EXHIBIT 10.1
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SERIES C CONVERTIBLE PREFERRED STOCK
AND WARRANT PURCHASE AGREEMENT
among
INTEGRA LIFESCIENCES HOLDINGS CORPORATION,
QUANTUM INDUSTRIAL PARTNERS LDC,
and
SFM DOMESTIC INVESTMENTS LLC
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Dated: February 16, 2000
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TABLE OF CONTENTS
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SECTION I. PURCHASE AND SALE OF SERIES C PREFERRED STOCK AND WARRANTS.....7
1.1 Purchase and Sale of Series C Preferred Stock and Warrants.....7
1.2 Certificate of Designation.....................................7
1.3 Closing........................................................7
SECTION II. REPRESENTATIONS AND WARRANTIES OF THE
COMPANY........................................................7
2.1 Corporate Existence and Power..................................7
2.2 Corporate Authorization; No Contravention......................8
2.3 Governmental Authorization; Third Party Consents...............8
2.4 Binding Effect.................................................9
2.5 Litigation.....................................................9
2.6 Compliance with Laws...........................................9
2.7 Capitalization................................................10
2.8 No Default or Breach......................................... 10
2.9 Taxes.........................................................10
2.10 Financial Statements..........................................11
2.11 No Material Adverse Change; Ordinary Course of Business.......11
2.12 SEC Documents.................................................12
2.13 Investment Company............................................12
2.14 Private Offering..............................................12
2.15 Employee Benefit Plans........................................12
2.16 Title to Assets...............................................12
2.17 Intellectual Property.........................................13
2.18 Trade Relations...............................................13
2.19 Contracts and Other Agreements................................14
2.20 Liabilities...................................................14
2.21 Broker's, Finder's or Similar Fees............................14
2.22 Disclosure; Agreement and Other Documents.....................14
SECTION III. REPRESENTATIONS AND WARRANTIES OF THE
PURCHASERS ...................................................15
3.1 Existence and Power...........................................15
3.2 Authorization; No Contravention...............................15
3.3 Governmental Authorization; Third Party Consents..............15
3.4 Binding Effect................................................15
3.5 Purchase for Own Account......................................15
3.6 Accreditation; Sophistication; Other Securities Laws Matters..16
3.7 Broker's, Finder's or Similar Fees............................16
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SECTION IV. CONDITIONS TO THE OBLIGATION OF THE PURCHASERS TO CLOSE.......17
4.1 Representations and Warranties................................17
4.2 Compliance with this Agreement................................17
4.3 Secretary's Certificate.......................................17
4.4 Officers' Certificate.........................................17
4.5 Documents.....................................................17
4.6 Filing of Certificate of Designation..........................18
4.7 Amended and Restated Rights Agreement.........................18
4.8 Opinion of Counsel............................................18
4.9 Approval of Counsel to the Purchasers.........................18
4.10 Purchased Shares..............................................18
4.11 Warrants......................................................18
4.12 Consents and Approvals........................................18
4.13 No Litigation.................................................19
4.14 No Material Judgment or Order.................................19
4.15 No Material Adverse Change....................................19
4.16 Hart-Scott-Rodino.............................................19
4.17 Schedules.....................................................19
4.18 No Change in Capitalization...................................19
SECTION V. CONDITIONS TO THE OBLIGATIONOF THE COMPANY TO CLOSE...........19
5.1 Representations and Warranties................................20
5.2 Compliance with this Agreement................................20
5.3 Amended and Restated Rights Agreement.........................20
5.4 Consents and Approvals........................................20
5.5 Payment of Purchase Price.....................................20
5.6 No Material Judgment or Order.................................20
5.7 Hart-Scott-Rodino.............................................20
5.8 Consent of Purchasers.........................................21
SECTION VI. INDEMNIFICATION...............................................21
6.1 Indemnification...............................................21
6.2 Notification..................................................21
6.3 Amended and Restated Rights Agreement.........................22
SECTION VII. AFFIRMATIVE COVENANTS.........................................23
7.1 Preservation of Existence.....................................23
7.2 Delivery of 1999 Audited Financial Statements.................23
7.3 Financial Statements and Other Information....................24
7.4 Reservation of Shares.........................................25
7.5 Registration and Listing......................................25
7.6 Tax Matters...................................................25
7.7 Further Assurances............................................26
7.8 Delivery of Schedules.........................................26
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SECTION VIII. TERMINATION OF AGREEMENT......................................26
8.1 Termination...................................................26
8.2 Survival......................................................27
SECTION IX. MISCELLANEOUS.................................................27
9.1 Survival of Representations and Warranties....................27
9.2 Notices.......................................................27
9.3 Successors and Assigns........................................29
9.4 Amendment and Waiver..........................................29
9.5 Counterparts..................................................30
9.6 Headings......................................................30
9.7 GOVERNING LAW.................................................30
9.8 Severability..................................................30
9.9 Rules of Construction.........................................30
9.10 Entire Agreement..............................................30
9.11 Fees..........................................................30
9.12 Publicity; Confidentiality....................................31
9.13 Further Assurances............................................31
9.14 Schedules.....................................................31
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EXHIBITS
A Form of Warrant
B Certificate of Designation
C Amended and Restated Registration Rights Agreement
D Form of Drinker Biddle & Shanley Opinion
SCHEDULES
1 Purchased Shares and Warrants and Purchase Price
2.5 Litigation
2.7 Capitalization
2.8 No Default or Breach
2.9 Tax Agreements or Arrangements
2.11 No Material Adverse Change; Ordinary Course of Business
2.16 Title to Assets
2.17(a) Intellectual Property
2.17(b) Infringements of Integra
2.17(c) Intellectual Property Litigation
2.18 Trade Relations
2.19 Contracts and other Agreements
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SERIES C CONVERTIBLE PREFERRED STOCK
AND WARRANT PURCHASE AGREEMENT
THIS SERIES C CONVERTIBLE PREFERRED STOCK AND WARRANT PURCHASE
AGREEMENT (this "Agreement") is made as of February 16, 2000 by and among
Integra LifeSciences Holdings Corporation, a Delaware corporation ("Integra"),
and the several purchasers listed on Schedule 1 hereto (the "Purchasers").
WHEREAS, Integra has agreed to issue and sell to each of the
Purchasers, and each of the Purchasers has agreed to purchase from Integra, for
the aggregate purchase price set forth opposite such Purchaser's name on
Schedule 1 hereto, (i) the aggregate number of shares of Series C Convertible
Preferred Stock, par value $.01 per share, of Integra (the "Series C Preferred
Stock") set forth opposite such Purchaser's name on Schedule 1 hereto, and (ii)
a warrant ("Warrant") to purchase, subject to the terms and conditions thereof,
the aggregate number of shares of Common Stock, par value $.01 per share, of
Integra (the "Common Stock") set forth opposite such Purchaser's name on
Schedule 1 hereto, at an exercise price of $9.00 per share, containing terms and
conditions set forth in the form of warrant attached hereto as Exhibit A.
NOW, THEREFORE, in consideration of the mutual terms and conditions
herein contained, and for good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:
DEFINITIONS
For all purposes of this Agreement, unless otherwise expressly
provided, (a) the terms defined in this Definitions section have the meanings
assigned to them herein and include the plural as well as the singular, (b) all
accounting terms not otherwise defined herein have the meanings assigned under
generally accepted accounting principles in the United States, (c) all
references in this Agreement to designated "Sections" and other subdivisions are
to the designated Sections and other subdivisions of the body of this Agreement,
(d) pronouns of either gender or neuter shall include, as appropriate, the other
pronoun forms, and (e) the words "herein," "hereof" and other words of similar
import refer to this Agreement as a whole and not to any particular Article,
Section or other subdivision.
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As used in this Agreement, the following definitions shall apply:
"Action" means any action, complaint, petition, investigation, suit
or other proceeding, whether civil or criminal, in law or in equity, or before
any arbitrator or Governmental Entity.
"Affiliate" shall mean any Person who is an "affiliate" (as defined
in Rule 12b-2 of the General Rules and Regulations under the Exchange Act) of,
and any Person controlling, controlled by, or under common control with, any
Purchaser. For the purposes of this Agreement, "control" includes the ability to
have investment discretion through contractual means or by operation of law.
"Agreement" means this Agreement as the same may be amended,
supplemented or modified in accordance with the terms hereof.
"Amended and Restated Registration Rights Agreement" means the
Amended and Restated Registration Rights Agreement substantially in the form
attached hereto as Exhibit C.
"Board of Directors" means the Board of Directors of Integra.
"Business" means the business of Integra and shall be deemed to
include any of the following incidents of such business: income, operations,
condition (financial or other), assets, properties and liabilities.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in the State of New York are authorized or
required by law or executive order to close.
"By-laws" means the amended and restated by-laws of Integra, as the
same may have been amended and as in effect on the Closing Date.
"Certificate of Designation" means the Certificate of Designation
with respect to the Series C Preferred Stock adopted by the Board of Directors
and filed with the Secretary of State of the State of Delaware on or before the
Closing Date substantially in the form attached hereto as Exhibit B.
"Certificate of Incorporation" means the Amended and Restated
Certificate of Incorporation of Integra, as the same has been amended and as in
effect on the Closing Date.
"Closing" has the meaning set forth in Section 1.3 of this
Agreement.
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"Closing Date" means the date specified in Section 1.3 of this
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor statute thereto.
"Commission" means the Securities and Exchange Commission or any
similar agency then having jurisdiction to enforce the Securities Act.
"Common Stock" means the Common Stock, par value $.01 per share, of
Integra and any other capital stock of Integra into which such stock is
reclassified or reconstituted.
"Condition of Integra" means the assets, business, properties,
operations or financial condition of Integra and the Subsidiaries, taken as a
whole.
"Contract" means any agreement, arrangement, bond, commitment,
franchise, indemnity, indenture, instrument, lease, license or understanding,
whether or not in writing.
"Contractual Obligations" means as to any Person, any provision of
any security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument to which such Person is a
party or by which it or any of its property is bound.
"Delivery Date" shall have the meaning set forth in Section 2.6 of
this Agreement.
"Encumbrance" means any claim, charge, easement, encumbrance, lease,
covenant, security interest, lien, option, pledge, rights of others, restriction
(whether on voting, sale, transfer, disposition or otherwise), whether imposed
by agreement, understanding, law, equity or otherwise, except for any
restrictions on transfer generally arising under any applicable United States
federal or state securities law.
"Environmental Laws" means federal, state and local laws, principles
of common law, regulations and codes, as well as orders, decrees, judgments or
injunctions issued, promulgated, approved or entered thereunder relating to
pollution, protection of the environment or public health and safety.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended (or any successor statute thereto).
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"Exchange Act" means the Securities Exchange Act of 1934, as amended
(or any successor statute thereto), and the rules and regulations of the
Commission promulgated thereunder.
"Financial Statements" has the meaning set forth in Section 2.10 of
this Agreement.
"GAAP" means generally accepted United States accounting principles
in effect from time to time.
"Governmental Authority" means the government of any state, city,
locality or other political subdivision thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
"Governmental Entity" means any government or any agency, bureau,
board, commission, court, department, official, political subdivision, tribunal
or other instrumentality of any government of or within the United States,
whether federal, state or local.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the rules and regulations promulgated thereunder.
"Indemnified Party" has the meaning set forth in Section 6.1 of this
Agreement.
"Integra" has the meaning set forth in the recitals to this
Agreement.
"Intellectual Property" has the meaning set forth in Section 2.17 of
this Agreement.
"IP Licenses" has the meaning set forth in Section 2.17 of this
Agreement.
"Law" means any constitutional provision, statute or other law,
rule, regulation, or interpretation of any Governmental Entity and any Order.
"Letter" shall have the meaning set forth in Section 7.6 of this
Agreement.
"Liabilities" has the meaning set forth in Section 2.20 of this
Agreement.
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"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, encumbrance, lien (statutory or other) or preference, priority,
right or other security interest or preferential arrangement of any kind or
nature whatsoever (excluding preferred stock and equity related preferences)
including, without limitation, those created by, arising under or evidenced by
any conditional sale or other title retention agreement, the interest of a
lessor under a capital lease obligation, or any financing lease having
substantially the same economic effect as any of the foregoing.
"NASDAQ" means the Nasdaq National Market of the National
Association of Securities Dealers, Inc. Automated Quotation System.
"Order" mans any decree, injunction, judgement, order, ruling,
assessment or writ of any Governmental Entity.
"Permits" has the meaning set forth in Section 2.6 of this
Agreement.
"Person" means any individual, firm, corporation, partnership,
limited liability company, trust, incorporated or unincorporated association,
joint venture, joint stock company, Governmental Authority or other entity of
any kind, and shall include any successor (by merger or otherwise) of such
entity.
"Purchased Shares" has the meaning set forth in Section 1.1 of this
Agreement.
"Purchasers" has the meaning set forth in the recitals to this
Agreement.
"Requirements of Law" means as to any Person, any law, treaty, rule,
regulation, right, privilege, qualification, license or franchise or
determination of an arbitrator or a court or other Governmental Authority or a
stock exchange, in each case applicable or binding upon such Person or any of
its property or to which such Person or any of its property is subject or
pertaining to any or all of the transactions contemplated or referred to herein.
"SEC" means the Securities and Exchange Commission or any successor
entity.
"SEC Documents" means all registration statements, proxy statements,
reports and other documents required to be filed by Integra under the Securities
Act or the Exchange Act, and all amendments and supplements thereto, filed by
Integra with the Commission since December 31, 1998.
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"Securities" means the Purchased Shares, the shares of Common Stock
issuable upon conversion of the Purchased Shares, the Warrants, the Warrant
Shares and the Additional Preferred Shares.
"Securities Act" means the Securities Act of 1933, as amended (or
any successor statute thereto), and the rules and regulations of the Commission
promulgated thereunder.
"Series B Preferred Stock" shall have the meaning set forth in
Section 5.8 of this Agreement.
"Series C Preferred Stock" has the meaning set forth in the recitals
to this Agreement.
"Subsidiary" means, as of the relevant date of determination, with
respect to any Person, a corporation or other entity of which 50% or more of the
voting power of the outstanding voting equity securities or 50% or more of the
outstanding economic equity interest is held, directly or indirectly, by such
Person. Unless otherwise qualified, or the context otherwise requires, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of Integra.
"Tax" or "Taxes" means any federal, state, county, local, foreign
and other taxes (including, without limitation, income, profits, premium,
estimated, excise, sales, use, occupancy, gross receipts, franchise, ad valorem,
severance, capital levy, production, transfer, withholding, employment,
unemployment compensation, payroll and property taxes, import duties and other
governmental charges and assessments), whether or not measured in whole or in
part by net income, and including deficiencies, interest, additions to tax or
interest, and penalties with respect thereto, and including expenses associated
with contesting any proposed adjustments related to any of the foregoing.
"Tax Returns" shall have the meaning set forth in Section 2.9 of
this Agreement.
"Transaction Documents" means collectively, this Agreement, the
Warrant, the Certificate of Designation and the Amended and Restated
Registration Rights Agreement.
"Treasury Regulations" shall have the meaning set forth in Section
2.9 of this Agreement.
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"USRPHC" shall have the meaning set forth in Section 2.9 of this
Agreement.
"Warrant Shares" has the meaning set forth in Section 1.1 of this
Agreement.
"Warrant" has the meaning set forth in the recitals to this
Agreement.
SECTION I. PURCHASE AND SALE OF SERIES C
PREFERRED STOCK AND WARRANTS
1.1 Purchase and Sale of Series C Preferred Stock and Warrants.
Subject to the terms and conditions herein set forth, Integra agrees to issue
and sell to each of the Purchasers, and each of the Purchasers agrees that it
will purchase from Integra, for the aggregate purchase price set forth opposite
such Purchaser's name on Schedule 1 hereto, on the Closing Date, (i) the
aggregate number of shares of Series C Preferred Stock set forth opposite such
Purchaser's name on Schedule 1 hereto (all of the shares of Series C Preferred
Stock being purchased pursuant hereto being referred to herein as "Purchased
Shares"), and (ii) a Warrant to purchase the aggregate number of shares of
Common Stock set forth opposite such Purchaser's name on Schedule 1 hereto (all
of the shares of Common Stock issuable upon exercise of the Warrants being
purchased pursuant hereto being referred to herein as the "Warrant Shares").
1.2 Certificate of Designation. The Purchased Shares will have the
rights, preferences, privileges and restrictions set forth in the Certificate of
Designation of Series C Preferred Stock to Integra's Certificate of
Incorporation attached hereto as Exhibit B (the "Certificate of Designation"),
which shall be filed by Integra with the Secretary of State of the State of
Delaware prior to the Closing (as hereinafter defined).
1.3 Closing. Unless this Agreement shall have terminated pursuant to
Section VIII and subject to the satisfaction or waiver of the conditions set
forth in Sections IV and V (except for Sections 4.10, 4.11 and 5.5, which shall
occur simultaneously with the Closing (as hereinafter defined)), the closing of
the purchase and issuance of the Purchased Shares and the Warrants (the
"Closing") shall take place at the offices of Paul, Weiss, Rifkind, Wharton &
Garrison, at 10:00 a.m., local time, on March 17, 2000, or at such time and on
such date that Integra and the Purchasers may agree in writing (the "Closing
Date"). On the Closing Date, Integra shall deliver to the Purchasers (a) stock
certificates representing the Purchased Shares and (b) the Warrants, against
delivery by the Purchasers to Integra of the aggregate purchase price therefor
by wire transfer of immediately available funds.
SECTION II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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Integra represents and warrants to the Purchasers as follows:
2.1 Corporate Existence and Power. Each of Integra and its
Subsidiaries (a) is a corporation or limited liability company duly incorporated
and organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation; (b) has all requisite corporate (or limited
liability company) power and authority to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it is
currently engaged as described in the SEC Documents; (c) is duly qualified as a
foreign corporation or other entity, licensed and in good standing under the
laws of each jurisdiction in which its ownership, lease or operation of property
or the conduct of its business requires such qualification, except to the extent
that the failure to do so or be so would not have a material adverse effect on
the Condition of Integra; and (d) has the requisite corporate (or limited
liability company) power and authority to execute, deliver and perform its
obligations under this Agreement and each of the other Transaction Documents.
2.2 Corporate Authorization; No Contravention. The execution,
delivery and performance by Integra of this Agreement and each of the other
Transaction Documents and the transactions contemplated hereby and thereby,
including, without limitation, the sale, issuance and delivery of the Securities
(a) are within Integra's corporate power and have been duly authorized by all
necessary corporate action of Integra; (b) do not contravene the terms of the
Certificate of Incorporation or By-laws, or any organizational or governing
documents, or any amendment thereof, of the Subsidiaries; (c) do not violate,
conflict with or result in any breach or contravention of or the creation of any
Lien under, any material Contractual Obligation of Integra or any of its
Subsidiaries, or any Requirement of Law applicable to Integra or any of its
Subsidiaries; and (d) do not violate any judgment, injunction, writ, award,
decree or order of any nature (collectively, "Orders") of any Governmental
Authority against, or binding upon, Integra or any of the Subsidiaries except
for those Orders the violation of which would not have a material adverse effect
on the Condition of Integra. Neither Integra nor any of its Subsidiaries
previously entered into any agreement which is currently in effect or by which
Integra is currently bound, granting any rights to any Person which are
inconsistent with the rights to be granted by Integra in this Agreement and each
of the other Transaction Documents.
2.3 Governmental Authorization; Third Party Consents. Other than
(a) the filing and approval of an application for the listing on NASDAQ of the
shares of Common Stock issuable upon conversion of the Purchased Shares and the
exercise of the Warrants, (b) the filing of the Certificate of Designation, (c)
those required pursuant to the applicable state securities or "blue sky" laws,
with respect to the offer and sale of the Securities, (d) with respect to the
performance by Integra of the Amended and Restated Registration Rights
Agreement, the registration of the
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Registrable Securities (as defined in the Amended and Restated Registration
Rights Agreement) covered thereby with the Commission and the registration or
qualification of such Registrable Securities and other filings pursuant to
applicable state securities or "blue sky" laws, and (e) any filings required
under the HSR Act, no approval, consent, compliance, exemption, authorization,
or other action by, or notice to, or filing with, any Governmental Authority or
any other Person, including, without limitation, any approval or authorization
of Integra's stockholders, any further approval of the Board of Directors or any
approval of NASDAQ, and no lapse of a waiting period under a Requirement of Law,
is necessary or required in connection with the execution, delivery or
performance (including, without limitation, the sale, issuance and delivery of
the Securities) by Integra of this Agreement, each of the other Transaction
Documents and the transactions contemplated hereby or thereby.
2.4 Binding Effect. This Agreement and each of the other Transaction
Documents have been duly executed and delivered by Integra and constitute the
legal, valid and binding obligations of Integra, enforceable against Integra in
accordance with their terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer, moratorium or similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity relating to enforceability
(regardless of whether considered in a proceeding at law or in equity).
2.5 Litigation. Except as set forth in the SEC Documents, the
Financial Statements (including the draft notes thereto) or Schedule 2.5, there
are no actions, suits, proceedings, claims, complaints, disputes or
investigations pending or threatened, at law, in equity, in arbitration or
before any Governmental Authority against Integra or any of its Subsidiaries and
with respect to which Integra or any of its Subsidiaries is responsible by way
of indemnity or otherwise, which would, if adversely determined, (a) have a
material adverse effect on the Condition of Integra, or (b) have an adverse
effect on the ability of Integra to perform its obligations under this Agreement
and each of the other Transaction Documents. No Order has been issued by any
court or other Governmental Authority against Integra or any of its Subsidiaries
purporting to enjoin or restrain the execution, delivery or performance of this
Agreement or any of the other Transaction Documents.
2.6 Compliance with Laws.
(a) Each of Integra and its Subsidiaries is in compliance with
all Requirements of Law in all respects, except to the extent that the failure
to comply with such Requirements of Law would not have a material adverse effect
on the Condition of Integra.
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(b) (i) Each of Integra and its Subsidiaries has all licenses,
permits, orders or approvals of any Governmental Authority (collectively,
"Permits") that are material to or necessary for the conduct of the business of
Integra in the manner described in the SEC Documents, except to the extent that
the failure to have such Permits would not have a material adverse effect on the
Condition of Integra; (ii) such Permits are in full force and effect; and (iii)
no violations are or have been recorded in respect of any Permit.
(c) The property, assets and operations at any time owned or
leased by Integra have been in compliance in all material respects with all
applicable Environmental Laws, while so owned or leased, except to the extent
that the failure to comply with such Environmental Laws would not have a
material adverse effect on the Condition of Integra.
2.7 Capitalization.
(a) The authorized capital stock of Integra at the close of
business on February 16, 2000 consisted of (x) 60,000,000 shares of Common
Stock, of which 16,285,790 shares are issued and outstanding and (y) 15,000,000
shares of preferred stock, par value $.01 per share, of which (i) 2,000,000
shares have been designated as Series A Preferred Stock and of which 500,000
shares are issued and outstanding and (ii) 120,000 shares have been designated
as Series B Preferred Stock and of which 100,000 shares are issued and
outstanding. Integra has reserved an aggregate of 600,000 shares of Common Stock
for issuance upon conversion of the Purchased Shares and 300,000 shares of
Common Stock for issuance upon exercise of the Warrants. Except as set forth in
Schedule 2.7, there are no options, warrants, conversion privileges or other
rights presently outstanding to purchase or otherwise acquire any authorized but
unissued or unauthorized shares or treasury shares of Integra's capital stock.
(b) The Purchased Shares are duly authorized and, when issued
and sold to the Purchasers after payment therefor, will be validly issued, fully
paid and nonassessable by Integra. The shares of Common Stock issuable upon
conversion of the Purchased Shares and the exercise of the Warrants are duly
authorized and, when issued in compliance with the provisions of this Agreement,
the Certificate of Incorporation, the Certificate of Designation (in the case of
the shares of Common Stock issuable upon conversion of the Purchased Shares) and
the Warrants (in the case of the Warrant Shares) will be validly issued, fully
paid and nonassessable by Integra. The issued and outstanding shares of Common
Stock are all duly authorized, validly issued, fully paid and nonassessable by
Integra, and were issued in compliance with the registration and qualification
requirements of all applicable federal securities laws.
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2.8 No Default or Breach. Except as set forth in Schedule 2.8,
neither Integra nor any of its Subsidiaries has received notice of, and is not
in, default under or with respect to any, Contractual Obligation in any respect,
which, individually or together with all such defaults, could have a material
adverse effect on the Condition of Integra, or which could materially adversely
affect the ability of Integra to perform its obligations under this Agreement or
any of the other Transaction Documents.
2.9 Taxes.
(a) Each of Integra and its Subsidiaries has timely filed all
income, franchise and other material tax returns, reports, forms and other such
documents ("Tax Returns") required to be filed by them and have paid and
discharged all Taxes as shown on such Tax Returns other than payments that are
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves have been set aside. Such Tax Returns are true and
correct in all material respects. Each of Integra and its Subsidiaries has paid
or caused to be paid, or has established reserves that are adequate in all
material respects, all Tax liabilities applicable to Integra and its
Subsidiaries, respectively, for all fiscal years that have not been examined and
reported on by the taxing authorities (or closed by applicable statutes). As to
each of Integra and its Subsidiaries (i) no additional Federal or other material
Tax assessment, Federal or other material Tax deficiency or claim for additional
Federal or other material Taxes (including interest thereon and penalties in
connection therewith) has been heretofore proposed or threatened by any taxing
authority, (ii) no audit is in progress and no extension of time is in force
with respect to any date on which any Federal or other material Tax Return is to
be filed and no waiver or agreement is in force for the extension of time for
the assessment or payment of any Federal or other material Tax, and (iii) no
waivers of the statute of limitation or extension of time within which to assess
any Federal or other material Tax have been granted.
(b) There are no liens for Federal or other material Taxes (other
than for Federal or other material Taxes not yet due and payable) upon the
assets of Integra or any of its Subsidiaries.
(c) Other than as between Integra and any of its Subsidiaries,
neither Integra nor any of its Subsidiaries (i) is a party to or bound by (nor
will Integra or any of its Subsidiaries, prior to the Closing, become a party to
or bound by) any Tax indemnity, Tax sharing or Tax allocation agreement or
arrangement (other than those arrangements or agreements entered into in
connection with the purchase or sale of a company or business listed on Schedule
2.9 hereto); or (ii) is liable for the Taxes of any other corporation pursuant
to Section 1.1502-6 or 1.1502-78 of the treasury regulations promulgated under
the Internal Revenue Code of 1986, as amended (the "Treasury Regulations"), or
any similar provision of state, local or foreign law.
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(d) Integra is not a "United States real property holding
corporation" (a "USRPHC") as that term is defined in Section 897(c)(2) of the
Code and the Treasury Regulations promulgated thereunder, and Integra has no
plan or intention of becoming a USRPHC.
2.10 Financial Statements. Integra has heretofore delivered to the
Purchasers true and correct copies of its unaudited consolidated financial
statements (balance sheet and statements of operations, cash flows and
shareholders' equity) for the nine months ended and as at September 30, 1999
(the "Financial Statements"). The Financial Statements comply in all material
respects with the requirements of the Exchange Act and have been prepared in
accordance with GAAP applied on a consistent basis. The Financial Statements
fairly present the consolidated financial condition, operating results and cash
flows of Integra as of September 30, 1999 and for the nine months then ended in
accordance with GAAP.
2.11 No Material Adverse Change; Ordinary Course of Business. Except
as set forth in Schedule 2.11 hereto or the SEC Documents or as previously
disclosed to the Purchasers in writing, (i) since September 30, 1999, there has
not been any material adverse change in the Condition of Integra (other than the
incurrence of operating losses consistent with historic results of Integra) and
(ii) since September 30, 1999, neither Integra nor any of its Subsidiaries has
participated in any transaction or acted outside the ordinary course of
business.
2.12 SEC Documents.
(a) Integra has filed all SEC Documents required to be filed
by it since December 31, 1998 under the Securities Act or the Exchange Act, and
all amendments thereto.
(b) As of its filing date, each SEC Document (including all
exhibits and schedules thereto and documents incorporated by reference therein),
in each case as amended, referred to in subsection (a) above (i) complied in all
material respects with the applicable requirements of the Exchange Act and (ii)
did not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading. Integra is not
aware of any issues raised by, or correspondence (other than routine filing
packages and cover letters) with, the Commission with respect to any of the SEC
Documents.
2.13 Investment Company. Integra is not an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
2.14 Private Offering. No form of general solicitation or general
advertising was used by Integra or its representatives in connection with the
offer or
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sale of the Purchased Shares or the Warrants. No registration of the Purchased
Shares or the Warrants, pursuant to the provisions of the Securities Act or any
state securities or "blue sky" laws, is required on the date hereof or on the
Closing Date by the offer, sale or issuance of the Securities. Integra hereby
agrees that neither it nor anyone acting on its behalf, will offer to sell the
Purchased Shares or the Warrants or any other security so as to require the
registration of the Purchased Shares or the Warrants, pursuant to the provisions
of the Securities Act or any state securities or "blue sky" laws, unless such
securities are so registered.
2.15 Employee Benefit Plans. All employee benefit plans (as defined
in Section 3(3) of ERISA) or arrangements of Integra or any of the Subsidiaries
are in substantial compliance with all applicable Requirements of Law. The
execution and delivery of this Agreement and each of the other Transaction
Documents, the purchase and sale of the Purchased Shares hereunder and the
consummation of the transactions contemplated hereby and thereby will not result
in any prohibited transaction within the meaning of Section 406 of ERISA or
Section 4975 of the Code, assuming that none of the consideration received by
Integra pursuant to this Agreement is derived from the assets of any employee
benefit plan.
2.16 Title to Assets. Except as set forth in Schedule 2.16, each of
Integra and its Subsidiaries has good title to all of its properties and assets
used in the business described in the SEC Documents and reflected as owned on
the Financial Statements or so described in any Schedule hereto, in each case
free and clear of any Lien, except for (a) Liens specifically described on the
notes to the Financial Statements and (b) Liens not material to the Condition of
Integra.
2.17 Intellectual Property.
(a) Schedule 2.17(a) sets forth all United States and foreign
patents and patent applications, trademark and service mark registrations and
applications, and copyright registrations and applications owned or licensed by
Integra and all material licenses, sublicenses, and other agreements or
permissions ("IP Licenses") under which Integra is a licensor or licensee or
otherwise is authorized to use or practice any Intellectual Property (as defined
below).
(b) Except as set forth in Schedule 2.17(b), Integra owns or
otherwise has the right to use, and will continue to own or otherwise have the
right to use immediately following the Closing, free and clear of any and all
Encumbrances, all United States and foreign patents and patent applications,
trademark and service mark registrations and applications, copyright
registrations and applications, trade secrets, know-how, software, and other
technology and proprietary rights (collectively, "Intellectual Property") used
in the operation of its business as described in the SEC Documents.
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(c) Except as set forth on Schedule 2.17(c), to the best of
Integra's knowledge, Integra's use or licensing of the Intellectual Property
used in the operation of its business as described in the SEC Documents does not
infringe or otherwise violate any Intellectual Property rights of any third
party. Except as set forth on Schedule 2.17(c), no litigation is pending and no
claim has been made in writing against Integra or, to the best of Integra's
knowledge, is threatened contesting the right of Integra to sell or license to
third parties or use the Intellectual Property presently sold or licensed to
third parties or used by Integra.
(d) Integra has taken all reasonable precautions to protect
the secrecy, confidentiality, and value of its trade secrets and the proprietary
nature and value of its know-how, patents, and other technology. Each employee
and third party who has contributed to the development of Intellectual Property
on behalf of Integra has signed an agreement with Integra stating that such
employee or third party (i) shall maintain the confidentiality of Integra's
trade secrets and other confidential information, and (ii) assigns to Integra
all rights that such employee or third party might have in such Intellectual
Property, except where the terms of particular agreements provide otherwise. To
the knowledge of Integra, no such employee or third party has materially
breached any such agreement.
2.18 Trade Relations. Except as set forth in Schedule 2.18, there
exists no actual or threatened termination, cancellation or limitation of, or
any adverse modification or change in, the business relationship of Integra or
any of its Subsidiaries with, any customer or any group of customers whose
purchases are individually or in the aggregate material to the business of
Integra or any of its Subsidiaries, or with any material supplier, and there
exists no present condition or state of fact or circumstances that would
materially adversely affect the Condition of Integra or prevent Integra from
conducting its business after the consummation of the transactions contemplated
by this Agreement and each of the other Transaction Documents, in substantially
the same manner in which such business has heretofore been conducted and
described in the SEC Documents.
2.19 Contracts and Other Agreements. All of the Contractual
Obligations of Integra and any of its Subsidiaries that are currently in effect
and are required to be described in the SEC Documents or to be filed as exhibits
thereto are (a) described in the SEC Documents or filed as exhibits thereto and
(b) valid, subsisting, in full force and effect and binding upon Integra or its
Subsidiaries, as the case may be, and, to the knowledge of Integra, the other
parties thereto, in accordance with their terms. Except as set forth on Schedule
2.19, Integra has paid in full or accrued all material amounts currently due
thereunder and has satisfied in full or provided for all of its currently
matured liabilities and obligations thereunder, and is not in default under any
of them. Except as set forth on Schedule 2.19, to the knowledge
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of Integra, no other party to any such Contractual Obligation is in breach
thereof or in default thereunder nor does any condition exist that with notice
or lapse of time or both will constitute a breach thereof or default thereunder
by such other party, except for such breaches or defaults that would not have a
material adverse effect on the Condition of Integra.
2.20 Liabilities. As at September 30, 1999, neither Integra nor any
of its Subsidiaries had any direct or indirect obligation or liability required
by GAAP to be set forth on its financial statements or the footnotes thereto
(the "Liabilities") that were not fully and adequately reflected or reserved
against in the Financial Statements.
2.21 Broker's, Finder's or Similar Fees. There are no brokerage
commissions, finder's fees or similar fees or commissions payable by Integra in
connection with the transactions contemplated hereby based on any agreement,
arrangement or understanding with Integra or any of its Subsidiaries or any
action taken by any such entity.
2.22 Disclosure; Agreement and Other Documents. This Agreement,
each of the other Transaction Documents and each of the certificates furnished
to the Purchasers by Integra in connection with the purchase and sale of the
Purchased Shares and the Warrants at or prior to the Closing, taken as a whole,
do not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained herein or
therein, in the light of the circumstances under which they were made, not
misleading.
SECTION III. REPRESENTATIONS AND WARRANTIES
OF THE PURCHASERS
Each of the Purchasers hereby represents and warrants (severally as
to itself and not jointly) to Integra as follows:
3.1 Existence and Power. Such Purchaser that is an entity (a) is
duly organized and validly existing under the laws of the jurisdiction of its
formation and (b) has the requisite power and authority to execute, deliver and
perform its obligations under this Agreement and each of the other Transaction
Documents to which it is a party.
3.2 Authorization; No Contravention. The execution, delivery and
performance by such Purchaser of this Agreement and each of the other
Transaction Documents to which it is a party and the transactions contemplated
hereby and thereby, including, without limitation, the purchase of the Purchased
Shares and the Warrants, (a) have been duly authorized by all necessary action,
(b) do not contravene the terms of such Purchaser's organizational documents, or
any amendment thereof, and (c) do
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not violate, conflict with or result in any breach or contravention of or the
creation of any Lien under, any Contractual Obligation of such Purchaser, or any
Requirement of Law applicable to such Purchaser.
3.3 Governmental Authorization; Third Party Consents. Other than
any filings required under the HSR Act, no approval, consent, compliance,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person, and no lapse of a waiting period
under a Requirement of Law, is necessary or required in connection with the
execution, delivery or performance (including, without limitation, the purchase
of the Purchased Shares and the Warrants) by, or enforcement against, such
Purchaser of this Agreement, each of the other Transaction Documents to which it
is a party and the transactions contemplated hereby or thereby.
3.4 Binding Effect. This Agreement and each of the other Transaction
Documents to which it is a party have been duly executed and delivered by such
Purchaser and constitute the legal, valid and binding obligations of such
Purchaser, enforceable against it in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar laws
affecting the enforcement of creditors' rights generally or by equitable
principles relating to enforceability (regardless of whether considered in a
proceeding at law or in equity).
3.5 Purchase for Own Account. The Purchased Shares and the Warrants
to be acquired by such Purchaser pursuant to this Agreement are being or will be
acquired for its own account and with no intention of distributing or reselling
such Purchased Shares or any part thereof in any transaction that would be in
violation of the securities laws of the United States of America, or any state,
without prejudice, however, to the rights of such Purchaser at all times to sell
or otherwise dispose of all or any part of such Purchased Shares or Warrants
under an effective registration statement under the Securities Act, or under an
exemption from such registration available under the Securities Act, and
subject, nevertheless, to the disposition of such Purchaser's property being at
all times within its control. If such Purchaser should in the future decide to
dispose of any of the Securities, such Purchaser understands and agrees that it
may do so only in compliance with the Securities Act and applicable state
securities laws, as then in effect. Such Purchaser agrees to the imprinting, so
long as required by law, of a legend on certificates representing the Securities
substantially to the following effect:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF
EXCEPT PUR-
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SUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT."
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE ENTITLED TO THE
BENEFITS OF A REGISTRATION RIGHTS AGREEMENT AMONG INTEGRA LIFESCIENCES
HOLDINGS CORPORATION AND THE ORIGINAL PURCHASERS OF THE PREFERRED STOCK
REPRESENTED HEREBY. TRANSFEREES OF SUCH SECURITIES SHOULD REVIEW SUCH
AGREEMENT TO DETERMINE THEIR RIGHTS."
3.6 Accreditation; Sophistication; Other Securities Laws Matters.
Each Purchaser (a) is an "accredited investor" within the meaning of Rule 501
under the Securities Act; (b) has sufficient knowledge and experience in
investing in companies similar to Integra so as to be able to evaluate the risks
and merits of its investment in Integra and is able financially to bear the
risks thereof; (c) has had an opportunity to discuss Integra's business,
management and financial affairs with Integra's management; and (d) is a
resident of the jurisdiction listed next to its name on Schedule 1 hereto for
purposes of state "blue sky" securities law purposes.
3.7 Broker's, Finder's or Similar Fees. There are no brokerage
commissions, finder's fees or similar fees or commissions payable by the
Purchasers or any of them, in connection with the transactions contemplated
hereby based on any agreement, arrangement or understanding with such Purchaser
or any action taken by such Purchaser.
SECTION IV. CONDITIONS TO THE OBLIGATION
OF THE PURCHASERS TO CLOSE
The obligation of the Purchasers to purchase the Purchased Shares
and the Warrants, to pay the purchase price therefor at the Closing and to
perform any obligations hereunder shall be subject to the satisfaction as
determined by, or waiver by, the Purchasers of the following conditions on or
before the Closing Date.
4.1 Representations and Warranties. The representations and
warranties of Integra contained in Section II hereof shall be true and correct
in all material respects at and on the Closing Date as if made at and on such
date, except to the extent that any representation and warranty expressly speaks
as of an earlier date, in which case such representation and warranty is true
and correct as of such date and except for any activities or transactions which
may have taken place after the date hereof which are contemplated by this
Agreement.
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4.2 Compliance with this Agreement. Integra shall have performed and
complied in all material respects with all of its agreements and conditions set
forth herein that are required to be performed or complied with by Integra on or
before the Closing Date.
4.3 Secretary's Certificate. The Purchasers shall have received a
certificate from Integra, in form and substance satisfactory to the Purchasers,
dated the Closing Date and signed by a secretary or an assistant secretary of
Integra, certifying (a) that the attached copies of the Certificate of
Incorporation, the By-laws and resolutions of the Board of Directors of Integra
approving this Agreement, each of the other Transaction Documents and the
transactions contemplated hereby and thereby, are all true, complete and correct
and remain unamended and in full force and effect, and (b) as to the incumbency
and specimen signature of each officer of Integra executing this Agreement, each
of the other Transaction Documents and any other document delivered in
connection herewith on behalf of Integra.
4.4 Officers' Certificate. The Purchasers shall have received a
certificate from Integra, in form and substance satisfactory to the Purchasers,
dated the Closing Date and signed by Integra's chief executive officer and its
treasurer, certifying that (a) the representations and warranties of Integra
contained in Section II hereof are true and correct in all material respects on
the Closing Date and (b) Integra has performed and complied with in all material
respects all of the agreements and conditions set forth or contemplated herein
that are required to be performed or complied with by Integra on or before the
Closing Date.
4.5 Documents. The Purchasers shall have received true, complete and
correct copies of such documents as they may reasonably request in connection
with or relating to the issue and sale of the Purchased Shares and the
transactions contemplated hereby, all in form and substance reasonably
satisfactory to the Purchasers.
4.6 Filing of Certificate of Designation. The Certificate of
Designation shall have been duly filed by Integra with the Secretary of State of
the State of Delaware in accordance with the General Corporation Law of the
State of Delaware.
4.7 Amended and Restated Registration Rights Agreement. Integra
shall have duly executed and delivered the Amended and Restated Registration
Rights Agreement, substantially in the form attached hereto as Exhibit C.
4.8 Opinion of Counsel. The Purchasers shall have received an
opinion of counsel to Integra, dated the Closing Date, relating to the
transactions
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contemplated hereby or referred to herein, substantially in the form attached
hereto as Exhibit D.
4.9 Approval of Counsel to the Purchasers. All actions and
proceedings hereunder and all documents required to be delivered by Integra
hereunder or in connection with the consummation of the transactions
contemplated hereby, and all other related matters, shall have been acceptable
to Paul, Weiss, Rifkind, Wharton & Garrison, counsel to the Purchasers, in their
reasonable judgment as to their form and substance.
4.10 Purchased Shares. Integra shall have delivered to each of the
Purchasers stock certificates in definitive form representing the number of
Purchased Shares set forth opposite such Purchaser's name on Schedule 1 hereto
and registered in the name of such Purchaser.
4.11 Warrants. Integra shall have duly executed and delivered to the
Purchasers the Warrants, each substantially in the form attached hereto as
Exhibit A.
4.12 Consents and Approvals. All consents, exemptions,
authorizations, or other actions by, or notices to, or filings with (other than
the filings referenced in Section 2.3(a) and (d) hereof), Governmental
Authorities and other Persons in respect of all Requirements of Law and with
respect to those Contractual Obligations of Integra which are necessary or
required in connection with the execution, delivery or performance (including,
without limitation, the issuance of the Purchased Shares, the Warrants, shares
of Common Stock issuable upon conversion of the Purchased Shares and the
exercise of the Warrants) by, or enforcement against, Integra of this Agreement
and each of the other Transaction Documents shall have been obtained and be in
full force and effect, and each of the Purchasers shall have been furnished with
appropriate evidence thereof.
4.13 No Litigation. No action, suit, proceeding, claim or dispute
shall have been brought or otherwise arisen at law, in equity, in arbitration or
before any Governmental Authority against Integra or any of its Subsidiaries
which would, if adversely determined, (a) have a material adverse effect on the
Condition of Integra or (b) have a material adverse effect on the ability of
Integra to perform its obligations under this Agreement or any of the other
Transaction Documents.
4.14 No Material Judgment or Order. There shall not be on the
Closing Date any Order of a court of competent jurisdiction or any ruling of any
Governmental Authority or any condition imposed under any Requirement of Law
which would, in the judgment of the Purchasers, (a) prohibit or restrict (i) the
purchase of the Purchased Shares or (ii) the consummation of the transactions
contemplated by this Agreement, (b) subject the Purchasers to any penalty or
other onerous condition
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under or pursuant to any Requirement of Law if the Purchased Shares were to be
purchased hereunder or (c) restrict the operation of the business of Integra or
any of the Subsidiaries as conducted on the date hereof in a manner that would
have a material adverse effect on the Condition of Integra.
4.15 No Material Adverse Change. Since the date hereof, there shall
have been no material adverse change in the Condition of Integra (other than
operating losses consistent with the historic results of Integra).
4.16 Hart-Scott-Rodino. Any Person required in connection with the
transactions contemplated under this Agreement to file a notification and report
form in compliance with the HSR Act shall have filed such form and the waiting
period specified in the HSR Act, including any extensions thereof, shall have
expired or been terminated.
4.17 Schedules. The Purchasers shall have received copies of
Integra's Schedules to this Agreement in form and substance reasonably
satisfactory to the Purchasers.
4.18 No Change in Capitalization. There shall have been no change
in the authorized, issued and outstanding capital stock of Integra in the
interval between the date hereof and the Closing Date, except for shares of
Common Stock issued upon the exercise of warrants or options, or purchased by
Integra pursuant to its current share repurchase program.
SECTION V. CONDITIONS TO THE OBLIGATION
OF THE COMPANY TO CLOSE
The obligations of Integra to issue and sell the Purchased Shares
and to perform its other obligations hereunder, shall be subject to the
satisfaction as determined by, or waiver by, Integra of the following conditions
on or before the Closing Date:
5.1 Representations and Warranties. The representations and
warranties of the Purchasers contained in Section III hereof shall be true and
correct on at and on the Closing Date as if made at and on such date, except to
the extent that any representation and warranty expressly speaks as of an
earlier date, in which case such representation and warranty is true and correct
as of such date and except for any activities or transactions which may have
taken place after the date hereof which are contemplated by this Agreement.
5.2 Compliance with this Agreement. The Purchasers shall have
performed and complied in all material respects with all of their agreements and
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conditions set forth herein that are required to be performed or complied with
by the Purchasers on or before the Closing Date.
5.3 Amended and Restated Registration Rights Agreement. The
Purchasers shall have duly executed and delivered the Amended and Restated
Registration Rights Agreement, substantially in the form attached hereto as
Exhibit C.
5.4 Consents and Approvals. All consents, exemptions,
authorizations, or other actions by, or notices to, or filings with,
Governmental Authorities and other Persons in respect of all Requirements of Law
and with respect to those Contractual Obligations of the Purchasers which are
necessary or required in connection with the execution, delivery or performance
(including, without limitation, the purchase of the Purchased Shares, the
Warrants, and the shares of Common Stock issuable upon conversion of the
Purchased Shares and the exercise of the Warrants) by, or enforcement against,
the Purchasers of this Agreement shall have been obtained and be in full force
and effect, and Integra shall have been furnished with appropriate evidence
thereof.
5.5 Payment of Purchase Price. Integra shall have received the
aggregate purchase price for the Purchased Shares and the Warrants.
5.6 No Material Judgment or Order. There shall not be on the Closing
Date any Order of a court of competent jurisdiction or any ruling of any
Governmental Authority or any condition imposed under any Requirement of Law
which would, in the judgment of Integra, (a) prohibit or restrict (i) the sale
of the Purchased Shares or the Warrants or (ii) the consummation of the
transactions contemplated by this Agreement or (b) subject Integra to any
penalty or other onerous condition under or pursuant to any Requirement of Law
if the Purchased Shares were to be sold hereunder.
5.7 Hart-Scott-Rodino. Any Person required in connection with the
transactions contemplated under this Agreement to file a notification and report
form in compliance with the HSR Act shall have filed such form and the waiting
period specified in the HSR Act, including any extensions thereof, shall have
expired or been terminated.
5.8 Consent of Purchasers. Each of the Purchasers, as a holder of
Series B Convertible Preferred Stock of Integra, par value $.01 per share (the
"Series B Preferred Stock"), shall have consented to (a) the issuance of the
Series C Preferred Stock, and (b) an amendment to the Certificate of
Designation, Preferences and Rights of the Series B Preferred Stock amending
certain terms of the Series B Preferred Stock, the form and substance of such
amendment to be reasonably satisfactory to the Purchasers and Integra.
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SECTION VI. INDEMNIFICATION
6.1 Indemnification. Except as otherwise provided in this Section
VI, Integra agrees to indemnify, defend and hold harmless each of the Purchasers
and their Affiliates and their respective officers, directors, agents,
employees, subsidiaries, members, partners and controlling persons (each, an
"Indemnified Party") to the fullest extent permitted by law from and against any
and all Losses (as hereinafter defined) resulting from, arising out of or
relating to any breach of any representation, warranty, covenant or agreement by
Integra in this Agreement or the other Transaction Documents, including, without
limitation, Losses arising out of or relating to any legal, administrative or
other actions (including actions brought by the Purchasers or Integra or any
equity holders of Integra or derivative actions brought by any Person claiming
through or in Integra's name), proceedings or investigations (whether formal or
informal), or written threats thereof, based upon, relating to or arising out of
this Agreement, each of the other Transaction Documents, the transactions
contemplated hereby and thereby, or any Indemnified Party's role therein or in
transactions contemplated hereby or thereby; provided, however, that the Integra
shall not be liable under this Section 6.1 to an Indemnified Party to the extent
that it is finally judicially determined that such Losses resulted primarily
from the material breach by such Indemnified Party of any representation,
warranty, covenant or other agreement of such Indemnified Party contained in
this Agreement; and provided, further, that if and to the extent that such
indemnification is unenforceable for any reason, then Integra shall make the
maximum contribution to the payment and satisfaction of such Losses which shall
be permissible under applicable laws. Losses means all losses, claims (including
any claim by a third party), damages, expenses (including reasonable fees,
disbursements and other charges of counsel incurred by the Indemnified Party in
any action between Integra and the Indemnified Party or between the Indemnified
Party and any third party or otherwise) or other liabilities; provided, however,
that Losses shall include only (a) direct out-of-pocket payments of judgments
and settlements, costs and expenses of the Indemnified Parties and (b)
diminution in value of the Purchased Shares directly attributable to a breach of
any representation, warranty, covenant or agreement by Integra in this Agreement
or the other Transaction Documents.
6.2 Notification. Each Indemnified Party under this Section VI will,
promptly after the receipt of notice of the commencement of any action,
investigation, claim or other proceeding against such Indemnified Party in
respect of which indemnity may be sought from Integra under this Section VI,
notify Integra in writing of the commencement thereof. The omission of any
Indemnified Party to so notify Integra of any such action shall not relieve
Integra from any liability which Integra may have to such Indemnified Party (a)
other than pursuant to this Section VI or (b) under this Section VI unless, and
only to the extent that, such omission results in Integra's forfeiture of
substantive rights or defenses. In case any such action, claim or other
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proceeding shall be brought against any Indemnified Party and it shall notify
Integra of the commencement thereof, Integra shall be entitled to assume the
defense thereof at its own expense, with counsel satisfactory to such
Indemnified Party in its reasonable judgment; provided, however, that any
Indemnified Party may, at its own expense, retain separate counsel to
participate in such defense at its own expense. Notwithstanding the foregoing,
in any action, claim or proceeding in which both Integra, on the one hand, and
an Indemnified Party, on the other hand, are, or are reasonably likely to
become, a party, such Indemnified Party shall have the right to employ separate
counsel at the expense of Integra and to control its own defense of such action,
claim or proceeding if, in the reasonable opinion of counsel to such Indemnified
Party, a conflict or potential conflict exists between Integra, on the one hand,
and such Indemnified Party, on the other hand, that would make such separate
representation advisable; provided, however, that Integra shall not be liable
for the fees and expenses of more than one counsel to all Indemnified Parties.
Integra agrees that it will not, without the prior written consent of the
Purchasers, settle, compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding relating to the matters
contemplated hereby (if any Indemnified Party is a party thereto or has been
actually threatened to be made a party thereto) unless such settlement,
compromise or consent includes an unconditional release of the Purchasers and
each other Indemnified Party from all liability arising or that may arise out of
such claim, action or proceeding and imposes no obligations upon such
Indemnified Party. Integra shall not be liable for any settlement of any claim,
action or proceeding effected against an Indemnified Party without its written
consent, which consent shall not be unreasonably withheld. The rights accorded
to each Indemnified Party hereunder shall be the sole rights that such
Indemnified Party may have at common law, by separate agreement or otherwise;
provided, however, that notwithstanding the foregoing or anything to the
contrary contained in this Agreement, nothing in this Section VI shall restrict
or limit any rights that any Indemnified Party may have to seek equitable
relief.
6.3 Amended and Restated Registration Rights Agreement.
Notwithstanding anything to the contrary contained in this Section VI, the
indemnification and contribution provisions of the Amended and Restated
Registration Rights Agreement shall govern any claim made with respect to
registration statements filed pursuant thereto or sales made thereunder.
SECTION VII. AFFIRMATIVE COVENANTS
Integra hereby covenants and agrees with the Purchasers with respect
to this Section VII that so long as any shares of Purchased Shares, shares of
Common Stock issuable upon the conversion thereof, the Warrants or the Warrant
Shares are outstanding, except to the extent that a particular section of this
Section VII provides for an earlier termination, as follows:
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7.1 Preservation of Existence. From the date hereof until the
Closing Date, Integra shall, and shall use its best efforts to cause its
Subsidiaries to:
(a) preserve and maintain in full force and effect its
existence and good standing under the laws of its jurisdiction of formation
or organization;
(b) take all reasonable action to preserve and maintain in
full force and effect all material rights, privileges, qualifications,
applications, estimates, licenses and franchises necessary in the normal conduct
of its business;
(c) use its reasonable efforts to preserve its business
organization;
(d) conduct its business in accordance with sound business
practices and keep its useful and necessary properties in good working order and
condition (normal wear and tear excepted);
(e) comply with all Requirements of Law and with the
directions of any Governmental Authority having jurisdiction over Integra or any
of the Subsidiaries or their respective business or property except to the
extent that the failure to comply with any Requirements of Law would not have a
material adverse effect on the Condition of Integra; and
(f) file or cause to be filed in a timely manner all reports,
applications, estimates and licenses that shall be required by a Governmental
Authority and that, if not timely filed, would have a material adverse effect on
the Condition of Integra.
7.2 Delivery of 1999 Audited Financial Statements. Integra shall
deliver to the Purchasers as soon as available a true and correct copy of its
audited consolidated financial statements (balance sheet and statement of
operations, cash flows and shareholders equity, together with the notes thereto)
for the fiscal year ended and as at December 31, 1999.
7.3 Financial Statements and Other Information. Integra shall
deliver to the Purchasers, in form and substance satisfactory to the
Purchasers:
(a) as soon as available, but not later than ninety (90) days
after the end of each fiscal year of Integra, a copy of the audited consolidated
balance sheet of Integra and its Subsidiaries as of the end of such year and the
related statements of operations and cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the previous year, all in
reasonable detail and accompanied by a management summary and analysis of the
operations of Integra and its Subsidiaries for such fiscal year and by the
opinion of a nationally recognized inde-
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pendent certified public accounting firm which report shall state without
qualification that such consolidated financial statements present fairly the
financial condition as of such date and results of operations and cash flows for
the periods indicated in conformity with GAAP applied on a consistent basis;
provided, however, that the delivery to each of the Purchasers of a copy of
Integra's Annual Report on Form 10-K for each fiscal year shall satisfy the
requirements of this Section 7.3(a);
(b) commencing with the fiscal period ending on March 31,
2000, as soon as available, but in any event not later than forty-five (45) days
after the end of each of the first three fiscal quarters of each fiscal year,
the unaudited consolidated balance sheet of Integra and its Subsidiaries, and
the related statements of operations and cash flows for such quarter and for the
period commencing on the first day of the fiscal year and ending on the last day
of such quarter, all certified by an appropriate officer of Integra as
presenting fairly the financial condition as of such date and results of
operations and cash flows for the periods indicated in conformity with GAAP
applied on a consistent basis, subject to normal year-end audit adjustments and
the absence of footnotes required by GAAP; provided, however, that the delivery
to each of the Purchasers of a copy of Integra's Quarterly Report on Form 10-Q
for each fiscal quarter shall satisfy the requirements of this Section 7.3(b);
(c) at any time when it is not subject to Section 13 or 15(d)
of the Exchange Act, upon request, to the Purchasers, information of the type
that would satisfy the requirement of subsection (d)(4)(i) of Rule 144A (or any
similar successor provision) under the Securities Act; and
(d) except as otherwise provided in Sections 7.3(a) and (b),
promptly after the same are filed, copies of all registration statements, proxy
statements, reports and other documents required to be filed by Integra under
the Securities Act or the Exchange Act, and all amendments thereto.
7.4 Reservation of Shares. Integra shall at all times reserve and
keep available out of its authorized shares of Common Stock, solely for the
purpose of issue or delivery upon conversion of the Purchased Shares, as
provided in the Certificate of Designation and the Certificate of Incorporation,
and the exercise of the Warrants, the number of shares of Common Stock that may
be issuable or deliverable upon such conversion or exercise. Integra shall issue
such shares of Common Stock in accordance with the terms of this Agreement, the
Certificate of Incorporation, the Certificate of Designation (in the case of the
shares of Common Stock issuable upon conversion of the Purchased Shares) and the
Warrants (in the case of the Warrant Shares), as the case may be, and otherwise
comply with the terms hereof and thereof.
7.5 Registration and Listing. If any shares of Common Stock required
to be reserved for purposes of conversion of the Purchased Shares, as provided
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in the Certificate of Designation, or the exercise of the Warrants, as provided
in the Warrants, require registration with or approval of any Governmental
Authority under any Federal or state or other applicable law before such shares
of Common Stock may be issued or delivered upon conversion or exercise, Integra
will in good faith and as expeditiously as possible cause such shares of Common
Stock to be duly registered or approved, as the case may be, unless such
registration or approval is required solely because of a breach of the
Purchasers' representation contained in Section 3.5. So long as the shares of
Common Stock are quoted on the NASDAQ or listed on any national securities
exchange, Integra will, if permitted by the rules of such system or exchange,
quote or list and keep quoted or listed on such system or exchange, upon
official notice of issuance, all shares of Common Stock issuable or deliverable
upon conversion of the Preferred Shares and exercise of the Warrants.
7.6 Tax Matters. In the event that a Purchaser desires to sell or
dispose of any of the Preferred Stock, Common Stock or Warrants, and upon demand
by such Purchaser, Integra and its Subsidiaries shall deliver to such Purchaser
a letter (the "Letter") which complies with Sections 1.1445-2(c)(3) and
1.897-2(h) of the Treasury Regulations, addressed to such Purchaser, stating
whether Integra is, or has been, a USRPHC during the period equal to the lesser
of (i) the period beginning five years prior to the date of the Letter through
the date of the Letter and (ii) the period from the date of this Agreement
through the date of the Letter. The Letter shall be delivered to the Purchaser
one business day prior to the close of any sale of the Preferred Stock, Common
Stock or Warrants by the Purchaser (the "Delivery Date"). The Letter shall be
dated as of the Delivery Date and signed by a corporate officer who must verify
under penalties of perjury that the statement is correct to his knowledge and
belief pursuant to Section 1.897-2(h) of the Treasury Regulations.
7.7 Further Assurances.
(a) Each of the parties shall execute, prior to and following
the Closing, such documents and other papers and perform such further acts as
may be reasonably required or desirable to carry out the provisions hereof and
the transactions contemplated hereby, including notification and report forms
with respect to the transactions contemplated by this Agreement under the HSR
Act. Each such party shall use its reasonable best efforts to fulfill or obtain
the fulfillment of the conditions to the Closing, including the execution and
delivery of any documents or other papers, the execution and delivery of which
are conditions precedent to the Closing.
(b) The Purchasers on the one hand and Integra on the other
shall each pay one-half of the filing fee required to be paid with respect to
this transaction under the HSR Act.
7.8 Delivery of Schedules. The Purchasers and Integra acknowledge
that as of the date of this Agreement Integra has not prepared the Schedules
called for
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by the provisions of Section II of this Agreement. Integra shall prepare and
deliver to the Purchasers on or before the Closing Date the completed Schedules
and shall update and revise such Schedules to reflect the reasonable comments of
the Purchasers. The Purchasers shall have the right to determine whether the
information contained in such Schedules is reasonably satisfactory to the
Purchasers. If, upon reasonable negotiation with Integra, the Purchasers
determine that such information is not reasonably satisfactory to the Purchasers
in any material respect, the Purchasers may terminate this Agreement by giving
written notice of such termination to Integra on or before the Closing Date,
whereupon this Agreement shall become null and void and no party shall have any
further liability to any other party hereunder. If the Purchasers approve the
Schedules, the Purchasers and Integra shall sign a letter identifying the
Schedules and confirming their mutual understanding and agreement that such
Schedules are the Schedules called for by this Agreement, whereupon the
Schedules shall be deemed to be part of this Agreement as if prepared and
delivered to, and accepted by, the Purchasers on the date hereof.
SECTION VIII. TERMINATION OF AGREEMENT
8.1 Termination. This Agreement may be terminated prior to the
Closing as follows:
(a) at any time on or prior to the Closing Date, by mutual
written consent of Integra and the Purchasers; or
(b) at the election of Integra or the Purchasers by written
notice to the other parties hereto after 5:00 p.m., New York City time on March
31, 2000, if the transactions contemplated by this Agreement shall not have been
consummated pursuant hereto, unless such date is extended by the mutual written
consent of Integra and the Purchasers; or
(c) at the election of Integra, if any one or more of the
conditions to its obligation to close set forth in Section V has not been
satisfied or waived and the Closing shall not have occurred on the scheduled
Closing Date; or
(d) at the election of the Purchasers pursuant to Section 7.8
or if any one or more of the conditions to its obligation to close set forth in
Section IV has not been satisfied or waived and the Closing shall not have
occurred on the scheduled Closing Date; or
(e) at the election of Integra, if there has been a material
breach of any representation, warranty, covenant or agreement on the part of the
Purchasers contained in this Agreement, which breach has not been cured within
ten (10) Business Days of notice to the Purchasers of such breach; or
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(f) at the election of the Purchasers, if there has been a
material breach of any representation, warranty, covenant or agreement on the
part of Integra contained in this Agreement, which breach has not been cured
within ten (10) Business Days notice to Integra of such breach.
If this Agreement so terminates, it shall become null and void and have no
further force or effect, except as provided in Section 8.2.
8.2 Survival. If this Agreement is terminated and the
transactions contemplated hereby are not consummated as described above, this
Agreement shall become void and of no further force and effect; provided,
however, that (i) none of the parties hereto shall have any liability in respect
of a termination of this Agreement pursuant to Section 7.8, Section 8.1(a) or
Section 8.1(b) and (ii) nothing shall relieve any party from any liability for
actual damages resulting from a termination of this Agreement pursuant to
Section 8.1(e) or 8.1(f); and provided further, that none of the parties hereto
shall have any liability for speculative, indirect, unforeseeable or
consequential damages resulting from a termination of this Agreement pursuant to
Section VIII.
SECTION IX. MISCELLANEOUS
9.1 Survival of Representations and Warranties. Except for the
representations and warranties in Section 2.7(c) (which shall survive without
limitation), all of the representations and warranties made herein shall survive
the execution and delivery of this Agreement for a period ending 60 days after
the delivery by Integra to the Purchasers of its audited consolidated financial
statements (balance sheet and statement of operations, cash flows and
shareholders' equity, together with the notes hereto) for the fiscal year ended
and as at December 31, 2000.
9.2 Notices. All notices, demands and other communications provided
for or permitted hereunder shall be made in writing and shall be by registered
or certified first-class mail, return receipt requested, telecopier, courier
service, overnight mail or personal delivery:
(i) if to Quantum Industrial Partners LDC:
Quantum Industrial Partners LDC
Kaya Flamboyan 9,
Villemstad
Curacao
Netherlands-Antilles
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with a copy to:
Soros Fund Management LLC
888 Seventh Avenue
New York, NY 10016
Telecopy: (212) 664-0544
Attention: Michael Neus, Esq.
and a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Telecopy: (212) 757-3990
Attention: Richard S. Borisoff, Esq.
(ii) If to SFM Domestic Investments LLC:
Soros Fund Management LLC
888 Seventh Avenue
New York, NY 10016
Telecopy: (212) 664-0544
Attention: Michael Neus, Esq.
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Telecopy: (212) 757-3990
Attention: Richard S. Borisoff, Esq.
(iii) if to Integra:
Integra LifeSciences Holdings Corporation
105 Morgan Lane
Plainsboro, NJ 08536
Telecopy: (609) 799-3297
Attention: Stuart M. Essig,
President and CEO
with a copy to:
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Drinker Biddle & Shanley LLP
105 College Road East
Princeton, NJ 08542-0627
Telecopy: (609) 799-7000
Attention: John E. Stoddard III, Esq.
All such notices and communications shall be deemed to have been
duly given when delivered by hand, if personally delivered; when delivered by
courier or overnight mail, if delivered by commercial courier service or
overnight mail; five (5) Business Days after being deposited in the mail,
postage prepaid, if mailed; and when receipt is mechanically acknowledged, if
telecopied.
9.3 Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of the
parties hereto. Subject to applicable securities laws, each of the Purchasers
may assign any of its rights under this Agreement to any of its Affiliates.
Integra may not assign any of its rights under this Agreement and each of the
other Transaction Documents, except to a successor-in-interest to Integra,
without the written consent of all of the Purchasers. Except as provided in
Section VI no Person other than the parties hereto and their successors and
permitted assigns is intended to be a beneficiary of this Agreement and each of
the other Transaction Documents.
9.4 Amendment and Waiver.
(a) No failure or delay on the part of Integra or the
Purchasers in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy.
(b) Any amendment, supplement or modification of or to any
provision of this Agreement, any waiver of any provision of this Agreement, and
any consent to any departure by Integra or the Purchasers from the terms of any
provision of this Agreement, shall be effective (i) only if it is made or given
in writing and signed by Integra and the Purchasers, and (ii) only in the
specific instance and for the specific purpose for which made or given. Except
where notice is specifically required by this Agreement, no notice to or demand
on Integra in any case shall entitle Integra to any other or further notice or
demand in similar or other circumstances.
9.5 Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when
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so executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
9.6 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
9.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW JERSEY, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW THEREOF.
9.8 Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.
9.9 Rules of Construction. Unless the context otherwise requires,
"or" is not exclusive, and references to sections or subsections refer to
sections or subsections of this Agreement.
9.10 Entire Agreement. This Agreement, together with the exhibits
and schedules hereto, and the other Transaction Documents are intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein and therein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein or therein.
9.11 Fees. Upon the Closing, Integra shall reimburse the Purchasers
for their reasonable out-of-pocket expenses (including attorney's fees,
disbursements and other charges) incurred in connection with the transactions
contemplated by this Agreement; provided, however, that Integra shall not be
obligated to reimburse the Purchasers for any reasonable out-of-pocket expenses
in excess of $40,000 in the aggregate.
9.12 Publicity; Confidentiality.
(a) Except as may be required by applicable law or the rules
of any securities exchange or market on which shares of Common Stock are traded,
none of the parties hereto shall issue a publicity release or public
announcement or otherwise make any disclosure concerning this Agreement, the
transactions contemplated hereby or the business and financial affairs of
Integra, without prior approval by the other parties hereto; provided, however,
that nothing in this Agreement shall
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restrict any Purchaser from disclosing information (i) that is already publicly
available, (ii) that was known to such Purchaser on a non-confidential basis
prior to its disclosure by Integra, (iii) that may be required or appropriate in
response to any summons or subpoena or in connection with any litigation,
provided that such Purchaser will use reasonable efforts to notify Integra in
advance of such disclosure so as to permit Integra to seek a protective order or
otherwise contest such disclosure, and such Purchaser will use reasonable
efforts to cooperate, at the expense of Integra, with Integra in pursuing any
such protective order, (iv) to the extent that such Purchaser reasonably
believes it appropriate in order to protect its investment in the Purchased
Shares in order to comply with any Requirement of Law, (v) to such Purchaser's
officers, directors, agents, employees, members, partners, controlling persons,
auditors or counsel, (vi) to Persons who are parties to similar confidentiality
agreements or (vii) to the prospective transferee in connection with any
contemplated transfer of any of the Securities. If any announcement is required
by law or the rules of any securities exchange or market on which shares of
Common Stock are traded to be made by any party hereto, prior to making such
announcement such party will deliver a draft of such announcement to the other
parties and shall give the other parties reasonable opportunity to comment
thereon.
(b) The Purchasers shall have the opportunity to review and
modify any provision of any publicly release or public announcement or document
which is to be released to the public or filed with the SEC, which provision
mentions Soros Fund Management LLC or any of its Affiliates, prior to the
release of such document to the public or the filing of such document with the
SEC.
9.13 Further Assurances. Each of the parties shall execute such
documents and perform such further acts (including, without limitation,
obtaining any consents, exemptions, authorizations or other actions by, or
giving any notices to, or making any filings with, any Governmental Authority or
any other Person) as may be reasonably required or desirable to carry out or to
perform the provisions of this Agreement.
9.14 Schedules. Anything disclosed on any schedule attached hereto
shall be deemed disclosed on all schedules attached hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their respective officers hereunto duly authorized
on the date first above written.
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
By: /s/ Stuart M. Essig
--------------------------------------------
Name: Stuart M. Essig
Title: President and Chief Executive Officer
QUANTUM INDUSTRIAL PARTNERS LDC
By: /s/ Michael C. Neus
--------------------------------------------
Name: Michael C. Neus
Title: Attorney-in-Fact
SFM DOMESTIC INVESTMENTS LLC
By: /s/ Michael C. Neus
--------------------------------------------
Name: Michael C. Neus
Title: Attorney-in-Fact
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Schedule 1
PURCHASED SHARES AND WARRANTS AND PURCHASE PRICE
- ---------------------------------------------- ------------------------- --------------------- ---------------------
Shares of
Purchaser Series C Preferred Warrants Purchased Purchase Price
Stock Purchased From From the Company
the Company
Quantum Industrial Partners LDC 48,699 270,550 $4,869,900
(principal place of business: Curacao)
SFM Domestic Investments LLC 5,301 29,450 $530,100
(principal place of business: New York)
------------------------- --------------------- ---------------------
TOTAL 54,000 300,000 $5,400,000