Contribution And Distribution Agreement

EXHIBIT 10.1


CONTRIBUTION AND DISTRIBUTION AGREEMENT


BY AND BETWEEN


ALLERGAN, INC.


AND


ADVANCED MEDICAL OPTICS, INC.


Dated as of June 24, 2002


TABLE OF CONTENTS


ARTICLE I. DEFINITIONS..................................................................................2


ARTICLE II. THE CONTRIBUTION...........................................................................13
Section 2.01 Transfer of AMO Assets and Assumption of AMO Liabilities....................13
Section 2.02 AMO Assets..................................................................15
Section 2.03 AMO Liabilities.............................................................17
Section 2.04 Termination of Agreements...................................................19
Section 2.05 Transfer Documents..........................................................20
Section 2.06 AMO Consideration...........................................................20
Section 2.07 Ancillary Agreements........................................................20
Section 2.08 The Restructuring Plan......................................................21
Section 2.09 Disclaimer of Representations and Warranties................................21
Section 2.10 Consents and Governmental Approvals.........................................22
Section 2.11 Novation of Assumed AMO Liabilities.........................................23
Section 2.12 Novation of Liabilities Other than AMO Liabilities..........................24


ARTICLE III. THE DISTRIBUTION..........................................................................25
Section 3.01 The Distribution............................................................25
Section 3.02 Actions Prior to the Distribution...........................................25
Section 3.03 Sole Discretion of Allergan.................................................26
Section 3.04 Conditions to Distribution..................................................26
Section 3.05 Fractional Shares...........................................................28
Section 3.06 The AMO Board of Directors..................................................29
Section 3.07 Termination of Obligations Under this Article III...........................29


ARTICLE IV. MUTUAL RELEASES; INDEMNIFICATION...........................................................29
Section 4.01 Release of Pre-Distribution Claims..........................................29
Section 4.02 Indemnification by AMO......................................................32
Section 4.03 Indemnification by Allergan.................................................32
Section 4.04 Indemnification Obligations Net of Insurance Proceeds and Other Amounts.....33
Section 4.05 Procedures for Indemnification of Third Party Claims........................33
Section 4.06 Additional Matters..........................................................35
Section 4.07 Litigation..................................................................36
Section 4.08 Remedies Cumulative.........................................................37
Section 4.09 Survival of Indemnities.....................................................37


ARTICLE V. CONTINGENT GAINS AND CONTINGENT LIABILITIES.................................................37
Section 5.01 Definitions Relating to Contingent Gains and Contingent Liabilities.........37
Section 5.02 Contingent Gains............................................................39
Section 5.03 Exclusive Contingent Liabilities............................................40
Section 5.04 Shared Contingent Liabilities...............................................40
Section 5.05 Payments....................................................................40


Section 5.06 Procedures to Determine Status of Contingent Liability or Contingent Gain...41
Section 5.07 Certain Case Allocation Matters.............................................41
Section 5.08 Termination of Certain Article V Provisions.................................42


ARTICLE VI. INSURANCE..................................................................................42
Section 6.01 Insurance Matters...........................................................42


ARTICLE VII. EXCHANGE OF INFORMATION; CONFIDENTIALITY..................................................43
Section 7.01 Agreement for Exchange of Information; Archives.............................43
Section 7.02 Ownership of Information....................................................44
Section 7.03 Compensation for Providing Information......................................44
Section 7.04 Record Retention............................................................44
Section 7.05 Limitations of Liability....................................................45
Section 7.06 Other Agreements Providing for Exchange of Information......................45
Section 7.07 Production of Witnesses; Records; Cooperation...............................45
Section 7.08 Confidentiality.............................................................46
Section 7.09 Protective Arrangements.....................................................47


ARTICLE VIII. DISPUTE RESOLUTION.......................................................................47
Section 8.01 Disputes....................................................................47
Section 8.02 Escalation; Mediation; Arbitration..........................................47


ARTICLE IX. FURTHER ASSURANCES.........................................................................48
Section 9.01 Further Assurances..........................................................48


ARTICLE X. CERTAIN OTHER MATTERS.......................................................................49
Section 10.01 Auditors and Audits; Annual and Quarterly Statements and Accounting.........49
Section 10.02 Non-Competition.............................................................51
Section 10.03 Non-Solicitation of Employees...............................................53
Section 10.04 Late Payments...............................................................53


ARTICLE XI. TERMINATION................................................................................53


ARTICLE XII. MISCELLANEOUS.............................................................................54
Section 12.01 Limitation of Liability.....................................................54
Section 12.02 Counterparts................................................................54
Section 12.03 Entire Agreement............................................................54
Section 12.04 Corporate Power.............................................................54
Section 12.05 Signatures..................................................................54
Section 12.06 Governing Law...............................................................55
Section 12.07 Assignability...............................................................55
Section 12.08 Third Party Beneficiaries...................................................55
Section 12.09 Notices.....................................................................55
Section 12.10 Severability................................................................56
Section 12.11 Force Majeure...............................................................56


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Section 12.12 Publicity...................................................................56
Section 12.13 Expenses....................................................................56
Section 12.14 Headings....................................................................56
Section 12.15 Survival of Covenants.......................................................56
Section 12.16 Waivers of Default..........................................................57
Section 12.17 Amendments..................................................................57
Section 12.18 Controlling Documents.......................................................57
Section 12.19 Interpretation..............................................................57


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SCHEDULES


Schedule 1.01(a) AMO International Notes Schedule 1.01(b) Restructuring Plan Schedule 2.01(c) Delayed Transfer Assets Schedule 2.02(a)(i) Specified AMO Assets Schedule 2.02(a)(ii) Subsidiary Stock Transfers Schedule 2.02(b)(i) Excluded Assets Schedule 2.03(a)(i) AMO Liabilities Schedule 2.03(b)(i) Allergan Assumed Liabilities Schedule 2.04(b)(ii) Retained Agreements Schedule 4.07(a) Litigation to be Transferred to AMO Schedule 4.07(b) Litigation to be Defended by Allergan Schedule 5.01(e) Exclusive Allergan Contingent Liability Schedule 5.01(h) Exclusive AMO Contingent Gain Schedule 5.01(i) Exclusive AMO Contingent Liability Schedule 5.01(k) Shared Contingent Gain Schedule 5.01(l) Shared Contingent Liability


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EXHIBITS


Exhibit A Restated By-laws of AMO Exhibit B Restated Certificate of Incorporation of AMO Exhibit C Employee Matters Agreement Exhibit D Intellectual Property Assignment and License Agreement Exhibit E Manufacturing Agreement Exhibit F Tax Sharing Agreement Exhibit G Transitional Services Agreement


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CONTRIBUTION AND DISTRIBUTION AGREEMENT


THIS CONTRIBUTION AND DISTRIBUTION AGREEMENT, dated as of June 24, 2002, is by and between ALLERGAN, INC., a Delaware corporation ("Allergan") and ADVANCED MEDICAL OPTICS, INC., a Delaware corporation ("AMO"). Capitalized terms used herein and not otherwise defined shall have the respective meanings assigned to them in Article I hereof.


R E C I T A L S:


WHEREAS, Allergan, directly and through Subsidiaries (as defined herein), owns, operates and develops the AMO Business (as defined herein) and also owns, operates and develops the Allergan Business (as defined herein);


WHEREAS, the Board of Directors of Allergan and AMO have each determined that it would be appropriate and desirable for Allergan to separate, contribute and transfer to AMO, and for AMO to receive and assume, directly or indirectly, substantially all of the Assets and Liabilities currently associated with the AMO Business and the stock, investments or similar interests currently held by Allergan and its Subsidiaries that conduct the AMO Business;


WHEREAS, in order to effect such separation and contribution, Allergan and its Subsidiaries will contribute to AMO and its Subsidiaries all of the operations, ownership interests, assets and liabilities of Allergan and Allergan's Subsidiaries that comprise the AMO Business and such other ownership interests, assets, liabilities and operations as are described below (the "Contribution");


WHEREAS, it is anticipated that, following the Contribution but prior to the Distribution, AMO shall distribute $50,142,014 to Allergan in exchange for various assets contributed to AMO in connection with the Contribution (the "Distributable Cash"), which amount will be used by Allergan to repay existing borrowings;


WHEREAS, following the Contribution, Allergan will distribute, on a pro rata basis, to all holders of outstanding shares of Allergan Common Stock all of the outstanding shares of AMO Common Stock owned directly or indirectly by Allergan (the "Distribution");


WHEREAS, the Contribution and the Distribution is intended to qualify as a tax-free reorganization under Sections 368(a)(1)(D) and 355 of the Code, and that this Agreement is intended to be, and is hereby adopted as, a plan of reorganization under Section 368 of the Code; and


WHEREAS, Allergan and AMO have determined that it is necessary and desirable to set forth the principal corporate transactions required to effect the Contribution and Distribution, and to set forth the agreements that will govern certain matters following the Distribution;


A G R E E M E N T


NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, the parties, intending to be legally bound, hereby agree as follows:


ARTICLE I.
DEFINITIONS


For the purpose of this Agreement the following terms shall have the following meanings:


"Action" means any demand, action, suit, counter suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority or any arbitration or mediation tribunal.


"Affiliate" of any Person means a Person 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 Person, whether through ownership of voting securities or other interests, by contract or otherwise.


"Agent" means the distribution agent to be appointed by Allergan to distribute to the stockholders of Allergan pursuant to the Distribution all of the shares of AMO Common Stock held by Allergan.


"Agreement" means this Contribution and Distribution Agreement, including all of the Schedules and Exhibits hereto.


"Allergan" has the meaning set forth in the Preamble.


"Allergan's Auditors" has the meaning set forth in Section 10.01(b).


"Allergan Business" means (a) the business and operations of the divisions and Subsidiaries of Allergan to the extent they relate to the research and development, manufacturing, marketing and sale of (i) prescription and non-prescription products designed to treat diseases and disorders of the eye, including, but not limited to, glaucoma, inflammation, infection and allergy, (ii) Delivery Devices, (iii) product lines designed to treat ocular surface disease and other ocular surface conditions, including, but not limited to, ocular tears, ocular decongestants, vasoconstrictors, any products indicated for conjunctive erythema, Refresh Products and any product that contains (A) carboxymethylcellulose or (B) castor oil, Pemulin(R) and polysorbate 80, (iv) prescription and over-the-counter product lines designed for skin care and (v) biologics, including Botox Purified Neurotoxin Complex, which is used to treat neuromuscular disorders characterized by involuntary muscle contractions; and (b) all other businesses of Allergan as of the date hereof not otherwise included in the AMO Business.


"Allergan Claims" has the meaning set forth in Section 4.01(b).


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"Allergan Common Stock" means the common stock, par value $0.01 per share, of Allergan, excluding any shares held as treasury stock by Allergan.


"Allergan Delayed Transfer Assets" means any Excluded Assets, the legal title to which is expressly provided in this Agreement or any Ancillary Agreement to be transferred after the Distribution Date, but the beneficial ownership of which is transferred by this Agreement or any Ancillary Agreement on or prior to the Distribution Date.


"Allergan Delayed Transfer Liabilities" means any Excluded Liabilities, the legal obligation under which is expressly provided in this Agreement or any Ancillary Agreement to be assumed after the Distribution Date, but the burden of which is transferred by this Agreement or any Ancillary Agreement on or prior to the Distribution Date.


"Allergan Group" means Allergan, each Subsidiary of Allergan and each Person (other than any member of the AMO Group) that is either controlled directly or indirectly by Allergan immediately after the Distribution Date or that is contemplated to be controlled by Allergan immediately after the Distribution Date pursuant to the terms hereof or the Restructuring Plan.


"Allergan Indemnitees" has the meaning set forth in Section 4.02.


"Allergan Parties" has the meaning set forth in Section 4.01(a).


"Allergan Releasors" has the meaning set forth in Section 4.01(b).


"AMO" has the meaning set forth in the Preamble.


"AMO Assets" has the meaning set forth in Section 2.02(a).


"AMO's Auditors" has the meaning set forth in Section 10.01(a).


"AMO Balance Sheet" means the unaudited combined balance sheet of AMO, including the notes thereto, as of March 31, 2002.


"AMO Business" means the business and operations of the divisions and Subsidiaries of Allergan to the extent that, prior to the Distribution Date, they relate to the research and development, manufacturing, marketing and sale of (a) intraocular lenses, contact lenses, phacoemulsification equipment and other ophthalmic surgical products, and (b) disinfecting solutions, daily cleaners, enzymatic cleaners and lens rewetting drops labeled for use with contact lenses (but excluding (i) any Refresh Product, (ii) any other product that contains (A) carboxymethylcellulose or (B) castor oil, Pemulin(R) and polysorbate 80, (iii) any other product labeled, advertised, marketed, promoted or otherwise indicated, in whole or in part, for the treatment of "dry eye", (iv) any product labeled, advertised, marketed, promoted or otherwise indicated, in whole or in part, for the treatment of conjunctive erythema and (v) any product labeled, advertised, marketed, promoted or otherwise indicated, in whole or in part, for the treatment of the symptoms of dry eye if that product is not labeled, advertised, marketed, promoted or otherwise indicated solely for use with contact lenses); provided, however, that the AMO Business shall not include Delivery Devices.


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"AMO Claims" has the meaning set forth in Section 4.01(a).


"AMO Common Stock" means the common stock, par value $0.01 per share, of AMO.


"AMO Contracts" means the following contracts and agreements to which Allergan is a party or by which it or any of its Assets is bound, whether or not in writing, except for any such contract or agreement that is contemplated to be retained by Allergan or any member of the Allergan Group pursuant to any provision of this Agreement or any other Ancillary Agreement:


(a) any Contract entered into in the name of, or expressly on
behalf of, any division or business unit of AMO;


(b) any Contract that relates primarily to the AMO Business;


(c) any Contract that is otherwise expressly contemplated
pursuant to this Agreement or any of the Ancillary
Agreements to be assigned to AMO;


(d) any guarantee, indemnity, representation, warranty or other
Liability of any member of the AMO Group or the Allergan
Group in respect of any other AMO Contract, any AMO
Liability or the AMO Business (including guarantees of
financing incurred by customers or other third parties in
connection with purchases of products or services from the
AMO Business); and


(e) any OFLs relating to the AMO Business.


"AMO Delayed Transfer Asset" means any AMO Assets, the legal title to which is expressly provided in this Agreement or any Ancillary Agreement to be transferred after the Distribution Date, but the beneficial ownership of which is transferred by this Agreement or any Ancillary Agreement on or prior to the Distribution Date.


"AMO Delayed Transfer Liabilities" means any AMO Liabilities, the legal obligation under which is expressly provided in this Agreement or any Ancillary Agreement to be assumed after the Distribution Date, but the burden of which is transferred by this Agreement or any Ancillary Agreement on or prior to the Distribution Date.


"AMO Group" means AMO, each Subsidiary of AMO and each other Person that is either controlled directly or indirectly by AMO immediately after the Distribution Date or that is contemplated to be controlled by AMO immediately after the Distribution Date pursuant to the terms hereof or the Restructuring Plan.


"AMO Indemnitees" has the meaning set forth in Section 4.03.


"AMO International" means AMO International Holdings, an Ireland corporation.


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"AMO Liabilities" has the meaning set forth in Section 2.03(a).


"AMO Parties" has the meaning set forth in Section 4.01(b).


"AMO Releasors" has the meaning set forth in Section 4.01(a).


"Ancillary Agreements" means the Employee Matters Agreement, the Transitional Services Agreement, the Tax Sharing Agreement, the Intellectual Property Assignment and License Agreement, the Manufacturing Agreement, the Implementation Agreements, any sublease entered into on or prior to the Distribution Date between any member of the AMO Group, on the one hand, and any member of the Allergan Group, on the other hand, and the supplemental and other agreements and instruments related to any of the foregoing.


"Assets" means assets, properties and rights (including goodwill), wherever located (including in the possession of vendors or other third parties or elsewhere), whether real, personal or mixed, tangible or contingent, in each case whether or not recorded or reflected or required to be recorded or reflected on the books and records or financial statements of any Person, including the following:


(a) all accounting and other books, records and files whether in
paper, microfilm, microfiche, computer tape or disc,
magnetic tape or any other form;


(b) all apparatus, computers and other electronic data
processing equipment, fixtures, machinery, equipment,
furniture, office equipment, automobiles, trucks, aircraft,
rolling stock, vessels, motor vehicles and other
transportation equipment, special and general tools, test
devices, prototypes and models and other tangible personal
property;


(c) all inventories of materials, parts, raw materials,
supplies, work-in-process and finished goods and products;


(d) all interests in real property of whatever nature, including
easements, whether as owner, mortgagee or holder of a
Security Interest in real property, lessor, sublessor,
lessee, sublessee or otherwise;


(e) all interests in any capital stock or other equity interests
of any Subsidiary or any other Person, all bonds, notes,
debentures or other securities issued by any Subsidiary or
any other Person, all loans, advances or other extensions of
credit or capital contributions to any Subsidiary or any
other Person and all other investments in securities of any
Person;


(f) all license agreements, leases of personal property, open
purchase orders for raw materials, supplies, parts or
services, unfilled orders


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for the manufacture and sale of products and other
contracts, agreements or commitments;


(g) all deposits, letters of credit and performance and surety
bonds;


(h) all written technical information, data, specifications,
research and development information, engineering drawings,
operating and maintenance manuals, and materials and
analyses prepared by consultants and other third parties;


(i) all domestic and foreign patents, patent applications,
records of inventions, discoveries, copyrights, trade names,
trademarks (including all goodwill associated therewith),
service marks and registrations and applications for any of
the foregoing, trade secrets, other proprietary information,
intellectual property and licenses from third Persons
granting the right to use any of the foregoing;


(j) all computer applications, programs and other software,
including operating software, network software, systems
documentation and instructions;


(k) all cost information, sales and pricing data, customer
prospect lists, supplier records, customer and supplier
lists, customer and vender data, correspondence and lists,
product literature, artwork, design, development and
manufacturing files, vendor and customer drawings,
formulations and specifications, quality records and reports
and other books, records, studies, surveys, reports, plans
and documents;


(l) all prepaid expenses, trade accounts and other accounts and
notes receivables;


(m) all rights under contracts or agreements, all claims or
rights against any Person, choses in action or similar
rights, whether accrued or contingent;


(n) all rights under insurance policies and all rights in the
nature of insurance, indemnification or contribution;


(o) all licenses, permits, approvals and authorizations which
have been issued by any Governmental Authority;


(p) all cash or cash equivalents, bank accounts, lock boxes and
other deposit arrangements; and
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