Execution Version

Certain identified information has been excluded from the exhibit because it is
both (i) not material and (ii) would likely cause competitive harm to the
Company, if publicly disclosed. Double asterisks denote omissions.

ASSET PURCHASE AGREEMENT
by and between
HOWMEDICA OSTEONICS CORP.
and
CONFORMIS, INC.
September 30, 2019

 

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TABLE OF CONTENTS

 
Page
ARTICLE 1 PRINCIPAL TRANSACTIONS
1
 
1.1.
Sale and Purchase of Assets
1
 
1.2.
Terms of Usage for Purchased Assets
2
 
1.3.
License Back to Seller; License to Buyer
2
 
1.4.
Non-Assumption of Any Liabilities
3
 
1.5.
Purchase Price and Payment
3
 
1.6.
Closing
3
 
1.7.
Closing Deliveries - Buyer
3
 
1.8.
Closing Deliveries – Seller
4
 
1.9.
Delivery of Purchased Assets.
4
 
1.10.
Joint Intellectual Property Rights
5
 
1.11.
Allocation of Purchase Price
6
 
1.12.
Withholding
6
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF SELLER
6
 
2.1.
Disclosure Schedule
6
 
2.2.
Organization and Good Standing
7
 
2.3.
Valid and Binding
7
 
2.4.
Title
7
 
2.5.
Authorization of Governmental Bodies
7
 
2.6.
Liabilities and Obligations
7
 
2.7.
Debt Guarantees
7
 
2.8.
No Conflict
7
 
2.9.
No Material Adverse Change; Absence of Restricted Events
8
 
2.10.
Litigation; Orders
8
 
2.11.
Compliance with Laws
8
 
2.12.
Intellectual Property
8
 
2.13.
Contracts
14
 
2.14.
Taxes
14
 
2.15.
No Broker’s Fees
15
 
2.16.
Certain Relationships
15
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF BUYER
15

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3.1.
Organization and Good Standing
15
 
3.2.
Authorization and Enforceability; No Conflict
15
 
3.3.
Authorization of Governmental Bodies
16
 
3.4.
No Broker’s Fees
16
ARTICLE 4 COVENANTS AND AGREEMENTS
16
 
4.1.
Further Assurances; Subsequent Delivery by Parties
16
 
4.2.
Public Announcements
16
 
4.3.
Confidentiality
16
 
4.4.
Transfer of Purchased Assets
19
ARTICLE 5 SURVIVAL; INDEMNIFICATION
19
 
5.1.
Survival of Representations, Warranties, Covenants and Agreements
19
 
5.2.
Seller Indemnification
19
 
5.3.
Buyer Indemnification
20
 
5.4.
Limitations on Amount
20
 
5.5.
Indemnification Process
21
 
5.6.
Other Claims
22
 
5.7.
Remedies Exclusive
22
 
5.8.
Limitation of Liability
23
ARTICLE 6 DEFINITIONS
23
ARTICLE 7 GENERAL
31
 
7.1.
Counterparts and Electronic Transmission
31
 
7.2.
Governing Law
31
 
7.3.
Jurisdiction
31
 
7.4.
Entire Agreement and Third-Party Beneficiaries
31
 
7.5.
Expenses
32
 
7.6.
Rules of Construction
32
 
7.7.
Severability
32
 
7.8.
Notices
32
 
7.9.
Assignment and Change of Control
33
 
7.10.
Amendments and Waivers
34
 
7.11.
Transfer Taxes; Tax Cooperation
34
 
7.12.
Interpretation
34
 
7.13.
Negotiation in Event of Dispute
34

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7.14.
Relationship
35

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Schedules:

Schedule 1.1
Disclosure Schedules

Exhibits:

Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Exhibit H

Software Code and Manufacturing Documents
Seller Disclosure Schedules

License Agreement
Development Agreement
Distribution Agreement
Quality Agreement
Consent and Non-Disturbance Agreement
Bill of Sale
Know-How and Copyright Assignment
Wire Instructions

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ASSET PURCHASE AGREEMENT
PREAMBLE
THIS ASSET PURCHASE AGREEMENT (this “Agreement”), dated as of September 30,
2019, is made by and between Howmedica Osteonics Corp., a New Jersey corporation
(“Buyer”), and Conformis, Inc., a Delaware corporation (“Seller”). Buyer and
Seller may each individually be referred to as a “Party” and together the
“Parties”.
RECITALS
A.    Buyer and its Affiliates have developed and commercialized an
Off-The-Shelf Knee Implant offered under the trademark Triathlon (such
Off-The-Shelf Knee Implant of Buyer, together with any other Stryker
Off-The-Shelf Knee Implant, “Triathlon”).
B.    Seller currently offers Patient-Specific Instrumentation for use with its
Patient-Specific Implants, including partial and total knee and hip arthroplasty
systems.
C.    Buyer desires to purchase from Seller, and Seller desires to sell to
Buyer, an interest in certain Seller assets relating to Patient-Specific
Instrumentation, on the terms set forth in this Agreement (the “Asset
Purchase”).
D.    On the Closing Date, Buyer (or an Affiliate of Buyer) and Seller will
enter into (a) a license agreement in the form of Exhibit A (the “License
Agreement”), (b) a development agreement in the form of Exhibit B (the
“Development Agreement”), (c) a distribution agreement in the form of Exhibit C
(the “Distribution Agreement”), and (d) a quality agreement in the form of
Exhibit D (the “Quality Agreement”).
ACCORDINGLY, the Parties agree as follows:
ARTICLE 1
PRINCIPAL TRANSACTIONS
1.1.    Sale and Purchase of Assets. On the Closing Date, and subject to the
terms and restrictions of this Agreement, Seller hereby sells, assigns, conveys,
transfers and delivers to Buyer, and Buyer hereby purchases, acquires and
accepts from Seller, (i) the entire right, title and interest in and to a single
electronic copy of the Software Code and of the Manufacturing Documents, as
defined in Schedule 1.1, provided that, such right, title and interest is
limited to the electronic copy itself and such copy itself does not include any
Intellectual Property rights or give rise to any rights under any Intellectual
Property rights whatsoever and as such, such copy itself, cannot establish
patent exhaustion as to any Patents, including any Patents that might relate to
the Software Code or the Manufacturing Documents, (ii) an undivided one-half
ownership interest in and to all Copyrights in the Software Code and in the
Manufacturing Documents, and (iii) an undivided one-half ownership interest in
and to all Know-How embodied in, underlying or otherwise contained in the
Software Code and in the Manufacturing Documents, as can be gleaned from a
review of such Software Code and Manufacturing Documents without Seller’s
assistance, provided that, for

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the avoidance of doubt, such Know-How does not include any Patents, including
any Patents that might relate to the Software Code or the Manufacturing
Documents (the interests in clauses (ii) and (iii) above being the “Transferred
IP”), such Transferred IP to be held jointly with an undivided one-half interest
retained by Seller, the one-half interests held by the Parties being subject to
Section 1.1 (collectively, clauses (i) – (iii) constitute the “Purchased
Assets”). For clarity, (a) other than delivery of a single electronic copy of
the Software Code and of the Manufacturing Documents, Seller shall have no
obligation under this Agreement to deliver to Buyer any other tangible assets or
any Intellectual Property and (b) no Patents or rights therein are sold,
assigned, conveyed, transferred or delivered hereunder. Buyer and its Affiliates
and any permitted assignees under Section 7.9 will not sell, license, distribute
or otherwise transfer or make available the Purchased Assets to any Third Party
except pursuant to Section 1.1, Section 7.9, or to the extent expressly set
forth in Section 2.3.4 of the Distribution Agreement.
1.2.    Terms of Usage for Purchased Assets. Buyer, its Affiliates and any
permitted assignees under Section 1.1 or Section 7.9, may only use the Purchased
Assets for the Permitted Use. Seller, its Affiliates and any assignees under
Section 1.1 or Section 7.9 shall not use the Purchased Assets in the Buyer Field
except as authorized by Buyer, its Affiliates or assignees under Section 7.9.
1.3.    License Back to Seller; License to Buyer.
(a)    Buyer hereby grants to Seller an exclusive (even as to Buyer), perpetual,
irrevocable, worldwide, royalty-free, paid-up, sublicensable, transferable
license, solely under Buyer’s rights in the Transferred IP, to use, copy,
distribute copies of, perform, prepare derivative works from, display and
otherwise fully exploit the Transferred IP and any derivative works thereof in
all fields other than the Buyer Field. Buyer agrees to assist Seller, or its
designee, [**], to the extent reasonably necessary in connection with securing,
applying for, registering and perfecting Seller’s rights and Buyer’s rights
under this Section 1.3.
(b)    Seller hereby grants to Buyer an exclusive (even as to Seller),
perpetual, irrevocable, worldwide, royalty-free, paid-up, sublicensable (solely
to the extent Buyer is permitted to sublicense its rights in the Licensed IP
pursuant to Section 1.1(b) hereunder and Section 2.2 of the License Agreement,
subject to all requirements set forth therein), transferable (solely as part of
a permitted assignment of this Agreement under Section 7.9) license, solely
under Seller’s rights in the Transferred IP, to use, copy, distribute copies of,
perform, prepare derivative works from, display and otherwise fully exploit the
Transferred IP and any derivative works thereof, solely in the Buyer Field.
(c)    The foregoing licenses and any sublicenses shall terminate in the event
of (i) termination of the Development Agreement together with Stryker’s election
to forfeit the licenses granted to it under the License Agreement under Section
5.2 of the License Agreement or (ii) any termination of the License Agreement.
The exclusivity of the license granted by Seller under this Section 1.3(c) shall
be subject to the following: [**].
(d)    [**].

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1.4.    Non-Assumption of Any Liabilities. It is understood and agreed by the
Parties hereto that Buyer is purchasing its interest in Purchased Assets
exclusive of any and all debts, Liabilities, obligations, and Contracts of
Seller, and that Seller shall remain responsible for the payment and performance
of and shall pay and perform all debts, Liabilities, obligations, and Contracts
of Seller to the extent they arise out of the conduct of Seller’s business (the
“Seller Obligations”), even if such Seller Obligations are first manifested
after the Closing Date, and regardless of whether they are known or unknown,
accrued, absolute, contingent or otherwise, including, but not limited to,
claims of creditors, and any and all Tax obligations imposed by any taxing
authority, product liability claims, claims arising out of or relating to actual
or alleged misappropriation, infringement, dilution or other violation of a
Third Party’s Intellectual Property, claims arising out of the termination of
existing supplier or manufacturing agreements, claims attributable to any
employees or non-employee service providers of Seller, or any other Liability to
which Seller is subject; provided that, for the avoidance of doubt, in no
instance shall Seller be liable for debts, Liabilities, obligations, and
Contracts of Buyer related to the Purchased Assets to the extent they arise out
of Buyer’s conduct of its business related to the Purchased Assets (“Buyer
Obligations”).
1.5.    Purchase Price and Payment. As consideration for the sale and transfer
of the Purchased Assets to Buyer and Seller’s other covenants in this Agreement,
Buyer will pay Seller a purchase price of $14,000,000 (the “Purchase Price”) at
the Closing, in immediately available funds by wire transfer in accordance with
the Wire Instructions.
1.6.    Closing. The consummation of the transactions contemplated by this
Agreement (the “Closing”) will take place at 12:00 a.m. Kalamazoo, Michigan time
as of the date hereof (the “Closing Date”).
1.7.    Closing Deliveries - Buyer. As of the Closing Date, Buyer has executed
and/or delivered, or caused to be executed and/or delivered, to Seller:
(a)    Purchase Price. The Purchase Price by wire transfer in accordance with
the Wire Instructions;
(b)    Bill of Sale. The Bill of Sale.
(c)    Know-How and Copyright Assignment. The Know-How and Copyright Assignment;
(d)    Distribution Agreement. The Distribution Agreement;
(e)    Development Agreement. The Development Agreement;
(f)    License Agreement. The License Agreement; and
(g)    Quality Agreement. The Quality Agreement
1.8.    Closing Deliveries – Seller. As of the Closing Date, Seller has executed
and/or delivered, or caused to be executed and/or delivered, to Buyer:

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(a)    Bill of Sale. The Bill of Sale.
(b)    Know-How and Copyright Assignment. The Know-How and Copyright Assignment;
(c)    Distribution Agreement. The Distribution Agreement;
(d)    Development Agreement. The Development Agreement;
(e)    License Agreement. The License Agreement;
(f)    Quality Agreement. The Quality Agreement;
(g)    Consent and Non-Disturbance Agreement. The Consent and Non-Disturbance
Agreement;
(h)    Secretary Certificate. A certificate executed by the Secretary of Seller,
certifying as to (i) the board of director resolutions of Seller authorizing the
consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements; and (ii) the incumbency of each of the Persons executing
this Agreement or any of the agreements, certificates or instruments
contemplated hereby on behalf of Seller;
(i)    Good Standing Certificate. A good standing certificate with respect to
Seller, issued by the applicable Governmental Body, dated within ten days of the
date hereof;
(j)    IRS Form W-9. A W-9 with respect to Seller.
1.9.    Delivery of Purchased Assets. Within three (3) Business Days of Seller’s
receipt of the Purchase Price, Seller shall electronically deliver the Software
Code and Manufacturing Documents to Buyer.
1.10.    Joint Intellectual Property Rights. With respect to the Purchased
Assets, the following rights and obligations shall apply:
(a)    Duty of Accounting. No duty of accounting shall apply with respect to the
Transferred IP except as set forth in this Agreement and except for payments due
to Seller from Buyer to the extent specifically set forth in the Development
Agreement, the License Agreement or the Distribution Agreement.
(b)    Assignment, Licenses and Releases of Interests in Purchased Assets.
Seller shall not be restricted from, and shall be able to freely assign (in
whole or in part) or license or grant releases under (exclusively or
non-exclusively, retroactively or prospectively), its interest in the
Transferred IP without consent of or notice to Buyer, to any other Person; in
any case, subject to Seller’s obligations under Section 4.1 of the Development
Agreement. Buyer may not assign (in whole or in part) or license or grant
releases under (exclusively or non-exclusively, retroactively or prospectively),
its interest in the Purchased Assets to any Person without the prior written
consent of Seller (which may be provided or withheld

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in Seller’s sole discretion); except that, Buyer shall be able to freely assign
(in whole or in part) or license or grant releases under (exclusively or
non-exclusively, retroactively or prospectively), its interest in the Purchased
Assets to an Affiliate of Buyer without the consent of or notice to Seller, and
Buyer may assign all of Buyer’s interest in the Transferred IP to a Person as
part of a permitted assignment of this Agreement (as specified in Section 7.9
below). Any assignment or grant of license or release by Buyer with respect to
Buyer’s interest in any of the Purchased Assets to any Person shall be made
expressly subject to, and Buyer shall require such Person to expressly assume,
all applicable obligations and restrictions hereunder (including as set forth in
Sections 1.2 and 1.3 hereunder) and in the License Agreement (including the
reassignment obligations under Section 5.2 of the License Agreement). Any such
licenses or releases granted by Buyer shall automatically terminate in the event
of any reassignment of the Purchased Assets under Section 5.2 of the License
Agreement.
(c)    Infringement. [**] shall have the first right, but not the obligation, to
determine and effect any actions with regard to any apparent, threatened or
actual infringement by any Third Party of the any Transferred IP, including the
initiating of any Action [**] provided that, if [**] decides that it will not
initiate an Action against, or commence settlement negotiations with such Third
Party with respect to apparent, threatened or actual infringement in the [**],
it shall promptly notify [**] and share relevant information on the infringement
with [**]. Thereafter, [**] may initiate an Action against or initiate
settlement discussions with such Third Party [**] shall make its decision in
this respect in a timely manner so as not to jeopardize any right of assertion
against such Third Party. The non-asserting Party shall provide all reasonably
necessary information and assistance, including by appearing as a plaintiff in
an applicable Action to the extent required by law to attain or preserve
standing. [**].
(d)    Prosecution and Maintenance. [**] has the sole right and option, without
the obligation, to prosecute and maintain any Intellectual Property
registrations worldwide in respect of the Transferred IP, and [**] shall provide
all reasonably necessary cooperation and assistance in connection therewith.
1.11.    Allocation of Purchase Price. The purchase price (for Tax purposes)
among the Purchased Assets will be allocated in accordance with applicable Legal
Requirements, including, to the extent applicable, Section 1060 of the Code and
U.S. Department of Treasury regulations thereunder. Within [**] after the
Closing Date, Buyer shall deliver a proposed allocation of the purchase price to
Seller. Within [**] after the delivery of the proposed allocation to Seller by
Buyer, Seller shall be permitted to review and comment on such allocation, and
Buyer and Seller shall use good faith efforts to resolve any dispute regarding
the preparation of the allocation. Seller and Buyer shall report, act, and file
Tax Returns in all respects and for all purposes consistent with the final
allocation agreed by Buyer and Seller. Seller shall timely and properly,
execute, file, and deliver all such documents, forms, and other information as
Buyer may reasonably request in preparing such allocation. Neither Seller nor
Buyer shall take any position (whether in audits, Tax Returns, or otherwise)
that is inconsistent with the final allocation agreed by Buyer and Seller unless
required to do so by applicable law.

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1.12.    Withholding. Buyer shall be entitled to deduct and withhold from any
amounts payable pursuant to this Agreement and any Ancillary Agreements such
amounts as are required to be deducted or withheld therefrom or in connection
therewith under the Code or any provision of state, local or foreign Tax law or
under any other applicable Legal Requirement. To the extent such amounts are so
deducted or withheld, such amounts shall be treated for all purposes under this
Agreement and any Ancillary Agreements as having been paid to the Person to whom
such amounts would otherwise have been paid. Any amounts that have been deducted
or withheld shall be timely paid over by Buyer to the applicable Governmental
Body.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLER
As of the Closing Date, Seller represents and warrants to Buyer as follows:
2.1.    Disclosure Schedule. Seller has delivered to Buyer and its counsel
individually numbered schedules (collectively, the “Disclosure Schedule”). Each
individual schedule in the Disclosure Schedule contains exceptions to the
specifically identified section and subsection contained in this Article. Each
section of the Disclosure Schedule will be deemed to incorporate by reference
information disclosed in any other section of the Disclosure Schedule only to
the extent that the relevance of such disclosure to any such other section is
reasonably apparent on its face from the terms of such disclosure. No
information set forth on any section of the Disclosure Schedule shall be deemed
to broaden in any way the scope of the Seller’s representations and warranties
under this Agreement. Nothing in the Disclosure Schedule will be deemed adequate
to disclose an exception to a representation or warranty unless the Disclosure
Schedule describes the relevant facts in reasonable detail. The mere listing (or
inclusion of a copy) of a document or other item on the Disclosure Schedule will
not be deemed adequate to disclose an exception to a representation or warranty
made in this Agreement unless the specific representation or warranty that it is
intended to qualify is referenced with regard to it.
2.2.    Organization and Good Standing. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the state of Delaware.
Seller is duly qualified to do business as a foreign entity and is in good
standing under the laws of each state or other jurisdiction in which either the
ownership or use of the properties owned or used by it, or the nature of the
activities conducted by it, requires such qualification. Seller has full power
and authority to own, use and sell the Purchased Assets.
2.3.    Valid and Binding. Seller has full power and authority to enter into and
perform this Agreement, and to carry out the transactions contemplated by this
Agreement. This Agreement is binding upon and enforceable against Seller in
accordance with its terms. The execution, performance, and delivery of each of
this Agreement has been duly authorized, approved, and adopted by unanimous
written consent or by vote of all of the members of the board of directors of
Seller.
2.4.    Title. Seller solely owns the entire right, title and interest in and
to, and has the full right to enjoy and exploit for its benefit, free and clear
of any licenses, Liens or similar restrictions

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of any kind or nature whatsoever, the Purchased Assets. Legal and beneficial
title in all Purchased Assets is in the name of Seller.
2.5.    Authorization of Governmental Bodies. No action by Seller (including any
authorization, consent or approval), or by Seller in respect of, or filing by
Seller with, any Governmental Body is required by Seller for, or in connection
with, the valid and lawful (a) authorization, execution, delivery and
performance by Seller of this Agreement or (b) the consummation of this
Agreement by Seller.
2.6.    Liabilities and Obligations. There are no Liabilities of Seller and
there is no other information on Seller’s audited or unaudited consolidated
balance sheets or related statements of income and cash flow or auditor reports
which could prevent or limit Seller from fulfilling its obligations under this
Agreement.
2.7.    Debt Guarantees. Seller does not have any debt secured by the Purchased
Assets and Seller does not have any Liability created by a guarantee with
respect to Purchased Assets.
2.8.    No Conflict. The execution, delivery and performance of this Agreement,
or of any of the Ancillary Agreements, will not directly or indirectly (with or
without notice or lapse of time): (a) contravene the Articles of Incorporation,
Bylaws or similar organizational document of Seller; (b) violate any Legal
Requirement or Order applicable to Seller or the Purchased Assets or give any
Governmental Body the right to revoke, withdraw, suspend, cancel, terminate or
modify any Governmental Authorization applicable to Seller or the Purchased
Assets; (c) result in any Lien being created or imposed upon or with respect to
any of the Purchased Assets; (d) result in the imposition of any Tax on Buyer or
the Purchased Assets; (e) result in a breach or violation of, default under, or
will cause the modification, cancellation, termination, suspension of, or
acceleration of any payments under any Contract to which Seller is a party; or
(f) will cause or give rise to the forfeiture, termination, or limitation of any
Transferred IP. All consents, approvals or authorizations of or declarations,
filings or registrations with any Person required to be obtained by Seller in
connection with the execution, delivery of performance of this Agreement or the
consummation of the transactions contemplated by this Agreement are set forth in
Schedule 2.8 and will be obtained or made, as applicable, by Seller prior to the
Closing.
2.9.    No Material Adverse Change; Absence of Restricted Events. Since [**]:
(a) Seller has conducted the operations and affairs of the business associated
with the Purchased Assets only in the Ordinary Course; (b) there has not been
any Material Adverse Change; and (c) no event has occurred or circumstance
exists that may result in such a Material Adverse Change. Since [**], no
Restricted Event has occurred with respect to the Purchased Assets.
2.10.    Litigation; Orders. There is no, and has not been, any Action pending
or, to Seller’s Knowledge, threatened against Seller involving the Purchased
Assets, or, to Seller’s Knowledge, any officer or director of Seller involving
the Purchased Assets, and, to the Knowledge of Seller, there are no facts that
may reasonably be expected to result in or form the basis for any such Action or
other proceeding. There are no Orders against Seller with respect to the
Purchased Assets.

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2.11.    Compliance with Laws. Seller is, and at all times has been, in
compliance with all Legal Requirements that are or were applicable to it in
connection with the Purchased Assets, including the Software, Copyrights and
Know-How therein, including research and development and other activities
related thereto. Seller has not received any notice or other communication
(whether written or oral) from any Governmental Body or any other Person
regarding any actual, alleged, possible or potential violation of, or failure to
comply with, any Legal Requirements in connection with the Purchased Assets.
Seller has no Knowledge of any violations by suppliers, representatives,
contractors or subcontractors of any Legal Requirements with respect to the
Purchased Assets or Patient-Specific Instrumentation.
2.12.    Intellectual Property.
(a)    Identification. Schedule 1.1 sets forth an identification of the
Purchased Assets.
(b)    Title. Seller solely owns the entire right, title and interest in and to,
and has the full right to enjoy and exploit for its benefit, free and clear of
any licenses, Liens or similar restrictions of any kind or nature whatsoever,
the Transferred IP. Legal and beneficial title in all Transferred IP is in the
name of Seller. All Transferred IP was conceived, reduced to practice and
otherwise developed and generated by employees of Seller without input or
assistance from any independent contractors, other than independent contractors
who have assigned their entire right, title and interest in and to the
Transferred IP to Seller. None of the Transferred IP is or has ever been jointly
owned with any Person. No current or former Representative of Seller or its
Affiliates or founder, stockholder, consultant, or independent contractor of
Seller or its Affiliates has retained any rights, title, interests, or licenses
in and to any Transferred IP, including the right to receive royalties or other
compensation.
(c)    Licenses. There are no licenses or sublicenses (to or from Seller) with
respect to the Transferred IP. There are no outstanding and no threatened
disputes or disagreements with respect to any former license or sublicense of or
to Transferred IP.
(d)    Ownership After Closing. Immediately following the Closing, and subject
to the licenses granted to Seller by Buyer and to Buyer from Seller hereunder,
Buyer will own an undivided one-half interest jointly with Seller in all right,
title and interest in and to all Transferred IP, and Buyer will be permitted to
exercise all of the rights of Seller relating to Transferred IP to the same
extent Seller would have been able to had the Closing not occurred and without
the payment of any additional amounts or consideration, subject only to the
restrictions and licenses set forth in Section 1.1, Section 1.2, Section 1.3 and
Section 1.1 of this Agreement.
(e)    No Limitations. Seller is not a party to any Contract, or subject to any
other obligation, that grants any Third Party rights to or under any Transferred
IP, or that restricts the use, transfer, delivery or licensing of Transferred
IP.
(f)    Transfer and Maintenance. Seller has not permitted the Copyrights or, to
Seller’s Knowledge, Know-How in Software Code to enter the public domain.

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(g)    Assignments. Seller has secured from all of its former and current
suppliers, manufacturers, consultants, employees and independent contractors who
individually or jointly contributed to the conception, reduction to practice,
creation or development of any Transferred IP unencumbered and unrestricted
exclusive ownership of all such supplier’s, manufacturer’s, consultant’s,
employee’s or independent contractor’s Intellectual Property rights, including
the waiver of any moral rights in such contribution that Seller does not already
own by operation of law in the Transferred IP, and such supplier, manufacturer,
consultant, employee, or independent contractor, as applicable, has not retained
any rights or licenses with respect thereto. Without limiting the foregoing,
Seller has obtained written agreements from all current and former suppliers,
manufacturers, consultants, employees and independent contractors of Seller that
assign and require assignment to Seller of all right, title and interest, in and
to any Transferred IP developed by such suppliers, manufacturers, consultants,
employees and independent contractors in their capacity as supplier,
manufacturer, consultant, employee or independent contractor to Seller. To
Seller’s Knowledge, no supplier, manufacturer, consultant, employee or
independent contractor of Seller has entered into any Contract with any Third
Party (including any academic or medical institution) or has had any obligation
under applicable terms and conditions of employment or retention with any such
Third Party, during or prior to the term of consulting, employment or
contracting with Seller, that conflicts in any way with the work for which the
supplier, manufacturer, consultant, employee or independent contractor has been
engaged by Seller or requires the supplier, manufacturer, consultant, employee
or independent contractor to transfer or assign any rights in his work for
Seller to anyone other than Seller.
(h)    No Royalties. There are no royalties, honoraria, fees or other payments
payable by or to Seller to or from any Person (other than salaries and other
amounts payable to employees, consultants and independent contractors not
contingent on use of their work product) as a result of the ownership, use,
possession, license-in, license-out, sale, marketing, advertising or disposition
of any Transferred IP by Seller, including no outstanding Compensation required
under the employee remuneration laws of any country.
(i)    Validity and Enforceability. No item of Transferred IP has been held to
be invalid or unenforceable in a Court decision that is unappealed or
unappealable by Seller. To Seller’s Knowledge, the Transferred IP is valid,
subsisting (or in the case of applications, applied for) and enforceable.
(j)    No Infringement. To the Knowledge of Seller, none of the activities or
business previously or currently conducted by Seller in practicing the
Transferred IP on or before the Closing Date in any way constitutes
infringement, misappropriation or violation of any Intellectual Property of any
Third Party anywhere in the world. The foregoing sentence constitutes the sole
and exclusive representation and warranty by Seller with respect to the
infringement, misappropriation or violation of any Intellectual Property of any
Third Party, and no other representation or warranty in this Agreement is
intended to or does address such infringement, misappropriation or violation.

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(k)    No Threatened or Asserted Claims or Suits. There is not now and has not
been at any time in the past a written Claim, suit or proceeding, or to Seller’s
Knowledge an oral Claim, by a Third Party alleging that any activity of Seller
as such relates to any of the Purchased Assets, or any product resulting
therefrom, infringes or otherwise violates the Intellectual Property owned or
licensed by any Third Party or will infringe a Patent issuing from a pending
Patent application if and when such Patent application issues as a Patent and to
Seller’s Knowledge there is no basis for any such Claim, suit or proceeding.
There is not now and has not been at any time in the past a pending written
Claim, suit or proceeding, or to Seller’s Knowledge an oral Claim, by a Third
Party contesting the validity, ownership, enforceability or right of Seller in
any Transferred IP, including in the nature of being offered a license or
covenant not to sue, and to Seller’s Knowledge there is no basis for any such
Claim, suit or proceeding.
(l)    No Infringement by Third Parties. To Seller’s Knowledge, there is no
unauthorized use, unauthorized disclosure, infringement, misappropriation, or
violation of any Transferred IP by any Third Party. Seller has not asserted
rights in any Transferred IP against any Person in a formal legal proceeding, in
any cease and desist letter or other written notice, including in the nature of
offering a license or covenant not to sue.
(m)    No Grants. Seller has not (i) entered into any agreement granting any
Person the right to bring infringement Actions or otherwise enforce rights with
respect to any Transferred IP, or (ii) granted a covenant not to sue under
Transferred IP.
(n)    Confidentiality. Seller has taken reasonable and customary measures to
protect and safeguard the proprietary nature of Transferred IP and to maintain
in confidence all Confidential Information owned or used by Seller included in
the Transferred IP including putting in place policies and procedures intended
to protect and maintain the confidentiality of Confidential Information and
other proprietary, non-public information included in Transferred IP. All
current and former officers, employees, independent contractors and consultants
of Seller have entered into written agreements with Seller under which such
Persons are obligated to protect and maintain the confidentiality of
Confidential Information included in the Transferred IP. To Seller’s Knowledge,
no party to any such agreement is in breach thereof. To Seller’s Knowledge,
there has been no unauthorized access, disclosure or use of any Confidential
Information owned or licensed by Seller and included in the Transferred IP. To
Seller’s Knowledge, (i) no Confidential Information included in the Transferred
IP has been disclosed or authorized to be disclosed to any Third Party not
subject to confidentiality obligations to Seller and (ii) no party to a
nondisclosure agreement with Seller with respect to any of the Transferred IP is
in breach or default thereof.
(o)    No Security Breaches. During the [**] prior to the date hereof there have
been no material security breaches in Seller’s information technology systems
related to the Purchased Assets that adversely affected Seller’s or any of its
Affiliates’ business or operations to the extent related to the Purchased
Assets, and to Seller’s Knowledge there are no material data security or other
technological vulnerabilities with respect to Seller’s information technology
systems, products, or networks to the extent related to the Purchased

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Assets. Seller maintains a written information privacy and security program that
maintains reasonable and appropriate measures with respect to the Purchased
Assets, including reasonable steps when using vendors, to protect the privacy,
operation, confidentiality, integrity, and security of all Confidential
Information against a security breach, consistent with industry practice and
applicable Legal Requirements. Seller has evaluated its disaster recovery and
backup needs and has implemented plans and systems that are reasonably designed
to address its assessment risk.
(p)    No Government Funding. No (i) government funding or (ii) funding from a
university, college or other educational institution was specifically used by
Seller in the development of Transferred IP. To Seller’s Knowledge, no employee,
consultant, or independent contractor who was involved in, or contributed to,
the creation or development of any Transferred IP has performed any services for
any government, university, college, or other educational, academic or medical
institution or research center during a period of time during which such Person
was also performing services for Seller with respect to the subject matter of
Purchased Assets.
(q)    No Impairments/No Consents. The execution of this Agreement by Seller and
the Closing will not result in the loss or impairment of any of the Transferred
IP (provided that the transactions contemplated herein shall not constitute an
impairment). No consent of any third Person is required to be obtained by Seller
in order to transfer any of the Transferred IP.
(r)    No Standards Body Intellectual Property Requirements. Seller is not now
and has never been a member or promoter of, or a contributor to, any industry
standards body or any similar organization that would reasonably be expected to
require or obligate Seller to grant or offer to any other Person any license or
right to any Software within the Transferred IP or any other Transferred IP.
(s)    The Software Code and Manufacturing Documents. The Software Code
constitutes all of the Software used directly by Seller for the purpose of
generating STL files for total knee arthroplasty Patient-Specific
Instrumentation for use by Seller’s selective laser sintering manufacturing
equipment, with the exception of the Excluded Code, as defined in Schedule 1.1.
The Software Code, together with the Excluded Code, is sufficient to operate for
its intended purpose of generating STL files for total knee arthroplasty
Patient-Specific Instrumentation for use by Seller’s selective laser sintering
manufacturing equipment. The Software Code can be understood by a programmer of
ordinary skill for purposes of maintenance and development. The Manufacturing
Documents constitute all of the material written materials (for the avoidance of
doubt, not including the Software Code or any Third-Party documentation (e.g.,
relating to licensed Software or machinery)) used by Seller to manufacture
Patient-Specific Instrumentation. Schedule 2.12(s) of the Disclosure Schedule
sets forth a listing of all material Software and equipment owned or controlled
by a Third Party that is currently used by Seller in its manufacture of
Patient-Specific Instrumentation for its own patient-specific knee implant
product.

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(t)    Open Source Materials. Schedule 2.12(t) (i) lists all Software or other
material that is distributed as “free software,” “open source software” or under
similar licensing or distribution terms, including but not limited to the GNU
General Public License (GPL), GNU Lesser General Public License (LPGL), Mozilla
Public License (MPL.), BSD licenses, the Artistic License, the Netscape Public
License, the Sun Community Source License (SCSL), the Sun Industry Standards
License (SISL), the Apache License and any license meeting the Open Source
Definition (as promulgated by the Open Source Initiative ()) or the Free
Software Definition (as promulgated by the Free Software Foundation ()) (“Open
Source Materials”) that is incorporated into, or used, combined or distributed
with the Software Code (or any portion thereof) by Seller and (ii) describes the
manner in which such Open Source Materials were so incorporated into, combined
or distributed with, or used by Seller, and identifies for each such item of
Open Source Materials (A) the applicable open source license, (B) whether the
item is incorporated into, or combined or distributed with, or used by Seller in
connection with the Software Code (or any portion thereof) and (C) whether or
not the item was modified by or on behalf of Seller.
(u)    Licenses to Open Source Materials. With respect to Open Source Materials
that are or have been incorporated into, or used, combined or distributed with
the Software Code (or any portion thereof), Seller has been and is in compliance
with the terms and conditions of all applicable licenses for the Open Source
Materials, including attribution and copyright notice requirements. There are no
Open Source Materials incorporated into, or used, combined or distributed with
the Software Code (or any portion thereof) or any Transferred IP (or any portion
thereof) contrary to the terms of the license agreement to which such Open
Source Materials are subject, including in such a way that creates, or purports
to create obligations for Seller with respect thereto or grants, or purports to
grant, to any Third Party any rights or immunities thereunder (including using
any Open Source Materials that require, as a condition of use, modification
and/or distribution of such Open Source Materials that other Software
incorporated into, derived from of distributed with such Open Source Materials
be (i) disclosed or distributed in source code form, (ii) be licensed for the
purpose of making derivative works, or (iii) be redistributable at no charge).
(v)    No Impairment of Software Code.
(i)    No Software Code contains any code designed or intended to disrupt,
disable, harm or otherwise impede in any manner the operation of, or provide
unauthorized access to, a computer system or network or other device on which
such Software Code is stored or installed, or to damage or destroy data or files
without the user’s consent. Seller has (a) used commercially available antivirus
software products designed to ensure that the Software Code is protected from
becoming infected by viruses and other harmful code; and (b) taken all
reasonable steps to ensure that the Software Code used by Seller in the carrying
on of its business is free of any virus or other harmful code.
(ii)    Seller has not assigned, delivered, licensed or made available, or has
any obligation to assign, deliver, license or make available, any Software Code

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(including but not limited to, the source code therefor) to any Third Party,
including any escrow agent or similar Third Party. This sale and purchase, or
any other transactions contemplated by this Agreement, will not entitle any
customer or other Third Party to obtain from Seller a copy of the source code
for the Software Code.
(iii)    Seller has not experienced any material defects or disruptions in the
Software Code, including any material error or omission that has not been
corrected. There are no defects in the Software Code that prevent such Software
Code from operating as intended and as it did in connection with the Excluded
Code. The Software Code does not include any back door, trap door, Trojan horse,
time bomb, software lock, worm, virus or malicious code or any other code,
program, or sub program designed to erase, halt, disable, damage or otherwise
interfere with the operation of such Software Code or any other computer system,
code, program or sub program or any device, method, or token that permits any
person to circumvent the normal security associated with such Software Code and
that either has been intentionally introduced by Seller or that Seller knows is
present in such Software Code. The Software Code does not contain any code
designed or intended to disrupt, disable, harm or otherwise impede in any manner
the operation of, or provide unauthorized access to, a computer system or
network or other device on which such code is stored or installed, or to damage
or destroy data or files without the user’s consent.
(iv)    Except for the Open Source Materials listed in Schedule 2.12(t), the
Software Code neither contains nor embodies any third-party software, including
development tools and utilities. Current copies of the source code for the
Software Code are recorded on machine readable media, clearly identified and
securely stored (together with the applicable documentation) by Seller.
2.13.    Contracts. Seller has not entered into any Contract with any Third
Party providing for the transfer or licenses of any interest in the Purchased
Assets.
2.14.    Taxes.
(a)    Seller has timely filed, or has caused to be timely filed on its behalf,
all Tax Returns in respect of or relation to the Purchased Assets required to be
filed by it (taking into account any extensions of time in which to file). All
such Tax Returns are true, correct and complete in all material respects. All
Taxes due and payable (whether or not shown on any such Tax Return) with respect
to or in relation to the Purchased Assets have been paid in full.
(b)    No claim has ever been made in writing by a Governmental Body in a
jurisdiction where Seller does not file Tax Returns that Seller is, or may be,
subject to taxation by, or required to file any Tax Return in, that jurisdiction
with respect to or in relation to any Purchased Asset.

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(c)    Seller has deducted, withheld and paid to the appropriate Governmental
Body all Taxes required to be deducted, withheld or paid with respect to or in
relation to any Purchased Asset.
(d)    There is no Action concerning any Tax liability of Seller with respect to
or in relation to any Purchased Asset either (i) claimed or raised by any
Governmental Body in writing or (ii) as to which Seller has Knowledge.
(e)    No waivers of statutes of limitations (other than waivers no longer in
force) have been granted in respect of or in relation to any Purchased Asset.
Seller has not entered into a closing agreement pursuant to Section 7121 of the
Code that will affect the Taxes of Seller with respect to or in relation to any
Purchased Asset after the Closing Date.
(f)    There are no Liens for Taxes on the Purchased Assets other than Liens (i)
for Taxes not yet past due or (ii) for Taxes the validity of which is being
contested in good faith by appropriate proceedings, for which adequate reserves
have been established in accordance with GAAP, and which are set forth on
Schedule 2.14.
2.15.    No Broker’s Fees. Other than with respect to fees or commissions that
will be borne solely by Seller, Seller has not retained any broker, finder,
consultant or other intermediary or incurred any Liability or obligation for any
brokerage fees, finder’s fees or commissions in connection with the transactions
contemplated by this Agreement.
2.16.    Certain Relationships. Neither Seller nor any officer or director of
Seller nor, to the Knowledge of Seller, any Related Person is an owner, equity
holder, creditor, director, manager, agent, consultant, or employee of, or
lender to, any Person (other than Seller) who is engaged in a business that acts
as a supplier of any goods or services in connection with Patient-Specific
Instrumentation, who otherwise has business or contractual relations with Seller
in connection with Patient-Specific Instrumentation, or any part of whom is in
actual or potential competition with Seller in connection with Patient-Specific
Instrumentation. Seller has not, in connection with Patient-Specific
Instrumentation, purchased, licensed or leased or otherwise acquired any
property or assets or obtained any services from, or sold, licensed, leased or
otherwise disposed of any property or assets or provided any services to, any
officer or director of Seller or, to the Knowledge of Seller, any Related
Person.
2.17.    EXCEPT AS EXPRESSLY PROVIDED IN ARTICLE 2, SELLER MAKES NO OTHER
WARRANTY OF ANY KIND, WHETHER WRITTEN, ORAL, IMPLIED OR STATUTORY, INCLUDING
WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR
PURPOSE IN RESPECT OF THE PURCHASED ASSETS; AND NOTHING HEREIN SHALL BE
CONSTRUED TO BE A REPRESENTATION OR WARRANTY THAT USE OF THE PURCHASED ASSETS
WILL NOT BE COVERED BY ANY PATENT RIGHTS OF BUYER, SELLER OR ANY THIRD PARTY.

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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
3.1.    Organization and Good Standing. Buyer is a corporation, duly formed,
validly existing and in good standing under the laws of Michigan. Buyer is duly
qualified to do business as a foreign entity and is in good standing under the
laws of each state or other jurisdiction in which either the ownership or use of
the properties owned or used by it, or the nature of the activities conducted by
it, requires such qualification.
3.2.    Authorization and Enforceability; No Conflict. Buyer has full power and
authority to enter into and perform, and to carry out the transactions
contemplated by this Agreement. This Agreement is binding upon Buyer and
enforceable against Buyer in accordance with its terms. The execution,
performance, and delivery of this Agreement has been duly authorized, approved
and adopted by Buyer. The execution, delivery and performance of this Agreement
by Buyer will not directly or indirectly (with or without notice or lapse of
time): (a) contravene the Articles of Incorporation or Bylaws of Buyer or result
in a breach of any provision of, or constitute a default under, any Contract, or
(b) violate any Legal Requirement or Order.
3.3.    Authorization of Governmental Bodies. No action by Buyer (including any
authorization, consent or approval), or by Buyer in respect of, or filing by
Buyer with, any Governmental Body is required by Buyer for, or in connection
with, the valid and lawful (a) authorization, execution, delivery and
performance by Buyer of this Agreement or (b) the consummation of this Agreement
by Buyer.
3.4.    No Broker’s Fees. Buyer has not retained or employed any broker, finder,
investment banker, or other Person, or taken any action, or entered into any
agreement or understanding that would give any broker, finder, investment
banker, or other Person any valid claim against Buyer or Seller for a
commission, brokerage fee, or other compensation arising out of the transactions
contemplated by this Agreement.
ARTICLE 4
COVENANTS AND AGREEMENTS
4.1.    Further Assurances; Subsequent Delivery by Parties. After the Closing,
upon the reasonable request of Buyer and for no consideration, Seller will
execute and deliver such further instruments of conveyance as may be reasonably
requested by Buyer to effect, record or verify the transfer to, and vesting in
Buyer, of Buyer’s right, title and interests in and to the Purchased Assets in
accordance with the terms of this Agreement and carry out the purposes and
intents of this Agreement and the transactions contemplated hereby.
4.2.    Public Announcements. The Parties recognize that each Party may from
time to time desire to issue press releases and make other public statements or
public disclosures regarding the terms of this Agreement. In such event, the
Party desiring to issue a press release or make a public statement or public
disclosure shall provide the other Party with a copy of the proposed press
release,

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statement or disclosure for review and approval as soon as practicable prior to
publication, which advance approval shall not be unreasonably withheld,
conditioned or delayed. Except as provided in this Section 4.2, no public
statement or public disclosure of, or concerning, the terms of this Agreement
shall be made, either directly or indirectly, by either Party, without first
obtaining the written approval of the other Party (such approval not to be
unreasonably withheld, conditioned or delayed). Once any public statement or
public disclosure has been approved in accordance with this Section 4.2, then
either Party may appropriately communicate information contained in such
permitted statement or disclosure. Notwithstanding the foregoing, Seller and
Buyer shall mutually agree on a press release to be issued by Seller upon the
execution of this Agreement (such agreement not be unreasonably withheld,
conditioned or delayed by Buyer).
4.3.    Confidentiality.
(a)    Legal Proceedings. Notwithstanding any provision herein to the contrary,
in the event that any Receiving Party hereafter or any of its Representatives
becomes obligated (by deposition, interrogatory, request for documents,
subpoena, civil investigative demand or similar process) to disclose any
Confidential Information of the Disclosing Party, the Receiving Party shall
immediately notify the Disclosing Party of each such requirement and identify
the Confidential Information so required thereby so that the Disclosing Party
may seek an appropriate protective order or other remedy with respect to
resisting disclosure, narrowing the scope of the requirement, protect as
confidential that which is disclosed, and/or waive the Receiving Party's
compliance with the terms hereof. If, failing the entry of an appropriate remedy
or receipt of a waiver, the Receiving Party or any of its Representatives, may
disclose that portion of the Confidential Information that its counsel advises
that the Receiving Party or such Representative is compelled to disclose. In any
event, the Receiving Party and its Representatives shall reasonably cooperate in
any action by the Disclosing Party [**] to obtain an appropriate protective
order or other reliable assurance that such Confidential Information shall be
treated as confidential.
(b)    Specificity. For the avoidance of doubt, the Receiving Party shall not be
relieved of its obligations as to any Confidential Information which is
specific, merely because such specific information is embraced by general
information falling within any of the exceptions set forth in the definition of
Confidential Information and Section 4.3(a) above.
(c)    Jointly Owned Confidential Information. The Purchased Assets and Joint IP
constitute the Confidential Information of both Parties (the “Joint CI”).
Subject to the foregoing, each Party shall be deemed to be the Receiving Party
of the Joint CI. The second and third sentences of Section 4.3(d) below shall
not be construed to limit either Party’s ability to use or disclose Joint CI.
Any disclosure to a Third Party of Joint CI by either Party shall include
confidentiality provisions designed to maintain the validity and enforceability
of any Intellectual Property therein, such provisions being no less strict than
those imposed herein. Notwithstanding the above, to the extent there is any
Confidential Information owned by Buyer under an Ancillary Agreement that was
initially disclosed by Seller to Buyer, or

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as between Affiliates of them, such that Seller is the Disclosing Party and
Buyer is the Receiving Party, Buyer shall have no obligation to Seller under
Section 4.3(a).
(d)    Standard of Protection and Use of Confidential Information. Each
Receiving Party shall, and shall direct its Representatives to, use at least the
same level of care to prevent any unauthorized use or disclosure of the
Confidential Information of the Disclosing Party as it exercises in protecting
its own information of a similar nature, but in no event less than a reasonable
standard of care. A Party shall not, without the prior written consent of the
Disclosing Party, make use of the Disclosing Party's Confidential Information
except pursuant to this Agreement or the Ancillary Agreements. The Receiving
Party will not disclose the Disclosing Party's Confidential Information to
anyone except to its Representatives to whom disclosure is reasonably required
under this Agreement or the Ancillary Agreements and who have been made aware
that the Confidential Information is confidential and are bound to treat it as
such. The Receiving Party shall be responsible for any unauthorized disclosure
or use of the Disclosing Party's Confidential Information by any of its
Representatives or any breach of this Agreement caused by any of its
Representatives as finally determined by a court of competent jurisdiction.
(e)    Ownership of Confidential Information. Except as set forth herein and in
any Ancillary Agreement respecting co-ownership and ownership, and in concert
with Section 4.3(c) above, all Confidential Information is and shall remain the
property of the Disclosing Party, and except to the extent as may be set forth
herein and in any Ancillary Agreement, no disclosure hereunder shall be deemed,
by implication, estoppel or otherwise, to vest in the Receiving Party or any of
its Representatives any license or other ownership rights to the Confidential
Information of the Disclosing Party or under any Patents, Trademarks or
Copyrights owned or controlled by the Disclosing Party.
(f)    Certain Disclosures.
(i)    Notwithstanding anything to the contrary in this Agreement, a Party may
disclose the terms of this Agreement where required by applicable stock exchange
or NASDAQ rule (with prompt notice of any such legally required disclosure to
the other Party and to the extent practicable an opportunity to comment on such
disclosure). Buyer acknowledges that Seller is required to file a Form 8-K with
the United States Securities and Exchange Commission upon execution of this
Agreement and/or the Ancillary Agreements and a copy of this Agreement and/or
the Ancillary Agreements with such Form 8-K or Seller’s next filed Form 10-Q,
and Seller shall use commercially reasonable efforts to seek confidential
treatment of such copies (with prompt notice to Buyer of any such proposed
redactions and a reasonable opportunity to comment on such redactions prior to
filing of copies of this Agreement and the Ancillary Agreements).
(ii)    A Party may disclose the other Party’s Confidential Information (i) in
connection with seeking FDA clearance and other approvals, clearances,
certifications, registrations and authorizations worldwide, solely to the extent
necessary for such regulatory approvals, clearances, certifications,
registrations and

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authorizations, so long as such Party employs reasonable and customary
procedures to protect confidentiality, including, as applicable, agency
procedures and/or non-disclosure agreements, and (ii) in connection with
investor disclosures solely to the extent required under applicable securities
laws or in the normal course of business, and so long as such Party employs
procedures to protect confidentiality, including agency procedures and/or
non-disclosure agreements.
(g)    Survival. Notwithstanding anything to the contrary, the confidentiality
and non-use obligations under this Section 4.3, and under applicable provisions
of the Ancillary Agreements, with respect to information or material
constituting Confidential Information shall remain in effect thereafter and
expire only upon such information or material no longer constituting
Confidential Information.
(h)    Remedies. Buyer and Seller shall notify the other Party immediately if it
knows or reasonably suspects that the terms of this Section 4.3 have been
breached. Each Party agrees that any unauthorized use and/or disclosure of the
other Party’s Confidential Information may cause irreparable harm to the
Disclosing Party for which monetary damages would be inadequate and that the
provisions of this Agreement may be enforced by way of a restraining order or
injunction and/or specific performance in addition to any other available legal
remedies.
(i)    A Disclosing Party shall not include in any disclosure to the Receiving
Party any information or material subject to the attorney-client privilege, work
product doctrine or any other applicable privilege concerning pending or
threatened legal or regulatory proceedings or governmental investigations. To
the extent that any such information or material be provided inadvertently
provided to a Party, promptly upon discovery by either Party of such disclosure,
the Parties shall cooperate in limiting dissemination within their organizations
and in returning or destroying the information or materials to the Disclosing
Party, including exploration of a commonality of interest with respect to the
subject matter of the inadvertently disclosed information or material, and the
desire, intention and mutual understanding that the disclosure of such material
is not intended to, and will not, waive or diminish in any way the
confidentiality of such material or its continued protection under the
attorney-client privilege, work product doctrine or other applicable privilege.
4.4.    Transfer of Purchased Assets. If either Party becomes aware that any
Purchased Assets have not been transferred to Buyer, it shall promptly notify
the other Party, and thereafter Seller and its Affiliates shall, as soon as
reasonably practicable, ensure that the Purchased Assets are transferred to
Buyer or its Affiliates [**].
ARTICLE 5
SURVIVAL; INDEMNIFICATION
5.1.    Survival of Representations, Warranties, Covenants and Agreements. All
representations, warranties, covenants and agreements in this Agreement made by
any Party will survive the Closing; provided, however, the representations and
warranties in this Agreement made by any Party will survive for a period of
[**]; provided, further, (a) the Intermediate Representations

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will survive for a period of the shorter of: (a) [**] following First Commercial
Sale of the Product; or (b) [**] from the Closing; and (b) the Fundamental
Representations will survive for a period of [**] following the expiration of
the applicable statute of limitations period (taking into account tolling
periods and extensions under applicable Legal Requirements). If written notice
of a Claim has been given prior to the end of such applicable period, the
termination date shall be extended until such Claim is fully resolved, but
solely purposes of resolving such Claim.
5.2.    Seller Indemnification. Subject to the provisions of this 0, Seller will
indemnify and hold harmless Buyer and its Affiliates and their respective
shareholders, directors, officers, employees, agents and representatives (“Buyer
Indemnified Persons”) from and against, and will reimburse Buyer for, any and
all Damages arising from or related to: (a) any breach by Seller of any
representation or warranty of Seller in this Agreement (for the purposes of this
ARTICLE 5, all materiality exceptions and qualifiers arising from the use of the
words “material” or “materially” or the phrase “Material Adverse Change” or
similar words or phrases set forth in the representations and warranties of
Seller contained in this Agreement (other than with respect to Section 2.9)
shall be disregarded for purposes of determining whether any such representation
and warranty has been breached and the amount of Damages resulting therefrom);
(b) any breach by Seller of any covenant of Seller in this Agreement; (c) any
Seller Obligations; (d) any claims against Buyer by creditors of Seller or any
of its Affiliates except to the extent arising from or relating to Buyer’s
breach of this Agreement or any Ancillary Agreement; and (e) any Tax arising
from, or that is attributable to, Seller’s ownership of the Purchased Assets on
or before the Closing Date or any Taxes of Seller or any of its Affiliates.
5.3.    Buyer Indemnification. Subject to the provisions of this ARTICLE 5,
Buyer will indemnify and hold harmless Seller and its Affiliates and their
respective shareholders, directors, officers, employees, agents and
representatives (“Seller Indemnified Persons”) from and against, and will
reimburse Seller for, any and all Damages arising from or related to: (a) any
breach by Buyer of any representation or warranty in this Agreement or any other
certificate or instrument delivered pursuant to this Agreement (for the purposes
of this ARTICLE 5, all materiality exceptions and qualifiers arising from the
use of the words “material” or “materially” or the phrase “Material Adverse
Change” or similar words or phrases set forth in the representations and
warranties of Seller contained in this Agreement (other than with respect to
Section 2.9) shall be disregarded for purposes of determining whether any such
representation and warranty has been breached and the amount of Damages
resulting therefrom); (b) any breach by Buyer of any covenant in this Agreement;
and (c) any Buyer Obligations.
5.4.    Limitations on Amount. With respect to the matters described in Section
5.2(a) and Section 5.3(a), the Parties will not be liable unless the aggregate
amount of Damages under Section 5.2(a) or Section 5.3(a), as applicable, exceeds
$[**] (the “Basket”), in which event, subject to the other limitations set forth
in this ARTICLE 5, the Indemnifying Person shall be responsible for the full
amount of all applicable Damages and not only those in excess of the Basket, but
only up to a maximum amount equal to the $[**] in the aggregate across all
Claims (the “Cap”); provided, that, the Basket and Cap shall not apply to
Damages resulting from breaches of [**] with respect to Seller, and breach of
[**], with respect to Buyer. Without derogation to the Cap, the liability of the
Indemnifying Person under Section 5.2 or Section 5.3, as applicable, for any and
all Claims shall

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not exceed the Purchase Price (the “Purchase Price Cap”), and Seller’s liability
as the Indemnifying Person with respect to Damages resulting from breaches of
the Intermediate Representations shall not exceed [**]-percent ([**]%) of the
Purchase Price Cap. Notwithstanding the foregoing, the limitations set forth in
this Section 5.4 shall not apply to any Damages resulting from [**].
5.5.    Indemnification Process.
(a)    Notice. Promptly after a Buyer Indemnified Person or Seller Indemnified
Person (such Person, an “Indemnified Person”) having knowledge of any written
threat of the commencement of any Claim against it, or receiving notice of the
commencement of any Claim against it, such Indemnified Person will, if a claim
is to be made against an Indemnifying Person under this Agreement (such Person,
an “Indemnifying Person”), give prompt notice to the Indemnifying Person of the
commencement of such claim, but the failure to provide prompt notice to the
Indemnifying Person will not relieve the Indemnifying Person of any
indemnification obligation that it may have to any Indemnified Person, except to
the extent that the Indemnifying Person is actually prejudiced by the
Indemnified Person’s failure to give such notice.
(b)    Participation. If any Claim by a Third Party is brought against an
Indemnified Person and it gives notice to the Indemnifying Person of the
commencement of such Claim, the Indemnifying Person will be entitled to
participate in such Action and, to the extent that it wishes to, assume control
over the defense and settlement of such Claim, with counsel satisfactory to the
Indemnified Person. After notice from the Indemnifying Person to the Indemnified
Person of its election to assume such control, the Indemnifying Person will not,
as long as it diligently conducts such defense, be liable to the Indemnified
Person under this ARTICLE 5 for any fees of other counsel or any other expenses
with respect to the defense of such Claim subsequently incurred by the
Indemnified Person in connection with the defense of such Claim. If the
Indemnifying Person assumes the defense of a Claim:
(i)    It will be conclusively established for purposes of this Agreement that
the claims made in that Claim are within the scope of and subject to
indemnification;
(ii)    No compromise or settlement of such claims may be effected by the
Indemnifying Person without the Indemnified Person’s consent unless: (A) there
is no finding or admission of any violation of Legal Requirements or any
violation of the rights of any Person by the Indemnified Person and no effect on
any other claims that may be made against the Indemnified Person, (B) the sole
relief provided is monetary damages that are paid in full by the Indemnifying
Person and (C) such settlement includes as an unconditional release of liability
by such Third Party claimant in respect of all Indemnified Persons; and
(iii)    The Indemnified Person will have no Liability with respect to any
compromise or settlement of such claims effected without its consent. If notice
is given to an Indemnifying Person of the commencement of any Action and the
Indemnifying Person does not, within thirty days after the Indemnified Person’s

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notice is given, give notice to the Indemnified Person of its election to assume
the defense of such Action, the Indemnifying Person will be bound by any
determination made in such Action or any compromise or settlement effected by
the Indemnified Person.
(c)    Special Claims. Notwithstanding any provision to the contrary in this
Agreement, an Indemnifying Person will not be entitled to assume or continue the
defense of a Claim without the prior written consent of the Indemnified Person
if: (i) the Claim involves criminal liability or Taxes; (ii) the Indemnifying
Person is also a party to such Claim and the Indemnified Person determines in
good faith that joint representation not be permitted due to an actual conflict
of interest; (iii) if requested by the Indemnified Person, the Indemnifying
Person fails to provide reasonable assurance to the Indemnified Person of its
financial capacity to defend such Claim and provide indemnification with respect
to such Claim; or (iv) an Indemnified Person determines in good faith that there
is a reasonable probability that a Claim may materially and adversely affect it
or its Affiliates other than as a result of monetary damages for which it would
be entitled to indemnification under this Agreement, including in respect of
Buyer’s or its Affiliates’ reputation or continuing business interests including
its relationships with current or potential customers, suppliers or other
parties material to the conduct of its business. In any of the foregoing cases
((i)-(iv)), the Indemnified Person may, by providing written notice to the
Indemnifying Person (which notice shall include reasonable details about the
reason for election and specifically refer to the applicable subsections of this
Section 5.5(c)), assume the exclusive right to defend, compromise, or settle
such Claim, but the Indemnifying Person will not be bound by any determination
of a Claim so defended or any compromise or settlement effected without its
consent, which consent may not be unreasonably withheld, conditioned, or
delayed. Notwithstanding anything to the contrary in this Agreement, neither
Party shall be required to provide, to permit any inspection of, to disclose any
information with respect to, or to allow participation or control in respect of,
any Tax Return of the Affiliated Group of such Party or its Affiliates.
5.6.    Other Claims. If any Indemnified Person should have a claim against any
Indemnifying Person hereunder that does not involve a Third Party claim, the
Indemnified Person will transmit to the Indemnifying Person a written notice
(the “Indemnity Notice”) describing in reasonable detail the nature of the
claim, and the basis of the Indemnified Person’s request for indemnification
under this Agreement. If the Indemnified Person does not receive notice from the
Indemnifying Person acknowledging or disputing such claim within [**] of
delivery of the Indemnity Notice, then the Indemnified Person shall transmit to
the Chief Executive Officer and Chief Legal Officer of the Indemnifying Person a
copy of the Indemnity Notice previously transmitted. If the Indemnifying Person
does not notify the Indemnified Person within [**] from its receipt of such
second transmittal of the Indemnity Notice that the Indemnifying Person disputes
such claim, the claim specified by the Indemnified Person in the Indemnity
Notice will be deemed a Liability of the Indemnifying Person hereunder, with
respect to which the Indemnified Person is entitled to prompt indemnification
hereunder.

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5.7.    Remedies Exclusive. The Parties acknowledge and agree that their sole
and exclusive remedy with respect to any and all Claims for any breach of any
representation, warranty, covenant, agreement or obligation set forth herein or
otherwise relating to the subject matter of this Agreement, shall be pursuant to
the indemnification provisions set forth in this Agreement. Notwithstanding the
foregoing, (i) neither Party shall be limited in its rights to (a) seek and
obtain any equitable relief or to seek any remedy on account of any fraud or
intentional misrepresentation by any Party hereto and (b) with respect to a
breach of any covenants in this Agreement, seek specific performance and (ii) a
remedy for breach of Section 2.12(s) shall be (a) the addition of the specific
omitted assets to the Purchased Assets if such omitted assets were owned by
Seller or its Affiliates or (b) with respect to breaches of the last sentence of
Section 2.12(s), the purchase by Seller of such omitted asset for Buyer or
reimbursement of Buyer’s reasonable purchase cost therefor.
5.8.    Limitation of Liability. EXCEPT FOR [**], NO PARTY SHALL BE LIABLE TO
THE OTHER PARTY OR ANY OF ITS AFFILIATES FOR [**] DAMAGES ARISING FROM OR
RELATING TO THIS AGREEMENT OR ITS SUBJECT MATTER, REGARDLESS OF ANY NOTICE OF
THE POSSIBILITY OF SUCH DAMAGES.
5.9.    No Reliance. Each Party acknowledges and agrees that in entering into
this Agreement it has not relied and is not relying on any representations,
warranties or other statements whatsoever, whether written or oral (from or by
the other Party or any Person acting on its behalf) other than those expressly
set out in this Agreement, and that it will not have any right or remedy rising
out of any representation, warranty or other statement not expressly set out in
this Agreement.
ARTICLE 6
DEFINITIONS
As used in this Agreement the listed terms will have the following respective
meanings and to the extent not defined in this section or otherwise in this
Agreement, a term shall have the meaning ascribed to it in any of the Ancillary
Agreements:
“Action” means any Claim, arbitration, charge, complaint, audit, proceeding,
examination, assessment, hearing, investigation, litigation or suit (whether
civil, criminal, administrative, investigative or informal) commenced, brought,
conducted or heard by or before, or otherwise involving, any Governmental Body
or arbitrator.
“Affiliate” means, with respect to any Person, any other Person that directly,
or indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control, currently or in the future, with, such specified
Person, but only for so long as such control persists. For purposes of this
definition, the term “control” (including the terms “controlling,” “controlled
by” and “under common control with”) means (a) the possession of the power to
vote 50% or more of the securities or other equity interests of a Person having
ordinary voting power or (b) the possession of the power to direct or cause the
direction of the management policies of a Person, by Contract or otherwise.

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“Affiliated Group” means an affiliated group as defined in Section 1504 of the
Code (or any analogous combined, consolidated, unitary or similar group defined
under state, local or foreign Legal Requirement).
“Agreement” has the meaning set forth in the Preamble.
“Ancillary Agreements” means the Distribution Agreement, the Quality Agreement,
the Development Agreement, the License Agreement, and the Know-How and Copyright
Assignment.
“Asset Purchase” has the meaning set forth in the Recitals.
“Basket” has the meaning set forth in Section 5.4.
“Bill of Sale” means the bill of sale substantially in the form of Exhibit F.
“Buyer” has the meaning set forth in the Preamble.
“Buyer Field” means any Permitted Use.
“Buyer Indemnified Person” has the meaning set forth in Section 5.2.
“Buyer Obligations” has the meaning set forth in Section 1.4.
“Cap” has the meaning set forth in Section 5.4.
“Change of Control” means, with respect to a Party, (i) the sale of all or
substantially all the assets of such Party to a Third Party; (ii) any merger,
consolidation or acquisition of such Party with, by or into a Third Party; or
(iii) any change in the ownership of more than fifty percent (50%) of the voting
capital stock of such Party in one or more related transactions.
“Claims” means any assertion of right whatsoever (including all debts, bonds,
promises, Damages, equitable claims and judgments), whether liquidated, fixed or
contingent, direct or indirect or imputed.
“Closing” has the meaning set forth in Section 1.6.
“Closing Date” has the meaning set forth in Section 1.6.
“Code” means the Internal Revenue Code of 1986, as amended.
“Confidential Information” means the existence and terms of this Agreement and
the Ancillary Agreements; “Confidential Information” (as such term is defined in
the Prior CDA) disclosed under the Prior CDA and prior to the Closing Date; the
fact that information is being shared for the performance of the Parties’
respective rights and obligations under this Agreement and the Ancillary
Agreements; materials and information (whether oral or fixed in any medium) in
reference to the following subject matter to the broadest extent possible;
technical (without limitation, design, manufacture, testing, sourcing, vendors),
clinical (without limitation, methods,

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testing data), financial, business, marketing, sales or other materials and
information, and with regard to the Purchased Assets, that which can be gleaned
from the Software Code and Manufacturing Documents. For the avoidance of doubt,
Confidential Information shall include Trade Secrets and Know-How. Confidential
Information shall exclude the following:

i.
Information that at the time of disclosure by the Disclosing Party to the
Receiving Party is publicly known or, after disclosure, becomes publicly known,
in each case other than as a result of disclosure by the Receiving Party or its
Representatives in violation of the terms of this Agreement;

ii.
Information that the Receiving Party was or becomes lawfully in possession of
prior to the first disclosure of such information by the Disclosing Party
hereunder or under the Prior CDA, and as to which the Receiving Party is not
under an obligation of confidentiality to the Disclosing Party;

iii.
Information that was or is independently developed by persons working for or on
behalf of the Receiving Party who had no knowledge of or access to the
Disclosing Party's Confidential Information; or

iv.
Information that is or was received by the Receiving Party from a Third Party
(other than a Representative of either party) having a legal right to transmit
the same and free of any confidentiality obligations to the Disclosing Party.

“Consent and Non-Disturbance Agreement” means the consent and non-disturbance
agreement substantially in the form of Exhibit E.
“Contract” means, with respect to any Person, any legally binding contract,
agreement, lease, license, commitment, promise, undertaking, arrangement or
understanding, whether written or oral.
“Copyrights” means, to the fullest extent permitted by any applicable law, all
rights in works of authorship, published or unpublished, in any medium
whatsoever, whether now known or hereafter known or devised, including
copyrights in computer programs, Software (whether in object or source code),
databases, data collections, data compilations and related documents including
for each copyright any right under such copyright to use, reproduce, display,
perform, modify, enhance, translate, distribute and prepare derivative works
thereof, and all moral rights, and all copyright registrations and applications
for registration of any of the foregoing, including renewals and extensions.
“Court” means any federal or state court or similar tribunal of the United
States, or court or similar tribunal of any foreign country or any political
subdivision thereof or supra-national court, or any arbitration tribunal.
“Damages” means any loss (including license fees, royalty or damage payments,
including a buy-out in the form of a one-time payment in lieu of periodic
royalty payments, or amounts paid

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in settlement), cost, Liability, penalty, Tax, claim, damage, expense (including
cost of investigation, defense, settlement and reasonable attorneys’, experts’
and other professional fees and expenses).
“Development Agreement” has the meaning set forth in the Recitals.
“Disclosing Party” means a Party disclosing Confidential Information pursuant to
this Agreement or the Ancillary Agreements.
“Disclosure Schedule” has the meaning set forth in Section 2.1.
“Distribution Agreement” has the meaning set forth in the Recitals.
“Excluded Code” has the meaning set forth in Schedule 1.1.
“FDA” means the U.S. Food and Drug Administration, or any successor agency.
“First Commercial Sale” has the meaning set forth in the Distribution Agreement.
“Fundamental Representations” means representations and warranties contained in
[**].
“Governmental Authorization” means any approval, clearance, consent, license,
permit, waiver or other authorization issued, granted, given or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
Legal Requirement.
“Governmental Body” means any: (a) nation, state, county, city, town, village,
district or other jurisdiction of any nature; (b) federal, state, local,
municipal, foreign or other government; (c) governmental or quasi-governmental
authority of any nature (including any governmental agency, branch, department,
official, or entity and any court or other tribunal); (d) multi-national
organization or body; or (e) body exercising, or entitled or purporting to
exercise, any administrative, executive, judicial, legislative, police,
regulatory or taxing authority or power of any nature.
“Indemnified Person” has the meaning set forth in Section 5.5.
“Indemnifying Person” has the meaning set forth in Section 5.5.
“Indemnity Notice” has the meaning set forth in Section 5.6.
“Intellectual Property” means all intellectual and industrial property rights
recognized under applicable Legal Requirements, and all related priority rights
protected, created or arising under the laws of the United States or any other
jurisdiction or under any international convention, registered or unregistered,
recognized by statute or under the common law, including (a) all inventions and
discoveries (whether patentable or unpatentable and whether or not reduced to
practice and all improvements thereto), (b) all Know-How, Copyrights, Software,
Trademarks and Patents, (c) recordings, licenses, common-law rights and
contractual rights for any of the foregoing, and (d) all copies of tangible
embodiments of the foregoing (in whatever form or medium) and any rights
equivalent to any of the foregoing anywhere in the world.

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“Intermediate Representations” means representations and warranties contained in
[**].
“Joint CI” has the meaning set forth in Section 4.3(c).
“Joint IP” has the meaning set forth in the Development Agreement.
“Know-How” means all information constituting Confidential Information and
relating to technical, scientific, marketing, commercial, and other information,
concepts, ideas, knowledge, technology, specifications, inventions, Trade
Secrets, methods, processes, controls, practices, formulas, instructions,
skills, techniques, procedures, experiences, technical assistance, designs,
drawings, assembly procedures, computer programs, apparatuses, manufacturing
procedures, and test procedures (whether or not patented or patentable) in
written, electronic or any other fixed form, and all improvements, whether to
the foregoing or otherwise, and other discoveries, and developments. Know-How
does not include any Patents.
“Know-How and Copyright Assignment” means the know-how and copyright assignment
substantially in the form of Exhibit G.
“Knowledge” and words of similar meaning means the actual knowledge of any
individual employed or engaged by Seller or its Affiliates with the title of
Chief Executive Officer, Chief Financial Officer, Chief Legal Officer or General
Counsel, in each case, as such individual reasonably ought to have in the
ordinary course of performing their duties and upon reasonable inquiry and
investigation (including inquiry of any timekeeper of [**] which has billed time
to the account of Seller or its Affiliates).
“Legal Requirement” means any federal, state, local, municipal, foreign,
international, multinational or other constitution, law, ordinance, standard,
principle of common law, statute, code, regulation, rule or treaty.
“Liability” means, with respect to any Person, any liability or obligation of
such Person whether known or unknown, whether asserted or unasserted, whether
determined, determinable or otherwise, whether absolute or contingent, whether
accrued or unaccrued, whether liquidated or unliquidated, whether incurred or
consequential, whether due or to become due and whether or not required under
generally accepted accounting principles in the United States, as in effect from
time to time, to be accrued on the financial statements of such Person.
“License Agreement” has the meaning set forth in the Recitals.
“Licensed IP” has the meaning set forth in the License Agreement.
“Lien” means any security interest, pledge, mortgage, lien, right of first
refusal or similar right, charge, encumbrance, or any similar interest.
“Manufacturing Documents” has the meaning set forth in Schedule 1.1.
“Material Adverse Change” means an adverse change, effect, occurrence, state of
facts, event or condition, individually or in the aggregate, in the business,
operations, properties, prospects,

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assets or condition of the Purchased Assets that has had, or could reasonably be
anticipated to (i) have an adverse effect on the value of the Purchased Assets,
financial or otherwise or (ii) or could reasonably be expected to prevent or
materially impede, hinder or delay the transactions contemplated hereby.
“Off-The-Shelf Implant” means a joint replacement implant not designed or made
to order for a particular patient.
“Off-The-Shelf Knee Implant” means a total, partial or revision knee replacement
implant not designed or made to order for a particular patient.
“Open Source Materials” has the meaning set forth in Section 2.12(t).
“Order” means any award, decision, injunction, judgment, order, decree,
stipulation, ruling, subpoena or verdict entered, issued, made or rendered by
any court, administrative agency or other Governmental Body or by any
arbitrator.
“Ordinary Course” means the ordinary course of Seller’s business consistent with
past practice.
“Patents” means all issued letter and design patents, reissued or reexamined
patents, patents amended during any post-grant proceeding, revivals of patents,
utility models, certificates of invention, registrations of patents and
extensions thereof, supplementary protection certificates regardless of country
issued or formal name and substantial equivalents thereto (such as registered
community designs, registered industrial designs, utility models and inventors’
certificates), including all published and unpublished non-provisional and
provisional patent applications, reissue applications, reexamination
proceedings, invention disclosures and records of invention, continuation
applications, continuation-in-part applications, requests for continued
examination, divisional applications, patent term extension applications,
applications for supplemental protection certificates, all rights in respect of
utility models and certificates of invention, and all rights and priorities and
all extensions and renewals thereof, regardless of the country filed or formal
name.
“Patient-Specific Implants” means any joint replacement implants that are not
Off-The-Shelf Implants.
“Patient-Specific Instrumentation” means any instrumentation or instrument that
is designed and manufactured for, or on behalf of, a particular patient.
“Permitted Use” means the use, copying, modification, or preparation of
derivative works by Buyer, its Affiliates and any permitted assignees under
Section 7.9 of the Purchased Assets solely to develop, manufacture and
commercialize Patient-Specific Instrumentation for use with Triathlon. The
Permitted Use shall not include the use of the Purchased [**].
“Person” means any individual, firm, corporation, partnership, limited liability
company, joint venture, association, estate, trust, governmental agency or body
or other entity, and will include any successor (by merger or otherwise) of such
Person.

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“Prior CDA” means the Confidentiality Agreement between the Parties dated [**]
(with retroactive effect to [**]).
“Product” has the meaning set forth in the Distribution Agreement.
“Purchase Price” has the meaning set forth in Section 1.5.
“Purchase Price Cap” has the meaning set forth in Section 5.4.
“Purchased Assets” has the meaning set forth in Section 1.1.
“Receiving Party” means a Party receiving, or whose Affiliate receives or
received, Confidential Information pursuant to this Agreement or the Ancillary
Agreements.
“Related Person” with respect to a particular individual, means: (a) any Person
that directly or indirectly controls, is directly or indirectly controlled by,
or is directly or indirectly under common control of Seller; (b) any Person that
holds a material interest in Seller; (c) any Person in which Seller holds a
material interest; and (d) any Person related (within the second degree) to any
individual described in foregoing clause (b).
“Representatives” means, with respect to a Person, the officers, directors,
members, managers, employees and Affiliates of such Person. Solely with respect
to confidentiality obligations, “Representatives” shall include (a) Third
Parties to the extent disclosure is authorized under this Agreement or the
applicable Ancillary Agreement; and (b) any actual or potential acquirer of or
investor in the Receiving Party.
“Restricted Event” means: (a) the entry into, termination of, material amendment
of, or receipt of notice of termination of any license or other Contract or
transaction that relates to the Purchased Assets; (b) any sale, lease or other
disposition of any property or asset or the imposition of any Lien on any
property or asset included in the Purchased Assets or (c) any failure to cause
any liability or obligation relating to Seller or a Purchased Asset to be paid
or satisfied when the same becomes due.
“Seller” has the meaning set forth in the Preamble.
“Seller Indemnified Persons” has the meaning set forth in Section 5.3.
“Seller Obligations” has the meaning set forth in Section 1.4.
“Software” means all computer programs and computer applications, including all
software implementations of algorithms, models and methodologies, whether in
source code or object code.
“Software Code” has the meaning set forth in Schedule 1.1.
“Stryker Off-The-Shelf Knee Implant” means either: (i) an Off-The-Shelf Knee
Implant that is developed, manufactured and sold by Buyer or its Affiliates
after the Closing Date; or (ii) any units of an Off-The-Shelf Knee Implant that
is developed and manufactured by a Third Party

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(a “Third Party Knee”) and are first purchased and resold by Buyer or its
Affiliates after the Closing Date, provided that, as of the date Buyer or its
Affiliates first contract for purchase and resale, (1) neither Seller nor any of
its Affiliates has made any assertion of infringement, misappropriation or
violation of any Intellectual Property rights against such Third Party Knee
(including without limitation any written communication to any manufacturer or
seller of such Third Party Knee indicating that a license under any patent
rights of Seller or its Affiliates may be necessary for the manufacture or sale
of such Third Party Knee) and (2) neither Seller nor any of its Affiliates is
engaged in discussions with any manufacturer or seller of such Third Party Knee
regarding an agreement under which the manufacture or sale of such Third Party
Knee would be licensed or otherwise immunized under any Intellectual Property
rights of Seller or any of its Affiliates. For the avoidance of doubt, units of
a Third Party Knee that are sold by any Person other than Buyer, its Affiliates
or their respective distributors cannot constitute Stryker Off-The-Shelf Knee
Implants.
“Tax” or “Taxes” means all United States federal, state, local, foreign and
other net income, gross income, gross receipts, sales, use, ad valorem,
transfer, franchise, profits, registration, license, lease, service, service
use, value added, withholding, payroll, employment, social security, excise
(including medical device excise), severance, stamp, occupation, premium,
property, production, windfall profits, unclaimed property, escheat, customs,
duties, alternative or add-on minimum or other taxes, customs, duties, fees,
assessments or charges of any kind whatsoever (including any amounts resulting
from the failure to file any Tax Return), together with any interest and any
penalties, additions to tax or additional amounts with respect thereto.
“Tax Return” means any return (including any information return), report,
statement, schedule, notice, form or other document or information filed with or
submitted to, or required to be filed with or submitted to, any Governmental
Body in connection with the determination, assessment, collection or payment of
any Tax or in connection with the administration, implementation or enforcement
of or compliance with any Legal Requirement relating to any Tax, in each case
including any attachments thereto or amendments thereof.
“Third Party” means any Person other than Seller or Buyer or their Affiliates.
“Trademarks” means any and all registered or unregistered words, devices or
symbols that serve as or are capable of serving as an indication of source when
used in connection with goods, services or the business, including trademarks,
service marks, trade dress, trade names, corporate names, logos, slogans,
assumed fictional business names, Internet domain names and registrations and
applications for registration to any of the foregoing, including extensions and
renewals, together with all translations, adaptations, derivations, and
combinations thereof and the goodwill associated therewith.
“Trade Secrets” means information that is entitled to trade secret protection
under the laws of any jurisdiction. Stryker acknowledges that Conformis asserts
that Conformis’ Trade Secrets include the information set forth on Exhibit 1 and
Exhibit 2 of the Prior CDA, the Software Code, Manufacturing Documents,
Deliverables, and Transfer Materials.
“Transfer Taxes” has the meaning set forth in Section 7.11.

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“Transferred IP” has the meaning set forth in Section 1.1.
“Triathlon” has the meaning set forth in the Recitals.
“Wire Instructions” means the Wire instructions set forth in Exhibit H.
ARTICLE 7
GENERAL
7.1.    Counterparts and Electronic Transmission. This Agreement may be executed
in one or more counterparts, all of which will be considered one and the same
agreement, and will become effective when one or more counterparts have been
signed by each of the Parties and delivered to the other Party. This Agreement
may be executed and delivered by facsimile or e-mail transmission with the same
effect as if a manually signed original was personally delivered.
7.2.    Governing Law. This Agreement shall be governed and construed in
accordance with the laws of New York State (without regard to the conflict of
laws provisions thereof).
7.3.    Jurisdiction. Subject to Section 7.13, the federal and state Courts of
New York State shall have exclusive jurisdiction to hear and decide any suit,
Action or proceedings, and to settle any disputes, which may arise out of or in
connection with this Agreement; provided, however, that each Party shall have
the right to institute judicial proceedings in any court of competent
jurisdiction against the other Party or anyone acting by, through or under the
other Party, in order to enforce an Order entered by federal or state courts of
New York. Each Party shall cause its applicable permitted Third Party
sublicensees and Affiliates receiving any rights or benefits (including the
receipt of any Confidential Information) in connection with this Agreement to be
bound by this Section 7.3 prior to their exercise of any such rights or receipt
of any such benefits. If such Party fails to comply with the foregoing sentence
with respect to any such Third Party or Affiliate, the other Party shall have
the right to seek relief in any court of competent jurisdiction in connection
with any dispute involving such Third Party or Affiliate.
7.4.    Entire Agreement and Third-Party Beneficiaries. This Agreement
(including agreements incorporated herein including the Ancillary Agreements)
and the Exhibits and Schedules hereto contain the entire agreement by and among
the Parties with respect to the subject matter hereof and there are no
agreements, understandings, representations or warranties between the Parties
other than those set forth or referred to herein. This Agreement is not intended
to confer upon any Person not a party (and their successors and assigns
permitted by Section 7.9) any rights or remedies hereunder, except that Section
5.2 and Section 5.3 hereof are intended to benefit, and to be enforceable by,
any of the Indemnified Persons.
7.5.    Expenses. Except as otherwise set forth in this Agreement and the other
Ancillary Agreements, all legal and other costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby will be
paid by the Party incurring such costs and expenses.
7.6.    Rules of Construction. The Parties acknowledge that each Party has read
and negotiated the language used in this Agreement. Because all Parties
participated in negotiating and

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drafting this Agreement, no rule of construction will apply to this Agreement
which construes ambiguous language in favor of or against any Party by reason of
that Party’s role in drafting this Agreement.
7.7.    Severability. The provisions of this Agreement shall be deemed severable
and the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof. If any term or other
provision of this Agreement, or the application thereof to any Person or any
circumstance, is invalid, illegal or unenforceable by a Court of competent
jurisdiction, (a) a suitable and equitable provision shall be substituted
therefor in order to carry out, so far as may be valid and enforceable, the
intent and purpose of such invalid or unenforceable provision and (b) the
remainder of this Agreement and the application of such provision to other
Persons or circumstances shall not be affected by such invalidity, illegality or
unenforceability, nor shall such invalidity, illegality or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
7.8.    Notices. All notices, requests, demands and other communications to be
given pursuant to the terms of this Agreement will be in writing and will be
deemed to have been duly given if delivered by hand, sent by e-mail, sent by a
nationally recognized overnight mail service, or mailed first class, postage
prepaid:
If to Buyer:
Howmedica Osteonics Corp.
c/o
Stryker Corporation
2825 Airview Boulevard
Kalamazoo, Michigan 49002
Attn: General Counsel
E-mail:

With a copy (which shall not constitute notice) to:
Ropes & Gray LLP
Prudential Tower
800 Boylston Street
Boston, MA 02199
Attn: Michael D. Beauvais
E-mail: Michael.Beauvais@ropesgray.com

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If to Seller:

Conformis, Inc.
Attn: Chief Executive Officer and General Counsel
600 Technology Park Drive
Billerica, MA 01821

With a copy (which shall not constitute notice) to:
WilmerHale
Attn: Jason Kropp, Esq.
60 State Street
Boston, MA 02109
 

Any Party may change its address, telephone number, or facsimile number by prior
written notice to the other Parties.
7.9.    Assignment and Change of Control. Except as otherwise provided herein, a
Party shall not have the right to assign any of its rights or obligations under
this Agreement (whether through a merger, sale of stock, or otherwise) without
the prior written consent of the other Party; except that, either Party shall be
permitted, without any need for the other Party’s consent, to assign this
Agreement (a) in whole or in part to an Affiliate (provided, however, that once
such Person is no longer an Affiliate of the assigning Party, such former
Affiliate shall assign this Agreement back to the assigning Party), provided
that the assigning Party provides the other Party notice of any such assignment;
provided further that failure to provide such notice of such assignment shall
not render such assignment void; or (b) to a Third Party in connection with sale
or transfer of all or substantially all of the assigning Party’s business or
assets relating to the subject matter of this Agreement, whether by Change of
Control, merger, sale of assets or otherwise; provided, however, that, with
respect to clause (b), (i) any assignment of this Agreement shall be void and
have no effect unless and until the assignee assumes the obligations of the
assigning Party in a written instrument, a copy of which is provided to the
other Party; and (ii) any assignment of this Agreement must be accompanied by a
simultaneous assignment of the Ancillary Agreements. Any assignment in whole or
in part shall not relieve the assigning Party of its obligations hereunder. If
and to the extent that a Party assigns any of its rights and/or obligations
hereunder in accordance with this Section 7.9, then this Agreement shall be
binding upon the assignee to the same extent as if it were a Party hereto. Any
assignment not in accordance with this Section 7.9 shall be void.
7.10.    Amendments and Waivers. This Agreement may not be modified or amended
except by an instrument or instruments in writing signed by the Party against
whom enforcement of any such modification or amendment is sought. Seller may
waive compliance by Buyer or Buyer may waive compliance by Seller with any term
or provision of this Agreement on the part of such Party to be performed or
complied with, but only by an instrument in writing. The waiver by any Party of
a breach of any term or provision of this Agreement will not be construed as a
waiver of any subsequent breach.

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7.11.    Transfer Taxes; Tax Cooperation. All recordation, transfer,
documentary, sales, value added, use, stamp, conveyance or other similar Taxes,
duties or governmental charges, and all recording or filing fees or similar
costs, imposed or levied by reason of, in connection with or attributable to
this Agreement or the transactions contemplated by this Agreement,
(collectively, “Transfer Taxes”), as well as any reasonable costs incurred in
connection with the preparation and filing of related Tax Returns shall be borne
by Seller. Each Tax Return relating to Transfer Taxes will be prepared by Seller
to the extent Seller is allowed to do so under applicable Legal Requirements.
After the Closing Date, Seller and Buyer shall: (i) assist the other party
(including by providing copies of any books, records or other documents that are
reasonably requested by such party) in preparing any Tax Returns; (ii) cooperate
fully with the other party (including by providing copies of any books, records
or other documents that are reasonably requested by such party) in preparing for
any Action of, or any disputes with, Tax authorities regarding, any Tax Returns
with respect to the Purchased Assets for a Tax period or portion thereof ending
on or before the Closing Date; and (iii) furnish each other with copies of
correspondence received from any Tax authority in connection with any Tax Action
with respect to any such Tax Return for a Tax period or portion thereof ending
on or before the Closing Date; provided that no party shall be required to
provide, to permit any inspection of, or to disclose any information with
respect to, any Tax Return of its Affiliated Group.
7.12.    Interpretation. It is understood and agreed that the specification of
any dollar amount in the representations and warranties contained in this
Agreement or the inclusion of any specific item in the Schedules is not intended
to imply that such amounts or higher or lower amounts, or the items so included
or other items, are or are not material, and no Party will use the fact of the
setting of such amounts or the fact of the inclusion of any such item in the
Schedules in any dispute or controversy between the Parties as to whether any
obligation, item or matter not described herein or included in a Schedule is or
is not material for purposes of this Agreement. As used in this Agreement, the
word “including” means “including without limitation.” Unless otherwise
specified, “party” or “parties” as used in this Agreement means the parties to
this Agreement.
7.13.    Negotiation in Event of Dispute. In the event of any dispute or
disagreement between any of the Parties as to the interpretation of any
provision of this Agreement or any agreement incorporated herein, the
performance of obligations hereunder or thereunder, or any other disputed matter
relating hereto or thereto, such matter, upon the written request of any Party,
will be referred to an executive of each Party. The executives will promptly
meet in good faith to resolve the dispute. If the executives do not agree upon a
decision within thirty calendar days after the reference of the matter to them,
any Party will be free to exercise any remedies available to it.
7.14.    Relationship. Neither this Agreement nor any of the Ancillary
Agreements creates any partnership, agency or other relationship among the
Parties, including for all Tax purposes. No Party is granted any right or
authority to assume or to create any obligation or responsibility on behalf or
in the name of the other Parties to bind the other Parties in any manner
whatsoever.
* * *

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This Asset Purchase Agreement has been signed by or on behalf of the Parties as
of the day first above written.
HOWMEDICA OSTEONICS CORP.
 
 
 
By:
/s/ Spencer Stiles
Name:
Spencer Stiles
Title:
President

[Signature Page to Asset Purchase Agreement]

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This Asset Purchase Agreement has been signed by or on behalf of the Parties as
of the day first above written.
CONFORMIS, INC.
 
 
 
 
 
 
By:
/s/ M. Augusti
Name:
M. Augusti
Title:
CEO