Exhibit 10.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of this 29th day of June, 1999 by and between Linvatec Corporation, a
Florida corporation (the "Buyer"), and Minnesota Mining and Manufacturing
Company, a Delaware corporation ("3M").
WHEREAS, 3M, through its Medical Surgical Division (the "Division"),
engages in the business of manufacturing and selling a broad range of surgical
powered instrument products excluding those instruments that formed any portions
of 3M's cardiovascular perfusion business, its orthopedic devices business,
metal implant business and carpal tunnel release businesses, (the manufacture
and sale of such products through such Division being herein called the
"Business");
WHEREAS, 3M now desires to exit the Business without interrupting the
availability of products and customer support and Buyer desires to purchase and
acquire the assets of the Business, all on the terms and conditions set forth in
this Agreement;
WHEREAS, Buyer wishes to purchase all assets used in or necessary to
the Business, and to hire or otherwise retain the services of certain 3M
employees or agents necessary to or used in the Business subject to the terms
set forth herein;
WHEREAS, Buyer wishes to purchase the Business in a manner that causes
as little disruption as possible to customers of and the profitability of the
Business; and
WHEREAS, 3M now desires to sell and the Buyer desires to purchase and
acquire certain assets of the Business, all on the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties agree as follows:
ARTICLE I
Definitions
1.01 Purchased Assets. The term "Purchased Assets" or any variation
thereof as used in this Agreement shall mean the assets required to be sold,
assigned, transferred and conveyed by 3M to the Buyer pursuant to Article II
hereof.
1.02 3M Products. The term "3M Products" or "3M Product Line" or any
variation thereof as used in this Agreement shall mean those 3M products
manufactured or sold through the Division described in the attached Schedule
1.02.
1.03 Assumed Liabilities. The term "Assumed Liabilities" or any
variation thereof as used in this Agreement shall mean the liabilities and
obligations required to be assumed by the Buyer pursuant to Article IV hereof.
1.04 Purchased Intellectual Property. The term "Purchased Intellectual
Property" means patents, patent applications, utility model registrations,
design patents, registered or unregistered trademarks, trade secrets and
know-how owned by 3M on the Closing Date that directly and solely relate to the
Business as conducted on the Closing Date, with such products being listed in
Schedule 1.04, but excluding components and materials supplied to the Business
by other businesses of 3M.
1.05 Licensed Intellectual Property. The term "Licensed Intellectual
Property" means patents, patent applications, utility model registrations,
design patents, trade secrets and know-how owned by 3M on the Closing Date that
are used directly in both the Business as conducted on the Closing Date and 3M's
electronic products and/or orthopedic casting business, but excluding Components
and Materials supplied to the Business by other businesses of 3M.
1.06 IP Agreements. The term "IP Agreements" means those agreements
licensing patents to or from 3M that directly and solely relate to the Business
as conducted on the Closing Date and are listed in Schedule 1.06, excluding
however supplier, distribution, consulting and confidentiality agreements.
1.07 Sublicensed IP Agreement. The term "Sublicensed IP Agreement"
means the Automotive Supplier Agreement dated 22nd September 1998 between the
Lemelson Medical, Education and Research Foundation, Limited Partnership and 3M.
1.08 Adverse Material Change. The term "Adverse Material Change" shall
mean any change that affects the valuation of the Business in a manner that a
reasonable buyer, familiar with trends likely to affect the Business, would
consider such change in valuing the Business.
ARTICLE II
Sale of Assets
2.01 Purchased Assets. Subject to the terms and conditions hereof, 3M
agrees to sell, assign, transfer and convey to the Buyer, and the Buyer agrees
to purchase and acquire from 3M, at the Closing (as hereinafter defined) on the
Closing Date (as hereinafter defined), all of 3M's right, title and interest, if
any, immediately prior to the effective time of the Closing in and to the
following assets wherever located:
(a) The fixed assets, machinery, manufacturing equipment, laboratory
and test equipment and 3M Product specifications, drawings and manufacturing
processes documents and office equipment used in the Business, including those
assets specified, on and offsite, in Schedule 2.01(a).
(b) Raw material, packaging, factory supplies, work in progress and
finished goods inventories to the extent related to the 3M Product Line, in an
amount consistent with past practices of the Business.
(c) Purchased Intellectual Property as provided in Article VI.
(d) Records to the extent substantially related to the 3M Product Line
and the Purchased Assets.
(e) Purchase orders to the extent substantially related to the 3M
Product Line, the Purchased Assets or the Business issued by or to 3M in the
ordinary course of business.
(f) Subject to Section VI, leases, contracts, agreements and
commitments to the extent substantially related to the 3M Product Line, the
Purchased Assets or the Business, to the extent assignable and/or transferable.
(g) All registrations, licenses, permits or any other government
authorizations relating to the 3M Product Line to the extent transferable,
subject to Article VI.
(h) All demonstration units or loaner units relating to the 3M Product
Line, including those listed on Schedule 2.01(h).
2.02 Excluded Assets. It is understood and agreed that the following
assets of the Business are excluded from Purchased Assets: (i) cash; (ii)
accounts receivable; (iii) any items listed in Schedule 2.02 (Excluded Assets);
and (iv) excluded intellectual property assets set forth in Section 6.10.
2.03 Retention of Certain Records. It is understood and agreed that 3M
reserves the right to retain copies or written records of the items referred to
in Sections 2.01(c) and (d) for the purpose of defending any claims, losses,
causes of action or lawsuits, including those related to the sale of the 3M
Product Line by 3M, and for the purpose of preparing any tax returns or
financial statements or reports, provided that 3M shall maintain the
confidentiality of such documents and shall promptly notify the Buyer of any
lawsuit or claim served upon 3M relating to the Business and/or records or
documents.
ARTICLE III
Purchase Price
3.01 Purchase Price and Payment. In consideration for the Purchased
Assets, the Buyer agrees to pay to 3M Forty Million Dollars ($40,000,000) (the
"Purchase Price"), subject to being adjusted pursuant to Section 3.04. The
Purchase Price shall be payable in cash at the Closing by wire transfer of
immediately available federal funds to 3M at Norwest Bank, Minnesota, N.A.,
Minneapolis, Minnesota, ABA #091 000 019, credit to 3M General Account #30103.
3.02 Allocation of Purchase Price. It is understood and agreed by the
parties that, except as hereinafter provided, the Purchase Price shall be
allocated, within ninety (90) days following the Closing, among the Purchased
Assets in accordance with the attached Exhibit A, and that said allocation will
be used for state and federal tax purposes. Each party acknowledges that such
allocation is consistent with the requirements of Section 1060 of the Internal
Revenue Code 1986, as amended, and the regulations thereunder. Each party agrees
(i) to jointly complete and separately file Form 8594 with its federal income
tax return for the tax year in which the Closing Date occurs, and (ii) that such
party will not take a position on any income, transfer or gains tax return,
before any governmental agency charged with the collection of any such tax or in
any judicial proceeding, that is in any manner inconsistent with the terms of
such allocation without the written consent of the other party. Notwithstanding
anything to the contrary provided herein, neither party shall be bound by such
allocation in the event the Internal Revenue Service or another tax authority
successfully challenges the allocation. In the event of any challenge to such
allocation by the Internal Revenue Service or another tax authority, the parties
will give each other notice of the challenge and advise each other periodically
of the status of such challenge and reasonably cooperate with each other with
respect to such challenge.
3.03 Sales, Use and Transfer Taxes. The Buyer shall be responsible for
all sales, use and transfer taxes, deed taxes and recording fees, if any, in
each case applicable to the sale and transfer of the Purchased Assets hereunder,
except for any taxes or other fees imposed by foreign jurisdictions, which taxes
or other fees shall be paid as is customary in such jurisdictions. The Buyer
will furnish 3M at the Closing with properly executed exemption certificates,
dated the Closing Date, relating to the inventory, supplies and manufacturing
equipment being transferred pursuant to this Agreement as to which Buyer is
claiming an exemption from sales, use or other transfer taxes.
3.04 Adjustment to Purchase Price. In conjunction with the payment
called for in Section 3.01, the Purchase Price shall be reduced, or increased,
for the precise amount, in dollars, by which the Net Assets of the Business as
of the Closing are less or more than the amount listed on the December 31, 1998
Balance Sheet. If the parties are unable to agree as to the value of the assets
conveyed pursuant to Section 2.01(b), the Buyer may withhold from the Purchase
Price so much as corresponds to Buyer's calculation of the value of such assets,
with a national accounting firm, to be selected within twenty (20) days after
the Closing to complete a valuation, using the same methodology used for the
December 31, 1998 Balance Sheet, within sixty (60) days after Closing, with both
parties making final submissions ten (10) days after such firm is selected and
with both parties being bound thereby.
ARTICLE IV
Assumption of Liabilities
4.01 Assumption of Liabilities. Subject to the terms and conditions
hereof and subject to Article VI (Intellectual Property), at the Closing, the
Buyer shall assume and agree to carry out and perform all of the following
liabilities and obligations which have not been paid, performed or discharged
prior to the effective time of the Closing by 3M:
(a) all obligations of 3M related to the Business in respect of goods
received and services delivered after the Closing Date under any of the
licenses, purchase orders, leases, contracts, or written agreements included in
the Purchased Assets (collectively, the "Contracts"), the Sublicensed IP
Agreement and the IP Agreements;
(b) all warranty obligations of 3M with respect to 3M Products; and
(c) such other liabilities of the Business related to the 3M Product
Line, the Purchased Assets and the Business arising after the Closing (e.g.,
intellectual and/or product liability claims arising for products sold after the
Closing).
4.02 The language of Section 4.01(a) - (c) notwithstanding, Buyer shall
not be responsible for any taxes or liens upon the Purchased Assets that arise
from pre-Closing facts or circumstances, which 3M agrees to remove for a period
of up to eighteen (18) months following Closing, regardless of amount and
notwithstanding the materiality threshold in Article XI concerning indemnity.
ARTICLE V
Representations and Warranties
5.01 3M Representations. 3M hereby represents and warrants as follows:
(a) Organization of 3M. 3M is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
(b) Authority of 3M. 3M has full corporate power and authority to
execute, deliver and perform this Agreement and each of the Transaction
Documents (as hereinafter defined) to be entered into by it at the Closing, and
such execution, delivery and performance have been duly authorized by all
necessary and proper corporate action of 3M. This Agreement has been duly
executed and delivered by 3M, and (assuming due authorization, execution and
delivery hereof by the Buyer) is the valid and binding obligation of 3M
enforceable against 3M in accordance with its terms (except as such
enforceability may be limited by bankruptcy, reorganization, insolvency,
moratorium and other similar laws affecting creditors' rights generally or by
general principles of equity). Upon execution and delivery thereof by 3M at the
Closing (and assuming due authorization, execution and delivery thereof by the
Buyer, to the extent applicable), each of the Transaction Documents to be
entered into by 3M at the Closing will be the valid and binding obligation of 3M
enforceable against 3M in accordance with its terms (except as such
enforceability may be limited by bankruptcy, reorganization, insolvency,
moratorium or other similar laws affecting creditors' rights generally or by
general principles of equity).
(c) Title to Purchased Assets. Except as set forth in Schedule 5.01(c),
Article VI (Intellectual Property) or elsewhere in this Agreement, 3M has or
will have at the Closing title to the Purchased Assets, free and clear of all
mortgages, liens, security interests, claims, tax liabilities, charges and
encumbrances.
(d) Contracts. The attached Schedule 5.01(d)(i) lists, as of the date
of Closing, all leases, contracts, agreements and commitments to the extent
substantially related to the 3M Product Line, other than those IP agreements
listed on Schedule 1.06, the Purchased Assets or the Business to which 3M is a
party or by which 3M is bound and which involve payments of more than $10,000.00
per annum, with all purchase orders that entail annual expenditures in excess of
$10,000.00, whether in the ordinary course or otherwise, listed on Schedule
5.01(d)(ii).
(e) No Brokers. With respect to the transactions contemplated by this
Agreement, 3M has not dealt with or been contacted by any finder or broker and
is not in any way obligated to compensate such persons.
(f) Compliance with Law And Other Requirements. Except as provided in
Schedule 5.01(f), to 3M's knowledge, the Business is not in violation of any
law, ordinance or regulation of any governmental entity, which violations would
have an Adverse Material Change. All governmental approvals, permits, licenses
and other authorizations required in connection with the conduct of any material
aspect of the Business have been obtained and are in full force and effect and
are being complied with in all material respects. During the last five (5)
years, 3M has not received any notification of any asserted past or present
violation in connection with the conduct of the Business of any law, ordinance
or regulation, which violation would have an Adverse Material Change, or any
complaint, inquiry or request for information from any governmental entity
relating thereto (including 483s, warning letters, consent decrees, or other
asserted violations of legal or regulatory requirements). The Business complies
in all material respects with the requirements for ISO 9001 certification, and
has such certifications and 3M has no knowledge that it is in violation of any
requirement for CE-markings.
(g) Financials. The financial statements provided by 3M and attached
hereto as Schedule 5.01(g) are true and accurate in all material respects, have
been derived from the books and records of 3M that have been prepared and
maintained in accordance with generally accepted accounting principles (GAAP) in
all material respects.
(h) Claims Status. Except as set forth on Schedule 5.01(h), 3M is
unaware of any claims that are being asserted with respect to product liability,
regulatory or other claims.
(i) Intellectual Property. 3M disclaims any representation or warranty
provided in this Agreement as it might be construed to apply to intellectual
property except as provided in Article VI (Intellectual Property).
(j) Regulatory Approval Status. Except for the Blitz(TM) II Surgical
Powered Instruments Cleaner and Lubricant (the "Blitz(TM) products"), 3M
represents and warrants that to 3M's knowledge, all 3M Products including any
accessories currently are being marketed in compliance with all Food and Drug
Act, Medical Device Directive, CE-marking and other legal requirements in each
jurisdiction in which the 3M Products are marketed. 3M further represents that
the Food and Drug Act, Medical Device Directive, and CE-marking requirements are
not applicable to the Blitz(TM) products.
(k) Completeness of Purchased Assets. The Purchased Assets constitute
all assets necessary for 3M or used by 3M in the conduct of the Business,
particularly the manufacture of the 3M Products, except those assets identified
on Schedule 2.02 as the Excluded Assets or intellectual property, which is
governed by Article VI, or those products supplied by 3M's New Ulm plant, with
such products to be provided in the Supply Agreement. Moreover, the Purchased
Assets include all assets necessary for 3M or used by 3M in production and
testing processes of the Business at Irvine, California.
(l) Inventory. All raw material, work in progress and finished goods
inventory is current and non-obsolete in accordance with 3M's inventory policy
which is attached as Schedule 5.01(i). All such inventory, wherever located,
bears the CE xxxx.
(m) Environmental. Except as may be disclosed in the environmental
audit as provided for in Section 8.19, 3M's operation of the Business and
ownership of the Purchased Assets are, and have been, in compliance in all
material respects with all applicable environmental laws, permit requirements,
use restrictions, and waste control requirements, and no releases of any
hazardous substance requiring notification to a governmental entity have
occurred in connection with the operation of the Business or the Purchased
Assets; and no hazardous substances are used in the operation of the Business or
use of the Purchased Assets except in compliance in all material respects with
applicable law as of the date of this Agreement. For purposes of this Agreement,
the term "hazardous substance" shall mean any substance which is listed or
otherwise defined as "hazardous" or "toxic" under applicable law; as well as any
petroleum product or nuclear materials; and the term "applicable law" as used in
this Section 5.01(m) shall include any local, state, federal and/or foreign laws
and regulations that govern the existence and/or remedy of contamination on
property, the protection of the environment from contamination, the control of
hazardous wastes, or other activities involving hazardous substances, including
building materials as of the date of this Agreement.
5.02 Buyer Representations. The Buyer hereby represents and warrants as
follows:
(a) Organization of Buyer. The Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Florida.
(b) Authority of Buyer. Buyer has full corporate power and authority to
execute, deliver and perform this Agreement and each of the Transaction
Documents to be entered into by it at the Closing, and such execution, delivery
and performance have been duly authorized by all necessary and proper corporate
action of Buyer. This Agreement has been duly executed and delivered by Buyer,
and (assuming due authorization, execution and delivery hereof by 3M) is the
valid and binding obligation of Buyer enforceable against Buyer in accordance
with its terms (except as such enforceability may be limited by bankruptcy,
reorganization, insolvency moratorium and other similar laws affecting
creditors' rights generally or by general principles of equity). Upon execution
and delivery thereof by Buyer at the Closing (and assuming due authorization,
execution and delivery thereof by 3M, to the extent applicable), each of the
Transaction Documents to be entered into by Buyer at the Closing will be the
valid and binding obligation of Buyer enforceable against Buyer in accordance
with its terms (except as such enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws affecting
creditors' rights generally or by general principles of equity).
(c) Financial Ability of Buyer. The Buyer has available cash and/or
existing committed borrowing facilities sufficient to enable it to consummate
the transactions contemplated by this Agreement.
(d) No Brokers. With respect to the transactions contemplated by this
Agreement, Buyer has not dealt with or been contacted by any finder or broker
and is not in any way obligated to compensate such persons.
ARTICLE VI
Intellectual Property
6.01 Intellectual Property Recitals. The transfer of intellectual
property, and any representations or warranties regarding intellectual property
by 3M, are exclusively controlled by this Article. 3M disclaims any warranty or
representation provided elsewhere in this Agreement as it might be construed to
apply to intellectual property owned, licensed or controlled by 3M or any third
party intellectual property right. Except as provided in this Article,
intellectual property is being transferred or licensed on an "AS IS" basis. The
general intent of this Article is to transfer or license to Buyer sufficient
intellectual property rights (to the extent transferable) that are owned by or
licensed to 3M to allow Buyer to conduct the Business in the same manner it was
conducted by 3M on the Closing Date, excluding, however, intellectual property
rights relating to components or materials supplied to the Business by other
businesses of 3M, which components or materials are identified on Schedule 6.01.
Buyer does not expect to be placed in a better position with respect to third
party intellectual property rights by virtue of this Agreement than the position
occupied by 3M as to such matters as of Closing. Buyer will be responsible for
any infringement alleged with respect to third party intellectual property
rights relating to products sold after Closing.
6.02 Purchased Intellectual Property. Subject to the terms and
conditions hereof, 3M agrees to sell, assign, transfer and convey to Buyer, and
Buyer agrees to purchase and acquire from 3M, at the Closing on the Closing
Date, all of 3M's right, title and interest, if any, immediately before the
effective time of the Closing in and to the following assets:
(a) The technology and know-how within Purchased Intellectual Property
to the extent transferable by 3M, subject to a worldwide, non-exclusive,
royalty-free, assignable license, with the right to sublicense, from Linvatec
back to 3M of any technology and know-how within the field of electronic
products and equipment and orthopedic casting products and equipment;
(b) The patents, applications for patents, utility model registrations
and design patents within Purchased Intellectual Property, subject to a
worldwide, non-exclusive, royalty-free, assignable license, with the right to
sublicense, from Linvatec back to 3M of such rights within the fields of
electronic products and equipment and orthopedic casting products and equipment,
and subject to any agreement listed in Schedule 1.06 (If any royalties are due
to a third party under an IP Agreement due to 3M's sales under its license
provided herein, however, 3M will pay those royalties to Linvatec so that they
may be passed through to the third party);
(c) Any registered and unregistered trademarks (and the goodwill of the
business in which any such trademarks are used and which is symbolized by said
trademarks), and copyrights within Purchased Intellectual Property to the extent
transferable by 3M, subject to any agreement listed in Schedule 1.06.
(d) Any IP Agreement to the extent transferable by 3M. 3M's obligations
with respect to transferability of any IP Agreement are provided in Section 8.03
(Unassignable Contracts) to the extent the mechanism provided in Section 8.03
would not constitute a breach of the IP Agreement.
6.03 Trade Name and Trademark Restrictions. It is understood and agreed
that this Agreement does not constitute an agreement to transfer to Buyer the
right to use: (i) the name 3M, (ii) any 3M corporate logo alone, or (iii) any
combination of any other xxxx or symbol with any of the marks identified in
Sections 6.03(i) or 6.03(ii), except as provided in Section 6.04.
6.04 Removal of 3M Trade Names. Within a reasonable period of time not
to exceed twenty-four (24) months, except as noted below, after the Closing
Date, Buyer shall remove all trade names and trademarks of 3M not included in
the Purchased Assets from all assets transferred to Buyer hereunder; provided,
however, that it is understood and agreed that with respect to product
literature and other assets where removal of such trade names or trademarks
would result in damage to such asset, Buyer may instead relabel such assets to
conceal such trade names or trademarks. It is understood that Buyer will not be
required to remove the 3M trademark or relabel the products, if to do so would
jeopardize the registration of such product in a particular jurisdiction,
provided that Buyer agrees not to change the manner in which such xxxx is
displayed. Buyer will use its best efforts to transfer said product
registrations in its own name as soon as reasonably possible after Closing.
6.05 Intellectual Property Agreement Assumptions. Buyer agrees to
assume all of 3M's post-Closing obligations, duties, liabilities and commitments
pursuant to the IP Agreements including but not limited to any obligation for 3M
to pay any royalty. Buyer agrees to forever hold 3M harmless, defend 3M and
indemnify 3M for any damages, penalties or expenses incurred, including
reasonable attorney expenses, with respect to any claim or cause of action of
any description (regardless of the theory of liability) related to the alleged
breach of Buyer's or 3M's assumed post-Closing obligations under the IP
Agreements. Without limiting the generality of the previous portion of this
section, Buyer agrees to forever hold 3M harmless, defend 3M and indemnify 3M
for any damages with respect to a) any cause of action alleging that any third
party is entitled to a royalty for sales after the Closing Date pursuant to the
IP Agreements, or b) any cause of action for a breach of any of the IP
Agreements arising out of this Agreement or the assignment of any IP Agreement
to Buyer. The consideration paid by Buyer for the transfer of the IP Agreements
shall include the assumption by Buyer of the duties, liabilities, obligations
and commitments relating to the Intellectual Property Agreements as set forth in
this Section of the Agreement.
6.06 Warranties. 3M hereby warrants and represents, to its knowledge,
as follows:
(a) 3M has title to the patents, patent applications, design patents
and utility model registrations listed in Schedule 1.04. In addition, such title
is subject to or encumbered by the agreements listed in Schedule 1.06;
(b) From the time period beginning five (5) years prior to the
execution of this Agreement, neither 3M's Office of Intellectual Property
Counsel nor 3M senior executive management have received any claim from any
third party charging 3M with infringement of any intellectual property right in
connection with 3M's conduct of the Business, except as provided in Schedule
6.06(b);
(c) Schedule 1.04 represents a complete list of patents, patent
applications, design patents, registered trademarks, and utility model
registrations for which 3M has title that directly and solely relate to the
Business as conducted on the Closing Date, except for any patent, patent
application, design patent and utility model registration for which 3M requested
an outside counsel or International patent firm to abandon more than six (6)
months before the Closing Date;
(d) Schedule 1.06 represents a complete list of IP Agreements; and
(e) From the time period beginning five (5) years prior to the
execution of this Agreement, 3M's Office of Intellectual Property Counsel has
not received any claim from any third party claiming 3M is in breach of any IP
Agreement in connection with 3M's conduct of the Business, except as provided in
Schedule 6.06(e).
6.07 Notice, Correction of Schedules. Buyer will provide 3M with prompt
written notice identifying any item not listed on Schedule 1.04, 1.06, 6.06(b)
or 6.06(e) that Buyer comes to believe belongs on Schedule 1.04, 1.06, 6.06(b)
or 6.06(e) along with an explanation as to why such missing item belongs on
Schedule 1.04, 1.06, 6.06(b) or 6.06(e). If 3M and Buyer agree that such item
should have been listed, then 3M will use its best efforts to provide a revised
Schedule listing the missing item, subject to Section 8.03 (Unassignable
Contracts) to the extent Section 8.03 would not constitute a breach of any
agreement that belongs on Schedule 6.06(b). At any time before the Closing Date,
3M will have the unilateral right to add items to Schedules 1.04, 1.06, 6.06(b)
or 6.06(e), although Buyer will have the right to terminate this Agreement
pursuant to Section 12.01(a) if such addition constitutes a material breach.
6.08 Disclaimers. BUYER ACKNOWLEDGES THAT 3M HAS DISCLAIMED (i) ANY
REPRESENTATION OR WARRANTY OF INVENTORSHIP, TRANSFERABILITY, VALIDITY,
ORIGINALITY, ENFORCEABILITY, RELATIONSHIP TO ANY OTHER INTELLECTUAL PROPERTY
(E.G., WHETHER PATENTS ARE COUNTERPARTS OR EQUIVALENTS), NON-INFRINGEMENT,
RIGHT-TO-PRACTICE, SCOPE, STATUS (PENDING OR ISSUED) OR PRIORITY OF ANY
INTELLECTUAL PROPERTY RIGHT AND ANY AGREEMENT RELATING TO INTELLECTUAL PROPERTY;
(ii) ANY REPRESENTATION OR WARRANTY WITH RESPECT TO RIGHT TO PRACTICE AND
WHETHER ANY THIRD PARTY INTELLECTUAL PROPERTY RIGHT IS OR WOULD BE INFRINGED BY
THE BUSINESS, 3M PRODUCTS OR 3M PRODUCT LINE, AND (iii) ANY REPRESENTATION OR
WARRANTY REGARDING THE STATUS OF ANY IP AGREEMENT (FOR EXAMPLE, WHETHER THE
AGREEMENT IS BEING BREACHED).
6.09 Assignment Documents. Buyer agrees to deliver to 3M at the Closing
assignment or transfer documents consistent with this Agreement and reasonably
acceptable to 3M of patents, patent applications, utility model registrations,
design patents, patent licenses assigned in this Article.
6.10 No Implied IP Transfers. It is expressly understood and agreed
that, other than the intellectual property expressly identified in Article VI of
this Agreement (and related Schedules thereof), this Agreement does not transfer
to Buyer any interest in any intellectual property rights.
6.11 Dispute Resolution. Any dispute regarding the terms or conditions
of this Article or either party's performance or alleged breach of any term or
condition of this Article will be subject to the dispute resolution provisions
of section 12.02 except that 3M's Intellectual Property Counsel will be
substituted for 3M's General Counsel in section 12.02.
6.12 Indemnity, Notice. This Article will be subject to the provisions
of Article XI. In addition, effective twenty-four (24) months after the Closing
Date, Buyer hereby releases 3M from any claim (whether known or unknown)
relating to intellectual property or this Article that is not the subject of
written notice provided to: Chief Intellectual Property Counsel, 3M Office of
Intellectual Property Counsel, X.X. Xxx. 00000, Xx. Xxxx, Xxxxxxxxx 00000-0000,
before twenty-four (24) months after the Closing Date.
6.13. Sublicensed Intellectual Property. Effective on the Closing Date,
3M grants to Buyer a non-exclusive, fully paid-up sublicense under the
Sublicensed IP Agreement with respect to the 3M Product Line to the extent
permitted in the provisions of such Sublicensed IP Agreement relating to 3M's
sale of a product line to a third party. 3M made the payment due under section
5.b. of the Sublicensed IP Agreement on or before January 15, 1999.
6.14 Other 3M Patent. Effective on the Closing Date, 3M agrees and
covenants not to xxx Buyer with respect to Buyer's use (if any) of the method
claimed in US Patent No. 4,806,730 in Buyer's conduct of the Business. This
covenant will also cover suppliers of Buyer to the extent they practice this
method to supply Buyer's needs with respect to the Business. This covenant will
be transferable by Buyer to any assignee or successor of the Business.
6.15 Licensed Intellectual Property. Effective on the Closing Date, 3M
hereby grants to Linvatec a fully-paid up, non-cancelable, worldwide,
non-exclusive license under Licensed Intellectual Property to use such rights
within the field of surgical powered instruments, including without limitation
the right to make, have made, use, sell, offer for sale, lease, import, export
or otherwise dispose of products, and the right to sublicense to customers or
suppliers as a part of the manufacture or sale of products, or assign such
license to any assignee or successor of the Business. It is believed that there
are no patents, patent applications, utility model registrations, or design
patents within Licensed Intellectual Property, and thus this Section shall be
construed to grant the described license to the extent that the parties discover
that this belief is incorrect. Various products of the Business are manufactured
or assembled at a common site with 3M's orthopedic casting products business
and/or 3M's electronic products business, and there may be trade secrets and
know-how within Licensed Intellectual Property that apply or are applicable to
the Business and 3M's orthopedic casting products business and/or 3M's
electronic products business. This Section will be construed to allow Linvatec
and 3M to use such trade secrets and know-how within their respective fields
without breaching this Agreement or being sued for misappropriation or
infringement by the other party.
ARTICLE VII
Conditions to Closing
7.01 Conditions to the Buyer's Obligations. The obligations of the
Buyer to be performed at the Closing shall be subject to the satisfaction or the
waiver in writing by the Buyer at or prior to the Closing of the following
conditions:
(a) Each of the representations and warranties of 3M contained in this
Agreement shall be true in all material respects as of the Closing with the same
effect as though such representations and warranties have been made as of the
Closing, except for any variations therein resulting from actions contemplated
or permitted by this Agreement, and each of the covenants to be performed by 3M
at or before the Closing pursuant to the terms hereof shall have been duly
performed in all material respects.
(b) No action, suit or proceeding by any governmental authority shall
be pending against the Buyer or 3M which seeks to prevent the consummation of
the transactions contemplated by this Agreement, and no injunction or order for
any court or administrative agency of competent jurisdiction shall be in effect
which restricts or prohibits the consummation by the Buyer or 3M of the
transactions contemplated by this Agreement.
(c) Any waiting period (and any extension thereof) under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), applicable to the acquisition of the Purchased Assets contemplated hereby
shall have expired or been terminated.
(d) 3M and Buyer shall have executed a supply agreement containing at
least the terms set forth on Exhibit B ("Supply Agreement") to ensure a smooth
transition during that period between the Closing and the commencement of
manufacturing by Buyer.
(e) 3M and Buyer shall have executed a transition and distribution
services agreement containing at least the terms set forth on Exhibit C
("Transition and Distribution Services Agreement") to ensure a smooth transition
during that period between the Closing and the commencement of distribution and
service by Buyer.
(f) 3M and Buyer shall have executed a lease agreement containing at
least the terms set forth on Exhibit D ("Lease and Shared Facilities Agreement")
to ensure a smooth transition during that period between the Closing and the
commencement of manufacturing by Buyer in Buyer's own facility.
(g) Buyer shall be reasonably satisfied that 3M has complied, in all
material respects, with 3M's obligations pursuant to Section 8.13 (providing
names of and information relating to certain sales and technical services
employees to be considered for employment with Buyer), 8.15(a) (relating to the
transfer of data in respect of sales, orders and customer service), 8.16
(Transition Assistance in Japan), and 8.17 (Pre-Closing Disclosure).
(h) Buyer shall have received from 3M:
(i) A Xxxx of Sale in the form of Exhibit E.
(ii) Certificate of Good Standing.
(iii) Certified copies of 3M's corporate resolutions authorizing
the transaction contemplated hereby and by the Supply
Agreement.
(i) 3M shall have delivered to Buyer raw material, packaging, factory
supplies, work in progress and finished goods inventory valued in the amount
specified in Section 2.01(b), with the appropriate mix of finished-goods
products, which value shall be in an amount consistent with past practices,
which Linvatec shall verify at Closing (the "Count") and such value being
measured according to the cost of manufacturing or purchase by 3M, with Linvatec
to ship the inventory upon completing the Count at Closing. 3M shall make its
sites and responsible employees available, as needed, on weekends or holidays to
facilitate the Count. 3M shall have shipped finished goods inventories in an
amount in value not to exceed One Million Dollars ($1,000,000.00) for receipt by
Linvatec as of August 1, 1999 at Linvatec's Belgium or Largo, Florida
facilities, provided Linvatec will designate on July 21, 1999 the products to be
shipped to the respective locations to which they shall be shipped.
(j) 3M shall have completed Schedule 2.02 (Excluded Assets). Any items
added by 3M to Schedule 2.02 between the signing of this Agreement and the
Closing must be approved by Buyer, which will not withhold its approval
unreasonably.
(k) Buyer shall be reasonably satisfied that there is no Adverse
Material Change, respect of sales, costs of manufacturing, the environmental
status of the California facility and the backorder status.
(l) Buyer and/or its parent company shall have received necessary
consents and commitments for financing and shall have received funds at least
equal to the Purchase Price from its lenders as of the Closing.
(m) Buyer shall have received the environmental audit reasonably in
advance of the Closing and such audit shall not disclose any adverse material
condition.
7.02 Conditions to the Obligations of 3M. The obligations of 3M to be
performed at the Closing shall be subject to the satisfaction or the waiver in
writing by 3M at or prior to the Closing of the following conditions:
(a) Each of the representations and warranties of the Buyer contained
in this Agreement shall be true in all material respects as of the Closing with
the same effect as though such representations and warranties had been made as
of the Closing, except for any variations therein resulting from actions
contemplated or permitted by this Agreement, and each of the covenants to be
performed by the Buyer at or before the Closing pursuant to the terms hereof
shall have been duly performed in all material respects.
(b) No action, suit or proceeding by any governmental authority shall
be pending against the Buyer or 3M which seeks to prevent the consummation of
the transactions contemplated by this Agreement, and no injunction or order of
any court or administrative agency of competent jurisdiction shall be in effect
which restricts or prohibits the consummation by the Buyer of 3M of the
transactions contemplated by this Agreement.
ARTICLE VIII
Certain Agreements
8.01 Buyer Investigation; No Representations or Warranties; Exclusivity
of Remedies
(a) THE BUYER HEREBY ACKNOWLEDGES THAT IT HAS EXPERIENCE IN THE
OPERATION OF THE BUSINESS, HAS INDEPENDENTLY EVALUATED AND CONDUCTED THOROUGH
DUE DILIGENCE WITH RESPECT TO THE 3M PRODUCT LINE, THE PURCHASED ASSETS AND THE
BUSINESS (INCLUDING THE OPERATIONS, FACILITIES, CONTRACTS, MANUFACTURING
PROCESS, INTELLECTUAL PROPERTY, FINANCIAL INFORMATION AND PROSPECTS OF THE
BUSINESS), AND HAS BEEN REPRESENTED BY, AND HAD THE ASSISTANCE OF, COUNSEL
(INCLUDING INTELLECTUAL PROPERTY COUNSEL) IN THE CONDUCT OF SUCH DUE DILIGENCE,
THE PREPARATION AND NEGOTIATION OF THIS AGREEMENT AND THE TRANSACTION DOCUMENTS,
AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY.
(b) 3M HAS MADE AVAILABLE TO THE BUYER AND ITS REPRESENTATIVES CERTAIN
INFORMATION AND RECORDS RELATING TO THE 3M PRODUCT LINE, THE PURCHASED ASSETS,
INTELLECTUAL PROPERTY, AND THE BUSINESS. IT IS UNDERSTOOD AND AGREED BY THE
PARTIES THAT NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, HAS BEEN MADE BY
3M OR ITS AGENTS REGARDING THE ACCURACY OR COMPLETENESS OF ANY SUCH INFORMATION
OR RECORDS, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR ANY OF THE
TRANSACTION DOCUMENTS, AND THAT 3M WILL NOT HAVE OR BE SUBJECT TO ANY LIABILITY
TO THE BUYER OR ANY OTHER PERSON RESULTING FROM THE DISTRIBUTION TO THE BUYER,
OR THE BUYER'S USE, OF ANY SUCH INFORMATION OR RECORDS, EXCEPT AS EXPRESSLY
PROVIDED IN THIS AGREEMENT. FURTHERMORE, THE BUYER AGREES THAT IT IS ACCEPTING
POSSESSION OF THE PURCHASED ASSETS AT THE CLOSING "AS IS, WHERE IS, WITH ALL
FAULTS", WITH NO RESULTING RIGHT OF SET-OFF OR REDUCTION IN THE PURCHASE PRICE,
AND THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR ANY OF THE
TRANSACTION DOCUMENTS, THE SALE OF THE PURCHASED ASSETS IS BEING MADE WITHOUT
REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY
WARRANTY OF INCOME POTENTIAL, OPERATION EXPENSE, USE, MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE, ALL OF WHICH REPRESENTATIONS AND WARRANTIES ARE HEREBY
DISCLAIMED AND RENOUNCED BY 3M.
(c) THE BUYER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED IN SECTION 12.15, ITS SOLE AND EXCLUSIVE REMEDY WITH RESPECT
TO ANY AND ALL CLAIMS RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT
(INCLUDING CLAIMS FOR BREACHES OF REPRESENTATIONS, WARRANTIES AND COVENANTS
CONTAINED IN THIS AGREEMENT) SHALL BE PURSUANT TO THE INDEMNIFICATION PROVISIONS
SET FORTH IN ARTICLE XI.
(d) WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, NO CLAIMS
RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT MAY BE BROUGHT BY THE BUYER
AGAINST ANY DIRECTOR, OFFICER OR EMPLOYEE OF 3M IN HIS OR HER INDIVIDUAL
CAPACITY.
8.02 Conduct of Business. Except as expressly contemplated by this
Agreement, from the date hereof until the Closing, 3M will conduct the Business
in the usual and ordinary course. 3M specifically agrees that it will not (i)
enter into any agreements with respect to the Business that are less favorable
than contracts currently in place, (ii) enter into new contracts without the
prior written consent of Buyer, (iii) give away any products or services
associated with the Business without the prior written consent of Buyer (iv)
offer or provide its products to customers, distributors or others in any
special incentive pricing packages, including any bundled sales of the Products
with other medical or other products, except as may be necessary to meet
competitive pricing in the markets for the Product being sold as part of the
Business and only then after receiving proof of approval from Buyer; and (v)
offer discounted pricing or free products in connection with any effort to sell
other 3M products. 3M may, however, reasonably offer prices as needed to meet
competitors' prices for the 3M Products.
8.03 Unassignable contracts. Notwithstanding anything to the contrary
stated in this Agreement, but Subject to Article VI (Intellectual Property), if
any Contract cannot be assigned to or assumed by the Buyer without the approval,
consent or waiver of another party thereto, and such approval, consent or waiver
has not been obtained at or prior to the Closing, then (i) such Contract shall
not be assigned to or assumed by the Buyer at the Closing, (ii) 3M and the Buyer
shall, if such approval, consent or waiver is obtained following the Closing,
promptly thereafter execute all documents necessary to complete the assignment
and assumption of such Contract (at Buyer's expense), and (iii) unless and until
such approval, consent or waiver is obtained and such assignment and assumption
occurs, 3M shall hold the benefits and privileges of such Contract arising after
the Closing Date in trust, to the extent permitted, for the Buyer and the Buyer
will indemnify and hold harmless 3M against and with respect to all obligations
of 3M payable or performable after the Closing Date under such Contract. Each of
3M and the Buyer agrees to use reasonable efforts to promptly obtain all
approvals, consents and waivers from third parties to the Contracts which are
necessary to permit the Contracts to be assigned to and assumed by the Buyer,
provided that neither 3M nor the Buyer shall be obligated to make any payment or
offer or grant any accommodation (financial or otherwise) in exchange for any
such approval, consent or waiver.
8.04 Bulk Transfer Laws. 3M and the Buyer mutually waive compliance
with the provisions of any applicable state bulk transfer laws, including any
state tax laws relating to the obligations of buyers of assets in bulk
transfers.
8.05 Removal of Assets. The Buyer agrees to assume responsibility for,
and pay all expenses in connection with, removing, transporting and relocating
those Purchased Assets which at the Closing are located at any of 3M's
facilities or service centers. Such removal shall be completed according to the
dates listed on a schedule to be completed by Buyer ninety (90) days before any
such removal. 3M agrees to give the Buyer, its agents and employees access to
such facilities at reasonable times and upon reasonable notice for purposes of
removing such Purchased Assets. 3M shall have no liability to the Buyer in
connection with the storage at, or removal from, such facilities of the
Purchased Assets after the Closing, and risk of loss with respect to such
Purchased Assets shall pass to the Buyer at the Closing. 3M will provide
assistance and cooperation, for example, in providing access to buildings on
weekends, if required, in scheduling the removal of such items, and will be
responsible for moving its own equipment, and scheduling its own production, to
the extent necessary for the removal of the Purchased Assets. Buyer shall be
responsible for any damage caused as a result of its own negligence.
8.06 Record Retention. The Buyer shall retain all business files and
documents included in the Purchased Assets and so specified in Schedule 8.06
(Record Retention) for a period of ten years after the Closing Date, and the
Buyer shall make available to 3M any such records for inspection and copying,
upon reasonable notice from 3M.
8.07 Regulatory Filings. (a) The parties agree to use their best
efforts to cooperate with one another in (i) determining which filings are
required to be made prior to the consummation of the transactions contemplated
hereby, and which consents, approvals, permits or authorizations are required to
be obtained prior to the consummation of the transactions contemplated hereby
from governmental or regulatory authorities of the United States, the several
states and foreign jurisdictions in connection with the execution and delivery
of this Agreement and the consummation of the transaction contemplated hereby
and (ii) timely making all such filings and timely seeking all such consents,
approvals, permits and authorizations. Notwithstanding the foregoing, Buyer will
be solely responsible for obtaining any said filings. The parties shall be
responsible for their own counsel fees, with Buyer being responsible for fees
associated with filings required to transfer regulatory approvals and licenses.
(b) With respect to FDA and similar agencies in other countries, 3M
will cooperate with Buyer prior to Closing in identifying regulatory filings
used in the Business that cannot be transferred freely. Buyer is solely
responsible for obtaining such filings (including, but not limited to the
payment of any fees and expenses).
(c) 3M will identify all import licenses and product registrations or
approvals it holds in foreign countries pursuant to Section 8.17.
8.08 Further Assurances. For a period of three (3) years following the
Closing Date, 3M shall promptly execute, acknowledge and deliver any further
assignments, conveyances and other instruments of transfer reasonably requested
by the Buyer and necessary to effectuate the transfer of title to the Purchased
Assets to the Buyer and, at the Buyer's expense, will take any other action
consistent with the terms of this Agreement that may reasonably be requested by
the Buyer for the purpose of assigning, transferring, granting, and confirming
ownership in or to the Buyer, or reducing to the Buyer's possession, any or all
of the Purchased Assets. Such further assurances shall also extend to any
efforts reasonably requested or required in connection with the transfer of
import and regulatory permits, licenses and authorizations, which efforts shall
include, by way of illustration, acting as an import agent with Buyer being
responsible for 3M's costs, including import fees, duties and administrative
costs but excluding freight and insurance (to be paid by Buyer).
8.09 No Adverse Material Change. 3M agrees that it will make all
commercially reasonable efforts to maintain the Business at its current levels
up to and through Closing, and that there will be no adverse material change in
the Business prior to and up to the Closing.
8.10 Non-Competition Agreement. (a) For a period of five (5) years
following the Closing Date, neither 3M, nor any of the affiliates of 3M shall,
directly or indirectly (whether as principal, agent, employee, independent
contractor, partner or otherwise) engage in the manufacture or sale of any 3M
Products or products substantially similar to and competitive to the 3M Products
being sold in this Agreement anywhere in the world, except to the extent
permitted under the Transition and Distribution Services Agreement.
Notwithstanding anything to the contrary in this Section 8.10, 3M and its
affiliates shall not be deemed to have violated the terms of this Section 8.10
as a result of a) ownership by 3M or its affiliates of less than five percent
(5%) of the outstanding shares of capital stock of any publicly traded company
with one or more classes of capital stock listed on a national securities
exchange or publicly traded market, except that in the case of ownership of such
stock, directly or indirectly, for purposes of its pension fund no such percent
limit shall be applicable; b) the purchase by 3M or its affiliates of any
business where the business to be acquired owns or operates a business engaged
in the manufacture or sale of 3M Products or products substantially similar to
and competitive to the 3M Products, where such business is incidental to the
acquisition of a more significant business provided that such business is
divested within one (1) year of the date of acquisition and that 3M offers Buyer
the right of last refusal to purchase such divested business, such right
exercisable by Buyer within thirty (30) days of written notice from 3M of the
proposed sale, 3M's asking price, terms for sale as set forth in a definitive
agreement (with 3M to provide Linvatec with such information as is customarily
provided for due diligence, including all information provided to or made
available to other prospective purchasers).
(b) For a period of three (3) years after the Closing Date, neither 3M
nor any of the affiliates of 3M shall, directly or indirectly (whether as
principal, agent, employee, independent contractor, partner, or otherwise)
induce or attempt to persuade any employee or agent of Buyer engaged in the
Business or customer of the Business to terminate such employment, agency or
business relationship in order to enter into any such relationship on behalf of
any other business organization in competition with the Business;
(c) In the event 3M or any of its affiliates violates any of their
respective obligations under this Section 8.10, and Buyer may proceed against
such party in law or in equity for such damages or other relief as any court may
deem appropriate. 3M acknowledges that a violation of this Section 8.10 may
cause Buyer irreparable harm which may not be adequately compensated for by
money damages. 3M therefore agrees that in the event of any actual or threatened
violation of this Section 8.10, any Buyer shall be entitled, in addition to
other remedies that it may have, to a temporary restraining order and to
preliminary and final injunctive relief against 3M to prevent any violations of
this Section 8.10, without the necessity of posting a bond. The prevailing party
in any action commenced under this Section 8.10 shall also be entitled to
receive reasonable attorneys' fees and court costs. If at the time of
enforcement of this Section 8.10, the court shall hold that the duration, scope
or area restrictions stated herein are unreasonable under circumstances then
existing, the parties agree that the court may reduce the duration, scope or
area, in a manner rendering the restriction imposed under this Section 8.10
reasonable in duration, scope or area, but in no event in excess of the stated
duration, scope or area. In an action in law or in equity for breach or
enforcement of this Section 8.10 brought in any court having competent
jurisdiction over the parties to such an action, the prevailing party shall be
entitled to recover from the other party or parties its reasonable attorneys
fees, costs and expenses associated with prosecuting or defending such an action
to its final disposition (including final dispositions by summary adjudication,
judge or jury verdict or final appeal)
8.11 Misdirected Payments. The parties anticipate that certain third
parties, including customers and vendors, may misdirect payments or good to 3M
rather than to the Buyer, or to the Buyer rather than 3M. 3M and the Buyer agree
to notify and to forward to the other promptly any such misdirected payments or
goods.
8.12 Transition Assistance. 3M will enter into a Transition and
Distribution Services Agreement for transition services requested by Buyer to
permit the Business to be operated consistent with past practices until Buyer
can assume control of the Business so as to effectively transfer ownership of
the Purchased Assets.
8.13. Sales and Marketing Employees. By July 16, 1999, 3M shall provide
to Buyer the names, addresses, phone numbers and employment information of at
least 10 3M sales persons who are located in Germany and the United Kingdom and
who are experienced in selling the 3M Products, and one product specialist in
Germany, as well as the names of employees of 3M's Japanese joint venture who
will be available for the Shuko employment option should Buyer choose to
exercise such option; provided, however, that 3M cannot guarantee said Japanese
employees will elect the Shuko arrangement. 3M has the option, but not the
obligation, to provide such information for other 3M employees in any other
locations, including the United States. Except as set forth in Section 9.01,
Buyer shall have the option, but not the obligation, to offer employment to
those employees it selects. As to any employees offered employment by Linvatec,
3M agrees to exercise reasonable efforts to encourage such employees to accept
such offers of employment. 3M further agrees to exercise reasonable efforts to
cause the 3M joint venture to enter into such an arrangement.
8.14. Retrieval of Loaners and Demos. 3M shall be responsible for
retrieving, within thirty (30) days of any request, all loaner and demonstration
equipment, whether located in hospitals, surgery centers, physician offices or
otherwise, as requested by Linvatec for up to six (6) months following the
Closing.
8.15. Data Transfer. 3M shall provide the following assistance with
transfer of electronic data:
(a) Sales, Order, Customer Service Data. 3M shall make available
sufficient personnel and resources to transfer electronic and non-electronic
data, and shall transfer such data, relating to sales, customer base, products,
ordering and customer service functions in the formats reasonably selected by
Buyer, with such transfer to be completed within twenty (20) days following the
signing of this Agreement.
(b) Manufacturing Systems, Quality System and Other Business Systems
Requirements. 3M shall make available sufficient personnel and resources to
transfer, and shall transfer, electronic data relating to manufacturing, quality
system requirement (including complaint handling, investigation and response)
and any other functions in the formats reasonably selected by Buyer within a
reasonable period of time following Closing.
(c) Continued Access To 3M Systems: Until the transfer of data
contemplated by subsection (b) above shall have been completed to Buyer's
reasonable satisfaction, 3M shall provide Buyer with access to 3M's computer
systems and provide personnel and resources sufficient to process the complaint
handling, investigation and quality systems as have been used in the Business
and permit Buyer to use such 3M computer systems and handle such complaints
consistent with past practices at the Business.
8.16 Transition Assistance in Japan. To assist in transferring the
Business in Japan, Buyer shall have the option to employ those employees in
Japan who are employed with the 3M joint venture and who are most familiar with
the 3M Products, under a Shuko arrangement to be defined prior to Closing;
provided, however, that 3M cannot guarantee said Japanese employees will elect
the Shuko arrangement.
8.17. Pre-Closing Disclosure and Assistance. To facilitate Buyer's
taking control of the Business as of the Closing, 3M agrees to provide Buyer
with all of the information set forth on Schedule 8.17, by the dates set forth
on Schedule 8.17. 3M shall also promptly provide other information reasonably
requested by Buyer before Closing.
8.18. Exclusivity. 3M agrees that, between the date of execution of the
Agreement and the Closing, it shall not enter into or conduct any discussions
with any other prospective purchaser of the Business. Moreover, 3M agrees to
deal exclusively with Buyer for the purchase of the Business between the
execution of this Agreement and the Closing.
8.19 Environmental Audit. 3M shall obtain and deliver to the Buyer an
environmental site audit covering the property in Irvine, California.
8.20 Warranty Reserve. 3M shall pay to Buyer for 3M Products sold prior
to Closing the warranty amount of Three Hundred Thousand Dollars ($300,000.00)
associated with 3M's "A" (new equipment) and "B" (repaired equipment)
warranties.
ARTICLE IX
Employees
9.01 Employment Offers. With the exception of no more than 7 customer
service and warehouse employees to be identified by Buyer (no later than June
30, 1999) in Schedule 9.01, Buyer agrees to offer employment (at compensation
levels comparable to those being paid by 3M) as of the Closing Date , to those
persons employed in the United States at Irvine, California by 3M in connection
with the Business purchased. Such persons employed in the United States by 3M in
connection with the Business purchased shall be referred to hereinafter as the
"Business Employees". 3M agrees to exercise reasonable efforts to encourage all
Business Employees who are offered employment by Buyer to accept such offers of
employment. Those Business Employees who accept employment with Buyer pursuant
to this Agreement shall be referred to as "Transferred Employees". Business
Employees of 3M who are on long-term disability as of the Closing Date will
remain employees of 3M. Should any Transferred Employee who is absent from work
on the Closing Date due to a short-term disability remain absent long enough to
qualify for benefits under Buyer's long-term disability plan, 3M shall reimburse
Buyer for its cost of providing benefit coverages to such Transferred Employee
for as long as such Employee continues to receive long-term disability benefits
under Buyer's long-term disability plan.
9.02 Benefits. From and after the Closing Date, Buyer will provide
coverage and benefits to the Transferred Employees under the same pension and
welfare benefit plans covering its employees, and 3M will have no responsibility
therefor on and after such date. Except as provided in Section 9.04, 3M shall
remain responsible to the Transferred Employees for all benefits accrued
pursuant to 3M benefit plans prior to the Closing Date and payable under the
provisions of such plans, and Buyer assumes no liability or obligation therefor.
9.03 Group Health Plans. Buyer will cause its group health benefit
plans to (i) waive any exclusions for pre-existing conditions affecting
Transferred Employees and their eligible family members, and (ii) recognize any
out-of-pocket medical and dental expenses incurred by Transferred Employees and
their eligible family members during 1999, but prior to the Closing Date, for
purposes of determining their deductibles and out-of-pocket maximums under
Buyer's plans. For a period of two years following the Closing Date, Buyer shall
cause the premiums paid by the Transferred Employees for their coverage under
Buyer's medical plan to be equal to the premiums charged by 3M's medical plan
for similar coverage. 3M will contribute to the cost of such reduced premiums by
paying $50,000 to Buyer at Closing.
9.04 Vacation Benefits. From and after the Closing Date, the
Transferred Employees will be covered by and begin accruing benefits under
Buyer's vacation plan covering its salaried employees. Buyer's vacation plan
shall recognize all of the Transferred Employees' years of service with 3M for
the purpose of determining their future vacation benefits. On or immediately
following the Closing Date, 3M will pay in cash to the Transferred Employees the
amount of their accrued and unused vacation benefits under 3M's vacation plan
through the Closing Date. Within thirty (30) days after the Closing Date, 3M
will provide Buyer with a list of Transferred Employees and the days of unused
vacation benefits for which such employees received payment from 3M. During the
remainder of 1999, Buyer will cause its vacation plan to permit the Transferred
Employees to take unpaid absences equal in time to the number of days of unused
vacation benefits for which they received payment from 3M.
9.05 Service Credit. Buyer shall cause each of its pension and welfare
benefit plans to recognize all of the service that the Transferred Employees
completed with 3M for purposes of determining their eligibility to participate
in, eligibility for benefits under, and vesting in accrued benefits. Accrual of
benefits under such plans shall commence on the date of Closing.
9.06 Non-Solicitation. 3M agrees not to seek to hire, or to hire, any
Transferred Employee, except as may be permitted with Buyer's prior written
consent or in the event Buyer terminates the employment of such Transferred
Employee, for a period of two (2) years following the Closing Date.
9.07 Severance. Buyer will provide the following severance benefits to
any Transferred Employee whose employment is either (a) involuntarily terminated
(other than for cause) by Buyer, or (b) terminated in connection with a sale or
other disposition of all or part of the Business (unless such Employee is
offered comparable employment with the entity that acquires the Business or such
part thereof), within two years after the Closing Date: (i) severance pay in
accordance with the severance policy of Buyer in effect at the time of
termination, but not less than one and one-half weeks of pay for each year of
employment with 3M and Buyer or their affiliates (including periods prior to the
Closing Date); and (ii) six months of continued health benefits coverage for
such Transferred Employee and his or her eligible family members at no cost.
ARTICLE X
Closing
10.01 Closing Date. The closing of the purchase and sale of the
Purchased Assets and the assumption of the Assumed Liabilities pursuant to this
Agreement (the "Closing") shall take place on August 11, 1999, at the offices of
3M Center, St. Xxxx, Minnesota, at 10:00 a.m., or, if the conditions to Closing
set forth in Article VII shall not have been satisfied or waived by the
appropriate party by such time of day on such date, at the same time of day on
the first business day to occur following the date on which all of the
conditions to Closing set forth in Article VII shall have been satisfied or
waived as provided therein (subject to the provisions of Section 12.01), or at
such other date, place or time as the Buyer and 3M may agree upon in writing.
The date on which the Closing shall be required to occur, as determined in
accordance with this Section 10.01, is herein referred to as the "Closing Date".
The Closing shall be deemed to have become effective as of the close of business
on the Closing Date.
10.02 Closing Deliveries.
(a) 3M agrees to deliver to the Buyer at the Closing (i) such bills of
sale, assignments and other instruments of transfer, in form and substance
reasonably satisfactory to the Buyer, as shall be necessary or appropriate to
effect the conveyance to the Buyer of the Purchased Assets (without
representation or warranty except as expressly provided in this Agreement), duly
executed by 3M; (ii) the sublicense provided for in Section 6.13, (iii) the
warranty reserve amount provided in Section 8.20; and (iv) the payment relating
to the health insurance premiums for Transferred Employees as provided in
Section 9.03.
(b) The Buyer agrees to pay or deliver, as the case may be, to 3M at
the Closing the following:
(i) an assumption agreement, in form and substance reasonably
satisfactory to 3M, effecting the assumption by the Buyer of the
Assumed Liabilities, duly executed by the Buyer; and
(ii) the Purchase Price paid in the manner provided in Section
3.01.
(c) The certificates, instruments and documents executed and delivered
by the parties at the Closing pursuant to this Agreement are herein collectively
referred to as the "Transaction Documents".
10.03 Post-Closing Deliveries. Each of the Buyer and 3M will, at the
request and sole cost and expense of the other such party, do, make, execute,
acknowledge and deliver after the Closing all such other and further acts and
instruments of conveyance, assignment, transfer, consent and assumption as the
Buyer may reasonably require to confirm conveyance and transfer to the Buyer of
any of the Purchased Assets or as 3M may reasonably require to confirm
assumption by the Buyer of any of the Assumed Liabilities.
ARTICLE XI
Indemnity
11.01 Survival. The representations and warranties of the Buyer and 3M
herein or in any of the Transaction Documents shall survive the Closing, but, as
to any claim, only for so long as the indemnification obligations under this
Agreement with respect to such claim remain in force as provided in Section
11.02(b) or 11.03(b).
11.02 Indemnity by 3M.
(a) 3M hereby agrees to indemnify and defend the Buyer against and with
respect to any and all claims, losses, injuries, damages, deficiencies,
liabilities, obligations, assessments, judgments, costs and expenses, including
(except as otherwise expressly provided in this Agreement) costs and expenses of
litigation and reasonable attorneys' fees ("Losses"), suffered or incurred by
the Buyer to the extent caused proximately by:
(i) any material breach of any representation or warranty of
3M contained in this Agreement;
(ii) any material non-fulfillment of any covenant or agreement
of 3M contained in this Agreement;
(iii) any failure of the parties, in connection with the
transactions contemplated hereby, to comply fully with the provisions
of any applicable state bulk transfer laws, including any state tax
laws relating to the obligations of buyers of assets in bulk transfers
(provided that in no event shall 3M be required to indemnify the Buyer
hereunder with respect to any liability for which the Buyer would have
been obligated even had such laws been fully complied with, including
any Assumed Liabilities or any other liabilities or obligations that
the Buyer has expressly agreed to pay or be responsible for pursuant to
this Agreement); and
(iv) with respect to any claim of product liability or
infringement of third party intellectual property rights relating to
any sales of 3M Products by 3M before the Closing Date
(b) Notwithstanding anything to the contrary provided elsewhere in this
Agreement, the obligations of 3M under this Agreement to indemnify the Buyer
with respect to any claim pursuant to clause (i) of Section 11.02(a) shall be of
no force unless the Buyer has given 3M written notice of such claim prior to the
eighteen (18) months after the Closing Date.
(c) Notwithstanding anything to the contrary provided elsewhere in this
Agreement, in no event shall 3M be liable to the Buyer for amounts payable under
clause (i) of Section 11.02(a) until such amounts exceed in the aggregate
$100,000.00, and then only to the extent of any such excess.
(d) Notwithstanding anything to the contrary provided in this
Agreement, in no event shall 3M be liable to the Buyer for amounts payable under
clause (i) of Section 11.02(a) to the extent such amounts exceed in the
aggregate fifty percent (50%) of the Purchase Price.
11.03 Indemnity by the Buyer.
(a) The Buyer hereby agrees to indemnify and defend 3M against and with
respect to any and all Losses suffered or incurred by 3M to the extent caused
proximately by:
(i) any material breach of any representation or warranty of
the Buyer contained in this Agreement or in any of the Transaction
Documents;
(ii) any material non-fulfillment of any covenant or agreement
of the Buyer contained in this Agreement or in any of the Transaction
Documents;. and
(iii) the Assumed Liabilities.
(b) Notwithstanding anything to the contrary provided elsewhere in this
Agreement, the obligations of the Buyer under this Agreement to indemnify 3M
with respect to any claim pursuant to clause (i) of Section 11.03(a) shall be of
no force unless 3M has given the Buyer written notice of such claim prior to
eighteen (18) months after the Closing Date.
(c) Notwithstanding anything to the contrary provided elsewhere in this
Agreement, in no event shall the Buyer be liable to 3M for amounts payable under
clause (i) of Section 11.03(a) until such amounts exceed in the aggregate
$100,000.00, and then only to the extent of any such excess.
11.04 Third Party Claims.
(a) Notice. A party seeking indemnification (`Indemnified Party')
pursuant to this Agreement in respect to, arising out of or involving a claim or
demand made by any third party (a `Third Party Claim') must promptly provide in
writing to the party obligated to provide indemnification (the `Indemnified
Party').
1. Notice of the Third Party Claim;
2. Tender of its defense against the Third Party Claim; and
3. All copies of documents (including court papers) relating
to the Third Party Claim.
Failure of the Indemnifying Party to promptly provide notice, tender of defense
or copies of documents does not affect the Indemnifying Party's obligation to
provide indemnification unless the Indemnifying Party has been actually
prejudiced by the failure. However, the Indemnifying Party will not be liable
for any costs or expenses (including any settlements or judgments) incurred
prior to receiving the notice, tender and documents.
(b) Assumption of Defense. The Indemnifying Party may, at any time,
assume the defense against a Third Party Claim for which it is obligated to
defend the Indemnified Party by giving written notice to the Indemnified Party.
However, the Indemnifying Party will be responsible for any costs or expenses
(including reasonable attorneys fees) of that defense incurred by the
Indemnified Party after the Indemnified Party provided notice of the Third Party
Claim, but before the Indemnifying Party assumed the defense. Upon assuming the
defense, the Indemnifying Party will control the defense and provide counsel of
its reasonable choice to represent the Indemnified Party; however, the
Indemnified Party may, at its own expense, participate in the defense with its
own counsel.
(c) Cooperation. The Indemnified Party will, at its expense, cooperate
in the defense assumed by the Indemnifying Party. Cooperation will include, for
example, the providing records and information and making available employees,
as reasonably requested by the Indemnifying Party. The Indemnifying Party will
only be required to reimburse the Indemnified Party for actual out-of-pocket
expenses (for example, copying charges and travel expenses) incurred by the
Indemnifying Party in cooperating.
(d) Settlement.
1. By the Indemnifying Party. The Indemnifying Party may not
enter any settlement on behalf of the Indemnified Party that requires
the admission of liability of or permits injunctive relief against the
Indemnified Party without the written consent of the Indemnified Party,
which consent will not be unreasonably withheld.
2. By the Indemnified Party. The Indemnified Party will not
admit any liability with respect to, settle, compromise or discharge,
any Third Party Claim for which it seeks indemnification without the
written consent of the Indemnifying Party, which consent will not be
unreasonably withheld.
11.05 Adjustments. The amount of any Losses for which indemnification
is provided under this Article XI shall be reduced to take account of any net
tax benefit realized by the Indemnified Party arising from the incurrence or
payment of any such Losses. In computing the amount of any such tax benefit, the
Indemnified Party shall be deemed to use all other items of income, gain, loss,
deduction or credit before using any item arising from the incurrence or payment
of any indemnified Losses.
ARTICLE XII
Miscellaneous
12.01 Termination. This Agreement may be terminated and the
transactions contemplated hereby abandoned prior to the Closing:
(a) by the Buyer giving written notice to 3M, if 3M shall be in breach
in any material respect of any representation, warranty or covenant contained in
this Agreement (provided that no such termination shall occur unless the Buyer
shall have given notice to 3M of such breach, specifying in reasonable detail
the nature of such breach, and such breach shall not have been cured in all
material respects within 30 days after such notice is given), or if the
conditions set forth in Section 7.01 shall become impossible to fulfill other
than for reasons totally within the control of the Buyer and shall not have been
waived in writing by the Buyer;
(b) by 3M giving written notice to the Buyer, if the Buyer shall be in
breach in any material respect of any representation, warranty or covenant
contained in this Agreement (provided that no such termination shall occur
unless 3M shall have given notice to the Buyer of such breach, specifying in
reasonable detail the nature of such breach, and such breach shall not have been
cured in all material respects within 30 days after such notice is given), or if
the conditions set forth in Section 7.02 shall become impossible to fulfill
other than for reasons totally within the control of 3M and shall not have been
waived in writing by 3M;
(c) by mutual agreement of 3M and the Buyer; and
(d) by the Buyer or 3M giving written notice to the other such party,
if the purchase and sale of the Purchased Assets and the assumption of the
Assumed Liabilities contemplated hereby shall not have been consummated by
August 30, 1999, unless such failure shall be due to the failure of the party
seeking to terminate this Agreement to perform or observe any covenants
contained in this Agreement required to be performed or observed by such party
at or before the Closing.
If this Agreement is terminated pursuant to any of the provisions
hereof, each of the parties hereto shall thereupon be released from all
liabilities hereunder, except (i) liabilities for any default under this
Agreement which shall have occurred prior to the effective date of such
termination, (ii) all confidentiality obligations pursuant to the Confidential
Disclosure Agreement dated Xxxxx 0, 0000 ("XXX"), and (iii) obligations set
forth in Sections 12.03 and 12.13.
12.02 Dispute Resolution
(a) Any disagreement or dispute between the parties arising out of or
related to this Agreement or the breach or making hereof (a "Dispute") shall be
resolved in the manner provided in this Section 12.02. Should there develop any
Dispute, either party may, by written notice to the other party, request that
such Dispute be referred to the Group Counsel of the Medical Markets Group of 3M
and the Vice President - Legal Affairs of the Buyer's parent company (the
"Principals"), who shall negotiate in good faith to attempt to resolve the
Dispute. No settlement reached under this Section 12.02(a) shall be binding on
the parties until reduced to a writing signed on behalf of the parties by the
Principals.
(b) Should the procedure outlined in Section 12.02(a) fail to bring
about a resolution of each outstanding Dispute within 30 days following the
giving of the notice referred to therein, then the parties shall promptly
initiate a voluntary, non-binding mediation conducted by a mutually-agreed
mediator. Should the parties for any reason be unable to agree upon a mediator,
they shall request the clerk of court of the Xxxxxx County District Court in the
State of Minnesota to appoint a capable mediator for them. The Buyer and 3M
shall each bear one-half of the costs and expenses of the mediation and shall
endeavor in good faith to resolve therein each outstanding Dispute. No
settlement reached under this Section 12.02(b) shall be binding on the parties
until reduced to a writing signed on behalf of the parties by the Principals.
(c) Notwithstanding anything to the contrary provided in this Section
12.02, and without prejudice to the above procedures, either party may at any
time, in connection with any Dispute, apply to a court of competent jurisdiction
for temporary injunctive or other provisional judicial relief if in such party's
sole judgment such action is necessary to avoid irreparable damage or to
preserve the status quo until such time as the arbitration award is rendered or
the Dispute is otherwise resolved in accordance with this Section 12.02.
12.03 Expenses. Except as otherwise expressly provided herein, each
party hereto shall pay its own legal, accounting and other expenses incident to
the preparation of, and consummation of the transactions contemplated by, this
Agreement.
12.04 Titles. The titles of the Articles and Sections of this Agreement
are for convenience of reference only and are not to be considered in construing
this Agreement.
12.05 Entire Agreement. This Agreement and the CDA constitute the
entire understanding between the parties with respect to the subject matter
hereof, superseding all negotiations, prior discussions and preliminary
agreements.
12.06 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be considered an original and all of which
shall constitute one and the same instrument.
12.07 Waivers, Consents and Amendments. Any failure of either of the
parties to comply with any obligation, covenant, agreement or condition herein
may be waived by the other party only by a written instrument signed by such
other party, but such waiver or failure to insist upon strict compliance with
such obligation, covenant, agreement or condition shall not operate as a waiver
of, or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of either party hereto,
such consent shall be given in writing in a manner consistent with the
requirements for a waiver of compliance as set forth herein. This Agreement may
be amended only by an agreement, in writing, signed by the parties hereto.
12.08 Governing Law. This Agreement shall be governed in all respects
by, and construed under, the laws of the State of Minnesota.
12.09 Jurisdiction. Subject to the provisions of Section 12.02, each of
3M and the Buyer (i) irrevocably submits to the exclusive jurisdiction of the
state and federal courts sitting in Minnesota for the purposes of any suit,
action or other proceeding arising out of this Agreement or the transactions
contemplated hereby (and agrees not to commence any action, suit or proceeding
relating hereto except in any such court), (ii) agrees that service of any
process, summons, notice or document by United States registered mail to such
party's respective address set forth in Section 12.13 shall be effective service
of process for any action, suit or proceeding in Minnesota with respect to which
it has submitted to jurisdiction as set forth above, and (iii) irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
hereby in any state or federal courts sitting in Minnesota and agrees not to
plead or claim in any such court that any such action, suit or proceeding
brought therein has been brought in an inconvenient forum. Each of 3M and the
Buyer acknowledges that the time and expense required for trial by jury exceed
the time and expense required for a bench trial and hereby waive, to the extent
permitted by law, trial by jury.
12.10 SPECIAL DAMAGES. BUYER AND 3M HAVE EACH AGREED TO WAIVE ANY RIGHT
TO RECEIVE PUNITIVE, CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES RELATING IN ANY
WAY TO THIS AGREEMENT OR THE PURCHASE/SALE OF THE BUSINESS AND/OR THE PURCHASED
ASSETS, IRRESPECTIVE OF THE LEGAL THEORY ASSERTED, INCLUDING BUT NOT LIMITED TO
PAYMENTS PURSUANT TO SECTIONS 11.02 AND 11.03.
12.11 Severability of this Agreement. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
12.12 Assignment. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of the parties hereto, provided that
this Agreement may not be assigned by either party without the prior written
consent of the other party. Except as expressly provided herein, this Agreement
is for the sole benefit of the parties hereto and nothing herein shall give or
be construed to give to any person other than the parties any legal or equitable
rights under this Agreement.
12.13 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given upon
delivery in person, or one day after the same shall have been sent by overnight
messenger service, or three days after the same shall have been mailed by
registered or certified mail, postage prepaid, return receipt requested, to the
respective parties at the following addresses:
If to the Buyer: Linvatec Corporation
00000 Xxxxxxx Xxxx.
Xxxxx, XX 00000
Attention: President
with a copy: CONMED Corporation
000 Xxxxx Xx.
Xxxxx, XX 00000
Attention: President and General Counsel
If to 3M: Minnesota Mining and
Manufacturing Company
Xxxx Xxxxxx Xxx 00000
Xxxxx Xxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxx
12.14 Public Announcements. No press releases or public announcements
regarding the terms of this Agreement shall be made by either party without the
prior written approval of the other party (which approval shall not be
unreasonably withheld), except as may be necessary, in the opinion of counsel
for such party, to meet the requirements of any law or governmental regulation
or any applicable exchange regulation (in which event the other party will be
notified before, if practical under the circumstances, and after any action is
taken thereon).
12.15 Tax Treatment. It is expressly understood and agreed that none of
3M, the Buyer or any of their respective officers or agents have made any
warranty or agreement, express or implied, as to the tax consequences of the
transactions contemplated hereby.
12.16 Specific Performance. Each of the parties hereto acknowledges and
agrees that the other party would be damaged irreparably in the event any of the
covenants contained in this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each of the parties
hereto agrees that the other party shall be entitled to an injunction or
injunctions to prevent breaches of the covenants contained in this Agreement and
to enforce specifically this Agreement and the covenants contained herein in any
action properly instituted, in addition to any other remedy to which such other
party may be entitled under this Agreement or at law or in equity.
12.17 Disclosures.
(a) Matters disclosed by 3M to the Buyer in this Agreement or the
Exhibits hereto are not necessarily limited to matters required to be disclosed
by this Agreement. Any such additional matters are set forth for informational
purposes and do not necessarily include other matters of a similar nature.
(b) From time to time prior to the Closing, 3M will promptly supplement
or amend the Exhibits hereto with respect to any matter hereafter arising which
would make any representation or warranty set forth in Section 5.01 inaccurate
if updated as of the Closing, or as is otherwise necessary to correct any
information in such Exhibits or in any representation or warranty of 3M made in
Section 5.01. For purposes of determining the satisfaction of the condition set
forth in Section 7.01(b) at or prior to the Closing and the accuracy of the
representations and warranties contained in Section 5.01 if the Closing does not
occur, the Exhibits hereto shall be deemed to include only that information
contained therein on the date of this Agreement and shall be deemed to exclude
any information contained in any subsequent supplement or amendment thereto.
However, for purposes of determining the accuracy of the representations or
warranties of 3M contained in Section 5.01 or the liability of 3M with respect
thereto under Section 11.02(a) should the Closing occur, the Exhibits hereto
shall be deemed to include all information contained in any subsequent
supplement or amendment thereto.
12.18 Interpretation. In this Agreement:
(a) words denoting the singular include the plural and vice versa and
words denoting any gender include all genders;
(b) the word "including" shall mean "including without limitation";
(c) the work "affiliate" shall have the meaning set forth in Rule 12b-2
of the General Rules and Regulations under the Securities Exchange Act of 1934,
as amended;
(d) the word "person" shall mean and include an individual, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof;
(e) the word "business day" shall mean any day other than a Saturday,
Sunday or a day which is a statutory holiday under the laws of the United States
or the State of Minnesota;
(f) when calculating the period of time within which or following which
any act is to be done or step taken, the date which is the reference day in
calculating such period shall be excluded and, if the last day of such period is
not a business day, the period shall end on the next day which is a business
day; and
(g) all dollar amounts are expressed in United States funds.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
MINNESOTA MINING AND
MANUFACTURING COMPANY
By:
Its:
LINVATEC CORPORATION
By:
Its: President
EXHIBITS
A. Allocation of Purchase Price
(to be provided within ninety (90) days from Closing)
B. Supply Agreement
C. Transition and Distribution
Services Agreement
D. Lease and Shared Facilities Agreement
E. Xxxx of Sale
SCHEDULES
3M Products
1.04 Patents, Trademarks
IP Agreements
2.01(a) Purchased Assets
2.01(i) Loaner and Demo Units
Excluded Assets
5.01(c) Assets without Clear Title
5.01(d)(i) Contracts in Excess of
$10,000 Per Annum
5.01(d)(ii) Purchase Orders
5.01(g) Financials: December 31, 1998
Balance Sheet and Contribution by
Region
5.01(h) Claims
5.01(i) Inventory Policy
6.01 Materials and Components
supplied to Business by 3M
6.06(b) Claims of Infringement
6.06(e) Claims relating to IP Agreements
8.06 Record Retention
8.17 Pre-Closing Disclosure
FIRST AMENDMENT
ASSET PURCHASE AGREEMENT
3M - LINVATEC
THIS AMENDMENT, made and entered into this 10th day of August, 1999 by
and between Linvatec Corporation, a Florida corporation, having its principal
offices at 00000 Xxxxxxx Xxxxxxxxx, Xxxxx, Xxxxxxx 00000 (hereinafter referred
to as "Linvatec") and MINNESOTA MINING AND MANUFACTURING COMPANY, a Delaware
corporation, having its principal offices at 0X Xxxxxx, Xx. Xxxx, Xxxxxxxxx
00000 (hereinafter referred to as "3M").
WITNESSETH:
WHEREAS, 3M and LINVATEC have entered into that certain Asset Purchase
Agreement dated the 29th day of June, 1999 (hereinafter called the "Agreement"),
and
WHEREAS, the parties desire to amend certain terms of said Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the parties hereto agree as
follows:
1. Section 5.01(g) of the Agreement shall be amended to read as
follows:
(g) Financials. The financial statements provided by 3M
and attached to the Agreement as Schedule 5.01(g) are
true and accurate in all material respects, have been
derived from the books and records of 3M that have
been prepared and maintained in accordance with
generally accepted accounting principles (GAAP) in
all material respects. The financial statements
concerning first quarter 1999 and second quarter 1999
provided by 3M and attached to this Amendment as
Exhibit A are true and accurate in all material
respects, have been derived from the books and
records of 3M that have been prepared and maintained
in accordance with GAAP in all material respects
2. Section 3.01 of the Agreement shall be amended to read as
follows:
3.01 Purchase Price and Payment. In consideration for the
Purchased Assets, the Buyer agrees to pay to 3M
Thirty-nine Million Dollars ($39,000,000) (the
"Purchase Price"), subject to being adjusted pursuant
to Section 3.04. The Purchase Price shall be payable
in cash at the Closing by wire transfer of
immediately available federal funds to 3M at Norwest
Bank, Minnesota, N.A., Minneapolis, Minnesota, ABA
#091 000 019, credit to 3M General Account #30103.
3. Except as expressly provided by this Amendment, the Agreement and
all Exhibits and Schedules thereto shall continue in full force and effect. In
the event any of the agreements set forth in this Amendment conflict with or are
inconsistent with the provisions of the Agreement, the provisions of the
Agreement shall supersede and prevail in interpreting the rights of the parties
hereto.
4. Each of the parties to this Amendment represent and warrant to the
other that each has the full corporate power and authority to execute and
deliver this Amendment.
5. The capitalized terms herein have the same meaning as in the
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed the day and year first above written.
MINNESOTA MINING AND LINVATEC CORPORATION
MANUFACTURING COMPANY
By: By:
Name: Name:
Its: Its:
