Amendment No. 2 to Form 10

As filed with the Securities and Exchange Commission on June 1, 2015

File No. 001- 36905

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Amendment No. 2

to

Form 10

 

 

General Form for Registration of Securities

Pursuant to Section 12(b) or (g) of

The Securities Exchange Act of 1934

 

 

SeaSpine Holdings Corporation

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   47-3251758
(State or other jurisdiction of
incorporation or organization)
  (I.R.S. Employer
Identification Number)
2302 La Mirada Drive,
Vista, California
  92081
(Address of principal executive offices)   (Zip Code)

(760) 727-8399

(Registrant’s telephone number, including area code)

 

 

Securities to be registered pursuant to Section 12(b) of the Act:

 

Title of each class
to be so registered

 

Name of each exchange on
which each class is to be registered

Common Stock, par value $0.01 per share   The NASDAQ Stock Market LLC

Securities to be registered pursuant to Section 12(g) of the Act: None

 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer   ¨    Accelerated filer   ¨
Non-accelerated filer   x    Smaller reporting company   ¨

 

 

 


INFORMATION INCLUDED IN INFORMATION STATEMENT

AND INCORPORATED BY REFERENCE IN FORM 10

CROSS-REFERENCE SHEET BETWEEN INFORMATION STATEMENT AND ITEMS OF FORM 10

This Registration Statement on Form 10 (“Form 10”) incorporates by reference information contained in the Information Statement filed as Exhibit 99.1 hereto (the “Information Statement”). The cross-reference table below identifies where the items required by Form 10 can be found in the Information Statement.

 

Item No.    Item Caption   

Location in Information Statement

1.    Business    “Information Statement Summary,” “Risk Factors,” “Business” and “Where You Can Find More Information”
1A.    Risk Factors    “Risk Factors” and “Special Note Regarding Forward-Looking Statements”
2.    Financial Information    “Information Statement Summary—Summary Historical Combined Financial Data,” “Selected Historical Combined Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
3.    Properties    “Business—Facilities”
4.    Security Ownership of Certain
Beneficial Owners and
Management
   “Security Ownership of Certain Beneficial Owners and Management”
5.    Directors and Executive Officers    “Management”
6.    Executive Compensation    “Executive Compensation”
7.    Certain Relationships and Related
Transactions, and Director
Independence
   “Risk Factors,” “Management” and “Certain Relationships and Related Party Transactions”
8.    Legal Proceedings    “Business—Legal Proceedings”
9.    Market Price of and Dividends on
the Registrant’s Common Equity
and Related Stockholder Matters
   “Information Statement Summary,” “Risk Factors,” “The Spin-Off,” “Dividend Policy” and “Description of SeaSpine Capital Stock”
10.    Recent Sales of Unregistered
Securities
   “Recent Sales of Unregistered Securities”
11.    Description of Registrant’s
Securities to be Registered
   “Description of SeaSpine Capital Stock”
12.    Indemnification of Directors and
Officers
   “Indemnification and Limitation of Liability of Directors and Officers” and “Management—Indemnification of Officers and Directors”
13.    Financial Statements and
Supplementary Data
   “Summary—Summary Historical Combined Financial Data,” “Selected Historical Combined Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Index to Financial Statements” including the Financial Statements
14.    Changes in and Disagreements
with Accountants on Accounting
and Financial Disclosure
   Not Applicable


ITEM 15. Financial Statements and Exhibits

 

(a) Financial Statements

See “Index to Financial Statements” beginning on page F-1 of the Information Statement.

 

(b) Exhibits

The following documents are filed as exhibits hereto:

 

Exhibit Index

 

Exhibit Description

  2.1   Form of Separation and Distribution Agreement between Integra LifeSciences Holdings Corporation and SeaSpine Holdings Corporation.
  3.1   Form of Amended and Restated Certificate of Incorporation of SeaSpine Holdings Corporation.
  3.2   Form of Amended and Restated Bylaws of SeaSpine Holdings Corporation.
  4.1   Form of Common Stock Certificate of SeaSpine Holdings Corporation.
10.1   Form of Transition Services Agreement between Integra LifeSciences Holdings Corporation and SeaSpine Holdings Corporation.
10.2   Form of Tax Matters Agreement between Integra LifeSciences Holdings Corporation and SeaSpine Holdings Corporation.
10.3   Form of Employee Matters Agreement between Integra LifeSciences Holdings Corporation and SeaSpine Holdings Corporation.
10.4   Form of Microfibrillar Collagen Supply Agreement between Integra LifeSciences Holdings Corporation and SeaSpine Holdings Corporation.
10.5   Form of Collagen Ceramic Supply Agreement between Integra LifeSciences Holdings Corporation and SeaSpine Holdings Corporation.
10.6   Form of Demineralized Bone Matrix and Collagen Ceramic Products Supply Agreement between Integra LifeSciences Holdings Corporation and SeaSpine Holdings Corporation.
10.7   Form of Indemnification Agreement entered into between SeaSpine Holdings Corporation and each of its directors and executive officers.
10.8   Form of SeaSpine Holdings Corporation 2015 Incentive Award Plan.
10.9   Form of SeaSpine Holdings Corporation 2015 Incentive Award Plan Stock Option Agreement.
10.10   Form of SeaSpine Holdings Corporation 2015 Employee Stock Purchase Plan.
10.11   Form of Non-Employee Director Compensation Program.
10.12   Employment Agreement, by and between SeaSpine Holdings Corporation, SeaSpine Orthopedics Corporation and Keith Valentine, dated April 28, 2015.
10.13   John Bostjancic Letter Agreement, dated March 30, 2015.
10.14   John Winge Letter Agreement, dated January 22, 2015.
10.15   Amended and Restated Lease between Salma Jason Monica Limited Partnership and SeaSpine, Inc., dated as of May 23, 2011 for property at 2384 La Miranda, Vista, CA.
10.16   Amended and Restated Lease between Salma Jason Monica Limited Partnership and SeaSpine, Inc., dated as of May 23, 2011 for property at 2302 La Miranda, Vista, CA
10.17   Amended and Restated Lease between Monarch RRC Properties, LLC (assignee of original landlord, New Goodyear LTD) and IsoTis Orthobiologics, Inc., dated as of February 23, 2006, for property at 2 Goodyear, Irvine, CA (the “Irvine Industrial Real Estate Lease”).


Exhibit Index

 

Exhibit Description

10.18   Amendment No. 1 to Irvine Industrial Real Estate Lease, dated as of May 26, 2011.
10.19   Amendment No. 2 to Irvine Industrial Real Estate Lease, dated as of May 14, 2013.
21.1   List of subsidiaries of SeaSpine Holdings Corporation.
99.1   Preliminary Information Statement of SeaSpine Holdings Corporation, subject to completion, dated June 1, 2015.


SIGNATURE

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

 

SeaSpine Holdings Corporation
By:

/s/ John J. Bostjancic

Name: John J. Bostjancic
Title: Chief Financial Officer

Dated: June 1, 2015

EX-2.1

Exhibit 2.1

 

SEPARATION AND DISTRIBUTION AGREEMENT

BY AND BETWEEN

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

AND

SEASPINE HOLDINGS CORPORATION

DATED AS OF [        ], 2015


TABLE OF CONTENTS

 

         Page  

ARTICLE I.

DEFINITIONS

 

  

  

Section 1.1  

General

     2   
Section 1.2  

Reference; Interpretation

     9   
Section 1.3  

Tax Matters

     9   

ARTICLE II.

THE SEPARATION

  

  

Section 2.1  

Restructuring

     10   
Section 2.2  

Transfer of SeaSpine Assets and SeaSpine Business; Assumption of SeaSpine Liabilities

     10   
Section 2.3  

Third-Party Consents and Government Approvals

     11   
Section 2.4  

Further Actions

     11   
Section 2.5  

Restructuring Documents

     12   
Section 2.6  

Certain Licenses and Permits

     12   

ARTICLE III.

DISTRIBUTION AND CERTAIN COVENANTS

  

  

Section 3.1  

Distribution

     12   
Section 3.2  

Integra Determinations

     12   
Section 3.3  

Charter; Bylaws

     13   
Section 3.4  

Directors

     13   
Section 3.5  

Election of Officers

     13   
Section 3.6  

State Securities Laws

     13   
Section 3.7  

Listing Application; Notice to Nasdaq

     13   
Section 3.8  

Removal of Certain Guarantees; Releases from Liabilities

     13   
Section 3.9  

Corporate Names; Trademarks

     15   
Section 3.10  

Ancillary Agreements

     15   
Section 3.11  

Acknowledgment by SeaSpine

     15   
Section 3.12  

Release

     15   
Section 3.13  

Discharge of Liabilities

     17   
Section 3.14  

Administration of Accounts

     17   
Section 3.15  

Further Assurances

     18   

ARTICLE IV.

CONDITIONS PRECEDENT

  

  

Section 4.1  

Conditions Precedent to Consummation of the Transactions

     18   
Section 4.2  

Right Not to Close

     19   

 

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ARTICLE V.

INDEMNIFICATION

  

  

Section 5.1

Indemnification by Integra

  20   
Section 5.2

Indemnification by SeaSpine

  20   
Section 5.3

Procedures for Indemnification

  20   
Section 5.4

Indemnification Payments

  22   
Section 5.5

Survival of Indemnities

  23   
Section 5.6

Limitation on Liability

  23   

ARTICLE VI.

LITIGATION MATTERS

  

  

Section 6.1

Case Allocation

  24   

ARTICLE VII.

ACCESS TO INFORMATION

  

  

Section 7.1

Provision of Corporate Records

  26   
Section 7.2

Access to Information

  27   
Section 7.3

Witnesses; Documents and Cooperation

  27   
Section 7.4

Confidentiality

  28   
Section 7.5

Privileged Matters

  29   
Section 7.6

Ownership of Information

  30   
Section 7.7

Cost of Providing Records and Information

  31   
Section 7.8

Retention of Records

  31   
Section 7.9

Other Agreements Providing for Exchange of Information

  31   
Section 7.10

Policies and Best Practices

  31   
Section 7.11

Compliance with Laws and Agreements

  31   

ARTICLE VIII.

DISPUTE RESOLUTION

  

  

Section 8.1

Agreement Disputes

  31   
Section 8.2

Negotiation

  32   
Section 8.3

Arbitration

  32   
Section 8.4

Choice of Law, Compliance, Enforcement, Costs

  32   
Section 8.5

Confidentiality of Proceedings

  32   
Section 8.6

Continuity of Service and Performance

  33   

ARTICLE IX.

INSURANCE

  

  

Section 9.1

General

  33   
Section 9.2

Combined Policies.

  33   
Section 9.3

D&O Policies

  33   
Section 9.4

Pre-Distribution Claims

  34   
Section 9.5

Retentions/Deductibles

  34   

 

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Section 9.6

Unearned Premium

  35   
Section 9.7

Expirations and Renewals

  35   
Section 9.8

Copies of Policies

  35   

ARTICLE X.

MISCELLANEOUS

  

  

Section 10.1

Complete Agreement; Construction

  35   
Section 10.2

Ancillary Agreements

  36   
Section 10.3

Counterparts

  36   
Section 10.4

Survival of Agreements

  36   
Section 10.5

Distribution Expenses

  36   
Section 10.6

Notices

  36   
Section 10.7

Waivers

  37   
Section 10.8

Amendments

  37   
Section 10.9

Assignment

  37   
Section 10.10

Successors and Assigns

  37   
Section 10.11

Termination

  37   
Section 10.12

Subsidiaries

  37   
Section 10.13

Third-Party Beneficiaries

  37   
Section 10.14

Title and Headings

  38   
Section 10.15

Schedules

  38   
Section 10.16

Governing Law

  38   
Section 10.17

Waiver of Jury Trial

  38   
Section 10.18

Specific Performance

  38   
Section 10.19

Severability

  38   

 

iii


SEPARATION AND DISTRIBUTION AGREEMENT

This Separation and Distribution Agreement (this “Agreement”) is dated as of [            ], 2015, by and between Integra LifeSciences Holdings Corporation, a Delaware corporation (“Integra”), and SeaSpine Holdings Corporation, a Delaware corporation and an indirect, wholly owned subsidiary of Integra (“SeaSpine” and, together with Integra, the “Parties”).

RECITALS:

WHEREAS, SeaSpine is and prior to the Distribution will be an indirect and/or direct, wholly owned subsidiary of Integra;

WHEREAS, the Board of Directors of Integra has determined that it is in the best interests of Integra and its stockholders to separate the business of SeaSpine and the SeaSpine Subsidiaries (the “Spin-Off”), all as more fully described in the Registration Statement, from Integra’s other businesses on the terms and conditions set forth herein;

WHEREAS, the Board of Directors of Integra has authorized the distribution to the holders of the issued and outstanding shares of common stock, par value $.01 per share, of Integra (the “Integra Common Stock”) as of the Distribution Record Date, by means of a dividend, of all of the issued and outstanding shares of common stock, par value $0.01 per share, of SeaSpine (each such share is individually referred to as a “SeaSpine Share” and collectively referred to as the “SeaSpine Common Stock”), respectively, on the basis of one (1) SeaSpine Share for every [            ] shares of Integra Common Stock (the “Distribution”);

WHEREAS, the Boards of Directors of Integra and SeaSpine have each determined that the Distribution, the other transactions contemplated by this Agreement and the Ancillary Agreements (the “Transactions”) are in the best interests of their respective companies and stockholders, as applicable, and have approved this Agreement and each of the Ancillary Agreements;

WHEREAS, the Parties have determined to set forth the principal corporate and other transactions required to effect the Distribution and to set forth other agreements that will govern certain other matters prior to and following the completion of the Distribution;

WHEREAS, the Parties intend that (i) the Internal Distribution will constitute a reorganization under Sections 355 and 368(a)(1)(D) of the Code and (ii) the Cash Contribution, together with the Distribution, will constitute a reorganization under Sections 355 and 368(a)(1)(D) of the Code, and this Agreement will be, and is hereby adopted as, a plan of reorganization under Section 368 of the Code; and

WHEREAS, the Restructuring and Distribution are part of a plan to separate the SeaSpine Business from the Integra Business.

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, the Parties hereby agree as follows:

 

1


ARTICLE I.

DEFINITIONS

Section 1.1 General. Unless otherwise defined herein or unless the context otherwise requires, as used in this Agreement, the following terms shall have the following meanings:

Action” shall mean any demand, action, suit, arbitration, inquiry, proceeding or investigation, audit, counter suit, hearing or litigation of any nature whether administrative, civil, criminal, regulatory or otherwise, by or before any Governmental Authority or any arbitration or mediation tribunal.

Affiliate” shall mean, when used with respect to any specified Person, a Person that directly or indirectly controls, is controlled by, or is under common control with such specified Person. As used herein, “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by contract or otherwise. Unless explicitly provided herein to the contrary, for purposes of this Agreement, Integra shall be deemed not to be an Affiliate of SeaSpine or any of its Subsidiaries, and SeaSpine shall be deemed not to be an Affiliate of Integra or any of its Subsidiaries (other than SeaSpine and the SeaSpine Subsidiaries).

Agent” shall have the meaning set forth in Section 3.1(a).

Agreement” shall have the meaning set forth in the preamble to this Agreement.

Agreement Disputes” shall have the meaning set forth in Section 8.1.

Ancillary Agreements” shall mean all of the written agreements, instruments, understandings, assignments or other arrangements (other than this Agreement) entered into by the Parties or by or among any of the Integra Entities, on the one hand, and any of the SeaSpine Entities, on the other hand, in connection with the transactions contemplated hereby, including the Transition Services Agreement, the Employee Matters Agreement, the Tax Matters Agreement, and the Supply Agreements.

Applicable Rate” shall mean the rate of interest per annum announced from time to time by the Wall Street Journal as the “prime rate” at large U.S. money center banks.

Asset” means all rights, properties or other assets, whether real, personal or mixed, tangible or intangible, of any kind, nature and description, whether accrued, contingent or otherwise, and wheresoever situated and whether or not carried or reflected, or required to be carried or reflected, on the books of any Person.

Business Day” shall mean any day other than a Saturday, Sunday or a day on which commercial banking institutions located in the City of New York are authorized or obligated by Law or executive order to close.

Cash Contribution” shall have the meaning set forth in Schedule 1.1.

 

2


Claims Made Policies” shall have the meaning set forth in Section 9.2(b).

Code” means the Internal Revenue Code of 1986, as amended.

Combined Policies” shall have the meaning set forth in Section 9.2(b).

Contract” means any written, oral, implied or other contract, agreement, covenant, lease, license, guaranty, indemnity, representation, warranty, assignment, sales order, purchase order, power of attorney, instrument or other commitment, assurance, undertaking or arrangement that is binding on any Person or entity or any part of its property under applicable Law.

Contribution” shall have the meaning set forth in Schedule 1.1.

Distribution” shall have the meaning set forth in the recitals to this Agreement.

Distribution Date” shall mean such date as may be determined by the Board of Directors of Integra or a committee of such Board of Directors, as the date as of which the Distribution shall be effected.

Distribution Record Date” shall mean such date as may be determined by the Board of Directors of Integra or a committee of such Board of Directors, as the record date for the Distribution.

Effective Time” shall mean 12:01 a.m., New York City time, on the Distribution Date.

Employee Matters Agreement” shall mean the Employee Matters Agreement by and between Integra and SeaSpine, which agreement shall be entered into prior to or on the Distribution Date.

Entities” shall mean, as applicable, the SeaSpine Entities and/or the Integra Entities (each an “Entity”).

Environmental Laws” shall mean any and all federal, state, local and foreign statutes, laws, regulations, ordinances, rules, principles of common law, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions (including without limitation the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601, et. seq.), whether now or hereafter in existence, relating to the environment, natural resources, human health or safety, endangered or threatened species of fish, wildlife and plants, or to emissions, discharges or releases of pollutants, contaminants, petroleum or petroleum products, chemicals or industrial, toxic or hazardous substances or wastes into the environment (including without limitation indoor or outdoor air, surface water, groundwater and surface or subsurface soils), or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, petroleum or petroleum products, chemicals or industrial, toxic or hazardous substances or wastes or the investigation, cleanup or other remediation thereof.

Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder.

 

3


Governmental Authority” shall mean any federal, state, local, foreign or international court, government, department, commission, board, bureau, agency, official, securities exchange (including the Nasdaq) or other regulatory, administrative or governmental authority.

Governmental Authorization” shall mean any authorization, approval, consent, license, certificate or permit issued, granted, or otherwise made available under the authority of any court, governmental or regulatory authority, agency, stock exchange, commission or body.

Indemnifying Party” shall have the meaning set forth in Section 5.3(a).

Indemnitee” shall have the meaning set forth in Section 5.3(a).

Information Statement” means the information statement, attached as an exhibit to the Registration Statement, and any related documentation to be provided to holders of Integra Common Stock in connection with the Distribution, including any amendments or supplements thereto.

Insurance Policy” means any insurance policies and insurance Contracts, including, without limitation, general liability, property and casualty, workers’ compensation, automobile, marine, directors & officers liability, errors and omissions, employee dishonesty and fiduciary liability policies, whether, in each case, in the nature of primary, excess, umbrella or self-insurance overage, together with all rights, benefits and privileges thereunder.

Integra” shall have the meaning set forth in the preamble to this Agreement.

Integra Action” shall mean any current or future Action relating primarily to the Integra Business in which one or more SeaSpine Entities is a defendant or the party against whom any claim or investigation is directed, but excluding any Joint Action.

Integra Asset” shall mean (a) all Assets owned by the Integra Entities, (b) all Assets owned by the SeaSpine Entities that are used primarily in, or that primarily relate to, the Integra Business and (c) all licenses, permits and authorizations listed on Schedule 2.6(a).

Integra Business” shall mean the medical technology business conducted by the Integra Entities, including the specialty surgical solutions and orthopedic and tissue technologies business, and any other business (other than the SeaSpine Business) directly conducted by any Integra Entity as of or prior to the date of this Agreement.

Integra Common Stock” shall have the meaning set forth in the recitals to this Agreement.

Integra Entities” means Integra and each Integra Subsidiary (each, an “Integra Entity”).

Integra Indemnitees” shall mean:

(a) Integra and each Affiliate thereof after giving effect to the Distribution; and

 

4


(b) each of the respective Representatives of any of the entities described in the immediately preceding clause (a) and each of the heirs, executors, successors and assigns of any of such Representatives, except in the case of clauses (a) and (b), the SeaSpine Indemnitees; provided, however, that a Person who was a Representative of Integra or an Affiliate thereof may be an Integra Indemnitee in that capacity notwithstanding that such Person may also be a SeaSpine Indemnitee.

Integra LCs” shall have the meaning set forth in Section 3.8(e).

Integra Liabilities” shall mean:

(a) any and all Liabilities that are expressly contemplated by this Agreement or any Ancillary Agreement (or the schedules hereto or thereto) as Liabilities to be assumed by Integra and all Liabilities of any of the Integra Entities under this Agreement or any of the Ancillary Agreements; and

(b) all Liabilities (other than Liabilities that are SeaSpine Liabilities), if and to the extent relating to, arising out of or resulting from:

(i) the ownership or operation of the Integra Business (including any discontinued business or any business which has been sold or transferred (for the avoidance of doubt, other than the SeaSpine Business)) as conducted at any time prior to, on or after the Distribution Date; or

(ii) the ownership or operation of any business conducted by Integra or any Integra Subsidiary at any time prior to, on or after the Distribution Date.

(c) Notwithstanding the foregoing, the Integra Liabilities shall not include:

(i) any Liabilities that are expressly contemplated by this Agreement or any Ancillary Agreement (or the schedules hereto or thereto) as Liabilities of SeaSpine or any SeaSpine Entity (including, for the avoidance of doubt, SeaSpine Liabilities); or

(ii) any Liabilities related or attributable to, or arising in connection with, Taxes or Tax Returns, which shall be exclusively governed by the Tax Matters Agreement.

Integra Marks” shall include all names, logos or trademarks of Integra or its Affiliates (other than SeaSpine), all intellectual property rights therein and all trademarks and logos comprised of or derivative of any of the foregoing.

Integra Retained Assets” shall mean (a) all Assets which are held at the Effective Time by Integra or any of the Integra Subsidiaries, other than any SeaSpine Assets and (b) all Assets owned by the SeaSpine Entities that are used primarily in, or that primarily relate to, the Integra Business.

Integra Subsidiaries” shall mean (a) each of the Persons listed on Annex 1.1(a)(i) hereto, (b) except as otherwise set forth on Annex 1.1(a)(i), any other Person (other than any SeaSpine Subsidiary) that is owned, directly or indirectly (in whole or in part), by any of the Persons listed on Annex 1.1(a)(i) hereto prior to the Distribution and (c) any other entity which becomes a Subsidiary of Integra after the Distribution.

 

5


Internal Distribution” shall have the meaning set forth in Schedule 1.1.

JAMS” shall have the meaning set forth in Section 8.3.

JAMS Rules” shall have the meaning set forth in Section 8.3.

Joint Action” shall mean any current or future Action with respect to which it is unclear at the onset of such Action whether Liabilities will arise primarily in connection with the SeaSpine Business or the Integra Business.

Law” shall mean all laws, statutes and ordinances and all regulations, rules and other pronouncements of Governmental Authorities having the effect of law of the United States of America, any foreign country, or any domestic or foreign state, province, commonwealth, city, country, municipality, territory, protectorate, possession or similar instrumentality, or any Governmental Authority thereof.

Liabilities” shall mean any and all debts, liabilities, obligations, responsibilities, Losses, damages (whether compensatory, punitive or treble), fines, penalties and sanctions, absolute or contingent, matured or unmatured, liquidated or unliquidated, foreseen or unforeseen, joint, several or individual, asserted or unasserted, accrued or unaccrued, known or unknown, whenever arising, including without limitation those arising under or in connection with any Law (including any Environmental Law), Action, threatened Action, order or consent decree of any Governmental Authority or any award of any arbitration tribunal, and those arising under any contract, guarantee, commitment or undertaking, whether sought to be imposed by a Governmental Authority, private party, or party to this Agreement, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute, or otherwise, and including any costs, expenses, interest, attorneys’ fees, disbursement and expense of counsel, expert and consulting fees and costs related thereto or to the investigation or defense thereof.

Litigation Expenses” shall have the meaning set forth in Section 6.1(f)(iii).

Losses” shall mean all losses, damages, claims, demands, judgments or settlements of any nature or kind, known or unknown, fixed, accrued, absolute or contingent, liquidated or unliquidated, including all reasonable costs and expenses (legal, accounting or otherwise as such costs are incurred) relating thereto, suffered by an Indemnitee.

Occurrence Based Policies” shall have the meaning set forth in Section 9.2(a).

Nasdaq” shall mean the Nasdaq Global Market.

Parties” shall have the meaning set forth in the preamble to this Agreement.

Person” shall mean any natural person, corporation, business trust, limited liability company, joint venture, association, company, partnership or government, or any agency or political subdivision thereof.

 

6


Pre-Distribution Claim” shall have the meaning set forth in Section 9.4(a).

Records” shall have the meaning set forth in Section 7.1(a).

Registration Statement” shall mean the registration statement on Form 10 filed by SeaSpine with the SEC to effect the registration of the SeaSpine Shares pursuant to the Exchange Act.

Representative” shall mean, with respect to any Person, any of such Person’s directors, officers, employees, agents, consultants, advisors, accountants, attorneys and representatives.

Restructuring” shall have the meaning set forth in Section 2.1(a).

Restructuring Plan” shall mean the Plan of Restructuring attached hereto as Schedule 1.1.

SeaSpine” shall have the meaning set forth in the preamble to this Agreement.

SeaSpine Action” shall mean any current or future Action relating primarily to the SeaSpine Business in which one or more Integra Entities is a defendant or the party against whom a claim or investigation is directed, but excluding any Joint Action.

SeaSpine Assets” shall mean (a) all Assets owned by the SeaSpine Entities, and (b) all Assets owned by the Integra Entities that are used primarily in, or that primarily relate to, the SeaSpine Business.

SeaSpine Business” shall mean (a) the business focused on the design, development and commercialization of surgical solutions for the treatment of patients suffering from spinal disorders, including the comprehensive portfolio of orthobiologics and spinal fusion hardware, conducted by the SeaSpine Entities and (b) any other business (other than the Integra Business) directly conducted by any SeaSpine Entity as of or prior to the date of this Agreement.

SeaSpine Common Stock” shall have the meaning set forth in the recitals to this Agreement.

SeaSpine Entities” means SeaSpine and each SeaSpine Subsidiary (each, a “SeaSpine Entity”).

SeaSpine Indemnitees” shall mean:

(a) SeaSpine and each Affiliate thereof after giving effect to the Distribution; and

(b) each of the respective Representatives of any of the entities described in the immediately preceding clause (a) and each of the heirs, executors, successors and assigns of any of such Representatives, except in the case of clauses (a) and (b), the Integra Indemnitees; provided, however, that a Person who was a Representative of SeaSpine or an Affiliate thereof may be a SeaSpine Indemnitee in that capacity notwithstanding that such Person may also be an Integra Indemnitee.

 

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SeaSpine Liabilities” shall mean:

(a) any and all Liabilities that are expressly contemplated by this Agreement or any Ancillary Agreement (or the schedules hereto or thereto) as Liabilities to be assumed by SeaSpine or any SeaSpine Entity, and all Liabilities of any SeaSpine Entity under this Agreement or any of the Ancillary Agreements; and

(b) all Liabilities, if and to the extent relating to, arising out of or resulting from:

(i) the ownership or operation of the SeaSpine Business (including any discontinued business or any business which has been sold or transferred), as conducted at any time prior to, on or after the Distribution Date; or

(ii) the ownership or operation of any business conducted by SeaSpine or any SeaSpine Subsidiary at any time prior to, on or after the Distribution Date.

(c) Notwithstanding the foregoing, the SeaSpine Liabilities shall not include:

(i) any Liabilities that are expressly contemplated by this Agreement or any Ancillary Agreement (or the schedules hereto or thereto) as Liabilities of Integra; or

(ii) any Liabilities related or attributable to, or arising in connection with, Taxes or Tax Returns, which shall be exclusively governed by the Tax Matters Agreement.

SeaSpine Marks” shall include all names, logos or trademarks of SeaSpine or its Affiliates, all intellectual property rights therein and all trademarks and logos comprised of or derivative of any of the foregoing.

SeaSpine Share” shall have the meaning set forth in the recitals to this Agreement.

SeaSpine Specific Policies” shall have the meaning set forth in Section 9.1.

SeaSpine Subsidiaries” shall mean (a) each of the Persons listed on Annex 1.1(b)(i) hereto, (b) except as otherwise set forth on Annex 1.1(b)(i), any other Person that was owned, directly or indirectly (in whole or in part) by any of the Persons listed on Annex 1.1(b)(i) hereto prior to the Distribution and (c) any other entity which becomes a Subsidiary of SeaSpine after the Effective Time.

SEC” means the United Stated Securities and Exchange Commission.

Spin-Off” shall have the meaning set forth in the recitals to this Agreement.

Subsidiary” shall mean with respect to any specified Person, any corporation or other legal entity of which such Person or any of its Subsidiaries controls or owns, directly or indirectly, 50% or more of the stock or other equity interests entitled to vote on the election of members to the board of directors or similar governing body or, in the case of a Person with no governing body, 50% or more of the equity or voting interests.

 

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Supply Agreements” shall mean (i) the Microfibrillar Collagen Supply Agreement by and between an Integra Entity and a SeaSpine Entity, (ii) the Collagen Ceramic Supply Agreement by and between an Integra Entity and a SeaSpine Entity and (iii) the Demineralized Bone Matrix and Collagen Ceramic Products Supply Agreement by and between an Integra Entity and a SeaSpine Entity, which agreements shall be entered into prior to or on the Distribution Date, as may be amended from time to time.

Tax” shall have the meaning set forth in the Tax Matters Agreement.

Tax Matters Agreement” shall mean the Tax Matters Agreement by and between Integra and SeaSpine, which agreement shall be entered into prior to or on the Distribution Date, as may be amended from time to time.

Tax Return” shall have the meaning set forth in the Tax Matters Agreement.

Third-Party” shall mean any Person who is not a Party to this Agreement.

Third-Party Claim” shall have the meaning set forth in Section 5.3(a).

Transactions” shall have the meaning set forth in the recitals to this Agreement.

Transition Services Agreement” shall mean the Transition Services Agreement by and between Integra and SeaSpine, which agreement shall be entered into prior to or on the Distribution Date.

Section 1.2 Reference; Interpretation. References in this Agreement to any gender include references to all genders, and references to the singular include references to the plural and vice versa. The words “include,” “includes” and “including” when used in this Agreement shall be deemed to be followed by the phrase “without limitation.” Unless the context otherwise requires, references in this Agreement to Articles, Sections and Schedules shall be deemed to be references to Articles and Sections of, and Schedules to, this Agreement. Unless the context otherwise requires, the words “hereof”, “hereby” and “herein” and words of similar meaning when used in this Agreement refer to this Agreement in its entirety and not to any particular Article, Section or provision of this Agreement. Neither this Agreement nor any Ancillary Agreement shall be construed against either Party as the principal draftsperson hereof or thereof.

Section 1.3 Tax Matters. The Tax Matters Agreement will govern Integra’s and SeaSpine’s respective rights, responsibilities and obligations after the Distribution with respect to Taxes, including ordinary course of business Taxes and Taxes, if any, incurred as a result of any failure of (i) the Internal Distribution to qualify as a reorganization under Sections 355 and 368(a)(1)(D) of the Code and (ii) the Cash Contribution, together with the Distribution, to qualify as a reorganization under Sections 355 and 368(a)(1)(D) of the Code. The Tax Matters Agreement sets forth the respective obligations of Integra and SeaSpine with respect to the filing of Tax Returns, the administration of Tax contests, cooperation and other matters, and imposes certain restrictions on Integra’s and SeaSpine’s ability to engage in certain actions following the Distribution. Except as expressly set forth in this Agreement or any Ancillary Agreement, all matters relating to Taxes in connection with the Transactions shall be governed exclusively by the Tax Matters Agreement.

 

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ARTICLE II.

THE SEPARATION

Section 2.1 Restructuring.

(a) The Parties have taken or will take, and have caused or will cause their respective Subsidiaries to take, all actions that are necessary or appropriate to implement and accomplish the transactions contemplated by each of the steps set forth in the Restructuring Plan (collectively, the “Restructuring”); provided, however, that all of such steps shall be completed by no later than the Distribution.

(b) All the transactions contemplated by the Restructuring and the Distribution are intended to be part of the same plan of reorganization, even though there may be delays between the completion of certain of the transactions.

Section 2.2 Transfer of SeaSpine Assets and SeaSpine Business; Assumption of SeaSpine Liabilities.

On the terms and subject to the conditions of this Agreement, and in furtherance of the Restructuring and the Spin-Off:

(a) Integra, by no later than the Effective Time, shall cause all of its (or its Subsidiaries’) rights, title and interest in and to all of the SeaSpine Assets and SeaSpine Business to be contributed, assigned, transferred, conveyed and delivered, directly or indirectly, to SeaSpine (or its Subsidiaries), and SeaSpine agrees to accept or cause to be accepted all such rights, title and interest in and to all the SeaSpine Assets and SeaSpine Business, in each case as contemplated by the Restructuring Plan and the applicable Ancillary Agreements. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR ANY ANCILLARY AGREEMENT, ALL ASSETS TRANSFERRED PURSUANT TO THIS AGREEMENT OR ANY ANCILLARY AGREEMENT ARE BEING TRANSFERRED AS IS, WHERE IS, WITH ALL FAULTS.

(b) Integra, by no later than the Effective Time, shall cause all of the SeaSpine Liabilities to be assigned, directly or indirectly, to SeaSpine, and SeaSpine agrees to accept, assume, perform, discharge and fulfill all of the SeaSpine Liabilities in accordance with their respective terms, in each case as contemplated by the Restructuring Plan.

(c) SeaSpine (or its Subsidiaries, as applicable), by no later than the Effective Time, shall cause all of its (or its Subsidiaries’) rights, title and interest in and to any Retained Assets to be distributed, assigned, transferred, conveyed and delivered, directly or indirectly, to Integra (or its Subsidiaries), and Integra agrees to accept or cause to be accepted all such rights, title and interest in and to such Retained Assets, in each case as contemplated by the Restructuring Plan and the applicable Ancillary Agreements. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR ANY ANCILLARY AGREEMENT, ALL ASSETS TRANSFERRED PURSUANT TO THIS AGREEMENT OR ANY ANCILLARY AGREEMENT ARE BEING TRANSFERRED AS IS, WHERE IS, WITH ALL FAULTS.

 

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(d) SeaSpine (or its Subsidiaries, as applicable), by no later than the Effective Time, shall cause any Integra Liabilities it holds to be assigned, directly or indirectly, to Integra, and Integra agrees to accept, assume, perform, discharge and fulfill all of such Integra Liabilities in accordance with their respective terms, in each case as contemplated by the Restructuring Plan.

(e) Upon completion of the transactions contemplated by Sections 2.1, 2.2(a), 2.2(b), 2.2(c) and 2.2(d) above: (i) SeaSpine will own, directly or indirectly, the SeaSpine Business and the SeaSpine Assets and be subject to the SeaSpine Liabilities; and (ii) Integra will continue to own, directly or indirectly, the Integra Business and the Integra Retained Assets and continue to be subject to the Integra Liabilities.

Section 2.3 Third-Party Consents and Government Approvals.

(a) To the extent that either the Distribution or any step in the Restructuring Plan requires a consent of any third party or a Governmental Authorization, the Parties will use commercially reasonable efforts to obtain each such consent and Governmental Authorization at or prior to the time such consent or Governmental Authorization is required in order to lawfully effect the Distribution and each step in the Restructuring Plan.

(b) If any Asset may not be transferred by reason of the requirement to obtain the consent of any third party or a Governmental Authorization and such consent has not been obtained by the Distribution Date, then (unless otherwise expressly agreed by Integra and SeaSpine) such Asset shall not be transferred until such consent has been obtained. Subject to reimbursement from the other Party of all reasonable costs and expenses incurred in connection with such actions, Integra and SeaSpine, as the case may be, shall (i) use commercially reasonable efforts to provide or cause the owner of such Asset to use commercially reasonable efforts to provide to the other Party (or appropriate Entity affiliated with the other Party) all the rights and benefits under such Asset, (ii) cause such owner to enforce such Asset for the benefit of such other Party (or for the benefit of the Entity affiliated with the other Party) and (iii) assume or cause the appropriate Entity affiliated with it to assume all obligations of such Asset, in each case to the extent that such action does not cause a breach or default under such Asset. Both Parties shall otherwise cooperate and use commercially reasonable efforts to provide the economic and operational equivalent of an assignment or transfer of the Asset as of the Distribution Date.

(c) From and after the Distribution Date, each Party shall promptly transfer or cause the Entity(ies) affiliated with it to promptly transfer to the other Party or the appropriate Entity(ies) affiliated with the other Party, from time to time, any property received that is an Asset of the other Party or of any Entity affiliated with the other Party. Without limiting the foregoing, funds received by a Party or any Entity affiliated with such Party upon the payment of accounts receivable that belong to the other Party or any Entity affiliated with the other party, shall be transferred to the other Party (or Entity affiliated with the other Party) in accordance with the procedures set forth on Schedule 2.3(c).

Section 2.4 Further Actions. From and after the Distribution, upon the reasonable request of a Party hereto, the other Party hereto will promptly take, or cause its Subsidiaries to promptly take, all commercially reasonable actions necessary or appropriate to fully accomplish the Restructuring and to give effect to the transactions provided for in this Agreement, including each step in the Restructuring Plan, in accordance with the purposes hereof.

 

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Section 2.5 Restructuring Documents. All documents and instruments used to effect the Restructuring and otherwise to comply with this Agreement shall be in form satisfactory to Integra and SeaSpine.

Section 2.6 Certain Licenses and Permits.

(a) On or prior to the Distribution Date or as soon as reasonably practicable thereafter and except as set forth on Schedule 2.6(a), Integra shall use its commercially reasonable efforts to transfer or cause to be transferred any transferable licenses, permits and authorizations issued by any Governmental Authority which relate primarily to the SeaSpine Business but which are held in the name of any Integra Entity, or in the name of any employee, officer, director, stockholder or agent of any such Integra Entity, or otherwise, on behalf of any SeaSpine Entity, to the appropriate SeaSpine Entity.

(b) On or prior to the Distribution Date or as soon as reasonably practicable thereafter, SeaSpine shall use its commercially reasonable efforts to transfer or cause to be transferred any transferable licenses, permits and authorizations issued by any Governmental Authority which relate primarily to the Integra Business but which are held in the name of any SeaSpine Entity, or in the name of any employee, officer, director, stockholder or agent of any such SeaSpine Entity, or otherwise, on behalf of any Integra Entity, to the appropriate Integra Entity.

ARTICLE III.

DISTRIBUTION AND CERTAIN COVENANTS

Section 3.1 Distribution.

(a) On or prior to the Distribution Date, Integra shall deliver to American Stock Transfer & Trust Company, LLC (the “Agent”) a single stock certificate representing all of the issued and outstanding SeaSpine Shares, in each case, endorsed by Integra in blank, for the benefit of the holders of Integra Common Stock, and Integra shall instruct the Agent to distribute, on or as soon as practicable following the Distribution Date, such number of the SeaSpine Shares to holders of record of shares of Integra Common Stock on the Distribution Record Date, all as further contemplated by the Registration Statement and hereby. SeaSpine shall provide any share certificates that the Agent shall require in order to effect the Distribution. The Distribution shall be effective at [            ] p.m., New York City time, on the Distribution Date.

(b) The SeaSpine Shares issued in the Distribution are intended to be distributed only pursuant to a book entry system. Integra shall instruct the Agent to deliver the SeaSpine Shares previously delivered to the Agent to a depositary and to mail to each holder of record of Integra Common Stock on the Distribution Record Date, a statement of the SeaSpine Common Stock credited to such holder’s account.

Section 3.2 Integra Determinations. Integra shall have the sole and absolute discretion to determine whether to proceed with all or part of the Distribution and all terms thereof,

 

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including the form, structure and terms of any transaction(s) and/or offering(s) to effect the Distribution and the timing of and conditions to the consummation of the Distribution. SeaSpine shall cooperate with Integra in all respects to accomplish the Distribution and shall, at Integra’s direction, promptly take any and all actions necessary or desirable to effect the Distribution.

Section 3.3 Charter; Bylaws. On or prior to the Distribution Date, SeaSpine and Integra shall take all necessary actions to provide for the adoption of the form of Certificate of Incorporation and Bylaws in substantially the form filed by SeaSpine with the SEC as exhibits to the Registration Statement.

Section 3.4 Directors. On or prior to the Distribution Date, Integra and SeaSpine shall have taken all necessary action to cause the board of directors of SeaSpine to consist of the individuals identified in the Registration Statement as directors of SeaSpine as of immediately following the Distribution.

Section 3.5 Election of Officers. On or prior to the Distribution Date, SeaSpine shall take all actions necessary and desirable so that as of the Distribution Date the officers of SeaSpine will be as set forth in the Registration Statement.

Section 3.6 State Securities Laws. Prior to the Distribution Date, Integra and SeaSpine shall take all such action as may be necessary or appropriate under the securities or blue sky laws of states or other political subdivisions of the United States of America in order to effect the Distribution.

Section 3.7 Listing Application; Notice to Nasdaq.

(a) Prior to the Distribution Date, Integra and SeaSpine shall prepare and file with Nasdaq a listing application and related documents and shall take all such other actions with respect thereto as shall be necessary or desirable in order to cause Nasdaq to list on or prior to the Distribution Date, subject to official notice of issuance, the SeaSpine Shares.

(b) Prior to the Distribution, Integra shall, to the extent possible, give Nasdaq not less than 10 days’ advance notice of the Distribution Record Date in compliance with Rule 10b-17 under the Exchange Act.

Section 3.8 Removal of Certain Guarantees; Releases from Liabilities.

(a) Except as otherwise specified in any Ancillary Agreement, (i) in the event that at any time before or after the Distribution Date, Integra or SeaSpine identifies any SeaSpine Liability for which any Integra Entity is a guarantor or obligor, SeaSpine shall use its commercially reasonable efforts to have, as quickly as practicable, such Integra Entities removed as guarantor of or obligor for any such Liability of SeaSpine, and (ii) in the event that at any time before or after the Distribution Date, Integra or SeaSpine identifies any Integra Liability for which any SeaSpine Entity is a guarantor or obligor, Integra shall use its commercially reasonable efforts to have, as quickly as practicable, such SeaSpine Entities removed as guarantor of or obligor for any such Liability of Integra.

 

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(b) If either Party is unable to obtain, or to cause to be obtained, any such required removal as set forth in Section 3.8(a), the guarantor or obligor shall continue to be bound as such and, unless not permitted by Law or the terms thereof, the applicable Party shall use commercially reasonable efforts to cause the relevant beneficiary to cause one of its Affiliates, as agent or subcontractor for such guarantor or obligor to pay, perform and discharge fully all the obligations or other Liabilities of the relevant guarantor or obligor thereunder from and after the date hereof.

(c) If (i) SeaSpine is unable to obtain, or to cause to be obtained, any such required removal as set forth in Section 3.8(a), or (ii) SeaSpine Liabilities arise from and after the Effective Time but before any Integra Entity, if such Integra Entity is a guarantor or obligor with reference to any such SeaSpine Liability, is removed pursuant to Section 3.8(a), then SeaSpine shall indemnify each Integra Entity for all Liabilities incurred by any of them in such Person’s capacity as guarantor or obligor. Without limiting the foregoing, SeaSpine shall, or shall cause a SeaSpine Entity to, reimburse Integra as soon as practicable (but in no event later than 30 days) following delivery by Integra to SeaSpine of notice of a payment made pursuant to this Section 3.8 in respect of SeaSpine Liabilities.

(d) If (i) Integra is unable to obtain, or to cause to be obtained, any such required removal as set forth in Section 3.8(a), or (ii) Integra Liabilities arise from and after the Effective Time but before any SeaSpine Entity, if such SeaSpine Entity is a guarantor or obligor with reference to any such SeaSpine Liability, is removed pursuant to Section 3.8(a), then Integra shall indemnify each SeaSpine Entity for all Liabilities incurred by any of them in such Person’s capacity as guarantor or obligor. Without limiting the foregoing, Integra shall, or shall cause an Integra Entity to, reimburse SeaSpine as soon as practicable (but in no event later than 30 days) following delivery by SeaSpine to Integra of notice of a payment made pursuant to this Section 3.8 in respect of Integra Liabilities.

(e) In the event that at any time before or after the Distribution Date, Integra identifies any letters of credit, interest rate or foreign exchange contracts, surety bonds or other contracts (excluding guarantees) that relate primarily to the SeaSpine Business but for which an Integra Entity has contingent, secondary, joint, several or other Liability of any nature whatsoever, SeaSpine shall, at its expense, take such actions and enter into such agreements and arrangements as Integra may reasonably request to effect the release or substitution of Integra (or an Integra Entity).

(f) In the event that at any time before or after the Distribution Date, SeaSpine identifies any letters of credit, interest rate or foreign exchange contracts, surety bonds or other contracts (excluding guarantees) that relate primarily to the Integra Business but for which a SeaSpine Entity has contingent, secondary, joint, several or other Liability of any nature whatsoever, Integra shall, at its expense, take such actions and enter into such agreements and arrangements as SeaSpine may reasonably request to effect the release or substitution of SeaSpine (or a SeaSpine Entity).

(g) At and after the Effective Time, the Parties shall use commercially reasonable efforts to obtain, or cause to be obtained, any consent, substitution or amendment required to novate, assign or extinguish all SeaSpine Liabilities (with respect to the Integra Entities) and

 

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Integra Liabilities (with respect to the SeaSpine Entities) of any nature whatsoever transferred under this Agreement or an Ancillary Agreement, or to obtain in writing the unconditional release of the assignor so that in each such case, Integra (or an appropriate Integra Entity) shall be solely responsible for the Integra Liabilities and SeaSpine (or an appropriate SeaSpine Entity) shall be solely responsible for the SeaSpine Liabilities; provided, however, that no Party shall be obligated to pay any consideration therefor (except for filing fees or other similar charges) to any Third Party from whom such consent, substitution, amendment or release is requested. Whether or not any such consent, substitution, amendment or release is obtained, nothing in this Section 3.8 shall in any way limit the obligations of the Parties under Article V. If, as and when it becomes possible to delegate, assign, novate or extinguish any SeaSpine Liabilities or Integra Liabilities in accordance with the terms hereof, the Parties shall promptly sign all such documents and perform all such other acts as may be necessary to give effect to such delegation, novation, extinction or other release; provided, however, than no Party shall be obligated to pay any consideration therefor.

Section 3.9 Corporate Names; Trademarks. Except as otherwise specifically provided in any Ancillary Agreement or in any other agreement to which an Integra Entity and a SeaSpine Entity are parties, as soon as reasonably practicable after the Distribution Date but in any event within the time period set forth on Schedule 3.9, each of SeaSpine and Integra will, at their own expense, cause their respective Subsidiaries to take the actions set forth on Schedule 3.9.

Section 3.10 Ancillary Agreements. Prior to or on the Distribution Date, each of Integra and SeaSpine shall enter into the Ancillary Agreements and any other agreements in respect of the Distribution reasonably necessary or appropriate in connection with the Transactions.

Section 3.11 Acknowledgment by SeaSpine. SeaSpine, on behalf of itself and all SeaSpine Entities, acknowledges, understands and agrees that, except as expressly set forth herein or in any Ancillary Agreement, (a) none of Integra or any other Person has, in this Agreement or in any other agreement or document, or otherwise made any representation or warranty of any kind whatsoever, express or implied, to SeaSpine or any SeaSpine Entity or to any director, officer, employee or agent thereof in any way with respect to any of the Transactions or the business, assets, condition or prospects (financial or otherwise) of, or any other matter involving, the assets, Liabilities or businesses of Integra or any Integra Entity, SeaSpine or any SeaSpine Entity, any SeaSpine Assets, any SeaSpine Liabilities or the SeaSpine Business and (b) none of Integra or any other Person has made or makes any representation or warranty with respect to the Distribution or the entering into of this Agreement or the Ancillary Agreements or the Transactions. Except as expressly set forth herein or in any other Ancillary Agreement, SeaSpine and each SeaSpine Entity shall bear the economic and legal risk that the SeaSpine Assets shall prove to be insufficient or that the title of any SeaSpine Entity to any SeaSpine Assets shall be other than good and marketable and free from encumbrances. The provisions of any related assignment agreement or other related documents are expressly subject to this Section 3.11 and to Section 3.12.

Section 3.12 Release.

 

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(a) Except as provided in Section 3.12(c), effective as of the Effective Time, SeaSpine does hereby, on behalf of itself and each other SeaSpine Entity, release and forever discharge each Integra Indemnitee, from any and all Liabilities whatsoever to any SeaSpine Entity, whether at law or in equity (including any right of contribution), whether arising under any Contract, by operation of Law or otherwise, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed at or before the Effective Time, including in connection with the Transactions.

(b) Except as provided in Section 3.12(c), effective as of the Effective Time, Integra does hereby, for itself and each other Integra Entity, release and forever discharge each SeaSpine Indemnitee from any and all Liabilities whatsoever to any Integra Entity, whether at law or in equity (including any right of contribution), whether arising under any Contract, by operation of Law or otherwise, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed at or before the Effective Time, including in connection with the Transactions.

(c) Nothing contained in Section 3.12(a) or Section 3.12(b) shall impair any right of any Person to enforce this Agreement, any Ancillary Agreement or any agreements, arrangements, commitments or understandings that are specified in, or contemplated to continue pursuant to, this Agreement or any Ancillary Agreement. Without limiting the foregoing, nothing contained in Section 3.12(a) or Section 3.12(b) shall release any Person from:

(i) any Liability assumed, transferred, assigned or allocated to such Person or any Entity affiliated with such Person in accordance with, or any other Liability of such person or any Entity affiliated with such Person under, this Agreement or any Ancillary Agreement;

(ii) any Liability that such Person may have with respect to indemnification or contribution pursuant to this Agreement or any Ancillary Agreement for claims brought by third Persons, which Liability shall be governed by the provisions of Article V and, if applicable, the appropriate provisions of the Ancillary Agreements;

(iii) any unpaid accounts payable or receivable arising from or relating to the sale, provision, or receipt of goods, payment for goods, property or services purchased, obtained or used in the ordinary course of business by any Integra Entity from any SeaSpine Entity, or by any SeaSpine Entity from any Integra Entity;

(iv) any Liability the release of which would result in the release of any Person other than an Integra Indemnitee (in the case of the release by the SeaSpine Entities) or a SeaSpine Indemnitee (in the case of the release by the Integra Entities); provided that each Party agrees not to bring suit, or permit any Entity affiliated with such Party to bring suit, against any such Integra Indemnitee or SeaSpine Indemnitee (as applicable) with respect to such Liability;

(v) any indemnification obligation under such Person’s articles of incorporation or bylaws; and

 

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(vi) any Liability arising under a written Contract entered into between an Integra Entity and a SeaSpine Entity prior to the Effective Time relating to the commercial sale of products or provision of services between such Entities (including for such purpose, their respective Affiliates).

(d) SeaSpine shall not make, and shall not permit any other SeaSpine Entity to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or indemnification, against any Integra Indemnitee with respect to any Liabilities released pursuant to Section 3.12(a). Integra shall not make, and shall not permit any other Integra Entity to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against any SeaSpine Indemnitee with respect to any Liabilities released pursuant to Section 3.12(b).

(e) It is the intent of each of Integra and SeaSpine by virtue of the provisions of this Section 3.12 to provide for a full and complete release and discharge of all Liabilities existing or arising from all acts and events occurring or failing to occur or alleged to have occurred or to have failed to occur and all conditions existing or alleged to have existed at or before the Effective Time, between or among Integra or any other Integra Entity, on the one hand, and SeaSpine or any other SeaSpine Entity, on the other hand (including any contractual agreements or arrangements existing or alleged to exist between or among any such Entity(ies) at or before the Effective Time), except as expressly set forth in Section 3.12(c). At any time, at the reasonable request of a Party, the other Party will cause each Entity affiliated with such Party to execute and deliver releases reflecting the provisions hereof.

Section 3.13 Discharge of Liabilities.

(a) Except as otherwise expressly provided herein or in any of the Ancillary Agreements, from and after the Effective Time, (i) Integra shall, and shall cause each other Integra Entity to, assume, pay, perform and discharge all Integra Liabilities in the ordinary course of business, consistent with past practice and (ii) SeaSpine shall, and shall cause each other SeaSpine Entity to, assume, pay, perform and discharge all SeaSpine Liabilities in the ordinary course of business, consistent with past practice. The agreements in this Section 3.13 are made by each Party for the sole and exclusive benefit of the other Party and the Entities affiliated with such other Party. To the extent reasonably requested to do so by the other Party, each Party agrees to execute and deliver such documents, in a form reasonably satisfactory to such Party, as may be reasonably necessary to evidence the assumption of any Liabilities hereunder.

(b) All intercompany trade, accounts receivable and accounts payable between any Integra Entity and SeaSpine Entity in existence at the Effective Time shall be paid, performed or otherwise settled in accordance with the Restructuring Plan.

Section 3.14 Administration of Accounts.

(a) All payments and reimbursements by any third-party (including in any lockbox or similar bank account of Integra or any of the other Integra Parties (other than SeaSpine and the other SeaSpine Parties)) in the name of or to Integra or any of the other Integra Parties (other

 

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than SeaSpine and the other SeaSpine Parties) that constitute SeaSpine Assets, or are received in respect of, the SeaSpine Business that are received after the Distribution shall be held by such Integra Party in trust for the benefit of SeaSpine and such Integra Party shall pay over or cause to be paid over to SeaSpine, in accordance with the procedures set forth on Schedule 2.3(c), the amount of such payment or reimbursement without deduction, withholding or right of set-off; provided, however, that such Integra Party shall have the right to set-off, without duplication, any amounts owed to it by any SeaSpine Party pursuant to the Transition Services Agreement.

(b) All payments and reimbursements by any third-party (including in any lockbox or similar bank account of SeaSpine or any of the other SeaSpine Parties) in the name of or to SeaSpine or any of the other SeaSpine Parties that constitute Integra Assets, or are received in respect of, the Integra Business that are received after the Distribution shall be held by such SeaSpine Party in trust for the benefit of Integra and such SeaSpine Party shall pay over or cause to be paid over to Integra, in accordance with the procedures set forth on Schedule 2.3(c), the amount of such payment or reimbursement without deduction, withholding or right of set-off; provided, however, that such SeaSpine Party shall have the right to set-off, without duplication, any amounts owed to it by any Integra Party pursuant to the Transition Services Agreement.

Section 3.15 Further Assurances. If at any time after the Effective Time any further action is reasonably necessary or desirable to carry out the purposes of this Agreement and the Ancillary Agreements, the proper officers of each Party shall take all such necessary action and do and perform all such acts and things, and execute and deliver all such agreements, assurances to the extent reasonably requested to do so by the other Party, each Party agrees to execute and deliver such documents, in a form reasonably satisfactory to such Party, as may be reasonably necessary to evidence the assumption of any Liabilities hereunder. Without limiting the foregoing, each Party shall use its commercially reasonable efforts promptly to obtain all consents and approvals, to enter into all agreements and to make all filings and applications that may be required for the consummation of the Transactions, including all applicable filings with, and approvals from, any Governmental Authority.

ARTICLE IV.

CONDITIONS PRECEDENT

Section 4.1 Conditions Precedent to Consummation of the Transactions. None of the Transactions shall become effective unless the following conditions have been satisfied or (except with respect to clauses (b) and (c) below) waived by the Board of Directors of Integra, in its sole and absolute discretion, at or before the Distribution:

(a) the Board of Directors of Integra shall have approved the Transactions, including the declaration of the Distribution, which approval may be given or withheld at its sole and absolute discretion;

(b) the SEC has declared effective the Registration Statement, with no stop order in effect with respect thereto, and with no proceedings for such purpose pending or threatened by the SEC;

 

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(c) SeaSpine shall have mailed the Information Statement (and such other information concerning SeaSpine, the SeaSpine Business, SeaSpine’s operations and management, the Distribution and such other matters as the Parties shall determine and as may otherwise be required by Law) to the holders of record of Integra Common Stock at the close of business on the record date for the Distribution;

(d) all other actions and filings necessary or appropriate under applicable federal or state securities Laws and state blue sky Laws in connection with the Transactions shall have been taken;

(e) prior to the Distribution, Integra shall have obtained an opinion from Latham & Watkins LLP, its tax counsel, in form and substance satisfactory to Integra (in its sole discretion), substantially to the effect that (i) the Internal Distribution will constitute a reorganization under Sections 355 and 368(a)(1)(D) of the Code and (ii) the Cash Contribution, together with the Distribution, will constitute a reorganization under Sections 355 and 368(a)(1)(D) of the Code;

(f) the SeaSpine Common Stock to be distributed pursuant to the Distribution and related transactions shall have been accepted for listing on Nasdaq, subject to official notice of issuance;

(g) the Ancillary Agreements shall have been executed and delivered by each of the Parties thereto and no Party to any of the Ancillary Agreements will be in material breach of any such agreement;

(h) any material Governmental Authorizations necessary to consummate the Transactions, or any portion thereof, shall have been obtained and be in full force and effect;

(i) SeaSpine’s amended and restated certificate of incorporation and amended and restated bylaws, each in substantially the form filed as exhibits to the Registration Statement are in effect;

(j) no preliminary or permanent injunction or other order, decree, or ruling issued by a Governmental Authority, and no statute (as interpreted through orders or rules of any Governmental Authority duly authorized to effectuate the statute), rule, regulation or executive order promulgated or enacted by any Governmental Authority shall be in effect preventing the consummation of, or materially limiting the benefits of, the Transactions; and

(k) no other event or development shall have occurred or failed to occur that, in the judgment of the Board of Directors of Integra, in its sole discretion, prevents the consummation of the Transactions or any portion thereof or makes the consummation of the Transactions inadvisable.

Section 4.2 Right Not to Close. Each of the conditions set forth in Section 4.1 is for the benefit of Integra and the Board of Directors of Integra may, in its sole and absolute discretion, determine whether to waive any condition, in whole or in part (other than the conditions set forth in Sections 4.1(b) and 4.1(c) above). Any determination made by the Board of Directors of Integra concerning the satisfaction or waiver of any or all of the conditions in

 

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Section 4.1 will be conclusive and binding on the Parties. The satisfaction of the conditions set forth in Section 4.1 will not create any obligation on the part of Integra to any other Person to effect any of the Transactions or in any way limit Integra’s right to terminate this Agreement as set forth in Section 10.11.

ARTICLE V.

INDEMNIFICATION

Section 5.1 Indemnification by Integra. Except as otherwise specifically set forth in any provision of this Agreement from and after the Distribution Date, Integra shall indemnify, defend and hold harmless the SeaSpine Indemnitees from and against any and all Losses of the SeaSpine Indemnitees to the extent arising out of, by reason of or otherwise in connection with (a) the Integra Liabilities or alleged Integra Liabilities, including any breach by Integra of any provision of this Section 5.1, (b) any breach by any Integra Entity of this Agreement, and (c) solely with respect to information regarding any Integra Entity provided by any Integra Entity in writing to SeaSpine expressly for inclusion in the Registration Statement or the Information Statement, any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading. This Agreement is not intended to address, and should not be interpreted to address, the matters specifically and expressly covered by the Ancillary Agreements unless such Ancillary Agreement expressly provides that this Agreement applies to any matter in such Ancillary Agreement.

Section 5.2 Indemnification by SeaSpine. Except as otherwise specifically set forth in any provision of this Agreement, from and after the Distribution Date, SeaSpine shall indemnify, defend and hold harmless the Integra Indemnitees from and against any and all Losses of the Integra Indemnitees to the extent arising out of, by reason of or otherwise in connection with (a) the SeaSpine Liabilities or alleged SeaSpine Liabilities, including any breach by any SeaSpine Entity of any provision of this Section 5.2, (b) any breach by any SeaSpine Entity of this Agreement, and (c) with respect to all information contained in the Registration Statement or the Information Statement (other than information regarding any Integra Entity provided by any Integra Entity in writing to SeaSpine expressly for inclusion in the Registration Statement or the Information Statement), any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading. This Agreement is not intended to address, and should not be interpreted to address, the matters specifically and expressly covered by the Ancillary Agreements unless such Ancillary Agreement expressly provides that this Agreement applies to any matter in such Ancillary Agreement.

Section 5.3 Procedures for Indemnification.

(a) If a claim or demand is made by a Third Party (a “Third-Party Claim”) against a SeaSpine Indemnitee or an Integra Indemnitee (each, an “Indemnitee”) as to which such Indemnitee is entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Party which is or may be required pursuant to Sections 5.1 or 5.2 hereof to make such indemnification (the “Indemnifying Party”) in writing, and in reasonable detail, of the Third-Party Claim promptly and in any event by the date that is the 15th Business Day after receipt by

 

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such Indemnitee of written notice of the Third-Party Claim; provided, however, that failure to give such notification shall not affect the indemnification provided hereunder except to the extent the Indemnifying Party shall have been actually prejudiced as a result of such failure.

(b) Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within 10 Business Days after the Indemnitee’s receipt thereof), copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. Notice under this Section 5.3 shall be provided in accordance with Section 10.6. For the avoidance of doubt, knowledge of a Third-Party Claim by a Person who is a director of both Integra and SeaSpine shall not constitute notice for purposes of this Section 5.3.

(c) Subject to Section 5.3(e), if a Third-Party Claim is made against an Indemnitee, the Indemnifying Party shall be entitled to participate in the defense thereof and, if it so chooses and irrevocably acknowledges without condition or reservation its obligation to fully indemnify the Indemnitee therefor, to assume the defense thereof with counsel selected by the Indemnifying Party; provided, however, that such counsel is not reasonably objected to by the Indemnitee. Should the Indemnifying Party so elect to assume the defense of a Third-Party Claim, the Indemnifying Party shall, within 30 days (or sooner if the nature of the Third-Party Claim so requires), notify the Indemnitee of its intent to do so, and the Indemnifying Party shall thereafter not be liable to the Indemnitee for legal or other expenses subsequently incurred by the Indemnitee in connection with the defense thereof; provided, however, that such Indemnitee shall have the right to employ counsel to represent such Indemnitee if, in such Indemnitee’s reasonable judgment, (A) a conflict of interest between such Indemnitee and such Indemnifying Party exists in respect of such claim which would make representation of both such Parties by one counsel inappropriate, or (B) the Third-Party Claim involves substantially different defenses for the Indemnifying Party and the Indemnitee, and in such event the fees and expenses of such single separate counsel shall be paid by such Indemnifying Party. If the Indemnifying Party assumes such defense, the Indemnitee shall have the right to participate in the defense thereof and to employ counsel, subject to the proviso of the preceding sentence, at its own expense, separate from the counsel employed by the Indemnifying Party, it being understood that the Indemnifying Party shall control such defense. The Indemnifying Party shall be liable for the fees and expenses of counsel employed by the Indemnitee for any period during which the Indemnifying Party has failed to assume the defense thereof (other than during the period prior to the time the Indemnitee shall have given notice of the Third-Party Claim as provided above).

(d) If the Indemnifying Party shall have assumed the defense of a Third-Party Claim, in no event will the Indemnitee admit any liability with respect to, or settle, compromise or discharge, any Third-Party Claim without the Indemnifying Party’s prior written consent; provided, however, that the Indemnitee shall have the right to settle, compromise or discharge such Third-Party Claim without the consent of the Indemnifying Party if the Indemnitee releases the Indemnifying Party from its indemnification obligation hereunder with respect to such Third-Party Claim and such settlement, compromise or discharge would not otherwise adversely affect the Indemnifying Party. The Indemnifying Party shall not enter into any settlement, compromise or discharge of a Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the settlement (A) has the effect of permitting any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against the Indemnitee, (B) does not completely release the Indemnitee from all

 

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Liabilities and obligations with respect to such claim, (C) includes a statement or admission of fault, culpability or failure to act by or on behalf of the Indemnitee, or (D) is otherwise prejudicial to the Indemnitee. If an Indemnifying Party elects not to assume the defense of a Third-Party Claim, or fails to notify an Indemnitee of its election to do so as provided herein, such Indemnitee may compromise, settle or defend such Third-Party Claim; provided that the Indemnitee shall not compromise or settle such Third-Party Claim without the consent of the Indemnifying Party, which consent is not to be unreasonably withheld, conditioned or delayed.

(e) Notwithstanding the foregoing, the Indemnifying Party shall not be entitled to assume the defense of any Third-Party Claim (and shall be liable for the fees and expenses of counsel incurred by the Indemnitee in defending such Third-Party Claim) if the Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee which the Indemnitee reasonably determines, after conferring with its counsel, cannot be separated from any related claim for money damages. If such equitable relief or other relief portion of the Third-Party Claim can be so separated from that for money damages, the Indemnifying Party shall be entitled to assume the defense of the portion relating to money damages.

(f) In the event of payment by an Indemnifying Party to any Indemnitee in connection with any Third-Party Claim, such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnitee as to any events or circumstances in respect of which such Indemnitee may have any right or claim relating to such Third-Party Claim. Such Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner, and at the cost and expense of such Indemnifying Party, in prosecuting any subrogated right or claim.

(g) SeaSpine shall, and shall cause the other SeaSpine Indemnitees to, and Integra shall, and shall cause the other Integra Indemnitees to, cooperate as may reasonably be required in connection with the investigation, defense and settlement of any Third-Party Claim. In furtherance of this obligation, the Parties agree that if an Indemnifying Party chooses to defend or to compromise or settle any Third-Party Claim, Integra or SeaSpine, as the case may be, shall use its reasonable best efforts to make available to the other Party, upon written request, the former and then current directors, officers, employees and agents of Integra or any SeaSpine Entity (as applicable) as witnesses and any Records or other documents within its control or which it otherwise has the ability to make available, to the extent that any such Person, Records or other documents may reasonably be required in connection with such defense, settlement or compromise. At the request of an Indemnifying Party, an Indemnitee shall enter into a reasonably acceptable joint defense agreement.

(h) The remedies provided in this Article V shall be cumulative and shall not preclude assertion by any Indemnitee of any other rights or the seeking of any and all other remedies against any Indemnifying Party.

Section 5.4 Indemnification Payments.

(a) Indemnification required by this Article V shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or a Loss is incurred. If the Indemnifying Party fails to make an indemnification

 

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payment required by this Article V within 30 days after receipt of a bill therefore or notice that a Loss has been incurred, the Indemnifying Party shall also be required to pay interest on the amount of such indemnification payment, from the date of receipt of the bill or notice of the Loss to but not including the date of payment, at the Applicable Rate.

(b) The amount of any claim by an Indemnitee under this Agreement shall be reduced to reflect any insurance proceeds actually received (net of costs or any mandatory premium increases) by any Indemnitee that result from the Losses that gave rise to such indemnity. Notwithstanding the foregoing, no Indemnitee will be obligated to seek recovery for any Losses from any Third Party before seeking indemnification under this Agreement and in no event will an Indemnifying Party’s obligation to indemnify and hold harmless any Indemnitee pursuant to this Agreement be conditioned upon the status of the recovery of any offsetting amounts from any such Third Party.

(c) The amount of any Loss subject to indemnification pursuant to this Article V shall be net of Taxes. Accordingly, the amount which an Indemnifying Party is required to pay to an Indemnitee will be adjusted to reflect any Tax benefit to the Indemnitee from the underlying Loss and to reflect any Taxes imposed upon the Indemnitee as a result of the receipt of such payment. Such an adjustment will first be made at the time that the indemnification payment is made and will further be made, as appropriate, to take into account any change in the liability of the Indemnitee for Taxes that occurs in connection with the final resolution of an audit by a Tax authority. For purposes of this Section 5.4(c), the value of any Tax benefit to the Indemnitee from the underlying Loss shall be an amount equal to the product of (a) the amount of any present or future deduction allowed or allowable to the Indemnitee by the Code, or other applicable Law, as a result of such Loss and (b) the highest statutory rate applicable under Section 11 of the Code, or other applicable Law.

(d) Except with respect to any indemnification payment for Losses relating to a breach of the Tax Matters Agreement, which indemnification payments shall be treated in accordance with the Tax Matters Agreement, and to the extent permitted by Law, the Parties will treat any indemnification payment paid pursuant to this Article V as a capital contribution made by Integra to SeaSpine or as a distribution made by SeaSpine to Integra, as the case may be, immediately prior to the Distribution.

Section 5.5 Survival of Indemnities. The rights and obligations of each of Integra and SeaSpine and their respective Indemnitees under this Article V will survive the sale or transfer by any Party of any assets or businesses or the assignment by it of any Liabilities.

Section 5.6 Limitation on Liability. Except as may expressly be set forth in this Agreement or any Ancillary Agreement, none of Integra, any other Integra Entity, SeaSpine, or any other SeaSpine Entity shall in any event have any Liability to the other Party or to any Entity affiliated with the other Party, or to any other Integra Indemnitee or SeaSpine Indemnitee, as applicable, under this Agreement (a) to the extent that any such Liability resulted from any willful violation of Law or fraud by the Party seeking indemnification or (b) for any exemplary, punitive, special, indirect, consequential, remote or speculative damages (including in respect of lost profits or revenues), however caused and on any theory of liability (including negligence) arising in any way out of any provision of this Agreement, except to the extent, in the case of this

 

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clause (b), any such damages were natural, probable and reasonably foreseeable as of the date hereof. Notwithstanding the foregoing, the provisions of this Section 5.6 shall not limit an Indemnifying Party’s indemnification obligations with respect to any Liability that any Indemnitee may have to any third party not affiliated with any Integra Entity or SeaSpine Entity.

ARTICLE VI.

LITIGATION MATTERS

Section 6.1 Case Allocation.

(a) As of the Distribution Date, SeaSpine shall, and, as applicable, shall cause the other SeaSpine Entities to (i) diligently conduct, at its sole cost and expense, the defense of the SeaSpine Actions and any applicable future SeaSpine Actions; (ii) notify Integra of material litigation developments related to the SeaSpine Actions; and (iii) agree not to file any cross claim or institute separate legal proceedings against Integra in relation to the SeaSpine Actions. Upon the settlement or judgment of any SeaSpine Action, SeaSpine shall in good faith determine an equitable apportionment of such settlement or judgment as between SeaSpine and Integra. If Integra provides SeaSpine with a written notice of Integra’s objection to SeaSpine’s allocation of Liability within 60 days of receipt of that allocation, SeaSpine and Integra shall endeavor in good faith to negotiate a mutually agreeable allocation of such Liability. If Integra and SeaSpine have not reached a mutually agreeable allocation of such Liability within 90 days of SeaSpine’s receipt of such objection notice, either Integra or SeaSpine may request in writing to the other Party that such allocation be resolved through the dispute resolution mechanism provided in Article VIII herein.

(b) As of the Distribution Date, Integra shall, and, as applicable, shall cause the other Integra Entities to (i) diligently conduct, at its sole cost and expense, the defense of the Integra Actions, including and any applicable future Integra Actions; (ii) notify SeaSpine of material litigation developments related to the Integra Actions; (iii) agree not to file any cross claim or institute separate legal proceedings against SeaSpine in relation to the Integra Actions. Upon the settlement or judgment of any Integra Action, Integra shall in good faith determine an equitable apportionment of the settlement or judgment as between Integra and SeaSpine. If SeaSpine provides Integra with a written notice of SeaSpine’s objection to Integra’s allocation of Liability within 60 days of receipt of that allocation, Integra and SeaSpine shall endeavor in good faith to negotiate a mutually agreeable allocation of such Liability. If SeaSpine and Integra have not reached a mutually agreeable allocation of such Liability within 90 days of Integra’s receipt of such objection notice, either SeaSpine or Integra may request in writing to the other Party that such allocation be resolved through the dispute resolution mechanism provided in Article VIII herein.

(c) Each of Integra and SeaSpine agrees that at all times from and after the Effective Time, if an Action currently exists or is commenced by a third party with respect to which a Party (or any Entity affiliated with such Party) is a named defendant but such Action is otherwise not a Liability allocated to such named Party under this Agreement or any Ancillary Agreement, then the other Party shall use commercially reasonable efforts to cause the named but not liable defendant to be removed from such Action.

 

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(d) Notwithstanding anything in this Section 6.1 to the contrary, (i) Integra shall have the right to participate in the defense of any SeaSpine Action from which it has not been removed, and to be represented by attorneys of its own choosing and at its sole cost and expense and (ii) SeaSpine shall have the right to participate in the defense of any Integra Action from which it has not been removed, and to be represented by attorneys of its own choosing and at its sole cost and expense.

(e) SeaSpine shall indemnify and hold harmless Integra and the other Integra Entities against SeaSpine Liabilities arising in connection with any Action, and Integra shall indemnify and hold harmless SeaSpine and the other SeaSpine Entities against Integra Liabilities arising in connection with any Action, in each case, in accordance with the indemnification provisions of Article V.

(f) Joint Actions.

(i) As of the Distribution Date, Integra shall, and, as applicable, shall cause the other Integra Entities to (A) diligently conduct the defense of the Joint Actions, including any applicable future Joint Actions; (B) notify SeaSpine of material litigation developments related to the Joint Actions; and (C) agree not to file any cross claim or institute separate legal proceedings against SeaSpine in relation to the Joint Actions; provided, however, that if it becomes clear that a Joint Action relates primarily to the SeaSpine Business then from and after such time such Joint Action shall instead be deemed to be a SeaSpine Action subject to Section 6.1(a) above, and SeaSpine shall promptly reimburse Integra for any costs or expenses incurred by Integra in connection with such Joint Action pursuant to Section 6.1(f)(iii); provided, further, that if it becomes clear that a Joint Action relates primarily to the Integra Business then from and after such time such Joint Action shall instead be deemed to be an Integra Action subject to Section 6.1(b) above, and Integra shall promptly reimburse SeaSpine for any costs or expenses incurred by SeaSpine in connection with such Joint Action pursuant to Section 6.1(f)(iii). Integra and SeaSpine shall regularly meet to review and discuss the progress of the Joint Actions and the classification thereof.

(ii) In a Joint Action, SeaSpine shall have the right to employ separate counsel to represent it and the other SeaSpine Entities if SeaSpine shall have reasonably concluded that (A) there may be a legal defense available to the SeaSpine Entities that are different from or in addition to those available to Integra, (B) representation of both Integra (or any Integra Entity) and SeaSpine (or any SeaSpine Entity) by the same counsel would be inappropriate due to actual or potential differing interests between them, or (C) the Joint Action involves a claim for equitable relief which would restrict or limit the future conduct of SeaSpine (or any SeaSpine Entity) or SeaSpine’s (or any SeaSpine Entity’s) business or operations, in which case fees and expenses of such counsel incurred by SeaSpine shall be included in the amounts allocated by Section 6.1(f)(iv). Otherwise, SeaSpine shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise, or settlement of any Joint Action, at its own expense. In the event of a conflict in the procedures described in this Section 6.1(f)(ii) and the procedures set forth in Sections 5.3(a) - (e), the terms of this Section 6.1(f)(ii) will control.

 

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(iii) Integra shall initially pay all joint attorneys’, accountants’, consultants’, expert witnesses’ and other professionals’ fees and expenses and all other out-of-pocket costs incurred on behalf of itself and SeaSpine in the investigation, defense and/or evaluation of a Joint Action (“Litigation Expenses”). Integra shall periodically furnish to SeaSpine copies of invoices paid by Integra for Litigation Expenses. Within 30 days of SeaSpine’s receipt of such invoices, SeaSpine shall pay Integra an amount equal to one-half of the Litigation Expenses (or such other share of the Litigation Expenses as reasonably determined by Integra), representing SeaSpine’s estimated share of the Litigation Expenses. For each Joint Action, within 60 days of the final determination of SeaSpine’s allocation of Liability pursuant to Section 6.1(f)(iv) below, Integra shall provide to SeaSpine a proposed allocation of the Litigation Expenses between Integra and SeaSpine, calculated to be in proportion to Integra’s and SeaSpine’s respective allocated Liability for the settlement or judgment of the Joint Action. If SeaSpine does not object to the proposed allocation within 60 days, SeaSpine shall pay to Integra, or Integra shall pay to SeaSpine, the amount necessary to true up the amounts contributed by each company to match the allocation of the Litigation Expenses. If SeaSpine provides Integra with a written notice of objection to Integra’s allocation of Litigation Expenses within such 60 days, Integra and SeaSpine shall endeavor in good faith to negotiate a mutually agreeable allocation of such Litigation Expenses. If SeaSpine and Integra have not reached a mutually agreeable allocation of such Litigation Expenses within 90 days of Integra’s receipt of such objection notice, either SeaSpine or Integra may request in writing to the other Party that such allocation be resolved through the dispute resolution mechanism provided in Article VIII.

(iv) Integra shall propose an allocation of Liability for any judgment or settlement of a Joint Action, based upon, if available, the allocation identified by a court verdict or, in the event of a settlement, the settling counterparty (i.e., the third party that Integra and/or SeaSpine is entering into a settlement with). If neither is available, Integra shall in good faith determine an equitable apportionment of Liability as between Integra and SeaSpine based on the portion of Liability relating primarily to each of the Integra Business and SeaSpine Business, respectively. If SeaSpine provides Integra with a written notice of objection to Integra’s allocation of Liability within 60 days of receipt of that allocation, Integra and SeaSpine shall endeavor in good faith to negotiate a mutually agreeable allocation of such Liability. If SeaSpine and Integra have not reached a mutually agreeable allocation of such Liability within 90 days of Integra’s receipt of such objection notice, either SeaSpine or Integra may request in writing to the other Party that such allocation be resolved through the dispute resolution mechanism provided in Article VIII herein.

ARTICLE VII.

ACCESS TO INFORMATION

Section 7.1 Provision of Corporate Records.

 

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(a) At all times from and after the Distribution Date, upon the prior written request by SeaSpine for specific and identified agreements, documents, books, records or files including accounting and financial records (collectively, “Records”) which relate to SeaSpine or the conduct of the SeaSpine Business up to the Effective Time, or which SeaSpine determines are necessary or advisable (i) for use in any Action or to satisfy audit, accounting, claims, regulatory, litigation or other similar legal or regulatory requirements or (ii) to comply with reporting, disclosure, filing or other requirements imposed on SeaSpine or its Affiliates (including without limitation under applicable securities and Tax Laws) by a Governmental Authority, Integra shall arrange, as soon as reasonably practicable following the receipt of such request, to provide appropriate copies of such Records (or the originals thereof if SeaSpine has a reasonable need for such originals) in the possession or control of Integra, but only to the extent such items are not already in the possession or control of the requesting Party.

(b) At all times from and after the Distribution Date, upon the prior written request by Integra for specific and identified Records which relate to Integra or SeaSpine or the conduct of the Integra Business or the SeaSpine Business up to the Effective Time, or which Integra determines are necessary or advisable (i) for use in any Action or to satisfy audit, accounting, claims, regulatory, litigation or other similar legal or regulatory requirements or (ii) to comply with reporting, disclosure, filing or other requirements imposed on Integra or its Affiliates (including without limitation under applicable securities and Tax Laws) by a Governmental Authority, SeaSpine shall arrange, as soon as reasonably practicable following the receipt of such request, to provide appropriate copies of such Records (or the originals thereof if Integra has a reasonable need for such originals) in the possession or control of SeaSpine or any of the SeaSpine Subsidiaries, but only to the extent such items are not already in the possession or control of the requesting Party.

Section 7.2 Access to Information. From and after the Distribution Date, each of Integra and SeaSpine shall afford to the other and its authorized Representatives reasonable access during normal business hours, subject to appropriate restrictions for classified, privileged or confidential information, to the Representatives, properties, and Records of, in the possession of or in the control of the non-requesting Party and its Subsidiaries insofar as such access is reasonably required by the requesting Party and relates to such other Party or the conduct of its business prior to the Effective Time.

Section 7.3 Witnesses; Documents and Cooperation in Actions.

(a) Integra and SeaSpine shall each use commercially reasonable efforts to make available to the other, upon reasonable written request, its and its Subsidiaries’ former and then current officers, directors, employees and agents as witnesses and any Records or other documents within its control or which it otherwise has the ability to make available, to the extent that such Person, Records or other documents may reasonably be required in connection with any Action in which the requesting Party or any Entity affiliated with the requesting Party may from time to time be involved, except in the case of any Action in which any SeaSpine Entity is adverse to any Integra Entity. The requesting Party shall bear all out-of-pocket expenses in connection therewith.

 

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(b) Without limiting any provision of this Section 7.3, each Party shall, and shall cause each Entity affiliated with such Party to, cooperate and consult, to the extent reasonably necessary with respect to any Actions.

(c) In connection with any matter contemplated by this Section 7.3, the Parties will enter into a mutually acceptable joint defense agreement so as to maintain to the extent practicable any applicable attorney-client privilege or work product immunity of any Integra Entity and any SeaSpine Entity.

Section 7.4 Confidentiality.

(a) Integra and the Integra Subsidiaries on the one hand, and SeaSpine and the SeaSpine Subsidiaries on the other hand, shall not use or permit the use of and shall keep, and shall cause their respective Representatives to keep, confidential all information concerning the other Party in their possession, their custody or under their control to the extent such information, (i) relates to or was acquired during the period up to the Effective Time, (ii) relates to any Ancillary Agreement, (iii) is obtained in the course of performing services for the other Party pursuant to any Ancillary Agreement or (iv) is based upon or is derived from information described in the preceding clauses (i), (ii) or (iii), and each Party shall not (without the prior written consent of the other) otherwise release or disclose such information to any other Person, except such Party’s auditors, attorneys, consultants and advisors, unless compelled to disclose such information by judicial or administrative process or unless such disclosure is required by Law and such Party has used commercially reasonable efforts to consult with the other affected Party or Parties prior to such disclosure. Each Party shall be deemed to have satisfied its obligation to hold confidential any information concerning or owned by the other Party or any Entity affiliated with the other Party, if it exercises the same care as it takes to preserve confidentiality for its own similar information. The covenants in this Section 7.4 shall survive the transactions contemplated by this Agreement and shall continue indefinitely; provided, however, that the covenants in this Section 7.4 shall terminate with respect to any information not constituting a trade secret under applicable Law on the third anniversary of the later of the Distribution Date or the date on which the Party subject to such covenants with respect to such information receives it (but any such termination shall not terminate or otherwise limit any other covenant or restriction regarding the disclosure or use of such information under any Ancillary Agreement or other agreement, instrument or legal obligation). This Section 7.4 shall not apply to information (a) that has been in the public domain through no fault of such Party, (b) that has been later lawfully acquired from other sources by such Party, provided that such source is not known to be (or have been) bound by a confidentiality agreement, (c) the use or disclosure of which is permitted by this Agreement or any other Ancillary Agreement or any other agreement entered into pursuant hereto, (d) that is immaterial and its disclosure is required as part of the conduct of that Party’s business and would not reasonably be expected to be detrimental to the interests of the other Party or (e) that the other Party has agreed in writing may be so used or disclosed.

(b) If any Party, or any Entity affiliated with such Party, either determines that it is required to disclose pursuant to applicable Law, or receives any demand under lawful process or from any Governmental Authority to disclose or provide, information of the other Party (or of any Entity affiliated with the other Party) that is subject to the confidentiality provisions of

 

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Section 7.4(a), such Party shall notify the other Party prior to disclosing or providing such information and shall cooperate at the expense of the requesting Party in seeking any reasonable protective arrangements requested by such other Party. Subject to the foregoing, the Person that received such request may thereafter disclose or provide such information if and to the extent required by such Law or by lawful process or such Governmental Authority; provided, however, that the Person shall only disclose such portion of the information as required to be disclosed or provided.

Section 7.5 Privileged Matters. Except as may be otherwise provided in an Ancillary Agreement, the Parties recognize that legal and other professional services that have been and will be provided prior to the Distribution Date have been and will be rendered for the benefit of the Integra Entities and the SeaSpine Entities, and that each of the Integra Entities, and each of the SeaSpine Entities should be deemed to be the client for the purposes of asserting all privileges which may be asserted under applicable Law. To allocate the interests of each Party in the information as to which any Party is entitled to assert a privilege, the Parties agree as follows:

(a) Integra shall be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information which relates solely to the Integra Business (other than with respect to Liabilities as to which SeaSpine is required to provide indemnification under Article V or Article VI), whether or not the privileged information is in the possession of or under the control of Integra, SeaSpine or any other Entity. Integra shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information that relates solely to the subject matter of any claims constituting Integra Liabilities, or other Liabilities as to which it is required to provide indemnification under Article V or Article VI, now pending or which may be asserted in the future, whether or not the privileged information is in the possession of or under the control of Integra, SeaSpine or any other Entity.

(b) SeaSpine shall be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information which relates solely to the SeaSpine Business (other than with respect to Liabilities as to which Integra is required to provide indemnification under Article V or Article VI), whether or not the privileged information is in the possession of or under the control of Integra, SeaSpine or any other Entity. SeaSpine shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information which relates solely to the subject matter of any claims constituting SeaSpine Liabilities, or other Liabilities as to which it is required to provide indemnification under Article V or Article VI, now pending or which may be asserted in the future, in any lawsuits or other proceedings initiated against or by SeaSpine, whether or not the privileged information is in the possession of or under the control of Integra, SeaSpine or any other Entity.

(c) The Parties agree that they shall have a shared privilege, with equal right to assert or waive, subject to the restrictions in this Section 7.5, with respect to all privileges not allocated pursuant to the terms of Sections 7.5(a) and 7.5(b).

(d) No Party may waive any privilege which could be asserted under any applicable Law, and in which the other Party has a shared privileged, without the consent of the other Party, which consent shall not be unreasonably withheld or delayed, except to the extent reasonably required in connection with any Third-Party Claims or as provided in subsection (e) below. Consent shall be in writing, or shall be deemed to be granted unless written objection is made within 20 days after notice upon the other Party requesting such consent.

 

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(e) In the event of any litigation or dispute between or among the Parties, any Party and a Subsidiary of the other Party, or a Subsidiary of one Party and a Subsidiary of the other Party, either such Party may waive a privilege in which the other Party has a shared privilege, without obtaining the consent of the other Party, provided, however, that such waiver of a shared privilege shall be effective only as to the use of information with respect to the litigation or dispute between the Parties and/or their Subsidiaries, and shall not operate as a waiver of the shared privilege with respect to any Third-Party Claims.

(f) If a dispute arises between or among the Parties or their respective Subsidiaries regarding whether a privilege should be waived to protect or advance the interest of any Party, each Party agrees that it shall negotiate in good faith, shall endeavor to minimize any prejudice to the rights of the other Party, and shall not unreasonably withhold consent to any request for a waiver by the other Party. Each Party hereto specifically agrees that it will not withhold consent to a waiver for any purpose except to protect its own legitimate interests.

(g) Upon receipt by any Party or by any Subsidiary thereof of any subpoena, discovery or other request which arguably calls for the production or disclosure of information subject to a shared privilege or as to which another Party has the sole right hereunder to assert a privilege, or if any Party obtains knowledge that any of its or any of its Subsidiaries’ current or former Representatives have received any subpoena, discovery or other request which arguably calls for the production or disclosure of such privileged information, such Party shall promptly notify the other Party of the existence of the request and shall provide the other Party a reasonable opportunity to review the information and to assert any rights it or they may have under this Section 7.5 or otherwise to prevent the production or disclosure of such privileged information.

(h) The transfer of all Records and other information pursuant to this Agreement is made in reliance on the agreement of Integra and SeaSpine, as set forth in Sections 7.2, 7.4, and 7.5, to maintain the confidentiality of privileged information and to assert and maintain all applicable privileges. The access to information being granted pursuant to Sections 7.1, 7.2, and 7.3 hereof, the agreement to provide witnesses and individuals pursuant to Sections 7.2 and 7.3 hereof, the furnishing of notices and documents and other cooperative efforts contemplated by Section 7.3 hereof, and the transfer of privileged information between and among the Parties and their respective Subsidiaries, Affiliates and Representatives pursuant to this Agreement shall not be deemed a waiver of any privilege that has been or may be asserted under this Agreement or otherwise.

Section 7.6 Ownership of Information. Any information owned by one Party or any of its Subsidiaries that is provided to a requesting Party pursuant to this Article VII shall be deemed to remain the property of the providing Person. Unless specifically set forth herein, nothing contained in this Agreement shall be construed as granting or conferring rights of license or otherwise in any such information.

 

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Section 7.7 Cost of Providing Records and Information. A Party requesting Records, information or access to Representatives, witnesses or properties, under this Article VII, agrees to reimburse the other Party and its Subsidiaries for the reasonable out-of-pocket costs, if any, incurred in seeking to satisfy the request of the requesting Party.

Section 7.8 Retention of Records. Except (a) as provided in the Tax Matters Agreement or (b) when a longer retention period is otherwise required by Law or agreed to in writing, the Integra Entities and the SeaSpine Entities shall retain all Records relating to the Integra Business and the SeaSpine Business as of the Effective Time for the periods of time provided in each Party’s record retention policy (with respect to the documents of such Party and without regard to the Distribution or its effects) as in effect on the Distribution Date. Notwithstanding the foregoing, in lieu of retaining any specific Records, Integra or SeaSpine may offer in writing to deliver such Records to the other and, if such offer is not accepted within 90 days, the offered Records may be destroyed or otherwise disposed of at any time. If a recipient of such offer shall request in writing prior to the scheduled date for such destruction or disposal that any of Records proposed to be destroyed or disposed of be delivered to such requesting Party, the Party proposing the destruction or disposal shall promptly arrange for delivery of such of the Records as was requested (at the cost of the requesting Party).

Section 7.9 Other Agreements Providing for Exchange of Information. The rights and obligations granted under this Article VII are subject to any specific limitations, qualifications or additional provisions on cooperation, access to information, privilege and the sharing, exchange or confidential treatment of information set forth in any Ancillary Agreement or in any other agreement to which an Integra Entity and a SeaSpine Entity are parties.

Section 7.10 Policies and Best Practices. Without representation or warranty, SeaSpine and Integra shall continue to be permitted to share, on a confidential basis, “best practices” information and materials (such as policies, workflow templates and standard form contracts).

Section 7.11 Compliance with Laws and Agreements. Nothing in this Article VII shall be deemed to require any Person to provide any information if doing so would, in the opinion of counsel to such Person, be inconsistent with any legal or constitutional obligation applicable to such Person.

ARTICLE VIII.

DISPUTE RESOLUTION

Section 8.1 Agreement Disputes. Except as specifically provided in any Ancillary Agreement, any controversy, dispute or claim arising out of, in connection with, or in relation to the interpretation, performance, nonperformance, validity, termination, enforcement or breach of this Agreement, or otherwise arising out of, or in any way related to this Agreement or the transactions contemplated hereby, including any claim based on contract, tort, statute or constitution (collectively, “Agreement Disputes”) shall be determined by binding arbitration according to the following provisions, as the sole and exclusive means of resolving such dispute, claim or controversy.

 

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Section 8.2 Negotiation. In the event either Party identifies an Agreement Dispute, it shall provide written notice thereof to the other Party identifying with reasonable particularity the facts which support the asserted dispute and the particular contractual provision at issue. Receipt of such notice by the other Party shall trigger a 30-day informal resolution process during which both Parties, through their designated representatives, shall attempt to resolve such Agreement Dispute in an amicable manner.

Section 8.3 Arbitration. In the event the Agreement Dispute remains unresolved at the end of such 30-day period, the Parties agree to seek to resolve such Agreement Dispute by arbitration administered by Judicial Arbitration and Mediation Services, Inc. (“JAMS”) pursuant to its Comprehensive Arbitration Rules and Procedures (the “JAMS Rules”), conducted in Philadelphia, Pennsylvania. For Agreement Disputes with an amount in controversy of less than $500,000, exclusive of interest or attorneys’ fees, the Agreement Dispute shall be heard and determined by a single arbitrator selected in accordance with the JAMS Rules. For Agreement Disputes with amount in controversy equal to or more than $500,000, exclusive of interest or attorneys’ fees, there shall be three arbitrators, with each Party appointing one arbitrator and the two party-appointed arbitrators agreeing on a third arbitrator who shall chair the arbitral tribunal. Any arbitrator not appointed within a reasonable time shall be appointed in accordance with the JAMS Rules. Any controversy concerning the jurisdiction of the arbitrator(s), whether an Agreement Dispute is an arbitrable Agreement Dispute, whether arbitration has been waived, whether an assignee of this Agreement is bound to arbitrate, or as to the interpretation of enforceability of this Article VIII shall be determined by the arbitrator(s). The final award in the arbitration shall be issued no later than six months after the date the arbitration is first filed with JAMS; all deadlines and dates in the arbitration shall be set such that they are consistent with, and shall not interfere with or derogate from, this six-month deadline. This Article VIII shall not preclude either Party from seeking provisional remedies in aid of arbitration from a court of appropriate jurisdiction.

Section 8.4 Choice of Law, Compliance, Enforcement, Costs. In resolving any Agreement Dispute, the Parties intend that the arbitrator(s) shall apply the substantive Laws of the State of Delaware, without regard to any choice of law principles thereof that would mandate the application of the laws of another jurisdiction. The Parties intend that the provisions to arbitrate set forth herein be valid, enforceable and irrevocable, and any award rendered by the arbitrator(s) shall be final and binding on the Parties. Each Party agrees to comply and to cause the Entities affiliated with such Party to comply with any award made in any such arbitration proceedings and agree to enforcement of or entry of judgment upon such award, in any court of competent jurisdiction. The arbitrator’s decision shall not be subject to appeal in any forum, but shall be enforceable by Delaware Courts if full compliance has not occurred within 30 days of the arbitrator’s written decision. Each Party shall bear its own costs of arbitration including its attorneys’ fees, without regard to which Party prevails; provided, that, the non-prevailing Party, as determined and identified by the arbitrator(s), shall bear 100% of costs and fees of the arbitrator(s).

Section 8.5 Confidentiality of Proceedings. Unless otherwise agreed in writing by or among the relevant Parties or permitted by this Agreement, the relevant Parties shall keep, and shall cause the Entities affiliated with them to keep, confidential all matters relating to the arbitration or the award. All negotiations, conferences and discussions pursuant to this Article

 

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VIII shall be treated as compromise and settlement negotiations; provided, that such matters may be disclosed (a) to the extent reasonably necessary in any proceeding brought to enforce this agreement to arbitrate or any arbitral award or for entry of a judgment upon the award and (b) to the extent otherwise required by Law or regulatory authority.

Section 8.6 Continuity of Service and Performance. During the course of dispute resolution pursuant to the provisions of this Article VIII, the Parties will continue to provide all other services and honor all other commitments under this Agreement and each Ancillary Agreement with respect to all matters not subject to such dispute resolution.

ARTICLE IX.

INSURANCE

Section 9.1 General. Each Insurance Policy owned or maintained by or on behalf of the Integra Entities that relates exclusively to (i) the SeaSpine Business (“SeaSpine Specific Policies”) shall be a SeaSpine Asset and (ii) the Integra Business shall be an Integra Asset. All other Insurance Policies shall be subject to the provisions of Section 9.2.

Section 9.2 Combined Policies. Each of Integra and SeaSpine hereby agrees to use its commercially reasonable efforts to take the following actions, effective in each case prior to or on the Distribution Date (it being understood that SeaSpine shall be responsible for all premiums, costs and fees associated with (x) any new Insurance Policies placed for the benefit of SeaSpine pursuant to this Section 9.2 and (y) any incremental increase in any Insurance Policy’s premiums, costs and fees associated with the prior acts coverage or with the transitional services coverage relating to the Transition Services Agreement):

(a) each Insurance Policy listed in Schedule 9.2(a) (the “Occurrence Based Policies”) shall be cancelled or endorsed such that separate policies for each of Integra and SeaSpine shall be acquired on substantially similar terms, or such other terms as elected by the applicable insured party, as the Occurrence Based Policies (other than with respect to limits, retentions and deductibles, as applicable); and

(b)(i) each Insurance Policy listed in Schedule 9.2(b) (the “Claims Made Policies” and together with the Occurrence Based Policies, the “Combined Policies”) shall be cancelled or endorsed such that (ii) separate claims made policies for SeaSpine shall be acquired on substantially similar terms, or such other terms as elected by the applicable insured party, as the Claims Made Policies (other than with respect to limits, retentions and deductibles, as applicable), with retroactive dates under each such policy that are the same retroactive dates under the corresponding Integra Claims Made Policy for each of the insureds to be covered under the respective policies of Integra and SeaSpine. Such policies placed for the benefit of SeaSpine shall also include Theken Spine LLC, IsoTis, Inc., SeaSpine, Inc. and their respective Subsidiaries.

Section 9.3 D&O Policies.

(a) SeaSpine shall cause directors and officers Insurance Policies to be put in place as of the Distribution Date for the benefit of directors and officers of the SeaSpine Entities (it being understood that SeaSpine shall be responsible for all premiums, costs and fees associated with such policies).

 

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(b) For the six-year period commencing immediately after the Distribution Date, Integra shall maintain in effect coverage for claims that arise out of, or are primarily related to, the SeaSpine Assets, serving as a director or officer of the SeaSpine Entities, or the operation of the SeaSpine Business prior to the Distribution Date, with respect to those Persons who are currently covered by the Integra Entities’ existing directors and officers Insurance Policies, on terms and at limits no less favorable than the coverage currently provided under such policies.

(c) All premiums and commissions due with respect to the coverage under 9.3(b) shall be paid by Integra.

Section 9.4 Pre-Distribution Claims.

(a) With respect to existing occurrence based policies and (to the extent such claims have been or are drawn back to a period prior to the Distribution Date) claims made policies, for any claim asserted against any SeaSpine Entity after the Distribution Date arising out of an occurrence or Loss taking place prior to the Distribution Date (“Pre-Distribution Claim”), the applicable SeaSpine Entity may access coverage under the Insurance Policies under which the applicable SeaSpine Entity is (or was) insured and Integra shall cooperate with the applicable SeaSpine Entity in connection with the tendering of such claims.

(b) In the event that a Pre-Distribution Claim relates to the same occurrence for which any Integra Entity is seeking coverage under an Insurance Policy, and the limits under the applicable Insurance Policy are not sufficient to fund all covered claims of the applicable Integra Entity and the applicable SeaSpine Entity, amounts due under such Insurance Policy shall be paid to the respective Entities in proportion to the amounts which otherwise would be due were the limits of liability infinite.

(c) After the Distribution Date, any third-party administrator fees and deposits related to claims made under any Insurance Policy shall be paid in accordance with the protocol historically used prior to the Distribution Date.

Section 9.5 Retentions/Deductibles.

(a) For any Pre-Distribution Claim made after the Distribution Date, all amounts necessary to exhaust or otherwise satisfy all applicable retentions, deductibles or other amounts not covered by such policy shall be:

(i) paid by Integra to the extent such claim relates exclusively to the Integra Business;

(ii) paid by SeaSpine to the extent such claim relates exclusively to the SeaSpine Business;

 

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(iii) split equitably between Integra and SeaSpine, as determined in Integra’s reasonable discretion, for all other claims, including any claim relating to general corporate matters; or

(iv) SeaSpine shall comply with all terms and conditions of all policies covering or potentially covering any Pre-Distribution Claims. SeaSpine will cooperate with Integra, its counsel and its insurance broker concerning obtaining and maintaining coverage for Pre-Distribution Claims.

(b) SeaSpine shall be permitted to determine whether to settle any claim for which SeaSpine is required to pay any applicable deductibles or retentions pursuant to Section 9.5(a)(ii); provided that, SeaSpine shall not enter into any such settlement without the consent (not to be unreasonably withheld, conditioned or delayed) of Integra if the settlement (i) has the effect of permitting any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Integra Entity, (ii) does not release the Integra Entities from all liabilities and obligations with respect to such claim, (iii) includes an admission of guilt or liability on behalf of any of the Integra Entities, or (iv) is otherwise prejudicial to any Integra Entity.

(c) For the avoidance of doubt, any dispute between the Parties arising out of or related to this Section 9.5 shall be subject to the dispute resolution provisions of Article VIII.

Section 9.6 Unearned Premium. Integra shall be entitled to its respective interest in any unearned premium paid by any insurer as a result of the cancellation or endorsement of any of the Combined Policies pursuant to Section 9.2(a) or Section 9.2(b) or the D&O Policies pursuant to Section 9.3.

Section 9.7 Expirations and Renewals. With respect to any Combined Policy that expires prior to the Distribution Date, Integra shall, in its sole discretion, take any of the following actions: (i) allow the policy to expire and place separate policies for Integra and SeaSpine in accordance with Section 9.2, as applicable, (ii) extend the policy through the Distribution Date or (iii) renew the policy.

Section 9.8 Copies of Policies. As soon as reasonably practical following the Distribution Date, Integra, at its own expense, shall provide to SeaSpine copies of all SeaSpine Specific Policies and all Combined Policies. At any time after the Distribution Date, upon the reasonable request of SeaSpine, Integra shall provide to SeaSpine copies of all other documents related to any SeaSpine Specific Policies or any Combined Policies (in each case, including without limitation, certificates of insurance, insurer quotes and documents provided to underwriters).

ARTICLE X.

MISCELLANEOUS

Section 10.1 Complete Agreement; Construction. This Agreement, including the Schedules, and the Ancillary Agreements shall constitute the entire agreement between the Parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter.

 

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Section 10.2 Ancillary Agreements. Except as may be expressly stated herein, this Agreement is not intended to address, and should not be interpreted to address, the matters specifically and expressly covered by the Ancillary Agreements.

Section 10.3 Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the Parties and delivered to the other Party.

Section 10.4 Survival of Agreements. Except as otherwise contemplated by this Agreement, all covenants and agreements of the Parties contained in this Agreement shall survive the Distribution Date.

Section 10.5 Distribution Expenses. Except as set forth on Schedule 10.5 or as otherwise expressly set forth in this Agreement or any Ancillary Agreement, all costs and expenses incurred on or prior to the Distribution Date (whether or not paid on or prior to the Distribution Date) in connection with the preparation, execution, delivery, printing and implementation of this Agreement and any Ancillary Agreement, the Registration Statement, the Distribution and the consummation of the transactions contemplated thereby, shall be charged to and paid by Integra. Except as set forth on Schedule 10.5, such expenses shall be deemed to be Integra Liabilities. Except as otherwise set forth in this Agreement or any Ancillary Agreement, each Party shall bear its own costs and expenses incurred after the Distribution Date. Any amount or expense to be paid or reimbursed by any Party to any other Party shall be so paid or reimbursed promptly after the existence and amount of such obligation is determined and written demand therefor is made.

Section 10.6 Notices. All notices and other communications hereunder shall be in writing, shall reference this Agreement and shall be hand delivered or mailed by registered or certified mail (return receipt requested) to the Parties at the following addresses (or at such other addresses for a Party as shall be specified by like notice) and will be deemed given on the date on which such notice is received:

To Integra:

Integra LifeSciences Holdings Corporation

311 Enterprise Drive

Plainsboro, New Jersey 08536

Attention: General Counsel

Tel: (609) 275-0500

Fax: (609) 275-5363

To SeaSpine:

SeaSpine Holdings Corporation

2302 La Mirada Drive

Vista, California 92081

Attention: General Counsel

Tel: (760) 727-8399

Fax: (760) 216-5702

 

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Section 10.7 Waivers. The failure of any Party to require strict performance by any other Party of any provision in this Agreement will not waive or diminish that Party’s right to demand strict performance thereafter of that or any other provision hereof.

Section 10.8 Amendments. Subject to the terms of Sections 10.11 and 10.13 hereof, this Agreement may not be modified or amended except by an agreement in writing signed by each of the Parties.

Section 10.9 Assignment. This Agreement shall not be assignable, in whole or in part, directly or indirectly, by any Party without the prior written consent of the other Party, and any attempt to assign any rights or obligations arising under this Agreement without such consent shall be void; provided, however, that either Party may assign this Agreement to a purchaser of all or substantially all of the properties and assets of such Party so long as such purchases expressly assumes, in a written instrument in form reasonably satisfactory to the non-assigning Party, the due and punctual performance or observance of every agreement and covenant of this Agreement on the part of the assigning Party to be performed or observed.

Section 10.10 Successors and Assigns. The provisions to this Agreement shall be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and permitted assigns.

Section 10.11 Termination. This Agreement (including Article V hereof) may be terminated and the Distribution may be amended, modified or abandoned at any time prior to the Distribution by and in the sole discretion of Integra without the approval of SeaSpine or the stockholders of Integra. In the event of such termination, no Party shall have any liability of any kind to any other Party or any other Person. After the Distribution, this Agreement may not be terminated except by an agreement in writing signed by the Parties; provided, however, that Article V shall not be terminated or amended after the Distribution in respect of a Third Party beneficiary thereto without the consent of such Person.

Section 10.12 Subsidiaries. Each of the Parties shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any entity that is contemplated to be a Subsidiary of such Party after the Distribution Date.

Section 10.13 Third-Party Beneficiaries. Except (a) as provided in Section 3.12 for the release of any Person provided thereunder, (b) as provided in Article V relating to Indemnitees, and (c) as specifically provided in any Ancillary Agreement, this Agreement and the Ancillary Agreements are solely for the benefit of the Parties and their respective Subsidiaries and Affiliates and shall not be deemed to confer upon any other Person any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Agreement.

 

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Section 10.14 Title and Headings. Titles and headings to Sections herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

Section 10.15 Schedules. The Schedules shall be construed with and as an integral part of this Agreement to the same extent as if the same had been set forth verbatim herein

Section 10.16 Governing Law. This Agreement shall be governed by and construed in accordance with the Laws of the State of Delaware applicable to Contracts made and to be performed in the state of Delaware.

Section 10.17 Waiver of Jury Trial. The Parties hereby irrevocably waive any and all right to trial by jury in any legal proceeding arising out of or related to this Agreement.

Section 10.18 Specific Performance. From and after the Distribution, in the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the Parties agree that the Party to this Agreement who is or is to be thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief of its rights under this Agreement, in addition to any and all other rights and remedies at Law or in equity, and all such rights and remedies shall be cumulative. The Parties agree that, from and after the Distribution, the remedies at Law for any breach or threatened breach of this Agreement, including monetary damages, are inadequate compensation for any loss, that any defense in any action for specific performance that a remedy at Law would be adequate is hereby waived, and that any requirements for the securing or posting of any bond with such remedy are hereby waived.

Section 10.19 Severability. In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The Parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the day and year first above written.

 

Integra LifeSciences Holdings Corporation
By:    
Name:  
Title:  

SeaSpine Holdings Corporation

By:    
Name:  
Title:  
EX-3.1

Exhibit 3.1

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

SEASPINE HOLDINGS CORPORATION

SeaSpine Holdings Corporation, a corporation organized and existing under the General Corporation Law of the State of Delaware (the “DGCL”), does hereby certify that:

1. The Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on February 12, 2015.

2. The terms and provisions of this Amended and Restated Certificate of Incorporation have been fully approved by unanimous written consent of the Board of Directors of the Corporation and the Stockholders, pursuant to Subsections 141(f), 228(a), 242 and 245 of the DGCL. The text of the Amended and Restated Certificate of Incorporation reads in its entirety as follows:

ARTICLE I.

The name of the Corporation is SeaSpine Holdings Corporation (the “Corporation”).

ARTICLE II.

The address of the Corporation’s registered office in the State of Delaware is 2711 Centerville Road, Suite 400, Wilmington, County of New Castle, Delaware, 19808, and the name of its registered agent at such address is Corporation Service Company.

ARTICLE III.

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL, as it now exists or may hereafter be amended and supplemented.

ARTICLE IV.

The Corporation is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares of capital stock which the Corporation shall have authority to issue is seventy-five million (75,000,000). The total number of shares of Common Stock that the Corporation is authorized to issue is sixty million (60,000,000), having a par value of $0.01 per share, and the total number of shares of Preferred Stock that the corporation is authorized to issue is fifteen million (15,000,000), having a par value of $0.01 per share.


ARTICLE V.

The designations and the powers, privileges and rights, and the qualifications, limitations or restrictions thereof in respect of each class of capital stock of the Corporation are as follows:

 

  A. COMMON STOCK

1. General. The voting, dividend, liquidation, conversion and stock split rights of the holders of the Common Stock are subject to and qualified by the rights of the holders of the Preferred Stock of any series as may be designated by the Board of Directors of the Corporation (the “Board of Directors”) upon any issuance of the Preferred Stock of any series.

2. Voting. Each holder of Common Stock shall be entitled to one (1) vote for each share of Common Stock held by such holder. Each holder of Common Stock shall be entitled to notice of any stockholders’ meeting in accordance with the Bylaws of the Corporation (as in effect at the time in question) (the “Bylaws”) and applicable law on all matters put to a vote of the stockholders of the Corporation.

Subject to the rights of any holders of any shares of Preferred Stock which may from time to time come into existence and be outstanding, the number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the DGCL.

3. Dividends. Subject to the rights of any holders of any shares of Preferred Stock which may from time to time come into existence and be outstanding, the holders of Common Stock shall be entitled to the payment of dividends when, as and if declared by the Board of Directors in accordance with applicable law and to receive other distributions from the Corporation. Any dividends declared by the Board of Directors to the holders of the then outstanding Common Stock shall be paid to the holders thereof pro rata in accordance with the number of shares of Common Stock held by each such holder as of the record date of such dividend.

4. Liquidation. Subject to the rights of any holders of any shares of Preferred Stock which may from time to time come into existence and be outstanding, in the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the funds and assets of the Corporation that may be legally distributed to the Corporation’s stockholders shall be distributed among the holders of the then outstanding Common Stock pro rata in accordance with the number of shares of Common Stock held by each such holder.

 

  B. PREFERRED STOCK

Preferred Stock may be issued from time to time in one or more series, each of such series to have such terms as stated or expressed herein and in the resolution or resolutions providing for the issue of such series adopted by the Board of Directors as hereinafter provided. Authority is hereby expressly granted to the Board of Directors from time to time to issue the Preferred Stock in one or more series, and in connection with the creation of any such series, by adopting a resolution or resolutions providing for the issuance of the shares thereof and by filing a certificate of designations relating thereto in accordance with the DGCL, to determine and fix the number of shares of such series and such voting powers, full or limited, or no voting powers, and such designations, preferences and relative participating, optional or other special rights, and qualifications, limitations or restrictions thereof, including without limitation thereof, dividend


rights, conversion rights, redemption privileges and liquidation preferences, as shall be stated and expressed in such resolutions, all to the fullest extent now or hereafter permitted by the DGCL. Without limiting the generality of the foregoing, the resolution or resolutions providing for the issuance of any series of Preferred Stock may provide that such series shall be superior or rank equally or be junior to any other series of Preferred Stock to the extent permitted by law. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the DGCL.

 

  C. STOCK SPLIT

Upon the filing and effectiveness of this Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware (the “Effective Time”), each then-outstanding share of Common Stock (“Old Common Stock”) shall be automatically converted into [            ] validly issued, fully paid and non-assessable shares of Common Stock without any further action by the Corporation or the holder of such shares of Old Common Stock (the “Common Stock Split”). Each stock certificate representing shares of Old Common Stock shall thereafter represent a number of shares of Common Stock equal to the same number of shares of Old Common Stock previously represented by such stock certificate, multiplied by [            ] and rounded down to the nearest whole number; provided, however, that each person holding of record a stock certificate or certificates that represented shares of Old Common Stock shall receive, upon surrender of such certificate or certificates, a new certificate or certificates evidencing and representing the number of whole shares of Common Stock to which such person is entitled as a result of the Common Stock Split based on the aggregate number of shares of Old Common Stock held by such person. No fractional interest in a share of Common Stock shall be deliverable upon the Common Stock Split. Stockholders who otherwise would have been entitled to receive any fractional interest in a share of Common Stock, in lieu of receipt of such fractional interest, shall be entitled to receive from the Corporation an amount in cash equal to the fair value of such fractional interest as of the Effective Time. All share numbers, dollar amounts and other provisions set forth herein give effect to the Common Stock Split.

ARTICLE VI.

For the management of the business and for the conduct of the affairs of the Corporation it is further provided that:

A. The directors of the Corporation shall be classified with respect to the time for which they severally hold office into three classes, as nearly equal in number as possible, designated as Class I, Class II and Class III. The initial Class I directors shall serve for a term expiring at the first annual meeting of the stockholders following the date hereof, the initial Class II directors shall serve for a term expiring at the second annual meeting of the stockholders following the date hereof and the initial Class III directors shall serve for a term expiring at the third annual meeting of stockholders following the date hereof, with directors of each class to hold office until their successors are duly elected and qualified; provided that the term of each director shall continue until the election and qualification of a successor and be subject to such director’s earlier death, resignation or removal. At each annual meeting of stockholders of the Corporation


beginning with the first annual meeting of stockholders following the date hereof, subject to any rights of the holders of shares of any class or series of Preferred Stock, the successors of the class of directors whose term expires at that meeting shall be elected to hold office for a term expiring at the annual meeting of stockholders held in the third year following the year of their election; provided that the term of each director shall continue until the election and qualification of a successor and be subject to such director’s earlier death, resignation or removal. In the case of any increase or decrease, from time to time, in the authorized number of directors of the Corporation, the number of directors in each class shall be apportioned as nearly equal as possible. No decrease in the number of directors shall shorten the term of any incumbent director. The Board is authorized to assign members of the Board already in office to Class I, Class II and Class III.

B. The management of the business and the conduct of the affairs of the Corporation shall be vested in the Board of Directors. The number of directors which shall constitute the whole Board of Directors shall be fixed exclusively by one or more resolutions adopted from time to time by the Board of Directors.

C. Subject to the special rights of the holders of one or more series of Preferred Stock to elect directors, the Board of Directors or any individual director may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the then outstanding shares of voting stock of the Corporation entitled to vote at an election of directors (the “Voting Stock”).

D. Subject to the special rights of the holders of one or more series of Preferred Stock to elect directors, any vacancies on the Board of Directors resulting from death, resignation, disqualification, retirement, removal or other causes and any newly created directorships resulting from any increase in the number of directors shall, unless the Board of Directors determines by resolution that any such vacancies or newly created directorships shall be filled by the stockholders, and except as otherwise provided by law, be filled only by the affirmative vote of a majority of the directors then in office, even though less than a quorum, or by a sole remaining director, and shall not be filled by the stockholders. Any director appointed in accordance with the preceding sentence shall hold office until such director’s successor shall have been elected and qualified or until his or her earlier death, resignation, disqualification, retirement or removal.

E. In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, alter or repeal Bylaws of the Corporation. In addition to any vote of the holders of any class or series of stock of the Corporation required by applicable law or by this Certificate of Incorporation (including any Certificate of Designation in respect of one or more series of Preferred Stock), the adoption, amendment or repeal of the Bylaws of the Corporation by the stockholders of the Corporation shall require the affirmative vote of the holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the then-outstanding shares of the Voting Stock, voting together as a single class.

F. The directors of the Corporation need not be elected by written ballot unless the Bylaws so provide.


ARTICLE VII.

A. Subject to the rights of the holders of any series of Preferred Stock, any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of the stockholders of the Corporation, and the taking of any action by written consent of the stockholders in lieu of a meeting of the stockholders is specifically denied.

B. Special meetings of the stockholders of the Corporation may be called, for any purpose or purposes, at any time by the Board of Directors, the Chairperson of the Board of Directors, the Chief Executive Officer or President (in the absence of a Chief Executive Officer), but such special meetings may not be called by stockholders or any other person or persons.

C. Advance notice of stockholder nominations for the election of directors and of other business proposed to be brought by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in the Bylaws of the Corporation.

ARTICLE VIII.

A. To the maximum extent permitted by the DGCL, as the same exists or as may hereafter be amended, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. If the DGCL is amended after approval by the stockholders of this Article VIII to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL as so amended.

B. The Corporation, to the fullest extent permitted by law, may indemnify and advance expenses to any person made or threatened to be made a party to an action, suit or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he or she, or his or her testator or intestate, is or was a director, officer, employee or agent of the Corporation or any predecessor of the Corporation, or serves or served at any other enterprise as a director, officer, employee or agent at the request of the Corporation or any predecessor to the Corporation.

C. Neither any amendment nor repeal of this Article VIII, nor the adoption of any provision of the Corporation’s certificate of incorporation inconsistent with this Article VIII, shall eliminate or reduce the effect of this Article VIII in respect of any matter occurring, or any action or proceeding accruing or arising (or that, but for this Article VIII, would accrue or arise) prior to such amendment or repeal or adoption of an inconsistent provision.

ARTICLE IX.

Unless the Corporation consents in writing to the selection of an alternate forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by, or other wrongdoing by, any director, officer or employee of the Corporation to the Corporation


or the Corporation’s stockholders, (iii) any action asserting a claim against the Corporation or any director, officer or employee of the Corporation arising pursuant to any provision of the DGCL or the Certificate of Incorporation or the Bylaws of the Corporation, (iv) any action to interpret, apply, enforce or determine the validity of this Certificate of Incorporation or the Bylaws of the Corporation, or (v) any action asserting a claim against the Corporation or any director, officer or employee of the Corporation governed by the internal affairs doctrine. To the fullest extent permitted by law, any person purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article IX. If any provision or provisions of this Article IX shall be held to be invalid, illegal or unenforceable as applied to any person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Article IX (including, without limitation, each portion of any sentence of this Article IX containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby.

ARTICLE X.

Notwithstanding any other provisions of this Certificate of Incorporation or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of the Voting Stock required by law or by this Certificate of Incorporation (including any Certificate of Designation in respect of one or more series of Preferred Stock), the affirmative vote of the holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the then-outstanding shares of the Voting Stock, voting together as a single class, shall be required to alter, amend or repeal Articles VI, VII, VIII, IX and X.

[Signature Page to Follow.]


IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate of Incorporation to be executed by its duly authorized officer on this     th day of             , 2015.

 

SEASPINE HOLDINGS CORPORATION

 

EX-3.2

Exhibit 3.2

AMENDED AND RESTATED

BYLAWS

OF

SEASPINE HOLDINGS CORPORATION

 

 

ARTICLE I

Meetings of Stockholders

Section 1.1. Annual Meetings. The annual meeting of the stockholders of SeaSpine Holdings Corporation (the “Corporation”) for the election of directors (each, a “Director”) and for the transaction of such other business as properly may come before such meeting shall be held each year either within or without the State of Delaware at such place, if any, and on such date and at such time, as may be fixed from time to time by resolution of the Corporation’s Board of Directors (the “Board”) and set forth in the notice or waiver of notice of the meeting. The Board may postpone, reschedule or cancel any annual meeting of stockholders previously scheduled by the Board.

Section 1.2. Special Meetings. A special meeting of the stockholders of the Corporation for any purpose or purposes may be called at any time only by or at the direction of the Board pursuant to a resolution of the Board adopted by a majority of the total number of Directors then in office. Any special meeting of the stockholders shall be held at such place, if any, within or without the State of Delaware, and on such date and at such time, as shall be specified in such resolution. Business transacted at any special meeting of the stockholders shall be limited to the purpose(s) stated in the notice. The Board may postpone, reschedule or cancel any special meeting of the stockholders previously scheduled by the Board.

Section 1.3. Participation in Meetings by Remote Communication. The Board, acting in its sole discretion, may establish guidelines and procedures in accordance with applicable provisions of the Delaware General Corporation Law (the “DGCL”) and any other applicable law for the participation by stockholders and proxyholders in a meeting of stockholders by means of remote communications, and may determine that any meeting of stockholders will not be held at any place but will be held solely by means of remote communication. Stockholders and proxyholders complying with such procedures and guidelines and otherwise entitled to vote at a meeting of stockholders shall be deemed present in person and entitled to vote at a meeting of stockholders, whether such meeting is to be held at a designated place or solely by means of remote communication.

Section 1.4. Notice of Meetings. Whenever stockholders are required or permitted to take any action at a meeting, a notice of the meeting shall be given that shall state the place, if any, date and hour of the meeting, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, the record date for determining the stockholders entitled to vote at the meeting (if such date is different from the record date for stockholders entitled to notice of the meeting) and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by law, the certificate of incorporation of the Corporation (the “Certificate of


Incorporation”) or these Bylaws, the notice of any meeting shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at the meeting as of the record date for determining the stockholders entitled to notice of the meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the Corporation.

Section 1.5. Adjournments. Any meeting of stockholders may be adjourned from time to time, by the chairperson of the meeting or by the vote of a majority of the shares of stock present in person or represented by proxy at the meeting, to reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the place, if any, and date and time thereof (and the means of remote communication, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting) are announced at the meeting at which the adjournment is taken unless the adjournment is for more than thirty (30) days or a new record date is fixed for the adjourned meeting after the adjournment, in which case notice of the adjourned meeting in accordance with Section 1.4 of these Bylaws shall be given to each stockholder of record entitled to vote at the meeting. At the adjourned meeting, the Corporation may transact any business that might have been transacted at the original meeting. If after the adjournment a new record date for determination of stockholders entitled to vote is fixed for the adjourned meeting, the Board shall fix as the record date for determining stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote at the adjourned meeting, and shall give notice of the adjourned meeting to each stockholder of record as of the record date so fixed for notice of such adjourned meeting.

Section 1.6. Quorum. Except as otherwise provided in the Certificate of Incorporation or by law, the presence in person or by proxy of the holders of record of a majority in voting power of the shares entitled to vote at a meeting of stockholders shall constitute a quorum for the transaction of business at such meeting, provided, however, that where a separate vote by a class or series is required, the holders of a majority in voting power of all issued and outstanding stock of such class or series entitled to vote on such matter, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to such matter. In the absence of a quorum, the stockholders so present may, by a majority in voting power thereof, adjourn the meeting from time to time in the manner provided in Section 1.5 of these Bylaws until a quorum shall attend.

Section 1.7. Organization. At every meeting of stockholders the presiding officer shall be the Chairman of the Board, or in the event of his or her absence or disability, a presiding officer chosen by resolution of the Board. The Secretary, or in the event of his or her absence or disability, the Assistant Secretary, if any, or if there be no Assistant Secretary, in the absence of the Secretary, an appointee of the presiding officer, shall act as secretary of the meeting.

Section 1.8. Voting; Proxies. Except as otherwise provided in the Certificate of Incorporation or by law, every holder of record of shares entitled to vote at a meeting of stockholders is entitled to one vote for each share outstanding in his or her name on the books of

 

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the Corporation (x) at the close of business on the record date for such meeting or (y) if no record date has been fixed, at the close of business on the day next preceding the day on which notice of the meeting is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. Except as otherwise required by law, the Certificate of Incorporation, these Bylaws, the rules and regulations of any stock exchange applicable to the Corporation or pursuant to any other rule or regulation applicable to the Corporation, its securities or its stockholders, the vote of a majority of the voting power of the shares entitled to vote at a meeting of stockholders on the subject matter in question represented in person or by proxy at any meeting at which a quorum is present shall be sufficient for the transaction of any business at such meeting. The stockholders do not have the right to cumulate their votes for the election of Directors. Each stockholder entitled to vote at a meeting of stockholders or to express consent to or dissent from corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy. A stockholder may authorize a valid proxy by executing a written instrument signed by such stockholder, or by causing his or her signature to be affixed to such writing by any reasonable means, including but not limited to by facsimile signature, a proxy solicitation firm or a like authorized agent. Proxies by electronic transmission must either set forth, or be submitted with, information from which it can be determined that the electronic transmission was authorized by the stockholder. Any copy, facsimile telecommunication or other reliable reproduction of a writing or transmission created pursuant to this section may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used if such copy, facsimile telecommunication or other reproduction is a complete reproduction of the entire original writing or transmission. No proxy may be voted or acted upon after the expiration of three years from the date of such proxy, unless such proxy provides for a longer period. Every proxy is revocable at the pleasure of the stockholder executing it unless the proxy states that it is irrevocable and applicable law makes it irrevocable. A stockholder may revoke any proxy that is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or by filing another duly executed proxy bearing a later date with the Secretary.

Section 1.9. Fixing Date for Determination of Stockholders of Record.

(a) In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall, unless otherwise required by law, not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If the Board so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. The Secretary or any Assistant Secretary shall cause notice of each meeting of stockholders to be given in writing in a manner permitted by the DGCL not less than ten (10) days nor more than sixty (60) days prior to the meeting to each stockholder of record entitled to vote at such meeting as of the record date for determining the stockholders entitled to notice of the meeting, subject to such exclusions as are then permitted by the DGCL. The notice shall specify (i) the record date

 

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for determining the stockholders entitled to vote at the meeting (if such date is different from the record date for stockholders entitled to notice of the meeting), (ii) the place, if any, date and time of such meeting, (iii) the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting, (iv) in the case of a special meeting, the purpose or purposes for which such meeting is called and (v) such other information as may be required by law or as may be deemed appropriate by the Board, the Chairman of the Board, the President or the Secretary of the Corporation. If the stockholder list referred to in Section 1.10 of these Bylaws is made accessible on an electronic network, the notice of meeting must indicate how the stockholder list can be accessed.

(b) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix a record date, which shall not be more than sixty (60) days prior to such other action. If no such record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.

Section 1.10. List of Stockholders Entitled to Vote. The officer who has charge of the stock ledger shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting (provided, however, if the record date for determining the stockholders entitled to vote is less than ten (10) days before the date of the meeting, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date), arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting at least ten (10) days prior to the meeting (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of meeting or (ii) during ordinary business hours at the principal place of business of the Corporation. If the meeting is to be held at a place, then a list of stockholders entitled to vote at the meeting shall be produced and kept at the time and place of the meeting during the whole time thereof and may be examined by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. Except as otherwise provided by law, the stock ledger shall be the only evidence as to who are the stockholders entitled to examine the list of stockholders required by this Section 1.10 or to vote in person or by proxy at any meeting of stockholders.

Section 1.11. Inspectors of Election. The Corporation may, and shall if required by law, in advance of any meeting of stockholders, appoint one or more inspectors of election, who may be employees of the Corporation, to act at the meeting or any adjournment thereof and to make a written report thereof. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. In the event that no inspector so appointed or designated is able to act at a meeting of stockholders, the person presiding at the meeting shall

 

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appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath to execute faithfully the duties of inspector with strict impartiality and according to the best of his or her ability. The inspector or inspectors so appointed or designated shall (i) ascertain the number of shares of capital stock of the Corporation outstanding and the voting power of each such share, (ii) determine the shares of capital stock of the Corporation represented at the meeting and the validity of proxies and ballots, (iii) count all votes and ballots, (iv) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors, and (v) certify their determination of the number of shares of capital stock of the Corporation represented at the meeting and such inspectors’ count of all votes and ballots. Such certification and report shall specify such other information as may be required by law. In determining the validity and counting of proxies and ballots cast at any meeting of stockholders of the Corporation, the inspectors may consider such information as is permitted by applicable law. No person who is a candidate for an office at an election may serve as an inspector at such election.

Section 1.12. Conduct of Meetings. The Board may make such rules or regulations for the conduct of meetings of stockholders as it shall deem necessary, appropriate or convenient. Subject to any such rules and regulations, the presiding officer of any meeting shall have the right and authority to convene and (for any or no reason) to recess and/or adjourn the meeting and to prescribe rules, regulations and procedures for such meeting and to take all such actions as in the judgment of the presiding officer are appropriate for the proper conduct of such meetings. Such rules, regulations or procedures, whether adopted by the Board or prescribed by the presiding officer of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the presiding person of the meeting shall determine; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. The presiding person at any meeting of stockholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall, if the facts warrant, determine and declare to the meeting that a matter or business was not properly brought before the meeting and if such presiding person should so determine, such presiding person shall so declare to the meeting and any such matter or business not properly brought before the meeting shall not be transacted or considered. Unless and to the extent determined by the Board or the person presiding over the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

Section 1.13. Notice of Stockholder Proposals and Nominations.

(a) Annual Meetings

(i) Nominations of persons for election to the Board and proposals of business to be considered by the stockholders at an annual meeting of stockholders may be made only (x) as specified in the Corporation’s notice of meeting (or any notice supplemental thereto), (y) by or at

 

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the direction of the Board, or a committee appointed by the Board for such purpose, or (z) by any stockholder of the Corporation who or which (1) is entitled to vote at the meeting, (2) complies in a timely manner with all notice procedures set forth in this Section 1.13, and (3) is a stockholder of record when the required notice is delivered and at the date of the meeting. A stockholder proposal must constitute a proper matter for corporate action under the DGCL.

(ii) Notice in writing of a stockholder nomination or stockholder proposal must be delivered to the attention of the Secretary at the principal place of business of the Corporation by the close of business not fewer than ninety (90) days nor more than one hundred twenty (120) days prior to the first anniversary of the preceding year’s annual meeting (which anniversary date, in the case of the first annual meeting of stockholders following the date hereof, shall be deemed to be [            ]); provided that if the date of the annual meeting is advanced by more than thirty (30) days or delayed by more than seventy (70) days from such anniversary date of the preceding year’s annual meeting, notice by the stockholder to be timely must be so delivered not earlier than one hundred twenty (120) days prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. If the number of Directors to be elected to the Board at an annual meeting is increased, and if the Corporation does not make a public announcement naming the applicable nominees for Director or specifying the size of the increased Board at least one hundred (100) days prior to the first anniversary of the preceding year’s annual meeting, then any stockholder nomination in respect of the increased number of positions shall be considered timely if delivered not later than the close of business on the 10th day following the day on which a public announcement naming all nominees or specifying the size of the increased Board is first made by the Corporation.

(iii) Notice of a stockholder nomination shall include, as to each person whom the stockholder proposes to nominate for election or reelection as a Director, all information relating to such person required to be disclosed in solicitations of proxies for election of Directors or is otherwise required, in each case pursuant to and in accordance with Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder, including such person’s written consent to being named in the proxy statement as a nominee and to serving as a Director if elected. Notice of a stockholder proposal shall include a brief description of the business desired to be brought before the meeting, the text of the proposal (including the text of any resolutions proposed for consideration and if such business includes proposed amendments to the Certificate of Incorporation and/or Bylaws of the Corporation, the text of the proposed amendments), the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made.

(iv) Notice of a stockholder nomination or proposal shall also set forth, as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made:

(1) the name and address of such stockholder, as they appear on the Corporation’s books and records, and of any such beneficial owner;

 

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(2) the class or series and number of shares of capital stock of the Corporation which are owned beneficially and of record by such stockholder and any such beneficial owner;

(3) a description of any agreement, arrangement or understanding between or among such stockholder and any such beneficial owner, any of their respective affiliates or associates, and any other person or persons (including their names) in connection with the proposal of such nomination or other business;

(4) a description of any agreement, arrangement or understanding (including, regardless of the form of settlement, any derivative, long or short positions, profit interests, forwards, futures, swaps, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions and borrowed or loaned shares) that has been entered into by or on behalf of, or any other agreement, arrangement or understanding that has been made, the effect or intent of which is to create or mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such stockholder or any such beneficial owner or any such nominee with respect to the Corporation’s securities (a “Derivative Instrument”);

(5) to the extent not disclosed pursuant to clause (4) above, the principal amount of any indebtedness of the Corporation or any of its subsidiaries beneficially owned by such stockholder or by any such beneficial owner, together with the title of the instrument under which such indebtedness was issued and a description of any Derivative Instrument entered into by or on behalf of such stockholder or such beneficial owner relating to the value or payment of any indebtedness of the Corporation or any such subsidiary;

(6) a representation that such stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business or nomination;

(7) any other information relating to such stockholder and any such beneficial owner required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in an election contest pursuant to and in accordance with Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder; and

(8) a representation as to whether such stockholder or any such beneficial owner intends or is part of a group which intends (x) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to elect the nominee or to approve or adopt the proposal or and/or (y) otherwise to solicit proxies from stockholders in support of such nomination or proposal.

If requested by the Corporation, the information required under clauses (iv)(2), (3), (4) and (5) of the preceding sentence of this Section 1.13(a) shall be supplemented by such stockholder and any such beneficial owner not later than ten (10) days after the record date for notice of the meeting to disclose such information as of such record date. The foregoing notice requirements

 

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of this Section 1.13(a) shall be deemed satisfied by a stockholder with respect to business or a nomination if such stockholder has notified the Corporation of his or her intention to present a proposal or make a nomination at an annual meeting in compliance with the applicable rules and regulations promulgated under the Exchange Act and such stockholder’s proposal or nomination has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for such annual meeting.

(b) Special Meetings.

(i) Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting pursuant to Section 1.4 of these Bylaws. Nominations of persons for election to the Board at a special meeting of stockholders may be made only (x) by or at the direction of the Board, or a committee appointed by the Board for such purpose, if the Corporation’s notice of meeting indicated that the purposes of meeting included the election of Directors and specified the number of Directors to be elected, or (y) provided that the Board has determined that directors shall be elected at such meeting, by any stockholder of the Corporation. A stockholder may nominate persons for election to the Board (a “stockholder nomination”) at a special meeting only if the stockholder (1) is entitled to vote at the meeting, (2) complies in a timely manner with the notice procedures set forth in paragraph (ii) of this Section 1.13(b), and (3) is a stockholder of record when the required notice is delivered and at the date of the meeting.

(ii) Notice in writing of a stockholder nomination must be delivered to the attention of the Secretary at the principal place of business of the Corporation not more than 120 days prior to the date of the meeting and not later than the close of business on the later of the 90th day prior to the meeting or the 10th day following the last to occur of the public announcement by the Corporation of the date of such meeting and the public announcement by the Corporation of the nominees proposed by the Board to be elected at such meeting, and must comply with the provisions of Sections 1.12(a)(iii) and (iv) of these Bylaws. The foregoing notice requirements of this Section 1.13(b) shall be deemed satisfied by a stockholder with respect to a nomination if the stockholder has notified the Corporation of his or her intention to present a nomination at such special meeting in compliance with the applicable rules and regulations promulgated under the Exchange Act and such stockholder’s nomination has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for such special meeting.

(c) General.

(i) Except as otherwise expressly provided in any applicable rule or regulation promulgated under the Exchange Act, only such persons who are nominated in accordance with the procedures set forth in this Section 1.13 shall be eligible to be elected at an annual or special meeting of stockholders of the Corporation to serve as Directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 1.13. Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, the presiding officer of a meeting of

 

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stockholders shall have the power and duty (x) to determine whether a nomination or any business proposed to be brought before the meeting was made in accordance with the procedures set forth in this Section 1.13, and (y) if any proposed nomination or business is not in compliance with this Section 1.13, to declare that such defective nomination shall be disregarded or that such proposed business shall not be transacted.

(ii) The Corporation may require any proposed stockholder nominee for Director to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as a Director of the Corporation. Unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) making a nomination or proposal under this Section 1.13 does not appear at a meeting of stockholders to present such nomination or proposal, the nomination shall be disregarded and/or the proposed business shall not be transacted, as the case may be, notwithstanding that proxies in favor thereof may have been received by the Corporation. For purposes of this Section 1.13, to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.

(iii) For purposes of this Section 1.13, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

(iv) Notwithstanding the foregoing provisions of this Section 1.13, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 1.13; provided, however, that any references in these Bylaws to the Exchange Act or the rules and regulations promulgated thereunder are not intended to and shall not limit any requirements applicable to nominations or proposals as to any other business to be considered pursuant to this Section 1.13 and compliance with paragraphs (a) and (b) of this Section 1.13 shall be the exclusive means for a stockholder to make nominations or submit other business (other than, as provided in the last sentences of paragraphs (a) and (b) hereof, business or nominations brought properly under and in compliance with Rule 14a-8 or Rule 14a-11 of the Exchange Act, as such Rules may be amended from time to time). Nothing in this Section 1.13 shall be deemed to affect any rights of (x) stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (y) the holders of any series of preferred stock to elect Directors pursuant to any applicable provisions of the Certificate of Incorporation or of the relevant preferred stock certificate or designation.

(v) The announcement of an adjournment or postponement of an annual or special meeting does not commence a new time period (and does not extend any time period) for the giving of notice of a stockholder nomination or a stockholder proposal.

 

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ARTICLE II

Board of Directors

Section 2.1. General Powers. Except as may otherwise be provided by law or by the Certificate of Incorporation, the affairs and business of the Corporation shall be managed by or under the direction of the Board and the Board may exercise all the powers and authority of the Corporation. The Directors shall act only as a Board, and the individual Directors shall have no power as such.

Section 2.2. Number and Term of Office. The number of Directors shall initially be [            ], classified (including Directors in office as of the date hereof) with respect to the time for which they severally hold office into three classes, as nearly equal in number as possible, designated as Class I, Class II and Class III, which number may be modified (but not reduced to less than three) from time to time exclusively by resolution of the Board, subject to the rights of the holders of shares of any class or series of preferred stock, if any. The initial Class I directors shall serve for a term expiring at the first annual meeting of the stockholders following the date hereof, the initial Class II directors shall serve for a term expiring at the second annual meeting of the stockholders following the date hereof and the initial Class III directors shall serve for a term expiring at the third annual meeting of stockholders following the date hereof, with Directors of each class to hold office until their successors are duly elected and qualified, provided that the term of each Director shall continue until the election and qualification of a successor and be subject to such Director’s earlier death, resignation or removal. At each annual meeting of stockholders of the Corporation beginning with the first annual meeting of stockholders following the date hereof, subject to any rights of the holders of shares of any class or series of preferred stock, the successors of the class of Directors whose term expires at that meeting shall be elected to hold office for a term expiring at the annual meeting of stockholders held in the third year following the year of their election, provided that the term of each Director shall continue until the election and qualification of a successor and be subject to such Director’s earlier death, resignation or removal. At each meeting of the stockholders for the election of Directors, provided a quorum is present, the Directors shall be elected by a plurality of the votes validly cast in such election. Any director may resign at any time upon notice to the Corporation. In the case of any increase or decrease, from time to time, in the authorized number of Directors, the number of Directors in each class shall be apportioned as nearly equal as possible. No decrease in the number of Directors shall shorten the term of any incumbent Director.

Section 2.3. Regular Meetings. Regular meetings of the Board may be held at such places within or without the State of Delaware and at such times as the Board may from time to time determine.

Section 2.4. Special Meetings. Special meetings of the Board shall be held whenever called by the President, by the Chairman of the Board, or by a majority of the Directors then in office, at such place, date and time as may be specified in the respective notices or waivers of notice of such meetings. Any business may be conducted at a special meeting. Notice of a special meeting of the Board shall be given by the person or persons calling the meeting at least twenty-four hours before the special meeting.

 

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Section 2.5. Notice of Meetings. Notices of special meetings shall be given to each Director, and notice of each resolution or other action affecting the date, time or place of one or more regular meetings shall be given to each Director not present at the meeting adopting such resolution or other action, subject to Section 2.8 of these Bylaws. Notices shall be given personally, or by telephone confirmed by facsimile or email dispatched promptly thereafter, or by facsimile or email confirmed by a writing delivered by a recognized overnight courier service, directed to each Director at the address from time to time designated by such Director to the Secretary. Each such notice and confirmation must be given (received in the case of personal service or delivery of written confirmation) at least 24 hours prior to the time of a meeting.

Section 2.6. Telephonic Meetings Permitted. Members of the Board, or any committee designated by the Board, may participate in a meeting thereof by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this by-law shall constitute presence in person at such meeting.

Section 2.7. Quorum; Vote Required for Action. At all meetings of the Board the directors entitled to cast a majority of the votes of the whole Board shall constitute a quorum for the transaction of business. Except in cases in which the Certificate of Incorporation, these Bylaws or applicable law otherwise provides, a majority of the votes entitled to be cast by the directors present at a meeting at which a quorum is present shall be the act of the Board.

Section 2.8. Adjournment. A majority of the Directors present may adjourn any meeting of the Board to another date, time or place, whether or not a quorum is present. No notice need be given of any adjourned meeting unless (a) the date, time and place of the adjourned meeting are not announced at the time of adjournment, in which case notice conforming to the requirements of Section 2.5 of these Bylaws shall be given to each Director, or (b) the meeting is adjourned for more than 24 hours, in which case the notice referred to in clause (a) shall be given to those Directors not present at the announcement of the date, time and place of the adjourned meeting.

Section 2.9. Action Without a Meeting. Unless otherwise restricted in the Certificate of Incorporation, any action required or permitted to be taken at any meeting of the Board may be taken without a meeting if all members of the Board consent thereto in writing or by electronic transmission, and such writing or writings or electronic transmissions are filed with the minutes of proceedings of the Board. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

Section 2.10. Regulations. To the extent consistent with applicable law, the Certificate of Incorporation and these Bylaws, the Board may adopt such rules and regulations for the conduct of meetings of the Board and for the management of the affairs and business of the Corporation as the Board may deem appropriate. The Board may elect from among its members a chairperson and one or more vice-chairpersons to preside over meetings and to perform such other duties as may be designated by the Board.

 

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Section 2.11. Resignations of Directors. Any Director may resign at any time by submitting an electronic transmission or by delivering a written notice of resignation, signed by such Director, to the Chairman of the Board, the President or the Secretary. Such resignation shall take effect upon delivery unless the resignation specifies a later effective date or an effective date determined upon the happening of a specified event.

Section 2.12. Removal of Directors. Subject to the rights of the holders of shares of any class or series of preferred stock, if any, to elect Directors pursuant to the Certificate of Incorporation (including any certificate of designation thereunder), any Director may be removed only for cause, upon the affirmative vote of the holders of sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the then outstanding shares of voting stock of the Corporation entitled to vote at an election of directors in accordance with the DGCL, the Certificate of Incorporation and these Bylaws.

Section 2.13. Vacancies and Newly Created Directorships. Subject to the rights of the holders of shares of any class or series of preferred stock, if any, to elect additional Directors pursuant to the Certificate of Incorporation (including any certificate of designation thereunder), any vacancy in the Board that results from the death, disability, resignation, disqualification or removal of any Director or from any other cause or newly created directorship shall be filled solely by the affirmative vote of a majority of the total number of Directors then in office, even if less than a quorum, or by a sole remaining Director. Any Director filling a vacancy shall be of the same class as that of the Director whose death, resignation, disqualification, removal or other event caused the vacancy, and any Director filling a newly created directorship shall be of the class specified by the Board at the time the newly created directorship was created. A Director elected to fill a vacancy or newly created Directorship shall hold office until his or her successor has been elected and qualified or until his or her earlier death, resignation or removal.

Section 2.14. Director Fees and Expenses. The amount, if any, which each Director shall be entitled to receive as compensation for his or her services shall be fixed from time to time by the Board. The Corporation will cause each non-employee Director serving on the Board to be reimbursed for all reasonable out-of-pocket costs and expenses incurred by him or her in connection with such service.

Section 2.15. Reliance on Accounts and Reports, etc. A Director, as such or as a member of any committee designated by the Board, shall in the performance of his or her duties be fully protected in relying in good faith upon the records of the Corporation and upon information, opinions, reports or statements presented to the Corporation by any of the Corporation’s officers or employees, or committees designated by the Board, or by any other person as to the matters the member reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.

 

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ARTICLE III

Committees

Section 3.1. Designation of Committees. The Board shall designate such committees as may be required by applicable laws, regulations or stock exchange rules and may designate such additional committees as it deems necessary or appropriate. Each committee shall consist of such number of Directors, with such qualifications, as may be required by applicable laws, regulations or stock exchange rules or as from time to time may be fixed by the Board and shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation to the extent delegated to such committee by resolution of the Board, which delegation shall include all such powers and authority as may be required by applicable laws, regulations or stock exchange rules. No committee shall have any power or authority as to (a) approving or adopting, or recommending to the stockholders, any action or matter (other than the election or removal of directors) expressly required by the DGCL to be submitted to stockholders for approval, (b) adopting, amending or repealing any of these Bylaws or (c) as may otherwise be excluded by law or by the Certificate of Incorporation.

Section 3.2. Members and Alternate Members. The members of each committee and any alternate members shall be selected by the Board. The Board may provide that the members and alternate members serve at the pleasure of the Board. An alternate member may replace any absent or disqualified member at any meeting of the committee. An alternate member shall be given all notices of committee meetings, may attend any meeting of the committee, but may count towards a quorum and vote only if a member for whom such person is an alternate is absent or disqualified. Each member (and each alternate member) of any committee shall hold office only until the time he or she shall cease for any reason to be a Director, or until his or her earlier death, resignation or removal.

Section 3.3. Committee Procedures. A quorum for each committee shall be a majority of its members, unless the committee has only one or two members, in which case a quorum shall be one member, unless a greater quorum is established by the Board. The vote of a majority of the committee members present at a meeting at which a quorum is present shall be the act of the committee. Each committee shall keep regular minutes of its meetings and report to the Board when required. The Board shall adopt a charter for each committee for which a charter is required by applicable laws, regulations or stock exchange rules, may adopt a charter for any other committee, and may adopt other rules and regulations for the government of any committee not inconsistent with the provisions of these Bylaws or any such charter, and each committee may adopt its own rules and regulations of government, to the extent not inconsistent with these Bylaws or any charter or other rules and regulations adopted by the Board.

Section 3.4. Meetings and Actions of Committees. Except to the extent that the same may be inconsistent with the terms of any committee charter required by applicable laws, regulations or stock exchange rules, each committee designated by the Board may make, alter and repeal rules for the conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board conducts its business pursuant to Article II of these Bylaws.

 

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Section 3.5. Resignations and Removals. Any member (and any alternate member) of any committee may resign from such position at any time by submitting an electronic transmission or by delivering a written notice of resignation, signed by such member, to the Chairman of the Board, the President or the Secretary. Such resignation shall take effect upon delivery unless the resignation specifies a later effective date or an effective date determined upon the happening of a specified event. Any member (and any alternate member) of any committee may be removed from such position by the Board at any time, either for or without cause.

Section 3.6. Vacancies. If a vacancy occurs in any committee for any reason, the remaining members (and any alternate members) may continue to act if a quorum is present. A committee vacancy may be filled only by the Board.

ARTICLE IV

Officers

Section 4.1. Officers; Election; Qualifications; Term of Office; Resignation; Removal; Vacancies. The Board shall elect a Chairman of the Board (who shall be a Director), a President and Secretary, and it may, if it so determines, choose a Vice Chairperson of the Board from among its members. The Board may also choose one or more Vice Presidents, one or more Assistant Secretaries, a Treasurer and one or more Assistant Treasurers and such other officers as it shall from time to time deem necessary or desirable. In addition, the Board from time to time may delegate to any officer the power to appoint subordinate officers or agents and to prescribe their respective rights, terms of office, authorities and duties. Any action by an appointing officer may be superseded by action by the Board. Any number of offices may be held by the same person, except that one person may not hold both the office of President and the office of Secretary. Unless otherwise determined by the Board, the officers of the Corporation need not be elected for a specified term but shall serve at the pleasure of the Board or for such terms as may be agreed in the individual case by each officer and the Board. Each officer shall hold office until his or her successor has been elected or appointed and qualified, or until his or her earlier death, resignation or removal. A failure to elect officers shall not dissolve or otherwise affect the Corporation. Any officer or agent may resign at any time by delivering notice of resignation, either in writing signed by such officer or by electronic transmission, to the Board, the Chairman of the Board or the President, without prejudice to the rights, if any, of the Corporation under any contract to which such officer is a party. Unless otherwise specified therein, such resignation shall take effect upon delivery. The Board may remove any officer with or without cause at any time, but such removal shall be without prejudice to the contractual rights of such officer, if any, with the Corporation. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise, may be filled by the Board or by the officer, if any, who appointed the person formerly holding such office.

 

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Section 4.2. Powers and Duties of Officers. An officer of the Corporation shall have such authority and shall exercise such powers and perform such duties (a) as may be required by law, (b) to the extent not inconsistent with law, as may be specified by resolution of the Board, (c) to the extent not inconsistent with law or as specified by resolution of the Board, as may be specified by the appointing officer with respect to a subordinate officer appointed pursuant to delegated authority under Section 4.1, and (d) to the extent not inconsistent with any of the foregoing, as generally pertain to their respective offices. The Board may require any officer, agent or employee to give security for the faithful performance of his or her duties.

Section 4.3. Appointing Attorneys and Agents; Voting Securities of Other Entities. Unless otherwise provided by resolution adopted by the Board, the Chairperson of the Board, the President or any Vice President may from time to time appoint an attorney or attorneys or agent or agents of the Corporation, in the name and on behalf of the Corporation, to cast the votes which the Corporation may be entitled to cast as the holder of stock or other securities in any other corporation or other entity, any of whose stock or other securities may be held by the Corporation, at meetings of the holders of the stock or other securities of such other corporation or other entity, or to consent in writing, in the name of the Corporation as such holder, to any action by such other corporation or other entity, and may instruct the person or persons so appointed as to the manner of casting such votes or giving such consents, and may execute or cause to be executed in the name and on behalf of the Corporation and under its corporate seal or otherwise, all such written proxies or other instruments as he or she may deem necessary or proper. Any of the rights set forth in this Section 4.8 which may be delegated to an attorney or agent may also be exercised directly by the Chairperson of the Board, the President or the Vice President.

ARTICLE V

Stock

Section 5.1. Certificates. The shares of the Corporation shall be represented by certificates or shall be uncertificated. Certificates for the shares of stock, if any, shall be in such form as is consistent with the Certificate of Incorporation and applicable law. Every holder of stock represented by a certificate shall be entitled, upon their request, to have a certificate signed by, or in the name of the Corporation by the chairperson or vice-chairperson of the Board, or the president or vice-president, and by the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the Corporation representing the number of shares registered in certificate form. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue.

Section 5.2. Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates. The Corporation may issue a new certificate of stock in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the

 

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owner of the lost, stolen or destroyed certificate, or such owner’s legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.

Section 5.3. Transfer of Stock. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares, duly endorsed or accompanied by appropriate evidence of succession, assignment or authority to transfer, the Corporation shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Within a reasonable time after the transfer of uncertificated stock, the Corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to Sections 151, 156, 202(a) or 218(a) of the DGCL. Subject to the provisions of the Certificate of Incorporation and these Bylaws, the Board may prescribe such additional rules and regulations as it may deem appropriate relating to the issue, transfer and registration of shares of the Corporation.

Section 5.4. Registered Stockholders. Prior to due surrender of a certificate for registration of transfer, the Corporation may treat the registered owner as the person exclusively entitled to receive dividends and other distributions, to vote, to receive notice and otherwise to exercise all the rights and powers of the owner of the shares represented by such certificate, and the Corporation shall not be bound to recognize any equitable or legal claim to or interest in such shares on the part of any other person, whether or not the Corporation shall have notice of such claim or interests. If a transfer of shares is made for collateral security, and not absolutely, this fact shall be so expressed in the entry of the transfer if, when the certificates are presented to the Corporation for transfer or uncertificated shares are requested to be transferred, both the transferor and transferee request the Corporation to do so.

Section 5.5. Transfer Agent and Registrar. The Board may appoint one or more transfer agents and one or more registrars, and may require all certificates representing shares to bear the signature of any such transfer agents or registrars.

ARTICLE VI

Indemnification and Advancement of Expenses

Section 6.1. Right to Indemnification. The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person (a “Covered Person”) who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees)

 

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reasonably incurred by such Covered Person. Notwithstanding the preceding sentence, except as otherwise provided in Section 6.3, the Corporation shall be required to indemnify a Covered Person in connection with a proceeding (or part thereof) commenced by such Covered Person only if the commencement of such proceeding (or part thereof) by the Covered Person was authorized in the specific case by the Board of the Corporation.

Section 6.2. Advancement of Expenses. The Corporation shall to the fullest extent not prohibited by applicable law pay the expenses (including attorneys’ fees) incurred by a Covered Person in defending any proceeding in advance of its final disposition, provided, however, that, to the extent required by law, such payment of expenses in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by the Covered Person to repay all amounts advanced if it should be ultimately determined that the Covered Person is not entitled to be indemnified under this Article VI or otherwise.

Section 6.3. Claims. If a claim for indemnification under this Article VI (following the final disposition of such proceeding) is not paid in full within sixty (60) days after the Corporation has received a claim therefor by the Covered Person, or if a claim for any advancement of expenses under this Article VI is not paid in full within thirty (30) days after the Corporation has received a statement or statements requesting such amounts to be advanced, the Covered Person shall thereupon (but not before) be entitled to file suit to recover the unpaid amount of such claim. If successful in whole or in part, the Covered Person shall be entitled to be paid the expense of prosecuting such claim to the fullest extent permitted by law. In any such action, the Corporation shall have the burden of proving that the Covered Person is not entitled to the requested indemnification or advancement of expenses under applicable law.

Section 6.4. Non-exclusivity of Rights. The rights conferred on any Covered Person by this Article VI shall not be exclusive of any other rights which such Covered Person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, these Bylaws, agreement, vote of stockholders or disinterested directors or otherwise.

Section 6.5. Amendment or Repeal. Any right to indemnification or to advancement of expenses of any Covered Person arising hereunder shall not be eliminated or impaired by an amendment to or repeal of these Bylaws after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought.

Section 6.6. Other Indemnification and Advancement of Expenses. This Article VI shall not limit the right of the Corporation, to the extent and in the manner permitted by law, to indemnify and to advance expenses to persons other than Covered Persons when and as authorized by appropriate corporate action.

 

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ARTICLE VII

Miscellaneous

Section 7.1. Dividends.

(a) Subject to any applicable provisions of law and the Certificate of Incorporation, dividends upon the shares of the Corporation may be declared by the Board at any regular or special meeting of the Board, or by written consent in accordance with the DGCL and these Bylaws, and any such dividend may be paid in cash, property or shares of the Corporation’s stock.

(b) A member of the Board, or a member of any committee designated by the Board shall be fully protected in relying in good faith upon the records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of its officers or employees, or committees of the Board, or by any other person as to matters the Director reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation, as to the value and amount of the assets, liabilities and/or net profits of the Corporation, or any other facts pertinent to the existence and amount of surplus or other funds from which dividends might properly be declared and paid.

Section 7.2. Reserves. There may be set apart out of any funds of the Corporation available for dividends such sum or sums as the Board from time to time may determine proper as a reserve or reserves for meeting contingencies, equalizing dividends, repairing or maintaining any property of the Corporation or for such other purpose or purposes as the Board may determine conducive to the interest of the Corporation, and the Board may similarly modify or abolish any such reserve.

Section 7.3. Execution of Instruments. Except as otherwise required by law or the Certificate of Incorporation, the Board or any officer of the Corporation authorized by the Board may authorize any other officer or agent of the Corporation to enter into any contract or execute and deliver any instrument in the name and on behalf of the Corporation. Any such authorization must be in writing or by electronic transmission and may be general or limited to specific contracts or instruments.

Section 7.4. Fiscal Year. The fiscal year of the Corporation shall be determined by resolution of the Board.

Section 7.5. Seal. The corporate seal shall have the name of the Corporation inscribed thereon and shall be in such form as may be approved from time to time by the Board.

Section 7.6. Books and Records. Except to the extent otherwise required by law, the books and records of the Corporation shall be kept at such place or places within or without the State of Delaware as may be determined from time to time by the Board. Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or by means of, or be in the form of, any information storage device or method, provided that the records so kept can be converted into clearly legible paper form within a reasonable time.

 

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Section 7.7. Manner of Notice. Except as otherwise provided herein or permitted by applicable law, notices to directors and stockholders shall be in writing and delivered personally or mailed to the directors or stockholders at their addresses appearing on the books of the Corporation. Without limiting the manner by which notice otherwise may be given effectively to stockholders, and except as prohibited by applicable law, any notice to stockholders given by the Corporation under any provision of applicable law, the Certificate of Incorporation, or these Bylaws shall be effective if given by a single written notice to stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. Any such consent shall be revocable by the stockholder by written notice to the Corporation. Any stockholder who fails to object in writing to the Corporation, within 60 days of having been given written notice by the Corporation of its intention to send the single notice permitted under this Section 8.7, shall be deemed to have consented to receiving such single written notice. Notice to directors may be given by telecopier, telephone or other means of electronic transmission.

Section 7.8. Waiver of Notice of Meetings of Stockholders, Directors and Committees. Any waiver of notice, given by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at nor the purpose of any regular or special meeting of the stockholders, directors, or members of a committee of directors need be specified in a waiver of notice.

Section 7.9. Amendment of Bylaws. Subject to the provisions of the Certificate of Incorporation, these Bylaws may be amended, altered or repealed (a) by resolution adopted by a majority of the Directors present at any special or regular meeting of the Board at which a quorum is present if, in the case of such special meeting only, notice of such amendment, alteration or repeal is contained in the notice or waiver of notice of such meeting, or (b) at any regular or special meeting of the stockholders upon the affirmative vote of the holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the then-outstanding shares of the Corporation entitled to vote generally in the election of Directors, voting together as a single class, if, in the case of such special meeting only, notice of such amendment, alteration or repeal is contained in the notice or waiver of notice of such meeting.

 

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EX-4.1

Exhibit 4.1

 

C- Incorporated Under the Laws of the State of Delaware

Shares

-0-

SEASPINE HOLDINGS CORPORATION

COMMON STOCK

Authorized Issue:         , Par Value $0.01

Specimen Certificate

This is to certify that                              is the owner of                              fully paid and non-assessable shares of the above Corporation transferable only on the books of the Corporation by the holder hereof in person or by duly authorized attorney upon surrender of this Certificate properly endorsed.

Witness, the seal of the Corporation and the signatories of its duly authorized officers.

 

Dated:

 

 

 

 

President Secretary
EX-10.1

Exhibit 10.1

TRANSITION SERVICES AGREEMENT

THIS TRANSITION SERVICES AGREEMENT (this “Agreement”) is made and entered into as of [            ], 2015, by and between Integra LifeSciences Corporation, a Delaware corporation (“Provider”) and SeaSpine Holdings Corporation, a Delaware corporation (“Recipient”) (Provider and Recipient are referred to individually as a “Party”, and collectively as the “Parties”).

R E C I T A L S

WHEREAS, Provider and Recipient have entered into that certain Separation and Distribution Agreement, dated [            ], 2015 (the “Separation Agreement”), pursuant to which the SeaSpine Business (the “Recipient Business”) will be separated from the Integra Business; and

WHEREAS, to facilitate the transactions contemplated by the Separation Agreement, Provider and Recipient deem it to be appropriate and in their best interests that Provider and its Affiliates provide certain services to Recipient and its Affiliates on a transitional basis pursuant to the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and for other good and valuable consideration, the receipt of which are hereby acknowledged, the Parties to this Agreement agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions. Capitalized terms used but not defined herein shall have the meanings assigned thereto in the Separation Agreement. In the case of capitalized terms defined herein by definitions inconsistent with the definitions ascribed to such terms in the Separation Agreement, the definitions provided herein shall be regarded as controlling for the purposes of this Agreement.

ARTICLE II

SERVICES

Section 2.1 Transition Services.

(a) On the terms and subject to the conditions of this Agreement, Provider shall provide the transition services set forth in Exhibit A (the “Transition Services”) to Recipient and its Affiliates.

(b) The Transition Services provided under this Agreement will be provided at a substantially similar level (type, frequency, quality, timeliness) and in a substantially similar manner as such services were performed by Provider with respect to the Recipient Business over the twelve (12) month period immediately prior to the Distribution Date. Recipient shall not resell, assign or subcontract any of the Transition Services to any Person whatsoever or permit the use of the Transition Services by any other Person (other than its Affiliates).


(c) Provider may perform its obligations through its Affiliates and/or Persons that are unaffiliated with any Party hereto (each, a “Third Party”); provided that Provider shall not be relieved of its obligations under this Agreement by use of such Affiliates and/or Third Parties and shall be responsible for compliance with the terms hereof by such Affiliates and/or Third Parties.

(d) Without limiting Provider’s obligations pursuant to Section 2.1(b) or otherwise under this Agreement, Recipient acknowledges that Provider may be providing similar services and/or services that involve the same resources as those used to provide the Transition Services, to its other businesses and/or Third Parties.

(e) Provider may suspend any or all of the Transition Services, to the extent and for the period it determines in good faith that the provision of such Transition Service(s) hereunder would violate any Law applicable to Provider. If Provider becomes aware of any such actual or potential violation, Provider shall promptly notify Recipient in writing of such violation and the Parties shall work together in good faith to seek and implement a reasonable alternative arrangement that resolves such violation, including provision of the applicable Transition Service through a Third Party. For the avoidance of doubt, Recipient shall not be obligated to pay any Fees in connection with any such suspended Transition Services during the period such services are not provided (other than Fees owed for such Transition Services rendered by but not paid for prior to such suspension).

(f) Recipient acknowledges and agrees that Provider is not in the business of providing services and that the Transition Services will be provided by Provider to Recipient in connection with, and in order to facilitate, the Spin-Off. This Agreement is not intended by the Parties to have Provider manage and operate the Recipient Business.

Section 2.2 Additional Transition Services. If Recipient reasonably determines that there are additional services that are necessary to conduct the Recipient Business but were not included in the Transition Services set forth in Exhibit A (each such service an “Omitted Transition Service”), then Recipient may provide written notice thereof to Provider requesting such additional services. Upon receipt of such a notice by Provider, the Parties shall negotiate in good faith an amendment to Exhibit A setting forth the Omitted Transition Service, the terms and conditions for the provision of such Omitted Transition Service and the Fees payable by Recipient for such Omitted Transition Service, all of which shall be commercially reasonable and pursuant to which such Omitted Transition Service shall become a “Transition Service” for all purposes of this Agreement. Recipient may request that Provider provide additional services that are not Omitted Transition Services, but the provision of such services shall be subject to the sole, but reasonable discretion of Provider and mutual agreement between the Parties with respect to the terms and conditions for the provision of such services and the Fees payable by Recipient for such services.

 

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Section 2.3 Consents.

(a) At Recipient’s sole cost and expense, Provider and Recipient shall, and shall cause their respective Affiliates to, cooperate and exercise commercially reasonable efforts to obtain (i) all consents, approvals or authorizations (the “Consents”) for any necessary software or other Intellectual Property that is not owned by Provider or its Affiliates or otherwise not allowed to be used or transferred to unaffiliated entities and is related to the provision of the Transition Services sufficient to enable Provider, its designee or a Third Party to perform the Transition Services in accordance with this Agreement and (ii) all other Consents to allow Provider to provide the Transition Services and to allow Recipient to access and use the Transition Services (collectively, the “Required Consents”).

(b) In the event that any Required Consent is not obtained, then, unless and until such Required Consent is obtained, the Parties hereto shall cooperate with each other in achieving a reasonable alternative arrangement for Recipient to continue to operate the Recipient Business and for Provider to perform Transition Services (if possible), in each case, in a manner that does not increase the costs to Provider in providing such Transition Services.

Section 2.4 Standard for Transition Services. In addition to the standards set forth in Section 2.1(b), Provider shall at all times perform the Transition Services: (i) with at least the use of reasonable care and (ii) in material compliance with applicable Laws. Provider shall perform its duties and responsibilities hereunder diligently, in good faith and in a manner consistent with past standards and practices with respect to the Recipient Business.

Section 2.5 Provision of Services.

(a) Employment and Supervision. Provider shall have the sole responsibility to employ, pay, supervise, direct and discharge all of its personnel used in its provision of Transition Services hereunder. Provider shall be solely responsible for the payment of all employee benefits and any other direct and indirect compensation for any of its personnel assigned to perform services under this Agreement, as well as such personnel’s worker’s compensation insurance, employment taxes and other employer liabilities relating to such personnel as required by Law.

(b) Independence. Each of Provider and Recipient acknowledges that they are separate entities, each of which has entered into this Agreement for independent business reasons. Provider shall be an independent contractor in connection with the performance of Transition Services hereunder for any and all purposes (including federal or state tax purposes), and the employees performing Transition Services in connection herewith shall not be deemed to be employees or agents of Recipient and nothing contained herein shall be deemed to create a joint venture or partnership.

Section 2.6 Cooperation. During the Service Term (as defined below), the Parties shall, and shall cause each of their agents, auditors and representatives to, cooperate with each other in good faith (i) in the performance of the Transition Services and the Parties’ respective obligations under this Agreement and (ii) to facilitate an orderly and efficient transition of services, processes and functions as contemplated in this Agreement, and in each case in a manner consistent with the intent of this Agreement and without undue burden on any Party.

 

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Section 2.7 Service Interruption. Upon reasonable written notice to Recipient, Provider shall have the right to temporarily interrupt the provision of Transition Services for routine or emergency maintenance purposes whenever it is the commercially reasonable judgment of Provider that such action is desirable or necessary so long as such maintenance is consistent with Provider’s policies and standards applicable to provision of similar services to Provider’s own businesses. If maintenance is non-scheduled, with respect to Transition Services provided by Provider, Provider shall notify Recipient as far in advance as reasonably practicable under the circumstances that maintenance is required. Notwithstanding the foregoing, Recipient acknowledges and agrees that there may be some circumstances in which advance notice is not practicable, such as in the case of emergency or unanticipated failure. In such case, Provider shall be relieved of its obligations to provide Transition Services only for the period of time that the relevant facilities or systems are so shut down. Provider shall use commercially reasonable efforts to minimize each period of shut down and to schedule, to the extent reasonably practicable under the circumstances, such period of shut down so as to not materially inconvenience or disrupt the conduct of the Recipient Business. Provider shall consult with Recipient prior to temporary shut downs to the extent reasonably practicable or, if not reasonably practicable, promptly thereafter. This Section 2.7 shall not be applicable to any event that constitutes a Force Majeure Event, which is governed by Section 2.8.

Section 2.8 Force Majeure.

(a) If Provider is prevented from or delayed in complying, either totally or in part, with any of the terms or provisions of this Agreement for any reason beyond its reasonable control, including without limitation acts of God, acts of any public enemy, floods, Laws or any judgment, decree, injunction or order of any Governmental Authority (a “Force Majeure Event”), then upon notice to Recipient, which shall be provided as promptly as practicable under the circumstances, the affected provisions and/or other requirements of this Agreement shall be suspended during the period of such disability and, unless otherwise set forth herein to the contrary, Provider shall not have any liability to any Person in connection therewith with respect to such period. Provider shall use commercially reasonable efforts to promptly remove such disability as soon as reasonably possible and shall use commercially reasonable efforts to provide the Transition Services during such period of disability; provided, however, that nothing in this Section 2.8 will be construed to require the settlement of any strike, walkout, lockout, other labor dispute or any other claim or litigation on terms which, in the reasonable judgment of Provider are contrary to its interest. It is understood that the settlement of a strike, walkout, lockout, other labor dispute or any other claim or litigation will be entirely within the discretion of Provider. If Provider is unable to provide any of the Transition Services due to such a disability, the Parties hereto shall use commercially reasonable efforts to cooperatively seek a solution that is mutually satisfactory.

(b) Notwithstanding anything in this Agreement to the contrary, the obligation of Provider to resume performance of its obligations hereunder pursuant to this Section 2.8 shall cease to be in effect to the extent and for the period that Recipient has acquired such Transition Services from an alternate source pursuant to this Section 2.8. Recipient shall be free to acquire such Transition Services from an alternate source, at Recipient’s sole cost and expense, and without liability to Provider, for the period and to the extent reasonably necessitated by such non-performance and during the continuation of any

 

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agreement entered into with the provider of such Transition Service, and for that period that such Transition Service is provided by an alternate source, Provider shall have no obligation to provide such Transition Service to Recipient. For the avoidance of doubt, Recipient shall not be obligated to pay Provider for such Transition Services during the period when Provider is not providing itself, or through a Third Party, such Transition Services.

Section 2.9 TSA Manager. Each Party shall nominate a representative to act as the primary contact person for business issues arising under this Agreement (each a “TSA Manager”). The initial TSA Manager of Provider shall be [            ] and the initial TSA Manager of Recipient shall be [            ]. Each Party shall have the right at any time and from time to time to replace its TSA Manager by advising the other Party in writing of any change in its TSA Manager in accordance with Section 10.1 hereof. The Parties agree that all written communications relating to the provision of any Transition Service shall be directed to the TSA Managers. Each Party may treat an act of a TSA Manager on behalf of the other Party as an act authorized by such other Party.

Section 2.10 Obligations. The provision of Transition Services hereunder is subject to the following:

(a) Provider shall not be liable for any action or inaction taken or omitted to be taken by it, its Affiliate or a relevant Third Party pursuant to, and in accordance with, instructions received from Recipient;

(b) Provider may refuse to take any action requested by Recipient if it is not an action required to be taken under this Agreement. Any services provided beyond the scope of the Transition Services shall be billed on such basis as the Parties hereto may mutually agree in accordance with this Agreement;

(c) Provider shall have no obligation to perform any Transition Service to the extent that performing such Transition Service is dependent upon, or otherwise requires, Recipient to perform some service, operation or function prior to Provider performing any such Transition Service unless Recipient shall have, in fact, prior to when Provider is required to perform such Transition Service, performed such other service, operation or function consistent with commercially reasonable business practices;

(d) the Parties shall, during the term of this Agreement, comply with any applicable Law relating to the Transition Services;

(e) the Parties shall not, and shall cause their respective employees not to, break, bypass or circumvent, or attempt to break, bypass or circumvent any security system of any Party hereunder or obtain access to any program or data other than that to which access has been specifically granted; and

(f) the Parties shall, and shall cause their respective Representatives and employees to, at all times comply with all physical and technological security rules, policies and procedures of Provider and Recipient, as applicable.

 

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ARTICLE III

FEES AND PAYMENT

Section 3.1 Fees. During the Service Term for any Transition Service, the fees payable by Recipient for such Transition Service (the “Fees”) shall be as set forth on Exhibit A.

Section 3.2 Invoice and Payment. Provider shall invoice Recipient for amounts due hereunder on a monthly basis, and amounts due hereunder shall be paid by Recipient within thirty (30) days of receipt of the applicable invoice.

Section 3.3 Disputes and Resolution. Recipient shall promptly notify Provider in writing of any amounts billed to it that are in dispute. Upon receipt of such notice, Provider shall research the items in question in a reasonably prompt manner and cooperate with Recipient to resolve any such dispute. Any such dispute shall not relieve Recipient of the obligation to make prompt payment according to the mechanism described in this ARTICLE III for any undisputed amounts. In the event that the Parties agree that any amount that was paid by Recipient was not properly owed, Provider shall refund that amount within thirty (30) days of such agreement (or, alternatively, at Recipient’s option, Provider shall deduct the dollar amount from the next invoice submitted to Recipient).

Section 3.4 Taxes. To the extent required by applicable Law, there shall be added to any Fees due under this Agreement, and included on the applicable invoice, and Recipient agrees to pay to Provider, amounts equal to any Taxes, however designated or levied, based upon such Fees, or upon this Agreement or the Transition Services or materials provided under this Agreement, or their use, as provided by Provider to Recipient hereunder. Provider agrees to pay any such amounts received by it with respect to any Taxes to the appropriate Governmental Authority plus any interest and penalty that may be imposed as the result of Provider not remitting such Taxes in a timely manner. In the event any Taxes based upon services provided by Provider are not added to an invoice from Provider, Recipient shall be responsible, as applicable, to remit to the appropriate Governmental Authority any additional amounts due including Tax, interest and penalty (if the penalty is imposed as a result of Recipient’s payment failure or delay to make payment). If additional amounts are determined to be due on the Transition Services provided to Recipient hereunder as a result of an audit by a Tax jurisdiction, Recipient agrees to reimburse Provider for any additional Tax due, including any interest or penalties (if a penalty or interest is imposed as a result of Recipient’s failure or delay to make payment), unless Recipient has already paid such Tax, interest or penalty itself. The Parties hereto further agree that no Party hereto shall be required to pay any franchise Taxes, Taxes based on the net income of the other Party hereto or personal property Taxes on property owned or leased by a Party hereto.

 

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ARTICLE IV

DISCLAIMER AND LIMITATION OF LIABILITY

Section 4.1 Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, EACH PARTY MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE TRANSITION SERVICES TO BE PROVIDED OR RECEIVED BY IT OR OTHERWISE WITH RESPECT TO THIS AGREEMENT.

Section 4.2 Limitation of Damages. EXCEPT IN THE CASE OF THIRD PARTY CLAIMS, NEITHER PARTY SHALL UNDER ANY CIRCUMSTANCES BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES (INCLUDING LOSS OF PROFITS OR REVENUE OR ANY DIMINUTION OF VALUE) RESULTING OR ARISING FROM THIS AGREEMENT, INCLUDING THE TRANSITION SERVICES, ANY PERFORMANCE OR NONPERFORMANCE OF THE TRANSITION SERVICES OR TERMINATION OF THE TRANSITION SERVICES REGARDLESS OF WHETHER SUCH DAMAGES OR OTHER RELIEF ARE SOUGHT BASED ON BREACH OF WARRANTY, BREACH OF CONTRACT, NEGLIGENCE, STRICT LIABILITY, IN TORT (INTENTIONAL OR OTHERWISE), OR ANY OTHER LEGAL OR EQUITABLE THEORY, SUBJECT TO SECTION 4.4.

Section 4.3 Limitation of Liability. The maximum liability of Provider to, and the sole remedy of, Recipient for breach of this Agreement shall be an amount not to exceed the Fee scheduled to be paid by Recipient to Provider for the particular Transition Service that is the subject of such breach. The limitation of liability described in this Section 4.3 shall not apply to liabilities arising out of or resulting from gross negligence or willful misconduct or as provided in Section 4.4.

Section 4.4 Exclusions From Section 4.2 and 4.3. Neither the limitations of damages set forth in Section 4.2 nor the limitations of liability set forth in Section 4.3 shall apply to (i) a Party’s breach of ARTICLE VI or (ii) to a Party’s intentional and willful breaches or actual fraud.

ARTICLE V

OWNERSHIP OF ASSETS

Section 5.1 Systems. Any information system, software, computer network, database or data file owned, licensed, leased or provided by or for Provider which is used by Provider or its suppliers on behalf of Provider in connection with provision of any Transition Service, each as modified, maintained or enhanced from time to time by Provider or any relevant Third Party (collectively, the “Systems”) shall remain the sole exclusive property of Provider. Except as provided for in Section 5.1(a) and Section 5.1(b) or in any Transaction Document, under no circumstances will Recipient obtain hereunder any ownership right or license (implied or otherwise) in or to (i) any custom development work performed hereunder by Provider or Third Parties working at the direction of Provider, (ii) any intellectual property of Provider, or (iii) any Systems used in connection with the Transition Services not owned or licensed by Recipient as of the effective date of this Agreement.

(a) Data Products. Access to, and any license to use, Provider’s data products will be provided subject to Provider’s standard terms and conditions of use with respect thereto that are applicable to Third Parties (other than the payment terms, which are set forth in this Agreement).

 

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(b) Intellectual Property. Except with respect intellectual property expressly created for Recipient as a Transition Service deliverable or as otherwise agreed to by the Parties, as between Provider, on the one hand, and Recipient, on the other hand, all right, title and interest in and to all intellectual property developed or provided by Provider in connection with its provision of Transition Services shall be owned exclusively by Provider.

Section 5.2 Other Assets. Except as provided in Section 5.1, all procedures, methods, systems, strategies, tools, equipment, facilities and other resources used by a Party hereto or any relevant Third Party shall remain the property of such Party and, except as otherwise provided herein, shall at all times be under the sole direction and control of such Party or Third Party.

ARTICLE VI

CONFIDENTIALITY

Section 6.1 Non-Disclosure. The Parties to this Agreement agree to, and to cause their Affiliates and Representatives to, keep confidential all information received in the performance of their duties under this Agreement, and shall not disclose such information except where such disclosure is reasonably necessary to perform, or settle any dispute regarding, their respective duties under this Agreement or is required by applicable Law or the rules of a stock exchange on which such Party (or its Affiliates) are listed, and shall not use any such information other than for the purposes of performance of Transition Services under this Agreement or obtaining the Transition Services from alternative sources should they become unavailable pursuant to the terms hereof, or obtaining any Required Consents, or for transferring or assigning any rights, obligations, accounts, products or licenses related to the provision of the Transition Services, as applicable and to the extent permitted hereunder. The obligations of the Parties and their respective Representatives under this Section 6.1 shall remain in effect indefinitely following the expiration or termination of this Agreement. Nothing in this Section 6.1 shall limit the obligations of confidentiality and non-use set forth in the Separation Agreement.

ARTICLE VII

INDEMNIFICATION

Section 7.1 Indemnification by Recipient. Recipient shall indemnify, defend and hold harmless Provider, its Affiliates and Representatives, and each of the successors and assigns of any of the foregoing (collectively, the “Provider Indemnitees”) from and against any and all Third Party Claims (as defined below) relating to, arising out of or resulting from (a) the provision of the Transition Services by Provider or their designees in accordance with the terms of this Agreement, (b) the failure of Recipient to comply with the terms and conditions set forth on Section 5.1(a) hereto or (c) any other breach of this Agreement by Recipient, in each case, except to the extent the Third Party Claims arise out of any breach by Provider of this Agreement or the negligence or willful misconduct of Provider in providing Transition Services hereunder. Provider shall take all commercially reasonable steps to mitigate any such claims upon becoming aware of any event which would reasonably be expected to, or does, give rise thereto, including incurring costs only to the minimum extent necessary to remedy the cause which gives rise to such claim.

 

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Section 7.2 Indemnification by Provider. Provider shall indemnify, defend and hold harmless Recipient, its Affiliates, their respective Representatives, and each of the successors and assigns of any of the foregoing (collectively, the “Recipient Indemnitees”) from and against any Third Party Claims relating to, arising out of or resulting from (a) gross negligence or willful misconduct on the part of Provider in providing the Transition Services or (b) any breach of this Agreement by Provider, in each case, except to the extent the Third Party Claims arise out of any breach by Recipient of this Agreement. Recipient shall take all commercially reasonable steps to mitigate any such claims upon becoming aware of any event which would reasonably be expected to, or does, give rise thereto, including incurring costs only to the minimum extent necessary to remedy the cause which gives rise to such claim.

Section 7.3 Indemnification Obligations Net of Insurance Proceeds. The Parties hereto intend that any liability subject to indemnification pursuant to this ARTICLE VII will be net of insurance proceeds actually received, realized or recovered by an Indemnified Party. Accordingly, the amount which any Party hereto (an “Indemnifying Party”) is required to pay to any Person entitled to indemnification hereunder (an “Indemnified Party”) will be reduced or offset by any insurance proceeds theretofore actually received, realized or recovered by or on behalf of the Indemnified Party in reduction of the related liability. If an Indemnified Party receives a payment (an “Indemnity Payment”) required by this Agreement from an Indemnifying Party in respect of any liability and subsequently receives insurance proceeds in respect thereof, then the Indemnified Party will pay to the Indemnifying Party an amount equal to the excess of the Indemnity Payment received over the amount of the Indemnity Payment that would have been due if the insurance proceeds had been received, realized or recovered before the Indemnity Payment was made.

Section 7.4 Procedures for Indemnification of Third Party Claims.

(a) If an Indemnified Party shall receive notice or otherwise learn of the assertion by a third party of any claim or of the commencement by any such third party of any action (collectively, a “Third Party Claim”) with respect to which an Indemnifying Party may be obligated to provide indemnification to such Indemnified Party pursuant to Section 7.1 or Section 7.2, such Indemnified Party shall give the Indemnifying Party written notice thereof within twenty (20) days after becoming aware of such Third Party Claim. Any such notice shall describe the Third Party Claim in reasonable detail. Notwithstanding the foregoing, the failure of any Indemnified Party to give notice as provided in this Section 7.4(a) shall not relieve the relevant Indemnifying Party of its obligations under this ARTICLE VII, except to the extent that such Indemnifying Party is actually materially prejudiced by such failure to give notice.

(b) An Indemnifying Party may elect to defend (and to seek to settle or compromise), at such Indemnifying Party’s own expense and by such Indemnifying Party’s own counsel, any Third Party Claim. Within thirty (30) days after the receipt of notice from an Indemnified Party in accordance with Section 7.4(a), the Indemnifying Party shall notify the Indemnified Party of its election whether the Indemnifying Party will assume responsibility for defending such Third Party Claim, which election shall specify any reservations or exceptions. After notice from an Indemnifying Party to an Indemnified Party of its election to assume the defense of a Third Party Claim, such Indemnified Party shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise, or settlement thereof, but the fees and expenses of such counsel shall be the expense of such Indemnified Party.

 

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(c) If an Indemnifying Party elects not to assume responsibility for defending a Third Party Claim, or fails to notify an Indemnified Party of its election as provided in Section 7.4(b), such Indemnified Party may defend such Third Party Claim, at the cost and expense of the Indemnifying Party to the extent indemnifiable hereunder.

(d) No Party hereto shall consent to entry of any judgment or enter into any settlement of a Third Party Claim without the consent of the other Party (which consent shall not be unreasonably withheld, delayed or conditioned).

ARTICLE VIII

DISPUTE RESOLUTION

Section 8.1 Dispute Resolution. Any and all disputes, controversies or claims, including any disputes regarding the enforceability of this Agreement, including this provision (each, a “Dispute”) arising under or relating to this Agreement shall be resolved in accordance with the terms of this Section 8.1. Either Party may notify the other of its intent to resolve a Dispute by delivering a written notice to the TSA Manager of the other Party in accordance with Section 10.1. The written notice shall describe the Dispute in reasonable detail (including references to the sections of this Agreement that are at issue in such Dispute and, if any claim involves an allegation that the other Party has committed a material breach, reasons as to why the Party serving such notice believes such breach to be material) (“Initial Notice”). The TSA Managers shall then meet and confer in good faith to attempt to resolve the Dispute. If the Dispute is not resolved within ten (10) days following the receipt of the Initial Notice, then either Party may, by a second notice to the other Party, submit such Dispute to [            ] of Recipient (or his/her designee) and [            ] of Provider (or his/her designee) (together, the “Management Representatives”). The Management Representatives shall then meet and confer in good faith to attempt to resolve the Dispute. If the Management Representatives are unable to resolve the Dispute, within ten (10) days following referral of such Dispute to the Management Representatives, then the Parties agree that any Party shall have the right to submit such Dispute to a court of competent jurisdiction in accordance with Section 10.8. For avoidance of doubt, nothing contained in this Section 8.1 shall operate as a restriction on a Party’s rights to terminate this Agreement pursuant to ARTICLE IX. Nothing contained in this Section 8.1 shall restrict or limit any rights that a Party may have to seek injunctive relief (including specific performance) or other equitable relief.

 

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ARTICLE IX

TERM AND TERMINATION

Section 9.1 Term.

(a) Term of Agreement. This Agreement shall commence on the date hereof and shall end on the earliest of: (i) the date all Transition Services have expired in accordance with the terms of this Agreement, (ii) the date all Transition Services have been terminated in accordance with the terms of this Agreement or (iii) the date on which this Agreement is terminated (as a whole) pursuant to its terms.

(b) Term of Services. Provider shall provide each Transition Service beginning on the date hereof, or as otherwise set forth in Exhibit A or agreed to by the Parties in writing, and continuing for a period equal to the service term set forth in Exhibit A and any extension pursuant to the terms hereof (the “Service Term”), or as otherwise agreed to by the Parties in writing, unless renewed or sooner terminated in accordance with the provisions of this Agreement.

Section 9.2 Termination of Services.

(a) Termination of Particular Transition Services. Recipient may terminate its right to receive any particular Transition Service for any or no reason, by providing Provider with written notice of termination (the “Termination Notice”), not less than sixty (60) days (or such lesser number of days set forth in Exhibit A with respect to a specific Transition Service) prior to the date on which services shall be terminated (the “Termination Date”) setting forth in reasonable detail the applicable Transition Services to be terminated (the “Terminated Services”) and the Termination Date for each Terminated Service. Upon such termination, Recipient’s obligation to pay for such Terminated Services beyond the specified Termination Date will terminate.

(b) Termination for Breach. If a Party hereto materially breaches any of its obligations under this Agreement, and does not cure such default within thirty (30) days after receiving written notice thereof from the non-breaching Party, then the non-breaching Party may, at its option, terminate any Transition Service affected by such breach or this Agreement in its entirety by providing a Termination Notice to the breaching Party, for which termination the effective Termination Date shall be the date of receipt of such Termination Notice.

(c) Procedures on Termination of Services. Beginning on the Termination Date, Recipient shall not be obligated to pay any Fees in connection with any Terminated Services other than Fees owed for such Terminated Services rendered but not paid for prior to the Termination Date. Any Termination Notice delivered pursuant to this Section 9.2 shall be irrevocable, except as provided in Section 9.2(a).

Section 9.3 Termination of the Transition Services Agreement. Any termination of this Agreement pursuant to this Section 9.3 shall be without prejudice to any rights or obligations of the Parties hereto accruing prior to such termination, including the right to payment of unpaid Fees and reimbursable costs owing for Transition Services performed prior to termination.

 

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(a) By Mutual Consent. This Agreement may be terminated by mutual consent of the Parties in writing at any time.

(b) Termination for Non-Payment. Provider may terminate this Agreement (to be effective immediately) if any Fees or other amounts due by Recipient hereunder fail to be timely paid in accordance with this Agreement or otherwise, except those amounts that are reasonably contested pursuant to the terms hereof, within thirty (30) days following written notice to Recipient by Provider of such failure.

(c) Bankruptcy Termination. This Agreement may be terminated by either Party hereto upon at least thirty (30) days prior written notice if the other Party hereto is declared insolvent or bankrupt, or makes an assignment for the benefit of creditors, or a receiver is appointed or any proceeding is demanded by, for or against the other under any provision of bankruptcy law.

Section 9.4 Procedures on Termination of the Agreement. Following any termination of this Agreement or termination of any Transition Services each Party hereto will cooperate with the other Party, at the requesting Party’s expense, as reasonably necessary to avoid disruption of the ordinary course of the other Party’s and its Affiliates’ businesses. Termination shall not affect any right to payment for Transition Services provided, or expenses incurred in connection therewith, prior to termination.

Section 9.5 Survival. Section 2.9, ARTICLE III (with respect to Fees and Taxes attributable to periods prior to termination), ARTICLE IV, ARTICLE V, ARTICLE VI, ARTICLE VII, ARTICLE VIII, ARTICLE IX (including, without limitation, this Section 9.5) and ARTICLE X and shall survive any termination of this Agreement for the periods set forth in the applicable provisions, if any, or if none, indefinitely. Termination of this Agreement shall not relieve a Party of any liability that has accrued prior to the effective date of such termination.

ARTICLE X

MISCELLANEOUS

Section 10.1 Notices. All notices and other communications hereunder shall be in writing, shall reference this Agreement and shall be hand delivered, delivered via electronic mail or facsimile or mailed by registered or certified mail (return receipt requested) to the Parties at the addresses specified in Section 10.6 of the Separation Agreement (or at such other addresses for a Party as shall be specified by like notice) and will be deemed given on the date on which such notice is received.

Section 10.2 Severability. In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The Parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

 

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Section 10.3 Entire Agreement. This Agreement, including the Exhibits and Schedules hereto, and the Separation Agreements shall constitute the entire agreement between the Parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter.

Section 10.4 Assignment. This Agreement shall not be assignable, in whole or in part, directly or indirectly, by any Party without the prior written consent of the other Party, and any attempt to assign any rights or obligations arising under this Agreement without such consent shall be void; provided, however, that either Party may assign this Agreement to a purchaser of all or substantially all of the properties and assets of such Party so long as such purchases expressly assumes, in a written instrument in form reasonably satisfactory to the non-assigning Party, the due and punctual performance or observance of every agreement and covenant of this Agreement on the part of the assigning Party to be performed or observed.

Section 10.5 Successors and Assigns. The provisions to this Agreement shall be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and permitted assigns.

Section 10.6 No Third Party Beneficiaries. This Agreement is solely for the benefit of the Parties and their respective Affiliates and shall not be deemed to confer upon any other Person any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Agreement.

Section 10.7 Amendments. This Agreement may not be modified or amended except by an agreement in writing signed by each of the Parties.

Section 10.8 Governing Law Submission to Jurisdiction; Waivers.

(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF DELAWARE.

(b) SUBJECT TO ARTICLE VIII, ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST THE PARTIES ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, SHALL BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF DELAWARE. BY EXECUTING AND DELIVERING THIS AGREEMENT, THE PARTIES, IRREVOCABLY (I) ACCEPT GENERALLY AND UNCONDITIONALLY THE EXCLUSIVE JURISDICTION AND VENUE OF THESE COURTS; (II) WAIVE ANY OBJECTIONS WHICH SUCH PARTY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (I) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM; (III) AGREE THAT SERVICE

 

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OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO SUCH PARTY AT THEIR RESPECTIVE ADDRESSES PROVIDED IN ACCORDANCE WITH SECTION 10.6 OF THE SEPARATION AGREEMENT; AND (IV) AGREE THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT.

(C) THE PARTIES HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT.

Section 10.12 Rules of Construction. Interpretation of this Agreement shall be governed by the following rules of construction: (a) words in the singular shall be held to include the plural and vice versa, and words of one gender shall be held to include the other gender as the context requires; (b) references to the terms Article, Section, paragraph, Exhibit and Schedule are references to the Articles, Sections, paragraphs, Exhibits and Schedules to this Agreement unless otherwise specified; (c) the terms “hereof”, “herein”, “hereby”, “hereto”, and derivative or similar words refer to this entire Agreement, including the Exhibits and Schedules hereto; (d) references to “$” shall mean U.S. dollars; (e) the word “including” and words of similar import when used in this Agreement shall mean “including without limitation,” unless otherwise specified; (f) the word “or” shall not be exclusive; (g) references to “written” or “in writing” include in electronic form; (h) the headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement; (i) the Parties hereto have each participated in the negotiation and drafting of this Agreement and if an ambiguity or question of interpretation should arise, this Agreement shall be construed as if drafted jointly by the Parties thereto and no presumption or burden of proof shall arise favoring or burdening any Party hereto by virtue of the authorship of any of the provisions in this Agreement; (j) a reference to any Person includes such Person’s successors and permitted assigns; (k) any reference to “days” means calendar days unless Business Days are expressly specified; and (l) when calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded and, if the last day of such period is not a Business Day, the period shall end on the next succeeding Business Day.

Section 10.13 Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the Parties and delivered to the other Party.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first written above.

 

Provider

 

Integra LifeSciences Corporation

By:    
Name:  
Title:  

Recipient

 

SeaSpine Holdings Corporation

By:    
Name:  
Title:  
EX-10.2

Exhibit 10.2

TAX MATTERS AGREEMENT

This TAX MATTERS AGREEMENT (this “Agreement”), is made and entered into as of [            ], 2015, by and between INTEGRA LIFESCIENCES HOLDINGS CORPORATION, a Delaware corporation (“Integra”), and SEASPINE HOLDINGS CORPORATION, a Delaware corporation (“Spinco”). All capitalized terms not otherwise defined shall have the meanings set forth in Article I.

RECITALS

WHEREAS, Integra and certain of its subsidiaries have joined in filing consolidated federal Income Tax Returns and certain consolidated, combined or unitary state or local Income Tax Returns;

WHEREAS, Integra LifeSciences Corporation, a Delaware corporation and wholly owned subsidiary of Integra (“ILS”), contributed all of the outstanding membership interests of Theken Spine, LLC (“Theken”), all of the outstanding stock of SeaSpine, Inc. (“SeaSpine”) and all of the outstanding stock of IsoTis, Inc. (“IsoTis”) to SeaSpine Orthopedics Corporation, a Delaware corporation and wholly owned subsidiary of ILS (“Controlled”) in exchange for common stock of Controlled;

WHEREAS, Integra and Spinco have entered into that certain Separation and Distribution Agreement, dated as of the date hereof (the “Separation Agreement”), pursuant to which, among other things, (i) ILS will contribute or will have contributed to Controlled additional assets and liabilities associated with the Spinco Business, (ii) ILS will contribute all of the outstanding common stock of Controlled to Spinco, (iii) ILS will distribute all of the outstanding common stock of Spinco to Integra in a transaction intended to qualify, in conjunction with the contribution described in clause (ii), under Sections 355 and 368(a)(1)(D) of the Code, (iv) Integra will contribute cash to Spinco and (v) Integra will distribute all of the outstanding common stock of Spinco to Integra’s stockholders in a transaction intended to qualify, in conjunction with the contribution described in clause (iv), under Sections 355 and 368(a)(1)(D) of the Code (collectively, the “Spin-off Transactions”);

WHEREAS, pursuant to the Spin-off Transactions, Spinco and its subsidiaries will leave the Pre-Spin Group; and

WHEREAS, the parties hereto, on behalf of themselves and their Affiliates, wish to provide for (i) the allocation of, and indemnification against, certain liabilities for Taxes, (ii) the preparation and filing of Tax Returns and the payment of Taxes with respect thereto and (iii) certain related matters.


NOW THEREFORE, in consideration of the foregoing and the respective covenants and agreements set forth below, the parties agree as follows:

ARTICLE I.

DEFINITIONS

When used herein the following terms shall have the following meanings:

Affiliate” means, with respect to any entity (the “given entity”), each entity that directly or indirectly, through one or more intermediaries is controlled by the given entity. For purposes of this definition, “control” means, with respect to any entity, (a) the possession, directly or indirectly, of 50% or more of the voting power or value of outstanding equity interests of such entity or (b) the power to direct or cause the direction of management and policies of such entity, whether through ownership of securities, partnership or other ownership interests, by contract or otherwise. Unless otherwise indicated, the term Affiliate shall refer to Affiliates of a party as determined after the Spin-off Transactions.

Affiliated Group” means, with respect to a Tax Period, (a) an affiliated group of corporations within the meaning of Section 1504(a) of the Code or, for purposes of any state or local Tax matters, any consolidated, combined, unitary or similar group of corporations within the meaning of any similar provisions of Tax law for the jurisdiction in question, and (b) for purposes of any federal, state or local Income Tax matters, any entity owned by a corporation described in clause (a) that is disregarded as separate from its owner for such purposes.

Agreement” has the meaning set forth in the preamble to this Agreement.

Audit” means any audit, assessment of Taxes, other examination by any Taxing Authority, proceeding or appeal of such a proceeding relating to Taxes, whether judicial or administrative.

Code” means the Internal Revenue Code of 1986, as amended, or any successor thereto.

Controlled” has the meaning set forth in the Recitals.

Current Allocation Methodology” means the allocation methodology that is set forth in Exhibit A, as applied to Integra Prepared Pre-Spin/Straddle Mixed Returns.

Delaware VDA” means the voluntary disclosure agreement relating to unclaimed property between Integra and the state of Delaware entered into prior to the date hereof, pursuant to which the entities included in the agreement must file Tax Returns with the state of Delaware on March 1, 2016, March 1, 2017, March 1, 2018 and additional dates as provided in the agreement.

Distribution” has the meaning set forth in the Separation Agreement.

Distribution Date” has the meaning set forth in the Separation Agreement.

Final Determination” means (i) a decision, judgment, decree, or other order by a court of competent jurisdiction, which has become final and unappealable; (ii) a closing agreement or accepted offer in compromise under Sections 7121 or 7122 of the Code, or comparable agreements under the laws of other jurisdictions; (iii) any other final settlement with the IRS or other Taxing Authority (including the execution of IRS Form 870-AD, or a comparable form under

 

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the laws of other jurisdictions, but excluding any such form that reserves (whether by its terms or by operation of law) the right of the taxpayer to file a claim for refund or the right of the Taxing Authority to assert a further deficiency); (iv) the expiration of an applicable statute of limitations; or (v) the allowance of a refund or credit, but only after the expiration of all periods during which such refund or credit may be recovered (including by way of offset).

GAAP” means generally accepted accounting principles in the United States, consistently applied.

ILS” has the meaning set forth in the Recitals.

Income Tax” means any and all Taxes based upon or measured by net income (regardless of whether denominated as an “income tax,” a “franchise tax” or otherwise).

Income Tax Return” means a Tax Return relating to an Income Tax.

Integra” has the meaning set forth in the preamble to this Agreement.

Integra Affiliated Group” means, for any applicable Tax Period, Integra and each entity that is a member of an Affiliated Group for such Tax Period (or portion thereof) with respect to which Integra would be the common parent. For the avoidance of doubt, the Integra Affiliated Group shall include, for the portion of the Straddle Period that ends on the Distribution Date, Spinco and other entities that will be members of the Spinco Affiliated Group beginning on the day immediately after the Distribution Date.

Integra Group” means Integra and its Affiliates, excluding any entity that would be a member of the Spinco Group.

Integra Member” means any entity that would be a member of the Integra Group.

Integra Prepared Pre-Spin/Straddle Mixed Return” has the meaning set forth in Section 2.3(a).

IRS” means the Internal Revenue Service or any successor thereto.

Latham Opinion” means the opinion of Latham & Watkins LLP with respect to certain matters relating to qualification of the Spin-off Transactions under Sections 368(a)(1)(D) and 355 of the Code.

Opinion Representation Letters” means the representation letters executed by officers of Integra, ILS and Spinco and delivered in connection with the Latham Opinion.

Overdue Rate” means a variable rate of interest per annum equal to the Federal short-term rate as established from time to time pursuant to Section 1274(d) of the Code.

Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof, without regard to whether any entity is treated as disregarded for U.S. federal income tax purposes.

 

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Post-Distribution Tax Period” means a Tax Period that begins after the Distribution Date.

Pre-Distribution Tax Period” means a Tax Period that ends on or before the Distribution Date.

Pre-Spin Group” means Integra and its Affiliates before the Spin-off Transactions.

Pre-Spin Member” means any entity that was a member of the Pre-Spin Group.

Representative” means, with respect to any Person, any of such Person’s directors, officers, employees, agents, consultants, accountants, attorneys and other advisors.

Responsible Party” means the party responsible for the preparation and filing of a Tax Return pursuant to Section 2.1.

SeaSpine” has the meaning set forth in the Recitals.

Section 355(e) Tax” shall mean any Taxes imposed on the Pre-Spin Group resulting from a Final Determination that Section 355(e) of the Code is applicable to the Spin-off Transactions because the Spin-off Transactions were part of a plan or series of related transactions pursuant to which one or more persons acquired directly or indirectly stock of Integra or Spinco (or interests in any predecessor or successor thereto within the meaning of Section 355(e)) representing a “50-percent or greater interest” within the meaning of Section 355(e) of the Code.

Separate Affiliated Group” means, with respect to any corporation, such corporation’s separate affiliated group as defined by Section 355(b)(3) of the Code and the Treasury Regulations promulgated thereunder.

Separation Agreement” has the meaning set forth in the Recitals.

Spinco” has the meaning set forth in the preamble to this Agreement.

Spinco Active Trade or Business” means the active conduct (as defined in Section 355(b)(2) of the Code and the Treasury Regulations thereunder) by Spinco and its Separate Affiliated Group of the Spinco Business as conducted immediately prior to the Distribution.

Spinco Affiliated Group” means Spinco and each entity that would be a member of an Affiliated Group with respect to which Spinco would be the common parent for any Post-Distribution Tax Period. For purposes of this Agreement, the Spinco Affiliated Group shall exist from and after the beginning of the day immediately after the Distribution Date.

Spinco Business” means the “SeaSpine Business” as defined in the Separation Agreement.

 

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Spinco Group” means Spinco and its Affiliates after the Spin-off Transactions.

Spinco Member” means any entity that would be a member of the Spinco Group.

Spinco Prepared Pre-Spin/Straddle Nonmixed Return” has the meaning set forth in Section 2.3(b).

Spin-off Transactions” has the meaning set forth in the Recitals.

Straddle Period” means a Tax Period that begins on or before and ends after the Distribution Date.

Tax” means any federal, state, foreign or local income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty or addition thereto.

Tax Asset” means any Tax Item that has accrued for Tax purposes, but has not been used during a Tax Period, and that could reduce a Tax in another Tax Period, including, but not limited to, a net operating loss, net capital loss, investment tax credit, foreign tax credit, charitable deduction, credit related to alternative minimum tax and any other Tax credit.

Taxing Authority” means the IRS or any other governmental authority responsible for the administration of any Tax.

Tax Item” means any item of income, gain, loss, deduction, credit, recapture of credit or any other attribute or item (including the adjusted basis of property) that may have the effect of increasing or decreasing any Tax.

Tax Period” means any period prescribed by law or any Taxing Authority for which a Tax Return is required to be filed or a Tax is required to be paid.

Tax Practices” means the policies, procedures and practices customarily and consistently employed by the Pre-Spin Group in the preparation and filing of, and positions taken on, any Tax Returns of the Integra Affiliated Group or any Pre-Spin Member (or group thereof) for any Pre-Distribution Tax Period.

Tax Refund” means any refund of Taxes, whether by payment, credit, offset, reduction in Tax or otherwise, plus any interest or other amounts received or payable with respect to such refund.

Tax Return” means any return (including any information return), report, statement, declaration, notice, form, election, estimated Tax filing, claim for refund or other filing (including any amendments thereof and attachments thereto) required to be filed with or submitted to any Taxing Authority with respect any Tax.

 

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Tax Treatment” has the meaning set forth in Section 3.3(a).

Theken” has the meaning set forth in the Recitals.

Treasury Regulations” means the income tax regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

ARTICLE II.

FILING OF TAX RETURNS AND PAYMENT OF TAXES

Section 2.1 Preparation and Filing of Tax Returns.

 

  (a) Subject to Section 2.3, Integra shall prepare (or caused to be prepared) and timely file (taking into account applicable extensions):

 

  (i) all Tax Returns of the Integra Affiliated Group or any Pre-Spin Member (or group thereof) for any Pre-Distribution Tax Period other than Tax Returns described in Section 2.1(b)(i);

 

  (ii) all Tax Returns of the Integra Affiliated Group or any Pre-Spin Member (or group thereof) for any Straddle Period other than Tax Returns described in Section 2.1(b)(ii); and

 

  (iii) all Tax Returns of the Integra Affiliated Group or any Integra Member (or group thereof) for all Post-Distribution Tax Periods.

 

  (b) Subject to Section 2.3, Spinco shall prepare (or caused to be prepared) and timely file (taking into account applicable extensions):

 

  (i) all Tax Returns for any Pre-Distribution Tax Period that are filed after the Distribution Date that relate solely to the Spinco Group or any Spinco Member (or group thereof);

 

  (ii) all Tax Returns for any Straddle Period that relate solely to the Spinco Group or any Spinco Member (or group thereof), including, for the avoidance of doubt, any Tax Return for a Straddle Period required to be filed by Spinco or any Spinco Member pursuant to the Delaware VDA; and

 

  (iii) all Tax Returns of the Spinco Affiliated Group or any Spinco Member (or group thereof) for all Post-Distribution Tax Periods, including, for the avoidance of doubt, any Tax Return for a Post-Distribution Tax Period required to be filed by Spinco or any Spinco Member pursuant to the Delaware VDA.

 

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Section 2.2 Provision of Filing Information. Each party shall cooperate with the Responsible Party in the preparation and filing of all Tax Returns relating to Pre-Distribution Tax Periods and Straddle Periods, including by providing the Responsible Party with (a) all necessary filing information in a manner consistent with past Tax Practices, (b) all other information reasonably requested in connection with the preparation of such Tax Returns, including permission to copy any applicable documents, and (c) such other assistance reasonably necessary or requested for the filing of such Tax Returns.

Section 2.3 Advance Review of Tax Returns.

 

  (a) At least fifteen (15) business days, or such other reasonable time as mutually agreed to by both parties, prior to the filing of any Tax Return pursuant to Section 2.1(a)(i) or Section 2.1(a)(ii) that includes a Spinco Member (collectively, an “Integra Prepared Pre-Spin/Straddle Mixed Return”), Integra shall provide Spinco with a copy of the portion of such Tax Return that relates to the Spinco Member.

 

  (b) At least fifteen (15) business days, or such other reasonable time as mutually agreed to by both parties, prior to the filing of any Tax Return pursuant to Section 2.1(b)(i) or Section 2.1(b)(ii) (collectively, a “Spinco Prepared Pre-Spin/Straddle Nonmixed Return”), Spinco shall provide Integra with a copy of such Tax Return.

 

  (c) Spinco and its Representatives shall have the right to review all related work papers prior to Integra’s filing of an Integra Prepared Pre-Spin/Straddle Mixed Return. Integra shall consult with Spinco and its Representatives regarding Spinco’s comments with respect to such Tax Returns or related work papers and shall in good faith consult with such party in an effort to resolve any differences with respect to (i) the preparation and accuracy of such Tax Returns and their consistency with past Tax Practices and (ii) the recommendations of Spinco and its Representatives for alternative positions with respect to items reflected on such Tax Returns; provided, however, that Integra shall not be obligated to consider any recommendation the result of which would materially adversely affect the Taxes of the Integra Affiliated Group (or any Integra Member) for any Straddle Period or Post-Distribution Tax Period, and Integra may condition the acceptance of any such recommendation upon the receipt of appropriate indemnification from Spinco for any increases in Taxes that may result from the adoption of the relevant alternative position.

 

  (d)

Integra and its Representatives shall have the right to review all related work papers prior to Spinco’s filing of a Spinco Prepared Pre-Spin/Straddle Nonmixed Return. Spinco shall consult with Integra and its Representatives regarding Integra’s comments with respect to such Tax Returns or related work papers and shall in good faith consult with such party in an effort to resolve any differences with respect to (i) the preparation and accuracy of such Tax Returns and their consistency with past Tax Practices and (ii) the recommendations of Integra and its Representatives for alternative positions with respect to items reflected on such Tax Returns; provided,

 

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  however, that Spinco shall not be obligated to consider any recommendation the result of which would materially adversely affect the Taxes of the Spinco Affiliated Group (or any Spinco Member) for any Straddle Period or Post-Distribution Tax Period, and Spinco may condition the acceptance of any such recommendation upon the receipt of appropriate indemnification from Integra for any increases in Taxes that may result from the adoption of the relevant alternative position.

Section 2.4 Consistent Positions on Tax Returns. The Responsible Party shall prepare all Tax Returns (a) for all Pre-Distribution Tax Periods and Straddle Periods in a manner consistent with past Tax Practices and (b) in a manner consistent with the Latham Opinion, except in either case as otherwise required by changes in applicable law or material underlying facts or as consented by the parties hereto in writing, which consent shall not be unreasonably withheld.

Section 2.5 Taxable Year. The parties agree that, to the extent permitted by applicable law, (a) the Tax Period with respect to federal Income Taxes of the Spinco Members included in the consolidated federal Income Tax Return of the Integra Affiliated Group for the Straddle Period that includes the Distribution Date (and all corresponding consolidated, combined, unitary or similar state or local Income Tax Returns of such Affiliated Group) shall end as of the close of the Distribution Date and (b) the Spinco Affiliated Group and each member thereof shall begin a new taxable year for purposes of such federal, state or local Income Taxes as of the beginning of the day after the Distribution Date. The parties further agree that, to the extent permitted by applicable law, all federal, state, local and foreign Tax Returns shall be filed consistently with this position.

Section 2.6 Straddle Period Taxes. For purposes of this Agreement, Taxes attributable to Straddle Periods shall be allocated between the portion of the Straddle Period ending on the Distribution Date and the portion of the Straddle Period beginning after the Distribution Date, as follows:

 

  (a) Income Taxes shall be allocated on the basis of the actual operations and taxable income for each such period, determined by closing the books at the end of the day on the Distribution Date; and

 

  (b) Non-Income Taxes shall be allocated by multiplying the amount of such Taxes for the entire Straddle Period by a fraction, the numerator of which is the number of days during the applicable portion of the Straddle Period and the denominator of which is the total number of days in the Straddle Period.

Section 2.7 Payment of Taxes.

 

  (a) Integra shall be liable for and shall pay all Taxes due and payable (including additional Taxes imposed as a result of a Final Determination) with respect to Tax Returns filed by Integra pursuant to Section 2.1(a); provided, however, that Integra and Spinco shall apportion and allocate the liability with respect to any Integra Prepared Pre-Spin/Straddle Mixed Returns in accordance with the Current Allocation Methodology.

 

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  (b) Spinco shall be liable for and shall pay all Taxes due and payable (including additional Taxes imposed as a result of a Final Determination) with respect to Tax Returns filed by Spinco pursuant to Section 2.1(b).

 

  (c) Spinco or Integra, as applicable, shall pay to the other party the amount required to be paid pursuant to Section 2.7(a) under the Current Allocation Methodology within thirty (30) days after written demand is made by such other party; provided, however, that any such amount shall not be payable earlier than five (5) business days before the date on which the applicable Taxes are required to be paid to the Taxing Authority.

Section 2.8 Amended Returns. Notwithstanding anything to the contrary in this Agreement, no party may file any amendment to an Integra Prepared Pre-Spin/Straddle Mixed Return or Spinco Prepared Pre-Spin/Straddle Nonmixed Return without the other party’s consent, which consent shall not be unreasonably withheld; provided, however, that Integra may amend an Integra Prepared Pre-Spin/Straddle Mixed Return without Spinco’s consent if (a) such amendment will not have an adverse effect on Spinco or any Spinco Member (including as a result of Spinco’s indemnification obligations pursuant to Sections 3.3(c)(i), 3.3(c)(ii)(B) and 3.3 (c)(iii)(B)) or (b) such amendment will have an adverse effect on Spinco or any Spinco Member (including as a result of Spinco’s indemnification obligations pursuant to Sections 3.3(c)(i), 3.3(c)(ii)(B) and 3.3 (c)(iii)(B)) and Integra agrees to indemnify Spinco for any and all increases in the liability for Taxes of the Spinco Group or any Spinco Member arising solely as a result of Integra’s amendment of the Integra Prepared Pre-Spin/Straddle Mixed Return.

Section 2.9 Refunds of Taxes. Integra shall apportion and allocate any Tax Refund realized as a result of a Final Determination with respect to any Integra Prepared Pre-Spin/Straddle Mixed Return filed pursuant to Section 2.1(a)(i) and Section 2.1(a)(ii) in the same proportion as the liability for the Taxes with respect to such Tax Return was apportioned and allocated pursuant to the Current Allocation Methodology. Any Tax Refund realized as a result of a Final Determination with respect to any other Tax Return filed pursuant to Section 2.1(a) and Section 2.1(b) shall be for the benefit of the Responsible Party. If Integra or Spinco, as applicable, receives a Tax Refund with respect to which the other party is entitled to all or an allocable portion pursuant to this Section 2.9, Integra or Spinco, as applicable, shall pay such amount to such other party in accordance with Section 4.1.

Section 2.10 Tax Elections. Nothing in this Agreement is intended to change or otherwise affect any previous tax election made by or on behalf of the Integra Affiliated Group (including the election with respect to the calculation of earnings and profits under Section 1552 of the Code and the Treasury Regulations thereunder). Integra, as common parent of the Integra Affiliated Group, shall continue to have discretion, reasonably exercised, to make any and all elections with respect to all members of the Integra Affiliated Group for all Tax Periods for which it is obligated to file Tax Returns under Section 2.1(a). Spinco, as common parent of the Spinco Affiliated Group, shall have sole discretion to make any and all elections with respect to

 

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all members of the Spinco Affiliated Group for all Tax Periods for which it is obligated to file Tax Returns under Section 2.1(b); provided, however, that if any such election could adversely affect any Integra Member, such election shall not be made without the prior written consent of Integra, which consent shall not be unreasonably withheld.

Section 2.11 Allocation of Tax Assets.

 

  (a) Except as provided in Section 2.11(b), Integra and Spinco shall cooperate, each at its own cost and expense, in determining the allocation of any Tax Assets or Tax liabilities among the parties in accordance with the Code and Treasury Regulations (and any applicable state, local and foreign laws). In the absence of controlling legal authority or unless otherwise provided under this Agreement, Integra shall reasonably determine the allocation of all Tax Assets and Tax liabilities of the Pre-Spin Group. Integra and Spinco hereby agree to compute all Taxes for Post-Distribution Tax Periods and Straddle Periods consistently with the determinations made pursuant to this Section 2.11 unless otherwise required by a Final Determination.

 

  (b) To the extent that the amount of any Tax Asset is later reduced or increased by a Taxing Authority, or as a result of an Audit or carrybacks of Tax Assets from Post-Distribution Tax Periods of either the Integra Affiliated Group or any Integra Member, on the one hand, or the Spinco Affiliated Group or any Spinco Member, on the other hand, such reduction or increase shall be allocated to the party to which such Tax Asset was allocated pursuant to Section 2.11(a).

ARTICLE III.

INDEMNIFICATION

Section 3.1 By Integra. Subject to Section 3.3, Integra shall indemnify and hold Spinco and each Spinco Member harmless against:

 

  (a) any and all Taxes for which Integra is liable pursuant to Section 2.7(a), Section 2.7(c) and Section 2.8(b); and

 

  (b) any and all increases in the liability for Taxes of the Spinco Group or any Spinco Member (or group thereof) as a result of an Integra Member’s material inaccuracies in, or failure to timely provide, such information and assistance specified in Section 2.2.

Section 3.2 By Spinco. Subject to Section 3.3, Spinco shall indemnify and hold Integra and each Integra Member harmless against:

 

  (a) any and all Taxes for which Spinco is liable pursuant to Section 2.7; and

 

  (b) any and all increases in the liability for Taxes of the Integra Affiliated Group or any Integra Member (or group thereof) as a result of a Spinco Member’s material inaccuracies in, or failure to timely provide, such information and assistance specified in Section 2.2.

 

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Section 3.3 Tax Treatment of Spin-off Transactions.

 

  (a) The parties expressly agree for all purposes to treat the Spin-off Transactions as qualifying under Sections 355 and 368(a)(1)(D) of the Code in accordance with the Latham Opinion (the “Tax Treatment”). Each party hereto also expressly agrees to (i) comply with the representations made in the Opinion Representation Letters, (ii) not take any action (unless otherwise required by law) that is inconsistent with the Tax Treatment, and (iii) take any and all reasonable actions to support and defend the Tax Treatment. Without limiting the generality of the foregoing, Integra and Spinco further represent, agree and covenant that the representations and information contained in the Opinion Representation Letters, insofar as they concern or relate to such party or its Affiliates, are true, correct and complete in all material respects.

 

  (b) Without limiting the generality of Section 3.3(a), Spinco further represents, agrees and covenants as follows:

 

  (i) From and after the Distribution Date until the second anniversary thereof, Spinco will (i) maintain its status as a company engaged in the Spinco Active Trade or Business for purposes of Section 355(b)(2) of the Code, and (ii) not engage in any transaction (or allow its Affiliates to engage in any transaction) that would result in it ceasing to be a company engaged in the Spinco Active Trade or Business for purposes of Section 355(b)(2) of the Code, in each case, taking into account Section 355(b)(3) of the Code, unless, prior to engaging in such transaction, Spinco obtains and provides to Integra a ruling from the IRS or a written opinion from a nationally recognized law firm with expertise in these matters, in form and substance reasonably acceptable to Integra, that such transaction, and any transaction or transactions related thereto, will not affect the qualification of the Spin-off Transactions under Sections 368(a)(1)(D) and 355 of the Code.

 

  (ii) From and after the Distribution Date until the second anniversary thereof, Spinco shall not take any of the following actions unless, prior to taking any such action, it obtains and provides to Integra a ruling from the IRS or a written opinion from a nationally recognized law firm with expertise in these matters, in form and substance reasonably acceptable to Integra, that such transaction, and any transaction or transactions related thereto, will not affect the qualification of the Spin-off Transactions under Sections 368(a)(1)(D) and 355 of the Code and will not cause Section 355(e) of the Code to apply:

 

  (A)

enter into (or, to the extent Spinco has the right to prohibit such action, permit) any transaction or series of transactions (or any agreement, understanding, arrangement or substantial negotiations,

 

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  within the meaning of Section 355(e) of the Code and Treasury Regulations Section 1.355-7, to enter into a transaction or series of transactions), as a result of which any person or group of persons would (directly or indirectly) acquire or have the right to acquire from Spinco or one or more holders of its stock, a number of shares of its stock that, together with any shares issued in an equity offering described in clause (B) below, would comprise [    ]% or more of (1) the value of all outstanding shares of stock of Spinco as of the date of such transaction or (2) the total combined voting power of all outstanding shares of stock of Spinco as of the date of such transaction, or, with respect to either (1) or (2), in the case of a series of transactions, the date of the last transaction of such series;

 

  (B) issue equity of Spinco in an offering in excess, in the aggregate, together with any shares acquired in a transaction described in clause (A) above, of [    ]% of (1) the value of all outstanding shares of stock of Spinco as of the date of such transaction or (2) the total combined voting power of all outstanding shares of stock of Spinco, as of the date of such transaction, or, with respect to either (1) or (2), in the case of a series of transactions, as of the date of the last transaction of such series;

 

  (C) merge or consolidate with any other Person or liquidate or partially liquidate; or

 

  (D) in a single transaction or series of transactions (whether or not such transactions are related) sell or transfer (other than sales or transfers of inventory in the ordinary course of business) 40% or more of the gross assets of the Spinco Active Trade or Business or 40% or more of the gross assets of Spinco’s Separate Affiliated Group (such percentages to be measured based on fair market value as of the Distribution Date).

 

  (c) Notwithstanding anything to the contrary in Section 2.7, Section 3.1, Section 3.2 or Section 6.2(c):

 

  (i)

If there is a Final Determination that results in the disallowance, in whole or in part, of the Tax Treatment (other than (x) a disallowance which is addressed by Section 3.3(c)(ii) or (y) the Section 355(e) Tax which is addressed by Section 3.3(c)(iii)), then any liability for Taxes of the Pre-Spin Group as a result of such disallowance shall be divided between Integra and Spinco in proportion to their respective fair market values as of the Distribution Date (determined using closing stock prices as of the Distribution Date). Integra shall be liable for, and shall indemnify Spinco and each Spinco Member against, any liability for which Integra is

 

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  responsible pursuant to the preceding sentence, and Spinco shall be liable for, and shall indemnify Integra and each Integra Member against, any liability for which Spinco is responsible pursuant to the preceding sentence.

 

  (ii) (A) If there is a Final Determination that results in the disallowance, in whole or in part, of the Tax Treatment (other than the Section 355(e) Tax, which is addressed by Section 3.3(c)(iii)), and Integra or any Integra Member (and neither Spinco nor any Spinco Member) has taken any action after the Distribution Date which action results in such disallowance, then Integra shall be liable for, and shall indemnify Spinco and each Spinco Member against, any Taxes of the Pre-Spin Group as a result of such disallowance.

(B) If there is a Final Determination that results in the disallowance, in whole or in part, of the Tax Treatment (other than the Section 355(e) Tax, which is addressed by Section 3.3(c)(iii)), and Spinco or any Spinco Member (and neither Integra nor any Integra Member) has taken any action after the Distribution Date which action results in such disallowance, then Spinco shall be liable for, and shall indemnify Integra and each other Integra Member against, any Taxes of the Pre-Spin Group as a result of such disallowance.

 

  (iii) (A) If there is a Final Determination that Section 355(e) of the Code is applicable to the Spin-off Transactions solely because the Spin-off Transactions were part of a plan or series of related transactions pursuant to which one or more persons acquired directly or indirectly stock of Integra (or interests in any predecessor or successor thereto within the meaning of Section 355(e)) representing a “50-percent or greater interest” within the meaning of Section 355(e), then Integra shall be liable for, and shall indemnify Spinco and each Spinco Member against, the Section 355(e) Tax; and

(B) If there is a Final Determination that Section 355(e) of the Code is applicable to the Spin-off Transactions solely because the Spin-off Transactions were part of a plan or series of related transactions pursuant to which one or more persons acquired directly or indirectly stock of Spinco (or interests in any predecessor or successor thereto within the meaning of Section 355(e)) representing a “50-percent or greater interest” within the meaning of Section 355(e), then Spinco shall pay and be liable for, and shall indemnify Integra and each Integra Member against, the Section 355(e) Tax.

 

  (iv)

Any such claim for indemnification to effectuate this Section 3.3(c) shall otherwise be governed in the manner specified under this Article III, but

 

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  shall not affect in any manner the provisions of Article V and Article VI (except as set forth in Section 6.2(a)) with respect to cooperation and control of Audits.

Section 3.4 Certain Reimbursements. Each party shall notify the other party of any Taxes paid by it or any of its Affiliates that are subject to indemnification under this Article III. Any notification pursuant to this Section 3.4 shall include a detailed calculation (including, if applicable, separate allocations of such Taxes between the parties and supporting work papers) and a brief explanation of the basis for indemnification hereunder. Whenever such a notification is given, the indemnifying party shall pay the amount requested in such notice to the indemnified party in accordance with Article IV, but only to the extent the indemnifying party agrees with such request. To the extent the indemnifying party disagrees with such request, it shall so notify the indemnified party within thirty (30) days of receipt of such notice, whereupon the parties shall use their best efforts to resolve any such disagreement. Any indemnification payment made after such thirty (30) day period shall include interest at the Overdue Rate from the date of receipt of the original indemnification notice.

Section 3.5 Adjustments. The parties agree to cooperate in good faith, without bias to any Integra Member or Spinco Member, to make appropriate adjustments to accomplish the objectives of this Article III.

ARTICLE IV.

METHOD AND TIMING OF

PAYMENTS REQUIRED BY THIS AGREEMENT

Section 4.1 Payment in Immediately Available Funds; Interest. All payments made pursuant to this Agreement shall be made in immediately available funds. Except as otherwise provided in the Agreement, all payments shall be made within thirty (30) days of receipt of request therefor. Except as otherwise provided in the Agreement, any payment not made within thirty (30) days of receipt shall thereafter bear interest at the Overdue Rate.

Section 4.2 Characterization of Payments. Any payment (other than interest thereon) made hereunder by Integra to Spinco, or by Spinco to Integra, shall be treated by all parties for all Tax purposes to the extent permitted by law and GAAP as a non-taxable distribution or capital contribution made immediately prior to the Distribution, except to the extent that Integra and Spinco treat a payment as the settlement of an intercompany liability (including, without limitation, the settlement of an intercompany liability with respect to the sharing of Tax liabilities pursuant to the Current Allocation Methodology).

Section 4.3 Payments Net of Taxes. The amount of any Loss subject to indemnification pursuant to Article III shall be net of Taxes. Accordingly, the amount which an indemnifying party is required to pay to an indemnitee will be adjusted to reflect any Tax benefit to the indemnitee from the underlying Loss and to reflect any Taxes imposed upon the indemnitee as a result of the receipt of such payment. Such an adjustment will first be made at the time that the indemnification payment is made and will further be made, as appropriate, to take into account any change in the liability of the indemnitee for Taxes that occurs in

 

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connection with the final resolution of an audit by a Tax authority. For purposes of this Section 4.3, the value of any Tax benefit to the indemnitee from the underlying Loss shall be an amount equal to the product of (a) the amount of any present or future deduction allowed or allowable to the indemnitee by the Code, or other applicable Law, as a result of such Loss and (b) the highest statutory rate applicable under Section 11 of the Code, or other applicable Law.

ARTICLE V.

COOPERATION; DOCUMENT RETENTION; CONFIDENTIALITY

Section 5.1 Provision of Cooperation, Documents and Other Information. Upon the reasonable request of any party to this Agreement, Integra or Spinco, as applicable, shall promptly provide (and shall cause its Affiliates to promptly provide) the requesting party with such cooperation and assistance, documents, and other information as may be necessary or reasonably helpful in connection with (a) the preparation and filing of any Tax Return, (b) the conduct of any Audit involving any Taxes or Tax Returns within the scope of this Agreement or (c) the verification by a party of an amount payable to or receivable from another party. Such cooperation and assistance shall include, without limitation, (i) the provision of books, records, Tax Returns, documentation or other information relating to any relevant Tax Return, (ii) the execution of any document that may be necessary or reasonably helpful in connection with the filing of any Tax Return, or in connection with any Audit, including, without limitation, the execution of powers of attorney and extensions of applicable statutes of limitations with respect to Tax Returns which Integra may be obligated to file on behalf of Spinco Members pursuant to Section 2.1, (iii) the prompt and timely filing of appropriate claims for refund, and (iv) the use of reasonable best efforts to obtain any documentation from a governmental authority or a third party that may be necessary or reasonably helpful in connection with the foregoing. Each party shall make its employees and facilities available on a mutually convenient basis to facilitate such cooperation.

Section 5.2 Retention of Books and Records. Each party to this Agreement shall retain or cause to be retained (and shall cause each of their Affiliates to retain) all Tax Returns and all books, records, schedules, work papers, and other documents relating thereto, until the later of (a) the date seven (7) years from the close of the applicable Tax Period, (b) the expiration of all applicable statutes of limitations (including any waivers or extensions thereof) and (c) the expiration of any retention period required by law (e.g., depreciation or inventory records) or pursuant to any record retention agreement. The parties hereto shall notify each other in writing of any waivers, extensions or expirations of applicable statutes of limitations.

Section 5.3 Confidentiality of Documents and Information. Except as required by law or with the prior written consent of the other party, all Tax Returns, documents, schedules, work papers and similar items and all information contained therein that are within the scope of this Agreement shall be kept confidential by the parties hereto and their Representatives, shall not be disclosed to any other Person and shall be used only for the purposes provided herein.

 

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ARTICLE VI.

AUDITS

Section 6.1 Notification and Status of Audits or Disputes. Upon the receipt by any party to this Agreement (or any of its Affiliates) of notice of any pending or threatened Audit pertaining to Taxes subject to indemnification under this Agreement, such party shall promptly notify the other party in writing of the receipt of such notice. Each party to this Agreement shall use reasonable best efforts to keep the other party advised as to the status of any Audits pertaining to Taxes subject to indemnification under this Agreement. To the extent relating to any such Tax, each party hereto shall promptly furnish the other party with copies of any inquiries or requests for information from any Taxing Authority or any other administrative, judicial or other governmental authority, as well as copies of any revenue agent’s report or similar report, notice of proposed adjustment or notice of deficiency.

Section 6.2 Control and Settlement.

 

  (a) Integra shall have the right to control, and to represent the interests of all affected taxpayers in, any Audit relating, in whole or in part, to any Tax Return filed pursuant to Section 2.1(a)(i) and Section 2.1(a)(ii) and to employ counsel or other advisors of its choice at its own cost and expense; provided, however, that with respect to any issue arising on an Audit of an Integra Prepared Pre-Spin/Straddle Mixed Return that may have a significant adverse effect on Spinco or any Spinco Member (including as a result of Spinco’s indemnification obligations pursuant to Sections 3.3(c)(i), 3.3(c)(ii)(B) and 3.3 (c)(iii)(B)), Integra shall not settle or otherwise resolve any such issue without the written consent of Spinco, which consent shall not be unreasonably withheld.

 

  (b) Spinco shall have the right to control, and to represent the interests of all affected taxpayers in, any Audit relating, in whole or in part, to any Tax Return filed pursuant to Section 2.1(b)(i) and Section 2.1(b)(ii) and to employ counsel or other advisors of its choice at its own cost and expense; provided, however, that with respect to any issue arising on an Audit of a Spinco Prepared Pre-Spin/Straddle Nonmixed Return that may have a significant adverse effect on Integra or any Integra Member (including as a result of Integra’s indemnification obligations pursuant to Sections 3.3(c)(i), 3.3(c)(ii)(A) and 3.3 (c)(iii)(A)), Spinco shall not settle or otherwise resolve any such issue without the written consent of Integra, which consent shall not be unreasonably withheld.

 

  (c) The payment of any Taxes as a result of a Final Determination with respect to an Audit, as well as any payments between Integra and Spinco with respect to such Taxes to the extent such Audit relates to an Integra Prepared Pre-Spin/Straddle Mixed Return and the Current Allocation Methodology applies, shall be governed by Section 2.7.

Section 6.3 Delivery of Powers of Attorney and Other Documents. Integra and Spinco shall execute and deliver to the other party, promptly upon request, powers of attorney authorizing such other party to extend statutes of limitations, receive refunds, negotiate settlements and take such other actions that Integra or Spinco, as applicable, reasonably considers to be appropriate in exercising its control rights pursuant to Section 6.2, and any other documents reasonably necessary thereto to effect the exercise of such control rights.

 

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ARTICLE VII.

MISCELLANEOUS

Section 7.1 Effectiveness. This Agreement shall be effective from and after the Distribution Date and shall survive until the expiration of any applicable statute of limitations.

Section 7.2 Entire Agreement. This Agreement, together with all documents and instruments referred to herein and therein, constitute the entire agreement among the parties hereto with respect to the subject matter hereof and supersede and terminate all prior agreements and understandings, both written and oral.

Section 7.3 Guarantees of Performance. Each party hereby guarantees the complete and prompt performance by its Affiliates of all of its obligations and undertakings pursuant to this Agreement. If, subsequent to the consummation of the Spin-off Transactions, either Integra or Spinco shall be acquired by another entity (the “acquirer”) such that 50% or more of the acquired corporation’s common stock is held by the acquirer and its affiliates, the acquirer shall, by making such acquisition, simultaneously agree to jointly and severally guarantee the complete and prompt performance by the acquired corporation and any Affiliate of the acquired corporation of all of their obligations and undertakings pursuant to this Agreement and the acquired corporation shall cause such acquirer to enter into an agreement reflecting such guarantee.

Section 7.4 Severability. In the event any one or more of the provisions contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions hereof without including any of such which may hereafter be declared invalid, void or unenforceable. In the event that any such term, provision, covenant or restriction is hereafter held to be invalid, void or unenforceable, the parties hereto agree to use their best efforts to find and employ an alternate means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction.

Section 7.5 Waiver. Neither the failure nor any delay on the part of any party to exercise any right under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right preclude any other or further exercise of the same or any other right, nor shall any waiver of any right with respect to any occurrence be construed as a waiver of such right with respect to any other occurrence.

Section 7.6 Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of Delaware without regard to any applicable conflicts of law principles, except with respect to matters of law concerning the internal corporate or other organizational affairs of any entity which is a party to or subject of this Agreement, and as to those matters the law of the jurisdiction under which the respective entity derives its powers shall govern.

 

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Section 7.7 Notices. All notices and other communications required or permitted under this Agreement shall be in writing and shall be duly given when delivered in person, by facsimile (with a confirmed receipt thereof), by messenger or courier service, or by registered or certified mail (postage prepaid, return receipt requested), at the following addresses (or at such other address for a party as shall be specified by like notice):

If to Integra, to:

Integra LifeSciences Holdings Corporation

311 Enterprise Drive

Plainsboro, New Jersey 08536

Attention: Neal Glueck, VP of Tax

Email: Neal.Glueck@integralife.com

Tel: (609) 936-6981

Fax: (609) 750-4264

If to Spinco, to:

SeaSpine Holdings Corporation

2302 La Mirada Drive

Vista, California 92081

Attention: John Bostjancic, Chief Financial Officer

Email: john.bostjancic@seaspine.com

Tel: (760) 727-8399

Fax: (760) 727-8809

Section 7.8 Amendments. This Agreement may be amended at any time only by written agreement executed and delivered by duly authorized officers of Integra and Spinco.

Section 7.9 Successors and Assigns. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by either party hereto (by operation of law or otherwise), without the prior written consent of the other party. All provisions of the Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns.

Section 7.10 No Third-Party Beneficiaries. This Agreement is solely for the benefit of the parties to this Agreement and their respective Affiliates and should not be deemed to confer upon third parties any remedy, claim, liability, reimbursement, claim of action or other right in excess of those existing without this Agreement.

Section 7.11 Headings; References. The article, section and paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. All references herein to “Article”, “Sections” or “Exhibits” shall be deemed to be references to Articles or Sections hereof or Exhibits hereto unless otherwise indicated.

 

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Section 7.12 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original instrument, and all such counterparts shall together constitute one and the same instrument.

Section 7.13 Predecessors and Successors. To the extent necessary to give effect to the purposes of this Agreement, any reference to any corporation or other entity shall also include any predecessors or successors thereto, by operation of law or otherwise.

Section 7.14 Specific Performance. The parties hereto acknowledge and agree that irreparable damages will result if this Agreement is not performed in accordance with its terms, and each party agrees that any damages available at law for a breach of this Agreement would not be an adequate remedy. Therefore, to the full extent permitted by applicable law, the provisions hereof and the obligations of the parties hereunder shall be enforceable in a court of equity, or other tribunal with jurisdiction, by a decree of specific performance, and appropriate injunctive relief may be applied for and granted in connection therewith.

Section 7.15 Further Assurances. Subject to the provisions hereof, the parties hereto shall make, execute, acknowledge and deliver such other instruments and documents, and take all such other actions, as may be reasonably required in order to effectuate the purposes of this Agreement and to consummate the transactions contemplated hereby. Subject to the provisions hereof, each party shall, in connection with entering into this Agreement, performing its obligations hereunder and taking any and all actions relating hereto, comply with all applicable laws, regulations, orders and decrees, obtain all required consents and approvals and make all required filings with any governmental authority (including any regulatory or administrative agency, commission or similar authority) and promptly provide the other party with all such information as it may reasonably request in order to be able to comply with the provisions of this sentence.

Section 7.16 Setoff. All payments to be made by any party under this Agreement shall be made without setoff, counterclaim or withholding, all of which are expressly waived.

Section 7.17 Expenses. Except as specifically provided in this Agreement, each party agrees to pay its own costs and expenses resulting from the fulfillment of its respective obligations hereunder.

Section 7.18 Rules of Construction. Any ambiguities shall be resolved without regard to which party drafted the Agreement.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date above written.

 

INTEGRA LIFESCIENCES HOLDINGS CORPORATION,
a Delaware corporation
By:

 

Name:
Title:

SEASPINE HOLDINGS CORPORATION,

a Delaware corporation

By:

 

Name:
Title:
EX-10.3

Exhibit 10.3

EMPLOYEE MATTERS AGREEMENT

BY AND BETWEEN

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

AND

SEASPINE HOLDINGS CORPORATION

DATED AS OF [            ], 2015


EMPLOYEE MATTERS AGREEMENT

This Employee Matters Agreement (the “Agreement”) is entered into as of [            ], 2015, by and between Integra LifeSciences Holdings Corporation, a Delaware corporation (“Integra”), and SeaSpine Holdings Corporation, a Delaware corporation (“SeaSpine”), each a “Party” and together, the “Parties.”

RECITALS:

WHEREAS, SeaSpine is and prior to the Distribution will be a wholly owned subsidiary of Integra;

WHEREAS, the board of directors of Integra has determined that it is advisable and in the best interests of Integra to establish SeaSpine as an independent publicly traded company;

WHEREAS, to effect this separation, the Parties have entered into that certain Separation and Distribution Agreement dated as of [            ], 2015 (as amended or otherwise modified from time to time, the “Separation Agreement”); and

WHEREAS, pursuant to the Separation Agreement, Integra and SeaSpine are entering into this Agreement for the purpose of allocating between and among them certain assets, Liabilities (as defined below) and responsibilities with respect to certain (i) employees, (ii) compensation and benefit plans, programs and arrangements and (iii) other employee-related matters.

NOW, THEREFORE, in consideration of the foregoing premises, the mutual promises and covenants hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

Section 1.1 Definitions. The following capitalized terms shall have the meanings set forth below when used in this Agreement:

Accrued PTO” means, with respect to an Integra Employee or a SeaSpine Employee, such individual’s accrued vacation, paid-time-off and sick time, if any.

Affiliate” shall mean, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the specified Person. For this purpose “control” of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through ownership of voting securities, by contract or otherwise. Unless explicitly provided herein to the contrary, for purposes of this Agreement, Integra shall be deemed not to be an Affiliate of SeaSpine or any of its Subsidiaries, and SeaSpine shall be deemed not to be an Affiliate of Integra or any of its Subsidiaries (other than SeaSpine and the SeaSpine Subsidiaries).

Auditing Party” has the meaning set forth in Section 9.10.

Agreement” shall have the meaning set forth in the preamble to this Agreement and includes all Exhibits attached hereto or delivered pursuant hereto.

Ancillary Agreements” shall have the meaning provided in the Separation Agreement.

 

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Benefit Plan” shall mean any compensation and/or benefit plan, program, arrangement, agreement or other commitment that is sponsored, maintained, entered into or contributed to by an entity or with respect to which such entity otherwise has any liability or obligation, whether fixed or contingent, including each such (i) employment, consulting, noncompetition, nondisclosure, nonsolicitation, severance, termination, pension, retirement, supplemental retirement, excess benefit, profit sharing, bonus, incentive, sales incentive, commission, deferred compensation, retention, transaction, change in control and similar plan, program, arrangement, agreement or other commitment, (ii) stock option, restricted stock, restricted stock unit, contract stock, share unit, performance stock, stock appreciation, stock purchase, deferred stock or other compensatory equity or equity-based plan, program, arrangement, agreement or other commitment, (iii) savings, life, health, disability, accident, medical, dental, vision, cafeteria, insurance, flexible spending, adoption/dependent/employee assistance, tuition, vacation, relocation, paid-time-off, other fringe benefit and other employee compensation plan, program, arrangement, agreement or other commitment, including in each case, each “employee benefit plan” as defined in Section 3(3) of ERISA and any trust, escrow, funding, insurance or other agreement related to any of the foregoing.

COBRA” shall mean the continuation coverage requirements for “group health plans” under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and as codified in Code Section 4980B and Sections 601 through 608 of ERISA, together with all regulations promulgated thereunder.

Code” shall mean the Internal Revenue Code of 1986, as amended.

Distribution” shall have the meaning provided in the Separation Agreement.

Distribution Date” shall have the meaning provided in the Separation Agreement.

Distribution Ratio” shall mean the quotient obtained by dividing (i) one by (ii) [            ].

Distribution Time” shall mean [            ] p.m., New York City time, on the Distribution Date.

DOL” shall mean the U.S. Department of Labor.

ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

Force Majeure” has the meaning set forth in Section 10.19.

Former Integra Employee” shall mean any employee, consultant, director or other service provider who provides or provided services primarily for the benefit of any Integra Entity and who (A) terminates or has terminated his or her employment or other service relationship with any Integra Entity at any time, including any such individual who terminated employment or service prior to the Distribution Time, and (B) the Parties determine to be a Former Integra Employee. For the avoidance of doubt, any transfer of employment or other service relationship between the Integra Entities and/or the SeaSpine Entities for purposes of effectuating the Distribution shall not constitute a termination of employment or other service relationship for purposes of this definition. To the extent such designation is not readily made, the Parties agree to negotiate in good faith to agree upon a designation as a Former Integra Employee or a Former SeaSpine Employee.

 

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Former SeaSpine Employee” shall mean any employee, consultant, director or other service provider who provides or provided services primarily for the benefit of any SeaSpine Entity or with respect to the SeaSpine Business and who (A) terminates or has terminated his or her employment or other service relationship at any time, including any such individual who terminated employment or service prior to the Distribution Time, and (B) whom the Parties determine to be a Former SeaSpine Employee. For the avoidance of doubt, any transfer of employment or other service relationship between Integra Entities and/or SeaSpine Entities for purposes of effectuating the Distribution shall not constitute a termination of employment or other service relationship for purposes of this definition. To the extent such designation is not readily made, the Parties agree to negotiate in good faith to agree upon a designation as a Former Integra Employee or a Former SeaSpine Employee.

Governmental Authority” shall mean any U.S. federal, state, local or non-U.S. court, government, department, commission, board, bureau, agency, official or other regulatory, administrative or governmental authority.

Hiring Party” shall have the meaning provided in Section 9.2.

HIPAA” shall mean the Health Insurance Portability and Accountability Act of 1996, as amended.

Integra” shall have the meaning provided in the preamble to this Agreement.

Integra 401(k) Plan” shall mean the Integra LifeSciences Corporation 401(k) Trust.

Integra Allocation Factor” shall mean the quotient obtained by dividing (i) the Integra Post-Separation Stock Value, by (ii) the sum of (A) the Integra Post-Separation Stock Value, plus (B) the product of (x) the SeaSpine Stock Value times (y) the Distribution Ratio.

Integra Benefit Plan” shall mean each Benefit Plan sponsored, maintained entered into or contributed to by any Integra Entity, in any case, under which more than one service provider is eligible to receive compensation and/or benefits.

Integra Cash Incentive Plans” shall have the meaning provided in Section 6.1.

Integra Cafeteria Plan” shall mean a “cafeteria plan” (within the meaning of Section 125 of the Code), including any health flexible spending account or dependent care plan, maintained by Integra.

Integra Common Stock” shall mean the common stock, par value $0.01 per share, of Integra.

Integra Employee” shall mean each employee, consultant, director and other service provider who provides services primarily for the benefit of any Integra Entity and who, following the Distribution Time, remains employed by or in service with any Integra Entity, including any such active employees and any such employees on approved leaves of absence. Notwithstanding the foregoing or anything to the contrary contained herein, for purposes of Article III, each member of Integra’s Board of Directors serving as of immediately prior to the Distribution Time and Jack Henneman shall be an Integra Employee.

Integra Entities” shall mean Integra and the Subsidiaries of Integra other than SeaSpine and the SeaSpine Subsidiaries (each, an “Integra Entity”).

Integra Equity Awards” shall mean the Integra Options, Integra Performance Share Awards, Integra Restricted Stock Awards and Integra RSU Awards, collectively.

 

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Integra Equity Plans” shall mean Integra’s 2000 Equity Incentive Plan, the 2001 Equity Incentive Plan, the Third Amended and Restated 2003 Equity Incentive Plan and the Employee Stock Purchase Plan, and any other stock option or equity incentive compensation plan or arrangement maintained by any Integra Entity on or prior to the Distribution Date for the benefit of employees, consultants, directors and/or other service providers of any Integra Entity. For the avoidance of doubt, neither the SeaSpine Holdings Corporation 2015 Incentive Award Plan nor the SeaSpine Holdings Corporation 2015 Employee Stock Purchase Plan shall be deemed to be an Integra Equity Plan.

Integra Health and Welfare Plans” shall mean, collectively, the plans listed on Exhibit A hereto and any group welfare plans or programs maintained by an Integra Entity in a foreign jurisdiction.

Integra Individual Agreement” shall mean each Benefit Plan sponsored, maintained entered into or contributed to by any Integra Entity, in any case, under which no more than one service provider is eligible to receive compensation and/or benefits.

Integra Option” shall mean an option to purchase shares of Integra Common Stock granted pursuant to any Integra Equity Plan.

Integra Participant” shall mean any individual who, (i) prior to the Distribution Date, is eligible to participate in one or more Integra Benefit Plans, and (ii) following the Distribution Date, is (A) an Integra Employee who is eligible to participate in one or more Integra Benefit Plans, (B) a Former Integra Employee who remains entitled to payments, benefits and/or participation under any Integra Benefit Plan, (C) a Former SeaSpine Employee who terminated employment or other service on or prior to the Distribution Date, to the extent such individual remains entitled to payments, benefits and/or participation under any Integra Benefit Plan, or (D) a beneficiary, dependent or alternate payee of any of the foregoing. For the avoidance of doubt, “Integra Participant” shall not include any individual who becomes a SeaSpine Participant (or any beneficiary, dependent or alternate payee thereof) once such individual becomes a SeaSpine Participant.

Integra Performance Share Award” shall mean an award of Integra performance stock granted under any Integra Equity Plan.

Integra Post-Separation Stock Value” shall mean the volume weighted average per-share price of Integra Common Stock trading in the “when issued market” on the Distribution Date.

Integra Pre-Separation Stock Value” shall mean the volume weighted average per-share price of Integra Common Stock trading the “regular way with due bills” over the five (5) trading-day period ending on the Distribution Date.

Integra Ratio” shall mean the quotient obtained by dividing the Integra Pre-Separation Stock Value by the Integra Post-Separation Stock Value.

Integra Restricted Stock Award” shall mean an award of restricted shares of Integra Common Stock granted under any Integra Equity Plan

Integra RSU Award” shall mean an award of Integra contract stock granted under any Integra Equity Plan.

IRS” shall mean the Internal Revenue Service.

 

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Law” shall mean any law, statute, ordinance, code, rule, regulation, order, writ, proclamation, judgment, injunction or decree of any Governmental Authority.

Liability” and “Liabilities” shall have such meanings as provided in the Separation Agreement.

Participating Company” shall mean, with respect to an Integra Benefit Plan, any Integra Entity and, prior to the Distribution, each SeaSpine Entity, in each case, that is a participating employer in such Integra Benefit Plan.

Party” or “Parties” shall have the meaning provided in the preamble to this Agreement.

Person” shall mean an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, a union, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof.

Records” shall have such meaning as provided in the Separation Agreement.

Representatives” shall have such meaning as provided in the Separation Agreement.

Separation Agreement” shall have the meaning provided in the recitals to this Agreement.

SeaSpine” shall have the meaning provided in the preamble to this Agreement.

SeaSpine 401(k) Plan” shall have the meaning provided in Section 4.1.

SeaSpine Allocation Factor” shall mean the quotient obtained by dividing (i) the product of (A) the SeaSpine Stock Value times (B) the Distribution Ratio, by (ii) the sum of (A) the Integra Post-Separation Stock Value, plus (B) the product of (x) the SeaSpine Stock Value times (y) the Distribution Ratio.

SeaSpine Benefit Plan” shall mean each Benefit Plan (i) that is not an Integra Benefit Plan, (ii) which is sponsored, maintained, entered into or contributed to by any SeaSpine Entity, and (iii) under which more than one service provider is eligible to receive compensation and/or benefits, including the SeaSpine 401(k) Plan, each SeaSpine Equity Plan, the SeaSpine Cafeteria Plan and the SeaSpine Health and Welfare Plans.

SeaSpine Business” shall have the meaning provided in the Separation Agreement.

SeaSpine Cafeteria Plan” shall mean a “cafeteria plan” (within the meaning of Section 125 of the Code), including any health flexible spending account or dependent care plan, maintained by any SeaSpine Entity.

SeaSpine Common Stock” shall mean the common stock, par value $0.001 per share, of SeaSpine.

SeaSpine Employee” shall mean each employee, consultant, director and other service provider who provides services primarily for the benefit of any SeaSpine Entity or with respect to the SeaSpine Business and who, following the Distribution Time, is employed by or in service with any SeaSpine Entity, including any such active employees and any such employees on approved leaves of absence. Notwithstanding the foregoing or anything to the contrary contained herein, for purposes of Article III, none of the members of Integra’s Board of Directors serving as of immediately prior to the Distribution Time or Jack Henneman shall be an Integra Employee shall be a SeaSpine Employee.

 

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SeaSpine Entities” means SeaSpine and each SeaSpine Subsidiary (each, a “SeaSpine Entity”).

SeaSpine Equity Awards” shall mean the SeaSpine Options, SeaSpine Performance Share Awards, SeaSpine Restricted Stock Awards and SeaSpine RSU Awards, collectively.

SeaSpine Health and Welfare Plans” shall have the meaning provided in Section 5.1.

SeaSpine Individual Agreement” shall mean each Benefit Plan sponsored, maintained entered into or contributed to by any SeaSpine Entity, in any case, under which no more than one service provider is eligible to receive compensation and/or benefits.

SeaSpine Option” shall mean an option to purchase shares of SeaSpine Common Stock issued pursuant to the SeaSpine Equity Plan as part of an equitable adjustment to an Integra Option made in connection with the Distribution.

SeaSpine Participant” shall mean any individual who is or becomes (i) a SeaSpine Employee who is eligible to participate in one or more SeaSpine Benefit Plans, (ii) a Former SeaSpine Employee who remains entitled to payments, benefits and/or participation under any SeaSpine Benefit Plan, or (iii) a beneficiary, dependent or alternate payee of any of the foregoing, in each case, beginning on the first date that such individual qualifies as a SeaSpine Participant in accordance with any of the foregoing.

SeaSpine Performance Share Award” shall mean an award of performance shares issued pursuant to the SeaSpine Equity Plan as part of an equitable adjustment to an Integra Performance Share Award made in connection with the Distribution.

SeaSpine Ratio” shall mean the quotient obtained by dividing the Integra Pre-Separation Stock Value by the SeaSpine Stock Value.

SeaSpine Restricted Stock Award” shall mean an award of restricted shares of SeaSpine Common Stock issued pursuant to the SeaSpine Equity Plan as part of an equitable adjustment to an Integra Restricted Stock Award made in connection with the Distribution.

SeaSpine RSU Award” shall mean an award of restricted stock units granted under the SeaSpine Equity Plan as part of an equitable adjustment to an Integra RSU Award made in connection with the Distribution.

SeaSpine Stock Value” shall mean the volume weighted average per-share price of SeaSpine Common Stock trading in the “when issued market” on the Distribution Date.

SeaSpine Subsidiaries” shall have such meaning as provided in the Separation Agreement.

Subsidiary” shall mean, with respect to any specified Person, any corporation, partnership, limited liability company, joint venture or other organization, whether incorporated or unincorporated, of which at least a majority of the securities or interests having by the terms thereof ordinary voting power to elect at least a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such specified Person or by any one or more of its subsidiaries, or by such specified Person and one or more of its subsidiaries.

 

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Transactions” shall have such meaning as provided in the Separation Agreement.

Workers’ Comp Liabilities” shall have the meaning provided in Section 5.6.

Section 1.2 References; Interpretation. References in this Agreement to any gender include references to all genders, and references to the singular include references to the plural and vice versa. Unless the context otherwise requires, the words “include,” “includes” and “including” when used in this Agreement shall be deemed to be followed by the phrase “without limitation.” Unless the context otherwise requires, references in this Agreement to Articles, Sections and Exhibits shall be deemed references to Articles and Sections of, and Exhibits to, this Agreement. Unless the context otherwise requires, the words “hereof,” “hereby” and “herein” and words of similar meaning when used in this Agreement refer to this Agreement in its entirety and not to any particular Article, Section or provision of this Agreement.

ARTICLE II

GENERAL PRINCIPLES

Section 2.1 Post-Distribution Employment. Immediately after the Distribution Time, by virtue of this Agreement and without further action by any Person, (a) each Integra Employee shall continue to be employed or engaged at Integra or such other Integra Entity as employs or engages such Integra Employee as of immediately prior to the Distribution Time, and (b) each SeaSpine Employee shall continue to be employed or engaged at SeaSpine or such other SeaSpine Entity as employs or engages such SeaSpine Employee as of immediately prior to the Distribution Time. The Parties shall cooperate to effectuate any transfers of employment contemplated by this Agreement, including transfers necessary to ensure that all Integra Employees are employed or engaged at an Integra Entity and all SeaSpine Employees are employed or engaged at a SeaSpine Entity, in each case, as of immediately prior to the Distribution Time.

Section 2.2 No Termination/Severance; No Change in Control. No Integra Employee or SeaSpine Employee shall (a) terminate employment or service or be deemed to terminate employment or service solely by virtue of the consummation of the Distribution, any transfer of employment or other service relationship contemplated hereby, or any related transactions or events contemplated by the Separation Agreement, this Agreement or any other Ancillary Agreement, or (b) become entitled to any severance, termination, separation or similar rights, payments or benefits, whether under any Benefit Plan or otherwise, in connection with any of the foregoing. Neither the Distribution nor any other transaction(s) contemplated by the Separation Agreement, this Agreement or any other Ancillary Agreement shall constitute or be deemed to constitute a “change in/of control” or any similar corporate transaction impacting the vesting or payment of any amounts or benefits for purposes of any Integra Benefit Plan or SeaSpine Benefit Plan.

Section 2.3 Termination of SeaSpine Participation in Integra Benefit Plans; Liability for Benefit Plans and Individual Agreements.

(a) Except as otherwise expressly provided for in this Agreement (including with respect to participation in any Integra Equity Plan) or as otherwise expressly agreed to in writing between the Parties, effective as of the Distribution Time, (i) SeaSpine and each other SeaSpine Entity shall cease to be a Participating Company in each Integra Benefit Plan (to the extent any such SeaSpine Entity was such a Participating Company as of immediately prior to the Distribution), and (ii) each SeaSpine Participant shall cease to participate in, be covered by, accrue benefits under or be eligible to contribute to any Integra Benefit Plan (to the extent any such SeaSpine Participant so participated in any Integra Benefit Plan as of immediately prior to the Distribution), and, in each case, Integra and SeaSpine shall take all necessary action prior to the Distribution Time to effectuate each such cessation.

 

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(b) Effective as of the Distribution Time, each Integra Individual Agreement set forth on Exhibit C hereto is hereby transferred and assigned, without further action by any Person, to SeaSpine (or to such other SeaSpine Entity as SeaSpine may designate) and each such transferred agreement shall, from and after the Distribution Time, constitute a SeaSpine Individual Agreement.

(c) Effective as of the Distribution Time, (A) Integra and/or the other Integra Entities shall be solely liable for, and no SeaSpine Entity shall have any obligation or Liability under, any Integra Benefit Plan or Integra Individual Agreement, and (B) except to the extent provided in Section 3.1 below, SeaSpine and/or the other SeaSpine Entities shall be solely liable for, and no Integra Entity shall have any obligation or Liability under, any SeaSpine Benefit Plan or any SeaSpine Individual Agreement.

Section 2.4 Employment Law Liabilities.

(a) Separate Employers. Subject to the provisions of ERISA and the Code, on and after the Distribution Date, each Integra Entity shall be a separate and independent employer from each SeaSpine Entity.

(b) Employment Litigation. Except as otherwise expressly provided in this Agreement and to the extent permissible under applicable Law, (i) SeaSpine and/or the other SeaSpine Entities shall be solely liable for, and no Integra Entity shall have any obligation or Liability with respect to, any employment-related claims and Liabilities regarding SeaSpine Employees, prospective SeaSpine Employees and/or Former SeaSpine Employees relating to, arising out of, or resulting from the prospective employment or service, actual employment or service and/or termination of employment or service, in any case, of such individual(s) with any Integra Entity or SeaSpine Entity, whether the basis for such claims arose before, as of, or after the Distribution Time, and (ii) Integra and/or the other Integra Entities shall be solely liable for, and no SeaSpine Entity shall have any obligation or Liability with respect to, any employment-related claims and Liabilities regarding Integra Employees, prospective Integra Employees and/or Former Integra Employees relating to, arising out of, or resulting from the prospective employment or service, actual employment or service and/or termination of employment or service, in any case, of such individual(s) with any Integra Entity or SeaSpine Entity, whether the basis for such claims arose before, as of, or after the Distribution Time.

(c) Prior Notice of Claims Settlement. Each Party hereto shall, when applicable, notify in writing and consult with the other Party prior to making any settlement of an employee claim or an employment-related claim, for the purpose of attempting to avoid any prejudice to such other Party arising from the settlement. For the avoidance of doubt, nothing herein shall prevent any Party from settling any employment-related claim or shall confer upon any Party any rights of consent or other rights (other than to notice of proposed settlement and consultation) with respect to any employee claim against another Party.

Section 2.5 Service Recognition.

(a) Pre-Distribution Service Credit. With respect to SeaSpine Participants, each SeaSpine Benefit Plan shall provide that all service, all compensation and all other benefit-affecting determinations (including with respect to vesting) that, as of immediately prior to the Distribution Time, were recognized under a corresponding Integra Benefit Plan (or would have been recognized under a corresponding Integra Benefit Plan in which such SeaSpine Participant was eligible to participate immediately prior to the

 

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Distribution Time, had such SeaSpine Participant actually participated in such corresponding Integra Benefit Plan) shall, as of immediately after the Distribution Time or any subsequent effective date for such SeaSpine Benefit Plan, receive full recognition, credit and validity and be taken into account under such SeaSpine Benefit Plan to the same extent as credit was (or would have been) recognized under such Integra Benefit Plan, except (i) to the extent that duplication of benefits would result or (ii) for benefit accrual under any defined benefit pension plan.

(b) Post-Distribution Service Credit. Except to the extent required by applicable Law, (i) no Integra Entity shall be obligated to recognize any service of a SeaSpine Employee after the Distribution Time for any purpose under any Integra Benefit Plan, and (ii) no SeaSpine Entity shall be obligated to recognize any service of an Integra Employee after the Distribution Time for any purpose under any SeaSpine Benefit Plan; provided, however, that nothing herein shall prohibit any Integra Entity or any SeaSpine Entity from recognizing such service.

Section 2.6 Reimbursement.

(a) Reimbursement of Integra. From time to time after the Distribution, SeaSpine shall promptly reimburse Integra, upon Integra’s reasonable request and the presentation by Integra of such substantiating documentation as SeaSpine shall reasonably require, for the cost of any obligations or Liabilities satisfied or assumed by an Integra Entity that are the responsibility of a SeaSpine Entity pursuant to this Agreement. Except as otherwise provided in this Agreement, any such request for reimbursement must be made by Integra not later than ninety (90) days following the date on which such obligations or Liabilities are satisfied or assumed, as applicable, by a Integra Entity.

(b) Reimbursement of SeaSpine. From time to time after the Distribution, Integra shall promptly reimburse SeaSpine, upon SeaSpine’s reasonable request and the presentation by SeaSpine of such substantiating documentation as Integra shall reasonably require, for the cost of any obligations or Liabilities satisfied or assumed by a SeaSpine Entity that are the responsibility of a Integra Entity pursuant to this Agreement. Except as otherwise provided in this Agreement, any such request for reimbursement must be made by SeaSpine not later than ninety (90) days following the date on which such obligations or Liabilities are satisfied or assumed, as applicable, by a SeaSpine Entity.

Section 2.7 French Employees. Schedule 1 attached hereto contains certain terms and conditions with respect to employees residing in France. Notwithstanding anything to the contrary anywhere else in this Agreement, Schedule 1 is incorporated herein by reference and shall control in the event of any inconsistency between this Agreement and Schedule 1 solely as they relate to employees residing in France.

ARTICLE III

ADJUSTMENT OF INTEGRA EQUITY AWARDS; EQUITY PLANS

Section 3.1 Treatment of Outstanding Integra Options.

(a) Integra Option Adjustments. Subject to Sections 3.1(b), 3.5, 3.6, 3.7 and 3.8:

(i) Integra Options Granted Prior to 2015. Each Integra Option that remains outstanding as of immediately prior to the Distribution Time that was granted prior to calendar year 2015 shall be converted, as of immediately prior to the Distribution Time, into both an Integra Option and a SeaSpine Option pursuant to the following adjustment mechanisms (and shall otherwise be subject to the same terms and conditions after the Distribution Time as applied to such Integra Option immediately prior to the Distribution Time):

(A) Shares Subject to New SeaSpine Option. The number of shares of SeaSpine Common Stock subject to the new SeaSpine Option shall be equal to the product obtained by multiplying (x) the number of shares of Integra Common Stock subject to the Integra Option immediately prior to the Distribution Time, times (y) the SeaSpine Allocation Factor, times (z) the SeaSpine Ratio, and rounding down to the nearest whole share.

 

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(B) Exercise Price of New SeaSpine Option. The per share exercise price of the new SeaSpine Option shall be equal to the quotient obtained by dividing (x) the per share exercise price of the Integra Option immediately prior to the Distribution Time, by (y) the SeaSpine Ratio, and rounding such quotient up to the nearest whole cent.

(C) Shares Subject to Post-Distribution Integra Option. The number of shares of Integra Common Stock subject to the post-Distribution Integra Option shall be equal to the product obtained by multiplying (x) the number of shares of Integra Common Stock subject to the Integra Option immediately prior to the Distribution Time, times (y) the Integra Allocation Factor, times (z) the Integra Ratio, and rounding down to the nearest whole share.

(D) Exercise Price of Post-Distribution Integra Option. The per share exercise price of the post-Distribution Integra Option shall be equal to the quotient obtained by dividing (I) the per share exercise price of the pre-Distribution Integra Option immediately prior to the Distribution Time, by (II) the Integra Ratio, and rounding such quotient up to the nearest whole cent.

(ii) Integra Options Granted in 2015. Each Integra Option that remains outstanding as of immediately prior to the Distribution Time that was granted in calendar year 2015 shall be adjusted, as of immediately prior to the Distribution Time, solely into an Integra Option pursuant to the following adjustment mechanisms:

(A) Shares Subject to Post-Distribution Integra Option. The number of shares of Integra Common Stock subject to the post-Distribution Integra Option shall be equal to the product obtained by multiplying (I) the number of shares of Integra Common Stock subject to the Integra Option immediately prior to the Distribution Time, times (II) the Integra Ratio, and rounding such product down to the nearest whole share.

(B) Exercise Price of Post-Distribution Integra Option. The per share exercise price of the post-Distribution Integra Option shall be equal to the quotient obtained by dividing (I) the per share exercise price of the Integra Option immediately prior to the Distribution Time, by (II) the Integra Ratio, and rounding such quotient up to the nearest whole cent.

(b) The adjustments to the Integra Options contemplated by this Agreement, including without limitation, adjustments to the exercise price of Integra Options, to the number of shares subject to Integra Options and with respect to conversions into SeaSpine Options, are all intended to comply in all respects with the requirements of Sections 409A and 424 of the Code, in each case, to the extent applicable, and all such provisions shall be interpreted and implemented in accordance with the foregoing.

 

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Section 3.2 Treatment of Outstanding Integra RSU Awards. Subject to Sections 3.5, 3.6, 3.7 and 3.8:

(a) Integra RSU Awards held by Peter Arduini. Each Integra RSU Award that is outstanding as of immediately prior to the Distribution Time that is held by Peter Arduini shall be converted, as of immediately prior to the Distribution Time, into both: (i) an Integra RSU Award that (A) covers a number of post-Distribution shares of Integra Common Stock equal to the number of shares of Integra Common Stock covered by the Integra RSU Award immediately prior to the Distribution Time, and (B) is subject to the same terms and conditions after the Distribution Time as applied immediately prior to the Distribution Time, and (ii) a SeaSpine RSU Award (A) that covers a number of shares of SeaSpine Common Stock equal to the product obtained by multiplying (x) the number of shares of Integra Common Stock covered by the Integra RSU Award immediately prior to the Distribution Time, times (y) the Distribution Ratio, and (B) is otherwise subject to the same terms and conditions after the Distribution Time as applied to such Integra RSU Award immediately prior to the Distribution Time.

(b) Integra RSU Awards held by Integra Employees or Former Integra Employees (other than Peter Arduini). Each Integra RSU Award that is outstanding as of immediately prior to the Distribution Time that is held by an Integra Employee or Former Integra Employee, other than Peter Arduini, shall be adjusted, as of immediately prior to the Distribution Time, into solely an Integra RSU Award that (A) covers a number of post-Distribution shares of Integra Common Stock determined by multiplying (I) the number of share of Integra Common Stock covered by the Integra RSU Award immediately prior to the Distribution Time times (II) the Integra Ratio (rounding such product down to the nearest whole share), and (B) is otherwise subject to the same terms and conditions after the Distribution Time as applied to such Integra RSU Award immediately prior to the Distribution Time.

(c) Integra RSU Awards held by SeaSpine Employees. Each Integra RSU Award that is outstanding as of immediately prior to the Distribution Time that is held by a SeaSpine Employee shall be adjusted, as of immediately prior to the Distribution Time, into solely a SeaSpine RSU Award that (i) covers a number of shares of SeaSpine Common Stock equal to the product obtained by multiplying (A) the number of shares of Integra Common Stock covered by the Integra RSU Award immediately prior to the Distribution Time times (B) the SeaSpine Ratio (rounding such product down to the nearest whole share), and (ii) is otherwise subject to the same terms and conditions after the Distribution Time as applied to such Integra RSU Award immediately prior to the Distribution Time.

Section 3.3 Treatment of Outstanding Integra Restricted Stock Awards. Subject to Sections 3.5, 3.6, 3.7 and 3.8:

(a) Integra Restricted Stock Awards held by Integra Employees or Former Integra Employees. Each Integra Restricted Stock Award that is outstanding as of immediately prior to the Distribution Time that is held by an Integra Employee or Former Integra Employee shall be adjusted, as of immediately prior to the Distribution Time, into solely an Integra Restricted Stock Award that (i) covers a number of post-Distribution shares of Integra Common Stock determined by multiplying (A) the number of shares of Integra Common Stock covered by the Integra Restricted Stock Award immediately prior to the Distribution Time times (B) the Integra Ratio (rounding such product down to the nearest whole share), and (ii) is subject to the same terms and conditions after the Distribution Time as applied immediately prior to the Distribution Time.

 

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(b) Integra Restricted Stock Awards held by SeaSpine Employees. Each Integra Restricted Stock Award that is outstanding as of immediately prior to the Distribution Time that is held by a SeaSpine Employee shall be adjusted, as of immediately prior to the Distribution Time, into solely a SeaSpine Restricted Stock Award that (i) covers a number of shares of SeaSpine Common Stock equal to the product obtained by multiplying (A) the number of shares of Integra Common Stock covered by the Integra Restricted Stock Award immediately prior to the Distribution Time times (B) the SeaSpine Ratio (rounding such product down to the nearest whole share), and (ii) is otherwise subject to the same terms and conditions after the Distribution Time as applied to such Integra Restricted Stock Award immediately prior to the Distribution Time.

Section 3.4 Treatment of Outstanding Integra Performance Share Award. Subject to Sections 3.5, 3.6, 3.7 and 3.8:

(a) Integra Performance Share Awards held by Integra Employees or Former Integra Employees. Each Integra Performance Share Award that is outstanding as of immediately prior to the Distribution Time that is held by an Integra Employee or Former Integra Employee shall be adjusted, as of immediately prior to the Distribution Time, solely into an Integra Performance Share Award that (i) covers a number of post-Distribution shares of Integra Common Stock determined by multiplying (A) the number of shares of Integra Common Stock covered by the Integra Performance Share Award immediately prior to the Distribution Time times (B) the Integra Ratio (rounding such product down to the nearest whole share), and (ii) is subject to the same terms and conditions after the Distribution Time as applied immediately prior to the Distribution Time.

(b) Integra Performance Share Awards held by SeaSpine Employees. Each Integra Performance Share Award that is outstanding as of immediately prior to the Distribution Time that is held by a SeaSpine Employee shall be adjusted, as of immediately prior to the Distribution Time, into solely a SeaSpine Performance Share Award that covers a number of shares of SeaSpine Common Stock equal to the product obtained by multiplying (A) the number of shares of Integra Common Stock covered by the Integra Performance Share Award immediately prior to the Distribution Time times (B) the SeaSpine Ratio (rounding such product down to the nearest whole share). Such SeaSpine Performance Share Award shall be subject to the same terms and conditions after the Distribution Time as applied to such Integra Performance Share Award immediately prior to the Distribution Time; provided, however, that the parties shall cause such award to be amended pursuant to the form amended and restated agreement attached hereto as Exhibit D.

Section 3.5 Miscellaneous Terms. The Distribution shall not, in and of itself, constitute a termination of employment or service for any Integra Employee or any SeaSpine Employee for purposes of any Integra Equity Awards or SeaSpine Equity Awards, as applicable, held by such individual. With respect to awards adjusted or granted in accordance with this Article III, (a) employment with or service to Integra and/or its Affiliates shall be treated as employment with or service to, as applicable, SeaSpine with respect to SeaSpine Equity Awards held by Integra Employees and (b) employment with or service to SeaSpine and/or its Affiliates shall be treated as employment with or service to, as applicable, Integra with respect to Integra Equity Awards held by SeaSpine Employees.

Section 3.6 Adjustment of Certain Accelerated Vesting Provisions.

(a) Notwithstanding the foregoing, with respect to any unvested SeaSpine Equity Awards granted to an Integra Employee in accordance with this Agreement, if the original Integra Equity Award (that was partially adjusted into the SeaSpine Equity Award) was subject, as of immediately prior to the Distribution, to accelerated vesting provisions (i) by reference to a termination of employment or service with Integra and/or (ii) in connection with a “Change in Control” (as defined in the applicable award agreement and/or Integra Equity Plan) of Integra, then the SeaSpine Equity Award also shall be subject to such same acceleration provisions upon the Integra’s Employee’s termination of employment or service with the relevant Integra Entity(ies) and/or in connection with a Change in Control of Integra.

 

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(b) Further notwithstanding the foregoing, with respect to any unvested SeaSpine Equity Awards granted to a SeaSpine Employee in accordance with this Agreement, if the original Integra Equity Award (that was partially adjusted into the SeaSpine Equity Award), was subject, as of immediately prior to the Distribution, to accelerated vesting provisions (i) by reference to a termination of employment or service with Integra and/or (y) in connection with a “Change in Control” (as defined in the applicable award agreement and/or Integra Equity Plan) of Integra, then the SeaSpine Equity Award, also shall be subject to such same acceleration provisions upon the SeaSpine Employee’s termination of employment or service with the relevant SeaSpine entity(ies) and/or in connection with a change in control of SeaSpine.

Section 3.7 Waiting Period. Integra may determine, in its sole discretion, that, for reasons of administrative convenience, Integra Options shall not be exercisable, and that other Integra Equity Awards shall not be settled, in each case, during a period beginning on a date prior to the Effective Date determined by Integra in its sole discretion, and continuing until reasonably practicable after the Distribution Time.

Section 3.8 No Accelerated Vesting. The Parties hereto acknowledge and agree that in no event shall the vesting of any Integra Equity Awards or SeaSpine Equity Awards, in any case, accelerate solely by reason of the transactions or events contemplated by the Separation Agreement, this Agreement or any Ancillary Agreement.

Section 3.9 Tax Deduction. The Parties acknowledge and agree that each of the applicable tax deductions for which they may be eligible for federal income tax purposes with regard to the Integra Equity Awards and SeaSpine Equity Awards, in any case, shall be determined in accordance with Revenue Ruling 2002-1.

Section 3.10 Adoption and Approval of SeaSpine Equity Plans. Prior to the Distribution Time, Integra shall cause SeaSpine to adopt the SeaSpine 2015 Incentive Award Plan (the “SeaSpine Equity Plan”) and the SeaSpine 2015 Employee Stock Purchase Plan (the “SeaSpine ESPP”). In addition, prior to the Distribution Time, Integra shall approve the SeaSpine ESPP and the SeaSpine Equity Plan as the sole stockholder of SeaSpine.

Section 3.11 Cooperation. Each of the Parties shall establish an appropriate administration system in order to handle in an orderly manner exercises of Integra Options and SeaSpine Options and the settlement of other Integra Equity Awards and SeaSpine Equity Awards. The Parties shall work together to unify and consolidate all indicative data and payroll and employment information on regular timetables and make certain that each applicable entity’s data and records in respect of such awards are correct and updated on a timely basis. The foregoing shall include employment status and information required for tax withholding/remittance and reporting, compliance with trading windows and compliance with the requirements of the Exchange Act and other applicable Laws.

Section 3.12 SEC Registration. SeaSpine agrees that it shall use reasonable efforts to maintain on a continuous basis an effective registration statement(s) under the Securities Act (and maintain the prospectus(es) contained therein for its/their intended use) with respect to the shares of SeaSpine Common Stock authorized for issuance under the SeaSpine Equity Plan and the SeaSpine ESPP. Integra agrees that, following the Distribution Date, it shall use reasonable efforts to continue to maintain a Form S-8 Registration Statement (and maintain the prospectus(es) contained therein for its/their intended use) with respect to and cause to be registered pursuant to the Securities Act, the shares of Integra Common Stock authorized for issuance under the Integra Equity Plans as required pursuant to the Securities Act and any applicable rules or regulations thereunder.

 

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Section 3.13 Integra ESPP. Integra shall continue to administer its Employee Stock Purchase Plan, including with respect to SeaSpine Employees and Former SeaSpine Employees who participated in such plan prior to the Distribution.

ARTICLE IV

TAX-QUALIFIED DEFINED CONTRIBUTION PLAN

Section 4.1 Integra 401(k) Plan; SeaSpine 401(k) Plan. The Parties acknowledge and agree that, as of the Distribution Date, SeaSpine or another SeaSpine Entity has established or will establish a defined contribution plan and trust solely for the benefit of eligible SeaSpine Participants (the “SeaSpine 401(k) Plan”). SeaSpine shall be responsible for taking all necessary, reasonable and appropriate action to maintain and administer the SeaSpine 401(k) Plan so that it is qualified under Section 401(a) of the Code and the related trust thereunder is exempt under Section 501(a) of the Code. Following the Distribution Time, SeaSpine (acting directly or through any SeaSpine Entity) shall be responsible for any and all Liabilities and other obligations with respect to the SeaSpine 401(k) Plan, and Integra (acting directly or through any Integra Entity) shall be responsible for any and all Liabilities and other obligations with respect to the Integra 401(k) Plan.

Section 4.2 Transfer of SeaSpine 401(k) Plan Assets. As soon as practicable following the Distribution Date (or such later time as mutually agreed by the Parties), Integra shall cause the accounts (including any promissory notes related to outstanding participant loans) in the Integra 401(k) Plan attributable to eligible SeaSpine Participants and their beneficiaries and alternate payees and any Integra Participants who are Former SeaSpine Employees and their beneficiaries and alternate payees, if any, and all of the assets in the Integra 401(k) Plan related thereto to be transferred to the SeaSpine 401(k) Plan, and SeaSpine shall cause the SeaSpine 401(k) Plan to accept such transfer of accounts, promissory notes and underlying assets and, effective as of the date of such transfer, to assume and to fully perform, pay and discharge, all obligations relating to the accounts of SeaSpine Participants (to the extent the assets related to those accounts are actually transferred from the Integra 401(k) Plan to the SeaSpine 401(k) Plan).

Section 4.3 No Distributions. No distribution of account balances shall be made to any SeaSpine Participant solely on account of the transfers from the Integra 401(k) Plan described in Section 4.2 above.

Section 4.4 Regulatory Filings. In connection with the transfer of assets and Liabilities from the Integra 401(k) Plan to the SeaSpine 401(k) Plan contemplated in this Article IV, Integra and SeaSpine (each acting directly or through any Integra Entity or the SeaSpine Entity, as applicable) shall cooperate in making any and all appropriate filings required by the IRS, or required under the Code, ERISA or any applicable regulations, and shall take all such action as may be necessary and appropriate to cause such plan-to-plan transfer to take place as soon as practicable after the effectiveness of the SeaSpine 401(k) Plan; provided, however, that SeaSpine shall be solely responsible for complying with any requirements and applying for any IRS determination letters with respect to the SeaSpine 401(k) Plan.

 

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ARTICLE V

HEALTH AND WELFARE PLANS; WORKERS’ COMPENSATION

Section 5.1 SeaSpine Health and Welfare Plans. As of the Distribution Date, SeaSpine or one or more SeaSpine Subsidiaries maintains or will establish each of the health and welfare plans set forth on Exhibit B hereto (together with any group welfare plans or programs maintained by a SeaSpine Entity in a foreign jurisdiction, the “SeaSpine Health and Welfare Plans”) for the benefit of eligible employees of the SeaSpine Entities and their dependents and beneficiaries, each of which shall remain in effect immediately following the Distribution. In addition, as of the Distribution Date, Integra or one or more of the Integra Entities maintains each of the health and welfare plans set forth on Exhibit A hereto (the “Integra Health and Welfare Plans”).

Section 5.2 Cafeteria Plan. As soon as practicable following the Distribution Date and if and to the extent not effected prior to the Distribution Date, Integra (acting directly or through any other Integra Entity) shall, in accordance with Revenue Ruling 2002-32, cause the portion of the Integra Cafeteria Plan applicable to the SeaSpine Participants to be segregated into a separate component and the account balances in such component to be transferred to the SeaSpine Cafeteria Plan, which will include any health flexible spending account and dependent care plan. The SeaSpine Cafeteria Plan shall reimburse Integra or the Integra Cafeteria Plan to the extent amounts were paid by the Integra Cafeteria Plan and not collected from the SeaSpine Participant and such amounts are subsequently collected by the SeaSpine Cafeteria Plan with respect to such SeaSpine Participant.

Section 5.3 COBRA and HIPAA.

(a) SeaSpine (acting directly or through any other SeaSpine Entity) and the SeaSpine Health and Welfare Plans shall be solely responsible for compliance with the health care continuation coverage requirements of COBRA with respect to all SeaSpine Participants (and their respective dependents and beneficiaries), in each case, who experience a COBRA qualifying event on or after the first date on which such individual qualifies as a SeaSpine Participant. Integra (acting directly or through any other Integra Entity) and the Integra Health and Welfare Plans shall be solely responsible for compliance with the health care continuation coverage requirements of COBRA with respect to each individual who is an Integra Participant (or a dependent or beneficiary thereof) at the time such individual experiences a COBRA qualifying event, provided that SeaSpine shall reimburse Integra to the extent of any Liability actually incurred by an Integra Entity with respect thereto relating to an Integra Participant who is a Former SeaSpine Employee. Neither the consummation of the Distribution, any transfer of employment contemplated hereby, or any related transactions or events contemplated by the Separation Agreement, this Agreement or any other Ancillary Agreement shall constitute a COBRA qualifying event for purposes of COBRA with respect to any Integra Participant or any SeaSpine Participant (or any dependent or beneficiary thereof).

(b) SeaSpine (acting directly or through any other SeaSpine Entity) shall be responsible for compliance with any certificate of creditable coverage or other applicable requirements of HIPAA or Medicare applicable to the SeaSpine Health and Welfare Plans with respect to SeaSpine Participants. Integra (acting directly or through any other Integra Entity) shall be responsible for compliance with any certificate of creditable coverage or other applicable requirements of HIPAA or Medicare applicable to the Integra Health and Welfare Plans with respect to Integra Participants.

Section 5.4 Integra to Provide Information. To the extent permitted by Law, Integra or the relevant Integra Health and Welfare Plan shall provide to SeaSpine or the relevant SeaSpine Health and Welfare Plan (to the extent that relevant information is in Integra’s possession) such data as may be necessary for SeaSpine to comply with its obligations hereunder, which may include the names of SeaSpine Participants who were participants in or otherwise entitled to benefits under the Integra Health and Welfare

 

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Plans prior to the Distribution, together with each such individual’s service credit under such plans, information concerning each such individual’s current plan-year expenses incurred towards deductibles, out-of-pocket limits and co-payments, maximum benefit payments, and any benefit usage towards plan limits thereunder. Integra shall, as soon as practicable after requested, provide SeaSpine with such additional information that is in Integra’s possession (and not already in the possession of a SeaSpine Entity) as may be reasonably requested by SeaSpine and necessary to administer effectively any SeaSpine Health and Welfare Plan. Integra and each SeaSpine Entity shall enter into such other agreements as are necessary to comply with this Section 5.4, including, but not limited to, any agreements required by HIPAA.

Section 5.5 Liabilities.

(a) Health and Welfare Benefits. With respect to employee welfare and fringe benefits that are provided under the Integra Health and Welfare Plans, Integra shall, with respect to SeaSpine Participants who participated in such Integra Health and Welfare Plans, cause the Integra Health and Welfare Plans to pay and discharge all eligible claims of SeaSpine Participants (if applicable, through such insurance policies) that are incurred prior to the termination of such SeaSpine Participants’ participation in the applicable Integra Health and Welfare Plan, and SeaSpine shall cause the SeaSpine Health and Welfare Plans to pay and discharge all eligible claims of SeaSpine Participants (if applicable, through such insurance policies) that are incurred on or after enrollment of such SeaSpine Participants in the SeaSpine Health and Welfare Plans (it being understood that neither Integra Health and Welfare Plans nor SeaSpine Health and Welfare Plans shall be responsible for any claims that arise following the claimant’s termination of participation in the applicable Integra Health and Welfare Plan if the claimant does not validly enroll in an applicable SeaSpine Health and Welfare Plan).

(b) Short-Term and Long-Term Disability Benefits. For the avoidance of doubt, with respect to any SeaSpine Employee who becomes entitled to receive long-term or short-term disability benefits prior to the Distribution Time, such SeaSpine Employee shall be transferred to, and shall receive any long-term or short-term disability benefits to which such SeaSpine Employee is entitled under, the SeaSpine Health and Welfare Plans as of the Distribution Time in accordance with the terms of such plans.

(c) Incurred Claim Definition. For purposes of this Article V, a claim or Liability shall generally be deemed to be incurred (i) with respect to medical, dental, vision, and/or prescription drug benefits, on the date that the health services giving rise to such claim or Liability are rendered or performed and not when such claim is made; provided, however that with respect to a period of continuous hospitalization, a claim is incurred upon the first date of such hospitalization and not on the date that such services are performed and (ii) with respect to life insurance, accidental death and dismemberment and business travel accident insurance, upon the occurrence of the event giving rise to such claim or Liability.

(d) Accrued Paid-Time-Off. Following the Distribution Time, (i) SeaSpine shall (directly or through another SeaSpine Entity) recognize and honor the Accrued PTO credited to each SeaSpine Employee by such individual’s employer immediately prior to the Distribution Time and (ii) Integra shall (directly or through another Integra Entity) recognize and honor the Accrued PTO credited to each Integra Employee by such individual’s employer immediately prior to the Distribution Time. Notwithstanding the foregoing, (x) all Accrued PTO shall be used in accordance with the terms and conditions of the post-Distribution employer’s applicable policies and programs, to the extent permissible by law, and (y) any paid-time-off accruals in respect of post-Distribution services (if any) shall be made in accordance with the terms and conditions of the post-Distribution employer’s applicable policies and programs.

 

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Section 5.6 Workers’ Compensation Liabilities. All workers’ compensation Liabilities relating to, arising out of, or resulting from any claim by an Integra Employee or Former Integra Employee that results from an accident occurring, or from an occupational disease which becomes manifest (collectively, “Workers’ Comp Liabilities”) before, as of or after the Distribution Time, shall be retained by and be obligations of Integra or its insurers. All Workers’ Comp Liabilities relating to, arising out of, or resulting from any claim by a SeaSpine Employee or Former SeaSpine Employee that arises or manifests prior to the date on which such SeaSpine Employee or Former SeaSpine Employee was covered by an applicable workers’ compensation insurance program maintained by a SeaSpine Entity shall be obligations of Integra and its insurers, provided that SeaSpine shall reimburse Integra to the extent of any such Workers’ Comp Liability actually incurred by an Integra Entity. All Workers’ Comp Liabilities relating to, arising out of, or resulting from any claim by a SeaSpine Employee or Former SeaSpine Employee that arises or manifests on or after the date on which such SeaSpine Employee or Former SeaSpine Employee was covered under a workers’ compensation insurance program maintained by a SeaSpine Entity shall be obligations of SeaSpine and its insurers. For purposes of this Agreement, a compensable injury giving rise to a Workers’ Comp Liability shall be deemed to be sustained upon the occurrence of the event giving rise to eligibility for workers’ compensation benefits or at the time that an occupational disease becomes manifest, as the case may be. Each Integra Entity and each SeaSpine Entity shall cooperate with respect to any notification to appropriate Governmental Authorities of the Distribution Time and the issuance of new, or the transfer of existing, workers’ compensation insurance policies and claims handling contracts.

ARTICLE VI

INCENTIVE COMPENSATION

Section 6.1 SeaSpine Cash Incentive Plans and Liabilities. Following the Distribution Time, SeaSpine shall assume or retain, as applicable, responsibility for any and all payments, obligations and other Liabilities relating to any amounts that any SeaSpine Employee has either earned (if not payable by its terms prior to the Distribution Time) or become eligible to earn, in either case, as of the Distribution Time under any cash incentive, annual performance bonus, commission and similar cash plan or program maintained by Integra in which one or more SeaSpine Employees is eligible to participate as of immediately prior to the Distribution Time (excluding, for the avoidance of doubt, any such plans maintained by a SeaSpine Entity that are not Integra Benefit Plans) (the “Integra Cash Incentive Plans”), and shall fully perform, pay and discharge the foregoing if and when such payments, obligations and/or other Liabilities become due. Integra shall have no Liability for any payments, obligations or other Liabilities relating to any SeaSpine Employee with respect to any Integra Cash Incentive Plan after the Distribution Time. Following the Distribution Time, the SeaSpine Entities shall be solely responsible for, and no Integra Entities shall have any obligation or Liability with respect to, any and all payments, obligations and other Liabilities under any cash incentive, annual performance bonus, commission and similar cash plan or program maintained by SeaSpine, and shall fully perform, pay and discharge the forgoing if and when such payments, obligations and/or other Liabilities become due.

Section 6.2 Integra Retention of Cash Incentive Liabilities. Following the Distribution Time, the Integra Entities shall be solely liable for, and no SeaSpine Entity shall have any obligation or Liability with respect to, any and all payments, obligations and other Liabilities relating to any awards that any Integra Employee has earned or is eligible to earn under the Integra Cash Incentive Plans and shall fully perform, pay and discharge the foregoing if and when such payments, obligations and/or other Liabilities become due.

 

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ARTICLE VII

PAYROLL REPORTING AND WITHHOLDING

Section 7.1 Payroll.

(a) Form W-2. With respect to SeaSpine Employees, the Parties shall adopt the “standard procedure” for preparing and filing IRS Forms W-2 (Wage and Tax Statements), as described in Revenue Procedure 2004-53 (“Rev. Proc. 2004-53”).

(b) Form 941. Each Party shall be responsible for filing IRS Forms 941 for its respective employees.

Section 7.2 Forms W-4 and W-5. With respect to SeaSpine Employees, the Parties shall adopt the “standard procedure” of Rev. Proc. 2004-53 for purposes of filing IRS Forms W-4 (Employee’s Withholding Allowance Certificate) and W-5 (Earned Income Credit Advance Payment Certificate).

Section 7.3 Garnishments, Tax Levies, Child Support Orders, and Wage Assignments. With respect to garnishments, tax levies, child support orders, and wage assignments in effect with Integra (or any other Integra Entity) as of the Distribution Date for any SeaSpine Employee or Former SeaSpine Employee, SeaSpine (and any other employing SeaSpine Entity), as appropriate, shall honor such payroll deduction authorizations and shall continue to make payroll deductions and payments to the authorized payee, as specified by the court or governmental order which was on file with Integra as of immediately prior to the Distribution Date. Integra shall, as soon as practicable after the Distribution Date, provide SeaSpine (and any other employing SeaSpine Entity), as appropriate, with such information in Integra’s possession (and not already in the possession of a SeaSpine Entity) as may be reasonably requested by the SeaSpine Entities and necessary for the SeaSpine Entities to make the payroll deductions and payments to the authorized payee as required by this Section 7.3.

Section 7.4 Authorizations for Payroll Deductions. Unless otherwise prohibited by a Benefit Plan or by this Agreement or another Ancillary Agreement or by applicable Law, SeaSpine and the other SeaSpine Entities, as appropriate, shall honor payroll deduction authorizations attributable to any SeaSpine Employee that are in effect with any Integra Entity on the Distribution Date relating to such SeaSpine Employee, and shall not require that such SeaSpine Employee submit a new authorization to the extent that the type of deduction by SeaSpine or any other SeaSpine Entity, as appropriate, does not differ from that

 

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made by the Integra Entity. Such deduction types include: pre-tax contributions to any SeaSpine Benefit Plan, including any voluntary benefit plan; scheduled loan repayments to any SeaSpine Benefit Plan; and direct deposit of payroll, employee relocation loans, and other types of authorized company receivables usually collectible through payroll deductions. Each Party shall, as soon as practicable after the Distribution Date, provide the other Party with such information in its possession as may be reasonably requested by the other Party and as necessary for that Party to honor the payroll deduction authorizations contemplated by this Section 7.4.

ARTICLE VIII

INDEMNIFICATION

Section 8.1 General Indemnification. The indemnification rights and obligations of the Parties under this Agreement shall be governed by, and be subject to, the provisions of Article V of the Separation Agreement, which provisions are hereby incorporated by reference into this Agreement.

ARTICLE IX

GENERAL AND ADMINISTRATIVE

Section 9.1 Business Associate Agreements. The Parties hereby agree to enter into any business associate agreements that may be required for the sharing of any information pursuant to this Agreement to comply with the requirements of HIPAA.

Section 9.2 Non-Solicitation. Each Party agrees that it shall not, and it shall cause its Affiliates (such Party and its Affiliates collectively, the “Hiring Party”) not to, prior to the first anniversary of the Distribution Date, knowingly, directly or indirectly, on their own behalf or in the service or on behalf of others, solicit, aid, induce or encourage any individual who is a current employee of the other Party or the other Party’s Affiliates to leave his or her employment and to work for such Hiring Party or others without the prior written consent of the other Party. The restrictions contained in this Section 9.2 shall not apply to (a) general solicitations not specifically directed to any employee of a Party or its Affiliates (including a search firm who has not been encouraged or advised to approach any such employee), or (b) any solicitation or hiring of an individual who is no longer employed by a Party or its Affiliates at the time of such solicitation or hiring.

Section 9.3 Access to Information. From and after the Distribution Date, each of Integra and SeaSpine shall afford to the other and its authorized Representatives reasonable access during normal business hours, subject to appropriate restrictions for classified, privileged or confidential information, to the Representatives, properties, and Records of, in the possession of or in the control of the non-requesting Party and its Subsidiaries insofar as such access is reasonably required by the requesting Party and relates to such other Party or the conduct of its business prior to the Distribution Time. Any information shared or exchanged pursuant to this Agreement shall be subject to the confidentiality requirements set forth in the Separation Agreement and shall be subject to appropriate restrictions for classified, privileged or confidential information.

Section 9.4 Reasonable Efforts/Cooperation. Each Party shall use its commercially reasonable efforts to promptly take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable Laws to consummate the transactions contemplated by this Agreement, including adopting Benefit Plans and/or Benefit Plan amendments. Without limiting the generality of the foregoing, each of the Parties shall reasonably cooperate in all respects with regard to all matters relating to the transactions contemplated by this Agreement for which the other Party seeks a determination letter or private letter ruling from the IRS, an advisory opinion from the DOL or any other filing, consent or approval with respect to or by a Governmental Authority.

 

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Section 9.5 Employer Rights. Except as expressly provided for in Article V, nothing in this Agreement shall (a) prohibit any SeaSpine Entity from amending, modifying or terminating any SeaSpine Benefit Plan or SeaSpine Individual Agreement at any time, subject to the terms and conditions thereof, or (b) prohibit any Integra Entity from amending, modifying or terminating any Integra Benefit Plan or any Integra Individual Agreement at any time, subject to the terms and conditions thereof. In addition, nothing in this Agreement shall be interpreted as an amendment or other modification of any Benefit Plan.

Section 9.6 Effect on Employment. Without limiting any other provision of this Agreement, none of the Distribution or any actions taken in furtherance of the Distribution, whether under the Separation Agreement, this Agreement, any other Ancillary Agreement or otherwise, in any case, shall in and of itself cause any employee to be deemed to have incurred a termination of employment or service or, except as expressly provided in this Agreement, to entitle such individual to any payments or benefits under any Benefit Plan or otherwise. Furthermore, nothing in this Agreement is intended to or shall confer upon any Integra Employee, Former Integra Employee, SeaSpine Employee or Former SeaSpine Employee any right to continued employment or service, or any recall or similar rights to an individual on layoff or any type of approved leave.

Section 9.7 Consent Of Third Parties. If any provision of this Agreement is dependent on the consent or action of any third party, the Parties hereto shall use their commercially reasonable efforts to obtain such consent or cause such action. If such consent is withheld or such action is not taken, the Parties hereto shall use their commercially reasonable efforts to implement the applicable provisions of this Agreement to the fullest extent practicable. If any provision of this Agreement cannot be implemented due to the failure of such third party to consent or take action, the Parties hereto shall negotiate in good faith to implement the provision in a mutually satisfactory alternative manner.

Section 9.8 Access To Employees. Following the Distribution Date, Integra and SeaSpine shall, or shall cause the Integra Entities and the SeaSpine Entities, as applicable, to make available to each other those Integra Employees or SeaSpine Employees, as applicable, who may reasonably be needed by the other Party in order to defend or prosecute any legal or administrative action (other than a legal action between any Integra Entities on the one hand and any SeaSpine Entities on the other) to which any employee, director or Benefit Plan of the Integra Entities or SeaSpine Entities is a party and which relates to their respective Benefit Plans prior to the Distribution Date. The Party to whom an employee is made available in accordance with this Section 9.8 shall pay or reimburse the other Party for all reasonable expenses reimbursed by such other Party to such employee in connection therewith, including all reasonable travel, lodging, and meal expenses, but excluding any amount for such employee’s time spent in connection herewith.

Section 9.9 Beneficiary Designation/Release Of Information/Right To Reimbursement. Without limiting any other provision hereof, to the extent permitted by applicable Law and except as otherwise provided for in this Agreement, all beneficiary designations, authorizations for the release of information and rights to reimbursement made by or relating to SeaSpine Participants under Integra Benefit Plans and in effect immediately prior to the Distribution Time shall be transferred to and be in full force and effect under the corresponding SeaSpine Benefit Plans until such beneficiary designations, authorizations or rights are replaced or revoked by, or no longer apply to, the relevant SeaSpine Participant.

 

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Section 9.10 Audit Rights. Each of Integra and SeaSpine, and their duly authorized representatives, shall have the right to conduct reasonable audits with respect to all information required to be provided to it by the other Party under this Agreement. The Party conducting the audit (the “Auditing Party”) may adopt reasonable procedures and guidelines for conducting audits and the selection of audit representatives under this Section 9.10. The Auditing Party shall have the right to make copies of any records at its expense, subject to any restrictions imposed by applicable Laws and to any confidentiality provisions set forth in the Separation Agreement, which are incorporated by reference herein. The Party being audited shall provide the Auditing Party’s representatives with reasonable access during normal business hours to its operations, computer systems and paper and electronic files, and provide workspace to its representatives. After any audit is completed, the Party being audited shall have the right to review a draft of the audit findings and to comment on those findings in writing within thirty (30) days after receiving such draft.

Section 9.11 Compliance. As of the Distribution Date, SeaSpine (acting directly or through any SeaSpine Entity) shall be solely responsible for compliance under ERISA and all other applicable law with respect to each SeaSpine Benefit Plan.

ARTICLE X

MISCELLANEOUS

Section 10.1 Non-Occurrence of Distribution. Notwithstanding anything in this Agreement to the contrary, if the Separation Agreement is terminated prior to the Distribution Time, all actions and events that are, under this Agreement, to be taken or occur effective prior to, as of or following the Distribution Time, or otherwise in connection with the Separation, shall not be taken or occur, except to the extent otherwise determined by Integra.

Section 10.2 Section 409A. Notwithstanding anything in this Agreement to the contrary, with respect to any compensation or benefits that may be subject to Section 409A of the Code and related Department of Treasury guidance thereunder, the Parties agree to negotiate in good faith regarding any treatment different from that otherwise provided herein to the extent necessary or appropriate to (a) exempt such compensation and benefits from Section 409A of the Code, (b) comply with the requirements of Section 409A of the Code, and/or (c) otherwise avoid the imposition of tax under Section 409A of the Code; provided, however, that this Section 10.2 does not create an obligation on the part of either Party to adopt any amendment, policy or procedure, to take any other action or to indemnify any Person for any failure to do any of the foregoing.

Section 10.3 Entire Agreement. This Agreement and the Exhibits referenced herein and attached hereto, as well as the Separation Agreement and any other agreements and documents referred to herein or therein, constitute the entire agreement between the Parties with respect to the subject matter hereof, and supersede all previous agreements, negotiations, discussions, understandings, writings, commitments and conversations between the Parties with respect to such subject matter. No agreements or understandings exist between the Parties with respect to the subject matter hereof other than those set forth or referred to herein.

Section 10.4 Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the Parties and delivered to the other Party.

 

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Section 10.5 Survival of Agreements. Except as otherwise expressly contemplated by this Agreement, all covenants and agreements of the Parties contained in this Agreement shall survive the Distribution Date.

Section 10.6 Notices. All notices and other communications hereunder shall be in writing, shall reference this Agreement and shall be hand delivered or mailed by registered or certified mail (return receipt requested) to the Parties at the following addresses (or at such other addresses for a Party as shall be specified by like notice) and will be deemed given on the date on which such notice is received:

To Integra:

Integra LifeSciences Holdings Corporation

311 Enterprise Drive

Plainsboro, NJ 08536

Attention: General Counsel

Tel: (609) 275-0500

Fax: (609) 275-5363

To SeaSpine:

SeaSpine Holdings Corporation

2302 La Mirada Drive

Vista, CA 92081

Fax: (760) 216-5702

Attention: General Counsel

Notice by courier or certified or registered mail shall be effective on the date it is officially recorded as delivered to the intended recipient by return receipt or similar acknowledgment. All notices and communications delivered in person shall be deemed to have been delivered to and received by the addressee, and shall be effective, on the date of personal delivery.

Section 10.7 Waivers. The failure of any Party to require strict performance by any other Party of any provision in this Agreement will not waive or diminish that Party’s right to demand strict performance thereafter of that or any other provision hereof.

Section 10.8 Amendments. Subject to the terms of Sections 10.10 and 10.12, this Agreement may not be modified or amended except by an agreement in writing signed by each of the Parties.

Section 10.9 Assignment. This Agreement shall not be assignable, in whole or in part, directly or indirectly, by any Party without the prior written consent of the other Party, and any attempt to assign any rights or obligations arising under this Agreement without such consent shall be void; provided, however, that either Party may assign this Agreement to a purchaser of all or substantially all of the properties and assets of such Party so long as such purchases expressly assumes, in a written instrument in form reasonably satisfactory to the non-assigning Party, the due and punctual performance or observance of every agreement and covenant of this Agreement on the part of the assigning Party to be performed or observed.

Section 10.10 Termination. This Agreement may be terminated and the Distribution may be amended, modified or abandoned at any time prior to the Distribution by and in the sole discretion of Integra without the approval of SeaSpine or the stockholders of Integra. In the event of such termination, no Party shall have any liability of any kind to any other Party or any other Person. After the Distribution, this Agreement may not be terminated except by an agreement in writing signed by the Parties.

 

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Section 10.11 Performance. Each of Integra with respect to the Integra Entities and SeaSpine with respect to the SeaSpine Entities shall cause to be performed, and hereby guarantees the performance of, and all actions, agreements and obligations set forth in this Agreement by such Persons.

Section 10.12 No Third-Party Beneficiaries. Except as otherwise expressly provided in this Agreement, this Agreement is for the sole benefit of the Parties and their successors and assigns, and nothing herein, express or implied, is intended to or shall confer upon any other Person or entity any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Agreement. Without limiting the generality of the foregoing, in no event shall any Integra Employee, Former Integra Employee, Integra Participant, SeaSpine Employee, Former SeaSpine Employee or SeaSpine Participant (or any dependent, beneficiary or alternate payee of any of the foregoing) have any third-party rights under this Agreement.

Section 10.13 Title and Headings. Titles and headings to Sections herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

Section 10.14 Exhibits. The Exhibits attached hereto are incorporated herein by reference and shall be construed with and as an integral part of this Agreement to the same extent as if the same had been set forth verbatim herein.

Section 10.15 Governing Law. This Agreement shall be governed by and construed in accordance with the Laws of the State of Delaware applicable to Contracts made and to be performed in the state of Delaware.

Section 10.16 Dispute Resolution. The provisions of Article VIII of the Separation Agreement shall apply, mutatis mutandis, to all disputes, controversies or claims (whether arising in contract, tort or otherwise) that may arise out of or relate to, or arise under or in connection with this Agreement or the transactions contemplated hereby.

Section 10.17 Waiver of Jury Trial. EACH PARTY IRREVOCABLY AND ABSOLUTELY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING BROUGHT BY A PARTY TO COMPEL THE DISPUTE RESOLUTION PROCEDURES PROVIDED IN SECTION 10.15 OF THIS AGREEMENT AND ARTICLE VIII OF THE SEPARATION AGREEMENT AND THE ENFORCEMENT OF ANY AWARDS OR DECISION OBTAINED FROM SUCH ARBITRATION PROCEEDING, AND AGREES TO TAKE ANY AND ALL ACTION NECESSARY OR APPROPRIATE TO EFFECT SUCH WAIVER.

Section 10.18 Specific Performance. Subject to the provisions of Article VIII of the Separation Agreement, from and after the Distribution, in the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the Parties agree that the Party to this Agreement who is or is to be thereby aggrieved shall have the right to seek specific performance and injunctive or other equitable relief of its rights under this Agreement, in addition to any and all other rights and remedies at Law or in equity, and all such rights and remedies shall be cumulative. The Parties agree that, from and after the Distribution, the remedies at Law for any breach or threatened breach of this Agreement, including monetary damages, are inadequate compensation for any loss, that any defense in any action for specific performance that a remedy at Law would be adequate is hereby waived, and that any requirements for the securing or posting of any bond with such remedy are hereby waived.

 

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Section 10.19 Severability. In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The Parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their respective officers as of the date first set forth above.

 

INTEGRA LIFESCIENCES HOLDINGS CORPORATION
By:  
Name:
Title:
SEASPINE HOLDINGS CORPORATION
By:  
Name:
Title:
EX10.4

Exhibit 10.4

MICROFIB SUPPLY AGREEMENT

(Integra as Supplier)

This Supply Agreement (“Agreement”) sets forth the terms and conditions under which Integra LifeSciences Corporation (“Integra”) contracts with SeaSpine Orthopedics Corporation (“SeaSpine” and together with Integra, the “Parties”) to provide the products set forth on Exhibit A (each individually, a “Microfib Product” and collectively, the “Microfib Products”) on a non-exclusive basis at the prices set forth herein.

1. MANUFACTURING AND SUPPLY RELATIONSHIP:

1.1 General; the Microfib Products. Under this Agreement, SeaSpine engages Integra as a Microfib Products supplier. Integra may designate an affiliate of Integra to perform its obligations hereunder, provided that Integra shall remain liable for all such obligations. Attached hereto as Exhibit A is a complete list of the Microfib Products (as of the Effective Date (as defined in Section 3)) and their Prices (as defined in Section 2.1(a)). No other right or license is or shall be created or granted hereunder by implication, estoppel or otherwise, except as expressly provided in this Agreement. SeaSpine agrees to use the Microfib Products solely as part of a Mozaik Product (as defined below) and not to sell the Microfib Product in separate form. “Mozaik Product” means a ceramic collagen matrix product marketed under the Mozaik brand, including Mozaik Strip, Mozaik Putty, and Mozaik Moldable Morsels, and all equivalent products that are (x) marketed under spine brands, or (y) provided to third parties on a private label basis, in each case as of the Effective Date, any next generation successor version of any of the foregoing products and any biomaterial products created after the Effective Date that use any of the foregoing ceramic collagen matrix products as a subcomponent in the manufacture of the final configuration of such biomaterial product.

1.2 Specifications. The specifications for the Microfib Products (as the same may be modified from time to time hereunder, the “Specifications”) as of the Effective Date are set forth in Exhibit B.

 

  1.3 Changes to the Microfib Products.

 

  a. Integra shall have the right to modify the Microfib Products or their Specifications (i) as necessary to comply with changes in Law (as defined in Section 8.1) or (ii) for any other reason provided that such modification does not affect the form, fit, function, safety or appearance of the Microfib Products. If, however, Integra plans to modify any Microfib Product or its Specifications, Integra shall provide SeaSpine written notice at least sixty (60) days in advance of the effectiveness of such modification (unless impractical for regulatory reasons, in which case such notice shall be provided promptly after the need to modify the Microfib Products or their Specifications is determined by Integra).

 

  b. Integra will not in any event use tendons from bovine other than New Zealand bovine in the manufacture of the Microfib Products without the prior written consent of SeaSpine.

 

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  c. If Integra makes a modification to the Microfib Products in accordance with this Section 1.3, Integra shall provide SeaSpine with information on the changes, and corresponding updated guidelines and instructions for use, if applicable.

2. MICROFIB PRODUCT PRICES AND OTHER FEES:

 

  2.1 Prices.

 

  a. SeaSpine shall pay Integra for the Microfib Products at the per gram prices listed in Exhibit A, as such prices may be modified as described in Section 2.1(b) (the “Prices”).

 

  b. Integra may increase its Prices for the Microfib Products annually effective after Integra has given SeaSpine sixty (60) days’ prior notice of such Price increases. Price increases shall apply to all orders shipped after the effective date of such increase. Annual price increases shall not exceed the greater of (i) three percent (3%) or (ii) the annual change in the consumer price index for all urban consumers for all cities for the twelve month period immediately preceding the notice of such price increase, as published by the United States Bureau of Labor Statistics (http://www.bls.gov); provided, however, that if at any time during the Term, Integra experiences a documented increase in its variable costs related to the Microfib Products of greater than five percent (5%) in any calendar year, the Parties will meet and confer in good faith to negotiate applicable adjustments to the Prices.

3. EFFECTIVE DATE: The effective date of this Agreement shall be [                ],2015 (“Effective Date”).

4. TERM AND TERMINATION:

4.1 Term. This Agreement shall commence on the Effective Date and expire, except as earlier terminated hereunder, on the seventh (7th) anniversary of the Effective Date (the “Initial Term”), provided that this Agreement shall automatically renew for an additional one (1) year period after the end of the Initial Term. After such one year-renewal period, SeaSpine may, upon written notice to Integra at least one hundred eighty (180) days prior to the expiration of such one year-renewal period (or, if applicable, the first Term Extension) extend the Agreement for up to two additional three (3) year periods (each, a “Term Extension”). The Parties may, upon mutual written agreement, extend the Term thereafter. The Initial Term and any Term Extension are collectively referred to as the “Term”.

4.2 Termination

 

  a.

Breach. Either Party may terminate this Agreement for cause upon written notice of material breach by the other Party of this Agreement (a “Termination Notice”), which shall include an opportunity for the breaching Party to cure. If the breaching Party does not cure the material breach identified in the Termination

 

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  Notice within ninety (90) days (or if such breach is a failure of SeaSpine to make payment to Integra when due hereunder, thirty (30) days) after receipt of such Termination Notice or such longer cure period as the Parties may agree in writing, this Agreement shall terminate.

 

  b. Convenience. After the end of the Initial Term, either Party may terminate this Agreement for convenience upon at least one hundred eighty (180) days’ written notice to the other Party.

 

  c. Bankruptcy, etc. Either Party may terminate this Agreement immediately upon written notice to the other Party if proceedings in bankruptcy or insolvency are instituted by or against the other Party, or a receiver is appointed, or if any substantial part of the assets of the other Party is the object of attachment, sequestration or other type of comparable proceeding, and such proceeding is not vacated or terminated within sixty (60) days after its commencement of institution.

 

  4.3 Effects of Termination.

 

  a. Mutual Obligations. After either Party provides a Termination Notice and pending termination of this Agreement, the Parties shall continue to perform their respective obligations hereunder until termination or expiration of the Term is effective. Expiration of the Term or termination of this Agreement shall not relieve the Parties of any obligation accruing prior to such expiration or termination. Each Party agrees, at the request of the other Party upon the expiration of the Term or termination of this Agreement, to return or destroy at the option of the receiving party all Confidential Information exchanged pursuant to Section 10, except such Confidential Information it may be required to retain under applicable Laws.

 

  b. Termination by Integra. Upon termination of this Agreement by Integra pursuant to Section 4.2(a) (Breach), Integra may, at its sole option, supply and ship any Order(s) (as defined below) submitted to Integra prior to the effective date of termination or expiration of the Term to SeaSpine and SeaSpine shall pay the applicable Prices, all in accordance with the terms and conditions of this Agreement.

 

  c. Termination by SeaSpine. Upon termination of this Agreement by SeaSpine pursuant to Section 4.2(a) (Breach), with respect to Order(s) submitted to Integra and accepted prior to the effective date of termination, SeaSpine may at its option, either (x) cancel any unfilled Orders or (y) advise Integra that SeaSpine wishes to have such unfilled Orders filled, in which event Integra shall supply and ship the Microfib Products pursuant to such then pending Orders for the Microfib Products for delivery after the effective date of termination or expiration. SeaSpine shall pay the applicable Prices, all in accordance with the terms and conditions of this Agreement.

 

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4.4 Final Order. In the event of termination or expiration of this Agreement for any reason other than by Integra pursuant to Section 4.2(a) (Breach) or Section 4.2(c) (Bankruptcy, etc.), SeaSpine shall have the right, at its discretion, to place a final order for the Microfib Products prior to or on the last day of the Term in an amount of each Microfib Product not in excess of the lesser of (A) one hundred thirty percent (130%) of the amount of such Microfib Product set forth in the last forecast (including the Binding Forecast and calendar quarters 3 and 4 included therein) provided by SeaSpine in accordance with Section 5.2 prior to the placement of such final order and (B) four (4) times the Maximum Quarterly Order (as defined in Section 5.2). If SeaSpine desires to order additional grams of Microfib Product in excess of such amount, SeaSpine shall notify Integra in writing and the Parties shall discuss in good faith, provided that Integra shall have no obligation to accept any such additional order. Integra may schedule delivery of the final order over four calendar quarters with the first such calendar quarter beginning at least three (3) months after the end of the Term, at Integra’s discretion, provided that Integra will make available for delivery in each such calendar quarter an amount of each Microfib Product that, when added to the amount of such Microfib Product previously made available by Integra pursuant to this Section 4.4, equals at least (i) (A) the amount of such Product included in the final order, divided by (B) 4, multiplied by (ii) the number of such calendar quarters to date.

5. ORDERS; FORECASTS; ACCEPTANCE OF THE MICROFIB PRODUCTS, ETC.

5.1 Orders. SeaSpine is obligated to purchase the Microfib Products for which it has issued a firm order or orders to Integra (“Order(s)”), whether pursuant to a forecast that is deemed binding hereunder, or pursuant to a purchase order accepted by Integra. Integra does not stock the Microfib Products in inventory for purchase by SeaSpine. All Orders must contain delivery dates not less than ninety (90) days after the date of receipt of the Order by Integra, unless otherwise agreed upon in writing by Integra.

5.2 Forecasts. No later than the first business day of each calendar quarter, SeaSpine shall provide Integra with a written rolling forecast as to SeaSpine’s requirements of the Microfib Products for the next four (4) calendar quarter period. Each calendar quarter forecast will consist of the following:

 

  a. The first two (2) calendar quarters of each forecast shall be binding on SeaSpine (“Binding Forecast”) and accompanied by an Order for such forecasted amount of the Microfib Products. The Order shall be in writing and shall specify the delivery date (which must be at least ninety (90) days after the receipt by Integra of the Order), quantity of each Microfib Product ordered and the Prices and total cost of the Order.

 

  b. Each forecast shall update the prior forecast by:

 

  i. dropping the previous calendar quarter 1 from the forecast;

 

  ii. moving calendar quarter 2 from the previous forecast to be calendar quarter 1 of the updated forecast;

 

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  iii. updating, as appropriate and subject to clause (c) below, calendar quarters 3 and 4 of the previous forecast, which as updated will be calendar quarters 2 and 3 of the updated forecast; and

 

  iv. adding a new calendar quarter 4 to the updated forecast, subject to clause (c) below.

The initial forecast for the Microfib Products is set forth on Exhibit C attached hereto.

 

  c. SeaSpine may not increase or decrease the amounts forecasted in the Binding Forecast, but may, subject to Integra’s written acceptance, issue additional Orders during such two (2) calendar quarter period as provided in Section 5.6. In addition, SeaSpine may not increase the number of grams of the Microfib Products forecasted for any calendar quarter period (e.g., 2Q 2016) by more than thirty percent (30%) in aggregate from the number of grams first forecast for such calendar quarter (i.e. when such calendar quarter period was calendar quarter 4 of the forecast), and SeaSpine may not reduce such number of grams first forecasted for such calendar quarter by more than ten percent (10%) in aggregate from the number of grams first forecast for such calendar quarter, without the prior written consent of Integra. SeaSpine shall not order for any calendar quarter more than the number of grams of Microfib Product set forth on Exhibit D attached hereto (the “Maximum Quarterly Order”).

 

  d. SeaSpine will use commercially reasonable efforts to ensure that the forecast for calendar quarters 3 and 4 is accurate, but the forecast for such calendar quarters will not constitute an Order.

 

  e. In the event that SeaSpine fails to provide a Binding Forecast for a particular calendar quarter, unless Integra otherwise notifies SeaSpine in writing, the last available forecasted amount for such calendar quarter shall become a firm Order, provided, however, that nothing contained in this Section 5.2(e) shall be deemed to affect any of Integra’s rights or limit any of Integra’s remedies as a result of such failure.

5.3 Batch Sizes. SeaSpine agrees to order the Microfib Products in whole multiples of the batch sizes set forth on Exhibit D (although SeaSpine acknowledges and agrees that the actual quantity of the Microfib Products delivered may be adjusted as set forth in Section 5.5 or as otherwise expressly provided in this Agreement).

5.4 Acceptance of Orders. Upon receipt of an Order, Integra shall review the Order and shall have ten (10) business days from the Order’s receipt to notify SeaSpine of Integra’s acceptance or rejection of the Order. Integra shall accept any Order for a Binding Forecast that complies with the terms of this Agreement. If any other Order is rejected by Integra, Integra shall use reasonable efforts to provide SeaSpine with a reason for the rejection. If Integra fails to reject an Order in such ten (10) business day period, such Order shall be deemed accepted. Integra shall use commercially reasonable efforts to fill accepted Orders with Microfib Product

 

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not later than ninety (90) days after the receipt of the Order or on the delivery date requested, whichever date is later. However, reasonable delay in shipment (where any delay of ninety (90) days or less after scheduled shipment shall be presumed reasonable) shall not be considered a breach of this Agreement and shall not relieve SeaSpine of its obligations to accept such shipment.

5.5 Whole Lots. Due to variances in manufacturer yields of the Microfib Products (“Product Lots”), in filling any Order for SeaSpine, Integra has the right to deliver to SeaSpine a quantity of the Microfib Products that is larger or smaller than the Order. Within three (3) business days of notification by Integra of the quantity of the Microfib Products constituting a Product Lot, SeaSpine agrees to issue to Integra a revised purchase order matching the quantity of the Microfib Products in such Product Lot. Regardless of the size of an Order, all Microfib Products representing a single Product Lot shall be shipped together. SeaSpine will pay for the quantity of the Microfib Products actually delivered. The quantity of the Microfib Products actually delivered will not affect the firm Order for the Microfib Products if the difference in quantity is not more than ten percent (10%). In the event that shipping Microfib Product of a single Product Lot results in a shipment in excess of ten percent (10%) of the Microfib Products in the Order, such excess shall be applied to the Order for the subsequent month.

5.6 Supplemental Orders; Changes to Orders.

 

  a. If SeaSpine desires to order additional grams of Microfib Product in excess of Orders for the Binding Forecast, including if any such proposed order would result in Orders exceeding the applicable Maximum Quarterly Order, SeaSpine shall notify Integra in writing, stating the grams of the Microfib Products requested and the date by which delivery of such Microfib Products is desired. Integra shall have no obligation to accept any such order, but if Integra accepts any such request (or any portion thereof) in writing, SeaSpine shall be obligated to purchase all such quantities as a firm Order hereunder.

 

  b. Except as otherwise expressly permitted hereunder, any Order(s) deriving herefrom or related hereto may be changed, cancelled or amended only by written agreement signed by both SeaSpine and Integra, setting forth the particular changes to be made and the effect, if any, of such changes on the Prices and time of delivery. SeaSpine may not cancel any Orders unless such cancellation is expressly agreed to in writing by Integra. In the event of a cancellation that is expressly agreed to in writing by Integra, Integra will advise SeaSpine of the total charge for such cancellation, and SeaSpine agrees to pay such charges. Certification of such costs by Integra’s independent public accountants shall be conclusive on the Parties.

5.7 Acceptance and Agreement. ALL SALES AND ORDER(S) ARE SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT. NO VARIATION OF THESE TERMS AND CONDITIONS WILL BE BINDING UPON INTEGRA UNLESS AGREED TO IN WRITING AND SIGNED BY AN OFFICER OR OTHER AUTHORIZED REPRESENTATIVE OF INTEGRA. ANY ADDITIONAL OR DIFFERENT TERMS,

 

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ADDITIONS, DELETIONS OR EXCEPTIONS PROPOSED BY SEASPINE (WHETHER IN A PURCHASE ORDER, OTHER PRINTED FORM OR ELSEWHERE) ARE OBJECTED TO AND HEREBY REJECTED, UNLESS SUCH TERMS, ADDITIONS, OR EXCEPTIONS ARE APPROVED SPECIFICALLY BY INTEGRA IN WRITING AND SIGNED BY AN OFFICER OR OTHER AUTHORIZED REPRESENTATIVE OF INTEGRA. No course of prior dealings or usage of trade shall be relevant to supplement or explain any term used herein. Any clerical errors by Integra are subject to correction.

5.8 Returns. The Microfib Products may not be returned unless resulting from a Microfib Product recall, field correction or market withdrawal for which Integra is responsible as provided in Section 8.6 or as permitted pursuant to Section 5.9(c).

 

  5.9 Delivery; Certificate; Inspection and Acceptance.

 

  a. Terms for the shipments of the Microfib Products will be FCA (Incoterms, 2010). SeaSpine shall pay shipping and freight costs, which will be added to the invoice for each Order, and SeaSpine shall have the right to choose the carrier so long as such choice complies with the shipping validation for the Microfib Product. SeaSpine may designate the destination of Products to be delivered hereunder so long as such destination complies with applicable Law. Delivery of the Microfib Products to the carrier at Integra’s shipping point shall constitute delivery to SeaSpine; SeaSpine shall bear all risk of loss or damage in transit. However, Integra reserves the right, in its discretion, to change the exact method of shipment and to make delivery in installments, all such installments to be separately invoiced and paid for when due as provided in Section 6.1, without regard to subsequent deliveries. Delay in delivery of any installment within the parameters set forth in this Article 5 shall not relieve SeaSpine’s obligations to accept remaining deliveries.

 

  b. Each shipment of the Microfib Products must be accompanied by final Microfib Product testing and inspection results and a certificate, substantially in the form attached as Exhibit E, signed by Integra stating that the Microfib Products comply with the Specifications; the testing, inspections results and certificate shall be set forth by Microfib Product serial number and must be signed by Integra.

 

  c.

SeaSpine, upon receipt of the Microfib Products from Integra, shall have thirty (30) days to inspect the Microfib Products with respect to whether or not they comply with the Specifications. If the Microfib Products do not comply with the Specifications, SeaSpine shall notify Integra and provide Integra with samples of the nonconforming Microfib Products (to the extent SeaSpine deems possible) along with such notice and provide Integra with the results of its inspection. If Integra’s inspection confirms the Microfib Products do not comply with the Specifications, then Integra, at its expense and at SeaSpine’s option, within thirty (30) days following the completion of Integra’s investigation, will either bring the Microfib Products in question into conformance with the Specifications or replace the Microfib Products that failed to comply with the Specifications, in either case,

 

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  at no additional charge to SeaSpine. If after inspection, Integra disagrees with SeaSpine’s determination, the Parties shall submit samples of the Microfib Product in question to a mutually acceptable independent testing laboratory for evaluation to determine whether the Microfib Product complies with the Specifications. The results of such evaluation shall be deemed conclusive of the matter, and the non-prevailing party shall bear the costs of the evaluation.

6. PAYMENT AND TAXES:

 

  6.1 Payment.

 

  a. Payment terms of an Order are net thirty (30) calendar days from the date of invoice, unless otherwise stated. SeaSpine specifically waives any right for any reason to withhold or set-off payments it owes to Integra hereunder, whether available at law, in equity or otherwise under the laws, rules, regulations, ordinances, decrees or orders of any governmental authority.

 

  b. SeaSpine agrees to pay all costs, including, but not limited to, reasonable attorneys’ fees, accounting fees and other expenses of collection resulting from any default by SeaSpine of any of the terms hereof.

6.2 Taxes and Other Charges. Any medical device tax, use tax, sales tax, excise tax, duty, custom, inspection or testing fee, or any other tax, fee or charge of any nature whatsoever imposed by any governmental authority, on or measured by the transaction between SeaSpine and Integra, except for taxes of Integra’s income, shall be paid by SeaSpine in addition to the Prices quoted or invoiced. In the event Integra is required to pay any such tax, fee or charge, SeaSpine shall reimburse Integra therefor; or SeaSpine shall provide Integra at the time the applicable Order is submitted an exemption certificate or other document acceptable to the authority imposing the tax, fee or charge.

7. SEASPINE GENERAL OBLIGATIONS:

7.1 Compliance. SeaSpine shall not (i) alter the Microfib Products other than incorporating the Microfib Products into the Mozaik Products, (ii) pay, offer or promise to pay, or authorize payment of any money, or give, offer or promise to give, or authorize the giving of anything of value to any healthcare professional in violation of any anti-kickback statutes, the AdvaMed Code, or other applicable Laws or policies described herein, (iii) incur any obligation in the name of or on behalf of Integra or (iv) make any warranty, representation or guaranty to any third party with respect to any Microfib Product.

7.2 SeaSpine’s Use of the Microfib Products; Mozaik Products. The Microfib Products are intended solely for inclusion in and subsequent resale as part of SeaSpine’s Mozaik Product, and SeaSpine shall not sell the Microfib Products in separate form. SeaSpine agrees to comply with all written instructions furnished by Integra relating to the use of the Microfib Products and not misuse the Microfib Products in any manner. SeaSpine warrants to Integra that (i) the Mozaik Product will be marketed, promoted, stored and distributed in compliance with

 

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applicable FDA regulations, applicable ISO and Current Good Manufacturing Practices, (ii) the Mozaik Product will not be adulterated or misbranded within the meaning of the Federal Food, Drug and Cosmetic Act and (iii) all facilities used for storage and distribution of the Mozaik Products are FDA compliant.

8. SEASPINE REGULATORY AND QUALITY OBLIGATIONS:

8.1 Compliance with Laws. SeaSpine agrees to comply with: (i) the AdvaMed Code, as modified from time to time and which is incorporated into SeaSpine’s compliance policies, (ii) its responsibilities under the Safe Harbor Regulations relating to program “fraud and abuse” promulgated under the Social Security Act and Medicare and Medicaid Patient and Program Protection Act, (iii) its compliance policies which are consistent with the AdvaMed Code, (iv) the U.S. Foreign Corrupt Practices Act and any other applicable anti-bribery laws, (v) all applicable laws, rules, ordinances, regulations, decrees and orders of any governmental authority, including but not limited to, those related to the advertising, promotion, sale and use of the Microfib Products or Mozaik Products, privacy, health, safety and environmental matters and record-keeping and reporting in compliance with all governmental authority regulations (collectively, the “Laws”) for the Microfib Products or Mozaik Products (which related records and reporting information shall be supplied to Integra promptly upon request), and (vi) all internal policies and procedures of SeaSpine, including without limitation, discount policies. SeaSpine further agrees to notify Integra immediately upon receiving any notice with respect to a violation or alleged violation of any of the above mentioned Laws and any other laws or regulations, to the extent relating to the Microfib Products or Mozaik Products.

8.2 Recordkeeping. Each Party agrees to comply with the document retention policy attached hereto as Exhibit F with respect to its activities hereunder. SeaSpine shall make such records, to the extent relating to the Microfib Products, available to Integra immediately upon request for regulatory purposes.

8.3 Review. Integra shall have the right to send its representatives to review, during regular business hours and upon reasonable prior written notice, SeaSpine’s marketing and regulatory records and files and all other records and files related to the Microfib Products and related to SeaSpine’s compliance with this Agreement. SeaSpine shall reasonably cooperate with Integra in such review and any reasonable requests of Integra that result from such review by Integra.

 

  8.4 Complaints.

 

  a. SeaSpine shall promptly (and in any event within one business day) report to Integra (i) any accident, or incident involving the Mozaik Product (of which it becomes aware) which results in personal injury or damage to property and is related to the Microfib Products; (ii) any complaint involving the Mozaik Product (of which it becomes aware), whether oral or written, that is related to the Microfib Products; (iii) any defect in or condition of the Mozaik Product (of which it becomes aware) that is related to the Microfib Products; or (iv) any other fact or circumstance (of which it becomes aware) which may result in a report to the FDA or other applicable regulatory authority or may result in a violation or alleged violation of any applicable Law, that may relate to the Microfib Product.

 

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  b. Integra shall promptly (and in any event, within one business day) report to SeaSpine (i) any complaint involving the Microfib Product, whether oral or written, that implicates the Mozaik Product and (ii) any defect in or condition of the Microfib Product that implicates the Mozaik Product, in each case of which Integra becomes aware.

 

  c. The Parties shall cooperate in the investigation and determination of the cause of any of the foregoing accidents, incidents or complaints and shall make available all statements, reports and tests made to investigate such accident or incident. Furnishing such information and any investigation of such information or incident report shall not in any way constitute any assumption of any liability for such accident or incident by either Party.

 

  d. Except as otherwise provided in the DBM and OS Supply Agreement between the parties or the Mozaik Supply Agreement between the Parties, each of even date herewith, SeaSpine will be responsible for Medical Device Reporting per Title 21 CFR Part 803 or similar vigilance reporting requirements in the U.S., the European Union and any other jurisdiction as related to the Mozaik Products and as required by Laws where the Mozaik Product is marketed. Integra may file any such reports with the FDA or other responsible regulatory authority (x) for the Microfib Products and (y) for the Mozaik Products to the extent the underlying issue may relate to the Microfib Products.

8.5 Governmental Authority. SeaSpine agrees to notify Integra within forty-eight (48) hours of any audit or inspection by, or contact with, the FDA or other regulatory authority that involves the Mozaik Product and is related to any Microfib Product. SeaSpine agrees to provide Integra with a copy of the portion of the audit or inspection report or contact document that relates to the Mozaik Product and any response provided by SeaSpine, in each case that relate to the Microfib Product.

8.6 Recall, etc. SeaSpine shall be entitled to execute a recall, field correction or market withdrawal of the Mozaik Product, and either Party shall be entitled to execute a recall, field correction or market withdrawal of the Mozaik Product if related to the Microfib Products. The Parties agree to cooperate with and reasonably assist each other in the event of a recall, field notification or market withdrawal of the Microfib Product or the Mozaik Product. SeaSpine agrees to pay for any recall, field notification and/or market withdrawal related to the Mozaik Product, unless directly resulting from a breach of the warranty set forth in Section 9.1(a)(ii), in which case Integra agrees to pay all direct, documented, out-of-pocket costs of such recall, field notification or market withdrawal. If either Party decides to execute a recall, field notification or market withdrawal of the Mozaik Product, it shall promptly notify the other Party of such action.

8.7 No Debarment. Integra certifies that neither it nor any of its employees has been debarred under Section 306(a) or Section 306(b) of the Act and that no debarred person will in

 

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the future be employed to manufacture the Microfib Products. Integra also certifies that no person working in the manufacture of the Microfib Products has a conviction that could lead to debarment under Section 306(a) or Section 306(b) of the Act. Furthermore, Integra agrees to notify SeaSpine immediately of any action toward conviction or debarment under Section 306(a) or Section 306(b) of the Act of any person working in the manufacture of the Microfib Products.

8.8 Quality Agreement. Each Party (or an affiliate designee thereof) has entered into the Quality Agreement attached as Exhibit G as of the Effective Date.

8.9 Compliance with Laws. Integra will manufacture the Microfib Products in compliance with Laws applicable to the processing, storage, packaging, labeling and shipment of the Microfib Products, as modified from time to time.

8.10 Quality Audits. Integra shall allow SeaSpine to perform quality audits at its manufacturing facility for the Microfib Product during regular business hours and upon reasonable prior written notice if SeaSpine has reasonable cause to believe there is a quality issue affecting the Microfib Products that implicates the Mozaik Products or as required by applicable Law. SeaSpine shall provide Integra with a written report of all nonconformances to the manufacturing procedures, storage and shipping procedures and test/inspection procedures within thirty (30) days of identification, which non-conformances are identified by SeaSpine during quality audits.

 

  8.11 Additional Regulatory Matters.

 

  a. SeaSpine shall have sole responsibility for obtaining all required consents, licenses, authorizations and approvals for the manufacture, use and sale of the Mozaik Product worldwide, and such consents, licenses, authorizations and approvals shall be held in the name of SeaSpine or its designee, except as provided in the DBM and OS Supply Agreement between the Parties or the Mozaik Supply Agreement between the Parties, each of even date herewith.

 

  b. Integra shall reasonably assist SeaSpine in accordance with Section 8.11(a) by providing information related to the Microfib Products when necessary to obtain any consents, licenses, authorizations or approvals, provided that SeaSpine shall reimburse Integra for its costs and expenses associated with Integra’s assistance in providing information related to the Microfib Products in obtaining or maintaining consents, licenses, authorizations or approvals for the Mozaik Product at a per hour charge of $200. Integra will provide the FDA or other applicable regulatory authority with access to Integra’s files related to the Microfib Products, but shall not be obligated to permit SeaSpine or any foreign governmental regulatory agency to review certain confidential files, including without limitation, the design history files or processing information for the Microfib Product.

 

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9. INTEGRA LIMITED WARRANTY; CERTAIN OBLIGATIONS:

 

  9.1 Limited Warranty

 

  a. Integra warrants to SeaSpine that (i) it will convey good title to all Microfib Products delivered to SeaSpine, free from any security interest, liens or other encumbrances, and (ii) the Microfib Products manufactured hereunder shall be manufactured in compliance with the then-current Specifications at the time of shipment from Integra’s facilities. Except as set forth in Section 8.6, SeaSpine’s sole remedy, and Integra’s sole obligation, in the event of a breach by Integra of the warranty set forth in clause (ii) above is as set forth in Section 5.9(c).

 

  b. The limited warranty set forth in Section 9.1(a) is the sole warranty Integra makes regarding the Microfib Products. THIS WARRANTY IS EXCLUSIVE AND INTEGRA HEREBY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, WRITTEN OR ORAL, INCLUDING WITHOUT LIMITATION, (I) ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR APPLICATION, OR WARRANTY OF QUALITY, OTHER THAN THOSE EXPRESSLY SET FORTH IN THE ATTACHED WARRANTY, OR (II) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING, OR USAGE OF TRADE OR (III) WARRANTIES OF NON-INFRINGEMENT. SEASPINE UNDERSTANDS THAT NO EMPLOYEE, OFFICER, AGENT OR REPRESENTATIVE OF INTEGRA IS AUTHORIZED IN ANY WAY TO MAKE ANY STATEMENT TO THE CONTRARY WHICH SHALL BE BINDING ON INTEGRA OR TO ASSUME FOR INTEGRA ANY OTHER LIABILITY IN CONNECTION WITH THE MICROFIB PRODUCTS.

 

  c. The warranty set forth in Section 9.1(a)(ii) shall not apply to, and Integra shall not be responsible for, any loss or damages arising in connection with the purchase or use of any Microfib Product (i) which has been modified by anyone other than an authorized service representative of Integra, or (ii) which has been altered in any way so as, in Integra’s judgment, to affect its stability or reliability, or which has been subject to misuse, negligence or accident, or (iii) which has been subject to improper or negligent installation, storage or handling, or (iv) which has been subject to improper cleaning, sterilization or maintenance, or (v) which has been subject to accidental damage arising from acts of God, electrical power damage, equipment malfunction, unusual stress, unreasonable operating procedures or abnormal or extreme operating conditions or (vi) which has been used otherwise than in accordance with the instructions furnished by Integra.

9.2 Integra Non-Compete; Sale by Integra.

 

  a.

For the period from the Effective Date through the earlier of (i) the fifth anniversary of the Effective Date and (ii) one year after the effectiveness of the termination of this Agreement by Integra pursuant to Section 4.2(a) (Breach) or Section 4.2(c) (Bankruptcy, etc.) (such period, the “Restricted Period”), provided, that the Restricted Period shall be extended thereafter for such period as Integra is

 

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supplying Mozaik Restricted Products to SeaSpine, provided, further, that in no event shall the Restricted Period exceed seven (7) years, Integra shall and shall cause its affiliates not to manufacture, have manufactured, distribute or otherwise sell any product substantially similar to the Mozaik Restricted Products for use in spine surgery (“Field”) for or to any third party, including the entities set forth in Exhibit H, other than for or to SeaSpine and its affiliates and other than as set forth in Exhibit H. For purposes of this Section 9.2, “Mozaik Restricted Products” means the ceramic collagen matrix products marketed under the Mozaik brand, including Mozaik Strip, Mozaik Putty, and Mozaik Moldable Morsels, and all equivalent products (x) marketed under spine brands or (y) provided to third parties on a private label basis, in each case on the Effective Date, and any next generation successor version of any of the foregoing products. Notwithstanding the foregoing, nothing contained in this Section 9.2 shall prohibit Integra or its affiliates from acquiring (through merger, stock purchase, purchase of assets or otherwise) ownership of, or any equity interest in, any entity or business that manufactures, distributes or otherwise sells any product substantially similar to the Mozaik Restricted Product for use in the Field, provided that during the Restricted Period, Integra shall not, and shall cause its affiliates not to, use any of the Licensed Intellectual Property, (as such term is defined in that certain License Agreement attached hereto as Exhibit I) or any Confidential Information of SeaSpine in the manufacture, distribution, or sale of such acquired products.

 

  b. For clarity’s sake, (i) Integra and its affiliates may at any time manufacture, have manufactured, distribute and otherwise sell the Microfib Products and any products substantially similar thereto, (ii) Integra and its affiliates may at any time manufacture, have manufactured, distribute and otherwise sell any product substantially similar to any Mozaik Restricted Product for use in any field, including without limitation the Foot and Ankle Reconstruction Surgery Field and other uses in reconstruction surgery, other than the Field. “Foot and Ankle Reconstruction Surgery Field” means the design, manufacture, marketing and distribution of products and services used to modify the structural and functional characteristics of the lower extremity and small bone neuromuscular and skeletal system to control, guide, limit, heal or immobilize the lower extremity, joint or body segment for a particular medical or clinical reason.

 

  c. Except as set forth in Section 9.2(a), Integra may itself manufacture, have manufactured, distribute, sell, distribute, license and otherwise make available to third parties products that are substantially similar to the Microfib Products, the Mozaik Restricted Products or the Mozaik Products.

10. CONFIDENTIALITY AND OWNERSHIP:

10.1 Confidential Information. Each Party agrees that it shall not during the Term and anytime thereafter, directly or indirectly, without the prior written consent of the other Party, disclose to any third party, pursuant to a press release or otherwise, any Confidential Information of the other Party. As used herein, “Confidential Information” of a Party means information

 

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possessed by such Party, or its affiliates, that relates to the other Party’s business or, in the case of SeaSpine as the receiving Party, the Microfib Products (which may include information of third parties as to which either Integra or SeaSpine and their respective affiliates has a confidential arrangement or understanding), whether that information is written or oral, however acquired. Notwithstanding the foregoing, Confidential Information does not include any such information that as of the date of disclosure to, or acquisition by, the receiving Party was (i) obtained by the receiving Party from a third party with no obligation of confidentiality to the disclosing Party or its affiliates, (ii) disclosed in published literature, (iii) generally available to the industry or (iv) known to the receiving Party without any obligation to keep it confidential or any restriction on its use and such knowledge can be substantiated by reasonable documentation. Confidential Information shall additionally include the existence and terms of this Agreement and the business relationship established hereunder, together with any documents or data prepared by any of the Parties that reflect such information. Each Party further agrees that it shall not, directly or indirectly, without the prior written consent of the other Party, use any of the Confidential Information of the other Party for any reason or purpose, including, in the case of SeaSpine as the receiving Party, to reverse engineer any Microfib Product, other than as contemplated by this Agreement.

10.2 Degree of Care. Notwithstanding Section 10.1, each Party may disclose Confidential Information received pursuant to this Agreement to its directors, officers, employees, consultants, attorneys and accountants and other agents and representatives, but not to any other third party, provided, however, that all such access is limited to those that have a need-to-know in connection with the business relationship established hereunder, and further provided that such persons and entities are obligated to hold the Confidential Information in confidence in accordance with restrictions and procedures no less stringent than provided for herein. Each Party shall be responsible for any breach of this Section 10 by its directors, officers, employees, consultants, attorneys and accountants and other agents and representatives. Each Party covenants that it shall exercise the same degree of care with respect to the other Party’s Confidential Information as it would its own Confidential Information, and, in any event, shall exercise no less than a reasonable degree of care. Notwithstanding the foregoing, a Party may disclose the Confidential Information belonging to the other Party to the extent such disclosure is reasonably necessary in the context of preparation and filing of regulatory documents (including, without limitation, governmental approvals) to regulatory authorities in connection with the Microfib Products pursuant to this Agreement, provided that the disclosing Party notify the other Party in writing of such disclosure and the disclosing Party requests confidential treatment of such disclosure to the extent confidential treatment is reasonably available to such Party.

10.3 Remedies. The Parties understand and agree that this Section 10 is reasonable and necessary to protect the Parties respective business interests. The Parties further agree that the other may suffer irreparable harm from a breach of this Section 10. Thus, in addition to any other rights or remedies, all of which shall be deemed cumulative, a Party shall be entitled to pursue injunctive relief to enforce the terms of this Section 10 without the necessity of proof of damages or the posting of a bond or other security.

 

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10.4 Disclosure Required by Law. Notwithstanding Section 10.1, a receiving Party may disclose Confidential Information if such information is required by Law to be disclosed in response to a valid order of a court of competent jurisdiction or authorized governmental authority, provided that the receiving Party must give the other Party prompt written notice and seek to obtain or allow for and reasonably cooperate with the other Party to seek to obtain a protective order prior to such disclosure. In any event, a receiving Party shall disclose only that portion of the Confidential Information which is legally required and will use all commercially reasonable efforts to assure that confidential treatment is accorded any Confidential Information.

10.5 Return of Copies. Upon termination of this Agreement, each Party shall, upon the written request of the other Party, return all copies, whether in paper, electronic, or other format, of all Confidential Information received by it from the other Party which contain the other Party’s Confidential Information, except that one copy thereof may be retained solely for archival or regulatory compliance purposes.

 

  10.6 Intellectual Property.

 

  a. Integra, its licensors and/or their respective affiliates are and shall remain the exclusive owner(s) of all intellectual property rights related to the Microfib Products and to Integra’s business, including all intellectual property rights pertaining to inventions, developments or improvements made in the course of the manufacturing of the Microfib Products hereunder.

 

  b. SeaSpine, its licensors and/or their respective affiliates are and shall remain the exclusive owner(s) of all intellectual property rights owned or licensed by SeaSpine or any subsidiary thereof, as of the Effective Date, after giving effect to the spin-off of SeaSpine by Integra, in each case related to the Mozaik Restricted Products, excluding any trademark rights and product registrations (including 510(k) clearances) relating thereto owned by Integra or its affiliates as of the Effective Date.

 

  c. SeaSpine agrees not to, and not to authorize a third party to, infringe, misappropriate or violate any intellectual property rights of Integra, its licensors, or their respective affiliates. For purposes of this Agreement, “intellectual property rights” includes, without limitation, (i) all registered or unregistered trademarks, patents, designs or inventions; (ii) all rights in products including product registrations; (iii) copyrights, moral rights, know-how and Confidential Information; and (iv) any similar rights worldwide, or the right to apply for any such rights.

 

  d. Each Party will comply with the terms of the agreement set forth on Exhibit J hereto.

 

  e. Except as provided in the Mozaik Supply Agreement, of even date herewith, between the Parties, SeaSpine shall have no right to use any Integra trademark, except that SeaSpine shall have the right to reference Integra as the source of the Microfib Product in the Mozaik Product in SeaSpine’s regulatory filings. Any such references shall be provided to Integra in writing for review and written approval prior to their use, disclosure or publication by SeaSpine.

 

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  11. GENERAL:

11.1 Notices. All notices, approvals, and other communications required or permitted herein shall be in writing and shall be delivered personally (which shall include delivery by courier or overnight delivery service) or sent by certified or registered mail, postage prepaid, return receipt requested.

 

If to Integra: Integra LifeSciences Corporation
ATTN: David Hoffman
311 Enterprise Drive, Plainsboro, NJ 08536
With required copy to: Integra LifeSciences Corporation
ATTN: General Counsel
311 Enterprise Drive, Plainsboro, NJ 08536
If to SeaSpine: SeaSpine Orthopedics Corporation
ATTN: Brian Baker
2 Goodyear, Suite A, Irvine, CA 92618
With required copy to: SeaSpine Orthopedics Corporation
ATTN: Colin Smith
2384 La Mirada Drive, Vista, CA 92081
With required copy to: SeaSpine Orthopedics Corporation
ATTN: General Counsel
2384 La Mirada Drive, Vista, CA 92081

Either Party may change its address for notice purposes by providing written notice of the change of address to the other Party.

11.2 Insurance. Each Party will comply with the insurance obligations for such Party set forth in Exhibit K.

11.3 Limitation of Liability. INTEGRA AND ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR AFFILIATES SHALL NOT IN ANY EVENT BE LIABLE FOR INCIDENTAL, EXEMPLARY, INDIRECT, CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES, OF ANY KIND RESULTING FROM ANY USE OR FAILURE OR ACQUISITION OF THE MICROFIB PRODUCTS, WHETHER BASED UPON A CLAIM OR ACTION OF CONTRACT, WARRANTY, NEGLIGENCE, STRICT LIABILITY OR OTHER TORT, OR OTHERWISE, ARISING OUT OF THIS AGREEMENT (EVEN IF INTEGRA HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES) INCLUDING

 

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WITHOUT LIMITATION, LIABILITY FOR LOSS OF USE, LOSS OF WORK IN PROGRESS, DOWN TIME, LOSS OF REVENUE OR PROFITS, FAILURE TO REALIZE SAVINGS, LOSS OF PRODUCTS OF SEASPINE OR OTHER USE OR ANY LIABILITY OF SEASPINE TO A THIRD PARTY ON ACCOUNT OF SUCH LOSS, OR FOR ANY LABOR OR ANY OTHER EXPENSE, DAMAGE OR LOSS OCCASIONED BY SUCH PRODUCT. EXCEPT IN THE CASE OF A CLAIM FOR THIRD PARTY INDEMNIFICATION UNDER SECTION 11.4(B) OF THIS AGREEMENT, INTEGRA’S LIABILITY IN THE AGGREGATE INCLUDING THE LIABILITY OF INTEGRA’S DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND AFFILIATES, WITH RESPECT TO PERFORMANCE OR NON-PERFORMANCE OF THIS AGREEMENT AND ANY INTEGRA PRODUCTS OR OTHER ITEMS FURNISHED UNDER THIS AGREEMENT (WHETHER IN TORT, CONTRACT OR OTHERWISE, AND NOTWITHSTANDING ANY FAULT, NEGLIGENCE WHETHER ACTIVE, PASSIVE OR IMPUTED OR STRICT LIABILITY OF INTEGRA) SHALL IN NO EVENT EXCEED ONE MILLION DOLLARS ($1,000,000).

 

  11.4 Indemnity.

 

  a. SeaSpine shall indemnify and defend Integra and its affiliates and their respective directors, officers, members, employees, counsel, agents and representatives and the successors and permitted assigns of any of the foregoing (the “Integra Indemnitees”) and hold the Integra Indemnitees harmless from and against any and all claims, demands, actions, liabilities, damages, losses , judgments, costs or expenses (including interest and penalties and reasonable attorneys’ fees and professional fees and expenses of litigation) (collectively, “Claims”) of third parties to the extent arising out of, in connection with, or resulting from (i) the design, manufacture, marketing, sale, distribution, use or promotion of the Mozaik Product incorporating the Microfib Products, except to the extent such claims result from a breach of the warranty set forth in Section 9.1(a)(ii); (ii) the bodily injury, property damage or any other damages or injury caused in whole or in part, by any use of the Microfib Product in conjunction with the Mozaik Product unless such claims are a direct result of the failure of the Microfib Products to have been manufactured in compliance with the then-current Specifications at the time of shipment from Integra’s facilities; (iii) SeaSpine’s breach of any representation, warranty or covenant contained in this Agreement; (iv) the negligence or willful misconduct of SeaSpine; or (v) any claims relating to the misappropriation or infringement of a third party’s intellectual property rights related to the Mozaik Products, except to the extent such claims relate solely to the Microfib Product.

 

  b.

Integra shall indemnify, defend and hold harmless SeaSpine and its affiliates and their respective directors, officers, members, employees, counsel, agents and representatives and the successors and permitted assigns of any of the foregoing (the “SeaSpine Indemnitees”) and hold the SeaSpine Indemnitees harmless from and against any and all Claims of third parties to the extent arising out of, in connection with, or resulting from (i) the negligence or willful misconduct of Integra, except to the extent that SeaSpine is obligated to indemnify Integra for

 

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  any of the foregoing third party Claims as provided in Section 11.4(a) (including those third party Claims caused, in whole or in part, by the negligence or willful misconduct of SeaSpine), (ii) the failure of the Microfib Products to have been manufactured in compliance with the then-current Specifications at the time of shipment from Integra’s facilities or (iii) any claims relating to the misappropriation or infringement of a third party’s intellectual property rights to the extent solely related to the Microfib Products.

 

  c. In any case in which claims arise out of or are caused by both Integra’s negligence and SeaSpine’s negligence, a comparative negligence standard shall apply with respect to the Parties’ enumerated obligations under this Section 11.4.

 

  d. A Party that intends to claim indemnification under this Agreement (the “Indemnitee”) for third party Claims shall promptly notify the other Party (the “Indemnitor”) in writing of such Claim in respect of which the Indemnitee or its affiliates, directors, officers, members, employees, counsel, agents or representatives intends to claim such indemnification, and the Indemnitor, at its cost and expense, shall have the right to participate in, and to the extent the Indemnitor so desires, to assume the defense thereof with counsel mutually satisfactory to the Parties; provided, however, that an Indemnitee shall have the right to retain its own counsel, with the fees and expenses to be paid by the Indemnitor, if such Indemnitee’s outside counsel advises that representation of such Indemnitee by the counsel retained by the Indemnitor would be inappropriate due to actual or potential conflicts of interests between such Indemnitee and the other Party represented by such counsel in such proceeding. The Indemnitor shall control the defense and/or settlement of any such Claims, and this indemnity agreement shall not apply to amounts paid in connection with any Claims if such payments are made by the Indemnitee without the consent of the Indemnitor; provided, however, that the Indemnitor shall not enter into any settlement that admits fault, wrongdoing or damages without the Indemnitee’s written consent, such consent not to be unreasonably withheld, delayed or conditioned. For clarity, any Claims that relate solely to the payment of monetary damages may be settled or otherwise disposed of on such terms as the Indemnitor, in its sole discretion, shall deem appropriate. The failure to deliver written notice to the Indemnitor within a reasonable time after the commencement of any Claim, if and to the extent prejudicial to its ability to defend such Claim, shall to such extent relieve such Indemnitor of any liability to the Indemnitee under this Section 11.4. At the Indemnitor’s request and expense, the Indemnitee and its employees and agents shall reasonably cooperate with the Indemnitor and its legal representatives in the investigation of any Claims covered by this indemnification and provide full information with respect thereto.

 

    

THE PARTIES ACKNOWLEDGE THAT INTEGRA SHALL NOT HAVE CONTROL OVER THE USES TO WHICH THE MICROFIB PRODUCT WILL BE DEVOTED WITHIN THE MOZAIK PRODUCT OR OVER ITS USE, STORAGE, HANDLING, DISTRIBUTION OR APPLICATION AFTER

 

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  SHIPMENT FROM INTEGRA’S FACILITY. SEASPINE ASSUMES FULL RESPONSIBILITY WITH RESPECT TO THE USE OF THE MICROFIB PRODUCTS, AND IT IS MUTUALLY AGREED THAT INTEGRA ASSUMES NO LIABILITIES OF ANY KIND WITH RESPECT TO THE USE BY SEASPINE OR ANY THIRD PARTY OF THE MICROFIB PRODUCT IN ANY MOZAIK PRODUCT.

12. MISCELLANEOUS:

12.1 Independent Contractors. This Agreement shall not constitute, and is not intended to constitute, either Party as an employee, agent, partner or legal representative of the other Party for any purpose, or give either Party any right to supervise or direct the functions of the other Party. Neither Party shall have authority to act for or obligate the other Party in any way or to extend any representation or warranty on behalf of the other Party. Each Party agrees to perform under this Agreement solely as an independent contractor and neither Party shall have any right, power, or authority, nor shall they represent themselves as having any authority to assume, create, or incur any expense, liability or obligation, express or implied, on behalf of the other Party, or otherwise act as an agent for the other Party for any purpose. Each Party agrees not to permit its employees or agents to do anything that might be construed or interpreted as acts of the other Party.

12.2 Integration. This Agreement, including its Exhibits, sets forth all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties and supersedes all prior discussions, negotiations and agreements between the Parties concerning the subject matter hereof. Integra and SeaSpine agree that nothing in any SeaSpine purchase order or other document submitted pursuant to this Agreement shall in any way modify or add to the terms and conditions set forth in this Agreement (except for identification of the Microfib Products, quantity and delivery date consistent with this Agreement). Except as expressly set forth in this Agreement, no subsequent modification or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by the respective authorized officers of the Parties.

12.3 Waiver. Integra’s failure to strictly enforce any term or condition stated herein or exercise any right arising hereunder shall not constitute a waiver of Integra’s right to enforce such terms or conditions or exercise such right thereafter. All of Integra’s rights and remedies against SeaSpine with regard to this Agreement are cumulative and are in addition to any other rights and remedies Integra may have at law or in equity. No waiver by either Party of any condition or term in any one or more instances shall be construed as a continuing waiver of such condition or term or of another condition or term.

12.4 Assignment. This Agreement shall be binding upon and shall inure to the benefit of the Parties, and their respective successors and permitted assigns. Neither Party may transfer or assign this Agreement, in whole or in part, without the prior written consent of the other Party, except that either Party may transfer or assign this Agreement, in whole or in part, without the prior written consent of the other Party, to any affiliate and to any successor to substantially all of its business or assets to which this Agreement relates, whether by merger, sale of assets, sale of stock, reorganization or otherwise, without the consent of the other Party.

 

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12.5 Severability. If any provisions of this Agreement should be or become fully or partly invalid or unenforceable for any reason whatsoever or violate any applicable Law, this Agreement is to be considered divisible as to such provision and the Parties shall negotiate in good faith a valid or enforceable substitute provision that most nearly reflects the original intent of the Parties and all other provisions hereof shall remain in full force and effect. Moreover, if one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to scope, activity or subject so as to be unenforceable at law, such provision or provisions shall be construed by the appropriate judicial body by limiting and reducing it or them, so as to be enforceable to the maximum extent compatible with the applicable Law as it shall then appear.

12.6 Force Majeure. Except with respect to the payment of money, neither Party shall be liable for any failure or delay in performance under this Agreement if either Party is prevented from performing any of its obligations hereunder due to any cause which is beyond the non-performing Party’s reasonable control, including, without limitation, fire, explosion, earthquake, flood, acts of war, terrorism, or other acts of God; acts, regulations or laws or application thereof;, war or civil commotion; strike, lock-out or labor disturbances; or failure of public utilities or common carrier, embargo or other governmental action or request, equipment failure, shortage of raw materials or inability to obtain labor, fuel, materials supplies or power at reasonable prices (a “Force Majeure Event”), such non-performing Party shall promptly give notice thereof to the other Party and shall use reasonable commercial efforts to cure or correct any such Force Majeure Event and to resume performance of its affected obligations as soon as possible.

12.7 Choice of Law; Venue; Waiver of Jury Trial. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New Jersey without reference to its conflict of laws provisions. In the event of a dispute arising from this Agreement the Parties agree that the state and federal courts of the State of New Jersey shall have exclusive jurisdiction over any litigation or proceeding. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

12.8 Survival. Any provision of this Agreement that contemplates performance or observance subsequent to any termination or expiration of this Agreement (in whole or in part) shall survive any termination or expiration of this Agreement (in whole or in part, as applicable) and continue in full force and effect. Without limiting the foregoing, Articles 7, 8, 10, 11 and 12 and Sections 4.3, 4.4, and 9.2 of this Agreement shall survive the expiration or termination of this Agreement.

12.9 Section Headings. Section headings herein are for convenience only, are not part of the terms and conditions and shall not affect their interpretation.

 

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12.10 Ambiguities. Ambiguities, if any, in this Agreement shall not be construed against any Party irrespective of which Party may be deemed to have authored the ambiguous provision.

12.11 Counterparts. This Agreement may be executed in any number of counterparts, or facsimile or .pdf scanned versions, each of which shall be considered to be an original instrument and to be effective as of the Effective Date.

(Signature Page Follows)

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement effective as of the Effective Date.

SEASPINE ORTHOPEDICS CORPORATION

By:  
 Name:  
 Title:  

INTEGRA LIFESCIENCES CORPORATION

By:  
 Name:  
 Title:  
EX-10.5

Exhibit 10.5

MOZAIK SUPPLY AGREEMENT

(Integra as Supplier)

This Supply Agreement (“Agreement”) sets forth the terms and conditions under which Integra LifeSciences Corporation (“Integra”) contracts with SeaSpine Orthopedics Corporation (“SeaSpine” and together with Integra, the “Parties”) to provide the products set forth on Exhibit A (the “Products”) on a non-exclusive basis at the prices set forth herein.

1. MANUFACTURING AND SUPPLY RELATIONSHIP:

1.1 General; Products. Under this Agreement, SeaSpine engages Integra as a Product supplier. Integra may designate an affiliate of Integra to perform its obligations hereunder, provided that Integra shall remain liable for all such obligations. Attached hereto as Exhibit A is a complete list of the Products (as of the Effective Date (as defined in Section 3)) and their Prices (as defined in Section 2.1(a)). No other right or license is or shall be created or granted hereunder by implication, estoppel or otherwise, except as expressly provided in this Agreement.

1.2 Specifications. The specifications for the Products, as of the Effective Date, are set forth in Exhibits B-1, B-2, B-3 and B-4. Such specifications, as the same may be modified from time to time hereunder, are referred to herein, as the “Specifications.”

 

  1.3 Changes to Products.

 

  a. Integra shall have the right to modify the Products or their Specifications (i) as necessary to comply with changes in Law (as defined in Section 8.1) or (ii) for any other reason provided that such modification does not affect the form, fit, function, safety or appearance of the Products. If, however, Integra plans to modify any Product or its Specifications, Integra shall provide SeaSpine written notice at least sixty (60) days in advance of the effectiveness of such modification (unless impractical for regulatory reasons, in which case such notice shall be provided promptly after the need to modify the Products or their Specifications is determined by Integra).

 

  b. If Integra makes a modification to the Products in accordance with this Section 1.3, Integra shall provide SeaSpine with information on the changes, and corresponding updated guidelines and instructions for use, if applicable.

2. PRODUCT PRICES AND OTHER FEES:

 

  2.1 Prices.

 

  a. SeaSpine shall pay Integra for the Products at the per unit prices listed in Exhibit A, as such prices may be modified as described in Section 2.1(b) (the “Prices”).

 

  b.

Integra may increase its Prices for the Products annually effective after Integra has given SeaSpine sixty (60) days prior notice of such Price increases. Price increases shall apply to all orders shipped after the effective date of such increase.

 

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  Annual price increases shall not exceed the greater of (i) three percent (3%) or (ii) the annual change in the consumer price index for all urban consumers for all cities for the twelve month period immediately preceding the notice of such price increase, as published by the United States Bureau of Labor Statistics (http://www.bls.gov); provided, however, that if at any time during the Term, Integra experiences a documented increase in its variable costs related to the Products of greater than five percent (5%) in any calendar year, the Parties will meet and confer in good faith to negotiate applicable adjustments to the Prices.

3. EFFECTIVE DATE: The effective date of this Agreement shall be [                ], 2015 (“Effective Date”).

4. TERM AND TERMINATION:

4.1 Term. This Agreement shall commence on the Effective Date and expire, except as earlier terminated hereunder, on the third (3rd) anniversary of the Effective Date (the “Term”). The Parties may, upon mutual written agreement, extend the Term thereafter.

4.2 Termination

 

  a. Breach. Either Party may terminate this Agreement for cause upon written notice of material breach by the other Party of this Agreement (a “Termination Notice”), which shall include an opportunity for the breaching Party to cure. If the breaching Party does not cure the material breach identified in the Termination Notice within ninety (90) days (or if such breach is a failure of SeaSpine to make payment to Integra when due hereunder, thirty (30) days) after receipt of such Termination Notice or such longer cure period as the Parties may agree in writing, this Agreement shall terminate.

 

  b. [Reserved]

 

  c. Bankruptcy, etc. Either Party may terminate this Agreement immediately upon written notice to the other Party if proceedings in bankruptcy or insolvency are instituted by or against the other Party, or a receiver is appointed, or if any substantial part of the assets of the other Party is the object of attachment, sequestration or other type of comparable proceeding, and such proceeding is not vacated or terminated within sixty (60) days after its commencement of institution.

4.3 Effects of Termination.

 

  a.

Mutual Obligations. After either Party provides a Termination Notice and pending termination of this Agreement, the Parties shall continue to perform their respective obligations hereunder until termination or expiration of the Term is effective. Expiration of the Term or termination of this Agreement shall not relieve the Parties of any obligation accruing prior to such expiration or

 

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  termination. Each Party agrees, at the request of the other Party upon the expiration of the Term or termination of this Agreement, to return or destroy at the option of the receiving party all Confidential Information exchanged pursuant to Section 10, except such Confidential Information it may be required to retain under applicable Laws.

 

  b. Termination by Integra. Upon termination of this Agreement by Integra pursuant to Section 4.2(a) (Breach), Integra may, at its sole option, supply and ship any Order(s) (as defined below) submitted to Integra prior to the effective date of termination or expiration of the Term to SeaSpine and SeaSpine shall pay the applicable Prices, all in accordance with the terms and conditions of this Agreement.

 

  c. Termination by SeaSpine. Upon termination of this Agreement by SeaSpine pursuant to Section 4.2(a) (Breach), with respect to Order(s) submitted to Integra and accepted prior to the effective date of termination, SeaSpine may at its option, either (x) cancel any unfilled Orders or (y) advise Integra that SeaSpine wishes to have such unfilled Orders filled, in which event Integra shall supply, and ship the Products pursuant to such then pending Orders for the Products for delivery after the effective date of termination or expiration. SeaSpine shall pay the applicable Prices, all in accordance with the terms and conditions of this Agreement.

4.4 Final Order. In the event of termination or expiration of this Agreement for any reason other than by Integra pursuant to Section 4.2(a) (Breach) or Section 4.2(c) (Bankruptcy, etc.), SeaSpine shall have the right, at its discretion, to place a final order for the Products prior to or on the last day of the Term in an amount of each Product not in excess of the lesser of (A) one hundred thirty percent (130%) of the amount of such Product set forth in the last forecast (including the Binding Forecast and calendar quarters 3 and 4 included therein) provided by SeaSpine in accordance with Section 5.2 prior to the placement of such final order and (B) four (4) times the Maximum Quarterly Order (as defined in Section 5.2). If SeaSpine desires to order additional units of the Product in excess of such amount, SeaSpine shall notify Integra in writing and the Parties shall discuss in good faith, provided that Integra shall have no obligation to accept any such additional order. Integra may schedule delivery of the final order over four calendar quarters with the first such calendar quarter beginning at least three (3) months after the end of the Term, at Integra’s discretion, provided that Integra will make available for delivery in each such calendar quarter an amount of each Product that, when added to the amount of such Product previously made available by Integra pursuant to this Section 4.4, equals at least (i) (A) the amount of such Product included in the final order, divided by (B) 4, multiplied by (ii) the number of such calendar quarters to date.

5. ORDERS; FORECASTS; ACCEPTANCE OF MOZIAK PRODUCTS, ETC.

5.1 Orders. SeaSpine is obligated to purchase the Products for which it has issued a firm order or orders to Integra (“Order(s)”), whether pursuant to a forecast that is deemed binding hereunder, or pursuant to a purchase order accepted by Integra. Integra does not stock the Products in inventory for purchase by SeaSpine. All Orders must contain delivery dates not less than ninety (90) days after the date of receipt of the Order by Integra, unless otherwise agreed upon in writing by Integra.

 

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5.2 Forecasts. No later than the first business day of each calendar quarter, SeaSpine shall provide Integra with a written rolling forecast as to SeaSpine’s requirements of the Products for the next four (4) calendar quarter period. Each calendar quarter forecast will consist of the following:

 

  a. The first two (2) calendar quarters of each forecast shall be binding on SeaSpine (“Binding Forecast”) and accompanied by an Order for such forecasted amount of the Products. The Order shall be in writing and shall specify the delivery date (which must be at least ninety (90) days after the receipt by Integra of the Order), quantity of each Product ordered and the Prices and total cost of the Order.

 

  b. Each forecast shall update the prior forecast by:

 

  i. dropping the previous calendar quarter 1 from the forecast;

 

  ii. moving calendar quarter 2 from the previous forecast to be calendar quarter 1 of the updated forecast;

 

  iii. updating, as appropriate and subject to clause (c) below, calendar quarters 3 and 4 of the previous forecast, which as updated will be calendar quarters 2 and 3 of updated forecast; and

 

  iv. adding a new calendar quarter 4 to the updated forecast, subject to clause (c) below.

The initial forecast for the Products is set forth on Exhibit C attached hereto.

 

  c. SeaSpine may not increase or decrease the amounts forecasted in the Binding Forecast, but may, subject to Integra’s written acceptance, issue additional Orders during such two (2) calendar quarter period as provided in Section 5.6. In addition, SeaSpine may not increase the number of units of the Products forecasted for any calendar quarter (e.g., 2Q2016) by more than thirty percent (30%) in aggregate from the number of units first forecasted for such calendar quarter (i.e. when such calendar quarter period was calendar quarter 4 of the forecast), and SeaSpine may not reduce such number of units first forecasted for such calendar quarter by more than ten percent (10%) in the aggregate from the number of units of each Product first forecast for such calendar quarter, without the prior written consent of Integra. SeaSpine shall not order for any calendar quarter more than the number of units of each Product set forth in Exhibit D attached hereto (the “Maximum Quarterly Order”).

 

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  d. SeaSpine will use commercially reasonable efforts to ensure that the forecast for calendar quarters 3 and 4 is accurate, but the forecast for such calendar quarters will not constitute an Order.

 

  e. In the event that SeaSpine fails to provide a Binding Forecast for a particular calendar quarter, unless Integra otherwise notifies SeaSpine in writing, the last available forecasted amount for such calendar quarter shall become a firm Order, provided, however, that nothing contained in this Section 5.2(e) shall be deemed to affect any of Integra’s rights or limit any of Integra’s remedies as a result of such failure.

5.3 Batch Sizes. SeaSpine agrees to order the Products in whole multiples of the batch sizes set forth in Exhibit D (although SeaSpine acknowledges and agrees that the actual quantity of the Products delivered may be adjusted as set forth in Section 5.5 or as otherwise expressly provided in this Agreement).

5.4 Acceptance of Orders. Upon receipt of an Order, Integra shall review the Order and shall have ten (10) business days from the Order’s receipt to notify SeaSpine of Integra’s acceptance or rejection of the Order. Integra shall accept any Order for a Binding Forecast that complies with the terms of this Agreement. If any other Order is rejected by Integra, Integra shall use reasonable efforts to provide SeaSpine with a reason for the rejection. If Integra fails to reject an Order in such ten (10) business day period, such Order shall be deemed accepted. Integra shall use commercially reasonable efforts to fill accepted Orders with the Product not later than ninety (90) days after the receipt of the Order or on the delivery date requested, whichever date is later. However, reasonable delay in shipment (where any delay of ninety (90) days or less after scheduled shipment shall be presumed reasonable) shall not be considered a breach of this Agreement and shall not relieve SeaSpine of its obligations to accept such shipment.

5.5 Whole Lots. Due to variances in manufacturer yields of the Products (“Product Lots”), in filling any Order for SeaSpine, Integra has the right to deliver to SeaSpine a quantity of the Products that is larger or smaller than the Order. Within three (3) business days of notification by Integra of the quantity of the Products constituting a Product Lot, SeaSpine agrees to issue to Integra a revised purchase order matching the quantity of the Products in such Product Lot. Regardless of the size of an Order, all Products representing a single Product Lot shall be shipped together. SeaSpine will pay for the quantity of the Products actually delivered. The quantity of the Products actually delivered will not affect the firm Order for the Products if the difference in quantity is not more than ten percent (10%). In the event that shipping the Product of a single Product Lot results in a shipment in excess of ten percent (10%) of the Products in the Order, such excess shall be applied to the Order for the subsequent month.

5.6 Supplemental Orders; Changes to Orders.

 

  a.

If SeaSpine desires to order additional units of the Product in excess of Orders for the Binding Forecast, including if any such proposed order would result in Orders exceeding the applicable Maximum Quarterly Order, SeaSpine shall notify

 

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  Integra in writing, stating the units of the Products requested and the date by which delivery of such Products is desired. Integra shall have no obligation to accept any such order, but if Integra accepts any such request (or any portion thereof) in writing, SeaSpine shall be obligated to purchase all such quantities as a firm Order hereunder.

 

  b. Except as otherwise expressly permitted hereunder, any Order(s) deriving herefrom or related hereto may be changed, cancelled or amended only by written agreement signed by both SeaSpine and Integra, setting forth the particular changes to be made and the effect, if any, of such changes on the Prices and time of delivery. SeaSpine may not cancel any Orders unless such cancellation is expressly agreed to in writing by Integra. In the event of a cancellation that is expressly agreed to in writing by Integra, Integra will advise SeaSpine of the total charge for such cancellation, and SeaSpine agrees to pay such charges. Certification of such costs by Integra’s independent public accountants shall be conclusive on the Parties.

5.7 Acceptance and Agreement. ALL SALES AND ORDER(S) ARE SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT. NO VARIATION OF THESE TERMS AND CONDITIONS WILL BE BINDING UPON INTEGRA UNLESS AGREED TO IN WRITING AND SIGNED BY AN OFFICER OR OTHER AUTHORIZED REPRESENTATIVE OF INTEGRA. ANY ADDITIONAL OR DIFFERENT TERMS, ADDITIONS, DELETIONS OR EXCEPTIONS PROPOSED BY SEASPINE (WHETHER IN A PURCHASE ORDER, OTHER PRINTED FORM OR ELSEWHERE) ARE OBJECTED TO AND HEREBY REJECTED, UNLESS SUCH TERMS, ADDITIONS, OR EXCEPTIONS ARE APPROVED SPECIFICALLY BY INTEGRA IN WRITING AND SIGNED BY AN OFFICER OR OTHER AUTHORIZED REPRESENTATIVE OF INTEGRA. No course of prior dealings or usage of trade shall be relevant to supplement or explain any term used herein. Any clerical errors by Integra are subject to correction.

5.8 Returns. The Products may not be returned unless resulting from a Product recall, field correction or market withdrawal for which Integra is responsible as provided in Section 8.6 or as permitted pursuant to Section 5.9(c).

5.9 Delivery; Certificate; Inspection and Acceptance.

 

  a. Terms for the shipments of the Products will be FCA (Incoterms, 2010). SeaSpine shall pay shipping and freight costs, which will be added to the invoice for each Order, and SeaSpine shall have the right to choose the carrier so long as such choice complies with the shipping validation for the Product. SeaSpine may designate the destination of the Products to be delivered hereunder so long as such destination complies with applicable Law. Delivery of the Products to the carrier at Integra’s shipping point shall constitute delivery to SeaSpine; SeaSpine shall bear all risk of loss or damage in transit. However, Integra reserves the right, in its discretion, to change the exact method of shipment and to make delivery in installments, all such installments to be separately invoiced and paid for when due as provided in Section 6.1, without regard to subsequent deliveries. Delay in delivery of any installment within the parameters set forth in this Article 5 shall not relieve SeaSpine’s obligations to accept remaining deliveries.

 

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  b. Each shipment of the Product must be accompanied by final Product testing and inspection results and a certificate, substantially in the form attached hereto as Exhibit E, signed by Integra stating that the Products comply with the Specifications; the testing, inspections results and certificate shall be set forth by the Product serial number and must be signed by Integra.

 

  c. SeaSpine, upon receipt of the Products from Integra, shall have thirty (30) days to inspect the Products with respect to whether or not they comply with the Specifications. If the Products do not comply with the Specifications, SeaSpine shall notify Integra and provide Integra with samples of the nonconforming Products (to the extent SeaSpine deems possible) along with such notice and provide Integra with the results of its inspection. If Integra’s inspection confirms the Products do not comply with the Specifications, then Integra, at its expense and at SeaSpine’s option, within thirty (30) days following the completion of Integra’s investigation, will either bring the Products in question into conformance with the requirements of Section 9.1(a)(ii) or replace such nonconforming Products, in either case, at no additional charge to SeaSpine. If after inspection, Integra disagrees with SeaSpine’s determination, the Parties shall submit samples of the Product in question to a mutually acceptable independent testing laboratory for evaluation to determine whether the Product are in conformance with the requirements of Section 9.1(a)(ii). The results of such evaluation shall be deemed conclusive of the matter, and the non-prevailing party shall bear the costs of the evaluation.

6. PAYMENT AND TAXES:

 

  6.1 Payment.

 

  a. Payment terms of an Order are net thirty (30) calendar days from the date of invoice, unless otherwise stated. SeaSpine specifically waives any right for any reason to withhold or set-off payments it owes to Integra hereunder, whether available at law, in equity or otherwise under the laws, rules, regulations, ordinances, decrees or orders of any governmental authority.

 

  b. SeaSpine agrees to pay all costs, including, but not limited to, reasonable attorneys’ fees, accounting fees and other expenses of collection resulting from any default by SeaSpine of any of the terms hereof.

6.2 Taxes and Other Charges. Any medical device tax, use tax, sales tax, excise tax, duty, custom, inspection or testing fee, or any other tax, fee or charge of any nature whatsoever imposed by any governmental authority, on or measured by the transaction between Integra and SeaSpine, except for taxes of Integra’s income, shall be paid by SeaSpine in addition to the

 

7


Prices quoted or invoiced. In the event Integra is required to pay any such tax, fee or charge, SeaSpine shall reimburse Integra therefor; or SeaSpine shall provide Integra at the time the applicable Order is submitted an exemption certificate or other document acceptable to the authority imposing the tax, fee or charge.

7. SEASPINE GENERAL OBLIGATIONS:

7.1 Compliance. SeaSpine shall not (i) alter the Products, (ii) pay, offer or promise to pay, or authorize payment of any money, or give, offer or promise to give, or authorize the giving of anything of value to any healthcare professional in violation of any anti-kickback statutes, the AdvaMed Code, or other applicable Laws or policies described herein, (iii) incur any obligation in the name of or on behalf of Integra.

7.2 SeaSpine’s Use of Products. SeaSpine warrants to Integra that (i) following delivery to SeaSpine, the Products will be marketed, promoted, stored and distributed in compliance with applicable FDA regulations, applicable ISO and Current Good Manufacturing Practices and (ii) all facilities used for storage and distribution of the Products after delivery to SeaSpine hereunder are FDA compliant.

8. SEASPINE REGULATORY AND QUALITY OBLIGATIONS:

8.1 Compliance with Laws. SeaSpine agrees to comply with: (i) the AdvaMed Code, as modified from time to time and which is incorporated into SeaSpine’s compliance policies, (ii) its responsibilities under the Safe Harbor Regulations relating to program “fraud and abuse” promulgated under the Social Security Act and Medicare and Medicaid Patient and Program Protection Act, (iii) its compliance policies which are consistent with the AdvaMed Code, (iv) the U.S. Foreign Corrupt Practices Act and any other applicable anti-bribery laws, (v) all applicable laws, rules, ordinances, regulations, decrees and orders of any governmental authority, including but not limited to, those related to the advertising, promotion, sale and use of the Products, privacy, health, safety and environmental matters and record-keeping and reporting in compliance with all governmental authority regulations (collectively, the “Laws”) for the Products (which related records and reporting information shall be supplied to Integra promptly upon request), and (vi) all internal policies and procedures of SeaSpine, including without limitation, discount policies. SeaSpine further agrees to notify Integra immediately upon receiving any notice with respect to a violation or alleged violation of any of the above mentioned Laws and any other laws or regulations, to the extent relating to the Products.

8.2 Recordkeeping. Each Party agrees to comply with the document retention policy attached hereto as Exhibit F with respect to its activities hereunder. SeaSpine shall make such records available to Integra, immediately upon request for regulatory purposes.

8.3 Review. Integra shall have the right to send its representatives to review, during regular business hours and upon reasonable prior written notice, SeaSpine’s marketing and regulatory records and files and all other records and files related to the Products and related to SeaSpine’s compliance with this Agreement. SeaSpine shall reasonably cooperate with Integra in such review and any reasonable requests of Integra that result from such review by Integra.

 

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  8.4 Complaints.

 

  a. SeaSpine shall promptly (and in any event within one business day) report to Integra (i) any accident, or incident involving the Product (of which it becomes aware) which results in personal injury or damage to property; (ii) any complaint involving the Product (of which it becomes aware), whether oral or written; (iii) any defect in or condition of the Product (of which it becomes aware); or (iv) any other fact or circumstance (of which it becomes aware) that may result in a report to the FDA or other applicable regulatory authority or may result in a violation or alleged violation of any applicable Law relating to the Product.

 

  b. Integra shall promptly (and in any event within one business day) report to SeaSpine (i) any complaint involving the Product, whether oral or written and (ii) any defect in or condition of the Product, in each case of which Integra becomes aware.

 

  c. The Parties shall cooperate in the investigation and determination of the cause of any of the foregoing accidents, incidents or complaints and shall make available all statements, reports and tests made to investigate such accident or incident. Furnishing such information and any investigation of such information or incident report shall not in any way constitute any assumption of any liability for such accident or incident by either Party.

 

  d. Integra will be responsible for Medical Device Reporting per Title 21 CFR Part 803 or similar vigilance reporting requirements in the U.S., the European Union and any other jurisdiction as related to the Products and as required by Laws where the Products are marketed, provided that upon conclusion of the applicable Phase I Period in a jurisdiction, SeaSpine shall become responsible for such reporting responsibilities in such jurisdiction.

8.5 Governmental Authority. Each Party agrees to notify the other Party within forty-eight (48) hours of any audit or inspection by, or contact with, the FDA or other regulatory authority that involves the Product. Each Party agrees to provide the other Party with a copy of the portion of the audit or inspection report or contact document that relates to the Product and any response thereto provided by such Party.

8.6 Recall, etc. Each Party shall be entitled to execute a recall, field correction or market withdrawal of the Products. The Parties agree to cooperate with and reasonably assist each other in the event of a recall, field notification or market withdrawal of the Products. SeaSpine agrees to pay for any recall, field notification and/or market withdrawal related to the Products, unless directly resulting from a breach of the warranty set forth in Section 9.1(a)(ii), in which case Integra agrees to pay all direct, documented, out-of-pocket costs of such recall, field notification or market withdrawal. If either Party decides to execute a recall, field notification or market withdrawal of a Product, it shall promptly notify the other Party of such action.

 

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8.7 No Debarment. Integra certifies that neither it nor any of its employees has been debarred under Section 306(a) or Section 306(b) of the Act and that no debarred person will in the future be employed to manufacture the Products. Integra also certifies that no person working in the manufacture of the Products has a conviction that could lead to debarment under Section 306(a) or Section 306(b) of the Act. Furthermore, Integra agrees to notify SeaSpine immediately of any action toward conviction or debarment under Section 306(a) or Section 306(b) of the Act of any person working in the manufacture of the Products.

8.8 Quality Agreement. Each Party (or an affiliate designee thereof) has entered into the Quality Agreement attached as Exhibit G as of the Effective Date.

8.9 Compliance with Laws. Integra will manufacture the Products in compliance with Laws applicable to the processing, storage, packaging, labeling and shipment of the Products, as modified from time to time.

8.10 Quality Audits. Integra shall allow SeaSpine to perform quality audits at its manufacturing facility for the Product during regular business hours and upon reasonable prior written notice if SeaSpine has reasonable cause to believe there is a quality issue affecting the Products or as required by applicable law. SeaSpine shall provide Integra with a written report of all nonconformances to the manufacturing procedures, storage and shipping procedures and test/inspection procedures within thirty (30) days of identification, which non-conformances are identified by SeaSpine during quality audits.

8.11 Additional Regulatory Matters.

 

  a. As of the Effective Date, Integra (or one of its affiliates) owns the 510(k) clearances, CE Marks and other regulatory consents, licenses, authorizations and approvals, including as applicable design dossiers, in other jurisdictions for the Products (the “Product Registrations”). The terms and conditions set forth in Exhibit H shall apply with respect to SeaSpine obtaining a “duplicate” Product Registration in each applicable jurisdiction. The period between the Effective Date and the date SeaSpine obtains a Product Registration in a jurisdiction is referred to herein as the “Phase I Period” for such jurisdiction.

 

  b. SeaSpine shall have sole responsibility for obtaining all required consents, licenses, authorizations and approvals for the manufacture, use and sale of the Product worldwide, and such consents, licenses, authorizations and approvals shall be held in the name of SeaSpine or its designee, except as otherwise provided herein.

 

  c.

Integra shall reasonably assist SeaSpine in accordance with Section 8.11(b) by providing information related to the Products when necessary to obtain any consents, licenses, authorizations or approvals, provided that SeaSpine shall reimburse Integra for its costs and expenses associated with Integra’s assistance in providing information related to the Products in obtaining or maintaining consents, licenses, authorizations or approvals for the Product at a per hour charge

 

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  of $200. Integra will provide the FDA or other applicable regulatory authority with access to Integra’s files related to the Products, but shall not be obligated to permit SeaSpine or any foreign governmental regulatory agency to review certain confidential files, including without limitation, the design history files or processing information for the Products.

9. INTEGRA LIMITED WARRANTY; CERTAIN OBLIGATIONS:

9.1 Limited Warranty

 

  a. Integra warrants to SeaSpine that (i) it will convey good title to each Product delivered to SeaSpine hereunder, free from any security interest, liens or other encumbrances, and (ii) each Product shall have been manufactured in compliance with the then-current Specifications and will be free from defects in materials or workmanship during the Shelf-life for such Product. “Shelf-life” means with respect to a Product, the shelf-life of such Product as set forth in the applicable Specifications. As of the Effective Date, the Shelf-life for each Product is as set forth in Exhibit I. Except as set forth in Section 8.6, SeaSpine’s sole remedy, and Integra’s sole obligation, in the event of a breach by Integra of the warranty set forth in clause (ii) above is as set forth in Section 5.9(c).

 

  b. The limited warranty set forth in Section 9.1(a) is the sole warranty Integra makes regarding the Products. THIS WARRANTY IS EXCLUSIVE AND INTEGRA HEREBY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, WRITTEN OR ORAL, INCLUDING WITHOUT LIMITATION, (I) ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR APPLICATION, OR WARRANTY OF QUALITY, OTHER THAN THOSE EXPRESSLY SET FORTH IN THE ATTACHED WARRANTY, OR (II) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING, OR USAGE OF TRADE OR (III) WARRANTIES OF NON-INFRINGEMENT. SEASPINE UNDERSTANDS THAT NO EMPLOYEE, OFFICER, AGENT OR REPRESENTATIVE OF INTEGRA IS AUTHORIZED IN ANY WAY TO MAKE ANY STATEMENT TO THE CONTRARY WHICH SHALL BE BINDING ON INTEGRA OR TO ASSUME FOR INTEGRA ANY OTHER LIABILITY IN CONNECTION WITH THE PRODUCTS.

 

  c.

The warranty set forth in Section 9.1(a)(ii) shall not apply to, and Integra shall not be responsible for, any loss or damages arising in connection with the purchase or use of any Product (i) which has been modified by anyone other than an authorized service representative of Integra or (ii) which has been altered in any way so as, in Integra’s judgment, to affect its stability or reliability, or which has been subject to misuse, negligence or accident, in each case after delivery to SeaSpine hereunder or (iii) which has been subject to improper or negligent installation, storage or handling, in each case after delivery to SeaSpine hereunder or (iv) which has been subject to improper cleaning, sterilization or maintenance,

 

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  in each case after delivery to SeaSpine hereunder or (v) which has been subject to accidental damage arising from acts of God, electrical power damage, equipment malfunction, unusual stress, unreasonable operating procedures or abnormal or extreme operating conditions, in each case after delivery to SeaSpine hereunder or (vi) which has been used otherwise than in accordance with the instructions furnished by Integra.

10. CONFIDENTIALITY AND OWNERSHIP:

10.1 Confidential Information. Each Party agrees that it shall not during the Term and anytime thereafter, directly or indirectly, without the prior written consent of the other Party, disclose to any third party, pursuant to a press release or otherwise, any Confidential Information of the other Party. As used herein, “Confidential Information” of a Party means information possessed by such Party, or its affiliates, that relates to the other Party’s business or the Products (which may include information of third parties as to which either SeaSpine or Integra and their respective affiliates has a confidential arrangement or understanding), whether that information is written or oral, however acquired. Notwithstanding the foregoing, Confidential Information does not include any such information that as of the date of disclosure to, or acquisition by, the receiving Party was (i) obtained by the receiving Party from a third party with no obligation of confidentiality to the disclosing Party or its affiliates, (ii) disclosed in published literature, (iii) generally available to the industry or (iv) known to the receiving Party without any obligation to keep it confidential or any restriction on its use and such knowledge can be substantiated by reasonable documentation. Confidential Information shall additionally include the existence and terms of this Agreement and the business relationship established hereunder, together with any documents or data prepared by any of the Parties that reflect such information. Each Party further agrees that it shall not, directly or indirectly, without the prior written consent of the other Party, use any of the Confidential Information of the other Party for any reason or purpose, including to reverse engineer any Product, other than as contemplated by this Agreement.

10.2 Degree of Care. Notwithstanding Section 10.1, each Party may disclose Confidential Information received pursuant to this Agreement to its directors, officers, employees, consultants, attorneys and accountants and other agents and representatives, but not to any other third party, provided, however, that all such access is limited to those that have a need-to-know in connection with the business relationship established hereunder, and further provided that such persons and entities are obligated to hold the Confidential Information in confidence in accordance with restrictions and procedures no less stringent than provided for herein. Each Party shall be responsible for any breach of this Section 10 by its directors, officers, employees, consultants, attorneys and accountants and other agents and representatives. Each Party covenants that it shall exercise the same degree of care with respect to the other Party’s Confidential Information as it would its own Confidential Information, and, in any event, shall exercise no less than a reasonable degree of care. Notwithstanding the foregoing, a Party may disclose the Confidential Information belonging to the other Party to the extent such disclosure is reasonably necessary in the context of preparation and filing of regulatory documents (including, without limitation, governmental approvals) to regulatory authorities in connection with the Products pursuant to this Agreement; provided that the disclosing Party notify the other Party in writing of such disclosure and the disclosing Party requests confidential treatment of such disclosure to the extent confidential treatment is reasonably available to such Party.

 

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10.3 Remedies. The Parties understand and agree that this Section 10 is reasonable and necessary to protect the Parties respective business interests. The Parties further agree that the other may suffer irreparable harm from a breach of this Section 10. Thus, in addition to any other rights or remedies, all of which shall be deemed cumulative, a Party shall be entitled to pursue injunctive relief to enforce the terms of this Section 10 without the necessity of proof of damages or the posting of a bond or other security.

10.4 Disclosure Required by Law. Notwithstanding Section 10.1, a receiving Party may disclose Confidential Information if such information is required by Law to be disclosed in response to a valid order of a court of competent jurisdiction or authorized governmental authority, provided that the receiving Party must give the other Party prompt written notice and seek to obtain or allow for and reasonably cooperate with the other Party to seek to obtain a protective order prior to such disclosure. In any event, a receiving Party shall disclose only that portion of the Confidential Information which is legally required and will use all commercially reasonable efforts to assure that confidential treatment is accorded any Confidential Information.

10.5 Return of Copies. Upon termination of this Agreement, each Party shall, upon the written request of the other Party, return all copies, whether in paper, electronic, or other format, of all Confidential Information received by it from the other Party which contain the other Party’s Confidential Information, except that one copy thereof may be retained solely for archival or regulatory compliance purposes.

10.6 Intellectual Property.

 

  a. SeaSpine, its licensors and/or their respective affiliates are and shall remain the exclusive owner(s) of all intellectual property rights owned or licensed by SeaSpine or any subsidiary thereof, as of the Effective Date, after giving effect to the spin-off of SeaSpine by Integra, in each case related to the Specified Products, excluding any trademark rights and product registrations (including 510(k) clearances) relating thereto. “Specified Products” means the ceramic collagen matrix products marketed under the Mozaik brand, including Mozaik Strip, Mozaik Putty, and Mozaik Moldable Morsels, and all equivalent products (x) marketed under spine brands or (y) provided to third parties on a private label basis, in each case as of the Effective Date, and any next generation successor version of any of the foregoing products.

 

  b. Integra agrees not to, and not to authorize a third party to, infringe, misappropriate or violate any intellectual property rights of SeaSpine, its licensors, or their respective affiliates in the Products. For purposes of this Agreement, “intellectual property rights” includes, without limitation, (i) all registered or unregistered trademarks, patents, designs or inventions; (ii) all rights in products, including product registrations; (iii) copyrights, moral rights, know-how and Confidential Information; and (iv) any similar rights worldwide, or the right to apply for any such rights.

 

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  c. SeaSpine hereby grants to Integra a limited, non-exclusive, royalty-free, non-assignable, non-transferrable license to SeaSpine names, trademarks, and logos designated by SeaSpine (collectively, the “SeaSpine Marks”) in order for Integra to procure and affix SeaSpine -specific labels and markings, to the extent applicable, in connection with Integra’s supply obligations under this Agreement. Upon termination of this Agreement, the foregoing limited license shall automatically terminate.

 

  d. Integra hereby grants to SeaSpine an irrevocable, worldwide, nonexclusive, royalty-free, non-assignable and non-transferrable (except to the extent a sublicense to distributors and sales representatives is needed in connection with the sale and distribution of the Products) license to the rights of Integra in the trademarks set forth in Exhibit J (the “Licensed Marks”) to market, sell and distribute any Product supplied hereunder that carries such Licensed Marks for a period commencing as of the Effective Date and expiring on the date set forth in Exhibit J. The terms and conditions set forth in Exhibit J also shall apply to the foregoing limited license.

 

  e. Except in connection with performing its obligations hereunder, Integra shall, and shall cause its affiliates to, cease all use of the “Integra Mozaik” and “Mozaik” trademarks.

 

  f. Each Party will comply with the terms of the agreement set forth on Exhibit K.

 

11. GENERAL:

11.1 Notices. All notices, approvals, and other communications required or permitted herein shall be in writing and shall be delivered personally (which shall include delivery by courier or overnight delivery service) or sent by certified or registered mail, postage prepaid, return receipt requested.

 

If to Integra: Integra LifeSciences Corporation
ATTN: David Hoffman
311 Enterprise Drive, Plainsboro, NJ 08536
With required copy to: Integra LifeSciences Corporation
ATTN: General Counsel
311 Enterprise Drive, Plainsboro, NJ 08536
If to SeaSpine: SeaSpine Orthopedics Corporation
ATTN: Brian Baker
2 Goodyear, Suite A, Irvine, CA 92618
With required copy to: SeaSpine Orthopedics Corporation
ATTN: Colin Smith
2384 La Mirada Drive, Vista, CA 92081
With required copy to: SeaSpine Orthopedics Corporation
ATTN: General Counsel
2384 La Mirada Drive, Vista, CA 92081

 

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Either Party may change its address for notice purposes by providing written notice of the change of address to the other Party.

11.2 Insurance. Each Party will comply with the insurance obligations for such Party set forth in Exhibit L.

11.3 Limitation of Liability. INTEGRA AND ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR AFFILIATES SHALL NOT IN ANY EVENT BE LIABLE FOR INCIDENTAL, EXEMPLARY, INDIRECT, CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES, OF ANY KIND RESULTING FROM ANY USE OR FAILURE OR ACQUISITION OF THE PRODUCTS, WHETHER BASED UPON A CLAIM OR ACTION OF CONTRACT, WARRANTY, NEGLIGENCE, STRICT LIABILITY OR OTHER TORT, OR OTHERWISE, ARISING OUT OF THIS AGREEMENT (EVEN IF INTEGRA HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES) INCLUDING WITHOUT LIMITATION, LIABILITY FOR LOSS OF USE, LOSS OF WORK IN PROGRESS, DOWN TIME, LOSS OF REVENUE OR PROFITS, FAILURE TO REALIZE SAVINGS, LOSS OF PRODUCTS OF SEASPINE OR OTHER USE OR ANY LIABILITY OF SEASPINE TO A THIRD PARTY ON ACCOUNT OF SUCH LOSS, OR FOR ANY LABOR OR ANY OTHER EXPENSE, DAMAGE OR LOSS OCCASIONED BY SUCH PRODUCT. EXCEPT IN THE CASE OF A CLAIM FOR THIRD PARTY INDEMNIFICATION UNDER SECTION 11.4(B) OF THIS AGREEMENT, INTEGRA’S LIABILITY IN THE AGGREGATE INCLUDING THE LIABILITY OF SEASPINE’S DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND AFFILIATES, WITH RESPECT TO PERFORMANCE OR NON-PERFORMANCE OF THIS AGREEMENT AND ANY INTEGRA PRODUCTS OR OTHER ITEMS FURNISHED UNDER THIS AGREEMENT (WHETHER IN TORT, CONTRACT OR OTHERWISE, AND NOTWITHSTANDING ANY FAULT, NEGLIGENCE WHETHER ACTIVE, PASSIVE OR IMPUTED OR STRICT LIABILITY OF INTEGRA) SHALL IN NO EVENT EXCEED THREE MILLION DOLLARS ($3,000,000).

11.4 Indemnity.

 

  a.

SeaSpine shall indemnify and defend Integra and its affiliates and their respective directors, officers, members, employees, counsel, agents and representatives and the successors and permitted assigns of any of the foregoing (the “Integra Indemnitees”) and hold the Integra Indemnitees harmless from and against any and all claims, demands, actions, liabilities, damages, losses, judgments, costs or expenses (including interest and penalties and reasonable attorneys’ fees and professional fees and expenses of litigation) (collectively, “Claims”) of third

 

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  parties to the extent arising out of, in connection with, or resulting from (i) the marketing, sale, distribution, use or promotion of the Products after title has passed to SeaSpine hereunder, except to the extent such claims result from a breach of the warranty set forth in Section 9.1(a)(ii); (ii) the bodily injury, property damage or any other damages or injury caused in whole or in part, by any use of the Product, except to the extent such claims result from a breach of the warranty set forth in Section 9.1(a)(ii); (iii) SeaSpine’s breach of any representation, warranty or covenant contained in this Agreement; (iv) any claims relating to the misappropriation or infringement of third party intellectual property rights relating to the Products; or (v) the negligence or willful misconduct of SeaSpine.

 

  b. Integra shall indemnify, defend and hold harmless SeaSpine and its affiliates and their respective directors, officers, members, employees, counsel, agents and representatives and the successors and permitted assigns of any of the foregoing (the “SeaSpine Indemnitees”) and hold the SeaSpine Indemnitees harmless from and against any and all Claims of third parties to the extent arising out of, in connection with, or resulting from (i) the negligence or willful misconduct of Integra, except to the extent that SeaSpine is obligated to indemnify Integra for any of the foregoing third party Claims as provided in Section 11.4(a) (including those third party Claims caused, in whole or in part, by the negligence or willful misconduct of SeaSpine), or (ii) the bodily injury, property damage or any other damages or injury caused in whole or in part, by any use of the Product, to the extent resulting from a breach of the warranty set forth in Section 9.1(a)(ii).

 

  c. In any case in which claims arise out of or are caused by both SeaSpine’s negligence and Integra’s negligence, a comparative negligence standard shall apply with respect to the Parties’ enumerated obligations under this Section 11.4.

 

  d.

A Party that intends to claim indemnification under this Agreement (the “Indemnitee”) for third party Claims shall promptly notify the other Party (the “Indemnitor”) in writing of such Claim in respect of which the Indemnitee or its affiliates, directors, officers, members, employees, counsel, agents or representatives intends to claim such indemnification, and the Indemnitor, at its cost and expense, shall have the right to participate in, and to the extent the Indemnitor so desires, to assume the defense thereof with counsel mutually satisfactory to the Parties; provided, however, that an Indemnitee shall have the right to retain its own counsel, with the fees and expenses to be paid by the Indemnitor, if such Indemnitee’s outside counsel advises that representation of such Indemnitee by the counsel retained by the Indemnitor would be inappropriate due to actual or potential conflicts of interests between such Indemnitee and the other Party represented by such counsel in such proceeding. The Indemnitor shall control the defense and/or settlement of any such Claims, and this indemnity agreement shall not apply to amounts paid in connection with any Claims if such payments are made by the Indemnitee without the consent of the Indemnitor; provided, however, that the Indemnitor shall not enter into any

 

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  settlement that admits fault, wrongdoing or damages without the Indemnitee’s written consent, such consent not to be unreasonably withheld, delayed or conditioned. For clarity, any Claims that relate solely to the payment of monetary damages may be settled or otherwise disposed of on such terms as the Indemnitor, in its sole discretion, shall deem appropriate. The failure to deliver written notice to the Indemnitor within a reasonable time after the commencement of any Claim, if and to the extent prejudicial to its ability to defend such Claim, shall to such extent relieve such Indemnitor of any liability to the Indemnitee under this Section 11.4. At the Indemnitor’s request and expense, the Indemnitee and its employees and agents shall reasonably cooperate with the Indemnitor and its legal representatives in the investigation of any Claims covered by this indemnification and provide full information with respect thereto.

12. MISCELLANEOUS:

12.1 Independent Contractors. This Agreement shall not constitute, and is not intended to constitute, either Party as an employee, agent, partner or legal representative of the other Party for any purpose, or give either Party any right to supervise or direct the functions of the other Party. Neither Party shall have authority to act for or obligate the other Party in any way or to extend any representation or warranty on behalf of the other Party. Each Party agrees to perform under this Agreement solely as an independent contractor and neither Party shall have any right, power, or authority, nor shall they represent themselves as having any authority to assume, create, or incur any expense, liability or obligation, express or implied, on behalf of the other Party, or otherwise act as an agent for the other Party for any purpose. Each Party agrees not to permit its employees or agents to do anything that might be construed or interpreted as acts of the other Party.

12.2 Integration. This Agreement, including its Exhibits, sets forth all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties and supersedes all prior discussions, negotiations and agreements between the Parties concerning the subject matter hereof. SeaSpine and Integra agree that nothing in any SeaSpine purchase order or other document submitted pursuant to this Agreement shall in any way modify or add to the terms and conditions set forth in this Agreement (except for identification of Products, quantity and delivery date consistent with this Agreement). Except as expressly set forth in this Agreement, no subsequent modification or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by the respective authorized officers of the Parties.

12.3 Waiver. Integra’s failure to strictly enforce any term or condition stated herein or exercise any right arising hereunder shall not constitute a waiver of Integra’s right to enforce such terms or conditions or exercise such right thereafter. All of Integra’s rights and remedies against SeaSpine with regard to this Agreement are cumulative and are in addition to any other rights and remedies Integra may have at law or in equity. No waiver by either Party of any condition or term in any one or more instances shall be construed as a continuing waiver of such condition or term or of another condition or term.

 

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12.4 Assignment. This Agreement shall be binding upon and shall inure to the benefit of the Parties, and their respective successors and permitted assigns. Neither Party may transfer or assign this Agreement, in whole or in part, without the prior written consent of the other Party, except that either Party may transfer or assign this Agreement, in whole or in part, without the prior written consent of the other Party, to any affiliate and to any successor to substantially all of its business or assets to which this Agreement relates, whether by merger, sale of assets, sale of stock, reorganization or otherwise, without the consent of the other Party.

12.5 Severability. If any provisions of this Agreement should be or become fully or partly invalid or unenforceable for any reason whatsoever or violate any applicable Law, this Agreement is to be considered divisible as to such provision and the Parties shall negotiate in good faith a valid or enforceable substitute provision that most nearly reflects the original intent of the Parties and all other provisions hereof shall remain in full force and effect. Moreover, if one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to scope, activity or subject so as to be unenforceable at law, such provision or provisions shall be construed by the appropriate judicial body by limiting and reducing it or them, so as to be enforceable to the maximum extent compatible with the applicable Law as it shall then appear.

12.6 Force Majeure. Except with respect to the payment of money, neither Party shall be liable for any failure or delay in performance under this Agreement if either Party is prevented from performing any of its obligations hereunder due to any cause which is beyond the non-performing Party’s reasonable control, including, without limitation, fire, explosion, earthquake, flood, acts of war, terrorism, or other acts of God; acts, regulations or laws or application thereof;, war or civil commotion; strike, lock-out or labor disturbances; or failure of public utilities or common carrier, embargo or other governmental action or request, equipment failure, shortage of raw materials or inability to obtain labor, fuel, materials supplies or power at reasonable prices (a “Force Majeure Event”), such non-performing Party shall promptly give notice thereof to the other Party and shall use reasonable commercial efforts to cure or correct any such Force Majeure Event and to resume performance of its affected obligations as soon as possible.

12.7 Choice of Law; Venue; Waiver of Jury Trial. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New Jersey without reference to its conflict of laws provisions. In the event of a dispute arising from this Agreement the Parties agree that the state and federal courts of the State of New Jersey shall have exclusive jurisdiction over any litigation or proceeding. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

12.8 Survival. Any provision of this Agreement that contemplates performance or observance subsequent to any termination or expiration of this Agreement (in whole or in part) shall survive any termination or expiration of this Agreement (in whole or in part, as applicable) and continue in full force and effect. Without limiting the foregoing, Articles 7, 8, 10, 11 and 12 and Sections 4.3 and 4.4 of this Agreement shall survive the expiration or termination of this Agreement.

 

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12.9 Section Headings. Section headings herein are for convenience only, are not part of the terms and conditions and shall not affect their interpretation.

12.10 Ambiguities. Ambiguities, if any, in this Agreement shall not be construed against any Party irrespective of which Party may be deemed to have authored the ambiguous provision.

12.11 Counterparts. This Agreement may be executed in any number of counterparts, or facsimile or .pdf scanned versions, each of which shall be considered to be an original instrument and to be effective as of the Effective Date.

(Signature Page Follows)

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement effective as of the Effective Date.

SEASPINE ORTHOPEDICS CORPORATION

By:  
 Name:  
 Title:  

INTEGRA LIFESCIENCES CORPORATION

By:  
 Name:  
 Title:  
EX-10.6

Exhibit 10.6

DBM AND OS SUPPLY AGREEMENT

(SeaSpine as Supplier)

This Supply Agreement (“Agreement”) sets forth the terms and conditions under which SeaSpine Orthopedics Corporation (“SeaSpine”) contracts with Integra LifeSciences Corporation (“Integra” and together with SeaSpine, the “Parties”) to provide the products set forth on Exhibit A-1 (each an “OS Product” and collectively, the “OS Products”) and the products set forth on Exhibit A-2 (each a “DBM Product” and collectively, the “DBM Products”) on a non-exclusive basis at the prices set forth herein. Each DBM Product and OS Product is also referred to herein as a “Product” and collectively as the “Products”.

1. MANUFACTURING AND SUPPLY RELATIONSHIP:

1.1 General; Products. Under this Agreement, Integra engages SeaSpine as a Product supplier. SeaSpine may designate an affiliate of SeaSpine to perform its obligations hereunder, provided that SeaSpine shall remain liable for all such obligations. Attached hereto as Exhibit A-1 and Exhibit A-2 are a complete list of the Products (as of the Effective Date (as defined in Section 3)) and their Prices (as defined in Section 2.1(a)). No other right or license is or shall be created or granted hereunder by implication, estoppel or otherwise, except as expressly provided in this Agreement.

1.2 Specifications. The specifications for the OS Products as of the Effective Date are set forth in Exhibit B-1. The specifications for the DBM Products as of the Effective Date are set forth in Exhibits B-2, B-3, B-4 and B-5. Such specifications, as the same may be modified from time to time hereunder, are referred to herein, as the “Specifications.”

 

  1.3 Changes to Products.

 

  a. SeaSpine shall have the right to modify the Products or their Specifications (i) as necessary to comply with changes in Law (as defined in Section 8.1) or (ii) for any other reason provided that such modification does not affect the form, fit, function, safety or appearance of the Products, provided, that, the foregoing right of SeaSpine shall not apply with respect to any OS Product with respect to any jurisdiction until the end of the Phase I Period (as defined in Section 8.11) for such OS Product in such jurisdiction. If, however, SeaSpine plans to so modify any Product or its Specifications, SeaSpine shall provide Integra written notice at least sixty (60) days in advance of the effectiveness of such modification (unless impractical for regulatory reasons, in which case such notice shall be provided promptly after the need to modify the Products or their Specifications is determined by SeaSpine).

 

  b. If SeaSpine makes a modification to the Products in accordance with this Section 1.3, SeaSpine shall provide Integra with information on the changes, and corresponding updated guidelines and instructions for use, if applicable.

 

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1.4 Microfib. The Parties acknowledge that SeaSpine may use Microfib products (“Microfib”) in the manufacture of the OS Products that SeaSpine purchased from Integra under the Supply Agreement, dated as of the date hereof, between Integra, as supplier, and SeaSpine, as purchaser, relating to Microfib (the “Microfib Supply Agreement”).

2. PRODUCT PRICES AND OTHER FEES:

 

  2.1 Prices.

 

  a. Integra shall pay SeaSpine for the Products at the per unit prices listed in Exhibits A-1 and A-2, as such prices may be modified as described in Section 2.1(b) (the “Prices”).

 

  b. SeaSpine may increase its Prices for the Products annually effective after SeaSpine has given Integra sixty (60) days prior notice of such Price increases. Price increases shall apply to all orders shipped after the effective date of such increase. Annual price increases shall not exceed the greater of (i) three percent (3%) or (ii) the annual change in the consumer price index for all urban consumers for all cities for the twelve month period immediately preceding the notice of such price increase, as published by the United States Bureau of Labor Statistics (http://www.bls.gov); provided, however, that if at any time during the Term, SeaSpine experiences a documented increase in its variable costs related to the Products of greater than five percent (5%) in any calendar year, the Parties will meet and confer in good faith to negotiate applicable adjustments to the Prices.

 

  3. EFFECTIVE DATE: The effective date of this Agreement shall be [                ], 2015 (“Effective Date”).

4. TERM AND TERMINATION:

4.1 Term. This Agreement shall commence on the Effective Date and expire, except as earlier terminated hereunder, on the seventh (7th) anniversary of the Effective Date (the “Initial Term”). In addition, Integra may, upon written notice to SeaSpine at least one hundred eighty (180) days prior to the expiration of the Initial Term (or, if applicable, the first Term Extension) extend the Agreement for up to two additional three (3) year periods (each, a “Term Extension”). The Parties may, upon mutual written agreement, extend the Term thereafter. The Initial Term and any Term Extension are collectively referred to as the “Term”.

4.2 Termination

 

  a. Breach. Either Party may terminate this Agreement for cause upon written notice of material breach by the other Party of this Agreement (a “Termination Notice”), which shall include an opportunity for the breaching Party to cure. If the breaching Party does not cure the material breach identified in the Termination Notice within ninety (90) days (or if such breach is a failure of Integra to make payment to SeaSpine when due hereunder, thirty (30) days) after receipt of such Termination Notice or such longer cure period as the Parties may agree in writing, this Agreement shall terminate.

 

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  b. Convenience. After the end of the Initial Term, either Party may terminate this Agreement for convenience upon at least one hundred eighty (180) days’ written notice to the other Party.

 

  c. Bankruptcy, etc. Either Party may terminate this Agreement immediately upon written notice to the other Party if proceedings in bankruptcy or insolvency are instituted by or against the other Party, or a receiver is appointed, or if any substantial part of the assets of the other Party is the object of attachment, sequestration or other type of comparable proceeding, and such proceeding is not vacated or terminated within sixty (60) days after its commencement of institution.

4.3 Effects of Termination.

 

  a. Mutual Obligations. After either Party provides a Termination Notice and pending termination of this Agreement, the Parties shall continue to perform their respective obligations hereunder until termination or expiration of the Term is effective. Expiration of the Term or termination of this Agreement shall not relieve the Parties of any obligation accruing prior to such expiration or termination. Each Party agrees, at the request of the other Party upon the expiration of the Term or termination of this Agreement, to return or destroy at the option of the receiving party all Confidential Information exchanged pursuant to Section 10, except such Confidential Information it may be required to retain under applicable Laws.

 

  b. Termination by SeaSpine. Upon termination of this Agreement by SeaSpine pursuant to Section 4.2(a) (Breach), SeaSpine may, at its sole option, supply and ship any Order(s) (as defined below) submitted to SeaSpine prior to the effective date of termination or expiration of the Term to Integra and Integra shall pay the applicable Prices, all in accordance with the terms and conditions of this Agreement.

 

  c. Termination by Integra. Upon termination of this Agreement by Integra pursuant to Section 4.2(a) (Breach), with respect to Order(s) submitted to SeaSpine and accepted prior to the effective date of termination, Integra may at its option, either (x) cancel any unfilled Orders or (y) advise SeaSpine that Integra wishes to have such unfilled Orders filled, in which event SeaSpine shall supply, and ship the Products pursuant to such then pending Orders for the Products for delivery after the effective date of termination or expiration. Integra shall pay the applicable Prices, all in accordance with the terms and conditions of this Agreement.

 

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4.4 Final Order. In the event of termination or expiration of this Agreement for any reason other than by SeaSpine pursuant to Section 4.2(a) (Breach) or Section 4.2(c) (Bankruptcy, etc.), Integra shall have the right, at its discretion, to place a final order for the Products prior to or on the last day of the Term in an amount of each Product not in excess of the lesser of (A) one hundred thirty percent (130%) of the amount of such Product set forth in the last forecast (including the Binding Forecast and calendar quarters 3 and 4 included therein) provided by Integra in accordance with Section 5.2 prior to the placement of such final order and (B) four (4) times the Maximum Quarterly Order (as defined in Section 5.2). If Integra desires to order additional units of Product in excess of such amount, Integra shall notify SeaSpine in writing and the Parties shall discuss in good faith, provided that Integra shall have no obligation to accept any such additional order. SeaSpine may schedule delivery of the final order over four calendar quarters with the first such calendar quarter beginning at least three months after the end of the Term, at SeaSpine’s discretion, provided that SeaSpine will make available for delivery in each such calendar quarter an amount of each Product that, when added to the amount of such Product previously made available by SeaSpine pursuant to this Section 4.4, equals at least (i) (A) the amount of such Product included in the final order, divided by (B) 4, multiplied by (ii) the number of such calendar quarters to date.

5. ORDERS; FORECASTS; ACCEPTANCE OF PRODUCTS, ETC.

5.1 Orders. Integra is obligated to purchase the Products for which it has issued a firm order or orders to SeaSpine (“Order(s)”), whether pursuant to a forecast that is deemed binding hereunder, or pursuant to a purchase order accepted by SeaSpine. SeaSpine does not stock the Products in inventory for purchase by Integra. All Orders must contain delivery dates not less than ninety (90) days after the date of receipt of the Order by SeaSpine, unless otherwise agreed upon in writing by SeaSpine.

5.2 Forecasts. No later than the first business day of each calendar quarter, Integra shall provide SeaSpine with a written rolling forecast as to Integra’s requirements of the Products for the next four (4) calendar quarter period. Each calendar quarter forecast will consist of the following:

 

  a. The first two (2) calendar quarters of each forecast shall be binding on Integra (“Binding Forecast”) and accompanied by an Order for such forecasted amount of the Products. The Order shall be in writing and shall specify the delivery date (which must be at least ninety (90) days after the receipt by SeaSpine of the Order), quantity of each Product ordered and the Prices and total cost of the Order.

 

  b. Each forecast shall update the prior forecast by:

 

  i. dropping the previous calendar quarter 1 from the forecast;

 

  ii. moving calendar quarter 2 from the previous forecast to be calendar quarter 1 of the updated forecast;

 

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  iii. updating, as appropriate and subject to clause (c) below, calendar quarters 3 and 4 of the previous forecast, which as updated will be calendar quarters 2 and 3 of the updated forecast; and

 

  iv. adding a new calendar quarter 4 to the updated forecast, subject to clause (c) below.

The initial forecast for the Products is set forth on Exhibit C attached hereto.

 

  c. Integra may not increase or decrease the amounts forecasted in the Binding Forecast, but may, subject to SeaSpine’s written acceptance, issue additional Orders during such two (2) calendar quarter period as provided in Section 5.6. In addition, Integra may not increase the number of units of the Products forecasted for any calendar quarter (e.g., 2Q 2016) by more than thirty percent (30%), in aggregate from the number of units first forecast for such calendar quarter (i.e. when such calendar quarter period was calendar quarter 4 of the forecast), and Integra may not reduce such number of units first forecasted for such calendar quarter by more than ten percent (10%) in aggregate from the number of units first forecast for such calendar quarter, without the prior written consent of SeaSpine. Integra shall not order for any calendar quarter more than the number of units of Product set forth on Exhibit D attached hereto (the “Maximum Quarterly Order”).

 

  d. Integra will use commercially reasonable efforts to ensure that the forecast for calendar quarters 3 and 4 is accurate, but the forecast for such calendar quarters will not constitute an Order.

 

  e. In the event that Integra fails to provide a Binding Forecast for a particular calendar quarter, unless SeaSpine otherwise notifies Integra in writing, the last available forecasted amount for such calendar quarter shall become a firm Order, provided, however, that nothing contained in this Section 5.2(e) shall be deemed to affect any of SeaSpine’s rights or limit any of SeaSpine’s remedies as a result of such failure.

5.3 Batch Sizes. Integra agrees to order the Products in whole multiples of the batch sizes set forth on Exhibit D (although Integra acknowledges and agrees that the actual quantity of the Products delivered may be adjusted as set forth in Section 5.5 or as otherwise expressly provided in this Agreement).

5.4 Acceptance of Orders. Upon receipt of an Order, SeaSpine shall review the Order and shall have ten (10) business days from the Order’s receipt to notify Integra of SeaSpine’s acceptance or rejection of the Order. SeaSpine shall accept any Order for a Binding Forecast that complies with the terms of this Agreement. If any other Order is rejected by SeaSpine, SeaSpine shall use reasonable efforts to provide Integra with a reason for the rejection. If SeaSpine fails to reject an Order in such ten (10) business day period, such Order shall be deemed accepted. SeaSpine shall use commercially reasonable efforts to fill accepted Orders

 

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with Product not later than ninety (90) days after the receipt of the Order or on the delivery date requested, whichever date is later. However, reasonable delay in shipment (where any delay of ninety (90) days or less after scheduled shipment shall be presumed reasonable) shall not be considered a breach of this Agreement and shall not relieve Integra of its obligations to accept such shipment.

5.5 Whole Lots. Due to variances in manufacturer yields of the Products (“Product Lots”), in filling any Order for Integra, SeaSpine has the right to deliver to Integra a quantity of the Products that is larger or smaller than the Order. Within three (3) business days of notification by SeaSpine of the quantity of the Products constituting a Product Lot, Integra agrees to issue to SeaSpine a revised purchase order matching the quantity of the Products in such Product Lot. Regardless of the size of an Order, all Products representing a single Product Lot shall be shipped together. Integra will pay for the quantity of the Products actually delivered. The quantity of the Products actually delivered will not affect the firm Order for the Products if the difference in quantity is not more than ten percent (10%). In the event that shipping the Product of a single Product Lot results in a shipment in excess of ten percent (10%) of the Products in the Order, such excess shall be applied to the Order for the subsequent month.

 

  5.6 Supplemental Orders; Changes to Orders.

 

  a. If Integra desires to order additional units of Product in excess of Orders for the Binding Forecast, including if any such proposed order would result in Orders exceeding the applicable Maximum Quarterly Order, Integra shall notify SeaSpine in writing, stating the units of the Products requested and the date by which delivery of such Products is desired. SeaSpine shall have no obligation to accept any such order, but if SeaSpine accepts any such request (or any portion thereof) in writing, Integra shall be obligated to purchase all such quantities as a firm Order hereunder.

 

  b. Except as otherwise expressly permitted hereunder, any Order(s) deriving herefrom or related hereto may be changed, cancelled or amended only by written agreement signed by both Integra and SeaSpine, setting forth the particular changes to be made and the effect, if any, of such changes on the Prices and time of delivery. Integra may not cancel any Orders unless such cancellation is expressly agreed to in writing by SeaSpine. In the event of a cancellation that is expressly agreed to in writing by SeaSpine, SeaSpine will advise Integra of the total charge for such cancellation, and Integra agrees to pay such charges. Certification of such costs by SeaSpine’s independent public accountants shall be conclusive on the Parties.

5.7 Acceptance and Agreement. ALL SALES AND ORDER(S) ARE SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT. NO VARIATION OF THESE TERMS AND CONDITIONS WILL BE BINDING UPON SEASPINE UNLESS AGREED TO IN WRITING AND SIGNED BY AN OFFICER OR OTHER AUTHORIZED REPRESENTATIVE OF SEASPINE. ANY ADDITIONAL OR DIFFERENT TERMS, ADDITIONS, DELETIONS OR EXCEPTIONS PROPOSED BY INTEGRA (WHETHER IN A

 

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PURCHASE ORDER, OTHER PRINTED FORM OR ELSEWHERE) ARE OBJECTED TO AND HEREBY REJECTED, UNLESS SUCH TERMS, ADDITIONS, OR EXCEPTIONS ARE APPROVED SPECIFICALLY BY SEASPINE IN WRITING AND SIGNED BY AN OFFICER OR OTHER AUTHORIZED REPRESENTATIVE OF SEASPINE. No course of prior dealings or usage of trade shall be relevant to supplement or explain any term used herein. Any clerical errors by SeaSpine are subject to correction.

5.8 Returns. The Products may not be returned unless resulting from a Product recall, field correction or market withdrawal for which SeaSpine is responsible as provided in Section 8.6 or as permitted pursuant to Section 5.9(c).

5.9 Delivery; Certificate; Inspection and Acceptance.

 

  a. Terms for the shipments of the Products will be FCA (Incoterms, 2010). Integra shall pay shipping and freight costs, which will be added to the invoice for each Order, and Integra shall have the right to choose the carrier so long as such choice complies with the shipping validation for the Product. Integra may designate the destination of the Products to be delivered hereunder so long as such destination complies with applicable Law. Delivery of the Products to the carrier at SeaSpine’s shipping point shall constitute delivery to Integra; Integra shall bear all risk of loss or damage in transit. However, SeaSpine reserves the right, in its discretion, to change the exact method of shipment and to make delivery in installments, all such installments to be separately invoiced and paid for when due as provided in Section 6.1, without regard to subsequent deliveries. Delay in delivery of any installment within the parameters set forth in this Article 5 shall not relieve Integra’s obligations to accept remaining deliveries.

 

  b. Each shipment of Product must be accompanied by final Product testing and inspection results and a certificate, substantially in the form attached hereto as Exhibit E, signed by SeaSpine stating that the Products comply with the Specifications; the testing, inspections results and certificate shall be set forth by Product serial number and must be signed by SeaSpine.

 

  c.

Integra, upon receipt of the Products from SeaSpine, shall have thirty (30) days to inspect the Products with respect to whether or not they comply with the Specifications. If the Products do not comply with the Specifications, Integra shall notify SeaSpine and provide SeaSpine with samples of nonconforming Products (to the extent Integra deems possible) along with such notice and provide SeaSpine with the results of its inspection. If SeaSpine’s inspection confirms the Products do not comply with the Specifications, then SeaSpine, at its expense and at Integra’s option, within thirty (30) days following the completion of SeaSpine’s investigation, will either bring the Products in question into conformance with the requirements of Section 9.1(a)(ii) or replace such nonconforming Products, in either case, at no additional charge to Integra. If after inspection, SeaSpine disagrees with Integra’s determination, the Parties shall submit samples of the Product in question to a mutually acceptable independent

 

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  testing laboratory for evaluation to determine whether the Product are in conformance with the requirements of Section 9.1(a)(ii). The results of such evaluation shall be deemed conclusive of the matter, and the non-prevailing party shall bear the costs of the evaluation.

6. PAYMENT AND TAXES:

 

  6.1 Payment.

 

  a. Payment terms of an Order are net thirty (30) calendar days from the date of invoice, unless otherwise stated. Integra specifically waives any right for any reason to withhold or set-off payments it owes to SeaSpine hereunder, whether available at law, in equity or otherwise under the laws, rules, regulations, ordinances, decrees or orders of any governmental authority.

 

  b. Integra agrees to pay all costs, including, but not limited to, reasonable attorneys’ fees, accounting fees and other expenses of collection resulting from any default by Integra of any of the terms hereof.

6.2 Taxes and Other Charges. Any medical device tax, use tax, sales tax, excise tax, duty, custom, inspection or testing fee, or any other tax, fee or charge of any nature whatsoever imposed by any governmental authority, on or measured by the transaction between SeaSpine and Integra except for taxes of SeaSpine’s income, shall be paid by Integra in addition to the Prices quoted or invoiced. In the event SeaSpine is required to pay any such tax, fee or charge, Integra shall reimburse SeaSpine therefor; or Integra shall provide SeaSpine at the time the applicable Order is submitted an exemption certificate or other document acceptable to the authority imposing the tax, fee or charge.

7. INTEGRA GENERAL OBLIGATIONS:

7.1 Compliance. Integra shall not (i) alter the Products, (ii) pay, offer or promise to pay, or authorize payment of any money, or give, offer or promise to give, or authorize the giving of anything of value to any healthcare professional in violation of any anti-kickback statutes, the AdvaMed Code, or other applicable Laws or policies described herein, or (iii) incur any obligation in the name of or on behalf of SeaSpine.

7.2 Integra’s Use of Products. Integra warrants to SeaSpine that (i) following delivery to Integra, the Products will be marketed, promoted, stored and distributed in compliance with applicable FDA regulations, applicable ISO and Current Good Manufacturing Practices and (ii) all facilities used for storage and distribution of the Products after delivery to Integra hereunder are FDA compliant.

 

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8. INTEGRA REGULATORY AND QUALITY OBLIGATIONS:

8.1 Compliance with Laws. Integra agrees to comply with: (i) the AdvaMed Code, as modified from time to time and which is incorporated into Integra’s compliance policies, (ii) its responsibilities under the Safe Harbor Regulations relating to program “fraud and abuse” promulgated under the Social Security Act and Medicare and Medicaid Patient and Program Protection Act, (iii) its compliance policies which are consistent with the AdvaMed Code, (iv) the U.S. Foreign Corrupt Practices Act and any other applicable anti-bribery laws, (v) all applicable laws, rules, ordinances, regulations, decrees and orders of any governmental authority, including but not limited to, those related to the advertising, promotion, sale and use of the Products, privacy, health, safety and environmental matters and record-keeping and reporting in compliance with all governmental authority regulations (collectively, the “Laws”) for the Products (which related records and reporting information shall be supplied to SeaSpine promptly upon request), and (vi) all internal policies and procedures of Integra, including without limitation, discount policies. Integra further agrees to notify SeaSpine immediately upon receiving any notice with respect to a violation or alleged violation of any of the above mentioned Laws and any other laws or regulations, to the extent relating to the Products.

8.2 Recordkeeping. Each Party agrees to comply with the document retention policy attached hereto as Exhibit F with respect to its activities hereunder. Integra shall make such records available to SeaSpine immediately upon request for regulatory purposes.

8.3 Review. SeaSpine shall have the right to send its representatives to review, during regular business hours and upon reasonable prior written notice, Integra’s marketing and regulatory records and files and all other records and files related to the Products and related to Integra’s compliance with this Agreement. Integra shall reasonably cooperate with SeaSpine in such review and any reasonable requests of SeaSpine that result from such review by SeaSpine.

 

  8.4 Complaints.

 

  a. Integra shall promptly (and in any event within one business day) report to SeaSpine (i) any accident, or incident involving the Product (of which it becomes aware) which results in personal injury or damage to property; (ii) any complaint involving the Product (of which it becomes aware), whether oral or written; (iii) any defect in or condition of the Product (of which it becomes aware); or (iv) any other fact or circumstance (of which it becomes aware) that may result in a report to the FDA or other applicable regulatory authority or may result in a violation or alleged violation of any applicable Law relating to the Product.

 

  b. SeaSpine shall promptly (and in any event within one business day) report to Integra (i) any complaint involving the Product, whether oral or written and (ii) any defect in or condition of the Product, in each case of which SeaSpine becomes aware).

 

  c. The Parties shall cooperate in the investigation and determination of the cause of any of the foregoing accidents, incidents or complaints and shall make available all statements, reports and tests made to investigate such accident or incident. Furnishing such information and any investigation of such information or incident report shall not in any way constitute any assumption of any liability for such accident or incident by either Party.

 

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  d. (i) SeaSpine will be responsible for Medical Device Reporting per Title 21 CFR Part 803 or similar vigilance reporting requirements in the U.S., the European Union and any other jurisdiction as related to the DBM Products and as required by Laws where the DBM Products are marketed.

 

     (ii) Integra will be responsible for Medical Device Reporting per Title 21 CFR Part 803 or similar vigilance reporting requirements in the U.S. or other applicable jurisdictions for the OS Products, provided that upon conclusion of the applicable Phase I Period, SeaSpine shall become responsible for such reporting responsibilities.

8.5 Governmental Authority. Each Party agrees to notify the other Party within forty-eight (48) hours of any audit or inspection by, or contact with, the FDA or other regulatory authority that involves a Product. Each Party agrees to provide the other Party with a copy of the portion of the audit or inspection report or contact document that relates to the Product and any response thereto provided by such Party.

8.6 Recall, etc. Each Party shall be entitled to execute a recall, field correction or market withdrawal of the Products, and either Party shall be entitled to execute a recall, field correction or market withdrawal of the Product. The Parties agree to cooperate with and reasonably assist each other in the event of a recall, field notification or market withdrawal of the Products. Integra agrees to pay for any recall, field notification and/or market withdrawal related to the Products, unless directly resulting from a breach of the warranty set forth in Section 9.1(a)(ii), in which case SeaSpine agrees to pay all direct, documented, out-of-pocket costs of such recall, field notification or market withdrawal. If either Party decides to execute a recall, field notification or market withdrawal of a Product, it shall promptly notify the other Party of such action.

8.7 No Debarment. SeaSpine certifies that neither it nor any of its employees has been debarred under Section 306(a) or Section 306(b) of the Act and that no debarred person will in the future be employed to manufacture the Products. SeaSpine also certifies that no person working in the manufacture of the Products has a conviction that could lead to debarment under Section 306(a) or Section 306(b) of the Act. Furthermore, SeaSpine agrees to notify Integra immediately of any action toward conviction or debarment under Section 306(a) or Section 306(b) of the Act of any person working in the manufacture of the Products.

8.8 Quality Agreement. Each Party (or an affiliate designee thereof) has entered into the Quality Agreement attached as Exhibit G as of the Effective Date.

8.9 Compliance with Laws. SeaSpine will manufacture the Products in compliance with Laws applicable to the processing, storage, packaging, labeling and shipment of the Products, as modified from time to time.

8.10 Quality Audits. SeaSpine shall allow Integra to perform quality audits at its manufacturing facility for the Products during regular business hours and upon reasonable prior written notice if Integra has reasonable cause to believe there is a quality issue affecting the

 

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Products, or as required by applicable law. Integra shall provide SeaSpine with a written report of all nonconformances to the manufacturing procedures, storage and shipping procedures and test/inspection procedures within thirty (30) days of identification, which non-conformances are identified by Integra during quality audits.

 

  8.11 Additional Regulatory Matters; Distribution Rights.

 

  a. i. As of the Effective Date, Integra (or one of its affiliates) owns the 510(k) clearances for the OS Products (the “OS Product Registrations”). Integra hereby grants authority to SeaSpine to manufacture the OS Products under such OS Product Registrations, until, with respect to each such OS Product Registration, such time as SeaSpine has obtained a “duplicate” OS Product Registration in the applicable jurisdiction. The terms and conditions set forth on Exhibit H shall apply with respect to SeaSpine obtaining such “duplicate” OS Product Registrations. The period between the Effective Date and the date SeaSpine obtains an OS Product Registration in a jurisdiction is referred to herein as the “Phase I Period” for such jurisdiction.

 

     ii. SeaSpine owns the 510(k) clearances for the DBM Products (the “DBM Product Registrations”).

 

  b. Integra shall have sole responsibility for obtaining all required consents, licenses, authorizations and approvals for the use and sale of the Product worldwide, and such consents, licenses, authorizations and approvals shall be held in the name of Integra or its designee, except as provided in Section 8.11(d) or otherwise in this Agreement or the Mozaik Supply Agreement, of even date herewith, between the Parties. Without limiting Section 1.2, the Products shall be labeled as determined by Integra so long as such labeling complies with applicable Law.

 

  c. SeaSpine shall reasonably assist Integra in accordance with Section 8.11(b) by providing information related to the Products when necessary to obtain any consents, licenses, authorizations or approvals, provided that Integra shall reimburse SeaSpine for its costs and expenses associated with SeaSpine’s assistance in providing information related to the Products in obtaining or maintaining consents, licenses, authorizations or approvals for the Product at a per hour charge of $200 (for clarity, such reimbursement obligations will not apply to the costs and expenses associated with activities undertaken by SeaSpine to comply with its obligations under Section 8.11(a)). SeaSpine will provide the FDA or other applicable regulatory authority with access to SeaSpine’s files related to the Products, but shall not be obligated to permit Integra or any foreign governmental regulatory agency to review certain confidential files, including without limitation, the design history files or processing information for the Products.

 

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  d. SeaSpine hereby grants authority to Integra and its affiliates to market, distribute, and sell the DBM Products purchased from SeaSpine hereunder under the DBM Product Registrations.

9. SEASPINE LIMITED WARRANTY; CERTAIN OBLIGATIONS:

 

  9.1 Limited Warranty

 

  a. SeaSpine warrants to Integra that (i) it will convey good title to all Products delivered to Integra hereunder, free from any security interest, liens or other encumbrances, and (ii) the Products manufactured shall have been manufactured in compliance with the then-current Specifications and will be free from defects in materials (but excluding any Microfib used in the OS Products purchased under the Microfib Supply Agreement) or workmanship during the Shelf-life for such Product. “Shelf-life” means with respect to a Product, the shelf-life of such Product as set forth in the applicable Specifications. As of the Effective Date, the Shelf-life for each Product is as set forth in Exhibit I. Except as set forth in Section 8.6, Integra’s sole remedy, and SeaSpine’s sole obligation, in the event of a breach by SeaSpine of the warranty set forth in clause (ii) above is as set forth in Section 5.9(c).

 

  b. The limited warranty set forth in Section 9.1(a) is the sole warranty SeaSpine makes regarding the Products. THIS WARRANTY IS EXCLUSIVE AND SEASPINE HEREBY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, WRITTEN OR ORAL, INCLUDING WITHOUT LIMITATION, (I) ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR APPLICATION, OR WARRANTY OF QUALITY, OTHER THAN THOSE EXPRESSLY SET FORTH IN THE ATTACHED WARRANTY, OR (II) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING, OR USAGE OF TRADE OR (III) WARRANTIES OF NON-INFRINGEMENT. INTEGRA UNDERSTANDS THAT NO EMPLOYEE, OFFICER, AGENT OR REPRESENTATIVE OF SEASPINE IS AUTHORIZED IN ANY WAY TO MAKE ANY STATEMENT TO THE CONTRARY WHICH SHALL BE BINDING ON SEASPINE OR TO ASSUME FOR SEASPINE ANY OTHER LIABILITY IN CONNECTION WITH THE PRODUCTS.

 

  c.

The warranty set forth in Section 9.1(a)(ii) shall not apply to, and SeaSpine shall not be responsible for, any loss or damages arising in connection with the purchase or use of any Product (i) which has been modified by anyone other than an authorized service representative of SeaSpine, or (ii) which has been altered in any way so as, in SeaSpine’s judgment, to affect its stability or reliability, or which has been subject to misuse, negligence or accident, in each case after delivery to Integra hereunder or (iii) which has been subject to improper or negligent installation, storage or handling, in each case after delivery to Integra hereunder or (iv) which has been subject to improper cleaning, sterilization or

 

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  maintenance, in each case after delivery to Integra hereunder or (v) which has been subject to accidental damage arising from acts of God, electrical power damage, equipment malfunction, unusual stress, unreasonable operating procedures or abnormal or extreme operating conditions, in each case after delivery to Integra hereunder or (vi) which has been used otherwise than in accordance with the instructions furnished by SeaSpine.

10. CONFIDENTIALITY AND OWNERSHIP:

10.1 Confidential Information. Each Party agrees that it shall not during the Term and anytime thereafter, directly or indirectly, without the prior written consent of the other Party, disclose to any third party, pursuant to a press release or otherwise, any Confidential Information of the other Party. As used herein, “Confidential Information” of a Party means information possessed by such Party, or its affiliates, that relates to the other Party’s business or, or in the case of Integra as the receiving Party, the Products (which may include information of third parties as to which either Integra or SeaSpine and their respective affiliates has a confidential arrangement or understanding), whether that information is written or oral, however acquired. Notwithstanding the foregoing, Confidential Information does not include any such information that as of the date of disclosure to, or acquisition by, the receiving Party was (i) obtained by the receiving Party from a third party with no obligation of confidentiality to the disclosing Party or its affiliates, (ii) disclosed in published literature, (iii) generally available to the industry or (iv) known to the receiving Party without any obligation to keep it confidential or any restriction on its use and such knowledge can be substantiated by reasonable documentation. Confidential Information shall additionally include the existence and terms of this Agreement and the business relationship established hereunder, together with any documents or data prepared by any of the Parties that reflect such information. Each Party further agrees that it shall not, directly or indirectly, without the prior written consent of the other Party, use any of the Confidential Information of the other Party for any reason or purpose, including in the case of Integra as the receiving Party, to reverse engineer any Product, other than as contemplated by this Agreement.

10.2 Degree of Care. Notwithstanding Section 10.1, each Party may disclose Confidential Information received pursuant to this Agreement to its directors, officers, employees, consultants, attorneys and accountants and other agents and representatives, but not to any other third party, provided, however, that all such access is limited to those that have a need-to-know in connection with the business relationship established hereunder, and further provided that such persons and entities are obligated to hold the Confidential Information in confidence in accordance with restrictions and procedures no less stringent than provided for herein. Each Party shall be responsible for any breach of this Section 10 by its directors, officers, employees, consultants, attorneys and accountants and other agents and representatives. Each Party covenants that it shall exercise the same degree of care with respect to the other Party’s Confidential Information as it would its own Confidential Information, and, in any event, shall exercise no less than a reasonable degree of care. Notwithstanding the foregoing, a Party may disclose the Confidential Information belonging to the other Party to the extent such disclosure is reasonably necessary in the context of preparation and filing of regulatory documents (including, without limitation, governmental approvals) to regulatory authorities in

 

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connection with the Products pursuant to this Agreement; provided that the disclosing Party notify the other Party in writing of such disclosure and the disclosing Party requests confidential treatment of such disclosure to the extent confidential treatment is reasonably available to such Party.

10.3 Remedies. The Parties understand and agree that this Section 10 is reasonable and necessary to protect the Parties respective business interests. The Parties further agree that the other may suffer irreparable harm from a breach of this Section 10. Thus, in addition to any other rights or remedies, all of which shall be deemed cumulative, a Party shall be entitled to pursue injunctive relief to enforce the terms of this Section 10 without the necessity of proof of damages or the posting of a bond or other security.

10.4 Disclosure Required by Law. Notwithstanding Section 10.1, a receiving Party may disclose Confidential Information if such information is required by Law to be disclosed in response to a valid order of a court of competent jurisdiction or authorized governmental authority, provided that the receiving Party must give the other Party prompt written notice and seek to obtain or allow for and reasonably cooperate with the other Party to seek to obtain a protective order prior to such disclosure. In any event, a receiving Party shall disclose only that portion of the Confidential Information which is legally required and will use all commercially reasonable efforts to assure that confidential treatment is accorded any Confidential Information.

10.5 Return of Copies. Upon termination of this Agreement, each Party shall, upon the written request of the other Party, return all copies, whether in paper, electronic, or other format, of all Confidential Information received by it from the other Party which contain the other Party’s Confidential Information, except that one copy thereof may be retained solely for archival or regulatory compliance purposes.

 

  10.6 Intellectual Property.

 

  a. SeaSpine, its licensors and/or their respective affiliates are and shall remain the exclusive owner(s) of (i) all intellectual property rights related to the DBM Products and (ii) all intellectual property rights owned or licensed by SeaSpine or any subsidiary thereof, as of the Effective Date, after giving effect to the spin-off of SeaSpine by Integra, in each case related to the Specified Products, excluding any trademark rights and product registrations (including 510(k) clearances) relating thereto owned by Integra or its affiliates as of the Effective Date. “Specified Products” means the ceramic collagen matrix products marketed under the Mozaik brand, including Mozaik Strip, Mozaik Putty, and Mozaik Moldable Morsels, and all equivalent products (x) marketed under spine brands or (y) provided to third parties on a private label basis, in each case of the Effective Date, and any next generation successor version of any of the foregoing products.

 

  b.

Integra agrees not to, and not to authorize a third party to, infringe, misappropriate or violate any intellectual property rights of SeaSpine, its licensors, or their respective affiliates in the Products. For purposes of this Agreement, “intellectual property rights” includes, without limitation, (i) all registered or unregistered

 

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  trademarks, patents, designs or inventions; (ii) all rights in products, including product registrations; (iii) copyrights, moral rights, know-how and Confidential Information; and (iv) any similar rights worldwide, or the right to apply for any such rights.

 

  c. Integra hereby grants to SeaSpine a limited, non-exclusive, royalty-free, non-assignable, non-transferrable license to Integra names, trademarks, and logos designated by Integra (collectively, the “Integra Marks”) in order for SeaSpine to procure and affix Integra-specific labels and markings in connection with SeaSpine’s supply obligations under this Agreement. Upon termination of this Agreement, the foregoing limited license shall automatically terminate.

 

11. GENERAL:

11.1 Notices. All notices, approvals, and other communications required or permitted herein shall be in writing and shall be delivered personally (which shall include delivery by courier or overnight delivery service) or sent by certified or registered mail, postage prepaid, return receipt requested.

 

If to Integra: Integra LifeSciences Corporation
ATTN: David Hoffman
311 Enterprise Drive, Plainsboro, NJ 08536
With required copy to: Integra LifeSciences Corporation
ATTN: General Counsel
311 Enterprise Drive, Plainsboro, NJ 08536
If to SeaSpine: SeaSpine Orthopedics Corporation
ATTN: Brian Baker
2 Goodyear, Suite A, Irvine, CA 92618
With required copy to: SeaSpine Orthopedics Corporation
ATTN: Colin Smith
2384 La Mirada Drive, Vista, CA 92081
With required copy to: SeaSpine Orthopedics Corporation
ATTN: General Counsel
2384 La Mirada Drive, Vista, CA 92081

Either Party may change its address for notice purposes by providing written notice of the change of address to the other Party.

11.2 Insurance. Each Party will comply with the insurance obligations for such Party set forth in Exhibit J.

 

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11.3 Limitation of Liability. SEASPINE AND ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR AFFILIATES SHALL NOT IN ANY EVENT BE LIABLE FOR INCIDENTAL, EXEMPLARY, INDIRECT, CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES, OF ANY KIND RESULTING FROM ANY USE OR FAILURE OR ACQUISITION OF THE PRODUCTS, WHETHER BASED UPON A CLAIM OR ACTION OF CONTRACT, WARRANTY, NEGLIGENCE, STRICT LIABILITY OR OTHER TORT, OR OTHERWISE, ARISING OUT OF THIS AGREEMENT (EVEN IF SEASPINE HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES) INCLUDING WITHOUT LIMITATION, LIABILITY FOR LOSS OF USE, LOSS OF WORK IN PROGRESS, DOWN TIME, LOSS OF REVENUE OR PROFITS, FAILURE TO REALIZE SAVINGS, LOSS OF PRODUCTS OF INTEGRA OR OTHER USE OR ANY LIABILITY OF INTEGRA TO A THIRD PARTY ON ACCOUNT OF SUCH LOSS, OR FOR ANY LABOR OR ANY OTHER EXPENSE, DAMAGE OR LOSS OCCASIONED BY SUCH PRODUCT. EXCEPT IN THE CASE OF A CLAIM FOR THIRD PARTY INDEMNIFICATION UNDER SECTION 11.4(B) OF THIS AGREEMENT, SEASPINE’S LIABILITY IN THE AGGREGATE INCLUDING THE LIABILITY OF SEASPINE’S DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND AFFILIATES, WITH RESPECT TO PERFORMANCE OR NON-PERFORMANCE OF THIS AGREEMENT AND ANY SEASPINE PRODUCTS OR OTHER ITEMS FURNISHED UNDER THIS AGREEMENT (WHETHER IN TORT, CONTRACT OR OTHERWISE, AND NOTWITHSTANDING ANY FAULT, NEGLIGENCE WHETHER ACTIVE, PASSIVE OR IMPUTED OR STRICT LIABILITY OF INTEGRA) SHALL IN NO EVENT EXCEED ONE MILLION DOLLARS ($1,000,000).

 

  11.4 Indemnity.

 

  a. Integra shall indemnify and defend SeaSpine and its affiliates and their respective directors, officers, members, employees, counsel, agents and representatives and the successors and permitted assigns of any of the foregoing (the “SeaSpine Indemnitees”) and hold the SeaSpine Indemnitees harmless from and against any and all claims, demands, actions, liabilities, damages, losses , judgments, costs or expenses (including interest and penalties and reasonable attorneys’ fees and professional fees and expenses of litigation) (collectively, “Claims”) of third parties to the extent arising out of, in connection with, or resulting from (i) the marketing, sale, distribution, use or promotion of the Products after title has passed to Integra hereunder, except to the extent such claims result from a breach of the warranty set forth in Section 9.1(a)(ii); (ii) the bodily injury, property damage or any other damages or injury caused in whole or in part, by any use of the Product, except to the extent such claims result from a breach of the warranty set forth in Section 9.1(a)(ii); (iii) Integra’s breach of any representation, warranty or covenant contained in this Agreement; or (iv) the negligence or willful misconduct of Integra, in each case except to the extent SeaSpine is obligated to indemnify Integra with respect to such claim under the Microfib Supply Agreement.

 

  b.

SeaSpine shall indemnify, defend and hold harmless Integra and its affiliates and their respective directors, officers, members, employees, counsel, agents and

 

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  representatives and the successors and permitted assigns of any of the foregoing (the “Integra Indemnitees”) and hold the Integra Indemnitees harmless from and against any and all Claims of third parties to the extent arising out of, in connection with, or resulting from (i) the negligence or willful misconduct of SeaSpine, except to the extent that Integra is obligated to indemnify SeaSpine for any of the foregoing third party Claims as provided in Section 11.4(a) (including those third party Claims caused, in whole or in part, by the negligence or willful misconduct of Integra), (ii) the bodily injury, property damage or any other damages or injury caused in whole or in part, by any use of the Product, to the extent resulting from a breach of the warranty set forth in Section 9.1(a)(ii); or (iii) any claims relating to the misappropriation or infringement of third party intellectual property rights relating to the Products (other than with respect to any Integra intellectual property rights licensed hereunder), in each case except to the extent Integra is obligated to indemnify SeaSpine with respect to such claim under the Microfib Supply Agreement.

 

  c. In any case in which claims arise out of or are caused by both Integra’s negligence and SeaSpine’s negligence, a comparative negligence standard shall apply with respect to the Parties’ enumerated obligations under this Section 11.4.

 

  d.

A Party that intends to claim indemnification under this Agreement (the “Indemnitee”) for third party Claims shall promptly notify the other Party (the “Indemnitor”) in writing of such Claim in respect of which the Indemnitee or its affiliates, directors, officers, members, employees, counsel, agents or representatives intends to claim such indemnification, and the Indemnitor, at its cost and expense, shall have the right to participate in, and to the extent the Indemnitor so desires, to assume the defense thereof with counsel mutually satisfactory to the Parties; provided, however, that an Indemnitee shall have the right to retain its own counsel, with the fees and expenses to be paid by the Indemnitor, if such Indemnitee’s outside counsel advises that representation of such Indemnitee by the counsel retained by the Indemnitor would be inappropriate due to actual or potential conflicts of interests between such Indemnitee and the other Party represented by such counsel in such proceeding. The Indemnitor shall control the defense and/or settlement of any such Claims, and this indemnity agreement shall not apply to amounts paid in connection with any Claims if such payments are made by the Indemnitee without the consent of the Indemnitor; provided, however, that the Indemnitor shall not enter into any settlement that admits fault, wrongdoing or damages without the Indemnitee’s written consent, such consent not to be unreasonably withheld, delayed or conditioned. For clarity, any Claims that relate solely to the payment of monetary damages may be settled or otherwise disposed of on such terms as the Indemnitor, in its sole discretion, shall deem appropriate. The failure to deliver written notice to the Indemnitor within a reasonable time after the commencement of any Claim, if and to the extent prejudicial to its ability to defend such Claim, shall to such extent relieve such Indemnitor of any liability to the Indemnitee under this

 

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  Section 11.4. At the Indemnitor’s request and expense, the Indemnitee and its employees and agents shall reasonably cooperate with the Indemnitor and its legal representatives in the investigation of any Claims covered by this indemnification and provide full information with respect thereto.

12. MISCELLANEOUS:

12.1 Independent Contractors. This Agreement shall not constitute, and is not intended to constitute, either Party as an employee, agent, partner or legal representative of the other Party for any purpose, or give either Party any right to supervise or direct the functions of the other Party. Neither Party shall have authority to act for or obligate the other Party in any way or to extend any representation or warranty on behalf of the other Party. Each Party agrees to perform under this Agreement solely as an independent contractor and neither Party shall have any right, power, or authority, nor shall they represent themselves as having any authority to assume, create, or incur any expense, liability or obligation, express or implied, on behalf of the other Party, or otherwise act as an agent for the other Party for any purpose. Each Party agrees not to permit its employees or agents to do anything that might be construed or interpreted as acts of the other Party.

12.2 Integration. This Agreement, including its Exhibits, sets forth all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties and supersedes all prior discussions, negotiations and agreements between the Parties concerning the subject matter hereof. Integra and SeaSpine agree that nothing in any Integra purchase order or other document submitted pursuant to this Agreement shall in any way modify or add to the terms and conditions set forth in this Agreement (except for identification of the Products, quantity and delivery date consistent with this Agreement). Except as expressly set forth in this Agreement, no subsequent modification or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by the respective authorized officers of the Parties.

12.3 Waiver. SeaSpine’s failure to strictly enforce any term or condition stated herein or exercise any right arising hereunder shall not constitute a waiver of SeaSpine’s right to enforce such terms or conditions or exercise such right thereafter. All of I SeaSpine’s rights and remedies against Integra with regard to this Agreement are cumulative and are in addition to any other rights and remedies Integra may have at law or in equity. No waiver by either Party of any condition or term in any one or more instances shall be construed as a continuing waiver of such condition or term or of another condition or term.

12.4 Assignment. This Agreement shall be binding upon and shall inure to the benefit of the Parties, and their respective successors and permitted assigns. Neither Party may transfer or assign this Agreement, in whole or in part, without the prior written consent of the other Party, except that either Party may transfer or assign this Agreement, in whole or in part, without the prior written consent of the other Party, to any affiliate and to any successor to substantially all of its business or assets to which this Agreement relates, whether by merger, sale of assets, sale of stock, reorganization or otherwise, without the consent of the other Party.

 

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12.5 Severability. If any provisions of this Agreement should be or become fully or partly invalid or unenforceable for any reason whatsoever or violate any applicable Law, this Agreement is to be considered divisible as to such provision and the Parties shall negotiate in good faith a valid or enforceable substitute provision that most nearly reflects the original intent of the Parties and all other provisions hereof shall remain in full force and effect. Moreover, if one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to scope, activity or subject so as to be unenforceable at law, such provision or provisions shall be construed by the appropriate judicial body by limiting and reducing it or them, so as to be enforceable to the maximum extent compatible with the applicable Law as it shall then appear.

12.6 Force Majeure. Except with respect to the payment of money, neither Party shall be liable for any failure or delay in performance under this Agreement if either Party is prevented from performing any of its obligations hereunder due to any cause which is beyond the non-performing Party’s reasonable control, including, without limitation, fire, explosion, earthquake, flood, acts of war, terrorism, or other acts of God; acts, regulations or laws or application thereof;, war or civil commotion; strike, lock-out or labor disturbances; or failure of public utilities or common carrier, embargo or other governmental action or request, equipment failure, shortage of raw materials or inability to obtain labor, fuel, materials supplies or power at reasonable prices (a “Force Majeure Event”), such non-performing Party shall promptly give notice thereof to the other Party and shall use reasonable commercial efforts to cure or correct any such Force Majeure Event and to resume performance of its affected obligations as soon as possible.

12.7 Choice of Law; Venue; Waiver of Jury Trial. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New Jersey without reference to its conflict of laws provisions. In the event of a dispute arising from this Agreement the Parties agree that the state and federal courts of the State of New Jersey shall have exclusive jurisdiction over any litigation or proceeding. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

12.8 Survival. Any provision of this Agreement that contemplates performance or observance subsequent to any termination or expiration of this Agreement (in whole or in part) shall survive any termination or expiration of this Agreement (in whole or in part, as applicable) and continue in full force and effect. Without limiting the foregoing, Articles 7, 8, 10, 11 and 12 and Sections 4.3 and 4.4 of this Agreement shall survive the expiration or termination of this Agreement.

12.9 Section Headings. Section headings herein are for convenience only, are not part of the terms and conditions and shall not affect their interpretation.

12.10 Ambiguities. Ambiguities, if any, in this Agreement shall not be construed against any Party irrespective of which Party may be deemed to have authored the ambiguous provision.

 

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12.11 Counterparts. This Agreement may be executed in any number of counterparts, or facsimile or .pdf scanned versions, each of which shall be considered to be an original instrument and to be effective as of the Effective Date.

(Signature Page Follows)

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement effective as of the Effective Date.

INTEGRA LIFESCIENCES CORPORATION

By:  
 Name:  
 Title:  

SEASPINE ORTHOPEDICS CORPORATION

By:  
 Name:  
 Title:  
EX-10.7

EXHIBIT 10.7

INDEMNIFICATION AGREEMENT

This Indemnification Agreement (“Agreement”) is made as of                     ,              by and between SeaSpine Holdings Corporation, a Delaware corporation (the “Company”), and                      (“Indemnitee”). This Agreement supersedes and replaces any and all previous agreements between the Company and Indemnitee covering the subject matter of this Agreement.

RECITALS

WHEREAS, directors, officers, and other persons in service to publicly-held corporations and other business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the corporation or business enterprise itself;

WHEREAS, highly competent persons have become more reluctant to serve publicly-held corporations as directors or in other capacities unless they are provided with adequate protection through insurance and indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that, in order to attract and retain qualified individuals to serve the Company, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect such persons; however, the Board recognizes that although the furnishing of such insurance has been a customary and widespread practice among U.S. corporations and other business enterprises, given current market conditions and trends, such insurance may be available in the future only at higher premiums and with more exclusions;

WHEREAS, the General Corporation Law of the State of Delaware (the “DGCL”) permits, and the Bylaws of the Company require, indemnification of the officers and directors of the Company; each expressly provides that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the Board, officers and other persons with respect to indemnification;

WHEREAS, in light of uncertainties relating to such insurance and to indemnification and the resulting difficulty of attracting and retaining persons to serve the Company, the Board has determined that the best interests of the Company and its stockholders would be served by assuring such persons that there will be increased certainty of such protection in the future;

WHEREAS, it is reasonable, prudent and necessary for the Company to obligate itself contractually to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified; and

WHEREAS, although this Agreement is a supplement to and in furtherance of the Bylaws of the Company (and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder), Indemnitee does not regard the protection available under the Company’s Bylaws and insurance as adequate in the present circumstances, and may not be willing to serve (or continue to serve) as an officer or director without adequate protection, and the Company desires Indemnitee to serve and continue to serve in such capacity.


NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

Section 1. Services to the Company. Indemnitee agrees to serve, or continue to serve, as a director, officer, employee and Agent (as defined below) of the Company and/or, as applicable, its subsidiaries and any Enterprise (as defined below). Indemnitee may at any time and for any reason resign from any such position (subject to any other contractual obligation or any obligation imposed by operation of law), in which event the Company shall have no obligation under this Agreement to continue Indemnitee in such position. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitee’s employment with the Company (or any of its subsidiaries or any Enterprise), if any, is at will, and Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any such subsidiary or Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director or officer of the Company, by the Company’s Certificate of Incorporation, the Company’s Bylaws and the DGCL. The foregoing notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as a director, officer, employee and Agent of the Company or any of its subsidiaries or other Enterprise as provided in Section 16 hereof.

Section 2. Certain Definitions. As used in this Agreement:

(a) “Agent” shall mean any person who is or was a director, officer or employee of the Company or other person authorized by the Company to act for the Company, to include any person serving in such capacity as a director, officer, employee, fiduciary or other official of another corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other Enterprise (including any subsidiary of the Company) at the request of, for the convenience of, or to represent the interests of the Company.

(b) A “Change in Control” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following events:

i. Acquisition of Stock by Third Party. Any Person (as defined below), other than Richard E. Caruso, Ph.D.,                      or                     , is or becomes the Beneficial Owner (as defined below), directly or indirectly, of securities of the Company representing fifteen percent (15%) or more of the combined voting power of the Company’s then outstanding securities;

ii. Change in Board of Directors. During any period of two (2) consecutive years (not including any period prior to the execution of this Agreement), individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in Sections 2(b)(i), 2(b)(iii) or 2(b)(iv) hereof) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the members of the Board;

iii. Corporate Transactions. The effective date of a merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or

 

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consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 51% of the combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation and with the power to elect at least a majority of the board of directors or other governing body of such surviving entity;

iv. Liquidation. The approval by the stockholders of the Company of a complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets; or

v. Other Events. There occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar item on any similar schedule or form) promulgated under the Exchange Act (as defined below), whether or not the Company is then subject to such reporting requirement.

For purposes of this Section 2(b), the following terms shall have the following meanings:

(A) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

(B) “Person” shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

(C) “Beneficial Owner” shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided, however, that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity.

(c) “Corporate Status” describes the status of a person who is or was a director, officer, employee or Agent of the Company or any other corporation, limited liability company, partnership or joint venture, trust, employee benefit plan or other Enterprise, in which capacity such person is or was serving at the request of, for the convenience of, or to represent the interests of the Company.

(d) “Disinterested Director” shall mean a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

(e) “Enterprise” shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise (including any subsidiary of the Company) of which Indemnitee is or was serving as a director, officer, employee or Agent at the request of, for the convenience of, or to represent the interests of the Company.

(f) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, any federal, state, local or foreign taxes imposed

 

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on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties, and all other disbursements or expenses of the types customarily incurred in connection with or as a result of prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a deponent or witness in, or otherwise participating in, a Proceeding. Expenses also shall include, without limitation: (i) expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 14(d), expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement, by litigation or otherwise. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

(g) “Independent Counsel” shall mean a law firm, or a member of a law firm, that is experienced in matters of corporate law and neither presently is, nor in the past five (5) years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee’s right to indemnification under this Agreement, or of other indemnitees under similar indemnification agreements with the Company), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any law firm or member of a law firm who, under the applicable standards of professional conduct, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to indemnify such counsel fully against any and all expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

(h) The term “Proceeding” shall include any threatened, pending or completed action, suit, arbitration, mediation, alternate dispute resolution process, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of the Company or otherwise, and whether of a civil, criminal, administrative, regulatory, legislative or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is or could be involved as a party, potential party, non-party witness or otherwise by reason of the fact that Indemnitee is or was a director, officer, employee or Agent of the Company and/or any other Enterprise, by reason of any action taken by him or of any action on his part while acting as a director, officer, employee or Agent of the Company and/or such other Enterprise, in each case whether or not serving in such capacity at the time any liability or expense is incurred for which indemnification, reimbursement, or advancement of expenses can be provided under this Agreement. If the Indemnitee believes in good faith that a given situation may lead to or culminate in the institution of a Proceeding, such situation shall be considered a Proceeding under this paragraph.

(i) References to “fines” shall include any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, officer, employee or Agent of the Company that imposes duties on, or involves services by, such director, officer, employee or Agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in manner “not opposed to the best interests of the Company” as referred to in this Agreement.

Section 3. Indemnity in Third-Party Proceedings. The Company shall indemnify Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the right of the

 

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Company to procure a judgment in its favor. Pursuant to this Section 3, Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Company and, in the case of a criminal action or proceeding, had no reasonable cause to believe that his conduct was unlawful. The parties hereto intend that this Agreement shall provide to the fullest extent permitted by law for indemnification in excess of that expressly permitted by statute, including, without limitation, any indemnification provided by the Company’s Certificate of Incorporation, its Bylaws, vote of its stockholders or Disinterested Directors (or any committee thereof), or applicable law.

Section 4. Indemnity in Proceedings by or in the Right of the Company. The Company shall indemnify Indemnitee in accordance with the provisions of this Section 4 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Expenses actually and reasonably incurred by him or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company; provided, however, that no indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification for such Expenses that the Delaware Court of Chancery or such other court deems proper.

Section 5. Indemnification for Expenses of a Party Who is Wholly or Partially Successful. To the fullest extent permitted by applicable law and to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all applicable claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with or related to each successfully resolved claim, issue or matter to the fullest extent permitted by law. For purposes of this Section 5 and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

Section 6. Indemnification For Expenses of a Witness. To the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of his Corporate Status, a witness or otherwise asked to participate in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.

Section 7. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

 

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Section 8. Additional Indemnification.

(a) Notwithstanding any limitation in Sections 3, 4, or 5 hereof, the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee in connection with the Proceeding.

(b) For purposes of Section 8(a), the meaning of the phrase “to the fullest extent permitted by applicable law” shall include, but not be limited to, the following:

i. to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and

ii. to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a Delaware corporation may indemnify its directors, officers, employees, and Agents of the Company or any of its subsidiaries.

Section 9. Exclusions. Notwithstanding any other provision in this Agreement, the Company shall not be obligated to indemnify Indemnitee in connection with any claim against Indemnitee:

(a) to the extent that payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision; or

(b) for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as defined in Section 2(b) hereof) or similar provisions of state statutory law or common law, or (ii) any reimbursement of the Company by Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (as amended, the “Sarbanes-Oxley Act”), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act); or

(c) in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or such part of such Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law; provided, however, that this provision shall not apply to any claims related to the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement by litigation or otherwise, including as provided in Sections 10 and 14(d) hereof.

Section 10. Advances of Expenses. In furtherance and not in limitation of the provisions of Section 6.02 of the Bylaws of the Company, and notwithstanding any other provision of this Agreement to the contrary, the Company shall advance, to the extent not prohibited by law, the Expenses incurred by Indemnitee in connection with any Proceeding, and such advancement shall be made within thirty (30) days after the receipt by the Company of a statement or statements requesting such advances from time to

 

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time, whether prior to or after final disposition of any Proceeding. Advances shall be unsecured and interest free. Advances shall be made without regard to Indemnitee’s ability to repay the Expenses and without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement. Advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. Indemnitee shall qualify for advances upon the execution and delivery to the Company of this Agreement, which shall constitute an undertaking by Indemnitee to repay (without interest) the amounts advanced to the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified by the Company, and no other form of undertaking shall be required from Indemnitee other than the execution of this Agreement. This Section 10 shall not apply to any claim made by Indemnitee for which indemnity is otherwise excluded pursuant to Section 9.

Section 11. Procedure for Notification and Defense of Claim.

(a) Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof or Indemnitee’s becoming aware thereof (the “Indemnification Notice”). The Indemnification Notice shall include a description of the nature of the Proceeding and the facts underlying the Proceeding, in each case to the extent known to Indemnitee. To obtain indemnification under this Agreement, Indemnitee shall also submit to the Company such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding. The omission by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee under this Agreement or otherwise, and any delay in so notifying the Company shall not constitute a waiver by Indemnitee of any rights under this Agreement. The Secretary of the Company shall, promptly upon receipt of the Indemnification Notice, advise the Board in writing that Indemnitee has requested indemnification and/or advancement of Expenses.

(b) The Company will be entitled to participate in the Proceeding at its own expense.

Section 12. Procedure Upon Application for Indemnification.

(a) Upon delivery of the Indemnification Notice by Indemnitee under Section 11(a), a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall be made with respect to such request as follows: (i) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (ii) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (iii) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee or (iv) if so directed by the Board, by the stockholders of the Company; provided, however, that, notwithstanding the foregoing, in all cases, Indemnitee shall have the option, but not the obligation, to require, by delivery of a written request to the Company, that the determination with respect to Indemnitee’s entitlement to indemnification hereunder be made by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee (in which case such request shall be made prior to any determination by the Disinterested Directors (or any committee thereof) or prior to the submission of such matter to a vote by the stockholders of the Company).

(b) If it is determined pursuant to Section 12(a) hereof that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination.

 

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Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance written request any documentation or information that is not privileged or otherwise protected from disclosure and that is reasonably available to Indemnitee and reasonably necessary to such determination. Any Expenses incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

(c) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) hereof, the Independent Counsel shall be selected as provided in this Section 12(c). If a Change in Control shall have occurred or if Indemnitee otherwise elects to require determination with respect to Indemnitee’s entitlement to indemnification hereunder to be made by Independent Counsel, the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board, in which event the following sentence shall apply), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. If a Change in Control shall not have occurred and the determination with respect to Indemnitee’s entitlement to indemnification hereunder is to be made by Independent Counsel pursuant to Section 12(a)(iii), or if Indemnitee shall otherwise request, the Independent Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising him of the identity of the Independent Counsel so selected. In either event, Indemnitee or the Company, as the case may be, may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 2(g) of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after the later of (i) submission by Indemnitee of a written request for indemnification pursuant to Section 11(a) hereof and (ii) the final disposition of the Proceeding, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of any objection made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 12(a) hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 14(a) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

Section 13. Presumptions and Effect of Certain Proceedings.

(a) In making a determination with respect to entitlement to indemnification hereunder, the person, persons or entity making such determination (including, without limitation, any Independent Counsel) shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted an Indemnification Notice in accordance with Section 11(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of

 

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the Company (including by its directors or Independent Counsel) to have made a determination, at any time prior to the commencement of any action pursuant to this Agreement, as to whether indemnification is proper in the circumstances because Indemnitee has or has not met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or Independent Counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

(b) Subject to Section 14(e) (which section allows determination regarding Indemnitee’s entitlement to indemnification under this Agreement to be deferred until following the final disposition of the Proceeding), if the person, persons or entity empowered or selected under Section 12 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the Indemnification Notice from Indemnitee therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such sixty (60)-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; provided, further, that the foregoing provisions of this Section 13(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 12(a) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination the Board has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) of this Agreement.

(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) in and of itself adversely affect the right of Indemnitee to indemnification or create a presumption (i) that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, or (ii) that Indemnitee had reasonable cause to believe that his conduct was unlawful.

(d) For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise, or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with the reasonable care by the Enterprise. The provisions of this Section 13(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

 

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(e) The knowledge and/or actions, or failure to act, of any other director, officer, Agent or employee of the Company or any other Enterprise shall not be imputed to Indemnitee for purposes of determining Indemnitee’s right to indemnification under this Agreement.

Section 14. Remedies of Indemnitee.

(a) Subject to Section 14(e) (which section allows determination regarding Indemnitee’s entitlement to indemnification under this Agreement to be deferred until following the final disposition of the Proceeding), in the event that:

i. a determination is made pursuant to Section 12 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement;

ii. advancement of Expenses is not timely made pursuant to Section 10 of this Agreement;

iii. no determination of entitlement to indemnification shall have been made pursuant to Section 12(a) of this Agreement within ninety (90) days after receipt by the Company of the Indemnification Notice, as provided in Section 13(b);

iv. payment of indemnification is not made pursuant to Section 5, 6 or 7, or the last sentence of Section 12(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor;

v. payment of indemnification pursuant to Section 3, 4 or 8 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification; or

vi. the Company or any other person or Enterprise takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to deny, or to recover from, Indemnitee the benefits provided or intended to be provided to Indemnitee hereunder,

then, in any such event, Indemnitee shall be entitled to an adjudication by a court of his entitlement to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 14(a); provided, however, that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to enforce his rights under Section 5 of this Agreement. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

(b) In the event that a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted in all respects as a de novo trial or arbitration on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 14 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.

 

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(c) If a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

(d) The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. It is the intent of the Company that, to the fullest extent permitted by law, Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to Indemnitee hereunder. The Company shall, to the fullest extent permitted by law, indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company, if Indemnitee is wholly successful on the underlying claims; if Indemnitee is not wholly successful on the underlying claims, then such indemnification and advancement shall be only to the extent Indemnitee is successful on such underlying claims or otherwise as permitted by law, whichever is greater.

(e) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.

Section 15. Non-exclusivity; Survival of Rights; Insurance; Subrogation.

(a) The rights of indemnification and to advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Company’s Certificate of Incorporation, the Company’s Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Company’s Bylaws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by virtue of this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

(b) To the extent that the Company maintains any insurance policy providing liability insurance for directors, officers, employees, or Agents of the Company or any other Enterprise, Indemnitee shall be covered by such policy in accordance with its terms to the maximum extent of the

 

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coverage available for any such director, officer, employee or Agent under such policy. If, at the time of the receipt of an Indemnification Notice pursuant to the terms hereof, the Company has director and officer liability or similar insurance (“D&O Insurance”) in effect, the Company shall give prompt notice of such claim or of the commencement of a Proceeding, as the case may be, to the applicable insurers in accordance with the procedures set forth in the applicable policy. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of each such policy.

(c) In the event (i) that the Company determines to reduce materially or not to renew its D&O Insurance coverage, the Company will purchase six (6) year tail coverage D&O Insurance, on terms and conditions substantially similar to the existing D&O Insurance (“Comparable Coverage”), for the benefit of the directors, officers, employees or Agents of the Company or any other Enterprise who had served in such capacity prior to the reduction, termination or expiration of the coverage (the “Prior Directors and Officers”); or (ii) of a Change in Control, the Company will either (A) purchase six (6) year tail coverage D&O Insurance with Comparable Coverage for the benefit of the directors, officers, employees or Agents of the Company or any other Enterprise who had served in such capacity prior to the closing of the transaction or the occurrence of the event constituting the Change in Control, and/or (B) as applicable, secure the contractual agreement by the acquiring entity or person to purchase such coverage and require the acquiring entity or person to deliver proof of the purchase of such coverage, in form and substance satisfactory to the Company, at or prior to the closing of the transaction or the occurrence of the event constituting the Change in Control; provided, however, that this clause (ii) shall not apply if, in connection with the Change in Control, there is no material reduction or non-renewal of the existing D&O Insurance coverage for the benefit of the directors, officers, employees or Agents of the Company or any other Enterprise who served in such capacity prior to the closing of the transaction or the occurrence of the event constituting the Change in Control for the six (6) year period following the date of such closing or event. Notwithstanding the foregoing, if the annual premium for any year of such tail coverage or other continuing D&O Insurance coverage would exceed 200% of the annual premium the Company paid for D&O Insurance in its last full fiscal year prior to the reduction, termination or expiration of the D&O Insurance or such Change in Control event, the Company (or the acquiror or successor, as the case may be) will be deemed to have satisfied its obligations under this Section 15(c) by purchasing as much D&O Insurance for such year as can be obtained for a premium equal to 200% of such annual premium the Company paid for D&O Insurance in its last full fiscal year.

(d) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

(e) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (including Expenses for which advancement is provided hereunder) hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

(f) The Company’s obligation to indemnify or to advance Expenses hereunder to Indemnitee in connection with any claim related to Indemnitee’s service as a director, officer, employee or Agent of any Enterprise other than the Company shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses from such other Enterprise.

Section 16. Duration of Agreement. This Agreement shall continue in full force and effect until and terminate upon the later of: (a) ten (10) years after the date that Indemnitee shall have ceased to

 

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serve as a director, officer, employee, and/or Agent of the Company or any other Enterprise, and (b) one (1) year after the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 14 of this Agreement relating thereto. This Agreement shall be binding upon the Company and its successors and assigns, and shall inure to the benefit of Indemnitee and his heirs, representatives, executors and administrators.

Section 17. Amendments to Bylaws. Any amendments to the Bylaws of the Company that purport to reduce or eliminate indemnification rights of Indemnitee thereunder shall have no effect with respect to this Agreement, and Indemnitee shall continue to have all of the rights and benefits of this Agreement despite any such amendments to the Bylaws. However, if the Bylaws of the Company are amended to provide for greater indemnification rights or privileges, this Agreement shall not be construed so as to limit Indemnitee’s rights and privileges to the terms hereof, and Indemnitee shall be entitled to the full benefit of any such additional rights and privileges.

Section 18. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

Section 19. Enforcement.

(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director, officer, employee and/or Agent of the Company and/or one or more other Enterprises, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director, officer, employee and/or Agent of the Company and/or any of such other Enterprises.

(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation of the Company, the Bylaws of the Company, any D&O Insurance policy maintained by the Company and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

Section 20. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties thereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver.

Section 21. Notice by Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter that is or may be subject to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement or otherwise.

 

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Section 22. Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed, or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:

If to Indemnitee:

at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company in writing.

If to the Company to:

SeaSpine Holdings Corporation

2302 La Mirada Drive

Vista, California 92081

Attention: General Counsel

or to any other address as may have been furnished to Indemnitee by the Company in writing.

Section 23. Contribution. To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or Expenses, in connection with any Proceeding or other claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding or other claim in order to reflect (a) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (b) the relative fault of the Company (and its directors, officers, employees and Agents) and Indemnitee in connection with such event(s) and/or transaction(s).

Section 24. Applicable Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (a) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the “Delaware Court”), and not in any other state or federal court in the United States of America or any court in any other country, (b) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (c) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, Corporation Service Company irrevocably as its agent in the State of Delaware as such party’s agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (d) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (e) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.

 

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Section 25. Construction

(a) The section and subsection headings contained in this Agreement are solely for the purpose of reference and convenience, are not part of the agreement of the parties, and shall not in any way limit, modify or otherwise affect the meaning or interpretation of this Agreement.

(b) References to “Sections” or “Articles” refer to corresponding Sections or Articles of this Agreement unless otherwise specified.

(c) Unless the context requires otherwise, the words “include,” “including” and variations thereof mean without limitation, the words “hereof,” “hereby,” “herein,” “hereunder” and similar terms refer to this Agreement as a whole and not any particular section or article in which such words appear, and any reference to a law shall include any amendment thereof or any successor thereto and any rules and regulations promulgated thereunder.

(d) Unless the context requires otherwise, words in the singular include the plural, words in the plural include the singular, and words importing any gender shall be applicable to all genders.

Section 26. Counterparts; Facsimile Signatures. This Agreement may be executed in two or more counterparts, each of which shall for all purposes be deemed to be an original but all of which, taken together, shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement. This Agreement may be executed and delivered by facsimile or email transmission of a file in “.pdf” or similar format and upon such delivery, each signature shall be deemed to have the same effect as if the original signature had been delivered to the other party.

Signature page follows.

 

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.