SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. )*
INTEGRA LIFESCIENCES CORPORATION
_______________________________________________________
(Name of Issuer)
Common Stock, Par Value $0.01 Per Share
_____________________________________
(Title of Class of Securities)
457985208
__________
(CUSIP Number)
Stephen M. Vine, Esq.
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
590 Madison Avenue
New York, New York 10022
(212) 872-1000
_______________________________________________________
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
March 29, 1999
_______________________
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
|_|.
Note. Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the Notes).
Continued on following page(s)
Page 1 of 83 Pages
Exhibit Index: Page 18
Page 2 of 83 Pages
SCHEDULE 13D
CUSIP No. 457985208
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
QUANTUM INDUSTRIAL PARTNERS LDC
2 Check the Appropriate Box If a Member of a Group*
a. [ ]
b. [X]
3 SEC Use Only
4 Source of Funds*
WC
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
Cayman Islands
7 Sole Voting Power
Number of 2,143,350
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 2,143,350
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
2,143,350
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain
Shares* [x]
13 Percent of Class Represented By Amount in Row (11)
11.99%
14 Type of Reporting Person*
OO; IV
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 3 of 83 Pages
SCHEDULE 13D
CUSIP No. 457985208
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
QIH MANAGEMENT INVESTOR, L.P.
2 Check the Appropriate Box If a Member of a Group*
a. [ ]
b. [X]
3 SEC Use Only
4 Source of Funds*
AF
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 2,143,350
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 2,143,350
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
2,143,350
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain
Shares* [x]
13 Percent of Class Represented By Amount in Row (11)
11.99%
14 Type of Reporting Person*
PN; IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 4 of 83 Pages
SCHEDULE 13D
CUSIP No. 457985208
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
QIH MANAGEMENT, INC.
2 Check the Appropriate Box If a Member of a Group*
a. [ ]
b. [X]
3 SEC Use Only
4 Source of Funds*
AF
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 2,143,350
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 2,143,350
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
2,143,350
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain
Shares* [x]
13 Percent of Class Represented By Amount in Row (11)
11.99%
14 Type of Reporting Person*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 5 of 83 Pages
SCHEDULE 13D
CUSIP No. 457985208
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
SOROS FUND MANAGEMENT LLC
2 Check the Appropriate Box If a Member of a Group*
a. [ ]
b. [X]
3 SEC Use Only
4 Source of Funds*
AF
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 2,143,350
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 2,143,350
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
2,143,350
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain
Shares* [x]
13 Percent of Class Represented By Amount in Row (11)
11.99%
14 Type of Reporting Person*
OO; IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 6 of 83 Pages
SCHEDULE 13D
CUSIP No. 457985208
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
GEORGE SOROS (in the capacity described herein)
2 Check the Appropriate Box If a Member of a Group*
a. [ ]
b. [X]
3 SEC Use Only
4 Source of Funds*
AF
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
Number of 714,450
Shares
Beneficially 8 Shared Voting Power
Owned By 2,143,350
Each
Reporting 9 Sole Dispositive Power
Person 714,450
With
10 Shared Dispositive Power
2,143,350
11 Aggregate Amount Beneficially Owned by Each Reporting Person
2,857,800
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain
Shares* [ ]
13 Percent of Class Represented By Amount in Row (11)
15.37%
14 Type of Reporting Person*
IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 7 of 83 Pages
SCHEDULE 13D
CUSIP No. 457985208
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
STANLEY F. DRUCKENMILLER (in the capacity described herein)
2 Check the Appropriate Box If a Member of a Group*
a. [ ]
b. [X]
3 SEC Use Only
4 Source of Funds*
AF
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
Number of 0
Shares
Beneficially 8 Shared Voting Power
Owned By 2,143,350
Each
Reporting 9 Sole Dispositive Power
Person 0
With
10 Shared Dispositive Power
2,143,350
11 Aggregate Amount Beneficially Owned by Each Reporting Person
2,143,350
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain
Shares* [x]
13 Percent of Class Represented By Amount in Row (11)
11.99%
14 Type of Reporting Person*
IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 8 of 83 Pages
This Statement on Schedule 13D relates to shares of Common
Stock, $0.01 par value per share (the "Shares"), of Integra LifeSciences
Corporation (the "Issuer"). This Statement is being filed by the Reporting
Persons (as defined herein) to report the recent acquisition of securities of
the Issuer, convertible into Shares, as a result of which the Reporting Persons
may be deemed to be the beneficial owners of more than 5% of the outstanding
Shares of the Issuer.
Item 1. Security and Issuer.
This Statement relates to the Shares. The address of the principal
executive office of the Issuer is 105 Morgan Lane, Plainsboro, New Jersey 08536.
Item 2. Identity and Background.
This Statement is being filed on behalf of each of the following
persons (collectively, the "Reporting Persons"):
i) Quantum Industrial Partners LDC ("QIP");
ii) QIH Management Investor, L.P. ("QIHMI");
iii) QIH Management, Inc. ("QIH Management");
iv) Soros Fund Management LLC ("SFM LLC");
v) Mr. George Soros ("Mr. Soros"); and
vi) Mr. Stanley F. Druckenmiller ("Mr. Druckenmiller").
This Statement relates to the Shares held for the accounts of QIP and
SFM Domestic Investments LLC ("SFM Domestic Investments").
The Reporting Persons
QIP, QIHMI and QIH Management
- -----------------------------
QIP is a Cayman Islands exempted limited duration company with
its principal address at Kaya Flamboyan 9, Willemstad, Curacao, Netherlands
Antilles. The principal business of QIP is investment in securities. Current
information concerning the identity and background of the directors and officers
of QIP is set forth in Annex A hereto, which is incorporated by reference in
response to this Item 2.
QIHMI, an investment advisory firm organized as a Delaware
limited partnership, is a minority shareholder of, and (pursuant to constituent
documents of QIP) is vested with investment discretion with respect to the
portfolio assets held for the account of, QIP. The principal business of QIHMI
is to provide management and advisory services to, and to invest in, QIP. QIH
Management, a Delaware corporation of which Mr. Soros is the sole shareholder,
is the sole general partner of QIHMI. The principal business of QIH Management
is to serve as the sole general partner of QIHMI. QIHMI and QIH Management have
their principal offices at 888 Seventh Avenue, 33rd Floor, New York, New York
10106. QIHMI, by reason of its investment discretion over the securities owned
by QIP, and QIH Management, as the sole general partner of QIHMI, may each be
deemed the beneficial owner of the Shares held for the account of QIP for
purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended
(the "Act").
Page 9 of 83 Pages
Mr. Soros has entered into an agreement dated as of January 1,
1997 with SFM LLC pursuant to which Mr. Soros has, among other things, agreed to
use his best efforts to cause QIH Management, as the general partner of QIHMI,
to act at the direction of SFM LLC, which agreement to so act shall terminate
upon the earlier of (a) the assignment to SFM LLC of the legal and beneficial
ownership interest in QIH Management and (b) the assignment to SFM LLC of the
general partnership interest in QIHMI (the "QIP Contract").
SFM LLC, Mr. Soros and Mr. Druckenmiller
- ----------------------------------------
The business of SFM LLC is managed through a Management
Committee (the "Management Committee") comprised of Mr. Soros, Mr. Druckenmiller
and Mr. Gary Gladstein. SFM LLC, a Delaware limited liability company, has its
principal office at 888 Seventh Avenue, 33rd Floor, New York, New York 10106.
Its principal business is to serve, pursuant to contract, as the principal
investment manager to several foreign investment companies (the "SFM Clients").
Mr. Soros, as Chairman of SFM LLC, has the ability to direct the investment
decisions of SFM LLC and as such may be deemed to have investment discretion
over the securities held for the accounts of the SFM Clients. Mr. Druckenmiller,
as Lead Portfolio Manager of SFM LLC, has the ability to direct the investment
decisions of SFM LLC and as such may be deemed to have investment discretion
over the securities held for the accounts of the SFM Clients. Set forth in Annex
B hereto and incorporated by reference in response to this Item 2 and elsewhere
in this Schedule 13D as applicable is a list of the Managing Directors of SFM
LLC.
The principal occupation of Mr. Soros, a United States
citizen, is his direction of the activities of SFM LLC, which is carried out in
his capacity as Chairman of SFM LLC at SFM LLC's principal office.
The principal occupation of Mr. Druckenmiller, a United States
citizen, is his position as Lead Portfolio Manager and a Member of the
Management Committee of SFM LLC, which is carried out at SFM LLC's principal
office.
Pursuant to regulations promulgated under Section 13(d) of the
Act, SFM LLC, pursuant to the provisions of the QIP Contract, Mr. Soros, in his
capacity as Chairman of SFM LLC, and Mr. Druckenmiller, in his capacity as Lead
Portfolio Manager of SFM LLC, each may be deemed a beneficial owner of the
Shares held for the account of QIP.
Mr. Soros may also be deemed a beneficial owner of the Shares
held for the account of SFM Domestic Investments. SFM Domestic Investments is a
Delaware limited liability company with its principal address at 888 Seventh
Avenue, 33rd Floor, New York, New York 10106. The principal business of SFM
Domestic Investments is investment in securities.
During the past five years, none of the Reporting Persons and,
to the best of the Reporting Persons' knowledge, any other person identified in
response to this Item 2 has been (a) convicted in a criminal proceeding or (b) a
party to any civil proceeding as a result of which it or he has been subject to
a judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws, or finding
any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
QIP expended approximately $7,500,000 of its working capital
to purchase the securities reported herein as being acquired in the last 60
days. SFM Domestic Investments expended approximately $2,500,000 of its working
capital to purchase the securities reported herein as being acquired in the last
60 days.
Page 10 of 83 Pages
The securities held for the accounts of QIP and SFM Domestic
Investments may be held through margin accounts maintained with brokers, which
extend margin credit as and when required to open or carry positions in their
margin accounts, subject to applicable federal margin regulations, stock
exchange rules and such firms' credit policies. The positions which may be held
in the margin accounts, including the Shares, are pledged as collateral security
for the repayment of debit balances in the respective accounts.
Item 4. Purpose of Transaction.
All of the Shares reported herein as having been acquired for
or disposed of from the accounts of QIP and/or SFM Domestic Investments were
acquired or disposed of for investment purposes. Neither the Reporting Persons
nor, to the best of their knowledge, any of the other persons identified in
response to Item 2, has any plans or proposals that relate to or would result in
any of the transactions described in subparagraphs (a) through (j) of Item 4 of
Schedule 13D.
The Reporting Persons reserve the right to acquire, or cause
to be acquired, additional securities of the Issuer, to dispose of, or cause to
be disposed, such securities at any time or to formulate other purposes, plans
or proposals regarding the Issuer or any of its securities, to the extent deemed
advisable in light of general investment and trading policies of the Reporting
Persons, market conditions or other factors.
Item 5. Interest in Securities of the Issuer.
(a) (i) Each of QIP, QIHMI, QIH Management,
SFM LLC and Mr. Druckenmiller may be deemed the beneficial owner of the
2,143,350 Shares (approximately 11.99% of the total number of Shares which would
be outstanding assuming the exercise and conversion of all of the securities
held for the account of QIP). This number includes (A) 1,963,350 Shares issuable
upon conversion of 75,000 Series B Preferred Shares (as defined herein) held for
the account of QIP and (B) 180,000 Shares issuable upon exercise of 180,000
warrants held for the account of QIP.
(ii) Mr. Soros may be deemed the
beneficial owner of 2,857,800 Shares (approximately 15.37% of the total number
of Shares which would be outstanding assuming the exercise and conversion of all
of the securities held for the account of QIP). This number includes (A)
1,963,350 Shares issuable upon conversion of 75,000 Series B Preferred Shares
held for the account of QIP; (B) 180,000 Shares issuable upon exercise of
180,000 warrants held for the account of QIP; (C) 654,450 Shares issuable upon
conversion of 25,000 Series B Preferred Shares held for the account of SFM
Domestic Investments; and, (D) 60,000 Shares issuable upon exercise of 60,000
warrants held for the account of SFM Domestic Investments.
(b) (i) Each of QIP, QIHMI, QIH Management
and SFM LLC (by virtue of the QIP contract) may be deemed to have the sole power
to direct the voting and disposition of the 2,143,350 Shares held for the
account of QIP (assuming the conversion of all Series B Preferred Shares and the
exercise of all warrants held for the account of QIP).
(ii) Mr. Soros and Mr. Druckemiller as a
result of their positions with SFM LLC may be deemed to have the shared power to
direct the voting and disposition of the 2,143,350 Shares held for the account
of QIP (assuming the conversion of all Series B Preferred Shares and the
exercise of all warrants held for the account of QIP).
(iii) Mr. Soros in his capacity as a
managing member of SFM Domestic Investments may be deemed to have the sole power
to direct the voting and disposition of the 714,450 Shares held for the account
of SFM Domestic Investments (assuming the conversion of all Series B Preferred
Shares and the exercise of all warrants held for the account of SFM Domestic
Investments).
Page 11 of 83 Pages
(c) Except for the transactions listed on Annex
C hereto, there have been no transactions effected with respect to the Shares
since February 7, 1999 (60 days prior to the date hereof) by any of the
Reporting Persons.
(d) (i) The shareholders of QIP, including
Quantum Industrial Holdings, Ltd., a British Virgin Islands international
business company, have the right to participate in the receipt of dividends
from, or proceeds from the sale of, the Shares held for the account of QIP in
accordance with their ownership interests in QIP.
(ii) Certain members of SFM Domestic
Investments have the right to participate in the receipt of dividends from, or
proceeds from the sale of, the Shares held for the account of SFM Domestic
Investments.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
On March 29, 1999, each of QIP and SFM Domestic Investments
entered into a Series B Convertible Preferred Stock and Warrant Purchase
Agreement (the "Series B Agreement") with the Issuer (a copy of which is
attached hereto as Exhibit E and incorporated herein by reference in response to
this Item 6) pursuant to which they purchased an aggregate of 100,000 shares of
Series B Convertible Preferred Stock ("Series B Preferred Shares") and warrants
to purchase, subject to the terms and conditions thereof, an aggregate of
240,000 Shares.
Pursuant to Section 1.3 of the Series B Agreement, the Issuer
is given a put right, which, within a specific time frame, permits the Issuer to
require each of QIP and SFM Domestic Investments to purchase additional shares
of convertible preferred stock.
Pursuant to Section 7.6 of the Series B Agreement, QIP and SFM
Domestic Investments collectively are entitled to name one representative to the
Issuer's Board of Directors and are entitled to be represented on significant
committees of the Issuer's Board of Directors, provided that they own at least
one half of their initial investment. Neal Moszkowski has been named by QIP and
SFM Domestic Investments to the Issuer's Board of Directors.
The foregoing description of the Series B Agreement does not
purport to be complete and is qualified in its entirety by reference to the
Series B Agreement (attached as Exhibit E to this Initial Statement), which is
incorporated herein by reference.
On March 29, 1999, each of QIP and SFM Domestic Investments
entered into a Registration Rights Agreement (the "Registration Rights
Agreement") with the Issuer (a copy of which is attached hereto as Exhibit F and
incorporated herein by reference in response to this Item 6) pursuant to which
the Issuer has agreed to grant registration rights with respect to certain
securities.
Pursuant to Section 3 of the Registration Rights Agreement,
QIP and SFM Domestic Investments were granted certain rights relating to their
ability to demand that the Issuer register under the Securities Act of 1933
unregistered securities of the Issuer held by QIP or SFM Domestic Investments.
Pursuant to Section 4 of the Registration Rights Agreement,
QIP and SFM Domestic Investments were granted certain piggy-back registration
rights, which, if exercised, entitle QIP and SFM Domestic Investments to
participate in registered offerings by the Issuer.
Page 12 of 83 Pages
Pursuant to Section 5 of the Registration Rights Agreement,
each of QIP and SFM Domestic Investments may be required to enter into a lock-up
agreement under certain circumstances, provided that entering into such an
agreement will not violate applicable law or contravene QIP's and SFM Domestic
Investments' fiduciary duties.
Pursuant to Section 6 of the Registration Rights Agreement,
each of QIP and SFM Domestic Investments will be required to discontinue
disposition of the Issuer's securities upon receiving notice from the Issuer
that the Issuer's prospectus contains an untrue statement of a material fact or
omits to state a material fact required to be stated therein.
The foregoing description of the Registration Rights Agreement
does not purport to be complete and is qualified in its entirety by reference to
the Registration Rights Agreement (attached as Exhibit F to this Initial
Statement), which is incorporated herein by reference.
From time to time, each of the Reporting Persons may lend
portfolio securities to brokers, banks or other financial institutions. These
loans typically obligate the borrower to return the securities, or an equal
amount of securities of the same class, to the lender and typically provide that
the borrower is entitled to exercise voting rights and to retain dividends
during the term of the loan. From time to time, to the extent permitted by
applicable laws, each of the Reporting Persons may borrow securities, including
the Shares, for the purpose of effecting, and may effect, short sale
transactions, and may purchase securities for the purpose of closing out short
positions in such securities.
Except as described above, the Reporting Persons do not have
any contracts, arrangements, understandings or relationships with respect to any
securities of the Issuer.
Item 7. Material to be Filed as Exhibits.
A. Power of Attorney dated as of January 1, 1997 granted
by Mr. Soros in favor of Mr. Sean C. Warren and Mr. Michael C. Neus.
B. Power of Attorney dated as of January 1, 1997 granted
by Mr. Druckenmiller in favor of Mr. Sean C. Warren and Mr. Michael C. Neus.
C. Joint Filing Agreement dated April 8, 1999 by and
among QIP, QIHMI, QIH Management, SFM LLC, Mr. Soros and Mr. Druckenmiller.
D. Power of Attorney dated May 23, 1996 granted by QIP
in favor of Mr. Gary Gladstein, Mr. Sean Warren and Mr. Michael Neus.
E. Series B Convertible Preferred Stock and Warrant
Purchase Agreement dated March 29, 1999 among the Issuer, QIP and SFM Domestic
Investments.
F. Registration Rights Agreement dated March 29, 1999,
and all amendments thereto, executed by the Issuer for the benefit of QIP and
SFM Domestic Investments.
Page 13 of 83 Pages
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this Statement is
true, complete and correct.
Date: April 8, 1999
QUANTUM INDUSTRIAL PARTNERS LDC
By: /S/ SEAN C. WARREN
-----------------------------------
Sean C. Warren
Attorney-in-Fact
QIH MANAGEMENT INVESTOR, L.P.
By: QIH Management, Inc.,
its General Partner
By: /S/ SEAN C. WARREN
------------------
Sean C. Warren
Vice President
QIH MANAGEMENT, INC.
By: /S/ SEAN C. WARREN
-----------------------------------
Sean C. Warren
Vice President
SOROS FUND MANAGEMENT LLC
By: /S/ SEAN C. WARREN
-----------------------------------
Sean C. Warren
Managing Director
GEORGE SOROS
By: /S/ SEAN C. WARREN
-----------------------------------
Sean C. Warren
Attorney-in-Fact
Page 14 of 83 Pages
STANLEY F. DRUCKENMILLER
By: /S/ SEAN C. WARREN
-----------------------------------
Sean C. Warren
Attorney-in-Fact
Page 15 of 83 Pages
ANNEX A
Directors and Officers of Quantum Industrial Partners LDC
Name/Title/Citizenship Principal Occupation Business Address
---------------------- -------------------- ----------------
Curacao Corporation Managing Director of Kaya Flamboyan 9
Company N.V. Netherlands Antilles Willemstad
Managing Director corporations Curacao,
(Netherlands Antilles) Netherlands Antilles
Inter Caribbean Services Limited Administrative services Citco Building
Secretary Wickhams Cay
(British Virgin Islands) Road Town
Tortola
British Virgin Islands
Directors and Officers of QIH Management, Inc.
Name/Title/Citizenship Principal Occupation Business Address
---------------------- -------------------- ----------------
Gary Gladstein Managing Director of SFM 888 Seventh Avenue
Director and President LLC 33rd Floor
(United States) New York, NY 10106
Sean C. Warren Managing Director of SFM 888 Seventh Avenue
Director, Vice President LLC 33rd Floor
and Secretary New York, NY 10106
(United States)
Peter Streinger Chief Financial Officer of 888 Seventh Avenue
Treasurer SFM LLC 33rd Floor
(United States) New York, NY 10106
Michael C. Neus Assistant General Counsel of 888 Seventh Avenue
Vice President and SFM LLC 33rd Floor
Assistant Secretary New York, NY 10106
(United States)
To the best of the Reporting Persons' knowledge /1/:
(a) None of the above persons hold any Shares. /1/
(b) None of the above persons has any contracts, arrangements,
understandings or relationships with respect to the Shares. /1/
- ----------
/1/ Certain persons may have an interest in SFM Domestic Investments.
Page 16 of 83 Pages
ANNEX B
The following is a list of all of the persons (other than
Stanley Druckenmiller) who serve as Managing Directors of SFM LLC. /1/
Scott K. H. Bessent
Walter Burlock
Brian J. Corvese
L. Kevin Dann
Gary Gladstein
Ron Hiram
Robert K. Jermain
David N. Kowitz
Alexander C. McAree
Paul McNulty
Steven Okin
Frank Sica
Sean C. Warren
Each of the above-listed persons is a United States citizen whose
principal occupation is serving as Managing Director of SFM LLC, and each has a
business address c/o Soros Fund Management LLC, 888 Seventh Avenue, 33rd Floor,
New York, New York 10106.
To the best of the Reporting Persons' knowledge:
(a) None of the above persons hold any Shares. /1/
(b) None of the above persons has any contracts, arrangements,
understandings or relationships with respect to the Shares. /1/
- ----------
/1/ Certain persons may have an interest in SFM Domestic Investments.
Page 17 of 83 Pages
ANNEX C
RECENT TRANSACTIONS IN THE SECURITIES OF
INTEGRA LIFESCIENCES CORPORATION
Date of Nature of Number of
For the Account of Transaction Transaction Securities Price
- ------------------ ----------- ----------- ---------- -----
QIP 3/29/99 PURCHASE 75,000/1/ /3/
180,000/2/
SFM Domestic Investments 3/29/99 PURCHASE 25,000/1/ /4/
60,000/2/
- -------------------------
/1/ Shares of Series B Preferred Stock.
/2/ Warrants.
/3/ Total consideration of $7,500,000 was paid for the securities purchased by QIP.
/4/ Total consideration of $2,500,000 was paid for the securities purchased by
SFM Domestic Investments.
Page 18 of 83 Pages
EXHIBIT INDEX
Page No.
--------
A. Power of Attorney dated as of January 1, 1997 granted by Mr. George Soros in favor
of Mr. Sean C. Warren and Mr. Michael C. Neus......................................................... 19
B. Power of Attorney dated as of January 1, 1997 granted by Mr. Stanley F. Druckenmiller
in favor of Mr. Sean C. Warren and Mr. Michael C. Neus................................................. 20
C. Joint Filing Agreement dated April 8, 1999 by and among Quantum Industrial
Partners LDC, QIH Management Investor, L.P., QIH Management, Inc., Soros Fund
Management LLC, Mr. George Soros and Mr. Stanley F. Druckenmiller ................................... 21
D. Power of Attorney dated May 23, 1996 granted by Quantum Industrial Partners LDC
in favor of Mr. Gary Gladstein, Mr. Sean Warren and Mr. Michael Neus................................ 23
E. Series B Convertible Preferred Stock and Warrant Purchase Agreement dated March 29,
1999 by and among Integra LifeSciences Corporation, Quantum Industrial Partners LDC
and SFM Domestic Investments LLC. ................................................................... 24
F. Registration Rights Agreement dated March 29, 1999 by and among Integra
LifeSciences Corporation, Quantum Industrial Partners LDC and SFM Domestic Investments
LLC. ................................................................................................ 62
Page 19 of 83 Pages
EXHIBIT A
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, GEORGE SOROS, hereby make, constitute
and appoint each of SEAN C. WARREN and MICHAEL C. NEUS, acting individually, as
my agent and attorney-in-fact for the purpose of executing in my name, (a) in my
personal capacity or (b) in my capacity as Chairman of, member of or in other
capacities with Soros Fund Management LLC, all documents, certificates,
instruments, statements, filings and agreements ("documents") to be filed with
or delivered to any foreign or domestic governmental or regulatory body or
required or requested by any other person or entity pursuant to any legal or
regulatory requirement relating to the acquisition, ownership, management or
disposition of securities or other investments, and any other documents relating
or ancillary thereto, including but not limited to, all documents relating to
filings with the United States Securities and Exchange Commission (the "SEC")
pursuant to the Securities Act of 1933 or the Securities Exchange Act of 1934
(the "Act") and the rules and regulations promulgated thereunder, including: (1)
all documents relating to the beneficial ownership of securities required to be
filed with the SEC pursuant to Section 13(d) or Section 16(a) of the Act
including, without limitation: (a) any acquisition statements on Schedule 13D or
Schedule 13G and any amendments thereto, (b) any joint filing agreements
pursuant to Rule 13d-1(f) and (c) any initial statements of, or statements of
changes in, beneficial ownership of securities on Form 3, Form 4 or Form 5 and
(2) any information statements on Form 13F required to be filed with the SEC
pursuant to Section 13(f) of the Act.
All past acts of the attorney-in-fact in furtherance of the foregoing are hereby
ratified and confirmed.
This power of attorney shall be valid from the date hereof until revoked by me.
IN WITNESS WHEREOF, I have executed this instrument as of the 1st day of
January, 1997.
/s/ George Soros
------------------------------------
GEORGE SOROS
Page 20 of 83 Pages
EXHIBIT B
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, STANLEY F. DRUCKENMILLER, hereby make,
constitute and appoint each of SEAN C. WARREN and MICHAEL C. NEUS, acting
individually, as my agent and attorney-in-fact for the purpose of executing in
my name, (a) in my personal capacity or (b) in my capacity as Lead Portfolio
Manager of, member of or in other capacities with Soros Fund Management LLC, all
documents, certificates, instruments, statements, filings and agreements
("documents") to be filed with or delivered to any foreign or domestic
governmental or regulatory body or required or requested by any other person or
entity pursuant to any legal or regulatory requirement relating to the
acquisition, ownership, management or disposition of securities or other
investments, and any other documents relating or ancillary thereto, including
but not limited to, all documents relating to filings with the United States
Securities and Exchange Commission (the "SEC") pursuant to the Securities Act of
1933 or the Securities Exchange Act of 1934 (the "Act") and the rules and
regulations promulgated thereunder, including: (1) all documents relating to the
beneficial ownership of securities required to be filed with the SEC pursuant to
Section 13(d) or Section 16(a) of the Act including, without limitation: (a) any
acquisition statements on Schedule 13D or Schedule 13G and any amendments
thereto, (b) any joint filing agreements pursuant to Rule 13d-1(f) and (c) any
initial statements of, or statements of changes in, beneficial ownership of
securities on Form 3, Form 4 or Form 5 and (2) any information statements on
Form 13F required to be filed with the SEC pursuant to Section 13(f) of the Act.
All past acts of the attorney-in-fact in furtherance of the foregoing are hereby
ratified and confirmed.
This power of attorney shall be valid from the date hereof until revoked by me.
IN WITNESS WHEREOF, I have executed this instrument as of the 1st day of
January, 1997.
/s/ Stanley F. Druckenmiller
-----------------------------------------
STANLEY F. DRUCKENMILLER
Page 21 of 83 Pages
EXHIBIT C
JOINT FILING AGREEMENT
The undersigned hereby agree that the statement on Schedule
13D with respect to the Common Stock of Integra LifeSciences Corporation dated
April 8, 1999 is, and any amendments thereto signed by each of the undersigned
shall be, filed on behalf of each of us pursuant to and in accordance with the
provisions of Rule 13d-1(f) under the Securities Exchange Act of 1934.
Date: April 8, 1999
QUANTUM INDUSTRIAL PARTNERS LDC
By: /S/ SEAN C. WARREN
----------------------------------------
Sean C. Warren
Attorney-in-Fact
QIH MANAGEMENT INVESTOR, L.P.
By: QIH Management, Inc.,
its General Partner
By: /S/ SEAN C. WARREN
------------------------------
Sean C. Warren
Vice President
QIH MANAGEMENT, INC.
By: /S/ SEAN C. WARREN
----------------------------------------
Sean C. Warren
Vice President
SOROS FUND MANAGEMENT LLC
By: /S/ SEAN C. WARREN
----------------------------------------
Sean C. Warren
Managing Director
GEORGE SOROS
By: /S/ SEAN C. WARREN
----------------------------------------
Sean C. Warren
Attorney-in-Fact
Page 22 of 83 Pages
STANLEY F. DRUCKENMILLER
By: /S/ SEAN C. WARREN
----------------------------------------
Sean C. Warren
Attorney-in-Fact
Page 23 of 83 Pages
EXHIBIT D
QUANTUM INDUSTRIAL PARTNERS LDC
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENT, that the undersigned QUANTUM INDUSTRIAL PARTNERS
LDC (the "Company"), an exempted limited duration company existing and operating
under the laws of the Cayman Islands does, pursuant to a duly adopted resolution
of its Managing Director, hereby designate, constitute and appoint:
GARY GLADSTEIN, SEAN WARREN and MICHAEL NEUS
acting, singly and not jointly, as its true and lawful agent and attorney in
fact for the purpose of executing in its name, all documents, certificates,
instruments, statements, filings and agreements ("documents") to be filed with
or delivered to any foreign or domestic governmental or regulatory body or
required or requested by any other person or entity pursuant to any legal or
regulatory requirement relating to the acquisition, ownership, management or
disposition of securities or other investments, and any other documents relating
or ancillary thereto, including but not limited to, all documents relating to
filings with the United States Securities and Exchange Commission (the "SEC")
pursuant to the Securities Act of 1933 or the Securities Exchange Act of 1934
(the "Act") and the rules and regulations promulgated thereunder, including: (1)
all documents relating to the beneficial ownership of securities required to be
filed with the SEC pursuant to Section 13(d) or Section 16(a) of the Act
including, without limitation: (a) any acquisition statements on Schedule 13D or
Schedule 13G and any amendments thereto, (b) any joint filing agreements
pursuant to Rule 13d-1(f) and (c) any initial statements of, or statements of
changes in, beneficial ownership of securities on Form 3, Form 4 or Form 5 and
(2) any information statements on Form 13F required to be filed with the SEC
pursuant to Section 13(f) of the Act.
Each attorney-in-fact is hereby authorized and empowered to perform all other
acts and deeds, which he or she in his or her sole discretion deems necessary or
appropriate to carry out to the fullest extent the terms and the intent of the
foregoing. All prior acts of each attorney-in-fact in furtherance of the
foregoing are hereby ratified and confirmed.
IN WITNESS WHEREOF, the Company has caused this document to be execute this 23rd
day of May, 1996.
QUANTUM INDUSTRIAL PARTNERS LDC
/s/ Curacao Corporation Company N.V.
---------------------------------------------
Curacao Corporation Company N.V.
Managing Director
Page 24 of 83 Pages
EXHIBIT E
________________________________________________________________________________
SERIES B CONVERTIBLE PREFERRED STOCK
AND WARRANT PURCHASE AGREEMENT
among
INTEGRA LIFESCIENCES CORPORATION,
QUANTUM INDUSTRIAL PARTNERS LDC,
and
SFM DOMESTIC INVESTMENTS LLC
______________________________________________
Dated: March 29, 1999
______________________________________________
________________________________________________________________________________
Page 25 of 83 Pages
TABLE OF CONTENTS
Page
____
SECTION I. PURCHASE AND SALE OF SERIES BPREFERRED STOCK
AND WARRANTS.......................................................................6
1.1 Purchase and Sale of Series B Preferred Stock and Warrants.........................6
1.2 Certificate of Designation.........................................................7
1.3 Additional Preferred Stock.........................................................7
1.4 Closing............................................................................7
SECTION II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................................8
2.1 Corporate Existence and Power......................................................8
2.2 Corporate Authorization; No Contravention..........................................8
2.3 Governmental Authorization; Third Party Consents...................................8
2.4 Binding Effect.....................................................................9
2.5 Litigation.........................................................................9
2.6 Compliance with Laws...............................................................9
2.7 Capitalization....................................................................10
2.8 No Default or Breach..............................................................11
2.9 Taxes.............................................................................11
2.10 Financial Statements..............................................................11
2.11 No Material Adverse Change; Ordinary Course of Business...........................11
2.12 SEC Documents.....................................................................12
2.13 Investment Company................................................................12
2.14 Private Offering..................................................................12
2.15 Employee Benefit Plans............................................................12
2.16 Title to Assets...................................................................12
2.17 Intellectual Property.............................................................13
2.18 Trade Relations...................................................................13
2.19 Contracts and Other Agreements....................................................14
2.20 Liabilities.......................................................................14
2.21 Broker's, Finder's or Similar Fees................................................14
2.22 Disclosure; Agreement and Other Documents.........................................14
2.23 NeuroCare Acquisition Agreement...................................................15
Page 26 of 83 Pages
SECTION III. REPRESENTATIONS AND WARRANTIES OF THE
PURCHASERS........................................................................15
3.1 Existence and Power...............................................................15
3.2 Authorization; No Contravention...................................................15
3.3 Governmental Authorization; Third Party Consents..................................15
3.4 Binding Effect....................................................................15
3.5 Purchase for Own Account..........................................................16
3.6 Accreditation; Sophistication; Other Securities Laws Matters......................16
3.7 Broker's, Finder's or Similar Fees................................................16
SECTION IV. CONDITIONS TO THE OBLIGATION OF THE PURCHASERS
TO CLOSE ......................................................................17
4.1 Representations and Warranties....................................................17
4.2 Compliance with this Agreement....................................................17
4.3 Secretary's Certificate...........................................................17
4.4 Officers' Certificate.............................................................17
4.5 Documents.........................................................................18
4.6 Filing of Certificate of Designation..............................................18
4.7 Registration Rights Agreement.....................................................18
4.8 Opinion of Counsel................................................................18
4.9 Approval of Counsel to the Purchasers.............................................18
4.10 Purchased Shares..................................................................18
4.11 Warrants..........................................................................18
4.12 Consents and Approvals............................................................18
4.13 No Litigation.....................................................................19
4.14 No Material Judgment or Order.....................................................19
4.15 No Material Adverse Change........................................................19
4.16 Neurocare Acquisition.............................................................19
SECTION V. CONDITIONS TO THE OBLIGATIONOF THE COMPANY TO
CLOSE.............................................................................19
5.1 Representations and Warranties....................................................19
5.2 Compliance with this Agreement....................................................20
5.3 Registration Rights Agreement.....................................................20
5.4 Consents and Approvals............................................................20
5.5 Payment of Purchase Price.........................................................20
5.6 No Material Judgment or Order.....................................................20
5.7 Opinion of Counsel................................................................20
SECTION VI. INDEMNIFICATION...................................................................21
6.1 Indemnification...................................................................21
6.2 Notification......................................................................21
6.3 Registration Rights Agreement.....................................................22
Page 27 of 83 Pages
SECTION VII. AFFIRMATIVE COVENANTS.............................................................22
7.1 Preservation of Existence.........................................................22
7.2 Delivery of 1998 Audited Financial Statements.....................................23
7.3 Financial Statements and Other Information........................................23
7.4 Reservation of Shares.............................................................24
7.5 Registration and Listing..........................................................25
7.6 Board Representation..............................................................25
7.7 Director and Officer Liability Insurance..........................................25
SECTION VIII. TERMINATION OF AGREEMENT..........................................................25
8.1 Termination.......................................................................25
8.2 Survival..........................................................................26
SECTION IX. MISCELLANEOUS.....................................................................26
9.1 Survival of Representations and Warranties........................................26
9.2 Notices...........................................................................27
9.3 Successors and Assigns............................................................28
9.4 Amendment and Waiver..............................................................29
9.5 Counterparts......................................................................29
9.6 Headings..........................................................................29
9.7 GOVERNING LAW.....................................................................29
9.8 Severability......................................................................29
9.9 Rules of Construction.............................................................29
9.10 Entire Agreement..................................................................29
9.11 Fees..............................................................................30
9.12 Publicity; Confidentiality........................................................30
9.13 Further Assurances................................................................31
9.14 Schedules.........................................................................31
Page 28 of 83 Pages
EXHIBITS
- --------
A Form of Warrant
B Certificate of Designation
C Amended and Restated Registration Rights Agreement
D Form of Drinker Biddle & Reath Opinion
E Form of Paul, Weiss, Wharton & Garrison Opinion
SCHEDULES
- ---------
1 Purchased Shares and Warrants and Purchase Price
2.5 Litigation
2.7 Capitalization
2.8 No Default or Breach
2.11 No Material Adverse Change; Ordinary Course of Business
2.16 Title to Assets
2.17(a) Intellectual Property
2.17(b) Infringements of Integra
2.17(c) Intellectual Property Litigation
2.18 Trade Relations
2.19 Contracts and other Agreements
Page 29 of 83 Pages
SERIES B CONVERTIBLE PREFERRED STOCK
AND WARRANT PURCHASE AGREEMENT
THIS SERIES B CONVERTIBLE PREFERRED STOCK AND WARRANT PURCHASE
AGREEMENT (this "Agreement") is made as of March 29, 1999 by and among Integra
---------
LifeSciences Corporation, a Delaware corporation ("Integra"), and the several
-------
purchasers listed on Schedule 1 hereto (the "Purchasers").
---------- ----------
WHEREAS, Integra has agreed to issue and sell to each of the
Purchasers, and each of the Purchasers has agreed to purchase from Integra, for
the aggregate purchase price set forth opposite such Purchaser's name on
Schedule 1 hereto, (i) the aggregate number of shares of Series B Convertible
- ----------
Preferred Stock, par value $.01 per share, of Integra (the "Series B Preferred
------------------
Stock") set forth opposite such Purchaser's name on Schedule 1 hereto, and (ii)
- ----- ----------
the warrant (the "Warrant") to purchase, subject to the terms and conditions
-------
thereof, the aggregate number of shares of Common Stock, par value $.01 per
share, of Integra (the "Common Stock") set forth opposite such Purchaser's name
------------
on Schedule 1 hereto, at an exercise price of $3.82 per share, containing terms
----------
and conditions set forth in the form of warrant attached hereto as Exhibit A.
---------
NOW, THEREFORE, in consideration of the mutual terms and
conditions herein contained, and for good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:
DEFINITIONS
For all purposes of this Agreement, unless otherwise expressly
provided, (a) the terms defined in this Definitions section have the meanings
assigned to them herein and include the plural as well as the singular, (b) all
accounting terms not otherwise defined herein have the meanings assigned under
generally accepted accounting principles in the United States, (c) all
references in this Agreement to designated "Sections" and other subdivisions are
to the designated Sections and other subdivisions of the body of this Agreement,
(d) pronouns of either gender or neuter shall include, as appropriate, the other
pronoun forms, and (e) the words "herein", "hereof" and other words of similar
import refer to this Agreement as a whole and not to any particular Article,
Section or other subdivision.
As used in this Agreement, the following definitions shall
apply:
"Additional Preferred Stock" shall mean the convertible
-----------------------------
preferred stock issued pursuant to Section 1.3 having substantially identical
terms as the Series B Preferred Stock.
Page 30 of 83 Pages
"Action" means any action, complaint, petition, investigation,
------
suit or other proceeding, whether civil or criminal, in law or in equity, or
before any arbitrator or Governmental Entity.
"Affiliate" shall mean any Person who is an "affiliate" (as
---------
defined in Rule 12b-2 of the General Rules and Regulations under the Exchange
Act) of, and any Person controlling, controlled by, or under common control
with, any Purchaser. For the purposes of this Agreement, "control" includes the
ability to have investment discretion through contractual means or by operation
of law.
"Agreement" means this Agreement as the same may be amended,
---------
supplemented or modified in accordance with the terms hereof.
"Audited Financial Statements" has the meaning set forth in
------------------------------
Section 7.2 of this Agreement.
"Board of Directors" means the Board of Directors of Integra.
------------------
"Business" means the business of Integra and shall be deemed
--------
to include any of the following incidents of such business: income, operations,
condition (financial or other), assets, properties and liabilities.
"Business Day" means any day other than a Saturday, Sunday or
------------
other day on which commercial banks in the State of New York are authorized or
required by law or executive order to close.
"By-laws" means the amended and restated by-laws of Integra,
-------
as the same may have been amended and as in effect on the Closing Date.
"CEO Certificate" has the meaning set forth in Section 1.3 of
----------------
this Agreement.
"Certificate of Designation" means the Certificate of
------------------------------
Designation with respect to the Series B Preferred Stock adopted by the Board of
Directors and filed with the Secretary of State of the State of Delaware on or
before the Closing Date substantially in the form attached hereto as Exhibit B.
"Certificate of Incorporation" means the Amended and Restated
----------------------------
Certificate of Incorporation of Integra, as the same has been amended and as in
effect on the Closing Date.
"Closing" has the meaning set forth in Section 1.4 of this
-------
Agreement.
"Closing Date" means the date specified in Section 1.4 of this
------------
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, or
----
any successor statute thereto.
Page 31 of 83 Pages
"Commission" means the Securities and Exchange Commission or
----------
any similar agency then having jurisdiction to enforce the Securities Act.
"Common Stock" means the Common Stock, par value $.01 per
-------------
share, of Integra and any other capital stock of Integra into which such stock
is reclassified or reconstituted.
"Condition of Integra" means the assets, business, properties,
--------------------
operations or financial condition of Integra and the Subsidiaries, taken as a
whole.
"Contract" means any agreement, arrangement, bond, commitment,
--------
franchise, indemnity, indenture, instrument, lease, license or understanding,
whether or not in writing.
"Contractual Obligations" means as to any Person, any
-------------------------
provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other instrument to
which such Person is a party or by which it or any of its property is bound.
"Conversion Price" has the meaning set forth in Section 1.3 of
----------------
this Agreement.
"Encumbrance" means any claim, charge, easement, encumbrance,
-----------
lease, covenant, security interest, lien, option, pledge, rights of others,
restriction (whether on voting, sale, transfer, disposition or otherwise),
whether imposed by agreement, understanding, law, equity or otherwise, except
for any restrictions on transfer generally arising under any applicable United
States federal or state securities law.
"Environmental Laws" means federal, state and local laws,
-------------------
principles of common law, regulations and codes, as well as orders, decrees,
judgments or injunctions issued, promulgated, approved or entered thereunder
relating to pollution, protection of the environment or public health and
safety.
"ERISA" means the Employee Retirement Income Security Act of
-----
1974, as amended (or any successor statute thereto).
"Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended (or any successor statute thereto), and the rules and regulations of the
Commission promulgated thereunder.
"Financial Statements" has the meaning set forth in Section
---------------------
2.10 of this Agreement.
Page 32 of 83 Pages
"GAAP" means generally accepted United States accounting
----
principles in effect from time to time.
"Governmental Authority" means the government of any state,
-----------------------
city, locality or other political subdivision thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
"Governmental Entity" means any government or any agency,
--------------------
bureau, board, commission, court, department, official, political subdivision,
tribunal or other instrumentality of any government of or within the United
States, whether federal, state or local.
"Initial Term" has the meaning set forth in Section 1.3 of
-------------
this Agreement.
"Law" means any constitutional provision, statute or other
---
law, rule, regulation, or interpretation of any Governmental Entity and any
Order.
"Liabilities" has the meaning set forth in Section 2.20 of
-----------
this Agreement.
"Lien" means any mortgage, deed of trust, pledge,
----
hypothecation, assignment, encumbrance, lien (statutory or other) or preference,
priority, right or other security interest or preferential arrangement of any
kind or nature whatsoever (excluding preferred stock and equity related
preferences) including, without limitation, those created by, arising under or
evidenced by any conditional sale or other title retention agreement, the
interest of a lessor under a Capital Lease Obligation, or any financing lease
having substantially the same economic effect as any of the foregoing.
"Loss" means any action, cost, damage, disbursement, expense,
----
liability, loss, deficiency, diminution in value, obligation, penalty or
settlement of any kind or nature, whether foreseeable or unforeseeable,
including but not limited to, interest or other carrying costs, penalties,
legal, accounting and other professional fees and expenses incurred in the
investigation, collection, prosecution and defense of claims and amounts paid in
settlement, that may be imposed on or otherwise incurred or suffered by the
specified Person.
"NASDAQ" means the Nasdaq National Market of the National
------
Association of Securities Dealers, Inc. Automated Quotation System.
Page 33 of 83 Pages
"NeuroCare Acquisition Agreement" means the Asset Purchase
---------------------------------
Agreement dated the date hereof between the Company, Integra NeuroCare LLC, a
Delaware limited liability company and an indirect wholly-owned subsidiary of
the Company ("IN LLC"), Redmond NeuroCare LLC, a Delaware limited liability
company and a wholly-owned subsidiary of IN LLC, Heyer-Schulte NeuroCare, L.P.,
a Delaware limited partnership ("HSN, LP"), and Neuro Navigational, L.L.C., a
Delaware limited liability company and a wholly-owned subsidiary of HSN, LP.
"Order" mans any decree, injunction, judgement, order, ruling,
-----
assessment or writ of any Governmental Entity.
"Person" means any individual, firm, corporation, partnership,
------
limited liability company, trust, incorporated or unincorporated association,
joint venture, joint stock company, Governmental Authority or other entity of
any kind, and shall include any successor (by merger or otherwise) of such
entity.
"Purchased Shares" has the meaning set forth in Section 1.1 of
----------------
this Agreement.
"Purchasers" has the meaning ascribed to such term in the
----------
recital to this Agreement.
"Put Right" has the meaning set forth in Section 1.3 of this
----------
Agreement.
"Registration Rights Agreement" means the Registration Rights
------------------------------
Agreement substantially in the form attached hereto as Exhibit C.
---------
"Requirements of Law" means as to any Person, any law, treaty,
-------------------
rule, regulation, right, privilege, qualification, license or franchise or
determination of an arbitrator or a court or other Governmental Authority or a
stock exchange, in each case applicable or binding upon such Person or any of
its property or to which such Person or any of its property is subject or
pertaining to any or all of the transactions contemplated or referred to herein.
"SEC" means the Securities and Exchange Commission or any
---
successor entity.
"SEC Documents" means all registration statements, proxy
--------------
statements, reports and other documents required to be filed by Integra under
the Securities Act or the Exchange Act, and all amendments and supplements
thereto, filed by Integra with the Commission since December 31, 1997.
Page 34 of 83 Pages
"Second Term" has the meaning set forth in Section 1.3 to this
-----------
Agreement.
"Securities" means the Purchased Shares, the shares of Common
----------
Stock issuable upon conversion of the Purchased Shares, the Warrants, the
Warrant Shares and the Additional Preferred Shares.
"Securities Act" means the Securities Act of 1933, as amended
---------------
(or any successor statute thereto), and the rules and regulations of the
Commission promulgated thereunder.
"Series B Preferred Stock" has the meaning assigned to such
-------------------------
term in the recital to this Agreement.
"Subsidiary" means, as of the relevant date of determination,
----------
with respect to any Person, a corporation or other entity of which 50% or more
of the voting power of the outstanding voting equity securities or 50% or more
of the outstanding economic equity interest is held, directly or indirectly, by
such Person. Unless otherwise qualified, or the context otherwise requires, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of Integra.
"Transaction Documents" means collectively, this Agreement,
----------------------
the Warrants, the Certificate of Designation and the Registration Rights
Agreement.
"Warrant Shares" has the meaning set forth in Section 1.1 of
---------------
this Agreement.
"Warrants" has the meaning ascribed to such term in the
--------
recital to this Agreement.
SECTION I. PURCHASE AND SALE OF SERIES B
PREFERRED STOCK AND WARRANTS
I.1 Purchase and Sale of Series B Preferred Stock and
---------------------------------------------------------
Warrants. Subject to the terms and conditions herein set forth, Integra agrees
- --------
to issue and sell to each of the Purchasers, and each of the Purchasers agrees
that it will purchase from Integra, for the aggregate purchase price set forth
opposite such Purchaser's name on Schedule 1 hereto, on the Closing Date, (i)
----------
the aggregate number of shares of Series B Preferred Stock set forth opposite
such Purchaser's name on Schedule 1 hereto (all of the shares of Series B
-----------
Preferred Stock being purchased pursuant hereto being referred to herein as
"Purchased Shares"), and (ii) the Warrant to purchase the aggregate number of
-----------------
shares of Common Stock set forth opposite such Purchaser's name on Schedule 1
----------
hereto (all of the shares of Common Stock issuable upon exercise of the Warrants
being purchased pursuant hereto being referred to herein as the "Warrant
-------
Shares").
- ------
Page 35 of 83 Pages
I.2 Certificate of Designation. The Purchased Shares will have
--------------------------
the rights, preferences, privileges and restrictions set forth in the
Certificate of Designation of Series B Preferred Stock to Integra's Certificate
of Incorporation attached hereto as Exhibit A (the "Certificate of
Designation"), which shall be filed by Integra with the Secretary of State of
the State of Delaware prior to the Closing (as hereinafter defined).
I.3 Additional Preferred Stock
--------------------------
(a) At any time within 180 days after the Closing Date
(the "Initial Term") on 14 days written notice, Integra will have the right (the
------------
"Put Right") to require the Purchasers (or certain Affiliates thereof) to
----------
purchase up to an additional $2,000,000 of convertible preferred stock having
substantially identical terms as the Series B Preferred Stock ("Additional
----------
Preferred Stock"), with each Purchaser purchasing that proportion of the
- ----------------
Additional Preferred Stock equal to such Purchaser's proportionate initial
investment in the Series B Preferred Stock, provided that the conversion price
for such Additional Preferred Stock shall be equal to the lesser of (i) the
Conversion Price, which initially shall be $3.82 per share of Common Stock, as
adjusted and then in effect (the "Conversion Price") or (ii) the average closing
----------------
price of Integra's Common Stock for the ten (10) trading days ending two days
prior to the date of issuance of the Additional Preferred Stock.
(b) If the Initial Term expires without the exercise of
the Put Right by Integra, such Put Right will continue for an additional 180
days (the "Second Term"), subject to the receipt by the Purchasers of a
------------
certificate from the Chief Executive Officer of Integra (the "CEO Certificate")
----------------
certifying that the representations and warranties contained in Section III of
this Agreement are true and correct in all material respects as of the exercise
date of the Put Right as if made on and as of such date and as if all references
to Purchased Shares include the Additional Preferred Stock, and that no material
adverse change in the Condition of Integra (other than operating losses
consistent with the historic results of Integra) has occurred since the Closing
Date.
I.4 Closing. Unless this Agreement shall have terminated
-------
pursuant to Section VIII and subject to the satisfaction or waiver of the
conditions set forth in Sections IV and V (except for Sections 4.10, 4.11 and
5.5, which shall occur simultaneously with the Closing (as hereinafter
defined)), the closing of the purchase and issuance of the Purchased Shares and
the Warrants (the "Closing") shall take place at the offices of Paul, Weiss,
-------
Rifkind, Wharton & Garrison, at 10:00 a.m., local time, on March 29, 1999, or at
such time and on such date that Integra and the Purchasers may agree in writing
(the "Closing Date"). On the Closing Date, Integra shall deliver to the
-------------
Purchasers (a) stock certificates representing the Purchased Shares and (b) the
Warrants, against delivery by the Purchasers to Integra of the aggregate
purchase price therefor by wire transfer of immediately available funds.
Page 36 of 83 Pages
SECTION II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
Integra represents and warrants to the Purchasers as follows:
II.1 Corporate Existence and Power. Each of Integra and
-------------------------------
its Subsidiaries (a) is a corporation or limited liability company duly
incorporated and organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation; (b) has all requisite corporate (or
limited liability company) power and authority to own and operate its property,
to lease the property it operates as lessee and to conduct the business in which
it is currently engaged as described in the SEC Documents; (c) is duly qualified
as a foreign corporation or other entity, licensed and in good standing under
the laws of each jurisdiction in which its ownership, lease or operation of
property or the conduct of its business requires such qualification, except to
the extent that the failure to do so or be so would not have a material adverse
effect on the Condition of Integra; and (d) has the requisite corporate (or
limited liability company) power and authority to execute, deliver and perform
its obligations under this Agreement and each of the other Transaction
Documents.
II.2 Corporate Authorization; No Contravention. The
----------------------------------------------
execution, delivery and performance by Integra of this Agreement and each of the
other Transaction Documents and the transactions contemplated hereby and
thereby, including, without limitation, the sale, issuance and delivery of the
Securities (a) are within Integra's corporate power and have been duly
authorized by all necessary corporate action of Integra; (b) do not contravene
the terms of the Certificate of Incorporation or By-laws, or any organizational
or governing documents, or any amendment thereof, of the Subsidiaries; (c) do
not violate, conflict with or result in any breach or contravention of or the
creation of any Lien under, any material Contractual Obligation of Integra or
any of its Subsidiaries, or any Requirement of Law applicable to Integra or any
of its Subsidiaries; and (d) do not violate any judgment, injunction, writ,
award, decree or order of any nature (collectively, "Orders") of any
Governmental Authority against, or binding upon, Integra or any of the
Subsidiaries except for those Orders the violation of which would not have a
material adverse effect on the Condition of Integra. Neither Integra nor any of
its Subsidiaries previously entered into any agreement which is currently in
effect or by which Integra is currently bound, granting any rights to any Person
which are inconsistent with the rights to be granted by Integra in this
Agreement and each of the other Transaction Documents.
II.3 Governmental Authorization; Third Party Consents.
---------------------------
Other than (a) the filing and approval of an application for the listing on
NASDAQ of the shares of Common Stock issuable upon conversion of the Purchased
Shares and the exercise of the Warrants, (b) the filing of the Certificate of
Page 37 of 83 Pages
Designation, (c) those required pursuant to the applicable state securities or
"blue sky" laws, with respect to the offer and sale of the Securities and (d)
with respect to the performance by Integra of the Registration Rights Agreement,
the registration of the Registrable Securities (as defined in the Registration
Rights Agreement) covered thereby with the Commission and the registration or
qualification of such Registrable Securities and other filings pursuant to
applicable state securities or "blue sky" laws, no approval, consent,
compliance, exemption, authorization, or other action by, or notice to, or
filing with, any Governmental Authority or any other Person, including, without
limitation, any approval or authorization of Integra's stockholders, any further
approval of the Board of Directors or any approval of NASDAQ, and no lapse of a
waiting period under a Requirement of Law, is necessary or required in
connection with the execution, delivery or performance (including, without
limitation, the sale, issuance and delivery of the Securities) by Integra of
this Agreement, each of the other Transaction Documents and the transactions
contemplated hereby or thereby.
II.4 Binding Effect. This Agreement and each of the other
--------------
Transaction Documents have been duly executed and delivered by Integra and
constitute the legal, valid and binding obligations of Integra, enforceable
against Integra in accordance with their terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity relating to
enforceability (regardless of whether considered in a proceeding at law or in
equity).
II.5 Litigation. Except as set forth in the SEC Documents,
----------
the Financial Statements (including the draft notes thereto) or Schedule 2.5,
------------
there are no actions, suits, proceedings, claims, complaints, disputes or
investigations pending or threatened, at law, in equity, in arbitration or
before any Governmental Authority against Integra or any of its Subsidiaries and
with respect to which Integra or any of its Subsidiaries is responsible by way
of indemnity or otherwise, which would, if adversely determined, (a) have a
material adverse effect on the Condition of Integra or (b) have an adverse
effect on the ability of Integra to perform its obligations under this Agreement
and each of the other Transaction Documents. No Order has been issued by any
court or other Governmental Authority against Integra or any of its Subsidiaries
purporting to enjoin or restrain the execution, delivery or performance of this
Agreement or any of the other Transaction Documents.
II.6 Compliance with Laws.
--------------------
(a) Each of Integra and its Subsidiaries is in
compliance with all Requirements of Law in all respects, except to the extent
that the failure to comply with such Requirements of Law would not have a
material adverse effect on the Condition of Integra.
Page 38 of 83 Pages
(b) (i) Each of Integra and its Subsidiaries has
all licenses, permits, orders or approvals of any Governmental Authority
(collectively, "Permits") that are material to or necessary for the conduct of
the business of Integra in the manner described in the SEC Documents, except to
the extent that the failure to have such Permits would not have a material
adverse effect on the Condition of Integra; (ii) such Permits are in full force
and effect; and (iii) no violations are or have been recorded in respect of any
Permit.
(c) The property, assets and operations at any
time owned or leased by Integra have been in compliance in all material respects
with all applicable Environmental Laws, while so owned or leased, except to the
extent that the failure to comply with such Environmental Laws would not have a
material adverse effect on the Condition of Integra.
II.7 Capitalization.
--------------
(a) The authorized capital stock of Integra at
the close of business on March 22, 1999 consisted of (x) 60,000,000 shares of
Common Stock, of which 15,730,933 shares are issued and outstanding and (y)
15,000,000 shares of preferred stock, par value $.01 per share, of which (i)
2,000,000 shares have been designated as Series A Preferred Stock and of which
500,000 shares are issued and outstanding and (ii) 120,000 shares have been
designated as Series B Preferred Stock and of which no shares are issued and
outstanding. Integra has reserved an aggregate of 2,617,801 shares of Common
Stock for issuance upon conversion of the Purchased Shares and 240,000 shares of
Common Stock for issuance upon exercise of the Warrants. Except as set forth in
Schedule 2.7, there are no options, warrants, conversion privileges or other
- ------------
rights presently outstanding to purchase or otherwise acquire any authorized but
unissued or unauthorized shares or treasury shares of Integra's capital stock.
(b) There has been no change in the authorized,
issued and outstanding capital stock of Integra in the interval between March
22, 1999 and the Closing Date, except for shares of Common Stock issued upon the
exercise of warrants or options, or purchased by Integra pursuant to its current
share repurchase program.
(c) The Purchased Shares are duly authorized
and, when issued and sold to the Purchasers after payment therefor, will be
validly issued, fully paid and nonassessable by Integra. The shares of Common
Stock issuable upon conversion of the Purchased Shares and the exercise of the
Warrants are duly authorized and, when issued in compliance with the provisions
of this Agreement, the Certificate of Incorporation, the Certificate of
Designation (in the case of the shares of Common Stock issuable upon conversion
Page 39 of 83 Pages
of the Purchased Shares) and the Warrants (in the case of the Warrant Shares)
will be validly issued, fully paid and nonassessable by Integra. The issued and
outstanding shares of Common Stock are all duly authorized, validly issued,
fully paid and nonassessable by Integra, and were issued in compliance with the
registration and qualification requirements of all applicable federal securities
laws.
II.8 No Default or Breach. Except as set forth in Schedule
-------------------- --------
2.8, neither Integra nor any of its Subsidiaries has received notice of, and is
- ---
not in, default under or with respect to any, Contractual Obligation in any
respect, which, individually or together with all such defaults, could have a
material adverse effect on the Condition of Integra, or which could materially
adversely affect the ability of Integra to perform its obligations under this
Agreement or any of the other Transaction Documents.
II.9 Taxes. Each of Integra and its Subsidiaries has filed
-----
or caused to be filed, or has properly filed extensions for, all tax returns
which are required to be filed for federal, state, local and foreign tax
purposes and has paid or caused to be paid all taxes required to be paid by it
and all assessments received by it to the extent that such taxes have become
due, except taxes the validity or amount of which is being contested in good
faith by appropriate proceedings and with respect to which adequate reserves
have been set aside. Each of Integra and its Subsidiaries has paid or caused to
be paid, or has established reserves that are adequate in all material respects,
for all tax liabilities applicable to Integra and its Subsidiaries for all
fiscal years which have not been examined and reported on by the taxing
authorities (or closed by applicable statutes).
II.10 Financial Statements. Integra has heretofore
----------------------
delivered to the Purchasers true and correct copies of its unaudited
consolidated financial statements (balance sheet and statements of operations,
cash flows and shareholders' equity, together with draft notes thereto) for the
fiscal year ended and as at December 31, 1998 (the "Financial Statements"). The
--------------------
Financial Statements comply in all material respects with the requirements of
the Exchange Act and have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods indicated and with each other, except as
may be indicated therein or in the draft notes thereto. The Financial Statements
fairly present the consolidated financial condition, operating results and cash
flows of Integra as of the respective dates and for the respective periods
indicated in accordance with GAAP.
II.11 No Material Adverse Change; Ordinary Course of
-----------------------------------------------------
Business. Except as set forth in Schedule 2.11 hereto or the SEC Documents or as
- -------- -------------
previously disclosed to the Purchasers in writing, (i) since December 31, 1998,
there has not been any material adverse change in the Condition of Integra
(other than the incurrence of operating losses consistent with historic results
of Integra) and (ii) since December 31, 1998, neither Integra nor any of its
Subsidiaries has participated in any transaction or acted outside the ordinary
course of business.
Page 40 of 83 Pages
II.12 SEC Documents.
-------------
(a) Integra has filed all SEC Documents required
to be filed by it since December 31, 1997 under the Securities Act or the
Exchange Act, and all amendments thereto.
(b) As of its filing date, each SEC Document
(including all exhibits and schedules thereto and documents incorporated by
reference therein), in each case as amended, referred to in subsection (a) above
(i) complied in all material respects with the applicable requirements of the
Exchange Act and (ii) did not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. Integra is not aware of any issues raised by, or correspondence
(other than routine filing packages and cover letters) with, the Commission with
respect to any of the SEC Documents.
II.13 Investment Company. Integra is not an "investment
-------------------
company" within the meaning of the Investment Company Act of 1940, as amended.
II.14 Private Offering. No form of general solicitation or
----------------
general advertising was used by Integra or its representatives in connection
with the offer or sale of the Purchased Shares or the Warrants. No registration
of the Purchased Shares or the Warrants, pursuant to the provisions of the
Securities Act or any state securities or "blue sky" laws, is required on the
date hereof or on the Closing Date by the offer, sale or issuance of the
Securities. Integra hereby agrees that neither it nor anyone acting on its
behalf, will offer to sell the Purchased Shares or the Warrants or any other
security so as to require the registration of the Purchased Shares or the
Warrants, pursuant to the provisions of the Securities Act or any state
securities or "blue sky" laws, unless such securities are so registered.
II.15 Employee Benefit Plans. All employee benefit plans
-----------------------
(as defined in Section 3(3) of ERISA) or arrangements of Integra or any of the
Subsidiaries are in substantial compliance with all applicable Requirements of
Law. The execution and delivery of this Agreement and each of the other
Transaction Documents, the purchase and sale of the Purchased Shares hereunder
and the consummation of the transactions contemplated hereby and thereby will
not result in any prohibited transaction within the meaning of Section 406 of
ERISA or Section 4975 of the Code, assuming that none of the consideration
received by Integra pursuant to this Agreement is derived from the assets of any
employee benefit plan.
Page 41 of 83 Pages
II.16 Title to Assets. Except as set forth in Schedule
---------------- --------
2.16, each of Integra and its Subsidiaries has good title to all of its
- ----
properties and assets used in the business described in the SEC Documents and
reflected as owned on the Financial Statements or so described in any Schedule
hereto, in each case free and clear of any Lien, except for (a) Liens
specifically described on the notes to the Financial Statements and (b) Liens
not material to the Condition of Integra.
II.17 Intellectual Property.
---------------------
(a) Schedule 2.17(a) sets forth all United
------------------
States and foreign patents and patent applications, trademark and service mark
registrations and applications, and copyright registrations and applications
owned or licensed by Integra and all material licenses, sublicenses, and other
agreements or permissions ("IP Licenses") under which Integra is a licensor or
licensee or otherwise is authorized to use or practice any Intellectual Property
(as defined below).
(b) Except as set forth in Schedule 2.17(b),
-----------------
Integra owns or otherwise has the right to use, and will continue to own or
otherwise have the right to use immediately following the Closing, free and
clear of any and all Encumbrances, all United States and foreign patents and
patent applications, trademark and service mark registrations and applications,
copyright registrations and applications, trade secrets, know-how, software, and
other technology and proprietary rights (collectively, "Intellectual Property")
used in the operation of its business as described in the SEC Documents.
(c) Except as set forth on Schedule 2.17(c), to
----------------
the best of Integra's knowledge, Integra's use or licensing of the Intellectual
Property used in the operation of its business as described in the SEC Documents
does not infringe or otherwise violate any Intellectual Property rights of any
third party. Except as set forth on Schedule 2.17(c), no litigation is pending
----------------
and no claim has been made in writing against Integra or, to the best of
Integra's knowledge, is threatened contesting the right of Integra to sell or
license to third parties or use the Intellectual Property presently sold or
licensed to third parties or used by Integra.
(d) Integra has taken all reasonable precautions
to protect the secrecy, confidentiality, and value of its trade secrets and the
proprietary nature and value of its know-how, patents, and other technology.
Each employee and third party who has contributed to the development of
Intellectual Property on behalf of Integra has signed an agreement with Integra
stating that such employee or third party (i) shall maintain the confidentiality
of Integra's trade secrets and other confidential information, and (ii) assigns
to Integra all rights that such employee or third party might have in such
Intellectual Property, except where the terms of particular agreements provide
otherwise. To the knowledge of Integra, no such employee or third party has
materially breached any such agreement.
II.18 Trade Relations. Except as set forth in Schedule
---------------- --------
2.18, there exists no actual or threatened termination, cancellation or
- ----
limitation of, or any adverse modification or change in, the business
relationship of Integra or any of its Subsidiaries with, any customer or any
group of customers whose purchases are individually or in the aggregate material
to the business of Integra or any of its Subsidiaries, or with any material
supplier, and there exists no present condition or state of fact or
circumstances that would materially adversely affect the Condition of Integra or
prevent Integra from conducting its business after the consummation of the
transactions contemplated by this Agreement and each of the other Transaction
Documents, in substantially the same manner in which such business has
heretofore been conducted and described in the SEC Documents.
Page 42 of 83 Pages
II.19 Contracts and Other Agreements. All of the
------------------------------------
Contractual Obligations of Integra and any of its Subsidiaries that are
currently in effect and are required to be described in the SEC Documents or to
be filed as exhibits thereto are (a) described in the SEC Documents or filed as
exhibits thereto and (b) valid, subsisting, in full force and effect and binding
upon Integra or its Subsidiaries, as the case may be, and, to the knowledge of
Integra, the other parties thereto, in accordance with their terms. Except as
set forth on Schedule 2.19, Integra has paid in full or accrued all material
--------------
amounts currently due thereunder and has satisfied in full or provided for all
of its currently matured liabilities and obligations thereunder, and is not in
default under any of them. Except as set forth on Schedule 2.19, to the
--------------
knowledge of Integra, no other party to any such Contractual Obligation is in
breach thereof or in default thereunder nor does any condition exist that with
notice or lapse of time or both will constitute a breach thereof or default
thereunder by such other party, except for such breaches or defaults that would
not have a material adverse effect on the Condition of Integra.
II.20 Liabilities. As at December 31, 1998, neither Integra
-----------
nor any of its Subsidiaries had any direct or indirect obligation or liability
required by GAAP to be set forth on its financial statements or the footnotes
thereto (the "Liabilities") that were not fully and adequately reflected or
reserved against in the Financial Statements.
II.21 Broker's, Finder's or Similar Fees. There are no
--------------------------------------
brokerage commissions, finder's fees or similar fees or commissions payable by
Integra in connection with the transactions contemplated hereby based on any
agreement, arrangement or understanding with Integra or any of its Subsidiaries
or any action taken by any such entity.
Page 43 of 83 Pages
II.22 Disclosure; Agreement and Other Documents. This
----------------------------------------------
Agreement, each of the other Transaction Documents and each of the certificates
furnished to the Purchasers by Integra in connection with the purchase and sale
of the Purchased Shares and the Warrants at or prior to the Closing, taken as a
whole, do not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained herein or
therein, in the light of the circumstances under which they were made, not
misleading.
II.23 NeuroCare Acquisition Agreement. Integra has
-----------------------------------
delivered to the Purchasers a true and complete copy of the NeuroCare
Acquisition Agreement, and all of the representations and warranties of Integra
as set forth therein shall be true and complete in all material respects as of
the date hereof and as at the Closing Date.
SECTION III. REPRESENTATIONS AND WARRANTIES
OF THE PURCHASERS
-----------------
Each of the Purchasers hereby represents and warrants
(severally as to itself and not jointly) to Integra as follows:
III.1 Existence and Power. Such Purchaser that is an entity
-------------------
(a) is duly organized and validly existing under the laws of the jurisdiction of
its formation and (b) has the requisite power and authority to execute, deliver
and perform its obligations under this Agreement and each of the other
Transaction Documents to which it is a party.
III.2 Authorization; No Contravention. The execution,
----------------------------------
delivery and performance by such Purchaser of this Agreement and each of the
other Transaction Documents to which it is a party and the transactions
contemplated hereby and thereby, including, without limitation, the purchase of
the Purchased Shares and the Warrants, (a) have been duly authorized by all
necessary action, (b) do not contravene the terms of such Purchaser's
organizational documents, or any amendment thereof, and (c) do not violate,
conflict with or result in any breach or contravention of or the creation of any
Lien under, any Contractual Obligation of such Purchaser, or any Requirement of
Law applicable to such Purchaser.
III.3 Governmental Authorization; Third Party Consents. No
-------------------------------------------------
approval, consent, compliance, exemption, authorization, or other action by, or
notice to, or filing with, any Governmental Authority or any other Person, and
no lapse of a waiting period under a Requirement of Law, is necessary or
required in connection with the execution, delivery or performance (including,
without limitation, the purchase of the Purchased Shares and the Warrants) by,
or enforcement against, such Purchaser of this Agreement, each of the other
Transaction Documents to which it is a party and the transactions contemplated
hereby or thereby.
Page 44 of 83 Pages
III.4 Binding Effect. This Agreement and each of the other
--------------
Transaction Documents to which it is a party have been duly executed and
delivered by such Purchaser and constitute the legal, valid and binding
obligations of such Purchaser, enforceable against it in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, moratorium or
similar laws affecting the enforcement of creditors' rights generally or by
equitable principles relating to enforceability (regardless of whether
considered in a proceeding at law or in equity).
III.5 Purchase for Own Account. The Purchased Shares and
------------------------
the Warrants to be acquired by such Purchaser pursuant to this Agreement are
being or will be acquired for its own account and with no intention of
distributing or reselling such Purchased Shares or any part thereof in any
transaction that would be in violation of the securities laws of the United
States of America, or any state, without prejudice, however, to the rights of
such Purchaser at all times to sell or otherwise dispose of all or any part of
such Purchased Shares or Warrants under an effective registration statement
under the Securities Act, or under an exemption from such registration available
under the Securities Act, and subject, nevertheless, to the disposition of such
Purchaser's property being at all times within its control. If such Purchaser
should in the future decide to dispose of any of the Securities, such Purchaser
understands and agrees that it may do so only in compliance with the Securities
Act and applicable state securities laws, as then in effect. Such Purchaser
agrees to the imprinting, so long as required by law, of a legend on
certificates representing the Securities substantially to the following effect:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN
APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT."
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE ENTITLED TO THE
BENEFITS OF A REGISTRATION RIGHTS AGREEMENT AMONG INTEGRA LIFESCIENCES
CORPORATION AND THE ORIGINAL PURCHASERS OF THE PREFERRED STOCK
REPRESENTED HEREBY. TRANSFEREES OF SUCH SECURITIES SHOULD REVIEW SUCH
AGREEMENT TO DETERMINE THEIR RIGHTS."
Page 45 of 83 Pages
III.6 Accreditation; Sophistication; Other Securities Laws
-----------------------------------------------------
Matters. Each Purchaser (a) is an "accredited investor" within the meaning of
- -------
Rule 501 under the Securities Act; (b) has sufficient knowledge and experience
in investing in companies similar to Integra so as to be able to evaluate the
risks and merits of its investment in Integra and is able financially to bear
the risks thereof; (c) has had an opportunity to discuss Integra's business,
management and financial affairs with Integra's management; and (d) is a
resident of the jurisdiction listed next to its name on Schedule 1 hereto for
----------
purposes of state "blue sky" securities law purposes.
III.7 Broker's, Finder's or Similar Fees. There are no
--------------------------------------
brokerage commissions, finder's fees or similar fees or commissions payable by
the Purchasers or any of them, in connection with the transactions contemplated
hereby based on any agreement, arrangement or understanding with such Purchaser
or any action taken by such Purchaser.
SECTION IV. CONDITIONS TO THE OBLIGATION
OF THE PURCHASERS TO CLOSE
--------------------------
The obligation of the Purchasers to purchase the Purchased
Shares and the Warrants, to pay the purchase price therefor at the Closing and
to perform any obligations hereunder shall be subject to the satisfaction as
determined by, or waiver by, the Purchasers of the following conditions on or
before the Closing Date.
IV.1 Representations and Warranties. The representations
-------------------------------
and warranties of Integra contained in Section II hereof shall be true and
correct in all material respects at and on the Closing Date as if made at and on
such date, except to the extent that any representation and warranty expressly
speaks as of an earlier date, in which case such representation and warranty is
true and correct as of such date and except for any activities or transactions
which may have taken place after the date hereof which are contemplated by this
Agreement.
IV.2 Compliance with this Agreement. Integra shall have
--------------------------------
performed and complied in all material respects with all of its agreements and
conditions set forth herein that are required to be performed or complied with
by Integra on or before the Closing Date.
IV.3 Secretary's Certificate. The Purchasers shall have
------------------------
received a certificate from Integra, in form and substance satisfactory to the
Purchasers, dated the Closing Date and signed by a secretary or an assistant
secretary of Integra, certifying (a) that the attached copies of the Certificate
of Incorporation, the By-laws and resolutions of the Board of Directors of
Integra approving this Agreement, each of the other Transaction Documents and
the transactions contemplated hereby and thereby, are all true, complete and
correct and remain unamended and in full force and effect, and (b) as to the
incumbency and specimen signature of each officer of Integra executing this
Agreement, each of the other Transaction Documents and any other document
delivered in connection herewith on behalf of Integra.
Page 46 of 83 Pages
IV.4 Officers' Certificate. The Purchasers shall have
----------------------
received a certificate from Integra, in form and substance satisfactory to the
Purchasers, dated the Closing Date and signed by Integra's chief executive
officer and its treasurer, certifying that (a) the representations and
warranties of Integra contained in Section II hereof are true and correct in all
material respects on the Closing Date and (b) Integra has performed and complied
with in all material respects all of the agreements and conditions set forth or
contemplated herein that are required to be performed or complied with by
Integra on or before the Closing Date.
IV.5 Documents. The Purchasers shall have received true,
---------
complete and correct copies of such documents as they may reasonably request in
connection with or relating to the issue and sale of the Purchased Shares and
the transactions contemplated hereby, all in form and substance reasonably
satisfactory to the Purchasers.
IV.6 Filing of Certificate of Designation. The Certificate
------------------------------------
of Designation shall have been duly filed by Integra with the Secretary of State
of the State of Delaware in accordance with the General Corporation Law of the
State of Delaware.
IV.7 Registration Rights Agreement. Integra shall have
-------------------------------
duly executed and delivered the Registration Rights Agreement, substantially in
the form attached hereto as Exhibit C.
---------
IV.8 Opinion of Counsel. The Purchasers shall have
--------------------
received an opinion of counsel to Integra, dated the Closing Date, relating to
the transactions contemplated hereby or referred to herein, substantially in the
form attached hereto as Exhibit D.
---------
IV.9 Approval of Counsel to the Purchasers. All actions
---------------------------------------
and proceedings hereunder and all documents required to be delivered by Integra
hereunder or in connection with the consummation of the transactions
contemplated hereby, and all other related matters, shall have been acceptable
to Paul, Weiss, Rifkind, Wharton & Garrison, counsel to the Purchasers, in their
reasonable judgment as to their form and substance.
IV.10 Purchased Shares. Integra shall have delivered to
-----------------
each of the Purchasers stock certificates in definitive form representing the
number of Purchased Shares set forth opposite such Purchaser's name on Schedule
--------
1 hereto and registered in the name of such Purchaser.
- -
Page 47 of 83 Pages
IV.11 Warrants. Integra shall have duly executed and
--------
delivered to the Purchasers the Warrants, each substantially in the form
attached hereto as Exhibit A.
---------
IV.12 Consents and Approvals. All consents, exemptions,
-----------------------
authorizations, or other actions by, or notices to, or filings with (other than
the filings referenced in Section 2.3(a) and (d) hereof), Governmental
Authorities and other Persons in respect of all Requirements of Law and with
respect to those Contractual Obligations of Integra which are necessary or
required in connection with the execution, delivery or performance (including,
without limitation, the issuance of the Purchased Shares, the Warrants, shares
of Common Stock issuable upon conversion of the Purchased Shares and the
exercise of the Warrants) by, or enforcement against, Integra of this Agreement
and each of the other Transaction Documents shall have been obtained and be in
full force and effect, and each of the Purchasers shall have been furnished with
appropriate evidence thereof.
IV.13 No Litigation. No action, suit, proceeding, claim or
-------------
dispute shall have been brought or otherwise arisen at law, in equity, in
arbitration or before any Governmental Authority against Integra or any of its
Subsidiaries which would, if adversely determined, (a) have a material adverse
effect on the Condition of Integra or (b) have a material adverse effect on the
ability of Integra to perform its obligations under this Agreement or any of the
other Transaction Documents.
IV.14 No Material Judgment or Order. There shall not be on
-----------------------------
the Closing Date any Order of a court of competent jurisdiction or any ruling of
any Governmental Authority or any condition imposed under any Requirement of Law
which would, in the judgment of the Purchasers, (a) prohibit or restrict (i) the
purchase of the Purchased Shares or (ii) the consummation of the transactions
contemplated by this Agreement, (b) subject the Purchasers to any penalty or
other onerous condition under or pursuant to any Requirement of Law if the
Purchased Shares were to be purchased hereunder or (c) restrict the operation of
the business of Integra or any of the Subsidiaries as conducted on the date
hereof in a manner that would have a material adverse effect on the Condition of
Integra.
IV.15 No Material Adverse Change. Since the date hereof,
----------------------------
there shall have been no material adverse change in the Condition of Integra
(other than operating losses consistent with the historic results of Integra).
IV.16 Neurocare Acquisition. All conditions precedent to
----------------------
the consummation of the Neurocare Acquisition Agreement shall have been
satisfied in all material respects (and not waived, except for any waiver which
would not be adverse to the Purchasers in any material respect).
Page 48 of 83 Pages
SECTION V. CONDITIONS TO THE OBLIGATION
OF THE COMPANY TO CLOSE
-----------------------
The obligations of Integra to issue and sell the Purchased
Shares and to perform its other obligations hereunder, shall be subject to the
satisfaction as determined by, or waiver by, Integra of the following conditions
on or before the Closing Date:
V.1 Representations and Warranties. The representations
-------------------------------
and warranties of the Purchasers contained in Section III hereof shall be true
and correct on at and on the Closing Date as if made at and on such date, except
to the extent that any representation and warranty expressly speaks as of an
earlier date, in which case such representation and warranty is true and correct
as of such date and except for any activities or transactions which may have
taken place after the date hereof which are contemplated by this Agreement.
V.2 Compliance with this Agreement. The Purchasers shall
------------------------------
have performed and complied in all material respects with all of their
agreements and conditions set forth herein that are required to be performed or
complied with by the Purchasers on or before the Closing Date.
V.3 Registration Rights Agreement. The Purchasers shall
------------------------------
have duly executed and delivered the Registration Rights Agreement,
substantially in the form attached hereto as Exhibit C.
---------
V.4 Consents and Approvals. All consents, exemptions,
-----------------------
authorizations, or other actions by, or notices to, or filings with,
Governmental Authorities and other Persons in respect of all Requirements of Law
and with respect to those Contractual Obligations of the Purchasers which are
necessary or required in connection with the execution, delivery or performance
(including, without limitation, the purchase of the Purchased Shares, the
Warrants, and the shares of Common Stock issuable upon conversion of the
Purchased Shares and the exercise of the Warrants) by, or enforcement against,
the Purchasers of this Agreement shall have been obtained and be in full force
and effect, and Integra shall have been furnished with appropriate evidence
thereof.
V.5 Payment of Purchase Price. Integra shall have
-----------------------------
received the aggregate purchase price for the Purchased Shares and the Warrants.
V.6 No Material Judgment or Order. There shall not be on
-----------------------------
the Closing Date any Order of a court of competent jurisdiction or any ruling of
any Governmental Authority or any condition imposed under any Requirement of Law
which would, in the judgment of Integra, (a) prohibit or restrict (i) the sale
of the Purchased Shares or the Warrants or (ii) the consummation of the
transactions contemplated by this Agreement or (b) subject Integra to any
penalty or other onerous condition under or pursuant to any Requirement of Law
if the Purchased Shares were to be sold hereunder.
Page 49 of 83 Pages
V.6 Opinion of Counsel. Integra will have received the
------------------
opinion of Paul, Weiss, Wharton & Garrison, dated the Closing Date, relating to
the transactions contemplated hereby or referred to herein, substantially in the
form attached hereto as Exhibit E.
---------
SECTION VI. INDEMNIFICATION
---------------
VI.1 Indemnification. Except as otherwise provided in this
---------------
Section VI, Integra agrees to indemnify, defend and hold harmless each of the
Purchasers and their Affiliates and their respective officers, directors,
agents, employees, subsidiaries, members, partners and controlling persons
(each, an "Indemnified Party") to the fullest extent permitted by law from and
against any and all Losses (as hereinafter defined) resulting from, arising out
of or relating to any breach of any representation, warranty, covenant or
agreement by Integra in this Agreement or the other Transaction Documents,
including, without limitation, Losses arising out of or relating to any legal,
administrative or other actions (including actions brought by the Purchasers or
Integra or any equity holders of Integra or derivative actions brought by any
Person claiming through or in Integra's name), proceedings or investigations
(whether formal or informal), or written threats thereof, based upon, relating
to or arising out of this Agreement, each of the other Transaction Documents,
the transactions contemplated hereby and thereby, or any Indemnified Party's
role therein or in transactions contemplated hereby or thereby; provided,
--------
however, that the Integra shall not be liable under this Section 6.1 to an
- -------
Indemnified Party to the extent that it is finally judicially determined that
such Losses resulted primarily from the material breach by such Indemnified
Party of any representation, warranty, covenant or other agreement of such
Indemnified Party contained in this Agreement; and provided, further, that if
-------- -------
and to the extent that such indemnification is unenforceable for any reason,
then Integra shall make the maximum contribution to the payment and satisfaction
of such Losses which shall be permissible under applicable laws. Losses means
all losses, claims (including any claim by a third party), damages, expenses
(including reasonable fees, disbursements and other charges of counsel incurred
by the Indemnified Party in any action between Integra and the Indemnified Party
or between the Indemnified Party and any third party or otherwise) or other
liabilities; provided, however, that Losses shall include only (a) direct
-------- -------
out-of-pocket payments of judgments and settlements, costs and expenses of the
Indemnified Parties and (b) diminution in value of the Purchased Shares directly
attributable to a breach of any representation, warranty, covenant or agreement
by Integra in this Agreement or the other Transaction Documents.
Page 50 of 83 Pages
VI.2 Notification. Each Indemnified Party under this
Section VI will, promptly after the receipt of notice of the commencement of any
action, investigation, claim or other proceeding against such Indemnified Party
in respect of which indemnity may be sought from Integra under this Section VI,
notify Integra in writing of the commencement thereof. The omission of any
Indemnified Party to so notify Integra of any such action shall not relieve
Integra from any liability which Integra may have to such Indemnified Party (a)
other than pursuant to this Section VI or (b) under this Section VI unless, and
only to the extent that, such omission results in Integra's forfeiture of
substantive rights or defenses. In case any such action, claim or other
proceeding shall be brought against any Indemnified Party and it shall notify
Integra of the commencement thereof, Integra shall be entitled to assume the
defense thereof at its own expense, with counsel satisfactory to such
Indemnified Party in its reasonable judgment; provided, however, that any
-------- -------
Indemnified Party may, at its own expense, retain separate counsel to
participate in such defense at its own expense. Notwithstanding the foregoing,
in any action, claim or proceeding in which both Integra, on the one hand, and
an Indemnified Party, on the other hand, are, or are reasonably likely to
become, a party, such Indemnified Party shall have the right to employ separate
counsel at the expense of Integra and to control its own defense of such action,
claim or proceeding if, in the reasonable opinion of counsel to such Indemnified
Party, a conflict or potential conflict exists between Integra, on the one hand,
and such Indemnified Party, on the other hand, that would make such separate
representation advisable; provided, however, that Integra shall not be liable
-------- -------
for the fees and expenses of more than one counsel to all Indemnified Parties.
Integra agrees that it will not, without the prior written consent of the
Purchasers, settle, compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding relating to the matters
contemplated hereby (if any Indemnified Party is a party thereto or has been
actually threatened to be made a party thereto) unless such settlement,
compromise or consent includes an unconditional release of the Purchasers and
each other Indemnified Party from all liability arising or that may arise out of
such claim, action or proceeding and imposes no obligations upon such
Indemnified Party. Integra shall not be liable for any settlement of any claim,
action or proceeding effected against an Indemnified Party without its written
consent, which consent shall not be unreasonably withheld. The rights accorded
to each Indemnified Party hereunder shall be the sole rights that such
Indemnified Party may have at common law, by separate agreement or otherwise;
provided, however, that notwithstanding the foregoing or anything to the
- -------- -------
contrary contained in this Agreement, nothing in this Section VI shall restrict
or limit any rights that any Indemnified Party may have to seek equitable
relief.
Page 51 of 83 Pages
VI.3 Registration Rights Agreement. Notwithstanding
---------------------------------
anything to the contrary contained in this Section VI, the indemnification and
contribution provisions of the Registration Rights Agreement shall govern any
claim made with respect to registration statements filed pursuant thereto or
sales made thereunder.
SECTION VII. AFFIRMATIVE COVENANTS
---------------------
Integra hereby covenants and agrees with the Purchasers with
respect to this Section VII so long as any shares of Preferred Stock, shares of
Common Stock issuable upon the conversion thereof, the Warrants or the Warrant
Shares are outstanding, except to the extent that a particular section of this
Section VII provides for an earlier termination as follows:
VII.1 Preservation of Existence. From the date hereof until
-------------------------
the Closing Date, Integra shall, and shall use its best efforts to cause its
Subsidiaries to:
(a) preserve and maintain in full force and
effect its existence and good standing under the laws of its jurisdiction of
formation or organization;
(b) take all reasonable action to preserve and
maintain in full force and effect all material rights, privileges,
qualifications, applications, estimates, licenses and franchises necessary in
the normal conduct of its business;
(c) use its reasonable efforts to preserve its
business organization;
(d) conduct its business in accordance with
sound business practices and keep its useful and necessary properties in good
working order and condition (normal wear and tear excepted);
(e) comply with all Requirements of Law and with
the directions of any Governmental Authority having jurisdiction over Integra or
any of the Subsidiaries or their respective business or property except to the
extent that the failure to comply with any Requirements of Law would not have a
material adverse effect on the Condition of Integra; and
(f) file or cause to be filed in a timely manner
all reports, applications, estimates and licenses that shall be required by a
Governmental Authority and that, if not timely filed, would have a material
adverse effect on the Condition of Integra.
Page 52 of 83 Pages
VII.2 Delivery of 1998 Audited Financial Statements.
---------------------------------------------
(a) Integra shall deliver to the Purchasers as
soon as available a true and correct copy of its audited consolidated financial
statements (balance sheet and statement of operations, cash flows and
shareholders equity, together with the notes thereto) for the fiscal year ended
and as at December 31, 1998 (the "Audited Financial Statements") which will be
the same in all material respect as the Financial Statements.
(b) In the event the Audited Financial
Statements differ in any material respect from the Financial Statements, Integra
shall indemnify the Purchasers for the reduction in the value of the Series B
Preferred Stock, if any, caused by such differences by paying to the Purchasers
an amount in cash or shares of Common Stock equal to such reduction in value.
VII.3 Financial Statements and Other Information. Integra
-------------------------------------------
shall deliver to the Purchasers, in form and substance satisfactory to the
Purchasers:
(a) as soon as available, but not later than
ninety (90) days after the end of each fiscal year of Integra, a copy of the
audited consolidated balance sheet of Integra and its Subsidiaries as of the end
of such year and the related statements of operations and cash flows for such
fiscal year, setting forth in each case in comparative form the figures for the
previous year, all in reasonable detail and accompanied by a management summary
and analysis of the operations of Integra and its Subsidiaries for such fiscal
year and by the opinion of a nationally recognized independent certified public
accounting firm which report shall state without qualification that such
consolidated financial statements present fairly the financial condition as of
such date and results of operations and cash flows for the periods indicated in
conformity with GAAP applied on a consistent basis; provided, however, that the
-------- -------
delivery to each of the Purchasers of a copy of Integra's Annual Report on Form
10-K for each fiscal year shall satisfy the requirements of this Section 7.3(a);
(b) commencing with the fiscal period ending on
March 31, 1999, as soon as available, but in any event not later than forty-five
(45) days after the end of each of the first three fiscal quarters of each
fiscal year, the unaudited consolidated balance sheet of Integra and its
Subsidiaries, and the related statements of operations and cash flows for such
quarter and for the period commencing on the first day of the fiscal year and
ending on the last day of such quarter, all certified by an appropriate officer
of Integra as presenting fairly the financial condition as of such date and
results of operations and cash flows for the periods indicated in conformity
with GAAP applied on a consistent basis, subject to normal year-end audit
adjustments and the absence of footnotes required by GAAP; provided, however,
-------- -------
that the delivery to each of the Purchasers of a copy of Integra's Quarterly
Report on Form 10-Q for each fiscal quarter shall satisfy the requirements of
this Section 7.3(b);
Page 53 of 83 Pages
(c) at any time when it is not subject to
Section 13 or 15(d) of the Exchange Act, upon request, to the Purchasers,
information of the type that would satisfy the requirement of subsection
(d)(4)(i) of Rule 144A (or any similar successor provision) under the Securities
Act; and
(d) except as otherwise provided in Sections
7.3(a) and (b), promptly after the same are filed, copies of all registration
statements, proxy statements, reports and other documents required to be filed
by Integra under the Securities Act or the Exchange Act, and all amendments
thereto.
VII.4 Reservation of Shares. Integra shall at all times
-----------------------
reserve and keep available out of its authorized shares of Common Stock, solely
for the purpose of issue or delivery upon conversion of the Purchased Shares, as
provided in the Certificate of Designation and the Certificate of Incorporation,
and the exercise of the Warrants, the number of shares of Common Stock that may
be issuable or deliverable upon such conversion or exercise. Integra shall issue
such shares of Common Stock in accordance with the terms of this Agreement, the
Certificate of Incorporation, the Certificate of Designation (in the case of the
shares of Common Stock issuable upon conversion of the Purchased Shares) and the
Warrants (in the case of the Warrant Shares), as the case may be, and otherwise
comply with the terms hereof and thereof.
VII.5 Registration and Listing. If any shares of Common
--------------------------
Stock required to be reserved for purposes of conversion of the Purchased
Shares, as provided in the Certificate of Designation or the exercise of the
Warrants, as provided in the Warrants, require registration with or approval of
any Governmental Authority under any Federal or state or other applicable law
before such shares of Common Stock may be issued or delivered upon conversion or
exercise, Integra will in good faith and as expeditiously as possible cause such
shares of Common Stock to be duly registered or approved, as the case may be,
unless such registration or approval is required solely because of a breach of
the Purchasers' representation contained in Section 3.5. So long as the shares
of Common Stock are quoted on the NASDAQ or listed on any national securities
exchange, Integra will, if permitted by the rules of such system or exchange,
quote or list and keep quoted or listed on such system or exchange, upon
official notice of issuance, all shares of Common Stock issuable or deliverable
upon conversion of the Preferred Shares and exercise of the Warrants.
VII.6 Board Representation. For so long as the Purchasers
---------------------
or Affiliates thereof collectively own at least one half of their initial
investment in the Series B Preferred Stock or the Common Stock into which it is
converted, the Purchasers as a group shall be entitled to name one
representative to Integra's Board of Directors (the "Purchasers'
Representative"), which Purchasers' Representative shall be reasonably
satisfactory to the Chief Executive Officer of Integra and who initially shall
be Neal Moszkowski. Integra will use its best efforts to cause the Purchasers'
Representative to be nominated and to solicit proxies for his election. The
Purchasers as a group will also be entitled to representation on significant
committees of Integra Board of Directors.
Page 54 of 83 Pages
VII.7 Director and Officer Liability Insurance. Integra
-------------------------------------------
will maintain director and officer liability insurance reasonably satisfactory
to the Purchasers.
SECTION VIII. TERMINATION OF AGREEMENT
------------------------
VIII.1 Termination. This Agreement may be terminated prior
-----------
to the Closing as follows:
(a) at any time on or prior to the Closing Date,
by mutual written consent of Integra and the Purchasers; or
(b) at the election of Integra or the Purchasers
by written notice to the other parties hereto after 5:00 p.m., New York City
time on April 30, 1999, if the transactions contemplated by this Agreement shall
not have been consummated pursuant hereto, unless such date is extended by the
mutual written consent of Integra and the Purchasers; or
(c) at the election of Integra, if any one or
more of the conditions to its obligation to close set forth in Section V has not
been satisfied or waived and the Closing shall not have occurred on the
scheduled Closing Date; or
(d) at the election of the Purchasers, if any
one or more of the conditions to its obligation to close set forth in Section IV
has not been satisfied or waived and the Closing shall not have occurred on the
scheduled Closing Date; or
(e) at the election of Integra, if there has
been a material breach of any representation, warranty, covenant or agreement on
the part of the Purchasers contained in this Agreement, which breach has not
been cured within ten (10) Business Days of notice to the Purchasers of such
breach; or
(f) at the election of the Purchasers, if there
has been a material breach of any representation, warranty, covenant or
agreement on the part of Integra contained in this Agreement, which breach has
not been cured within ten (10) Business Days notice to Integra of such breach.
If this Agreement so terminates, it shall become null and void and have no
further force or effect, except as provided in Section 8.2.
Page 55 of 83 Pages
VIII.2 Survival. If this Agreement is terminated and the
--------
transactions contemplated hereby are not consummated as described above, this
Agreement shall become void and of no further force and effect; provided,
--------
however, that (i) none of the parties hereto shall have any liability in respect
- -------
of a termination of this Agreement pursuant to Section 8.1(a) or Section 8.1(b)
and (ii) nothing shall relieve any party from any liability for actual damages
resulting from a termination of this Agreement pursuant to Section 8.1(e) or
8.1(f); and provided further, that none of the parties hereto shall have any
-------- -------
liability for speculative, indirect, unforeseeable or consequential damages
resulting from a termination of this Agreement pursuant to Section VIII.
SECTION IX. MISCELLANEOUS
-------------
IX.1 Survival of Representations and Warranties. Except
--------------------------------------------
for the representations and warranties in Section 2.7(c) (which shall survive
without limitation), all of the representations and warranties made herein shall
survive the execution and delivery of this Agreement for a period ending 60 days
after the delivery by Integra to the Purchasers of its audited consolidated
financial statements (balance sheet and statement of operations, cash flows and
shareholders' equity, together with the notes hereto) for the fiscal year ended
and as at December 31, 1999; provided, however, that if Integra exercises its
Put Right during the Second Term the representations and warranties set forth in
the CEO Certificate shall survive for a period of one year following the receipt
by the Purchasers of the Additional Preferred Stock.
IX.2 Notices. All notices, demands and other
-------
communications provided for or permitted hereunder shall be made in writing and
shall be by registered or certified first-class mail, return receipt requested,
telecopier, courier service, overnight mail or personal delivery:
(i) if to Quantum Industrial Partners LDC.:
Kaya Flamboyan 9,
Villemstad
Curacao
Netherlands-Antilles
with a copy to:
Soros Fund Management LLC
888 Seventh Avenue
New York, NY 10016
Telecopy: (212) 664-0544
Attn: Michael Neus, Esq.
Page 56 of 83 Pages
and a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Telecopy: (212) 757-3990
Attention: Matthew Nimetz, Esq.
(ii) If to SFM Domestic Investments LLC:
Soros Fund Management LLC
888 Seventh Avenue
New York, NY 10016
Telecopy: (212) 664-0544
Attn: Michael Neus, Esq.
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Telecopy: (212) 757-3990
Attention: Matthew Nimetz, Esq.
(iii) if to Integra:
Integra LifeSciences Corporation
105 Morgan Lane
Plainsboro, NJ 08536
Telecopy: (609) 799-3297
Attention: Stuart M. Essig,
President and CEO
with a copy to:
Drinker Biddle & Reath LLP
105 College Road East
Princeton, NJ 08542-0627
Telecopy: (609) 799-7000
Attention: John E. Stoddard III, Esq.
Page 57 of 83 Pages
All such notices and communications shall be deemed to have
been duly given when delivered by hand, if personally delivered; when delivered
by courier or overnight mail, if delivered by commercial courier service or
overnight mail; five (5) Business Days after being deposited in the mail,
postage prepaid, if mailed; and when receipt is mechanically acknowledged, if
telecopied.
IX.3 Successors and Assigns. This Agreement shall inure to
----------------------
the benefit of and be binding upon the successors and permitted assigns of the
parties hereto. Subject to applicable securities laws, each of the Purchasers
may assign any of its rights under this Agreement to any of its Affiliates.
Integra may not assign any of its rights under this Agreement and each of the
other Transaction Documents, except to a successor-in-interest to Integra,
without the written consent of all of the Purchasers. Except as provided in
Section VI no Person other than the parties hereto and their successors and
permitted assigns is intended to be a beneficiary of this Agreement and each of
the other Transaction Documents.
IX.4 Amendment and Waiver.
--------------------
(a) No failure or delay on the part of Integra
or the Purchasers in exercising any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy.
(b) Any amendment, supplement or modification of
or to any provision of this Agreement, any waiver of any provision of this
Agreement, and any consent to any departure by Integra or the Purchasers from
the terms of any provision of this Agreement, shall be effective (i) only if it
is made or given in writing and signed by Integra and the Purchasers, and (ii)
only in the specific instance and for the specific purpose for which made or
given. Except where notice is specifically required by this Agreement, no notice
to or demand on Integra in any case shall entitle Integra to any other or
further notice or demand in similar or other circumstances.
IX.5 Counterparts. This Agreement may be executed in any
------------
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
IX.6 Headings. The headings in this Agreement are for
--------
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
Page 58 of 83 Pages
IX.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
--------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW JERSEY, WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
IX.8 Severability. If any one or more of the provisions
------------
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired, unless the
provisions held invalid, illegal or unenforceable shall substantially impair the
benefits of the remaining provisions hereof.
IX.9 Rules of Construction. Unless the context otherwise
---------------------
requires, "or" is not exclusive, and references to sections or subsections refer
to sections or subsections of this Agreement.
IX.10 Entire Agreement. This Agreement, together with the
----------------
exhibits and schedules hereto, and the other Transaction Documents are intended
by the parties as a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein and therein.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein or therein.
IX.11 Fees. Upon the Closing, Integra shall reimburse the
----
Purchasers for their reasonable out-of-pocket expenses (including attorney's
fees, disbursements and other charges) incurred in connection with the
transactions contemplated by this Agreement; provided, however, that Integra
-------- -------
shall not be obligated to reimburse the Purchasers for any reasonable
out-of-pocket expenses in excess of $40,000 in the aggregate.
IX.12 Publicity; Confidentiality.
--------------------------
(a) Except as may be required by applicable law
or the rules of any securities exchange or market on which shares of Common
Stock are traded, none of the parties hereto shall issue a publicity release or
public announcement or otherwise make any disclosure concerning this Agreement,
the transactions contemplated hereby or the business and financial affairs of
Integra, without prior approval by the other parties hereto; provided, however,
-------- -------
that nothing in this Agreement shall restrict any Purchaser from disclosing
information (i) that is already publicly available, (ii) that was known to such
Purchaser on a non-confidential basis prior to its disclosure by Integra, (iii)
that may be required or appropriate in response to any summons or subpoena or in
connection with any litigation, provided that such Purchaser will use reasonable
--------
Page 59 of 83 Pages
efforts to notify Integra in advance of such disclosure so as to permit Integra
to seek a protective order or otherwise contest such disclosure, and such
Purchaser will use reasonable efforts to cooperate, at the expense of Integra,
with Integra in pursuing any such protective order, (iv) to the extent that such
Purchaser reasonably believes it appropriate in order to protect its investment
in the Purchased Shares in order to comply with any Requirement of Law, (v) to
such Purchaser's officers, directors, agents, employees, members, partners,
controlling persons, auditors or counsel, (vi) to Persons who are parties to
similar confidentiality agreements or (vii) to the prospective transferee in
connection with any contemplated transfer of any of the Securities. If any
announcement is required by law or the rules of any securities exchange or
market on which shares of Common Stock are traded to be made by any party
hereto, prior to making such announcement such party will deliver a draft of
such announcement to the other parties and shall give the other parties
reasonable opportunity to comment thereon.
(b) The Purchasers shall have the opportunity to
review and modify any provision of any publicly release or public announcement
or document which is to be released to the public or filed with the SEC, which
provision mentions Soros Fund Management LLC or any of its Affiliates, prior to
the release of such document to the public or the filing of such document with
the SEC.
IX.13 Further Assurances. Each of the parties shall execute
------------------
such documents and perform such further acts (including, without limitation,
obtaining any consents, exemptions, authorizations or other actions by, or
giving any notices to, or making any filings with, any Governmental Authority or
any other Person) as may be reasonably required or desirable to carry out or to
perform the provisions of this Agreement.
IX.14 Schedules. Anything disclosed on any schedule
---------
attached hereto shall be deemed disclosed on all schedules attached hereto.
Page 60 of 83 Pages
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their respective officers hereunto
duly authorized on the date first above written.
INTEGRA LIFESCIENCES CORPORATION
By: /S/ STUART M. ESSIG
________________________________________
Name: Stuart M. Essig
Title: President and Chief Executive
Officer
QUANTUM INDUSTRIAL PARTNERS LDC
By: /S/ MICHAEL C. NEUS
________________________________________
Name: Michael C. Neus
Title: Attorney-in-Fact
SFM DOMESTIC INVESTMENTS LLC
By: /S/ MICHAEL C. NEUS
________________________________________
Name: Michael C. Neus
Title:
Page 61 of 83 Pages
Schedule 1
----------
PURCHASED SHARES AND WARRANTS AND PURCHASE PRICE
------------------------------------------------
Purchaser Shares of Warrants Purchase Price
Series B Preferred Purchased
Stock Purchased From From the Company
the Company
Quantum Industrial Partners LDC 75,000 180,000 $7,500,000
(principal place of business: Curacao)
SFM Domestic Investments LLC 25,000 60,000 $2,500,000
(principal place of business: New
York)
Page 62 of 83 Pages
________________________________________________________________________________
REGISTRATION RIGHTS AGREEMENT
among
INTEGRA LIFESCIENCES CORPORATION,
QUANTUM INDUSTRIAL PARTNERS LDC,
and
SFM DOMESTIC INVESTMENTS LLC
_____________________________________________________
Dated: March 29, 1999
_____________________________________________________
________________________________________________________________________________
Page 63 of 83 Pages
TABLE OF CONTENTS
Page
----
1. Definitions.....................................................................................1
2. General; Securities Subject to this Agreement...................................................3
(a) Grant of Rights........................................................................3
(b) Registrable Securities.................................................................3
(c) Holders of Registrable Securities......................................................4
3. Demand Registration.............................................................................4
(a) Request for Demand Registration........................................................4
(b) Effective Demand Registration..........................................................4
(c) Expenses...............................................................................5
(d) Underwriting Procedures................................................................5
(e) Selection of Underwriters..............................................................5
4. Piggy-Back Registration.........................................................................6
(a) Piggy-Back Rights......................................................................6
(b) Expenses...............................................................................7
5. Holdback Agreements.............................................................................7
(a) Restrictions on Public Sale by Designated Holders......................................7
(b) Restrictions on Public Sale by the Company.............................................7
6. Registration Procedures.........................................................................8
(a) Obligations of the Company.............................................................8
(b) Obligations of Each Designated Holder of Registrable Securities.......................11
(c) Notice to Discontinue.................................................................12
(d) Registration Expenses.................................................................12
7. Indemnification; Contribution..................................................................13
(a) Indemnification by the Company........................................................13
(b) Indemnification by Designated Holders.................................................13
(c) Conduct of Indemnification Proceedings................................................14
(d) Contribution..........................................................................14
8. Rule 144.......................................................................................15
Page 64 of 83 Pages
9. Miscellaneous..................................................................................15
(a) Recapitalizations, Exchanges, etc.....................................................15
(b) No Inconsistent Agreements............................................................16
(c) Remedies..............................................................................16
(d) Amendments and Waivers................................................................16
(e) Notices...............................................................................16
(f) Successors and Assigns; Third Party Beneficiaries.....................................18
(g) Counterparts..........................................................................18
(h) Headings..............................................................................18
(i) GOVERNING LAW.........................................................................18
(j) Severability..........................................................................18
(k) Entire Agreement......................................................................18
(l) Further Assurances....................................................................19
Page 65 of 83 Pages
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated March 29, 1999 (this
"Agreement"), among INTEGRA LIFESCIENCES CORPORATION, a Delaware corporation
---------
(the "Company"), QUANTUM INDUSTRIAL PARTNERS LDC, a Cayman Islands limited
-------
duration company ("QIP"), and SFM DOMESTIC INVESTMENTS LLC, a Delaware limited
liability company ("SFM DI" and together with QIP, the "Stockholders").
WHEREAS, this Agreement is made in connection with the Series
B Convertible Preferred Stock and Warrant Purchase Agreement, dated March 29,
1999 (the "Series B Agreement"), among the Company and the Stockholders pursuant
------------------
to which the Company has agreed to issue and sell to the Stockholders, and the
Stockholders have agreed to purchase from the Company, (i) an aggregate of
100,000 shares of Series B Preferred Stock and (ii) warrants (the "Warrants") to
--------
purchase, subject to the terms and conditions thereof, an aggregate of 240,000
shares of Common Stock;
WHEREAS, in order to induce the Stockholders to purchase their
shares of Series B Preferred Stock and the Warrants, the parties hereto have
agreed to enter into this Agreement pursuant to which the Company has agreed to
grant registration rights with respect to the Registrable Securities (as
hereinafter defined).
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, the parties hereto agree as
follows:
1. Definitions. As used in this Agreement the following
-----------
terms have the meanings indicated:
"Act" means the Securities Act of 1933, as amended.
---
"Affiliate" shall mean any Person who is an "affiliate" as
---------
defined in Rule 12b-2 of the General Rules and Regulations under the Exchange
Act, and any Person controlling, controlled by, or under common control with
Soros Fund Management LLC. For the purposes of this Agreement, "control"
includes the ability to have investment discretion through contractual means or
by operation of law.
"Approved Underwriter" has the meaning assigned such term in
---------------------
Section 3(e).
"Common Stock" means the Common Stock, par value $.01 per
-------------
share, of the Company or any other equity securities of the Company into which
such securities are converted, reclassified, reconstituted or exchanged.
Page 66 of 83 Pages
"Company Underwriter" has the meaning assigned such term in
--------------------
Section 4(a).
"Demand Registration" has the meaning assigned such term in
--------------------
Section 3(a).
"Designated Holder" means each of the Stockholders, and any
------------------
transferee of any of them to whom Registrable Securities have been transferred
in accordance with the provisions of this Agreement, other than a transferee to
whom such securities have been transferred pursuant to a registration statement
under the Securities Act or Rule 144 or Regulation S under the Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended, and the rules and regulations promulgated thereunder.
"Existing Rightholders" means the stockholders of the Company,
---------------------
if any, who have obtained registration rights pursuant to agreements existing on
the date hereof.
"Initiating Holders" has the meaning assigned such term in
-------------------
Section 3(a).
"Inspector" has the meaning assigned such term in Section
---------
6(a)(viii).
"NASD" has the meaning assigned such term in Section
----
6(a)(xiv).
"Person" means any individual, firm, corporation, partnership,
------
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company, government (or an agency or political
subdivision thereof) or other entity of any kind, and shall include any
successor (by merger or otherwise) of such entity.
"QIP" means Quantum Industrial Partners LDC.
---
"Registrable Securities" means each of the following: (a) any
-----------------------
shares of Common Stock owned by the Designated Holders issued or issuable upon
conversion of shares of Series B Preferred Stock or Additional Preferred Stock
(as defined in the Series B Agreement), or upon exercise of the Warrants, (b)
any shares of Common Stock issued or issuable by the Company to any or all of
the Designated Holders during the time that any of such Designated Holders are
holders of shares of Common Stock or shares of Series B Preferred Stock, (c) any
other shares of Common Stock acquired or owned by any of the Designated Holders
and (d) any shares of Common Stock issued or issuable with respect to shares of
Common Stock and shares of Series B Preferred Stock and Additional Preferred
Stock by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise and shares of Common Stock issuable upon conversion,
exercise or exchange thereof.
Page 67 of 83 Pages
"Registration Expenses" has the meaning set forth in Section
----------------------
6(d).
"SEC" means the Securities and Exchange Commission or any
---
similar agency then having jurisdiction to enforce the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended,
--------------
and the rules and regulations promulgated thereunder.
"Series B Agreement" has the meaning assigned such term in the
------------------
recital to this Agreement.
"Series B Preferred Stock" has the meaning assigned such term
-------------------------
in the recital to this Agreement.
"SFM DI" means SFM Domestic Investments LLC.
------
"Stockholders" means Quantum Industrial Partners LDC and SFM
------------
Domestic Investments LLC.
"Warrants" has the meaning assigned such term in the recital
--------
to this Agreement.
2. General; Securities Subject to this Agreement.
---------------------------------------------
(a) Grant of Rights. The Company hereby grants
---------------
registration rights to the Stockholders upon the terms and conditions set forth
in this Agreement.
(b) Registrable Securities. For the purposes of
----------------------
this Agreement, (i) Registrable Securities will cease to be Registrable
Securities when a registration statement covering such Registrable Securities
has been declared effective under the Securities Act by the SEC and such
Registrable Securities have been disposed of pursuant to such effective
registration statement and (ii) the securities of a Designated Holder shall be
deemed not to be Registrable Securities at any time when the Company is
registered pursuant to Section 12 of the Exchange Act and the entire amount of
such Designated Holder's Registrable Securities proposed to be sold in a single
sale are or, in the opinion of counsel satisfactory to the Company and the
Designated Holder, each in their reasonable judgment, may be distributed to the
public pursuant to Rule 144 (or any successor provision then in effect) under
the Securities Act.
(c) Holders of Registrable Securities. A Person
---------------------------------
is deemed to be a holder of Registrable Securities whenever such Person owns of
record Registrable Securities, or holds an option to purchase, or a security
convertible into or exercisable or exchangeable for, Registrable Securities
whether or not such acquisition or conversion has actually been effected and
Page 68 of 83 Pages
disregarding any legal restrictions upon the exercise of such rights. If the
Company receives conflicting instructions, notices or elections from two or more
Persons with respect to the same Registrable Securities, the Company may act
upon the basis of the instructions, notice or election received from the
registered owner of such Registrable Securities. Registrable Securities issuable
upon exercise of an option or upon conversion of another security shall be
deemed outstanding for the purposes of this Agreement.
3. Demand Registration.
-------------------
(a) Request for Demand Registration. At any time
-------------------------------
on or after the date hereof, the holders of more than 50% of the Registrable
Securities outstanding may make a written request for registration (such
Designated Holders making such request being deemed to be "Initiating Holders")
-------------------
of Registrable Securities under the Securities Act, and under the securities or
"blue sky" laws of a reasonable number of jurisdictions designated by such
holder or holders (a "Demand Registration"); provided, however, that the Company
------------------- -------- -------
shall not be required to effect more than two Demand Registrations pursuant to
this Section 3. If at the time of any request to register Registrable Securities
pursuant to this Section 3(a), the Company is engaged in, or has fixed plans to
engage in within ninety (90) days of the time of such request, a registered
public offering or is engaged in any other activity which, in the good faith
determination of the Board of Directors of the Company, would be required to be
disclosed under applicable law as a result of such request or would be adversely
affected by the requested registration, then the Company may at its option
direct that such request be delayed for a reasonable period not in excess of
three (3) months from the effective date of such offering or the date of
completion of such other activity, as the case may be, such right to delay a
request to be exercised by the Company not more than once in any one-year
period. In addition, the Company shall not be required to effect any
registration within three (3) months after the effective date of any other
Registration Statement of the Company. Each such request for a Demand
Registration by the Initiating Holders shall state the amount of the Registrable
Securities proposed to be sold, the intended method of disposition thereof and
the jurisdictions in which registration is desired. Upon a request for a Demand
Registration, the Company shall promptly take such steps as are necessary or
appropriate to prepare for the registration of the Registrable Securities to be
registered.
(b) Effective Demand Registration. The Company
------------------------------
shall use commercially reasonable efforts to cause any such Demand Registration
to become effective not later than forty-five (45) days after it receives a
request under Section 3(a) hereof and to remain effective for the lesser of (i)
the period during which all Registrable Securities registered in the Demand
Registration are sold and (ii) ninety (90) days; provided, however, that if the
-------- -------
Initiating Holders request the Company to withdraw such registration, it shall
constitute a Demand Registration unless the Initiating Holders promptly pay all
of the costs and expenses incurred by the Company in connection with such
registration.
Page 69 of 83 Pages
(c) Expenses. In any registration initiated as a
--------
Demand Registration, the Company shall pay all Registration Expenses (other than
underwriting discounts and commissions and brokerage commissions), including the
reasonable fees and expenses of one counsel selected by the Designated Holders
holding a majority of the Registrable Securities being registered in such
registration ("Holders' Counsel") in connection therewith (not to exceed
-----------------
$15,000), whether or not such Demand Registration becomes effective.
(d) Underwriting Procedures. If the Initiating
------------------------
Holders holding a majority of the Registrable Securities held by all of the
Initiating Holders to which the requested Demand Registration relates so elect,
the offering of such Registrable Securities pursuant to such Demand Registration
shall be in the form of a firm commitment underwritten offering and the managing
underwriter or underwriters selected for such offering shall be the Approved
Underwriter (as hereinafter defined) selected in accordance with Section 3(e).
In such event, if the Approved Underwriter advises the Company in writing that
in its opinion the aggregate amount of such Registrable Securities requested to
be included in such offering is sufficiently large to have a material adverse
effect on the success of such offering, subject to the rights of the Existing
Rightholders, the Company shall include in such registration only the aggregate
amount of Registrable Securities that in the opinion of the Approved Underwriter
may be sold without any such material adverse effect and shall reduce, first as
to the Company and any stockholders who are not Designated Holders as a group,
if any, and then as to the Designated Holders as a group, pro rata within each
group based on the number of Registrable Securities included in the request for
Demand Registration, the amount of Registrable Securities to be included by each
Designated Holder in such registration.
(e) Selection of Underwriters. If any Demand
---------------------------
Registration of Registrable Securities is in the form of an underwritten
offering, the Initiating Holders holding a majority of the Registrable
Securities held by all such Initiating Holders shall select and obtain an
investment banking firm of national reputation to act as the managing
underwriter of the offering (the "Approved Underwriter"); provided, however,
--------------------- -------- -------
that the Approved Underwriter shall, in any case, be acceptable to the Company
in its reasonable judgment.
4. Piggy-Back Registration.
-----------------------
(a) Piggy-Back Rights. If the Company proposes
------------------
to file a registration statement under the Securities Act with respect to an
offering by the Company for its own account or for the account of an Initiating
Holder pursuant to Section 3 of any class of security (other than a registration
statement on Form S-4 or S-8 or any successor forms thereto), then the Company
shall give written notice of such proposed filing to each of the Designated
Holders of Registrable Securities (other than any Initiating Holders), and such
Page 70 of 83 Pages
notice shall describe in detail the proposed registration and distribution and
shall offer such Designated Holders (other than any Initiating Holders) the
opportunity to register the number of Registrable Securities as each such holder
may request. The Company shall, and shall use commercially reasonable efforts
(within ten (10) days of the notice provided for in the preceding sentence) to
cause the managing underwriter or underwriters of a proposed underwritten
offering (the "Company Underwriter") to, permit the Designated Holders of
--------------------
Registrable Securities who have requested in writing (within ten (10) days of
the giving of the notice of the proposed filing by the Company) to participate
in the registration for such offering to include such Registrable Securities in
such offering on the same terms and conditions as the securities of the Company
included therein. In connection with any offering under this Section 4(a)
involving an underwriting, the Company shall not be required to include any
Registrable Securities in such underwriting unless (i) the holders thereof
accept the terms of the underwriting as agreed upon between the Company and the
underwriters selected by it, (ii) if such underwriting has been initiated by the
Company or requested by another party that has contractual registration rights,
all of the shares of Common Stock held by the parties making such request or
entitled to include shares of Common Stock pursuant to the same rights as the
requesting parties have been included in such registration and (iii) all of the
shares of Common Stock held by Existing Rightholders for which such registration
has been requested by such Existing Rightholders have been included in such
registration, and then only in such quantity as will not, in the opinion of the
underwriters, jeopardize the success of the offering by the Company. If in the
opinion of the Company Underwriter the registration of all, or part, of the
Registrable Securities which the Designated Holders have requested to be
included would materially and adversely affect such public offering, then the
Company shall be required to include in the underwriting only that number of
Registrable Securities, if any, which the Company Underwriter believes may be
sold without causing such adverse effect, and the amount of securities to be
offered in the underwriting shall be allocated first, to the Company based on
the number of shares it desires to sell in the underwritten offering for its own
account; and thereafter pro rata among the Initiating Holders and all other
selling stockholders, if any, based on the number of shares otherwise proposed
to be included therein by the Initiating Holders and such other selling
stockholders. If the number of Registrable Securities to be included in the
underwriting in accordance with the foregoing is less than the total number of
shares which the Designated Holders of Registrable Securities have requested to
be included, then the Designated Holders of Registrable Securities who have
requested registration shall participate in the underwriting pro rata based upon
their total ownership of the Registrable Securities. If any Designated Holder
would thus be entitled to include more shares than such holder requested to be
registered, the excess shall be allocated among other requesting Designated
Holders pro rata based upon their total ownership of Registrable Securities.
Page 71 of 83 Pages
(b) Expenses. The Company shall bear all
--------
Registration Expenses (other than underwriting discounts and commissions and
brokerage commissions), including the reasonable fees and expenses of the
Holders' Counsel (not to exceed $15,000), in connection with any registration
pursuant to this Section 4.
5. Holdback Agreements.
-------------------
(a) Restrictions on Public Sale by Designated
--------------------------------------------
Holders. Each Designated Holder of Registrable Securities agrees not to effect
- -------
any public sale or distribution of any Registrable Securities being registered
or of any securities convertible into or exchangeable or exercisable for such
Registrable Securities, including a sale pursuant to Rule 144 under the
Securities Act, during the ninety (90) day period beginning on the effective
date of such registration statement (except as part of such registration), if
and to the extent requested by the Company in the case of a non-underwritten
public offering or if and to the extent requested by the Company Underwriter or
the Approved Underwriter in the case of an underwritten public offering, except
to the extent that such Designated Holder is prohibited by applicable law or
exercise of fiduciary duties from agreeing to withhold Registrable Securities
from sale or is acting in its capacity as a fiduciary or investment adviser. If
requested by the Company Underwriter, each Designated Holder will execute and
deliver a lock-up agreement in a form acceptable to such Underwriter and the
Company for purposes of its obligations under this Section 5. Without limiting
the scope of the term "fiduciary," a Designated Holder shall be deemed to be
acting as a fiduciary or an investment adviser if its actions or the Registrable
Securities proposed to be sold are subject to the Employee Retirement Income
Security Act of 1974, as amended, or the Investment Company Act of 1940, as
amended, or if such Registrable Securities are held in a separate account under
applicable insurance law or regulation.
(b) Restrictions on Public Sale by the Company.
-------------------------------------------
The Company agrees not to effect any public sale or distribution of any of its
securities for its own account, or any securities convertible into or
exchangeable or exercisable for such securities (except pursuant to
registrations on Form S-4 or S-8 or any successor forms thereto), during the
period beginning on the effective date of any Demand Registration in which the
Designated Holders of Registrable Securities are participating and ending on the
earlier of (i) the date on which all shares of Common Stock registered on such
registration statement are sold and (ii) the date thirty (30) days after the
effective date of such registration statement.
6. Registration Procedures.
-----------------------
(a) Obligations of the Company. Whenever
--------------------------------
registration of Registrable Securities has been requested pursuant to Section 3
or 4 of this Agreement, the Company shall use commercially reasonable efforts to
effect the registration and sale of such Registrable Securities in accordance
with the intended method of distribution thereof as promptly as reasonably
practicable, and in connection with any such request, the Company shall, as
promptly as reasonably possible:
Page 72 of 83 Pages
(i) use commercially reasonable efforts to
prepare and file with the SEC a registration statement on any form for which the
Company then qualifies or which counsel for the Company shall deem appropriate
and which form shall be available for the sale of such Registrable Securities in
accordance with the intended method of distribution thereof, and use
commercially reasonable efforts to cause such registration statement to become
effective; provided, however, that (x) before filing a registration statement or
-------- -------
prospectus or any amendments or supplements thereto, the Company shall provide
Holders' Counsel and any other Inspector (as hereinafter defined) with an
adequate and appropriate opportunity to participate in the preparation of such
registration statement and each prospectus included therein (and each amendment
or supplement thereto) to be filed with the SEC, which documents shall be
subject to the review of Holders' Counsel, and (y) the Company shall notify the
Holders' Counsel and each seller of Registrable Securities of any stop order
issued or threatened by the SEC and take all reasonable action required to
prevent the entry of such stop order or to remove it if entered;
(ii) prepare and file with the SEC such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective for the lesser of (x) ninety (90) days and (y) such shorter
period which will terminate when all Registrable Securities covered by such
registration statement have been sold, and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in such registration
statement;
(iii) as soon as reasonably possible,
furnish to each seller of Registrable Securities, prior to filing a registration
statement, copies of such registration statement as is proposed to be filed, and
thereafter such number of copies of such registration statement, each amendment
and supplement thereto (in each case including all exhibits thereto), the
prospectus included in such registration statement (including each preliminary
prospectus) and such other documents as each such seller may reasonably request
in order to facilitate the disposition of the Registrable Securities owned by
such seller;
(iv) use its best efforts to register or
qualify such Registrable Securities under such other securities or "blue sky"
laws of such jurisdictions as any seller of Registrable Securities may
reasonably request, and to continue such qualification in effect in such
jurisdiction for as long as permissible pursuant to the laws of such
jurisdiction, or for as long as any such seller requests or until all of such
Registrable Securities are sold, whichever is shortest, and do any and all other
acts and things which may be reasonably necessary or advisable to enable any
Page 73 of 83 Pages
such seller to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such seller; provided, however, that the Company
-------- -------
shall not be required to (x) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 6(a)(iv), (y) subject itself to taxation in any such jurisdiction or (z)
consent to general service of process in any such jurisdiction;
(v) use its best efforts to cause the
Registrable Securities covered by such registration statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary by virtue of the business and operations of the Company to enable the
seller or sellers of Registrable Securities to consummate the disposition of
such Registrable Securities;
(vi) notify each seller of Registrable
Securities, at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, upon discovery that, or upon the happening
of any event as a result of which, the prospectus included in such registration
statement contains an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which they were made,
and the Company shall promptly prepare a supplement or amendment to such
prospectus (except that the Company may avoid supplementing or amending such
prospectus for up to 90 days when, in the good faith determination of the Board
of Directors of the Company, supplementing or amending such prospectus would
require disclosure under applicable law of any material activity in which the
Company is then engaged, the disclosure of which would adversely affect the
Company) and furnish to each seller a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that,
after delivery to the purchasers of such Registrable Securities, such prospectus
shall not contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which they were made;
(vii) enter into and perform customary
agreements (including an underwriting agreement in customary form with the
Approved Underwriter or Company Underwriter, if any, selected as provided in
Sections 3 or 4) and take such other actions as are prudent and reasonably
required in order to expedite or facilitate the disposition of such Registrable
Securities;
(viii) make available for inspection by any
seller of Registrable Securities, any managing underwriter participating in any
disposition pursuant to such registration statement, Holders' Counsel and any
attorney, accountant or other agent retained by any such seller or any managing
underwriter (each, an "Inspector" and collectively, the "Inspectors"), all
--------- ----------
Page 74 of 83 Pages
financial and other records, pertinent corporate documents and properties of the
Company and its subsidiaries (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's and its subsidiaries' officers,
directors and employees, and the independent public accountants of the Company,
to supply all information reasonably requested by any such Inspector in
connection with such registration statement. Records that the Company
determines, in good faith, to be confidential and which it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors unless (x)
the disclosure of such Records is necessary to avoid or correct a misstatement
or omission in the registration statement, (y) the release of such Records is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction or is requested by any regulatory body (including the National
Association of Insurance Commissioners) or (z) the information in such Records
was known to the Inspectors on a non-confidential basis prior to its disclosure
by the Company or has been made generally available to the public. Each seller
of Registrable Securities agrees that it shall, upon learning that disclosure of
such Records is sought in a court of competent jurisdiction, give notice to the
Company and allow the Company, at the Company's expense, to undertake
appropriate action to prevent disclosure of the Records deemed confidential;
(ix) if such sale is pursuant to an
underwritten offering, use its best efforts to obtain a "cold comfort" letter
from the Company's independent public accountants in customary form and covering
such matters of the type customarily covered by "cold comfort" letters as
Holders' Counsel or the managing underwriter reasonably request; provided,
--------
however, that the Company shall not be required to obtain such a letter from its
- -------
former independent public accountants;
(x) use its best efforts to furnish, at the
request of any seller of Registrable Securities on the date such securities are
delivered to the underwriters for sale pursuant to such registration or, if such
securities are not being sold through underwriters, on the date the registration
statement with respect to such securities becomes effective, an opinion, dated
such date, of counsel representing the Company for the purposes of such
registration, addressed to the underwriters, if any, and to the seller making
such request, covering such legal matters with respect to the registration in
respect of which such opinion is being given as such seller may reasonably
request and are customarily included in such opinions;
(xi) otherwise use its best efforts to
comply with all applicable rules and regulations of the SEC, and make available
to its security holders, as soon as reasonably practicable but no later than
fifteen (15) months after the effective date of the registration statement, an
earnings statement covering a period of twelve (12) months beginning after the
effective date of the registration statement, in a manner which satisfies the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
Page 75 of 83 Pages
(xii) cause all such Registrable Securities
to be listed on each securities exchange on which similar securities issued by
the Company are then listed, provided, that the applicable listing requirements
are satisfied;
(xiii) keep Holders' Counsel advised in
writing as to the initiation of any registration under Section 3 or 4 hereunder
and provide Holders' Counsel with copies of any SEC filings made in connection
therewith;
(xiv) cooperate with each seller of
Registrable Securities and each underwriter participating in the disposition of
such Registrable Securities and their respective counsel in connection with any
filings required to be made with the National Association of Securities Dealers,
Inc. (the "NASD"); and
----
(xv) use commercially reasonable efforts to
take all other steps necessary to effect the registration of the Registrable
Securities contemplated hereby.
(b) Obligations of Each Designated Holder of
--------------------------------------------
Registrable Securities. Following the filing of a registration statement
- -----------------------
registering the Eligible Securities of any Designated Holder and during any
period that the registration statement is effective, each such Designated Holder
shall:
(i) not effect any stabilization
transactions or engage in any stabilization activity in connection with any
securities of the Company in contravention of Regulation M under the Securities
Exchange Act of 1934, as amended (the "Exchange Act");
(ii) furnish each broker or dealer through
whom such Designated Holder offers Eligible Securities such number of copies of
the prospectus as the broker may require and otherwise comply with the
prospectus delivery requirements under the Securities Act;
(iii)report to the Company each month all
sales and other dispositions of Eligible Securities made by such Designated
Holder during said month;
(iv) not, and shall not permit any
Affiliated Purchaser (as that term is defined in Regulation M under the Exchange
Act) to, bid for or purchase for any account in which such Designated Holder has
a beneficial interest, or attempt to induce any other person to purchase, any
securities of the Company in contravention of Regulation M under the Exchange
Act;
Page 76 of 83 Pages
(v) not offer or agree to pay, directly or
indirectly, to anyone any compensation for soliciting another to purchase, or
for purchasing (other than for such Designated Holder's own account), any
securities of the Company on a national securities exchange in contravention of
Regulation M under the Exchange Act;
(vi) cooperate in all reasonable respects
with the Company as it fulfills its obligations under this Agreement; (vii)
furnish such information concerning such Designated Holder and the distribution
of the Eligible Securities as the Company may from time to time request to the
extent required by federal securities laws; and
(viii) sell Eligible Securities only in the
manner described in the Registration Statement or as otherwise permitted by
federal securities laws.
(c) Notice to Discontinue. Each Designated
------------------------
Holder of Registrable Securities agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section
6(a)(vi), such Designated Holder shall forthwith discontinue disposition of
Registrable Securities pursuant to the registration statement covering such
Registrable Securities until such Designated Holder's receipt of the copies of
the supplemented or amended prospectus contemplated by Section 6(a)(vi). If the
Company shall give any such notice, the Company shall extend the period during
which such registration statement shall be maintained effective pursuant to this
Agreement (including, without limitation, the period referred to in Section
6(a)(ii)) by the number of days during the period from and including the date of
the giving of such notice pursuant to Section 6(a)(vi) to and including the date
when the Designated Holder shall have received the copies of the supplemented or
amended prospectus contemplated by and meeting the requirements of Section
6(a)(vi).
(d) Registration Expenses. The Company shall pay
---------------------
all expenses (other than as set forth in Sections 3(c) and 4(b)) arising from or
incident to the performance of, or compliance with, this Agreement, including,
without limitation, (i) SEC, stock exchange and NASD registration and filing
fees, (ii) all fees and expenses incurred in complying with securities or "blue
sky" laws (including reasonable fees, charges and disbursements of Holders'
Counsel in connection with "blue sky" qualifications of the Registrable
Securities), (iii) all printing, messenger and delivery expenses, (iv) the fees,
charges and disbursements of counsel to the Company and of its independent
public accountants and any other accounting and legal fees, charges and expenses
incurred by the Company (including, without limitation, any expenses arising
from any special audits incident to or required by any registration or
qualification) and (v) any liability insurance or other premiums for insurance
obtained in connection with any Demand Registration or piggy-back registration
pursuant to the terms of this Agreement, regardless of whether such registration
statement is declared effective; provided, however, that, in connection with the
-------- -------
registration or qualification of the Eligible Securities under state securities
laws, nothing herein shall be deemed to require the Company to make any payments
to third parties in order to obtain "lock-up," escrow or other extraordinary
agreements. All of the expenses described in this Section 7 are referred to
herein as "Registration Expenses."
---------------------
Page 77 of 83 Pages
7. Indemnification; Contribution.
-----------------------------
(a) Indemnification by the Company. The Company
------------------------------
agrees to indemnify and hold harmless, to the fullest extent permitted by law,
each Designated Holder, its officers, directors, trustees, partners, employees,
advisors and agents and each Person who controls (within the meaning of the
Securities Act or the Exchange Act) such Designated Holder from and against any
and all losses, claims, damages, liabilities and expenses (including reasonable
costs of investigation) caused by any untrue statement of a material fact
contained in any registration statement, prospectus or notification or offering
circular (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or caused by any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein (in the case of a prospectus, in light of the
circumstances under which they were made) not misleading, except insofar as the
same are caused by or contained in any information concerning such Designated
Holder furnished in writing to the Company by such Designated Holder expressly
for use therein or caused by such Designated Holder's failure to deliver a copy
of the prospectus or any amendments or supplements thereto in accordance with
the requirements of the Securities Act after the Company has furnished such
Designated Holder with a copy of the same. The Company shall also provide
customary indemnities to any underwriters of the Registrable Securities, their
officers, directors and employees and each Person who controls such underwriters
(within the meaning of the Securities Act and the Exchange Act) to the same
extent as provided above with respect to the indemnification of the Designated
Holders of Registrable Securities.
(b) Indemnification by Designated Holders. In
---------------------------------------
connection with any registration statement in which a Designated Holder is
participating pursuant to Section 3 or 4 hereof, each such Designated Holder
shall furnish to the Company in writing such information with respect to such
Designated Holder as the Company may reasonably request or as may be required by
law for use in connection with any such registration statement or prospectus and
each Designated Holder agrees to indemnify and hold harmless, to the fullest
extent permitted by law, the Company, any underwriter retained by the Company
and their respective directors, officers, employees and each Person who controls
the Company or such underwriter (within the meaning of the Securities Act and
the Exchange Act) to the same extent as the foregoing indemnity from the Company
to the Designated Holders, but only with respect to any such information with
Page 78 of 83 Pages
respect to such Designated Holder furnished in writing to the Company by such
Designated Holder expressly for use therein, or with respect to such Designated
Holder's failure to deliver a copy of the prospectus or any amendments or
supplements thereto in accordance with the requirements of the Securities Act
after the Company has furnished such Designated Holder with a copy of the same;
provided, however, that the total amount to be indemnified by such Designated
- -------- -------
Holder pursuant to this Section 7(b) shall be limited to the net proceeds
received by such Designated Holder in the offering to which the registration
statement or prospectus relates.
(c) Conduct of Indemnification Proceedings. Any
---------------------------------------
Person entitled to indemnification hereunder (the "Indemnified Party") agrees to
-----------------
give prompt written notice to the indemnifying party (the "Indemnifying Party")
-------------------
after the receipt by the Indemnified Party of any written notice of the
commencement of any action, suit, proceeding or investigation or threat thereof
made in writing for which the Indemnified Party intends to claim indemnification
or contribution pursuant to this Agreement; provided, however, that the failure
-------- -------
so to notify the Indemnifying Party shall not relieve the Indemnifying Party of
any liability that it may have to the Indemnified Party hereunder except to the
extent that the delay or failure to give such notice materially prejudices the
ability of the Indemnifying Party to defend such action. If notice of
commencement of any such action is given to the Indemnifying Party as above
provided, the Indemnifying Party shall be entitled to participate in and, to the
extent it may wish, jointly with any other Indemnifying Party similarly
notified, to assume the defense of such action at its own expense, with counsel
chosen by it and satisfactory to such Indemnified Party. The Indemnified Party
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be paid by the Indemnified Party unless (i) the Indemnifying Party agrees
to pay the same, (ii) the Indemnifying Party fails to assume the defense of such
action with counsel satisfactory to the Indemnified Party in its reasonable
judgment or (iii) the named parties to any such action (including any impleaded
parties) have been advised by such counsel that representation of such
Indemnified Party and the Indemnifying Party by the same counsel would be
inappropriate under applicable standards of professional conduct, in which case
the Indemnifying Party shall not have the right to assume the defense of such
action on behalf of such Indemnified Party. No Indemnifying Party shall be
liable for any settlement entered into without its written consent, which
consent shall not be unreasonably withheld.
(d) Contribution. If the indemnification
------------
provided for in this Section 7 from the Indemnifying Party is unavailable to an
Indemnified Party hereunder in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then the Indemnifying Party, in
lieu of indemnifying such Indemnified Party, shall contribute to the amount paid
or payable by such Indemnified Party as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is appropriate to reflect
the relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
faults of such Indemnifying Party and Indemnified Party shall be determined by
Page 79 of 83 Pages
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or relates to information
supplied by, such Indemnifying Party or Indemnified Party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in Sections 7(a), 7(b)
and 7(c), any reasonable legal or other fees, charges or expenses reasonably
incurred by such party in connection with any investigation or proceeding;
provided that the total amount to be indemnified by such Designated Holder shall
- --------
be limited to the net proceeds received by such Designated Holder in the
offering.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person.
8. Rule 144.
--------
The Company covenants that it shall file any reports required
to be filed by it under the Exchange Act; and that it shall take such further
action as each Designated Holder of Registrable Securities may reasonably
request (including providing any information necessary to comply with Rules 144
and 144A under the Securities Act), all to the extent required from time to time
to enable such Designated Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 under the Securities Act, as such rules may be amended
from time to time, or (b) any similar rules or regulations hereafter adopted by
the SEC. The Company shall, upon the request of any Designated Holder of
Registrable Securities, deliver to such Designated Holder a written statement as
to whether it has complied with such requirements.
9. Miscellaneous.
(a) Recapitalizations, Exchanges, etc. The
-------------------------------------
provisions of this Agreement shall apply, to the full extent set forth herein,
with respect to (i) the shares of Common Stock and (ii) to any and all equity
securities of the Company or any successor or assign of the Company (whether by
merger, consolidation, sale of assets or otherwise) which may be issued in
respect of, in conversion of, in exchange for or in substitution of, the shares
of Common Stock and shall be appropriately adjusted for any stock dividends,
splits, reverse splits, combinations, recapitalizations and the like occurring
after the date hereof.
Page 80 of 83 Pages
(b) No Inconsistent Agreements. The Company
----------------------------
shall not enter into any agreement with respect to its securities that is
inconsistent with the rights granted to the Designated Holders in this Agreement
or grant any additional registration rights to any Person or with respect to any
securities which are not Registrable Securities which are prior in right to or
inconsistent with the rights granted in this Agreement.
(c) Remedies. The Designated Holders, in
--------
addition to being entitled to exercise all rights granted by law, including
recovery of damages, shall be entitled to specific performance of their rights
under this Agreement. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agrees to waive in any action for
specific performance the defense that a remedy at law would be adequate.
(d) Amendments and Waivers. Except as otherwise
----------------------
provided herein, the provisions of this Agreement may not be amended, modified
or supplemented, and waivers or consents to departures from the provisions
hereof may not be given unless consented to in writing by all of the parties
hereto.
(e) Notices. All notices, demands and other
-------
communications provided for or permitted hereunder shall be made in writing and
shall be made by registered or certified first-class mail, return receipt
requested, telecopier, overnight courier service or personal delivery:
(i) if to QIP:
Kaya Flamboyan 9,
Villemstad
Curacao
Netherlands-Antilles
with a copy to:
Soros Fund Management LLC
888 Seventh Avenue
New York, NY 10016
Telecopy: (212) 664-0544
Attn: Michael Neus, Esq.
Page 81 of 83 Pages
and a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Telecopy: (212) 757-3990
Attention: Matthew Nimetz, Esq.
(ii) If to SFM DI:
Soros Fund Management LLC
888 Seventh Avenue
New York, NY 10016
Telecopy: (212) 664-0544
Attn: Michael Neus, Esq.
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Telecopy: (212) 757-3990
Attention: Matthew Nimetz, Esq.
(iii) if to the Company:
Integra LifeSciences Corporation
105 Morgan Lane
Plainsboro, NJ 08536
Telecopy: (609) 799-3297
Attention: Stuart M. Essig,
President and CEO
with a copy to:
Drinker Biddle & Reath LLP
105 College Road East
Princeton, NJ 08542-0627
Telecopy: (609) 799-7000
Attention: John E. Stoddard III, Esq.
(iv) if to any other Designated Holder, at
its address as it appears on the
transfer books of the Company
All such notices and communications shall be deemed to have
been duly given when delivered by hand, if personally delivered; when delivered
by courier, if delivered by commercial courier service; five (5) Business Days
after being deposited in the mail, postage prepaid, if mailed; and when receipt
is acknowledged, if telecopied.
Page 82 of 83 Pages
(f) Successors and Assigns; Third Party
--------------------------------------------
Beneficiaries. This Agreement shall inure to the benefit of and be binding upon
- -------------
the successors and assigns of each of the parties hereto. The registration
rights and the other rights of the Designated Holders contained in this
Agreement shall be, with respect to any Registrable Security, (i) automatically
transferred from QIP or SFM DI, as the case may be, to any Affiliate thereof,
and (ii) in all other cases, transferred by the Designated Holders only with the
consent of the Company. All of the obligations of the Company hereunder shall
survive any such transfer. No Person other than the parties hereto and their
successors and permitted assigns is intended to be a beneficiary of any of the
rights granted hereunder.
(g) Counterparts. This Agreement may be executed
------------
in any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are
--------
for convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE
--------------
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
JERSEY, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
(j) Severability. If any one or more of the
------------
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired,
it being intended that all of the rights and privileges of the Designated
Holders shall be enforceable to the fullest extent permitted by law.
(k) Entire Agreement. This Agreement is intended
----------------
by the parties as a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein and in the Series B Agreement. This Agreement supersedes
all prior agreements and understandings between the parties with respect to such
subject matter.
(l) Further Assurances. Each of the parties
-------------------
shall execute such documents and perform such further acts as may be reasonably
required or desirable to carry out or to perform the provisions of this
Agreement.
Page 83 of 83 Pages
IN WITNESS WHEREOF, the undersigned have executed, or have
caused to be executed, this Agreement on the date first written above.
INTEGRA LIFESCIENCES CORPORATION
By: /S/ STUART M. ESSIG
___________________________________
Name: Stuart M. Essig
Title: President and Chief
Executive Officer
QUANTUM INDUSTRIAL PARTNERS LDC
By: /S/ MICHAEL C. NEUS
___________________________________
Name: Michael C. Neus
Title: Attorney-in-Fact
SFM DOMESTIC INVESTMENTS LLC
By: /S/ MICHAEL C. NEUS
___________________________________
Name: Michael C. Neus
Title: