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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): July 15, 1997
(June 30, 1997)
American Standard Companies Inc.
Delaware 1-11415 13-3465896
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification Number)
One Centennial Avenue
P.O. Box 6820
Piscataway, NJ 08855-6820
(Address of principal executive offices)
Registrant's telephone number, including area code: (908) 980-6000
N/A
(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets.
On June 30, 1997, affiliates of American Standard Companies Inc. (the
"Registrant") consummated the acquisition of the European in vitro medical
diagnostics business of Sorin Biomedica S.p.A., an affiliate of the FIAT Group
("Sorin"), by purchasing 100 percent of the capital stock of newly-formed
entities to which the assets comprising that business had been contributed. On
June 30, 1997, an indirect subsidiary of the Registrant also completed a merger
with INCSTAR Corporation, a medical diagnostics company based in Stillwater,
Minnesota ("INCSTAR"), pursuant to which shares of INCSTAR's common stock have
been converted into the right to receive $6.32 per share in cash, without
interest. As a result of such merger, INCSTAR became an indirect, wholly-owned
subsidiary of the Registrant. Sorin's in vitro business and INCSTAR develop and
market test reagents for clinical diagnostics and medical research. The acquired
businesses are part of a new Medical Systems Group formed by the Registrant that
also includes two medical diagnostic product companies that the Registrant has
been developing during the last several years, Sienna Biotech Inc. and
Altimenterics Inc. The aggregate cost of the Sorin acquisition and the INCSTAR
merger was approximately $210 million and was funded from the Registrant's
existing bank credit facilities. A copy of the Registrant's press release
announcing the consummation of the acquisition from Sorin and the INCSTAR merger
(together, the "Acquisitions") is attached hereto as Exhibit (99) and
incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
7 (a) and (b) Financial Statements. The Registrant has sought a waiver
from the Securities and Exchange Commission from the requirements to
file the historical and pro forma financial statements required
hereunder. If such waiver is not obtained, the Registrant will make the
required filings within the prescribed time period.
Exhibits. The following exhibits are included or incorporated by reference
in accordance with Regulation S-K, Item 601:
(7)(c)(i) Agreement and Plan of Merger, dated as of March 10, 1997, among
American Standard Inc., American Standard Medical Systems, Inc., ISTR
Merger Corporation and INCSTAR Corporation (incorporated by reference to
Exhibit A to INCSTAR Corporation's definitive Proxy Statement on Schedule
14A (File No.1-9800), filed on May 31, 1997).
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(7)(c)(ii) Agreement, dated as of March 10, 1997, among Sorin Biomedica
S.p.A., Sienna Biotech International Inc., WABCO Standard Trane B.V., and
American Standard Inc., and Amendment No. 1 thereto, dated as of June 30,
1997.
(99) Press release of the Registrant, issued on June 30, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
AMERICAN STANDARD COMPANIES INC.
By: G. Ronald Simon
Name: G. Ronald Simon
Title: Vice President and Controller
Dated: July 15, 1997
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Exhibit (7)(c)(ii)
AGREEMENT
by and among
SORIN BIOMEDICA S.P.A
SIENNA BIOTECH INTERNATIONAL INC.
WABCO STANDARD TRANE B.V.
AMERICAN STANDARD INC.
MARCH 10, 1997
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TABLE OF CONTENTS
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ARTICLE 1 -- PREMISES; INTERPRETATION...................................... 3
2.01 "Accounting Principles"........................................ 3
2.02 "Affiliates"................................................... 3
2.03 "C.C."......................................................... 3
2.04 "Closing"...................................................... 4
2.05 "Closing Date"................................................. 4
2.06 "Confidentiality Agreement".................................... 4
2.07 "Contemplated Transactions".................................... 4
2.08 "Excluded Assets" ............................................. 4
2.09 "In Vitro Business" ........................................... 4
2.10 "I.P. Rights" ................................................. 4
2.11 "Material Adverse Effect"...................................... 4
2.12 "Net Invested Capital"......................................... 5
2.13 "NewCo Belgium"................................................ 5
2.14 "NewCo Brazil"................................................. 5
2.15 "NewCo France"................................................. 5
2.16 "NewCo Germany"................................................ 5
2.17 "NewCo Italy".................................................. 5
2.18 "NewCo Spain".................................................. 5
2.19 "Stated Assets and Liabilities"................................ 5
2.20 "Taxes"........................................................ 6
2.21 "Trustee"...................................................... 6
2.22 "Transition Services Agreement"................................ 6
2.23 "Bank Reimbursement Obligations"............................... 6
ARTICLE 3 -- REORGANIZATION............................................. 6
3.01 Italy.......................................................... 6
3.02 Germany........................................................ 7
3.03 France......................................................... 8
3.04 Belgium........................................................ 9
3.05 Spain.......................................................... 10
3.06 Brazil......................................................... 11
ARTICLE 4 -- PURCHASE PRICE............................................. 12
ARTICLE 5 - DOCUMENTATION.............................................. 12
ARTICLE 6 -- REPRESENTATIONS AND WARRANTIES OF SORIN BIOMEDICA.......... 13
6.01 Organization and Good Standing................................. 13
6.02 Authority -- No Conflict....................................... 13
6.03 Capitalization................................................. 15
6.04 Assets, Personnel and Contracts to be Transferred -- Balance
Sheets....................................................... 16
6.05 Title to Properties -- Assets -- Inventory..................... 16
6.06 Environmental Matters.......................................... 17
6.07 Intellectual Property Rights................................... 18
6.08 Accounts Receivable............................................ 19
6.09 Taxes.......................................................... 20
6.10 Employees...................................................... 21
6.11 Assigned Contracts............................................. 21
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6.12 Title to Permits and Compliance................................ 23
6.13 Legal Proceedings.............................................. 23
6.14 Absence of Certain Changes and Events.......................... 24
6.15 Minnesota Corporation.......................................... 25
6.16 Disclosure..................................................... 26
6.17 Brokers or Finders............................................. 26
6.18 Compliance with Law............................................ 26
6.19 Breaches of Representations and Warranties..................... 26
6.20 No Other Representations and Warranties........................ 27
ARTICLE 7 -- REPRESENTATIONS AND WARRANTIES OF BUYER.................... 27
7.01 Organization and Good Standing................................. 27
7.02 Authority -- No Conflict....................................... 27
7.03 Certain Proceedings............................................ 28
7.04 Broker or Finders.............................................. 28
7.05 Disclosure..................................................... 28
7.06 Breaches of Representations and Warranties..................... 28
7.07 No Other Representations and Warranties........................ 28
ARTICLE 8 -- COVENANTS OF SORIN BIOMEDICA AND THE SELLING PARTIES PRIOR
TO CLOSING DATE................................................ 28
8.01 Access and Investigation....................................... 28
8.02 Operation of the Business...................................... 29
8.03 Required Governmental Approvals................................ 30
8.04 Notification................................................... 30
8.05 No Negotiation................................................. 30
8.06 Minnesota Corporation Merger................................... 30
8.07 No Employment Offers........................................... 31
8.08 Lease and Service Agreements................................... 31
8.09 Minnesota Warrant.............................................. 31
ARTICLE 9 -- COVENANTS OF BUYER PRIOR TO CLOSING DATE................... 31
ARTICLE 10 -- CONDITIONS PRECEDENT........................................ 32
ARTICLE 11 -- TERMINATION................................................. 33
11.01 Termination Events............................................. 33
11.02 Effect of Termination.......................................... 34
ARTICLE 12 -- CLOSING..................................................... 34
ARTICLE 13 -- PURCHASE PRICE ADJUSTMENT; ACTIONS AFTER THE CLOSING DATE... 36
ARTICLE 14 -- INDEMNIFICATION ............................................ 43
ARTICLE 15 -- GENERAL PROVISIONS.......................................... 51
15.01 Expenses....................................................... 51
15.02 Transfer Taxes and Charges..................................... 51
15.03 Public Announcements -- Confidentiality........................ 51
15.04 Guarantee...................................................... 52
15.05 Notices........................................................ 53
15.06 Waiver......................................................... 54
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15.07 Entire Agreement and Modification.............................. 54
15.08 Assignments, Successors, and Limited Third-Party Rights........ 55
15.09 Severability................................................... 55
15.10 Governing Law; Controversies................................... 55
15.11 Counterparts................................................... 56
15.12 Knowledge...................................................... 56
15.13 Registration................................................... 56
15.14 Bank Reimbursement Obligations................................. 56
15.15 Non-Competition................................................ 56
15.16 Conbiotec...................................................... 57
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AGREEMENT
This Agreement is made and entered into as of the tenth day of March, 1997
by and among:
SORIN BIOMEDICA S.p.A., an Italian corporation with a registered office at
13040 Saluggia (VC), Italy represented by its legal representative Mr. Ezio
Garibaldi (hereafter called "Sorin Biomedica"), and
SIENNA BIOTECH INTERNATIONAL INC., a Delaware, U.S.A. corporation with an
office at 9115 Guilford Road, Suite 180, Columbia, Maryland 21046 represented by
its legal representative Mr. Benson I. Stein, WABCO STANDARD TRANE B.V., a
Netherlands corporation with a registered office at Jupiterstraat 254, 2132 HK
Hoofddorp, The Netherlands represented by its legal representative Mr. Johannes
Lips (hereafter collectively called "Buyer"), and
AMERICAN STANDARD INC., a Delaware, U.S.A. corporation with an office at
One Centennial Avenue, Piscataway, P. O. Box 6820, Piscataway, New Jersey
08855-6820 U.S.A. represented by its legal representative Mr. Benson I. Stein
(hereafter called "ASI").
WHEREAS
A. Sorin Biomedica directly and/or indirectly controls SORIN BIOMEDICA
DIAGNOSTICS S.p.A. with registered office at 13040 Saluggia (VC), Italy ("Sorin
Italy"), SORIN BIOMEDICA DEUTSCHLAND AG, with registered office at Heltorfer
Strasse 12, 40472 Dusseldorf, Germany ("Sorin Germany"), SORIN BIOMEDICA FRANCE
S.A., with registered office at parc de Haute Technologie - Antony 2, 9 rue
George Besse, 92160 Antony ("Sorin France"), SORIN BIOMEDICA BELGIUM S.A., with
registered office at Rue de la Grenouillette 2F, 1130 Brussels, Belgium ("Sorin
Belgium"), SORIN BIOMEDICA ESPANA S.A., with registered office at Ctra. de
Cerdanyola, 69-71, 08190 Sant Cugat del Valles-Barcelona, Spain ("Sorin Spain")
and SORIN BIOMEDICA INDUSTRIAL LTDA., with registered office at Rua Robert
Bosch, 130, 01141-010 Sao Paulo, Brazil ("Sorin Brazil") (these six entities are
hereafter referred to collectively as the "Selling Parties");
B. Sorin Biomedica through the Selling Parties operates a line of business
in the biomedical diagnostic field that may be identified as "in vitro";
C. Subject to and in accordance with the terms and conditions of this
Agreement, Sorin Biomedica plans to cause and shall cause immediately prior to
the Closing the Selling Parties to transfer to newly formed companies in Italy,
France, Germany, Belgium, Spain and Brazil the In Vitro Business, as defined
below, as shown in Exhibits 4, 5, 6, 7, 8 and 9 hereto, together with the
contracts listed on Schedule A thereto and the personnel listed on Schedule B
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thereto, all as modified by variations resulting from the ordinary course of
business since November 30, 1996, except for the I.P. Rights and the Excluded
Assets, as defined below, substantially in accordance with the procedures
described in Sections 3.01 through 3.06 hereof except to the extent provided in
the first sentence of Article 3 hereof;
D. Subject to and in accordance with the terms and conditions of this
Agreement, Sorin Biomedica plans to and shall transfer immediately prior to the
Closing to NewCo Italy the real estate, other assets, liabilities, employees and
operating licenses described in Exhibit 1 hereto.
E. Subject to and in accordance with the terms and conditions of this
Agreement, Sorin Biomedica shall sell or cause the Selling Parties to sell
and/or assign at the Closing, as defined below, under the terms of two separate
agreements attached hereto as Exhibit 2 (collectively, "IP Agreement"), to an
affiliate of Buyer, all of the intellectual property rights listed in Exhibit 3,
as modified by variations resulting from the ordinary course of business since
November 30, 1996;
F. In accordance with the clauses, terms and conditions set forth
hereafter: (i) subject to the terms and conditions of this Agreement, Sorin
Biomedica shall (a) cause the Selling Parties to sell to Buyer the shares of
NewCos, as defined below, to which Sorin Biomedica and the Selling Parties will
contribute, sell or otherwise transfer, subject to the terms and conditions of
this Agreement, on or prior to the Closing Date, all of the assets and
liabilities of Sorin Biomedica's in vitro biomedical diagnostics business
referred to in Recital C and all of the contractual relationships and personnel
referred to in Recital C, except for the Excluded Assets, together with all
relevant government operating and product licenses, and (b) sell and shall cause
the Selling Parties to sell, simultaneously with the Closing hereunder, the I.P.
Rights, as defined below, to an affiliate of the Buyer ("Buyer's IP Affiliate"),
and (ii) subject to the terms and conditions of this Agreement, Buyer is willing
to purchase all the outstanding shares of the NewCos, and to cause the purchase
by Buyer's IP Affiliate of the I.P. Rights, as described in Section 4.01.
G. Buyer and/or an Affiliate of Buyer (the "Acquisition Subsidiary") and
INCSTAR Corporation, a Minnesota, U.S.A. corporation (the "Minnesota
Corporation") are simultaneously entering into an Agreement and Plan of Merger
(the "Merger Agreement") whereby, if the Merger Agreement is consummated, the
Acquisition Subsidiary will be merged with the Minnesota Corporation and the
outstanding shares of the Minnesota Corporation immediately prior to the Merger
will be converted into cash (the "Merger"). Biofin Holding International, B.V.,
a subsidiary of Sorin Biomedica (the "Minnesota Corporation Shareholder"),
presently owns eight million five hundred seven thousand and seven hundred and
seven (8,507,707) shares of the outstanding common stock of the Minnesota
Corporation (the "Sorin Shares" and the percentage of shares the Minnesota
Corporation Shareholder owns in the Minnesota Corporation as of the Closing Date
as a percentage of all outstanding shares of the Minnesota Corporation is herein
referred to as the "Sorin Percentage"), holds a warrant to purchase an
additional 730,720 shares of common stock of the Minnesota Corporation pursuant
to a Warrant Certificate dated 13 December 1989 (the "Minnesota Warrant") and
has
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certain additional rights to purchase shares of common stock of the
Minnesota Corporation in certain circumstances pursuant to a Purchase Rights
Agreement dated 13 December 1989 (the "Minnesota Contingent Rights").
NOW THEREFORE, in consideration of the mutual understandings and covenants
contained herein, Sorin Biomedica, Buyer and ASI agree as follows:
ARTICLE 1 -- PREMISES; INTERPRETATION
1.01 The recitals hereof, as well as the Exhibits and Schedules attached
hereto, constitute an integral and substantive part of this Agreement. In case
of conflict between the terms of this Agreement and those contained in the
Exhibits and Schedules, the terms of this Agreement shall prevail.
1.02 The Selling Parties are not parties to this Agreement, but Sorin
Biomedica has the power to cause each of the Selling Parties to undertake the
obligations set forth herein and to implement the actions called for herein.
Whenever Sorin Italy, Sorin Germany, Sorin France, Sorin Belgium, Sorin Spain or
Sorin Brazil are mentioned herein without preceding their respective names with
the wording "Sorin Biomedica causes or shall cause", the interpretation of the
clause is to be that the undertakings and/or the actions of each of the
above-listed six Selling Parties shall be caused by Sorin Biomedica which shall,
subject to the terms and conditions of this Agreement, including, without
limitation Article 14 hereof, be liable to the Buyer under Article 1381 of the
C.C. if one or more of the six Selling Parties do not perform as provided
herein.
ARTICLE 2 -- DEFINITIONS
2.01 "Accounting Principles" shall mean the accounting principles agreed
upon by the parties hereto described in Exhibit 11 hereto.
2.02 "Affiliates" shall mean an entity which directly or indirectly
controls or is controlled by or is under common control with the applicable
party.
2.03 "C.C." shall mean the Italian Civil Code.
2.04 "Closing" shall mean the consummation of the Contemplated
Transactions relating to Sorin Italy and the other Contemplated Transactions
that are consummated simultaneously therewith as described under Article 12
hereof.
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2.05 "Closing Date" shall mean the date on which the Closing shall take
place.
2.06 "Confidentiality Agreement" shall mean that certain agreement, as
amended, and attached hereto as Exhibit 13.
2.07 "Contemplated Transactions" shall mean (a) the transfer by each of
the Selling Parties of its In Vitro Business to each NewCo, (b) the sale by the
Selling Parties and the purchase by Buyer of all of the shares of the NewCos,
and (c) the transfer by Sorin Biomedica of the real estate, assets, liabilities,
employees and operating licenses described in Recital D, subject in all cases to
Article 12.
2.08 "Excluded Assets" shall mean (i) marketable securities, (ii)
insurance policies and rights thereunder, (iii) all rights to the names "Sorin",
"Sorin Biomedica", "Sorin Diagnostics", and "Sorin Biomedica", except to the
extent provided under the IP Agreement, including registered and unregistered
trademark, servicemark and tradename rights, (iv) the Retained Receivables as
defined in Section 6.08 below, and (v) the assets of Sorin Biomedica and/or its
Affiliates (including computer software and hardware to the extent and until the
time the transfer of the same to Buyer or NewCo Italy becomes effective pursuant
to Section 13.05(c)) described in each of the Services Agreements attached
hereto as Exhibit 12 (the "Services Agreements") and the Transition Services
Agreement (as defined below), to be made available by Sorin Biomedica and/or the
Selling Parties to Buyer for the periods and pursuant to the other terms set
forth therein.
2.09 "In Vitro Business" shall mean the in vitro biomedical diagnostics
business ("IVD") presently carried out by the Selling Parties composed of the
Stated Assets and Liabilities, as defined in this Article 2, including the
contracts listed in Schedules A attached to Exhibits 4, 5, 6, 7, 8 and 9, all
relevant governmental licenses and permits, and the I.P. Rights (but, for the
avoidance of doubt, excluding the Excluded Assets, as defined in this Article
2).
2.10 "I.P. Rights" shall mean the intellectual property rights listed in
Exhibit 3 hereto, owned by and assignable by Sorin Italy, owned by and
assignable by any other Selling Parties, if any, and/or owned by and assignable
by Sorin Biomedica, if any.
2.11 "Material Adverse Effect" shall mean any circumstance relating to,
change in, or effect on any of the NewCos that has a material adverse effect on
the In Vitro Business (based on continuing operations consistent with past
practice) or the assets, financial condition, or results of operations of the
NewCos; provided that exclusively for the purposes of Sections 10(e), the NewCos
shall be taken as a whole.
2.12 "Net Invested Capital" shall mean the assets less liabilities shown
on the consolidating balance sheet of the In Vitro Business determined in the
manner set forth on Exhibit 10 attached hereto and Article 13 hereof (it being
understood there has been no re-
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evaluation after December 31, 1995), calculated by applying the Accounting
Principles as defined in this Article 2.
2.13 "NewCo Belgium" shall mean Sorin Diagnostics (Belgium) S.A., a
Belgian company to which Sorin Belgium will transfer, prior to the Closing Date,
its In Vitro Business, described as of November 30, 1996 by the assets and
liabilities listed in Exhibit 7 and the contracts listed in Schedule A to
Exhibit 7.
2.14 "NewCo Brazil" shall mean Sorin Diagnostics (Do Brasil) Ltda., a
Brazilian company to which Sorin Brazil will transfer, prior to the Closing
Date, its In Vitro Business, described as of November 30, 1996 by the assets and
liabilities listed in Exhibit 9 and the contracts listed in Schedule A to
Exhibit 9.
2.15 "NewCo France" shall mean Sorin Diagnostics (France) S.A., a French
company to which Sorin France will contribute, prior to the Closing Date, its In
Vitro Business, described as of November 30, 1996 by the assets and liabilities
listed in Exhibit 6 and the contracts listed in Schedule A to Exhibit 6.
2.16 "NewCo Germany" shall mean Sorin Diagnostics (Deutschland) GmbH, a
German company to which Sorin Germany will transfer, prior to the Closing Date,
its In Vitro Business, described as of November 30, 1996 by the assets and
liabilities listed in Exhibit 5 and the contracts listed in Schedule A to
Exhibit 5.
2.17 "NewCo Italy" shall mean Sorin Diagnostics S.r.l., an Italian company
to which Sorin Italy will contribute, prior to the Closing Date, its In Vitro
Business, described as of November 30, 1996 by the assets and the liabilities
listed in Exhibit 4 and the contracts listed in Schedule A to Exhibit 4.
2.18 "NewCo Spain" shall mean Sorin Diagnostics (Espana) S.A., a Spanish
company to which Sorin Spain will transfer, prior to the Closing Date, its In
Vitro Business, described as of November 30, 1996 by the assets and liabilities
listed in Exhibit 8 and the contracts listed in Schedule A to Exhibit 8.
2.19 "Stated Assets and Liabilities" shall mean (i) the assets and
liabilities related to the In Vitro Business of the Selling Parties listed, as
of November 30, 1996, in Exhibits 4, 5, 6, 7, 8 and 9 and the respective
Schedules A and B thereto with variations resulting from the normal course of
business since November 30, 1996, and (ii) the real estate, assets, liabilities
and license agreements described in Exhibit 1, which shall be transferred to
NewCo Italy, it being understood and agreed that no Excluded Assets shall be
transferred to the NewCos.
2.20 "Taxes" shall include all federal, state, regional, local, national
or foreign governmental entity corporation tax, income tax, capital gains tax,
capital transfer tax, capital acquisition tax, general sales tax, property tax,
business tax, value added tax, dividend
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withholding tax, salary and payroll taxes, excise taxes, franchise taxes, use or
occupancy taxes, social security contributions and other similar mandatory
contributions payable to governmental agencies in respect of employment related
matters similar to social security contributions, customs and other import
duties, gift tax, inheritance tax, stamp duty, capital duty, registration tax or
transfer tax, any estimated or advance payments related thereto and all civil or
criminal penalties, charges and interest relating to any claim for taxes or
resulting from a failure to comply with the provisions of any governmental
enactment relating to taxes.
2.21 "Trustee" shall mean Citibank, N.A., with registered office at Milan,
Italy, (or if Citibank, N.A., cannot or will not act in such capacity such other
financial institution mutually acceptable to the parties) which will act as
Escrow Agent in the event that one or more of the Contemplated Transactions may
not be implemented prior to the Closing.
2.22 "Transition Services Agreement" means the Transition Services
Agreement that the parties hereby agree to negotiate in good faith as soon as
practicable after the date hereof and to be entered into by the parties on or
prior to the Closing and the principal terms of which are set forth in Exhibit
39.
2.23 "Bank Reimbursement Obligations" means the reimbursement obligations
of Sorin Biomedica and its Affiliates to certain financial institutions, arising
from the guaranties ("fideiussioni") described in Exhibit 41.
ARTICLE 3 -- REORGANIZATION
Subject to Section 12.04 hereof, relating to each NewCo (other than NewCo
Italy), the satisfaction in all material respects of the procedures hereafter
listed or reasonable alternative procedures which effect substantially the same
results shall occur prior to the Closing.
3.01 Italy
(a) Sorin Italy has requested the appointment of an expert by the
Tribunal of Acqui (hereafter the "Expert") for the purpose of making an
appraisal of the assets and liabilities listed in the pro-forma balance sheet as
of November 30, 1996 pursuant to Article 2343 of the C.C.
(b) Sorin Italy and/or Sorin Biomedica have filed, or will file, a
petition with the Italian Health Ministry and other authorities in order to
obtain the assignment to NewCo Italy or the release in favor of NewCo Italy of
the Health Ministry licenses and other permits presently issued in favor of
Sorin Biomedica and/or Sorin Italy in connection with its In Vitro Business.
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(c) Sorin Italy will initiate the procedures prescribed by Italian
labor law in connection with the expected transfer of the In Vitro Business in
Italy to NewCo Italy.
(d) Promptly after the Expert files his sworn appraisal with the
Tribunal of Acqui, Sorin Italy shall cause the holding of a special
shareholders' meeting of NewCo Italy to resolve an increase of its capital, with
a reasonable share premium ("sopraprezzo quote"), by a total amount
corresponding to the net worth of the In Vitro Business in Italy, as determined
by the Expert, which capital increase and share premium shall be paid in by
Sorin Italy's contribution in kind of the In Vitro Business in Italy immediately
prior to the Closing.
(e) Subject to the ratification (omologa) of NewCo Italy's capital
increase resolution by the Tribunal of Acqui, and the other conditions precedent
of the deed of contribution (Atto di Conferimento), the happening of such
conditions to be certified by a notarial deed (Atto di Verificata Condizione)
prior to the implementation of the contribution in kind, Sorin Italy shall ask
the directors and statutory auditors of NewCo Italy to verify the correctness of
the Expert's appraisal in accordance with the third paragraph of Article 2343
C.C. and thereafter to issue the quotas corresponding to the capital increase.
(f) Sorin Biomedica shall sell or transfer to NewCo Italy all of the
real estate holdings, the other assets, liabilities and personnel shown in
Exhibit 1 hereof (except as provided in Section 13.05(c)) on or prior to the
Closing Date, such transfer to be financed by cash contributed by Sorin Italy to
NewCo Italy as part of the contribution in kind indicated in Section 3.01(d)
hereof. The transfer of the real estate shall be subject to I.V.A. (Imposta
Valore Aggiunto), while the transfer of all of the other assets shall be subject
to the registry tax (Imposta di Registro).
3.02 Germany
(a) Sorin Germany shall have incorporated NewCo Germany with
Articles of Association attached as Exhibit 22 and contributed capital funds as
equity sufficient to pay the purchase price owed to Sorin Germany for the assets
to be sold to NewCo Germany, and the capital of NewCo Germany shall be
registered in the Commercial Register.
(b) NewCo Germany shall have notified the local supervisory
authorities of the intended opening of its business as a distributor of in vitro
products.
(c) Sorin Germany shall make any notification and/or declaration to
the competent authorities in accordance with any applicable regulations in
connection with the transfer of the In Vitro Business to NewCo Germany, as the
case may be.
(d) NewCo Germany shall have obtained the necessary permit for the
storing and handling of radioactive substances as presently held by Sorin
Germany.
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(e) Sorin Germany shall have sold to NewCo Germany in a written
agreement the assets and liabilities listed in Exhibit 5 hereto, as modified as
contemplated by Recital C hereof. Such assets shall be carried in the balance
sheet of NewCo Germany at the same values at which they were carried by Sorin
Germany, the goodwill of the In Vitro Branch thereof included.
3.03 France
(a) Sorin France has initiated the procedures set forth under French
labor law (including any prior consultation with its works council (comite
d'entreprise)) in connection with the contemplated transfer of the In Vitro
Business in France to NewCo France.
(b) Sorin France and NewCo have requested, the appointment of an
appraiser (commissaire aux apports) by the commercial court of Nanterre for the
purpose of making an appraisal of the assets and liabilities concerning the In
Vitro Business as listed in the relevant financial statement closed at the
moment of the closing date and verifying that the net value of the assets
contributed is at least equal to the issued capital at the time of the increase
pursuant to Article 193 of Law no. 66-537 dated July 24, 1966, of French
companies (the "French Company Law").
(c) Sorin France has filed, or will file, a petition with the French
Health Ministry, the French Drug Agency (Agence du Medicament) and any other
competent authorities in order to obtain the transfer to NewCo France or the
release in favor of NewCo France of the operating permit, the reagents licenses
and any other permits necessary to operate the In Vitro Business in France in
accordance with applicable French laws and regulations.
(d) Sorin France shall have executed with NewCo France a
contribution in kind agreement pursuant to which Sorin France shall contribute
the In Vitro Business in France to NewCo France, which contribution shall be
subject to first obtaining the authorization by the French Health Ministry of
the transfer or release to NewCo France of the operating permit of the In Vitro
Business in France.
(e) Sorin France shall make any notification and/or declaration to
the competent authorities in accordance with any applicable environmental
regulations in connection with the transfer of the In Vitro Business to NewCo
France as the case may be.
(f) As early as legally possible after the "date d'effet" Sorin
France and NewCo will call a special shareholders' meeting to approve the
intended contribution by Sorin France of the In-Vitro business and the relevant
NewCo France increase of capital, for the net worth (including goodwill) of the
In-Vitro Business in France.
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(g) Promptly after the holding of the shareholders' meeting referred
to in Section 3.03(f) above, Sorin France shall have caused NewCo France to
carry out any publication, tax registration and other corporate formalities
required by French law in connection with the contribution in kind and the
subsequent increase in capital contemplated in this Section 3.03.
(h) Promptly after the issuing of the shares relevant to the
contribution as per Section 3.03(f), Sorin France will sell the NewCo France
shares at book value, to the Buyer, with effect starting from the date of
closing, at which time pursuant to Section 12.04, the relevant amount will be
released from escrow to Sorin Biomedica.
3.04 Belgium
(a) Sorin Belgium and any of its affiliates or directors have
executed a notarial deed in Belgium with a view to incorporating NewCo Belgium.
NewCo Belgium has been enrolled with the competent Commercial Registry and has
obtained a VAT registration number. The capital of NewCo Belgium has been fully
paid in.
(b) Subsequently to the incorporation of NewCo Belgium Sorin Belgium
shall have become the sole shareholder of NewCo Belgium.
(c) Sorin Belgium and NewCo Belgium shall have entered into an
agreement for the purpose of assigning to NewCo Belgium all government operating
licenses and product registrations (if any) necessary to operate the In Vitro
Business in Belgium as it is currently being operated by Sorin Belgium.
(d) The Belgian Ministry of Health and other Belgian national
authority and the Brussels Region shall have been notified of the transfer to
NewCo Belgium of all the government operating licenses and product registrations
necessary to operate the In Vitro Business in Belgium as it is currently being
operated by Sorin Belgium.
(e) The statutory auditor of NewCo Belgium shall have been requested
under Article 29 quarter of the Belgian Combined Law on Business Companies to
make a report as to the assets to be purchased by NewCo Belgium from Sorin
Belgium under paragraph (h) of this Section.
(f) The board of directors of NewCo Belgium shall have made a
special report justifying the acquisition of the assets and approving the
conclusions of the statutory auditor.
(g) The shareholder of NewCo Belgium shall have approved the
transaction.
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(h) Sorin Belgium and NewCo Belgium shall have entered into an asset
purchase agreement whereby Sorin Belgium has sold to NewCo Belgium in exchange
for cash the In Vitro Business (except for the operating licenses and product
registrations, which shall be transferred simultaneously to NewCo Belgium
pursuant to Section 3.04(c) hereof). The cash required to pay Sorin Belgium
shall have been procured in due time before the closing date. NewCo Belgium
shall have issued to Sorin Belgium an invoice covering the assets sold and the
VAT related thereto shall have been paid.
(i) To the extent required by law, Sorin Belgium, NewCo Belgium and
the Belgian employees to be transferred to NewCo Belgium (as of November 30,
1996, those listed in Schedule B to Exhibit 7 hereto) shall have entered into
contracts for the transfer of their employment contracts to NewCo Belgium.
3.05 Spain
(a) Sorin Spain has executed a notarial deed in Spain incorporating
NewCo Spain, its sole shareholder with a share capital fully paid, and this
share capital will be increased in order to be equal to the Net Invested Capital
of the In Vitro Business in Spain plus any VAT that NewCo Spain will have to pay
to Sorin Spain as a result of the transaction described in Section 3.05(c)
below, plus goodwill and any cost and expense applicable to NewCo Spain to be
paid by the Selling Parties under Section 15.01 below, and the incorporation of
NewCo Spain has been inscribed with the Commercial Registry.
(b) NewCo Spain has notified the competent authorities of the
intended transfer of all permits and authorizations required under Spanish law
to operate as a pharmaceutical company, including but not limited to those
permits and authorizations required by Spanish pharmaceutical, tax and social
security legislation.
(c) Sorin Spain shall have entered into an asset purchase agreement
providing for the transfer to NewCo Spain of the Stated Assets and Liabilities
and the personnel of the In Vitro Business in Spain in exchange for an amount of
cash equal to the Net Invested Capital of such business plus goodwill and any
applicable value added tax.
(d) Sorin Spain and NewCo Spain shall have executed a notarial deed
assigning to NewCo Spain all government operating licenses and product
registrations necessary to operate the In Vitro Business in Spain as it is
currently being operated by Sorin Spain.
(e) The Spanish Ministry of Health, any other necessary Spanish
national authority, the Autonomous Community of Catalonia and any other
necessary Spanish autonomous community or local authority shall have authorized
the assignment to NewCo Spain of all government operating licenses and product
registrations necessary to operate the In Vitro Business in Spain as it is
currently being operated by Sorin Spain.
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3.06 Brazil
(a) Subject to the satisfaction of the procedures provided for in
Section 3.06(a), as soon as the Brazilian Expert finishes his/her appraisal,
Seller and/or Sorin Brazil shall cause the capitalization in cash by Sorin
Brazil into NewCo Brazil, of an amount required by law.
(b) Subject to the satisfaction of the procedures provided for in
Section 3.06(a) and (d), Seller and/or Sorin Brazil shall have caused the sale
and transfer by Sorin Brazil to NewCo Brazil of the In Vitro Business, which
sale will be paid in cash by NewCo Brazil.
(c) Sorin Brazil shall have caused the assignment and transfer to or
release to NewCo Brazil of the Health Ministry licenses and permits formerly
issued in favor of Sorin Brazil in connection with its In Vitro Business. Sorin
Brazil shall have obtained from the Brazilian Health Ministry the authorizations
to assign and transfer such Health Ministry licenses and permits.
(d) Sorin Brazil shall have initiated the procedures set forth under
Brazilian labor law to transfer selected employees from the In Vitro Business in
Brazil to NewCo Brazil.
For the purposes of this Agreement any references to the "transfer"
(or terms of similar import) of the portion of the In Vitro Business of Sorin
Italy and Sorin France respectively to NewCo Italy and NewCo France shall be
interpreted to mean the "contribution" or "contribution-in-kind" of the same.
Notwithstanding the statements contained in the preceding provisions
of Sections 3.01 through 3.06 or in Recital C, (a) although the procedures and
acts provided for in such Sections must be satisfied in all material respects
prior to the Closing (except as contemplated by Section 12.04), to the extent
same involves any non-affiliated party (including, without limitation, any
governmental agency) same do not constitute covenants on the part of Sorin
Biomedica or the Selling Parties to obtain the authorizations or effect the
other results thereof or, except to the extent any actions are within the sole
control of such Selling Party, to take the actions contemplated thereby -- it
being agreed that the foregoing provisions of this paragraph do not reduce or
otherwise affect the obligations of Sorin Biomedica under Article 8 hereof --
and (b) it is also understood and agreed that any contribution in kind of, or
sale or other transfer of, any assets or liabilities contemplated by this
Article 3, and the transfer of any cash to any NewCo to pay for same, is
intended by the Selling Parties to be effected immediately prior to the Closing.
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ARTICLE 4 -- PURCHASE PRICE
4.01 The parties hereto agree, subject to Section 8.06 hereof, that the
total purchase price for (a) all of the outstanding shares of the NewCos under
this Agreement and (b) the I.P. Rights under the IP Agreement in Exhibit 2
hereto, plus the amount to be paid in the Merger pursuant to the Merger
Agreement for the Sorin Shares in the Minnesota Corporation, subject to the
consummation of the Merger provided for in the Merger Agreement, shall be Lit.
280.000.000.000, which at the Closing shall be first adjusted as described in
Exhibit 14 hereto (hereafter collectively, "Purchase Price"), and will be
subject to further adjustment after the Closing according to Article 13 hereof.
The exchange rate USD: Italian Lire shall be that reflected in The Wall Street
Journal on the business day immediately prior to the Closing Date.
4.02 The Parties agree to the post-Closing Purchase Price adjustment
described in Article 13 hereof.
4.03 Subject to the terms and conditions hereof, Buyer hereby undertakes
to purchase from the Selling Parties and the Selling Parties undertake to sell
to Buyer all of the NewCo's shares. Subject to the terms of Section 4.04 hereof,
the purchase price payable to Sorin Biomedica for the purchase of each NewCos'
shares shall be allocated pursuant to the allocations summarized in Exhibit 40
hereto. The amount of the Purchase Price allocated to the Sorin Shares shall be
the product of (a) the Sorin Shares and (b) $6.32, subject to Section 8.06
hereof.
4.04 In the event that any Selling Party (other than NewCo Italy) has not
been able to transfer its In Vitro Business to its respective NewCo prior to the
Closing Date, that amount of the Purchase Price allocable to the purchase of the
shares of such NewCo by Buyer shown on Exhibit 40 hereto shall be deducted from
the Purchase Price payable to Sorin Biomedica at the Closing, and Buyer shall
pay to the Escrow Agent via wire transfer of immediately available funds the
amount(s) so deducted in accordance with Section 12.04 hereof. Anything to the
contrary notwithstanding in this Agreement, the only conditions to the purchase
and sale of the shares of any NewCo, the shares of which have not been sold to
Buyer on the Closing Date, shall be contained in Section 3 of the Escrow
Agreement.
ARTICLE 5 - DOCUMENTATION
Prior to the Closing, Sorin Biomedica agrees to deliver to Buyer's duly
authorized representatives the documentation concerning the In Vitro Business
that Buyer may reasonably request in accordance with Section 8.01.
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ARTICLE 6 -- REPRESENTATIONS AND WARRANTIES OF SORIN BIOMEDICA
With respect to procedures and transactions preceding the Contemplated
Transactions as well as the proposed sale of the shares of the NewCos by the
Selling Parties to Buyer, Sorin Biomedica hereby makes to Buyer the following
representations and warranties.
6.01 Organization and Good Standing
(a) Sorin Biomedica and each of the Selling Parties, and the NewCos
are presently, or will be prior to the Closing, corporations duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation. Each of the Selling Parties and the NewCos has full corporate
power and corporate authority to conduct the In Vitro Business that it presently
carries out or, as to NewCos, at the time of Closing will carry out and, as to
each of the Selling Parties, to transfer the In Vitro Business to each of the
NewCos substantially in accordance with the terms of this Agreement, except
where the failure to have such power and authority would not, individually or in
the aggregate, have a Material Adverse Effect.
(b) The articles of incorporation and by-laws of Sorin Biomedica and
each of the Selling Parties and the NewCos, as amended, as well as the minutes
of all shareholders' meetings and Board of Directors' meetings, to the extent
such minutes relate to its In Vitro Business, duly transcribed are included in
its respective corporate books, and all transactions of each NewCo of the type
which under the laws of its jurisdiction of incorporation must be duly
registered are or will be properly transcribed, after the consummation thereof,
in its corporate books and documents prior to the Closing Date.
6.02 Authority -- No Conflict
(a) This Agreement constitutes the legal, valid, and binding
obligation of Sorin Biomedica and is enforceable against Sorin Biomedica, in
accordance with its terms. Sorin Biomedica has the absolute and unrestricted
right, power, authority and capacity to execute and deliver this Agreement.
Sorin Biomedica and the Selling Parties have the absolute and unrestricted
right, power, authority and capacity to perform their obligations under or
pursuant to this Agreement, and to sell or cause to be sold to Buyer all of the
shares and/or quotas of each of the NewCos.
(b) Neither the execution of this Agreement nor the consummation of
any of the Contemplated Transactions, directly or indirectly (with or without
notice or lapse of time) will:
(i) contravene, conflict with, or result in a violation of (A)
any provision of the articles of incorporation or by-laws of Sorin Biomedica or
any of the Selling
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Parties or the NewCos, or (B) any resolution adopted by the board of directors
or the stockholders of Sorin Biomedica or any of the Selling Parties or of the
NewCos;
(ii) contravene, conflict with, or result in a violation of,
or give any governmental body, or to Sorin Biomedica's knowledge, any other
person the right to enjoin any of the Contemplated Transactions, or to exercise
any remedy or obtain any relief under, any legal requirement or order to which
Sorin Biomedica or any of the Selling Parties or of the NewCos, may be subject;
provided that, with respect to the Contemplated Transactions, the third sentence
of Section 6.02(a) and Sections 6.02(b) (ii) and (iii) and Section 6.12(c)(ii)
are subject to (a) obtaining the consents of the relevant governmental
authorities respecting the transfer of, or the issuance or release of, permits,
licenses and other approvals, including, without limitation, "product licenses
and registrations" all as listed in Exhibit 21, and the subsequent transfer,
issuance or release thereof, as applicable, and antitrust matters, (b) effecting
the procedures described in Article 3 and (c) obtaining the consents referred to
in Exhibit 28 hereof (and obtaining other contractual consents not required to
be included in such Exhibit 28 because they do not require payments in excess of
Lit. 40.000.000 (forty million));
(iii) contravene, conflict with, or result in a violation of
any of the terms or requirements of, or give any governmental body the right to
revoke, withdraw, suspend, cancel, terminate or modify any governmental
authorization that is held or will be acquired by or that otherwise relates to
the business of, or any of the assets owned or used by, Sorin Biomedica or any
of the Selling Parties or the NewCos;
(iv) except as set forth in Exhibit 28 hereto and for
contracts not requiring payments in excess of Lit. 40.000.000 (forty million)
and except for any other matters referred to in this Section 6.02(iv) which do
not individually or in the aggregate have a Material Adverse Effect, contravene,
conflict with, or result in a violation or breach of any provision of, or give
any person the right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel, terminate (except by
operation of the second paragraph of Article 2558 of the C.C.), or modify, any
contract to be transferred to the NewCos or result in a violation or breach of,
constitute a default (or give rise to any right of termination (except by
operation of the second paragraph of Article 2558 of the C.C.), cancellation or
acceleration under, any note, bond, mortgage, indenture, license, agreement or
other instrument or obligation to be transferred to the NewCos to which any of
the Selling Parties or to which any of the NewCos is a party or by which any of
them or any of their assets is bound;
(v) except to the extent caused by Buyer and except to the
extent contemplated by Section 15.02 hereof, result in the imposition or
creation of any encumbrance upon or with respect to any of the assets included
in the Stated Assets and Liabilities.
(c) Except for taxes payable in connection with the Contemplated
Transactions, except as set forth in or contemplated by Article 3 or Article 10
hereof or in
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Exhibit 21 or Exhibit 28 hereto, and except for any other notices or consents
which, if not given or obtained, as applicable, would not individually or in the
aggregate have a Material Adverse Effect, (a) neither Sorin Biomedica, or any of
the Selling Parties, (b) nor, except to the extent required by Buyer's proposed
and/or subsequent ownership of the NewCos or the direct or indirect ownership of
Buyer, any of the NewCos is or will be required to give any notice to or obtain
any consent from any person or governmental body in connection with the
execution and delivery of this Agreement or the consummation of any of the
Contemplated Transactions.
6.03 Capitalization
(a) Each of the NewCos presently has, or will have prior to the
Closing, the capital listed in its pro-forma articles of incorporation (as may
be modified to the extent required by the Contemplated Transactions), copies of
which are attached hereto as Exhibit 22.
(b) The Selling Parties will be, on or prior to Closing, the
legitimate owners of record of the respective NewCo's shares and/or quotas (when
applicable) with good and valid title to such shares and/or quotas (except with
respect to NewCo Italy where a quota of 20 million Italian Lira will be owned by
another Affiliate of Sorin Biomedica, such quota to be transferred at Closing to
Buyer) and, subject to the qualifications contained in Section 12.08 hereof
and/or Exhibit 21 hereto, with full power to sell same to Buyer. All of the
NewCos' shares and/or quotas issued prior to Closing shall be duly authorized,
validly issued, fully paid and non-assessable and not subject to further payment
thereon. There are no, and there will not be at the Closing, any outstanding
preemptive rights, options, warrants, calls, subscriptions, claims, rights or
obligations relating to the NewCos' shares and/or quotas in favor of others, nor
any agreements or commitments whatsoever obligating any of the Selling Parties
or the NewCos to issue, transfer, deliver or sell or cause to be issued,
transferred, delivered or sold any additional shares and/or quotas of capital
stock of any of the NewCos, or obligating any of the Selling Parties or the
NewCos to grant, extend or enter into any such agreement or commitment. Upon the
sale and purchase of the NewCos' shares and/or quotas, Buyer will acquire full
ownership of all the outstanding shares and/or quotas of each of the NewCos
representing one hundred percent (100%) of its corporate capital, free from any
and all limitations or rights not created by Buyer in favor of any third party
subject, however, to the delay of the sale of the shares of certain NewCos as
contemplated by Section 4.04 hereof. As of the Closing Date, none of the NewCos
will own, or have any contract to acquire, any equity securities or other
securities of any person or any direct or indirect equity or ownership interest
in any other business. To the extent applicable, the foregoing provisions of
this Section 6.03 are subject to obtaining all necessary governmental consents
and other governmental authorizations.
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6.04 Assets, Personnel and Contracts to be Transferred -- Balance Sheets
(a) Except for (i) Excluded Assets (excluding the assets referred to
in clause (ii) immediately following) and (ii) the assets to be described in the
Transition Services Agreement and described in each of the Services Agreements,
in each case to be made available to Buyer and/or Buyer's IP Affiliate in
accordance with and subject to the terms thereof, (1) the assets, personnel,
government licenses and contracts that are required hereunder to be transferred
by Sorin Biomedica and the Selling Parties to the NewCos prior to the Closing,
(2) the assets to be transferred by Sorin Biomedica to NewCo Italy pursuant to
Section 3.01(f) hereof and (3) the I.P. Rights constitute all of the assets
necessary to operate the In Vitro Business consistent with the prior experience
of Sorin Biomedica and the Selling Parties prior to such transfer (subject to
obtaining the required governmental authorizations listed in Exhibit 21 hereto
and, in the case of certain governmental authorizations also listed in Exhibit
21, released or issued to the NewCos prior to the Closing and the consents of
contract parties listed in Exhibit 28 hereto).
(b) Subject to Section 6.04(a) hereof, the proforma balance sheets
attached as Exhibits 4, 5, 6, 7, 8 and 9 hereto have been prepared from, and are
in accordance with, the books and records of the Selling Parties, and, when
taken as a whole, present fairly the consolidated financial position of the In
Vitro Business of the Selling Parties together with assets to be conveyed by
Sorin Biomedica pursuant to Recital D hereof, as of their respective dates, in
conformity with Italian generally accepted accounting principles ("GAAP")
applied on a consistent basis over the past three fiscal years or such shorter
period as same have been in business, except as otherwise noted therein or in
Exhibit 23 hereto.
(c) There is no liability related to the In Vitro Business of Sorin
Biomedica and/or any of the Selling Parties, or any liability of the NewCos of
any nature, whether absolute, accrued, contingent or otherwise, which
individually or in the aggregate, is material to the NewCos, other than
liabilities (i) included or disclosed in Exhibits 1, 4, 5, 6, 7, 8 and 9 hereto
and Schedules A and B thereto, (ii) incurred in the ordinary course of business
since November 30, 1996 or (iii) disclosed in Exhibit 24 or Exhibit 29 or
referred to in Section 6.07 hereto. None of the NewCos has now, or will have any
outstanding indebtedness for borrowed money as of the Closing Date, except to
the extent of indebtedness arising in connection with the Contemplated
Transactions due to Sorin Biomedica or its Affiliates, if any.
6.05 Title to Properties -- Assets -- Inventory
(a) Sorin Biomedica has good and valid title to all of the owned
real properties listed in Exhibit 1. Sorin Biomedica and the Selling Parties, as
applicable, have the right to use all of such properties and all leased
properties for the operation of their normal business. Subject to Sections 6.06
and 14.01(e) hereof, (i) all such property conforms in all material respects to
the requirements of all applicable laws, ordinances and regulations with respect
to their use and ownership or lease in the jurisdictions where they are located
and (ii)
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in carrying out the In Vitro Business, the Selling Parties have been
and are complying in all material respects with all applicable laws, zoning
regulations, anti-pollution, waste disposal and water treatment regulations,
ordinances and other laws. All the real properties included in the Stated Assets
and Liabilities are free of liens, mortgages, pledges, encumbrances, or charges
except as indicated in Exhibit 25 hereto.
(b) Sorin Biomedica and/or the Selling Parties have full and
uncontested title to all of the moveable assets, machinery, equipment and any
other personal property listed in Exhibits 1, 4, 5, 6, 7, 8 and 9 hereto, except
for assets disposed of in the ordinary course of business since November 30,
1996, provided that a substantial part of moveable assets due to the nature of
the business is in the possession of customers. Subject to the facts indicated
in the proviso clause in the immediately preceding sentence all such property
and assets (i) are in all material respects in good operating condition and
repair subject to usual wear and tear, and (ii) comply in all material respects
to the requirements of all applicable laws, ordinances and regulations, and
(iii) are free from liens, pledges, encumbrances or charges (I) for borrowed
money or (II) of any other kind or nature whatsoever, except as to this clause
(II) as are expressly indicated in Exhibit 25 attached hereto. No such assets,
except (a) as provided in Exhibit 25 hereto or (b) as designated as leasehold
improvements in Exhibits 4, 5, 6, 7, 8 or 9 hereto, or any which are not
material, individually or in the aggregate, are held by any Selling Party as a
lessee or as a conditional vendee.
(c) The raw materials, inventory, work in process and finished
products of the Selling Parties listed in Exhibits 4, 5, 6, 7, 8 and 9 hereto,
inclusive (i) consist solely of items of a quality and quantity usable or
saleable in the normal course of their businesses, except as provided in, or as
determined in accordance with, the principles stated in Exhibit 11 hereto, after
giving effect to any write-downs and (ii) are owned outright by the Selling
Parties. No raw materials, work in process and finished goods with respect to
which title is held by others than the Selling Parties are listed in Exhibits 4,
5, 6, 7, 8 and 9 hereto, inclusive.
6.06 Environmental Matters. Sorin Biomedica hereby represents and warrants
to Buyer that Sorin Biomedica shall cause to be performed a cleanup or other
remediation of the property to be transferred to NewCo Italy in Saluggia, Italy
(the "Saluggia Site") to the extent required by Italian environmental laws
and/or regulations as of the Closing ("Applicable Environmental Laws") in
respect of any environmental issue identified by an environmental audit to be
carried out, prior to the Closing, by a firm jointly selected by the parties
("Environmental Audit"), it being agreed that such cleanup or other remediation
can be effected after the Closing (the "Sorin Environmental Obligation"). Sorin
Biomedica shall use commercially reasonable efforts to expeditiously cause the
completion of the performance of the Sorin Environmental Obligation. It is
agreed by the parties that Sorin Biomedica shall have the exclusive right to
cause to be performed the Sorin Environmental Obligation. Buyer shall provide
Sorin Biomedica and its representatives with access to such property to permit
Sorin Biomedica to cause to be performed the Sorin Environmental Obligation and
shall otherwise
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reasonably cooperate with Sorin Biomedica and its representatives in connection
with Sorin Biomedica causing to be performed the Sorin Environmental Obligation
provided that Buyer shall not be required to expend any funds in connection
therewith that is not advanced to it by Sorin Biomedica. Within 14 calendar days
of the receipt by the parties of the Environmental Audit, the parties shall
enter into a mutually acceptable agreement to regulate the procedures for the
verification by Buyer of the completion of the Sorin Environmental Obligation.
6.07 Intellectual Property Rights. Except as disclosed in Exhibit 29
hereto:
(a) Exhibit 3 attached hereto is an accurate list of all patents,
patent applications, registered trademarks, registered trade names, and other
material trademarks, registered service marks, registered trade names, and
copyrights used and owned by Sorin Biomedica and/or the Selling Parties in the
In Vitro Business. There are no patents, patent applications, registered
trademarks, service marks or trade names or other material trademarks, service
marks or trade names owned by Sorin Biomedica and/or the Selling Parties used in
the In Vitro Business which are not listed in Exhibit 3. To the best knowledge
of Sorin Biomedica and/or the Selling Parties, all the patents and registered
trademarks listed in Exhibit 3 are valid. All patents, patent applications and
registered trademarks listed in Exhibit 3 are in good standing. All fees
(including annuity fees) due to applicable patent and trademark offices in
respect to such patents, patent applications, and registered trademarks and
payable by the Closing Date have been paid or will be paid prior to the Closing
Date. All renewals of registered trademarks listed in Exhibit 3 have been
effected in due time. Sorin Biomedica has (if applicable) or Sorin Italy has the
right to assign the patents, trademarks, service marks and trade names set forth
in Exhibit 3 to the IP Affiliate or Newco as set forth in the IP Agreement.
Except as disclosed in Part B of Exhibit 29, to the knowledge of Sorin
Biomedica, no third party is infringing any patent, trademark, trade name or
service mark set forth in Exhibit 3.
(b) No claim has been made by any third party to Sorin Biomedica
and/or the Sellers that any patent, trademark, trade name or service mark set
forth on Exhibit 3 is invalid or that the exercise of the rights thereto
constitutes any form of unfair competition.
(c) Sorin Biomedica and/or the Selling Parties has or have not done
or committed any act that to the best knowledge of Sorin Biomedica has or have
impaired or will impair the validity of the patents trademarks, service marks,
trade names set forth in Exhibit 3 so as to have a Material Adverse Effect.
(d) Except as set forth in Exhibit 42 or Schedule A to Exhibits 1,
4, 5, 6, 7, 8 and 9, Sorin Biomedica and/or the Sellers have not granted any
license(s) under any of the patents, patent applications, trademarks, service
marks, trade names set forth in Exhibit 3. Exhibit 42 attached hereto is an
accurate list of all licenses to Sorin Biomedica and/or the Selling Parties
licensing rights under patents, patent applications and/or know-how used by
Sorin Biomedica and/or its Sellers in the In Vitro Business. Except for licenses
in Exhibit 28
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which are designated as requiring consent for assignment, Sorin
Biomedica and/or the Selling Parties have the right to assign the licenses to
Buyer for use by Buyer in the In Vitro Business transferred hereby. Sorin
Biomedica and/or the Selling Parties own or have acquired a right from third
parties to use all know-how used by Sorin Biomedica and/or the Selling Parties
in the In Vitro Business and has the right to assign to Buyer, the Buyer's IP
Affiliate or the NewCos, as the case may be, such know-how owned and to assign
to Buyers such rights to use know-how (acquired from third parties).
(e) Except as disclosed in Exhibit 29 hereto, no claims for
infringement of any patents, trademarks, trade names or service marks is pending
or known by Sorin Biomedica and/or the Selling Parties to be threatened (i)
against Sorin Biomedica or any of the Selling Parties or, (b) to Sorin
Biomedica's best knowledge with respect to any of the Selling Parties products
in the In Vitro Business, against any of their customers.
Anything to the contrary notwithstanding in this Agreement, Sorin
Biomedica shall not be deemed to have made and is not making any representation
or warranty in this Agreement or the IP Agreement relating to the infringement
or violation of the patent or other intellectual property rights or other patent
or other intellectual property interests of any person or entity (an "IP
Infringement") except to the extent contained in the last sentence of the
immediately preceding paragraph (including, without limitation, in Sections
6.04(c), 6.05(a) (third sentence), 6.05(b), 6.07, 6.12(b) or 6.18 hereof);
provided, that nothing in the preceding part of this sentence shall in any
manner limit or impair the rights of (I) Buyer or any of its Affiliates to
indemnification for infringement or violation of Intellectual Property Rights in
accordance with Article 14.01(c) hereof, (II) Buyer to not proceed to the
Closing, including, without limitation, in accordance with Section 10(e), or
(III) Buyer to Purchase Price adjustments in accordance with Article 13 for any
inventory which becomes non-saleable as a result of an IP Infringement claim
arising during the period commencing on the date hereof and the Closing.
6.08 Accounts Receivable
(a) Sorin Biomedica, Sorin Italy and Sorin Spain shall retain all of
their respective accounts receivable in each case dated prior to 1 January 1996
("Retained Receivables"). NewCos shall acquire all accounts receivable of the
Selling Parties other than Sorin Italy and Sorin Spain, the inter-company
accounts receivable, and the accounts receivable of each of Sorin Italy and
Sorin Spain dated after 1 January 1996 existing as of the Closing ("Assumed
Receivables"), and, subject to Section 12.04 and the Transition Services
Agreement, Sorin Biomedica shall cause the transfer of all such Assumed
Receivables to the NewCos on or prior to the Closing. The parties agree,
whenever reasonably requested, to cooperate with each other in the collection of
the Assumed Receivables and the Retained Receivables pursuant to the terms of
the Transition Services Agreement, including after any transfer pursuant to
Section 14.02.
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(b) Sorin Biomedica represents and warrants to Buyer that each
Assumed Receivable was validly created and legally maintained in the amount
reflected on the Closing Balance Sheet, and, except as will be contemplated in
the Transition Services Agreement, and except that subsequent to the Closing
notifications must be given to the various customers (which will be effected in
a manner reasonably satisfactory to the parties), that it will legally and
effectively be transferred to NewCos on or prior to Closing. There is no right
of setoff or counterclaim by such account debtor relating to such Assumed
Receivables (as defined herein) arising from the actions of any of the Selling
Parties.
(c) The Parties agree that the amount of the Retained Receivables to
be included in the "Retained Receivables" listed in Exhibit 14 for calculation
of the Purchase Price adjustment to be made at Closing shall be calculated by
deducting from Lit. 80.000.000.000 an amount equal to the Assumed Receivables as
at February 28, 1997 as determined pursuant to Exhibit 43.
6.09 Taxes
(a) Except as provided in Section 15.02 hereof, each of the Selling
Parties shall be responsible for the payment of any and all direct and/or
indirect Taxes attributable to their respective operations and/or to NewCos
prior to the Closing Date, except to the extent same is reflected in the Closing
Balance Sheet or with respect to that portion of the In Vitro Business that is
transferred to one or more NewCos after the Closing Date, the provisions of the
Transition Services Agreement shall control. Except to the extent liabilities
and reserves are reflected in the Closing Balance Sheet, none of such taxes
and/or social charges attributable to Sorin Biomedica and/or to the Selling
Parties' operations shall be transferred to the NewCos.
(b) No material deficiencies for Taxes were asserted against Sorin
Biomedica or the Selling Parties or the NewCos regarding the In Vitro Business
or the Contemplated Transactions, except for any which have either been fully
paid or which are adequately reserved for in accordance with local GAAP and the
Accounting Principles, as reflected, as of November 30, 1996, in Exhibits 1, 4,
5, 6, 7, 8 and 9 hereto, or as will be reflected in the Closing Balance Sheet.
(c) All returns and declarations ("Returns") required to be
delivered by the Selling Parties or NewCos to the Tax and Social Security
authorities have been and will be delivered and no Return is being officially
disputed by the relevant authority. NewCos have or will have paid any and all
Taxes which they are liable to pay for the period ending on the Closing Date
except those properly reflected or reserved in the Closing Balance Sheet.
(d) Notwithstanding the foregoing, this Section 6.09 is not intended
to and does not alter the provisions of Section 15.02 hereof.
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6.10 Employees
(a) Except as indicated in Schedule B to Exhibits 1, 4, 5, 6, 7, 8,
and 9 and Exhibit 27, no Selling Party has granted any special termination pay,
bonuses, and/or beneficial plan in excess of what is required by the laws in
force in its respective jurisdictions to any of its employees in the In Vitro
Business who are expected to be transferred to the NewCos.
(b) Except as indicated in Schedule B to Exhibits 1, 4, 5, 6, 7, 8,
and 9 and Exhibit 27, the Selling Parties are not parties to any collective
bargaining or other labor contract other than contracts made subject to the
industry concerned by the operation of law. There are no shop contracts
applicable to any of the Selling Parties' employees who are expected to be
transferred to the NewCos.
(c) The reserves for personnel severance indemnity, vacation pay and
any and all other personal benefits listed in Exhibits 1, 4, 5, 6, 7, 8 and 9
hereto are sufficient to discharge as of November 30, 1996 in full the
liabilities of each of Sorin Biomedica and the Selling Parties, whether
contingent or accrued, under the applicable laws of their jurisdictions of
incorporation to make termination payments or other personnel benefits to their
respective employees in the event of termination of the employment relationship
by voluntary resignation of the employee.
(d) Except as provided in Exhibit 27 or in the collective bargaining
agreements listed on Exhibit 27, the consummation of the transactions
contemplated by this Agreement will not entitle any individual to severance pay
or accelerate the time of payment, or increase the amount, of compensation or
benefits due to any individual.
(e) Except as provided in Exhibit 27, none of the NewCos has
incurred or reasonably expects prior to consummation of the Contemplated
Transactions to incur any material liability or obligation (whether directly or
indirectly) relating to employee benefit plans of the Selling Parties or of the
NewCos. Each of such plans has been operated and administered by the applicable
Selling Party in substantial compliance with their terms and all applicable
laws, statutes and regulations.
6.11 Assigned Contracts. Schedule A to Exhibits 1, 4, 5, 6, 7, 8 and 9
contains a true and complete list of all contracts belonging to the types
hereinafter specified below in this Section 6.11 to which Sorin Biomedica and/or
the Selling Parties are parties as of the date of this Agreement and which are
expected to be transferred to the NewCos ("Assigned Contracts"). Neither Sorin
Biomedica, nor any of the Selling Parties are in default or within the grace
default period in connection with any of the Assigned Contracts, except for
defaults which would not individually or in the aggregate have a Material
Adverse Effect. Copies of the Assigned Contracts to which Sorin Biomedica or the
Selling Parties is a party of the type specified below as of the date of this
Agreement, insofar as they relate, directly and/or
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indirectly, to the employees, consultants, agents, distributors and the like who
are intended to be transferred to NewCos, were delivered to the duly authorized
representatives of Buyer prior to the date hereof:
(a) Contracts of employment with the indication of the names of each
employee and the yearly amount of each of their salaries as at January 1, 1997;
(b) Shop regulations;
(c) Contracts for the employment of personnel and consultants;
(d) Contracts concerning any pension, bonus incentive, or retirement
concerning any employee of Sorin Biomedica or of any of the Selling Parties to
be transferred to the NewCos;
(e) Contracts with agents and distributors;
(f) Any contract for the purchase of materials and supplies, in
excess of Lit. 40.000.000 (forty million);
(g) Any contract providing for the sale or delivery of Selling
Parties' products in excess of Lit. 40.000.000 (forty million);
(h) Any contract providing for the rendering of services to or by
Selling Parties for greater than Lit. 40.000.000 (forty million);
(i) Any contract with any subcontractor requiring payment in excess
of Lit. 40.000.000 (forty million);
(j) Any contract or agreement in general with any individuals, firms
or corporations affiliated with Selling Parties requiring payment in excess of
Lit. 40.000.000 (forty million);
(k) Any such other contract requiring payment by Selling Parties in
excess of Lit. 40.000.000 (forty million);
(l) Operating and Products Licenses issued by government entities;
(m) Lease or rental agreements requiring payment in excess of Lit.
40.000.000 (forty million); and
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(n) Any contract with medical doctors, laboratories and/or
hospitals, or similar parties (excluding contracts for the sale of products)
requiring payment by or to the Selling Parties.
6.12 Title to Permits and Compliance
(a) Sorin Biomedica and/or the Selling Parties own any and all
permissions, governmental authorizations and licenses which are in any way
whatsoever necessary to run the In Vitro Business consistent with prior
experience, as listed in Exhibit 21 hereto.
(b) Sorin Biomedica and the Selling Parties are in compliance in all
material respects with the legal requirements and/or governmental authorizations
necessary to permit the Selling Parties to lawfully conduct and operate their In
Vitro Business in the manner they currently conduct and operate such business
and to permit the Selling Parties to own and use their assets of such business
in the manner in which they currently own and use such assets.
(c) To Sorin Biomedica's knowledge and to the knowledge of the
executive officers of each of the Selling Parties (including, without
limitation, the dirigenti of such Selling Parties), no event has occurred or
circumstance exists that (with or without notice or lapse of time), (i) may
constitute or result directly or indirectly in a violation of or a failure to
comply with, by Sorin Biomedica or the Selling Parties or NewCos, any term or
requirement of any governmental authorization, law, rule, regulation, order,
judgment or decree in any material respect with respect to the In Vitro
Business, or (ii) may result directly or indirectly in the revocation,
withdrawal, suspension, cancellation, or termination of, or any modification to,
any material governmental authorization, required in order to conduct the In
Vitro Business;
(d) Neither Sorin Biomedica nor any of the Selling Parties have
received any notice or other official communication from any governmental body
or any other person regarding (i) any actual, alleged, possible, or potential
violation of or failure to comply with any term or requirement of any
governmental authorization, or (ii) any actual, proposed, possible, or potential
revocation, withdrawal, suspension, cancellation, termination of, or
modification to any governmental authorization required for the In Vitro
Business.
(e) All applications required to have been filed for the renewal of
any governmental authorizations have been duly filed on a timely basis with the
appropriate governmental bodies, and all other filings duly concerning such
governmental authorizations have been duly made on a timely basis with the
appropriate governmental bodies.
6.13 Legal Proceedings. Except as listed in Exhibit 29 hereto, (a) there
is no suit, claim, action, proceeding or investigation pending or, to the
knowledge of any of the Selling Parties or the NewCos, threatened against any of
the NewCos related to the In Vitro Business that, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect or
materially delay or prevent the consummation of the Contemplated
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Transactions and (b) to the knowledge of any of the Selling Parties, or the
NewCos, no such proceeding has been threatened.
6.14 Absence of Certain Changes and Events. Except as disclosed in Exhibit
30 hereto, since September 30, 1996 there has not been any change in the
business, operations, properties, assets or condition of the In Vitro Business
of Sorin Biomedica or any of the Selling Parties or NewCos which has resulted in
a Material Adverse Effect (except to the extent the In Vitro Business will
become a business operated on a stand alone basis). Furthermore, since September
30, 1996, except as disclosed in Exhibit 30 hereto, none of the following have
occurred with respect to the In Vitro Business;
(a) Any damage, destruction or loss by reason of fire, flood,
accident or other casualty of such character as would interfere in any material
way with the operations of Sorin Biomedica, regardless of whether or not such
loss was covered by insurance;
(b) Other than in the ordinary course of business or other than as
contemplated by the terms of this Agreement, (i) any sale or disposition of or
undertaking to sell or dispose of any of the Stated Assets and Liabilities; (ii)
any purchase or undertaking to purchase any real property, machinery, equipment
or other fixed assets related to the In Vitro Business, or (iii) any change in
the nature or method of business or operation related to the In Vitro Business;
(c) Any material increase in the compensation payable or to become
payable by Sorin Biomedica or the Selling Parties to their managers, employees
or agents except to the extent imposed by operation of law or existing contract
delivered to Buyer;
(d) Any labor disputes or other labor controversies;
(e) Any entry into, termination of, or receipt of notice of
termination of any license, distributorship, dealer, sales representative, or
similar agreement which is material to the In Vitro Business, other than in the
ordinary course of business;
(f) Any conditions or circumstances that to Sorin Biomedica's
knowledge had a Material Adverse Effect on the ability of the Selling Parties to
maintain their respective relationships with their customers, suppliers and
distributors on substantially the same terms as such Selling Parties did during
the 12 (twelve) month period ending September 30, 1996, except for changes
arising in the ordinary course of business;
(g) Any change by Sorin Biomedica or the Selling Parties or the
NewCos in accounting principles or methods, except in so far as may be required
by a change in the Italian GAAP or a change in the GAAP of the applicable
country;
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For the avoidance of doubt, the parties agree that the matters
disclosed in Exhibit 30 hereto, and any further adverse changes after the date
of this Agreement arising out of or relating to the Hepatitis-C litigation
described therein, shall not be deemed to have resulted in a Material Adverse
Effect for the purposes of this Section 6.14 and Sections 10(e) and 12.02; it
being acknowledged that the foregoing shall be without prejudice to the
indemnification rights of Buyer set forth in Sections 14.01(b) and (c).
6.15 Minnesota Corporation. Sorin Biomedica makes the following
representations, on its own behalf and on behalf of the Minnesota Corporation
Shareholder, regarding the Sorin Shares it holds in the Minnesota Corporation,
which representations shall become effective only in the event that the Merger
becomes effective:
(a) The Minnesota Corporation Shareholder owns and immediately prior
to the effectuation of the Merger will own the Sorin Shares free and clear of
all restrictions and encumbrances;
(b) The Minnesota Corporation Shareholder has full voting rights
with respect to the Sorin Shares;
(c) (I) Neither Sorin Biomedica, its subsidiaries, the Minnesota
Corporation Shareholder nor to the knowledge of Sorin Biomedica, any Affiliate
of Sorin Biomedica owns any capital stock of the Minnesota Corporation other
than the Sorin Shares and (II) neither Sorin Biomedica, its subsidiaries or
other Affiliates, nor the Minnesota Corporation Shareholder, has any
non-capital-stock equity interest in the Minnesota Corporation other than
Minnesota Warrant and the Minnesota Contingent Rights;
(d) The consummation of the Merger will not contravene, conflict
with, or result in (i) a violation of any provision of the Articles of
Incorporation or By-Laws of Sorin Biomedica or the Minnesota Corporation
Shareholder, or (ii) a violation of any contract, agreement or other instrument
or document to which Sorin Biomedica or the Minnesota Corporation Shareholder is
a party or by which it is bound, or (iii) a violation of any resolution adopted
by the Board of Directors or the stockholders of Sorin Biomedica or the
Minnesota Corporation Shareholder, or (iv) subject to obtaining the consents
listed in Exhibit 28 and except for such matters that relate exclusively to
Buyer and its Affiliates, any action which would give any governmental body or,
to Sorin Biomedica's knowledge, any other person the right to enjoin any of the
Contemplated Transactions or, except as otherwise contemplated by the Merger
Agreement, to exercise any remedy or obtain any relief under, any legal
requirement, or any order to which Sorin Biomedica, any of the Selling Parties,
any NewCo, or the Minnesota Corporation Shareholder may be subject;
(e) (I) The Minnesota Warrant and the Minnesota Contingent Rights as
described in Recital G hereof are true and accurate representations of any and
all of the non-stock beneficial equity ownership in rights in the Minnesota
Corporation by the Minnesota
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Corporation Shareholder and of its Affiliates and (II) the Sorin Shares
represent all the capital stock in the Minnesota Corporation owned by Sorin
Biomedica, its subsidiaries, the Minnesota Corporation Shareholder, and to the
knowledge of Sorin Biomedica, the Affiliates of Sorin Biomedica.
The representations, warranties and agreements contained in this
Article 6 and in Article 8, to the extent the same relate to the Minnesota
Corporation, are based upon the assumption that neither ASI nor any of its
Affiliates or associates was an "interested shareholder," as such term is
defined in Section 302A.011, Subd. 49(a) of the Minnesota Business Corporation
Act, of the Minnesota Corporation immediately prior to the execution and
delivery of this Agreement.
6.16 Disclosure
(a) No representation or warranty of Sorin Biomedica in this
Agreement omits to state a material fact necessary to make the statements
herein, in light of the circumstances in which they were made, not misleading.
(b) No notice given pursuant to Article 8 hereof will contain any
material untrue statement or omit to state a material fact necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading.
(c) The representations and warranties set forth in this Article 6
shall be applied, notwithstanding any investigation or inspection made by or on
behalf of Buyer, which investigation or inspection shall have no effect on the
obligations of Sorin Biomedica hereunder.
6.17 Brokers or Finders. With respect to brokerage or finders' fees or
agents' commissions or other similar payments in connection with this Agreement,
Sorin Biomedica will indemnify and hold Buyer harmless from any such disclosed
or non-disclosed payment alleged to be due by or through Sorin Biomedica as a
result of its actions, or those of its officers or agents.
6.18 Compliance with Law. Except to the extent set forth in Exhibit 29,
neither Sorin Biomedica nor the Selling Parties (a) are, in carrying out the In
Vitro Business, in violation of any applicable provisions of any law or
regulations, except for violations that have not had any Material Adverse Effect
or (b) has, with respect to the In Vitro Business, within the last five (5)
years, authorized any of their respective directors, officers, employees or
agents to make any payments or provide anything else of value to (I) officials
or employees of any governmental entity or (II) officers or employees or any
customers of Sorin Biomedica or any of the Selling Parties, in either case (as
described in the immediately preceding clauses (I) and (II)) which if done by a
United States corporation would constitute a violation of the U.S. Foreign
Corrupt Practices Act.
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6.19 Breaches of Representations and Warranties. Sorin Biomedica hereby
acknowledges that it is not actually aware as at the date hereof that Buyer is
in breach of any of the representations and warranties of Buyer set forth in
Article 7 hereof.
6.20 No Other Representations and Warranties. Sorin Biomedica agrees that
it is not relying upon any representations and warranties by or on behalf of
Buyer (including, without limitation, its Affiliates) that are not contained in
this Agreement, the IP Agreement, any of the Services Agreements or the
Transition Services Agreements, and agrees that there shall not be deemed to be
any other express or implied representations or warranties made by or on behalf
of Buyer (including, without limitation, by its Affiliates) in connection with
the transactions contemplated by this Agreement (which includes the Exhibits
hereto, including the IP Agreement).
ARTICLE 7 -- REPRESENTATIONS AND WARRANTIES OF BUYER
7.01 Organization and Good Standing
(a) WABCO Standard Trane B.V. is a corporation duly organized,
validly existing, and in good standing under the laws of The Netherlands.
(b) Sienna Biotech International Inc. is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware, U.S.A.
7.02 Authority -- No Conflict.
(a) Except for governmental approvals listed in Exhibit 21, the
Buyer has the absolute and unrestricted right, power and authority to execute
this Agreement and to perform its obligations under this Agreement. Upon the
execution hereof by Buyer this Agreement will constitute the legal, valid, and
binding obligations of Buyer, enforceable against Buyer in accordance with their
respective terms.
(b) Neither Buyer's execution of this Agreement nor the consummation
or performance of any of the Contemplated Transactions by Buyer will give any
person the right to prevent, delay, or otherwise interfere with any of the
Contemplated Transactions pursuant to;
(i) any provision of Buyer's organizational documents;
(ii) any resolution adopted by the Board of Directors or the
stockholders of Buyer;
(iii) any legal requirement or order to which Buyer may be
subject; or
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(iv) any contract to which Buyer is a party or by which Buyer
may be bound.
Buyer is not and will not be required to obtain any consent from any
person in connection with the execution of this Agreement or the consummation or
performance of any of the Contemplated Transactions or the other transactions
contemplated hereby.
7.03 Certain Proceedings. There is no pending proceeding that has been
commenced against Buyer and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions. To Buyer's knowledge, no such proceeding has been
threatened.
7.04 Broker or Finders. With respect to brokerage or finders' fees or
agents' commissions or other similar payments in connection with this Agreement
Buyer will indemnify and hold Sorin Biomedica harmless from any disclosed or
undisclosed payment alleged to be due by or through Buyer as a result of its
actions, or those of its officers or agents.
7.05 Disclosure. No representation or warranty of Buyer in this Agreement
omits to state a material fact necessary to make the statements herein, in light
of the circumstances in which they were made, not misleading.
7.06 Breaches of Representations and Warranties. Buyer hereby acknowledges
that it is not actually aware as at the date hereof that Sorin Biomedica is in
breach of any of the representations and warranties of Sorin Biomedica set forth
in Article 6 hereof.
7.07 No Other Representations and Warranties. Buyer agrees that it is not
relying upon any representations or warranties by or on behalf of Sorin
Biomedica (including, without limitation, its Affiliates) that are not contained
in this Agreement, the IP Agreement, the Services Agreements or the Transition
Services Agreement, and agrees that there shall not be deemed to be any other
express or implied representations or warranties made by or on behalf of Sorin
Biomedica (including, without limitation, by its Affiliates) in connection with
the transactions contemplated by this Agreement (which includes the Exhibits
hereto, including the IP Agreement); provided that nothing contained in this
Section 7.08 is intended to diminish the representations and warranties set
forth in the Merger Agreement.
ARTICLE 8 -- COVENANTS OF SORIN BIOMEDICA AND THE SELLING PARTIES
PRIOR TO CLOSING DATE
8.01 Access and Investigation. Between the date of this Agreement and the
Closing Date, Sorin Biomedica will, and will cause its representatives to, with
respect to the In Vitro Business, afford Buyer and its representatives
reasonable access to the Selling Parties'
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personnel and properties and other assets under terms to be agreed upon with
Sorin Biomedica and in any case in a way that will not materially adversely
affect Sorin Biomedica's normal business operations (it being agreed that the
existing Confidentiality Agreement applies to the foregoing).
8.02 Operation of the Business. Between the date hereof and the Closing
Date, Sorin Biomedica agrees to, and to cause the Selling Parties and the NewCos
to, comply with the following operating actions and procedures with respect to
the In Vitro Business unless Buyer shall otherwise consent in writing, which
consent shall not be unreasonably withheld or delayed:
(a) operate and maintain the In Vitro Business in substantially the
same way as heretofore operated and maintained;
(b) refrain from making any purchase, sale or disposition of any
asset or property other than in the ordinary course of business, from purchasing
any capital asset costing more than Lit. 100.000.000, except to the extent
reasonably necessary in carrying out the business in the ordinary course, and
from mortgaging any of the Stated Assets and Liabilities, and from pledging,
subjecting to a lien or otherwise encumbering any of the assets included in the
Stated Assets and Liabilities, except in the ordinary course of business (but
not for borrowed money), such as deposits on certain contracts;
(c) refrain from incurring any contingent liability as a guarantor
or otherwise with respect to the obligations of others, and from incurring any
other fixed or contingent obligations or liabilities except those that are
incurred in the ordinary course of business;
(d) refrain from making any change or incurring any obligation to
make a change in the NewCos' articles of incorporation or by-laws or authorized
or issued capital stock, except to the extent contemplated hereby (including
changing the name of each NewCo, as contemplated by Section 13.06 hereof, which
changes in name the parties hereby consent to);
(e) refrain from (1) entering into any employment contract with any
person which provides for an annual rate of compensation, including fringe
benefits, which exceeds Lit. 100.000.000; or (2) except as may be required by
law or existing contract and except in connection with the negotiation of the
contracts identified in Exhibit 33 hereto, making any change in the compensation
payable or to become payable to any employee who will be transferred to the
NewCos or is employed by NewCos;
(f) use all reasonable efforts to keep intact the Selling Parties'
business organization, to keep available their present managers, agents and
employees and to preserve the goodwill of suppliers, customers and others having
business relations with them;
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(g) consult with Buyer concerning all contracts involving
commitments, other than to the extent same is for the purchase or sale of
products or raw materials therefor in the ordinary course of business, which
individually are for more than Lit. 100,000,000 before entering into the same.
8.03 Required Governmental Approvals. As promptly as reasonably
practicable after the date of this Agreement, Sorin Biomedica, NewCos and the
Selling Parties will make all necessary legal filings they are legally permitted
to make required in order to consummate the Contemplated Transactions ("Required
Governmental Approvals"). Between the date of this Agreement and until all such
Required Governmental Approvals are received, subject to Article 9, Sorin
Biomedica will, and will cause each NewCo, with Buyer's cooperation, and the
applicable Selling Party to, (a) cooperate with Buyer with respect to all
filings that Buyer elects to make or is required by legal requirements to make
in connection with the Contemplated Transactions, and (b) cooperate with Buyer
in obtaining all consents that it may be required to obtain in connection with
the Contemplated Transactions.
8.04 Notification. Between the date of this Agreement and the Closing
Date, Sorin Biomedica will reasonably promptly notify Buyer in writing if it, or
any of the Selling Parties or any NewCo becomes aware of any fact or condition
that has caused or has constituted a breach that results in a Material Adverse
Effect of any of Sorin Biomedica's representations and warranties as of the date
of this Agreement, or if any of the Selling Parties or any NewCo becomes aware
of the occurrence after the date of this Agreement of any fact or condition
which (except as expressly contemplated by this Agreement) would have caused or
would have constituted any such representation or warranty to be false had such
representation or warranty been made as of the time of occurrence or discovery
of such fact or condition. Notwithstanding any such disclosure, Buyer shall have
its rights to be indemnified for Excluded Liabilities under Sections 14.01(b)
and (c), but Buyer shall have no right for indemnification under Section
14.01(a) with respect to disclosed items.
8.05 No Negotiation. Until such time, if any, as this Agreement is
terminated pursuant to Article 11 hereof, Sorin Biomedica will not, and will
cause each of the Selling Parties and/or NewCos and each of their
representatives not to, directly or indirectly solicit, initiate, or encourage
any inquiries or proposals from, discuss or negotiate with, provide any
non-public information to, or consider the merits of any unsolicited inquiries
or proposals from, any person (other than Buyer and its representatives)
relating to any transaction involving the sale of the In Vitro Business or any
of the capital stock of any of NewCos, or any merger, consolidation, business
combination, or similar transaction involving any of NewCos, except, with
respect to the Minnesota Corporation and in its capacity as the majority
stockholder thereof, to the extent it reasonably believes it is necessary to
perform any fiduciary duties it may have as the majority stockholder thereof.
8.06 Minnesota Corporation Merger. From the date hereof until the Closing
Date, or the date of termination of this Agreement pursuant to the provisions of
Article 11 hereof, Sorin
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Biomedica shall inform Buyer of any third party, other than Buyer, inquiry
regarding a potential merger, consolidation or sale of the In Vitro Business. In
the event that the Board of Directors or any authorized independent committee
thereof (including, without limitation the Special Committee of the Minnesota
Corporation) shall cause a termination of the Merger Agreement by approving an
Acquisition Proposal other than the Merger, or not approving, modifying in any
manner adverse to Buyer or its Affiliates or withdrawing its approval or
recommendation of the Merger, or in the event that the Minnesota Corporation
Shareholder shall not vote in favor of the Merger Agreement at the Minnesota
Corporation shareholder meeting called to approve the Merger Agreement, and the
Merger shall not be consummated, then Sorin Biomedica and Buyer agree to
consummate the Contemplated Transactions, subject to the terms and conditions of
this Agreement, as reflected in this Agreement, subject to an adjustment in the
price stated in Article 4 hereof by a reduction equal to the Sorin Shares owned
as of the Closing X USD 5.75/share, in which event the adjustment based on the
Net Worth of the Minnesota Corporation indicated in Article 13 hereof shall not
apply (and, for the avoidance of doubt, the adjustments in Paragraphs 2 and 3 of
Exhibit 14 shall not apply).
8.07 No Employment Offers. Sorin Biomedica and the Selling Parties shall
not, and shall cause SNIA BPD S.p.A. to undertake not to, for a three-year
period commencing on the Closing Date, solicit the hiring of any employee
dedicated to the In Vitro Business, to be transferred to any NewCo.
8.08 Lease and Service Agreements. Sorin Biomedica shall cause any related
third party and shall use commercially reasonable efforts to cause any unrelated
third parties which, prior to the Closing Date, have granted the use of the
facilities which are presently available to the Selling Parties to consent to
the arrangements provided for in the Services Agreements.
8.09 Minnesota Warrant. Sorin Biomedica shall cause the Minnesota
Corporation Shareholder (a) to not exercise the Minnesota Warrant prior to the
earlier of the consummation of the Closing or termination of the Merger
Agreement, and (b) to terminate the rights under the Minnesota Warrant and the
Minnesota Contingent Rights at the Closing in the event the Merger becomes
effective. Prior to the Closing the Minnesota Corporation Shareholder shall have
the right to exercise the Minnesota Contingent Rights to the extent necessary to
maintain its percentage ownership in excess of 50.5% of the Shares of the
Minnesota Corporation and officers of Sorin Biomedica and SNIA shall have the
right to exercise their respective stock options prior to the Closing and/or be
paid an amount of consideration payable to holders of stock options in the
Minnesota Corporation generally on the same terms such holders of options are
entitled to payment pursuant to the Merger Agreement (i.e. the product of (a)
the options held and (b) the difference between $6.32 and the exercise price per
option).
ARTICLE 9 -- COVENANTS OF BUYER PRIOR TO CLOSING DATE
Approvals of Governmental Bodies; Notice
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As promptly as practicable after the date of this Agreement, Buyer will,
and will cause each of its related persons to, make all filings required for the
Required Governmental Approvals. Until all such Required Governmental Approvals
are received, Buyer will, and will cause each related person to, cooperate with
Sorin Biomedica with respect to all such filings and in obtaining all necessary
consents.
ARTICLE 10 -- CONDITIONS PRECEDENT
Except as is provided in Section 10(g), the parties' obligation to proceed
to the Closing shall be subject to the conditions precedent hereafter set out:
(a) The transfer of the In Vitro Business to the NewCos shall have
been completed in all material respects, the corporate capital increases of the
NewCos to be transferred at the Closing shall have been made, and the shares
and/or quotas of the NewCos to be transferred at the Closing have been issued in
the names of the respective Selling Parties (except as indicated under Section
6.03(b) hereof respecting certain shares of Sorin Italy) and be freely available
for sale to Buyer without any encumbrance whatsoever or any need of
authorization by third parties.
(b) All authorizations listed in Exhibit 21 hereto shall have been
transferred or assigned or released or issued to the NewCos (it being understood
and agreed that this is a condition precedent for both Buyer and Sorin
Biomedica).
(c) All required consents shall have been received from third
parties to the assignment to the NewCos of the contracts listed in Exhibit
28-Bis hereto and classified as "Main Contracts" (it being understood and agreed
that this is a condition precedent for both Buyer and Sorin Biomedica).
(d) There shall have been received prior to the Closing all required
governmental authorizations listed in Exhibit 21 hereto to complete the sale of
(a) each NewCo's shares, and (b) the I.P. Rights under the terms of a separate
agreement between Sorin Biomedica and an affiliate of Buyer, as attached in
Exhibit 2 hereto (it being understood and agreed that this is a condition
precedent for both Buyer and Sorin Biomedica), and Sorin Biomedica and Buyer
have complied with their obligations in all material respects under Articles 8
and 9 hereof.
(e) No adverse changes to the operating and financial condition of
NewCos taken as a whole which result in a Material Adverse Effect shall have
occurred between the dates when they started their operations and the Closing
Date.
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(f) The Transition Services Agreement and each applicable Services
Agreement shall have been duly executed and the consents of third parties
described in Section 8.08 hereof shall have been obtained.
(g) The completion of the Contemplated Transactions as to NewCo
Italy. Notwithstanding Sections 10(a) through 10(f), the completion of the
Contemplated Transactions with reference to any NewCo, except for NewCo Italy,
which shall not have received the authorizations listed in Exhibit 21 hereto as
of the Closing Date or the consents listed in Exhibit 28-Bis classified as "Main
Contracts", do not constitute conditions precedent to the Closing, but shall be
regulated by Section 13.05 below.
(h) All of the conditions set forth in the Merger Agreement shall
have been satisfied or waived, and the parties shall have completed all actions
necessary to consummate the Merger provided for under the Merger Agreement
except the filing of the Articles of Merger with the Secretary of State of
Minnesota, U.S.A. (which filing shall occur simultaneously with the Closing),
provided that this condition shall be of no effect and shall be inapplicable,
and Section 8.06 of this Agreement shall apply if the Board of Directors or any
authorized independent committee thereof (including, without limitation the
Special Committee of the Minnesota Corporation) shall cause a termination of the
Merger Agreement by approving an Acquisition Proposal other than the Merger, or
not approving, modifying in any manner adverse to Buyer or its Affiliates or
withdrawing its approval or recommendation of the Merger, or in the event that
the Minnesota Corporation Shareholder shall not vote in favor of the Merger
Agreement at the Minnesota Corporation shareholder meeting called to approve the
Merger Agreement, and the Merger shall not be consummated.
As to the conditions contained in Sections 10(b), (c) and (d), to the
extent that the non-obtaining of the governmental authorizations referred to in
Section 10(b) and/or the non-fulfillment of such other conditions does not
constitute a known violation of applicable law with respect to the effecting of
any of the Contemplated Transactions, Buyer shall have the unilateral right to
effect the Closing so long as Buyer provides Sorin Biomedica and the Selling
Parties with an indemnification in respect of the waiver of any conditions in
Sections 10(b), (c) and (d) in form and substance reasonably satisfactory to
Sorin Biomedica and guaranteed by ASI.
ARTICLE 11 -- TERMINATION
11.01 Termination Events. This Agreement may, by notice given prior to the
Closing, be terminated:
(a) by either Buyer or Sorin Biomedica if a breach of any provision
of this Agreement which results in a material damage has been committed by the
other party and such breach has not been waived provided that the party alleging
such breach shall provide written
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notice of any such alleged failure to perform to the other party and the party
alleged to have committed a breach in any material respect shall have the right
to cure any such breach within twenty (20) days after the receipt of such
notice;
(b) by mutual written consent of Buyer and Sorin Biomedica; or
(c) by either Buyer or Sorin Biomedica if the Closing has not
occurred on or before August 1, 1997, or such later date as the parties may
agree upon in writing.
11.02 Effect of Termination. If this Agreement is terminated pursuant to
Article 11.01, all further obligations of the parties under this Agreement will
terminate, except that the Confidentiality Agreement and the obligations in
Sections 11.01, 14.01(e) (only with respect to the payment obligations of the
parties for the cost of the Environmental Audit), 15.01 and 15.03 through 15.13
will survive. If this Agreement is terminated by reason of a relevant
non-compliance with a party's obligations (which may be effected pursuant to
Section 11.01(a)), the other party shall be entitled to recover any and all
reasonable expenses it has incurred in connection with or otherwise related to
the transactions contemplated hereby up to a maximum in the aggregate of Lit.
3,000,000,000 (three billion)but shall not be entitled to any other remedy
whatsoever except in the event of a breach which results in a material damage
constituting gross negligence or willful misconduct or is caused by bad faith
behavior, in which case (a) the non-breaching party shall have any and all
rights and remedies available to it under this Agreement or at law and (b) the
termination of this Agreement shall not constitute an election of remedies. The
foregoing shall constitute all of the rights and remedies any party may have in
respect of the termination of this Agreement.
ARTICLE 12 -- CLOSING
12.01 When the conditions precedent to the Closing listed under Article 10
hereof have been met, the Closing shall take place in Milan, Italy, on a date
which shall be the last business day of the calendar month during which such
conditions are satisfied. The hereafter listed actions shall take place at the
Closing and shall be deemed to have occurred simultaneously.
12.02 Sorin Biomedica will deliver to Buyer written documents whereby
Sorin Biomedica certifies that, as of the Closing Date: (i) all the
representations and warranties set forth herein are true and correct in all
material respects, except to the extent that (A) such representations and
warranties speak as of an earlier specific date or (B) at or prior to the
Closing Sorin Biomedica discloses to Buyer that any such representation and
warranty is not correct pursuant to Section 8.04 and (ii) the conditions in
Sections 10(b), (c) and (d) have been satisfied. Buyer will deliver a reciprocal
certification to Sorin Biomedica.
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12.03 Except as provided in Section 12.04 hereof, and provided that the
Contemplated Transactions have been completed and the shares and/or quotas of
all the NewCos are available for assignment to Buyer, Buyer shall pay one
hundred percent (100%) of the Purchase Price with respect to the sales of the
shares or quotas of the NewCos to Sorin Biomedica, subject to the adjustments
shown in Exhibit 14 hereto. Payment of such Purchase Price shall be made
simultaneously with the transfer of the quotas and shares on the Closing Date by
wire transfer of immediately available funds to the account of SNIA BPD
identified in writing by SNIA (the "SNIA Bank Account") (which payment shall be
received on behalf of Sorin Biomedica).
12.04 In the event that the Contemplated Transactions for any NewCo,
except for NewCo Italy, have not been completed and/or the shares of such NewCo
cannot be transferred to Buyer on or before the Closing Date, an amount equal to
the purchase price for such NewCo, as stated in Section 4.04 hereof will be
deducted from the Purchase Price and paid to Trustee by wire transfer of
immediately available funds. The payment of such amounts and the interest
thereon shall be governed by the Escrow Agreement substantially in the form
attached hereto as Exhibit 34. In accordance with the procedure set forth in the
Escrow Agreement, the Trustee shall wire transfer immediately available funds to
Sorin Biomedica in the amount corresponding to the purchase price for the
subject NewCo shares plus accrued interest when such shares are sold to Buyer.
12.05 Sorin Biomedica and a third-party affiliate of Buyer, have agreed to
the terms and conditions of the sale and/or transfer as the case may be of, the
I.P. Rights to such third-party affiliate of Buyer for the purchase price set
forth in Paragraph 6 of Exhibit 14, which is subject to adjustments pursuant to
such Paragraph 6, and, in connection with such agreement, which is attached
hereto as Exhibit 2 hereto, Sorin Biomedica shall have received the full payment
(via wire transfer of immediately available funds, to the account specified in
Section 12.03 hereof) of the consideration set forth therein from the
third-party affiliate of Buyer.
12.06 Ordinary shareholders' meetings of NewCos shall have taken place
prior to or on the Closing Date. At such meetings, Buyer and Sorin Biomedica
shall cause the directors and ask all the members of the Board of Statutory
Auditors (when applicable) of NewCos at the time of the sale of the shares of
NewCos to Buyer to resign and NewCos' shareholders shall vote in favor of the
following resolutions: (i) election of Boards of Directors designated by Buyer,
and (ii) election of Boards of Statutory Auditors (when applicable) composed of
auditors designated by Buyer.
12.07 Subject to Section 12.04, the Selling Parties and Buyer shall
execute the contracts for the sale of all the outstanding shares or quotas of
NewCos to Buyer containing only such terms and conditions as may be required by
applicable law and not inconsistent with the provisions of this Agreement or any
other agreement contemplated hereby. In addition, each of the parties shall take
such other actions as is required under applicable law to transfer the shares or
quotas of each of the NewCo contemplated to be transferred on the Closing Date.
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12.08 Sorin Biomedica and NewCo Italy shall have entered into an agreement
respecting easements to and from the property to be conveyed by Sorin Biomedica
to NewCo Italy in accordance with the terms set forth in Exhibit 35.
Anything to the contrary in this Agreement notwithstanding, including
without limitation Recitals C, D, E and F, Sections 2.13 through 2.19 and
Sections 3.01 through 3.06 no Selling Party shall be obligated to transfer to
the corresponding NewCo the assets and liabilities and contractual relationships
contemplated to be transferred in Recitals C and F hereof unless the conditions
set forth in Sections 10(b), (c) and (d) are satisfied. It shall not be deemed
to be a breach of this Agreement if Sorin Biomedica cannot, by reason of an
inability to obtain the necessary required governmental operating permits and
governmental authorizations or contractual consents, cause any one or more of
the Selling Parties to transfer the assets and liabilities and contractual
obligations to such corresponding NewCo or the transfer of the shares of such
NewCo to Buyer (except to the extent Sorin Biomedica is in breach of a covenant
or representation). As to those NewCos whose shares will not be transferred to
the Buyer at the Closing, the capital contributions to be made thereto may or
may not be made as of the Closing. Notwithstanding any provisions of Article 3
to the contrary, the representations and warranties contained in Article 3
hereof shall be construed consistently with the preceding provisions of this
paragraph.
12.09 The parties agree that the representations and warranties contained
in this Agreement with respect to the sale of shares of NewCos after the
Closing, as contemplated by Section 12.04 hereof, shall apply as of the date of
this Agreement and, with respect to the consummation of the sale of such shares
of such NewCo, the certification required to be provided by Sorin Biomedica to
Buyer pursuant to Section 12.02 shall be as of the date of the Closing hereunder
and not as of the date of the transfer of the Shares, provided that it is
further confirmed and agreed that Sorin Biomedica shall have the obligations
with respect to the operations of such NewCos after the Closing pursuant to the
Transition Services Agreement.
ARTICLE 13 -- PURCHASE PRICE ADJUSTMENT; ACTIONS AFTER THE CLOSING DATE
13.01 (a) Sorin Biomedica shall prepare balance sheets of the In Vitro
Business as of the Closing Date within 30 days of the Closing Date, in
accordance with generally accepted accounting principles consistently applied by
the corresponding transferring Selling Party, adjusted, however, to be in
accordance with the Accounting Principles and Section 13.04 hereof, with the
purpose of determining the amount of the Net Invested Capital as of the Closing
Date, and the parties confirm that the Accounting Principles apply only to the
In Vitro Business and not to the Minnesota Corporation (it being further
confirmed that the accounting principles applicable to the Minnesota Corporation
are those referred to in Section 13.02(a)). Such balance sheets shall be
presented on a consolidated and on a consolidating basis for the entire In Vitro
Business. Buyer shall reasonably cooperate with Sorin Biomedica respecting
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the foregoing, including by providing information. The assets and liabilities of
any NewCo not transferred on the Closing Date ("Non-Transferred NewCo") shall
not be taken into account for purposes of the determination of the Purchase
Price adjustments set forth in Section 13.03 and there will be a deduction from
the "initial" Net Invested Capital relating to such Non-Transferred NewCo in the
amount provided for in Section 13.03 hereof. The exchange rate to convert any
currency other than USD into Lire shall be based on the exchange rates on the
business day immediately prior to the Closing Date as provided in II Sole 24
Ore.
(b) The balance sheet described under Section 13.01(a) (except for
the In Vitro Business of Sorin Brazil) shall be subject to audit by Deloitte &
Touche (or if Deloitte & Touche is unwilling or unable to perform same, another
mutually agreeable accounting firm, herein collectively referred to as the
"Independent Accountant") provided that such Independent Accountant shall apply
generally accepted accounting principles consistently applied by the
corresponding Selling Party except to the extent same conflicts with the
Accounting Principles or the provisions of Section 13.04 hereof (in which case
such Accounting Principles and provisions of Section 13.04 shall be applied).
The costs for the audit shall be shared equally between the parties. The closing
balance sheet, as audited by the Independent Accountant, shall be final and
binding on Sorin Biomedica and Buyer, and is referred to herein as the Closing
Balance Sheet.
(c) In the event Deloitte & Touche or a mutually agreeable
accounting firm cannot be agreed to by the parties, the substantive procedures
to be employed to determine the Net Worth (herein defined) of the Minnesota
Corporation provided for in Section 13.02 hereof shall be used as closely as
possible to determine the purchase price adjustment pursuant to Section
13.03(a).
13.02 (a) As promptly as practicable after the Closing, and no later than
thirty (30) business days after the Closing Date, Sorin Biomedica shall, at its
expense, prepare, or cause to be prepared, a balance sheet of the Minnesota
Corporation, and shall deliver to Buyer a statement certified by the Minnesota
Corporation's independent auditors existing as of the date hereof (or, if they
do not agree to perform such audit, another nationally recognized accounting
firm selected by Sorin Biomedica) utilizing generally accepted auditing
standards setting forth, as of the Closing Date, a balance sheet of the
Minnesota Corporation, based upon the accounting records of the Minnesota
Corporation. Such balance sheet, which is herein referred to as the Preliminary
Minnesota Corporation Balance Sheet, shall be determined on a basis consistent
with the generally accepted accounting principles used and consistently applied
by the Minnesota Corporation except to the extent same conflicts with the
provisions of Section 13.04 hereof (in which case the provisions of Section
13.04 shall apply). Buyer and its accountants shall have the opportunity to
observe the physical count of the inventory performed by Sorin Biomedica (which
may begin prior to the Closing Date) in connection with the preparation of the
Preliminary Minnesota Corporation Balance Sheet and shall have full access to
all information used by Sorin Biomedica in preparing the Preliminary Minnesota
Corporation Balance Sheet, including the work papers of its accountants.
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(b) Promptly following receipt of the Preliminary Minnesota
Corporation Balance Sheet, Buyer shall review the same and, within thirty (30)
business days after such receipt, Buyer shall deliver to Sorin Biomedica a
certificate setting forth its acceptance of, or the objections of its nationally
recognized independent accountants to, the Preliminary Minnesota Corporation
Balance Sheet, together with a summary of the reasons therefor (which shall be
limited to the mathematical accuracy of the Preliminary Minnesota Corporation
Balance Sheet and any assertion that such Preliminary Minnesota Corporation
Balance Sheet has not been determined on the basis set forth in Section 13.02(a)
above) and proposed adjustments which, in its view, are necessary to eliminate
such objections.
(c) If Buyer accepts the Preliminary Minnesota Corporation Balance
Sheet (or its independent accountants do not so object within such thirty (30)
business day period), the determination of the adjustment pursuant to Section
13.03 by Sorin Biomedica shall be deemed final and binding as of such thirtieth
(30th) business day and the Preliminary Minnesota Corporation Balance Sheet
shall constitute the Minnesota Corporation Closing Balance Sheet.
(d) To the extent Buyer's independent accountants objects within
such thirty (30) business day period to the Preliminary Minnesota Corporation
Balance Sheet, Buyer and Sorin Biomedica shall use reasonable efforts during the
following fifteen (15) business day period to resolve any such objections. If
Buyer and Sorin Biomedica resolve all such differences and each signs a
certificate to that effect, the Preliminary Minnesota Corporation Balance Sheet,
as so adjusted, shall constitute the Minnesota Corporation Closing Balance Sheet
and shall be deemed final and binding for purposes of this Agreement. If Buyer
and Sorin Biomedica resolve some of such differences, the items as to which the
parties have agreed shall be final and binding for purposes of this Agreement
and the remaining items shall be determined as provided below.
(e) To resolve any objections raised by Buyer's independent
accountants that are not resolved as provided above, the parties shall refer
their remaining differences to Deloitte & Touche (or if they refuse to accept,
to another nationally recognized firm of independent public accountants, as to
which Sorin Biomedica and Buyer shall mutually agree, or if such agreement
cannot be reached within five (5) calendar days, a nationally recognized firm of
independent accountants selected by an arbitrator in accordance with the
UNCITRAL Rules of Arbitration (collectively, the "CPA Firm"), who shall, acting
as experts and not as arbitrators (pursuant to the second paragraph of Article
1349 of the C.C.), determine on the basis of the Minnesota Corporation's
generally accepted accounting principles consistently applied (except to the
extent in conflict with the principles set forth in Section 13.04 hereof), and
only with respect to the remaining differences so submitted, whether and to what
extent, if any, the Preliminary Minnesota Corporation Balance Sheet requires
adjustment (after taking into consideration the adjustments agreed to in Section
13.02(d)) to arrive at the Net Worth of the Minnesota Corporation and the
Minnesota Corporation Closing Balance Sheet. Sorin Biomedica and Buyer shall
direct the CPA Firm to use its best efforts to render its
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determination as soon as practicable, but in no event later than 45 days
following the referral of differences to such CPA Firm. The decision of the CPA
Firm will be final and binding on the parties (including that no party will
institute any arbitration proceeding with regard to the dispute or controversy
except to enforce the decision). Sorin Biomedica and Buyer shall each (and Buyer
shall cause the Minnesota Corporation to) make readily available to the CPA Firm
all relevant books and records and any work papers (including those of the
parties respective accountants) necessary to prepare and/or otherwise relating
to the Preliminary Minnesota Corporation Balance Sheet and Buyer's review
thereof and all other items reasonably requested by the CPA Firm) so as to
determine the purchase price adjustment related to the Minnesota Corporation
provided for in Section 13.03(b) hereof and the final balance sheet determined
thereby. The closing balance sheet of the Minnesota Corporation as determined
based on the foregoing (including without limitation, the adjustments determined
by the CPA Firm) is referred to herein as the Minnesota Corporation Closing
Balance Sheet. Buyer shall cause the Minnesota Corporation to cooperate with
Sorin Biomedica in connection with such preparation by Sorin Biomedica and audit
by KPMG (or such other accounting firm as Sorin Biomedica selects). Each party
will pay an equal share of the costs and expenses of the CPA Firm.
13.03 (a) Within thirty (30) days of the Closing Balance Sheet having
become final and binding on the Parties pursuant to Section 13.01, the Purchase
Price shall be adjusted so that if the Net Invested Capital shown on the Closing
Balance Sheet (not taking into account the portion of the Net Invested Capital
relative to the Non-Transferred NewCos) (i) exceeds Lit. 92.400.000.000
(ninety-two billion four hundred million) minus (A) the amount of Retained
Receivables deducted at Closing according to Section 6.08(c) above and (B) the
Initial Net Invested Capital of any Non-Transferred NewCo, then Buyer shall pay
to Sorin Biomedica the difference, or (ii) is less than Lit. 92.400.000.000
(ninety-two billion four hundred million) minus (A) the amount of Retained
Receivables deducted at Closing according to Section 6.08(c) above and (B) the
Initial Net Invested Capital of any Non-Transferred NewCo, then Sorin Biomedica
shall pay to Buyer the difference. The Initial Net Invested Capital of any NewCo
which becomes a Non-Transferred NewCo means the amount listed as the Initial Net
Invested Capital on Exhibit 40.
(b) If the net worth (i.e., assets minus liabilities) of the
Minnesota Corporation as of the Closing date as shown on the Minnesota
Corporation Closing Balance Sheet, as finally determined pursuant to Section
13.02, ("Net Worth") (a) exceeds $28,384,000, the amount of the reduction in
paragraph 2 of Exhibit 14 would be reduced (by means of reimbursement by Buyer
to Sorin Biomedica after the Closing) by an amount equal to such difference
multiplied by the Sorin Percentage (but such amount shall not be reduced below
zero), or (b) is less than $28,384,000, the amount of the reduction in paragraph
2 of Exhibit 14 would be increased (by means of payment by Sorin Biomedica to
Buyer) after the Closing by an amount equal to such difference multiplied by the
Sorin Percentage. The exchange rate USD: Italian Lire to convert such dollars
into Lire shall be that reflected in the Wall Street Journal on the business day
immediately prior to the Closing Date. Such payment or reimbursement shall be
made within 30 days of the Minnesota Corporation Closing Balance
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Sheet becoming final and binding on the Parties. The maximum purchase price
adjustment reimbursable to Sorin Biomedica relating to the Net Worth of the
Minnesota Corporation pursuant to this Section 13.03(b) shall be the actual
amount deducted at Closing as provided for in Paragraph 2 of Exhibit 14.
(c) Any payments or reimbursements to be made from one party to
the other under the terms of this Article 13 shall include an additional amount
of interest on the principal amount due from the Closing Date up to actual date
of payment, at an interest rate equal to RIBOR (at three months)+1 percent, as
reflected in Il Sole 24 Ore on the Closing Date. Save as provided in Sections
13.01 and 13.02 above regarding the costs for the Independent Accountant and the
CPA Firm, each Party shall be responsible for its costs and expenses incurred in
its preparation and/or review of the Closing Balance Sheet and the Minnesota
Corporation Closing Balance Sheet and other matters relating thereto.
13.04(a) The parties also agree as follows:
(i) With respect to the preparation of the determination of
the Net Worth of the Minnesota Corporation as of the Closing, for the avoidance
of doubt (A) any compensation or other benefits which relate to or are otherwise
in the nature of severance which relate to or arise out of the transactions
contemplated by this Agreement or the Merger Agreement shall be taken into
account in determining the Net Worth of the Minnesota Corporation, including any
such amounts up to two years severance and benefits payable to the chief
executive officer pursuant to Section 3.9 of the Disclosure Schedules to the
Merger Agreement (it being understood however, that retention bonuses shall not
be taken into account in determining the Net Worth of the Minnesota Corporation)
provided that such amounts relating to (I) the chief financial officer of the
Minnesota Corporation and/or (II) to the extent same is in excess of two years,
the chief executive officer of the Minnesota Corporation that constitutes a
liability as of the Closing will not be deducted in calculating the Net Worth
(i.e., such amounts shall be excluded from the calculation of the Net Worth) and
if any such amount was paid by the Minnesota Corporation prior to the Closing
such amount shall, for the purposes of the computation of the Purchase Price
Adjustment pursuant to this Article 13, be added back to the Net Worth, (B) an
amount equal to the excess, if any, of $6.32 per share over the exercise price
per share for the 673,640 options of the Minnesota Corporation outstanding on
January 23, 1997 and the Minnesota Contingent Rights (to the extent such
difference is paid and/or stock options and/or rights are exercised) in
connection with any payments after January 23, 1997 to option holders of the
Minnesota Corporation in respect of their options and/or the exercise after
January 23, 1997 of such options, as contemplated by the Merger Agreement, shall
reduce the Net Worth of the Minnesota Corporation for the purposes of this
Article 13 and (C) notwithstanding anything in this Article 13 to the contrary,
all costs incurred by the Minnesota Corporation related to the Merger (and not
authorized by an ASI-controlled Board of Directors or management) including,
without limitation, Cowen & Company fees, accounting fees, consulting fees,
legal fees and other similar fees shall also be
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taken into account in determining the Net Worth of the Minnesota Corporation and
shall be reflected in the Minnesota Corporation Closing Balance Sheet.
(ii) No profit arising by reason of sales by any of the
Selling Parties and/or Sorin Biomedica to the Minnesota Corporation or by the
Minnesota Corporation to any of the Selling Parties and/or Sorin Biomedica
(collectively, "Intercompany Sales") shall be eliminated in connection with the
determination of the purchase price adjustment provided for in this Article 13
except only to the extent of the adjustment provided for in the next sentence.
The parties shall determine the difference between (a) the amount of any such
intercompany profit in inventory as of the Closing from Intercompany Sales minus
(b) the amount of any such intercompany profit in inventory from Intercompany
Sales at December 31, 1995 (which is hereby deemed to be equal to Lit.
351,000,000 (three hundred fifty-one million)). If the difference referred to in
the preceding sentence is (a) positive, such difference shall be paid by Sorin
Biomedica to Buyer; and (b) negative, such difference shall be paid by Buyer to
Sorin Biomedica. Amounts in dollars shall be converted into Lira using the
exchange rate USD: Italian Lire reflected in The Wall Street Journal on the
business day immediately prior to the Closing Date.
(iii) Except as provided in Section 13.04(a)(ii), the profit
in any inventory as of the Closing arising from sales by any Selling Party
and/or Sorin Biomedica to any other Selling Party and/or Sorin Biomedica shall
be eliminated in preparing the closing balance sheet for the In Vitro Business.
(iv) In light of Sorin Biomedica's obligation to repurchase
the accounts receivable payable by non-public customers pursuant to Section
14.02 hereof, for the purposes of this Article 13, there shall be no allowance
for doubtful accounts or other reserves relating to the accounts receivable of
the Selling Parties.
(v) The parties shall prior to Closing in good faith try to
agree how to allocate the purchase price adjustment arising from this Article
13.
(vi) There shall be no deduction from Net Invested Capital for
the non-transfer of the rights to the names "Sorin," "Sorin Biomedica" and
"Sorin Diagnostics."
(vii) To the extent (a) the provisions of this Section 13.04
conflict with either the Accounting Principles or generally accepted accounting
principles to otherwise be applied pursuant to this Article 13, the provisions
of this Section 13.04 shall be applied, including by Sorin Biomedica, Buyer, the
Independent Accountant and the CPA Firm named herein, and (b) the Accounting
Principles conflict with such generally accepted accounting principles, the
Accounting Principles shall be applied by Sorin Biomedica and the auditors.
(viii) Each party confirms that Deloitte & Touche is
independent as to them.
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13.05 (a) (i) Sorin Biomedica shall cause the Selling Parties to sell and
Buyer shall buy, under the terms of Section 4.04 hereof, the shares of any
NewCos which did not receive all government operating authorizations listed on
Exhibit 21 and the consent to the assignment of the listed Main Contracts in
Exhibit 28-Bis, if any, within thirty (30) days following receipt of such
government operating authorizations and consents. The payment for such shares to
Sorin Biomedica shall be made from the funds escrowed under the provisions of
Section 12.04 hereof.
(ii) Promptly after the closing of the sale of the shares of
any Non-Transferred NewCo, the Parties shall effect a purchase price adjustment,
utilizing as closely as possible the procedures set forth in Section 13.01
hereof and Section 13.03 hereof provided that the Parties shall in good faith
endeavor to agree as to same without any use of independent accountants (except
for NewCo Brazil which balance sheet shall be audited). If the Net Invested
Capital of such Non-Transferred NewCo or to the extent the corresponding Selling
Party did not transfer the relevant Stated Assets and Liabilities to such
Non-Transferred NewCo at the Closing, the In Vitro Business of such Selling
Party (the "Relevant Division") as of the date of the transfer of the shares of
such Non-Transferred NewCo (the "Subsequent Transfer Date") adjusted by adding
any net losses incurred or deducting any net profits earned by such
Non-Transferred NewCo or such Relevant Division, as the case may be, during the
period (the "Pre-Transfer Period") from the Closing to the Subsequent Transfer
Date (A) exceeds the Initial Net Invested Capital of such Non-Transferred Newco
or the Relevant Division, as the case may be, then promptly after the final
determination of such amount Buyer shall pay to Sorin Biomedica the difference,
or (B) is less than the Initial Net Invested Capital of such Non-Transferred
NewCo or the Relevant Division, as the case may be, then promptly after the
final determination of such amount Sorin Biomedica shall pay to Buyer the
difference.
(iii) For the avoidance of doubt, the determination of net
profits and net losses for the purposes of Section 13.05(a)(ii) shall be made
simultaneously with the determination of the Net Invested Capital as at the
Subsequent Transfer Date utilizing as closely as possible the procedures set
forth in Section 13.01 hereof and Section 13.03 hereof; it being understood and
agreed that (A) such procedures shall be applied to the preparation and
finalization of an income statement of the relevant NewCo or the Relevant
Division, as the case may be (rather than a balance sheet) and (B) the Parties
shall in good faith endeavor to agree as to same without any use of independent
accountants.
(b) If the transfer of any Non-transferred NewCo to Buyer does not
occur within 12 (twelve) months from the Closing (24 (twenty-four) months as to
Brazil) (or such other date agreed in writing by the Parties) by reason of the
refusal by the relevant governmental agencies to grant the government operating
authorizations or to consent to their transfer to such Non-Transferred NewCos
that portion of the escrowed amount pursuant to the provisions of Section 12.04
relating to such Non-Transferred NewCo shall be distributed to Buyer. The
Parties shall negotiate in good faith a mutually agreeable distribution
agreement relating to such Non-Transferred NewCo and the Parties shall agree on
the principal terms
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thereof prior to Closing. The earnings on such escrowed funds applicable to such
Non-Transferred NewCo shall be distributed to Sorin Biomedica and Buyer shall
receive from Sorin Biomedica the net profits and reimburse Sorin Biomedica for
the net losses of the operations, from the Closing Date to the date of the
distribution from escrow provided for in this Section 13.05(b).
(c) Sorin Biomedica and Buyer agree to cause, at the Closing, the
transfer and purchase -- such transfer and purchase to be effective January 1,
1998 -- of certain computer software and certain computer hardware to Buyer and
the transfer of personnel (currently 9 people) dedicated to perform services
relating to such assets as identified in Exhibit 1, it being understood and
agreed that the relevant purchase price for such items (including the retirement
liabilities of such employees) shall be considered to have been paid at Closing
since it has been taken into account in the determination of the relevant
purchase price of NewCo Italy and such assets and liabilities shall be taken
into account for the purposes of determining the Net Invested Capital relative
to NewCo Italy.
13.06 The parties hereto agree (a) to furnish upon request to each other
such further information, (b) to execute and deliver to each other such other
documents (but without incurring any actual or potential additional
obligations), and (c) to do such other acts and things, in each case as the
other party may reasonably request for the purpose of carrying out the intent of
this Agreement and the documents referred to in this Agreement. Buyer agrees to
change the names of each of the NewCos to eliminate the name "Sorin
Diagnostics", "Sorin Biomedica Diagnostics" and any similar name within 12
(twelve) months after the Closing Date (or, as to any Non-Transferred NewCo,
within 12 (twelve) months after the date that the shares of any NewCos are
transferred to it after the Closing, as applicable).
ARTICLE 14 -- INDEMNIFICATION
14.01 Subject to the provisions of this Article 14 and the Transition
Services Agreement and the Services Agreements, for a term of 18 months from the
Closing Date which 18 month period shall be applicable to all matters required
to be indemnified pursuant to this Article 14, including any which concern or
otherwise relate to the Contemplated Transactions or the Merger, or the In Vitro
Business or the Minnesota Corporation (it being understood that to the extent
related to any NewCo the shares of which are not transferred to Buyer at the
Closing pursuant to Section 12.04, such 18 month period shall be considered to
commence on the actual date such shares are transferred to Buyer), whether Sorin
Biomedica or Buyer is the party required to indemnify, except that (i) for Taxes
(including Transfer Taxes) the term shall be the applicable government's
established statute of limitation (without giving effect to waivers or
extensions by the Minnesota Corporation), (ii) as to the Minnesota Corporation,
with respect to breaches of representations and warranties or covenants to the
extent same relate to environmental matters the term shall be 36 months from the
Closing Date, (iii) for breaches of Section 15.15 hereof, the term shall be six
years and (iv) such 18 month period
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shall not apply to (A) the covenants of Sorin Biomedica or Buyer's IP Affiliate
contained in Article 2 of the IP Agreement respecting trademarks (including with
respect to provisions respecting the use (including prohibition on the use) of
the names "DiaSorin", "Sorin", "Sorin Biomedica" and "Sorin Diagnostics"), (B)
the obligation of Buyer or Sorin Biomedica to pay the purchase price adjustments
provided for in Article 13 hereof, and (C) the Sorin Environmental Obligation
and the Sorin Environmental Indemnity Obligation, all of which covenants and
obligations shall not be limited in time, Sorin Biomedica shall defend, at its
own expense and indemnify and hold harmless Buyer, the NewCos, the Minnesota
Corporation and their respective affiliates in respect of, but without
duplication:
(a) Any and all liabilities, damages, claims or losses resulting
from, arising out of or in any manner attributable to, any inaccuracy in or
breach of any representation, warranty, or agreement, made by Sorin Biomedica,
on its own behalf or on behalf of the Selling Parties and of NewCos, which is
contained in this Agreement, including its Exhibits, or the IP Agreement or in
the certificate covering the matters referred to in Section 12.02 hereof or by
the Minnesota Corporation in the Merger Agreement (notwithstanding Section 9.3
of the Merger Agreement), unless any such matter is taken into account in the
Closing Balance Sheet or in the Minnesota Corporation Closing Balance Sheet.
(b) Except (i) to the extent such liability is reflected in the
Closing Balance Sheet or the Minnesota Corporation Closing Balance Sheet, and
(ii) as provided in Section 15.02 hereof, any and all liabilities for Taxes of
Sorin Biomedica, the Selling Parties or NewCos, the Minnesota Corporation or any
other Affiliates of Sorin Biomedica and any interest, fines, or penalties
relating thereto, which Taxes, interest, fines or penalties relating to NewCos
or the Minnesota Corporation were incurred prior to the Closing (it being
understood that, for liabilities regarding any NewCo the shares of which could
not be transferred at Closing pursuant to Section 12.04 above, the date of
reference shall be considered the date of actual transfer of such shares of such
NewCo to Buyer).
(c) Any and all liabilities, damages, claims or losses that arise
from Excluded Liabilities (as defined below). For the avoidance of doubt, this
will confirm the parties understanding and agreement that Sorin Biomedica has no
right to, and shall not, seek indemnification for Excluded Liabilities from
Buyer or its Affiliates. For the purposes of this Agreement:
"Excluded Liabilities" means those liabilities of the Selling
Parties, Sorin Biomedica (to the extent they relate to the InVitro Business),
NewCos or the Minnesota Corporation, other than the Assumed Liabilities, that
(i) exist at the Closing, recorded or unrecorded or (ii) arise after the
Closing, recorded or unrecorded, known or unknown or contingent or
non-contingent, exclusively from facts or events that occurred prior to the
Closing but only to the extent related to the period up to the Closing. Further,
to the extent liabilities (y) are incurred prior to the Closing and should have
been recorded on the Closing Balance Sheet or the Minnesota Corporation Closing
Balance Sheet in accordance with Article
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13 hereof and have not been so recorded or (z) arise out of the litigation
disclosed in items 1 and 2 of Exhibit 29 under the heading pending suits, such
liabilities shall not be subject to the Deductible.
"Assumed Liabilities" means those liabilities (A) to the extent
reflected on the Closing Balance Sheet or the Minnesota Corporation Closing
Balance Sheet, or (B) consisting of contractual obligations otherwise required
by this Agreement (including the exhibits) to be assumed in connection with the
Contemplated Transactions, including, without limitation, in deed of transfer or
similar instruments of transfer contemplated by this Agreement by a NewCo or one
or more of its Affiliates or that are contractual obligations of the Minnesota
Corporation as of the Closing pursuant to the Merger Agreement.
"Buyer-Post-Closing Liabilities" means those liabilities that arise
after the Closing, whether or not known, contingent or non-contingent, and that
arise exclusively from facts or events that occurred after the Closing but only
to the extent related to the period after the Closing. It is understood and
agreed that neither Buyer-Post-Closing Liabilities nor Transfer Taxes are
Excluded Liabilities.
Excluded Liabilities also means liabilities arising from products
sold prior to the Closing or manufactured to the level of finished goods prior
to the Closing and transferred by the Selling Parties to one or more NewCos
("Pre-Closing Finished Goods") and Buyer-Post-Closing Liabilities also means
liabilities arising from products sold after the Closing except to the extent
the same constitute Pre-Closing Finished Goods. Anything in this Agreement to
the contrary notwithstanding, Sorin Biomedica expressly acknowledges and agrees
that any disclosure by Sorin Biomedica to Buyer as to any potential basis for a
patent infringement claim to the extent related to products sold prior to the
Closing or Pre-Closing Finished Goods shall not in any manner whatsoever
diminish Sorin Biomedica's obligation to Buyer pursuant to this Section 14.01(c)
to defend, indemnify and hold harmless Buyer, the NewCos, the Minnesota
Corporation and their respective Affiliates in respect of any patent
infringement claims to the extent same constitute Excluded Liabilities.
For the purposes of the definition of "Excluded Liabilities",
"Assumed Liabilities" and "Buyer-Post-Closing Liabilities," to the extent
liabilities relate to any Non-Transferred NewCo or any Selling Party that has
not made the transfer or contribution to such Non-Transferred NewCo as
contemplated by Article 3 hereof, Closing or Closing Date shall mean the date or
time of the sale of the shares of such Non-Transferred NewCo; provided that in
respect of any Non-Transferred NewCo or Relevant Division, the parties agree
prior to the Closing to modify the preceding part of this sentence to address
relevant considerations, such as Buyer's providing certain direction to the
Non-Transferred NewCos and Relevant Divisions in respect of operations and
management.
It is the intent of the parties that this Section 14.01(c) shall be
interpreted consistent with the following example and to the extent of any
inconsistency between this
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illustration and the definitions of "Excluded Liabilities", "Assumed
Liabilities" and "Buyer-Post-Closing Liabilities," the principles in this
illustration shall control:
Illustration. Buyer seeks indemnification from Sorin Biomedica for a
patent infringement action from a third party that resulted in a judgement after
the Closing for an award of $200,000 in royalties -- $50,000 of which relates to
infringement prior to the Closing and $150,000 of which relates to infringement
after the Closing. In this case, $50,000 of such royalties that relate to the
period prior to the Closing would constitute an Excluded Liability because such
liability arose after the Closing exclusively from facts or events that occurred
prior to the Closing, and such $50,000 (if not related to the litigation
disclosed in items 1 and 2 of Exhibit 29 under the heading pending suits) to the
extent not required to be provided in the Closing Balance Sheet would be subject
to the Deductible and $150,000 of such royalties that relate to the period after
the Closing would not constitute Excluded Liabilities but would constitute a
Buyer-Post-Closing Liability.
(d) Any and all reasonable costs and expenses, including reasonable
legal fees, incurred by Buyer and/or NewCos defending or participating in any
and all actions, suits, proceedings, demands, assessments and judgments with
respect to which Sorin Biomedica does not discharge its obligation under this
Article 14 to defend and to indemnify and hold harmless Buyer and NewCos and its
affiliates.
(e) Any and all liabilities, damages, claims or losses resulting
from, arising out of or in any manner attributable to (I) Sorin Biomedica's
non-compliance with its obligations provided for in Section 6.06 hereof or (II)
any suit or action commenced by an owner of a property adjacent to the Saluggia
Site (an "Adjacent Property") relating to a release from the Saluggia Site on to
such Adjacent Property prior to the Closing of one or more substances required
by Applicable Environmental Laws to be cleaned-up or remediated so long as any
such (y) release and (z) clean-up and/or remediation obligation is identified in
the Environmental Audit, provided that to the extent exposure to third party
claims as a consequence of the environmental problems that constitute violations
of Applicable Environmental Law is specifically identified by the Environmental
Audit, the parties shall in good faith agree before the Closing on reasonable
terms (both in terms of time and substance) under which Sorin Biomedica shall be
required to further idemnify, defend and hold harmless NewCo Italy in respect to
such third party claims (it being understood that any non-resolution thereof by
the parties will be resolved after the Closing pursuant to Section 15.10 hereof)
(the "Sorin Environmental Indemnity Obligation"). Sorin Biomedica shall have the
exclusive right to effect the Sorin Environmental Obligation and the Sorin
Environmental Indemnity Obligation and shall comply with all environmental laws
in effecting each of the Sorin Environmental Obligation and the Sorin
Environmental Indemnity Obligation. The Environmental Audit cost shall be paid
equally by Sorin Biomedica and Buyer. Except as provided in Section 6.06 hereof
and the Sorin Environmental Indemnity Obligation, anything to the contrary
notwithstanding in this Agreement including, without limitation, Section 6.05(a)
and Section 6.18, there shall be and are no other environmental representations
and
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warranties and there shall be no other responsibility of Sorin Biomedica
after the Closing in respect of environmental matters related to the In Vitro
Business. For the avoidance of doubt, this will confirm that this Section
14.01(e) and Section 14.01(f) do not limit or otherwise impair the obligations
of Sorin Biomedica under this Article 14 to indemnify, defend and hold harmless
in respect of environmental matters related to the Minnesota Corporation.
(f) Anything to the contrary notwithstanding in this Agreement, the
obligations of Sorin Biomedica relating to environmental matters of any kind or
nature respecting the In Vitro Business shall be limited to the Sorin
Environmental Obligation and the Sorin Environmental Indemnity Obligation.
For the avoidance of doubt, the parties confirm that neither Sorin
Biomedica nor Buyer nor their respective Affiliates may make any claim under
this Article 14 at any time after 18 months after the Closing except as is
expressly provided in this Article 14 (and except that it is understood and
agreed that any claims made during such 18 month period that are not resolved by
the end of such 18 month period shall be resolved thereafter).
14.02 Indemnity for Private Assumed Receivables. Sorin Biomedica shall
indemnify Buyer with respect to any Assumed Receivables payable by non-public
customers of the In Vitro Business which the respective NewCo shall not have
collected within a period of twelve (12) months following the Closing, by
repurchasing within thirty (30) days following their tender in a form which
properly conveys all of such NewCos right, title and interest in and to the
uncollected portion of such Assumed Receivables payable by a non-public customer
in an amount equal to (i) the uncollected face value plus (ii) reasonable legal
fees incurred by Buyer or its Affiliates relating to such Assumed Receivable
provided that such legal fees prior to the incurrence thereof have been mutually
agreed upon in writing and provided further that Buyer shall indemnify Sorin
Biomedica (which indemnification shall survive for twelve (12) months from the
period commencing on the date such Assumed Receivable is repurchased,
notwithstanding the 18 month period in Section 14.03) for any Losses with
respect to rights of setoff or counterclaim (excluding rights under bankruptcy,
insolvency or similar laws affecting creditors rights generally) by such account
debtor relating to such Assumed Receivable arising from the actions of such
NewCo or Buyer after the Closing. In the event of a delay in payment to Buyer,
or its Affiliates beyond such thirty (30)-day period, Sorin Biomedica shall also
pay interest thereon at the same interest rate as stated in Section 13.03
hereof. For the purposes of this Section 14.02, public customers include,
without limitation, (i) governmental agencies or other public bodies of any kind
or nature, and (ii) hospitals or other entities that are not majority owned as
of the Closing by individuals or private entities. Without limiting the
generality of the foregoing and for illustration purposes only, the following
are examples of public customers: U.S.L, A.S.L., Aziende Ospedaliere, and
Ospedalie Universita. Except as is set forth in this Section 14.02 and Section
6.08, Buyer shall have the risks and costs of the collection of the receivables
transferred to NewCos. During such 12 month period, Buyer shall cause Newcos to
use reasonable efforts to collect the Assumed Receivables payable by non-public
customers.
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14.03 Subject to provisions of this Article 14, and the Transition
Services Agreement and the Services Agreements, for a term of 18 months from the
Closing Date, except to the extent a longer period is provided in Section 14.01
hereof, Buyer shall defend, at its own expense and indemnify and hold harmless
the Selling Parties and Sorin Biomedica and their respective affiliates in
respect of:
(a) any and all liabilities, damages, claims or losses resulting
from, arising out of, or in any manner attributable to any inaccuracy in or
breach of any representation, warranty or agreement, made by Buyer, or the
Buyer's IP Affiliate which is contained in this Agreement, including its
Exhibits, (including the IP Agreement) or in the certificate covering the
matters referred to in Section 12.02.
(b) Any and all reasonable costs and expenses, including reasonable
legal fees, incurred by the Selling Parties, Sorin Biomedica and/or their
respective affiliates defending or participating in any and all actions, suits,
proceedings, demands, assessments and judgments with respect to which Buyer does
not discharge its obligation under this Article 14 (or as to NewCos pursuant to
the instruments described in the definition of Assumed Liabilities) to defend
and to indemnify and hold harmless the Selling Parties, Sorin Biomedica and
their respective affiliates.
14.04 In all actions, suits, proceedings, demands, assessments and
judgments ("Legal Proceedings") in which a party undertakes to discharge its
obligation to defend, the other party shall have the right to be represented by
advisory counsel and accountants, at their own expense (and shall not be
indemnified for such legal or other fees and expenses). The party that has the
obligation to indemnify pursuant to this Article 14 shall also have the right to
defend and the right to control the defense thereof provided that, if there is
in the reasonable judgment of the indemnified party a conflict of interest, such
indemnitor shall have no right at any time to settle any such matter or make an
admission to the effect that the plaintiff is entitled to any material remedies
it seeks without the prior written consent of the indemnified party.
14.05 The obligations of Sorin Biomedica and Buyer with respect to any
claims indemnifiable pursuant to this Article 14 ("Indemnifiable Claim"), except
as provided below in this Section 14.05, are subject to the limitation that an
indemnitee may not make or bring any claim against an indemnitor in respect of
any such Indemnifiable Claim unless the aggregate amount of all Losses for all
such claims from time to time incurred or suffered by all such indemnitees
collectively exceeds USD 4 million (the "Deductible") after which all Losses in
excess of the Deductible shall be indemnified in full in accordance with the
terms of this Article 14 (it being understood and agreed that such first U.S.D.
4,000,000 shall not be indemnified for). Single claims that are less than Lit.
10 million shall not be made and shall not be included in determining whether
Losses incurred or suffered exceed the Deductible in the aggregate, it being
further agreed that this amount is established solely for the purposes of the
preceding part of this sentence and shall not have any relevance whatsoever to
establishing
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or otherwise determining materiality in or under this Agreement. "Losses" means
any and all liabilities, damages, claims, losses or other items, including costs
and expenses, incurred or sustained that are required to be indemnified for
under this Agreement. The foregoing provisions of this Section 14.05 shall not
apply to the payment or performance of claims concerning (i) Taxes, including
Transfer Taxes, (ii) the Sorin Environmental Obligation and the Sorin
Environmental Indemnity Obligation, (iii) those matters described in the second
sentence of the definition of Excluded Liabilities in Section 14.01(c) as not
being subject to the Deductible, (iv) those matters described in Section 14.02,
(v) the obligations under Section 15.02, (vi) the obligations under the
Transition Services Agreement, the Services Agreements, the Escrow Agreement and
the covenants required to be performed or observed after the Closing pursuant to
Section 2 of the IP Agreement, (vii) the obligations to pay the purchase price
adjustments provided for in Article 13 hereof respecting the Net Invested
Capital and the Net Worth of the Minnesota Corporation, (viii) the Assumed
Liabilities or (ix) the other obligations described in Sections 14.06(b), 15.14
and 15.15 (the foregoing items described in clauses (i) through (ix) being
referred to as "claims not subject to the Deductible"). For the avoidance of
doubt, it is further agreed that, whether or not Losses relating to claims not
subject to the Deductible exceed U.S.D. 4,000,000 and regardless of when same
are incurred or sustained, any Losses other than such Losses shall not be
indemnified for unless and only to the extent such other Losses exceed U.S.D.
4,000,000.
14.06 Buyer shall defend, at its own expense, and indemnify and hold
harmless the Selling Parties and Sorin Biomedica and their respective affiliates
in respect of any and all liabilities, damages, claims or losses that arise from
(a) any of the Assumed Liabilities and (b) any Bank Reimbursement Obligation to
the extent the underlying obligation satisfied by the obligee to the
Reimbursement Obligation (i.e., the financial institution) is an Assumed
Liability or (c) Section 15.02 hereof. For the avoidance of doubt, it is agreed
that the obligations described in this Section 14.06 shall not be limited in
time, and that the Deductible and the other provisions provided in Section 14.05
do not apply to the matters referred to in this Section 14.06.
14.07 The aggregate liability to a party hereto for indemnification under
this Article 14, with respect to all Losses incurred or sustained by the other
party (which shall be deemed to include Losses incurred or sustained by its
Affiliates) shall in no event exceed an amount equal to Lit. 75.000.000.000
(seventy-five billion) except for Losses related to Taxes, the Sorin
Environmental Obligation, the Sorin Environmental Indemnity Obligation, Assumed
Liabilities and product liability claims (provided that the aggregate maximum
liability for each party for all Losses -- whether or not claims relating to (i)
Taxes, the Sorin Environmental Obligation, the Sorin Environmental Indemnity
Obligation, Assumed Liabilities and product liability claims or (ii) non-tax
claims, non-Sorin Environmental Obligation claims, non-Sorin Environmental
Indemnity Obligation claims, non-Assumed Liabilities claims and non-product
liability claims -- shall be limited to Lit. 250.000.000.000 (two-hundred fifty
billion)). For all purposes of this Article 14 including, without limitation,
the Deductible, as to any Losses that Sorin Biomedica is required to indemnify
for under this Article 14 that arise out of or
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otherwise relate to the Merger Agreement or the Minnesota Corporation, such
Losses shall be deemed to and shall be equal to such Losses multiplied by the
Sorin Percentage. No party shall be liable to any other party for consequential
or special damages or loss of profits. The parties agree that the provisions of
this Article 14 constitute the sole and exclusive rights and remedies that each
party and their Affiliates have as a result of any breach of this Agreement,
including any exhibit (except the Transition Services Agreement), the IP
Agreement and/or the Merger Agreement provided, however, that (a) the provisions
of Article 11 hereof shall apply with respect to a breach which results in the
termination of this Agreement (b) if the Closing does not occur, the only
obligation of Sorin Biomedica respecting the Merger Agreement shall be to
indemnify for the obligations of the Minnesota Corporation under the Merger
Agreement if the Minnesota Corporation has not performed its obligations in
respect of any such breach after Buyer has exhausted its remedies against the
Minnesota Corporation in respect thereof (it being understood, as aforesaid,
that Sorin Biomedica's obligation to indemnify with respect to any such breach
of the Merger Agreement shall be limited to Sorin's Percentage of the Losses
payable by the Minnesota Corporation thereunder) and (c) each party shall be
entitled to specific performance prior to closing of the other party's
obligations and each party shall be entitled to specific performance of the
covenants under the IP Agreement and the Escrow Agreement to the extent set
forth in the IP Agreement and the Escrow Agreement. For the avoidance of doubt,
notwithstanding anything to the contrary in this Agreement (including without
limitation, the next sentence), the rights and remedies of Sorin Biomedica, the
Selling Parties, and their respective Affiliates arising out of or in connection
with or otherwise relating to any Buyer-Post-Closing Liability shall not be
governed by any provision of this Agreement, but shall in all respects be
instead governed by applicable law. Without limiting the preceding sentence, the
parties agree that no party shall seek, or be entitled to, any remedy or right
which is in any manner inconsistent with the provisions of this Article 14 or
Article 11 hereof including without limitation, Section 14.05 or Section 14.07
hereof. There shall be no indemnification for Taxes arising out of the Merger
respecting the Minnesota Corporation contemplated by the Merger Agreement. Any
indemnification obligations hereunder shall be reduced by the actual amount of
insurance recoveries. The rights of Buyer or NewCos for indemnification
hereunder shall be subject to reduction to the extent of any surplus of assets
or over accrual or other over-provisions for liabilities with respect to the
Closing Balance Sheet or of Sorin's Percentage of same as to such matters
relating to the Minnesota Corporation Closing Balance Sheet. For all purposes of
this Article 14, whenever the term Closing Balance Sheet is used, with respect
to any Non-Transferred NewCo, such term means the balance sheet of such
Non-Transferred NewCo as of the date of the transfer of the shares and/or quotas
of such Non-Transferred NewCo to Buyer, which balance sheet is to be prepared
pursuant to Section 13.05 hereof. The parties hereto acknowledge that the
rescission of this Agreement by any party after the Closing is specifically
excluded as a remedy in case of breach of this Agreement by either party. To the
maximum extent permitted by law, no party shall and each party shall cause its
Affiliates and the NewCos not to, assert any rights or remedies based on any
express or implied (by operation of law or otherwise) representations or
warranties in any deed of transfer or other document conveying the In Vitro
Business to any NewCo or the shares or the quotas of any NewCo. The parties
acknowledge that the Minnesota Corporation
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may have rights against third parties in connection with Indemnifiable Claims
("Third Party Rights"), and the parties shall, with respect to such Third Party
Rights agree, based on the amount for which each party is responsible under this
Article 14 for such Indemnifiable Claims as to an equitable procedure to realize
on such Third Party Rights and to equitably share the costs and the proceeds
payable by any such third parties (it being understood that any non-resolution
thereof by the parties will be resolved pursuant to Section 15.10 hereof), and
Buyer agrees to cause the Minnesota Corporation to otherwise cooperate with it
respecting any Indemnifiable Claims.
ARTICLE 15 -- GENERAL PROVISIONS
15.01 Expenses. Except as otherwise expressly provided in this Agreement
(including without limitation in Section 15.02 hereof), each party to this
Agreement will bear its respective expenses incurred in connection with the
preparation, execution, and performance of this Agreement, including all fees
and expenses of agents, representatives, counsel and accountants. Without
prejudice to Section 15.02 and excluding Transfer Taxes, it is hereby agreed
that all costs and expenses incurred by Sorin Biomedica or the Selling Parties
or incurred prior to Closing by NewCos in transferring the assets and
liabilities to NewCos and in transferring the shares and/or quotas of NewCos to
Buyer (including costs and expenses of organizing the NewCos) shall be paid by
the Selling Parties, including, without limitation, costs of appraisal, expert
fees, notary fees, attorney fees, and preparation or review of the applicable
deed of transfer incurred by Sorin Biomedica or the Selling Parties or incurred
prior to the Closing by NewCos, provided that such fees and expenses payable to
the appraiser in connection with the appraisal relating to Sorin Italy shall be
reimbursed by Buyer to the Selling Parties, and to the extent known such
reimbursement shall be made at the Closing. For the avoidance of doubt, and
notwithstanding the preceding provisions of this Section 15.01, Sorin Biomedica
shall not, and the Selling Parties shall not, have any responsibility for any
costs and expenses of any kind or nature incurred by Buyer in connection with
the transfer of assets and liabilities to NewCos or the transfer of the shares
and/or quotas of NewCos to Buyer. In the event of termination of this Agreement,
the obligation of each party to pay its own expenses (except as otherwise
expressly provided in this Agreement) will be subject to any rights such party
may have pursuant to Article 11 hereof to be reimbursed due to a breach of this
Agreement by another party.
15.02 Transfer Taxes and Charges. "Transfer Taxes" means transfer,
registration ("Imposta di Registro," in Italy), recording, stamp, capital (but
not capital gains), I.V.A. and value added and other similar taxes, fees and
other charges of any kind or nature in connection with or arising out of the
Contemplated Transactions (which shall be deemed to include transfers and
transactions contemplated by the IP Agreement and the other Exhibits hereto).
Buyer shall promptly (a) pay all Transfer Taxes; and (b) to the extent that
Sorin Biomedica or any Selling Party pays any required Transfer Taxes, reimburse
Sorin Biomedica for the
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payment of any such Transfer Taxes (it being agreed that, to the extent the same
can be determined, such reimbursement shall occur at Closing). For the avoidance
of doubt, (a) should there be Transfer Taxes sustained by the Selling Parties or
NewCos, such amount shall not be taken into account in determining the Net
Invested Capital (i.e., such amount shall not reduce Net Invested Capital), (b)
for all purposes of this Agreement, Transfer Taxes shall be deemed to be Taxes;
and (c) the provisions of this Section 15.02 shall apply to Transfer Taxes
incurred after the Closing.
15.03 Public Announcements -- Confidentiality. Any public announcement or
similar publicity with respect to this Agreement or the Contemplated
Transactions will be issued, if at all, at such time and in such manner as Sorin
Biomedica and Buyer determine, except as may be required by law or regulation.
Sorin Biomedica and Buyer will consult with each other, other than with respect
to communications which may be required by law or regulation, concerning the
means by which the NewCos' employees, customers and suppliers, and others having
dealings with the NewCos will be informed of the Contemplated Transactions, and
Buyer will have the right to be present at and participate in the drafting and
delivery of any such material communication, which is either not in the ordinary
course of business, or which is made to employees generally, customers
generally, suppliers generally, or others having dealings with the NewCos
generally provided that Sorin Biomedica shall have the final decision making
power with respect to same. Between the date of this Agreement and the Closing
Date, Buyer and Sorin Biomedica will maintain in confidence, and will cause the
directors, officers, employees, agents, and advisors of Buyer and Sorin
Biomedica and the NewCos to maintain in confidence, any written, oral or other
information obtained in confidence from the other party or any NewCos in
connection with this Agreement or the Contemplated Transactions, unless (a) such
information was already known to such party prior to such disclosure to it or
was obtained from others not bound by a duty of confidentiality or such
information becomes publicly available through no fault of such party, (b) the
use of such information is necessary or appropriate in making any filing or
obtaining any consent or approval required for the consummation of the
Contemplated Transactions, or (c) the furnishing or use of such information is
required by legal proceeding, law or regulations. Notwithstanding the foregoing
(including, without limitation clause (a) immediately above), the terms and
conditions of the Confidentiality Agreement, as amended, executed by or on
behalf of Buyer or its affiliates in connection with or relating to the sale of
the In Vitro Business shall continue in full force and effect and shall survive
the termination of this Agreement, but shall not survive the Closing. If the
transactions contemplated hereby are not consummated, each party will return or
destroy as much of such written information as the other party may reasonably
request. Notwithstanding the foregoing, in connection with its disclosures
relating to any registration statement or other securities filings, (i) ASI
agrees that it will not disclose any non-public information relating to the In
Vitro Business and (ii) Sorin Biomedica agrees that it will not disclose any
non-public information relating to ASI except as reflected in those press
releases agreed to by the parties and except as agreed in writing by the
parties, which the parties agree to work diligently and in good faith to agree
upon.
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15.04 Guarantee. American Standard Inc. hereby guarantees the full and
timely performance (including, without limitation payment) of all of the
obligations of Buyer under this Agreement (including, the exhibits), all of the
obligations of Buyer's I.P. Affiliate under the IP Agreement, and all the
obligations of any direct or indirect permitted assignees or successors of same.
The parties agree that the provisions of the first three paragraphs of Article
1957 of the C.C. shall not apply. The maximum liability of ASI under this
Section 15.04 with respect to the obligations of Buyer, Buyer's I.P. Affiliate
and to the extent applicable their respective permitted successors and assigns
to pay to Sorin Biomedica the Purchase Price in accordance with the provisions
of this Agreement shall be limited to the amount of the Purchase Price. The
maximum liability of ASI for all of the obligations of Buyer, Buyer's I.P.
Affiliates, and each of their respective direct and indirect permitted
successors and assigns under this Agreement (including the exhibits) and the IP
Agreement other than the obligations described in the immediately preceding
sentence shall be limited to Lit. 150.000.000.000 (one-hundred fifty billion).
ASI represents and warrants that its obligations under this Section 15.04 are
enforceable against it in accordance with the terms of this Section 15.04,
including, without limitation, that it has the corporate power and authority to
execute, deliver and perform this Agreement in accordance with its terms and
that same does not constitute a breach of any material agreement to which it is
a party to which any of its assets may be bound or subject.
15.05 Notices. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been duly
given when (a) delivered by hand (with written confirmation of receipt), (b)
sent by telecopier (with written confirmation of receipt), or (c) when received
by the addressee, if sent by an internationally recognized overnight delivery
service (receipt requested), in each case to the appropriate addresses and
telecopier numbers set forth below (or to such other addresses and telecopier
numbers as a party may designate by notice to the other parties):
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SORIN BIOMEDICA S.p.A With Copy to:
Via Crescentino
13040 Saluggia (vc) ITALY SNIA BPD
Attn: Mr. Ezio Garibaldi Via Borgonuovo 14
Fax: (161) 487-545 20121 Milano, Italy
Attn: Mr. Carlo Vanoli
Fax: (02) 6332321
Sills Cummis Zuckerman Radin
Tischman
Epstein & Gross P.A
One Riverfront Plaza
Newark, NJ 07102-5400 USA
Attn: Steven E. Gross, Esq.
Jerry Genberg, Esq
Fax: (201) 643-6500
and
Colesanti E Giliberti
Studio Legale
via Visconti di Mondrone 21
20122 Milano Italy
Attn: Avv. Carlo Pappalettera
Fax: (02) 780858
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<PAGE> 59
SIENNA BIOTECH INTERNATIONAL INC., With Copies to:
WABCO STANDARD TRANE, B.V. or
AMERICAN STANDARD, INC. AMERICAN STANDARD, INC. (if
One Centennial Avenue notice is to Buyer)
Piscataway, NJ 08855-6820 USA One Centennial Avenue
Attn: Mr. Benson I. Stein Piscataway, NJ 08855-6820 USA
Richard A. Kallaher, Esq. Attn: Mr. Benson I. Stein
Eric Rose, Esq. Richard A. Kallaher, Esq.
Fax: (908) 980-6117 Eric Rose, Esq.
(908) 980-6118 Fax: (908) 980-6117
(908) 980-6118
and
De Libero Camilli Boniello
Bartoli Di Gardbo
(Associated with ) Baker & McKenzie
Studio Avvocati
Piazza Meda, 3
20121 Milano, Italy
Attn: Avv. Alberto F. Semeria
Fax: (02) 76007074
15.06 Waiver. Except to the extent provided in Article 14, (a) the rights
and remedies of the parties to this Agreement are cumulative and not alternative
and (b) neither the failure nor any delay by any party in exercising any right,
power or privilege under this Agreement or the documents referred to in this
Agreement will operate as a waiver of such rights, power, or privilege, and no
single or partial exercise of any such right, power or privilege will preclude
any other or further exercise of such right, power, or privilege or the exercise
of any other right, power, or privilege. To the maximum extent permitted by
applicable law, (a) no claim or right arising out of this Agreement or the
documents referred to in this Agreement can be discharged by one party, in whole
or in part, by a waiver or renunciation of the claim or right unless in writing
signed by the other party; (b) no waiver that may be given by a party will be
applicable except in the specific instance for which it is given; and (c) no
notice to or demand on one party will be deemed to be a waiver of any obligation
of such party or of the right of the party giving such notice or demand to take
further action without notice or demand as provided in this Agreement or the
documents referred to in this Agreement.
15.07 Entire Agreement and Modification. Except for the Confidentiality
Agreement, this Agreement supersedes all prior agreements among the parties with
respect to its subject matter and constitutes (along with the documents referred
to in this Agreement) a complete and exclusive statement of the terms of the
agreement among the parties with respect to its subject
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matter. This Agreement may not be amended except by a written agreement executed
by the party to be charged with the amendment.
15.08 Assignments, Successors, and Limited Third-Party Rights. Neither
party may assign any of its rights under this Agreement without the prior
consent of the other parties; provided that without the prior consent of Sorin
Biomedica, Buyer may assign all or part of its rights and delegate all or part
of its obligations under this Agreement to one or more Affiliates of ASI that
are beneficially wholly-owned by ASI (a "Permitted Assignee") upon ten business
days prior written notice from Buyer and ASI wherein Buyer and ASI certify to,
and confirm and agree with Sorin Biomedica (A) the identity of the Permitted
Assignee and that it is so beneficially owned, (B) that Buyer continues as a
primary joint obligor with respect to the obligations delegated to such
Permitted Assignee and (C) that the obligations of ASI under Section 15.4 remain
in full force and effect as to the obligations of the Permitted Assignee and
Buyer notwithstanding such assignment or delegation. Subject to the preceding
sentence, this Agreement will apply to, be binding in all respects upon, and
inure to the benefit of the successors and permitted assigns of the parties.
Except as may be described in the IP Agreement concerning the I.P. Rights and
except that the individuals and entities described in Article 14 hereof are
hereby provided the full rights and remedies under Article 14 hereof that each
party hereunder has as fully as if they were a party hereto, (i) nothing
expressed or referred to in this Agreement will be construed to give any person
other than the parties to this Agreement any legal right, remedy, or claim under
or with respect to this Agreement or any provision of this Agreement and (ii)
this Agreement and all of its provisions and conditions are for the sole and
exclusive benefit of the parties to this Agreement and their successors and
permitted assigns.
15.09 Severability. Should one or more provisions contained herein be
invalid or unenforceable under the applicable provisions of law, such provisions
shall be enforced to the maximum extent permitted by law. As to any such
provisions which are wholly unenforceable and to the extent any such provisions
are partly unenforceable, they shall be severed from this Agreement and the
parties shall in good faith negotiate to replace such wholly or partly severed
provision(s) with other(s) having the same economic effect to the maximum extent
as permitted by the law.
15.10 Governing Law; Controversies. This Agreement will be governed by,
and construed in accordance with, the substantive laws of Republic of Italy
(without giving effect to conflicts of laws). Except to the extent set forth in
the IP Agreement respecting injunctive relief or the Escrow Agreement respecting
specific performance or as to the final and binding determinations to be made by
the Independent Accountant or the CPA Firm pursuant to Article 13 hereof, any
dispute arising in connection with this Agreement which is not settled by the
parties shall be settled exclusively by arbitration in accordance with UNCITRAL
Rules of Arbitration, which arbitration shall be final and binding on the
parties. Each party and its Affiliates shall be entitled to collectively appoint
one arbitrator in any such arbitration, and the
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third arbitrator shall be appointed under the UNCITRAL Rules of Arbitration. The
arbitration will be held in London, England.
15.11 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
15.12 Knowledge. Wherever the terms "Sorin Biomedica's knowledge", "Sorin
Biomedica's actual knowledge", "the receipt of notice", "aware of", "the best
knowledge of Sorin Biomedica", "Sorin Biomedica's best knowledge", "best
knowledge of Sorin Biomedica and/or the Selling Parties", "known to Sorin
Biomedica" or any such terms as applied to any one or more Selling Parties or
NewCos, and any similar term is used, in each case each such term shall mean the
actual knowledge of any of Mr. Antonio Boniolo, Mr. Ezio Garibaldi, Mr. Mario
Palla, Mr. Umberto Rosa, Mr. Carlo Vanoli, Mr. Virgilio Vecchio or Mr. Marco
Isaia.
15.13 Registration. Subject to Section 15.02 hereof, in the event that
registration of this Agreement in Italy becomes necessary in connection with any
legal or arbitration proceedings, any and all expenses, including without
limitation any registration taxes and fines arising out of such registration
shall be borne by that party against whom an arbitration award or a judgment by
a court in said legal proceedings is directed.
15.14 Bank Reimbursement Obligations. With 120 calendar days after the
Closing, Buyer shall or shall cause one or more of its Affiliates to cause each
of obligees (i.e., the financial institutions) to each of the Bank Reimbursement
Obligations to release each of Sorin Biomedica and its Affiliates as obligors to
each of the Bank Reimbursement Obligations.
15.15 Non-Competition. For a period commencing on the Closing Date and
terminating on the fifth anniversary thereof, Sorin Biomedica will not and will
not permit any of its subsidiaries for which it then has direct or indirect
voting control (other than a Non-Transferred NewCo) (collectively, the
"Covenanting Parties") to, directly or indirectly, engage in or acquire any
interest in any business or entity that engages in the in vitro biomedical
diagnostics business ("IVD") in Europe, North America or the Far East; provided,
that (i) none of the current activities of Sorin Biomedica or its Affiliates
shall be deemed to constitute engagement in such business (except for the
business to be conveyed to the NewCos hereunder), (ii) a Covenanting Party may
acquire a direct or indirect interest in any business or entity that engages in
IVD so long as the sales of IVD are less than 25 percent of the sales of the
business or entity purchased and so long as such Covenanting Party divests
itself of the IVD portion of its business within 12 (twelve) months of the
acquisition of such business or entity by such Covenanting Party, (iii) this
Section 15.15 is not intended to and shall not prohibit the Covenanting Parties,
to the extent it or they do so in connection with the sale of cardiovascular
products, from selling (including, marketing) any products which directly relate
to its existing cardiovascular business, however this clause (iii) shall not in
any manner permit the manufacturing, development or research by the Covenanting
Parties in the IVD business
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during such five year period and (iv) nothing herein shall be deemed to prevent
any Covenanting Party from acquiring through market purchases and owning, solely
as an investment, less than five percent (5%) in the aggregate of the equity
securities of any class of any issuer whose shares are publicly traded. Sorin
Biomedica agrees that the covenant provided for in this Section 15.15 is
reasonable and necessary in terms of time, activity and territory to protect
Buyer's interest as a buyer of the In Vitro Business as contemplated by this
Agreement. Without limiting Section 15.09, to the extent that the covenant
provided for in this Section 15.15 may later be deemed by a court to be too
broad to be enforced with respect to its duration or with respect to any
particular activity or geographic area, the court making such determination
shall have the power to reduce the duration or scope of the provision, and to
add or delete specific words or phrases to or from the provision. The provision
as modified shall then be enforced.
15.16 Conbiotec. Sorin Biomedica will withdraw and will cause Sorin Italy
and Caffaro to withdraw prior to Closing from Consortium CONBIOTEC in order to
enable NewCo Italy to acquire participation interests at nominal value of Sorin
Biomedica, Sorin Italy and Caffaro in Consortium CONBIOTEC, subject in all event
to CNR approval.
15.17 German Warehouse Insurance Proceeds. With reference to the costs
incurred by Sorin Germany for the setting up of a new warehouse which have been
capitalized and will be transferred to NewCo Germany as part of Exhibit 5, Sorin
Biomedica undertakes to transfer to Buyer any net proceeds it may receive from
the insurance company with respect to such costs, up to the amount which has
been capitalized and transferred to NewCo Germany. Sorin Biomedica shall
actively cooperate with Buyer in order to realize its rights on such proceeds,
it being understood that Buyer shall reimburse to it any costs previously
approved in this respect.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, this Agreement has been executed by the duly empowered
representatives of the parties hereto on the day and year first above written.
SORIN BIOMEDICA S.p.A. SIENNA BIOTECH INTERNATIONAL INC.
By:__________________________ By:__________________________
Title:_______________________ Title:_______________________
WABCO STANDARD TRANE B.V. AMERICAN STANDARD INC.
By:___________________________ By:__________________________
Title:________________________ Title:_______________________
European Agreement
Signature Page
<PAGE> 64
EXHIBIT 14
Calculation of Purchase Price Adjustments at Closing
(subject to further post-Closing adjustment pursuant to Article 13)
1.Lit. 280.000.000.000 (two hundred eighty billion) -- Purchase
Price; minus
2.Lit. (7.491.185.100) (seven billion four hundred ninety-one
million one hundred eighty-five thousand one
(estimated amount)** hundred) -- it is agreed that such deduction
is only an estimate and that the final
deduction at Closing shall be determined
based on the following formula:
AxBxC*
where A is USD 0.57 (i.e. USD 6.32 minus USD
5.75), B is the number of shares in the
Minnesota Corporation other than the shares
constituting the Sorin Shares and C is the
exchange rate USD: Lira calculated under
Section 4.01. The above estimate is based on
assumption that B is equal to 8,163,000 and
C is equal to 1,610. Such estimates shall be
updated on the Closing Date. The deduction
is conditioned on the consummation of the
Merger Agreement;(1) minus
3.Lit. (86.567.620.000) (eighty-six billion five hundred sixty seven
million six hundred twenty thousand) -- it
(estimated amount)** is agreed that such deduction is only an
estimate and that the final deduction at
Closing shall be determined based on the
following formula:
DxExC*
where D is USD 6.32, E is the Sorin Shares
(i.e., eight million five hundred seven
thousand seven hundred and seven (8,507,707)
shares) and C is the exchange rate USD: Lira
calculated under Section 4.01. The above
estimate shall be updated on the Closing.
The deduction is conditioned on the
consummation of the Merger Agreement; minus
4.Lit. [(26.700.000.000)] Retained Receivables as defined in Section
6.08;
(estimated amount)
5.Lit. 150.700.000.000 (one hundred fifty billion seven hundred
million) -- Estimated cash payment at
Closing for the shares of the NewCos by
Buyer to Sorin Biomedica, based on the above
estimates to be updated on Closing, and
subject to Section 4.04 and to post-Closing
adjustments according to Section 13 of the
Agreement; and
6.Lit. (11.641.194.900) (eleven billion six hundred forty-one
million one hundred ninety four thousand and
nine hundred) -- Estimated consideration for
the I.P. Rights referred to in Section 12.05
of the Agreement, subject to change as
provided in footnote 2 below, to be paid at
Closing(2).
1 The maximum purchase price adjustment reimbursable to Sorin Biomedica relating
to the net worth of the Minnesota Corporation pursuant to Article 13 shall be
the actual amount deducted at Closing as provided in paragraph 2 above.
2 Notwithstanding the other provisions of this Exhibit 14, it is agreed that, if
the amounts of deductions in paragraphs 2 and/or 3 results to be higher or lower
than the estimated amounts above, the adjustments to the amount in paragraphs 5
and 6 shall be done as follows: (A) in case of higher deductions, the amount in
6 allocated to the shares for the NewCos shall be decreased only after the
amount in 6 allocated to IP Rights has been reduced down to Lit. 1,000,000,0000
(under which level the amount in 6 shall not be further reduced); (B)
(continued...)
Exhibit 14 - Page 1
<PAGE> 65
* The Parties agree that the USD: Italian Lira Exchange rate to be
utilized on Closing for purposes of this Exhibit 14 [and Exhibit 10,
in order to determine any adjustment to the Purchase Price shall be
the exchange rate as reflected in The Wall Street Journal on the
business day prior to the Closing Date. The exchange rate of 1610 is
solely for the purposes of illustration.
** It is hereby further understood and agreed that, should the Merger
not be consummated to the extent contemplated by Section 8.06
hereof, the adjustment provided in Section 8.06 shall apply instead
of the two adjustments indicated above regarding the Minnesota
Corporation.
(continued...)
in case of lower deductions, the amount in 5 allocated to shares shall be
increased only after the amount in 6 allocated to IP Rights has been increased
up to Lit. 17,000,000,000 (above which level the amount in 6 shall not be
increased). It is also understood that the parties have contractually accepted
the "alea" deriving from any fluctuation of the USD:Lit exchange rate and the
mechanism of purchase price adjustments as indicated in the Agreement and in
this Exhibit 14.
Exhibit 14 - Page 2
<PAGE> 66
AMENDMENT NO. 1 TO
EUROPEAN ACQUISITION AGREEMENT
Amendment No. 1 To Acquisition Agreement (this "Amendment") by and among:
SORIN BIOMEDICA S.p.A., an Italian corporation with a registered office at
13040 Saluggia (VC), Italy represented by its legal representative Mr. Ezio
Garibaldi (hereafter called "Sorin Biomedica"), and
SIENNA BIOTECH INTERNATIONAL INC., a Delaware, U.S.A. corporation with an
office at 9115 Guilford Road, Suite 180, Columbia, Maryland 21046 represented by
its legal representative Mr. Benson I. Stein, WABCO STANDARD TRANE B.V., a
Netherlands corporation with a registered office at Jupiterstraat 254, 2132 HK
Hoofddorp, The Netherlands represented by its legal representative Mr. Benson I.
Stein (hereafter collectively called "Buyer"), and
AMERICAN STANDARD INC., a Delaware, U.S.A. corporation with an office at
One Centennial Avenue, Piscataway, P. O. Box 6820, Piscataway, New Jersey
08855-6820 U.S.A. represented by its legal representative Mr. Benson I. Stein
(hereafter called "ASI").
WITNESSETH:
WHEREAS, the above named parties have entered into an agreement dated as
of March 10, 1997 (the "Agreement") respecting the sale of the stock of NewCos
(as that term is defined in the Agreement) and the other matters provided for in
the Agreement, and the parties desire to enter into this Amendment.
AGREEMENT:
NOW, THEREFORE, the Parties hereby agree as follows:
1. Definitions; References. Capitalized terms used and not defined in this
Amendment and defined in the Agreement shall, unless the context otherwise
requires, have the meanings ascribed to such terms in the Agreement. Unless
otherwise defined, Section and Article references are references to Sections and
Articles in the Agreement.
2. Effective Date. This Amendment shall be and is effective simultaneously
with the Closing.
<PAGE> 67
3. Cash Payment at Closing. The parties agree that the cash payment at the
Closing to Sorin Biomedica is in the aggregate 166,172,000,000 Lit. and has been
determined in accordance with the mechanism described in Exhibit A hereto. The
parties acknowledge that such payment includes the payment of Lit.
10,612,000,000 as indicated in Paragraph 7 of Exhibit A.
4. Services Agreements and Related Matters. The parties agree to the
following: (a) the lease contemplated with respect to NewCo Germany, rather then
being a lease from NewCo Germany to an affiliate of Sorin Biomedica, instead
constitutes a sublease from Sorin Germany to NewCo Germany, and such sublease
has been executed; and (b) mutually agreeable service agreements with respect to
all the NewCos (except NewCo Brazil) have been executed as of June 1, 1997 and
same replace the corresponding service agreements that are attached to the
Agreement.
5. No Required Environmental Remediation. The parties agree that, based
upon the environmental report prepared by an outside consulting firm pursuant to
Section 6.06 of the Agreement, there is no environmental remediation or cleanup
that Sorin Biomedica is obligated to perform as contemplated in the definition
of "Sorin Environmental Obligation" (contained in Section 6.06 of the
Agreement).
6. Elimination of Escrow Agreement and Escrow; Entrance into Distribution
Agreement Respecting NewCo Brazil. The parties hereby agree as follows with
respect to (i) the elimination of the Escrow Agreement and escrow and (ii) Sorin
Brazil:
(a) The parties (i) confirm that the only Non-Transferred NewCo is
Sorin Brazil; and (ii) waive the execution and delivery of the Escrow Agreement
as contemplated by Section 4.04 and Article 12 of the Agreement. The parties
agree that the purchase price for Sorin Brazil of One Billion Lit. shall be paid
to Sorin Brazil through transfer of funds directly to Sorin Biomedica when the
transfer of the shares/quotas ("shares") of NewCo Brazil is made to Buyer. The
price shall be subject to adjustment after the transfer according to Section
13.05 of the Agreement, as amended by Section 6(b) below. The closing
certificate required by Section 12.02 shall refer to the Sorin Brazil Share
Transfer Date (herein defined) (and not to the June 30 Closing Date). The
conditions to the sale of the shares of NewCo Brazil to Buyer and Buyer's
purchase of same are the same conditions contained in the Agreement relating to
the sale of the various NewCos (to be applied to only Sorin Brazil and NewCo
Brazil) and such conditions shall have been satisfied as of the date that the
shares of NewCo Brazil are to be sold to Buyer, and neither the execution,
delivery, performance or termination of the Brazil Distribution Agreement
(herein defined), nor the updating of the representation and warranties as of
the date of transfer, shall in any manner whatsoever change the preceding
sentence. Buyer agrees that it shall not in any manner setoff against (including
in any other manner withhold) any portion of the purchase price for the shares
of Newco Brazil, whether or not
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there is any dispute of any kind between Buyer and Sorin Biomedica at the time
such payment is due. The provisions of this Section 6(a) shall be specifically
enforceable.
(b) The parties acknowledge that Sorin Brazil and NewCo Italy have
entered into a mutually agreeable distribution agreement with effect as of June
1, 1997 (the "Brazil Distribution Agreement"). The provisions of Articles 12 and
13 that require interest to be paid on escrowed funds to Sorin Biomedica in
respect of Sorin Brazil and provide for the profits of the in vitro diagnostic
operations of Sorin Brazil or NewCo Brazil for the period from the Closing to
the time in which the shares of NewCo Brazil are transferred to Buyer (the
"Sorin Brazil Share Transfer Date") to be transferred to Buyer or for Buyer to
economically bear the losses during such period shall be deemed inapplicable
(and, accordingly, Sorin Brazil shall, for its own account, retain the profits
and bear the responsibility of the losses of the operations of Sorin Brazil or
NewCo Brazil from the Closing through the Sorin Brazil Share Transfer Date), it
being therefore understood that after the closing of the sale of NewCo Brazil to
Buyer to the extent any such profits and losses have been transferred or accrued
in NewCo Brazil, such profits and losses shall effectively be taken into
consideration in determining the Net Invested Capital of NewCo Brazil at the
Sorin Brazil Share Transfer Date for the purposes of the purchase price
adjustment provided for in Section 13.05 of the Agreement (and for the purpose
of such purchase price adjustment, the Initial Net Invested Capital of NewCo
Brazil is 1,000,000,000 Lit.). The parties further agree that, notwithstanding
the provisions of Section 13.05(b), if the shares of NewCo Brazil are not
transferred to Buyer within 24 months after the Closing, the Brazil Distribution
Agreement shall terminate and they will have no obligation to negotiate or
replace it with a new distribution agreement. To the extent that the provisions
of Article 13 of the Agreement are inconsistent with the provisions of this
Section 6(b), the provisions of this Section 6(b) shall control.
7. Various Arrangements. The parties agree to and/or acknowledge the
following:
(a) As to government authorizations and the conditions contained in
Sections 10(b) and 10(d): (i) with respect to Autorizzazione allo stoccaggio in
azienda di rifiuti tossico nocivi autoprodotti (art. 16 DPR n.915 del
10/09/1982), Sorin Biomedica represents and warrants to Buyer that NewCo Italy
has a temporary waiver pursuant to which it is authorized to store toxic waste
up 10.000 liters (and it must discharge the waste when the limit is reached).
Buyer acknowledges that Sorin Biomedica has advised it that NewCo Italy did not
receive as of the Closing such Italian Authorization for storage of toxic waste;
(ii) with respect to the Autorizzazione n. 392 del Ministro delle Finanze a
beneficiare delle procedure semplificate di import/export D.L. 8/11/1990 n. 37)
the authorization will not be issued before the closing, but Sorin Biomedica
represents and warrants that NewCo Italy will be able to operate applying the
standard procedures; (iii) with respect to Certificato Prevenzione Incendi NewCo
Italy has not obtained this authorization, but Sorin Biomedica represents and
warrants that, in the absence of this certificate, NewCo Italy can operate under
the certificate covering
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all the companies in the area; (iv) Sorin Biomedica represents and warrants that
NewCo France has obtained a temporary operating permit which will allow NewCo
France to operate until it receives the final authorization and Buyer
acknowledges that Sorin Biomedica has advised it that a permanent operating
permit has not as of the Closing been issued to NewCo France; and (v) Buyer
acknowledges that Sorin Biomedica has advised it that the governmental
authorization respecting China has not been obtained. Buyer accepts the
foregoing provisions of this Section 7(a). The non-obtaining of the governmental
licenses and other approvals referred to in this Section 7(a) shall not
constitute a breach of the Agreement.
(b) Sorin Biomedica represents and warrants that since the execution
of the Agreement no Selling Party has, and no NewCo has, entered into any
agreement outside of the ordinary course of business or agreement which has had
individually or in the aggregate a Material Adverse Effect and there have been
no changes in employees that have had individually or in the aggregate a
Material Adverse Effect. The parties agree that based on such representations
and warranties of Sorin Biomedica that no updating of Schedules A and B to each
of Exhibits 1, 4, 5, 6, 7, 8 and 9 will be required. For the avoidance of doubt,
contractual obligations entered into in the ordinary course of business in June
by each of the NewCos (and from April 1 - June 30 respecting NewCo France) shall
be treated as if they were entered into prior to the transfer and/or
contribution of assets by the Selling Parties and Sorin Biomedica to each of the
NewCos.
(c) Exhibit C hereto contains an update of certain Schedules to the
Agreement. The matters referred to in Exhibit C shall be treated as if they were
included in revised Schedules to the Agreement as of the Closing Date.
(d) The equity of various NewCos (other than Newco Italy) is
apportioned as identified in Exhibit B.
(e) To the extent it may be required, the consents of British
Technology are hereby waived.
(f) To the extent any disclosure or statement contained or referred
to in this Section 7 (including without limitation in Exhibit C hereto)
qualifies or modifies the representations and warranties contained in the
Agreement or evidences that any such representations and warranties are not true
and correct in all material respects as of the Closing Date, such disclosures
and statements shall for the purposes of the Agreement and the closing
certificate delivered by Sorin Biomedica to Buyer at the Closing pursuant to
Section 12.02 constitute and be deemed to constitute disclosure of same to Buyer
pursuant to Section 8.04 of the Agreement (including that any notice
requirements contained in Section 15.05 respecting the matters described in this
Section 7 shall be deemed complied with).
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<PAGE> 70
8. Exchange Rate Calculations; Certain Other Adjustments. The parties
agree to and/or acknowledge the following:
(a) The parties acknowledge that, in connection with the exchange
rate calculations to be made for the purposes of determining the cash payment at
the Closing, such calculations have been based on the exchange rates published
in the Wall Street Journal edition dated June 25, 1997 (the "temporary exchange
rate"). The parties hereby agree that at the time in which the post-closing
purchase price adjustments are made pursuant to Section 13.03 of the Agreement,
a further adjustment shall be made to adjust for the difference between using
the temporary exchange rates and using the exchange rate provisions provided for
in the Agreement, including Section 4.01 of the Agreement and the first
paragraph on page 2 of Exhibit 14 of the Agreement (the "agreed to exchange
rate") and to the extent that (i) Buyer would had paid less cash to Sorin
Biomedica at the Closing had the agreed to exchange rate been used, Sorin
Biomedica shall pay Buyer such difference, and (ii) Sorin Biomedica would have
received more cash at the Closing had the agreed to exchange rate been used,
Buyer shall pay Sorin Biomedica such difference. The payment referred to in this
Subsection shall be made with interest from the date of Closing to the day of
payment at the rate provided for in Section 13.03(c) and allocated as it will be
agreed to by the parties at the moment of the post-Closing purchase price
adjustment pursuant to Article 13, taking into consideration the interest of the
Buyer to have an upward adjustment allocated to the price of the IP Rights to
the maximum extent permitted by the law. For the avoidance of doubt, it is also
understood that any payment which has been made or will have been made by Buyer
to Sorin Biomedica for the account of any Selling Party in accordance with this
Agreement shall be considered as having been made to such Selling Party which
will therefore have no further claim vis-a-vis Buyer in this respect.
(b) The eventual intercompany financial debt/credit on the Closing
Date (i) exclusively deriving from the month of June 1997 ordinary operations
(period April-June 1997 for NewCo France) and/or (ii) arising from or related to
the Contemplated Transactions will be settled by Buyer/Sorin Biomedica as
follows: (A) as to Lit. 10,612,000,000 of intercompany debt of NewCo Italy to
SNIA BPD, through payment by Buyer to Sorin Biomedica of such amount
simultaneously herewith according to item 7 of Exhibit A hereto; and (B) as to
the remaining amounts, at the time in which the post-closing purchase price
adjustments shall be made pursuant to Section 13.03 of the Agreement. Any such
amount shall be audited by Deloitte & Touche if one of the parties so requests.
Such payment pursuant to clause (B) shall be made with interest from the Closing
Date to the day of payment, at the rate provided for in Section 13.03(c). For
the avoidance of doubt, profits and losses of NewCos subsequent to the
contributions and/or transfers by the Selling Parties to each of the NewCos as
of June 1, 1997 (NewCo France as of April 1, 1997) will be taken into account
when determining the Net Invested Capital contemplated by Article 13. The net
income/loss after tax for the month of June 1997 (April-June 1997 for France)
will be audited by Deloitte & Touche.
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9. Other Arrangements. The parties agree to and/or acknowledge the
following:
(a) Sorin Biomedica hereby represents and warrants to ASI that it
has caused Biofin to execute a document terminating Biofin's Minnesota
Contingent Rights and the Minnesota Warrant. ASI hereby represents and warrants
to Sorin Biomedica that, to the extent not previously done, it will immediately
cause Incstar Corporation ("Incstar") to execute a document terminating any
rights Incstar may have under a credit line with Fiat or its affiliates. The
parties acknowledge and agree that each such document is effective as of the
filing of the Articles of Merger with the Minnesota Secretary of State.
(b) ASI represents and warrants to Sorin Biomedica that, with
respect to Section 10(h) of the Agreement (i) the Articles of Merger
contemplated by Section 1.5 of the Merger Agreement have been filed with the
Minnesota Secretary of State and became effective at the time of filing and,
accordingly, all closing conditions under the Merger Agreement have been
satisfied and the Merger has become effective and (ii) ASI has provided to the
Exchange Agent an amount equal to the Merger Consideration (as such term is
defined in the Merger Agreement) for all outstanding Incstar shares, except with
respect to dissenting shares.
(c) Additional land having a Net Invested Capital of 100,000,000
Lit. has been transferred pursuant to a deed of transfer to NewCo Italy as of
June 1, 1997 that is in addition to the land originally contemplated by the
parties to be conveyed, and, accordingly, the parties confirm and agree that
such 100,000,000 Lit. shall be included in the Net Invested Capital for the
purpose of Article 13 of the Agreement.
(d) The parties have determined that it is unnecessary prior to the
Closing to allocate the purchase price resulting from any potential purchase
price adjustment arising out of Article 13.
(e) The parties agree that the Exhibit attached hereto as Exhibit D
replaces in all respects the Exhibit 41 that was attached to the Agreement, and
the Exhibit 41 that is attached to the Agreement is deemed to be void in all
respects. The parties further agree that any bank reimbursement obligations to
the extent related to the In Vitro Business entered into the ordinary course of
business by any of NewCo Italy, Sorin Biomedica or any other NewCo in June, 1997
shall be deemed to be a Bank Reimbursement Obligation.
(f) ASI hereby confirms that it has no objection to the fact that
contributions and transfers of the In Vitro Business were made to the respective
NewCos (other than to NewCo Brazil) at a time prior to the time which was
immediately prior to the Closing.
(g) The parties have executed a mutually satisfactory Transition
Services Agreement.
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<PAGE> 72
(h) The parties agree that the transfer of computer hardware and
software contemplated in Section 13.05(c) of the Agreement has been made
effective as of June 30, 1998 rather then January 1, 1998.
(i) The parties agree that Buyer shall pay to Sorin Biomedica the
appraisal fees and expenses for the Italian appraiser as required by Section
15.01 of the Agreement and the Transfer Taxes pursuant to Section 15.02 of the
Agreement at the time in which the post-closing purchase price adjustments are
paid pursuant to Section 13.03(c) upon presentation of reasonable documentation
evidencing the amount due (provided the parties further confirm and agree that
such payment regarding Transfer Taxes shall not be deemed to and shall not
reduce or otherwise affect the obligations of Buyer under Section 15.02
respecting Transfer Taxes, including, without limitation, Section 15.02(c)).
(j) Sorin Biomedica hereby undertakes that it will cause Sorin Italy
and Caffaro S.p.A. to withdraw from Consortium Conbiotech prior to September 30,
1997 with effect as of December 31, 1997. Sorin Biomedica agrees not to withdraw
from Consortium Conbiotech earlier than one year from the date hereof. The
parties further agree that the payments required pursuant to Section 15.16 re:
Conbiotech are hereby eliminated. The foregoing provisions supersede any
inconsistent provisions of Section 15.16.
(k) Buyer agrees that on June 30, 1997 it will cause NewCos not to
take any actions outside the ordinary course of business which could impact on
the purchase price adjustment provided for in Article 13. Sorin Biomedica agrees
that, pending registration of the transfer of the shares of NewCo Italy to Buyer
in the Ledger's Book of NewCo Italy, it will cause Sorin Italy and Sorin
Biomedica Cardio S.p.A. not to take any actions in their capacity as registered
shareholders of NewCo Italy except to the extent required to complete such
registration.
(l) In case of conflict between the terms of the Agreement, as
amended by this Amendment, and those contained in the local country stock
purchase agreements being delivered at the Closing, the terms of the Agreement,
as amended hereby, shall prevail. Without limiting the generality of the
preceding sentence, the provisions in the local country stock purchase
agreements respecting the assignment of all rights to undistributed profits and
economic rights and any similar provisions and payments regarding taxes and
expenses are not intended to and do not supersede, amend or otherwise modify the
provisions of Article 13 or any other provisions of the Agreement.
(m) Notwithstanding the provisions of Section 12.06, Buyer confirms
that the following resignations of Directors are not required: Messers.
Delaville and Crivelli of NewCo France, Mr. Zieboldt of NewCo Germany, Messers.
Crivelli and Lammens of NewCo Belgium and the current directors except for Mr.
Luis Mendivil of NewCo Spain.
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<PAGE> 73
(n) ASI confirms Sorin Biomedica has delievered to ASI a document
terminating the original Warrant Certificate issued to Biofin by Incstar.
(o) This Amendment 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.
(p) The parties confirm that, except for the Confidentiality
Agreement, the Agreement, as amended by this Amendment, supersedes all prior
agreements among the parties with respect to its subject matter and constitutes
(along with documents referred to in the Agreement and this Amendment) a
complete and exclusive statement of the terms of the agreement among the parties
with respect to its subject matter. The Exhibits hereto are an integral part of
this Amendment. Neither the Agreement nor this Amendment may be amended except
by a written agreement executed by the party to be charged with the amendment.
10. Governing Laws; Controversies. The provisions of Section 15.10 of the
Agreement shall apply in all respects to this Amendment.
11. Guarantee. ASI hereby consents to this Amendment and agrees that (a)
this Amendment shall not reduce or otherwise impair or affect its obligations
under Section 15.04 of the Agreement, and (b) Buyer's obligations under the
Agreement mean the obligations thereunder, as amended by this Amendment.
12. Limited Amendment. Each of the parties hereto agree that all of the
provisions of the Agreement, as amended by this Amendment, remain in full force
and effect in all respects, and, except to the extent expressly amended hereby,
the Agreement shall remain unamended.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK. SIGNATURE
PAGE FOLLOWS.]
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<PAGE> 74
IN WITNESS WHEREOF, this Amendment has been executed by the duly empowered
representatives of the parties hereto on the day and year first above written.
SORIN BIOMEDICA S.p.A. SIENNA BIOTECH INTERNATIONAL INC.
By:__________________________ By:__________________________
Title:_______________________ Title:_______________________
WABCO STANDARD TRANE B.V. AMERICAN STANDARD INC.
By:__________________________ By:_________________________
Title:_______________________ Title:_______________________
European Agreement - Amendment No. 1 Signature Page
Exhibit A Cash Calculation
Exhibit B Apportionment of Equity
Exhibit C Updating of Schedules
Exhibit D Revised Exhibit 41
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<PAGE> 75
EXHIBIT A
Calculation of Cash Purchase Price at Closing(1)
<TABLE>
<S> <C>
1. Lit. 280,000,000,000 (two hundred eighty billion) -- Purchase Price; minus
2. Lit. 7,693,000,000 (seven billion six hundred ninety three million) -- such deduction is
based on the following formula:
AxBxC*
where A is USD 0.57 (i.e. USD 6.32 minus USD
5.75), B is the number of shares in the Minnesota
Corporation other than the shares constituting the
Sorin Shares (i.e., 7,997,750 shares) and C is the
exchange rate USD: Lira of 1,687.5 calculated
under Section 8 of Amendment No. 1(2) minus
3. Lit. 90,735,000,000 (ninety billion seven hundred thirty five million) -- it has been
determined based on the following formula:
DxExC*
where D is USD 6.32, E is the Sorin Shares (i.e.,
eight million five hundred seven thousand seven
hundred and seven (8,507,707) shares) and C is the
exchange rate USD: Lira of 1,687.5 calculated
under Section 8 of Amendment No. 1; minus
4. Lit. (14,400,000,000) Retained Receivables as defined in Section 6.08; minus
4A. Lit. (1,000,000,000) Payment deferred re: NewCo Brazil pursuant to Section 6 of Amt. No. 1
5. Lit. 148,840,000,000 (one hundred forty eight billion eight hundred forty million) -- Cash
payment at Closing for the shares of the NewCos by Buyer to Sorin
Biomedica;
6. Lit. 6,720,000,000 (six billion seven hundred twenty million) -- Consideration for the
I.P. Rights referred to in Section 12.05 of the Agreement.
7. Lit. 10,612,000,000 Cash payment to be allocated as partial repayment of current existing
intercompany financial debt due by NewCo Italy to Snia B.p.D.
and/or its affiliates
</TABLE>
- --------
1 The fact that temporary exchange rates are being used in this
calculation of the cash purchase price at the Closing shall not alter in any
manner the provisions of Section 8(a) of this Amendment No. 1 requiring an
adjustment after the Closing regarding the exchange rates.
2 The maximum purchase price adjustment reimbursable to Sorin Biomedica
relating to the net worth of the Minnesota Corporation pursuant to Article 13
shall be the amount deducted at Closing as provided in paragraph 2 above.
<PAGE> 76
EXHIBIT B
Apportionment of Equity
[The Exhibit previously provided will be attached]
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<PAGE> 77
EXHIBIT C
[The Exhibit previously provided and attachments thereto will be attached.]
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<PAGE> 78
EXHIBIT D
Revise Exhibit 41
[An Exhibit will be attached]
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<PAGE> 1
Exhibit (99)
[AMERICAN STANDARD COMPANIES LETTERHEAD]
NEWS RELEASE
FOR IMMEDIATE RELEASE
AMERICAN STANDARD COMPANIES INC. COMPLETES ACQUISITION
OF MEDICAL DIAGNOSTICS BUSINESSES
Piscataway, NJ -- June 30, 1997 -- American Standard Companies Inc.
(NYSE:ASD) today announced the closing of the purchase of the European medical
diagnostics business of Sorin Biomedica S.p.A., an affiliate of the Fiat Group.
The Company also announced completion of the merger of its wholly-owned
subsidiary with INCSTAR Corporation (NASDAQ:ISTR), a medical diagnostics
company based in Stillwater, MN, pursuant to which holders of INCSTAR common
shares will receive $6.32 per share in cash and INCSTAR has become a
wholly-owned indirect subsidiary of American Standard. Sorin and INCSTAR
develop and market test reagents for clinical diagnostics and medical research
and in 1996 had annual consolidated sales related to diagnostics of
approximately $120 million. The acquired businesses, as previously announced on
January 24th, are part of a new Medical Systems Group formed by American
Standard that also includes two medical diagnostic product companies that
American Standard has been developing during the last several years. Sienna
Biotech Inc. and Alimenterics Inc.
The aggregate cost of the Sorin acquisition and INCSTAR merger is
approximately $210 million and has been funded from the Company's bank credit
facilities.
American Standard is the global, diversified manufacturer of Trane(R)
and American Standard(R) air conditioning products, American Standard(R), Ideal
Standard(R), Standard(R) and Porcher(R) plumbing products, WABCO(R) commercial
and utility vehicle braking and control systems and LARA(TM) and Copalis(TM)
medical diagnostic systems.
For Further Information, Contact:
Phil Bradtmiller
(732) 980-6038
The latest news release and corporate information can be heard on
1-888-ASD-NEWS. Additional information on American Standard is available on the
Company's World Wide Web site http: www.americanstandard.com
