EXHIBIT 10.3
TAX SHARING AGREEMENT
THIS TAX SHARING AGREEMENT (this "Agreement"), dated as of May 2, 1997,
is made and entered into by and between Bio-Vascular, Inc., a Minnesota
corporation ("Bio-Vascular"), and Vital Images, Inc., a Minnesota corporation
("Vital Images"). Capitalized terms used in this Agreement and not defined
herein will have the meaning given in that certain Distribution Agreement
between the parties, dated of even date herewith (the "Distribution Agreement").
RECITALS
WHEREAS, Vital Images is currently a wholly-owned subsidiary of Bio-
Vascular, and, as such, Bio-Vascular and Vital Images have joined in filing
consolidated federal Tax Returns (as defined below) and certain consolidated,
combined or unitary state, local or foreign Tax Returns; and
WHEREAS, Bio-Vascular and Vital Images have entered into the Distribution
Agreement, pursuant to which Bio-Vascular will distribute all of the issued and
outstanding shares of Vital Images Common Stock to Bio-Vascular's shareholders
in a transaction intended to qualify for tax-free treatment under Section 355 of
the Internal Revenue Code of 1986, as amended (the "Code"), on such terms and
conditions as are contained therein; and
WHEREAS, following the Distribution, Bio-Vascular and Vital Images will be
operated as independent public companies, and Vital Images will no longer be a
wholly-owned subsidiary of Bio-Vascular; and
WHEREAS, Bio-Vascular and Vital Images wish to provide for (i) allocations
of, and indemnification against, certain liabilities for Taxes (as defined
below); (ii) the preparation and filing of Tax Returns on a basis consistent
with prior practice and the payment of Taxes with respect thereto; and (iii)
certain related matters.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements contained herein, and intending to be legally bound, Bio-Vascular and
Vital Images hereby agree as follows:
ARTICLE
1.
ADDITIONAL DEFINITIONS; CERTAIN TAX PERIODS
1.1. Additional Tax Definitions. As used in this Agreement, capitalized terms
defined immediately after their use shall have the respective meanings
thereby provided, and the following additional terms shall have the
following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Bio-Vascular" shall mean only Bio-Vascular, Inc., as a separate
legal entity, excluding Vital Images or other affiliates, and such
term as used herein is not intended to represent the entire Bio-
Vascular consolidated group of companies as such term is used for
financial reporting purposes.
"Bio-Vascular Income Taxes" means, subject to Section 1.3, all
Income Taxes imposed on, assessed against, collected with respect to,
or measured by the net or gross income, profits, receipts, assets,
equity or other basis related to Bio-Vascular, or its respective
assets or operations, that arise in, or are attributable to, any and
all Pre-Closing Periods, excluding any Reserved Tax and excluding any
Vital Images Income Taxes.
"Income Tax" means any and all liability for any taxes imposed on
the income or assets of a corporation, including without limitation,
any liability under the Code and all federal, state, local, and
foreign income, alternative minimum, franchise, profits, gross
receipts and unitary taxes or similar taxes or other fees or
assessments imposed with respect thereto irrespective of the basis on
which such taxes are measured and any interest, penalties or additions
in respect of such tax.
"Pre-Closing Periods" means all taxable periods (i) ending on or
prior to the Distribution Date, and (ii) the portion to and including
the Distribution Date of any taxable period that begins on or before
the Distribution Date and ends after the Distribution Date.
"Post-Closing Periods" means all taxable periods (i) beginning
after the Distribution Date, and (ii) the portion after the
Distribution Date of any taxable period that begins on or before the
Distribution Date and ends after the Distribution Date.
"Reserved Tax" means an Income Tax liability separately accrued
or deferred on the balance sheet of Vital Images as of the
Distribution Date. The parties agree that Income Taxes shall be
accrued on such balance sheet in a manner consistent with past
practices.
"Tax" means Income Tax.
"Tax Return" means any return, report, information return or
other documents (including any related supporting schedules,
statements, or information) filed or required to be filed with any tax
authority or governmental entity in connection with the determination,
assessment or collection of any Income Taxes of any party or the
administration of any laws, regulations or administrative requirements
relating to any Taxes defined herein.
"Vital Images Income Taxes" means, subject to Section 1.3, (i)
all Income Taxes imposed on, assessed against, or collected with
respect to, Vital Images, as a separate legal entity, or its assets or
operations that arise in, or are attributable to, any and all Pre-
Closing Periods and Post-Closing Periods, and (ii) all Reserved Taxes.
"Vital Images Tax Returns" means all Tax Returns filed or
required to be filed by or with respect to Vital Images or its assets
or operations (including any consolidated, combined or unitary Tax
Returns to the extent they relate thereto).
1.2. Tax Periods Including Pre-Closing Period and Post-Closing Period Activity.
For purposes of determining Vital Images Income Taxes, for Tax periods that
begin on or prior to the Distribution Date and end after the Distribution
Date, such Income Taxes shall be determined on
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the basis of an interim "closing of the books" computation as of the end of
the Distribution Date and any net operating losses (or other tax
attributes) shall be subject to Section 1.3 hereof. With respect to the
Bio-Vascular federal consolidated income tax return for the taxable year
including the Distribution Date, appropriate allocation and cutoff of
income or loss shall be made as required in the federal consolidated income
tax return regulations. Any subsequent adjustments occurring with respect
to such period, including the Distribution Date, shall be appropriately
allocated to the Pre-Closing Period and the Post-Closing Period based on a
simulated Tax Return for each period.
1.3. Pre-Closing Period Net Operating Losses. Notwithstanding anything to the
contrary herein, the parties hereto agree that any net operating losses (or
other tax attributes) arising in any Pre-Closing Period of either party
will be available to either party to offset any taxable income for such
Pre-Closing Periods that may be generated by the other party and which may
be offset by such net operating losses (or other tax attributes) under
applicable federal or state law. The provisions of this Section 1.3 shall
apply to any net operating losses (or other tax attributes) existing on the
Distribution Date and any such net operating losses (or other tax
attributes) that may subsequently arise upon audit or examination of any
Pre-Closing Period. Under no circumstances shall either party be liable to
the other party under Article 2 or otherwise for their usage of any net
operating losses (or other tax attributes) generated by the other party and
arising in any Pre-Closing Period.
ARTICLE
2.
INDEMNIFICATION AND PAYMENT
2.1. Indemnification for and Payment of Income Taxes.
(a) Bio-Vascular shall pay when due, without setoff, and be responsible
for, all Bio-Vascular Income Taxes assessed against it by any
jurisdiction. Bio-Vascular shall indemnify and hold harmless Vital
Images against any and all Bio-Vascular Income Taxes incurred in
connection with the operation or enforcement of this Article 2.
(b) Vital Images shall pay when due, without setoff, and be responsible
for, all Vital Images Income Taxes assessed against it by any
jurisdiction, including, without limitation, any liability
subsequently imposed for Vital Images Income Taxes for Pre-Closing
Periods. Vital Images shall indemnify and hold harmless Bio-Vascular
and its affiliates against any and all Vital Images Income Taxes
incurred in connection with the operation or enforcement of this
Article 2.
(c) Bio-Vascular shall not be obligated to indemnify or hold harmless
Vital Images for any decrease to any net operating loss carryforward
or credit (or the carryforward of any other tax attributes) available
to Vital Images resulting from adjustments to any item of income,
deduction, credit or exclusion on Tax Returns for which Bio-Vascular
is responsible (including the Bio-Vascular Consolidated Returns, as
defined below).
(d) Vital Images shall not be obligated to indemnify or hold harmless Bio-
Vascular or its affiliates for any increase to any net operating loss
carryforward or credit (or the carryforward of any other tax
attributes) available to Vital Images.
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ARTICLE
3.
REFUNDS
3.1. Bio-Vascular Refunds. Vital Images shall promptly assign and remit (or
cause to be promptly assigned and remitted) to Bio-Vascular an amount equal
to any refunds of, or credits against, any Income Taxes received and
realized by Vital Images (including interest thereon, if any) to the extent
attributable to Bio-Vascular Income Taxes, other than a refund or credit
(or the right thereto) that is reflected on the balance sheet of Vital
Images as of the Distribution Date (a "Balance Sheet Refund").
3.2. Vital Images Refunds. Bio-Vascular shall promptly assign and remit (or
cause to be promptly assigned and remitted) to Vital Images an amount equal
to all Balance Sheet Refunds.
3.3. Carryback from a Vital Images Post-Closing Period Return to any Bio-
Vascular Separate, Consolidated or Combined Federal or State Tax Return.
Unless: (i) Bio-Vascular, in its sole and absolute discretion, consents to
do so; or (ii) such carryback is specifically required by law, Vital Images
shall not carry back any losses or credits accruing after the Distribution
Date in any Post-Closing Period to any Bio-Vascular separate, consolidated
or combined federal or state Tax Return. Vital Images shall make any
elections and take all such actions necessary to avoid and relinquish any
such carryback, pursuant to Code Section 172(b)(3) and, to the extent
feasible, any similar provision of any state, local or foreign law. Even if
such carryback is required by law, Bio-Vascular and its affiliates shall
make no payment to Vital Images, and Vital Images shall be entitled to no
refund to the extent that the use of such carryback prevented Bio-Vascular
or its affiliates from using a credit or loss which it would otherwise use
in the year or years to which the Vital Images' credit or loss is carried
back.
ARTICLE
4.
TAX RETURNS
4.1. Preparation and Filing.
(a) Bio-Vascular shall file or cause to be filed (upon execution thereof
by an authorized officer of Vital Images, which authorization will not
be unreasonably withheld) all Vital Images Tax Returns with respect to
all Tax periods of Vital Images ending on or prior to the Distribution
Date ("Vital Images Separate Pre-Closing Period Returns"), and,
including, without limitation, all Vital Images Tax Returns that are
(or are a part of) a consolidated or combined Tax Return that include
entities other than Vital Images, even if the Tax period with respect
to such other entities does not end on or prior to the Distribution
Date ("Bio-Vascular Consolidated Returns").
(b) Bio-Vascular shall prepare the Bio-Vascular Consolidated Returns (to
the extent they relate to Vital Images or its assets or operations)
and the Vital Images Separate Pre-Closing Period Returns in a manner
that: (i) is consistent with prior practice (including without
limitation as to Tax and accounting methods, conventions and
elections), and (ii) apportions items equitably from period to period
consistent with Section 1.2 hereof.
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Bio-Vascular shall cause the Bio-Vascular Consolidated Returns to
include and reflect the activities, transactions and operations of
Vital Images for all Pre-Closing Periods.
(c) Vital Images shall file or cause to be filed all Vital Images Tax
Returns required to be filed for all Post-Closing Periods (including
any period that begins on or prior to the Distribution Date but ends
after the Distribution Date), other than Vital Images Separate Pre-
Closing Period Returns and Bio-Vascular Consolidated Returns (the
"Vital Images Post-Closing Period Returns"). However, with respect to
a Vital Images Post-Closing Period Return that is for (i) Income Taxes
of Vital Images and (ii) a Tax year with respect to Vital Images that
begins on or prior to the Distribution Date (a "Vital Images Overlap
Return"), Vital Images shall (a) have a national "Big 6" accounting
firm prepare the Vital Images Overlap Return consistent with prior
practice, including, without limitation, as to Tax and accounting
methods, conventions and elections and (b) provide Bio-Vascular with
an opportunity to review and comment on such Tax Return at least four
weeks prior to the due date thereof, including extensions. The parties
shall use all reasonable efforts to resolve any disagreements with
respect thereto as soon as possible. If they cannot resolve the matter
prior to the due date for such Vital Images Overlap Return, including
extensions, Vital Images may nevertheless file such Tax Return.
Thereafter, the parties shall refer the matter to a mutually
acceptable accounting firm (other than the firm that prepared the
returns) of nationally recognized standing (an "Independent Firm"),
whose fees are to be borne 50% by Vital Images and 50% by Bio-
Vascular. The Independent Firm shall seek to resolve the matter as
soon as practicable. Upon the Independent Firm's determination, an
amended Vital Images Overlap Return shall be filed in accordance
therewith to the extent it differs materially from the Tax Return
originally filed.
(d) Vital Images, upon its request, shall be entitled to copies of Vital
Images Separate Pre-Closing Period Returns and Bio-Vascular
Consolidated Returns following the filing thereof to the extent they
relate to Vital Images.
4.2. Tax Return Payments. Amounts shown due on any Vital Images Tax Returns
shall be timely paid by the party responsible therefor as determined in
accordance with Article 2 of this Agreement (the "Responsible Party"),
irrespective of which party is obligated to prepare or file such Vital
Images Tax Return under this Article 4. The party obligated to file a
particular Vital Images Tax Return (the "Filing Party") has the right, but
not the obligation, unless it is the Responsible Party to pay the Tax shown
due thereon, in which case the Responsible Party shall immediately
reimburse the Filing Party for the payment of such Tax.
ARTICLE
5.
INFORMATION EXCHANGE AND CONFIDENTIALITY
5.1. Cooperation. Upon the reasonable request of any party to this Agreement,
the other party shall promptly provide the requesting party with such
cooperation and assistance, documents, and other information as may
reasonably be requested by such party in connection with: (i) the
preparation and filing of any original or amended Tax Return; (ii) the
conduct of any audit or other examination or any judicial or administrative
proceeding involving to any extent Taxes or Tax Returns within the scope of
this Agreement; or (iii) the verification by a party of an amount
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payable hereunder to, or receivable hereunder from, another party
(collectively, "Tax Data"). Such cooperation and assistance shall include,
without limitation: (i) the provision on demand of books, records, Tax
Returns, documentation or other information relating to any relevant Tax
Return; (ii) the execution of any document that may be necessary or
reasonably helpful in connection with the filing of any Tax Return, or in
connection with any audit, proceeding, suit or action of the type generally
referred to in the preceding sentence; (iii) the prompt and timely filing
of appropriate claims for refund; and (iv) the use of reasonable efforts to
obtain any documentation from a governmental authority or a third party
that may be necessary or helpful in connection with the foregoing
(collectively, "Tax Documentation"). Each party shall make its employees
and facilities available on a mutually convenient basis to facilitate such
cooperation.
5.2. Retention. The Tax Data and the Tax Documentation shall be retained until
the later of (i) the expiration of ninety (90) days after expiration of the
applicable statute of limitations (including any waivers or extensions
thereof for any Income Taxes or net operating loss carryovers available in
any tax year); (ii) eight (8) years after the Distribution Date; and (iii)
any retention period required by law or pursuant to any record retention
agreement; provided, however, that in the event an audit, examination,
investigation or other proceeding has been instituted prior to the
expiration of the applicable statute of limitations (or in the event of any
claim under this Agreement), such Tax Data and Tax Documentation shall be
retained until there is a final determination thereof and the time for any
appeal has expired.
5.3. Expenses. Subject only to the provisions of Article 6 of this Agreement,
each party shall cooperate in the manner described in this Article 5 at its
own expense.
5.4. Notification of Carryovers. Bio-Vascular will undertake reasonable
efforts to notify Vital Images of (i) any carryover of losses or credits
that could be partially or totally attributed to and carried over by Vital
Images pursuant to Treasury Regulations Section 1.1502-79 or any similar
law, rule or regulation; and (ii) any subsequent adjustment that could
affect any such item.
5.5. Notification to Shareholders. Bio-Vascular will undertake reasonable
efforts to provide each Bio-Vascular shareholder who receives Vital Images
Common Stock pursuant to the Distribution Agreement with the information
necessary to comply with the requirements of Code Section 355 and all
regulations thereunder which relate to the statements that are to be filed
by such shareholders with their federal income tax returns.
5.6. Confidentiality. Except as required by law or with the prior written
consent of the other party, all (i) Tax Returns; (ii) Tax Data; (iii) Tax
Documentation; (iv) similar documents, schedules, workpapers and items; and
(v) all information contained therein, which are within the scope of this
Agreement, shall be kept confidential by the parties hereto and their
representatives, shall not be disclosed to any other person or entity and
shall be used only for the purposes provided herein.
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ARTICLE
6.
CONTESTS AND AUDITS
6.1. Notice and Cooperation.
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(a) If any claim, demand, assessment (including a notice of proposed
assessment) or other assertion, whether oral or written, is made for
Taxes ("Tax Claim") against a party entitled to indemnification with
respect thereto pursuant to this Agreement (an "Indemnitee") or if the
Indemnitee receives any notice, whether oral or written, from any
jurisdiction with respect to any current or future audit, examination,
investigation or other proceeding ("Proceeding"), the Indemnitee shall
promptly notify the party obligated to so indemnify the Indemnitee
(the "Indemnitor") of such Tax Claim or notice of Proceeding. If an
Indemnitor receives notice of a Tax Claim or notice of Proceeding,
whether oral or written, for which the Indemnitor is responsible under
this Agreement, such Indemnitor shall promptly notify the Indemnitee
thereof if such Tax Claim or Proceeding could directly or indirectly
affect (adversely or otherwise) any Indemnitee, determined without
regard to this Agreement.
(b) The party controlling the defense, settlement or compromise of any
Proceeding or any Tax Claim with respect to a Tax Return or any Income
Tax (as determined pursuant to Section 6.2) shall keep the other party
hereto duly informed of the progress thereof to the extent such
Proceeding or Tax Claim could directly or indirectly affect (adversely
or otherwise) such other party, determined without regard to this
Agreement.
(c) If the Indemnitor controls the defense, settlement or compromise of
any Proceeding or Tax Claim for which it is responsible, the
Indemnitee shall nevertheless cooperate in such defense, settlement or
compromise as and to the extent reasonably requested by Indemnitor.
Such cooperation shall be at Indemnitor's expense (on a current
basis), including all liabilities, costs and expenses (including
reasonable attorneys' fees and accounting fees but excluding in-house
legal or tax assistance) incurred in connection with such cooperation
and authorized by Indemnitor.
(d) If the Indemnitor does not control the defense, settlement or
compromise of any Proceeding or Tax Claim for which it is responsible,
it shall nevertheless (i) cooperate at its own expense in such
defense, settlement or compromise to the extent reasonably requested
by Indemnitee; and (ii) indemnify (on a current basis) Indemnitee
against any reasonable liabilities, costs and expenses (including
reasonable attorneys' and accounting fees but excluding in-house legal
or tax assistance) arising out of, or incident to, the Proceeding or
Tax Claim, including without limitation those incurred in connection
with the defense, settlement or compromise thereof.
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6.2. Control.
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(a) Except as otherwise provided in Section 6.2(b) or Section 6.3 hereof,
the Indemnitor shall have the right to control the defense, settlement
or compromise of any Proceeding or Tax Claim to the extent it is
responsible therefor pursuant to Article 2 of this Agreement.
(b) Notwithstanding the provisions of Section 6.2(a) hereof (and subject
to the provisions of Section 6.3 hereof):
(i) an Indemnitee (in lieu of the Indemnitor) shall have the right
(but not the obligation) to control the defense, compromise or
settlement of any Proceeding or Tax Claim if the Indemnitor
fails to do so or requests the Indemnitee to do so;
(ii) an Indemnitee (in lieu of the Indemnitor) shall have the right
(but not the obligation) to control the defense, compromise or
settlement of any Proceeding or Tax Claim if the Indemnitor is
(a) the subject of a voluntary bankruptcy, (b) an adjudicated
bankrupt, or (c) the subject of an involuntary petition in
bankruptcy that has been filed and which has not been discharged
within ninety days;
(iii) Bio-Vascular shall control the defense, settlement or compromise
of any Proceeding or Tax Claim with respect to any Bio-Vascular
Consolidated Return and any Vital Images Separate Pre-Closing
Period Return; and
(iv) Vital Images shall control the defense, settlement or compromise
of any Proceeding or Tax Claim with respect to any Vital Images
Post-Closing Period Returns, including any Vital Images Overlap
Returns (but exclusive of any Vital Images Separate Pre-Closing
Period Returns). With respect to Vital Images Overlap Returns,
Bio-Vascular is entitled, at its own expense, to attend meetings
or conferences with the Tax authorities and to receive copies of
all relevant correspondence.
6.3. Approval.
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(a) The Indemnitee shall not agree to a settlement or compromise of any
Proceeding or Tax Claim without the prior written consent of the
Indemnitor (which consent shall not be unreasonably withheld) if such
settlement or compromise will result in an obligation of the
Indemnitor pursuant to this Agreement.
(b) Vital Images shall not agree to a settlement or compromise of any
Proceeding or Tax Claim with respect to a Vital Images Post-Closing
Period Return (including a Vital Images Overlap Return) involving a
Tax period beginning prior to the Distribution Date without the prior
written consent of Bio-Vascular, which consent shall not be
unreasonably withheld.
(c) A party receiving a written request for consent pursuant to this
Section 6.3 shall respond as soon as practicable and in no event after
the period of time beginning ten (10) working days prior to the
expiration of the period for appealing the assessment or claim. The
parties shall seek to resolve any dispute with respect thereto as
quickly as possible.
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However, in the event the parties are unable to resolve such dispute
promptly, the matter shall be referred to the Independent Party for
resolution.
ARTICLE
7.
MISCELLANEOUS
7.1. Effectiveness and Term. This Agreement shall be effective from and after
the Distribution Date and shall survive until the later of: (i) ninety (90)
days after the expiration of any applicable statute of limitations
(including any waivers or extensions) related to any Income Taxes or net
operating loss carryovers to any taxable year, or (ii) the final conclusion
of any Proceeding, including any applicable litigation and appeals of any
liability for Taxes; provided, however, that this Agreement shall terminate
immediately upon a termination of the Distribution Agreement.
7.2. Entire Agreement. This Agreement contains the entire agreement among the
parties hereto with respect to the subject matter hereof. This Agreement
terminates and supersedes, on a prospective basis only, all Tax agreements
(other than this Agreement) between Bio-Vascular and Vital Images (or any
other predecessor thereof). However, nothing in the preceding sentence
shall limit or reduce (i) the obligation of Vital Images for Reserved Taxes
as separately accrued on the balance sheet of Vital Images as of the
Distribution Date or (ii) the right of Vital Images to any Balance Sheet
Refund.
7.3. Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Minnesota (regardless
of the laws that might otherwise govern under applicable principles of
conflict of laws) as to all matters, including, without limitation, matters
of validity, construction, effect, performance and remedies.
7.4. Jurisdiction and Venue. Subject to the arbitration provisions of the
Distribution Agreement, each party consents to the personal jurisdiction of
the state and federal courts located in the State of Minnesota and hereby
waives any argument that venue in any such forum is not convenient or
proper.
7.5. Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly
given (i) on the date of service if served personally on the party to whom
notice is given; (ii) on the day of transmission if sent via facsimile
transmission to the facsimile number given below, provided telephonic
confirmation of receipt is obtained promptly after completion of
transmission; (iii) on the business day after delivery to an overnight
courier service or the express mail service maintained by the United States
Postal Service, provided receipt of delivery has been confirmed; or (iv) on
the fifth day after mailing, provided receipt of delivery is confirmed, if
mailed to the party to whom notice is to be given, by registered or
certified mail, postage prepaid, properly addressed and return-receipt
requested, to the party as follows:
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If to Bio-Vascular: Bio-Vascular, Inc.
0000 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attn: Chief Executive Officer
Facsimile No. (000) 000-0000
If to Vital Images: Vital Images, Inc.
0000 Xxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attn: Chief Financial Officer
Facsimile No. (000) 000-0000
Any party may change its address by giving the other party written notice
of its new address in the manner set forth above.
7.6. Modification of Agreement. No modification, amendment or waiver of any
provision of this Agreement shall be effective unless the same shall be in
writing and signed by each of the parties hereto and then such
modification, amendment or waiver shall be effective only in the specific
instance and for the purpose for which given.
7.7. Successors and Assigns. A party's rights and obligations hereunder may
not be assigned or transferred without the prior written consent of the
other party hereto. Subject to the foregoing, this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, and shall survive any
acquisition, disposition or other corporate restructuring or transaction
involving either party.
7.8. No Third-Party Beneficiaries. This Agreement is solely for the benefit of
the parties to this Agreement and should not be deemed to confer upon
third parties any remedy, claim, liability, reimbursement, claim of action
or other right in excess of those existing without this Agreement.
7.9. Titles and Headings. The titles and headings to Articles and Sections
herein are inserted for convenience of reference only and are not intended
to constitute a part of or to affect the meaning or interpretation of this
Agreement.
7.10. Severability. In case any one or more of the provisions contained in this
Agreement should be invalid, illegal or unenforceable, the enforceability
of the remaining provisions hereof shall not in any way be affected or
impaired thereby. It is hereby stipulated and declared to be the intention
of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions hereof without including any of
such which may hereafter be declared invalid, void or unenforceable. In
the event that any such term, provision, covenant or restriction is
hereafter held to be invalid, void or unenforceable, the parties hereto
agree to use their best efforts to find and employ an alternate means to
achieve the same or substantially the same result as that contemplated by
such term, provision, covenant or restriction.
7.11. No Waiver. Neither the failure nor any delay on the part of any party
hereto to exercise any right under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any right
preclude any other or further exercise of the same or any other right, nor
shall any waiver of any right with respect to any occurrence be construed
as a waiver of such right with respect to any other occurrence.
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7.12. Survival of Obligations. Notwithstanding anything in this Agreement or the
Distribution Agreement to the contrary, this Agreement shall survive the
consummation of the transactions contemplated by the Distribution
Agreement and shall continue throughout the period ending on the later of
(i) ninety (90) days after the expiration of all applicable statutes of
limitation (including extensions), or (ii) the final determination of (and
the expiration of the time to appeal) any Proceeding relating to Taxes or
Tax matters covered by (or any claim under) this Agreement and the payment
of any obligation arising thereunder.
7.13. Counterparts. This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement, and shall
become a binding agreement when one or more counterparts have been signed
by each party and delivered to the other party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first written above.
BIO-VASCULAR, INC.
By:
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Its:
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VITAL IMAGES, INC.
By:
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Its:
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