1
Exhibit 99.1
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UNIT PURCHASE AGREEMENT
by and among
INTEGRA, INC.
(a Delaware corporation),
GLOBAL BENEFITS SOLUTIONS LLC,
(a Delaware limited liability company)
and
THE UNITHOLDER
LISTED ON THE SIGNATURE PAGE
Dated as of July 27, 2001
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TABLE OF CONTENTS
PAGE
1. EXCHANGE OF SECURITIES..................................................................................1
1.1 Exchange of Company Securities.................................................................1
1.2 Post Closing Adjustment........................................................................1
1.3 Exchange Procedures............................................................................2
1.4 No Fractional Shares...........................................................................2
1.5 CEO of Integra.................................................................................2
1.6 Repurchase Right...............................................................................2
1.7 Installment Purchase...........................................................................2
2. CLOSING.................................................................................................2
2.1 Closing Date; Location.........................................................................2
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND INDEMNITY UNITHOLDER..................................3
3.1 LLC Existence..................................................................................3
3.2 Power; Authorization; Enforceable Obligations; Applicability of Takeover Statutes..............3
3.3 Authority; Ownership...........................................................................3
3.4 Validity of Contemplated Transactions..........................................................3
3.5 Securities of the Company......................................................................4
3.6 Transactions in Securities.....................................................................4
3.7 No Bonus Securities............................................................................4
3.8 Subsidiaries...................................................................................4
3.9 Predecessor Status; etc........................................................................5
3.10 Spin-offs by Company...........................................................................5
3.11 No Third Party Options.........................................................................5
3.12 Financial Statements...........................................................................5
3.13 Liabilities and Obligations....................................................................5
3.14 Accounts and Notes Receivable..................................................................6
3.15 Permits........................................................................................6
3.16 Real and Personal Property.....................................................................6
3.17 Contracts and Commitments......................................................................7
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TABLE OF CONTENTS
(continued)
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3.18 Government Contracts...........................................................................8
3.19 Insurance......................................................................................8
3.20 Employees......................................................................................9
3.21 Employee Benefit Plans and Arrangements........................................................9
3.22 Compliance with Law; Authorizations...........................................................10
3.23 Transactions With Affiliates..................................................................10
3.24 Litigation....................................................................................10
3.25 Restrictions..................................................................................11
3.26 Taxes.........................................................................................11
3.27 Intellectual Property Matters.................................................................12
3.28 Completeness; No Violations...................................................................13
3.29 Existing Condition............................................................................13
3.30 Deposit Accounts; Powers of Attorney..........................................................15
3.31 Books of Account..............................................................................15
3.32 Environmental Matters.........................................................................15
3.33 No Illegal Payments...........................................................................16
3.34 Leases........................................................................................16
3.35 Disclosure....................................................................................16
3.36 Investment Intent.............................................................................17
4. REPRESENTATIONS OF INTEGRA.............................................................................18
4.1 Corporate Existence...........................................................................18
4.2 Integra Stock.................................................................................18
4.3 Corporate Power and Authorization.............................................................18
4.4 No Conflicts..................................................................................18
4.5 Accuracy of Filings...........................................................................18
5. COVENANTS OF INTEGRA, INDEMNITY UNITHOLDER AND THE COMPANY.............................................18
5.1 Existing Condition............................................................................19
5.2 Maintenance of Properties and Assets..........................................................19
5.3 Employees and Business Relations..............................................................19
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TABLE OF CONTENTS
(continued)
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5.4 Maintenance of Insurance......................................................................19
5.5 Compliance with Laws, etc.....................................................................19
5.6 Conduct of Business...........................................................................19
5.7 Access........................................................................................19
5.8 Press Releases and Other Communications.......................................................20
5.9 Exclusivity...................................................................................20
5.10 Third Party Approvals.........................................................................20
5.11 Notification of Certain Matters...............................................................21
5.12 Amendment of Schedules........................................................................21
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND THE INDEMNITY UNITHOLDER........................21
6.1 Representations and Warranties; Performance of Obligations....................................21
6.2 Employment Agreement..........................................................................22
6.3 No Litigation.................................................................................22
6.4 Repurchase Agreement..........................................................................22
6.5 Consents and Approvals........................................................................22
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF INTEGRA.........................................................22
7.1 Representations and Warranties; Performance of Obligations....................................22
7.2 No Litigation.................................................................................22
7.3 Examination of Financial Statements...........................................................22
7.4 No Material Adverse Change....................................................................23
7.5 Regulatory Review and Approval................................................................23
7.6 Employment Agreement..........................................................................23
7.7 Resignation of Company officers and Directors.................................................23
7.8 Opinion of Counsel............................................................................23
7.9 Consents and Approvals........................................................................25
7.10 Good Standing Certificates....................................................................25
8. INDEMNIFICATION; SURVIVAL..............................................................................25
8.1 General Indemnification by Indemnity Unitholder...............................................25
8.2 Specific Indemnification by Indemnity Unitholder..............................................25
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TABLE OF CONTENTS
(continued)
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8.3 Indemnification by Integra....................................................................26
8.4 Third Party Claims............................................................................26
8.5 Limitations on Indemnification................................................................27
8.6 Survival of Representations and Warranties....................................................28
9. TERMINATION OF AGREEMENT...............................................................................28
9.1 Termination by Integra........................................................................28
9.2 Automatic Termination.........................................................................28
10. NONDISCLOSURE OF CONFIDENTIAL INFORMATION..............................................................28
10.1 Indemnity Unitholder..........................................................................29
10.2 Damages.......................................................................................29
11. GENERAL................................................................................................29
11.1 Warrants......................................................................................29
11.2 Cooperation...................................................................................30
11.3 Successors and Assigns........................................................................30
11.4 Entire Agreement..............................................................................30
11.5 Counterparts..................................................................................30
11.6 Brokers and Agents............................................................................30
11.7 Expenses......................................................................................30
11.8 Notices.......................................................................................31
11.9 Governing Law.................................................................................32
11.10 Exercise of Rights and Remedies...............................................................32
11.11 Time..........................................................................................32
11.12 Reformation and Severability..................................................................32
11.13 Remedies Cumulative...........................................................................32
11.14 Captions......................................................................................32
12. DEFINITIONS............................................................................................32
12.1 "Accounts Receivable".........................................................................32
12.2 "Acquisition Proposal"........................................................................32
12.3 "Agent".......................................................................................32
12.4 "Agreement"...................................................................................32
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TABLE OF CONTENTS
(continued)
PAGE
12.5 "Authorizations"..............................................................................33
12.6 "Benefit Plan"................................................................................33
12.7 "CERCLA"......................................................................................33
12.8 "Certificates"................................................................................33
12.9 "Closing".....................................................................................33
12.10 "Closing Date"................................................................................33
12.11 "Code"........................................................................................33
12.12 "Commonly Controlled Entity"..................................................................33
12.13 "Company".....................................................................................33
12.14 "Company Documents"...........................................................................33
12.15 "Constituent Corporations"....................................................................33
12.16 "Contracts"...................................................................................33
12.17 "Earn-out Percentage".........................................................................33
12.18 "Earn-out Period".............................................................................33
12.19 "Environmental Laws"..........................................................................33
12.20 "Environmental Permits".......................................................................34
12.21 "ERISA".......................................................................................34
12.22 "Exchange" is defined in the recitals to this Agreement.......................................34
12.23 "Expiration Date".............................................................................34
12.24 "Financial Statements"........................................................................34
12.25 "GAAP"........................................................................................34
12.26 "Governmental Entity".........................................................................34
12.27 "Hazardous Substances"........................................................................34
12.28 "Indemnified Party"...........................................................................34
12.29 "Indemnifying Party"..........................................................................34
12.30 "Indemnity Unitholder" is defined in the preamble to this Agreement...........................34
12.31 "Integra".....................................................................................34
12.32 "Integra Stock"...............................................................................34
12.33 "Intellectual Property".......................................................................34
12.34 "Interim Balance Sheet Date"..................................................................34
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12.35 "Losses"......................................................................................34
12.36 "Maximum Number"..............................................................................34
12.37 "PCBs"........................................................................................34
12.38 "Pension Plan"................................................................................35
12.39 "Post Closing Company is defined in Section _____.............................................35
12.40 "Regulations".................................................................................35
12.41 "Release".....................................................................................35
12.42 "SEC".........................................................................................35
12.43 "Securities Act"..............................................................................35
12.44 "Target Amount"...............................................................................35
12.45 "Tax Returns".................................................................................35
12.46 "Taxes".......................................................................................35
12.47 "Third Party Claim"...........................................................................35
12.48 "UCC".........................................................................................35
12.49 "Unaudited Balance Sheet".....................................................................35
12.50 "Unaudited Balance Sheet Date"................................................................35
12.51 "Units" is defined in the Preamble to this Agreement..........................................35
12.52 "Welfare Plan"................................................................................35
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ANNEX I Form of Employment Agreement
ANNEX II Certificate of Designation
ANNEX III Repurchase Agreement
SCHEDULES
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UNIT PURCHASE AGREEMENT
THIS UNIT PURCHASE AGREEMENT (the "Agreement") is made as of the 27th
day of July, 2001 among Integra, Inc., a Delaware corporation ("Integra") Global
Benefits Solutions LLC, a Delaware limited liability company (the "Company") and
▇▇▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇" or the "Indemnity Unitholder"). Certain capitalized
terms used herein are defined in Article 12 hereof.
WHEREAS, the Indemnity Unitholder holds all of the issued and
outstanding membership units of the Company (the "Units");
WHEREAS, the Board of Directors of Integra deems it advisable and in
the best interests of Integra and its stockholders that Integra purchase all of
the issued and outstanding membership interests of the Company pursuant to this
Agreement and the applicable provisions of the laws of the state of Delaware
(such transaction being herein called the "Exchange"); and
WHEREAS, subject to the terms and conditions set forth herein, each
party hereto desires to consummate the Exchange.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
1. EXCHANGE OF SECURITIES
1.1 EXCHANGE OF COMPANY SECURITIES. Subject to the terms and
conditions hereinafter set forth and on the basis of the representations,
warranties, covenants and agreements set forth herein, at the Closing, the
Indemnity Unitholder shall exchange with Integra and Integra shall exchange with
the Indemnity Unitholder, all of the issued and outstanding Units, free and
clear of all liens, in exchange for delivery to the Indemnity Unitholder of
1,000,000 shares of Integra common stock at the price at the Closing Date and
107,500 shares of preferred stock valued at $40.00 per share, subject to
adjustments listed below (the "Preferred Stock" and together with the common
stock the "Integra Stock"). The terms of the Integra Preferred Stock are set
forth in Annex II.
1.2 POST CLOSING ADJUSTMENT. On the Closing (as defined below),
the maximum number of shares of Preferred Stock to be issued to Piltch pursuant
to the terms of this Agreement is 107,500 (the "Maximum Number"). The Maximum
Number shall be subject to reduction as follows: in the event that the gross
revenue of the Company for the period between August 1, 2001 and December 31,
2001 (the "Earn-out Period") is less than $2,300,000 (as evidenced by a separate
Company line item on Integra's financial statements, which includes the monthly
$32,500 payments from Integra to the Company) on an annualized basis (using the
accrual method of accounting) (the "Target Amount"), then the Maximum Number
shall be decreased by a percentage (the "Earn-out Percentage"), equal to 100
multiplied by the difference
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between 1 and a quotient, the numerator of which shall be the actual gross
revenue for the Earn-out Period and the denominator of which shall be the Target
Amount. Provided, however, if and to the extent that the Earn-out Percentage is
less than 5%, no reduction in the Maximum Number shall be made. For example, if
the Company has gross revenue for the Earn-out Period equal to $2,116,000 (or 8%
less than the Target Amount), then the Maximum Number will be reduced by 3% to
104,275 shares.
Integra will have Ernst & Young LLP prepare its financial statements
which include the Company's financial information setting forth the gross
revenue of the Company for the Earn-out Period. Integra, the Company and Piltch
hereby agree that the calculation of the Company's gross revenue for the
Earn-out Period included in such financial statements shall be final and binding
on the parties.
1.3 EXCHANGE PROCEDURES. On the Closing Date, the Indemnity
Unitholder shall be entitled to receive, in exchange for all of the issued and
outstanding Units of the Company, a certificate or certificates registered in
the name of the Indemnity Unitholder representing that number of whole shares of
Integra Stock which the holder has the right to receive. The Indemnity
Unitholder will be issued Integra Stock, upon surrender to Integra of
certificates representing all of the outstanding Units of the Company
("Certificates"), which Certificates shall be held in escrow by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
pursuant to that certain Escrow Agreement between Integra and the Indemnity
Unitholder dated of even date herewith.
1.4 NO FRACTIONAL SHARES. Notwithstanding any other provision of
this Article 1, no fractional shares of Integra Stock will be issued and the
Indemnity Unitholder, even though such Indemnity Unitholder would otherwise be
entitled hereunder to receive a fractional share of Integra Stock but for this
Section 1.4; the Indemnity Unitholder will be entitled hereunder to receive in
lieu of such fractional share a cash payment.
1.5 CEO OF INTEGRA. Immediately after the Closing Date, ▇▇▇▇▇▇
▇▇▇▇▇▇ shall be the Chief Executive Officer, President and a director of Integra
pursuant to that certain Employment Agreement dated August 1, 2001 between
Integra and the Indemnity Unitholder.
1.6 REPURCHASE RIGHT. Piltch shall have the right to purchase all
of Integra's interest in the Company that is transferred under this Agreement as
set forth in Annex III.
1.7 INSTALLMENT PURCHASE. Any monies due Piltch for the
transaction contemplated hereby, other than the 8% interest payment on the
Preferred Stock, shall be made on an installment basis during the five year
period contemplated herein, the amount of which installment and the timing of
which shall be agreed upon by Integra and Piltch.
2. CLOSING.
2.1 CLOSING DATE; LOCATION. The Exchange referred to in Article I
hereof (hereinafter referred to as the "Closing") shall take place at the
offices of ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇. Subject to the Exchange receiving
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all requisite Stockholder and unitholder approvals and subject to the other
provisions of this Agreement, the parties shall hold the Closing on the next
business day (or such later date as the parties hereto may agree) after the last
of the conditions set forth in Sections 6 and 7 are fulfilled or waived. The
date on which the Closing shall occur shall be referred to as the "Closing
Date."
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND INDEMNITY UNITHOLDER
As of the date hereof and as of the Closing Date, the Company and
Indemnity Unitholder jointly and severally (except for the second sentence of
Section 3.5), represent and warrant to Integra, as follows:
3.1 LLC EXISTENCE. The Company is a limited liability company duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization. The Company is duly qualified to do business
and is in good standing as a foreign limited liability company in each
jurisdiction where the conduct of its business requires it to be so qualified,
all of which jurisdictions are listed on Schedule 3.1(b).
3.2 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS; APPLICABILITY
OF TAKEOVER STATUTES. The Company has the power, authority and legal right to
execute, deliver and perform this Agreement. The execution, delivery and
performance of this Agreement by the Company has been duly authorized by its
members and the Indemnity Unitholder and no further action on the part of the
Company or the Indemnity Unitholder is necessary to authorize this Agreement and
the performance of the transactions contemplated hereby. This Agreement has
been, and the other agreements, documents and instruments required to be
delivered by the Company in accordance with the provisions hereof (the "Company
Documents") will be, duly executed and delivered on behalf of the Company by
duly authorized officers of the Company, and this Agreement constitutes, and the
Company Documents when executed and delivered will constitute, the legal, valid
and binding obligations of the Company, enforceable against it in accordance
with their respective terms. No other "fair price," "moratorium," "control share
acquisition" or other form of anti-takeover statute or regulation (each a
"Takeover Statute") as in effect on the date hereof or any anti-takeover
provision in the Company's Certificate of Formation or Operating Agreement is
applicable to the Company, the Units, or the other transactions contemplated by
this Agreement.
3.3 AUTHORITY; OWNERSHIP. Except as set forth in Schedule 3.3, the
Indemnity Unitholder holds all of the issued and outstanding Units of the
Company and has the full legal right, power and authority to enter into this
Agreement.
3.4 VALIDITY OF CONTEMPLATED TRANSACTIONS. The execution, delivery
and performance of this Agreement by the Company and the Indemnity Unitholder
does not and will not violate, conflict with or result in the breach of any
term, condition or provision of, or require the consent of any other person
under (a) any existing law, ordinance, or governmental rule or regulation to
which the Company or the Indemnity Unitholder is subject, (b) any judgment,
order, writ, injunction, decree or award of any Governmental Entity which is
applicable to the
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Company or the Indemnity Unitholder, (c) the organizational documents of the
Company or any securities issued by the Company, or (d) except as set forth on
Schedule 3.4, any mortgage, indenture, agreement, contract, commitment, lease,
plan, Authorization, or other instrument, document or understanding, oral or
written, to which any of the Company or Indemnity Unitholder is a party, by
which the Company may have rights or by which any of the properties or assets of
the Company may be bound or affected, or give any party with rights thereunder
the right to terminate, modify, accelerate or otherwise change the existing
rights or obligations of the Company thereunder. Except as set forth on Schedule
3.4, no authorization, approval or consent of, and no registration or filing
with, any Governmental Entity is required in connection with the execution,
delivery or performance of this Agreement by the Company or the Indemnity
Unitholder.
3.5 SECURITIES OF THE COMPANY. The authorized membership units of
the Company consists solely of the Units shown on Schedule 3.5, of which only
the Units shown on such Schedule 3.5 to be issued and outstanding are issued and
outstanding. The Indemnity Unitholder represents and warrants that all of the
issued and outstanding Units of the Company owned by the Indemnity Unitholder as
set forth on Schedule 3.5, as owner of record and beneficially by the Indemnity
Unitholder and are free and clear of all liens, security interests, pledges,
charges, voting trusts, restrictions, encumbrances and claims of every kind
except as set forth on Schedule 3.5. All of the issued and outstanding Company
Units to be delivered on the Closing Date will have been duly authorized and
validly issued, fully paid and nonassessable, and will have been offered,
issued, sold and delivered by the Company in compliance with all applicable
state and federal laws concerning the offering, sale or issuance of securities.
None of such Units will have been, and none of the Units from which they will
have been derived were, issued in violation of the tag-along, drag-along or
preemptive rights of any past or present unitholder or rights of first refusal
of the Company pursuant to any agreement, or any other statutory rights of the
Indemnity Unitholder or the Company.
3.6 TRANSACTIONS IN SECURITIES. The Company has not acquired any
treasury units since its formation. Except as set forth on Schedule 3.6, no
option, warrant, call, conversion right or commitment of any kind exists which
obligates the Company to issue any of its authorized but unissued Units. Except
as set forth on Schedule 3.6, the Company has no obligation (contingent or
otherwise) to purchase, redeem or otherwise acquire any of its equity securities
or any interests therein or to pay any dividend or make any distribution in
respect thereof.
3.7 NO BONUS SECURITIES. None of the Units of the Company were,
and none of the Company Units will be, issued pursuant to awards, grants or
bonuses, whether of units or of options or other rights. The Company has no
options to purchase securities of the Company outstanding.
3.8 SUBSIDIARIES. The Company has no subsidiaries and is not a
participant in any joint venture, partnership or other noncorporate entity.
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3.9 PREDECESSOR STATUS; ETC. There are no predecessor companies of
the Company and no entities from whom the Company previously acquired
significant assets. Except as set forth on Schedule 3.9, the Company has never
been a subsidiary or division of another corporation or been a part of an
acquisition that was later rescinded.
3.10 SPIN-OFFS BY COMPANY. Since the formation of the Company,
there has not been any sale or spin-off of significant assets of the Company
other than in the ordinary course of business.
3.11 NO THIRD PARTY OPTIONS. There are no existing agreements,
options, commitments or rights with, of or to any person for that person to
acquire any properties, assets or rights of the Company or any interest therein.
3.12 FINANCIAL STATEMENTS. Attached hereto as Schedule 3.12 are
copies of the unaudited balance sheet of the Company (the "Unaudited Balance
Sheet") at December 31, 2000 (the "Unaudited Balance Sheet Date"), and the
related statements of income, cash flows and changes in members' equity for the
fiscal years then ended (the "Financial Statements").
All of the Financial Statements have been prepared in accordance with
generally accepted accounting principles ("GAAP") consistently applied
throughout the periods involved. All of the balance sheets included in the
Financial Statements fairly present the financial position, assets and
liabilities (whether accrued, absolute, contingent or otherwise) of the Company
on a consolidated basis at the dates indicated and such statements of income,
cash flows and changes in Unitholders' equity fairly present the results of
operations, cash flows and changes in Unitholders' equity of the Company on a
consolidated basis for the periods indicated.
3.13 LIABILITIES AND OBLIGATIONS.
(a) Attached hereto as Schedule 3.13 is an accurate list,
as of June 30, 2001, of: (i) all liabilities of the Company which are reflected
on the unaudited consolidated balance sheet included in the Financial
Statements; (ii) all liabilities incurred thereafter other than in the ordinary
course of business; (iii) all material liabilities incurred thereafter in the
ordinary course of business; and (iv) all liabilities incurred as of the
Unaudited Balance Sheet Date or incurred thereafter that are not reflected on
the Unaudited Balance Sheet; provided, however, that Schedule 3.13 does not
include liabilities arising out of any Contract described on Schedule 3.17. Each
of the foregoing liabilities that has not heretofore been paid or discharged is
so noted on Schedule 3.13. For purposes of this Agreement, "liabilities" means
liabilities of any kind, character or description, whether accrued, absolute,
secured or unsecured, contingent or otherwise.
(b) For each such liability for which the amount is not
fixed or is contested, Schedule 3.13 shall include a summary description of the
liability, together with copies of all relevant documentation relating thereto,
detail of all amounts claimed and any other action or relief sought, the names
of the claimant and all other parties to the claim, suit or proceeding, the name
of each court or agency before which such claim, suit or proceeding is pending,
the date
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such claim, suit or proceeding was instituted, and a best estimate of the
maximum amount, if any, which is likely to become payable with respect to each
such liability. If no estimate is provided, the best estimate shall for purposes
of this Agreement be deemed to be zero.
(c) All of the liabilities reflected on the Unaudited
Balance Sheet included in the Unaudited Financial Statements arose only out of
or were incurred only in connection with the conduct of the respective
businesses of the Company. Except as set forth on Schedule 3.13 and except for
liabilities not required to be set forth thereon pursuant to Section 3.13(a),
the Company has no liabilities or obligations with respect to its business,
whether direct or indirect, matured or unmatured, absolute contingent or
otherwise, and there is no condition, situation or set of circumstances which
would reasonably be expected to result in any such liability.
3.14 ACCOUNTS AND NOTES RECEIVABLE. Attached hereto as Schedule
3.14 is a complete and accurate list, as of June 30, 2001, of the accounts and
notes receivable of the Company (including, without limitation, receivables from
and advances to employees and the Company) (collectively, the "Accounts
Receivable"). Schedule 3.14 includes an aging of all Accounts Receivable showing
amounts due in 30-day aging categories. On the Closing Date, the Company will
deliver to Integra a complete and accurate list, as of June 30, 2001, of the
Accounts Receivable. All Accounts Receivable represent valid obligations arising
from bona fide business transactions in the ordinary course of business
consistent with past practice. The Accounts Receivable are, and as of the
Closing Date will be, current and collectible net of any respective reserves
shown on the Company's books and records (which reserves are adequate and
calculated consistent with past practice). There is no contest, claim,
counterclaim, defense or right of set-off, other than rebates and returns in the
ordinary course of business, under any contract with any obligor of any Account
Receivable relating to the amount or validity of such Account Receivable except
as listed as a liability under Schedule 3.13. The allowance for collection
losses on the unaudited consolidated balance sheet as of the Unaudited Balance
Sheet Date has been determined in accordance with GAAP consistent with past
practice.
3.15 PERMITS. The Company has no Permit issued by any Governmental
Entity.
3.16 REAL AND PERSONAL PROPERTY. The Company owns no real property.
Attached hereto as Schedule 3.16 is an accurate list, including substantially
complete descriptions as of the Interim Balance Sheet Date, of all the personal
property (which had an original cost in excess of $25,000) owned or leased by
the Company, including true and correct copies of leases for equipment. All
fixed assets used by the Company in the operation of its business are leased
under agreements set forth on Schedule 3.16. All leases set forth on Schedule
3.16 have been duly authorized, executed and delivered and constitute the legal,
valid and binding obligations of the Company. All fixed assets used by the
Company in the operation of its business are either owned by the Company or
leased under an agreement set forth on Schedule 3.16. Schedule 3.16 sets forth a
summary description of all plans or projects involving the opening of new
operations, expansion of any existing operations or the acquisition of any real
property or existing business to which management of the Company has devoted any
significant effort or expenditure in the
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since its formation which, if pursued by the Company would require additional
expenditures of significant efforts or capital.
3.17 CONTRACTS AND COMMITMENTS. Schedule 3.17 sets forth an
accurate, correct and complete list of all agreements, contracts, commitments,
arrangements and understandings, written or oral, including all amendments and
supplements thereto, of the Company (the "Contracts"), to which the Company is a
party or is bound, or by which any of its assets are bound, and which involve
any:
(a) agreement, contract, commitment, arrangement or
understanding with any present or former employee or consultant or for the
employment of any person, including any consultant;
(b) agreement, contract, commitment, arrangement or
understanding for the future purchase of, or payment for, supplies or products,
or for the performance of services by a third party involving in any one case
$10,000 or more;
(c) agreement, contract, commitment, arrangement or
understanding to sell or supply products or to perform services involving in any
one case $10,000 or more;
(d) agreement, contract, commitment, arrangement or
understanding containing requirements or "take or pay" provisions;
(e) agreement, contract, commitment, arrangement or
understanding not otherwise listed on Schedule 3.17 and continuing over a period
of more than six months from the date hereof or exceeding $10,000 in value;
(f) distribution, dealer, representative or sales agency
agreement, contract, commitment, arrangement or understanding;
(g) agreement, contract, commitment, arrangement or
understanding containing a provision to indemnify any person or entity or assume
any tax, environmental or other liability;
(h) agreement, contract, commitment, arrangement or
understanding with federal, state, local, regulatory or other Governmental
Entity;
(i) note, debenture, bond, equipment trust agreement,
letter of credit agreement, loan agreement or other contract or commitment for
the borrowing or lending of money or agreement or arrangement for a line of
credit or guarantee, pledge or undertaking of the indebtedness of any other
person;
(j) agreement, contract, commitment, arrangement or
understanding for any charitable or political contribution;
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(k) agreement, contract, commitment, arrangement or
understanding for any capital expenditure or leasehold improvement in excess of
$10,000;
(l) agreement, contract, commitment, arrangement or
understanding limiting or restraining the Company or any successor thereto, or
to the knowledge of Company and the Indemnity Unitholder, any employee of the
Company or any successor thereto, from engaging or competing in any manner or in
any business;
(m) license, franchise, distributorship or other
agreement which relates in whole or in part to any software, patent, trademark,
trade name, service ▇▇▇▇ or copyright or to any ideas, technical assistance or
other know-how of or used by the Company;
(n) agreement, contract, commitment, arrangement or
understanding to which the Company, on the one hand, and any affiliate, officer,
director or unitholder of the Company, on the other hand, are parties; or
(o) material agreement, contract, commitment, arrangement
or understanding not made in the ordinary course of business.
The Company is, and to the knowledge of the Company and the Indemnity
Unitholder, all other parties are, in compliance with the provisions to each of
the Contracts listed in Schedule 3.17. The Company is not, and to the knowledge
of the Company and the Indemnity Unitholder, no other party thereto is, in
default in the performance, observance or fulfillment of any material
obligation, covenant or condition contained therein; and no event has occurred
which with or without the giving of notice or lapse of time, or both, would
constitute a default thereunder by the Company. Except as set forth on Schedule
3.17, none of the rights of the Company under any Contract will be impaired by
the consummation of the transactions contemplated hereby, and all such rights
will be enforceable by the Company after the Closing Date without the consent or
agreement of any other party. The Company has delivered accurate and complete
copies of each Contract to Integra. Except as set forth in Schedule 3.17, no
Contract obligates any party to obtain any consent in connection with the
transactions contemplated hereby.
3.18 GOVERNMENT CONTRACTS. The Company is not now or has ever been
a party to any contract with any Governmental Entity subject to price
redetermination or renegotiation.
3.19 INSURANCE. The assets, properties and operations of the
Company are insured under various policies of general liability and other forms
of insurance, all of which are described in Schedule 3.19, which discloses for
each policy the risks insured against, coverage limits, deductible amounts, all
outstanding claims thereunder, and whether the terms of such policy provide for
retrospective premium adjustments. All such policies are in full force and
effect in accordance with their terms, no notice of cancellation has been
received, and there is no existing default or event which, with the giving of
notice or lapse of time or both, would constitute a default thereunder. Such
policies are in amounts which, in relation to the business and assets of the
Company, are consistent with the normal or customary industry practice and all
premiums due to date have been paid in full. The Company has never been refused
any
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insurance, nor has the Company's coverage been limited, by any insurance
carrier to which it has applied for insurance or with which it has carried
insurance since its formation. Schedule 3.19 also contains a true and complete
description of all outstanding bonds and other surety arrangements issued or
entered into in connection with the business, assets and liabilities of the
Company.
3.20 EMPLOYEES. Schedule 3.20 contains the following with respect
to the Company:
(a) a list of all current employees of the Company
(including name, title and position);
(b) each such employee's length of service; and
(c) the compensation (including terms of payment,
bonuses, commissions and deferred compensation, as well as any benefits) of each
such employee.
Except as disclosed on Schedule 3.20: (i) there have not been since the
Company's formation and, to the knowledge of the Company and the Indemnity
Unitholder, there are not pending, any labor disputes, work stoppages, requests
for representation, pickets or work slow-downs due to labor disagreements; (ii)
there are and have been no unresolved violations of any laws of any Governmental
Entity respecting the employment of any employees; (iii) there is no unfair
labor practice, charge or complaint pending, unresolved or, to the knowledge of
the Company and the Indemnity Unitholder, threatened before the National Labor
Relations Board or similar body in any foreign country; (iv) there is no
employment handbook, personnel policy manual, or similar document that creates
prospective employment rights or obligations other than made a part of Schedule
3.20; (v) the employees of the Company are not covered by any collective
bargaining agreement; (vi) the Company has provided or will timely provide prior
to Closing all notices required by law to be given prior to Closing to all
local, state, federal or national labor, wage-payment, equal employment
opportunity, unemployment insurance and related agencies; (vii) the Company has
paid or properly accrued in the ordinary course of business all wages and
compensation due to employees, including all vacations or vacation pay, holidays
or holiday pay, sick days or sick pay, and bonuses; and (viii) the transactions
contemplated by this Agreement will not create liability under any Laws of any
Governmental Entity respecting reductions in force or the impact on employees on
plant closing or sales of businesses. All employees of the Company are legally
able to work in the United States.
3.21 EMPLOYEE BENEFIT PLANS AND ARRANGEMENTS. The Company does not
have any Benefit Plans. "Benefit Plan" means each "employee pension benefit
plan" (as defined in Section 3(3) of ERISA, hereinafter a "Pension Plan"),
"employee welfare benefit plan" (as defined in Section 3(1) of ERISA,
hereinafter a "Welfare Plan") and each other plan or arrangement (written or
oral) relating to deferred compensation, bonus, performance compensation, stock
purchase, stock option, stock appreciation, severance, vacation, sick leave,
holiday pay, fringe benefits, personnel policy, reimbursement program,
incentive, insurance, welfare or similar plan, program, policy or arrangement,
in each case maintained or contributed to, or required to be maintained or
contributed to, by the Company or its affiliates or any other person or entity
that,
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together with the Company, is treated as a single employer under Section 414(b),
(c), (m) or (o) of the Internal Revenue Code of 1986, as amended (the"Code"),
(each, together with the Company, a "Commonly Controlled Entity") for the
benefit of any present or former officer, employee or director. The Company has
no intent or commitment to create any Benefit Plan.
3.22 COMPLIANCE WITH LAW; AUTHORIZATIONS. The Company has complied
with each, and is not in violation of any, law, ordinance, or governmental or
regulatory rule or regulation, whether federal, state, local or foreign
("Regulations"), to which the Company' business, operations, assets or
properties are subject. The Company owns, holds, possesses or lawfully uses in
the operation of its business all franchises, licenses, permits, easements,
rights, applications, filings, registrations and other authorizations
("Authorizations") which are in any manner necessary for it to conduct its
business as now or previously conducted or for the ownership and use of the
assets owned or used by the Company in the conduct of the business of the
Company, free and clear of all liens, charges, restrictions and encumbrances and
in compliance with all Regulations. All such Authorizations are listed and
described in Schedule 3.22. The Company is not in default, nor has the Company
received any notice of any claim of default, with respect to any such
Authorization. All such Authorizations are renewable by their terms or in the
ordinary course of business without the need to comply with any special
qualification procedures or to pay any amounts other than routine filing fees.
None of such Authorizations will be adversely affected by consummation of the
transactions contemplated hereby. The Indemnity Unitholder does not and no
director, officer, employee or former employee of the Company or any affiliates
of the Company, or any other person, firm or corporation, owns or has any
proprietary, financial or other interest (direct or indirect) in any
Authorization which the Company owns, possesses or uses in the operation of the
business of the Company as now or previously conducted.
3.23 TRANSACTIONS WITH AFFILIATES. Except as set forth in Schedule
3.23, no unitholder and no director, officer or employee of the Company, or any
member of his or her immediate family or any other of its, his or her
affiliates, owns or has a 5% or more ownership interest in any corporation or
other entity that is or was during the period since the Company's formation a
party to, or in any property which is or was during the the period since the
Company's formation the subject of, any contract, agreement or understanding,
business arrangement or relationship with the Company.
3.24 LITIGATION.
(a) No litigation, including any arbitration,
investigation or other proceeding of or before any court, arbitrator or
governmental or regulatory official, body or authority is pending or, to the
knowledge of the Company and the Indemnity Unitholder, threatened against the
Company which relates to the transactions contemplated by this Agreement.
(b) Except as set forth on Schedule 3.24, no litigation,
including any arbitration, investigation or other proceeding of or before any
court, arbitrator or governmental or regulatory official, body or authority is
pending or, to the knowledge of the Company and the Indemnity Unitholder,
threatened against the Company or which relates to such Company.
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(c) Neither the Company nor the Indemnity Unitholder
knows of any reasonably likely basis for any litigation, arbitration,
investigation or proceeding referred to in Sections 3.24(a) or (b).
(d) The Company is not a party to or subject to the
provisions of any judgment, order, writ, injunction, decree or award of any
court, arbitrator or governmental or regulatory official, body or authority.
3.25 RESTRICTIONS. Except for the Contracts set forth on Schedule
3.17, the Company is not a party to any indenture, agreement, contract,
commitment, lease, plan, license, permit, authorization or other instrument,
document or understanding, oral or written, or subject to any charter or other
restriction or any judgment, order, writ, injunction, decree or award which
materially adversely affects or materially restricts or, so far as the Company
or any of the Indemnity Unitholder can now reasonably foresee, may in the future
materially adversely affect or materially restrict, the business, operations,
assets, properties, prospects or condition (financial or otherwise) of the
Company after consummation of the transactions contemplated hereby.
3.26 TAXES. The Company is not, and has not ever been, classified
as an association and taxable as a corporation for federal or state income tax
purposes. All federal, state, local and foreign tax returns, reports, statements
and other similar filings required to be filed by the Company or the Indemnity
Unitholder(the "Tax Returns") with respect to any federal, state, local or
foreign taxes, assessments, interest, penalties, deficiencies, fees and other
governmental charges or impositions (including without limitation all income
tax, unemployment compensation, social security, payroll, sales and use, excise,
privilege, property, ad valorem, franchise, license, school and any other tax or
similar governmental charge or imposition under laws of the United States or any
state or municipal or political subdivision thereof or any foreign country or
political subdivision thereof) (singly, a "Tax", and collectively, the "Taxes")
have been timely filed with the appropriate governmental agencies in all
jurisdictions in which such Tax Returns are required to be filed, and all such
Tax Returns fairly reflect the liabilities of the Company for Taxes for the
periods, property or events covered thereby. All Taxes called for by the Tax
Returns have been paid by the Company and any deficiency assessments, penalties
and interest have been timely paid, withheld or accrued. The accruals for Taxes
contained in the Unaudited Balance Sheet are fairly stated as of that date and
nothing has occurred subsequent to that date to make any of such accruals
inadequate as of that date. The Company's Tax basis in its assets for purposes
of determining its future amortization, depreciation and other federal income
tax deductions is fairly stated on the Company's Tax books and records. The
Company is not and has not at any time ever been a party to a Tax sharing, Tax
indemnity or Tax allocation agreement, and the Company has not assumed any Tax
liability of any other person or entity under contract. The Company has not
received any notice of assessment or proposed assessment in connection with any
Tax Returns and there are not pending tax examinations of or tax claims asserted
against the Company or any of its assets or properties. The Company has not
extended, or waived the application of, any statute of limitations of any
jurisdiction regarding the assessment or collection of any Taxes. There are now
(and as of immediately following the Closing there will be) no liens (other than
any lien for current Taxes not yet due and payable) on
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any of the assets or properties of the Company relating to or attributable to
Taxes. To the knowledge of the Company and the Indemnity Unitholder, there is no
basis for the assertion of any claim relating to or attributable to Taxes which,
if adversely determined, would have an adverse effect on the Company or its
business, operations, assets, properties, prospects or condition (financial or
otherwise). All Tax payments related to employees, including income tax
withholding, FICA, FUTA, unemployment and worker's compensation, required to be
made by the Company have been fully and properly paid, withheld, accrued or
recorded. There are no contracts, agreements, plans or arrangements, including
but not limited to the provisions of this Agreement, covering any employee or
former employee of the Company that, individually or collectively, could give
rise to any payment (or portion thereof) that would not be deductible pursuant
to Sections 280G, 404 or 162 of the Code. Correct and complete copies of (a) all
Tax examinations, (b) all extensions of statutory limitations and (c) all
federal, state and local income tax returns and franchise tax returns of the
Company since its formation, have heretofore been delivered by the Company and
the Indemnity Unitholder to Integra. The Company has a taxable year ended
December 31 and the Company has not made an election to retain a fiscal year
other than December 31 under Section 444 of the Code. The Company currently
utilizes the accrual method of accounting for income tax purposes and has not
changed its method of accounting for income tax purposes since its formation.
3.27 INTELLECTUAL PROPERTY MATTERS.
(a) The Company uses or has used the patents, trade
names, service marks, copyrights, software, trade secrets and know-how listed on
Schedule 3.27 (the "Intellectual Property"), all of which are owned by the
Company free and clear of any liens, claims, charges or encumbrances except as
set forth on Schedule 3.27. The Intellectual Property constitutes all such
rights necessary for the conduct of the business of the Company.
(b) There are no royalty, commission or similar
arrangements, and no licenses, sublicenses or agreements, pertaining to any of
the Intellectual Property or products or services of the Company.
(c) The Company does not infringe upon or unlawfully or
wrongfully uses any patent, trademark, trade name, service ▇▇▇▇, copyright or
trade secret owned or claimed by another. Except as set forth on Schedule 3.27,
no action, suit, proceeding or investigation has been instituted or, to the
knowledge of the Company and the Indemnity Unitholder, threatened relating to
any, patent, trademark, trade name, service ▇▇▇▇, copyright or trade secret
formerly or currently used by the Company. None of the Intellectual Property is
subject to any outstanding order, decree or judgment. The Company has not agreed
to indemnify any person or entity for or against any infringement of or by the
Intellectual Property.
(d) No present or former employee of the Company and no
other person or entity owns or has any proprietary, financial or other interest,
direct or indirect, in whole or in part, in any of the Intellectual Property.
Schedule 3.27 lists all confidentiality or non-disclosure agreements currently
in force and effect to which the Company or to its knowledge any of their
employees is a party.
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(e) Schedule 3.27 sets forth a complete and accurate list
of all items of Intellectual Property duly registered in, filed in or issued by
the United States Copyright Office or the United States Patent and Trademark
Office, any offices in the various states of the United States and the any
offices in other jurisdictions.
(f) All rights of the Company in the Intellectual
Property shall vest in the Surviving Corporation pursuant to the transactions
contemplated hereby without any consent or other approval except as set forth on
Schedule 3.27.
3.28 COMPLETENESS; NO VIOLATIONS. Copies of the certified copies of
the Certificate of Formation and the Operating Agreement, both as amended to
date, of the Company, and the copies of all leases, instruments, agreements,
licenses, permits, certificates or other documents which are included on
schedules attached hereto or which have been delivered to Integra in connection
with the transactions contemplated hereby, are complete and correct; neither the
Company nor, to the knowledge of the Indemnity Unitholder, any other party to
any of the foregoing is in material default thereunder; and, except as set forth
in the schedules and documents attached to this Agreement, the rights and
benefits of the Company thereunder will not be materially and adversely affected
by the transactions contemplated hereby, and the execution of this Agreement and
the performance of the obligations hereunder will not result in a material
violation or breach or constitute a material default under any of the terms or
provisions thereof. Except as set forth on Schedule 3.28, none of such leases,
instruments, agreements, contracts, licenses, permits, certificates or other
documents requires notice to, or the consent or approval of, any governmental
agency or other third party to any of the transactions contemplated hereby to
remain in full force and effect. The consummation of the transactions
contemplated hereby will not give rise to any right of termination, cancellation
or acceleration or result in the loss of any right or benefit thereunder.
3.29 EXISTING CONDITION. Except as set forth on Schedule 3.29,
since December 31, 2000, the Company has not:
(a) incurred any liabilities not disclosed on Schedule
3.13, other than liabilities incurred in the ordinary course of business
consistent with past practice, or discharged or satisfied any lien or
encumbrance, or paid any liabilities, other than in the ordinary course of
business consistent with past practice, or failed to pay or discharge when due
any liabilities of which the failure to pay or discharge has caused or will
cause any material damage or risk of material loss to it or any of its assets or
properties;
(b) sold, encumbered, assigned or transferred any assets,
properties or rights or any interest therein, except as reflected by omission
from Schedule 3.14 or 3.16 for the sales in the ordinary course of business
consistent with past practice, or made any agreement or commitment or granted
any option or right with, of or to any person to acquire any assets, properties
or rights of the Company or any interest therein;
(c) created, incurred, assumed or guaranteed any
indebtedness for money borrowed, or mortgaged, pledged or subjected any of its
assets to any mortgage, lien, pledge,
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security interest, conditional sales contract or other encumbrance of any nature
whatsoever, except as disclosed in Schedule 3.13, 3.16 and 3.19 in the ordinary
course of business consistent with past practice;
(d) made or suffered any amendment or termination of any
material agreement, contract, commitment, lease or plan to which it is a party
or by which it is bound, or canceled, modified or waived any substantial debts
or claims held by it or waived any rights of substantial value, whether or not
in the ordinary course of business except as disclosed on Schedule 3.17;
(e) declared, set aside or paid any dividend or made or
agreed to make any other distribution or payment in respect of its Units or
redeemed, purchased or otherwise acquired or agreed to redeem, purchase or
acquire any of its Units or other ownership interests;
(f) suffered any damage, destruction or loss (i)
materially and adversely affecting its business, operations, assets, properties
or prospects or (ii) of any item or items carried on its books of account
individually or in the aggregate at more than $100,000;
(g) made any material adverse change in its business,
operations, assets, properties, or financial condition;
(h) received notice or had knowledge of any actual or
threatened labor trouble, strike or other occurrence, event or condition of any
similar character which has had or might have an adverse effect on its business,
operations, assets, properties or financial condition, except as disclosed on
Schedule 3.21;
(i) made commitments or agreements for capital
expenditures or capital additions exceeding in the aggregate $100,000, except as
disclosed on Schedule 3.17 or such as may be involved in ordinary repair,
maintenance or replacement of its assets;
(j) increased the salaries or other compensation of, or
made any advance (excluding advances for ordinary and necessary business
expenses) or loan to, any of its employees or made any increase in, or any
addition to, other benefits to which any of its employees may be entitled except
in each case as disclosed on Schedule 3.21;
(k) changed any of the accounting principles followed by
it or the methods of applying such principles;
(l) entered into any transaction other than in the
ordinary course of business consistent with past practice;
(m) except as reflected in Schedule 3.5, changed its
authorized capital or its securities outstanding or otherwise changed its
ownership interests, or granted any options, warrants, calls, conversion rights
or commitments with respect to any of its capital stock or other ownership
interests; or
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(n) agreed to take any of the actions referred to above.
3.30 DEPOSIT ACCOUNTS; POWERS OF ATTORNEY. Attached hereto as
Schedule 3.30 is an accurate list, as of the date of this Agreement, of:
(a) the name of each financial institution in which the
Company has accounts or safe deposit boxes;
(b) the names in which the accounts or boxes are held;
(c) the type of account;
(d) the name of each person authorized to draw thereon or
have access thereto; and
(e) the name of each person, corporation, firm or other
entity holding a general or special power of attorney from the Company and a
description of the terms of such power.
3.31 BOOKS OF ACCOUNT. The books, records and accounts of the
Company reflect fairly, in reasonable detail, the transactions and the assets
and liabilities of the Company. The Company has not engaged in any transaction,
maintained any bank account or used any of the funds of such Company except for
transactions, bank accounts and funds which have been and are reflected in the
normally maintained books and records of the business.
3.32 ENVIRONMENTAL MATTERS.
(a) The Company has secured, and are in compliance with,
all Environmental Permits, with respect to any premises on which its business is
operated, all of which Environmental Permits shall vest in the Surviving
Corporation upon consummation of the transactions contemplated hereby. The
Company is in compliance with all Environmental Laws.
(b) Neither the Company nor the Indemnity Unitholder has
received any communication from any Governmental Entity that alleges that the
Company is not in compliance with any Environmental Laws or Environmental
Permits.
(c) The Company has not entered into or agreed to any
court decree or order, and the Company is not subject to any judgment, decree or
order, relating to compliance with any Environmental Law or to investigation or
cleanup of a Hazardous Substance under any Environmental Law.
(d) No lien, charge, interest or encumbrance has been
attached, asserted, or to the knowledge of the Company and the Indemnity
Unitholder, threatened to or against any assets or properties of the Company
pursuant to any Environmental Law.
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(e) There has been no treatment, storage, disposal or
release of any Hazardous Substance on any property owned, operated or leased by
the Company.
(f) The Company has not received a CERCLA 104(e)
information request nor has been named a potentially responsible party for any
National Priorities List site under CERCLA or any site under analogous state law
or received an analogous notice or request from any non-U.S. Governmental
Entity, which notice, request or any resulting inquiry or litigation has not
been fully and finally resolved without possibility of reopening.
(g) There are no aboveground tanks or underground storage
tanks on, under or about any property owned, operated or leased by the Company
and any former aboveground or underground tanks on any property owned, operated
or leased by the Company have been removed in accordance with all Environmental
Laws and no residual contamination, if any, remains at such sites in excess of
applicable standards.
(h) To the Company's knowledge, there are no
polychlorinated biphenyls ("PCBs") leaking from any article, container or
equipment on, under or about any property owned, operated or leased by the
Company and there are no such articles, containers or equipment containing PCBs,
and there is no asbestos containing material in a condition or location
currently constituting a violation of any Environmental Law at, on, under or
within any property owned, operated or leased by the Company.
(i) The Company has provided to Integra true and complete
copies of, or access to, all written environmental assessment materials and
reports in their possession that have been prepared by or on behalf of the
Company since its formation.
3.33 NO ILLEGAL PAYMENTS. Neither the Company nor, to the knowledge
of the Company and the Indemnity Unitholder, any affiliate, officer, agent or
employee thereof, directly or indirectly, has, since the Company's formation, on
behalf of or with respect to the Company, or any affiliate thereof, (a) made any
unlawful domestic or foreign political contributions, (b) made any payment or
provided services which were not legal to make or provide or which the Company,
or any affiliate thereof or any such officer, agent or employee should have
known were not legal for the payee or the recipient of such services to receive,
(c) received any payment or any services which were not legal for the payer or
the provider of such services to make or provide, (d) had any transactions or
payments related to the Company which are not recorded in its accounting books
and records or (e) had any bank or cash accounts not reflected in the books and
records of the Company.
3.34 LEASES. The Company is not a lessor under any lease.
3.35 DISCLOSURE. The Company has delivered to Integra true and
complete copies of each agreement, contract, commitment or other document (or,
in the case of any such document not in the possession of, or reasonably
available to the Company, accurate and complete summaries thereof) that is
referred to in the schedules to this Agreement or that has been requested by
Integra or its representatives. Without limiting any exclusion, exception or
other
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limitation contained in any of the representations and warranties made herein,
this Agreement and the schedules hereto and all other documents and information
furnished to Integra and its representatives pursuant hereto do not include any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements herein and therein not misleading. If the Indemnity
Unitholder becomes aware of any fact or circumstance that would change a
representation or warranty of the Indemnity Unitholder in this Agreement or any
representation made on behalf of the Company, then the Indemnity Unitholder
shall immediately give notice of such fact or circumstance to Integra. However,
such notification shall not relieve the Company or the Indemnity Unitholder of
their respective obligations under this Agreement, and at the sole option of
Integra, the truth and accuracy of any and all warranties and representations of
the Indemnity Unitholder, at the date of this Agreement and at the Closing,
shall be a precondition to the consummation of this transaction.
3.36 INVESTMENT INTENT. The Indemnity Unitholder understands and
acknowledges that: (a) he must bear the economic risk of his investment in
Integra Stock; (b) the shares of Integra Stock to be transferred to him
hereunder have not been registered under the Securities Act or any state
securities laws and are being offered and sold in reliance upon exemptions
provided in the Securities Act and state securities laws for transactions not
involving any public offering and, therefore, cannot be resold or transferred
unless they are subsequently registered under the Securities Act and applicable
state laws or unless an exemption from such registration is available; (c) the
Indemnity Unitholder is purchasing the Integra Stock for investment purposes
only for the Indemnity Unitholder's own account and not with any view toward a
distribution thereof; (d) the Indemnity Unitholder does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or
pledge to such person or anyone else any of the shares of Integra Stock which
the Indemnity Unitholder hereby subscribes to purchase or any part thereof, and
the Indemnity Unitholder does not have any present plans to enter into any such
contract, undertaking, agreement or arrangement within 1 year of the date of
this Agreement; (e) the Indemnity Unitholder has such knowledge and experience
in financial and business matters that he is capable of evaluating the merits
and risks of his investment in Integra Stock pursuant to Rule 506(b)(2)(ii) of
the general rules and regulations under the Securities Act; (f) no federal or
state agency has reviewed the transactions set forth in this Agreement or
approved or disapproved the Integra Stock for investment or any other purpose;
(g) the Indemnity Unitholder has reviewed and fully understands all the Exchange
Act filings of Integra; (h) the Integra Stock has been issued and sold to the
Indemnity Unitholder in reliance upon a specific exemption from the registration
requirements of the Securities Act which depends, in part, upon the accuracy of
the representations, warranties and agreements of the Indemnity Unitholder set
forth in this Agreement and the investor questionnaire (the "Investor
Questionnaire") executed by the Indemnity Unitholders and delivered to Integra,
a copy of which is attached hereto as a part of Schedule 3.36; and (i) the
certificate(s) representing the shares of Integra Stock shall bear a legend in
substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR ANY STATE SECURITIES OR BLUE SKY
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LAWS. SUCH SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY
NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES
UNDER THE SECURITIES ACT AND ANY STATE SECURITIES OR BLUE SKY
LAWS, UNLESS, IN THE OPINION OF COUNSEL SATISFACTORY TO THE
INTEGRA, INC., SUCH REGISTRATION IS NOT REQUIRED."
4. REPRESENTATIONS OF INTEGRA
As of the date hereof and as of each of the Closing Date, Integra
represents and warrants as follows:
4.1 CORPORATE EXISTENCE. Integra is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
4.2 INTEGRA STOCK. The shares of Integra Stock to be issued and
delivered to the Indemnity Unitholder on the Merger Effective Date, when issued
and delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and nonassessable shares. The Integra Stock to be issued upon
the exchange for Units held by the Indemnity Unitholder pursuant to the terms of
this Agreement will be free and clear of all liens, encumbrances and claims of
every kind, other than restrictions upon transfer contained herein and other
than any liens, encumbrances or claims arising other than by the actions of
Integra.
4.3 CORPORATE POWER AND AUTHORIZATION. Integra has the corporate
power, authority and legal right to execute, deliver and perform this Agreement.
The execution, delivery and performance of this Agreement by Integra has been
duly authorized by all necessary corporate action. This Agreement has been duly
executed and delivered by Integra and constitutes the legal, valid and binding
obligation of Integra enforceable against Integra in accordance with its terms.
4.4 NO CONFLICTS. The execution, delivery and performance of this
Agreement and the consummation of any transactions contemplated hereby will not
conflict with, or result in a breach or violation of, the Certificate of
Incorporation or Bylaws of Integra.
4.5 ACCURACY OF FILINGS. All of Integra's filings with the
Securities and Exchange Commission have contained all the information required
to be contained therein, have not contained a misstatement of a material fact
and have not omitted to state a material fact that was required to be stated in
order to make the information contained therein not misleading. Integra has not
issued any common stock or suffered any material adverse change since the date
on which it filed its most recent Quarterly Report on Form 10-Q.
5. COVENANTS OF INTEGRA, INDEMNITY UNITHOLDER AND THE COMPANY
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As of the date hereof, Integra on the one hand and the Company and the
Indemnity Unitholder on the other hand, jointly and severally, covenant as
follows:
5.1 EXISTING CONDITION. The Company shall not, and the Indemnity
Unitholder shall not suffer the Company to, cause or permit to occur any of the
events or occurrences described in Section 3.29 hereof.
5.2 MAINTENANCE OF PROPERTIES AND ASSETS. The Company shall, and
the Indemnity Unitholder shall cause the Company to, maintain and service its
properties and assets in order to preserve their value and usefulness in the
conduct of its business.
5.3 EMPLOYEES AND BUSINESS RELATIONS. The Company shall, and the
Indemnity Unitholder shall cause the Company to, use its best efforts to keep
available the services of its current employees and agents and to maintain its
relations and goodwill with its suppliers, customers, distributors and any
others with whom or with which it has business relations.
5.4 MAINTENANCE OF INSURANCE. The Company shall, and the Indemnity
Unitholder shall cause the Company to, notify Integra of any changes in the
terms of the insurance policies and binders referred to on Schedule 3.19 hereto.
5.5 COMPLIANCE WITH LAWS, ETC. The Company shall, and the
Indemnity Unitholder shall cause the Company to, comply with all laws,
ordinances, rules, regulations and orders applicable to such Company or its
business, operations, properties or assets, the noncompliance with which might
materially affect the Company.
5.6 CONDUCT OF BUSINESS. The Company shall, and the Indemnity
Unitholder shall cause the Company to, use its best efforts to conduct its
business in such a manner that on the Closing Date the representations and
warranties of the Indemnity Unitholder contained in this Agreement shall be
true, as though such representations and warranties were made on and as of each
such date, and the Company shall, and the Indemnity Unitholder shall cause the
Company to, use its best efforts to cause all of the conditions under this
Agreement to be satisfied on or prior to the Closing Date.
5.7 ACCESS. The Company shall and the Indemnity Unitholder shall
cause the Company to give to Integra's officers, employees, counsel, accountants
and other representatives free and full access to and the right to inspect,
during normal business hours, all of the premises, properties, assets, records,
contracts and other documents relating to such Company and shall permit them to
consult with the officers, employees, accountants, counsel and agents of such
Company for the purpose of making such investigation of such Company as Integra
shall desire to make, provided that such investigation shall not unreasonably
interfere with such Company's business operations. Furthermore, the Company
shall, and the Indemnity Unitholder shall cause the Company to, furnish to
Integra all such documents and copies of documents and records and information
with respect to the affairs of the Company and copies of any working papers
relating thereto as Integra shall from time to time reasonably request. No
information or knowledge obtained in any investigation pursuant to this Section
5.7 or otherwise shall affect or be deemed
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to modify any representation or warranty contained in this Agreement or the
conditions to the obligations of the parties to consummate the Merger.
5.8 PRESS RELEASES AND OTHER COMMUNICATIONS. Neither the Company
or Integra (except as required by law in the opinion of its counsel) shall give
notice to third parties or otherwise make any press release or other public
statement concerning this Agreement or the transactions contemplated hereby.
Neither the Company, the Indemnity Unitholder or Integra shall grant any
interview, publish any article, report or statement, or respond to any press
inquiry or other inquiry of any third party relating to this Agreement, the
business of the Company, the business (current and proposed) of Integra, or any
other matter connected with any of the foregoing without the express prior
written approval of the counter parties hereto, and all inquiries and questions
with respect to any of the foregoing shall be coordinated through ▇▇▇▇ ▇▇▇▇▇,
Chief Financial Officer of Integra or Piltch, of the Company, as appropriate.
The Company, the Indemnity Unitholder or Integra shall coordinate all
communications regarding the Exchange through the counter party hereto prior to
making any such communication.
5.9 EXCLUSIVITY. Except with respect to this Agreement and the
transactions contemplated hereby, the Company, the Indemnity Unitholder and
their affiliates shall not, and each of them shall cause its respective
employees, agents and representatives (including, without limitation, any
investment banking, legal or accounting firm retained by it or them and any
individual member or employee of the foregoing) (each, an "Agent") not to, (a)
initiate, solicit or seek, directly or indirectly, any inquiries or the making
or implementation of any proposal or offer (including, without limitation, any
proposal or offer to the Indemnity Unitholder) with respect to an acquisition,
consolidation, recapitalization, liquidation, dissolution or similar transaction
involving, or any purchase of all or any portion of the assets or any equity
securities of, the Company (any such proposal or offer being hereinafter
referred to as an "Acquisition Proposal"), or (b) engage in any negotiations
concerning, or provide any confidential information or data to, or have any
substantive discussions with, any person relating to an Acquisition Proposal,
(c) otherwise cooperate in any effort or attempt to make, implement or accept an
Acquisition Proposal, or (d) enter into or consummate any agreement or
understanding with any person or entity relating to an Acquisition Proposal,
except for the merger contemplated hereby. If the Company or the Indemnity
Unitholder, or any of their respective Agents, have provided any person or
entity (other than Integra) with any confidential information or data relating
to an Acquisition Proposal, then they shall request the immediate return
thereof. The Company and the Indemnity Unitholder shall notify Integra
immediately if any inquiries, proposals or offers related to an Acquisition
Proposal are received by, any confidential information or data is requested
from, or any negotiations or discussions related to an Acquisition Proposal are
sought to be initiated or continued with, it or any individual or entity
referred to in the first sentence of this Section 5.9.
5.10 THIRD PARTY APPROVALS. Prior to the Closing Date, the Company
shall satisfy any requirement for notice and approval of the transactions
contemplated by this Agreement under applicable agreements with third parties,
and shall provide Integra with satisfactory evidence of such third party
approvals.
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5.11 NOTIFICATION OF CERTAIN MATTERS.
(a) The Company and the Indemnity Unitholder shall give
prompt notice to Integra of (i) the occurrence or non-occurrence of any event
known to the Indemnity Unitholder or the Company the occurrence or
non-occurrence of which would be likely to cause any representation or warranty
contained in Article 3 to be untrue or inaccurate in any material respect at or
prior to the Closing Date and (ii) any material failure of the Indemnity
Unitholder or the Company to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by such person hereunder.
(b) Integra shall give prompt notice to the Indemnity
Unitholder of (i) the occurrence or non-occurrence of any event known to Integra
the occurrence of non-occurrence of which would be likely to cause any
representation or warranty contained in Article 4 to be untrue or inaccurate in
any material respect at or prior to the Closing Date and (ii) any material
failure of Integra to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder.
(c) The delivery of any notice pursuant to this Section
5.11 shall not be deemed to (i) modify the representations or warranties
hereunder of the party delivering such notice, which modification may only be
made pursuant to Section 5.12, (ii) modify the conditions set forth in Sections
6 and 7 or (iii) limit or otherwise affect the remedies available hereunder to
the party receiving such notice.
5.12 AMENDMENT OF SCHEDULES. Each party hereto agrees that, with
respect to the representations and warranties of such party contained in this
Agreement, such party shall have the continuing obligation until the Closing
Date to supplement or amend promptly the schedules hereto with respect to any
matter hereafter arising or discovered which, if existing or known at the date
of this Agreement, would have been required to be set forth or described in the
schedules, provided that no amendment or supplement to a schedule that
constitutes or reflects a material adverse change to the Company may be made
unless Integra consents to such amendment or supplement.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND THE INDEMNITY
UNITHOLDER
The obligations of the Company and the Indemnity Unitholder hereunder
are subject to the satisfaction on or prior to the Closing Date (or such earlier
date specified below) of the following conditions:
6.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS.
The representations and warranties of Integra contained in Article 4 shall be
accurate as of the Closing Date as though such representations and warranties
had been made as of such times; all of the terms, covenants and conditions of
this Agreement to be complied with and performed by Integra on or before the
Closing Date shall have been duly complied with and performed; and a certificate
to the foregoing effect dated the Closing Date and signed by a duly authorized
agent,
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the President or any Vice President of Integra shall have been delivered to the
Indemnity Unitholder.
6.2 EMPLOYMENT AGREEMENT. Integra shall have executed and
delivered an Employment Agreement substantially in the form of Annex I attached
hereto.
6.3 NO LITIGATION. No action or proceeding before a court of any
other governmental agency or body shall have been instituted or threatened to
restrain or prohibit the Exchange and no governmental agency or body shall have
taken any other action or made any request of the Company as a result of which
the management of the Company deems it inadvisable to proceed with the
transactions hereunder.
6.4 REPURCHASE AGREEMENT. At the Closing, Integra shall have
delivered to the Company an instrument in the form attached hereto as Annex III.
6.5 CONSENTS AND APPROVALS. All necessary consents of and filings
with any governmental authority or agency relating to the consummation of the
transactions contemplated herein shall have been obtained and made.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF INTEGRA
The obligations of Integra hereunder are subject to the satisfaction,
on or prior to the Closing Date (or such earlier date specified below), of the
following conditions:
7.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS.
The Indemnity Unitholder shall have delivered to Integra a certificate dated the
Closing Date and signed by him to the effect that all of the representations and
warranties of the Indemnity Unitholder contained in this Agreement shall be true
on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date, except for
matters expressly disclosed in the certificate or a schedule thereto (which
shall not serve to modify any representation or warranty made herein or in any
other document or otherwise in information supplied by the Company or the
Indemnity Unitholder); and each and all of the agreements of the Indemnity
Unitholder and the Company to be performed on or before the Closing Date
pursuant to the terms hereof shall have been performed.
7.2 NO LITIGATION. No action or proceeding before a court or any
other governmental agency or body shall have been instituted or threatened to
restrain or prohibit the acquisition by Integra of the Company Units and no
governmental agency or body shall have taken any other action or made any
request of Integra as a result of which the management of Integra deems it
inadvisable to proceed with the transactions hereunder.
7.3 EXAMINATION OF FINANCIAL STATEMENTS. Prior to the Closing
Date, Integra shall have had sufficient time to review the unaudited balance
sheets of the Company as of the end of the then most recently completed calendar
month and the unaudited consolidated statements of income, cash flows and
Unitholders' equity of the Company for the periods then ended, which
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statements shall have disclosed no material adverse change in the financial
condition of the Company or the results of their respective operations from the
financial statements originally furnished by the Company as set forth in
Schedule 3.12.
7.4 NO MATERIAL ADVERSE CHANGE. No material adverse change in the
business, operations, assets, properties or financial condition of the Company
shall have occurred, which individually or in the aggregate exceeds $100,000 and
the Company shall not have suffered any material loss or damage to any of its
assets, since the December 31, 2000 balance sheet, which change, loss or damage
affects or impairs the ability of such Company to conduct its business as now
conducted or as proposed to be conducted which individually or in the aggregate
exceeds $100,000; and Integra shall have received on the Closing Date a
certificate signed by the Indemnity Unitholder and dated the Closing Date to
such effect.
7.5 REGULATORY REVIEW AND APPROVAL. Integra, through its
authorized representatives, shall have completed a satisfactory review of the
practices and procedures of the Company including, but not limited to,
environmental and land use practices, import and export laws, compliance with
contracts and federal, state and local laws and regulations governing the
respective operations of the Company, which review reflects compliance with all
applicable laws governing the Company, disclosing no material actual or probable
violations, compliance problems, required capital expenditures or other
substantive environmental, real estate and land use related concerns and which
review is otherwise satisfactory in all respects to Integra, in its sole
discretion.
7.6 EMPLOYMENT AGREEMENT. Piltch shall have executed and delivered
an Employment Agreement substantially in the form of Annex I attached hereto.
7.7 RESIGNATION OF COMPANY OFFICERS. Each of the officers of the
Company shall submit written resignations to the Company, effective as of the
Closing Date. Copies of such resignations shall be provided to Integra.
7.8 OPINION OF COUNSEL. Integra shall have received an opinion
from counsel to the Company, dated the Closing Date, in form and substance
satisfactory to Integra stating substantially that with respect to the Company:
(a) the Company has been duly organized and is validly
existing and in good standing under the laws of the state of Delaware;
(b) to the knowledge of such counsel, the Company is duly
authorized, qualified and licensed under all applicable laws, regulations,
ordinances or orders of public authorities to carry on its business in the
places and in the manner now conducted;
(c) the authorized and outstanding Units of the Company
and each Unit has been duly and validly authorized and issued, is fully paid and
nonassessable and was not issued in violation of the preemptive rights of any
unitholder of the Company;
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(d) this Agreement has been duly authorized, executed and
delivered by the Company and the Indemnity Unitholder and constitutes a valid
and binding agreement of the Company and the Indemnity Unitholder enforceable in
accordance with its terms, except as such enforceability may be subject to
bankruptcy, moratorium, insolvency, reorganization, arrangement and other
similar laws relating to or affecting the rights of creditors and except (i) as
the same may be subject to the effect of general principles of equity and (ii)
that no opinion need be expressed as to the enforceability of indemnification
provisions included herein;
(e) the Company has good and marketable title to the
assets shown on the schedules to this Agreement, except for those assets sold or
otherwise disposed of in the ordinary course of business since the date of such
schedules, subject only to liens, if any, reflected on Schedules attached to the
Agreement as securing specified liabilities, liens for current taxes and
assessments not yet due or in default and other minor encumbrances not
materially affecting the use of such assets;
(f) upon consummation of the Exchange contemplated by
this Agreement, Integra will receive good title to the Company Units, free and
clear of all liens, security interests, pledges, charges, voting trusts,
equities, restrictions, encumbrances and claims of every kind;
(g) except to the extent set forth in Schedules to the
Agreement, the Company is not in violation of or default under any law or
regulation, or under any order of any court, commission, board, bureau, agency
or instrumentality wherever located and there are no claims, actions, suits or
proceedings pending, or threatened against or affecting any Company, at law or
in equity, or before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality wherever
located;
(h) except to the extent set forth in Schedules to the
Agreement, the Company is not in default under any of its material contracts or
agreements or has received notice of such default;
(i) no notice to, consent, authorization, approval or
order of any court or governmental agency or body is required in connection with
the execution, delivery or consummation of this Agreement by the Company or any
Indemnity Unitholder or for the transfer to Integra of the Company Units; and
(j) the execution of this Agreement and the performance
of the obligations hereunder will not violate or result in a breach or
constitute a default under any of the terms or provisions of the Company's
Certificate of Formation or Operating Agreement or of any lease, instrument,
license, permit or any other agreement to which any Company is a party or by
which any Company or any Indemnity Unitholder is bound.
(k) As of the date hereof, the authorized capital stock
of the Company consists of 42.1 Units. Based upon our review of the record books
of the Company, immediately prior to closing, 42.1 Units were issued and
outstanding. Except as set forth on the Disclosure Schedules to the Agreement,
we know of no preemptive rights, options, warrants or similar rights granted
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by the Company in respect of Units of the Company or any other agreements to
which the Company is a party providing for the issuance or sale by it of any
securities.
Such opinion shall include any other matters incident to the matters
set forth herein as agreed to by the parties and their respective counsel.
7.9 CONSENTS AND APPROVALS. All necessary consents of and filings
with any governmental authority or agency relating to the consummation of the
transactions contemplated herein shall have been obtained and made.
7.10 GOOD STANDING CERTIFICATES. The Company shall have delivered
to Integra certificates, dated as of a date no earlier than five days prior to
the Closing Date, duly issued by the appropriate governmental authority in the
Company's state of organization and, unless waived by Integra, in each state in
which the Company is authorized to do business, showing that the Company is in
good standing and authorized to do business and that all state franchise and/or
income tax returns and taxes for the Company for all periods prior to the dates
of such certificates have been filed and paid.
8. INDEMNIFICATION; SURVIVAL
8.1 GENERAL INDEMNIFICATION BY INDEMNITY UNITHOLDER. Subject to
the limitations contained in Section 8.5 hereof, the Indemnity Unitholder
covenants and agrees that he will indemnify, defend, protect and hold harmless
Integra and the Company after the Closing Date (the "Post Closing Company") and
their respective officers, security-holders, directors, divisions, subdivisions,
affiliates, subsidiaries, parents, agents, employees, successors and assigns at
all times from and after the date of this Agreement until the Expiration Date
(as defined in Section 8.6) from and against all claims, damages, losses,
liabilities, actions, suits, proceedings, demands, assessments, adjustments,
costs and expenses (including specifically, but without limitation, reasonable
attorneys' fees and expenses of investigation) (collectively, "Losses") incurred
by Integra or the Post Closing Company as a result of or arising from (a) any
breach of the representations and warranties made by the Indemnity Unitholder or
the Company set forth herein or on the schedules or certificates delivered in
connection herewith, (b) any nonfulfillment of any covenant or agreement on the
part of the Indemnity Unitholder or the Company under this Agreement (c) the
business, operations or assets of the Company prior to the Closing Date or the
actions or omissions of the Company's members, officers, unitholders, employees
or agents prior to the Closing Date, other than Losses arising from matters
expressly disclosed in the Financial Statements.
8.2 SPECIFIC INDEMNIFICATION BY INDEMNITY UNITHOLDER. Subject to
the limitations contained in Section 8.5 hereof, notwithstanding any disclosure
made in this Agreement or in the schedules or exhibits hereto and
notwithstanding any investigation by Integra, the Indemnity Unitholder covenants
and agrees that he will indemnify, defend, protect and hold harmless Integra and
the Post Closing Company and their respective officers, security-holders,
directors, divisions, subdivisions, affiliates, subsidiaries, parents, agents,
employees, successors and assigns at all times from and after the date of this
Agreement, from and against all Losses
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incurred by Integra or the Post Closing Company as a result of or incident to:
(a) the existence of liabilities of any Company in excess of the liabilities set
forth on Schedule 3.13, to the extent of such excess; (b) the failure of the
Company or the Indemnity Unitholder to file all required Form 5500's prior to
the Closing Date; and (c) the litigation matters listed on Schedule 3.24; and
(d) any material adverse amendments pursuant to Section 5.12 hereof.
8.3 INDEMNIFICATION BY INTEGRA. Subject to the limitations
contained in Section 8.5 hereof, Integra covenants and agrees that it will
indemnify, defend, protect and hold harmless the Indemnity Unitholder at all
times from and after the date of this Agreement from and against all Losses
incurred by the Indemnity Unitholder as a result of or arising from (a) any
breach of the representations and warranties made by Integra set forth herein or
on the schedules or certificates attached hereto or (b) any nonfulfillment of
any agreement on the part of Integra under this Agreement.
8.4 THIRD PARTY CLAIMS.
(a) In order for a party hereto eligible to be
indemnified hereunder (an "Indemnified Party") to be entitled to any
indemnification provided for under this Agreement in respect of, arising out of
or involving a claim or demand made by any person or entity against the
Indemnified Party (a "Third Party Claim"), such Indemnified Party must notify
the parties obligated to provide indemnification pursuant to Section 8.1, 8.2,
or 8.3 hereof (each, an "Indemnifying Party") in writing, and in reasonable
detail, of the Third Party Claim within 30 business days after receipt by such
Indemnified Party of written notice of the Third Party Claim; provided, however,
that failure to give such notification shall not affect the indemnification
provided hereunder except to the extent the Indemnifying Party shall have been
actually prejudiced as a result of such failure. Such notice shall state the
nature and the basis of such claim and a reasonable estimate of the amount
thereof. Thereafter, the Indemnified Party shall deliver to the Indemnifying
Party, within five business days after the Indemnified Party's receipt thereof,
copies of all notices and documents (including court papers) received by the
Indemnified Party relating to the Third Party Claim.
(b) The Indemnifying Party shall have right to defend and
settle, at its own expense and by its own counsel, any Third Party Claim as the
Indemnifying Party pursues the same in good faith and diligently and so long as
the Third Party Claim does not relate to an actual or potential Loss to which
Section 8.4(e) applies in which the Indemnified Party is Integra or the Post
Closing Company. If the Indemnifying Party undertakes to defend or settle, it
shall promptly notify the Indemnified Party of its intention to do so, and the
Indemnified Party shall cooperate with the Indemnifying Party and its counsel in
the defense thereof and in any settlement thereof. Such cooperation shall
include, but shall not be limited to, furnishing the Indemnifying Party with any
books, records or information reasonably requested by the Indemnifying Party
that are in the Indemnified Party's possession or control. Notwithstanding the
foregoing, the Indemnified Party shall have the right to participate in any
matter through counsel of its own choosing at its own expense (unless there is a
conflict of interest that prevents counsel for the Indemnifying Party from
representing the Indemnified Party, in which case the
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Indemnifying Party will reimburse the Indemnified Party for the expenses of its
counsel). After the Indemnifying Party has notified the Indemnified Party of its
intention to undertake to defend or settle any such asserted liability, and for
so long as the Indemnifying Party diligently pursues such defense, the
Indemnifying Party shall not be liable for any additional legal expenses
incurred by the Indemnified Party in connection with any defense or settlement
of such asserted liability, except to the extent such participation is requested
by the Indemnifying Party, in which event the Indemnified Party shall be
reimbursed by the Indemnifying Party for reasonable additional legal expenses
and out-of-pocket expenses, and except in the case of a Third Party Claim
relating to an actual or potential Loss to which Section 8.4(e) applies in which
the Indemnified Party is Integra or the Post Closing Company.
(c) No Indemnifying Party shall, in the defense of any
Third Party Claim, consent to entry of any judgment (other than a judgment of
dismissal on the merits without costs) or enter into any settlement, except with
the written consent of the Indemnified Party, which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to the
Indemnified Party of a release from all liability in respect of such claim or
matter.
(d) If the Indemnifying Party does not assume the defense
of any Third Party Claim, then the Indemnified Party may defend against such
Third Party Claim in such manner as it deems appropriate at the expense of the
Indemnifying Party.
(e) Notwithstanding anything to the contrary in this
Article 8, if at any time, in the reasonable opinion of Integra or the Post
Closing Company as the Indemnified Party (notice of which opinion shall be given
in writing to the Indemnifying Party), any Third Party Claim seeks material
prospective relief which could have an adverse effect on any such Indemnified
Party or any subsidiary, then such Indemnified Party shall have the right to
control or assume (as the case may be) the defense of any such Third Party Claim
and the amount of any judgment or settlement and the reasonable costs and
expenses of defense (including, but not limited to, fees and disbursements of
counsel and experts, as well as any sampling, testing, investigation, removal,
treatment or remediation undertaken by Integra or the Post Closing Company and
all counseling or engineering fees and expenses related thereto) shall be
included as part of the indemnification obligations of the Indemnifying Party
hereunder. If the Indemnified Party elects to exercise such right, then the
Indemnifying Party shall have the right to participate in, but not control, the
defense of such Third Party Claim at the sole cost and expense of the
Indemnifying Party.
8.5 LIMITATIONS ON INDEMNIFICATION. Notwithstanding any other term
of this Agreement, in no event shall the Indemnity Unitholder be liable under
this Article 8 for an amount that exceeds the aggregate value (determined at the
Closing Date) of the consideration received by the Indemnity Unitholder under
this Agreement. Notwithstanding anything to the contrary contained in this
Agreement, the limitations upon indemnification contained in this Section 8.5
shall not apply to Losses arising out of any willful misrepresentation, willful
breach of warranty or willful failure to fulfill any covenant or agreement or
any breach of the
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representations and warranties of the Indemnity Unitholder contained in Sections
3.3, 3.5, 3.13, 3.26 and 3.32 hereof.
8.6 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The parties agree
that representations and warranties made by the parties in this Agreement, or in
any certificate or other instrument delivered pursuant to this Agreement shall
survive for a period of two years from the Closing Date (which date is
hereinafter called the "Expiration Date"), except that:
(a) the representations and warranties contained in
Section 3.26 hereof shall survive until such time as the limitations period has
run for all tax periods ended on or prior to the Closing Date, which shall be
deemed to be the Expiration Date for purposes of this clause (a) and claims
arising from a breach of the representations and warranties contained in Section
3.26;
(b) the representations and warranties contained in
Section 3.32 hereof regarding environmental matters shall survive for a period
of five years from the Closing Date, which shall be deemed the Expiration Date
for purposes of this clause (b) and claims arising from a breach of the
representations and warranties contained in such Section 3.32;
(c) the representations and warranties of the Indemnity
Unitholder contained in Section 3.5 hereof, regarding security ownership shall
survive the Closing Date without time limitation; and
(d) any representations and warranties which serve as a
basis of the indemnity obligations of the Indemnity Unitholder under Section 8.2
shall survive the Closing Date without time limitation.
9. TERMINATION OF AGREEMENT
9.1 TERMINATION BY INTEGRA. Integra may, by notice in the manner
hereinafter provided on or before the Closing Date, terminate this Agreement (a)
if a material default shall be made by the Indemnity Unitholder in the
observance or due and timely performance of any of the covenants, agreements or
conditions contained herein, and the curing of such default shall not have been
made on or before the Closing Date and shall not reasonably be expected to occur
or (b) if Integra in its sole judgment determines that any condition exists
which has made or could reasonably be expected to make any of the
representations or warranties contained in Article 3 hereof untrue in any
material respect, or (c) if Integra in its sole judgment determines that
information disclosed on the schedules to the Agreement delivered pursuant to
Section 3.13 has or could reasonably be expected to have a material adverse
effect of over $100,000 individually or in the aggregate on the business,
operations, assets, properties, prospects or financial condition of the Company.
9.2 AUTOMATIC TERMINATION. This Agreement shall terminate
automatically if the Closing Date has not occurred by December 31, 2001.
10. NONDISCLOSURE OF CONFIDENTIAL INFORMATION
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10.1 INDEMNITY UNITHOLDER. The Indemnity Unitholder recognizes and
acknowledges that he has in the past, currently has, and in the future may
possibly have access to certain confidential information of the Company,
including, but not limited to, information disclosed to the Indemnity Unitholder
or known by them as a result of their employment by the Company, not generally
known in the industry, about the Company's services, products or customers,
including, but not limited to, customer lists, finance, strategic planning,
business plans, client retention, data processing, pricing and cost policies,
operational policies, insurance plans, risk management, marketing, key
customers, business prospects, contracting and selling, employees, special and
unique assets of the Company and its business, and information concerning
acquisition opportunities in or reasonably related to the Company's business or
industry. The Indemnity Unitholder agrees that he will not disclose, use,
disseminate, lecture upon, or publish any confidential information of which he
becomes informed during his employment, whether or not developed by him
individually or collectively, at any time during his employment with the
Company, to any person, firm, corporation, association or other entity for any
purpose or reason whatsoever, except to authorized representatives of Integra,
unless the Indemnity Unitholder can show that such information has become known
to the public generally through no fault of the Indemnity Unitholder. Prior to
disclosing any confidential information required by law or order of a court of
competent jurisdiction, the Indemnity Unitholder shall provide Integra with
prompt notice of the disclosure requirement so that Integra may take whatever
action it deems appropriate to prohibit such disclosure. In the event of a
breach or threatened breach by the Indemnity Unitholder of the provisions of
this Section 10.1, Integra and the Post Closing Company shall be entitled to an
injunction restraining the Indemnity Unitholder from disclosing, in whole or in
part, such confidential information. Nothing herein shall be construed as
prohibiting Integra and the Post Closing Company from pursuing any other
available remedy for such breach or threatened breach, including the recovery of
damages. Notwithstanding the provisions herein contained, in the event of the
exercise by the Company of its rights under the provisions of the Unit
Repurchase Agreement, the restrictions contained in this paragraph will not
apply to the ongoing business of the Company after the repurchase.
10.2 DAMAGES. Because of the difficulty of measuring economic
losses as a result of the breach of the foregoing covenants, and because of the
immediate and irreparable damage that would be caused for which Integra and the
Post Closing Company would have no other adequate remedy, the Indemnity
Unitholder agrees that, in the event of a breach by him of the foregoing
covenant, the covenant may be enforced against him by injunctions and
restraining orders.
11. GENERAL
11.1 WARRANTS. Except as provided in this Agreement, the Company
will not exercise any right from the date hereof to accelerate the vesting or
exerciseability of or otherwise modify the terms and conditions applicable to
warrants to purchase securities of the Company. At the Closing Date, any
warrants to purchase securities of the Company that are outstanding and
unexercised on the Closing Date shall have been exercised or shall be canceled.
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11.2 COOPERATION. The Indemnity Unitholder and Integra shall each
deliver or cause to be delivered to the other on the Closing Date, and at such
other times and places as shall be reasonably agreed to, such additional
instruments as the other may reasonably request for the purpose of carrying out
this Agreement. The Indemnity Unitholder will cooperate and use his best efforts
to have the officers, directors and employees of the Company prior to the
Closing Date cooperate with Integra on and after the Closing Date in furnishing
information, evidence, testimony and other assistance in connection with any
actions, proceedings, arrangements or disputes of any nature with respect to
matters pertaining to all periods prior to the Closing Date.
11.3 SUCCESSORS AND ASSIGNS. This Agreement and the rights and
obligations of the parties hereunder may not be assigned (except by operation of
law and/or as a result of a sale of Integra) and shall be binding upon and shall
inure to the benefit of the parties hereto, the successors of Integra, and the
heirs and legal representatives of the Indemnity Unitholder.
11.4 ENTIRE AGREEMENT. This Agreement (including the schedules,
exhibits and annexes attached hereto) and the agreements and documents delivered
pursuant hereto constitute the entire agreement and understanding among the
Indemnity Unitholder, the Company and Integra and supersede any prior agreement
and understanding relating to the subject matter of this Agreement. This
Agreement, upon execution, constitutes a valid and binding agreement of the
parties hereto, enforceable in accordance with its terms, and may be modified or
amended only by a written instrument executed by the Indemnity Unitholder
(subject to the limitations set forth below), the Company and Integra acting
through their respective officers, duly authorized by their members and Board of
Directors, respectively.
11.5 COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same instrument.
11.6 BROKERS AND AGENTS. Each party represents and warrants that it
employed no broker or agent in connection with the transactions contemplated
hereby, and Integra, on the one hand, and the Indemnity Unitholder on the other
hand, agrees to indemnify the other against all loss, liability, cost damages or
expense arising out of or related to claims for fees or commissions of brokers
employed or alleged to have been employed by such indemnifying party.
11.7 EXPENSES. If the transactions herein contemplated shall be
consummated, Integra will pay the fees, expenses and disbursements of Integra
and its respective agents, representatives, accountants and counsel incurred in
connection with the subject matter of this Agreement and any amendments thereto.
Integra will also pay the legal fees of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, incurred by the Company
and the Indemnity Stockholder in connection with the transactions contemplated
hereby, an estimate of which is set forth on Schedule 11.7. Whether or not the
transactions herein contemplated shall be consummated, the Company will pay the
fees, expenses and disbursements of the Company, the Indemnity Unitholder and
their agents, representatives, accountants and counsel (except as set forth
below) incurred in connection with the subject matter of this Agreement and any
amendments hereto and all other costs and expenses incurred in the performance
of this Agreement by the Indemnity Unitholder and the
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Company and in compliance with all conditions to be performed by the Indemnity
Unitholder and the Company under this Agreement. Notwithstanding the foregoing,
Integra will pay the legal fees of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ as discussed above.
11.8 NOTICES. All notices and other communications hereunder shall
be in writing (including wire, telefax or similar writing) and shall be sent,
delivered or mailed, addressed, or telefaxed:
(a) If to Integra, addressed to it at:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Integra, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
Telefax:
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ & Bockius LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telefax: ▇▇▇-▇▇▇-▇▇▇▇
(b) If to the Indemnity Unitholder, addressed at the
following address or such other address as the Indemnity Unitholder has notified
Integra:
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Each such notice, request or other communication shall be given by hand
delivery, by nationally recognized courier service or by telefax, receipt
confirmed. Each such notice, request or communication shall be effective (i) if
delivered by hand or by nationally recognized courier service, when delivered at
the address specified in this Section 11.8 (or in accordance with the latest
unrevoked written direction from such party) and (ii) if given by telefax, when
such telefax
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is transmitted to the telefax number specified in this Section 11.8 (or in
accordance with the latest unrevoked written direction from such party), and the
appropriate confirmation is received.
11.9 GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the Commonwealth of Pennsylvania without giving effect to any
of the provisions thereof that would require the application of the substantive
laws of any other jurisdiction. Each party to this Agreement: (a) agrees that
any legal action or proceeding under this Agreement shall be brought in the
courts of the Commonwealth of Pennsylvania; (b) irrevocably submits to the
jurisdiction of such courts; (c) agrees not to assert any claim or defense that
it is not personally subject to the jurisdiction of such courts, that any such
forum is not convenient or the venue thereof is improper, or that this Agreement
or the subject matter hereof may not be enforced in such courts; and (d) agrees
to accept service of process on it by certified or registered mail or by any
other method authorized by law.
11.10 EXERCISE OF RIGHTS AND REMEDIES. Except as otherwise provided
herein, no delay of or omission in the exercise of any right, power or remedy
accruing to any party as a result of any breach or default by any other party
under this Agreement shall impair any such right, power or remedy, nor shall it
be construed as a waiver of or acquiescence in any such breach or default, or of
any similar breach or default occurring later; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
occurring before or after that waiver.
11.11 TIME. Time is of the essence with respect to this Agreement.
11.12 REFORMATION AND SEVERABILITY. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, it shall, to the extent
possible, be modified in such manner as to be valid, legal and enforceable but
so as to most nearly retain the intent of the parties, and if such modification
is not possible, such provision shall be severed from this Agreement, and in
either case the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby.
11.13 REMEDIES CUMULATIVE. No right, remedy or election given by any
term of this Agreement shall be deemed exclusive but each shall be cumulative
with all other rights, remedies and elections available at law or in equity.
11.14 CAPTIONS. The headings of this Agreement are inserted for
convenience only and shall not constitute a part of this Agreement or be used to
construe or interpret any provision hereof.
12. DEFINITIONS
12.1 "Accounts Receivable" is defined in Section 3.14.
12.2 "Acquisition Proposal" is defined in Section 5.9.
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12.3 "Agent" is defined in Section 5.9.
12.4 "Agreement" is defined in the preamble to this Agreement.
12.5 "Authorizations" are defined in Section 3.22.
12.6 "Benefit Plan" is defined in Section 3.21.
12.7 "CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq.
12.8 "Certificates" are defined in Section 1.3.
12.9 "Closing" is defined in Section 2.1.
12.10 "Closing Date" is defined in Section 2.1.
12.11 "Code" is defined in Section 3.21.
12.12 "Commonly Controlled Entity" is defined in Section 3.21.
12.13 "Company" is defined in the preamble to this Agreement.
12.14 "Company Documents" are defined in Section 3.2.
12.15 "Constituent Corporations" are defined in the recitals to this
Agreement.
12.16 "Contracts" are defined in Section 3.17.
12.17 "Earn-out Percentage" as defined in Section 1.2.
12.18 "Earn-out Period" as defined in Section 1.2.
12.19 "Environmental Laws" mean any and all applicable treaties,
laws, regulations, ordinances, enforceable requirements, binding determinations,
orders, decrees, judgments, injunctions, permits, approvals, authorizations,
licenses or binding agreements issued, promulgated or entered into by any
Governmental Entity, relating to the environment, preservation or reclamation of
natural resources, or to the management, Release or threatened Release of or
exposure to Hazardous Substances, including CERCLA, the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901 et seq., the Federal Water Pollution
Control Act, 33 U.S.C. Section 1251 et seq., the Clean Air Act, 42 U.S.C.
Section 7401 et seq., the Toxic Substances Control Act, 15 U.S.C. Section 2601
et seq., the Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq.,
the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C.
Section 11001 et. seq., the Safe Drinking Water Act, 42 U.S.C. Section 300(f) et
seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et
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seq., and any similar or implementing state or local law and all amendments or
regulations promulgated thereunder.
12.20 "Environmental Permits" mean all permits, licenses, approvals
or authorizations from any Governmental Entity required under Environmental Laws
for the operation of the business of the Company.
12.21 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
12.22 "Exchange" is defined in the recitals to this Agreement.
12.23 "Expiration Date" is defined in Section 8.6.
12.24 "Financial Statements" are defined in Section 3.12.
12.25 "GAAP" is defined in Section 3.12.
12.26 "Governmental Entity" means any court, administrative or
regulatory agency or commission, or other governmental authority or
instrumentality, domestic, foreign or supranational.
12.27 "Hazardous Substances" mean all explosive or regulated
radioactive materials or substances, hazardous or toxic materials, wastes or
chemicals, petroleum and petroleum products (including crude oil or any fraction
thereof), asbestos or asbestos containing materials, and all other materials or
chemicals regulated pursuant to any Environmental Law, including materials
listed in 49 C.F.R. Section 172.101 and materials defined as hazardous pursuant
to Section 101(14) of CERCLA.
12.28 "Indemnified Party" is defined in Section 8.4(a).
12.29 "Indemnifying Party" is defined in Section 8.4(a).
12.30 "Indemnity Unitholder" is defined in the preamble to this
Agreement.
12.31 "Integra" is defined in the preamble to this Agreement.
12.32 "Integra Stock" is defined in Section 1.2.
12.33 "Intellectual Property" is defined in Section 3.27(a).
12.34 "Interim Balance Sheet Date" is defined in Section 3.12(b).
12.35 "Losses" are defined in Section 8.1.
12.36 "Maximum Number" as defined in Section 1.2.
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12.37 "PCBs" are defined in Section 3.32(h).
12.38 "Pension Plan" is defined in Section 3.21.
12.39 "Post Closing Company" is defined in Section 8.1.
12.40 "Regulations" are defined in Section 3.22.
12.41 "Release" means any spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching, emanation or
migration of any Hazardous Substance in, into, onto or through the environment
(including ambient air, surface water, ground water, soils, land surface,
subsurface strata, workplace or structure).
12.42 "SEC" means the Securities and Exchange Commission.
12.43 "Securities Act" is means the Securities Act of 1933, as
amended.
12.44 "Target Amount" as defined in Section 1.2.
12.45 "Tax Returns" are defined in Section 3.26.
12.46 "Taxes" are defined in Section 3.26.
12.47 "Third Party Claim" is defined in Section 8.4(a).
12.48 "UCC" means the Uniform Commercial Code.
12.49 "Unaudited Balance Sheet" is defined in Section 3.12.
12.50 "Unaudited Balance Sheet Date" are defined in Section 3.12.
12.51 "Units" is defined in the Preamble to this Agreement.
12.52 "Welfare Plan" is defined in Section 3.21.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
INTEGRA, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
Global Benefits Solutions LLC
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
INDEMNITY UNITHOLDER
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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