Document:

Exhibit 10.1

 

BLUE CROSS AND BLUE SHIELD OF FLORIDA, INC.

HEALTH OPTIONS, INC.

HEALTH CARE BENEFITS CONTRACT 

Amendment No. 1

Effective February 15, 2006

 

The Agreement dated October 1, 2005, between the Blue Cross and Blue Shield of Florida Inc.   (hereinafter referred to as "BCBSF") and its subsidiary HEALTH OPTIONS, INC., (hereinafter referred to as "HOI") located at 4800 Deerwood Campus Parkway, Jacksonville Florida 32246, hereinafter jointly referred to as “BCBSF/HOI”, and Gevity HR, Inc. (Employer/Plan Sponsor) and the Gevity HR, Inc. Group Health Plan (hereinafter jointly referred to as “the Group”) now located at 9000 Town Center Parkway, Bradenton, Florida  34202 is hereby amended effective February 15, 2006, as set forth below in this Amendment No. 1 to the Agreement:

VIII. D – This section is replaced in its entirety with the following:

 

BCBSF/HOI and the Group agree that the Group will offer BCBSF/HOI health products to its employees of client groups located in Florida.  No more than one other health plan will be offered during the contract period, unless mutually agreed to by both parties.  The client group will decide which one of the two plans will be provided to their worksite employees.  Client groups cannot split enrollment between the two health plans. 

 

IN WITNESS WHEREOF each of the parties to this Amendment No. 1, through their duly authorized representative, hereby acknowledges that they have read and understand this Amendment No. 1 to the Agreement and agree to be bound by its terms. 

 

BLUE CROSS AND BLUE SHIELD OF FLORIDA, INC./HEALTH OPTIONS, INC.

 

	
             
 	
            Signature:
 	
            /s/ Alan Guzziano
 
	
             
 	
            Print Name:
 	
            Alan Guzziano
 	
             

	
             
 	
            Title:
 	
            VP
 	
             

						

 

GEVITY HR, INC

 

	
             
 	
            Signature:  
 	
            /s/  James M. Slaba
 
	
             
 	
            Print Name:
 	
            James M. Slaba
 	
             

	
             
 	
            Title:
 	
            VP, Benefits
 	
             

						

 

GEVITY HR, INC.GROUP HEALTH PLAN

 

	
             
 	
            Signature:
 	
            /s/ Ronald Krupa
 	
             

	
             
 	
            Print Name:
 	
            Ronald Krupa
 	
             

	
             
 	
            Title:
 	
            Director, Benefits Managementexv10w1

 

Exhibit 10.1

Gilbert Goldstein, P.C.

4350 South Monaco Street, Suite 100

Denver, CO 80237

February 20, 2006

Mr. Larry A. Mizel

Chief Executive Officer

M.D.C. Holdings, Inc.

4350 S. Monaco St., Suite 500

Denver, Colorado 80237

Dear Larry:

     The purpose of this letter agreement (the “Agreement”) is to confirm an understanding reached
between us, subject to the approval of the Board of Directors of M.D.C. Holdings, Inc., concerning
the retention by M.D.C. Holdings, Inc. (“MDC”) of Gilbert Goldstein, P.C. (“GG, P.C.”) as a
professional consultant on legal matters as follows:

	 	1.	 	GG, P.C. agrees to make Gilbert Goldstein available to perform legal
consultation services for MDC on a day-to-day as-needed and directed basis commencing March
1, 2006, through February 28, 2008.
	 
	 	2.	 	MDC agrees to compensate GG, P.C. as follows:

	 	a.	 	$360,000 per year payable in equal monthly installments of
$30,000 on the first day of each month commencing March 1, 2006, through February
28, 2008.
	 
	 	b.	 	Provide mutually agreed-upon office space at the office building known as
4350 South Monaco Street, Denver, Colorado, or such other location as may be
mutually agreed upon by GG, P.C. and MDC.
	 
	 	c.	 	Reimburse actual expenses incurred that are directly related to the
services provided hereunder.
	 
	 	d.	 	Provide full-time secretarial services of a mutually agreed-upon
secretary.

 

 

Mr. Larry A. Mizel

February 20, 2006

Page 2

	 	3.	 	In the event Gilbert Goldstein retires from the practice of law, becomes disabled or
dies or his consulting agreement with MDC is not renewed or extended during the term of
this Agreement, MDC shall pay Mr. Goldstein or his estate, as the case may be, in lieu of
any
payments or other benefits or services to be provided by MDC pursuant to this Agreement,
$15,000 per month on the first day of each month following the date of his retirement,
disability or death, the monthly payments to continue for the duration of Mr. Goldstein’s
life or for five years, whichever is longer.
	 
	 	4.	 	The term of this Agreement shall be in full force and effect for a period of two years
commencing as of March 1, 2006.
	 
	 	5.	 	GG, P.C. is an independent contractor and is not an employee
of MDC for any
purpose. In that regard, the method or performance of services, the services rendered, and
the exact time and hours, GG, P.C. is to perform services on any given day will be entirely
in the control and discretion of GG, P.C. MDC will rely on GG, P.C. to perform the
services as reasonably necessary to fulfill the spirit and purpose of this Agreement.
	 
	 	6.	 	GG, P.C. will have the right to continue to perform legal services for other persons
and entities.

We have discussed the fact that Gilbert Goldstein is an “outside member of the Board of
Directors” of MDC. Each party desires that Gilbert Goldstein continue in that capacity. The
consulting Agreement will be performed in such fashion as not to interfere with or change that
relationship. In the capacity of a consultant to MDC, GG, P.C. may provide legal counsel and advice
to the Audit, Corporate Governance/Nominating and Compensation Committees of the MDC Board of
Directors. Those services will be provided by Gilbert Goldstein in his capacity as a consultant to
MDC, and not in his capacity as a member of the MDC Board of Directors.

Effective as of March 1, 2006, this Agreement will supersede all prior Agreements among GG,
P.C., MDC and Gilbert Goldstein related to the subject matter hereof, including without
limitation, the letter agreements between GG, P.C. and MDC dated April 10, 2003 and July 26, 2004.

This entire Agreement is subject to the approval of the Board of Directors of MDC as confirmed
by Board resolution.

If you have any questions, please call me.

 

 

Mr. Larry A. Mizel

February 20, 2006

Page 3

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Yours truly,	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	GILBERT GOLDSTEIN, P.C.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Gilbert Goldstein	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Gilbert Goldstein	 	 
	 
	 	 	 	 	 	 	 	 
	Approved and agreed to this

	 	 	 	 	 	 
	20th day of February, 2006

	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	M.D.C. HOLDINGS, INC.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	/s/ Larry A. Mizel	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Larry A. Mizel,	 	 	 	 	 	 
	 

	 	Chief Executive OfficerExhibit
10.27

 

Abbott
Laboratories

 

Description
of Base Salary of Named Executive Officers

 

                Set
forth below are the base salaries, effective March 1, 2005 and
March 1, 2006, of the chief executive officer and each of the four other
most highly compensated executive officers in 2005.

 

Miles D. White

Chairman of the Board and Chief Executive
Officer

 

	
   

  	
   

  	
  Base Salary

  	
   

  
	
  2005

  	
   

  	
  $

  	
  1,614,600

  	
   

  
	
  2006

  	
   

  	
  $

  	
  1,671,000

  	
   

  
						

 

Richard A. Gonzalez

President and Chief Operating Officer,

Medical Products Group

 

	
   

  	
   

  	
  Base Salary

  	
   

  
	
  2005

  	
   

  	
  $

  	
  910,800

  	
   

  
	
  2006

  	
   

  	
  $

  	
  942,700

  	
   

  

 

Jeffrey M. Leiden

President and Chief Operating Officer,

Pharmaceutical Products Group

 

	
   

  	
   

  	
  Base Salary

  	
   

  
	
  2005

  	
   

  	
  $

  	
  910,800

  	
   

  
	
  2006

  	
   

  	
  $

  	
  942,700

  	
   

  

 

Thomas C. Freyman

Executive Vice President, Finance and

Chief Financial Officer

 

	
   

  	
   

  	
  Base Salary

  	
   

  
	
  2005

  	
   

  	
  $

  	
  750,000

  	
   

  
	
  2006

  	
   

  	
  $

  	
  825,000

  	
   

  

 

William G. Dempsey

Senior Vice President,

Pharmaceutical Operations

 

	
   

  	
   

  	
  Base Salary

  	
   

  
	
  2005

  	
   

  	
  $

  	
  595,100

  	
   

  
	
  2006

  	
   

  	
  $

  	
  615,900Exhibit 10.28

 

EXECUTION COPY

 

 

TRANSACTION AGREEMENT

 

 

Between

 

BOSTON SCIENTIFIC CORPORATION

 

and

 

ABBOTT LABORATORIES

 

Dated as of January 8, 2006

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
   

  
	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.01. Certain Defined Terms

  	
   

  	
  1

  
	
  SECTION 1.02. Definitions

  	
   

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  
	
  PURCHASE AND SALE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01. Purchase and Sale of the Business

  	
   

  	
  6

  
	
  SECTION 2.02. Assumption and Exclusion of
  Liabilities

  	
   

  	
  7

  
	
  SECTION 2.03. Purchase Price; Allocation of
  Purchase Price

  	
   

  	
  8

  
	
  SECTION 2.04. Milestone Payments

  	
   

  	
  9

  
	
  SECTION 2.05. Closing

  	
   

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  
	
  REPRESENTATIONS AND WARRANTIES OF BOSTON SCIENTIFIC

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01. Organization, Authority and
  Qualification

  	
   

  	
  9

  
	
  SECTION 3.02. No Conflict

  	
   

  	
  10

  
	
  SECTION 3.03. Governmental Consents and Approvals

  	
   

  	
  10

  
	
  SECTION 3.04. Litigation

  	
   

  	
  10

  
	
  SECTION 3.05. Certain Regulatory Matters

  	
   

  	
  10

  
	
  SECTION 3.06. Brokers

  	
   

  	
  10

  
	
  SECTION 3.07. Disclaimer

  	
   

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  
	
  REPRESENTATIONS AND WARRANTIES OF ABBOTT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01. Organization and Authority of
  Abbott

  	
   

  	
  11

  
	
  SECTION 4.02. No Conflict

  	
   

  	
  11

  
	
  SECTION 4.03. Governmental Consents and
  Approvals

  	
   

  	
  11

  
	
  SECTION 4.04. Litigation

  	
   

  	
  12

  
	
  SECTION 4.05. Brokers

  	
   

  	
  12

  
	
  SECTION 4.06. Disclaimer

  	
   

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  
	
  ADDITIONAL AGREEMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01. Conduct of Business; Merger
  Agreement

  	
   

  	
  12

  
	
  SECTION 5.02. Representations and Warranties
  in Purchase Agreement

  	
   

  	
  12

  
	
  SECTION 5.03. Access to Information;
  Confidentiality

  	
   

  	
  12

  
	
  SECTION 5.04. Regulatory and Other Authorizations; Notices and Consents

  	
   

  	
  13

  
	
  SECTION 5.05. Notifications

  	
   

  	
  15

  

 

i

 

	
  SECTION 5.06. Release
  of Indemnity Obligations

  	
   

  	
  15

  
	
  SECTION 5.07. Supply
  Arrangements

  	
   

  	
  15

  
	
  SECTION 5.08. License
  and Technology Transfer Agreement

  	
   

  	
  17

  
	
  SECTION 5.09.
  Transition Services

  	
   

  	
  22

  
	
  SECTION 5.10. Abbott
  Loan

  	
   

  	
  23

  
	
  SECTION 5.11. Tax Election

  	
   

  	
  24

  
	
  SECTION 5.12.
  Insurance

  	
   

  	
  24

  
	
  SECTION 5.13. Further
  Action

  	
   

  	
  24

  
	
  SECTION 5.14. Timing
  of Transactions

  	
   

  	
  25

  
	
  SECTION 5.15. Other
  Agreements

  	
   

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
   

  
	
  EMPLOYEE MATTERS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01.
  Transferred Employees

  	
   

  	
  26

  
	
  SECTION 6.02.
  Employee Benefits

  	
   

  	
  26

  
	
  SECTION 6.03. General
  Matters

  	
   

  	
  29

  
	
  SECTION 6.04. Mutual
  Non-Solicitation

  	
   

  	
  29

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
   

  
	
  TAXES

  	
   

  
	
   

  	
   

  
	
  SECTION 7.01.
  Apportionment

  	
   

  	
  30

  
	
  SECTION 7.02. Tax
  Return Filing and Amendment

  	
   

  	
  30

  
	
  SECTION 7.03.
  Resolution of Tax Controversies

  	
   

  	
  30

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  
	
  CONDITIONS TO CLOSING

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.01.
  Conditions to Obligation of Boston Scientific

  	
   

  	
  31

  
	
  SECTION 8.02.
  Conditions to Obligation of Abbott

  	
   

  	
  32

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
   

  
	
  TERMINATION

  	
   

  
	
  SECTION 9.01. Termination

  	
   

  	
  33

  
	
  SECTION 9.02. Effect
  of Termination

  	
   

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
   

  
	
  INDEMNIFICATION

  	
   

  
	
   

  	
   

  
	
  SECTION 10.01. Survival of Representations and Warranties

  	
   

  	
  33

  
	
  SECTION 10.02.
  Indemnification by Boston Scientific

  	
   

  	
  34

  
	
  SECTION 10.03.
  Indemnification by Abbott

  	
   

  	
  34

  
	
  SECTION 10.04. Limits
  on Indemnification

  	
   

  	
  35

  
	
  SECTION 10.05. Notice
  of Loss; Third Party Claims

  	
   

  	
  35

  

 

ii

 

	
  ARTICLE XI

  	
   

  
	
  GENERAL PROVISIONS

  	
   

  
	
   

  	
   

  
	
  SECTION 11.01.
  Expenses

  	
   

  	
  36

  
	
  SECTION 11.02.
  Notices

  	
   

  	
  36

  
	
  SECTION 11.03.
  Public Announcements

  	
   

  	
  37

  
	
  SECTION 11.04. Severability

  	
   

  	
  37

  
	
  SECTION 11.05.
  Entire Agreement

  	
   

  	
  38

  
	
  SECTION 11.06. Assignment

  	
   

  	
  38

  
	
  SECTION 11.07. Amendment

  	
   

  	
  38

  
	
  SECTION 11.08. Waiver

  	
   

  	
  38

  
	
  SECTION 11.09. No Third Party Beneficiaries

  	
   

  	
  38

  
	
  SECTION 11.10. Other Remedies;
  Specific Performance

  	
   

  	
  38

  
	
  SECTION 11.11. Interpretive Rules

  	
   

  	
  39

  
	
  SECTION 11.12. Governing Law

  	
   

  	
  39

  
	
  SECTION 11.13. Waiver of
  Jury Trial

  	
   

  	
  39

  
	
  SECTION 11.14. Counterparts

  	
   

  	
  40

  

 

iii

 

TRANSACTION
AGREEMENT, dated as of January 8, 2006 (this “Agreement”), between
BOSTON SCIENTIFIC CORPORATION, a Delaware corporation (“Boston Scientific”),
and ABBOTT LABORATORIES, an Illinois corporation (“Abbott”).

 

WHEREAS, Boston Scientific intends to make an offer to acquire all of
Guidant Corporation, an Indiana corporation (“Guidant”), on the terms
and conditions set forth in a proposed Agreement and Plan of Merger (the “Merger
Agreement”) among Boston Scientific, Galaxy Merger Sub, Inc., an
Indiana corporation and a wholly owned subsidiary of Boston Scientific (“Sub”), and
Guidant;

 

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

 

WHEREAS, subject to Boston Scientific’s and Guidant’s entry into the
Merger Agreement and either 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 or the acquisition by Boston
Scientific of Guidant pursuant to the Merger Agreement, Boston Scientific
wishes to sell, or cause to be sold, to Abbott and/or one or more of its
Affiliates (collectively, the “Purchaser”), and Purchaser wishes to
purchase from Boston Scientific or Guidant, all right, title and interest in
and to all assets of the Business, and in connection therewith Purchaser is willing
to assume certain liabilities relating thereto, all upon the terms and subject
to the conditions set forth herein and in the other definitive agreements to be
negotiated by the parties; and

 

WHEREAS, in connection with the purchase and sale of the Business
contemplated by this Agreement, Boston Scientific and Abbott will enter into a
Purchase Agreement (the “Purchase Agreement”) and the other Definitive
Agreements (as defined herein) containing terms and conditions consistent with
this Agreement.

 

NOW, THEREFORE, in consideration of the promises and the mutual
agreements and covenants hereinafter set forth, and intending to be legally
bound, Boston Scientific and Abbott 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, (i) with respect to
Boston Scientific, Guidant and its Affiliates following the Merger, (ii) with
respect to Abbott, any Person to be acquired pursuant to this Agreement, and (iii) with
respect to each party hereto, any Person resulting from any internal reorganization,
provided such resulting Person is an Affiliate.

 

“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.

 

“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.

 

“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.

 

“Definitive Agreements” means the Purchase Agreement, the Supply
Agreements, the License and Technology Transfer Agreement, the Transition
Services Agreement, the Note, the release and/or settlement agreement in
respect of Actions between Boston Scientific and/or its Affiliates and Guidant and/or
its Affiliates relating to the Business to the extent contemplated herein and
such other agreements as may be mutually agreed between the parties.

 

“DES Intellectual Property” means all Intellectual Property
included in the Assets, including Intellectual Property available to Guidant
pursuant to agreements with third parties and subject to the terms of those
agreements, that is used in Guidant’s drug eluting stent system program having
a priority date prior to, or otherwise existing as of, the date of the Closing,
including Intellectual Property relating to the bare metal and bioabsorbable
stents, drugs, polymers and delivery systems used with respect to such drug
eluting stent systems.

 

“DES
Stents” means the everolimus eluting stent system in development by Guidant
or its Affiliates at the time of the Closing, as approved by applicable
Governmental Authorities, including the FDA, and any improvements or iterations
thereof approved for sale during the term of the applicable supply arrangements
and of the type that could be approved by a supplement to an approved PMA rather
than requiring a new PMA if such DES Stent were to be sold in the United
States.

 

“Existing
DES Stents” means the drug eluting stent system in development by Guidant
or its Affiliates between the date of Closing and the later of the date on
which a DES

 

2

 

Stent is approved for sale
in Europe and the date on which a DES Stent is approved for sale in the United
States.

 

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

 

“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.

 

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

 

“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, service marks, trade dress, logos, trade names, corporate
names and other source identifiers, registrations and applications for
registration thereof, including all extensions, modifications and renewals of
same, (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,
data, databases and compilations of information, and (e) confidential and
proprietary information, inventions, formulas, processes, developments,
technology, research, trade secrets and know-how.

 

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

 

“J&J Merger Agreement” means 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 amended or successor agreement
thereof.

 

“Knowledge” means, when used in connection with a Person with
respect to any matter in question, the actual knowledge of the Person’s
executive officers after making due inquiry of the current employees having
primary responsibility for such matter.

 

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

 

“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).

 

“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

 

3

 

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 (1) in
the financial or securities markets or the economy in general, (2) 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 (3) 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.

 

“Novartis Agreement” means the Everolimus Local Delivery License
Agreement (Exclusive), dated September 17, 2002, by and between Novartis
Pharma AG and Novartis AG, both Swiss corporations, and Advanced Cardiovascular
Systems, Inc., a California corporation, on behalf of itself and its
affiliates, as amended and/or supplemented from time to time.

 

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

 

“PMA” means an application submitted to the FDA to obtain
pre-market approval with respect to the safety and effectiveness of devices,
which approval is required under Section 515 of the Medical Device
Amendments of 1976 to the Federal Food, Drug, and Cosmetic Act.

 

“Pre-Closing Tax Period” means any taxable period (or portion
thereof) ending on or prior to the Closing.

 

“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.

 

“Restricted Persons” means the Persons listed on Schedule 1.01
attached hereto or any of their Affiliates.

 

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

 

“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

 

4

 

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 and all returns, reports and forms
(including elections, declarations, amendments, schedules, information returns
or attachments thereto) required to be filed with a Governmental Authority or
taxing authority with respect to Taxes.

 

“Transferred
Subsidiary” means any direct or indirect subsidiary of Guidant acquired by
way of stock purchase pursuant to this Agreement.

 

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

 

	
  Definition

  	
   

  	
  Location

  
	
   

  	
   

  	
   

  
	
  “Abbott”

  	
   

  	
  Preamble

  
	
  “Agreement”

  	
   

  	
  Preamble

  
	
  “Allocation”

  	
   

  	
  2.03(b)

  
	
  “Allocation Accounting
  Firm”

  	
   

  	
  2.03(b)

  
	
  “ASP”

  	
   

  	
  5.07(h)

  
	
  “Assets”

  	
   

  	
  2.01(a)

  
	
  “Assumed Liabilities”

  	
   

  	
  2.02(a)

  
	
  “Business”

  	
   

  	
  Recitals

  
	
  “Closing”

  	
   

  	
  2.05

  
	
  “Confidentiality
  Agreement”

  	
   

  	
  5.03(b)

  
	
  “EU Merger Regulation”

  	
   

  	
  3.03

  
	
  “EVT”

  	
   

  	
  2.01(b)(iii)

  
	
  “Excluded Assets”

  	
   

  	
  2.01(b)

  
	
  “Excluded Businesses”

  	
   

  	
  2.01(b)(iii)

  
	
  “Excluded Liabilities”

  	
   

  	
  2.02(b)

  
	
  “First DES Stent”

  	
   

  	
  5.08(m)

  
	
  “Guidant”

  	
   

  	
  Recitals

  
	
  “Guidant CIC Plans”

  	
   

  	
  6.03(b)

  
	
  “Initial Purchase Price”

  	
   

  	
  2.03(a)

  
	
  “License and Technology
  Transfer Agreement”

  	
   

  	
  5.08(a)

  
	
  “Loss”

  	
   

  	
  10.02

  
	
  “Merger Agreement”

  	
   

  	
  Recitals

  
	
  “Milestone Payment”

  	
   

  	
  2.04

  
	
  “Mixed Account”

  	
   

  	
  5.09(d)

  
	
  “Mixed Contract”

  	
   

  	
  5.09(c)

  
	
  “Non-U.S. Business
  Employee”

  	
   

  	
  6.01(b)

  
	
  “Non-U.S. Transferred
  Employee”

  	
   

  	
  6.01(b)

  
	
  “Note”

  	
   

  	
  5.10(a)

  
	
  “Purchaser”

  	
   

  	
  Preamble

  
	
  “Purchase Price”

  	
   

  	
  2.03(a)

  
	
  “Settlement Agreement”

  	
   

  	
  5.08(1)

  

 

5

 

	
  Definition

  	
   

  	
  Location

  
	
   

  	
   

  	
   

  
	
  “Shared Asset”

  	
   

  	
  2.01(b)(ii)

  
	
  “Shares”

  	
   

  	
  2.01(a)

  
	
  “Supply Agreements”

  	
   

  	
  5.07(a)

  
	
  “Territory”

  	
   

  	
  5.07(a)

  
	
  “Third Party Claim”

  	
   

  	
  10.05(b)

  
	
  “Transferred Employees”

  	
   

  	
  6.01(b)

  
	
  “Transition Services
  Agreement”

  	
   

  	
  5.09(a)

  
	
  “U.S. Business Employee”

  	
   

  	
  6.01(a)

  
	
  “U.S. Transferred
  Employee”

  	
   

  	
  6.01(a)

  

 

ARTICLE II

 

PURCHASE AND SALE

 

SECTION 2.01.
Purchase and Sale of the Business. (a) Upon the terms and subject
to the conditions of this Agreement, at the Closing, Boston Scientific shall
sell, convey, assign and transfer, or cause Guidant and/or its Affiliates to
sell, convey, assign and transfer, to Purchaser all the assets (including,
where applicable, stock or other equity interests of subsidiaries of Guidant (“Shares”)),
rights, properties and business of every kind and description and wherever
located, whether tangible or intangible, real, personal or mixed, that 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 (together with, to the extent available, the
right to bring an Action for the infringement or other violation thereof prior
to the Closing and the right to recover and retain all damages or proceeds therefrom)
(the “Assets”), and Purchaser shall purchase the Assets; provided,
however, that, subject to Section 5.11, at Abbott’s election (which shall be exercised as promptly as
practicable after the date hereof), the Assets of any subsidiaries of Guidant,
the assets of which are used primarily in, or related primarily to, the
Business, may be purchased by Purchaser by purchasing Shares rather than the
applicable Assets, in which case the parties shall cooperate with respect to
the transfer from such subsidiaries of any assets that are not Assets, any
Liabilities that are not Assumed Liabilities and any employees who are not
Transferred Employees. For the purposes of this Agreement, references to the
Business shall be deemed to include the Assets and the Shares if the context so
requires.

 

(b) Notwithstanding
anything in Section 2.01(a) to the contrary, Purchaser 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)                                     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;

 

6

 

(ii)                                  subject to Sections 5.08(h) and 5.09, any right, property or asset used
both in the Business and in any other business of Guidant (a “Shared Asset”)
that is both (1) not used primarily in, or related primarily to, the
Business, and (2) that is not reasonably capable of being transferred with
the Assets;

 

(iii)                               all businesses of Guidant and its
subsidiaries 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”); and

 

(iv)                              all assets of any employee or independent
contractor compensation or benefit plan, program or arrangement that is
maintained or contributed to by Guidant, Boston Scientific or any of their
respective 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 Purchaser or its Affiliate
pursuant to Article VI.

 

(c) Boston
Scientific and Abbott will share all 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, and, prior to the Closing,
each of Boston Scientific and Abbott will use its reasonable best efforts to
identify such investments and to agree on a mechanism for sharing such rights,
benefits and obligations.

 

SECTION 2.02.
Assumption and Exclusion of Liabilities. (a) Upon the terms and
subject to the conditions set forth in this Agreement, at the Closing,
Purchaser shall assume, and agree to pay, perform and discharge when due, any
and all of the Liabilities to the extent relating to the Business or the Assets,
other than the Excluded Liabilities set forth in Section 2.02(b) below
(the “Assumed Liabilities”).

 

(b) After
the Closing, Boston Scientific and/or its Affiliates shall retain (or, if
necessary, expressly assume), and shall be responsible for paying, performing
and discharging when due, and Purchaser shall not 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 Boston
Scientific, Guidant or any of their 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

 

7

 

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 J&J Merger Agreement;

 

(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, Boston Scientific
or any of its or their respective 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 Purchaser
or its Affiliate pursuant to Article VI; and

 

(v)                                 all indebtedness for borrowed money.

 

SECTION 2.03.
Purchase Price; Allocation of Purchase Price. (a) Abbott shall pay,
or cause the applicable Purchaser to pay, an aggregate purchase price for the
Assets equal to the sum of (i) an amount in cash equal to $3,800,000,000
(the “Initial Purchase Price”), (ii) the Milestone Payments, and (iii) the
Assumed Liabilities (collectively, the “Purchase Price”). The Initial
Purchase Price shall be paid at the Closing by wire transfer in immediately
available funds to a bank account designated by Boston Scientific not fewer
than three Business Days prior to the date of the Closing.

 

(b)                                 Within 20 days of the execution by Boston
Scientific of the Merger Agreement, Abbott shall provide Boston Scientific with
a proposed allocation of the Purchase Price among the Asset categories (the “Allocation”)
for Boston Scientific’s review and comment. For purposes of the Allocation,
Asset categories shall consist of the following two classes: (i) Assets
located or owned in the United States, and (ii) Assets located or owned
outside of the United States. If Boston Scientific does not provide any
comments to Abbott in writing within 20 days following delivery by Abbott of
the proposed Allocation, then the Allocation proposed by Abbott shall be deemed
to be final and binding, absent manifest error. If, however, Boston Scientific
submits comments to Abbott within such 20-day period, Abbott and Boston
Scientific shall negotiate in good faith to resolve any differences within 20
days of such submission. If Boston Scientific and Abbott are unable to reach a
resolution within such 20 day period, then all remaining disputed items shall
be submitted for resolution by an internationally-recognized, independent
accounting firm mutually selected by Abbott and Boston Scientific (the “Allocation
Accounting Firm”), which shall make a final determination as to the
disputed items within 20 days after such submission, but in no event later than
20 days following the closing of the Merger, and such determination shall be
final and binding on Boston Scientific and Abbott. The fees and disbursements
of the Allocation Accounting Firm shall be shared equally between Boston
Scientific and Abbott. Any subsequent adjustments to the Purchase Price shall
be reflected in the Allocation in a manner consistent with Section 1060 of
the Code and the Regulations thereunder. For all Tax purposes, Abbott and
Boston Scientific agree that the transactions contemplated by this Agreement
shall be reported in a manner consistent with the

 

8

 

terms of this Agreement,
including the Allocation, and that neither of them will take any position
inconsistent therewith in any Tax Return, in any refund claim, in any
litigation, or otherwise.

 

SECTION 2.04.
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 shall pay to Boston Scientific the following payments
(each, a “Milestone Payment”) by wire transfer in immediately available
funds to a bank account designated by Boston Scientific (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. Total Milestone Payments shall not
exceed $500,000,000.

 

SECTION 2.05.
Closing. Subject to the terms and conditions of this Agreement and the
Purchase Agreement, the sale and purchase of the Business and the assumption of
the Assumed Liabilities contemplated by this Agreement and the Purchase
Agreement shall take place at a closing (the “Closing”) to be held at
the offices of Shearman &  Sterling LLP, 599 Lexington Avenue, New York, New York at 10:00 a.m.,
New York time, on the 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 Boston
Scientific and Abbott may mutually agree upon in writing.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

OF BOSTON SCIENTIFIC

 

Boston
Scientific hereby represents and warrants to Purchaser as follows:

 

SECTION 3.01.
Organization, Authority and Qualification. Boston Scientific is a
corporation duly incorporated, validly existing and in good standing under the
Laws of the State of Delaware 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 hereby.
The execution and delivery of this Agreement by Boston Scientific, the
performance by Boston Scientific of its obligations hereunder and the
consummation by Boston Scientific of the transactions contemplated hereby have
been duly authorized by all requisite corporate action on the part of Boston
Scientific. This Agreement has been duly executed and delivered by Boston
Scientific, and, assuming due authorization, execution and delivery by Abbott,
this Agreement is a legal, valid and binding obligation of Boston Scientific,
enforceable against it in accordance with its terms.

 

9

 

SECTION 3.02.
No Conflict. Assuming that all consents, approvals, authorizations and
other actions described in Section 3.03 have been obtained and any
applicable waiting period has expired or been terminated, and except as may
result from any facts or circumstances relating solely to Purchaser, the
execution, delivery and performance of this Agreement by Boston Scientific 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 Boston Scientific, (b) conflict with or violate any Law or Governmental
Order applicable to Boston Scientific, 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 Boston Scientific is a party, except,
in the case of clauses (b) and (c), as would not materially and adversely
affect the ability of Boston Scientific to carry out its obligations under, and
to consummate the transactions contemplated by, this Agreement.

 

SECTION 3.03.
Governmental Consents and Approvals. The execution, delivery and
performance of this Agreement by Boston Scientific do not and will not require
any consent, approval, authorization or other order of, action by, 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, or (c) as may be necessary as a result of any facts or
circumstances relating solely to Purchaser or any of its Affiliates.

 

SECTION 3.04.
Litigation. As of the date hereof, no Action by or against
Boston Scientific is pending or, to the Knowledge of Boston Scientific,
threatened, that could affect the legality, validity or enforceability of this
Agreement or the consummation of the transactions contemplated hereby.

 

SECTION 3.05.
Certain Regulatory Matters. Except for the Subpoena Regarding the Matter
of Investigation of Guidant Corporation from the State of California Department
of Justice, Office of the Attorney General, to the actual knowledge of the
individuals listed on Schedule 3.05 attached hereto, as of the date of
this Agreement, there is no pending or threatened demand letter or Governmental
Order outstanding or any investigation by any Governmental Authority involving
the Business or Guidant or its subsidiaries that, individually or in the
aggregate, has had or would reasonably be expected to have, a Material Adverse
Effect.

 

SECTION 3.06.
Brokers. Boston Scientific 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
Boston Scientific.

 

SECTION 3.07.
Disclaimer. EXCEPT AS SET FORTH IN THIS ARTICLE III OR AS MAY BE
SET FORTH IN ANY DEFINITIVE AGREEMENT, NONE OF BOSTON
SCIENTIFIC, ITS AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES OR REPRESENTATIVES MAKE OR HAVE MADE ANY

 

10

 

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 Boston Scientific as follows:

 

SECTION 4.01.
Organization and Authority of Abbott. 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 hereby. The execution and delivery
of this Agreement by Abbott, the performance by Abbott of its obligations
hereunder and the consummation by Abbott of the transactions contemplated
hereby have been duly authorized by all requisite corporate action on the part
of Abbott. This Agreement has been duly executed and delivered by Abbott, and,
assuming due authorization, execution and delivery by Boston Scientific, this
Agreement is a legal, valid and binding obligation of Abbott 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 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, (b) conflict
with or violate any Law or Governmental Order applicable to Abbott or its
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 is a party,
except, in the case of clauses (b) and (c), as
would not materially and adversely affect the ability of Abbott to carry out
its obligations under, and to consummate the transactions contemplated by, this
Agreement.

 

SECTION 4.03.
Governmental Consents and Approvals. The execution, delivery and
performance by Abbott of this Agreement do not and will not require any
consent, approval, authorization or other order of, action by, filing with, or
notification to, any Governmental Authority, except (a) the requirements
of the EU Merger Regulation and, to the extent applicable, the requirements of
the HSR Act and 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 Purchaser of the transactions contemplated by this
Agreement.

 

11

 

SECTION 4.04.
Litigation. As of the date hereof, no Action by or against Abbott is
pending or, to the Knowledge of Abbott, threatened, that could affect the
legality, validity or enforceability of this Agreement or the consummation of
the transactions contemplated hereby.

 

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 Purchaser.

 

SECTION 4.06.
Disclaimer. EXCEPT AS SET FORTH IN THIS ARTICLE IV OR AS MAY BE
SET FORTH IN ANY DEFINITIVE 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.
Conduct of Business; Merger Agreement. (a) Except as may otherwise
be agreed between Boston Scientific and Abbott, from the date of execution of
the Merger Agreement until the earlier of the termination of the Merger
Agreement or the closing date under the Merger Agreement, Boston Scientific
will enforce its rights under the Merger Agreement with respect to, and will
not waive, amend or agree to amend, any provisions of the Merger Agreement
relating to, the Business.

 

(b) Boston
Scientific has given Abbott an opportunity to review a draft of the Merger
Agreement. The Merger Agreement, if any, entered into by Boston Scientific and
Guidant, insofar as it relates to the Business, shall be the same in all
material respects, as such draft.

 

SECTION 5.02.
Representations and Warranties in Purchase Agreement. The Purchase Agreement shall include representations and warranties (i) by
Boston Scientific and Abbott, on behalf of themselves and each of their
respective subsidiaries or Affiliates (to the extent party to a Definitive
Agreement) substantially similar to those set forth in Articles III and IV
hereto relating to the Definitive Agreements to which such Person is a party
and the transactions contemplated thereby, and (ii) by Boston Scientific
regarding the Business that are substantially similar in scope and substance to
the representations and warranties of Guidant contained in the Merger
Agreement, except that with respect thereto, any qualifications or exceptions
as to materiality, material adverse effect or similar qualifiers or exceptions
shall refer to materiality with respect to or effects on the Business as
opposed to effects on Guidant and its subsidiaries, taken as a whole.

 

SECTION 5.03.
Access to Information; Confidentiality. (a) From the date hereof
until the Closing, upon reasonable notice, Boston Scientific shall use its
reasonable best

 

12

 

efforts to cause Guidant to:
(a) afford Purchaser and its authorized representatives reasonable access
to the offices, properties and books and records of the Business, and (b) furnish to the officers, employees, and authorized agents and
representatives of Purchaser such additional financial and operating data and
other information regarding the Business (or copies thereof) as Purchaser may
from time to time reasonably request; provided, however, that any
such access or furnishing of information shall be conducted at Purchaser’s
expense, during normal business hours, under the supervision of Boston
Scientific’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, Boston Scientific shall not be required to
request that Guidant disclose any information to Purchaser if such disclosure
would be reasonably likely to (x) cause significant competitive harm to the
Business if the transactions contemplated hereby 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 letter agreement dated as of December 17, 2005 (the “Confidentiality
Agreement”) between Boston Scientific and Abbott 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 5.03(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 and the transactions contemplated hereby and all confidential
information relating to Boston Scientific and the Excluded Businesses, and (ii) Boston
Scientific 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 and the transactions contemplated
hereby 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 5.03(a) shall in any way amend
or diminish Abbott’s obligations under the Confidentiality Agreement. Abbott
acknowledges and agrees that any Evaluation Material provided to Abbott
pursuant to Section 5.03(a) or otherwise by or on behalf of Guidant,
Boston Scientific or any officer, director, employee, agent, representative,
accountant or counsel thereof shall be subject to the terms and conditions of
the Confidentiality Agreement.

 

SECTION 5.04.
Regulatory and Other Authorizations; Notices and Consents. (a) Each of Boston Scientific and Abbott shall
use its reasonable best efforts to obtain, and, to the extent necessary, Boston
Scientific will use its reasonable best efforts to cause Guidant 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. Boston Scientific and Abbott will cooperate
with one another in promptly seeking to obtain all such authorizations,
consents, orders and approvals; provided, however, that neither
Boston Scientific nor Guidant shall be required to pay any fees or other
payments to any such

 

13

 

Governmental Authorities in
order to obtain any such authorization, consent, order or approval (other than
normal filing fees that are imposed by Law on Boston Scientific or Guidant).
Neither Boston Scientific 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. Boston Scientific and Abbott each
agree to make, or to cause to be made, (i) if required, an appropriate
filing of a 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 5.04(a),
Abbott shall, on a reasonable and timely basis consistent with Section 5.04(a):
(i) 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) Boston Scientific 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) Boston Scientific shall remit all of the proceeds of such sale
(net of Taxes and the costs and expenses paid by Boston Scientific 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 Boston Scientific 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 5.04(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

 

14

 

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 5.05. Notifications. Each
party hereto shall promptly notify the other party in writing of any fact,
change, condition, circumstance or occurrence or nonoccurrence of 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 5.05 shall not limit or otherwise
affect the remedies available hereunder to the party receiving such notice. In
addition, Boston Scientific 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 Boston Scientific
pursuant to the Merger Agreement that materially affect the Business, the
Assets, Purchaser’s 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 5.06. Release of Indemnity
Obligations. Boston Scientific and Abbott will cooperate with each other
with a view to entering into arrangements effective as of the Closing whereby
Purchaser would be substituted for Guidant or its Affiliates in any guarantees,
letters of comfort, indemnities or similar arrangements entered into by Guidant
or its Affiliates in respect of the Business (but only to the extent such
guarantees, letters of comfort, indemnities or arrangements constitute Assumed
Liabilities). If Purchaser cannot enter into such arrangements, Boston
Scientific shall cause Guidant not to terminate such guaranty arrangements
without Purchaser’s consent; provided, however, that Purchaser
shall enter into a separate guaranty with Guidant or one of its Affiliates to
guarantee the performance of the obligations of the relevant Person pursuant to
the contract underlying such guaranty arrangements.

 

SECTION 5.07. Supply Arrangements. (a) Following
the Closing, Abbott will supply Boston Scientific, on an interim and private
label basis, with DES Stents. In connection with the foregoing obligation, on
or prior to the Closing, the parties will enter into four interim supply
agreements, each effective as of the Closing (collectively, the “Supply Agreements”).
Each of the Supply Agreements shall contain pricing and other terms as provided
in this Section 5.07 and
other terms and conditions customary for similar supply agreements and shall
cover the supply of DES Stents in the following territories (one Supply
Arrangement for each territory): United States, Japan, Europe and Rest of World
(each, a “Territory”).

 

15

 

(b) During
the term of the supply arrangements, if Boston Scientific manufactures drug
eluting stent systems substantially identical to DES Stents being supplied by
Abbott under the supply arrangements, then Boston Scientific shall pay to
Abbott an amount equal to 40% of the result obtained by subtracting from the
ASP (as defined below), the sum of (A) royalties payable to third parties
by Boston Scientific with respect to such drug eluting stent systems sold by
it, (B) 7% of the ASP, representing Boston Scientific’s variable selling
costs for such drug eluting stent systems, and (C) Boston Scientific’s cost of manufacturing such drug eluting stent
systems, as reported by Boston Scientific to Abbott on a semiannual basis
(subject to audit by a third party reasonably acceptable to the parties). If
Boston Scientific wishes to substitute the delivery system of a DES Stent being
supplied by Abbott under the supply arrangements, then, at its option, Boston
Scientific may either (i) deliver the substitute component to Abbott for
inclusion in DES Stents to be supplied by Abbott to Boston Scientific, or (ii) manufacture
the DES Stents itself, in which case Boston Scientific shall, during the term
of the applicable supply arrangement, pay to Abbott an amount equal to 40% of
the result obtained by subtracting from the ASP (as defined below), the sum of (A) royalties
payable to third parties by Boston Scientific with respect to the DES Stents
sold by it, (B) 7% of the ASP, representing Boston Scientific’s variable
selling costs for DES Stents, and (C) Boston Scientific’s cost of
manufacturing DES Stents, as reported by Boston Scientific to Abbott on a
semiannual basis (subject to audit by a third party reasonably acceptable to
the parties). At the request of Boston Scientific, Abbott will supply to Boston
Scientific at cost any components used to make DES Stents. Boston Scientific
shall reimburse Abbott for any actual costs associated with changeovers from
Abbott to Boston Scientific components included in the DES Stents.

 

(c) Abbott’s
obligation to supply DES Stents to Boston Scientific in the United States,
Europe and Japan shall terminate on the later of (i) December 31, 2010, and (ii) the date that
is one year following the last date on which Boston Scientific has received all
requisite approvals from applicable Governmental Authorities to sell an
everolimus eluting stent on a Boston Scientific stent platform in the
applicable Territory; provided, however, that such obligation
will not terminate on a date that is later than June 30, 2012. Abbott’s
obligation to supply DES Stents to Boston Scientific in the Rest of World shall
terminate on December 31, 2010.

 

(d) If
there is a shortage of DES Stents or Abbott’s ability to supply DES Stents is
otherwise constrained, then an equal number of DES Stents by volume for each
product code will be allocated between Abbott and Boston Scientific.

 

(e) Each
DES Stent supplied to Boston Scientific will have a remaining shelf life at the
time of delivery at least equal to 50% of the approved shelf life of such DES
Stent.

 

(f) Abbott will use its reasonable best efforts
to develop, manufacture and obtain approvals for, and each of Abbott and Boston
Scientific will use its reasonable best efforts to market and sell, Existing
DES Stents during the term of the applicable supply arrangements in the
applicable Territory; provided, however, that Abbott will not be
required to continue to use such efforts to develop, manufacture and obtain
approvals for Existing DES Stents in any Territory if in Abbott’s reasonable
judgment the results of clinical trials with respect to an Existing DES Stent
in such Territory are such that such Existing DES Stent is unlikely to be
approved for marketing and sale by the applicable Governmental Authority or, if
approved, is

 

16

 

unlikely to be competitive
with other drug eluting stent systems then being sold. Nothing contained in
this Section 5.07(f) will require Abbott to continue to use such
efforts if Abbott reasonably determines that such action would result in a
product that infringes any Intellectual Property of any Person (other than
Intellectual Property included in the Assets).

 

(g) DES
Stents sold by Abbott and Boston Scientific will be separately branded, priced
and marketed.

 

(h) The
transfer price paid by Boston Scientific to Abbott for each DES Stent will be
equal to Abbott’s cost of manufacturing such DES Stent, as reported by Abbott
to Boston Scientific on a semiannual basis (subject to audit by a third party
reasonably acceptable to the parties), payable quarterly in arrears, plus a
manufacturing margin on DES Stents sold by Boston Scientific equal to 40% of
the result obtained by subtracting from the average selling price for DES
Stents sold by Boston Scientific (the “ASP”), the sum
of (A) royalties payable to third parties by Boston Scientific with
respect to the DES Stents sold by it, (B) 7% of the ASP,
representing Boston Scientific’s variable selling costs for DES Stents, and (C) Abbott’s
cost of manufacturing DES Stents, as reported by Abbott to Boston Scientific on
a semiannual basis (subject to audit by a third party reasonably acceptable to
the parties); provided, however, that if, during any semiannual
period during the term of the supply arrangement, the ASP of the DES Stent in
any Territory is less than $400, then the transfer price for such DES Stent in
such Territory during such period shall instead be equal to Abbott’s cost of
manufacturing such DES Stent, as reported by Abbott to Boston Scientific on a
semiannual basis (subject to audit by a third party reasonably acceptable to
the parties), payable quarterly in arrears, plus a manufacturing margin on DES
Stents sold by Boston Scientific equal to 25% of such cost of manufacturing.

 

(i) Boston
Scientific will be required to pay any royalty payments to third parties
required pursuant to any license agreements or arrangements in respect of any
sales by Boston Scientific or its Affiliates of DES Stents. Boston Scientific
will also be required to reimburse Abbott for 50% of all outstanding
developmental milestones payable under Section 7.1 of the Novartis
Agreement. The minimum payments pursuant to Sections 8.4 and 9.4 of the
Novartis Agreement shall be paid by each party in proportion to the net sales
of DES Stents sold by such party during the applicable period.

 

(j)
The ASP in a particular
Territory will be based on data available from an independent market research
firm acceptable to Abbott and Boston Scientific. If such independent data is
unavailable, then the ASP will be established at the beginning of each calendar
year based on the ASP of DES Stents sold by Boston Scientific in such Territory
during the first six months of the immediately preceding calendar year (subject
to audit by Abbott), with an adjustment at the end of each six-month period to
reflect the actual selling price of DES Stents during the penultimate six-month
period.

 

SECTION 5.08.
License and Technology Transfer Agreement. (a) Upon the Closing,
Abbott shall grant to Boston Scientific and its Affiliates, to the fullest
extent permitted by Law and the agreements included in the Assets, a perpetual,
exclusive (except for Abbott and its Affiliates), royalty-free license (with no
right to sublicense other than “have made” rights solely on behalf of Boston
Scientific) to use the DES Intellectual Property (except for trademarks

 

17

 

and related rights, other
than as set forth in Section 5.07 or in the Supply Agreements or as
otherwise agreed by the parties). In connection with the foregoing obligation,
on or prior to the Closing Abbott and Boston Scientific will enter into a
License and Technology Transfer Agreement (the “License and Technology
Transfer Agreement”). The license granted pursuant to this Section 5.08(a) is
not assignable by Boston Scientific except in connection with a merger, change
of control, or sale of all or substantially all of Boston Scientific’s and its
Affiliates’ vascular intervention business. Boston Scientific shall be
responsible for all royalties payable by it and its Affiliates with respect to
products sold by Boston Scientific and its Affiliates using the DES
Intellectual Property licensed to Boston Scientific and its Affiliates pursuant
to this Section 5.08. The parties hereby acknowledge that the spirit of
this Section 5.08 and of the License and Technology Transfer Agreement is
that Boston Scientific and its Affiliates will have access to the DES
Intellectual Property as if they were co-owners thereof, including with respect
to Boston Scientific’s ability to supplement Abbott’s PMA for DES Stents.

 

(b) Within
90 days after the Closing, each of Boston Scientific and Abbott shall conduct
an initial inventory of DES Intellectual Property for purposes of facilitating
the license and technology transfers contemplated by this Section 5.08. In
connection with the foregoing, Abbott shall give Boston Scientific sufficient
access to the Assets and Transferred Employees to enable it to conduct such an
inventory. The parties will cooperate to minimize any disruption to the
Transferred Employees or the Business during such period.

 

(c) From
and after the Closing, Abbott will provide Boston Scientific with (i) copies
of, and reasonable access to, all studies, analyses and other materials
relating to pre-clinical work and clinical trial data or information relating
to Existing DES Stents or any other drug eluting stent program in development
by Guidant or its Affiliates at the time of Closing; (ii) copies of Abbott’s
submissions to all Governmental Authorities in connection with obtaining the
requisite approvals to sell Existing DES Stents, (iii) reasonable access
to the appropriate personnel of Abbott for purposes of understanding, and
authorization to use in Boston Scientific’s regulatory filings, Abbott’s
regulatory submissions, data and positions in connection with obtaining
approvals to sell Existing DES Stents, (iv) information, including
studies, analyses and other materials, relating to product performance of
Existing DES Stents, (v) such technology and assistance included in the
Assets as is necessary to enable Boston Scientific to have, within 12 months of
the Closing, a validated manufacturing system sufficient to obtain FDA approval
that will allow Boston Scientific to manufacture Existing DES Stents with
yields and volumes comparable to those being manufactured by Abbott, (vi) the
information and access described in clauses (i), (ii), (iii) and (iv) of
this Section 5.08(c), to the extent related to any improvements or
iterations to Existing DES Stents made prior to receipt of approval to sell
such stents in Japan, and (vii) such assistance and access as is
reasonably necessary for Boston Scientific to benefit fully from the DES
Intellectual Property licensed hereunder or under the License and Technology
Transfer Agreement. Notwithstanding the foregoing, neither Abbott nor its
Affiliates will be required to provide Boston Scientific access to information
that does not relate to DES Intellectual Property, nor shall the provision of
information pursuant to this Section 5.08(c) materially interfere
with Abbott’s ability to conduct its business in the ordinary course. The
parties will cooperate to effect the technology transfers contemplated by this Section 5.08
within 24 months following the Closing. The information and access described in
clauses (i), (ii), (iii), (iv), (v) and (vii) will terminate on the
second anniversary of the Closing, after which (and during the term of the
applicable supply arrangement) Boston Scientific shall

 

18

 

receive from Abbott such
access and information with respect to any improvements or iterations to DES
Stents as are reasonably necessary to allow Boston Scientific to use the DES
Intellectual Property as contemplated by this Section 5.08.

 

(d) From
and after the Closing, Boston Scientific and Abbott will vigorously defend against
any Action by any third party alleging that Existing DES Stents or DES Stents
infringe any Intellectual Property of such third party. From and after the
Closing, the parties will consult with each other with respect to a strategy
for asserting DES Intellectual Property against third parties.

 

(e) From
and after the Closing, Boston Scientific will not, on behalf of itself or its
Affiliates, file, initiate, join, maintain or prosecute any Action against
Abbott or any of its Affiliates based on or related to an allegation that (i) (A) any
product that is approved for sale in the US, Europe or Japan, manufactured by
Guidant or any of its Affiliates or for Guidant or any of its Affiliates by any
Person other than a Restricted Person, and sold by Guidant or any of its
Affiliates in commercial quantities as of the Closing, or (B) any products
in human clinical trials as of the Closing manufactured by Guidant or any of
its Affiliates or for Guidant or any of its Affiliates by any Person other than
a Restricted Person, or (ii) any improvement or iteration of any product
described in the preceding clause (i) infringes, misappropriates or
otherwise violates any Intellectual Property owned, controlled or otherwise
held by any of Boston Scientific or any of its Affiliates; provided, however,
that nothing contained in this Section 5.08(e) shall prevent Boston
Scientific or any of its Affiliates from filing, initiating, joining,
maintaining or prosecuting any Action against Abbott or any of its Affiliates
based upon an allegation that any change, including any change in the method of
manufacture, to any of the products described in clause (i) of this Section 5.08(e) infringes,
misappropriates or otherwise violates any Intellectual Property owned,
controlled or otherwise held by any of Boston Scientific or any of its
Affiliates; and provided, further, that with respect to drug
eluting stent systems, such improvement or iteration shall incorporate
everolimus as the sole therapeutic agent as well as the same polymers as are
used in the drug eluting stent system in development by Guidant or its
Affiliates as of the Closing. The covenant not to sue contained in this Section 5.08(e) shall
extend only to suppliers, licensees, distributors and customers of Abbott and
its Affiliates that are not Restricted Persons.

 

(f) From and after the Closing, to the extent Law or any agreement included
in the Assets prevents Abbott from licensing any DES Intellectual Property to
Boston Scientific pursuant to this Section 5.08, Abbott will not, on
behalf of itself or its Affiliates, file, initiate, join, maintain or prosecute
any Action against Boston Scientific or any of its Affiliates based upon an
allegation that any product of Boston Scientific or any of its Affiliates
infringes, misappropriates or otherwise violates any such DES Intellectual
Property.

 

(g) Not
later than the Closing, Boston Scientific will, on behalf of itself and its
Affiliates, release, acquit and forever discharge Abbott and its Affiliates of
and from any and all pending and potential claims (including all existing
Actions by Boston Scientific and any of its Affiliates) against Guidant or any
of its Affiliates and all demands, actions, suits, debts, liabilities, losses,
attorneys’ fees, expenses, judgments, settlements and other damages, expenses
or costs of whatever nature, whether known or unknown, pending or future,
certain or contingent arising out of, derived from, predicated upon or relating
to any product manufactured by Guidant or any of its Affiliates or for Guidant
or any of its Affiliates by any Person other than a

 

19

 

Restricted Person, approved
for sale in the US, Europe or Japan and sold by Guidant or any of its
Affiliates in commercial quantities as of the Closing.

 

(h) The
parties recognize the benefit of maintaining their own product identity in
connection with drug-eluting stent products. To this end, the license granted
pursuant to this Agreement shall not extend to or cover “knock-off” products. A
“knock-off” product is one that is developed or acquired after public release
of an earlier product of another party or any of its Affiliates or after
knowledge of an earlier product of another party or any of its Affiliates is
otherwise acquired and is substantially identical to and is intended to imitate
the earlier product. Notwithstanding the foregoing, if Abbott cannot supply
Boston Scientific with DES Stents during the term of the supply arrangements,
then Boston Scientific may, during the period that Abbott is not supplying
Boston Scientific with DES Stents and for 90 days thereafter, make and sell DES
Stents itself, with no obligation to make the payments contemplated by Section 5.07(b).

 

(i) Boston
Scientific, on behalf of itself and its Affiliates, shall grant to Abbott and
its Affiliates, as of the Closing, a non-exclusive, royalty-free, worldwide
license under all Intellectual Property owned or, to the extent permitted by
the applicable agreement, licensed to (with the right to sublicense) or
otherwise controlled by, Guidant or any of its Affiliates immediately prior to
the consummation of the Merger that is used in the Business but is not included
in the Assets. The license granted pursuant to this Section 5.08(i) is
not assignable by Abbott except in connection with a merger, change of control,
or sale of all or substantially all of Abbott’s vascular intervention business.
The license will be sublicensable by Abbott to all suppliers, licensees,
distributors and customers of Abbott and its Affiliates that are not Restricted
Persons.

 

(j) None
of the entry into this Agreement, any agreement contemplated hereby or any
provision hereof or thereof, shall be deemed as an admission by either party of
any wrongdoing, or of the validity or invalidity of any position taken or
proposed to be taken by or against the other party in past, present or future
litigation.

 

(k)
In addition to the covenants contained in Section 5.08(e), for a period of five years following the date of the Closing, (i) Boston
Scientific will not, on behalf of itself or its Affiliates, file, initiate,
join, maintain or prosecute any Action against Abbott or any of its Affiliates
based on or related to an allegation that any vascular interventional or
endovascular products manufactured by Abbott or any of its Affiliates or for
Abbott or any of its Affiliates by any Person other than a Restricted Person
(provided that the arrangement described in Schedule 5.08(k) attached hereto shall not
deprive Abbott of the benefit of this covenant with respect to the product
involved in such arrangement) infringe, misappropriate or otherwise violate any
Intellectual Property owned, controlled or otherwise held by Boston Scientific
or any of its Affiliates; provided that Boston Scientific’s covenant not to sue
contained in this Section 5.08(k) shall extend only to suppliers,
licensees, distributors and customers of Abbott and its Affiliates that are not
Restricted Persons; and (ii) Abbott will not, on behalf of itself or its
Affiliates, file, initiate, join, maintain or prosecute any Action against
Boston Scientific or any of its Affiliates based on or related to an allegation
that any vascular interventional or endovascular products manufactured by
Boston Scientific or any of its Affiliates or for Boston Scientific or any of
its Affiliates by any Person other than a Restricted Person infringe,
misappropriate or otherwise violate any Intellectual Property owned, controlled
or otherwise held by Abbott or any of its

 

20

 

Affiliates; provided that
Abbott’s covenant not to sue contained in this Section 5.08(k) shall
extend only to suppliers, licensees, distributors and customers of Boston
Scientific and its Affiliates that are not Restricted Persons. The parties
hereby acknowledge that no implicit or explicit license is granted under this Section 5.08(k)
and that neither of them is receiving, pursuant to this Agreement, any rights
to the Intellectual Property of the other party other than as expressly set
forth herein.

 

(l) Abbott
hereby acknowledges that it has elected not to make available to Boston
Scientific its patents under the Settlement Agreement dated February 20, 2004
by and among Guidant, Boston Scientific and certain of their Affiliate parties
thereto (the “Settlement Agreement”). Accordingly, Abbott hereby
acknowledges that the Guidant Companies (as defined in the Settlement
Agreement) will forego the benefits of the licenses and covenants not to sue
granted under the Settlement Agreement by the Boston Scientific Companies (as
defined in the Settlement Agreement), and that the Boston Scientific Companies
will continue to have the benefits of the licenses and covenants not to sue
granted to them by the Guidant Companies in accordance with the terms and
conditions of the Settlement Agreement.

 

(m)
Abbott and Boston Scientific agree that if, between the date of the Closing and
the date on which the Guidant drug eluting stent system that is the subject of
human clinical trials as of the Closing Date is first approved for sale in
Europe or the United States (the “First DES Stent”), Abbott reasonably determines that it is
required to make any changes (including any change in the method of
manufacturing) to the First DES Stent in response to requests, and in
connection with receiving approvals, from the applicable Governmental
Authority, then Abbott will, subject to Section 5.07(f), use its
reasonable best efforts to make such changes if such changes would not result
in a product that infringes the Intellectual Property of any Person other than
Boston Scientific or any of its Affiliates or Abbott or any of its Affiliates.
If, having made such changes, the First DES Stent would infringe the
Intellectual Property of Boston Scientific or any of its Affiliates, Boston
Scientific agrees that it will not, on behalf of itself or its Affiliates,
file, initiate, join, maintain or prosecute any Action against Abbott or any of
its Affiliates based on or related to an allegation that the First DES Stent
infringes, misappropriates or otherwise violates any Intellectual Property
owned, controlled or otherwise held by any of Boston Scientific or any of its
Affiliates; provided, however, that any subsequent changes to the
First DES Stent will be subject to Section 5.08(e). If, having made such changes,
the First DES Stent would infringe the Intellectual Property of Abbott or any
of its Affiliates, Abbott agrees that it will not, on behalf of itself or its
Affiliates, file, initiate, join, maintain or prosecute any Action against
Boston Scientific or any of its Affiliates based on or related to an allegation
that the First DES Stent infringes, misappropriates or otherwise violates any
Intellectual Property owned, controlled or otherwise held by Abbott or any of
its Affiliates; provided, however, that Abbott’s covenant not to
sue contained in this Section 5.08(m) shall not extend to or cover any
subsequent changes made by Boston Scientific or any of its Affiliates to the
First DES Stent.

 

(n)
Other than with respect to everolimus, nothing in this Agreement will extend to
or cover the use by any Person: (i) other than Boston Scientific or any of
its Affiliates, of paclitaxel or any other pharmaceutical owned by Boston
Scientific or any of its Affiliates, and (ii) other than Abbott or any of
its Affiliates, of zotarolimus (ABT-578) or any other pharmaceutical owned by
Abbott or any of its Affiliates.

 

21

 

SECTION 5.09.
Transition Services. (a) Following the Closing (i) Boston
Scientific or one or more of its Affiliates will provide or make available to
the Business those services, rights, properties and assets of Guidant and its
Affiliates that are not included in the Assets reasonably required by Purchaser
and such Affiliates to enable them to conduct the Business substantially as
conducted as of the Closing, and (ii) Purchaser and its Affiliates will
provide or make available to Boston Scientific and its Affiliates those
services, rights, properties and assets reasonably required by Boston
Scientific and its Affiliates to enable them to conduct the business conducted
by Guidant and its Affiliates, other than the Business, in substantially the
same manner as conducted as of the Closing, to the extent those services,
rights, properties and assets are included in the Assets. In connection with
the foregoing obligations, on or prior to the Closing, Boston Scientific and,
to the extent applicable, its Affiliates shall enter into a transition services
agreement with Purchaser and, to the extent applicable, its Affiliates (the “Transition
Services Agreement”). The services, rights, properties and assets provided
or made available hereunder will, in each case, be provided or made available
at prices or rates determined on the basis of actual cost incurred by the applicable
provider in performing the applicable service or making available the
applicable rights, properties or assets for the recipient, including a
reasonable allocation for overhead expenses attributable thereto, calculated in
a manner consistent with past custom and practice, without markup for profit.
Without limiting the generality of the foregoing, Purchaser and its Affiliates
will have the right to use or obtain copies of the information technology
systems of Guidant necessary to operate the Business for such period of time as
Purchaser and its Affiliates reasonably deem necessary in order to allow them
to transition to alternative systems if necessary.

 

(b) Shared
Assets shall constitute Assets if such Shared Assets are used primarily in, or
related primarily to, the Business. Otherwise, Shared Assets shall be retained
by Boston Scientific. It is hereby understood and agreed that the party that
does not receive Shared Assets shall receive the benefit and use of any such
Shared Assets pursuant to this Agreement, the Transition Services Agreement or
a lease or similar agreement.

 

(c) Unless
the parties agree otherwise, any agreement to which Guidant or any of its
subsidiaries is a party prior to the Closing that inures to the benefit or
burden of each of the Business and the Excluded Assets (“Mixed Contract”)
shall be separated on or after the Closing, so that each of Purchaser and
Boston Scientific shall be entitled to the rights and benefits and shall assume
the related portion of any Liabilities (other than in the case of Purchaser,
Excluded Liabilities) inuring to their respective businesses. If any Mixed
Contract cannot be so separated, Abbott and Boston Scientific 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 Purchaser;
(ii) the Liabilities (other than in the case of Purchaser, Excluded
Liabilities) related with that portion of each Mixed Contract that relates to
the Business to be borne by Purchaser; (iii) the assets associated with
the portion of each Mixed Contract that relates to the Excluded Assets to be
enjoyed by Boston Scientific; and (iv) the Liabilities (other than in the
case of Purchaser, Excluded Liabilities) related with that portion of each
Mixed Contract that relates to the Excluded Assets to be borne by Boston
Scientific. The parties will cooperate with each other to effect such
separation.

 

(d) 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

 

22

 

Assets (“Mixed Account”).
Abbott and Boston Scientific 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 Purchaser; (ii) the Liabilities (other than in
the case of Purchaser, Excluded Liabilities) related with that portion of each
Mixed Account that relates to the Business to be borne by Purchaser; (iii) the
assets associated with that portion of each Mixed Account that relates to the
Excluded Assets to be enjoyed by Boston Scientific; and (iv) the
Liabilities (other than in the case of Purchaser, Excluded Liabilities) related
with that portion of each Mixed Account that relates to the Excluded Assets to
be borne by Boston Scientific.

 

(e) At
and immediately after the Closing, but in no event no later than 365 days after
the Closing, Purchaser shall cease to use and remove or cover the name “Guidant”
from all signs, billboards, advertising materials (other than promotional
inserts), telephone listings, stationary, office forms or other similar
materials of the Business, unless such use is required by a Governmental
Authority. Boston Scientific hereby grants to Abbott and its Affiliates, for a
period of 5 years after the Closing, a non-exclusive and royalty free license
to use all trademarks and trade names that include the name “Guidant” used in
the Business as of the Closing. Thereafter, Abbott and its Affiliates shall not
use such trademarks and trade names in connection with the Business or
otherwise; provided, however, that nothing in this Section 5.09(e) 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 trademarks and trade names used in the Business. The parties will discuss
in good faith whether Abbott may, at its request, continue to use such
trademarks and trade names after the fifth anniversary of the Closing. Boston
Scientific hereby covenants that, for a period of 5 years after the Closing, Boston Scientific,
Guidant and any of its or their Affiliates shall not use any of the Guidant
trademarks and trade names in connection with products included in the vascular
intervention field, including DES Stents. The parties will cooperate with each
other to avoid any confusion in the marketplace during the period when both
parties are using the Guidant name. If Boston Scientific or Abbott divests the
Carotid Stent Assets in accordance with Section 5.04(b), then Boston
Scientific 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 5.09(e) for a reasonable transition period.

 

SECTION 5.10.
Abbott Loan. (a) At the Closing, Abbott will lend Boston Scientific
$700,000,000 on a subordinated basis (relative to any senior indebtedness of
Boston Scientific during the term of the loan) by wire transfer of immediately
available funds to a bank account designated in writing by Boston Scientific to
Purchaser not fewer than three Business Days prior to the date of the Closing.
In connection with the foregoing obligation, Abbott and Boston Scientific shall
enter into a subordinated promissory note (the “Note”). The full
principal amount of the loan shall be payable on the fifth anniversary of the
Closing. Interest shall accrue on the outstanding principal amount of the loan
at a rate of 5.25% per annum. Interest shall be payable in arrears
semiannually, and on the date on which the principal amount of the loan is paid
in full. If Boston Scientific defaults in the payment of the outstanding
principal amount of the loan on the fifth anniversary of the Closing, and if
such default continues for a period of 15 days, the license granted pursuant to
Section 5.08(a) will terminate upon written notice by Abbott upon the
expiration of such 15-day period.

 

23

 

(b) In the event of a failure by Boston
Scientific to pay any principal or interest when due (by operation of Law or
otherwise) on the loan or on Boston Scientific’s principal credit agreement or
then outstanding public indebtedness, any proceeds Boston Scientific receives
or is entitled to receive with respect to Milestone Payments pursuant to Section 2.04
will be applied, by set-off or recoupment, to prepay any amounts then
outstanding under the loan. The loan will be prepayable at any time, in whole
or in part, without penalty, at the option of Boston Scientific. Each such prepayment
of the loan shall be accompanied by accrued interest to the date of such
prepayment on the amount prepaid.

 

SECTION 5.11.
Tax Election. Abbott, in its sole discretion, may require
Boston Scientific and/or its Affiliates, or Guidant and/or its Affiliates, as
the case may be, 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. Boston Scientific and
Guidant shall cooperate with Abbott in effecting each such election, including
its timely filing. In connection with each such election, Abbott shall
reasonably determine the fair market values of the assets of such entity, which
shall in no event exceed the purchase price allocation to such entity under Section 2.03(b),
and such valuations shall be binding on Boston Scientific and/or its
Affiliates, or Guidant and/or its Affiliates, in completing any income tax
returns reflecting gain or loss from the election. Abbott shall reimburse
Boston Scientific 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.

 

SECTION 5.12.
Insurance. 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.

 

SECTION 5.13.
Further Action. (a) Each of Boston Scientific 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. Without
limiting the generality of the foregoing, Boston Scientific and Abbott shall
work diligently and in good faith toward the execution of, and shall, on or
prior to the Closing, execute the Purchase Agreement and the other Definitive
Agreements with such terms and conditions required pursuant hereto and such
other terms and conditions as are mutually agreeable to the parties.

 

(b) Boston Scientific 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 Purchaser prior to the
termination of this Agreement.

 

24

 

(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 Purchaser or
confirm Purchaser’s right, title to or interest in, all of the Assets, to put
Purchaser in actual possession and operating control thereof and to permit
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 Boston Scientific or Abbott is unable to obtain any required
consents, Boston Scientific or Guidant shall (i) continue to be bound
thereby pending assignment to Purchaser, (ii) at the direction and expense
of Purchaser, pay, perform and discharge fully all of its obligations
thereunder from and after the closing and prior to assignment to Purchaser and (iii) without
further consideration therefor, pay, assign and remit to Purchaser promptly all
monies, rights and other consideration received in respect of such agreements.
Boston Scientific or Guidant shall 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 Purchaser. If and when any such consent
shall be obtained or such agreement, lease, license or other right shall
otherwise become assignable, Boston Scientific shall, or shall cause Guidant
to, promptly assign all its rights and obligations thereunder to Purchaser
without payment of further consideration and Purchaser shall, without the
payment of any further consideration therefor, assume such rights and
obligations.

 

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

 

SECTION 5.14. Timing of Transactions.
Boston Scientific may, and will if requested by Abbott, cause Guidant to (a) assume
obligations of Boston Scientific under this Agreement and/or the Definitive
Agreements (provided, that no such assumption shall (unless Abbott
expressly agrees to the contrary) relieve Boston Scientific of such
obligations) and (b) effect
the Closing contemplated by this Agreement prior to the closing of the Merger,
in either case if 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 that it is ready, willing and able to consummate
the Merger as set forth in the Merger Agreement and will consummate such Merger
immediately following the action set forth in subclauses (a) and (b).

 

SECTION 5.15. Other Agreements.
Nothing in this Agreement or the Definitive Agreements shall prohibit Abbott
from pursuing arrangements or agreements with Johnson &

 

25

 

Johnson or any other 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). This Agreement
and any Definitive Agreements entered into by the parties shall automatically
terminate immediately prior to the closing of the acquisition of Guidant by
Johnson & Johnson if such a closing occurs.

 

ARTICLE VI

 

EMPLOYEE MATTERS

 

SECTION 6.01.
Transferred Employees. (a) As of the Closing, 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,
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 in the United States,
in each case who 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 Purchaser or its Affiliate.

 

(b) 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 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 as of the Closing who 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, whose employment transfers to Purchaser or one of its
Affiliates by operation of Law, or who accepts the offer of employment by
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”.

 

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

 

26

 

employment of Purchaser and 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 Purchaser or any of its Affiliates. For a period of not
less than eighteen months following the Closing, the Transferred Employees who
remain in the employment of 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 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(b), nothing contained in this Agreement
shall be construed as requiring 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, 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 Boston Scientific 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 for this purpose, Boston Scientific shall cause
to be transferred to Purchaser or to the appropriate benefit or compensation
plan or arrangement of Purchaser or its Affiliate, such cash, insurance
contracts or other assets as of the Closing.

 

(b) Purchaser shall
recognize the prior service of each Transferred Employee as if such service had
been performed with Purchaser (i) for purposes of vesting (but not benefit
accrual) under Purchaser’s defined benefit pension plan, (ii) for purposes of
eligibility for vacation under Purchaser’s vacation program, (iii) for purposes
of eligibility and participation under any health or welfare plan maintained by
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 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 Purchaser or its Affiliates shall be immediately eligible for
the company matching contribution under that 401(k) savings plan maintained by
Purchaser or one of its Affiliates), and (v) unless covered under another
arrangement with or of Guidant, for benefit accrual purposes under 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 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 Purchaser or any of its
Affiliates or any other purpose not expressly described in this Section
6.02(b), except as required by Law).

 

27

 

(c) With respect to any
welfare plan maintained by Purchaser in which Transferred Employees are
eligible to participate after the Closing, 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 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, 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. 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 Boston Scientific from any and all liabilities for such
payments; provided, however, that to the extent that, after the Closing,
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 Purchaser for just cause within
12 months of the Closing, Boston Scientific shall indemnify Purchaser 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 for this
purpose, Boston Scientific shall cause to be transferred to Purchaser or to the
appropriate benefit or compensation plan or arrangement of Purchaser or its
Affiliate, such cash, insurance contracts, or other assets as of the Closing.

 

(e) Purchaser 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, without
limitation, any liabilities under any employee benefit plan of Guidant
regardless of whether such employee benefit plan transfers automatically to
Purchaser 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 Purchaser or its Affiliates or to the Non-U.S. Transferred
Employees as a result of the transactions contemplated by this Agreement,
Boston Scientific shall cause to be transferred to Purchaser or its Affiliates,
or the appropriate compensation or benefit plan of 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,
assets of any applicable compensation or benefit plan of Guidant, to the extent
such assets do not transfer automatically to 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 Boston Scientific 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 in respect of those
types of liabilities, in each

 

28

 

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, Boston Scientific 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, Boston Scientific 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 Boston Scientific or 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, Boston
Scientific shall provide 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 5.04(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) After the Closing,
Purchaser 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 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.

 

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

 

SECTION 6.04. Mutual
Non-Solicitation. Without the prior written consent of Abbott, Boston
Scientific shall not, 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

 

29

 

accept employment with Boston Scientific or any of its Affiliates.
Without the prior written consent of Boston Scientific, Abbott shall not, and
shall cause the Purchaser 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. 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.
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 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 Period based on a closing of the books; provided, however,
that (a) 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, (b) 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 (c) real and personal
property Taxes shall be allocated on a per diem basis.

 

SECTION 7.02. Tax Return
Filing and Amendment. Boston Scientific 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 Boston Scientific will pay, or cause to be
paid, all Taxes shown as due thereon. 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). A copy of the
relevant portions of any such Straddle Period Tax Return filed shall be
provided to Boston Scientific no later than five days after such Tax Return was
filed.

 

SECTION 7.03. Resolution
of Tax Controversies. In the event that a Governmental Authority determines
a deficiency in any Tax, the party ultimately responsible for

 

30

 

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.

 

ARTICLE VIII

 

CONDITIONS TO CLOSING

 

SECTION 8.01. Conditions
to Obligation of Boston Scientific. The obligation of Boston Scientific 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, 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 Boston Scientific 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 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 Definitive
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)           Merger Consummated; Closing
Conditions Satisfied. Either (i) the closing of the Merger shall have
occurred, or (ii) to the extent Boston Scientific or Abbott has elected to
consummate the transactions contemplated by this Agreement or the Purchase
Agreement prior to the consummation of the Merger as contemplated by Section
5.14, 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

 

31

 

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 will consummate the Merger immediately following the
consummation of the transactions contemplated by this Agreement or the Purchase
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 Boston Scientific
contained in this Agreement shall be true and correct 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 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, and the covenants and agreements contained in this Agreement to be
complied with by Boston Scientific 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 Boston Scientific by an officer of Boston
Scientific 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 or Purchaser, 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)           Merger Consummated; Closing
Conditions Satisfied. Either (i) the closing of the Merger shall have
occurred, or (ii) to the extent Boston Scientific or Abbott has elected to
consummate the transactions contemplated by this Agreement or the Purchase
Agreement prior to the consummation of the Merger as contemplated by Section
5.14, 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

 

32

 

the Merger (and will
consummate the Merger immediately following the consummation of the
transactions contemplated by this Agreement or the Purchase Agreement).

 

ARTICLE IX

 

TERMINATION

 

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

 

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

 

(b)           by either Boston Scientific 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 Boston Scientific 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;

 

(d)           by Abbott if Boston Scientific has
failed to submit to Guidant a publicly- announced firm offer regarding a proposed
acquisition of Guidant by Boston Scientific prior to the close of business on
the fourth Business Day following execution of this Agreement; or

 

(e)           immediately, without any action by
either Boston Scientific or Abbott, (i) upon the approval of the J&J Merger Agreement by the
shareholders of Guidant, (ii) in accordance with Section 5.15 hereof, (iii) if
the Merger Agreement is not entered into by February 7, 2006, or (iv) 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
5.03 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 Purchase Agreement shall
terminate at the Closing.

 

33

 

SECTION
10.02. Indemnification by Boston Scientific. (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 Boston Scientific 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;

 

(iii)          Taxes of Boston Scientific, Guidant or any of their
Affiliates (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 last sentence of
Section 5.11); 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 Boston Scientific
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 Boston Scientific 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 Boston Scientific 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. Boston
Scientific 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
Boston Scientific 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 Boston Scientific and Abbott using customary valuation
methodologies. The determination of such independent investment banking firm
shall be final and binding on Boston Scientific and Abbott. The fees and
expenses of such independent investment banking firm shall be shared equally
between Boston Scientific and Abbott.

 

SECTION 10.03. Indemnification
by Abbott. From and after the Closing, Boston Scientific 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

 

34

 

out of or related to the Business (other than the Excluded Liabilities)
and the Assumed Liabilities.

 

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 any insurance or other recoveries actually paid to an indemnified party or
its Affiliates 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
indemnifylng 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.

 

35

 

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.

 

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
Definitive 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 Boston Scientific:

 

Boston Scientific
Corporation

One Boston Scientific Place

Natick, Massachusetts 01760

Fax: (508) 650-8960

Attention: General Counsel

 

with a copy to:

 

Shearman & Sterling LLP

599 Lexington Avenue

New York, NY 10022-6069

Fax: (212) 848-7179

Attention: Peter D. Lyons

Clare O’Brien

 

(b)           if to Abbott:

 

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

 

36

 

with a copy to:

 

Abbott Laboratories

Dept. 364, Bldg. AP6D

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.

 

37

 

SECTION 11.05. Entire
Agreement. This Agreement and the Confidentiality Agreement constitute the
entire agreement of the parties hereto with respect to the subject matter
hereof and thereof and supersede all prior agreements and undertakings, both
written and oral, between Boston Scientific 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
Boston Scientific and Abbott (which consent may be granted or withheld in the
sole discretion of Boston Scientific 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, (b) Boston Scientific may, without the consent of Abbott,
assign its rights and obligations, in whole or in part, under this Agreement to
Guidant so long as Boston Scientific remains liable for its obligations
hereunder, or to any acquiror of all or substantially all of Boston
Scientific’s vascular intervention business, and (c) Abbott may, without the
consent of Boston Scientific, 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. Any purported
assignment in contravention of this provision shall be null and void.

 

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, Boston Scientific 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

 

38

 

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.

 

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 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. 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 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 11.12 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 11.12 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 11.12.

 

SECTION 11.13. Waiver of
Jury Trial. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW

 

39

 

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
11.13.

 

SECTION 1 1.14. 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.

 

40

 

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

 

	
   

  	
  BOSTON SCIENTIFIC CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Lawrence C. Best

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Lawrence C. Best

  
	
   

  	
   

  	
  Title: 

  	
  Executive Vice President, Chief

  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ABBOTT LABORATORIES

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Richard A. Gonzalez

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Richard A. Gonzalez

  
	
   

  	
   

  	
  Title: 

  	
  President and Chief Operating

  Officer, Medical Products

  Group

  
					

 

 

SCHEDULE 1.0l

 

RESTRICTED PERSONS

 

•     Johnson
& Johnson

•     Medtronic,
Inc.

•     St. Jude
Medical, Inc.

•     Conor
Medsystems, Inc.

•     ev3 Inc.

•                  any other Person that has publicly announced
prior to Closing an intention to develop a drug eluting stent product (other
than any Person with which any of Abbott, Guidant or Boston Scientific, as the
context requires, has an agreement or purchasing arrangement as of the date
hereof)

 

 

SCHEDULE 3.05

 

KNOWLEDGE

 

•     Fredericus A. Colen

Executive
Vice President and Chief Technology Officer

 

•     Brian R. Burns

Senior Vice
President, Quality

 

•     Paul W. Sandman

Executive
Vice President and General Counsel

 

 

SCHEDULE 5.08(k)

 

OEM Agreement dated May 9, 2002 between Abbott
Vascular Devices Ireland Limited and Medtronic Vascular Galway Limited, as
amended.

 

 

SCHEDULE 6.02(f)

PAYMENT PRINCIPLES

 

1.               SERP / Pension – An amount equal to:

 

(i)                                     The actuarially determined accumulated
benefit obligations attributable to the U.S. Transferred Employees, compared to

 

(ii)                                  The assets, accruals and reserves
attributable to the U.S. Transferred Employees.

 

This actuarial determination
would be performed using the actuarial assumptions used by Guidant in preparing
its most recent 10-K; provided, however, the discount rate will be determined
as of the date of Closing in the same manner as the discount rate was
determined in Guidant’s most recent Form 10-K. Assets, accruals, and reserves
shall be allocated in proportion to the related liability.

 

2.                Active Healthcare – An amount equal to:

 

(i)                                     The reserve established by Guidant at Closing
for unreported medical claims (IBNR) attributable to the U.S. Transferred Employees, compared
to

 

(ii)                                  The actual medical claims made by such
employees with respect to those previously unreported medical claims plus the
recalculated IBNR for such claims determined at a date six months following
Closing.

 

In the event these amounts
cannot be so determined at a commercially reasonable cost, Abbott and Boston
will agree upon a fair and equitable method of making such determination.

 

3.               401(K) /ESOP –This plan is not taken into account for
purposes of this schedule.

 

4.              Retiree Healthcare Plan - This plan is not taken into account for
purposes of this schedule.

 

5.              Other Employee Plans – Where either (i) plan assets, accruals or
reserves or (ii) plan liabilities can be determined on an individual
employee-by-employee basis at a commercially reasonable cost, they shall be so
determined for purposes of making the calculations hereunder. Where they cannot
be so determined, Abbott and Boston will agree upon a fair and equitable method
of making such determination.

 

6.               Plan Administration Costs – Plan administration costs will be
disregarded, and will not be a factor, in the calculations under this schedule.

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