As filed with the Securities and Exchange Commission on January 19, 2000
Registration No. [ ]
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
BIOMET, INC.
(Exact name of Registrant as specified in its charter)
Indiana 35-1418342
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
P. O. Box 587
Airport Industrial Park
Warsaw, Indiana 46581-0587
(219) 267-6639
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Daniel P. Hann
Airport Industrial Park
P. O. Box 587
Warsaw, Indiana 46581-0587
(219) 267-6639
(Name, address, including Zip Code, and telephone number, including area code,
of agent for service)
COPIES TO:
Berkley W. Duck
Ice Miller Donadio & Ryan
One American Square, Box 82001
Indianapolis, Indiana 46282-0002
Approximate date of commencement of proposed sale of the securities to the
public: At such time or times after the effective date of this registration
statement as the selling shareholders shall determine.
If the only securities being registered on this Form are to be offered pursuant
to dividend or interest reinvestment plans, please check the following box: [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C>
Title of each class of securities Amount to be registered Proposed maximum Amount of registration
to be registered aggregate offering fee(1)
price(1)
Common Shares 4,763,454 shares $190,091,586 $50,184
<FN>
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c), based on the average high and low prices
reported for Biomet, Inc. Common Shares on the Nasdaq National Market
System on January 12, 2000.
</FN>
</TABLE>
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission acting pursuant to said section 8(a),
may determine.
<PAGE>
PROSPECTUS
for the Public Offering for Sale of
4,763,454
Common Shares
of
Biomet, Inc.
Terms of the Offering
o Keith D. Beaty, Linda L. Beaty, Richard J. Lazzara and certain other former
shareholders of Implant Innovations International Corporation are offering
to sell up to 4,763,454 Biomet common shares.
o The selling shareholders will receive all of the net proceeds from the sale
of the shares.
o The selling shareholders will sell the shares over time through brokers or
in transactions directly with market makers at market prices.
o On January 14, 2000, the last reported sale price of the common shares
quoted on the Nasdaq National Market System was $42.50 per share.
o The shares are traded over-the-counter and price information is reported by
the Nasdaq National Market System under the symbol "BMET".
This investment involves risk. See the Risk Factors beginning on page 4 of
this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the shares or passed upon the accuracy
or adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
The date of this prospectus is January ____, 2000.
Additional information regarding our business is available to you without
charge upon written or oral request to us. Please contact Greg W. Sasso, Vice
President of Corporate Development and Communication by mail at Biomet, Inc.,
P.O. Box 587, Airport Industrial Park, Warsaw, Indiana 46581-0587, by telephone
at (800) 348-9500 or (219) 267-6639 or by e-mail at [email protected].
<PAGE>
COMPANY
Biomet
We design, manufacture and market products used primarily by orthopedic
medical specialists in both surgical and non-surgical therapy, including
reconstructive and fixation devices, electrical bone growth stimulators,
orthopedic support devices, operating room supplies, general surgical
instruments, arthroscopy products, bone cements, bone substitutes, spinal
implants and craniomaxillofacial implants and instruments. Our corporate
headquarters are in Warsaw, Indiana, and we have manufacturing and/or office
facilities in more than 25 locations worldwide.
We market our products in the United States, Australia and Canada through
independent, commissioned sales representatives; in Austria, Belgium, Chile, the
Czech Republic, Denmark, France, Germany, Greece, Holland, Italy, Mexico, New
Zealand, Norway, Poland, Portugal, Spain, Switzerland and the United Kingdom
primarily through direct sales representatives; and in other international
markets through independent sales representatives and specialty medical product
dealers. Our subsidiary, EBI, L.P., sells electrical stimulation, external
fixation devices, spinal products and softgoods primarily through direct factory
sales representatives in the United States and the United Kingdom and through
specialty medical product dealers in the remainder of its markets. We currently
distribute products in more than 100 countries.
On January 1, 1998, we formed a joint venture with Merck KGaA, Darmstadt,
Germany (Merck KGaA). Biomet and Merck KGaA contributed their European
orthopedic and biomaterials operations to a limited partnership named BioMer
C.V. BioMer C.V. is the parent of a holding company, Biomet Merck B.V. ("Biomet
Merck"), which holds the operating entities of this joint venture. We control
the partnership and, accordingly, we consolidate the partnership's financial
statements for financial reporting and reflect Merck KGaA's 50% ownership
interest as a minority interest. This joint venture has significantly expanded
our presence in the European marketplace and provides us with exclusive rights
to Merck KGaA's current and future biomaterials-based products.
On December 15, 1999, we acquired Implant Innovations International
Corporation ("Implant"). Through its subsidiaries, Implant designs, develops,
manufactures, markets and distributes oral reconstruction products including a
proprietary line of dental implants, healing abutments and surgical products
along with regenerative membrane products manufactured by W. L. Gore and
Associates, Inc. and synthetic bone substitute material manufactured by
Orthovita, Inc. See "Merger with Implant Innovations International Corporation."
Products
We have one reportable segment, orthopedic products, which includes the
design, manufacture and marketing of four major product groups: reconstructive
devices, fixation products, spinal products and other products. Reconstructive
devices include (in addition to the Implant products described above) total
knee, total hip and shoulder systems, as well as bone cements and the
procedure-specific instrumentation required to implant our reconstructive
systems. Fixation product sales include internal and external fixation devices,
craniomaxillofacial fixation systems and EBI's electrical stimulation devices
that do not address the spine. Spinal product sales include EBI's SpF(R) Spinal
Fusion Stimulation System and the SpineLink(TM), Omega 21(TM) and K2(TM) spinal
fixation systems. The other product sales category includes arthroscopy
products, softgoods products, casting materials, general surgical instruments,
operating room supplies, wound care products and other surgical products such as
the Indiana Tome(TM) Carpal Tunnel Release System.
<PAGE>
RISK FACTORS
The shares offered are speculative and involve a high degree of risk,
including, but not necessarily limited to, the risk factors described below. You
should carefully consider the following risk factors inherent in and affecting
our business and this offering before making an investment decision.
We Are Subject to Extensive Government Regulation.
The development, testing, labeling, distribution, marketing and
manufacture of medical devices, including reconstructive implant products, are
subject to extensive and rigorous regulation in the United States and other
countries. Failure to obtain approvals and clearances for new products and/or
modifications to existing products on a timely basis would likely have a
material adverse effect on our business and financial results. The primary
regulatory authority in the United States is the U.S. Food and Drug
Administration. The process of obtaining approval or clearance from government
authorities for the sale and marketing of new products is time consuming,
expensive and uncertain. In addition, government approval or clearance of
products can subsequently be withdrawn due to failure to comply with regulatory
standards or the occurrence of unforeseen problems following initial marketing.
The U.S. Food and Drug Administration has the power to ban products manufactured
or distributed by us as well as to require the recall, repair, or replacement of
or refund for our products. A significant recall of one or more of our products
could have a material adverse effect on us. We will be required to apply for
approval or clearance to market new products and certain modifications to
existing products. There can be no assurance that such clearances will be
granted or that review by government authorities will not involve delays
materially adversely affecting the marketing and sale of our products.
We Face Uncertainty Relating to the Availability of Third-party Reimbursement
for Our Products.
In the United States, health care providers that purchase our products
generally rely on third-party payors, principally federal Medicare, state
Medicaid and private health insurance plans, to pay for all or a portion of the
cost of joint reconstructive procedures and products utilized in those
procedures. There can be no assurance that third-party reimbursement for our
products will continue to be available. We could be materially adversely
affected by changes in reimbursement policies of governmental or private health
care payors that restrict reimbursement for procedures in which our products are
used. In addition, some health care providers have adopted or are considering a
managed care system in which the providers contract to provide comprehensive
health care for a fixed cost per person. Health care providers may attempt to
control costs by authorizing fewer elective surgical procedures, including joint
reconstructive surgeries, or by requiring the use of the least expensive implant
available. We are unable to predict the changes that will be made in the
reimbursement methods or utilization policies utilized by third-party health
care payors or managed care providers. Reimbursement and health care payment
systems in international markets vary significantly by country and include both
government sponsored health care and private insurance. Failure by physicians,
hospitals and other users of our products to obtain sufficient reimbursement
from health care payors for procedures in which our products are used or adverse
changes in governmental and private payors' policies toward reimbursement for
such procedures would have a material adverse effect on our business and
financial results.
<PAGE>
We Face Significant Competition.
The orthopedic implant industry is highly competitive and dominated by a
number of companies with substantially greater financial and other resources
than us and competition is expected to intensify. Competitive factors consist
primarily of:
o product features and design
o innovation
o service
o the ability to maintain new product flow
o relationships with key orthopedic surgeons and hospitals
o strength of distribution network
o price
We May Need Additional Financing.
Our business is capital intensive and our capital requirements are
expected to increase significantly in connection with our continued expansion.
We anticipate, based on currently proposed plans and assumptions relating to our
operations (including the costs associated with, and the timetable for,
expansion), that projected cash flow from operations will be sufficient to
satisfy our contemplated cash requirements for at least the next 12 months. In
the event that our plans change or our assumptions change or prove to be
inaccurate, or if cash flow proves to be insufficient (due to unanticipated
expenses, lower than anticipated sales or profit margins or otherwise), we may
be required to seek financing or curtail our growth activities. To the extent
that we incur indebtedness, we will be subject to risks associated therewith
including the risks that interest rates may fluctuate and cash flow may be
insufficient to pay principal and interest on the indebtedness. We have no
current arrangements with respect to, or sources of, financing in the United
States. There can be no assurance that financing will be available to us on
acceptable terms, or at all.
We Are Subject to Risks Relating to Our Growth Strategy.
Our growth strategy contemplates the expansion of our product line and our
network of sales representatives and distributors. The failure to successfully
implement our growth strategy could have a material adverse effect on our
business and financial results. Our continued expansion will be dependent on,
among other things, our ability to:
o obtain governmental clearances for new products
o increase market acceptance of our products
o expand our network of domestic sales representatives and foreign
distributors
o hire and retain qualified scientific and technical personnel
o successfully manage growth, including monitoring operations,
controlling costs and maintaining effective regulatory compliance
procedures
Our operating expenses can be expected to increase significantly in
connection with our efforts to grow. Increases in those expenses may have a
negative effect on operating results until that time, if ever, as these expenses
are offset by increased revenues. There can be no assurance that our growth
strategy will ultimately be successful.
<PAGE>
We Face Uncertainty of Market Acceptance.
Our ability to successfully market new and improved products will depend
on gaining market acceptance of those products. The failure of our products to
gain market acceptance would be likely to have a material adverse effect on our
business and financial results. We are currently developing new products, as
well as improvements to our existing products. There can be no assurance that
new or improved products will gain market acceptance.
We Are Subject to Anti-kickback and Self-referral Laws.
Federal anti-kickback laws and regulations prohibit any knowing and
willful offer, payment, solicitation or receipt of any form of remuneration,
either directly or indirectly, in return for, or to induce:
o referral of an individual for a service or product for which payment
may be made by Medicare, Medicaid or another government sponsored
health care program
o purchasing, leasing, ordering or arranging for, or recommending the
purchase, lease or order of, any service or product for which payment
may be made by a government-sponsored health care program
Federal physician self-referral laws are applicable to inpatient and
outpatient hospital services. Subject to some exceptions, these laws prohibit
Medicare or Medicaid payments for services or products furnished by an entity
pursuant to a referral by a physician who has a financial relationship with the
entity through ownership, investment or a compensation arrangement. Possible
sanctions for violation of these anti-kickback and self-referral laws include
monetary fines, civil and criminal penalties, exclusion from Medicare and
Medicaid programs and forfeiture of amounts collected in violation of such
prohibitions. Some states in which we market our products have similar
anti-kickback, anti-fee splitting and self-referral laws, imposing substantial
penalties for violations. The scope and enforcement of these laws is uncertain
and subject to rapid change, especially in light of the lack of applicable
precedent and regulations. There can be no assurance that federal or state
regulatory authorities will not challenge our current or future activities under
these laws. Any challenge by those regulatory authorities could have a material
adverse effect on our business or financial results. Any state or federal
regulatory review of our company, regardless of the outcome, would be both
costly and time consuming. Additionally, changes in these laws and the
enforcement of these laws by regulatory agencies are likely. We cannot predict
the impact on our company of these changes.
Uncertain Protection of Patents and Proprietary Technology; Risk of
Infringement.
We hold numerous United States patents covering various orthopedic implant
products and components. We also have patent applications pending with respect
to various orthopedic implant products and implant components and anticipate
that we will apply for additional patents. In addition, we hold licenses from
third parties to utilize some patents. As a result of the rapid rate of
development of orthopedic implant products, we believe that patents generally
have not been a major factor in the orthopedic industry to date. However,
patents on specific designs and processes can provide a competitive advantage
and we believe that patent protection of orthopedic products will become more
important as the industry matures. There can be no assurance:
o as to the breadth or degree of protection which existing or future
patents, if any, may afford us
<PAGE>
o that any patent applications will result in issued patents
o that patents will not be circumvented or invalidated
o that the parties from whom we have licensed or otherwise acquired
patent rights, proprietary rights and technology have full rights to
those patent rights and technology
In addition, we have patents in key foreign countries where our products
are marketed. The medical device industry has been characterized by extensive
litigation regarding patents and other intellectual property rights. Some of our
consultants and key employees have employment and other business relationships
with third parties. If technology, concepts or ideas developed by consultants,
key employees or other third parties are incorporated into our products,
disputes with those persons or other parties with whom those persons have
business relationships may arise as to the proprietary rights to that technology
or those concepts or ideas which may not be resolved in our favor. Our inability
to obtain agreements with each of our consultants and those third parties
pursuant to which they assign to us all their intellectual property rights in
the products being developed by us could have a material adverse effect on our
business and financial results. In the event that our products infringe patents
or proprietary rights of others, we may be required to modify the design of our
products or obtain a license. There can be no assurance that we will be able to
do so in a timely manner or upon acceptable terms and conditions or at all. The
failure to modify our products or obtain a license could have a material adverse
effect on our business and financial results. Furthermore, if our products
infringe patents or other proprietary rights of others, we could become liable
for damages, which could have a material adverse effect on our business and
financial results.
In addition to patents, we rely on trade secrets and proprietary know-how
and employ various methods to protect our proprietary information, including
confidentiality agreements and proprietary information agreements. However,
those methods may not provide adequate protection. There can be no assurance
that those confidential or proprietary information agreements will not be
breached, that we would have adequate remedies for any breach, or that our trade
secrets and proprietary know-how will not otherwise become known to or
independently developed by competitors. The failure to protect our proprietary
information could have a material adverse effect on our business and financial
results.
We Must Devote Substantial Resources to Research and Development.
The orthopedic implant industry is subject to rapid technological change.
In order for us to remain competitive and to retain market share, we must
continually develop new products as well as improve our existing ones.
Accordingly, we must devote substantial resources to research and development.
There can be no assurance that we will be successful in developing competitive
new products and/or improving existing products so that our products remain
competitive and avoid obsolescence.
We Are Subject to Foreign Government Regulation.
Approximately 20%, 24% and 29% of our sales during the years ended May 31,
1997, 1998 and 1999, respectively, were to foreign customers. We are required to
obtain various licenses and permits from foreign governments and to comply with
significant regulations that vary by country in order to market our products in
foreign markets. There can be no assurance that we will be able to obtain and
maintain any necessary licenses and permits or comply with applicable
regulations of foreign governments. The failure by us to obtain or maintain the
required licenses, permits or certifications, or comply with those regulations,
could have a material adverse effect on our business and financial results.
<PAGE>
We Depend on Key Personnel.
The loss of the services of any of our executive officers or certain other
key personnel could have a material adverse effect on our business and financial
results. Our success is also dependent on our ability to continue to attract and
retain qualified scientific and technical personnel. Loss of the services of, or
failure to recruit, key scientific and technical personnel could be detrimental
to our product development programs.
We Are Subject to Anti-takeover Legislation.
We are incorporated under the laws of the State of Indiana. The State of
Indiana has enacted legislation that may deter or frustrate takeovers of Indiana
corporations. For example, the Indiana Control Share Acquisitions Act generally
provides that shares acquired in excess of certain specified thresholds will not
possess any voting rights unless such voting rights are approved by a majority
vote of a corporation's disinterested shareholders. The Indiana Business
Combinations Act generally requires majority approval by the board of directors
or shareholders of certain specified transactions between a public corporation
and holders of more than 10% of the outstanding voting shares of the corporation
(or their affiliates).
In addition to the anti-takeover laws of the State of Indiana, we have
also adopted anti-takeover strategies. We have adopted a shareholders rights
plan that, upon an individual or entity obtaining 15% of our outstanding common
shares, allows all our other shareholders to purchase additional Biomet common
shares (or other Biomet securities) at a discounted price. Our Articles of
Incorporation also provide that an affirmative vote of 75% of our outstanding
common shares is necessary to approve any merger, consolidation or sale of
substantially all of our assets.
The Market Price of Our Common Shares Is Subject to Volatility.
The market price for our common shares may be subject to wide fluctuations
in response to variations in our operating results, announcements by us or
others, developments affecting us, and other events or factors. In addition, the
stock market has experienced a high level of price and volume fluctuations in
recent years. These fluctuations have had a substantial effect on the market
prices for many companies, often unrelated to the operating performance of those
companies, and may adversely affect the market price for the common shares.
We May Encounter Difficulties in Combining the Operations of Acquired Entities
With Biomet's Own Operations.
Because the markets and industries in which we operate are highly
competitive, and because of the inherent uncertainties associated with the
integration of an acquired company, there can be no assurance that we will be
able to realize fully the strategic objectives and operating efficiencies in our
acquisition of Implant. In addition, we may lose key personnel, either from
Implant or from Biomet, as a result of this acquisition. These factors could
contribute to the benefits expected from the acquisition not being achieved
within expected timeframes.
Our Forward-Looking Statements May Prove Inaccurate.
This document, including information incorporated by reference into this
document, contains or may contain forward-looking statements that involve risks
and uncertainties. This document contains certain forward-looking statements
with respect to our financial position, results of operations, plans,
objectives, future performance and business including statements preceded by,
followed by or that include the words "believes," "expects," "anticipates" or
similar expressions. These forward-looking statements include, among others,
those risks discussed above.
<PAGE>
MERGER WITH IMPLANT INNOVATIONS INTERNATIONAL CORPORATION
On December 15, 1999, we completed the merger of Implant with and into Palm
Acquisition Corp., our wholly owned subsidiary. In connection with this merger
we issued approximately 5.2 million Biomet common shares to the individuals and
entities holding shares of Implant on the closing date. This merger was
accounted for as a pooling-of-interests transaction. Under this method of
accounting, the recorded historical cost basis of the assets and liabilities of
Biomet and Implant for the entire fiscal period in which the combination
occured, and the historical results of operations of the separate companies for
fiscal years prior to the merger, are combined and reported as the results of
operations of the combined company. If the merger fails to qualify for
pooling-of-interests accounting treatment, the purchase method of accounting
will be applied. Purchase accounting treatment would have a material adverse
effect on our reported operating results as compared to pooling-of-interests
accounting treatment because of required charges to our earnings for in-process
research and development and the amortization of goodwill required by purchase
accounting treatment.
Through its subsidiaries, Implant designs, develops, manufactures, markets
and distributes oral reconstruction products including a proprietary line of
dental implants, healing abutments and surgical products along with regenerative
membrane products manufactured by W. L. Gore and Associates, Inc. and synthetic
bone substitute material manufactured by Orthovita, Inc.
Implant markets its products to dental professionals involved in the
implant procedure, including oral surgeons, periodontists, implantologists,
general dentists and prosthodontists. Implant markets and distributes its
products through a direct sales force in the United States, Germany, Canada, the
United Kingdom, Spain, Switzerland, Denmark and Mexico. It markets its products
in other international markets through its exclusive independent distributors.
Implant's manufacturing facilities are in Palm Beach Gardens, Florida.
Subsidiaries of Implant have sales offices in Germany, Canada, the United
Kingdom, Spain, Switzerland, Denmark and Mexico.
USE OF PROCEEDS
The shares being offered by this prospectus were originally issued to the
selling shareholders as shareholders of Implant, in connection with the merger
of Implant into Palm Acquisition Corp., our wholly owned subsidiary. The selling
shareholders will offer the shares on a periodic or continuous basis for their
own accounts. We will not receive any of the proceeds from the sale of the
shares.
SELLING SHAREHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the shares as of the effective date of this prospectus. We believe
that each of the selling shareholders has sole voting and investment power with
respect to the shares listed opposite their names below. Because the selling
shareholders may sell all or some of the shares, we cannot estimate the
aggregate amount of the shares that will be owned by the selling shareholders
upon completion of the offering to which this prospectus relates.
<PAGE>
<TABLE>
<CAPTION>
Beneficial Ownership Prior to
the Offering
<S> <C> <C> <C> <C>
Name Position/Title Shares Percentage Offered Number of Shares
---- -------------- ------ ---------- ------------------------
Keith D. Beaty Mr. Beaty is President 1,841,195 1.56% 1,841,195
and CEO of Implant and
holds various other
executive positions
with its subsidiaries.
Linda L. Beaty None. Linda L. Beaty 100,433 * 100,433
is the spouse of Keith
D. Beaty.
Richard J. Lazzara Mr. Lazzara is 1,941,627 1.64% 1,941,627
Chairman of Implant and
holds various other
executive positions
with its subsidiaries.
Certain other former These individuals have 880,199 * 880,199
shareholders of Implant held executive officer
positions with Implant
and its subsidiaries.
<FN>
* Represents ownership of less than 1%.
</FN>
</TABLE>
Registration Rights Agreement.
In connection with the completion of the merger of Implant with and into
Palm Acquisition Corp., the selling shareholders and Biomet executed a
Registration Rights Agreement. A copy of this agreement has been filed as an
exhibit to the registration statement of which this prospectus is a part. Under
the Registration Rights Agreement, we are required to maintain the effectiveness
of the registration statement until the earlier to occur of either:
o December 15, 2000, the first anniversary of the closing of the merger
between Implant and Palm Acquisition Corp., plus any length of time
we have given notice to the selling shareholders to suspend their
sales of Biomet common shares they received in connection with the
merger or
o the date on which all the shares received by the selling shareholders
in connection with the merger have been sold by the selling
shareholders
<PAGE>
The selling shareholders will be required to suspend the offer and sale of
the Biomet common shares issued to them in connection with the merger upon a
written notice from us that we have determined maintaining the effectiveness of
the registration statement would require disclosure of information that would
have a material adverse effect on us. The selling shareholders will be able to
commence sales of their Biomet common shares once the information has been
disclosed to the public or is no longer material and they have received notice
from us to that effect.
We will also provide written notice to the selling shareholders of any
event that makes this prospectus, the registration statement or any document
incorporated by reference into this prospectus untrue in any material respect.
Upon receipt of this notice, the selling shareholders are required to cease the
offer or sale of Biomet common shares until:
o they have received copies of a supplemented or amended registration
statement and/or prospectus or
o they have been advised by us in writing that they may resume the use
of the prospectus and they have received any additional supplemental
filings which are incorporated by reference into this prospectus
Notwithstanding any of the above, the selling shareholders may not sell
any of the Biomet common shares without giving us at least three business days'
prior written notice.
Affiliate Agreement.
In connection with the completion of the merger of Implant with and into
Palm Acquisition Corp., the selling shareholders and Biomet executed an
Affiliate Agreement. A copy of this agreement has been filed as an exhibit to
the registration statement of which the prospectus is a part. Under the
Affiliate Agreement, the selling shareholders have agreed not to sell, pledge,
transfer or otherwise dispose of any of their Biomet Common Shares they received
in connection with the merger unless:
o the disposition was made in compliance with Rule 145 of the Securities
and Exchange Commission
o the disposition was made under an effective registration statement
under the Securities Act of 1933 or
o the selling shareholder delivers to us a written opinion of counsel,
which we find acceptable and which opines that the disposition is
exempt from registration under the Securities Act of 1933.
Notwithstanding the above, the selling shareholders may not sell,
exchange, transfer, pledge, distribute or otherwise dispose of or grant any
option, establish any "short" or "put" equivalent position or enter into any
transaction intending to or having the effect of reducing their risk in either
Implant stock or our common shares for the period beginning 30 days prior to the
closing of the merger (November 15, 1999) and ending with the release of
financial results covering at least 30 days of combined operations of Biomet and
Implant, unless this transfer is equal to or less than a selling shareholder's
pro rata portion of 1% of the total number of Biomet common shares acquired by
all Implant stockholders pursuant to the merger and these shares are used to
make a bona fide charitable contribution or gift. The transferees of the
donation or gift must agree, in writing, to hold these securities for a
specified period. These restrictions are designed to protect the
pooling-of-interest accounting method used in connection with the merger.
Violation of this restriction could cause the pooling-of-interest accounting
method to become inapplicable to the merger and force the merger to be accounted
for by the purchase method of accounting. This could have a material adverse
effect on our reported financial results.
<PAGE>
Escrow Agreement
In connection with the completion of the merger of Implant with and into
Palm Acquisition Corp., the selling shareholders and Biomet executed an Escrow
Agreement. A copy of this agreement has been filed as an exhibit to the
registration statement of which this prospectus is a part. A certain number of
Biomet common shares issued in connection with the merger are being held in
escrow pursuant to the terms of the Escrow Agreement to indemnify us against
losses we may incur as a result of a breach by Implant or certain other parties
to the merger agreement of their representations or warranties, or as a result
of their failure to perform their obligations set forth in the merger agreement,
or as a result of contingencies identified in the merger agreement.
Any shareholder, including the selling shareholders, whose shares are held
in escrow pursuant to the Escrow Agreement may sell any of the Biomet Common
Shares held in his, her or its account (subject to compliance with the
Registration Rights Agreement and the Affiliate Agreement described above), if
the shares are sold in market transactions effected on Nasdaq-NMS through
NatCity Investments or any other market-maker in our shares approved by us. The
sale proceeds must be deposited in the escrow account and invested in short term
U.S. government obligations or commercial paper.
PLAN OF DISTRIBUTION
Transactions. The selling shareholders may offer and sell their shares in
one or more of the following transactions:
o on the Nasdaq National Market
o in the over-the-counter market
o in negotiated transactions
o in a combination of any of these transactions
However, the Biomet common shares held in escrow pursuant to the Escrow
Agreement, may only be sold on the Nasdaq National Market as described above.
Prices. The selling shareholders may sell their shares at any of the
following prices:
o fixed prices which may be changed
o market prices prevailing at the time of sale
o prices related to prevailing market prices
o negotiated prices
Direct Sales; Agents, Dealers and Underwriters. The selling shareholders
may effect transactions by selling their shares in any of the following ways:
o directly to purchasers
o to or through agents, dealers or underwriters designated from time to
time
Agents, dealers or underwriters may receive compensation in the form of
underwriting discounts, concessions or commissions from the selling shareholders
and/or the purchasers of shares for whom they act as agent or to whom they sell
as principals, or both. The selling shareholders and any agents, dealers or
underwriters that act in connection with the sale of shares might be deemed to
be "underwriters" within the meaning of Section 2(11) of the Securities Act, and
any discount or commission received by them and any profit on the resale of
shares as principal might be deemed to be underwriting discounts or commissions
under the Securities Act.
<PAGE>
Supplements. To the extent required, we will set forth in a supplement to
this prospectus filed with the SEC the number of shares to be sold, the purchase
price and public offering price, the name or names of any agent, dealer or
underwriter, and any applicable commissions or discounts with respect to a
particular offering.
State Securities Law. Under the securities laws of some states, the
selling shareholders may only sell the shares in those states through registered
or licensed brokers or dealers. In addition, in some states the selling
shareholders may not sell the shares unless they have been registered or
qualified for sale in that state or an exemption from registration or
qualification is available and is satisfied.
Expenses; Indemnification. We will not receive any of the proceeds from
the sale of the shares sold by the selling shareholders under this prospectus.
We will bear all expenses related to the registration of this offering but will
not pay for any underwriting commissions, fees or discounts, if any. The
expenses we will pay include:
o all registration and filing fees
o all fees and expenses of complying with state blue sky or securities
laws
o all costs of preparation of the registration statement
o all fees and disbursements of our counsel and independent auditors
We will indemnify the selling shareholders against some civil liabilities,
including some liabilities which may arise under the Securities Act.
LEGAL MATTERS
Certain legal matters relating to the issuance of the shares has been
passed upon for us by Ice Miller Donadio & Ryan.
EXPERTS
The consolidated financial statements of Biomet, Inc. incorporated in this
prospectus by reference to Biomet's Annual Report on Form 10-K for the year
ended May 31, 1999, have been so incorporated in reliance of the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
that firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission a registration
statement under the Securities Act of 1933 that registers the Biomet common
shares offerred by this prospectus. The registration statement, including the
attached exhibits and schedules, contains additional relevant information about
us and Biomet common shares. The rules and regulations of the Securities and
Exchange Commission allow us to omit certain information included in the
registration statement from this prospectus.
In addition, we file reports, proxy statements and other information with
the Securities and Exchange Commission under the Securities Exchange Act of
1934. You may read and copy this information at the following locations of the
Securities and Exchange Commission:
<TABLE>
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<S> <C> <C>
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, DC 20549 New York, NY 10048 Suite 1400
1-800-SEC-0330 Chicago, IL 60661-2511
</TABLE>
<PAGE>
You may also obtain copies of this information by mail from the Public
Reference Room of the Securities and Exchange Commission, 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549, at prescribed rates. You may obtain
information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330.
The Securities and Exchange Commission also maintains an Internet world
wide web site that contains reports, proxy statements and other information
about issuers, like Biomet, that file electronically with the Securities and
Exchange Commission. The address of that site is http://www.sec.gov.
The Securities and Exchange Commission allows us to "incorporate by
reference" information into this prospectus. This means that we can disclose
important information to you by referring you to another document filed
separately with the Securities and Exchange Commission. The information
incorporated by reference is considered to be a part of this prospectus, except
for any information that is superseded by information that is included directly
in this document.
This prospectus incorporates by reference the documents listed below that
we (File No. 0-12515) have previously filed with the Securities and Exchange
Commission. They contain important information about Biomet and its financial
condition.
1) Annual Report on Form 10-K for the year ended May 31, 1999.
2) Quarterly Report on Form 10-Q for the quarter ended August 31, 1999.
3) Quarterly Report on Form 10-Q for the quarter ended November 30,
1999.
4) Current Report on Form 8-K dated as of December 29, 1999.
5) Current Report on Form 8-K dated as of January 5, 2000.
6) The description of Biomet common shares set forth in Biomet's
registration statement (Registration No. 33-6798) filed on Form S-3
on June 26, 1986; including any amendment or report filed with the
Securities and Exchange Commission for the purpose of updating that
description.
In addition, all documents and reports filed by us pursuant to Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 subsequent to
the date of this prospectus and prior to the date of the meeting shall be deemed
to be incorporated by reference in this prospectus and to be a part hereof from
the date of filing of such documents or reports. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this prospectus.
You can obtain any of the documents incorporated by reference in this
document through us or from the Securities and Exchange Commission through its
web site at the address described above. Documents incorporated by reference are
available from us without charge, excluding any exhibits to those documents
unless the exhibit is specifically incorporated by reference as a exhibit in
this prospectus. You can obtain documents incorporated by reference in this
prospectus by requesting them in writing or by telephone from us at the
following address:
<PAGE>
Greg W. Sasso
Vice President - Corporate Development and Communications
Biomet, Inc.
P.O. Box 587
Airport Industrial Park
Warsaw, Indiana 46581-0587
Telephone: (800) 348-9500 or (219) 267-6639
[email protected]
We have not authorized anyone to give any information or make any
representation about the offering made by this prospectus that is different
from, or in addition to, the information contained in this prospectus or in any
of the materials that we have incorporated into this document. Therefore, if
anyone does give you information of this sort, you should not rely on it. If you
are in a jurisdiction where offers to exchange or sell, or solicitations of
offers to exchange or purchase, the securities offered by this document or the
solicitation of proxies is unlawful, or if you are a person to whom it is
unlawful to direct these types of activities, then the offer presented in this
document does not extend to you. The information contained in this document
speaks only as of the date of this document unless the information specifically
indicates that another date applies.
FORWARD-LOOKING STATEMENTS
This prospectus, including information included or incorporated by
reference herein, contains certain forward-looking statements with respect to
our financial condition, results of operations, plans, objectives, future
performance and business including, without limitation, statements preceded by,
followed by or that include the words "believes," "expects," "anticipates,"
"estimates" or similar expressions. These forward-looking statements involve
certain risks and uncertainties. For those statements, we claim the protection
of the safe harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995. Actual results may differ materially
from those contemplated by such forward-looking statements due to, among others,
the factors described under "Risk Factors" in this prospectus and the following
factors:
o competitive pressures among health care products manufacturers and
service providers may increase significantly
o general economic or business conditions, either internationally,
nationally or in the states in which we do business, may be less
favorable than expected resulting in, among other things, a reduced
demand for health care products and services
o legislative or regulatory changes may adversely affect the business in
which we are engaged
o technological changes, including "Year 2000" data systems compliance
issues, may be more difficult or expensive than anticipated
o changes may occur in the securities markets
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Under the Registration Rights Agreement, we are required to pay only the
following expenses associated with the filing of this registration statement:
SEC registration fee $50,184
Legal fees and expenses 10,000
Audit fees 10,000
-------
Total $70,184
=======
All other fees and expenses associated with this offering will be paid by
the current holders of the securities being offered.
Item 15. Indemnification of Directors and Officers
Indiana corporate law, the provisions of which govern Biomet, empowers an
Indiana corporation to indemnify present and former directors, officers,
employees, or agents or any person who may have served at the request of the
corporation as a director, officer, employee, or agent of another corporation
("Eligible Persons") against liability incurred in any proceeding, civil or
criminal, in which the Eligible Person is made a party by reason of being or
having been in any such capacity, or arising out of his status as such, if the
individual acted in good faith and reasonably believed that (a) the individual
was acting in the best interests of the corporation, (b) if the challenged
action was taken other than in the individual's official capacity as an officer,
director, employee or agent, the individual's conduct was at least not opposed
to the corporation's best interests, or (c) if in a criminal proceeding, either
the individual had reasonable cause to believe his conduct was lawful or no
reasonable cause to believe his conduct was unlawful.
Indiana corporate law further empowers a corporation to pay or reimburse
the reasonable expenses incurred by an Eligible Person in connection with the
defense of any such claim, including counsel fees; and, unless limited by its
articles of incorporation, the corporation is required to indemnify an Eligible
Person against reasonable expenses if he is wholly successful in any such
proceeding, on the merits or otherwise. Under certain circumstances, a
corporation may pay or reimburse an Eligible Person for reasonable expenses
prior to final disposition of the matter. Unless a corporation's articles of
incorporation otherwise provide, an Eligible Person may apply for
indemnification to a court which may order indemnification upon a determination
that the Eligible Person is entitled to mandatory indemnification for reasonable
expense or that the Eligible Person is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances without regard to
whether his actions satisfied the appropriate standard of conduct.
Before a corporation may indemnify any Eligible Person against liability
or reasonable expenses under Indiana corporate law, a quorum consisting of
directors who are not parties to the proceeding must (1) determine that
indemnification is permissible in the specific circumstances because the
Eligible Person met the requisite standard of conduct (2) authorize the
corporation to indemnify the Eligible Person and (3) if appropriate, evaluate
the reasonableness of expenses for which indemnification is sought. If it is not
possible to obtain a quorum of uninvolved directors, the foregoing action may be
taken by a committee of two or more directors who are not parties to the
proceeding, special legal counsel selected by the Board or such a committee, or
by the shareholders of the corporation.
<PAGE>
In addition to the foregoing, Indiana corporate law states that the
indemnification it provides shall not be deemed exclusive of any other rights to
which those indemnified may be entitled under any provision of the articles of
incorporation or bylaws, resolution of the board of directors or shareholders,
or any other authorization adopted after notice by a majority vote of all the
voting shares then issued and outstanding.
Indiana corporate law also empowers an Indiana corporation to purchase and
maintain insurance on behalf of any Eligible Person against any liability
asserted against or incurred by him in any capacity as such, or arising out of
his status as such, whether or not the corporation would have had the power to
indemnify him against such liability. Biomet's directors and officers are
insured under a directors and officers liability insurance policy maintained by
Biomet.
See Article VI, Section 6.3 of Biomet's Amended Articles of Incorporation
for a further description of Biomet's rights and obligations to indemnify its
officers and directors.
Item 16. Exhibits.
See Index to Exhibits.
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represents no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement.
(iii)to include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registrations statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) of this section do
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with or
furnished to the commission by the registrant pursuant to section 13 or section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
<PAGE>
(3) to remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(4) that, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of 1934
that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Biomet,
Inc. certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Warsaw, Indiana, on January 12, 2000.
BIOMET, INC.
By: /s/ Dane A. Miller
------------------------------------
Dane A. Miller,
President And Chief Executive Officer
Each person whose signature appears below on this Registration
Statement hereby constitutes and appoints Dane A. Miller and Daniel P. Hann, and
each of them, with full power to act without the other, as his or her true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in any
and all capacities (unless revoked in writing), to sign any and all amendments
to the registrant's Form S-3 Registration Statement, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting to such attorney-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he or she might and could do in person,
hereby ratifying and confirming all that such attorney-in-fact and agents or any
of them, or their or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on January 12, 2000.
/s/Dane A. Miller /s/Gregory D. Hartman
- -------------------------------- -------------------------------------
Dane A. Miller, Director Gregory D. Hartman, Senior Vice
(Principal Executive Officer) President, Finance
(Principal Financial Officer)
/s/Niles L. Noblitt /s/Jerry L. Ferguson
- -------------------------------- -------------------------------------
Niles L. Noblitt, Director Jerry L. Ferguson, Director
/s/M. Ray Harroff /s/Kenneth V. Miller
- -------------------------------- -------------------------------------
M. Ray Harroff, Director Kenneth V. Miller, Director
/s/Jerry L. Miller /s/L. Gene Tanner
- -------------------------------- -------------------------------------
Jerry L. Miller, Director L. Gene Tanner, Director
/s/Daniel P. Hann
- -------------------------------- -------------------------------------
Thomas F. Kearns, Jr., Director Daniel P. Hann, Director
<PAGE>
/s/Charles E. Niemier /s/ Marilyn Tucker Quayle
- -------------------------------- -------------------------------------
Charles E. Niemier, Director Marilyn Tucker Quayle, Director
- -------------------------------- -------------------------------------
C. Scott Harrison, Director Prof. Dr. Bernhard Scheuble, Director
/s/James W. Haller
- --------------------------------
James W. Haller, Controller
(Principal Accounting Officer)
<PAGE>
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INDEX TO EXHIBITS
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Sequential Numbering
Number Assigned in System Page Number of
Regulation S-K Item 601 Description of Exhibit Exhibit
(1) No Exhibit.
(2) No Exhibit
(4) 4.1 Specimen certificate for Common Shares.
(Incorporated by reference to
Exhibit 4.1 to Biomet, Inc. Form 10-K
Report for the year ended May 31, 1985.)
4.2 Rights Agreement between Biomet, Inc.
and Lake City Bank as Rights Agent,
dated as of December 16, 1999.
(Incorporated by reference to
Exhibit 4.1 to Biomet, Inc. Form 8-K
Current Report dated January 5, 2000.)
4.3 Registration Rights Agreement by and among
the registrant and certain former
stockholders of Implant Innovations
International Corporation.
4.4 Affiliate Agreement by and among the
registrant and certain former
stockholders of Implant Innovations
International Corporation.
4.5 Escrow Agreement by and among the
registrant, Palm Acquisition Corp.,
Implant Innovations International
Corporation, Keith D. Beaty as
shareholder representative, certain
former stockholders of Implant
Innovations International Corporation
and Wilmington Trust Company as escrow
agent.
<PAGE>
4.6 The Registrant agrees that the Exhibit and
Schedule to the Escrow Agreement, a list of
which is filed as Exhibit 4.6, will be
furnished supplementally to the Securities
and Exchange Commission upon request.
(5) 5.1 Opinion of Ice Miller Donadio & Ryan.
(8) No Exhibit.
(12) No Exhibit.
(15) No Exhibit.
(23) 23.1 Consent of PricewaterhouseCoopers LLP.
23.3 Consent of Ice Miller Donadio & Ryan
(included in Exhibit 5.1).
(24) 24.1 See the signature page of this
Registration Statement.
(25) No Exhibit.
(26) No Exhibit.
(27) No Exhibit.
(99) No Exhibit.
</TABLE>
EXHIBIT 4.3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement dated as of December 15, 1999, is by and
among Biomet, Inc., an Indiana corporation (the "Company") and the investors
named on the signature pages hereof (collectively, the "Investors").
Preliminary Statements
A. The Company and Implant Innovations International Corporation have entered
into an Agreement and Plan of Merger dated as of August 28, 1999 (the
"Merger Agreement"), pursuant to which the Investors are being issued
Common Shares of the Company.
B. This Agreement is being entered into pursuant to Section 9.10 of the Merger
Agreement.
Terms and Conditions
1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"Commission" shall mean the United States Securities and Exchange
Commission, or any other federal agency at the time administering the Securities
Act and the Exchange Act.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
or any similar successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Person" shall mean an individual, a corporation, a partnership, a joint
venture, a trust, an unincorporated organization, a limited liability company or
partnership, a government and any agency or political subdivision thereof.
"Registrable Securities" shall mean (i) the Biomet Common Shares received
by the Investors pursuant to the Merger Agreement (including the Biomet Common
Shares deliverable to the Escrow Agent) and (ii) any other securities issued or
issuable with respect to any such shares described in clause (i) above by way of
a stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization (it being
understood that for purposes of this Agreement, a Person will be deemed to be a
holder of Registrable Securities whenever such Person has the right to then
acquire or obtain from the Company any Registrable Securities, whether or not
such acquisition has actually been effected); provided, however, that shares
shall cease to be Registrable Securities when a registration statement covering
the shares has been declared effective by the Commission and the shares have
been disposed of pursuant to the effective registration statement.
"Securities Act" shall mean the Securities Act of 1933, as amended, or any
similar successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
Other terms capitalized but not defined herein shall have the meanings
assigned to them in the Merger Agreement.
<PAGE>
2. Required Registration.
(a) As soon as practicable following the Closing, the Company shall prepare
and file with the Commission a shelf registration statement on Form S-3 (or any
successor or other appropriate form) under the Securities Act with respect to
the Registrable Securities (the "Registration Statement") and effect all such
registrations, qualifications and compliances (including, without limitation,
obtaining appropriate qualifications under applicable state securities or "blue
sky" laws and compliance with any other applicable governmental requirements or
regulations) as may reasonably be required in connection with the sale of the
Registrable Securities as described herein.
(b) The Company shall use its best efforts to cause the Registration
Statement to become effective, and shall maintain the effectiveness of the
Registration Statement and other applicable registrations, qualifications and
compliances until the first to occur of (i) the first anniversary of the Closing
(plus, if applicable, the amount of time that has elapsed during any Suspension
Periods, as defined below), or (ii) the date on which all of the Registrable
Securities have been disposed of by the Investors.
(c) If at any time after the Registration Statement is declared effective,
the Company determines that the sale of the Registrable Securities pursuant to
the Registration Statement would require disclosure of information that, in the
judgment of the Company, cannot be disclosed at that time without other material
adverse consequences to the Company, the Investors shall, upon receipt of
written notice of that determination, suspend sales of the Registrable
Securities for a period (the "Suspension Period") beginning on the date of
receipt of that notice and expiring on the date upon which the information is
disclosed to the public or ceases to be material, and in any case as evidenced
by a written notice from the Company to the Investors to that effect.
(d) Upon written notice from the Company of the happening of any event that
makes any statement made in the Registration Statement, related prospectus or
any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or which requires the making of any changes in
the Registration Statement, prospectus or document so that it will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, each holder of
Registrable Securities registered under the Registration Statement shall
forthwith discontinue disposition of Registrable Securities pursuant to the
Registration Statement until (i) receipt of the copies of the supplemented or
amended prospectus or (ii) it is advised in writing by the Company that the use
of the prospectus may be resumed, and has received copies of any additional or
supplemental filings which are incorporated by reference in the prospectus. In
the event that the Company shall give any notice under this subparagraph (d),
the Company shall use its reasonable efforts and take such actions as are
reasonably necessary to end the Suspension Period as promptly as practicable.
(e) In no event shall any holder of Registrable Securities sell any
securities registered under the Registration Statement without giving the
Company at least three (3) business days' prior written notice.
<PAGE>
3. Expenses. The Company shall pay only the following expenses associated
with the filing of the Registration Statement: all registration and filing fees,
fees and disbursements of counsel for the Company, the expense of any audits
incident to or required by any the registration and expenses of complying with
the securities or blue sky laws of any jurisdictions. All other expenses
associated with the offering of the Registrable Securities, including any
underwriting discounts or commissions, shall be paid by the holders of the
Registrable Securities.
4. Registration Procedures.
(a) Before filing the Registration Satement or any amendments or
supplements thereto, the Company shall furnish to the holders of Registrable
Securities copies of all such documents proposed to be filed, which documents
shall be subject to the review of such holders and the Company shall not file
any such registration statement or amendment thereto or any prospectus or any
supplement thereto to which the holders of a majority of the Registrable
Securities covered by such registration statement shall reasonably object on a
timely basis.
(b) The Company shall prepare and file with the Commission such amendments
and supplements to the Registration Statement and the prospectus used in
connection therewith as may be necessary to keep Registration Statement
effective and to comply with the provisions of the Securities Act with respect
to the sale or other disposition of all securities covered by the Registration
Statement whenever the holder or holders of such securities shall desire to sell
or otherwise dispose of the same, but only to the extent provided in this
Agreement.
(c) The Company shall furnish to each selling holder of Registrable
Securities, without charge, one hard copy and one copy on diskette of the
Registration Statement and each amendment thereto.
(d) The Company shall notify the selling holders of Registrable Securities
promptly, and (if requested by any such person) confirm such notice in writing,
(i) when a prospectus or any prospectus supplement or post-effective amendment
has been filed, and, with respect to the Registration Statement or any
post-effective amendment, when the same has become effective, (ii) of any
request by the Commission or any other federal or state governmental authority
for amendments or supplements to the Registration Statement or related
prospectus or for additional information, (iii) of the issuance by the
Commission or any other federal or state governmental authority of any stop
order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for the purpose, (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose, (v) of the Company's reasonable determination that a post-effective
amendment to a registration statement would be appropriate.
(e) The Company shall use its best efforts to prevent the issuance of any
stop order suspending the effectiveness of the Registration Statement, and if
one is issued use its best efforts to obtain the withdrawal of any stop order
suspending the effectiveness of the Registration Statement, or the lifting of
any suspension of the qualification (or exemption from qualification) of any of
the Registrable Securities for sale in any jurisdiction, at the earliest
possible moment.
(f) The Company will otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission.
<PAGE>
5. Indemnification.
(a) The Company shall indemnify and hold harmless the selling holder of
Registrable Securities, each underwriter (as defined in the Securities Act), and
each other Person who participates in the public offering of securities under
this Agreement and each other Person, if any, who controls (within the meaning
of the Securities Act) such selling holder, underwriter or participating Person
(individually and collectively, the "Indemnified Person") against any losses,
claims, damages or liabilities (collectively, the "liability"), joint or
several, to which such Indemnified Person may become subject under the
Securities Act or any other statute or at common law, insofar as such liability
(or action in respect thereof) arises out of or is based upon (i) any untrue
statement or alleged untrue statement of any material fact contained, on the
effective date thereof, in any registration statement under which such
securities were registered under the Securities Act, any preliminary prospectus
or final prospectus contained therein, any document incorporated or deemed
incorporated therein by reference, or any amendment or supplement thereto, or
(ii) any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading
regardless of any investigation made by or on behalf of such Indemnified Person.
Except as otherwise provided in Section 5(d), the Company shall reimburse each
such Indemnified Person in connection with investigating or defending any such
liability; provided, however, that the Company shall not be liable to any
Indemnified Person in any such case to the extent that any such liability arises
out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement, preliminary or
final prospectus, incorporated document or amendment or supplement thereto in
reliance upon and in conformity with information furnished in writing to the
Company by such Person specifically for use therein; and provided further, that
the Company shall not be required to indemnify any Person against any liability
arising from any untrue or misleading statement or omission contained in any
preliminary prospectus if such deficiency is corrected in the final prospectus
or for any liability which arises out of the failure of any Person to deliver a
prospectus as required by the Securities Act.
(b) Each selling holder of any securities included in a registration being
effected pursuant hereto shall indemnify and hold harmless each other selling
holder of any securities, the Company, its directors and officers, each
underwriter and each other Person, if any, who controls the Company or such
underwriter (individually and collectively also the "Indemnified Person"),
against any liability, joint or several, to which any such Indemnified Person
may become subject under the Securities Act or any other statute or at common
law, insofar as such liability (or actions in respect thereof) arises out of or
is based upon (i) any untrue statement or alleged untrue statement of any
material fact contained, on the effective date thereof, in any registration
statement under which securities were registered under the Securities Act at the
request of such selling holder, any preliminary prospectus or final prospectus
contained therein, any document incorporated or deemed incorporated therein by
reference, or any amendment or supplement thereto, or (ii) any omission or
alleged omission by such selling holder to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in the case of (i) and (ii) to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in such registration statement, preliminary or final
prospectus, incorporated document, amendment or supplement thereto in reliance
upon and in conformity with information furnished in writing to the Company by
such selling holder specifically for use therein. Such selling holder shall
reimburse any Indemnified Person for any legal fees incurred in investigating or
defending any such liability; provided, however, that such selling holder's
obligations hereunder shall be limited to any amount equal to the net proceeds
to such selling holder of the securities sold in any such registration; and
provided further, however, that no selling holder shall be required to indemnify
any Person against any liability arising from any untrue or misleading statement
or omission contained in any preliminary prospectus if such deficiency is
corrected in the final prospectus or for any liability which arises out of the
failure of any Person to deliver a prospectus as required by the Securities Act.
<PAGE>
(c) Indemnification similar to that specified in Sections 5(a) and (b)
shall be given by the Company and each selling holder of Registrable Securities
(with such modifications as may be appropriate) with respect to any required
registration or other qualification of their securities under any federal or
state law or regulation of governmental authority other than the Securities Act.
(d) In the event the Company, any selling holder of Registrable Securities
or other Person receives a complaint, claim or other notice of any liability or
action, giving rise to a claim for indemnification under Sections 5(a), (b) or
(c) above, the Person claiming indemnification under such paragraphs shall
promptly notify the Person against whom indemnification is sought of such
complaint, notice, claim or action, and such indemnifying Person shall have the
right to investigate and defend any such loss, claim, damage, liability or
action. The Person claiming indemnification shall have the right to employ
separate counsel in any such action and to participate in the defense thereof
but the fees and expenses of such counsel shall not be at the expense of the
Person against whom indemnification is sought (unless the indemnifying party
fails to promptly defend, in which case the fees and expenses of such separate
counsel shall be borne by the Person against whom indemnification is sought). In
no event shall a Person whom indemnification is sought be obligated to indemnify
any Person for any settlement of any claim or action effected without the
indemnifying Person's prior written consent.
6. Compliance with Rule 144. The Company will use its reasonable efforts to
file with the Commission such information as is required under the Exchange Act
for so long as there are holders of Registrable Securities and shall use its
reasonable efforts to take all action as may be required as a condition to the
availability to such holders of Rule 144 under the Securities Act (or any
comparable successor rules).
7. Amendments. The provisions of this Agreement may be amended, and the
Company may take any action herein prohibited or omit to perform any act herein
required to be performed by it, only if the Company has obtained the written
consent of the Shareholder Representative.
8. Damages. The Company recognizes and agrees that each holder of
Registrable Securities will not have an adequate remedy at law if the Company
fails to comply with the terms and provisions of this Agreement and that damages
will not be readily ascertainable, and the Company expressly agrees that, in the
event of such failure, it shall not oppose an application by any holder of
Registrable Securities or any other Person entitled to the benefits of this
Agreement requiring specific performance of any and all provisions hereof,
enjoining the Company from continuing to commit any such breach of this
Agreement or acquiring any other appropriate equitable relief.
9. Miscellaneous.
(a) All notices, requests, demands and other communications provided for
hereunder shall be in writing and mailed (by first class registered or certified
mail, postage prepaid), telegraphed, sent by express overnight courier service
or electronic facsimile transmission (with a copy by mail), or delivered to the
applicable party at the addresses indicated below:
<PAGE>
With a copy to: Berkley W. Duck
Ice Miller Donadio & Ryan
One American Square
Box 82001
Indianapolis, Indiana 46282
Fax: (317) 236-2219
If to the Investors: Keith D. Beaty, President
Implant Innovations, Inc.
4555 Riverside Drive
Palm Beach Gardens, Florida 33410
Fax: (561) 776-6833
and Gerard Moufflet
Advent International Corporation
75 State Street
Boston, Massachusetts 02109
Fax: (617) 951-0566
With copies to: Thomas G. O'Brien III
Steel Hector & Davis LLP
1900 Phillips Point West
777 South Flagler Drive
West Palm Beach, Florida 33401-6198
Fax: (561) 655-1509
If to any holder of Registrable Securities:
At such Person's address for notice as set forth in the books and records of the
Company
or, as to each of the foregoing, at such other address as shall be designated by
such Person in a written notice to other parties complying as to delivery with
the terms of this subsection (a). All such notices, requests, demands and other
communications shall, when mailed, telegraphed or sent, respectively, be
effective (i) three business days after being deposited in the mails or (ii) one
day after being delivered to the telegraph company, deposited with the express
overnight courier service or sent by electronic facsimile transmission,
respectively, addressed as aforesaid.
(b) This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, without application of the conflict of laws
principles thereof.
(c) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(d) If any provision of this Agreement shall be held to be illegal, invalid
or unenforceable, such illegality, invalidity or unenforceability shall attach
only to such provision and shall not in any manner affect or render illegal,
invalid or unenforceable any other provision of this Agreement, and this
Agreement shall be carried out as if any such illegal, invalid or unenforceable
provision were not contained herein.
<PAGE>
IN WITNESS WHEREOF, this Agreement is executed as of the date first stated
above.
BIOMET, INC.
By: /s/ Daniel P. Hann
-------------------------------------------
Daniel P. Hann,
Senior Vice President
"INVESTORS"
/s/ Keith D. Beaty
-------------------------------------------
Keith D. Beaty
/s/ Linda L. Beaty
-------------------------------------------
Linda L. Beaty
/s/ Richard J. Lazzara
-------------------------------------------
Richard J. Lazzara
GLOBAL PRIVATE EQUITY II L.P.
By: Advent International Limited Partnership,
its General Partner
By: Advent International Corporation,
its General Partner
By: /s/ Gerard Moufflet
--------------------------------------
ADVENT INTERNATIONAL INVESTORS II L.P.
By: Advent International Corporation,
its General Partner
By: /s/ Gerard Moufflet
-------------------------------------------
/s/ Edward G. Sabin
-------------------------------------------
Edward G. Sabin
<PAGE>
/s/ Bareld J. Doedens
-------------------------------------------
Bareld J. Doedens
/s/ Steven F. Schiess
-------------------------------------------
Steven F. Schiess
/s/ Glenn L. Criser
-------------------------------------------
Glenn L. Criser
/s/ James W. Scott
-------------------------------------------
James W. Scott
Exhibit 4.4
AFFILIATE AGREEMENT
This Affiliate Agreement, dated as of December 15, 1999 (this "Agreement"),
is by and among Biomet, Inc., an Indiana corporation ("Biomet"), and the
undersigned stockholders (singly, a "Stockholder" and collectively, the
"Stockholders") of Implant Innovations International Corporation, a Delaware
corporation ("Parent").
Preliminary Statements
A. Biomet and Parent have entered into an Agreement and Plan of Merger,
dated as of August 28, 1999 (the "Merger Agreement"), pursuant to which Parent
will merge with and into Palm Acquisition Corp., an Indiana corporation and a
wholly owned subsidiary of Biomet ("Acquisition").
B. Pursuant to the Merger Agreement, at the Effective Time, as that term is
defined in the Merger Agreement, all outstanding shares of Parent Stock,
including Parent Stock owned by the Stockholders, will be converted into the
right to receive Biomet Common Shares.
C. It is a condition to each party's obligation to effect the transaction
contemplated by the Merger Agreement (the "Merger") that (i) legal counsel to
Parent and Biomet shall have delivered their respective opinions to the effect
that the Merger will constitute a reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and that
Biomet, Acquisition and Parent each will be a party to the reorganization within
the meaning of Section 368(b) of the Code, and (ii) the independent public
accounting firms for Parent and Biomet shall have delivered their respective
opinions to the effect that the Merger will qualify for pooling-of-interests
accounting treatment.
D. The execution and delivery of this Agreement by the Stockholders is
required under the terms of the Merger Agreement as a condition precedent to the
obligations of Biomet and Parent to complete the transactions contemplated
thereby.
E. The Stockholders have been advised that the Stockholders may be deemed
to be "affiliates" of Parent, as such term is used (i) for purposes of
paragraphs (c) and (d) of Rule 145 of the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended (the "Act"), or
(ii) in the Commission's Accounting Series Releases 130 and 135, as amended,
although nothing contained herein shall be construed as an admission by the
Stockholders that the Stockholders are in fact affiliates of Parent.
<PAGE>
Terms and Conditions
NOW, THEREFORE, intending to be legally bound, the parties agree as
follows:
1. Use of Defined Terms. Capitalized terms not otherwise defined in this
Agreement have the meanings ascribed to them in the Merger Agreement.
2. Acknowledgements by Stockholders. Each of the Stockholders acknowledges and
understands that the representations, warranties and covenants made by the
Stockholders set forth in this Agreement will be relied upon by Biomet,
Parent and their respective affiliates, counsel and accounting firms, and
that substantial losses and damages may be incurred by such persons if the
Stockholders' representations, warranties or covenants are breached. Each
Stockholder has carefully read this Agreement and the Merger Agreement and
has consulted with such legal counsel and financial advisers as the
Stockholder has deemed appropriate in connection with the execution of this
Agreement.
3. Compliance with Rule 145 and the Act.
(a) Each Stockholder has been advised that (i) the issuance of Biomet
Common Shares in connection with the Merger is expected to be effected
pursuant to a Registration Statement filed by Biomet on Form S-4, and the
resale of such shares will be subject to the restrictions set forth in Rule
145 under the Act unless such shares are otherwise transferred pursuant to
an effective registration statement under the Act or an appropriate
exemption from registration, and (ii) each Stockholder may be deemed to be
an affiliate of Parent. Each of the Stockholders accordingly agrees not to
sell, pledge, transfer or otherwise dispose of any Biomet Common Shares
issued to the Stockholders in the Merger unless (i) the sale, pledge,
transfer or other disposition is made in conformity with the requirements
of Rule 145 under the Act, (ii) the sale, pledge, transfer or other
disposition is made pursuant to an effective registration statement under
the Act, or (iii) the Stockholder delivers to Biomet a written opinion of
counsel, in form and substance reasonably acceptable to Biomet, to the
effect that the sale, pledge, transfer or other disposition is otherwise
exempt from registration under the Act.
(b) Biomet will give stop transfer instructions to its transfer agent
with respect to any Biomet Common Shares received by the Stockholders
pursuant to the Merger, and there will be placed on the certificates
representing those Biomet Common Shares, or any substitutions therefor,
legends stating in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED PURSUANT TO A
BUSINESS COMBINATION WHICH IS BEING ACCOUNTED FOR AS A POOLING -OF-
INTERESTS, IN A TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE
SECURITIES ACT OF 1933 APPLIES, AND MAY ONLY BE TRANSFERRED IN
CONFORMITY WITH RULE 145, PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT, OR IN ACCORDANCE WITH A WRITTEN OPINION OF COUNSEL,
REASONABLY ACCEPTABLE TO THE ISSUER, IN FORM AND SUBSTANCE TO THE
EFFECT THAT SUCH TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933. SUCH SHARES MAY NOT BE TRANSFERRED UNTIL SUCH
TIME AS BIOMET, INC. SHALL HAVE PUBLISHED FINANCIAL RESULTS COVERING
AT LEAST 30 DAYS OF COMBINED OPERATIONS WITH IMPLANT INNOVATIONS
INTERNATIONAL CORPORATION."
and
<PAGE>
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED, SOLD,
PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE
WITH THE REQUIREMENTS OF THE CONDITIONS SPECIFIED IN THE AFFILIATE
AGREEMENT DATED AS OF DECEMBER 15, 1999 BETWEEN THE HOLDER OF THIS
CERTIFICATE AND BIOMET, INC., A COPY OF WHICH AGREEMENT MAY BE
INSPECTED BY THE HOLDER OF THIS CERTIFICATE AT THE PRINCIPAL OFFICES
OF BIOMET, INC. OR FURNISHED BY BIOMET, INC. TO THE HOLDER OF THIS
CERTIFICATE UPON WRITTEN REQUEST AND WITHOUT CHARGE."
The legends set forth above shall be removed (by delivery of a substitute
certificate without such legends), and Biomet shall so instruct its
transfer agent, if a registration statement respecting the sale of the
shares has been declared effective under the Act or if the Stockholder
delivers to Biomet (i) satisfactory written evidence that the shares have
been sold in compliance with Rule 145 (in which case, the substitute
certificate will be issued in the name of the transferee), or (ii) an
opinion of counsel, in form and substance reasonably acceptable to Biomet,
to the effect that sale of the shares by the holder thereof is no longer
subject to Rule 145. A sale of Biomet Common Shares made pursuant to the
registration statement described in Section 9.10 of the Merger Agreement,
when effective, will meet the requirements of this Section and the shares
sold, when reissued, will not be required to contain the legends set forth
herein.
4. Covenants Related to Pooling-of-Interests.
(a) During the period beginning on the date 30 days prior to the
Closing Date (as defined in the Merger Agreement) and ending on the day
after Biomet has published (within the meaning of Section 201.01 of the
Commission's Codification of Financial Reporting Policies) financial
results covering at least 30 days of combined operations of Biomet and
Parent (the "Restricted Period"), the Stockholders will not sell, exchange,
transfer, pledge, distribute or otherwise dispose of or grant any option,
establish any "short" or "put"-equivalent position with respect to or enter
into any similar transaction (through derivatives or otherwise) intended to
have or having the effect, directly or indirectly, or reducing its risk
relative to (i) any shares of Parent Stock owned by the Stockholders or
(ii) any Biomet Common Shares received by the Stockholders in connection
with the Merger.
(b) Notwithstanding anything to the contrary contained in Section
4(a), each Stockholder will be permitted, during the Restricted Period, (i)
to sell, exchange, transfer, pledge, distribute or otherwise dispose of or
grant any option, establish any "short" or "put"-equivalent position with
respect to or enter into any similar transaction (through derivatives or
otherwise) intended to have or having the effect, directly or indirectly,
of reducing its risk relative to any Biomet Common Shares received by the
Stockholder in connection with the Merger (a "Transfer") equal to the
Stockholder's pro rata portion of 1% of the total number of outstanding
Biomet Common Shares acquired by all stockholders of Parent pursuant to the
Merger (measured as of the date of such Transfer and subject to
confirmation of such calculation by Biomet), and (ii) to make bona fide
charitable contributions or gifts of such securities; provided, however
that the transferee(s) of such charitable contributions or gifts agree(s)
in writing to hold such securities for the period specified in Section
4(a).
<PAGE>
(c) All Transfers described herein may be made only in accordance with
and subject to the terms of the Escrow Agreement during the term thereof.
5. Miscellaneous.
(a) This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same document.
(b) This Agreement shall be enforceable by, and shall inure to the
benefit of and be binding upon, the parties and their respective successors
and assigns. As used in this Agreement, the term "successors and assigns"
means, where the context permits, heirs, executors, administrators,
trustees and successor trustees, and personal and other representatives.
(c) This Agreement shall be deemed to be made in and in all respects
shall be interpreted, construed and governed by and in accordance with
Delaware law without regard to the conflict of law principles thereof. The
parties irrevocably and unconditionally consent to submit to the exclusive
jurisdiction of the courts of the State of Delaware and of the United
States of America located in Delaware (the "Delaware Courts") for any
litigation arising out of or relating to this Agreement and the
transactions contemplated by this Agreement (and agree not to commence any
litigation relating thereto except in the Delaware Courts), waive any
objection to the laying of venue of any such litigation in the Delaware
Courts and agree not to plead or claim in any Court that such litigation
brought therein has been brought in an inconvenient forum.
(d) If any term, provision, covenant, or restriction contained in this
Agreement is held by a court or a federal or state regulatory agency of
competent jurisdiction to be invalid, void, or unenforceable, the remainder
of the terms, provisions, covenants, and restrictions contained in this
Agreement shall remain in full force and effect, and shall in no way be
affected, impaired, or invalidated.
(e) Counsel to and accountants for the parties to the Merger Agreement
shall be entitled to rely upon this Agreement as needed.
(f) This Agreement shall not be modified or amended, or any right
waived or any obligations excused, except by a written agreement signed by
both parties.
(g) Notwithstanding any other provision contained in this Agreement,
this Agreement and all obligations under this Agreement shall terminate
upon the termination of the Merger Agreement in accordance with its terms.
<PAGE>
IN WITNESS WHEREOF, this Agreement is executed as of the date first stated
above.
BIOMET, INC.
By:/s/ Niles L. Noblitt
-------------------------------------------
Niles L. Noblitt, Chairman
"STOCKHOLDERS"
/s/ Keith D. Beaty
-------------------------------------------
Keith D. Beaty
/s/ Linda L. Beaty
-------------------------------------------
Linda L. Beaty
/s/ Richard J. Lazzarra
-------------------------------------------
Richard J. Lazzarra
GLOBAL PRIVATE EQUITY II L.P.
By: Advent International Limited Partnership,
its General Partner
By: Advent International Corporation,
its General Partner
By: /s/ Gerard Moufflet
--------------------------------------
ADVENT INTERNATIONAL INVESTORS II L.P.
By: Advent International Corporation,
its General Partner
By: /s/ Gerard Moufflet
-------------------------------------------
/s/ Edward G. Sabin
-------------------------------------------
Edward G. Sabin
<PAGE>
/s/ Bareld J. Doedens
-------------------------------------------
Bareld J. Doedens
/s/ Steven F. Schiess
-------------------------------------------
Steven F. Schiess
/s/ Glenn L. Criser
-------------------------------------------
Glenn L. Criser
/s/ James W. Scott
-------------------------------------------
James W. Scott
Exhibit 4.5
ESCROW AGREEMENT
This Escrow Agreement ("Agreement") dated as of December 15th, 1999 is by
and among Biomet, Inc., an Indiana corporation ("Biomet"); Palm Acquisition
Corp., an Indiana corporation ("Acquisition"); Implant Innovations International
Corporation, a Delaware corporation (the "Parent"); Keith D. Beaty (including
any successor thereto, the "Shareholder Representative") as Shareholder
Representative on behalf of all of the former shareholders of Parent entitled to
receive Biomet Common Shares pursuant to the Merger Agreement (the
"Shareholders"); Global Private Equity II L.P. and Advent International
Investors II L.P. (collectively, the "Advent Funds"); and Wilmington Trust
Company, a Delaware banking corporation, as escrow agent (the "Escrow Agent").
Preliminary Statements
A. Biomet, Parent, Implant Innovations, Inc., a Florida corporation, and
the Control Shareholders have entered into an Agreement and Plan of
Merger dated as of August 28, 1999 (the "Merger Agreement"),
providing, in part, for the merger of Parent with and into Acquisition
pursuant to the terms and conditions of the Merger Agreement.
B. The parties hereto wish to establish an escrow account to provide for
the delivery of certain Biomet Common Shares either to the
Shareholders or to Biomet, as provided for herein and in the Merger
Agreement.
C. It is a condition to the obligation of Biomet and Parent to consummate
the transactions contemplated by the Merger Agreement that the parties
hereto enter into this Agreement.
D. The Shareholder Representative has been duly authorized to enter into
this Agreement by all of the Shareholders and to act on their behalf
in the manner contemplated herein.
Terms and Conditions
NOW, THEREFORE, intending to be legally bound, the parties hereto agree as
follows:
1. Defined Terms. Capitalized terms used herein but not otherwise defined
shall have the meanings ascribed to them in the Merger Agreement.
<PAGE>
2. Authority of Escrow Agent. The Escrow Agent hereby agrees to act as
escrow agent and hold, transfer and deliver the securities and other property
held in the Escrow Account (as defined in Section 3 below) in accordance with
and subject to the terms and conditions of this Agreement.
3. Establishment of Escrow Account. As soon as practicable following the
Effective Time, Biomet will deliver to the Escrow Agent, in its capacity as
such, one or more certificates, registered in the name of the Escrow Agent or
its nominee, representing the Biomet Common Shares ("Biomet Shares") issued at
the Closing for the accounts of the persons and in the amounts set forth in
Schedule A hereto (the "Certificates"). The Escrow Agent shall immediately place
the Certificates into an escrow account (the "Escrow Account"). The Escrow
Account shall be held by the Escrow Agent pursuant to the terms and conditions
of this Agreement and shall be available to secure and indemnify Biomet,
Acquisition and the Biomet Persons to the extent provided herein and in the
Merger Agreement. The Escrow Account shall be disbursed by the Escrow Agent only
in accordance with the terms of this Agreement. Except as provided in Section
20, this Agreement and the deposit into the Escrow Account are irrevocable and
may not be canceled by any party hereto or to the Merger Agreement, or by any
Shareholder, and is made pursuant to the terms of the Merger Agreement.
4. Receipt by Escrow Agent. Upon receipt of the Certificates, the Escrow
Agent will provide to the other parties to this Agreement a confirmation of that
fact and of the deposit of the Certificates in the Escrow Account.
5. Voting, Dividends and Rights of Sale of the Biomet Shares.
A. Voting. The Shareholders shall be entitled to vote the Biomet
Shares at all meetings of Biomet shareholders. The Escrow Agent (or Biomet
acting on its behalf) will send to the Shareholders copies of all proxy
materials and other communications sent by Biomet to its shareholders
generally. If those materials are sent by the Escrow Agent, Biomet will
send to the Escrow Agent sufficient copies thereof for this purpose and
will reimburse the Escrow Agent for its reasonable expenses in connection
therewith. The Biomet Shares will be voted in accordance with the
instructions contained in each proxy that is properly executed and timely
received.
B. Dividends; Stock Splits. Dividends paid on the Biomet Shares
(whether in cash or Biomet securities) shall be paid to the Shareholders
but delivered to the Escrow Agent, to be held as a part of the Escrow
Account and distributed by the Escrow Agent pursuant to the terms of this
Agreement. In the event of a stock split, Biomet shall deliver to the
Escrow Agent certificates, registered in the manner described in Section 1,
representing the shares to which the Shareholders are entitled as a result
of the stock split. The shares represented by those certificates shall be
considered as "Biomet Shares" for purposes of this Agreement, and the
certificates shall be held and distributed by the Escrow Agent as
"Certificates" pursuant to the terms of this Agreement.
C. Disposition. Subject to the terms of the Merger Agreement and the
Affiliate Agreement, and to compliance with applicable laws and
regulations, each Shareholder shall have the right to sell any of the
Biomet Shares held for his, her or its account, on the following terms:
(i) Biomet Shares may be sold only in market transactions
effected on Nasdaq-NMS through NatCity Investments, Inc., 251 North
Illinois Street, Suite 500, Indianapolis, Indiana 46204, Attention:
Gene Tanner, or any registered broker-dealer then acting as a market
maker in Biomet Common Shares approved in writing by Biomet, which
approval will not be unreasonably withheld (the "Broker").
<PAGE>
(ii) The Shareholder will give notice to the Escrow Agent of each
sale of Biomet Shares by the Shareholder, and instructions to the
Escrow Agent to tender a Certificate held for the account of the
Shareholder, in deliverable form, to the Broker (or to otherwise make
effective delivery of the Shares sold), against delivery of the
proceeds of the sale transaction to the Escrow Agent to be held in the
Escrow Account and invested and disposed of in accordance with the
terms of this Agreement.
6. Investment of Escrow Account. Except as described in Section 5.C.,
neither the Certificates nor the Biomet Shares shall be transferred, sold,
exchanged or reinvested except to the extent and on the same terms as may apply
generally to the outstanding Common Shares of Biomet or as otherwise required
under the terms of this Agreement. Any cash held at any time in the Escrow
Account shall be invested in the name of the Escrow Agent or its nominee in any
of the following (which in any case may include money market funds and
investments provided by the Escrow Agent and its affiliates): (a) a government
money market portfolio (including portfolios of the Escrow Agent and its
affiliates) restricted to obligations with maturities of six months or less (but
not to extend beyond the Initial Termination Date or the Final Termination Date,
as applicable), composed of obligations issued or guaranteed as to payment of
principal and interest by the full faith and credit of the United States
("Government Obligations") or repurchase agreements secured by Government
Obligations, and (b) commercial paper of finance companies organized under the
laws of any state of the United States or any political subdivision thereof
having a rating assigned to that commercial paper by Standard & Poor's
Corporation or Moody's Investors Service, Inc., equal to the highest rating
assigned by that organization. Earnings on that portion of the Escrow Account
invested as provided in the foregoing sentence shall be apportioned among the
Shareholders in proportion to the principal cash invested for their accounts.
7. The Shareholder Representative. The Shareholder Representative hereby
agrees to act as, and to undertake the duties and responsibilities of, the
Shareholder Representative. A copy of the Representative Agreement pursuant to
which the Shareholder Representative is acting in this capacity is attached
hereto as Exhibit A.
8. Indemnification. Biomet, Acquisition and the Biomet Persons
(collectively, the "Indemnified Persons" and individually, an "Indemnified
Person") shall be entitled to indemnification with respect to Losses as provided
in the Merger Agreement, on and subject to the following terms and conditions:
A. Limited Recourse. From and after the Closing, the recourse of the
Indemnified Persons hereunder and under the Merger Agreement for
indemnification as provided in the Merger Agreement shall be the sole and
exclusive rights and remedies for the Indemnified Persons and shall be
limited to the Escrow Account. Except for Claims against the Escrow
Account, none of the Indemnified Persons shall have any recourse against
the Shareholders or any of them for any breach of a representation,
warranty, covenant or agreement in the Merger Agreement or any of the
Merger Documents or in the event the Escrow Account is insufficient to
reimburse the Indemnified Persons for indemnifiable Losses as provided
herein.
<PAGE>
B. Contingency Funds. Of the Biomet Shares held in the Escrow Account,
295,944 shares (and cash in the amount of $52.36 representing fractional
share interests) shall be held in a "Specified Contingency Fund" solely for
the purpose of indemnification of the Biomet Persons for any Losses
described in subsection (ii) of Article XIII of the Merger Agreement (the
"Specified Contingency"), and the remainder of the Escrow Account,
consisting of 520,864 Biomet Shares (and cash in the amount of $6.90
representing fractional share interests), shall be held in a "General
Contingency Fund." There shall be added to each contingency fund, and held
in escrow as herein provided, all dividends paid on Biomet Shares deposited
in that fund, all proceeds from the sale of those Biomet Shares and all
earnings on those proceeds.
C. Baskets. The Indemnified Persons shall not be entitled to
reimbursement for Losses unless and until the aggregate of all Losses
exceeds, on a cumulative basis: (i) with respect to the Specified
Contingency, an amount equal to $1,250,000, and thereafter shall be
reimbursed hereunder only for the amount of such Losses that exceed
$1,250,000, and (ii) with respect to all other Losses, an amount equal to
$250,000, and thereafter shall be reimbursed hereunder only for the amount
of such Losses that exceed $250,000.
D. Management of the Specified Contingency.
(i) Until such time as Biomet shall have determined that there is
a reasonable probability that the Specified Contingency will produce
Losses in an amount greater than $1,250,000, Biomet shall have the
sole right to manage and control the disposition of the Specified
Contingency.
(ii) Following such time as Biomet shall have determined that
there is a reasonable probability that the Specified Contingency will
produce Losses in an amount greater than $1,250,000, Biomet and the
Shareholder Representative shall jointly manage and control the
disposition of the Specified Contingency. Neither Biomet nor the
Shareholder Representative shall unreasonably withhold its or his
consent to the settlement of the Specified Contingency on terms
proposed by the other.
9. Claims Procedures.
A. Notice. If any Indemnified Person shall have any claim for which it
seeks the indemnification as provided for herein (a "Claim"), Biomet shall
notify the Shareholder Representative in writing and include in that notice
(a "Claim Notice") a description in reasonable detail of the facts upon
which the Claim is based and the amount of the claimed Losses (including,
with respect to third party claims, the basis for the valuation thereof by
Biomet). Within 30 days following the date of a Claim Notice, Biomet shall
provide the Shareholder Representative with reasonable documentation to
support the Claim and the amount of the claimed Losses. If no written
objection to the Claim is made by the Shareholder Representative within 10
days after the receipt of the Claim Notice by the Shareholder
Representative, the Losses identified in the notice and the liability of
the Shareholders therefor shall be deemed admitted by the Shareholder
Representative who shall thereby waive, on behalf of the Shareholders, all
rights to object to such Claim or deny liability for the Losses identified
in the Claim Notice in any forum whatsoever (an "Accepted Claim"). An
objection by the Shareholder Representative to a Claim must state with
reasonable specificity the basis for the objection.
<PAGE>
B. Dispute Resolution. In the event that the parties to this Agreement
are unable to resolve any dispute arising from an objection by the
Shareholder Representative, that matter shall be submitted to arbitration
in accordance with provisions therefor contained in the Merger Agreement;
provided, however, that unless Biomet and the Shareholder Representative
otherwise agree, any provisions of the Commercial Arbitration Rules of the
American Arbitration Association (the "Association") to the contrary
notwithstanding, the arbitration shall proceed as follows:
(i) Each party shall select the arbitrator to be selected by it
within 10 days following notice to the Association of the commencement
of the arbitration, and the arbitrators thus selected shall select the
third arbitrator within 10 days thereafter.
(ii) The dispute shall be decided on the basis of (A) a written
statement by each party of its position, which may include third party
opinions provided by a party in support of its position, and (B) if
requested by either party, both parties shall be allowed no more than
two hours of testimony and no more than one hour of cross-examination
in a hearing before the arbitrators to occur within 10 days following
the submission of the written statements described in (A). No oral
arguments or other evidence or testimony of any kind shall be taken or
submitted. The written statements described in (A) shall be submitted
within 20 days following notice to the Association of the commencement
of the arbitration. The written statements shall not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made not misleading.
(iii) A decision shall be rendered by the arbitrators within 30
days following the delivery of the statements described in (ii), and
in no event later than the next business day preceding the Final
Termination Date.
(iv) The decision of the arbitrators shall be final and neither
party shall have any right to appeal under common law or any federal
or state statute, all of which rights are hereby waived.
C. Accepted Claims. Any Claim objected to by the Shareholder
Representative shall become an Accepted Claim (both as to the right of the
Indemnified Party to be indemnified and the amount of the Losses) upon (i)
entry of the arbitrators' award, or (ii) notice by the Shareholder
Representative to the Escrow Agent that he has withdrawn the objection as
to the indemnifiability of the Claim or the amount of the Losses, as the
case may be. At such time as a Claim shall have become an Accepted Claim in
accordance with the provisions of this Section, Biomet shall give notice of
that fact to the Shareholder Representative and to the Escrow Agent (the
"Accepted Claim Notice").
10. Losses Net of Insurance; Effect of Adjustments. The amount of any
Losses for which reimbursement is provided under this Agreement shall be net of
any amounts recovered or recoverable by the Indemnified Persons under insurance
policies with respect to such Losses. Any reimbursement of Biomet under this
Agreement shall be treated as an adjustment to the Merger consideration for Tax
purposes, unless a final determination (which shall include the execution of a
Form 870-AD or successor form) with respect to the Indemnified Persons or any of
their affiliates causes any such payment not to be treated as an adjustment to
the Merger consideration for United States Federal income Tax purposes.
<PAGE>
11. Termination of Escrow Account and Final Distribution of Biomet Shares.
A. Termination of Rights to Assert Claims.
(i) The right of the Indemnified Persons to provide a Claim
Notice with respect to Losses related to the Specified Contingency
shall expire at the close of business on the fortieth (40th) day prior
to the fifth anniversary of the Closing Date (the "Final Termination
Date").
(ii) The right of the Indemnified Persons to assert a Claim for
Losses with respect to a matter that was or should have been
encountered in the audit process (taking into account limitations in
the scope of the audit due to materiality), other than Losses related
to the Specified Contingency, shall expire at the close of business on
the date of the report to Biomet of its independent certified public
accountants with respect to the accountants' examination of the
financial statements of Biomet for the fiscal year ended May 31, 2000,
but in no event later than the close of business on the first
anniversary of the Closing Date (the "Initial Termination Date").
(iii) The right of the Indemnified Persons to assert a Claim for
Losses with respect to all other matters shall expire at Initial
Termination Date.
B. Distributions to Biomet.
(i) Distributions to Biomet with respect to Accepted Claims other
than Claims that relate to the Specified Contingency shall be made by
the Escrow Agent from the General Contingency Fund as soon as
practicable following the Initial Termination Date.
(ii) Distributions to Biomet with respect to Accepted Claims that
relate to the Specified Contingency shall be made by the Escrow Agent
from the Specified Contingency Fund as soon as practicable following
the date on which the Claim becomes an Accepted Claim.
(iii) Distributions to Biomet shall be charged against each of
the Shareholders in proportion to their interests in the Escrow
Account, and made in the form of (A) Certificates representing that
number of Biomet Shares that have a value, determined with reference
to the Conversion Price, equal to the amount of an Accepted Claim, and
(B) if the interest of any Shareholder in Biomet Shares remaining in
the Escrow Account is not sufficient to cover the full amount of that
portion of the distribution charged to the Shareholder, then the
deficiency shall be paid in cash from the respective Shareholder's
portion of the Escrow Account, to the extent that each Shareholder has
cash in his portion of the Escrow Account.
(iv) Upon any distribution of Certificates representing Biomet
Shares to Biomet, the Escrow Agent also shall provide to Biomet a
stock power and any other authority needed to effect the transfer of
the shares into the name of Biomet. If any cash dividend shall have
been paid with respect to Biomet Shares prior to the date of a
distribution of Biomet Shares to Biomet, the per share amount thereof
with respect to the Biomet Shares subject to that distribution shall
be paid to Biomet in cash simultaneously with the distribution.
<PAGE>
C. Distributions to the Shareholders.
(i) As soon as practicable following the Initial Termination
Date, the Escrow Agent shall distribute to the Shareholders the
balance, if any, of the Biomet Shares held in the General Contingency
Fund after all distributions have been made to Biomet as herein
provided, and shall liquidate any other investments then held in the
General Contingency Fund and distribute the proceeds thereof and any
other cash then held in the Escrow Account to the Shareholders, in
proportion to their interests in the Escrow Account.
(ii) As soon as practicable following the Final Termination Date,
or in the event of a complete settlement of or a final, non-appealable
judgment in the Specified Contingency prior to the Final Termination
Date and distribution to Biomet of that part of the Specified
Contingency Fund to which it may be entitled, if any, as a result of
that final disposition, the Escrow Agent shall distribute to the
Shareholders the balance, if any, of the Biomet Shares held in the
Specified Contingency Fund after all distributions have been made to
Biomet as herein provided, and shall liquidate all other investments
then held in the Specified Contingency Fund and distribute the
proceeds thereof to the Shareholders, in proportion to their interests
in the Escrow Account.
D. Termination. This Agreement, and all of the liabilities and
obligations of the Escrow Agent hereunder, shall terminate upon the
delivery of all Biomet Shares and other property in the Escrow Account in
accordance with this Agreement.
12. Notices. Any notice or other communication given under this Agreement
shall be in writing and shall be (i) delivered personally; (ii) sent by
documented overnight delivery service; or (iii) sent by facsimile transmission,
provided that a confirmation copy thereof is sent no later than the business day
following the day of such transmission by documented overnight delivery service
or first class mail, postage prepaid (certified or registered mail, return
receipt requested). Such notice shall be deemed to have been duly given (i) on
the date of delivery, if delivered personally; (ii) on the business day after
dispatch by documented overnight delivery service, if sent in such manner; or
(iii) on the date of facsimile transmission, if so transmitted. Notices or other
communications shall be directed to the following addresses:
If to Biomet Daniel P. Hann
or Acquisition: Senior Vice President, General Counsel
& Secretary
Biomet, Inc.
Airport Industrial Park
P.O. Box 587
Warsaw, Indiana 46580
Fax: (219) 372-1960
With a copy to: Berkley W. Duck
Ice Miller Donadio & Ryan
One American Square
Box 82001
Indianapolis, Indiana 46282
Fax: (317) 236-2219
<PAGE>
If to the Shareholder Representative: Keith D. Beaty
Implant Innovations, Inc.
Palm Beach Gardens, Florida 33410
Fax: (561) 776-6833
With a copy to: Thomas G. O'Brien III
Steel Hector & Davis LLP
1900 Phillips Point West
777 South Flagler Drive
West Palm Beach, Florida 33401-6198
Fax: (561) 655-1509
If to the Advent Funds: Gerard Moufflet
Advent International Corporation
75 State Street
Boston, Massachusetts 02109
Fax: (617) 951-0566
If to the Escrow Agent: Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Custody
Fax: (302) 427-4605
Any party may, by notice given in accordance with this Section, specify a new
address for notices under this Agreement.
13. Escrow Agent Expense. The Escrow Agent's fees and reimbursable
expenses for its services hereunder shall be paid by Biomet. In the event Escrow
Agent renders any extraordinary services in connection with the Escrow Account
at the request of the parties, Escrow Agent shall be entitled to additional
compensation therefor.
14. Rights and Obligations of Escrow Agent.
A. Rights of Escrow Agent. The duties and obligations of the Escrow
Agent hereunder shall be governed solely by the provisions of this
Agreement and the Merger Agreement. The Escrow Agent shall be entitled to
retain counsel and to act in reliance upon the advice of such counsel in
all matters pertaining to this Agreement and the Merger Agreement and shall
incur no liability hereunder except for its gross negligence, wilful
misconduct or failure to have acted in good faith. The Escrow Agent shall
not be required to defend any legal proceedings which may be instituted
against it (other than legal proceedings based upon the alleged gross
negligence or wilful misconduct of the Escrow Agent or its failure to have
acted in good faith) with respect to the subject matter of this Agreement
unless requested to do so by a party to this Agreement, in which case the
Escrow Agent shall be indemnified against the cost and expense of that
defense by that party. The Escrow Agent shall in no way be responsible for
nor shall it be its duty to notify any party hereto or any other party
interested in this Agreement of any distribution required under this
Agreement unless such notice is explicitly provided for in this Agreement.
The Escrow Agent shall be protected in acting upon any written notice,
request, waiver, consent, certificate, receipt, authorization, power of
attorney or other paper or document which Escrow Agent in good faith
believes to be genuine and what it purports to be. In the event conflicting
demands for payment of the Escrow Account are made or conflicting notices
are served on Escrow Agent which remain unresolved, the parties hereto
expressly agree and consent that Escrow Agent may file, at the expense of
the parties, an interpleader action in a Court of competent jurisdiction in
the State of Delaware and so notify the parties hereto. Escrow Agent shall
then promptly file the interpleader action and place the portion of the
Escrow Account to which the conflicting notices relate in the registry of
said Court. Upon the filing of the interpleader action and the tender of
into the registry of said Court, Escrow Agent shall, ipso facto, be fully
released and discharged from all obligations imposed on it in this
Agreement to which the tendered portion of the Escrow Account relates.
<PAGE>
B. Indemnification of Escrow Agent. Biomet hereby agrees to indemnify
Escrow Agent and hold it harmless from any and against all liabilities,
losses, actions, suits or proceedings at law or in equity, and any other
expenses, fees or charges of any character or nature, including, without
limitation, attorney's fees, which Escrow Agent may incur by reason of its
acting as Escrow Agent under this Agreement or arising out of the existence
of the Escrow Account, except to the extent the same shall be caused by
Escrow Agent's gross negligence, willful misconduct or lack of good faith.
Biomet's indemnity obligations hereunder shall extend to all losses,
claims, damages, liabilities and expenses, including reasonable costs of
investigation, and counsel fees and disbursements, which may be imposed
upon Escrow Agent or incurred in connection with its acceptance of
appointment as Escrow Agent hereunder or the performing of its duties
hereunder including any litigation arising from this Agreement.
15. Capacity of the Escrow Agent. The parties hereto acknowledge that
Escrow Agent may now or in the future provide unrelated financial services to
any one or more of the parties to this Agreement, and that any such relationship
between Escrow Agent and such party shall not affect Escrow Agent's performance
of its duties hereunder. This Agreement expressly and exclusively sets forth the
duties and obligations of the Escrow Agent with respect to any and all matters
pertinent thereto and no implied duties or obligations shall be read into this
Agreement against the Escrow Agent. The Escrow Agent acts hereunder as a
depository only, and is not responsible or liable in any manner whatsoever for
the sufficiency, correctness, genuineness or validity of the subject matter of
this Agreement or any part thereof, or for the form of execution thereof, or for
the identity or authority of any person executing or depositing such subject
matter.
16. Resignation of Escrow Agent. The Escrow Agent may resign at any time by
giving written notice to the parties hereto whereupon the parties hereto will
immediately appoint a successor Escrow Agent. Until a successor Escrow Agent has
been named and accepts its appointment or until another disposition of the
subject matter of this Agreement has been agreed upon by all the parties hereto,
the Escrow Agent shall be discharged of all its duties hereunder save to keep
the Escrow Account whole.
17. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflict of laws thereof.
18. Interpretation. The Section and other headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation".
<PAGE>
19. Severability. In the event any one or more of the provisions contained
in this Agreement should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby. The
parties shall endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions, the economic effect
of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
20. Amendment and Waiver. This Agreement may not be amended, supplemented
or discharged, and no provision hereof may be modified or waived, except
expressly by an instrument in writing signed by the party to be charged. Any
term or provision of this Agreement may be waived, but only in writing by the
party which is entitled to the benefit thereof. No waiver of any provision
hereof by any party shall constitute a waiver thereof by any other party nor
shall any such waiver constitute a continuing waiver of any matter by such
party.
21. Binding Effect; Benefits. This Agreement shall be binding upon and
inure to the benefit of the parties to this Agreement and their respective
successors and permitted assigns. Nothing expressed or implied in this Agreement
is intended to or shall be construed to give any person other than the parties
to this Agreement or their respective successors or permitted assigns any legal
or equitable right, remedy or claim under or in respect of this Agreement, it
being the intention of the parties to this Agreement that this Agreement shall
be for the sole and exclusive benefit of such parties or such successors or
assigns and for the benefit of no other person.
22. Cooperation. Biomet, Acquisition and the Shareholder Representative
agree to use their respective best efforts to take, or cause to be taken, all
action, to do, or cause to be done, and to assist and cooperate with the other
parties hereto in doing, all acts and things reasonably necessary to make
effective, in the most expeditious manner practicable, the matters contemplated
by this Agreement, including the prompt delivery of all notices and instructions
required to be made to the parties to this Agreement.
23. Inspection; Statements. All funds or other property held as part of the
Escrow Account shall at all times be clearly identified as being held by the
Escrow Agent hereunder. Any party hereto may at any time during the Escrow
Agent's business hours (with reasonable notice) inspect any records or reports
relating to the Escrow Account. The Escrow Agent shall deliver to Parent and to
the Shareholder Representative monthly statements of account in customary form
covering the Escrow Account.
24. Assignment. Neither this Agreement nor any rights, interests or
obligations hereunder shall be assigned by any party hereto without the prior
written consent of the other parties.
25. Entire Agreement. This Agreement (together with the Merger Agreement
and the Affiliate Agreement, and all documents incorporated herein and therein,
the terms of which are incorporated herein by reference) constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, written and oral. To the
extent that the provisions of any of the agreements incorporated herein are
inconsistent with the provisions contained herein, this Agreement shall
supersede those agreement and be the controlling document.
<PAGE>
26. Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
BIOMET, INC.
By:/s/ Daniel P. Hann
---------------------------------------
PALM ACQUISITION CORP.
By:/s/ Daniel P. Hann
---------------------------------------
IMPLANT INNOVATIONS
INTERNATIONAL CORPORATION
By:/s/ Keith D. Beaty
---------------------------------------
/s/ Keith D. Beaty
---------------------------------------
Keith D. Beaty,
as Shareholder Representative
<PAGE>
GLOBAL PRIVATE EQUITY II L.P.
By: Advent International Limited
Partnership, its General Partner
By: Advent International Corporation,
its General Partner
By: /s/ Gerard Moufflet
----------------------------------
ADVENT INTERNATIONAL
INVESTORS II L.P.
By: Advent International Corporation,
its General Partner
By: /s/ Gerard Moufflet
---------------------------------------
WILMINGTON TRUST COMPANY,
As Escrow Agent
By: /s/ Margaret Pulgini
---------------------------------------
Exhibit 4.6
LIST OF EXHIBIT AND SCHEDULE
TO
ESCROW AGREEMENT
Exhibit A Representative Agreement, effective as of August
28, 1999, appointing Keith D. Beaty as representative
for certain former stockholders of Implant
Innovations International Corporation to act on their
behalf with respect to the Merger Agreement, the
Escrow Agreement and certain other documents relating
to the merger of Implant Innovations International
Corporation and Palm Acquisition Corp.
Schedule A Listing of former stockholders of Implant
Innovations International Corporation and the number
of Biomet Common Shares issued to these stockholders
in connection with the merger of Implant Innovation
International Corporation with and into Palm
Acquisition Corp.
Exhibit 5.1
January 12, 2000
Board of Directors
Biomet, Inc.
P.O. Box 587
Airport Industrial Park
Warsaw, Indiana 46581-0587
Ladies and Gentlemen:
We have acted as counsel to Biomet, Inc., an Indiana corporation (the
"Company"), in connection with the filing of a Registration Statement on Form
S-3 (the "Registration Statement") with the Securities and Exchange Commission
(the "Commission") for the purpose of registering under the Securities Act of
1933, as amended (the "Securities Act"), an aggregate of 4,763,454 of the common
shares of the Company (the "Shares") issued to the holders of Class A common
stock and Class B common stock of Implant Innovations International Corporation
in connection with an Agreement and Plan of Merger by and among the Company,
Palm Acquisition Corp., Implant Innovations International Corporation, Implant
Innovations, Inc. and the Control Shareholders of Implant Innovations
International Corporation, dated August 28, 1999 (the "Merger Agreement"), which
Shares may be offered and sold by certain shareholders in resale transactions.
In connection therewith, we have investigated those questions of law we
have deemed necessary or appropriate for purposes of this opinion. We have also
examined originals, or copies certified or otherwise identified to our
satisfaction, of those documents, corporate or other records, certificates and
other papers that we deemed necessary to examine for the purpose of this
opinion, including:
27. The Articles of Incorporation of the Company;
28. The Bylaws of the Company;
29. Resolutions relating to the filing of the Registration Statement
adopted by the Company's Board of Directors (the "Resolutions"); and
30. The Registration Statement.
<PAGE>
January 12, 1999
For purposes of this opinion, we have assumed (i) the authenticity of all
documents submitted to us as originals and the conformity to authentic originals
of all documents submitted to us as certified or photostatic copies; (ii) that
the Shares will be sold pursuant to the terms of the Registration Statement;
(iii) that the Resolutions will not be amended, altered or superseded before the
issuance of the Shares and (iv) that no changes will occur in the applicable law
or the pertinent facts prior to the sale of the Shares.
Based upon the foregoing and subject to the qualifications set forth in
this letter, we are of the opinion that the Shares are validly authorized,
legally issued, fully paid and non-assessable.
We hereby consent to the filing of this Opinion Letter as an exhibit to the
Registration Statement and to the reference to this Firm under the caption
"Legal Matters" in the prospectus included as part of the Registration
Statement. In giving this consent, we do not admit that we are within the
category of persons whose consent is required under Section 7 of the Securities
Act or under the rules and regulations relating thereto.
Very truly yours,
ICE MILLER DONADIO & RYAN
/s/ Ice Miller Donadio & Ryan
Exhibit 23.1
Consent of Independent Accountants
We hereby consent to the incorporation by reference in this Registration
Statement of Biomet, Inc. on Form S-3 and in the related Prospectus of our
report dated July 3, 1999, on our audits of the consolidated financial
statements and financial statement schedule of Biomet, Inc. and subsidiaries at
May 31, 1999 and 1998, and for each of the three years in the period ended May
31, 1999, which report appears in Biomet's Annual Report on Form 10-K for the
year ended May 31, 1999. We also consent to the reference to us under the
heading "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers, LLP
PricewaterhouseCoopers LLP
South Bend, Indiana
January 13, 2000
