Case Documents

PUBLIC VERSION CT- COMPETITION TRIBUNAL

IN THE MATTER OF the Competition Act, R.S.C. 1985, c. C-34, and the Competition Tribunal Rules, SOR/2008-141;

AND IN THE MATTER OF the proposed acquisition by Abbott Laboratories, or an affiliate thereof, of all of the issued and outstanding shares of St. Jude Medical, Inc.;

AND IN THE MATTER OF the filing and registration of a consent agreement pursuant to sections 92 and 105 of the Competition Act.

B E T W E E N : THE COMMISSIONER OF COMPETITION Applicant – and – ABBOTT LABORATORIES Respondent

CONSENT AGREEMENT RECITALS: A. Abbott Laboratories, or an affiliate thereof, proposes to acquire all of the issued and outstanding shares of St. Jude Medical, Inc. or an affiliate thereof (the “Transaction”).

B. The Commissioner has concluded that the Transaction is likely to result in a substantial lessening and/or prevention of competition in the supply of vascular closure devices in Canada, and that the implementation of this Agreement is necessary to ensure that any substantial lessening and/or prevention of competition will not result from the Transaction.

C. Abbott does not admit but will not for the purposes of this Agreement, including execution, registration, enforcement, variation or rescission, contest the Commissioner’s conclusions that (i) the Transaction is likely to result in a substantial lessening and/or prevention of competition in the supply of vascular closure devices in Canada; and (ii)

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PUBLIC VERSION the implementation of this Agreement is necessary to ensure that any substantial lessening and/or prevention of competition will not result from the Transaction.

D. Nothing in this Agreement affects any investigation, inquiry or proceeding other than under section 92 of the Act in respect of the Transaction.

THEREFORE Abbott and the Commissioner agree as follows: I. DEFINITIONS [1] Whenever used in this Agreement, the following words and terms have the meanings set out below:

(a) “Act” means the Competition Act, R.S.C. 1985, c. C-34, as amended;

(b) “Abbott” means Abbott Laboratories and its Affiliates and their respective directors, officers, employees, agents, representatives, successors and assigns;

(c) “Affiliate” means, in respect of a Person, any other Person controlling, controlled by or under common control with such first Person, whether directly or indirectly, and “control” means directly or indirectly hold securities or other interests in a Person (i) to which are attached more than 50% of the votes that may be cast to elect directors or persons exercising similar functions or (ii) entitling the holder to receive more than 50% of the profits of the Person or more than 50% of its assets on dissolution;

(d) “Agency” means any government regulatory authority in Canada responsible for granting approvals, clearances, qualifications, licenses or permits for any aspect of the research, Development, manufacture, marketing, distribution, or sale of a Product;

(e) “Agreement” means this Consent Agreement, including the schedules hereto, and references to a “Part”, “Section”, “Paragraph” or “Schedule” are, unless otherwise indicated, references to a part, section, paragraph or schedule of or to this Agreement;

(f) “Business Day” means a day on which the Competition Bureau’s Gatineau, Quebec office is open for business;

(g) “Closing” means the completion of the Transaction under the Transaction Agreement;

(h) “Closing Date” means the date on which Closing occurs; 2

(i) “Commissioner” means the Commissioner of Competition appointed under the representatives;

(j) “Confidential Information” means competitively sensitive, proprietary and all other information that is not in the public domain, and that is owned by or pertains to a Person or a Person’s business, and includes, but is not limited to, manufacturing, operations and financial information, customer lists, price lists, contracts, cost and revenue information, marketing methods, patents, technologies, processes, or other trade secrets;

(k) “Contracts” means all real and personal property leases, software licenses, Divestiture Product Intellectual Property licenses, warranties, employment contracts, all contracts of any kind relating to construction, customer contracts, sales contracts, distribution contracts, supply bargaining agreements, disclosure agreements, and other contracts or agreements of any kind;

(l) “Development” means all preclinical and clinical drug and medical device development activities, including formulation, biological research and development activities, test method development and stability testing, toxicology, formulation, process development, manufacturing scale-up, development-stage manufacturing, quality assurance and quality control development, statistical analysis and report writing, conducting clinical trials for the purpose of obtaining any and all Product Approvals, and regulatory affairs related to the foregoing;

“Direct Cost” means a cost not to exceed the cost of labour, material, travel, and other expenditures to the extent such costs are directly incurred to provide the Divestiture Products, inputs, components, goods, assistance or services; provided, however, in each instance where: (i) an agreement to divest relevant assets is specifically referenced and attached to this Consent Agreement; and (ii) an agreement becomes a Remedial Agreement for the Divestiture Assets, “Direct Cost” means such cost as is provided in such Remedial Agreement;

(m) “Divestiture” means the sale, conveyance, transfer, assignment or other disposal of the Divestiture Assets to a Purchaser pursuant to this Agreement and with the prior approval of the Commissioner, such that Abbott will have no direct or indirect interest in the Divestiture Assets;

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PUBLIC VERSION Act and includes his authorized

guaranties, insurance agreements, agreements, utility contracts, collective confidentiality agreements, non-

PUBLIC VERSION (n) “Divestiture Agreement” means a binding and definitive agreement between Abbott and a Purchaser to effect the Divestiture pursuant to this Agreement and subject to the prior approval of the Commissioner, and, in the event Terumo is the Purchaser, the Terumo Divestiture Agreement;

(o) “Divestiture Applicant” means Abbott during the Initial Sale Period or the Divestiture Trustee during the Divestiture Trustee Sale Period;

(p) “Divestiture Assets” means all of Abbott’s assets related to the Divestiture Products, and all of Abbott’s rights, title and interest in and to all such assets to the extent legally transferable, including the research, Development, manufacture, distribution, marketing, and sale of the Divestiture Products, including, without limitation, the following:

i. all Divestiture Product Intellectual Property; ii. all Divestiture Product Manufacturing Technology and Equipment, including, at the Purchaser’s option, the Specified VCD Manufacturing Equipment, provided, however, that the Specified VCD Manufacturing Equipment may be divested to the Purchaser only after completion by Abbott and St. Jude of any Transitional Manufacturing and Supply Agreements using such equipment;

iii. all Divestiture Product Marketing Materials; iv. all Scientific and Regulatory Material; v. the Puerto Rico Facility and all Facility Assets related thereto; provided, however, that this includes only the portion of the lease agreement between St. Jude and the Puerto Rico Industrial Development Company applicable to the Puerto Rico Facility;

vi. all Contracts related to the Puerto Rico Facility; vii. all Contracts related to the research, Development, manufacture, marketing, sale and distribution of the Divestiture Products and Divestiture Product Components at the Minnesota Facility, in each case only to the extent they are related to, and only upon completion of Abbott and St. Jude’s obligations under any Transitional Manufacturing and Supply Agreement

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PUBLIC VERSION for the supply of the Divestiture Products and Divestiture Product Components to the Purchaser;

viii. all Product Approvals for the Divestiture Products; ix. all applications and rights to applications for all Product Approvals for the Divestiture Products granted by any Agency, and all supplements, amendments, and revisions thereto, any preparatory work, drafts and data necessary correspondence between Abbott or St. Jude, as applicable, and the relevant Agency related thereto;

x. all inventories, stores and supplies related to the Puerto Rico Facility of any semi-finished and finished Divestiture Product(s) and work in progress, and of raw materials and other materials relating to the research, Development, labelling, distribution, marketing, or sale of any Divestiture Product(s), including all books, records, and files, databases, printouts, and all other documents of any kind, whether stored or maintained in hard copy format, by means of electronic, optical, or magnetic media or devices, photographic or video images, or any other format or media, including, without limitation: customer advertising, analyses, sales materials, price lists, cost information, employee lists and contracts, salary and benefits information, personnel files, financial and accounting records and documents, financial statements, financial plans and forecasts, operating plans, studies reports, regulatory materials, applications, Agency filings and submissions, Agency correspondence, operating guides, technical procedures, service and warranty records, maintenance logs, equipment logs, registrations, and permits;

Provided, however, that “Divestiture Assets” shall not include the Retained Products or Retained Business, or any part of the Divestiture Assets if not needed by the Purchaser, as evidenced by its exclusion from the Divestiture Agreement; or documents containing information: (i) that relates both to the Divestiture Assets and to Retained Products or the Retained Business and cannot be segregated in a manner that preserves the usefulness of the information as it relates to the Divestiture Assets; or (ii) for which Abbott has a legal obligation to retain the original copies, Abbott shall be required to provide only copies or relevant excerpts of, or

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for the preparation thereof, and all

manufacture, finishing, packaging, files, vendor lists, correspondence, and marketing materials, marketing information, manuals, policies and

PUBLIC VERSION access to, the relevant documents containing this information, in each case pursuant to the terms of any Divestiture Agreement. In instances where such copies are provided to the Purchaser, Abbott shall provide the Purchaser with access to original documents under circumstances where copies of documents are insufficient for evidentiary or regulatory purposes;

(q) “Divested Business” manufacture, marketing, sale and distribution of the Divestiture Products conducted by St. Jude as of the Closing Date and as maintained by Abbott up to the Divestiture Date;

(r) “Divestiture Date” means the date on which Abbott during the Initial Sale Period or a Divestiture Trustee during the Divestiture Trustee Sale Period complete the Divestiture;

(s) “Divestiture Process Agreement” means the agreement described in Section 6 of this Agreement;

(t) “Divestiture Product(s)” means vascular closure devices composed of an absorbable collagen sponge and absorbable polymer anchor, each connected by a self-tightening suture, and any related Products or devices, researched, Developed manufactured, marketed, promoted, sold in, into or for Canada by St. Jude prior to the Transaction, including all Divestiture Products marketed and sold under the Trademark Angio-Seal;

(u) “Divestiture Product Components” means the components specified and described in the Manufacturing and Supply Agreement between St. Jude and Terumo and the Terumo Purchase Agreement in Confidential Schedule A;

(v) “Divestiture Product Copyrights” means rights to all original works of authorship of any kind directly related to a Divestiture Product, and any registrations and applications for registrations thereof, within Canada;

(w) “Divestiture Product Intellectual Property” means the following intellectual property owned, controlled, or licensed by St. Jude in Canada as of the Closing Date and related to a Divestiture Product:

a. Patents, Divestiture Product Trademarks, Materials and Divestiture Product Software;

b. trade dress, industrial designs, distinguishing guises, trade secrets, Divestiture Product Know-How, techniques, data,

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means the research, Development,

Product Copyrights, Divestiture Divestiture Product Marketing

PUBLIC VERSION inventions, practices, methods, and other confidential or proprietary technical, business, research, Development and other information, and all rights in Canada to limit the use or disclosure thereof;

c. rights to obtain and file for Patents and copyrights and registrations thereof in Canada; and

d. rights to sue and recover damages or obtain injunctive relief for infringement, dilution, misappropriation, violation or breach of any of the foregoing;

provided, however, “Divestiture Product Intellectual Property” does not include the corporate name of Abbott or St. Jude or the corporate names of any other corporations or companies owned or controlled by Abbott or the related logos thereof; or the business marks specified on Schedule 5.07(a) of the Terumo Divestiture Agreement;

(x) “Divestiture Product Know-How” means all the know-how that is used for the Divestiture Products, including (i) all specifications, processes, designs, plans, trade secrets, ideas, concepts and inventions, (ii) manufacturing, engineering and other manuals and drawings, (iii) standard operating procedures, formulae and flow diagrams, (iv) toxicological, biological and physical analytical studies or reports, (v) information pertaining to safety, stability, supply, selection, constitution, or use of any raw material, (vi) quality assurance, quality control and clinical data, (vii) technical information and (viii) research records;

(y) “Divestiture Product Equipment” means all technology and equipment to make a Divestiture Product, including, but not limited to:

i. all technology, trade secrets, formulas and proprietary information (whether patented, patentable or otherwise) related to the manufacture of a Divestiture Product including, but not limited to: all product specifications; processes; product designs; plans; trade secrets; ideas; concepts; manuals and drawings; standard operating procedures; flow diagrams; quality assurance and quality control systems; research records; clinical data; compositions; annual product reviews; regulatory communications; control history; current and historical information associated conformance and GMP compliance; labeling and all

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Manufacturing Technology and

manufacturing, engineering, and other with Product Approval application

PUBLIC VERSION other information related to the manufacturing process; and supplier lists;

ii. all ingredients, materials, or components used in the manufacture of a Divestiture Product; and,

iii. all machinery, equipment, mechanical and spare parts, supplies, tools, tooling, jigs, molds, dies, production supplies, samples, media, and fixtures used to manufacture, finish and package a Divestiture Product (“Manufacturing Equipment”);

(z) “Divestiture Product marketing materials used specifically in the marketing or sale of a Divestiture Product in Canada as of the date of the Divestiture;

(aa) “Divestiture Product Software” means computer programs, including all software implementation of algorithms, models and methodologies whether in source code or object code form, databases and compilations, including any and all data and collections of data, all documentation, including user manuals and training materials, related to any of the foregoing and the content and information contained on any website, used in connection with the analysis of clinical trial data for a Divestiture Product, other than software that is readily purchasable or licensable and which has not been modified in a manner material to the use or function thereof (other than through user preference settings);

(bb) “Divestiture Product Trade-marks” means all proprietary names or designations, trade-marks, service marks, trade names, and brand names, including registrations and applications for registration therefor (and all renewals, modifications, and extensions thereof) and all common law rights, and the goodwill symbolized thereby and associated therewith, all in Canada, for the Divestiture Products;

(cc) “Divestiture Trustee” means the Person appointed pursuant to Part III of this Agreement (or any substitute appointed thereto) and any employees, agents or other Persons acting for or on behalf of the Divestiture Trustee;

(dd) “Divestiture Trustee Sale” means the Divestiture to be conducted by the Divestiture Trustee pursuant to Part III of this Agreement;

(ee) “Divestiture Trustee Sale Period” means the 12 month period commencing upon expiry of the Initial Sale Period;

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Marketing Materials” means all

PUBLIC VERSION (ff) “First Reference Date” shall have the meaning set out in Paragraph 22(d) of this Agreement;

(gg) “Facility Assets” means all of Abbott’s rights, title and interests in and to the following:

i. all real property interests, including all rights, title, and interests in and to owned or leased property, together with all easements, rights of way, buildings, improvements, and appurtenances “Facility(ies)”;

ii. all applicable federal, state, and local regulatory registrations, permits, and applications, and all documents related thereto, necessary for the operation and conduct of the Divested Business at such Facility(ies) to the extent held by Abbott and with respect to which the transfer thereof is permitted by law; provided, however, that Abbott shall cooperate with the Purchaser in securing any federal, state, or local regulatory registrations, permits, and applications for which transfer is not permitted by law; and,

iii. all fixtures, equipment, machinery, tools, dies, vehicles, personal property, or tangible property of any kind located at such Facility(ies) that are owned or leased by Abbott, or that Abbott has the legal right to use, or over which Abbott has custody or control, that are related to:

a. the manufacture, marketing or sale of any Divestiture Product; or

b. compliance regulation, (including, but not limited to, environmental laws) of any Government Authority;

(hh) “Government Authority” means (i) any federal, provincial, state, territorial, municipal, local or other government or governmental or public ministry, department, agency, tribunal, commission, board, bureau or instrumentality, domestic or foreign, (ii) any subdivision, or authority of any of the foregoing, and (iii) any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for account of any of the above;

(ii) “GMP” means current Good Manufacturing Practice, as set forth in the Food and Drugs Act, R.S.C. 1985, c. F-27, as amended, and all rules and regulations promulgated thereunder;

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research, Development, production,

with any statute, ordinance, rule, or other legal requirement

PUBLIC VERSION (jj) “Initial Sale Period” means the period that commences at Closing and ends 90 days from the Closing Date;

(kk) “Minnesota Facility” means St. Jude’s manufacturing facility located in Minnetonka, Manufacturing and Supply Agreement between St. Jude and Terumo which will be executed and become effective on the Divestiture Date, submitted as part of the Terumo Divestiture Agreement;

(ll) “Monitor” means the Person appointed pursuant to Part XI of this Agreement (or any substitute appointed thereto), and any employees, agents or other Persons acting for or on behalf of the Monitor, provided that if no Monitor is appointed, other than in Part XI of this Agreement, Monitor means the Commissioner;

(mm) “Monitor Agreement” means the agreement described in Section 40 of this Agreement;

(nn) “Patent” means any Canadian patent or patent application, including provisional patent applications, invention disclosures, certificates of invention and applications for certificates of invention and statutory invention registrations, in each case existing as of the Closing Date (except where this Agreement specifies a different time), and includes, without limitation, all inventions disclosed therein, and all rights therein provided by international treaties and conventions, related to any Divestiture Product in Canada as of the Closing Date;

(oo) “Person” means any individual, corporation or partnership, sole proprietorship, trust or other unincorporated organization capable of conducting business, and any Affiliates thereof;

(pp) “Puerto Rico Facility” means Building B of the premises located at Zona Industrial Oeste Lot 20, Calle B, Caguas, Puerto Rico;

(qq) “Product” means any vascular closure devices used to facilitate secure closure of the vascular access site after coronary and peripheral catheterizations;

(rr) “Product Approvals” means any approvals, registrations, permits, licences, consents, authorizations, and other approvals, and pending applications and requests therefor, required by any Agency related to the research, Development, manufacture, use, distribution, finishing, packaging, promotion, marketing, sale, storage, transport, import or export of a Product within, into or from Canada;

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Minnesota as specified in the

PUBLIC VERSION (ss) “Purchaser” means Terumo or any Person that acquires Divestiture Assets pursuant to this Agreement and a Divestiture Agreement;

(tt) “Records” means records within the meaning of subsection 2(1) of the Act;

(uu) “Remedial Agreement” means any agreement, including the Divestiture Agreement, between Abbott and a Purchaser, or between a Divestiture Trustee (on behalf of Abbott) and a Purchaser or a Third Party (to effect the assignment of assets or rights of Abbott related to the Divestiture Products to the benefit of a Purchaser), that has been approved by the Commissioner and that is specifically referenced in this Agreement as constituting a Remedial Agreement;

(vv) “Retained Business” means (i) all assets, tangible or intangible, businesses, and goodwill related to all of the Retained Products of Abbott; and (ii) cash and cash equivalents, accounts receivable arising prior to the Divestiture Date, compensation or benefit plans; and tax assets;

(ww) “Retained Product(s)” developed, manufactured, marketed, promoted, sold or distributed by Abbott or St. Jude prior to the Transaction other than the Divestiture Products;

(xx) “Scientific and Regulatory Material” means all technological, scientific, chemical, biological, pharmacological, toxicological, regulatory, and clinical trial materials and information;

(yy) “Second Reference Date” shall have the meaning set out in Paragraph 22(e) of this Agreement;

(zz) “St. Jude” means St. Jude Medical, Inc. and its Affiliates and their respective directors, officers, employees, agents, representatives, successors and assigns;

(aaa) “Specified VCD Manufacturing Equipment” means all machinery, equipment, mechanical and spare parts, supplies, tools, jigs, molds, dies, production supplies, samples, media, and fixtures located at the Minnesota Facility that are exclusively related to the manufacture of the Divestiture Products produced at the Minnesota Facility;

(bbb) “Terumo” means Terumo Corporation, and its Affiliates and their directors, officers, employees, agents, representatives, successors and assigns;

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means any product researched,

PUBLIC VERSION (ccc) “Terumo Divestiture Agreement” means the “Terumo Purchase Agreement” among Abbott, St. Jude and Terumo dated December 6, 2016, and all amendments, exhibits, attachments, agreements and schedules thereto, including, but not limited to: Transition Services Agreement between Abbott and Terumo, the Manufacturing and Supply Agreement between St. Jude and Terumo, and Quality Agreement between St. Jude and Terumo, each of which will be executed and become effective on the Divestiture Date, that have been approved by the Commissioner to accomplish the requirements of this Agreement. The “Terumo Purchase Agreement” is attached as Confidential Schedule A to this Agreement;

(ddd) “Third Party” means any Person other than the Commissioner, Abbott, St. Jude or a Purchaser;

(eee) “Transaction” means the transaction described in the first recital to this Agreement;

(fff) “Transaction Agreement” means the Agreement and Plan of Merger dated April 27, 2016 between St. Jude and Abbott;

(ggg) “Transition Services” means technical services, personnel, assistance, training, and other logistical, administrative and transitional support as required by the Purchaser and approved by the Commissioner to facilitate the transfer of the Divestiture Assets from Abbott to the Purchaser, including, but not limited to, services, training, personnel, and support related to: audits, finance and accounting, accounts receivable, accounts payable, employee benefits, payroll, pensions, human resources, information technology and systems, maintenance and repair of facilities and equipment, manufacturing, purchasing, quality control, research and development support, technology transfer, regulatory compliance, sales and marketing, customer service, and supply chain management and customer transfer logistics;