EXHIBIT 2.1
MASTER SEPARATION AND DISTRIBUTION AGREEMENT
BETWEEN
MILLIPORE CORPORATION
AND
MILLIPORE MICROELECTRONICS, INC.
EFFECTIVE AS OF March , 2001
TABLE OF CONTENTS Page
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ARTICLE I DEFINITIONS..................................................... 2
ARTICLE II SEPARATION..................................................... 5
Section 2.1. Separation Date.............................................. 5
Section 2.2. Closing of Transactions...................................... 5
Section 2.3. Obligations of Millipore at the Separation Closing........... 5
Section 2.4. Obligations of MMI at the Separation Closing................. 6
ARTICLE III THE IPO AND ACTIONS PENDING THE IPO........................... 7
Section 3.1. Transactions Prior to the IPO................................ 7
Section 3.2. Cooperation.................................................. 7
Section 3.3. Conditions Precedent to Consummation of the IPO.............. 8
Section 3.4. Proceeds from the IPO........................................ 8
ARTICLE IV THE DISTRIBUTION............................................... 9
Section 4.1. The Distribution............................................. 9
Section 4.2. Actions Prior to the Distribution............................ 9
Section 4.3. Sole Discretion of Millipore................................. 10
Section 4.4. Conditions Precedent to Distribution......................... 10
Section 4.5. Fractional Shares............................................ 11
ARTICLE V COVENANTS AND OTHER MATTERS..................................... 11
Section 5.1. Other Agreements............................................. 11
Section 5.2. Further Instruments.......................................... 11
Section 5.3. Additional Transitional Services Agreements.................. 12
Section 5.4. Agreement for Exchange of Information........................ 12
Section 5.5. Auditors and Audits; Annual and Quarterly
Statements and Accounting.................................... 14
Section 5.6. Consistency with Past Practices.............................. 16
Section 5.7. Payment of Expenses.......................................... 16
Section 5.8. Foreign Subsidiaries......................................... 16
Section 5.9. Governmental Approvals....................................... 16
Section 5.10. No Representation or Warranty............................... 17
Section 5.11. Non-Solicitation of Employees............................... 17
Section 5.12. Employee Agreements......................................... 17
Section 5.13. Cooperation in Obtaining New Agreements..................... 19
Section 5.14. Property Damage to MMI Assets Prior to the Separation Date.. 19
Section 5.15. Cash Management; Credit Facility............................ 20
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ARTICLE VI CONFIDENTIALITY............................................................ 20
Section 6.1. Confidential Information................................................. 20
Section 6.2. Confidentiality and Non-Use Obligations.................................. 21
Section 6.3. Disclosure to Sublicensees............................................... 21
Section 6.4. Contract Manufacturers................................................... 21
Section 6.5. Duration of Confidentiality Obligations.................................. 21
Section 6.6. Compelled Disclosure..................................................... 22
Section 6.7. No Restriction on Disclosing Party....................................... 22
Section 6.8. No Restriction on Reassignment........................................... 22
Section 6.9. Third Party Restrictions................................................. 22
Section 6.10. Disclaimer of Warranties as to Confidential Information................. 22
ARTICLE VII MUTUAL RELEASES; INDEMNIFICATION.......................................... 22
Section 7.1. Treatment, Release of Pre-Separation Claims.............................. 22
Section 7.2. Indemnification By MMI................................................... 24
Section 7.3. Indemnification By Millipore............................................. 24
Section 7.4. Reductions for Insurance Proceeds and Other Recoveries................... 24
Section 7.5. Procedures for Defense, Settlement and Indemnification of Third Parties.. 25
Section 7.6. Additional Matters....................................................... 26
Section 7.7. Survival of Indemnities.................................................. 27
Section 7.8. Not Applicable to Taxes.................................................. 27
ARTICLE VIII DEFINITION OF CORE BUSINESSES............................................ 27
Section 8.1. Purpose of Core Business Definitions.................................... 27
Section 8.2. Millipore Core Business................................................. 27
Section 8.2. MMI Core Business....................................................... 28
ARTICLE IX DISPUTE RESOLUTION......................................................... 28
Section 9.1. Use and Initiation of Procedure......................................... 28
Section 9.2. Unassisted Settlement................................................... 28
Section 9.3. Selection of Neutral.................................................... 29
Section 9.4. Time and Place of ADR................................................... 29
Section 9.5. Exchange of Information................................................. 29
Section 9.6. Summary of Views........................................................ 29
Section 9.7. Staffing the ADR........................................................ 29
Section 9.8. Conduct of ADR.......................................................... 29
Section 9.9. The Neutral's Views..................................................... 29
Section 9.10. Termination of Procedure............................................... 30
Section 9.11. Fees of Neutral; Disqualification...................................... 30
Section 9.12. Confidentiality of Procedure........................................... 30
Section 9.13. Arbitration............................................................ 30
Section 9.14. Continuity of Service and Performance.................................. 31
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ARTICLE X MISCELLANEOUS......................................................... 31
Section 10.1. Limitation of Liability .......................................... 31
Section 10.2. Entire Agreement.................................................. 31
Section 10.3. Governing Law..................................................... 31
Section 10.4. Termination....................................................... 31
Section 10.5. Notices........................................................... 32
Section 10.6. Counterparts...................................................... 32
Section 10.7. Binding Effect; Assignment........................................ 32
Section 10.8. Severability...................................................... 32
Section 10.9. Failure or Indulgence Not Waiver; Remedies Cumulative............. 33
Section 10.10. Amendment........................................................ 33
Section 10.11. Authority........................................................ 33
Section 10.12. Interpretation................................................... 33
Section 10.13. Conflicting Agreements........................................... 33
SCHEDULES
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Schedule 2.3.2........... Millipore Subsidiaries to be Transferred to MMI....... 34
Schedule 7.1............. Exclusions from Releases of Pre-Separation Claims..... 34
EXHIBITS
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Exhibit A............... Certificate of Clerk of Millipore
Exhibit B............... Certificate of Secretary of MMI
Exhibit C............... General Assignment and Assumption Agreement
Exhibit D-1............. Master Patent Assignment
Exhibit D-2............. Master Trademark Assignment
Exhibit D-3............. Master Patent License Agreement
Exhibit D-4............. Master Patent Grantback License Agreement
Exhibit D-5............. Master Trade Secret and Know-How Agreement
Exhibit D-6............. Master Invention Disclosure Agreement
Exhibit D-7............. Master Trademark License Agreement
Exhibit E............... Employee Matters Agreement
Exhibit F............... Tax Sharing Agreement
Exhibit G............... Master Transitional Services Agreement
Exhibit H............... Reorganization of Operations Outside the U.S. (the Non-US Plan)
Exhibit I............... Membrane Manufacture and Supply Agreement
Exhibit J............... Research Agreement
Exhibit K............... Product Distribution Agreement (MMI as Distributor)
Exhibit L............... Contract Manufacturing Agreement
Exhibit M............... Separation Note
Exhibit N............... Separation Revolving Credit Agreement
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MASTER SEPARATION AND DISTRIBUTION AGREEMENT
This Master Separation and Distribution Agreement (this "Separation
Agreement") is entered into as of March , 2001, between Millipore Corporation
("Millipore"), a Massachusetts corporation, with its principal place of business
at 80 Ashby Road, Bedford, MA 01730 and Millipore MicroElectronics, Inc.
("MMI"), a Delaware corporation with its principal place of business at
Patriot's Park, Bedford, MA 01730.
RECITALS
1. Millipore currently owns all of the issued and outstanding common stock of
MMI.
2. MMI has been formed by Millipore to take over the business of Millipore's
Microelectronics Division which is engaged in the development, manufacture and
sale of products for the purification of liquids and gases by semiconductor
fabrication companies and OEM and material suppliers to those companies and of
products for the monitoring and control of critical aspects of the manufacturing
process for integrated circuits, as described in the IPO Registration Statement
(the "MMI Business").
3. The Boards of Directors of Millipore and MMI have each determined that it
would be appropriate and desirable for Millipore to contribute and transfer to
MMI, and for MMI to receive and assume, directly or indirectly, assets and
liabilities currently held by Millipore and used to conduct the MMI Business and
otherwise associated with the MMI Business (the "Separation").
4. Millipore and MMI currently contemplate that, following the contribution
and assumption of assets and liabilities herein provided for, MMI will make an
initial public offering ("IPO") of an amount of its common stock pursuant to a
registration statement on Form S-1 under the Securities Act of 1933, as amended
(the "IPO Registration Statement"), that will reduce Millipore's ownership of
MMI after the IPO and any private placements of securities of MMI concluded
prior to or concurrent with the IPO to not less than 80.1%.
5. Millipore currently contemplates that, after an interval of time following
such IPO, Millipore will distribute, pro rata, to the holders of its common
stock,$1.00 par value, all of the shares of MMI common stock owned by Millipore
(the "Distribution").
6. Millipore and MMI intend that the Separation and the Distribution will
qualify as a tax-free reorganization under Sections 368(a)(1)(D) and 355 of the
Internal Revenue Code of 1986, as amended, and that this Separation Agreement is
intended to be, and is hereby adopted as, a plan of reorganization under Section
368 of the Code.
7. The parties intend that this Separation Agreement, including the Exhibits
hereto, shall set forth the principal arrangements between them regarding the
Separation.
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements set forth below, the parties hereto agree as follows:
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ARTICLE I
DEFINITIONS
The following terms shall have the meanings assigned to them below whenever
they are used in this Separation Agreement; terms defined elsewhere in this
Separation Agreement shall have the meanings ascribed to them at the location of
their definition indicated below. Except where the context otherwise requires,
words imparting the singular shall include the plural and vice versa, words
denoting any gender shall include all genders and words denoting persons shall
include bodies corporate and vice versa.
SECTION 1.1. AFFILIATED COMPANY. "Affiliated Company" of any Person means any
entity that controls, is controlled by, or is under common control with such
Person. As used herein, "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of such entity, whether through ownership of voting securities or
other interests, by contract or otherwise.
SECTION 1.2. ANCILLARY AGREEMENTS. "Ancillary Agreements" means the agreements
to be entered into by Millipore and MMI in order to effect the Separation and
the transition arrangements contemplated hereby as specified in Sections 2.3
and 2.4 below and attached to this Separation Agreement as Exhibits C through
N as well as all other agreements contemplated by each of the foregoing
agreements.
SECTION 1.3. CODE. "Code" means the Internal Revenue Code of 1986, as amended.
SECTION 1.4. COMMISSION. "Commission" means the Unites States Securities and
Exchange Commission.
SECTION 1.5. '34 ACT. "'34 Act" means the Securities Exchange Act of 1934, as
amended.
SECTION 1.6. DISTRIBUTION. "Distribution" has the meaning set forth in Recital
5 above.
SECTION 1.7. DISTRIBUTION DATE. "Distribution Date" means the date on which
the Distribution is effective in accordance with Section 4.1 below.
SECTION 1.8. EMPLOYEE AGREEMENT. "Employee Agreement" means the Millipore
Corporation Employee Agreement, the Tylan General, Inc. Employee Agreement and
corresponding Agreements in foreign countries executed by each employee of
Millipore (or of Tylan General, Inc.) or of their subsidiaries.
SECTION 1.9. GOVERNMENTAL APPROVALS. "Governmental Approvals" means any
notices, reports or other filings to be made, or any consents, registrations,
approvals, permits or authorizations to be obtained from, any Governmental
Authority.
SECTION 1.10. GOVERNMENTAL AUTHORITY. "Governmental Authority" shall mean
any federal, state, local, foreign or international court, government,
department, commission, board, bureau, agency, official or other regulatory,
administrative or governmental authority.
SECTION 1.11. INFORMATION. "Information" means business information,
technical information and data, know-how, research information and data,
formulae and other information, whether or not patentable or copyrightable, in
written, oral, electronic or other tangible or intangible forms, stored in any
medium, including studies, reports, records, books, contracts, instruments,
surveys, discoveries, ideas, concepts, know-how, techniques, designs,
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specifications, drawings, blueprints, diagrams, models, prototypes, samples,
flow charts, data, computer data, disks, diskettes, tapes, computer programs or
other software, marketing plans, customer names, communications by or to
attorneys (including attorney-client privileged communications), memos and other
materials prepared by attorneys or under their direction (including attorney
work product), and other technical, financial, employee or business information
or data.
SECTION 1.12. IPO. "IPO" has the meaning set forth in Recital 4 above.
SECTION 1.13. IPO CLOSING DATE. "IPO Closing Date" has the meaning set
forth in the Section 3.3 hereof.
SECTION 1.14. IPO REGISTRATION STATEMENT. "IPO Registration Statement" has
the meaning set forth in the Recital 4 above.
SECTION 1.15. MILLIPORE'S AUDITORS. "Millipore's Auditors" means
Millipore's independent certified public accountants.
SECTION 1.16. MILLIPORE CORE BUSINESS. "Millipore Core Business" means the
portion of Millipore's business as to which MMI's use of certain rights
granted under the Ancillary Agreements is restricted; the Millipore Core
Business is more specifically defined in Section 8.2 hereto.
SECTION 1.17. MILLIPORE GROUP. "Millipore Group" means Millipore, each
Subsidiary and Affiliated Company of Millipore (other than any member of the
MMI Group) immediately after the Separation Date, after giving effect to the
Non-US Plan and each Person that becomes a Subsidiary or Affiliate Company of
Millipore after the Separation Date.
SECTION 1.18. MMI ASSETS. "MMI Assets" has the meaning set forth in Section
1.13 of the General Assignment & Assumption Agreement.
SECTION 1.19. MMI'S AUDITORS. "MMI's Auditors" means MMI's independent
certified public accountants.
SECTION 1.20. MMI BUSINESS. "MMI Business" is defined in Recital 2 above.
SECTION 1.21. MMI CORE BUSINESS. "MMI Core Business" means the portion of
the MMI Business as to which Millipore's use of certain rights granted under
the Ancillary Agreements is restricted; the MMI Core Business is more
specifically defined in Section 8.3 hereto.
SECTION 1.22. MMI GROUP. "MMI GROUP" means MMI, each Subsidiary and
Affiliated Company of MMI (other than any member of the Millipore Group)
immediately after the Separation Date or that is contemplated to be a
Subsidiary or Affiliated Company of MMI pursuant to the Non-US Plan and each
Person that becomes a Subsidiary or Affiliate Company of MMI after the
Separation Date.
SECTION 1.23. NON-U.S. PLAN. "Non-U.S. Plan" means the plan for the
Separation of the MMI Business outside of the United States as described in
EXHIBIT H hereto.
SECTION 1.24. PERSON. "Person" means an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock
company, a trust, a joint venture, an unincorporated organization and a
governmental entity or any department, agency or political subdivision
thereof.
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SECTION 1.25. RECORD DATE. "Record Date" means the close of business on the
date to be determined by the Board of Directors of Millipore as the record
date for determining the stockholders of Millipore entitled to receive shares
of common stock of MMI in the Distribution.
SECTION 1.26. SEPARATION. "Separation" has the meaning set forth Recital 3
above.
SECTION 1.27. SEPARATION CLOSING. "Separation Closing" means the
consummation of the transactions comprising the Separation as provided in
Article II below.
SECTION 1.28. SEPARATION DATE. "Separation Date" means the effective time
and date of each transfer of property, assumption of liability, license,
undertaking, or agreement in connection with the Separation as specified in
Section 2.1 below.
SECTION 1.29. SEPARATION NOTE. "Separation Note" means the term note to be
delivered by MMI at the Separation Closing in the principal amount equal to
the net proceeds to MMI from the IPO LESS the sum of: (I) the outstanding
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balance under the Separation Revolving Credit Agreement PLUS (II) all expenses
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related to the IPO PLUS (III) Fifty Million Dollars ($50,000,000.00). The
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Separation Note shall be substantially in the form of EXHIBIT M hereto, shall
mature fifteen (15) business days following the IPO Closing Date and shall be
interest free until maturity.
SECTION 1.30. SEPARATION REVOLVING CREDIT AGREEMENT. "Separation Revolving
Credit Agreement" means the revolving credit agreement to be entered into by
MMI and Millipore in connection with Millipore supplying MMI with its cash
needs in accordance with Section 5.15 below; the Separation Revolving Credit
Agreement shall be in substantially the form of EXHIBIT N hereto.
SECTION 1.31. SUBSIDIARY. "Subsidiary" of any Person means a corporation or
other organization, whether incorporated or unincorporated, of which at least
a majority of the securities or interests having by the terms thereof ordinary
voting power to elect at least a majority of the board of directors or others
performing similar functions with respect to such corporation or other
organization is directly or indirectly owned or controlled by such Person or
by any one or more of its Subsidiaries, or by such Person and one or more of
its Subsidiaries; provided, however, that no Person that is not directly or
indirectly wholly-owned by any other Person shall be a Subsidiary of such
other Person unless such other Person controls, or has the right, power or
ability to control, that Person. For purposes of this Separation Agreement and
of the Ancillary Agreements, MMI shall be deemed not to be a subsidiary of
Millipore.
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ARTICLE II
SEPARATION
SECTION 2.1 SEPARATION DATE. Unless otherwise provided in this Separation
Agreement, or in any agreement to be executed in connection with this
Separation Agreement the Separation Date shall be the close of business,
Eastern Standard Time, on March 31, 2001 or such other date as may be fixed by
the Board of Directors of Millipore.
SECTION 2.2 CLOSING OF SEPARATION. Unless otherwise provided herein, the
closing of the transactions comprising the Separation shall take place on the
Separation Date at the offices of Millipore. All transactions comprising the
Separation shall be deemed to occur simultaneously at the closing.
SECTION 2.3. OBLIGATIONS OF MILLIPORE AT THE SEPARATION CLOSING. At the
Separation Closing Millipore will deliver, or will cause its appropriate
Subsidiaries to deliver, to MMI all of the Ancillary Agreements as follows:
2.3.1. A duly executed General Assignment & Assumption Agreement substantially
in the form attached hereto as EXHIBIT C;
2.3.2. Certificates representing all of the issued and outstanding capital
stock in the Subsidiaries of Millipore listed on SCHEDULE 2.3.2 to be
transferred to MMI in accordance with the Non-U.S. Plan together with
duly executed stock powers in the form proper for transfer;
2.3.3. A duly executed Master Patent Assignment, Master Trademark Assignment,
Master Patent License Agreement, Master Patent Grantback License
Agreement, Master Trade Secret and Know-How Agreement, Master Invention
Disclosure Agreement, and Master Trademark License Agreement
substantially in the forms attached hereto as Exhibits D-1, D-2, D-3,
D-4, D-5, D-6, and D-7, respectively;
2.3.4. A duly executed Employee Matters Agreement substantially in the form
attached hereto as EXHIBIT E;
2.3.5. A duly executed Tax Sharing Agreement substantially in the form attached
hereto as EXHIBIT F;
2.3.6. A duly executed Master Transitional Services Agreement substantially in
the form attached hereto as EXHIBIT G;
2.3.7. A duly executed Membrane Manufacture and Supply Agreement substantially
in the form attached hereto as EXHIBIT I;
2.3.8. A duly executed Research Agreement substantially in the form attached
hereto as EXHIBIT J;
2.3.9. A duly executed Product Distribution Agreement substantially in the form
attached hereto as EXHIBIT K;
2.3.10. A duly executed Contract Manufacturing Agreement substantially in the
form attached hereto as EXHIBIT L;
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2.3.11. A duly executed Separation Revolving Credit Agreement substantially in
the form attached hereto as EXHIBIT N;
2.3.12. Resignations of each person who is an officer or director of MMI or its
Subsidiaries, immediately prior to the Separation Date, and who will be
employees of Millipore from and after the Separation Date from all
positions held with MMI; and
2.3.13. Such other agreements, documents or instruments as the parties may agree
are necessary or desirable in order to achieve the purposes hereof.
SECTION 2.4. OBLIGATIONS OF MMI AT THE SEPARATION CLOSING. At the Separation
Closing MMI will deliver, or will cause its appropriate Subsidiaries to
deliver, to MMI all of the Ancillary Agreements as follows:
2.4.1. A duly executed General Assignment and Assumption Agreement
substantially in the form attached hereto as EXHIBIT C;
2.4.2. A duly executed Master Patent Assignment, Master Trademark Assignment,
Master Patent License Agreement, Master Patent Grantback License
Agreement, Master Trade Secret and Know-How Agreement, Master Invention
Disclosure Agreement, and Master Trademark License Agreement
substantially in the forms attached hereto as Exhibits D-1, D-2, D-3,
D-4, D-5, D-6, and D-7, respectively;
2.4.3. A duly executed Employee Matters Agreement substantially in the form
attached hereto as EXHIBIT E;
2.4.4. A duly executed Tax Sharing Agreement substantially in the form attached
hereto as EXHIBIT F;
2.4.5. A duly executed Master Transitional Services Agreement substantially in
the form attached hereto as EXHIBIT G;
2.4.6. A duly executed Membrane Manufacture and Supply Agreement substantially
in the form attached hereto as EXHIBIT I;
2.4.7. A duly executed Research & Development Agreement substantially in the
form attached hereto as EXHIBIT J;
2.4.8. A duly executed Product Distribution Agreement substantially in the
form attached hereto as EXHIBIT K;
2.4.9. A duly executed Contract Manufacturing Agreement substantially in the
form attached hereto as EXHIBIT L;
2.4.10. A duly executed Separation Note substantially in the form attached
hereto as EXHIBIT M;
2.4.11. A duly executed Separation Revolving Credit Agreement substantially in
the form attached hereto as EXHIBIT N;
2.4.12. Resignations of each person other than C. William Zadel who is an
officer or director of Millipore or its Subsidiaries, immediately prior
to the Separation Date,
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and who will be an officer, director or employee of MMI from and after
the Separation Date from all positions held with Millipore; the
resignation of Mr. C. William Zadel from the positions of President and
Chief Executive Officer of Millipore and as an officer or director of
all subsidiaries in the Millipore Group (but not from his other
positions with Millipore); and
2.4.13. Such other agreements, documents or instruments as the parties may agree
are necessary or desirable in order to achieve the purposes hereof.
ARTICLE III
THE IPO AND ACTIONS PENDING THE IPO
SECTION 3.1. TRANSACTIONS PRIOR TO THE IPO. Subject to the conditions
specified in Section 3.3, Millipore and MMI shall use their reasonable
commercial efforts to consummate the IPO. Such efforts shall include, but not
necessarily be limited to, those specified in this Section 3.1
3.1.1. REGISTRATION STATEMENT. MMI shall file the IPO Registration Statement,
----------------------
and such amendments or supplements thereto as may be necessary in order
to cause the same to become and remain effective as required by the
Securities Act of 1933, as amended, the regulations thereunder or by the
managing underwriters for the IPO (the "Underwriters"), including, but
not limited to, filing such amendments to the IPO Registration Statement
as may be required by the underwriting agreement to be entered into
between MMI and the Underwriters (the "Underwriting Agreement"), the
Commission or federal, state or foreign securities laws. Millipore and
MMI shall also cooperate in preparing, filing with the Securities and
Exchange Commission and causing to become effective a registration
statement registering the common stock of MMI under the `34 Act, and any
registration statements or amendments thereof which are required to
reflect the establishment of, or amendments to, any employee benefit and
other plans necessary or appropriate in connection with the IPO, the
Separation, the Distribution or the other transactions contemplated by
this Separation Agreement.
3.1.2. UNDERWRITING AGREEMENT. MMI shall enter into the Underwriting Agreement,
----------------------
in form and substance reasonably satisfactory to MMI, and shall comply
with its obligations thereunder.
3.1.3. NYSE LISTING. MMI shall prepare, file and use reasonable commercial
------------
efforts to seek to make effective, an application for listing of the
common stock of MMI issued in the IPO on the New York Stock Exchange,
subject to official notice of issuance.
SECTION 3.2. COOPERATION. MMI shall consult with, and cooperate in all
respects with, Millipore in connection with the pricing of the common stock of
MMI to be offered in the IPO and shall, at Millipore's direction, promptly
take any and all actions necessary or desirable to consummate the IPO as
contemplated by the IPO Registration Statement and the Underwriting Agreement.
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SECTION 3.3. CONDITIONS PRECEDENT TO CONSUMMATION OF THE IPO. The IPO closing
is currently scheduled to occur on or before ____________, 2001 (the "IPO
Closing Date"). The obligations of the parties to use their reasonable
commercial efforts to consummate the IPO shall be conditioned on the
satisfaction of the following conditions:
3.3.1. REGISTRATION STATEMENT. The IPO Registration Statement shall have been
----------------------
filed and declared effective by the Commission, and there shall be no
stop-order in effect with respect thereto.
3.3.2. BLUE SKY. The actions and filings with regard to state securities and
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blue sky laws of the United States (and any comparable laws under any
foreign jurisdictions) shall have been taken and, where applicable, have
become effective or been accepted.
3.3.3. NYSE LISTING. The common stock of MMI to be issued in the IPO shall
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have been accepted for listing on the New York Stock Exchange, on
official notice of issuance.
3.3.4. UNDERWRITING AGREEMENT. MMI shall have entered into the Underwriting
----------------------
Agreement and all conditions to the obligations of MMI and the
Underwriters shall have been satisfied or waived.
3.3.5. COMMON STOCK OWNERSHIP. Millipore shall be satisfied in its sole
----------------------
discretion that it will own at least 80.1% of the outstanding common
stock of MMI following the IPO and any private placements of securities
of MMI concluded prior to or concurrent with the IPO. All other
conditions to permit the Distribution to qualify as a tax-free
distribution to Millipore, MMI and Millipore's stockholders shall, to
the extent applicable as of the time of the IPO, be satisfied. There
shall be no event or condition that is likely to cause any of such
conditions not to be satisfied as of the time of the Distribution or
thereafter.
3.3.6. NO LEGAL RESTRAINTS. No order, injunction or decree issued by any court
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or agency of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Separation or the IPO or
any of the other transactions contemplated by this Separation Agreement
shall be in effect.
3.3.7. SEPARATION. The Separation shall have become effective by execution of
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this Separation Agreement and the Ancillary Agreements.
3.3.8. OTHER ACTIONS. Such other actions as the parties hereto may, based upon
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the advice of counsel, reasonably request to be taken prior to the IPO
in order to assure the successful completion of the IPO shall have been
taken.
3.3.9. NO TERMINATION. This Separation Agreement shall not have been
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terminated.
SECTION 3.4. PROCEEDS FROM THE IPO. The proceeds from the IPO may be used to
defray the IPO costs, MMI's costs incurred in connection with the Separation,
to discharge the Separation Note and all outstanding balances under the
Separation Revolving Credit Agreement or for other corporate purposes of MMI
or may be partially or wholly distributed to Millipore
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to defray its costs incurred in connection with the Separation or the
Distribution or for Millipore's other corporate purposes.
ARTICLE IV
THE DISTRIBUTION
SECTION 4.1. THE DISTRIBUTION. Subject to Section 4.4 hereof, on or prior to
the Distribution Date, Millipore will deliver to the distribution agent (the
"Distribution Agent") to be appointed by Millipore to distribute to the
stockholders of Millipore the shares of common stock of MMI held by Millipore
pursuant to the Distribution for the benefit of holders of record of common
stock of Millipore on the Record Date, a single stock certificate, endorsed by
Millipore, representing all of the outstanding shares of common stock of MMI
then owned by Millipore, and shall cause the transfer agent for the shares of
common stock of Millipore to instruct the Distribution Agent to distribute on
the Distribution Date the appropriate number of such shares of common stock of
MMI to each such holder or designated transferee or transferees of such
holder.
4.1.1. MMI SHARES TO BE RECEIVED. Subject to Sections 4.4 and 4.5, each holder
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of common stock of Millipore on the Record Date (or such holder's
designated transferee or transferees) will be entitled to receive in the
Distribution a number of shares of common stock of MMI equal to the
number of shares of common stock of Millipore held by such holder on the
Record Date multiplied by a fraction the numerator of which is the
number of shares of common stock of MMI beneficially owned by Millipore
on the Record Date and the denominator of which is the number of shares
of common stock of Millipore outstanding on the Record Date.
4.1.2. OBLIGATION TO PROVIDE INFORMATION. MMI and Millipore, as the case may
---------------------------------
be, will provide to the Distribution Agent all share certificates and
any information required in order to complete the Distribution on the
basis specified above.
SECTION 4.2. ACTIONS PRIOR TO THE DISTRIBUTION.
4.2.1. INFORMATION STATEMENT. Millipore and MMI shall prepare and mail, prior
---------------------
to the Distribution Date, to the holders of common stock of Millipore,
such information concerning MMI and the Distribution and such other
matters as Millipore shall reasonably determine are necessary and as may
be required by law. Millipore and MMI will prepare, and MMI will, to the
extent required under applicable law, file with the Commission any such
documentation which Millipore and MMI determine is necessary or
desirable to effectuate the Distribution, and Millipore and MMI shall
each use its reasonable commercial efforts to obtain all necessary
approvals from the Commission with respect thereto as soon as
practicable.
4.2.2. BLUE SKY. Millipore and MMI shall take all such actions as may be
--------
necessary or appropriate under the securities or blue sky laws of the
United States (and any comparable laws under any foreign jurisdiction)
in connection with the Distribution.
4.2.3. NYSE LISTING. MMI shall prepare and file, and shall use its reasonable
------------
commercial efforts to have approved, an application for the additional
listing of the common stock
-- 9 --
of MMI to be distributed in the Distribution on the New York Stock
Exchange, subject to official notice of distribution.
4.2.4. CONDITIONS. Millipore and MMI shall take all reasonable steps
----------
necessary and appropriate to cause the conditions set forth in Section
4.4 to be satisfied and to effect the Distribution on the Distribution
Date.
SECTION 4.3 SOLE DISCRETION OF MILLIPORE. Millipore currently intends,
following the consummation of the IPO, to complete the Distribution by
_________________, 2001. Millipore shall, in its sole and absolute discretion,
determine the date of the consummation of the Distribution and all terms of
the Distribution, including, without limitation, the form, structure and terms
of any transaction(s) and/or offering(s) to effect the Distribution and the
timing of and conditions to the consummation of the Distribution. In addition,
Millipore may at any time and from time to time until the completion of the
Distribution, modify or change the terms of the Distribution, including,
without limitation, by accelerating or delaying the timing of the consummation
of all or part of the Distribution. MMI shall cooperate with Millipore in all
respects to accomplish the Distribution and shall, at Millipore's direction,
promptly take any and all actions necessary or desirable to effect the
Distribution, including, without limitation, the registration under the
Securities Act of the common stock of MMI on an appropriate registration form
or forms to be designated by Millipore. Millipore shall select any investment
banker(s) and manager(s) in connection with the Distribution, as well as any
financial printer, solicitation and/or exchange agent and outside counsel for
Millipore; PROVIDED, HOWEVER, that nothing herein shall prohibit MMI from
-------- -------
engaging (at its own expense) its own financial, legal, accounting and other
advisors in connection with the Distribution.
SECTION 4.4 CONDITIONS PRECEDENT TO DISTRIBUTION. The following are conditions
that must take place prior to the consummation of the Distribution. The
conditions are for the sole benefit of Millipore and shall not give rise to or
create any duty on the part of Millipore or the Millipore Board of Directors
to waive or not waive any such condition.
4.4.1. IRS RULING. Millipore shall have obtained a private letter ruling from
----------
the Internal Revenue Service in form and substance satisfactory to
Millipore (in its sole discretion), and such ruling shall remain in
effect as of the Distribution Date, to the effect that: (I) the transfer
by the Millipore Group to the MMI Group of the property, subject to
liabilities, held by Millipore of the MMI Business, and MMI's assumption
of liabilities held by Millipore related to the MMI Business, followed
by the distribution by Millipore of all of its MMI stock to the
stockholders of Millipore, will qualify as a reorganization under
Sections 368(a)(1)(D) and 355 of the Code; (II) no gain or loss will be
recognized by Millipore on its transfer of property of the MMI Business
to MMI; (III) no gain or loss will be recognized by MMI on its receipt
of property of the MMI Business from Millipore; and (IV) no gain or loss
will be recognized by (and no amount will otherwise be included in the
income of) the stockholders of Millipore upon their receipt of MMI
common stock pursuant to the Distribution.
-- 10 --
4.4.2. GOVERNMENT APPROVALS. Any material governmental approvals and consents
--------------------
necessary to consummate the Distribution shall have been obtained and be
in full force and effect.
4.4.3. NO LEGAL RESTRAINTS. No order, injunction or decree issued by any court
-------------------
or agency of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Distribution shall be in
effect and no other event outside the control of Millipore shall have
occurred or failed to occur that prevents the consummation of the
Distribution.
4.4.4. NO MATERIAL ADVERSE EFFECT. No other events or developments shall have
--------------------------
occurred subsequent to the IPO Closing Date that, in the judgment of the
Board of Directors of Millipore, would result in the Distribution having
a material adverse effect on Millipore or on the stockholders of
Millipore.
SECTION 4.5 FRACTIONAL SHARES. As soon as practicable after the Distribution
Date, Millipore shall direct the Distribution Agent to determine the number of
whole shares and fractional shares of common stock of MMI allocable to each
holder of record or beneficial owner of common stock of Millipore as of the
Record Date, to aggregate all such fractional shares and sell the whole shares
obtained thereby at the direction of Millipore, in open market transactions,
at then prevailing trading prices, and to cause to be distributed to each such
holder or for the benefit of each such beneficial owner to which a fractional
share shall be allocable such holder's or owner's ratable share of the
proceeds of such sale, after making appropriate deductions of the amount
required to be withheld for federal income tax purposes and after deducting an
amount equal to all brokerage charges, commissions and transfer taxes
attributed to such sale. Millipore and the Distribution Agent shall use their
reasonable commercial efforts to aggregate the shares of common stock of
Millipore that may be held by any beneficial owner thereof through more than
one account in determining the fractional share allocable to such beneficial
owner.
ARTICLE V
COVENANTS AND OTHER MATTERS
SECTION 5.1 OTHER AGREEMENTS. Millipore and MMI agree to execute or cause to be
executed by the appropriate parties and deliver, as appropriate, such other
agreements, instruments and other documents as may be necessary or desirable
in order to effect the purposes of this Separation Agreement and the Ancillary
Agreements.
SECTION 5.2 FURTHER INSTRUMENTS. At the request of MMI, and without further
consideration, Millipore will execute and deliver, and will cause its
applicable Subsidiaries to execute and deliver, to MMI and its Subsidiaries
such other instruments of transfer, conveyance, assignment, substitution and
confirmation and take such action as MMI may reasonably deem necessary or
desirable in order more effectively to transfer, convey and assign to MMI and
its Subsidiaries and confirm MMI's and its Subsidiaries' title to all of the
assets, rights and other things of value contemplated to be transferred to MMI
and its Subsidiaries pursuant to this Separation Agreement, the Ancillary
Agreements, and any
-- 11 --
documents referred to therein, to put MMI and its Subsidiaries in actual
possession and operating control thereof and to permit MMI and its
Subsidiaries to exercise all rights with respect thereto (including, without
limitation, 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). At the request of Millipore and without further consideration,
MMI will execute and deliver, and will cause its applicable Subsidiaries to
execute and deliver, to Millipore and its Subsidiaries all instruments,
assumptions, novations, undertakings, substitutions or other documents and
take such other action as Millipore may reasonably deem necessary or desirable
in order to have MMI fully and unconditionally assume and discharge the
liabilities contemplated to be assumed by MMI under this Separation Agreement
or any document in connection herewith and to relieve the Millipore Group of
any liability or obligation with respect thereto and evidence the same to
third parties. Neither Millipore nor MMI shall be obligated, in connection
with the foregoing, to expend money other than reasonable out-of-pocket
expenses, attorneys' fees and recording or similar fees. Furthermore, each
party, at the request of the other party hereto, shall execute and deliver
such other instruments and do and perform such other acts and things as may be
necessary or desirable for effecting completely the consummation of the
transactions contemplated hereby.
SECTION 5.3 ADDITIONAL TRANSITIONAL SERVICES AGREEMENTS. Millipore and its
Subsidiaries and MMI and its Subsidiaries will enter into transitional
services agreements covering the provision of various transitional services,
including financial, accounting, tax, real estate and site services, sales,
customer support, human resources, supply chain services and information
technology services by Millipore (and its Subsidiaries) to MMI (and its
Subsidiaries) or, in certain circumstances, vice versa. Such services will
generally be provided for a fee equal to the direct costs and indirect costs
of providing such services. The transitional services agreements will
generally provide for a term of one year or less.
SECTION 5.4 AGREEMENT FOR EXCHANGE OF INFORMATION. Each of Millipore and MMI
agrees to provide, or cause to be provided, to each other, at any time before
or after the Distribution Date, as soon as reasonably practicable after
written request therefor, any Information in the possession or under the
control of such party that the requesting party reasonably needs: (I) to
comply with reporting, disclosure, filing or other requirements imposed on the
requesting party (including under applicable securities laws) by a
Governmental Authority having jurisdiction over the requesting party, (II) for
use in any other judicial, regulatory, administrative or other proceeding or
in order to satisfy audit, accounting, claims, regulatory, litigation or other
similar requirements, (III) to comply with its obligations under this
Separation Agreement or any Ancillary Agreement; or (IV) in connection with
the ongoing businesses of Millipore or MMI, as the case may be; PROVIDED,
--------
HOWEVER, that in the event that any party determines that any such provision
-------
of Information could be commercially detrimental, violate any law or
agreement, or waive any attorney-client privilege, the parties shall take all
reasonable measures to permit the compliance with such obligations in a manner
that avoids any such harm or consequence.
5.4.1. INTERNAL ACCOUNTING CONTROLS; FINANCIAL INFORMATION. After the
Separation Date: (I) each party shall maintain in effect at its own cost
and expense adequate systems and controls for its business to the extent
necessary to enable the other party to
-- 12 --
satisfy its reporting, accounting, audit and other obligations, and (II)
each party shall provide, or cause to be provided, to the other party
and its Subsidiaries in such form as such requesting party shall
request, at no charge to the requesting party, all financial and other
data and information as the requesting party determines necessary or
advisable in order to prepare its financial statements and reports or
filings with any Governmental Authority.
5.4.2. OWNERSHIP OF INFORMATION. Any Information owned by a party that is
------------------------
provided to a requesting party pursuant to this Section 5.4 shall be
deemed to remain the property of the providing party. Unless
specifically set forth herein, nothing contained in this Separation
Agreement shall be construed as granting or conferring rights of license
or otherwise in any such Information.
5.4.3. RECORD RETENTION. To facilitate the possible exchange of Information
----------------
pursuant to this Section 5.4 and other provisions of this Separation
Agreement after the Distribution Date, each party agrees to use its
reasonable commercial efforts to retain all Information in its
respective possession or control on the Distribution Date substantially
in accordance with the policies of Millipore as in effect on the
Separation Date. Notwithstanding the foregoing, except as set forth in
the Tax Sharing Agreement, at any time after the Distribution Date, each
party may amend its respective record retention policies at such party's
discretion; PROVIDED, HOWEVER, that if a party desires to effect the
-------- -------
amendment within three (3) years after the Distribution Date, the
amending party must give thirty (30) days prior written notice of such
change in the policy to the other party to this Separation Agreement. No
party will destroy, or permit any of its Subsidiaries to destroy, any
Information that exists on the Separation Date (other than Information
that is permitted to be destroyed under the current record retention
policies of Millipore) and that falls under the categories listed in
clauses (i) through (iv) of Section 5.4, without first using its
reasonable commercial efforts to notify the other party of the proposed
destruction and giving the other party the opportunity to take
possession of such Information prior to such destruction.
5.4.4. LIMITATION OF LIABILITY. No party shall have any liability to any other
-----------------------
party in the event that any Information exchanged or provided pursuant
to this Section 5.4 is found to be inaccurate, in the absence of gross
negligence or willful misconduct by the party providing such
Information. No party shall have any liability to any other party if any
Information is destroyed or lost after reasonable commercial efforts by
such party to comply with the provisions of Section 5.4.3.
5.4.5. OTHER AGREEMENTS PROVIDING FOR EXCHANGE OF INFORMATION. The rights and
------------------------------------------------------
obligations granted under this Section 5.4 are subject to any specific
limitations, qualifications or additional provisions on the sharing,
exchange or confidential treatment of Information set forth in this
Separation Agreement and any Ancillary Agreement.
5.4.6. PRODUCTION OF WITNESSES; RECORDS; COOPERATION. After the Distribution
---------------------------------------------
Date, except in the case of a legal or other proceeding by one party
against another party (which shall be governed by such discovery rules
as may be applicable under
-- 13 --
Section 5.9 or otherwise), each party hereto shall use its reasonable
commercial efforts to make available to each other party, upon written
request, the former, current and future directors, officers, employees,
other personnel and agents of such party as witnesses and any books,
records or other documents within its control or which it otherwise has
the ability to make available, to the extent that any such person
(giving consideration to business demands of such directors, officers,
employees, other personnel and agents) or books, records or other
documents may reasonably be required in connection with any legal,
administrative or other proceeding in which the requesting party may
from time to time be involved, regardless of whether such legal,
administrative or other proceeding is a matter with respect to which
indemnification may be sought hereunder. The requesting party shall bear
all costs and expenses in connection therewith.
SECTION 5.5 AUDITORS AND AUDITS; ANNUAL AND QUARTERLY STATEMENTS AND ACCOUNTING.
Each party agrees that, for so long as Millipore is required in accordance
with United States generally accepted accounting principles to consolidate
MMI's results of operations and financial position:
5.5.1. SELECTION OF AUDITORS. MMI shall not select as MMI's Auditors a
---------------------
different accounting firm from that used by Millipore to serve as its
(and its Subsidiaries') independent certified public accountants for
purposes of providing an opinion on its consolidated financial
statements without Millipore's prior written consent (which shall not be
unreasonably withheld).
5.5.2. DATE OF AUDITORS' OPINION AND QUARTERLY REVIEWS. MMI shall use its
-----------------------------------------------
reasonable commercial efforts to enable the MMI Auditors to complete
their audit such that they will date their opinion on MMI's audited
annual financial statements on the same date that Millipore's Auditors
date their opinion on Millipore's audited annual financial statements,
and to enable Millipore to meet its timetable for the printing, filing
and public dissemination of Millipore's annual financial statements. MMI
shall use its reasonable commercial efforts to enable the MMI Auditors
to complete their quarterly review procedures such that they will
provide clearance on MMI's quarterly financial statements on the same
date that Millipore's Auditors provide clearance on Millipore's
quarterly financial statements.
5.5.3. ANNUAL AND QUARTERLY FINANCIAL STATEMENTS. MMI shall provide to
-----------------------------------------
Millipore on a timely basis all Information that Millipore reasonably
requires to meet its schedule for the preparation, printing, filing, and
public dissemination of Millipore's annual and quarterly financial
statements. Without limiting the generality of the foregoing, MMI will
provide all required financial Information with respect to MMI and its
Subsidiaries to MMI's Auditors in a sufficient and reasonable time and
in sufficient detail to permit MMI's Auditors to take all steps and
perform all reviews necessary to provide sufficient assistance to
Millipore's Auditors with respect to financial Information to be
included or contained in Millipore's annual and quarterly financial
statements. Similarly, Millipore shall provide to MMI on a timely basis
all financial Information that MMI reasonably requires to meet its
schedule for the preparation, printing, filing, and public dissemination
of MMI's annual and
-- 14 --
quarterly financial statements. Without limiting the generality of the
foregoing, Millipore will provide all required financial Information
with respect to Millipore and its Subsidiaries to Millipore's Auditors
in a sufficient and reasonable time and in sufficient detail to permit
Millipore's Auditors to take all steps and perform all reviews necessary
to provide sufficient assistance to MMI's Auditors with respect to
Information to be included or contained in MMI's annual and quarterly
financial statements.
5.5.4. IDENTITY OF PERSONNEL PERFORMING THE ANNUAL AUDIT AND QUARTERLY REVIEWS.
-----------------------------------------------------------------------
MMI shall authorize MMI's Auditors to make available to Millipore's
Auditors both the personnel who performed or will perform the annual
audits and quarterly reviews of MMI and work papers related to the
annual audits and quarterly reviews of MMI, in all cases within a
reasonable time prior to MMI's Auditors' opinion date, so that
Millipore's Auditors are able to perform the procedures they consider
necessary to take responsibility for the work of MMI's Auditors as it
relates to Millipore's Auditors' report on Millipore's financial
statements, all within sufficient time to enable Millipore to meet its
timetable for the printing, filing and public dissemination of
Millipore's annual and quarterly statements. Similarly, Millipore shall
authorize Millipore's Auditors to make available to MMI's Auditors both
the personnel who performed or will perform the annual audits and
quarterly reviews of Millipore and work papers related to the annual
audits and quarterly reviews of Millipore, in all cases within a
reasonable time prior to Millipore's Auditors' opinion date, so that
MMI's Auditors are able to perform the procedures they consider
necessary to take responsibility for the work of Millipore's Auditors as
it relates to MMI's Auditors' report on MMI's statements, all within
sufficient time to enable MMI to meet its timetable for the printing,
filing and public dissemination of MMI's annual and quarterly financial
statements.
5.5.5. ACCESS TO BOOKS AND RECORDS. MMI shall provide Millipore's internal
---------------------------
auditors and their designees access to MMI's and its Subsidiaries' books
and records so that Millipore may conduct reasonable audits relating to
the financial statements provided by MMI pursuant hereto as well as to
the internal accounting controls and operations of MMI and its
Subsidiaries. Similarly, Millipore shall provide MMI's internal auditors
and their designees access to Millipore's and its Subsidiaries' books
and records so that MMI may conduct reasonable audits relating to the
financial statements provided by Millipore pursuant hereto as well as to
the internal accounting controls and operations of Millipore and its
Subsidiaries.
5.5.6. NOTICE OF CHANGE IN ACCOUNTING PRINCIPLES. MMI shall give Millipore as
-----------------------------------------
much prior notice as is reasonably practical as to any proposed
determination of, or any significant changes in, its accounting
estimates or accounting principles from those in effect on the
Separation Date. MMI will consult with Millipore and, if requested by
Millipore, MMI will consult with Millipore's independent public
accountants with respect thereto. Millipore shall give MMI as much prior
notice as reasonably practical of any proposed determination of, or any
significant changes in, its accounting estimates or accounting
principles from those in effect on the Separation Date.
-- 15 --
5.5.7. CONFLICT WITH THIRD-PARTY AGREEMENTS. Nothing in Sections 5.4 and 5.5
------------------------------------
shall require MMI to violate any agreement with any third party
regarding the confidentiality of confidential and proprietary
information relating to that third party or its business; PROVIDED,
--------
HOWEVER, that in the event that MMI is required under Sections 5.4 and
-------
5.5 to disclose any such Information, MMI shall use all commercially
reasonable efforts to seek to obtain such third party's consent to the
disclosure of such information.
SECTION 5.6. CONSISTENCY WITH PAST PRACTICES. At all times, Millipore and MMI
will conduct the MMI Business before the Separation Date in the ordinary
course, consistent with past practices.
SECTION 5.7. PAYMENT OF EXPENSES. Except as otherwise provided in this
Separation Agreement, the Ancillary Agreements or any other agreement between
the parties relating to the Separation, the IPO or the Distribution, all costs
and expenses of the parties hereto in connection with the Separation, the IPO
(including underwriting discounts and commissions) and the Distribution and
costs and expenses of the parties hereto in connection with the Separation
shall be paid or allocated as follows: [I] all expenses related to the IPO
incurred by either party shall be paid from the proceeds of the IPO; [II] all
direct expenses incurred by MMI in connection with the Separation shall be
borne by MMI and all direct expenses incurred by Millipore in connection with
the Separation shall be borne by Millipore; and [III] all expenses related to
the Distribution shall be paid by Millipore. MMI and Millipore shall each be
responsible for their own internal fees, costs and expenses incurred in
connection with the Separation, the IPO and the Distribution.
SECTION 5.8. FOREIGN SUBSIDIARIES. Millipore and MMI shall cause each of
their foreign subsidiaries to execute such local transfer agreements,
assignments, assumptions, novations, transition agreements and other documents
as shall be necessary to carry out the Non-U.S. Plan as described in EXHIBIT H
hereto to effect the purposes of this Separation Agreement with respect to
their respective operations outside the United States. With respect to any
such local agreements, Millipore and MMI reserve the right to readjust
payments due thereunder or override or restructure the terms thereof in the
event that they mutually agree that such payments, terms or conditions are
inconsistent with the purposes and intents of this Separation Agreement or of
any Ancillary Agreement.
SECTION 5.9. GOVERNMENTAL APPROVALS. To the extent that the Separation
requires any Governmental Approvals, the parties will use their reasonable
commercial efforts to obtain any such Governmental Approvals.
SECTION 5.10. NO REPRESENTATION OR WARRANTY. Millipore does not, in this
Separation Agreement or any other agreement, instrument or document
contemplated by this Separation Agreement, make any representation, warranty
of or covenant with respect to:
(a) the value of any asset or thing of value to be transferred to MMI;
-- 16 --
(b) the freedom from encumbrance of any asset or thing of value to be
transferred to MMI;
(c) the absence of defenses or freedom from counterclaims with respect to
any claim to be transferred to MMI; or
(d) the legal sufficiency of any assignment, document or instrument delivered
hereunder to convey title to any asset or thing of value upon its
execution, deliver and filing.
Except as may expressly be set forth herein or in any Ancillary Agreement, all
assets to be transferred to MMI shall be transferred "AS IS, WHERE IS" and MMI
shall bear the economic and legal risk that any conveyance shall prove to be
insufficient to vest in MMI good and marketable title, free and clear of any
lien, claim, equity or other encumbrance.
SECTION 5.11. NON-SOLICITATION OF EMPLOYEES. Millipore and MMI each agree
not to solicit or recruit, without the other party's express written consent,
the other party's employees for a period of two (2) years following the
Distribution Date. To the extent this prohibition is waived, any recruitment
efforts by either Millipore or MMI during the period of one (1) year after the
Distribution Date shall be coordinated with each party's senior Human
Resources officer or manager or his or her designee and with appropriate
management. Notwithstanding the foregoing, this prohibition on solicitation
does not apply to actions taken by a party either: (A) solely as a result of
an employee's affirmative response to a general recruitment effort carried out
through a public solicitation or general solicitation, or (B) as a result of
an employee's initiative.
SECTION 5.12. TREATMENT OF EMPLOYEE AGREEMENTS. The Employee Agreements
shall be handled by Millipore and MMI as provided in this Section 5.12.
5.12.1. SURVIVAL OF MILLIPORE EMPLOYEE AGREEMENT OBLIGATIONS AND MILLIPORE'S
--------------------------------------------------------------------
COMMON LAW RIGHTS. The Employee Agreements of all former Millipore
-----------------
employees transferred to MMI as of the Distribution Date (a
"Millipore/MMI Employee") shall remain in full force and effect
according to their terms; PROVIDED, HOWEVER, that none of the following
-----------------
acts committed by a Millipore/MMI Employee within the scope of their MMI
employment shall constitute a breach of such Employee Agreements: (I)
the use or disclosure of Confidential Information (as that term is
defined in the Millipore/MMI Employee's Employee Agreement) for or on
behalf of MMI, if such disclosure is consistent with the rights granted
to MMI and restrictions imposed on MMI under this Separation Agreement,
any Ancillary Agreement or any other agreement between the parties; (II)
the disclosure and assignment to MMI of rights in proprietary
developments authored or conceived by the Millipore/MMI Employee after
the Separation Date and resulting from the use of, or based upon
intellectual property (whether patented or not) which is retained by
Millipore; PROVIDED, HOWEVER, that in no event shall such disclosure and
-----------------
assignment be regarded as assigning the underlying intellectual property
to MMI; (III) the rendering of any services, directly or indirectly, to
MMI to the extent such services are consistent with the assignment or
license of rights granted to MMI and the restrictions imposed on MMI
under this Separation Agreement, any Ancillary Agreement or any other
agreement between the parties; and
-- 17 --
(IV) solicitation of the employees of one party by the other party prior
to the Distribution Date (so long as such solicitation does not violate
Section 5.12 hereof). Further, Millipore retains any rights it has under
statute or common law with respect to actions by any Millipore/MMI
Employee to the extent such actions are inconsistent with the rights
granted to MMI and restrictions imposed on MMI under this Separation
Agreement, any Ancillary Agreement or any other agreement between the
parties.
5.12.2. LIMITED ASSIGNMENT. Millipore retains all rights under the Employee
------------------
Agreements of all Millipore/MMI Employees necessary to permit Millipore
to protect the rights and interests of Millipore, but Millipore hereby
transfers and assigns to MMI its rights under the Employee Agreements of
all Millipore/MMI Employees to the extent required to permit MMI to
enjoin, restrain, recover damages from or obtain specific performance of
the Employee Agreements or obtain other remedies against any employee
who breaches his/her Employee Agreement. Millipore and MMI agree, at
their own respective cost and expense, to use their reasonable efforts
to cooperate as follows:
(A) MMI shall advise Millipore of: (1) any violation(s) of the Employee
Agreement by Millipore/MMI Employee, and (2) any violation(s) of any
employee agreement entered into with MMI by such Millipore/MMI
Employee which affect Millipore's rights; and
(B) Millipore shall advise MMI of any violations of the Employee
Agreement by current or former Millipore employees which affect
MMI's rights;
PROVIDED, HOWEVER, that the foregoing obligations shall only apply to
-----------------
violations of which there is actual knowledge by an officer, manager or
attorney of the party obligated to provide notice thereof.
5.12.3. ENFORCEMENT. Millipore and MMI each may separately enforce the Employee
-----------
Agreements of Millipore/MMI Employees to the extent necessary to
reasonably protect their respective interests, PROVIDED, HOWEVER, that
-----------------
MMI shall not commence any legal action relating thereto without first
consulting with Millipore's General Counsel or his/her designee and
Millipore shall not commence any legal action relating thereto against
any former Millipore employee who is at the time an MMI employee without
first consulting with MMI's General Counsel or his/her designee. If
either party, in seeking to enforce any Employee Agreement, notifies the
other party that it requires, or desires, such party to join in such
action, then the other party shall do so. In addition, if either party
commences or becomes a party to any action to enforce an Employee
Agreement of a Millipore/MMI Employee, the other party shall, whether or
not it becomes a party to the action, cooperate with the other party by
making available its files and employees who have information or
knowledge relevant to the dispute, subject to appropriate measures to
protect the confidentiality of any proprietary or confidential
information that may be disclosed in the course of such cooperation or
action and subject to any relevant privacy laws and regulations. Any
such enforcement action shall be conducted at the expense of the party
bringing the action and the parties shall agree on a case by case basis
on compensation, if any,
-- 18 --
of the other party for the value of the time of such other party's
employees as reasonably required in connection with the action.
5.12.4. SUPERCEDING LAW. Millipore and MMI understand and acknowledge that
---------------
matters relating to the making, performance, enforcement, assignment and
termination of Employee Agreements are typically governed by the laws
and regulations of the national, federal, state or local governmental
unit where an employee resides, or where an employee's services are
rendered, and that such laws and regulations may supersede or limit the
applicability or enforceability of this Section 5.13. In such
circumstances, Millipore and MMI agree to take action with respect to
the employee agreements that best accomplishes the parties' objectives
as set forth in this Section 5.13 and that is consistent with applicable
law.
SECTION 5.13. COOPERATION IN OBTAINING NEW AGREEMENTS. Millipore
understands that, prior to the Separation Date, MMI has derived benefits under
certain agreements and relationships between Millipore and third parties,
which agreements and relationships are not being assigned or transferred to
MMI in connection with the Separation. Upon the request of MMI, Millipore
agrees to make introductions of appropriate MMI personnel to Millipore's
contacts at such third parties, and agrees to provide reasonable assistance to
MMI, at Millipore's own expense, so that MMI may enter into agreements or
relationships with such third parties under substantially equivalent terms and
conditions, including financial terms and conditions, that apply to Millipore.
Such assistance may include, but is not limited to, requesting and encouraging
such third parties to enter into such agreements or relationships with MMI,
attending meetings and negotiating sessions with MMI and such third parties,
and participating in buying consortiums with MMI. Millipore also understands
that certain agreements between Millipore and third parties which are being
assigned to MMI in connection with the Separation may require the consent of
the applicable third party. Millipore shall assist MMI in seeking and
obtaining the consent of such third parties to such assignment. The parties
expect that the activities contemplated by this Section 5.14 will be
substantially completed by the Distribution Date, but in no event will
Millipore have any obligations hereunder after the first anniversary of the
Distribution Date.
SECTION 5.14. PROPERTY DAMAGE TO MMI ASSETS PRIOR TO THE SEPARATION DATE.
In the event of any property damage, other than ordinary wear and tear, to any
MMI Assets held by Millipore which occurs prior to the Separation Date,
Millipore shall repair or otherwise address such damage in the ordinary course
of business consistent with past practices; PROVIDED, HOWEVER, that nothing in
-----------------
this clause shall restrict Millipore from disposing of any Assets in the
ordinary course of business consistent with past practices.
SECTION 5.15. CASH MANAGEMENT; CREDIT FACILITY. During the period from the
Separation Date until the IPO Closing Date, MMI shall continue to use the
worldwide treasury and cash management services of Millipore. During this
period MMI's cash needs shall be supplied by Millipore and excess cash
balances generated by the operation of the MMI Business shall be available to
Millipore. These cash arrangements between Millipore and MMI shall be
memorialized by the Separation Revolving Credit Agreement to be entered into
at the Separation Closing.
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ARTICLE VI
CONFIDENTIALITY
SECTION 6.1. CONFIDENTIAL INFORMATION. For the purpose of this Separation
Agreement and of the Ancillary Agreements the term "Confidential Information"
means Information which is not otherwise in the public domain and of which the
owner actively undertakes to restrict or control the disclosure to Persons
other than the Millipore Group or the MMI Group in a manner reasonably
intended to maintain its confidentiality, and which: (I) the party owning or
disclosing Confidential Information ("Disclosing Party") disclosed to the non-
owning party or recipient of the Confidential Information ("Receiving Party")
or the Receiving Party had access to on or before the Separation Date; (II) is
contained in or referred to by this Separation Agreement, any Ancillary
Agreement or any exhibit or schedule hereto or thereto and is known to or in
the possession of the Receiving Party as of the Separation Date; or (III) is
disclosed to the Receiving Party pursuant to this Separation Agreement or any
Ancillary Agreement during the period from the Separation Date until the later
of March 31, 2004 or the period specified in any Ancillary Agreement with
respect to information disclosed pursuant to such Ancillary Agreement (the
"Disclosure Period"). Confidential Information may include information
relating to, by way of example, research, products, services, customers,
markets, software, developments, inventions, manufacturing processes, designs,
drawings, engineering, marketing or finances, and may be in writing, disclosed
orally or learned by inspection of computer programming code, equipment or
facilities. Confidential Information of Third Parties that is known to, in the
possession of or acquired by a Receiving Party pursuant to a relationship with
the Disclosing Party shall be deemed to be the Disclosing Party's Confidential
Information for purposes of this Article VI.
6.1.1. HIGHLY CONFIDENTIAL INFORMATION. means Confidential Information that is
-------------------------------
technical know-how and trade secrets relating to: (I) Information
relating to manufacturing processes or procedures with respect to
devices or other products that are commercially released or for which
substantial steps have been taken towards commercialization as of the
Separation Date; (II) Information generated by research and development
activities; (III) chemical and other scientific formulae used for the
manufacture or treatment of membranes or other separations media or of
devices or other products that are commercially released or for which
substantial steps have been taken towards commercialization as of the
Separation Date; or (IV) any other Information which Millipore and MMI
agree is Highly Confidential hereunder.
6.1.2. EXCLUSIONS FROM CONFIDENTIAL INFORMATION. Notwithstanding the foregoing
----------------------------------------
provisions of this Section 6.1, Confidential Information shall exclude
information that: (I) was in the Receiving Party's possession before
receipt from the Disclosing Party and obtained from a source other than
the Disclosing Party and other than through the prior relationship of
the Disclosing Party and the Receiving Party before the Separation Date;
(II) is or becomes a matter of public knowledge through no fault of the
Receiving Party; (III) is rightfully received by the
-- 20 --
Receiving Party from a Third Party without a duty of confidentiality;
(IV) is disclosed by the Disclosing Party to a Third Party without a
duty of confidentiality on such Third Party; (V) is independently
developed by the Receiving Party; or (VI) is publicly disclosed by the
Receiving Party with the Disclosing Party's prior written approval.
SECTION 6.2. CONFIDENTIALITY AND NON-USE OBLIGATIONS. During the
Confidentiality Period (as defined in Section 6.5 below), the Receiving Party
shall (I) protect the Confidential Information of the Disclosing Party by
using the same degree of care, but no less than a reasonable degree of care,
to prevent the unauthorized use, dissemination, or publication of the
Confidential Information as Receiving Party uses to protect its own
confidential information of a like nature, (II) not use such Confidential
Information in violation of any use restriction in any Ancillary Agreement,
and (III) not disclose such Confidential Information to any Third Party,
except as expressly permitted under this Separation Agreement, in the
Ancillary Agreements or in any other agreements entered into between the
parties in writing, without prior written consent of the Disclosing Party.
SECTION 6.3. DISCLOSURE TO SUBLICENSEES. The Receiving Party has the right to
disclose to its sublicensees permitted under an Ancillary Agreement such
portions of Confidential Information as are reasonably necessary in the
exercise of the Receiving Party's rights to sublicense under such Ancillary
Agreement, subject to the sublicensee's agreement in writing to
confidentiality and non-use terms at least as protective of the Disclosing
Party as the provisions of this Article VI.
SECTION 6.4. CONTRACT MANUFACTURERS. The Receiving Party has the right to
disclose to its contract manufacturers permitted under any Ancillary Agreement
such portions of the Confidential Information as are reasonably necessary in
the exercise of the Receiving Party's "have made" rights under any Ancillary
Agreement, subject to the contract manufacturer's agreement in writing to
confidentiality and non-use terms at least as protective of the Disclosing
Party as the provisions of this Article VI.
SECTION 6.5. Duration of Confidentiality Obligations. The confidentiality
obligations provided for in this Article VI shall continue in effect for the
following periods (the "Confidentiality Period"): (I) with respect to
Confidential Information that is not Highly Confidential Information, for a
period of five (5) years following either (A) the Separation Date with respect
to Confidential Information of the Disclosing Party that is known to or in the
possession of the Receiving Party as of the Separation Date or (B) the date of
disclosure with respect to Confidential Information that is disclosed by the
Disclosing Party to the Receiving Party after the Separation Date but before
the expiration of the Disclosure Period (as defined in Subsection 6.1 above);
and (II) with respect to Highly Confidential Information, in perpetuity. The
obligations set forth in this Article VI shall survive any termination of this
Separation Agreement.
SECTION 6.6. Compelled Disclosure. If the Receiving Party or any of its
respective Subsidiaries believes that it will be compelled by a court or other
authority of competent
-- 21 --
jurisdiction to disclose Confidential Information of the Disclosing Party, it
shall give the Disclosing Party prompt written notice so that the Disclosing
Party may take steps to oppose such disclosure and cooperate with the
Disclosing Party in its attempts to oppose such disclosure. If the Receiving
Party complies with the preceding sentence, it shall not be prohibited from
complying with such requirement to disclose, but shall take all reasonable
steps to make such disclosure subject to a suitable protective order or
otherwise to prevent unrestricted or public disclosure.
SECTION 6.7. NO RESTRICTION ON DISCLOSING PARTY. Nothing in this Article VI
shall restrict the Disclosing Party from using, disclosing, or disseminating
its own Confidential Information in any way.
SECTION 6.8. NO RESTRICTION ON REASSIGNMENT. This Separation Agreement shall
not restrict reassignment of the Receiving Party's employees.
SECTION 6.9. THIRD PARTY RESTRICTIONS. Nothing in the Separation Agreement
supersedes any restriction imposed by Third Parties on their Confidential
Information, and there is no obligation on the Disclosing Party to conform
Third Party agreements to the terms of this Separation Agreement.
SECTION 6.10. DISCLAIMER OF WARRANTIES AS TO CONFIDENTIAL INFORMATION. EACH
PARTY ACKNOWLEDGES AND AGREES THAT ALL CONFIDENTIAL INFORMATION IS PROVIDED ON
AN "AS IS, WHERE IS" BASIS AND THAT NEITHER PARTY NOR ANY OF ITS SUBSIDIARIES
HAS MADE OR WILL MAKE ANY WARRANTY WHATSOEVER, EXPRESS, IMPLIED OR STATUTORY,
INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, TITLE, ENFORCEABILITY OR NON-INFRINGEMENT.
ARTICLE VII
MUTUAL RELEASES; INDEMNIFICATION
Section 7.1. TREATMENT RELEASE OF PRE-SEPARATION CLAIMS.
7.1.1. MMI RELEASE. Except as provided in Subsection 7.1.3 and SCHEDULE 7.1 to
-----------
this Separation Agreement, effective as of the Separation Date, MMI does
hereby, for itself and as agent for each member of the MMI Group,
remise, release and forever discharge Millipore, each member of the
Millipore Group and each of their respective directors, officers and
employees (the "Millipore Indemnitees") from any and all Liabilities (as
that term is defined in the General Assignment and Assumption Agreement
attached as EXHIBIT C hereto "Liabilities") whatsoever, whether at law
or in equity (including any right of contribution), whether arising
under any contract or agreement, by operation of law or otherwise,
existing or arising from any acts or events occurring or failing to
occur or alleged to have occurred or to have failed to occur or any
conditions existing or alleged to have existed on or before the
Separation Date, including in connection with the
-- 22 --
transactions and all other activities to implement any of the
Separation, the IPO and the Distribution.
7.1.2. MILLIPORE RELEASE. Except as provided in Section 7.1.3 and SCHEDULE 7.1
-----------------
to this Separation Agreement, effective as of the Separation Date,
Millipore does hereby, for itself and as agent for each member of the
Millipore Group, remise, release and forever discharge MMI, each member
of the MMI Group and each of their respective directors, officers and
employees (the "MMI Indemnitees") from any and all Liabilities
whatsoever, whether at law or in equity (including any right of
contribution), whether arising under any contract or agreement, by
operation of law or otherwise, existing or arising from any acts or
events occurring or failing to occur or alleged to have occurred or to
have failed to occur or any conditions existing or alleged to have
existed on or before the Separation Date, including in connection with
the transactions and all other activities to implement any of the
Separation, the IPO and the Distribution.
7.1.3. NO IMPAIRMENT. Nothing contained in Subsections 7.1.1 or 7.1.2 shall
-------------
impair any right of any Person to enforce this Separation Agreement or
any Ancillary Agreement, in each case in accordance with its terms.
7.1.4. NO ACTIONS AS TO RELEASED CLAIMS. MMI agrees, for itself and as agent
--------------------------------
for each member of the MMI Group, not to make any claim or demand, or
commence any action, suit, countersuit, arbitration, inquiry, proceeding
or investigation by or before any federal, state, local, foreign or
international governmental authority or any arbitration or mediation
tribunal (an "Action") asserting any claim or demand, including any
claim of contribution or any indemnification, against Millipore or any
member of the Millipore Group, or any other Person released pursuant to
Subsection 7.1.1, with respect to any Liabilities released pursuant to
Subsection 7.1.1. Millipore agrees, for itself and as agent for each
member of the Millipore Group, not to make any claim or demand, or
commence any Action asserting any claim or demand, including any claim
of contribution or any indemnification, against MMI or any member of the
MMI Group, or any other Person released pursuant to Subsection 7.1.2,
with respect to any Liabilities released pursuant to Subsection 7.1.2.
7.1.5. FURTHER INSTRUMENTS. At any time, at the request of any other party,
-------------------
each party shall cause each member of its respective Group to execute
and deliver releases reflecting the provisions hereof.
SECTION 7.2. INDEMNIFICATION BY MMI. Except as otherwise provided in this
Separation Agreement, MMI shall, for itself and as agent for each member of
the MMI Group, indemnify, defend (or, where applicable, pay the defense costs
for) and hold harmless the Millipore Indemnitees from and against any and all
Liabilities that any third party seeks to impose upon the Millipore
Indemnitees, or which are imposed upon the Millipore Indemnitees, and that
relate to, arise out of or result from any of the following items (without
duplication): (I) the MMI Business, any Liability of MMI or any contract,
agreement, lease, license, sales order, purchase order, instrument or other
commitment that is binding on MMI or any part of its property under applicable
law; (II) any breach by MMI or any member of the MMI Group
-- 23 --
of this Separation Agreement or any Ancillary Agreement; and (III) any IPO
Liabilities. In the event that any member of the MMI Group makes a payment to
the Millipore Indemnitees hereunder, and any of the Millipore Indemnitees
subsequently diminishes the Liability on account of which such payment was
made, either directly or through a third-party recovery, Millipore will
promptly repay (or will procure a Millipore Indemnitee to promptly repay) such
member of the MMI Group the amount by which the payment made by such member of
the MMI Group exceeds the actual cost of the associated indemnified Liability.
SECTION 7.3. INDEMNIFICATION BY MILLIPORE. Except as otherwise provided in
this Separation Agreement, Millipore shall, for itself and as agent for each
member of the Millipore Group, indemnify, defend (or, where applicable, pay
the defense costs for) and hold harmless the MMI Indemnitees from and against
any and all Liabilities that any third party seeks to impose upon the MMI
Indemnitees, or which are imposed upon the MMI Indemnitees, and that relate
to, arise out of or result from any of the following items (without
duplication): (I) the Millipore Business, any Liability of Millipore or any
contract, agreement, lease, license, sales order, purchase order, instrument
or other commitment that is binding on Millipore or any part of its property
under applicable law; and (II) any breach by Millipore or any member of the
Millipore Group of this Separation Agreement or any of the Ancillary
Agreements. In the event that any member of the Millipore Group makes a
payment to the MMI Indemnitees hereunder, and any of the MMI Indemnitees
subsequently diminishes the Liability on account of which such payment was
made, either directly or through a third-party recovery, MMI will promptly
repay (or will procure a MMI Indemnitee to promptly repay) such member of the
Millipore Group the amount by which the payment made by such member of the
Millipore Group exceeds the actual cost of the associated indemnified
Liability.
SECTION 7.4. REDUCTIONS FOR INSURANCE PROCEEDS AND OTHER RECOVERIES. The
amount of indemnification that any party (an "Indemnifying Party") is or may
be required to pay to a Millipore Indemnitee or a MMI Indemnitee (as
applicable) (an "Indemnitee") pursuant to Section 7.2, 7.3 or 7.4, as
applicable, shall be reduced (retroactively or prospectively) by any monies
received by an insured from an insurance carrier or paid by an insurance
carrier on behalf of the insured ("Insurance Proceeds") or other amounts
actually recovered from third parties by or on behalf of such Indemnitee in
respect of the related loss. The existence of a claim by an Indemnitee for
monies from an insurer or against a third party in respect of any
indemnifiable loss shall not, however, delay any payment pursuant to the
indemnification provisions contained herein and otherwise determined to be due
and owing by an Indemnifying Party. Rather the Indemnifying Party shall make
payment in full of the amount determined to be due and owing by it against an
assignment by the Indemnitee to the Indemnifying Party of the entire claim of
the Indemnitee for Insurance Proceeds or against such third party.
Notwithstanding any other provisions of this Separation Agreement, it is the
intention of the parties that no insurer or any other third party shall be (I)
entitled to a benefit it would not be entitled to receive in the absence of
the foregoing indemnification provisions, or (II) relieved of the
responsibility to pay any claims for which it is obligated. If an Indemnitee
has received the payment required by this Separation Agreement from an
Indemnifying Party in respect of any indemnifiable loss and later receives
Insurance Proceeds or other amounts in respect of such indemnifiable loss,
then such Indemnitee shall hold such Insurance Proceeds or other amounts
-- 24 --
in trust for the benefit of the Indemnifying Party (or Indemnifying Parties)
and shall pay to the Indemnifying Party, as promptly as practicable after
receipt, a sum equal to the amount of such Insurance Proceeds or other amounts
received, up to the aggregate amount of any payments received from the
Indemnifying Party pursuant to this Separation Agreement in respect of such
indemnifiable loss (or, if there is more than one Indemnifying Party, the
Indemnitee shall pay each Indemnifying Party, its proportionate share (based
on payments received from the Indemnifying Parties) of such Insurance
Proceeds).
SECTION 7.5. PROCEDURES FOR DEFENSE, SETTLEMENT AND INDEMNIFICATION OF THIRD
PARTY CLAIMS.
7.5.1. NOTICE OF CLAIMS. If an Indemnitee shall receive notice or otherwise
----------------
learn of the assertion by a Person (including any Governmental
Authority) who is not a member of the Millipore Group or of the MMI
Group of any claim or of the commencement by any such Person of any
Action (collectively, a "Third Party Claim") with respect to which an
Indemnifying Party may be obligated to provide indemnification to such
Indemnitee pursuant to Sections 7.2, 7.3 or 7.4, or any other section of
this Separation Agreement or any Ancillary Agreement, Millipore and MMI
(as applicable) will ensure that such Indemnitee shall give such
Indemnifying Party written notice thereof within 30 days after becoming
aware of such Third Party Claim. Any such notice shall describe the
Third Party Claim in reasonable detail. Notwithstanding the foregoing,
the delay or failure of any Indemnitee or other Person to give notice as
provided in this Subsection 7.5.1 shall not relieve the related
Indemnifying Party of its obligations under this Article VII, except to
the extent that such Indemnifying Party is actually and substantially
prejudiced by such delay or failure to give notice.
7.5.2. DEFENSE BY INDEMNIFYING PARTY. An Indemnifying Party will manage the
-----------------------------
defense of and may settle or compromise any Third Party Claim. Within 30
days following the receipt of notice from an Indemnitee in accordance
with Subsection 7.5.1 (or sooner, if the nature of such Third Party
Claim so requires), the Indemnifying Party shall notify the Indemnitee
that the Indemnifying Party will assume responsibility for managing the
defense of such Third Party Claim, which notice shall specify any
reservations or exceptions.
7.5.3. DEFENSE BY INDEMNITEE. If an Indemnifying Party fails to assume
---------------------
responsibility for managing the defense of a Third Party Claim, or fails
to notify an Indemnitee that it will assume responsibility as provided
in Subsection 7.5.1, such Indemnitee may manage the defense of such
Third Party Claim; PROVIDED, HOWEVER, that the Indemnifying Party shall
reimburse all such costs and expenses in the event it is ultimately
determined that the Indemnifying Party is obligated to indemnify the
Indemnitee with respect to such Third Party Claim.
7.5.4. NO SETTLEMENT BY INDEMNITEE WITHOUT CONSENT. Unless the Indemnifying
-------------------------------------------
Party has failed to manage the defense of the Third Party Claim in
accordance with the terms of this Article VII, no Indemnitee may settle
or compromise any Third Party Claim without the consent of the
Indemnifying Party.
-- 25 --
7.5.5. NO CONSENT TO CERTAIN JUDGMENTS OR SETTLEMENTS WITHOUT CONSENT.
--------------------------------------------------------------
Notwithstanding any provision of this Section 7.5, no party shall
consent to entry of any judgment or enter into any settlement of a Third
Party Claim without the consent of the other party (such consent not to
be unreasonably withheld) if the effect of such judgment or settlement
is to (A) permit any injunction, declaratory judgment, other order or
other non monetary relief to be entered, directly or indirectly, against
the other party or (B) affect the other party in a material fashion due
to the allocation of Liabilities and related indemnities set forth in
this Separation Agreement or any other Ancillary Agreement.
SECTION 7.6. ADDITIONAL MATTERS.
7.6.1. COOPERATION IN DEFENSE. With respect to any Third Party Claim that
----------------------
implicates both MMI and Millipore in a material fashion due to the
allocation of Liabilities, responsibilities for management of defense
and related indemnities set forth in this Separation Agreement or any
Ancillary Agreement, the parties agree to cooperate fully and maintain a
joint defense (in a manner that will preserve the attorney-client
privilege with respect thereto) so as to minimize such Liabilities and
defense costs associated therewith. The party that is not responsible
for managing the defense of any such Third Party Claims in accordance
with this Article VII, agrees to keep the other party reasonably
informed with respect to significant matters relating to such Third
Party claims.
7.6.2. SUBSTITUTION. In the event of an Action in which the Indemnifying Party
------------
is not a named defendant, if either the Indemnitee or the Indemnifying
Party shall so request, the parties shall endeavor to substitute the
Indemnifying Party for the named defendant. If such substitution or
addition cannot be achieved for any reason or is not requested, the
rights and obligations of the parties regarding indemnification and the
management of the defense of claims as set forth in this Article VII
shall not be altered.
7.6.3. SUBROGATION. In the event of payment by or on behalf of any Indemnifying
-----------
Party to or on behalf of any Indemnitee in connection with any Third
Party Claim, such Indemnifying Party shall be subrogated to and shall
stand in the place of such Indemnitee, in whole or in part based upon
whether the Indemnifying Party has paid all or only part of the
Indemnitee's Liability, as to any events or circumstances in respect of
which such Indemnitee may have any right, defense or claim relating to
such Third Party Claim against any claimant or plaintiff asserting such
Third Party Claim or against any other person. Such Indemnitee shall
cooperate with such Indemnifying Party in a reasonable manner, and at
the cost and expense of such Indemnifying Party, in prosecuting any
subrogated right, defense or claim.
SECTION 7.7. SURVIVAL OF INDEMNITIES. The rights and obligations of the
members of the Millipore Group and the MMI Group under this Article VII shall
survive the sale or other transfer by any party of any Assets or businesses or
the assignment by it of any Liabilities or
-- 26 --
the sale by any member of the Millipore Group or the MMI Group of the capital
stock or other equity interests of any Subsidiary to any Person.
SECTION 7.8. NOT APPLICABLE TO TAXES. The provisions of this Article VII shall
not apply to Taxes (which are covered by the Tax Sharing Agreement).
ARTICLE VIII
DEFINITION OF CORE BUSINESSES
SECTION 8.1. PURPOSE OF CORE BUSINESS DEFINITIONS. Pursuant to certain of the
Ancillary Agreements Millipore and MMI will agree to respect the MMI Core
Business and the Millipore Core Business, respectively, in their exercise of
their respective rights under those Ancillary Agreements. The parties agree
that it is necessary to have a common definition of the MMI Core Business and
of the Millipore Core Business to serve as a consistent reference point for
these Ancillary Agreements. The definition of Millipore Core Business set
forth in Section 8.2 below and the definition of MMI Core Business set forth
in Section 8.3 below are each intended to define the core business areas of
both Millipore and MMI and to provide a common reference point for the
specific non-compete and use restriction covenants contained in the various
Ancillary Agreements. The Core Business Definitions are not intended to
establish or imply a general non-competition covenant or to prevent Millipore
from pursuing business opportunities in the MMI Core Business or to prevent
MMI from pursuing business opportunities in the Millipore Core Business so
long as such pursuit does not violate the specific non-compete or use
restriction covenants contained in the Ancillary Agreements.
SECTION 8.2. MILLIPORE CORE BUSINESS. For purposes of this Separation
Agreement and the Ancillary Agreements, Millipore's Core Business means: (I)
the BIOPHARM INDUSTRY including pharmaceutical/biotechnology and genetic
engineering companies as well as manufacturers of cosmetics, medical devices
and clinical analytical and diagnostic products; (II) the LAB & LIFE SCIENCE
RESEARCH INDUSTRY including government, university and private research and
testing analytical laboratories for proteomic, genomic, microbiological and
similar research and analysis as well as for environmental research and
analysis ; and (III) the FOOD & BEVERAGE INDUSTRY including companies that
manufacture or process foods and beverages including dairy products, beer,
wine, juice and soft drink manufacturers and bottled water companies.
SECTION 8.3. MMI CORE BUSINESS. For purposes of this Separation Agreement and
the Ancillary Agreements, MMI's Core Business means: (I) the IC MANUFACTURING
INDUSTRY including companies that manufacture integrated circuits,
semiconductors, semiconductor chips and other microelectronics components,
flat panel displays, solar cells and fiber optic cables, optical coatings,
coated optical lenses and coated optical fibers; (II) the IC OEM EQUIP &
MATERIALS MFG. INDUSTRY including companies that manufacture equipment for the
fabrication and processing of semiconductors and integrated circuits for sale
to IC Manufacturing Companies as well as companies that integrate a number of
components into subsystems sold to OEM Equipment manufacturers for
incorporation into semiconductor fabrication equipment, as well as companies
that manufacture, process and supply liquids,
-- 27 --
gases, conductive materials and other advanced materials to the IC
Manufacturing Industry and which provide products and systems to purify,
monitor and control atmospheric conditions in clean room manufacturing
environments of the IC Manufacturing Industry; and (III) the IC RESEARCH
LABORATORY INDUSTRY including university, governmental and commercial
laboratories and research operations that research and/or develop innovations
in the structure and composition of integrated circuits, the processes and
materials used to manufacture integrated circuits and new forms of integrated
circuits.
ARTICLE IX
DISPUTE RESOLUTION
SECTION 9.1. USE AND INITIATION OF PROCEDURE. In the event of a dispute
between the parties arising out of or related to this Separation Agreement or
any of the Ancillary Agreements (the "Dispute"), the parties hereto agree to
use the alternative dispute resolution procedures specified in this Article IX
(the "Procedure") in good faith in order to resolve such dispute. The
Procedure may be modified by written agreement of the parties at the time the
Dispute arises. A party seeking to initiate the Procedure shall give written
notice to the other party, describing briefly the nature of the dispute and
its claim and identifying an individual with authority to settle the dispute
on its behalf. The party receiving such notice shall have five (5) days within
which to designate, in a written notice given to the initiating party, an
individual with authority to settle the dispute on its behalf. Neither of such
authorized individuals shall have had direct substantive involvement in the
matters involved in the Dispute.
SECTION 9.2. UNASSISTED SETTLEMENT. The authorized individuals shall make such
investigation as they deem appropriate and thereafter promptly (but in no
event later than thirty (30) days from the date of the initiating party's
notice) shall commence discussions concerning resolution of the Dispute. If
the Dispute has not been resolved within thirty (30) days from the
commencement of discussions, it shall be submitted to alternative dispute
resolution ("ADR") in accordance with the provisions of Sections 9.3 through
9.10 hereof.
-- 28 --
SECTION 9.3. SELECTION OF NEUTRAL. The parties shall have ten (10) days
following the submission of the Dispute to ADR in accordance with Section 9.2
above to agree upon a mutually-acceptable person not affiliated with either of
the parties (the "Neutral"). If no Neutral has been selected within such time,
the parties agree jointly to request the American Arbitration Association, the
Center for Public Resources, or another mutually agreed-upon provider of
neutral services to supply within ten (10) days a list of potential Neutrals
with qualifications as specified by the parties in the joint request. Within
five (5) days of receipt of the list, the parties shall independently rank the
proposed candidates, shall simultaneously exchange rankings, and shall select
as the Neutral the individual receiving the highest combined ranking who is
available to serve.
SECTION 9.4. TIME AND PLACE FOR ADR. In consultation with the Neutral, the
parties shall promptly designate a mutually convenient time and place for the
ADR (and unless circumstances require otherwise, such time to be not later
than forty-five (45) days after selection of the Neutral).
SECTION 9.5. EXCHANGE OF INFORMATION. In the event either of the parties has
substantial need for information in the possession of the other party in order
to prepare for the ADR, the parties shall attempt in good faith to agree on
Procedures for the expeditious exchange of such information, with the help of
the Neutral if required.
SECTION 9.6. SUMMARY OF VIEWS. One week prior to the first scheduled session
of the ADR, each party shall deliver to the Neutral and to the other party a
concise written summary of its views on the matter in Dispute.
SECTION 9.7. STAFFING THE ADR. In the ADR, each party shall be represented by
the authorized individual and by counsel. In addition, each party may bring
such additional persons as needed to respond to questions, contribute
information and participate in the negotiations, the number of such additional
persons to be agreed upon by the parties in advance, with the assistance of
the Neutral, if necessary.
SECTION 9.8. CONDUCT OF ADR. The parties, in consultation with the Neutral,
will agree upon a format for the meetings, designed to assure that both the
Neutral and the authorized individuals have an opportunity to hear an oral
presentation of each party's views on the matter in Dispute, and that the
authorized parties attempt to negotiate a resolution of the matter in Dispute,
with or without the assistance of counsel or others, but with the assistance
of the Neutral. To this end, the Neutral is authorized to conduct both joint
meetings and separate private caucuses with the parties. The Neutral will keep
confidential all information learned in private caucus with either party
unless specifically authorized by such party to make disclosure of the
information to the other party.
SECTION 9.9. THE NEUTRAL'S VIEWS. The Neutral (I) shall, unless requested not
to do so by both parties, provide his opinion to both parties on the probable
outcome should the matter be litigated, and (II) shall make one or more
recommendations as to the terms of a possible settlement, upon any conditions
imposed by the parties (including, but not limited to, a minimum and maximum
amount). The Neutral shall base his opinions and recommendations on
-- 29 --
information available to both parties, excluding such information as may be
disclosed to him by the parties in confidence. The opinions and
recommendations of the Neutral shall not be binding on the parties.
SECTION 9.10. TERMINATION OF PROCEDURE. The parties agree to participate in
the ADR in good faith to its conclusion (as designated by the Neutral) and not
to terminate negotiations concerning resolution of the matters in Dispute
until at least ten (10) days thereafter. Each party agrees not to commence any
other proceeding or to seek other remedies prior to the conclusion of the ten-
day post-ADR negotiation period; PROVIDED, HOWEVER, that either party may
-------- -------
commence litigation within five (5) days prior to the date after which the
commencement of litigation could be barred by an applicable statute of
limitations or in order to request an injunction to prevent irreparable harm,
in which event, the parties agree (except as prohibited by court order) to
nevertheless continue to participate in the ADR to its conclusion.
SECTION 9.11. FEES OF NEUTRAL; DISQUALIFICATION. The fees of the Neutral shall
be shared equally by the parties. The Neutral shall be disqualified as a
witness, consultant, expert or counsel for either party with respect to the
matters in Dispute and any related matters in any subsequent litigation or
other proceeding with respect to the Dispute.
SECTION 9.12. CONFIDENTIALITY. The parties agree that the Procedure and the
ADR are compromise negotiations for purposes of the Federal Rules of Evidence
and the Rules of Evidence of any state of competent jurisdiction. The entirety
of the Procedure and the ADR are confidential, and no stenographic, visual or
audio record shall be made. All conduct, statements, promises, offers, views
and opinions, whether oral or written, made in the course of the Procedure or
the ADR by either of the parties, their agents, employees, representatives, or
other invitees and by the Neutral (who will be the parties' joint agent for
purposes of these compromise negotiations) are confidential and shall, in
addition and where appropriate, be deemed to be work product and privileged.
Such conduct, statements, promises, offers, views and opinions shall not be
discoverable or admissible for any purposes, including impeachment, in any
litigation or other proceeding involving the parties, and shall not be
disclosed to anyone not an agent, employee, expert, witness, or representative
of either of the parties; provided, however, that evidence otherwise
-------- -------
discoverable or admissible is not excluded from discovery or admission as a
result of its use in the ADR.
SECTION 9.13. ARBITRATION. Any Dispute which the parties cannot resolve
through ADR within ninety (90) days following the commencement of the
Procedure, unless otherwise mutually agreed, shall be submitted to final and
binding arbitration under the then current Commercial Arbitration Rules of he
American Arbitration Association ("AAA"), by three (3) arbitrators in Boston,
Massachusetts. Such arbitrators shall be selected by the mutual agreement of
the parties or, failing such agreement, shall be selected according to the
aforesaid AAA rules. The arbitrators will be instructed to prepare and deliver
a written, reasoned opinion stating their decision within thirty (30) days of
the completion of the arbitration. The prevailing party in such arbitration
shall be entitled to expenses, including costs and reasonable attorneys' and
other professional fees, incurred in connection with the arbitration (but
excluding any costs and fees associated with prior ADR, negotiation or
mediation). The decision of the arbitrator shall be final and non-appealable
and may be enforced in any court of
-- 30 --
competent jurisdiction. The use of any ADR procedures will not be construed
under the doctrine of laches, waiver or estoppel to adversely affect the
rights of either party.
SECTION 9.14. CONTINUITY OF SERVICE AND PERFORMANCE. Unless otherwise agreed
in writing, the parties will continue to provide service and honor all other
commitments under this Separation Agreement and each Ancillary Agreement
during the course of dispute resolution pursuant to the provisions of this
Article IX with respect to all matters not subject to such dispute,
controversy or claim.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. LIMITATION OF LIABILITY. IN NO EVENT SHALL ANY MEMBER OF THE
MILLIPORE GROUP OR OF THE MMI GROUP BE LIABLE TO ANY OTHER MEMBER OF THE
MILLIPORE GROUP OR OF THE MMI GROUP FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT,
INCIDENTAL OR PUNITIVE DAMAGES OR LOST PROFITS, HOWEVER CAUSED AND ON ANY
THEORY OF LIABILITY (INCLUDING NEGLIGENCE) ARISING IN ANY WAY OUT OF THIS
SEPARATION AGREEMENT, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES; PROVIDED, HOWEVER, THAT THE FOREGOING LIMITATIONS
-----------------
SHALL NOT LIMIT EACH PARTY'S INDEMNIFICATION OBLIGATIONS FOR LIABILITIES AS
SET FORTH IN ARTICLE VII ABOVE.
SECTION 10.2. ENTIRE AGREEMENT. This Separation Agreement, the Ancillary
Agreements and the Exhibits and Schedules referenced or attached hereto and
thereto, constitute the entire agreement between the parties with respect to
the subject matter hereof and thereof and shall supersede all prior written
and oral and all contemporaneous oral agreements and understandings with
respect to the subject matter hereof and thereof.
SECTION 10.3. GOVERNING LAW. This Separation Agreement shall be construed
in accordance with and all Disputes hereunder shall be governed by the laws of
the Commonwealth of Massachusetts as applied to transactions taking place
wholly within Massachusetts between Massachusetts residents. The Superior
Court of Middlesex County and/or the United States District Court for the
District of Massachusetts shall have jurisdiction and venue over all Disputes
between the parties that are permitted to be brought in a court of law
pursuant to Article IX above.
SECTION 10.4. TERMINATION. This Separation Agreement and all Ancillary
Agreements may be terminated and the Distribution abandoned at any time prior
to the IPO Closing Date by and in the sole discretion of Millipore without the
approval of MMI. This Separation Agreement may be terminated at any time after
the IPO Closing Date and before the Distribution Date by mutual consent of
Millipore and MMI. In the event of termination pursuant to this Section 10.4,
no party shall have any liability of any kind to the other party.
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SECTION 10.5. NOTICES. Notices, offers, requests or other communications
required or permitted to be given by either party pursuant to the terms of
this Separation Agreement shall be given in writing to the respective parties
to the following addresses:
if to Millipore: Millipore Corporation
80 Ashby Road
Bedford, MA 01730
Attention: General Counsel
Fax: (781) 533-3162
if to MMI: Millipore MicroElectronics, Inc.
Patriots Park
Bedford, MA 01730
Attention: General Counsel
Fax: (781) 533-3125
or to such other address as the party to whom notice is given may have
previously furnished to the other in writing as provided herein. Any notice
involving non-performance, termination, or renewal shall be sent by hand
delivery, recognized overnight courier or, within the United States, may also
be sent via certified mail, return receipt requested. All other notices may
also be sent by fax, confirmed by first class mail. All notices shall be
deemed to have been given and received on the date of actual delivery.
SECTION 10.6. COUNTERPARTS. This Separation Agreement, including the
Ancillary Agreement and the Exhibits and Schedules hereto and thereto and the
other documents referred to herein or therein, may be executed in
counterparts, each of which shall be deemed to be an original but all of which
shall constitute one and the same agreement.
SECTION 10.7. BINDING EFFECT; ASSIGNMENT. This Separation Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective legal representatives and successors, and nothing in this
Separation Agreement, express or implied, is intended to confer upon any other
Person any rights or remedies of any nature whatsoever under or by reason of
this Separation Agreement. This Separation Agreement may be enforced
separately by each member of the Millipore Group and each member of the MMI
Group. Neither party may assign this Separation Agreement or any rights or
obligations hereunder, without the prior written consent of the other party,
and any such assignment shall be void.
SECTION 10.8. SEVERABILITY. If any term or other provision of this
Separation Agreement or the Exhibits or Schedules attached hereto is
determined by a court, administrative agency or arbitrator to be invalid,
illegal or incapable of being enforced by any rule of law or public policy,
all other conditions and provisions of this Separation Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any
manner materially adverse to either party. 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 Separation
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the fullest extent possible.
-- 32 --
SECTION 10.9. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No
failure or delay on the part of either party hereto in the exercise of any
right hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement
herein, nor shall any single or partial exercise of any such right preclude
other or further exercise thereof or of any other right. All rights and
remedies existing under this Separation Agreement or the Exhibits or Schedules
attached hereto are cumulative to, and not exclusive of, any rights or
remedies otherwise available.
SECTION 10.10. AMENDMENT. No change or amendment will be made to this
Separation Agreement or the Exhibits or Schedules attached hereto except by an
instrument in writing signed on behalf of each of the parties to such
agreement.
SECTION 10.11. AUTHORITY. Each of the parties hereto represents to the
other that (A) it has the corporate or other requisite power and authority to
execute, deliver and perform this Separation Agreement, (B) the execution,
delivery and performance of this Separation Agreement by it have been duly
authorized by all necessary corporate or other actions, (C) it has duly and
validly executed and delivered this Separation Agreement, and (D) this
Separation Agreement is a legal, valid and binding obligation, enforceable
against it in accordance with its terms subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and general equity principles.
SECTION 10.12. INTERPRETATION. The headings contained in this Separation
Agreement, in any Exhibit or Schedule hereto and in the table of contents to
this Separation Agreement are for reference purposes only and shall not be
conclusive as to the meaning or interpretation of this Separation Agreement.
When a reference is made in this Separation Agreement to an Article, Section,
Subsection Exhibit or Schedule, such reference shall be to an Article,
Section, Subsection, Exhibit or Schedule of, this Separation Agreement unless
otherwise indicated.
SECTION 10.13. CONFLICTING AGREEMENTS. In the event of conflict between
this Separation Agreement and any Ancillary Agreement or other agreement
executed in connection herewith, the provisions of such other agreement shall
prevail.
IN WITNESS WHEREOF, the parties have signed this Master Separation and
Distribution Agreement effective as of the date first set forth above.
MILLIPORE CORPORATION MILLIPORE MICROELECTRONICS, INC.
By: _____________________________ By:___________________________________
Name: Name:
Title: Title:
-- 33 --
Schedule 2.3.2
==============
Subsidiaries of Millipore to be Transferred to MMI
--------------------------------------------------
Transferred Subsidiary
Transferor [Included Subsidiaries Transferred] Transferee
---------- ----------------------------------- ----------
Millipore Corporation Millipore Asia Limited Millipore MicroElectronics, Inc.
[Millipore Korea Limited]
[Millipore Singapore Pte. Limited]
Millipore International Nihon Millipore Ltd. Millipore MicroElectronics BV
Holding Company BV
Millipore International
Holding Company BV Millipore UK Ltd. Millipore MicroElectronics BV
Schedule 7.1
============
Exclusions from Releases of Pre-Separation Claims
-------------------------------------------------
A. Exclusions from Millipore's Release.
----------------------------------------
None
B. Exclusions from MMI's Release.
----------------------------------
None
-- 34 --
EXHIBIT A TO SEPARATION AGREEMENT
----------------------------------
CERTIFICATE OF CLERK
OF
MILLIPORE CORPORATION
I, Jeffrey Rudin, Clerk of MILLIPORE CORPORATION, a corporation organized and
existing under the laws of the Commonwealth of Massachusetts (the
"Corporation"), Do Hereby Certify that attached hereto are true and correct
copies of certain resolutions adopted at a meeting of the Board of Directors of
the Corporation held on _______________, 2001, which resolutions have not been
amended, modified, rescinded and remain in full force and effect on the date
hereof.
IN WITNESS WHEREOF, I have hereunder set my hand this ____ day of March, 2001.
___________________________
Jeffrey Rudin, Clerk
-- 35 --
EXHIBIT B TO SEPARATION AGREEMENT
----------------------------------
CERTIFICATE OF SECRETARY
of
Millipore MicroElectronics, Inc.
I, Peter W. Walcott, Secretary of MILLIPORE MICROELECTRONICS, INC., a
corporation organized and existing under the laws of the State of Delaware (the
"Corporation"), Do Hereby Certify that attached hereto are true and correct
copies of certain resolutions adopted at a meeting of the Board of Directors of
the Corporation on _________________ ___, 2001, which resolutions have not been
amended, modified, rescinded and remain in full force and effect on the date
hereof.
IN WITNESS WHEREOF, I have hereunder set my hand this _____ day of March,
2001.
____________________________
Peter W. Walcott, Secretary
-- 36 --