
at the Closing (including all cash and cash equivalents generated with respect
thereto), (c) until the Deferred Local Closing occurs, Guidant and its
Affiliates shall conduct the Business in the Required Consent Jurisdictions for
the benefit and at the expense of Abbott, and (d) Guidant and its Affiliates
shall not integrate the Excluded Assets in the Required Consent Jurisdictions
with the businesses of Boston Scientific or its Affiliates until such time as
the Deferred Local Closing has occurred. The Deferred Local Closing shall occur
no later than three Business Days following receipt of the necessary consents
and the expiration of all mandatory waiting periods, or at such time as the
parties may mutually agree upon in writing. At Guidant’s election, Abbott or
the applicable Purchaser shall either (i) deliver, on the date of the Closing,
the portion of the Initial Purchase Price allocated to the Shares and the
Purchased Assets related to each Deferred Local Closing pursuant to Section
2.04(b) to a third-party trust account maintained by an escrow agent (to be
mutually agreed by Abbott and Guidant prior to the Closing), which portions
shall be released to Guidant or the applicable Seller on the date of the
applicable Deferred Local Closing, or (ii) pay to Guidant or the applicable
Seller the portion of the Initial Purchase Price allocated to the Shares and
the Purchased Assets related to each Deferred Local Closing pursuant to Section 2.04(b)
on the date of such Deferred Local Closing. Guidant shall notify Abbott in
writing of its election at least 10 days prior to the Closing. Solely with
respect to each Deferred Local Closing, the conditions set forth in each of
Sections 8.01(b) and (c) and 8.02(b) and (c) must be satisfied at or prior to
such Deferred Local Closing instead of the Closing.


 


SECTION
2.07. Closing Deliveries by Guidant. At the Closing, Guidant shall
deliver, or cause to be delivered, to the applicable Purchaser:


 


(a)                                  other than with respect to uncertificated
Shares (with respect to which such notarial deeds or other instruments of
transfer duly executed by the applicable Share Seller will be delivered as
required under applicable Law to give effect to the transfer of such
uncertificated Shares), stock certificates evidencing the Shares duly endorsed
in blank, or accompanied by stock powers duly executed in blank and with all
required stock transfer Tax stamps affixed, in all cases free and clear of any
Encumbrances;


 


(b)                                 copies of the resolutions (or local
equivalent) of the board of directors (or local equivalent) and, where
required, the stockholders of each Seller, authorizing and approving the
transactions contemplated by this Agreement and the applicable Ancillary Agreements,
to the extent applicable to such Seller, certified by the respective corporate


 


18

















 


secretary
(or local equivalent) or a director to be true and complete and in full force
and effect and unmodified as of the Closing;


 


(c)                                  executed counterparts of each Ancillary
Agreement to which Guidant or the applicable Seller is a party and such other
instruments, in form and substance reasonably satisfactory to Abbott, as may be
reasonably requested by Abbott or necessary under applicable Law to effect the
transfer of the Purchased Assets and the Shares to the Purchasers and to
evidence such transfer in the public records, in each case duly executed by
Guidant or the applicable Seller;


 


(d)                                 a receipt for the Initial Purchase Price; and


 


(e)                                  the certificate required by Section 8.02(a).


 


SECTION
2.08. Closing Deliveries by Abbott. At the Closing, Abbott shall
deliver, or cause to be delivered, to Guidant or the Applicable Seller:


 


(a)                                  the Initial Purchase Price, by wire transfer
in immediately available funds to an account or accounts designated in writing
by Guidant not fewer than three Business Days prior to the Closing (except as
otherwise may be required by applicable Law, in which case the portion of the
Initial Purchase Price that must be paid locally to the applicable Asset Seller
shall be paid by wire transfer in immediately available funds (in the local
currency, if required by applicable Law) to a local bank account of such Asset Seller
designated in writing by Guidant no fewer than three Business Days prior to the
Closing);


 


(b)                                 copies of the resolutions (or local
equivalent) of the board of directors (or local equivalent) and, where
required, the stockholders of each Purchaser, authorizing and approving the
transactions contemplated by this Agreement and the applicable Ancillary
Agreements to the extent applicable to such Purchaser, certified by the respective
corporate secretary (or local equivalent) or a director to be true and complete
and in full force and effect and unmodified as of the Closing;


 


(c)                                  executed counterparts of each Ancillary
Agreement to which Abbott or the applicable Purchaser is a party and such other
instruments, in form and substance reasonably satisfactory to Guidant, as may
be reasonably requested by Guidant or necessary under applicable Law to effect
the assumption by Abbott and/or the Purchasers of the Assumed Liabilities and
to evidence such assumption in the public records; and


 


(d)                                 the certificate required by Section 8.01(a).


 


ARTICLE III


 


REPRESENTATIONS AND WARRANTIES 


OF GUIDANT


 


Guidant
hereby represents and warrants to Abbott as follows:


 


19

















 


SECTION
3.01. Organization, Authority and Qualification. (a) Guidant is a
corporation duly incorporated, validly existing and in good standing under the
Laws of the State of Indiana and has all necessary corporate power and authority
to enter into, execute and deliver this Agreement, to carry out its obligations
hereunder and to consummate the transactions contemplated by this Agreement and
the Ancillary Agreements to which it is a party. The execution and delivery by
Guidant of this Agreement and the Ancillary Agreements to which it is a party,
the performance by Guidant of its obligations hereunder and thereunder and the
consummation by Guidant of the transactions contemplated hereby and thereby
have been duly authorized by all requisite corporate action on the part of
Guidant. This Agreement has been, and upon their execution each of the
Ancillary Agreements to which Guidant is a party will be, duly executed and
delivered by Guidant, and, assuming due authorization, execution and delivery
by each of the other parties hereto and thereto, this Agreement is, and each of
the Ancillary Agreements to which Guidant is a party will be, a legal, valid
and binding obligation of Guidant, enforceable against it in accordance with
its terms.


 


(b)                                 Each Seller has been duly organized, is a
validly existing legal entity and, where applicable, is in good standing (or
its local equivalent) under the Laws of the jurisdiction of its organization,
and will have when executed as provided in this Agreement all necessary
corporate power and authority to enter into, execute and deliver each Ancillary
Agreement to which it is a party, to carry out its obligations thereunder and
to consummate the transactions contemplated thereby. The execution and delivery
by each Seller of each Ancillary Agreement to which it is a party, the
performance by such Seller of its obligations thereunder and the consummation
by such Seller of the transactions contemplated thereby will be, when executed
as provided in this Agreement, duly authorized by all requisite corporate
action on the part of such Seller. Each Ancillary Agreement to which a Seller
is a party will be, when executed as provided in this Agreement, duly executed
and delivered by such Seller and, assuming due authorization, execution and
delivery by the other parties thereto, will constitute, when executed as
provided in this Agreement, a legal, valid and binding obligation of such
Seller enforceable against it in accordance with its terms.


 


SECTION
3.02. Organization, Authority and Qualification of the Transferred
Subsidiaries. Each Transferred Subsidiary is a company duly organized,
validly existing under the laws of the jurisdiction of its incorporation and
has all necessary corporate power and authority to own, operate or lease the
properties and assets now owned, operated or leased by it and to carry on the
Business as it has been and is currently conducted. Each Transferred Subsidiary
is duly licensed or qualified to do business and is in good standing (or its local
equivalent) in each jurisdiction in which the properties owned or leased by it
or the operation of its business makes such licensing or qualification
necessary or desirable, except to the extent that the failure to be so
licensed, qualified or in good standing individually or in the aggregate has
not had and would not reasonably be expected to have a Material Adverse Effect.
True and correct copies of the certificate of incorporation and bylaws (or
similar organizational documents) of each Transferred Subsidiary have been
delivered by Guidant to Abbott.


 


SECTION
3.03. Capitalization; Ownership of Shares. (a) Section 3.03(a) of the
Disclosure Schedule sets forth a list of each Transferred Subsidiary, and sets
forth, for each Transferred Subsidiary, the name, type of entity, jurisdiction
and date of its incorporation or organization, its authorized capital stock,
the number and type of its issued and outstanding


 


20

















 


shares of capital stock or
similar ownership interests of each Transferred Subsidiary and all of the
Persons owning all the issued and outstanding shares of capital stock or
similar ownership interests of each Transferred Subsidiary. All the issued and
outstanding shares of capital stock or similar ownership interests of each
Transferred Subsidiary have been validly issued and are fully paid and
nonassessable and are owned, directly or indirectly, by Guidant, the applicable
Share Seller or by a Transferred Subsidiary free and clear of all Encumbrances
and free of any restriction on the right to vote, sell or otherwise dispose of
such issued and outstanding shares of capital stock or similar ownership
interests of each Transferred Subsidiary. Except as set forth in Section
3.03(a) of the Disclosure Schedule and except for this Agreement, there are no
options, warrants, calls, subscriptions, convertible securities or other
rights, securities, agreements, arrangements or commitments relating to the
issued and outstanding shares of capital stock or similar ownership interests
of each Transferred Subsidiary or obligating Guidant or its Affiliates to
issue, transfer or sell, or cause to be issued, transferred or sold, any shares
of capital stock or similar ownership interests of any Transferred Subsidiary, or
grant, extend or enter into any such agreement, arrangement or commitment. The
Shares constitute all the issued and outstanding capital stock of the
Transferred Subsidiaries. There are no outstanding contractual obligations of
Guidant or its Affiliates to repurchase, redeem or otherwise acquire any Shares
or any other interest in the Transferred Subsidiaries.


 


(b)                                 Section 3.03(b) of the Disclosure Schedule
sets forth a true and complete list of each investment by Guidant or any of its
Affiliates in other Persons (other than Affiliates of Guidant) engaged in the
vascular interventional or endovascular solutions businesses.


 


SECTION
3.04. No Conflict. Assuming that all consents, approvals, authorizations
and other actions described in Section 3.05 have been obtained, all filings and
notifications listed in Section 3.05 of the Disclosure Schedule have been made
and any applicable waiting period has expired or been terminated, and except as
may result from any facts or circumstances relating solely to Abbott or the
other Purchasers, the execution, delivery and performance by Guidant of this
Agreement, and the execution, delivery and performance by each of Guidant and
each Seller of the Ancillary Agreements to which it is a party, do not and will
not (a) violate, conflict with or result in the breach of the certificate of
incorporation or by laws (or similar organizational documents) of Guidant, the
Sellers or the Transferred Subsidiaries, (b) conflict with or violate any Law
or Governmental Order applicable to Guidant, the Sellers or the Transferred
Subsidiaries, as applicable, or their respective properties or other assets, or
(c) except as set forth in Section 3.04(c) of the Disclosure Schedule, conflict
with, result in any violation or breach of, constitute a default (or event
which with the giving of notice or lapse of time, or both, would become a
default) under, or give to others any rights of, or result in, termination,
cancellation or acceleration of any obligation or to the loss of a benefit
under, or result in the creation of any Encumbrance (other than Permitted
Encumbrances) in or upon the properties or other assets of the Business or any
Transferred Subsidiary under, any Contract to which Guidant, a Seller or a
Transferred Subsidiary is a party, or to which any of the respective Purchased
Assets is subject, except, in the case of clauses (b) and (c), as individually
or in the aggregate has not had and would not reasonably be expected to (i)
have a Material Adverse Effect, (ii) impair in any material respect the ability
of Guidant or any Seller to perform its obligations under this Agreement, or
(iii) prevent or materially impede, interfere with, hinder or delay the
consummation of the transactions contemplated by this Agreement.


 


21

















 


SECTION
3.05. Governmental Consents and Approvals. The execution, delivery and
performance by Guidant of this Agreement, and the execution, delivery and
performance by each of Guidant and each Seller of each Ancillary Agreement to
which it is a party, do not and will not require any consent, approval or other
order or authorization of, action by or in respect of, or registration,
declaration or filing with or notification to, any Governmental Authority,
except (a) the requirements of the applicable Council Regulation of the
European Union, as amended (the “EU Merger Regulation”), and, to the
extent applicable, the requirements of the HSR Act and the antitrust Laws of
any other relevant jurisdiction, (c) where failure to obtain such consent,
approval, authorization or action, or to make such filing or notification,
individually or in the aggregate, has not had and would not reasonably be
expected to have a Material Adverse Effect, or (d) as may be necessary as a
result of any facts or circumstances relating solely to Abbott or any of its
Affiliates.


 


SECTION
3.06. Conduct in the Ordinary Course. Except for Liabilities incurred in
connection with, and actions taken in compliance with, this Agreement, since
the date of the most recent financial statements included in the “Filed Company
SEC Documents” (as defined in the Merger Agreement), the Business has been
conducted only in the ordinary course consistent with past practice, and there
has not been any Material Adverse Effect, and from such date until the date hereof
there has not been: (a) any declaration, setting aside or payment of any
dividend or other distribution (whether in cash, stock or property) with
respect to any capital stock of any Transferred Subsidiary, other than
dividends or distributions by a Transferred Subsidiary to Guidant or a Share
Seller, (b) any purchase, redemption or other acquisition by a Transferred
Subsidiary of any shares of capital stock or any other securities of such
Transferred Subsidiary or any options, warrants, calls or rights to acquire
such shares or other securities, (c) any split, combination or reclassification
of any capital stock of a Transferred Subsidiary or any issuance or the
authorization of any issuance of any other securities in respect of, in lieu of
or in substitution for shares of their respective capital stock, (d) (i) any
granting by Guidant or any of its Affiliates to any current or former (A)
director of a Transferred Subsidiary or (B) U.S. Business Employee or Non-U.S.
Business Employee who is treated as a Tier I Employee (a “Tier I Employee”)
or Tier II Employee (a “Tier II Employee”) for purposes of Guidant’s
Change in Control Severance Pay Plan for Select Employees (all individuals
described in the foregoing clauses (A) and (B) of this clause (d)(i), collectively,
the “Key Personnel”), of any increase in compensation, bonus or fringe
or other benefits, except for normal increases in cash compensation (including
cash bonuses) in the ordinary course of business consistent with past practice
or as was required under any (y) employment, deferred compensation, consulting,
severance, change of control, termination or indemnification contract with any
Key Personnel or (z) contract with any Key Personnel the benefits of which are
contingent, or the terms of which are materially altered, upon the occurrence
of a transaction involving Guidant of a nature contemplated by the Merger
Agreement (all such contracts in the foregoing clauses (y) and (z) of this
clause (d)(i), collectively, “Guidant Benefit Agreements”) or Guidant
Benefit Plan (as defined in Section 3.12), (ii) any granting by Guidant or any
of its Affiliates to any Key Personnel of (A) any increase in severance or
termination pay or (B) any right to receive any severance or termination pay
except for severance or termination pay received in the ordinary course of
business consistent with past practice or as was required under any Guidant
Benefit Agreement or Guidant Benefit Plan, (iii) any entry by Guidant or any of
its Affiliates into, or any amendments of, any Guidant Benefit Agreement, (iv)
the removal or modification of any restrictions in any Guidant Benefit
Agreement or Guidant Benefit Plan or awards made


 


22

















 


thereunder, except as
required to comply with applicable Law or any Guidant Benefit Agreement or
Guidant Benefit Plan in effect as of the date hereof or (v) the adoption,
amendment or termination of any Guidant Benefit Plan, other than, in the cases
of clauses (i), (ii), (iii) and (iv), such increases, amendments, new
agreements, removals, modifications or terminations with respect to Tier II
Employees that (1) do not provide for any increase in compensation or benefits
for any individual Tier II Employee that is material in relation to such Tier II
Employee’s compensation or benefits prior to such increase and (2) in the
aggregate do not result in any material increase in compensation, benefits or
other similar expenses of the Business, (e) any damage, destruction or loss,
whether or not covered by insurance, that individually or in the aggregate has
had or would reasonably be expected to have a Material Adverse Effect, (f) any
change in accounting methods, principles or practices of the Business
materially affecting its assets, liabilities or businesses, except insofar as
may have been required by a change in GAAP or (g) any material Tax election or
any settlement or compromise of any material income Tax liability.


 


SECTION
3.07. Litigation. Except as set forth in Section 3.07 of the Disclosure
Schedule, and except with respect to Taxes, which are the subject of Section
3.13, there is no Action pending or, to the Knowledge of Guidant, threatened,
against or affecting a Transferred Subsidiary, the Business or the Assets that
individually or in the aggregate has had or would reasonably be expected to
have a Material Adverse Effect, nor is there any demand or letter of any
Governmental Authority or any Governmental Order outstanding against, or, to
the Knowledge of Guidant, investigation by any Governmental Authority
involving, a Transferred Subsidiary, the Business or the Assets that
individually or in the aggregate has had or would reasonably be expected to
have a Material Adverse Effect. As of the date hereof, no Action by or against
Guidant or any of its Affiliates is pending, or to the Knowledge of Guidant,
threatened, that would reasonably be expected to affect the legality, validity
or enforceability of this Agreement or prevent the consummation of the
transactions contemplated hereby.


 


SECTION
3.08. Compliance with Laws. Except with respect to Environmental Laws,
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
Taxes and regulatory compliance, which are the subjects of Sections 3.09, 3.12,
3.13 and 3.15, respectively, each of the Transferred Subsidiaries and the
Business is in compliance with all Laws and Governmental Orders applicable to
it, its properties or other assets or its business or operations, except for
failures to be in such compliance that individually or in the aggregate have
not had and would not reasonably be expected to have a Material Adverse Effect.
Each of the Transferred Subsidiaries and the Business has in effect all
approvals, authorizations, certificates, filings, franchises, licenses, notices
and permits of or with all Governmental Authorities (collectively, “Permits”),
including all Permits under the Federal Food, Drug and Cosmetic Act of 1938, as
amended (including the rules and regulations promulgated thereunder, the “FDCA”),
necessary for the Transferred Subsidiaries and the Business to own, lease or
operate its properties and other assets and to carry on its activities and
operations as currently conducted, except where the failure to have such
Permits individually or in the aggregate has not had and would not reasonably
be expected to have a Material Adverse Effect. Since January 1, 2000, there has
not occurred any default under, or violation of, any such Permit, except for
any such default or violation that individually or in the aggregate has not had
and would not reasonably be expected to have a Material Adverse Effect. The
consummation of the transactions contemplated by this Agreement, in and of
itself, would not cause the revocation or cancellation of any such


 


23

















 


Permit
that individually or in the aggregate would reasonably be expected to have a
Material Adverse Effect.


 


SECTION
3.09. Environmental Matters. Except for those matters that individually
or in the aggregate have not had and would not reasonably be expected to have a
Material Adverse Effect: (i) during the period of ownership or operation by
Guidant and its Affiliates of any of their current or former Owned Business
Real Property or Leased Business Real Property, there have been no Environmental
Releases of Hazardous Materials in, on, under or affecting any properties that
would subject the Business to any Liability under any Environmental Law or
require any expenditure by the Transferred Subsidiaries or the Business for
remediation to meet applicable standards thereunder; (ii) prior to and after,
as applicable, the period of ownership or operation by Guidant, and its
Affiliates of any of their current or former Owned Business Real Property or
Leased Business Real Property, to the Knowledge of Guidant, there were no
Environmental Releases of Hazardous Materials in, on, under or affecting any
properties that would subject the Transferred Subsidiaries or the Business to
any Liability under any Environmental Law or require any expenditure by the
Transferred Subsidiaries or the Business for remediation to meet applicable
standards thereunder; (iii) none of the Transferred Subsidiaries are subject to
any indemnity obligation or other contract with any Person relating to
obligations or Liabilities under Environmental Laws; and (iv) to the Knowledge
of Guidant, there are no facts, circumstances or conditions that would
reasonably be expected to form the basis for any investigation, suit, claim,
action, proceeding or liability against or affecting a Transferred Subsidiary
or the Business relating to or arising under Environmental Laws.


 


SECTION
3.10. Intellectual Property. (a) Section 3.10(a) of the Disclosure
Schedule sets forth, as of the date hereof, a complete and accurate list (in
all material respects) of all patents and applications therefor, registered
trademarks and applications therefor, domain name registrations and copyright
registrations (if any) that are included in the Business Intellectual Property
and are material to the conduct of the Business as currently conducted. Such
Intellectual Property rights required to be listed in Section 3.10(a) of the
Disclosure Schedule, together with any tradename rights, trade secret or know
how rights, service mark rights, trademark rights, patent rights, Intellectual
Property rights in computer programs or software or other type of Intellectual
Property rights, in each case, that are used primarily in or related primarily
to the Business and that are material to the conduct of the Business, taken as
a whole, as currently conducted, are collectively referred to herein as the “Intellectual
Property Rights”. All Intellectual Property Rights are either (i) owned by
Guidant, a Transferred Subsidiary or an Asset Seller free and clear of all
Encumbrances (other than Permitted Encumbrances) or (ii) licensed to Guidant, a
Transferred Subsidiary or an Asset Seller free and clear (to the Knowledge of
Guidant) of all Encumbrances (other than Permitted Encumbrances), except where
the failure to so own or license such Intellectual Property Rights individually
or in the aggregate has not had and would not reasonably be expected to have a
Material Adverse Effect. There are no claims pending or, to the Knowledge of
Guidant, threatened with regard to the ownership or, to the Knowledge of
Guidant, licensing by Guidant, the Transferred Subsidiaries or the Asset
Sellers of any Intellectual Property Rights which individually or in the
aggregate has had or would reasonably be expected to have a Material Adverse
Effect. Guidant, a Transferred Subsidiary or an Asset Seller owns, is validly
licensed or otherwise has the right to use all Intellectual Property Rights,
except where the failure to own, have a valid license or otherwise have rights
to use such Intellectual Property Rights individually or in the aggregate has


 


24

















 


not had and would not
reasonably be expected to have a Material Adverse Effect. The execution and
delivery of this Agreement and the Ancillary Agreements by Guidant and its
Affiliates (other than the Transferred Subsidiaries) does not, and the
consummation by Guidant of the Closing and the other transactions contemplated
by this Agreement and the Ancillary Agreements will not, conflict with, or
result in any violation or breach of, or default (with or without notice or
lapse of time, or both) under, or give rise to a right of, or result in,
termination, cancellation or acceleration of any obligation or the loss of a
benefit under, or result in the creation of any Encumbrance in or upon, any
Intellectual Property Right, in each case that individually or in the aggregate
has not had or would reasonably be expected to have a Material Adverse Effect.
Section 3.10(a)(i) of the Disclosure Schedule sets forth, as of the date
hereof, all contracts under which Guidant, the Transferred Subsidiaries or the
Asset Sellers is obligated to make payments to third parties for use of any
Intellectual Property Rights with respect to the commercialization of any
products that are, as of the date hereof, being sold, manufactured by or under
development by the Business and for which such payments are in excess of
$2,000,000 per year for any single product. The aggregate amount of all such
payments that the Business is obligated to make under any contract of the type
described in the immediately preceding sentence that are not required to be
disclosed pursuant to such sentence does not exceed $10,000,000 per year.


 


(b)           There are no pending or, to the Knowledge of
Guidant, threatened claims that the operation of the Business or any
Transferred Subsidiary has infringed or is infringing (including with respect
to the manufacture, use or sale by the Business or the Transferred Subsidiaries
of any products or to the operations of the Business and the Transferred Subsidiaries)
any intellectual property rights of any Person that individually or in the
aggregate have had or would reasonably be expected to have a Material Adverse
Effect. To the Knowledge of Guidant, as of the date of this Agreement, there
are no facts, circumstances or conditions that would reasonably be expected to
form the basis for any claim by a Person to exclude or prevent the Business
from freely using its Intellectual Property Rights and that individually or in
the aggregate would reasonably be expected to have a Material Adverse Effect.


 


(c)           All patents required to be listed in Section
3.10(a) of the Disclosure Schedule that are owned by Guidant or its Affiliates
have been duly registered and/or filed with or issued by each appropriate
Governmental Authority, all necessary affidavits of continuing use have been
timely filed, and all necessary maintenance fees have been timely paid to
continue all such rights in effect, other than failures to be duly registered,
filed, issued or paid that individually or in the aggregate have not had and
would not reasonably be expected to have a Material Adverse Effect. None of the
patents required to be listed in Section 3.10(a) of the Disclosure Schedule
that are owned by Guidant or its Affiliates has expired or been declared invalid,
in whole or in part, by any Governmental Authority, other than such expirations
or declarations of invalidity that individually or in the aggregate have not
had and would not reasonably be expected to have a Material Adverse Effect.
There are no ongoing interferences, oppositions, reissues, reexaminations or
other proceedings challenging any of the patents or patent applications
required to be listed in Section 3.10(a) of the Disclosure Schedule and owned by
Guidant or its Affiliates for the benefit of the Business and the Transferred
Subsidiaries (or, to the Knowledge of Guidant, challenging any such patents or
patent applications licensed to the Business or the Transferred Subsidiaries),
including ex parte and post-grant proceedings, in the United States Patent and
Trademark Office or in any foreign patent office or similar administrative
agency, other than such interferences, oppositions, reissues, reexaminations or


 


25

















 


proceedings
that individually or in the aggregate have not had and would not reasonably be
expected to have a Material Adverse Effect.


 


(d)           Except as has not had and would not
reasonably be expected to have a Material Adverse Effect, Guidant and its
Affiliates have used commercially reasonable efforts to maintain their material
trade secrets included in the Business Intellectual Property in confidence.


 


SECTION
3.11. Title.  Each of Guidant and
each Asset Seller and Transferred Subsidiary has valid title to, or valid
leasehold or sublease interests or other comparable contract rights in or
relating to, all of its Owned Business Real Property or Leased Business Real
Property, as applicable, and other tangible Assets necessary for the conduct of
the Business as currently conducted, except as have been disposed of in the
ordinary course of business and except for defects in title, easements,
restrictive covenants and similar encumbrances that individually or in the
aggregate have not had and would not reasonably be expected to have a Material
Adverse Effect. Each of Guidant and each Asset Seller and Transferred
Subsidiary has complied with the terms of all leases or subleases relating to
Leased Business Real Property to which it is a party and under which it is in
occupancy, and all leases relating to Leased Business Real Property to which
Guidant or any Asset Seller or Transferred Subsidiary is a party and under
which it is in occupancy are in full force and effect, except for such failure
to comply or be in full force and effect that individually or in the aggregate
has not had and would not reasonably be expected to have a Material Adverse
Effect. None of Guidant or any Asset Seller or Transferred Subsidiary has
received any written notice of any event or occurrence that has resulted or
could result (with or without the giving of notice, the lapse of time or both)
in a default with respect to any lease or sublease regarding the Leased
Business Real Property to which it is a party, which defaults individually or in
the aggregate have had or would reasonably be expected to have a Material
Adverse Effect.


 


SECTION
3.12. Employee Benefit Matters. (a) Section 3.12(a) of the Disclosure
Schedule contains a complete and accurate list, as of the date hereof, of (i)
each employment, bonus, pension, profit sharing, deferred compensation,
incentive compensation, stock ownership, stock purchase, stock appreciation,
restricted stock, stock option, “phantom” stock, performance, retirement,
thrift, savings, stock bonus, paid time off, perquisite, fringe benefit,
vacation, severance, disability, death benefit, hospitalization, medical,
welfare benefit or other plan, program, policy or contract maintained,
contributed to or required to be maintained or contributed to by Guidant or any
of the Asset Sellers or Transferred Subsidiaries or any other Person that,
together with Guidant, is treated as a single employer under Section 414(b),
(c), (m) or (o) of the Code (each, a “Commonly Controlled Entity”)
(exclusive of any such plan, program, policy or contract mandated by and
maintained solely pursuant to applicable Law), in each case providing benefits
to any current or former U.S. Business Employee or Non-U.S. Business Employee
(collectively, but exclusive of individual option and restricted award
agreements issued under the Company Stock Plans, the “Guidant Benefit Plans”)
and (ii) each Guidant Benefit Agreement (exclusive of local offer letters
mandated under applicable non-U.S. Law that do not impose any severance
obligations other than any mandatory statutory severance). Guidant has caused
to be made available to Abbott a true and complete copy of (i) each Guidant
Benefit Plan or, at Guidant’s option, in the case of Guidant Benefit Plans
maintained primarily for Non-U.S. Business Employees, a summary thereof (or, in
either case, with respect to any unwritten Guidant Benefit Plans, descriptions
thereof) and each Guidant


 


26

















 


Benefit
Agreement (exclusive of local offer letters mandated under applicable foreign
Law that do not impose any severance obligations other than mandatory
severance), (ii) the two most recent annual reports on Form 5500 required to be
filed with the IRS with respect to each Guidant Benefit Plan (if any such
report was required), (iii) the most recent summary plan description for each
Guidant Benefit Plan for which such summary plan description is required, and
(iv) each trust and insurance or group annuity contract relating to any Guidant
Benefit Plan.


 


(b)
Each Guidant Benefit Plan has been administered in all material respects in accordance
with its terms and the requirements of all applicable Laws. Each of Guidant, a Transferred
Subsidiary or an Asset Seller, as the case may be, has performed all material obligations
required to be performed by it under, is not in any material respect in default
under or in material violation of, and Guidant has no Knowledge of any material
default or violation by any other party to, any Guidant Benefit Plan. No Action
is pending or, to the Knowledge of Guidant, threatened with respect to any
Guidant Benefit Plan (other than claims for benefits in the ordinary course)
and, to the Knowledge of Guidant, no fact or event exists that could give rise
to any such Action. Each of Guidant, the Transferred Subsidiaries, the Asset
Sellers and all the Guidant Benefit Plans are all in compliance in all material
respects with the applicable provisions of ERISA, the Code and all other
applicable Laws, including Laws of foreign jurisdictions, and the terms of all
collective bargaining Contracts.


 


(c)
All Guidant Benefit Plans intended to be tax-qualified have received favorable determination
letters from the IRS with respect to “TRA” (as defined in Section 1 of IRS Rev.
Proc. 93-39), and have timely filed with the IRS determination letter
applications (or have received such a determination letter) with respect to “GUST”
(as defined in Section 1 of IRS Notice 2001-42), to the effect that such
Guidant Benefit Plans are qualified and exempt from Federal income taxes under
Sections 401(a) and 501(a), respectively, of the Code, no such determination
letter has been revoked (nor, to the Knowledge of Guidant, has revocation been threatened)
and to the Knowledge of Guidant, no event has occurred since the date of the
most recent determination letter or application therefor relating to any such
Guidant Benefit Plan that would reasonably be expected to adversely affect the
qualification of such Guidant Benefit Plan or materially increase the costs
relating thereto or require security under Section 307 of ERISA. Guidant has
provided to Abbott a complete and accurate copy of the most recent
determination letter received prior to the date hereof with respect to each
Guidant Benefit Plan, as well as a complete and accurate copy of each pending
application for a determination letter, if any. Guidant has also provided to
Abbott a complete and accurate list of all amendments to any Guidant Benefit
Plan as to which a favorable determination letter has not yet been received.


 


(d)
Except as set forth on Section 3.12(d) of the Disclosure Schedule, neither Guidant
nor any Commonly Controlled Entity has, during the six-year period ending on
the date hereof, maintained, contributed to or been required to contribute to
any Guidant Benefit Plan that is subject to Title IV of ERISA or Section 412 of
the Code, or any “multiemployer plan” as defined in Section 3(37) or 4001(a)(3)
of ERISA. Except as has not had and would not reasonably be expected to have a
Material Adverse Effect, neither Guidant nor any Commonly Controlled Entity has
any unsatisfied liability under Title IV of ERISA. To the Knowledge of Guidant,
no condition exists that presents a material risk to Guidant, a Transferred
Subsidiary or an Asset Seller of incurring a material liability under Title IV
of ERISA. The Pension Benefit Guaranty Corporation has not instituted
proceedings under Section 4042 of ERISA to terminate


 


27

















 


any
Guidant Benefit Plan and, to the Knowledge of Guidant, no condition exists that
presents a material risk that such proceedings will be instituted.


 


(e)
Except as has not had and would not reasonably be expected to have a Material
Adverse Effect, (i) all reports, returns and similar documents with respect to
all Guidant Benefit Plans required to be filed with any Governmental Authority
or distributed to any Guidant Benefit Plan participant have been duly and
timely filed or distributed, (ii) none of Guidant or any of the Transferred
Subsidiaries has received notice of, and to the Knowledge of Guidant, there are
no investigations by any Governmental Authority with respect to, termination proceedings
or other claims (except claims for benefits payable in the normal operation of
the Guidant Benefit Plans), suits or proceedings against or involving any
Guidant Benefit Plan or asserting any rights or claims to benefits under any
Guidant Benefit Plan that could reasonably be expected to give rise to any
material liability, and (iii) to the Knowledge of Guidant, there are not any
facts that could give rise to any liability in the event of any such
investigation, claim, suit or proceeding.


 


(f)
Except as has not had and would not reasonably be expected to have a Material
Adverse Effect, (i) all contributions, premiums and benefit payments under or
in connection with any Guidant Benefit Plans that are required to have been
made as of the date hereof in accordance with the terms of the Guidant Benefit
Plans and applicable Laws have been timely made or will be made in accordance
with applicable Law, and (ii) no Guidant Benefit Plan has an “accumulated
funding deficiency” (as such term is defined in Section 302 of ERISA or Section
412 of the Code), whether or not waived.


 


(g)
With respect to each Guidant Benefit Plan, except as has not had and would not
reasonably be expected to have a Material Adverse Effect, (i) there has not
occurred any prohibited transaction (within the meaning of Section 406 of ERISA
or Section 4975 of the Code) in which any Transferred Subsidiary or Asset
Seller or any U.S. Business Employee or Non-U.S. Business Employee, or, to the
Knowledge of Guidant, any trustee, administrator or other fiduciary of such
Guidant Benefit Plan, or any agent of the foregoing, has engaged that could
reasonably be expected to subject any Transferred Subsidiary or Asset Seller or
any U.S. Business Employee or Non-U.S. Business Employee, or any such trustee,
administrator or other fiduciary, to the tax or penalty on prohibited
transactions imposed by Section 4975 of the Code or the sanctions imposed under
Title I of ERISA, and (ii) none of the Transferred Subsidiaries, Asset Sellers,
U.S. Business Employees or Non-U.S. Business Employees or, to the Knowledge of
Guidant, trustees, administrators or other fiduciaries of any Guidant Benefit
Plan nor any agent of any of the foregoing, has engaged in any transaction or
acted in a manner, or failed to act in a manner, that could reasonably be
expected to subject any Transferred Subsidiary, Asset Seller or any U.S.
Business Employee or Non-U.S. Business Employee or, to the Knowledge of Guidant,
any such trustee, administrator or other fiduciary, to any liability for breach
of fiduciary duty under ERISA or any other applicable Law.


 


(h)
Each Guidant Benefit Plan that is an “employee welfare benefit plan” (as
defined in Section 3(1) of ERISA) may be amended or terminated (including with
respect to benefits provided to retirees and other former employees) at any
time after Closing. Each of Guidant and the Commonly Controlled Entities complies
in all material respects with the applicable requirements of Section 4980B(f)
of the Code, Sections 601-609 of ERISA or any


 


28

















 


similar
state or local Law with respect to each Guidant Benefit Plan that is a group
health plan, as such term is defined in Section 5000(b)(1) of the Code or
such state Law. None of Guidant, any Transferred Subsidiary or any Asset Seller
has any material obligations for health or life insurance benefits following
termination of employment under any Guidant Benefit Plan (other than for
continuation coverage required under Section 4980(B)(f) of the Code).


 


(i)
Except as set forth on Section 3.12(i) of the Disclosure Schedule, none of the
execution and delivery of this Agreement or the consummation of any transaction
contemplated by this Agreement (alone or in conjunction with any other event,
including as a result of any termination of employment on or following the
Closing) will (i) entitle any current or former U.S. Business Employee or
Non-U.S. Business Employee to severance or termination pay, (ii) accelerate the
time of payment or vesting, or trigger any payment or funding (through a
grantor trust or otherwise) of, compensation or benefits under, increase the
amount payable or trigger any other material obligation pursuant to, any
Guidant Benefit Plan or Guidant Benefit Agreement, or (iii) result in any
breach or violation of, or a default under, any Guidant Benefit Plan or Guidant
Benefit Agreement.


 


(j)
Neither Guidant nor any of the Transferred Subsidiaries or Asset Sellers has
any material liability or obligations, including under or on account of a
Guidant Benefit Plan, arising out of the hiring of persons to provide services
to the Business and treating such persons as consultants or independent
contractors and not as employees of the Business. No current or former
independent contractor that provides or provided personal services to the
Business (other than a current or former director) is entitled to any material
fringe or other benefits (other than cash consulting fees) pursuant to any
plan, program, policy or contract to which Guidant, any Transferred Subsidiary
or any Asset Seller is a party or which is maintained, sponsored or contributed
to by Guidant, any Transferred Subsidiary or any Asset Seller.


 


(k)
No material deduction by a Transferred Subsidiary in respect of any “applicable
employee remuneration” (within the meaning of Section 162(m) of the Code) has
been disallowed or is subject to disallowance by reason of Section 162(m) of
the Code. For each of the Key Personnel, Guidant has previously provided to
Abbott (i) accurate Form W-2 information for the 1999, 2000, 2001, 2002 and
2003 calendar years, (ii) annual base salary as of the date hereof, actual
bonus earned for the 2003 calendar year and target annual bonus for the 2004
calendar year, (iii) a list, as of the date hereof, of all outstanding Company
Stock Options, Company Restricted Stock and Company Stock-Based Awards granted
under the Company Stock Plans or otherwise (other than rights under the ESPP),
together with (as applicable) the number of shares of Guidant common stock
subject thereto, and the grant dates, expiration dates, exercise or base prices
and vesting schedules thereof, (iv) estimated current annual cost of welfare
benefits, and (v) estimated costs of the pension benefit enhancement under
Section 8 of Guidant’s Change in Control Severance Pay Plan for Select
Employees. For purposes of this Section 3.12(k), the terms “Company Stock
Options”, “Company Restricted Stock”, “Company Stock-Based Awards”,
“Company Stock Plans” and “ESPP” shall have the meanings ascribed
to such terms in Section 3.01(c) of the Merger Agreement.


 


(l)
Except as provided in accordance with Guidant’s Change in Control Severance Pay
Plan for Select Employees, no current or former U.S. Business Employee or
Non-U.S. Business Employee is entitled to receive any additional payment from
Guidant or any


 


29

















 


Transferred
Subsidiary or Asset Seller by reason of the excise tax required by Section
4999(a) of the Code being imposed on such person by reason of the transactions
contemplated by the Merger Agreement.


 


(m)From
the date of the most recent financial statements included in the Filed Company
SEC Documents through the date of this Agreement, there has not been any
adoption, material amendment or termination by Guidant or any of its Affiliates
of any collective bargaining or other labor union contract to which Guidant or
any of its Affiliates is a party or by which Guidant or any of its Affiliates
is bound and affecting the U.S. Business Employees, the Non-U.S. Business
Employees or the Transferred Subsidiaries. As of the date of this Agreement,
none of the U.S. Business Employees are represented by any union with respect
to their employment by Guidant, a Transferred Subsidiary or an Asset Seller.
Except as set forth in Section 3.12(m) of the Disclosure Schedule, there are no
collective bargaining agreements or other labor union contracts to which
Guidant or any of its Subsidiaries is a party or by which Guidant or any of its
Subsidiaries is bound. Since January 1, 2003, with respect to the Business,
none of Guidant, a Transferred Subsidiary or an Asset Seller has experienced
any material labor disputes, union organization attempts or work stoppages,
slowdowns or lockouts due to labor disagreements.


 


SECTION
3.13. Taxes. Except as has not had and would not reasonably be expected
to have a Material Adverse Effect:


 


(a)
all Tax Returns required by applicable Law to have been filed with any Governmental
Authority by, or with respect to, Guidant and its Affiliates (with respect to
the Shares, the Assets or the Business) have been filed in a timely manner
(taking into account any valid extension) in accordance with all applicable
Laws, and all such Tax Returns are true and complete in all material respects;


 


(b)
Guidant and its Affiliates (with respect to the Shares, the Assets or the Business)
have paid (or have had paid on its behalf) all Taxes due and owing, and the
most recent financial statements of Guidant filed with the SEC for which
Guidant and its Affiliates are included reflect an adequate accrual for all
Taxes payable by Guidant and its Affiliates (with respect to the Shares, the
Assets or the Business) for all taxable periods and portions thereof accrued
through the date of such financial statements;


 


(c)
there are no Encumbrances for Taxes on any of the Shares or the Assets other than
for Taxes not yet due and payable;


 


(d)
Guidant and its Affiliates (with respect to the Shares, the Assets or the Business)
have complied with all applicable Laws relating to the payment and withholding
of Taxes;


 


(e)
no written notification has been received by Guidant and its Affiliates (with respect
to the Shares, the Assets or the Business) that any federal, state, local or
foreign audit, examination or similar proceeding is pending, proposed or
asserted with regard to any Taxes or Tax Returns of Guidant and its Affiliates
(with respect to the Shares, the Assets or the Business);


 


30

















 


(f)
there is no currently effective Contract extending, or having the effect of extending,
the period of assessment or collection of any federal, state or, to the
Knowledge of Guidant, non-United States Taxes by Guidant and its Affiliates
(with respect to the Shares, the Assets or the Business) nor has any request
been made for any such extension;


 


(g)
no written notice of a claim or pending investigation has been received from any
state, local or other jurisdiction with which Guidant and its Affiliates
currently does not file tax returns, alleging that Guidant or its Affiliate
(with respect to the Shares, the Assets or the Business) has a duty to file tax
returns and pay taxes or is otherwise subject to the taxing authority of such
jurisdiction;


 


(h) none of the Transferred Subsidiaries joins or
has joined, for any taxable period during the eight years prior to the date of
this Agreement, in the filing of any affiliated, aggregate, consolidated,
combined or unitary federal, state, local or, to the Knowledge of Guidant,
non-United States Tax Return other than consolidated Tax Returns for the
consolidated group of which Guidant is the common parent;


 


(i) none of Guidant or its Affiliates (with respect
to the Shares, the Assets or the Business) is a party to or bound by any Tax
sharing agreement or Tax indemnity agreement, arrangement or practice
(including any advance pricing agreement, closing agreement or other agreement
relating to Taxes with any taxing authority);


 


(j) none of the Transferred Subsidiaries has
constituted either a “distributing corporation” or a “controlled corporation”
in a distribution of stock qualifying for tax-free treatment under Section 355
of the Code in the two years prior to the date of this Agreement;


 


(k) none of the Transferred Subsidiaries will be
required to include in a taxable period ending after the Closing taxable income
attributable to income that accrued in a prior taxable period (or portion of a taxable
period) but was not recognized for Tax purposes in any prior taxable period as
a result of (i) an open transaction disposition made on or before the Closing,
(ii) a prepaid amount received on or prior to the Closing, (iii) the
installment method of accounting, (iv) the long-term contract method of
accounting, (v) the cash method of accounting or Section 481 of the Code, or
(vi) any comparable provisions of state or local Tax Law, domestic or foreign,
or for any other reason, other than any amounts that are specifically reflected
in a reserve for Taxes on the most recent financial statements of Guidant filed
with the SEC for which the Transferred Subsidiaries are included; and


 


(l) none of the Transferred Subsidiaries has entered
into a “listed transaction” within the meaning of Treasury Regulation § 1.6011-4(b)(2).


 


SECTION
3.14. Material Contracts. (a) Except as set forth in Section 3.14(a) of
the Disclosure Schedule, as of the date hereof, neither Guidant nor any of its
Affiliates is a party to, and none of the Assets are subject to, any Contract
related to the Business that is a “material contract” (as such term is defined
in Item 601(b)(10) of Regulation S-K of the SEC).


 


(b)
Section 3.14(b) of the Disclosure Schedule contains a complete and accurate
list, as of the date hereof, of:


 


31

















 


(i) each material Contract related to the Business restricting or
purporting to restrict the ability of Guidant or any Asset Seller or
Transferred Subsidiary to compete in any line of business, geographic area or
customer segment; and


 


(ii) each material Contract relating to distribution, sale, supply,
licensing, co-promotion or manufacturing of any products or services of the
Business or any products licensed by the Business.


 


(c)
None of Guidant or any Share Seller, Asset Seller or Transferred Subsidiary or,
to the Knowledge of Guidant, any other party thereto is in violation of or in
default under (nor does there exist any condition which upon the passage of
time or the giving of notice or both would cause such a violation or default by
any of Guidant or any of its Affiliates or, to the Knowledge of Guidant, any
other party thereto under) any Contract relating to the Business to which it is
a party or by which it or any of its Assets is bound, except for violations or
defaults that individually or in the aggregate have not had and would not
reasonably be expected to have a Material Adverse Effect. Neither Guidant nor
any of its Affiliates has entered into any Contract relating to the Business
that is currently in effect that is required to be disclosed pursuant to Item
404 of Regulation S-K of the SEC.


 


SECTION
3.15. Regulatory Matters. Except as set forth in Section 3.15 of the
Disclosure Schedule:


 


(a)
As to each product subject to the FDCA or similar Law in any foreign jurisdiction
that is developed, manufactured, tested, distributed and/or marketed by the
Business (a “Medical Device”), each such Medical Device is being
developed, manufactured, tested, distributed and/or marketed in compliance with
all applicable requirements under the FDCA and similar Laws, including those
relating to investigational use, premarket clearance or marketing approval to
market a Medical Device, good manufacturing practices, labeling, advertising,
record keeping, filing of reports and security, and in compliance with the
Advanced Medical Technology Association Code of Ethics on Interactions with
Healthcare Professionals and the American Medical Association’s guidelines on
gifts to physicians, except for failures that individually or in the aggregate
have not had and would not reasonably be expected to have a Material Adverse
Effect. None of Guidant or its Affiliates has received any notice or other communication
from the FDA or any other Governmental Authority (i) contesting the premarket clearance
or approval of, the uses of or the labeling and promotion of any products of
the Business, or (ii) otherwise alleging any violation applicable to any
Medical Device of any Law, in the case of (i) and (ii), that individually or in
the aggregate have not had and would reasonably be expected to have a Material
Adverse Effect.


 


(b)
No Medical Device is under consideration by senior management of Guidant or its
Affiliates for recall, withdrawal, suspension, seizure or discontinuance, or
has been recalled, withdrawn, suspended, seized or discontinued (other than for
commercial or other business reasons) by, Guidant, a Transferred Subsidiary or
an Asset Seller in the United States or outside the United States (whether
voluntarily or otherwise), in each case since January 1, 2002.  No proceedings in the United States or
outside of the United States of which Guidant has Knowledge (whether completed
or pending) seeking the recall, withdrawal, suspension, seizure or
discontinuance of any Medical Device are pending against Guidant, a Transferred
Subsidiary


 


32

















 


or
an Asset Seller or any licensee of any Medical Device that individually or in
the aggregate have had or would reasonably be expected to have a Material
Adverse Effect.


 


(c)
As to each Medical Device for which a premarket approval application, premarket
notification, investigational device exemption or similar state or foreign
regulatory application has been approved, the Business and the Transferred
Subsidiaries are in compliance with 21 U.S.C. §§ 360 and 360e or 21 C.F.R.
Parts 812 or 814, respectively, and all similar Laws and all terms and
conditions of such licenses or applications, except for any such failure or failures
to be in compliance that individually or in the aggregate have not had and
would not reasonably be expected to have a Material Adverse Effect. In
addition, with respect to the Business and the Transferred Subsidiaries,
Guidant and its Affiliates are in substantial compliance with all applicable
registration and listing requirements set forth in 21 U.S.C. § 360  and 21 C.F.R. Part 807 and all similar Laws,
except for any such failures to be in compliance that individually or in the
aggregate have not had and would not reasonably be expected to have a Material
Adverse Effect.


 


(d)
No article of any Medical Device is (i) adulterated within the meaning of 21 U.S.C.
§ 351 (or similar Law), (ii) misbranded within the meaning of 21 U.S.C. § 352
(or similar Law), or (iii) a product that is in violation of 21 U.S.C. § 360 or
§ 360e (or similar Law), except for failures to be in compliance with the
foregoing that would not reasonably be expected to have a Material Adverse
Effect.


 


(e)
With respect to the Business and the Transferred Subsidiaries, none of Guidant
or its Affiliates, nor, to the Knowledge of Guidant, any officer, employee or
agent of Guidant or any of its Affiliates, has made an untrue statement of a
material fact or fraudulent statement to the FDA or any other Governmental
Authority, failed to disclose a material fact required to be disclosed to the
FDA or any other Governmental Authority, or committed an act, made a statement,
or failed to make a statement that, at the time such disclosure was made, could
reasonably be expected to provide a basis for the FDA or any other Governmental
Authority to invoke its policy respecting “Fraud, Untrue Statements of Material
Facts, Bribery, and Illegal Gratuities”, set forth in 56 Fed. Reg. 46191 (September
10, 1991) or any similar policy.


 


(f)
With respect to the Business and the Transferred Subsidiaries, none of Guidant
or its Affiliates, nor, to the Knowledge of Guidant, any officer, employee or
agent of Guidant or any of its Affiliates, has been convicted of any crime or
engaged in any conduct for which debarment is mandated by 21 U.S.C. § 335a(a)
or any similar Law or authorized by 21 U.S.C. § 335a(b) or any similar Law.
With respect to the Business and the Transferred Subsidiaries, none of Guidant or
its Affiliates, nor, to the Knowledge of Guidant, any officer, employee or
agent of Guidant or its Affiliates has been convicted of any crime or engaged
in any conduct for which such Person or entity could be excluded from
participating in the federal health care programs under Section 1128 of the
Social Security Act of 1935, as amended (the “Social Security Act”) or
any similar Law.


 


(g)
With respect to the Business and the Transferred Subsidiaries, since January 1,
2002, none of Guidant or its Affiliates has received any written notice that
the FDA or any other Governmental Authority has (i) commenced, or threatened to
initiate, any action to withdraw its approval or request the recall of any
Medical Device, (ii) commenced, or threatened


 


33

















 


to initiate, any action to
enjoin production of any Medical Device, or (iii) commenced, or threatened to
initiate, any action to enjoin the production of any medical device produced at
any facility where any Medical Device is manufactured, tested or packaged,
except for any such action that individually or in the aggregate have not had
and would not reasonably be expected to have a Material Adverse Effect.


 


(h)
To the Knowledge of Guidant, there are no facts, circumstances or conditions
that would reasonably be expected to form the basis for any investigation,
suit, claim, action or proceeding against or affecting the Business relating to
or arising under (i) the FDCA, or (ii) the Social Security Act or regulations
of the Office of the Inspector General of the Department of Health and Human
Services, in each case individually or in the aggregate that has had or would
reasonably be expected to have a Material Adverse Effect.


 


SECTION
3.16. Assets. The Asset Sellers represent all of the Affiliates of
Guidant, other than a Transferred Subsidiary, that own, lease, control or hold
a license or otherwise have a right to use the Purchased Assets. The Assets,
together with the Intellectual Property to be provided under the License and
Technology Transfer Agreement and the services to be provided under the
Transition Services Agreement, constitute all of the assets necessary to
operate the Business in all material respects in the manner as it is now being
conducted by Guidant and its Affiliates.


 


SECTION
3.17. Brokers. Guidant will be solely responsible for the fees and
expenses of any broker, finder or investment banker entitled to any brokerage,
finder’s or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Guidant, and in no way will such fee or expense be deemed an Asset or Assumed
Liability.


 


SECTION
3.18. Disclaimer. EXCEPT AS SET FORTH IN THIS ARTICLE III OR AS MAY BE
SET FORTH IN ANY ANCILLARY AGREEMENT, NONE OF GUIDANT, ITS AFFILIATES OR ANY OF
THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES OR REPRESENTATIVES MAKE OR HAVE
MADE ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AT LAW OR IN
EQUITY, IN RESPECT OF GUIDANT, ITS AFFILIATES OR THE BUSINESS. ANY SUCH OTHER
REPRESENTATION OR WARRANTY IS HEREBY EXPRESSLY DISCLAIMED.


 


ARTICLE IV


 


REPRESENTATIONS AND WARRANTIES 


OF ABBOTT


 


Abbott
hereby represents and warrants to Guidant as follows:


 


SECTION
4.01. Organization and Authority. (a) Abbott is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Illinois and has all necessary corporate power and authority to enter into,
execute and deliver this Agreement, to carry out its obligations hereunder and
to consummate the transactions contemplated by this Agreement and the Ancillary
Agreements to which it is a party. The execution and delivery by Abbott of this
Agreement and the Ancillary Agreements to which it is a party, the performance


 


34

















 


by Abbott of its obligations
hereunder and thereunder and the consummation by Abbott of the transactions
contemplated hereby and thereby have been duly authorized by all requisite
corporate action on the part of Abbott. This Agreement has been, and upon their
execution each of the Ancillary Agreements to which Abbott is a party will be,
duly executed and delivered by Abbott, and, assuming due authorization,
execution and delivery by the other parties hereto and thereto, this Agreement
is, and each of the Ancillary Agreements to which Abbott is a party will be, a
legal, valid and binding obligation of Abbott, enforceable against it in
accordance with its terms.


 


(b)
Each Purchaser (other than Abbott) is an entity duly organized, validly
existing and, where applicable, is in good standing under the Laws of the
jurisdiction of its organization, and has all necessary corporate power and
authority to enter into, execute and deliver each Ancillary Agreement to which it
is a party, to carry out its obligations thereunder and to consummate the
transactions contemplated thereby. The execution and delivery by each Purchaser
(other than Abbott) of each Ancillary Agreement to which it is a party, the
performance by such Purchaser of its obligations thereunder and the
consummation by such Purchaser of the transactions contemplated thereby will
be, when executed as provided in this Agreement, duly authorized by all
requisite corporate action on the part of such Purchaser. Each Ancillary
Agreement to which a Purchaser (other than Abbott) is a party will be, when
executed as provided in this Agreement, duly executed and delivered by such
Purchaser and, assuming due authorization, execution and delivery by the other
parties thereto, will constitute, when executed as provided in this Agreement,
a legal, valid and binding obligation of such Purchaser enforceable against it
in accordance with its terms.


 


SECTION
4.02. No Conflict. Assuming compliance with the HSR Act, the pre-merger
notification and waiting period requirements of the EU Merger Regulation and
the making and obtaining of all filings, notifications, consents, approvals,
authorizations and other actions referred to in Section 4.03, the execution,
delivery and performance by Abbott of this Agreement, and the execution,
delivery and performance by Abbott and each other Purchaser of each Ancillary
Agreement to which it is a party do not and will not (a) violate, conflict with
or result in the breach of any provision of the certificate of incorporation or
bylaws (or similar organizational documents) of Abbott or such other Purchaser,
as applicable, (b) conflict with or violate any Law or Governmental Order
applicable to Abbott or such other Purchaser, as applicable, or their respective
assets, properties or businesses or (c) conflict with, result in any breach of,
constitute a default (or event which with the giving of notice or lapse of
time, or both, would become a default) under, require any consent under, or
give to others any rights of termination, amendment, acceleration, suspension,
revocation or cancellation of, any note, bond, mortgage or indenture, contract,
agreement, lease, sublease, license, permit, franchise or other instrument or
arrangement to which Abbott or such other Purchaser, as applicable, is a party,
except, in the case of clauses (b) and (c), as would not materially and
adversely affect the ability of Abbott or such other Purchaser to carry out its
obligations under, and to consummate the transactions contemplated by, this
Agreement and the Ancillary Agreements.


 


SECTION
4.03. Governmental Consents and Approvals. The execution, delivery and
performance by Abbott of this Agreement, and the execution, delivery and
performance by Abbott and each other Purchaser of each Ancillary Agreement to
which it is a party do not and will not require any consent, approval,
authorization or other order of, action by, filing with, or


 


35

















 


notification to, any
Governmental Authority, except (a) the EU Merger Regulation and the
requirements of the antitrust Laws of any other relevant jurisdiction or (b)
where failure to obtain such consent, approval, authorization or action, or to
make such filing or notification, would not prevent or materially delay the
consummation by Abbott or such other Purchaser, as applicable, of the
transactions contemplated by this Agreement and the Ancillary Agreements.


 


SECTION
4.04. Litigation. As of the date hereof, no Action by or against Abbott
or any other Purchaser is pending or, to the knowledge of Abbott and the other
Purchasers, threatened, that could affect the legality, validity or
enforceability of this Agreement, any Ancillary Agreement or the consummation
of the transactions contemplated hereby or thereby.


 


SECTION
4.05. Brokers. Abbott will be solely responsible for the fees and
expenses of any broker, finder or investment banker entitled to any brokerage,
finder’s or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Abbott and the other Purchasers.


 


SECTION
4.06. Disclaimer. EXCEPT AS SET FORTH IN THIS ARTICLE IV OR AS MAY BE
SET FORTH IN ANY ANCILLARY AGREEMENT, NONE OF ABBOTT, ITS AFFILIATES OR ANY OF
THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES OR REPRESENTATIVES MAKE OR HAVE
MADE ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AT LAW OR IN
EQUITY, IN RESPECT OF ABBOTT OR ITS AFFILIATES. ANY SUCH OTHER REPRESENTATION
OR WARRANTY IS HEREBY EXPRESSLY DISCLAIMED.


 


ARTICLE V 


 


ADDITIONAL AGREEMENTS


 


SECTION
5.01. Acknowledgment. The parties acknowledge and agree that the entry
of the parties hereto into this Agreement shall in no way affect the
effectiveness of the Transaction Agreement and the Transaction Agreement shall
remain in full force and effect pursuant to the terms thereof; provided,
however, that to the extent that any provisions of this Agreement conflict with
any provisions of the Transaction Agreement, the provisions herein shall control.


 


SECTION
5.02. Access to Information; Confidentiality. (a) From the date hereof
until the Closing, upon reasonable notice, Guidant shall: (i) afford the
Purchasers and their authorized representatives reasonable access to the
offices, properties and books and records of the Business, and (ii) furnish to
the officers, employees, and authorized agents and representatives of the
Purchasers such additional financial and operating data and other information
regarding the Business (or copies thereof) as the Purchasers may from time to
time reasonably request; provided, however, that any such access
or furnishing of information shall be conducted at Abbott’s expense, during
normal business hours, under the supervision of Guidant’s or its Affiliates’
personnel and in such a manner as not to interfere with the normal operations
of the Business. Notwithstanding anything to the contrary in this Agreement,
Guidant shall not be required to disclose any information to a Purchaser if
such disclosure would be reasonably likely to (x) cause significant competitive
harm to the Business if the transactions contemplated hereby


 


36

















 


are
not consummated, (y) jeopardize any attorney-client or other legal privilege or
(z) contravene any applicable Laws, fiduciary duty or binding agreement entered
into prior to the date hereof.


 


(b)           The terms of the Confidentiality Agreement,
dated as of February 2, 2006, among Guidant, Boston Scientific and Abbott (the “Confidentiality
Agreement”) are hereby incorporated herein by reference and shall
continue in full force and effect until the Closing, at which time such
Confidentiality Agreement and the obligations of Abbott under this Section 5.02(b)
shall terminate; provided, however, that, from and after the
Closing, except as would have been permitted under the terms of the
Confidentiality Agreement, (i) Abbott shall, and shall cause its officers,
directors, employees, representatives and Affiliates to, treat and hold as confidential,
and not disclose to any Person, information related to the discussions and negotiations
between the parties regarding this Agreement, the Transaction Agreement and the
transactions contemplated hereby and thereby and all confidential information
relating to Guidant and the Excluded Businesses, and (ii) Guidant shall, and
shall cause its officers, directors, employees, representatives and Affiliates
to, treat and hold as confidential, and not disclose to any Person, information
related to the discussions and negotiations between the parties regarding this
Agreement, the Transaction Agreement and the transactions contemplated hereby
and thereby and all confidential information relating to the Assets and the
Business. If this Agreement is, for any reason, terminated prior to the
Closing, the Confidentiality Agreement shall nonetheless continue in full force
and effect.


 


(c)           Nothing provided to Abbott pursuant to
Section 5.02(a) shall in any way amend or diminish Abbott’s obligations under
the Confidentiality Agreement. Abbott acknowledges and agrees that any
Confidential Information (as defined in the Confidentiality Agreement) provided
to Abbott pursuant to Section 5.02(a) or otherwise by or on behalf of Guidant
or any officer, director, employee, agent, representative, accountant or
counsel thereof shall be subject to the terms and conditions of the
Confidentiality Agreement.


 


SECTION
5.03. Regulatory and Other Authorizations; Notices and Consents. (a)
Each of Guidant and Abbott shall use its reasonable best efforts to obtain
promptly all authorizations, consents, orders and approvals of all Governmental
Authorities that may be or become necessary for the performance of its and the
other party’s obligations pursuant to, and the consummation of the transactions
contemplated by, this Agreement. Guidant and Abbott will cooperate with one
another in promptly seeking to obtain all such authorizations, consents, orders
and approvals; provided, however, that Guidant shall not be
required to pay any fees or other payments to any such Governmental Authorities
in order to obtain any such authorization, consent, order or approval (other
than normal filing fees that are imposed by Law on Guidant). Neither Guidant
nor Abbott shall knowingly take any action that would have the effect of materially
delaying, impairing or impeding the receipt of any authorizations, consents,
orders and approvals of any Governmental Authority; provided, however,
that in no way shall reasonable and timely negotiations in good faith by Abbott
with any applicable Governmental Authority relating to the sale, license or
other disposition or holding separate (through the establishment of a trust or
otherwise) of Assets or assets or property of Abbott requested or required by
such Governmental Authority in order to obtain such authorization, consent,
order or approval be deemed to constitute an act materially delaying,
impairing, or impeding the receipt of authorizations, consents, orders and
approvals of such Governmental Authority. Guidant and Abbott each agree to make,
or to cause to be made, (i) if required, an appropriate filing of a


 


37

















 


notification
and report form pursuant to the HSR Act and the EU Merger Regulation and (ii)
any other filing or notification required by any other applicable Law, in each
case, with respect to the transactions contemplated by this Agreement as
promptly as practicable after the date of this Agreement in the case of the HSR
Act and the EU Merger Regulation, and as promptly as reasonably practicable in
the case of any other filing or notification, and to supply promptly any
additional information and documentary material that may be requested pursuant
to the HSR Act and the EU Merger Regulation or any other applicable Law.


 


(b)           Without limiting the generality of Abbott’s
undertaking pursuant to Section 5.03(a), Abbott shall, on a reasonable and
timely basis consistent with Section 5.03(a): (i) to the extent necessary to
obtain timely approval by a Governmental Authority, propose, negotiate, commit
to and effect, by consent decree, hold separate orders or otherwise, the sale,
divestiture or disposition of the Carotid Stent Assets, Abbott’s carotid stent
assets or any other assets not material to the Business or the Assets, or (ii)
if a Governmental Authority does not allow Abbott to acquire the Carotid Stent
Assets (for purposes of divestiture or otherwise), agree to exclude the Carotid
Stent Assets from the Assets. If the Carotid Stent Assets are excluded from the
Assets, then (x) Guidant shall engage an investment banking firm selected by,
or satisfactory to, Abbott and on terms reasonably satisfactory to Abbott to
sell the Carotid Stent Assets within a reasonable period of time following the
Closing or as otherwise directed by the applicable Governmental Authorities,
(y) Guidant shall remit all of the proceeds of such sale (net of Taxes and the
costs and expenses paid by Guidant and any of its Affiliates in connection with
such sale) to Abbott, and (z) Abbott shall use its reasonable best efforts to
effect the separation of the Carotid Stent Assets from the Assets, including
entering into appropriate transition services or similar agreements with
Guidant or any other Person to which the Carotid Stent Assets are divested. For
all Tax purposes, the parties agree to treat all remittances of proceeds
pursuant to this Section 5.03(b)(y) as adjustments to the Purchase Price.


 


(c)           Each party to this Agreement shall promptly
notify the other party of any communication it or any of its Affiliates receives
from any Governmental Authority relating to the matters that are the subject of
this Agreement and permit the other party to review in advance any proposed
communication by such party to any Governmental Authority. Neither party to this
Agreement shall agree to participate in any meeting with any Governmental
Authority in respect of any filings, investigation or other inquiry related to
the transactions contemplated by this Agreement unless it consults with the
other party in advance and, to the extent permitted by such Governmental
Authority, gives the other party the opportunity to attend and participate at such
meeting. Subject to the Confidentiality Agreement, the parties to this
Agreement will coordinate and cooperate fully with each other in exchanging
such information and providing such assistance as the other party may
reasonably request in connection with the foregoing and in seeking early
termination of any applicable waiting periods including under the HSR Act and
the EU Merger Regulation. Subject to the Confidentiality Agreement, the parties
to this Agreement will provide each other with copies of all correspondence,
filings or communications between them or any of their representatives, on the
one hand, and any Governmental Authority or members of its staff, on the other
hand, with respect to this Agreement and the transactions contemplated by this
Agreement.


 


SECTION
5.04. Notifications. Each party hereto shall promptly notify the other
party in writing of any fact, change, condition, circumstance or occurrence or
nonoccurrence of


 


38

















 


any event of which it is
aware that will or is reasonably likely to result in (a) any representation or
warranty made by such party to be untrue or inaccurate in any material respect
at any time after the date of this Agreement and prior to the Closing, (b) any
material failure on such party’s part to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder, and
(c) the failure of any condition precedent set forth in Article VIII of this
Agreement; provided, however, that the delivery of any notice
pursuant to this Section 5.04 shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice. In addition, Guidant
shall promptly (i) notify Abbott in writing upon the occurrence of any event
that will or is reasonably likely to result in the termination of the Merger
Agreement, and (ii) to the extent permitted, forward copies of any notices
received or delivered by Guidant pursuant to the Merger Agreement that
materially affect the Business, the Assets, the Purchasers’ rights with respect
thereto or the likelihood of consummation of the transactions contemplated by
this Agreement in accordance with the terms hereof or of the Merger pursuant to
the Merger Agreement.


 


SECTION
5.05. Release of Indemnity Obligations. (a) Guidant and Abbott will
cooperate with each other with a view to entering into arrangements effective
as of the Closing whereby (i) the applicable Purchaser would be substituted for
Guidant or its Affiliates (other than the Transferred Subsidiaries) in any
guarantees, letters of comfort, indemnities or similar arrangements entered
into by Guidant or its Affiliates (other than the Transferred Subsidiaries) in
respect of the Business (but only to the extent such guarantees, letters of
comfort, indemnities or arrangements constitute Assumed Liabilities) and (ii)
Guidant or its Affiliates (other than the Transferred Subsidiaries) would be
substituted for the applicable Transferred Subsidiary in any guarantees,
letters of comfort, indemnities or similar arrangements entered into by Guidant
or its Affiliates in respect of any other businesses of Guidant (but only to
the extent such guarantees, letters of comfort, indemnities or arrangements
constitute Excluded Liabilities). If such substitution cannot be effected in
accordance with this Section 5.05, the guaranteeing party shall not terminate
such guaranty arrangements without the consent of the other party; provided,
however, that such party shall enter into a separate guaranty with the
other party or its Affiliates to guarantee the performance of the obligations
of the relevant Person pursuant to the contract underlying such guaranty
arrangements.


 


(b)           After the Closing, each of Guidant and
Abbott, at the request of the other party, shall use, and shall cause their
respective Affiliates to use, reasonable best efforts to obtain any consent,
substitution or amendment required to novate or assign all Assumed Liabilities
to the applicable Purchaser and any Excluded Liabilities to Guidant or its
Affiliates (other than the Transferred Subsidiaries), and obtain in writing the
unconditional release of Guidant and its Affiliates (other than the Transferred
Subsidiaries) with respect to the Assumed Liabilities and the unconditional
release of Abbott and its Affiliates with respect to the Excluded Liabilities.


 


SECTION
5.06. Tax Election. (a) Abbott, in its sole discretion, may require
Guidant and/or its Affiliates to participate in the making of an election under
section 338(h)(10) of the Code with respect to the purchase of any Shares that
qualify for such treatment, including as a result of such an election. Guidant
shall cooperate with Abbott in effecting each such election, including its
timely filing.


 


39

















 


(b)           In connection with each such election, Abbott
and Guidant shall agree to allocate the Country Allocation made to such
Transferred Subsidiary under Section 2.04(b) among the assets of such
Transferred Subsidiary. As promptly as practical following the Closing, Abbott
will prepare a proposed allocation among the assets of each such Transferred Subsidiary
and will furnish a copy thereof to Guidant for its review at least 45 days
prior to the due date for the filing of the Section 338(h)(10) election.
Guidant shall have the right to consent to such allocation, which consent shall
not be unreasonably withheld. Such allocations shall be binding on Guidant,
Abbott and their respective Affiliates in completing any income tax returns reflecting
gain or loss from the election and for all other Tax purposes.


 


(c)           Abbott shall reimburse Guidant and its
Affiliates for any additional Taxes incurred as a result of their participation
in any election under section 338(h)(10) of the Code (including any Taxes
resulting from such reimbursement). Such additional Taxes shall exist to the
extent that the Taxes with respect to the gain realized from such election
exceeds the Taxes that would have been payable by Guidant in respect of its
sale of the stock of such Transferred Subsidiary absent such election, and such
additional Taxes shall be determined in accordance with Section 5.06(d). Abbott
shall make such reimbursement on the due date of the relevant Tax Return in
which the Code section 338(h)(10) deemed asset sale is reflected. For Tax
purposes, the parties agree that any reimbursement by Abbott to Guidant and its
Affiliates pursuant to this Section 5.06(c), shall be treated as additional
Purchase Price.


 


(d)           Prior to the Closing, Abbott shall provide
Guidant a list of Share purchases for which an election under Code section
338(h)(10) is being considered. Within thirty days after Guidant’s receipt of
such list, Guidant shall provide Abbott with a pro forma calculation of additional
Taxes referred to in Section 5.06(c), together with all workpapers relating to
those calculations, which workpapers shall include all relevant detail,
including inside and outside tax basis information and consolidated and entity
specific net operating loss information. If Abbott does not provide comments in
writing to Guidant within thirty days after Abbott’s receipt of pro forma
calculations, then those pro forma calculations shall be deemed to be the final
pro forma calculation. If, however, Abbott submits comments to Guidant within
such thirty-day period, Abbott and Guidant shall negotiate in good faith to
resolve any differences during such thirty-day period following Abbott’s submission.
If Abbott and Guidant are unable to reach a resolution during that thirty-day
period, any disputed items shall be submitted for resolution to an
internationally recognized independent accounting firm mutually selected by
Abbott and Guidant which shall make a final determination as to the disputed
items within 30 days after such submission, and such determination shall be
final and binding upon Abbott and Guidant. Abbott shall be responsible for the
fees and expenses of such accounting firm. Guidant shall prepare and file all
relevant Tax Returns reflecting the tax consequences of the Section 338(h)(10) elections
(i) consistent with the principles used in the preparation of the final pro
forma calculation as determined under this Section 5.06(d), and (ii) the
allocation among the Assets of such Transferred Subsidiaries as determined in
accordance with Section 5.06(b). The additional amount of Taxes shall exist to
the extent that Taxes payable with respect to the gain realized from such
election (taking into account all net operating losses and other tax attributes
that would be attributed to such Transferred Subsidiary under applicable Law (“Transferred
Subsidiary Tax Attributes”)) exceed Taxes that would have been payable by
Guidant in respect of its sale of stock of such Transferred Subsidiary absent
such election, provided that, Guidant shall be deemed to have paid Taxes in
respect of gain realized from such election (determined


 


40

















 


using
a 35% marginal rate) to the extent that Guidant is required to absorb net
operating losses or other tax attributes other than Transferred Subsidiary
Attributes in excess of those that would have been absorbed had no such
election been made.


 


(e)           If (i) Assets are transferred pursuant to an
Intellectual Property Transfer Agreement, (ii) an election under Section
338(h)(10) of the Code is not made by Abbott with respect to the relevant IP
Seller, and (iii) Taxes of Guidant with respect to the sale of such Assets and
the sales of the Shares of the IP Seller exceeds the amount of Taxes of Guidant
that would have been due if there had been no such sale of Assets, then Abbott
shall reimburse Guidant and its Affiliates for any such additional Taxes
incurred as a result of such sale of Assets (including Taxes resulting from
such reimbursement).


 


SECTION
5.07. Insurance. (a) The parties agree to cooperate in structuring the
transactions contemplated by this Agreement so as to preserve to the fullest
extent possible available insurance coverage with respect to Assumed
Liabilities, the Business and any “D&O” coverage for employees of Guidant
or its subsidiaries who primarily perform or have primarily performed their
services for or with respect to the Business prior to the Closing.


 


(b)           Prior to the Closing, Guidant shall notify
all of its insurers of the sale of the Business to Abbott and the other
Purchasers and the Merger so as to ensure that there will not be any lapse in
insurance coverage of the Business due to any failure to make such
notification.


 


(c)           In the event that a loss related to the
Business which occurred prior to the Closing is covered by an insurance policy
of Guidant insuring, in whole or in part, the Business, the parties shall
cooperate in filing all necessary insurance claims. Upon receiving any payment from
the insurance carrier related to such loss, Guidant shall promptly remit such
amount to Abbott.


 


(d)           If Guidant or any of its Affiliates continues
coverage under any insurance policy which includes a provision allowing for
continued coverage after the expiration of such policy for losses that occur
during the policy period but which are reported following the expiration of the
policy (an “Occurrence Based Policy”), then (i) Guidant or such
Affiliate shall use its reasonable best efforts, for so long as coverage under
such Occurrence Based Policy remains effective and including with respect to
the payment of insurance premiums, to assure continued coverage under such
Occurrence Based Policy with respect to losses related to the Business, and
(ii) Abbott shall reimburse Guidant for any such insurance premiums or other costs
allocable the Business in continuing coverage under such Occurrence Based
Policy.


 


SECTION 5.08. Trademarks. (a) All Trademarks that are used
primarily in, or related primarily to, the Business and do not include the name
“Guidant” (i) to the extent that they are owned by Guidant and its Affiliates
as of the Closing, shall constitute Assets to be assigned to the applicable
Purchaser at the Closing, and (ii) to the extent that they are licensed (with a
right to sublicense) to Guidant and its Affiliates by third parties as of the
Closing, shall be sublicensed to the applicable Purchaser at the Closing.


 


(b)          Guidant shall retain the ownership of any Trademarks that are used both
in the Business and any other business of Guidant, that are not used primarily
in, or related primarily


 


41

















 


to, the Business and that do
not include the name “Guidant” (the “Non-Guidant Licensed Marks”). At
the Closing Guidant shall grant to Abbott and its Affiliates a perpetual,
non-terminable, non-exclusive, worldwide and royalty free right, license and
privilege to use the Non-Guidant Licensed Marks solely within the field of the
Business. Except as expressly provided in this Section 5.08, Abbott and its
Affiliates shall have no right to use in any way the Non-Guidant Licensed
Marks.


 


(c)           Guidant shall retain the ownership of the
trade name “Guidant” and any Trademarks that include the name “Guidant” used in
the Business as of the Closing (the “Guidant Licensed Marks” and,
together with the Non-Guidant Licensed Marks, the “Licensed Marks”) and,
except as expressly provided in this Section 5.08, Abbott and its Affiliates
shall have no right to use in any way the Guidant Licensed Marks.


 


(i)            As soon as reasonably practicable after the
Closing, but in no event later than three hundred sixty-five days after the
Closing, the Purchasers shall cease to use and remove or cover the name “Guidant”
from all signs, billboards, telephone listings, stationary, office forms or
other similar materials of the Business, unless such use is required by a
Governmental Authority.


 


(ii)           Subject to the terms and conditions contained herein, Guidant hereby
grants to Abbott and its Affiliates, for a period of five years after the
Closing, a non-exclusive, non-assignable, worldwide and royalty-free license,
right and privilege to use the Guidant Licensed Marks on any packages, labels,
displays promotional and other materials of the products of the Business (“Materials”)
used in the Business as of the Closing for the sole purpose of the operation of
the Business by Abbott and its Affiliates after the Closing.


 


(d)           Abbott, on behalf of itself and its Affiliates,
acknowledges and agrees that Guidant is the owner of all right, title, and
interest in and to the Licensed Marks, and all such right, title, and interest
shall remain with Guidant and its Affiliates. All rights not expressly granted
to Abbott and/or its Affiliates under this Agreement shall remain the exclusive
property of Guidant and its Affiliates. Abbott shall not (and shall ensure its
Affiliates do not) otherwise contest, dispute, or challenge the right, title,
and interest of Guidant and its Affiliates in and to the Licensed Marks. Abbott
shall not (and shall ensure its Affiliates do not) file applications to register
any Trademarks or apply for any domain names in any jurisdiction worldwide that
are (i) confusingly similar to any of the Licensed Marks or (ii) consist of, in
whole or part, any of the Licensed Marks. All goodwill and improved reputation
generated by Abbott’s or its Affiliates’ use of the Licensed Marks shall inure
to the benefit of Guidant.


 


(e)           Guidant hereby agrees and acknowledges that
its and its Affiliates’ use of the Licensed Marks immediately prior to the
Closing on the Materials fully complies with Guidant’s standard of quality for
the use of the Licensed Marks. If, after the Closing, Abbott changes the use of
the Licensed Marks on the Materials used in the Business, Abbott must submit
samples of its and its Affiliates’ proposed use of the Licensed Marks to
Guidant prior to such proposed use so Guidant may review such use in accordance
with the terms and conditions of this Section 5.08. Guidant may not
unreasonably withhold its consent to any changes in the use of the Licensed
Marks on the Materials by Abbott. If Guidant does not provide any comments to


 


42

















 


Abbott
within 15 Business Days of receiving such samples, Guidant shall be deemed to
have accepted the changes proposed by Abbott.


 


(f)            Effective upon the fifth anniversary of the
Closing, Abbott and its Affiliates shall not use the Guidant Licensed Marks in
connection with the Business or otherwise; provided, however,
that nothing in this Section 5.08 shall prohibit Abbott and any of its Affiliates
from selling any inventory in existence as of the fifth anniversary of the
Closing, which inventory bears any such Guidant Licensed Marks.


 


(g)           The parties will discuss in good faith
whether Abbott may, at its request, continue to use the Guidant Licensed Marks
after the fifth anniversary of the Closing.


 


(h)           Other than as provided in the Supply
Agreements, Guidant hereby covenants that, for a period of five years after the
Closing, none of Guidant or any of its Affiliates shall use, assign to any
third party, or license any third party to use, any of the Guidant Licensed
Marks in connection with products included in the vascular intervention or
endovascular solutions field. In addition, Guidant, Abbott and their respective
Affiliates will cooperate with each other to avoid any confusion in the
marketplace during the period when such parties are using the Guidant name.


 


(i)            If Guidant or Abbott divests the Carotid
Stent Assets in accordance with Section 5.03(b), then Guidant shall grant to
the purchaser of such Carotid Stent Assets a license to use the Guidant name in
connection therewith in a manner consistent with this Section 5.08 for a
reasonable transition period.


 


SECTION
5.09. Further Action. (a) Each of Guidant and Abbott shall use its
reasonable best efforts to take, or cause to be taken, all appropriate action,
to do or cause to be done all things necessary, proper or advisable under
applicable Law and the agreements included in the Assets, and to execute and
deliver such documents and other papers and any other agreements, as may be
necessary to carry out the provisions of this Agreement and consummate and make
effective the transactions contemplated by this Agreement or to effect the
separation of the Business and the Assets from other Guidant assets, including,
to the extent practicable, reasonable steps to divide Shared Assets that are
divisible and to obtain all required consents from third parties.


 


(b)           Guidant agrees that it shall not solicit,
initiate, facilitate or pursue any arrangement relating to the Business or the
Assets with any third parties other than a Purchaser prior to the termination
of this Agreement.


 


(c)           To the extent that any of the transfers,
distributions, deliveries and the assumptions required to be made in connection
with the transactions contemplated by this Agreement shall not have been so
consummated at Closing, the parties shall cooperate and use their reasonable
best efforts to effect such consummation as promptly thereafter as reasonably practicable,
including executing and delivering such further instruments of transfer and
taking such other actions as the parties may reasonably request in order to effectuate
the purposes of this Agreement or to more effectively transfer to the
applicable Purchaser or confirm the applicable Purchaser’s right, title to or
interest in, all of the Assets, to put the applicable


 


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Purchaser in actual
possession and operating control thereof and to permit the applicable Purchaser
to exercise all rights with respect thereto (including rights under contracts
and other arrangements as to which the consent of any third party to the
transfer thereof shall not have previously been obtained). In the event and to
the extent that Guidant or Abbott is unable to obtain any required consents,
Guidant or the applicable Seller shall (i) continue to be bound thereby pending
assignment to the applicable Purchaser, (ii) at the direction and expense of
Abbott, pay, perform and discharge fully all of its obligations thereunder from
and after the closing and prior to assignment to the applicable Purchaser,
(iii) exercise or exploit its rights and options under all such agreements,
leases, licenses and other rights and commitments when and only as reasonably
directed by Abbott, and (iv) without further consideration therefor, pay,
assign and remit to the applicable Purchaser promptly all monies, rights and
other consideration received in respect of such agreements or otherwise make
available to the applicable Purchaser the benefit of such agreements as
contemplated by this Agreement; provided, however, that none of
Guidant nor any of its Affiliates shall be obligated to transfer to the
Purchasers any Business Intellectual Property licensed from third parties that,
despite the use by Guidant and its Affiliates of such efforts, is incapable of
being transferred. If and when any such consent shall be obtained or such
agreement, lease, license or other right shall otherwise become assignable,
Guidant or the applicable Seller shall promptly assign all its rights and
obligations thereunder to the applicable Purchaser without payment of further
consideration and Abbott or such Purchaser shall, without the payment of any
further consideration therefor, assume such rights and obligations.


 


(d)           In the event that certain assets, rights or
properties which properly constitute Assets were not transferred to the applicable
Purchaser at Closing, then Guidant shall promptly take all steps reasonably
necessary to transfer and deliver any and all of such Assets to the applicable
Purchaser without the payment by Abbott of any further consideration therefor.
In the event that certain assets which do not properly constitute Assets were
transferred to a Purchaser at Closing, then the applicable Purchaser shall
promptly take all steps reasonably necessary to transfer and deliver any and
all of such assets to Guidant without the payment by Guidant of any further
consideration therefor.


 


SECTION
5.10. Mixed Contracts and Accounts. (a) Unless the parties agree
otherwise, any agreement to which Guidant or any of its Affiliates is a party
prior to the Closing that inures to the benefit or burden of each of the
Business and the Excluded Assets (a “Mixed Contract”) shall be separated
on or as promptly as practicable after the Closing, so that the applicable
Purchaser and Guidant or its Affiliates shall be entitled to the rights and benefits
and shall assume the related portion of any Liabilities (other than in the case
of the Purchasers, Excluded Liabilities) inuring to their respective
businesses. If any Mixed Contract cannot be so separated, Abbott and Guidant
shall, and shall cause each of their respective Affiliates to, take such other
reasonable and permissible action to cause (i) the Assets associated with that
portion of each Mixed Contract that relates to the Business to be enjoyed by
the applicable Purchaser; (ii) the Liabilities (other than in the case of the
Purchasers, Excluded Liabilities) related with that portion of each Mixed
Contract that relates to the Business to be borne by the applicable Purchaser;
(iii) the assets associated with the portion of each Mixed Contract that
relates to the Excluded Assets to be enjoyed by Guidant or its Affiliates; and
(iv) the Liabilities (other than in the case of Guidant or its Affiliates,
Assumed Liabilities) related with that portion of each Mixed Contract that
relates to the Excluded Assets to be borne by Guidant or its Affiliates. The
parties will cooperate with each other to effect such separation.


 


44

















 


(b)           Except as may otherwise be agreed by the
parties, the parties shall not seek to assign any account receivable or
accounts payable relating to both the Business and the Excluded Assets (a “Mixed
Account”). Abbott and Guidant shall, and shall cause each of their
respective Affiliates to, take such other reasonable and permissible actions to
cause (i) the Assets associated with that portion of each Mixed Account that
relates to the Business to be enjoyed by the applicable Purchaser; (ii) the
Liabilities (other than in the case of the Purchasers, Excluded Liabilities)
related with that portion of each Mixed Account that relates to the Business to
be borne by the applicable Purchaser; (iii) the assets associated with that
portion of each Mixed Account that relates to the Excluded Assets to be enjoyed
by Guidant or its Affiliates; and (iv) the Liabilities (other than in the case
of Guidant or its Affiliates, Assumed Liabilities) related with that portion of
each Mixed Account that relates to the Excluded Assets to be borne by Guidant.


 


SECTION
5.11. Intercompany Arrangements. (a) Prior to the Closing, Guidant
shall, and shall cause its Affiliates to, terminate all agreements or
arrangements, written or unwritten, of any kind (other than any Ancillary
Agreements), between (i) Guidant or any of its Affiliates (other than the
Transferred Subsidiaries), on the one hand, and a Transferred Subsidiary, on
the other hand, or (ii) any Transferred Subsidiary, on the one hand, and
another Transferred Subsidiary, on the other hand.


 


(b)           Prior to the Closing, all intercompany
receivables, payables and loans between Guidant or any of its Affiliates (other
than the Transferred Subsidiaries), on the one hand, and a Transferred
Subsidiary, on the other hand, shall be settled, capitalized, distributed or
otherwise terminated, with the result that there will not be intercompany
receivables, payables and loans between Guidant or any of its Affiliates (other
than the Transferred Subsidiaries), on the one hand, and a Transferred
Subsidiary, on the other hand, after the Closing.


 


(c)           Prior to the Closing, Guidant shall cause all
indebtedness for borrowed money of the Transferred Subsidiaries to be repaid in
full or otherwise satisfied or eliminated without any contingent Liability or
obligation of any of the Transferred Subsidiaries to repay such indebtedness
for borrowed money after the Closing.


 


SECTION
5.12. Restructuring. Prior to the Closing, Guidant shall, or shall cause
the Transferred Subsidiaries to, use reasonable best efforts to take the
actions described in Schedule 5.12 for the purposes of distributing or otherwise
transferring from the Transferred Subsidiaries to Guidant, Boston Scientific or
one of their respective Affiliates (other than the Transferred Subsidiaries)
any Excluded Assets, Excluded Liabilities and employees who are not Transferred
Employees.


 


SECTION
5.13. Books, Records and Files. (a) Subject to Section 2.02(b), Guidant
shall transfer all Books, Records and Files, to the extent related to the
Business, to Abbott or its Affiliates at the Closing or as soon as practicable
thereafter. Abbott shall transfer all Books, Records and Files of the
Transferred Subsidiaries, to the extent related to the Excluded Businesses, to
Guidant or its Affiliates at the Closing or as soon as practicable thereafter.
Abbott may redact any information related to the Business from any such Books,
Records and Files transferred to Guidant.


 


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(b)           Each party shall only be obligated to provide
Books, Records and Files pursuant to Section 5.13(a) in the form, condition and
format in which they exist as of the Closing, and in no event shall either
party be required to perform any improvement, modification, conversion,
updating or reformatting of any such Books, Records and Files.


 


SECTION
5.14. Other Agreements. Nothing in this Agreement, the Transaction
Agreement or the Ancillary Agreements shall prohibit Abbott from pursuing
arrangements or agreements with any third party which has publicly announced a
proposal that the Guidant board of directors has determined to be, or to be
reasonably likely to result in or lead to, a Superior Proposal (as defined in
the Merger Agreement).


 


SECTION
5.15. Third Party Claims Against Both the Business and the Excluded Business.
(a) Without duplication of Section 10.05, from and after the Closing: (i) if
Guidant or any of its Affiliates receives notice of any Mixed Action or any
Action from or involving any third party that Guidant believes is reasonably
likely to involve the Business but as to which neither Abbott nor any other
Purchaser is a named party, then Guidant shall as promptly as practicable
provide Abbott notice of such Action; and (ii) if Abbott or any of its
Affiliates receives notice of any Mixed Action or any Action from or involving
any third party that Abbott believes is reasonably likely to involve the
Excluded Business but as to which neither Guidant nor any other Seller is a
named party, then Abbott shall as promptly as practicable provide Guidant
notice of such Action. For purposes of this Agreement, “Mixed Action”
means any Action that a party believes is reasonably likely to: (i) include
claims that both give rise to a right of indemnification under Article X and
claims as to which no right of indemnification under Article X exists; or (ii)
include claims that both give rise to a right of the indemnification under
Article X of the Abbott Indemnified Parties and claims that give rise to a
right of indemnification under Article X of the Guidant Indemnified Parties.


 


(b)           Subject to the provisions of Article X, for
any Mixed Action, whether arising before or after the Closing, Abbott or its
Affiliates shall have the right to control the defense of such Mixed Action to
the extent such Mixed Action relates to the Business, and Guidant or its Affiliates
shall have the right to control the defense of such Mixed Action to the extent
such Mixed Action relates to the Excluded Business.


 


(c)           Neither Abbott nor its Affiliates shall
Settle any portion of a Mixed Action that relates to the Excluded Business
without the express written consent of Guidant, which may be withheld in its
sole discretion. Neither Guidant nor its Affiliates shall Settle any portion of
a Mixed Action that relates to the Business without the express written consent
of Abbott, which may be withheld in its sole discretion. Subject to the
provisions of Article X: (i) Abbott and its Affiliates may Settle a Mixed
Action to the extent it relates to the Business without consent of Guidant so
long as such judgment or settlement does not negatively impact the Excluded Business,
in which case the prior written consent of Guidant shall be required, which
consent may not be unreasonably withheld or delayed; (ii) Guidant and its
Affiliates may Settle a Mixed Action to the extent it relates to the Excluded
Business without consent of Abbott so long as such judgment or settlement does
not negatively impact the Business, in which case the prior written consent of
Abbott shall be required, which consent may not be unreasonably withheld or delayed.
As used in this Agreement, “Settle” means, with respect to any Action,
the consent to the entry of any judgment for such Action or entry into any
settlement of such Action.


 


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(d)           To the extent that any of the provisions of
this Section 5.15 conflict with any provisions of the Ancillary Agreements, the
provisions of the Ancillary Agreements shall govern.


 


ARTICLE VI 


 


EMPLOYEE MATTERS


 


SECTION
6.01. Transferred Employees. (a) As of the Closing, the applicable
Purchaser or one of its Affiliates shall employ the U.S. Business Employees (as
defined below) who are employed by the Transferred Subsidiaries, and on or
prior to the Closing, the applicable Purchaser or one of its Affiliates shall
offer employment to each of the other then-current U.S. Business Employees, in
each case on substantially the same terms and conditions as in effect prior to
the Closing (except as otherwise provided herein). For purposes of this
Agreement, “U.S. Business Employee” means an employee of a Transferred
Subsidiary employed in the United States as of the Closing, or an employee of
the Business employed by an employer domiciled in the United States, in each
case who (except as otherwise expressly agreed to in writing by Abbott)
primarily performs his or her services for or with respect to the Business as
of the Closing, including any such employee who is inactive because of leave of
absence, vacation, holiday or long-term disability. For purposes of this
Agreement, “U.S. Transferred Employee” means each U.S. Business Employee
of the Transferred Subsidiaries and each other U.S. Business Employee who
accepts the offer of employment by the applicable Purchaser or its Affiliate.
Schedule 6.01(a) contains a true and complete list, as of the date hereof, of
each U.S. Business Employee.


 


(b)           The applicable Purchaser or one of its
Affiliates shall (i) continue to employ each Non-U.S. Business Employee (as
defined below) of a Transferred Subsidiary as of the Closing (where employment
continues by operation of Law), (ii) continue to employ each Non-U.S. Business
Employee as of the Closing (where employment transfers by operation of Law),
and (iii) on or prior to the Closing, make offers of employment with respect to
all other Non-U.S. Business Employees whose employment does not transfer to the
applicable Purchaser by operation of Law, in each case on substantially the
same terms and conditions as in effect for each such employee prior to the
Closing (except as otherwise provided herein). For purposes of this Agreement, “Non-U.S.
Business Employee” means an employee of the Business employed by an
employer domiciled outside the United States as of the Closing who (except as
otherwise expressly agreed to in writing by Abbott) primarily performs his or
her services for or with respect to the Business outside the U.S. as of the
Closing, including any such employee who is inactive because of leave of
absence, vacation, holiday or long-term disability, and “Non-U.S. Transferred
Employee” means each Non-U.S. Business Employee of a Transferred Subsidiary,
and each Non-U.S. Business Employee whose employment transfers to the
applicable Purchaser or one of its Affiliates by operation of Law, or who
accepts the offer of employment by a Purchaser or one of its Affiliates.
Collectively, the U.S. Transferred Employees and the Non-U.S. Transferred
Employees shall be referred to as “Transferred Employees”. Schedule
6.01(b) contains a true and complete list of, as of the date hereof, of each
Non-U.S. Business Employee.


 


SECTION
6.02. Employee Benefits. (a) For a period of twelve months following the
Closing, Transferred Employees who remain in the employment of the applicable


 


47

















 


Purchaser or any of its
Affiliates shall receive employee benefits that in the aggregate are
substantially comparable to the employee benefits provided to such employees
immediately prior to the Closing. For the six-month period immediately
following the expiration of the twelve-month period described in the preceding
sentence, the Transferred Employees who remain in the employment of the
applicable Purchaser or any of its Affiliates shall receive employee benefits
that in the aggregate are substantially comparable to either the employee
benefits provided to such employees immediately prior to the Closing or the
employee benefits provided to similarly situated employees of such Purchaser or
its Affiliate. For a period of not less than eighteen months following the
Closing, the Transferred Employees who remain in the employment of the applicable
Purchaser or any of its Affiliates shall receive base salary or wage rates that
are not less than those in effect for such Transferred Employees immediately
prior to the Closing; provided, however, that neither such
Purchaser nor any of its Affiliates shall have any obligation to issue, or
adopt any plans or arrangements providing for the issuance of, shares of
capital stock, warrants, options, stock appreciation rights or other rights in
respect of any shares of capital stock of any entity or any securities
convertible or exchangeable into such shares pursuant to any such plans or
arrangements; and provided, further, that no plans or
arrangements of Guidant or Boston Scientific or any of its or their respective
Affiliates providing for such issuance shall be taken into account in
determining whether employee benefits are substantially comparable in the
aggregate, except as otherwise required by Law. Except as required by Law or
expressly provided in Section 6.03(c), nothing contained in this Agreement shall
be construed as requiring a Purchaser or one of its Affiliates to continue or
offer any specific employee benefit plans or to continue the employment of any
specific person. Notwithstanding anything in this Article VI to the contrary,
the applicable Purchaser and its Affiliates shall be responsible for any
severance or similar termination payments or to pay severance benefits that may
become payable to any U.S. Business Employee who is not a Transferred Employee,
and Abbott shall indemnify Guidant and its Affiliates from any and all
liabilities for such payments. In the event that any of the obligations to make
severance or similar termination payments or to pay severance benefits to U.S.
Business Employees are covered by cash, insurance contracts, or other assets
specifically set aside and designated by Guidant or its Affiliates for this
purpose, Guidant shall cause to be transferred to the applicable Purchaser or
its Affiliate or to the appropriate benefit or compensation plan or arrangement
of such Purchaser or its Affiliate, such cash, insurance contracts or other
assets as of the Closing.


 


(b)           The applicable Purchaser shall recognize the
prior service of each Transferred Employee as if such service had been
performed with such Purchaser (i) for purposes of vesting (but not benefit
accrual) under such Purchaser’s defined benefit pension plan, (ii) for purposes
of eligibility for vacation under such Purchaser’s vacation program, (iii) for
purposes of eligibility and participation under any health or welfare plan
maintained by such Purchaser (other than any post-employment health or
post-employment welfare plan), (iv) for purposes of eligibility for the company
matching contribution under a 401(k) savings plan maintained by such Purchaser
(it being understood that each Transferred Employee who was participating in
Guidant’s 401(k) savings plan immediately prior to becoming eligible to
participate in that 401(k) savings plan of such Purchaser or its Affiliates
shall be immediately eligible for the company matching contribution under that
401(k) savings plan maintained by such Purchaser or one of its Affiliates), and
(v) unless covered under another arrangement with or of Guidant or any of its
Affiliates, for benefit accrual purposes under such Purchaser’s severance plan,
(in the case of each of clauses (i), (ii), (iii), (iv) and (v), solely to the
extent that (x) Boston Scientific makes


 


48

















 


such plan or program
available to employees of the Surviving Corporation (as defined in the Merger
Agreement), it being Boston Scientific’s current intention to do so, (y) such
recognition does not result in any duplication of benefits, but (z) not for
purposes of any other employee benefit plan of the applicable Purchaser or any
of its Affiliates or any other purpose not expressly described in this Section
6.02(b), except as required by Law).


 


(c)           With respect to any welfare plan maintained
by the applicable Purchaser in which Transferred Employees are eligible to
participate after the Closing, such Purchaser shall (i) waive all limitations
as to preexisting conditions and exclusions with respect to participation and
coverage requirements applicable to such employees to the extent such
conditions and exclusions were satisfied or did not apply to such employees
under the welfare plans maintained by Guidant or any of its Affiliates prior to
the Closing and (ii) provide each Transferred Employee with credit for any
co-payments and deductibles paid prior to the Closing in satisfying any
analogous deductible or out-of-pocket requirements to the extent applicable
under any such plan.


 


(d)           With respect to Non-U.S. Transferred
Employees, the applicable Purchaser shall, and shall cause its applicable
Affiliates to, comply with all applicable Laws, directives and regulations
relating to the Non-U.S. Transferred Employees. The applicable Purchaser and
its Affiliates shall be responsible for any severance, redundancy or similar
termination payments that may become payable to any Non-U.S. Business Employee
in connection with the transactions contemplated by this Agreement, and Abbott
shall indemnify Guidant and its Affiliates from any and all liabilities for
such payments; provided, however, that to the extent that, after the Closing,
the applicable Purchaser or any of its Affiliates incurs a second severance, redundancy
or similar termination payment liability with respect to any particular
Non-U.S. Business Employee who becomes a Non-U.S. Transferred Employee under
Section 6.01(b) and who is subsequently terminated by such Purchaser or its
Affiliate for just cause within 12 months of the Closing, Guidant and its
Affiliates shall indemnify such Purchaser or its Affiliates for an amount equal
to the lesser of the two severance liabilities. In the event that any of the obligations
to make severance, redundancy or similar termination payments to Non-US
Business Employees are covered by cash, insurance contracts, or other assets
specifically set aside and designated by Guidant or its Affiliates for this
purpose, Guidant shall cause to be transferred to the applicable Purchaser or
its Affiliates or to the appropriate benefit or compensation plan or arrangement
of such Purchaser or its Affiliate, such cash, insurance contracts, or other
assets as of the Closing.


 


(e)           The applicable Purchaser or its Affiliates
shall assume all liabilities (other than any stock option liabilities described
in Section 6.03(a)) related to the Non-U.S. Transferred Employees, including
any liabilities under any Guidant Benefit Plan regardless of whether such employee
benefit plan transfers automatically to such Purchaser or its Affiliates as a
result of the transactions contemplated by this Agreement. In addition to any
cash, insurance contracts or other assets that will transfer automatically to
the applicable Purchaser or its Affiliates or to the Non-U.S. Transferred
Employees as a result of the transactions contemplated by this Agreement, Guidant
shall cause to be transferred to such Purchaser or its Affiliates, or the
appropriate compensation or benefit plan of such Purchaser or its Affiliates,
such cash, insurance contracts, or other assets, if any, specifically set aside
and designated by Guidant in respect of the liabilities related to the Non-U.S.
Transferred Employees as of the Closing, including, without limitation,


 


49

















 


assets
of any applicable compensation or benefit plan of Guidant, to the extent such
assets do not transfer automatically to such Purchaser or its Affiliates as a
result of the transactions contemplated by this Agreement. However, any such
transfer shall be subject to the consent of the affected Non-U.S. Transferred
Employees to the extent required by Law.


 


(f)            With respect to U.S. Transferred Employees,
Abbott shall pay Guidant an amount equal to the present value as of the Closing
of the excess, if any, of the pre-Closing liabilities attributable to the U.S.
Transferred Employees over the assets, accruals and reserves set aside and
designated by Guidant or its Affiliates in respect of those types of
liabilities, in each instance to the extent provided by, and as determined in
accordance with, the principles set forth on Schedule 6.02(f). Should such
designated assets, accruals and reserves allocable to such liabilities exceed
those liabilities, Guidant shall pay Abbott such excess. In either event, a
single payment for the net amount of the difference shall be paid within 12
months of the Closing. In addition, Guidant will cause all Transferred
Employees to be fully vested in their account balances under the Guidant
Employee Savings and Stock Ownership Plan (as defined in the Merger Agreement)
and they shall receive a proportionate share of any previously unallocated
shares of stock that may be allocated to participants under such plan in
connection with the transactions contemplated by this Agreement and the Merger
Agreement; provided, however, that nothing in this sentence shall require
Guidant or any of its Affiliates to contribute any additional amount to such
plan.


 


SECTION
6.03. General Matters. (a) All outstanding Guidant stock options held
immediately prior to the Closing by any Transferred Employee shall be
extinguished in accordance with their terms upon the Closing, and, in
satisfaction thereof, Guidant shall provide or cause to be provided to the
holder of each such option, as soon as practicable following the Closing, but
in all cases within the period necessary to comply with Code Section 409A,
either (i) a payment in cash equal to the excess of the aggregate fair market
value of the Guidant shares as of the Closing subject to each such option as of
the Closing over the aggregate exercise price of such option with respect to
those shares, net any applicable withholding Taxes, or (ii) a number of shares
of common stock of Boston Scientific with a fair market value as of the Closing
equal to the excess of the aggregate fair market value of the shares subject to
each such option over the aggregate exercise price of such option, net any
applicable withholding Taxes, to be determined by applying the conversion
formula in Section 5.03(a) of the Merger Agreement to each Guidant option to
determine the number of shares of common stock of Boston Scientific that would
have been subject to such option and the exercise price of such option,
adjusted as if the option holder had not been a Transferred Employee, at Boston
Scientific’s election provided that such election applies to all Transferred
Employees.


 


(b)           Guidant shall not, prior to the Closing:


 


(i)            dispose of or otherwise encumber any assets
of, or with respect to, any employee or independent contractor compensation or
benefit plan, program or arrangement (1) that is sponsored by a Transferred
Subsidiary and covers primarily U.S. Business Employees or Non-U.S. Business
Employees, or (2) for which the Purchasers or their Affiliates have assumed
liabilities pursuant to the provisions of this Article VI;


 


50

















 


(ii)           terminate the employment of any U.S. Business Employee or Non-U.S.
Business Employee, other than in the ordinary course of business consistent
with past practice; or


 


(iii)          increase the compensation or fringe benefits of any U.S. Business
Employee or Non-U.S. Business Employee, other than in the ordinary course of
business consistent with past practice.


 


(c)           After the Closing, the Purchasers shall
maintain and administer the Guidant Change in Control Severance Pay Plan for
Select Employees and the Guidant Change in Control Severance Pay Plan for
Employees (the “Guidant CIC Plans”) with respect to any benefits afforded
thereunder to any Transferred Employees; provided, however, that
the applicable Purchaser or any of its Affiliates shall have the right to amend
or terminate the Guidant CIC Plans with respect to the Transferred Employees in
accordance with their terms.


 


(d)           No provision of this Agreement shall create
any third party beneficiary rights in any employee of a Transferred Subsidiary
or in any employee of the Business, or any other current or former employee,
independent contractor, or director of Guidant, Boston Scientific, any
Purchaser or any of its or their respective Affiliates, in respect of
employment or any other matter.


 


(e)           With respect to Non-U.S. Business Employees,
Section 6.03(e) of the Disclosure Schedule sets forth a true and complete list
of each works council, union or other labor organization which has to be
notified or consulted or with which negotiations need to be conducted in
connection with the transactions contemplated by this Agreement and each collective
bargaining agreement which has any impact on the terms and conditions of employment
with respect to the Non-U.S. Business Employees. Where required under applicable
Law, Guidant and any of its Affiliates will have, prior to the Closing,
properly and timely notified, or where appropriate, consulted or negotiated
with, the local works council, union, labor board or relevant Governmental
Authority concerning the transactions contemplated by this Agreement.


 


SECTION 6.04. Mutual Non-Solicitation.
Without the prior written consent of Abbott, neither Guidant nor any of its
Affiliates shall, for a period of two years following the Closing, take any
action to solicit any sales representative or person performing a similar
function who is a Transferred Employee and who is employed by the Business
(whether as an employee or independent contractor) to terminate his or her
employment with the Business or to seek or accept employment with Guidant or
any of its Affiliates. Without the prior written consent of Guidant, Abbott
shall not, and shall cause each Purchaser and each of its other Affiliates not
to, for a period of two years following the Closing, take any action to solicit
any sales representative or person performing a similar function who is
employed by Guidant or its Affiliates immediately prior to the consummation of
the Merger (other than any Transferred Employee) and who, after the
consummation of the Merger, is employed by the Surviving Corporation or its
successor or any of their Affiliates (whether as an employee or independent
contractor) and primarily performs his or her services for or with respect to
the Excluded Businesses, to terminate his or her employment with the Surviving
Corporation or its successor or their Affiliates or to seek or accept
employment with Abbott or any of its Affiliates.


 


51

















 


Notwithstanding the
foregoing, nothing contained herein shall prevent either party or their
Affiliates from offering employment or service to persons who respond to a
general solicitation or advertisement that is not specifically directed at them
(and nothing shall prohibit such general solicitation or advertisement).


 


ARTICLE VII 


 


TAXES


 


SECTION
7.01. Apportionment. Any Tax imposed on any gain or income recognized by
reason, or as the result, of (a) a transfer of any Excluded Assets or Excluded
Liabilities of a Transferred Subsidiary, or (b) any action required or
contemplated by Section 5.11 shall be attributable to the Pre-Closing Tax
Period. With respect to any Tax Return for any Straddle Period of a Transferred
Subsidiary, Abbott will, to the extent permitted by Law, elect to treat the
Closing as the last day of the taxable year or period and will apportion any
Taxes arising out of or relating to a Straddle Period to the Pre-Closing Tax
Period and the Post-Closing Tax Period under the “closing-the-books” method as
described in Treasury Regulation Section 1.1502-76(b)(2)(i) (or any similar
provision of state, local or foreign law). In any case where applicable Law
does not permit a Transferred Subsidiary to treat the Closing as the last day
of the taxable year or period, any Taxes arising out of or relating to a
Straddle Period will be apportioned to the Pre-Closing Tax Period and the
Post-Closing Tax Period based on a closing of the books; provided, however,
that (i) exemptions, allowances or deductions that are calculated on an
annualized basis (including depreciation, amortization and depletion
deductions) will be apportioned on a daily pro rata basis, (ii) solely for
purposes of determining the marginal tax rate applicable to income during such
period in a jurisdiction in which such tax rate depends upon the level of
income, annualized income will be taken into account, and (iii) real and
personal property Taxes shall be allocated on a per diem basis.


 


SECTION
7.02. Tax Return Filing and Amendment. Guidant will prepare and file, or
cause to be prepared and filed, all Tax Returns of each Transferred Subsidiary
with respect to periods ending on or before Closing to the extent such returns
have not been filed prior to Closing, and Guidant will pay, or cause to be
paid, all Taxes shown as due thereon; provided that nothing in this Section
7.02 shall affect the rights of Guidant and its Affiliates to indemnification
under Section 5.06. Abbott will prepare and file, or cause to be prepared and
filed all Tax Returns of each Transferred Subsidiary with respect to any
Straddle Period to the extent such returns have not been filed prior to
Closing, and Abbott will pay, or cause to be paid, all Taxes shown as due
thereon; provided that nothing in this Section 7.02 shall affect the rights of
Abbott to indemnification under Section 10.02(a)(iii). Abbott shall deliver, at
least 20 days prior to the due date (taking into account extensions) for the
filing of each such Tax Return for any Straddle Period, to Guidant a statement
setting forth the amount of tax for which Guidant is responsible pursuant to
Section 10.02(a)(iii) and copies of such Tax Return. Guidant shall have the
right to review such Tax Return and the statement prior to the filing of such
Tax Return. Guidant and Abbott agree to consult and resolve in good faith any
issue arising as a result of the review of such Tax Return and statement and
mutually consent to the filing of such Tax Return. Neither Abbott nor any of
its Affiliates shall file any amended Tax Returns for any periods for or in
respect of any Transferred Subsidiary with respect to which Abbott is not
obligated to prepare,


 


52

















 


or cause to be prepared, the
original such Tax Returns pursuant to this Section 7.02 without the prior
written consent of Guidant (which consent shall not be unreasonably withheld).


 


SECTION
7.03. Refunds. Guidant shall be entitled to retain or, to the extent
actually received by or otherwise available to Abbott or its Affiliate, receive
immediate payment from Abbott or any of its Affiliates (including the
Transferred Subsidiaries) of, any refund or credit with respect to Taxes
(including without limitation refunds arising by reason of amended Tax Returns
filed after the Closing Date or otherwise) with respect to any Pre-Closing Tax
Period relating to the Transferred Subsidiaries or any Asset Sellers. Any
refunds or credits of Taxes with respect to Straddle Periods shall be
apportioned to the period ending on the date of the Closing pursuant to the
principles set forth in Section 7.01. Abbott shall be entitled to retain or, to
the extent actually received by Guidant or its Affiliate, receive immediate
payment from Guidant or any of its Affiliates of, any refund or credit with respect
to Taxes (including without limitation refunds arising by reason of amended Tax
Returns filed after the Closing or otherwise) with respect to any Post-Closing
Tax Period relating to the Transferred Subsidiaries or any Asset Sellers. Any
refunds or credit of Taxes with respect to Straddle Periods shall be
apportioned to the period beginning after the date of the Closing pursuant to
the principles set forth in Section 7.01.


 


SECTION
7.04. Resolution of Tax Controversies. If a claim shall be made by any Governmental
Authority that might result in an indemnity payment to the Abbott or any of its
affiliates pursuant to Section 10.02(a)(iii), Abbott shall promptly notify
Guidant of such claim. In the event that a Governmental Authority determines a
deficiency in any Tax, the party ultimately responsible for such Tax under this
Agreement, whether by indemnity or otherwise, shall have authority to determine
whether to dispute such deficiency determination and to control the prosecution
or settlement of such dispute; provided that with respect to Straddle
Periods, the party with the greater potential Tax burden shall control the
dispute. The party that is not ultimately responsible for such Tax under this
Agreement shall have the right to participate at its own expense in the conduct
of any such proceeding involving a Tax claim that would adversely affect such
party.


 


SECTION
7.05. Tax Cooperation. Each of Abbott and Guidant shall provide the
other party with such information and records and make such of its officers,
directors, employees and agents available as may reasonably be requested by
such other party in connection with the preparation of any Tax Return or any
audit or other proceeding that relates to the Transferred Subsidiaries or the
Asset Sellers.


 


SECTION
7.06. Conveyance Taxes. Notwithstanding any other provisions of this
Agreement to the contrary, all transfer, documentary, recording, sales, use,
registration, stamp and other similar Taxes (including all applicable real
estate transfer Taxes, but excluding any Taxes based on or attributable to
income or capital gains) together with any notarial and registry fees and
recording costs imposed by any taxing authority or other Governmental Authority
in connection with the transfer of the Shares and the Purchased Assets to the
Purchasers (“Conveyance Taxes”) will be shared equally by the
Purchasers, on the one hand, and Guidant or the applicable Seller, on the other
hand, regardless of which Person is obligated to pay such Conveyance Taxes
under applicable Law; provided, however, that the Purchasers
shall pay and be solely responsible for all value added, goods and services and
any other similar taxes


 


53

















 


that are recoupable by a
Purchaser. To the extent that one party claims any exemptions from any
Conveyance Taxes, such party shall provide to the other party the appropriate
exemption certificates. Abbott, Guidant and their respective Affiliates will
cooperate in timely making and filing all Tax Returns that may be required to
comply with Law relating to Conveyance Taxes. Abbott shall be responsible for
any incremental Conveyance Taxes incurred as a result of the participation by
Guidant and its Affiliates in any election under section 338(h)(10) of the
Code.


 


ARTICLE VIII 


 


CONDITIONS TO CLOSING


 


SECTION
8.01. Conditions to Obligation of Guidant. The obligation of Guidant to
consummate the transactions contemplated by this Agreement shall be subject to
the fulfillment or written waiver, at or prior to the Closing, of each of the
following conditions:


 


(a)           Representations, Warranties and Covenants. Each of
the representations and warranties of Abbott contained in this Agreement shall
be true and correct in all material respects as of the Closing, with the same
force and effect as if made as of the Closing (other than such representations
and warranties as are made as of another date, which shall be true and correct
in all material respects as of such date), except in either case where any
failure of such representations and warranties to be so true and correct would
not materially delay or prevent the consummation of the transactions
contemplated hereby in accordance with the terms hereof, and the covenants and
agreements contained in this Agreement to be complied with by Abbott on or
before the Closing shall have been complied with in all material respects, and
Guidant shall have received a certificate signed on behalf of Abbott by an
officer of Abbott to such effect;


 


(b)           Governmental Approvals. Any waiting period (and any
extension thereof) under the HSR Act and the EU Merger Regulation applicable to
the purchase of the Business contemplated by this Agreement, and any agreement
with a Governmental Authority not to consummate the transactions contemplated
by this Agreement, shall have expired or shall have been terminated, and Boston
Scientific, Guidant or Abbott, as the case may be, shall have obtained all
authorizations, consents, orders and approvals of all Governmental Authorities
that, if not received, would make any of the transactions contemplated by this
Agreement or any of the other Ancillary Agreements illegal or otherwise
prohibit the consummation of such transactions;


 


(c)           No Order. No Governmental Authority shall have
enacted, issued, promulgated, enforced or entered any Law or Governmental Order
(whether temporary, preliminary or permanent) that has the effect of making the
transactions contemplated by this Agreement illegal or otherwise prohibiting
the consummation of such transactions; and


 


(d)           Closing Conditions Satisfied. All of the respective
conditions to Boston Scientific’s, Sub’s and Guidant’s obligations to
consummate the Merger, as set forth in the Merger Agreement, shall have been
satisfied or waived, and each of Boston Scientific and Sub shall have notified
Guidant, and Guidant shall have notified Boston Scientific


 


54

















 


and
Sub, in writing (with copies of such notices having been delivered to Abbott)
that it is ready, willing and able to consummate the Merger and that it intends
to consummate the Merger immediately following the consummation of the
transactions contemplated by this Agreement and the Transaction Agreement.


 


SECTION
8.02. Conditions to Obligation of Abbott. The obligation of Abbott to consummate
the transactions contemplated by this Agreement shall be subject to the
fulfillment or written waiver, at or prior to the Closing, of each of the
following conditions:


 


(a)           Representations, Warranties and Covenants. Each of
the representations and warranties of Guidant contained in this Agreement shall
be true and correct in all material respects as of the Closing, with the same
force and effect as if made as of the Closing (other than such representations
and warranties as are made as of another date, which shall be true and correct
in all material respects as of such date), except in either case where any
failure of such representations and warranties to be so true and correct would
not materially delay or prevent the consummation of the transactions
contemplated hereby in accordance with the terms hereof, and the covenants and
agreements contained in this Agreement to be complied with by Guidant on or
before the Closing shall have been complied with in all material respects, and
Abbott shall have received a certificate signed on behalf of Guidant by an
officer of Guidant to such effect;


 


(b)           Governmental Approvals. Any waiting period (and any
extension thereof) under the HSR Act or the EU Merger Regulation applicable to
the purchase of the Business contemplated by this Agreement, and any agreement
with a Governmental Authority not to consummate the transactions contemplated
by this Agreement, shall have expired or shall have been terminated, and Boston
Scientific, Guidant or Abbott, as the case may be, shall have obtained all
authorizations, consents, orders and approvals of all Governmental Authorities
that, if not received, would make any of the transactions contemplated by this
Agreement illegal or otherwise prohibit the consummation of such transactions;


 


(c)           No Order. No Governmental Authority shall have
enacted, issued, promulgated, enforced or entered any Law or Governmental Order
(whether temporary, preliminary or permanent) that has the effect of making the
transactions contemplated by this Agreement illegal or otherwise prohibiting
the consummation of such transactions; and


 


(d)           Closing Conditions Satisfied. All of the respective
conditions to Boston Scientific’s, Sub’s and Guidant’s obligations to
consummate the Merger, as set forth in the Merger Agreement, shall have been
satisfied or waived, and each of Boston Scientific and Sub shall have notified
Guidant, and Guidant shall have notified Boston Scientific and Sub, in writing
(with copies of such notices having been delivered to Abbott) that it is ready,
willing and able to consummate the Merger and that it intends to consummate the
Merger immediately following the consummation of the transactions contemplated
by this Agreement and the Transaction Agreement.


 


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ARTICLE IX 


 


TERMINATION


 


SECTION
9.01. Termination. This Agreement may be terminated, or in the case of
clause (d) below shall terminate, at any time prior to the Closing in the
following circumstances:


 


(a)           by the mutual written consent of Guidant and Abbott;


 


(b)           by either Guidant or Abbott, if the Closing shall not have
occurred by September 30, 2006; provided, however, that the right
to terminate this Agreement under this Section 9.01(b) shall not be available
to any party whose failure to fulfill any obligation under this Agreement shall
have been the cause of, or shall have resulted in, the failure of the Closing
to occur on or prior to such date;


 


(c)           by either Guidant or Abbott in the event that any
Governmental Order restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement shall have become final and
non-appealable; or


 


(d)           immediately, without any action by either Guidant or
Abbott, upon any termination of the Merger Agreement.


 


SECTION
9.02. Effect of Termination. In the event of termination of this
Agreement as provided in Section 9.01, this Agreement shall forthwith become
void and there shall be no liability on the part of either party hereto except
(a) as set forth in Section 5.02 and Article XI and (b) that nothing herein
shall relieve either party from liability for any breach of this Agreement
occurring prior to such termination.


 


ARTICLE X 


 


INDEMNIFICATION


 


SECTION
10.01. Survival of Representations and Warranties. The representations
and warranties of the parties hereto contained in this Agreement and the
Transaction Agreement shall terminate at the Closing.


 


SECTION
10.02. Indemnification by Guidant. (a) From and after the Closing,
Abbott and its Affiliates, officers, directors, agents, successors and assigns
(the “Abbott Indemnified Parties”) shall be indemnified and held
harmless by Guidant for and against all losses, damages, claims, costs and
expenses, interest, awards, judgments and penalties (including reasonable
attorneys’ and consultants’ fees and expenses) actually suffered or incurred by
them (hereinafter, a “Loss”) to the extent arising out of or related to:


 


(i)            the
Excluded Assets; 


 


(ii)           the
Excluded Liabilities;


 


56

















 


(iii)          Taxes of Boston Scientific, Guidant or any of their
Affiliates (including any Liability arising as a transferee or successor by
contract or otherwise and including any Taxes arising under Regulation 1.1502-6
or similar Law) attributable to any Pre-Closing Tax Period (other than Taxes
referred to in the first sentence of Section 5.06(c)); and


 


(iv)          Taxes of Abbott or any of its Affiliates for any
Post-Closing Period that would not have been incurred but for a net adjustment
to a Pre-Closing Period Tax Liability of Guidant or any of its Affiliates.


 


(b)
In addition to the provisions of Section 10.02(a), from and after the Closing,
the Abbott Indemnified Parties shall be indemnified and held harmless by
Guidant for and against (i) any action between the date hereof and the Closing
with respect to the Assets, the U.S. Business Employees, the Non-U.S. Business
Employees or the Business that would have been a breach of the covenants
contained in Section 4.01 of the Merger Agreement if such covenants had been made
with respect to the Assets, the U.S. Business Employees, the Non-U.S. Business
Employees or the Business rather than having been made with respect to Guidant’s
assets, employees and businesses; provided, however, that Guidant
shall have no obligation to indemnify any Abbott Indemnified Party pursuant to
this clause (i) unless and until the aggregate amount of all such amounts
indemnifiable under this clause (i) exceeds $100,000,000, in which case Guidant
will only be liable for amounts indemnifiable under this clause (i) in excess
of such amount; and (ii) the occurrence of a Material Adverse Effect between
the date of this Agreement and the Closing. Guidant and Abbott will use their
reasonable best efforts to agree on the amount of any indemnification payable
under this Section 10.02(b). In the event Guidant and Abbott are unable to
reach agreement on such amount despite the use of such efforts, such amount
shall be determined by an independent investment banking firm or accounting
firm (depending on the subject matter of the claim) of international reputation
reasonably acceptable to each of Guidant and Abbott using customary valuation
methodologies. The determination of such independent investment banking firm
shall be final and binding on Guidant and Abbott. The fees and expenses of such
independent investment banking firm shall be shared equally between Guidant and
Abbott.


 


SECTION
10.03. Indemnification by Abbott. From and after the Closing, Guidant
and its Affiliates, officers, directors, agents, successors and assigns shall
be indemnified and held harmless by Abbott for and against any and all Losses
to the extent arising out of or related to the Business (other than the
Excluded Liabilities) and the Assumed Liabilities, except for Taxes described
in Section 10.02(iii).


 


SECTION
10.04. Limits on Indemnification. (a) Notwithstanding anything to the
contrary contained in this Agreement, neither party hereto shall have any
Liability under Section 10.02(a) for any punitive, incidental, consequential,
special or indirect damages, except to the extent that any such damages are
awarded in connection with a Third Party Claim against an indemnified party and
such indemnified party is entitled to be indemnified hereunder as a result of
the facts or circumstances giving rise to such Third Party Claim.


 


(b)
For all purposes of this Article X, “Losses” shall be net of (i) any insurance
or other recoveries actually paid to an indemnified party or its Affiliates in
connection with the


 


57

















 


facts giving rise to the
right of indemnification, and (ii) any Tax benefit to which an indemnified
party or any of its Affiliates is or will be entitled in connection with the
facts giving rise to the right of indemnification.


 


SECTION
10.05. Notice of Loss; Third Party Claims. (a) An indemnified party
shall give the indemnifying party notice of any matter that an indemnified
party has determined has given or could give rise to a right of indemnification
under this Agreement, within 60 days of such determination, stating the amount
of the Loss, if known, and method of computation thereof, and containing a
reference to the provisions of this Agreement in respect of which such right of
indemnification is claimed or arises.


 


(b)
If an indemnified party shall receive notice of any Action from or involving
any third party that the indemnified party believes is reasonably likely to
give rise to a right of indemnification under this Article X (each, a “Third
Party Claim”), then, as promptly as practicable after the receipt of such
notice, the indemnified party shall give the indemnifying party notice of such
Third Party Claim, stating the amount of the Loss, if known, and method of
computation thereof and containing a reference to the provisions of this
Agreement in respect of which such right of indemnification is claimed or
arises; provided, however, that the failure to provide such
notice shall not release the indemnifying party from any of its obligations
under this Article X except to the extent that such failure actually results in
a detriment to the indemnifying party and shall not relieve the indemnifying
party from any other Liability that it may have to any indemnified party other
than under this Article X. The indemnifying party shall be entitled to assume
and control the defense of such Third Party Claim at its expense and through
counsel reasonably satisfactory to the indemnified person if it gives notice of
its intention to do so to the indemnified party within 15 days of the receipt of
such notice from the indemnified party. If the indemnifying party elects to
undertake any such defense against a Third Party Claim, the indemnified party
may participate in such defense at its own expense. The indemnified party shall
reasonably cooperate with the indemnifying party in such defense and make
available to the indemnifying party, at the indemnifying party’s expense, all
witnesses, pertinent records, materials and information in the indemnified
party’s possession or under the indemnified party’s control relating thereto as
is reasonably required by the indemnifying party. If the indemnifying party
elects to direct the defense of any such claim or proceeding, it shall not
consent to the entry of any judgment or enter into any settlement with respect
to such Third Party Claim without the prior written consent of the indemnified
party, which consent shall not be unreasonably withheld or delayed. No
indemnifying party shall be liable for any settlement of a Third Party Claim
effected without such indemnifying party’s prior written consent, which consent
shall not be unreasonably withheld or delayed.


 


SECTION
10.06. Tax Treatment of Indemnity Payments. For all Tax purposes, the
parties agree to treat all payments made under any indemnity provisions contained
in this Agreement as adjustments to the Purchase Price, except to the extent
applicable Law requires otherwise.


 


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ARTICLE XI 


 


GENERAL PROVISIONS


 


SECTION
11.01. Expenses. Except as otherwise specified in this Agreement, all
costs and expenses, including fees and disbursements of counsel, financial
advisors and accountants, incurred in connection with this Agreement and the
other Ancillary Agreements and the transactions contemplated hereby and thereby
shall be borne by the party incurring such costs and expenses, whether or not
the Closing shall have occurred.


 


SECTION
11.02. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt) by delivery in
person, by an internationally recognized overnight courier service, by
facsimile, by e-mail or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties hereto at the following
addresses (or at such other address for a party as shall be specified in a
notice given in accordance with this Section 11.02):


 


(a)           if to Guidant or any Seller:


 


Guidant
Corporation 


111
Monument Circle, 29th Floor 


Indianapolis,
Indiana 46204 


Fax:
(317) 971-2119 


Attention:
General Counsel


 


with
a copy to:


 


Skadden,
Arps, Slate, Meagher & Flom LLP 


333
West Wacker Drive 


Chicago,
Illinois 60606 


Fax:
(312) 407-0411 


Attention:
Charles W. Mulaney, Jr. 


   Brian
W. Duwe


 


(b)           if to Abbott or any other Purchaser:


 


Abbott
Laboratories


Dept.
0392, Bldg. AP6D


100
Abbott Park Road


Abbott
Park, Illinois 60064-3500


Fax:
(847) 935-8207


Attention:
Chief Operating Officer, Medical Products Group


 


with
a copy to:


 


Abbott
Laboratories 


Dept.
364, Bldg. AP6D


 


59

















 


100
Abbott Park Road


Abbott
Park, Illinois 60064-6020 USA


Fax:
(847) 938-6277


Attention:
General Counsel


 


and
a copy to:


 


Simpson
Thacher & Bartlett LLP 


425
Lexington Avenue 


New
York, NY 10017-3903 


Fax:
(212) 455-2502 


Attention:
Charles I. Cogut


   William E. Curbow


 


SECTION
11.03. Public Announcements. Each party to this Agreement shall consult
with the other party before issuing, and shall provide the other party the
opportunity to review and comment upon, any press release or other public
announcement in respect of this Agreement or the transactions contemplated
hereby and shall not issue any press release or other public statements or
otherwise communicate with any news media regarding this Agreement and/or the
transactions contemplated hereby without the consultation and prior written
consent of the other party unless otherwise required by Law or applicable stock
exchange regulation and then only with such advance notice to and consultation
with the other party as is practical. The parties to this Agreement shall
cooperate as to the timing and contents of any such press release, public
announcement or communication. The parties agree that they shall each issue a
press release announcing the execution of this Agreement, the contents of which
shall be reasonably satisfactory to the other party. Notwithstanding the
foregoing, neither party shall have any obligation to consult with the other
party or provide the other party with an opportunity to review and comment upon
any press release or other public announcement announcing a termination of this
Agreement, and such party may issue such press release or public announcement
or otherwise communicate with any news media regarding such termination without
the consent of the other party; provided, however, that the
non-terminating party shall have received advance written notice of the other
party’s intention to terminate this Agreement.


 


SECTION
11.04. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any Law or public policy,
all other terms and provisions of this Agreement shall nevertheless remain in
full force and effect for so long as the economic or legal substance of the
transactions contemplated by this Agreement is not affected in any manner
materially adverse to either party hereto. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner in order that the transactions contemplated by this Agreement
are consummated as originally contemplated to the greatest extent possible.


 


SECTION
11.05. Entire Agreement. This Agreement, the Transaction Agreement, the
Confidentiality Agreement and the Ancillary Agreements constitute the entire
agreement of the parties hereto with respect to the subject matter hereof and
thereof and


 


60

















 


supersede all prior
agreements and undertakings, both written and oral, between Guidant and Abbott
with respect to the subject matter hereof and thereof.


 


SECTION
11.06. Assignment. This Agreement may not be assigned without the
express written consent of Guidant and Abbott (which consent may be granted or
withheld in the sole discretion of Guidant or Abbott), as the case may be; provided,
however, that (a) either party may, without the consent of the other
party, assign its rights and obligations, in whole or in part, under this
Agreement to one or more of its controlled Affiliates, except that no such
assignment shall relieve the assigning party from the performance of its
obligations hereunder, and (b) Abbott may, without the consent of Guidant,
assign its rights and obligations, in whole or in part, under this Agreement to
any designee of Abbott (in the event Abbott divests any of the Assets that
would otherwise be acquired by Abbott pursuant hereto due to applicable
antitrust laws and regulations) or to any acquirer of all or substantially all
of Abbott’s vascular intervention business.


 


SECTION
11.07. Amendment. This Agreement may not be amended or modified except
(a) by an instrument in writing signed by, or on behalf of, Guidant and Abbott
or (b) by a waiver in accordance with Section 11.08.


 


SECTION
11.08. Waiver. Either party to this Agreement may (a) extend the time
for the performance of any of the obligations or other acts of the other party,
(b) waive any inaccuracies in the representations and warranties of the other
party contained herein or in any document delivered by the other party pursuant
hereto or (c) to the extent permitted by applicable Law, waive compliance with
any of the agreements of the other party or conditions to such party’s
obligations contained herein. Any such extension or waiver shall be valid only
if set forth in an instrument in writing signed by the party to be bound
thereby. Any waiver of any term or condition shall not be construed as a waiver
of any subsequent breach or a subsequent waiver of the same term or condition,
or a waiver of any other term or condition of this Agreement. The failure of
either party hereto to assert any of its rights hereunder shall not constitute
a waiver of any of such rights.


 


SECTION
11.09. No Third Party Beneficiaries. This Agreement shall be binding
upon and inure solely to the benefit of the parties hereto and their respective
successors and permitted assigns and nothing herein is intended to or shall
confer upon any other Person any legal or equitable right, benefit or remedy of
any nature whatsoever, including any rights of employment for any specified
period, under or by reason of this Agreement.


 


SECTION
11.10. Other Remedies; Specific Performance. Except as otherwise
provided herein, any and all remedies herein expressly conferred upon a party
will be deemed cumulative with and not exclusive of any other remedy conferred
hereby, or by Law or equity upon such party, and the exercise by a party of any
one remedy will not preclude the exercise of any other remedy. The parties
hereto agree that irreparable damage would occur in the event that any
provision of this Agreement is not performed in accordance with its specific
terms or is otherwise breached. It is accordingly agreed that the parties shall
be entitled to seek an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any court
of the United States or any state having jurisdiction, this being in addition
to any other remedy to which they are entitled at Law or in equity.


 


61

















 


SECTION 11.11. Interpretive Rules. The
words “hereof,” “herein” and “hereunder” and words of similar import when used
in this Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement, and all Article and Section references are to this
Agreement unless otherwise specified. The words “include,” “includes” and “including”
will be deemed to be followed by the phrase “without limitation.” The word “days”
means calendar days unless otherwise specified herein. The table of contents
and headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement. No
provision of this Agreement shall be construed to require either party or their
respective officers, directors, subsidiaries or Affiliates to take any action
which would violate or conflict with any applicable Law.  The word “if” means “if and only if.” The
word “or” shall not be exclusive. The meanings given to terms defined herein
will be equally applicable to both the singular and plural forms of such terms.
Whenever the context may require, any pronoun includes the corresponding
masculine, feminine and neuter forms. Except as otherwise expressly provided
herein, all references to “dollars” or “$” will be deemed references to the
lawful money of the United States of America.


 


SECTION 11.12. Guarantees of Performance.
(a) Abbott hereby (i) absolutely, unconditionally and irrevocably guarantees
all of the obligations of each Purchaser under this Agreement and the Ancillary
Agreements to which such Purchaser is a party, and (ii) unconditionally and
irrevocably waives any right to revoke this guarantee and acknowledges that
this guarantee is continuing in nature and applies to all obligations of such
Purchaser under this Agreement and the Ancillary Agreements. The obligations of
Abbott under or in respect of this guarantee are independent of the guaranteed
obligations, and a separate action or actions may be brought and prosecuted
against Abbott to enforce this guarantee, irrespective of whether any action is
brought against the applicable Purchaser or whether such Purchaser is joined in
any such action or actions.


 


(b) Guidant hereby (i) absolutely,
unconditionally and irrevocably guarantees all of the obligations of each
Seller under this Agreement and the Ancillary Agreements to which such Seller
is a party, and (ii) unconditionally and irrevocably waives any right to revoke
this guarantee and acknowledges that this guarantee is continuing in nature and
applies to all obligations of such Seller under this Agreement and the
Ancillary Agreements. The obligations of Guidant under or in respect of this
guarantee are independent of the guaranteed obligations, and a separate action
or actions may be brought and prosecuted against Guidant to enforce this guarantee,
irrespective of whether any action is brought against the applicable Seller or
whether such Seller is joined in any such action or actions.


 


SECTION 11.13. Governing Law. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York. All Actions arising out of or relating to this Agreement
shall be heard and determined exclusively in any New York federal court sitting
in the Borough of Manhattan of The City of New York; provided, however,
that if such federal court does not have jurisdiction over such Action, such
Action shall be heard and determined exclusively in any New York state court
sitting in the Borough of Manhattan of The City of New York. Consistent with
the preceding sentence, the parties hereto hereby (a) submit to the exclusive
jurisdiction of any federal or state court sitting in the Borough of Manhattan
of The City of New York for the purpose of any Action arising out of or
relating to this Agreement brought by either party hereto and (b) irrevocably
waive, and agree not to assert by way of


 


62

















 


motion, defense, or
otherwise, in any such Action, any claim that it is not subject personally to
the jurisdiction of the above-named courts, that its property is exempt or
immune from attachment or execution, that the Action is brought in an
inconvenient forum, that the venue of the Action is improper, or that this
Agreement or the transactions contemplated by this Agreement may not be
enforced in or by any of the above-named courts. Each party further irrevocably
consents to the service of process out of any of the aforementioned courts in
any such Action by the mailing of copies thereof by mail to such party at its
address set forth in this Agreement, such service of process to be effective
upon acknowledgment of receipt by registered mail; provided, however,
that nothing in this Section 11.13 shall affect the right of any party to serve
legal process in any other manner permitted by law. The consent to jurisdiction
set forth in this Section 11.13 shall not constitute a general consent to
service of process in the State of New York and shall have no effect for any
purpose except as provided in this Section 11.13.


 


SECTION
11.14. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY WAIVES TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT. EACH OF THE PARTIES HERETO HEREBY (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 11.14.


 


SECTION
11.15. Exchange Rate. If applicable Law requires that any payment
pursuant to this Agreement be made in local currency, the parties shall use the
applicable exchange rate published in the Wall Street Journal three Business
Days prior to the Closing.


 


SECTION
11.16. Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement.


 


63

















 


IN
WITNESS WHEREOF, Guidant and Abbott have caused this Agreement to be executed
as of the date first written above by their respective officers thereunto duly
authorized.


 


	
   

  	
  GUIDANT CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bernard E. Kury

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Bernard E. Kury

  
	
   

  	
   

  	
  Title:

  	
  Vice President and General

  Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ABBOTT LABORATORIES

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard A. Gonzalez 

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Richard A. Gonzalez 

  
	
   

  	
   

  	
  Title:

  	
  President and Chief
  Operating

  Officer

  
					



 


 

















 


EXHIBIT A 


 


FORM OF ASSUMPTION AGREEMENT


 

















 


EXHIBIT B 


 


FORM OF BILL OF SALE


 

















 


EXHIBIT C


 


FORM OF BUSINESS TRANSFER AGREEMENT


 

















 


EXHIBIT D 


 


FORM OF EQUITY PURCHASE AGREEMENT


 

















 


EXHIBIT E 


 


FORM OF INTELLECTUAL PROPERTY TRANSFER
AGREEMENT


 

















 


EXHIBIT F 


 


FORM OF LICENSE AND TECHNOLOGY TRANSFER
AGREEMENT


 

















 


EXHIBIT G 


 


FORM OF NOTE


 

















 


EXHIBIT H 


 


FORM OF RELEASE


 

















 


EXHIBIT I 


 


FORM OF SUPPLY AGREEMENT


 

















 


EXHIBIT J 


 


FORM OF TRANSITION SERVICES AGREEMENT


 

















	
  Purchase
  Agreement between Abbott Laboratories and Guidant Corporation

  List of Schedules

  
	
  Schedule 1.01(a) — Asset Purchasers & Asset Sellers

  
	
  Schedule 1.01(b) — Leased Business Real Property

  
	
  Schedule 1.01(c) — Owned Business Real Property

  
	
  Schedule 1.01(d) — Share Sellers, Share Purchasers and
  Transferred Subsidiaries

  
	
  Schedule 2.02(a)(i) — Clonmel—Purchased Assets

  
	
  Schedule 2.02(a)(ii) — Leased Business Real Property—Purchased
  Assets

  
	
  Schedule 2.02(a)(iii) — Guidelines for Allocation of Tangible
  Personal Property

  
	
  Schedule 2.02(a)(xv) — Guidelines for Permits, Licenses,
  Certifications and Approvals

  
	
  Schedule 2.02(a)(xvi) — Guidelines for Computer Software
  Data and Information

  
	
  Schedule 2.02(a)(xxi) — Aircraft Assets

  
	
  Schedule 2.02(c)(iv) — Real Property—Excluded Assets

  
	
  Schedule 2.02(d) — Investments

  
	
  Schedule 2.02(e) — Intellectual Property Transfers

  
	
  Schedule 2.04(a) — Withholding Taxes

  
	
  Schedule 2.06 — Required Consent Jurisdictions &
  Deferred Local Closings

  
	
  Schedule 5.12 — Restructuring

  
	
  Schedule 6.01(a) — U.S. Business Employees

  
	
  Schedule 6.01(b) — Non-U.S. Business Employees

  
	
  Schedule 6.02(f) — Payment Principles

  
	
  Guidant Disclosure Schedules:

  
	
  Section 3.01 — Organization, Authority and Qualification

  
	
  Section 3.02 — Organization, Authority and Qualification of
  the Transferred Subsidiaries

  
	
  Section 3.03(a) — Capitalization; Ownership of Shares

  
	
  Section 3.03(b) — Capitalization; Ownership of Shares

  
	
  Section 3.04(c) — No Conflict

  



 


 

















 


	
  Section 3.05 — Governmental Consents and Approvals

  
	
  Section 3.06 — Conduct in the Ordinary Course

  
	
  Section 3.07 — Litigation

  
	
  Section 3.08 — Compliance with Laws

  
	
  Section 3.09 — Environmental Matters

  
	
  Section 3.10(a) — Intellectual Property

  
	
  Section 3.10(a)(i) — Intellectual Property

  
	
  Section 3.10(b) — Intellectual Property

  
	
  Section 3.10(c) — Intellectual Property

  
	
  Section 3.10(d) — Intellectual Property

  
	
  Section 3.11 — Title

  
	
  Section 3.12(a) — Employee Benefit Matters

  
	
  Section 3.12(b) — Employee Benefit Matters

  
	
  Section 3.12(d) — Employee Benefit Matters

  
	
  Section 3.12(e) — Employee Benefit Matters

  
	
  Section 3.12(f) — Employee Benefit Matters

  
	
  Section 3.12(g) — Employee Benefit Matters

  
	
  Section 3.12(h) — Employee Benefit Matters

  
	
  Section 3.12(i) — Employee Benefit Matters

  
	
  Section 3.12(j) — Employee Benefit Matters

  
	
  Section 3.12(k) — Employee Benefit Matters

  
	
  Section 3.12(l) — Employee Benefit Matters

  
	
  Section 3.12(m) — Employee Benefit Matters

  
	
  Section 3.13(e) — Taxes

  
	
  Section 3.13(f) — Taxes

  
	
  Section 3.13(h) — Taxes

  
	
  Section 3.13(i) — Taxes

  
	
  Section 3.14(b)(i) — Material Contracts

  
	
  Section 3.14(b)(ii) — Material Contracts

  



 


 


ii

















 


	
  Section 3.14(c) — Material Contracts

  
	
  Section 3.15(a) — Regulatory Matters

  
	
  Section 3.15(b) — Regulatory Matters

  
	
  Section 3.15(c) — Regulatory Matters

  
	
  Section 3.15(d)-(g) — Regulatory Matters

  
	
  Section 3.15(h) — Regulatory Matters

  
	
  Section 3.16 — Assets

  
	
  Section 6.03(e) — Non-U.S. Labor Organizations

  



 


 


iii