EXHIBIT 2.9
SUBSCRIPTION
AND
ASSET CONTRIBUTION AGREEMENT
THIS SUBSCRIPTION AND ASSET CONTRIBUTION AGREEMENT, is made this 16th
day of June, 1998, by and between CENTRA HealthPlan LLC, a Delaware Limited
Liability Corporation to be formed ("CENTRA LLC" or "LLC"), and its prospective
members: HEALTHPLAN SERVICES, INC., a Florida corporation ("HPS"), and CENTRA
BENEFIT SERVICES, INC., a Minnesota corporation ("CBS" or the "Contributor").
W I T N E S S E T H :
WHEREAS, the Contributor owns or leases certain assets (the
"Contributed Assets") comprising substantially all the assets used in a third
party administration business which administers self-insured employee health
benefit plans under administrative contracts with employers who sponsor such
plans (the "Business"); and
WHEREAS, subject to the terms and conditions of this Agreement, the
Contributor and HPS desire to set forth the terms and conditions under which
they will organize CENTRA LLC, and, at organization, (i) HPS will subscribe for
and contribute $201,400.00 in return for 1% of the Interests in CENTRA LLC and
(ii) the Contributor will contribute the Contributed Assets to the LLC subject
to the assumption by the LLC of certain Assumed Liabilities all as hereinafter
set forth and in return therefor CENTRA LLC will issue to the Contributor 99% of
the Interests in CENTRA LLC; and
WHEREAS, immediately after contribution the Contributed Assets to
CENTRA LLC and receiving from CENTRA LLC 99% of the Interests of CENTRA LLC, HPS
intends to purchase from the Contributor a portion of such Interests of the LLC
totalling 49.1% of the total outstanding Interests of the CENTRA LLC in
accordance with an LLC Interest Purchase Agreement of like date herewith between
the Contributor and HPS.
NOW, THEREFORE, in consideration of the premises and the mutual
promises, representations, warranties and covenants hereinafter set forth, the
parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. The capitalized terms used herein will have the
meanings ascribed to them in EXHIBIT 1.1 hereto. Unless the context otherwise
requires, such capitalized terms will include the singular and plural and the
conjunctive and disjunctive forms of the terms defined. Additionally,
capitalized terms defined in the LLC Interest Purchase Agreement or the Centra
LLC Operating Agreement which are not otherwise defined herein shall have the
meanings used in those agreements.
ARTICLE 2
COVENANTS AND UNDERTAKINGS.
2.1 FORMATION OF CENTRA LLC AND CONTRIBUTION OF THE CONTRIBUTED ASSETS
AND BUSINESS; ASSUMPTION OF ASSUMED LIABILITIES BY CENTRA LLC. Subject to the
terms and conditions hereinafter set forth, at the Closing (i)the Contributor
and HPS shall organize CENTRA LLC by executing the CENTRA Limited Liability
Company Operating Agreement in substantially the form as set forth in EXHIBIT
2.1(A) attached hereto and filing with the Secretary of State of the State of
Delaware such organizational documents as are required under the Delaware
Limited Liability Company Act, (ii) HPS shall contribute the sum of $201,400.00
to the capital of CENTRA LLC in return for a 1% interest in the LLC, (iii) the
Contributor shall contribute the Contributed Assets to CENTRA LLC, free and
clear of all liens, claims, charges, security interests and other encumbrances
of any nature whatsoever other than Permitted Liens and those associated with
the Assumed Liabilities, in return for a 99% interest in CENTRA LLC, and (iv)
CENTRA LLC shall assume the Assumed Liabilities. CENTRA LLC shall not assume any
of the Excluded Liabilities, which shall be retained by the Contributor in their
entirety. Such contribution, transfer, conveyance and delivery shall be
evidenced by the delivery by Contributor to CENTRA LLC of such documents of
transfer as HPS shall reasonably request.
2.2 POST-CLOSING AUDIT AND CONTRIBUTION REQUIREMENTS OF CONTRIBUTOR;
PROCEDURES AND DETERMINATION OF THE DEFICIENCY AMOUNT DUE FROM CONTRIBUTOR. The
percentage of Interests received by the Contributor for the Contributed Assets
has been determined based upon the assumption that a post-Closing audit of the
opening balance sheet of CENTRA LLC as of the close of business on the Closing
Date will verify that, as of the close of business on the Closing Date, CENTRA
LLC's Adjusted Working Capital will be not less than $701,400.00 and Net
Non-Current Assets as determined
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from the Audited Opening Balance Sheet prepared in connection with such audit
will not be less than the amounts thereof shown on the unaudited consolidated
balance sheet as of 2/28/98 (the "Unaudited 2/28/98 Balance Sheet") provided to
HPS by Contributor and attached as EXHIBIT 3.8 hereto. It is the intent of the
parties that at the Closing the parties will review a trial balance sheet
prepared by Contributor utilizing available information and projections for any
information not available so as to determine in good faith the position of the
Contributor with respect to the working capital of the Business and the changes
in the non-current assets and liabilities of the Business to be contributed.
Based upon this trial balance sheet the Contributor will in good faith pay down
bank debt and contribute cash to the Business being transferred as a part of the
Transferred Assets so as to minimize the amount of any Deficiency Amount in
connection with the post closing audit detailed below. This will be accomplished
by Contributor instructing HPS to the extent appropriate to disburse part of the
HPS Interests Cash Purchase Price Amount to CENTRA LLC or to the Contributor's
lender at Closing. Such disbursements shall be documented in a closing cash
disbursements instruction letter from the Contributor to HPS. In order to verify
the LLC's Adjusted Working Capital and Net Non-Current Assets, CENTRA LLC will
at its expense prepare an opening balance sheet after the contributions by
Contributor and HPS contemplated above and after the assumption of the Assumed
Liabilities and will have such opening balance sheet audited by the Tampa office
of Price Waterhouse LLP (the "Audited Opening Balance Sheet"). In connection
with the audit, any account or part of any account receivable included on the
Audited Opening Balance Sheet which is more than ninety (90) calendar days past
due or which is being disputed by the debtor will have a reserve established
therefor by the auditor. To the extent such accounts are subsequently collected
by CENTRA LLC, CENTRA LLC shall reimburse Contributor for the amount of the
reserve so collected. To the extent that the Adjusted Working Capital is less
than $701,400.00(US) and Net Non-Current Assets as determined from the Audited
Opening Balance Sheet is less than $2,772,000.00(US) (each a "Deficiency
Amount"), the Contributor shall make an additional contribution to the CENTRA
LLC, in the aggregate of such Deficiency Amounts as shown on the Final Statement
of Deficiency Amount (a "Deficiency Amount Contribution") provided that if such
Deficiency Amount Contribution is less than $250,000.00 (US), it shall be
payable only from Post Closing Payments due to Contributor from HPS as specified
in the LLC Interest Purchase Agreement. If the Deficiency Amount Contribution is
$250,000.00(US) or more, the Contributor shall pay such amount, in cash or other
readily available funds, to CENTRA LLC within 10 Business Days of final
determination. The Deficiency Amount shall be determined in accordance with the
following procedures:
(i) In order to determine the Deficiency ▇▇▇▇▇▇,
▇
if any, payable by Contributor to CENTRA LLC, within 120 days of the
Closing Date, CENTRA LLC will deliver to Contributor and HPS the
Audited Opening Balance Sheet together with a statement setting forth
the Deficiency Amount, if any, derived therefrom (a "Statement of
Deficiency Amount"). Thereafter, Contributor and HPS shall have 45
days during which its authorized representatives shall have full
access at all reasonable times to the properties, books, records and
personnel of the CENTRA LLC and the Contributor relating to periods
prior to the opening balance sheet for purposes of reviewing and
resolving any disputes concerning the Audited Opening Balance Sheet
and the Statement of Deficiency Amount. Contributor and HPS shall have
30 days following delivery to them of the Audited Opening Balance
Sheet and the Statement of Deficiency Amount during which to notify
CENTRA LLC of any dispute. Prior to the expiration of such 30-day
period, if Contributor or HPS has any objection to the Audited Opening
Balance Sheet or the Statement of Deficiency Amount, such disputing
party (a "Disputing Party") shall give written notice to CENTRA LLC
and the other non-disputing party of such objection to the Audited
Opening Balance Sheet (a "Disputing Party's Objection Notice") which
notice shall set forth in reasonable detail the basis for such
dispute. If neither HPS nor the Contributor notifies CENTRA LLC and
the other that they are disputing any item contained in the Audited
Opening Balance Sheet or the Statement of Deficiency Amount prior to
the close of business on the 30th day after delivery thereof, the
Audited Opening Balance Sheet and Statement of Deficiency Amount
provided by the CENTRA LLC shall be final, conclusive and binding and
shall be deemed to be the "Final Opening Balance Sheet" and the "Final
Statement of Deficiency Amount." In the event that Contributor shall
so notify CENTRA LLC of any dispute it shall notify CENTRA LLC and HPS
of the amount if any which is not in dispute (the "Non Disputed
Deficiency Amount") and such Non Disputed Deficiency Amount shall be
payable to the CENTRA LLC as specified above. The Contributor and HPS
shall cooperate in good faith to resolve any dispute as promptly as
practicable. If CENTRA LLC, HPS and the Contributor are unable to
resolve any such dispute within 15 days of a Disputing Party's
delivery of the Disputing Party's Objection Notice, such dispute shall
be resolved by the Settlement Auditor. In resolving such dispute, the
Settlement Auditor shall make such revisions to the Audited Opening
Balance Sheet and Statement of Deficiency Amount as it deems
appropriate in accordance
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with GAAP in order to make a determination of the Deficiency Amount,
if any, in accordance with GAAP as promptly as practicable provided
that the Deficiency Amount as so determined must be between (or equal
to one of) the high and low amounts proposed by Contributor, HPS and
CENTRA LLC in the dispute. Such determination shall be final,
conclusive and binding on the parties and shall be deemed a final
arbitration award that is enforceable pursuant to all terms of the
Federal Arbitration Act, 9 U.S.C. ?? 1 ET SEQ. (the "Federal
Arbitration Act"). The expenses relating to the engagement of the
Settlement Auditor shall be paid by CENTRA LLC until the Contributor's
Put Right has been exercised, after which the expenses shall be paid
one-half by HPS and one-half by the Contributor. In the event of a
dispute, the Audited Opening Balance Sheet and Statement of Deficiency
Amount, as modified by the Settlement Auditor, shall be the "Final
Opening Balance Sheet" and the "Final Statement of Deficiency Amount."
(ii) Upon determination of the Final Opening Balance Sheet and
the Final Statement of Deficiency Amount, if the Deficiency Amount is
less than $250,000.00, HPS shall deduct the Deficiency Amount shown
thereon less any undisputed portion previously deducted pursuant to
subparagraph (i) above, from the Post Closing Payments as specified in
the LLC Interest Purchase Agreement and shall pay such amount instead
to CENTRA LLC. If the Deficiency Amount is $250,000.00 or more, the
Deficiency Amount, less any undisputed portion previously paid
pursuant to subparagraph (i) above, shall be paid by the Contributor
to CENTRA LLC in cash or other immediately available funds within 10
Business Days of final determination. The payment of or deduction of
the Deficiency Amount shall not be subject to the limitation
provisions of Section 8.4 and 8.6 hereof.
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2.3 EMPLOYEE MATTERS.
(a) EMPLOYEE LEASE AND TRANSFERRED EMPLOYEES. No employees of the
Contributor shall become employees of CENTRA LLC on the Closing Date. On the
Closing Date, CENTRA LLC shall identify to Contributor those employees of the
Contributor that CENTRA LLC would like to lease from the Contributor (the
"Leased Employees") and shall enter into an employee leasing agreement (the
"Employee Lease Agreement") with the Contributor covering such employees in the
form of EXHIBIT 2.3 hereof. From and after the Closing, as between the
Contributor and the Employee, the Contributor shall be solely responsible for
the salary and benefits of the Leased Employees for so long as the Employee
Lease Agreement is in force. No employee liability of Contributor shall be
transferred to or assumed by CENTRA LLC except for the liability of CENTRA LLC
for payments to Contributor under the Employee Lease Agreement for those
employees leased by the CENTRA LLC. Without limiting the foregoing, the
Contributor shall pay and be liable for all payments due or owing to its
employees or former employees (whether or not such employees become Leased
Employees or Transferred Employees) which result from any event occurring on or
prior to the date they become Transferred Employees as contemplated below,
including but not limited to workers' compensation expenses and health care
costs and any severance or other benefit payments due to such employees as a
result of any termination or deemed termination of such employees by Contributor
or as a result of the transactions contemplated hereby. The Contributor will
retain all liability for the amount of any accrued or accruable vacation, sick
leave, personal time and other benefit plans applicable to its employees for all
periods until they become Transferred Employees. The Employee Lease Agreement
may be terminated at any time by agreement of the parties thereto but shall not
extend beyond January 1, 1999, at which time CENTRA LLC shall offer employment
to such of Contributor's employees as it deems appropriate in its sole
discretion (the "Transferred Employees"). Contributor shall have the right to
provide WARN Act notices to its employees when required by law; however any WARN
Act liabilities shall not be an Assumed Liability but shall remain the liability
of the Contributor. CENTRA LLC shall have no liability or responsibility to
those employees who are not offered employment with CENTRA LLC and any
termination or other liabilities to such persons shall be the Contributor's
responsibility. CENTRA LLC shall be responsible for the salaries and other costs
of all Transferred Employees from and after the termination of the Employee
Lease Agreement, and such Transferred Employees will be eligible to participate
in CENTRA LLC-sponsored Plans from and after the termination date of the
Employee Lease Agreement. Nothing contained in this Section 2.3 shall be deemed
to relieve HPS of its liabilities under Section 2.9 hereof.
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2.4 FIDUCIARY ACCOUNTS. At the Closing, the Contributor shall transfer
to CENTRA LLC exclusive control and signature authority over all fiduciary
accounts maintained by Contributor for customers whose contracts are transferred
to CENTRA LLC as a part of the Contributed Assets. Within thirty days of the
Closing, Contributor shall provide to CENTRA LLC a reconciliation and accounting
for each such account.
2.5 TRANSITION MATTERS. At the Closing, CENTRA LLC, HPS and Contributor
shall enter into an Administrative Services Agreement in the form of EXHIBIT 2.5
hereto which sets out certain agreements between them with respect to the
transfer of the Business and its conduct after transfer. In addition to the
matters set forth therein, the parties agree that the Contributor will inform
all stop loss and other insurance carriers who provide coverage to employer
customers of the Business that the administration of such cases including the
claims processing has been irrevocably assigned and transferred to CENTRA LLC,
and Contributor will take such other action as CENTRA LLC may reasonably request
to insure that such responsibilities are transferred.
2.6 CONSENTS. The Contributor, CENTRA LLC and HPS shall cooperate, and
use their best efforts, to make all filings and obtain all licenses, permits,
consents, approvals, authorizations, qualifications and orders of governmental
authorities and other third parties necessary to consummate the transactions
contemplated by this Agreement. Notwithstanding the foregoing, nothing herein
shall obligate or be construed to obligate HPS or Contributor to make any
payment to any third party in order to obtain the consent or approval of such
third party other than license applications or transfer fees to governmental
authorities. With respect to any required consent or approval which is not
obtained prior to the Closing, the Contributor, CENTRA LLC and HPS shall each
use commercial reasonable efforts to obtain any such consent or approval after
the Closing Date until such consent or approval has been obtained and the
Contributor shall provide CENTRA LLC with the same benefits arising under such
agreements, including performance by the Contributor as agent, and/or
performance by HPS or CENTRA LLC as sub-contractor or sub-agent, if legally and
commercially feasible, PROVIDED that CENTRA LLC shall provide the Contributor
with such access to the premises, books and records and personnel as is
reasonably necessary to enable the Contributor to perform its obligations under
such agreements and CENTRA LLC shall pay or satisfy the corresponding
liabilities for the enjoyment of such benefits to the extent CENTRA LLC would
have been responsible therefor if such consent or approval had been obtained.
CENTRA LLC shall indemnify, defend and hold CBS harmless for any claims,
damages, actions and costs arising from HPS's actions after Closing to the
extent such
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actions result in claims being asserted against CBS by reason of HPS's actions
as a subcontractor or subagent.
2.7 GOOD FAITH DEALING. Each of the parties hereto agrees that it will
at all times act in good faith and with fair dealing with respect to its
obligations under this Agreement.
2.8 CLOSING. The Closing will take place at the offices of Fowler,
White, Gillen, Boggs, ▇▇▇▇▇▇▇▇▇ and Banker P.A., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇,
▇▇▇▇▇▇▇, at 10:00 a.m. local time on the Closing Date, or by mail, in which
instance the transaction shall be deemed to have been closed in Tampa, Florida,
when signed in that state by CENTRA LLC after delivery of signed documents by
the Contributor and HPS.
2.9 ACCOUNTING FOR CERTAIN CONTRIBUTOR RETAINED EXPENSE ITEMS. At the
Closing, the Contributor will retain as an Excluded Liability responsibility for
the payment of all Designated Expense Items. If the aggregate of all such
Designated Expense Items determined as of March 15, 1999 (including reasonable
reserves for any employee related claims, third party claims which are
unresolved as of such date) exceeds the sum of $2,500,000.00, the excess of such
Designated Expense Items over $2,500,000.00 shall be reimbursed to the
Contributor by CENTRA LLC. Likewise, if the aggregate amount of such Designated
Expense Items are less than $2,500,000.00 as of March 15, 1999 (including
reasonable reserve for any third party claims which are unresolved as of such
date), such shortfall shall be paid by the Contributor to CENTRA LLC. Such
payments ("Retained Expense Reimbursements") will be made by the party charged
therewith within ten Business Days after receipt of an acceptable accounting
thereof from the Contributor, which accounting shall be delivered to CENTRA LLC
and HPS by April 15, 1999. Any dispute with respect to the financial aspects of
the accounting shall be resolved by a Settlement Auditor in accordance with the
Dispute Resolution Procedures. Any other dispute shall be settled in accordance
with the Dispute Resolution Procedures by an arbitrator. Any reserves
established in the above-referenced accounting shall be accounted for between
the parties when the claims related thereto are finally resolved with the amount
of any payments made is excess of the reserve being reimbursed to the party
paying money under the foregoing provisions and the amount of any payments which
are less than the reserve being paid to the party receiving money under the
foregoing provisions. If any claims are received by the Contributor after March
15, 1999 and prior the June 30, 2000, when they are finally determined, they
shall be accounted for in the same manner as they would have been accounted for
had they been resolved prior to March 15, 1999.
2.10 POST CLOSING RECEIPTS. From and after the Closing, the Contributor
will promptly pay over and forward to CENTRA LLC any
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receipts of the Business received by the Contributor from any customer or past
customer or any other revenues which are received by the Contributor which
should have been a part of the Contributed Assets or otherwise belong to the
Business which was contributed to CENTRA LLC pursuant to the terms of this
Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF THE CONTRIBUTOR
The Contributor represents and warrants to HPS and CENTRA LLC as
follows:
3.1 CAPACITY TO SELL. The Contributor has the full legal right, power,
and authority to contribute, convey, assign, and transfer the Contributed Assets
to CENTRA LLC pursuant to this Agreement.
3.2 ORGANIZATION. The Contributor is a corporation duly organized,
validly existing, and in good standing under the Laws of Minnesota and is duly
qualified to do business as a foreign corporation in good standing in each
jurisdiction in which the ownership of the Business and the use of the
Contributed Assets or the conduct or nature of the Business or the Contributed
Assets makes such qualification necessary. SCHEDULE 3.2 attached hereto sets
forth a true and complete list of each jurisdiction in which the Contributor is
qualified to do business as a foreign corporation by reason of its operation of
the Business or the ownership of the Contributed Assets.
3.3 AUTHORITY. The Contributor has full power and authority to enter
into this Agreement and to perform its obligations hereunder. The execution,
delivery and compliance with the terms of this Agreement by the Contributor and
the performance by the Contributor of its obligations hereunder has been duly
and validly authorized by all necessary action on the part of its Board of
Directors. This Agreement has been duly and validly executed and delivered by
the Contributor and constitutes a legal, valid, and binding obligation of the
Contributor, enforceable against the Contributor in accordance with its terms,
except to the extent that (a) enforcement may be limited by or subject to any
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
conveyance, or similar Laws now or hereafter in effect relating to or limiting
creditors' rights generally, and (b) the remedy of specific performance and
injunctive and other forms of equitable relief are subject to certain equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
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3.4 NO CONFLICTS. Neither the execution and delivery by the Contributor
of this Agreement nor the performance of the obligations of the Contributor
hereunder will:
(a) conflict with or violate any Law or Order applicable to the
Contributor, or any of the Contributed Assets including any Law applicable to
bulk sales of assets;
(b) conflict with or violate any term of the Articles of
Incorporation or Bylaws of the Contributor;
(c) result in the creation or imposition of any Lien upon the
Contributed Assets or conflict with or result in or constitute a default under,
or give to any Person any right of termination, cancellation, acceleration, or
modification in or with respect to, any Contract which is a part of the
Contributed Assets; or
(d) require the Contributor or CENTRA LLC to obtain any material
consent, approval, or action of, or make any material filing with or give any
notice to, any Person except for those consents, filings and notices listed on
SCHEDULE 3.4.
3.5 LITIGATION. Except as disclosed on SCHEDULE 3.5 hereto:
(a) there are no actions, suits, investigations, arbitrations, or
similar proceedings pending or, to the knowledge of the Contributor or the
Shareholders or any of their officers, directors or employees, threatened
against the Contributor which involve or could result in a Lien against the
Business or the Contributed Assets, at law or in equity, in, before, or by any
Person; and
(b) there is no Order outstanding against or involving the
Contributor, or any of the Contributed Assets.
3.6 COMPLIANCE WITH LAWS. The Contributor is not and has not been in
violation (or with or without notice or lapse of time or both, would be in
violation) of any Law or Order applicable to the Business or the Contributed
Assets, except for violations that, individually or in the aggregate, do not or
may not reasonably be expected to have a Material Adverse Effect on the Business
or the Contributed Assets.
3.7 LICENSES.
(a) SCHEDULE 3.7(a) hereto sets forth a true and complete list
of all jurisdictions in which the Contributor or any of its employees are
licensed as insurance brokers, agents, third
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party administrators or utilization review providers and a true and complete
list of each other License held by the Contributor or its employees in
connection with the conduct of the Business or the ownership of the Contributed
Assets.
(b) Except as disclosed on SCHEDULE 3.7(b), the Contributor and
its employees hold all Licenses required in connection with the conduct of the
Business.
(c) The Contributor and its employees have complied with the
terms and conditions of each License disclosed or required to be disclosed on
SCHEDULE 3.7(a), and all such Licenses are valid, binding, and in full force and
effect.
(d) Except as disclosed on SCHEDULE 3.7(d), to the knowledge of
the Contributor, each Person who has been involved in any way with the sale of
any administrative Contract or other product by or through the Contributor and
who, at the time of any such involvement, was required to hold any Licenses for
such involvement, has so held all such required Licenses at all required times.
3.8 FINANCIAL STATEMENTS. The Contributor has delivered to HPS and to
CENTRA LLC true and complete copies of the unaudited consolidated balance sheet
of the Contributor at December 31, 1997 and the related statements of income and
expense for the fiscal year then ended, together with the Unaudited 2/28/98
Balance Sheet and the related statement of income and expense for the period
then ended (collectively the "Financial Statements"), all of which have been
prepared in accordance with GAAP, consistently applied with prior periods,
except as disclosed in SCHEDULE 3.8 attached hereto. Such Financial Statements
present fairly in all material respects the financial position of the
Contributor for the periods indicated.
3.9 NO UNDISCLOSED LIABILITIES. At Closing, there will be no
Liabilities of the Contributor which encumber or otherwise are attached to the
Contributed Assets, except for the Assumed Liabilities and any Liabilities
arising through CENTRA LLC.
3.10 ASSETS NECESSARY TO THE BUSINESS.
(a) ASSETS. The Contributed Assets, including but not limited to
the Tangible Leased Assets and the Tangible Owned Property , comprise all of the
assets that are currently being used in, and all the assets that are necessary
to, the conduct of the Business in the ordinary course and consistent with past
practice and are adequate for the conduct, after the Closing, of the Business in
the ordinary course consistent with past practice. All of the Contributed Assets
are in operating condition and are
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adequate for use by the CENTRA LLC, after the Closing, in the ordinary course of
the Business consistent with past practice. The Contributor currently has and,
at Closing, will transfer to CENTRA LLC title to all such Contributed Assets
free and clear of any Lien, charge or encumbrance other than Permitted Liens
including but not limited to those set forth in SCHEDULE 3.10(a) attached
hereto.
(b) TANGIBLE LEASED ASSETS. SCHEDULE 3.10(b) attached hereto sets
forth all leases and similar Contracts under which the Contributor leases or
otherwise has the right to use any tangible property or tangible assets
currently used in the Business other than those which are Excluded Assets (the
"Tangible Leases"). All of such leases will be assigned to CENTRA LLC as a part
of the Contributed Assets as soon after Closing as possible in accordance with
the provisions of Section 2.6 hereto. The Contributor has, and after assignment,
the CENTRA LLC will have, a valid leasehold interest in or valid right under
each such Tangible Lease to use each such asset.
(c) TANGIBLE OWNED ASSETS. SCHEDULE 3.10(c) of the Agreement sets
forth all material tangible property owned by the Contributor currently used in
the Business whether real or personal in nature (the "Tangible Owned Property").
All such Tangible Owned Property is included in the Contributed Assets.
(d) INTELLECTUAL PROPERTY. SCHEDULE 3.10(d) of this Agreement
sets forth a true and complete list and description of all of the following
assets or properties of the Contributor that are used in or arise from the
conduct of the Business: (i) all registered marks, names, trademarks, service
marks, patents, patent rights, assumed names, logos, trade secrets, copyrights,
processes, know how, procedures, trade names, service marks, and other
intellectual properties (the "Intellectual Property"); and (ii) all computer
software, programs, and similar systems owned by or licensed to the Contributor
(the "Computer Software"). Except as disclosed on SCHEDULE 3.10(D), the
consummation of the transactions contemplated by this Agreement will not (A)
require any consent, approval, or action of, filing with, or payment or notice
to, any Person in connection with the ownership or use of such Intellectual
Property and Computer Software, or (B) invalidate, terminate, or violate any
term applicable to the ownership or use of such Intellectual Property or
Computer Software. Except as disclosed on SCHEDULE 3.10(d)(i), CENTRA LLC will
have the right to use, free and clear of any royalty or other payment
obligations, such Intellectual Property and Computer Software except to the
extent that such Intellectual Property or Computer Software is expressly
included in the Excluded Assets. Except as disclosed on SCHEDULE 3.10(d)(ii),
the Contributor is not in conflict with or in violation or infringement of, and
the
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Contributor has received no notice of any conflict with or violation or
infringement of or any claimed conflict with, any asserted rights of any other
Person with respect to any Intellectual Properties or Computer Software
disclosed or required to be disclosed on SCHEDULE 3.10(d)(i)OR(ii).
3.11 TAXES AND TAX RETURNS. CENTRA LLC will not become subject to any
Taxes, interest, penalties or other similar charges as a result of the
Contributor's failure to file timely or accurately, as required by applicable
law, any Tax Return or to pay timely any amount shown to be due thereon,
including, without limitation, any Taxes, interest, penalties or charges
resulting from the obtaining of an extension of time to file any return or to
pay any Tax. As between the parties hereto, Contributor shall be solely liable
for any Taxes, interest, penalties, or charges attributable to the operation of
the Business and the Contributed Assets during any period ending on or before
the Closing Date, and which may be assessed against CENTRA LLC as a transferee
or successor under provisions including, but not limited to, Treas. Reg. "
1.1502-6 (or any similar provisions of state, local or foreign law). No
assessments or notices of deficiency or other communications have been received
by the Contributor relating to the Business with respect to any Tax Return which
has not been paid or discharged. Any tax sharing agreements to which the
Contributor is a party shall be terminated with respect to the Business and the
Contributed Assets as of the Closing and shall thereafter be inoperative with
respect to CENTRA LLC or the Business for any taxable year (whether the current
year, a future year, or a past year). The Contributor as of the Closing will
have duly and timely withheld from all of its employees' salaries, wages, and
other compensation and then, or as soon as thereafter due, paid over to the
appropriate taxing authorities all amounts required to be so withheld and paid
over for all periods under all applicable Laws.
For purposes of this Section 3.11, any reference to the Contributor
shall include any corporation which merged or was liquidated with and into the
Contributor.
3.12 MATERIAL CONTRACTS. SCHEDULE 3.12 of this Agreement sets forth a
true and complete list of each Material Contract of the Business as of the
Closing Date. Each such Material Contract is in full force and effect and
constitutes a legal, valid, and binding obligation of the Contributor and each
other party thereto, enforceable against the parties thereto in accordance with
its terms, except to the extent that (a) enforcement may be limited by or
subject to any bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer, or similar Laws now or hereafter in effect relating to or limiting
creditors' rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief are subject to
13
certain equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought. Neither the Contributor nor to the knowledge
of the Contributor any other party to any Material Contract is in default under
any such Material Contract or under any other Contract to which the Contributor
is a party which relates to the Business. Since the Balance Sheet Date, no
Material Contract has been amended or supplemented in any material and adverse
respect.
3.13 MATERIAL CHANGES. Except as disclosed on SCHEDULE 3.13 hereto or
except as contemplated by this Agreement:
(a) since the Balance Sheet Date, there has not been, occurred,
or arisen any change, event (including without limitation any damage,
destruction, or loss, whether or not covered by insurance), condition,
circumstance, or development of any character that, individually or, in the
aggregate, has or may reasonably be expected to have a Material Adverse Effect
on the Business or the Contributed Assets;
(b) since the Balance Sheet Date, the Contributor has conducted
the Business solely in the ordinary course of business and consistent with past
practice; and
(c) since the Balance Sheet Date, Contributor has not declared or
paid any dividends or other distributions in respect of its capital stock, nor
have either made, or committed to make, any redemption or other repurchase of
any of its capital stock, and there has been no increase in or incurrence of any
intercompany payables or subordinated debt and no material change in the fixed
assets, intangible assets (less normal amortization), other assets or
liabilities accounts of the Contributor.
3.14 CUSTOMERS, AGENTS, ETC. Except as set forth on SCHEDULE 3.14
hereto, no customer, employer or other Person to whom or through whom the
Contributor has sold any service or other product related to the Business,
accounted for more than 10% of the gross revenue of the Business during 1997 and
1998. To the knowledge of the management of the Contributor (meaning those
management employees of Contributor who are in positions on the organizational
chart at the level of sales manager and above), no Person with whom the
Contributor does business intends to terminate or materially alter its
relationship with the Business or CENTRA LLC after the Closing.
3.15 COMPANIES WHOSE PRODUCTS ARE SOLD. SCHEDULE 3.15 hereto sets forth
a true and complete list of all Persons whose insurance or other products
related to the Business were sold by or through the Contributor during 1997 and
1998. To the knowledge of the Contributor and the Shareholders, no Person listed
on
14
SCHEDULE 3.15 intends to terminate or materially alter its relationship with the
Business or CENTRA LLC after the Closing.
3.16 LABOR MATTERS:
(a) No employee of the Contributor is represented by any labor
organization;
(b) the Contributor is not a party to any labor or collective
bargaining Contract which would cover the Transferred Employees;
(c) there is no material labor controversy, labor dispute, labor
arbitration, unfair labor practice charge, grievance, or complaint, strike,
lockout, or work slowdown or stoppage pending or, to the knowledge of the
Contributor, threatened against or involving the Contributor based on, arising
out of, or related to the employment by the Contributor of any employee;
(d) there is no complaint, charge, or claim pending or, to the
knowledge of the Contributor, threatened against or involving the Contributor by
any Person based on, arising out of, or related to the employment by the
Contributor of any employee, except for the claim of ▇▇▇▇▇ ▇▇▇▇▇, which claim
does not exceed $12,000.00;
(e) no labor or collective bargaining Contract with respect to
the employees of the Contributor is currently being negotiated, and to the
knowledge of the Contributor, no union organizing activities are currently
taking place with respect to any employees of the Contributor; and
(f) to the knowledge of the Contributor, no employee has
expressed any intention or desire to terminate his or her relationship with the
Business after the Closing.
3.17 ENVIRONMENTAL COMPLIANCE. Contributor has complied with all
applicable environmental Laws relating to real property to be transferred to or
leased by CENTRA LLC which has been owned or occupied by Contributor, and the
business, activities, and processing conducted thereon, except for such
noncompliance that, individually or in the aggregate, has not had and may not
reasonably be expected to have a Material Adverse Effect on the Business or the
Contributed Assets. To the Contributor's knowledge, there is not on or in any
part of such leased real property any underground storage tanks or surface
tanks, lines, dikes, or impoundments which are leaking or discharging any
Hazardous Substance.
15
3.18 INTEREST IN COMPETITORS, ETC. Except as listed on SCHEDULE 3.18
(which contains a brief description of such relationship) neither the
Contributor, nor, to the knowledge of the Contributor, any employee of the
Contributor is, directly or indirectly, a principal, officer, director,
shareholder, investor, consultant, advisor, partner, joint venturer or equity
owner in or with, or to the knowledge of the Contributor, employee of, any
Person who is a competitor, supplier, manufacturer, vendor or customer of the
Business. Notwithstanding the foregoing, Contributor, or any of its respective
employees, may own up to 1% of any stock or equity in a publicly-traded company
which is a competitor of the Business.
3.19 ACCOUNTS RECEIVABLE. All accounts receivable which are a part of
the Contributed Assets represent bona fide claims for sales or distribution of
products or services by or through Contributor in the ordinary course of
business and consistent with past practice and are not subject to offset,
reduction or other claim by reason of any action, inaction or practice of the
Contributor. The reserve for bad debts related to such accounts as of the
Closing Date has been established in accordance with GAAP based on historical
experience.
3.20 BANK ACCOUNTS. SCHEDULE 3.20 hereto contains (a) a true and
complete list of the names and locations of all banks, trust companies,
securities brokers, and other financial institutions at which the Contributor
has an account or safe deposit box or maintains a banking, custodial, trading,
or other similar relationship and (b) a true and complete list and description
of each such account, box, and relationship, indicating in each case the account
number and the names of the respective officers, employees, agents, or other
similar representatives of Contributor who are signatories thereon or who are
authorized to act in connection therewith.
3.21 BOOKS AND RECORDS. The books, records and accounts of the Business
accurately and fairly reflect, in reasonable detail, the transactions and the
assets and liabilities of the Business. The Contributor has not engaged in any
transaction, maintained any bank account or used any of its funds except for
transactions, bank accounts and funds which have been and are reflected in the
normally maintained books and records of the Business.
3.22 FIDUCIARY ACCOUNTS. All accounts maintained by the Contributor on
behalf of clients or customers have been maintained in accordance with
applicable principles of fiduciary law and the agreements or understandings
under which they were established. No funds which were supposed to be maintained
therein have been co-mingled with Contributor funds and all such accounts are
reconciled on a monthly basis and no unaccounted for material
16
shortage or deficiency exists with respect to such accounts. Signature authority
and control of all such accounts have been transferred to CENTRA LLC as a part
of the Contributed Assets.
3.23 DISCLOSURE. No representation or warranty made by the Contributor
in this Agreement or in any certificate furnished by the Contributor hereunder
and no other factual information (other than estimates, pro forma financial
statements or forecasts) relating to the Business, the Shareholders or the
Contributor furnished by or on behalf of the Contributor to CENTRA LLC's
officers, directors, employees, agents, consultants, or other representatives
for purposes of or in connection with this Agreement or the transactions
contemplated hereby contains any untrue statement of material fact or omits to
state a material fact necessary to make the statements herein or therein not
misleading in light of the circumstances in which they were made.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF HPS
HPS hereby represents and warrants to the Contributor and CENTRA LLC as
follows:
4.1 ORGANIZATION. HPS is a corporation duly organized, validly
existing, and in good standing under the Laws of the State of Florida.
4.2 AUTHORITY. HPS has full corporate power and authority to enter into
this Agreement and to perform its obligations hereunder. The execution,
delivery, and compliance with the terms of this Agreement by HPS and the
performance by HPS of its obligations hereunder have been duly and validly
authorized by all necessary action on the part of HPS. This Agreement has been
duly and validly executed and delivered by HPS and constitutes, a legal, valid,
and binding obligation of HPS, enforceable against HPS in accordance with its
terms, except to the extent that (a) enforcement may be limited by or subject to
any bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
conveyance, or similar Laws now or hereafter in effect relating to or limiting
creditors, rights generally, and (b) the remedy of specific performance and
injunctive and other forms of equitable relief which are subject to certain
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
4.3 NO CONFLICTS. Except as disclosed in SCHEDULE 4.3 hereto, neither
the execution and delivery by HPS of this Agreement nor the performance by HPS
of its obligations under this
17
Agreement will:
(a) conflict with or violate any Law or Order applicable to HPS
or any of its respective assets or properties;
(b) conflict with or violate any term of the Articles of
Incorporation or Bylaws of HPS;
(c) result in the creation or imposition of any Lien upon CENTRA
LLC or any of its assets or properties or conflict with or result in a default
under, or give any Person any right of termination, cancellation, acceleration,
or modification in or with respect to, any Contract to which CENTRA LLC is a
party or by which any of HPS's assets or properties may be bound; or
(d) require HPS to obtain any consent, approval or action of, or
make any filing with or give any notice to, any Person.
ARTICLE 5
COVENANTS RELATING TO CONDUCT OF BUSINESS
At all times during the period between the date hereof and the Closing,
inclusive, the Contributor will comply with all covenants and provisions of this
Article 5, unless otherwise agreed by HPS and CENTRA LLC in writing.
5.1 CONDUCT OF BUSINESS. The Contributor will conduct the Business
solely in the ordinary course of business and consistent with past practice.
Without limiting the generality of the foregoing and except as otherwise
expressly required by this Agreement:
(a) The Contributor will use all commercially reasonable
efforts to (i) preserve intact the Business's present business organizations,
relationships, and reputation; (ii) maintain in full force and effect all
Licenses held by the Contributor with respect to the Business; (iii) maintain in
full force and effect all Contracts relating to the Business (other than
Contracts which expire and are not renewed in the ordinary course of business
and consistent with past practice); (iv) continue all marketing and promotional
activities, programs, and efforts relating to the Business; (vi) maintain in
good working order and condition (ordinary wear and tear excepted) all of the
Contributed Assets;(vii) maintain in full force and effect substantially the
same levels of insurance coverage as afforded under the insurance Contracts in
force as of the Balance Sheet Date; and (viii) prevent any material adverse
change in the
18
Contributor's fixed assets, intangible assets(other than normal amortization),
other assets or liability accounts of the Business.
(b) The Contributor will (i) prepare and timely file (or cause to
be prepared and timely filed, including any extensions thereof) all Tax Returns
required to be filed with any Governmental Authority by the Contributor; (ii)
duly and timely pay all estimated Taxes necessary to avoid the imposition of
Liens or liabilities attaching to the Business or the Contributed Assets; (iii)
duly and timely pay (or cause to be duly and timely paid) all Taxes indicated by
such Tax Returns or otherwise levied or assessed upon the Contributor or any of
its assets or properties; and (iv) withhold or collect and pay to the proper
Governmental Authority all Taxes that the Contributor is required to so withhold
or collect and pay, unless such Taxes are being contested in good faith and, if
appropriate, reasonable reserves therefor have been established and reflected on
the books and records of the Contributor.
(c) The Contributor will continue to comply with all Laws
applicable to the Business or to the Contributed Assets.
(d) The Contributor will refrain from selling or otherwise
disposing of any of the Contributed Assets, permitting any of the Contributed
Assets to be subjected to any Liens, or otherwise creating any right, title, or
interest in or to any of the Contributed Assets.
5.2 INVESTIGATION BY HPS. Before the Closing, the Contributor will
provide HPS and HPS's legal counsel, accountants, financial advisers, and other
representatives with full access to all facilities, officers, employees, agents,
accountants, and books and records of the Contributor which relate to the
Business and will furnish CENTRA LLC and such Persons with copies of such
documents, information, and data concerning the Business, as HPS or such Persons
may reasonably request. After the Closing, the Contributor will cooperate with
HPS and provide access to all records in the Contributor's possession which
relate to the Contributor so as to allow HPS and HPS's accountants to complete
an audit (within 45 days after the Closing) of CENTRA LLC's opening balance
sheet as of the Closing Date.
5.3 FINANCIAL STATEMENTS AND REPORTS. The Contributor will deliver to
HPS (as promptly as practicable after becoming available) true and complete
copies of such financial statements, reports, or analyses as may be prepared or
received by the Contributor that relate to the Business or the Contributed
Assets including without limitation periodic financial statements, normal
internal reports (such as those reflecting monthly cash flow), and special
reports (such as those of consultants).
19
5.4 NO NEGOTIATIONS, ETC. Except as contemplated by this Agreement, the
Contributor will and will cause the Shareholders to refrain, and will cause its
officers, directors, employees, agents, and other representatives (including
without limitation any brokers, legal counsel, accountants, or financial
advisers, of the Contributor) to refrain, from directly or indirectly making any
offer or proposal to any Person, providing any information to or assisting any
person who indicates an interest in making an offer for or entering into any
Contract with any Person, to sell or otherwise transfer the Business or the
Contributed Assets. If any such offer or proposal is received from any Person,
the Contributor will promptly advise such Person by written notice of the terms
of this Section 5.4 and will promptly deliver a copy of such notice to CENTRA
LLC.
5.5 EMPLOYEE MATTERS. The Contributor will refrain from directly or
indirectly:
(i) making any change to, or amending in any way, the Contracts,
salaries, wages, or other compensation of any Leased Employee except
for any change in salaries, wages or other compensation pursuant to
annual reviews conducted in the ordinary course of business consistent
with past practice; or
(ii) adopting or entering into any Plan which covers the Leased
Employees.
ARTICLE 6
CERTAIN OTHER COVENANTS
6.1 REGULATORY AND THIRD PARTY APPROVALS.
(a) The Contributor, HPS and CENTRA LLC will (i) take all
commercially reasonable steps necessary or desirable, and proceed diligently and
in good faith and use all commercially reasonable efforts to obtain, as promptly
as practicable, all approvals, authorizations, clearances, and Orders of
Governmental Authorities respectively required of such party to consummate the
transactions contemplated by this Agreement, and (ii) cooperate with the other
party hereto in obtaining, as promptly as practicable, all approvals,
authorizations, clearances, and Orders of Governmental Authorities required of
the other party to consummate the transactions contemplated by this Agreement.
(b) The Contributor will use all commercially reasonable efforts,
as promptly as practicable, to obtain all
20
consents, approvals, and actions disclosed or required to be disclosed on
SCHEDULE 3.4.
(c) HPS will use all commercially reasonable efforts, as promptly
as practicable, to obtain all consents, approvals, and actions disclosed or
required to be disclosed in SCHEDULE 4.3.
6.2 SATISFACTION OF CLOSING CONDITIONS. The Contributor, HPS and CENTRA
LLC shall take all commercially reasonable steps necessary or desirable, and
proceed diligently and in good faith and use all commercially reasonable
efforts, to cause to be fulfilled at or prior to the Closing all of the
conditions precedent to such party's obligation to consummate the transactions
contemplated by this Agreement.
ARTICLE 7
CONDITIONS PRECEDENT
7.1 CONDITIONS TO THE OBLIGATIONS OF HPS AND CENTRA LLC. The
obligations of HPS and CENTRA LLC to consummate the transactions contemplated by
this Agreement are subject to the fulfillment at or before the Closing of each
of the following conditions (all or any of which may be waived in whole or in
part by CENTRA LLC and HPS):
(a) NO INJUNCTION. There shall not be in effect on the Closing
Date any valid Order of any Governmental Authority restraining, enjoining, or
otherwise preventing consummation of any of the transactions contemplated by
this Agreement.
(b) NO PROCEEDING OR LITIGATION. There shall not be instituted,
pending, or (to the knowledge of the parties hereto) threatened any action,
suit, investigation, arbitration, or similar proceeding in, before, or by any
Governmental Authority or other Person to restrain, enjoin, or otherwise prevent
consummation of any of the transactions contemplated by this Agreement.
(c) REPRESENTATIONS AND WARRANTIES. All representations and
warranties of the Contributor contained in this Agreement (including the
statements contained in the Schedule hereto) shall be true in all material
respects as of the date of this Agreement and shall be true in all material
respects on and as of the Closing Date as if made on and as of the Closing Date.
(d) PERFORMANCE OF AGREEMENT. The Contributor shall have
performed or complied in all material respects with all obligations that are
required to be performed or complied with by
21
the Contributor pursuant to the terms of this Agreement on or before the Closing
Date.
(e) CERTIFICATES. The Contributor shall have delivered to HPS and
CENTRA LLC a certificate, dated the Closing Date, in a form reasonably
satisfactory to HPS and CENTRA LLC, certifying as to the fulfillment of the
conditions set forth in Sections 7.1(a), 7.1(b), 7.1(c), 7.1(d) and 7.1(e)
hereof. In addition, the Contributor shall deliver to HPS and CENTRA LLC one or
more certificates of the Secretary or any Assistant Secretary of the Contributor
certifying as to corporate matters reasonably requested by HPS or CENTRA LLC and
shall deliver to HPS and CENTRA LLC a certificate of good standing from the
state of Contributor's incorporation attesting to the good standing of
Contributor in such jurisdictions.
(f) OPINIONS OF COUNSEL. The Contributor shall have delivered to
HPS and CENTRA LLC an opinion, dated as of the Closing Date, of ▇▇▇▇▇▇ & ▇▇▇▇▇▇
P.A., as counsel to the Contributor, to the effect set forth in EXHIBIT 7.1(G)
hereto.
(g) LICENSES AND ADMINISTRATIVE SERVICES AGREEMENTS. The
Contributor shall own or hold all Licenses that are necessary in connection with
the conduct of the Business as currently conducted and shall be in substantial
compliance with all the material terms of all current in-force administrative
services contracts.
(h) LEASE AGREEMENT. The ▇▇▇▇▇▇▇▇▇▇ Lease Agreement shall have
been assigned to CENTRA LLC in form acceptable to HPS and the CENTRA LLC and
shall extend to CENTRA LLC the right to lease the property covered thereby
consisting of a minimum of 90,000 square feet for the 6 months after Closing and
60,000 sq. feet for a minimum of 6 years and six months thereafter. Such lease
shall expressly permit the purchase of the Remaining CENTRA LLC Interests by HPS
pursuant to the terms of the LLC Interest Purchase Agreement without the need
for any approval by the Landlord.
(i) ADMINISTRATIVE SERVICES AGREEMENT. The Contributor and CENTRA
LLC shall have executed and delivered to HPS the Administrative Services
Agreement.
(j) SHAREHOLDER NON-COMPETITION AGREEMENTS. Contributor shall
have delivered to HPS and CENTRA LLC, executed Shareholder Non-Competition
Agreements in the form of Exhibit 7.1(j) from all Shareholders other than ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇.
(k) TRANSFER DOCUMENTS. The Contributor shall have executed and
delivered such transfer documents as HPS and CENTRA LLC and their counsel shall
reasonably request in order to
22
transfer, convey and assign all of Contributor's rights, title and interest in
the Business and the Contributed Assets to CENTRA LLC, subject to the assumption
of the Assumed Liabilities.
(l) EXECUTION OF REPRESENTATION LETTER FOR CONTRIBUTOR'S AUDIT.
At or prior to the Closing, CENTRA LLC (and to the extent requested, the
Contributor) shall have executed a representation letter with Price Waterhouse
LLP pursuant to which the CENTRA LLC's Opening Balance Sheet as of the Closing
Date shall be audited at CENTRA LLC's expense.
(m) COMPLETION OF FINANCIAL DUE DILIGENCE. At or prior to
Closing, HPS shall have completed its financial due diligence review and shall
not have notified Contributor that it does not want to close the transaction
based upon such review.
(n) MATERIAL ADVERSE CHANGE. There shall not have accrued any
material adverse change in the Contributor's Business as a whole or in
Contributed Assets or the fixed assets, intangible assets(other than normal
amortization), other assets or liability accounts of the Business.
(o) EMPLOYEE LEASE AGREEMENT. CENTRA LLC and CBS shall have
executed and delivered to each other the Employee Lease Agreement.
(p) ▇▇▇▇▇▇▇▇▇▇ EMPLOYMENT AGREEMENT ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ shall have
executed and delivered to CENTRA LLC the ▇▇▇▇▇▇▇▇▇▇ Employment Agreement.
7.2 CONDITIONS TO THE OBLIGATIONS OF THE CONTRIBUTOR. The obligations
of the Contributor to consummate the transactions contemplated by this Agreement
are subject to the fulfillment at or before the Closing of each of the following
conditions (all or any of which may be waived in whole or in part by the
Contributor):
(a) NO INJUNCTION. There shall not be in effect on the Closing
Date any valid Order of any Governmental Authority restraining, enjoining, or
otherwise preventing consummation of any of the transactions contemplated by
this Agreement.
(b) NO PROCEEDING OR LITIGATION. There shall not be instituted,
pending, or (to the knowledge of the parties hereto) threatened any action,
suit, investigation, arbitration, or similar proceeding in, before, or by any
Governmental Authority or other Person to restrain, enjoin, or otherwise prevent
consummation of any of the transactions contemplated by this Agreement.
23
(c) REPRESENTATIONS AND WARRANTIES. All representations and
warranties of HPS contained in this Agreement shall be true in all material
respects as of the date of this Agreement and shall be true in all material
respects on and as of the Closing Date as if made on and as of the Closing Date.
(d) PERFORMANCE OF AGREEMENT. HPS and the CENTRA LLC shall have
performed or complied in all material respects with all obligations that are
required to be performed or complied with by them pursuant to the terms of this
Agreement on or before the Closing Date.
(e) CERTIFICATES. HPS shall have delivered to the Contributor an
officer's certificate, dated the Closing Date, in a form reasonably satisfactory
to the Contributor, certifying as to the fulfillment of the conditions set forth
in Sections 7.2(a), 7.2(b), 7.2(c), and 7.2(d) hereof. In addition, HPS shall
deliver to the Contributor one or more certificates of the Secretary or any
Assistant Secretary of HPS certifying as to corporate matters reasonably
requested by the Contributor.
(f) OPINION OF COUNSEL. HPS shall have delivered to the
Contributor an opinion, dated as of the Closing Date, of Fowler, White, Gillen,
Boggs, ▇▇▇▇▇▇▇▇▇ and Banker P.A., as counsel to HPS, to the effect set forth in
EXHIBIT 7.2(f) hereto.
(g) DELIVERY OF LLC INTEREST PURCHASE AGREEMENT. HPS shall
have executed and delivered to the Contributor the LLC Interest Purchase
Agreement and there shall be no condition to closing thereunder which has not
been satisfied or waived by HPS.
(h) ADMINISTRATIVE SERVICES AGREEMENT. HPS and the CENTRA LLC
shall have executed and delivered to the Contributor the Administrative Services
Agreement.
(i) ASSUMPTION OF LIABILITIES. The transfer documents in form and
substance acceptable to Contributor and its counsel shall have been executed and
delivered by CENTRA LLC to Contributor in order to document CENTRA LLC's
assumption of the Assumed Liabilities.
24
ARTICLE 8
INDEMNIFICATION
8.1 INDEMNIFICATION BY THE CONTRIBUTOR. Subject to the provisions of
this Article 8 and Section 9.2 hereof, the Contributor indemnifies and holds
harmless CENTRA LLC in respect of any and all Damages resulting from or relating
to (i) any breach by the Contributor of any representation, warranty, covenant,
or agreement made to CENTRA LLC by the Contributor in this Agreement or in any
certificate delivered by the Contributor in connection with this Agreement, and
(ii) any Liability of the Contributor (other than the Assumed Liabilities) which
may be asserted against CENTRA LLC by reason of the Contributor's contribution
to CENTRA LLC of the Business and the Contributed Assets or which results from
or is based on events or circumstances arising on or prior to the Closing Date
including but not limited to any liability under any of the law suits listed on
Schedule 3.5 hereto.
8.2 INDEMNIFICATION BY CENTRA LLC. Subject to the provisions of this
Article 8 and Section 9.2 hereof, CENTRA LLC will indemnify and hold harmless
the Contributor in respect of any and all Damages resulting from or relating to
any breach by CENTRA LLC of any representation, warranty, covenant, or agreement
made by CENTRA LLC in this Agreement or in any certificate delivered by CENTRA
LLC in connection with this Agreement.
8.3 INDEMNIFICATION PROCEDURES.
(a) If an Indemnitee becomes aware of any matter that it believes
is indemnifiable pursuant to this Article 8 and such matter involves (i) any
claim made against the Indemnitee by any Person other than HPS, CENTRA LLC or
Contributor or (ii) the commencement of any action, suit, investigation,
arbitration, or similar proceeding against the Indemnitee by any Person other
than HPS, CENTRA LLC or Contributor, the Indemnitee will give the Indemnifying
Party prompt written notice of such claim or the commencement of such action,
suit, investigation, arbitration, or similar proceeding. Such notice will (A)
provide (with reasonable specificity) the basis on which indemnification is
being asserted, (B) set forth the actual or estimated amount of Damages for
which indemnification is being asserted, if known, and (C) be accompanied by
copies of all relevant pleadings, demands, and other papers served on the
Indemnitee.
(b) The Indemnifying Party will have a period of 30 days after
the delivery of each notice required by Section 8.3(a) hereof during which to
respond to such notice. If the Indemnifying Party responds within such 30-day
period that it
25
accepts its indemnification obligation and elects to defend the claim described
in such notice, the Indemnifying Party will be obligated to compromise or defend
(and will control the defense of) such claim, at its own expense and by counsel
chosen by the Indemnifying Party and reasonably satisfactory to the Indemnitee.
The Indemnitee will cooperate fully with the Indemnifying Party and counsel for
the Indemnifying Party in the defense against any such claim, and the Indemnitee
will have the right to participate at its own expense in the defense of any such
claim. If the Indemnifying Party (i) responds within such 30-day period that it
elects not to defend such claim or that it does not accept responsibility for
indemnification, (ii) does not respond within such 30-day period, or (iii)
responds within such 30-day period that it elects to defend such claim but does
not, in fact, take actions reasonably necessary to defend such claim, the
Indemnitee will be free, without prejudice to any of the Indemnitee's rights
hereunder, to compromise or defend (and control the defense of) such claim, at
the expense of the Indemnifying Party and by counsel chosen by the Indemnitee,
and to pursue such remedies as may be available to the Indemnitee under
applicable Law.
(c) Any compromise or settlement of any claim (whether defended
by the Indemnitee or by the Indemnifying Party) will require the prior written
consent of the Indemnitee and the Indemnifying Party, which consent will not be
unreasonably withheld. If, however, the Indemnitee refuses to consent to a bona
fide offer of compromise or settlement that the Indemnifying Party desires to
accept, the Indemnitee may continue to pursue such claim, free of any
participation by the Indemnifying Party, at the sole expense of the Indemnitee.
In such event, the obligation of the Indemnifying Party to the Indemnitee will
equal the lesser of (i) the amount of the offer of compromise of settlement that
the Indemnifying Party desired to accept, plus the reasonable out-of-pocket
expenses (except for expenses resulting from the Indemnitee's participation in
any defense controlled by the Indemnifying Party) incurred by the Indemnitee
before the date the Indemnifying Party notified the Indemnitee of the offer of
compromise or settlement, or (ii) the actual out-of-pocket amount that the
Indemnitee is obligated to pay as a result of the Indemnitee's continued pursuit
of such claim, plus the reasonable out-of-pocket expenses incurred by the
Indemnitee in connection with such claim.
(d) If an Indemnitee becomes aware of any matter that it believes
is indemnifiable pursuant to this Article 8 and such matter involves a claim
made by any HPS Party or Contributor, the Indemnitee will give the Indemnifying
Party prompt written notice of such claim (a "Claim Notice"). Such notice will
(i) provide (with reasonable specificity) the basis for which indemnification is
being asserted and (ii) set forth the actual or estimated amount of Damages for
which Indemnification is being asserted.
26
The Indemnifying Party will have a period of 30 days after the delivery of each
notice required by this Section 8.3(d) during which to respond to such notice.
If the Indemnifying Party accepts (in writing) full responsibility for the claim
described in such notice, the actual or estimated amount of Damages reflected in
such notice will be conclusively deemed a Liability that the Indemnifying Party
owes, and will pay (in cash) upon demand, to the Indemnitee except that if the
Indemnifying Party is the Contributor, payment shall be accomplished in
accordance with the provisions of Section 8.4 hereof. If the Indemnifying Party
responds in writing to the Indemnified Party (a "Dispute Notice") within such
30-day period that it disputes such claim, the Indemnifying Party and the
Indemnitee agree to proceed in good faith to negotiate a resolution of such
dispute. If all such disputes are not resolved through negotiations within 30
days after receipt by the Indemnitee of the Dispute Notice, either the
Indemnifying Party or the Indemnitee may initiate the Dispute Resolution
Procedure to resolve such disputes. If the Indemnifying Party does not respond
within 30 days after delivery of any Claim Notice required by this Section
8.3(d), the Indemnitee may initiate the Dispute Resolution Procedure to resolve
such claim.
8.4 INDEMNIFICATION LIMITATION AND PAYMENTS. CENTRA LLC, HPS and the
Contributor agree that with the exception of claims which result from a breach
of the representations and warranties of Sections 3.1 and 3.2 hereof, no claim
for indemnification will be payable under this Section 8 until the total of all
indemnifiable claims indemnifiable by an Indemnifying Party pursuant to the
terms of this Agreement which are undisputed or have been finally resolved in
accordance with the foregoing procedures equals or exceeds $350,000 and then
only the amount of such claims in excess of $350,000 shall be payable. Any
payments due from Contributor under this Agreement which do not relate to
Contribution Agreement Unlimited Claims shall be offset only against the
Indemnity Holdback and Contributor shall have no other obligation for such
indemnification claims. Any payments due from Contributor under this Agreement
which relate to Contribution Agreement Unlimited Claims shall be paid to CENTRA
LLC by Contributor in cash unless otherwise offset in HPS's sole discretion
against a Post Closing Payment. Upon offset by HPS, any payments which are due
from the Contributor to CENTRA LLC shall be paid by HPS to CENTRA LLC. The
Contributor and HPS each agree that any payment made to the CENTRA LLC pursuant
to Section 8.1 hereof will be treated by the parties as a loan to CENTRA LLC by
HPS.
8.5 INDEMNITEE ACTIONS. Whenever Indemnitee is entitled or required to
take any action pursuant to the provisions of this Article VIII and the
Indemnitee is CENTRA LLC, HPS may but shall
27
not be required to take such action on behalf of CENTRA LLC and is hereby
authorized to pursue as CENTRA LLC's attorney-in-fact and in the name of CENTRA
LLC any and all rights CENTRA LLC may have hereunder against the Contributor or
any third party claimant.
8.6 LIMITATION ON PERIOD DURING WHICH CLAIMS CAN BE MADE AND AMOUNT OF
CLAIMS. No claim for indemnification hereunder can be made after the expiration
of the survival period of the representation or warranty to which such claim
relates as set forth in Section 9.2 hereof provided that any claims made prior
to the expiration of such survival period shall not be extinguished at the
expiration of such survival period but shall continue until finally resolved.
Additionally, HPS shall not be entitled under this Article VIII to offset
against the Indemnity Holdback more than an aggregate $1,150,000.00 in claims
related to breaches of representations and warranties which have a limited
survival period as set forth in Section 9.2 hereof. In order to be considered a
pending claim at the expiration of the survival period specified in Section 9.2
hereof, the Contributor must have been notified of such claim in writing on or
prior to the expiration of such survival period. This limitation shall not apply
to Contribution Agreement Unlimited Claims.
ARTICLE 9
MISCELLANEOUS
9.1 TERMINATION. Without limiting the rights or remedies that any party
hereto may otherwise have, this Agreement may be terminated, and the
transactions contemplated hereby may be abandoned:
(a) at any time before the Closing, by written agreement of the
Contributor and HPS; or
(b) at any time after June 30, 1998, by the Contributor or HPS
if the transactions contemplated by this Agreement have not been consummated on
or before such date and such failure to consummate is not caused by a breach of
any representation, warranty, covenant, or agreement included in this Agreement
by the party electing to terminate pursuant to this Section 9.1(b).
If this Agreement is validly terminated pursuant to Section 9.1 hereof, (i) the
obligations of the parties to effect the transactions contemplated hereby will
terminate, (ii) the provisions of Section 9.1, 9.5, 9.6 and 9.7 hereof will
continue to apply following any such termination, and (iii) no party hereto will
be relieved of any Liability for Damages that such party may have to any other
party by reason of such party's breach of this
28
Agreement, if any (or any representation, warranty, covenant, or agreement
included herein).
9.2 SURVIVAL OF PROVISIONS.
(a) All representations and warranties made by any party in this
Agreement will survive the consummation of the transactions contemplated hereby,
and will remain in full force and effect thereafter, until the last day of the
eighteenth month after the Closing Date, except that the representations and
warranties made by the Contributor in Sections 3.1 and 3.2 will survive the
consummation of the transactions contemplated hereby, will remain in full force
and effect indefinitely thereafter and notwithstanding anything in this
agreement to the contrary any claims related thereto will be paid by the
Contributor without regard to the limitation on payment set forth in Sections
8.3, 8.4 and 8.6 hereof.
(b) All covenants and agreements respectively made by any party
in this Agreement to be performed after the date hereof will survive the
consummation of the transactions contemplated hereby, and will remain in full
force and effect thereafter, until the expiration of the terms or periods
respectfully specified therein or indefinitely in the case of the covenants that
have no such specified term or period.
9.3 BROKERS. Neither the Contributor, nor HPS has paid or has become
obligated to pay any fee or commission to any broker, finder, or intermediary
for or on account of the transactions provided for in this Agreement. The
Contributor will indemnify and hold harmless CENTRA LLC and HPS in respect of
any and all claims or demands for commission, compensation, or other Damages by
any broker, finder, or other agent (whether or not a present or former employee
or agent of the Contributor) claiming to have been engaged by the Contributor in
connection with the transactions contemplated by this Agreement, and the
Contributor, will bear the cost of the reasonable out-of-pocket expenses
incurred by either of them in investigating, defending against, or appealing any
such claim. HPS will indemnify and hold harmless the Contributor and CENTRA LLC
in respect of any and all claims or demands for commission, compensation, or
other Damages by any broker, finder, or other agent (whether or not a present or
former employee or agent of HPS) claiming to have been engaged by HPS in
connection with the transactions contemplated by this Agreement, and HPS will
bear the cost of the reasonable out-of-pocket expenses incurred by Contributor
in investigating, defending against, or appealing any such claim.
29
9.4 NON-COMPETITION.
(a) During the Term of Non-competition, the Contributor will
refrain from and will cause any company controlled by either of them to refrain
from directly or indirectly:
(i) engaging or participating in, as a principal, officer,
director, employee, shareholder, investor, consultant, advisor,
partner, joint venturer, broker, agent, equity owner, or in any other
capacity whatsoever, or soliciting customers for, any business
enterprise (regardless of whether it is a sole proprietorship or a
corporation, partnership, trust, business association, or other entity)
that engages (in the Restricted Territories), directly or indirectly,
in the business of acting as a third party administrator for health,
accident or disability plans whether insured or self insured (the
"Third Party Administration Business") (other than through or for the
CENTRA LLC or its Affiliates);
(ii) causing or attempting to cause (A) any Person or entity by
or through or with whom the Business sells or distributes its services
or products to terminate or reduce its relationship or dealings with
CENTRA LLC, or (B) any company whose services or products are sold by
or through the Business to terminate or reduce its relationship or
dealings with CENTRA LLC, or (C) any customer of the Business to
terminate or reduce its relationship or dealings with CENTRA LLC; or
(iii) causing or attempting to cause any employee, agent,
consultant, or independent contractor of the Business to cease serving
CENTRA LLC in such capacity; or
(iv) hiring or otherwise retaining or soliciting any Person who,
prior to the Closing or at any time during the Term of Non-competition,
was an employee, consultant or other contractor of the Business. This
subsection (iv) shall not apply to Contributor Employee ▇▇▇▇▇ ▇▇▇▇▇.
(b) The Contributor acknowledges that the geographic boundaries
contained in the Restricted Territories, scope of prohibited activities, and
Term of Non-competition contained in Section 9.4(a) hereof (i) are reasonable
and no broader than necessary to protect the investment by HPS and CENTRA LLC in
the Contributed Assets and the Business and (ii) do not and will not impose any
unreasonable burden upon the Contributor.
30
(c) HPS, CENTRA LLC and the Contributor each agree that (i) any
breach by the Contributor of any of the provisions contained in this Section 9.4
would cause irreparable Damage to the HPS and the CENTRA LLC Parties for which
monetary damages and other remedies at law may be inadequate, and (ii) both HPS
and the CENTRA LLC Parties will be entitled as a matter of right to obtain,
without posting any bond whatsoever and without proof of any actual Damage, a
restraining order, an injunction, specific performance, or other form of
equitable or extraordinary relief from any court of competent jurisdiction to
restrain any threatened or further breach of this Section 9.4 or to require the
Contributor to perform its obligations under this Section 9.4, which right to
equitable or extraordinary relief will not be exclusive but will be in addition
to all other remedies to which HPS or the CENTRA LLC Parties may be entitled
under this Agreement, at law, or in equity (including without limitation the
right to recover monetary damages).
(d) HPS, CENTRA LLC and the Contributor agree that if any portion
of this covenant not to compete is held to be unreasonable, arbitrary or against
public policy, this covenant shall be considered divisible both as to time and
geographical area; and each month of the specified period of non-competition
shall be deemed a separate period of time, and each state within the Restricted
Territory shall be deemed a separate geographical area.
(e) The Contributor agrees to deliver at Closing Shareholder
Non-Compete Agreements signed by each of the Shareholders containing terms and
conditions substantially equivalent to the foregoing provisions and binding the
Shareholders from competing with CENTRA LLC in the same fashion that Contributor
is prohibited from competing with CENTRA LLC.
(f) Notwithstanding the foregoing, Contributor may own up to 2%
of any stock or equity in a publicly traded company which is a competitor of the
Business.
9.5 PUBLIC ANNOUNCEMENTS. At all times at or before the Closing, the
Contributor, on the one hand, and CENTRA LLC, on the other hand, will consult
with one another before issuing or making any reports, statements, or releases
to the public with respect to this Agreement or the transactions contemplated
hereby and will use good faith efforts to agree on the text of a joint public
report, statement, or release or will use good faith efforts to obtain the other
party's approval of the text of any public report, statement or release to be
made solely on behalf of a party. If such parties are unable to agree on or
approve any such public report, statement, or release and such report,
statement, or release is, based on the advice of legal counsel to a party,
31
required by Law or appropriate to discharge such party's disclosure obligations,
then such party may make or issue the legally required or appropriate report,
statement, or release upon prior notice to the other parties hereto.
9.6 CONFIDENTIALITY.
(a) The Contributor will refrain, and will cause its officers,
directors, shareholders, employees, agents, and other representatives to
refrain, from disclosing to any other Person (i) any documents or information
concerning CENTRA LLC or its Affiliates furnished to it in connection with this
Agreement or the transactions contemplated hereby, and (ii) any documents or
information concerning the Contributed Assets or Business, unless (A) such
disclosure is compelled by judicial or administrative process or by other
requirements of Law and notice of such disclosure is furnished to HPS and CENTRA
LLC; or (B) such confidential documents or information can be shown to have been
(x) previously known by the Person receiving such documents or information, or
(y) in the public domain through no fault of the Contributor.
(b) If this Agreement is terminated pursuant to Section 9 hereof,
HPS will refrain, and will cause its officers, directors, employees, agents, and
other representatives to refrain, from disclosing to any other Person any
documents or information concerning the Contributor furnished to it in
connection with this Agreement or the transactions contemplated hereby, unless
(i) such disclosure is compelled by judicial or administrative process or by
other requirements of Law and notice of such disclosure is furnished to the
Contributor; (ii) HPS deems it necessary (upon advice of legal counsel) to
disclose any such documents or information in connection with the requirements
of any Law; or (iii) such documents or information can be shown to have been (A)
previously known by the Person receiving such documents or information, or (B)
in the public domain through no fault of HPS.
9.7 EXPENSES. Except as otherwise specifically provided in this
Agreement, the Contributor, HPS and CENTRA LLC will each pay all of their own
expenses incurred or to be incurred by them in negotiating this Agreement, in
performing their obligations under this Agreement, or in consummating the
transactions contemplated by this Agreement.
9.8 NOTICES. Any notice or communication given pursuant to this
Agreement must be in writing and (a) delivered personally, (b) sent by
telefacsimile or other similar facsimile transmission, (c) delivered by
overnight express, or (d) sent by registered or certified mail, postage prepaid,
as follows:
32
(i) If to Contributor:
CENTRA Benefit Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile number: ▇▇▇-▇▇▇-▇▇▇▇
with copy to:
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.A.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile number: ▇▇▇-▇▇▇-▇▇▇▇
(ii) If to HPS:
HealthPlan Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn. ▇▇▇▇ ▇▇▇▇▇▇, General Counsel
Facsimile number: ▇▇▇-▇▇▇-▇▇▇▇
with copy to:
Fowler, White, Gillen, Boggs,
▇▇▇▇▇▇▇▇▇ and Banker, P.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn. ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile number: ▇▇▇-▇▇▇-▇▇▇▇
(iii) If to CENTRA LLC:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile number: ▇▇▇-▇▇▇-▇▇▇▇
All notices and other communications required or permitted under this Agreement
that are addressed as provided in this Section 9.8 will (A) if delivered
personally or by overnight express, be deemed given upon delivery; (B) if
delivered by telefacsimile or
33
similar facsimile transmission, be deemed given when electronically confirmed;
and (C) if sent by registered or certified mail, be deemed given when received.
Any party from time to time may change its address for the purpose of notices to
that party by giving a similar notice specifying a new address, but no such
notice will be deemed to have been given until it is actually received by the
party sought to be charged with the contents thereof.
9.9 ENTIRE AGREEMENT. This Agreement, together with the exhibits and
schedules hereto, constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof and supersedes all prior
communications, agreements, understandings, representations, and warranties,
whether oral or written, between the parties hereto with respect to the subject
matter hereof. There are no oral or written agreements, understandings,
representations, or warranties between the parties hereto with respect to the
subject matter hereof other than those set forth in this Agreement.
9.10 ASSIGNMENT AND AMENDMENT OF AGREEMENT. This Agreement will be
binding upon the parties hereto and their respective successors and permitted
assignees. Neither this Agreement, any part hereof, nor any right or obligation
hereunder may be assigned by any party hereto without the prior written consent
of the other party hereto (and any attempt to do so will be void), except that
HPS may, without the consent of the Contributor or CENTRA LLC, assign all or any
portion of its rights or obligations hereunder to any wholly owned subsidiary of
it or of its parent HealthPlan Services Corporation provided that HPS remains
primarily liable for the obligations of HPS hereunder. This Agreement may be
modified or amended only by a writing duly executed on behalf of each party
hereto.
9.11 GOVERNING LAW. CENTRA LLC and the Contributor agree that this
Agreement is and shall be deemed to be executed and performed in the State of
Florida and this Agreement will be governed by and construed and enforced in
accordance with the Laws of the State of Florida applicable to a Contract
executed and to be performed in such state; and any disputes, controversies and
claims arising out of or relating to this Agreement shall be resolved in Tampa,
Florida utilizing the Dispute Resolution Procedures. CENTRA LLC and Contributor
agree that they are subject to and shall submit to the jurisdiction of the State
of Florida, and any legal action to enforce the provisions of this Agreement or
otherwise in connection with this agreement shall be brought exclusively in the
courts located in Tampa, Florida and any arbitration instituted under the
Dispute Resolution Procedures shall be conducted exclusively in Tampa, Florida.
34
9.12 NO THIRD PARTY RIGHTS. Except as specifically provided in this
Agreement, this Agreement is not intended and may not be construed to create any
rights (including third party beneficiary rights) in any parties other than the
Contributor, HPS, CENTRA LLC and their respective successors and permitted
assignees.
9.13 INCORPORATION OF EXHIBITS. The exhibits attached hereto are hereby
incorporated into this Agreement and will be deemed a part hereof as if set
forth herein in full. In the event of any conflict between the provisions of
this Agreement and any such exhibit, the provisions of this Agreement will
control.
9.14 HEADINGS, GENDER, ETC. The headings used in this Agreement have
been inserted for convenience and do not constitute matter to be construed or
interpreted in connection with this Agreement. Unless the context of this
Agreement otherwise requires, (a) words of any gender will be deemed to include
each other gender, (b) words using the singular or plural number also will
include the plural or singular number, respectively, (c) the terms "hereof,"
"herein," "hereby," "hereunder," "hereto," and derivative or similar words will
refer to this entire Agreement, (d) the terms "Article" or "Section" will refer
to the specified Article or Section of this Agreement, (e) the conjunction "or"
will denote any one or more, or any combination or all, of the specified items
or matters involved in the applicable list, and (f) the words "setoff" or
"offset" are used interchangeably and are intended to have the same meaning.
9.15 WAIVER AND REMEDIES. Any term or condition of this Agreement may
be waived at any time by the party that is entitled to the benefit thereof. Any
such waiver will be in writing and will be executed by such party. A waiver on
one occasion will not be deemed to be a waiver of the same or any other breach
on a future occasion. All remedies, either under this Agreement or by Law or
otherwise afforded, will be cumulative and not alternative.
9.16 INVALID PROVISIONS. If any provision of this Agreement is held to
be illegal, invalid, or unenforceable under any present or future Law, and if
the rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid, or unenforceable provision had never comprised a part hereof, (c) the
remaining provisions of this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid, or unenforceable provision or by
its severance herefrom, and (d) in lieu of such illegal, invalid, or
unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid, and enforceable provision as similar in terms to such
illegal, invalid, or unenforceable provision as may
35
be possible.
9.17 FURTHER ASSURANCES. Each of CENTRA LLC and the Contributor agrees
that, from time to time after the Closing Date, upon the reasonable request of
the other party, it will cooperate with such other party to effect the orderly
transfer of the Contributed Assets and the Business. Each such party may, at its
own expense, make such copies of any portions of the relevant books and records
as the respective party may reasonably require.
9.18 COUNTERPARTS. This Agreement may be executed simultaneously in one
or more counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, each of the undersigned has duly executed and
delivered this Agreement this 16th day of June, 1998.
HEALTHPLAN SERVICES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Senior Vice President & CFO
CENTRA BENEFIT SERVICES, INC
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Chairman
CENTRA HEALTHPLAN LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Secretary
LIST OF EXHIBITS AND SCHEDULES
EXHIBIT DESCRIPTION
Exhibit 1.1 Definitions
Exhibit 1.2 Assumed Liabilities
Exhibit 1.3 Excluded Assets
Exhibit 2.1(A) Form of CENTRA LLC Operating Agreement
Exhibit 2.3 Form of Employee Lease Agreement
Exhibit 2.5 Form of Administrative Services Agreement
Exhibit 2.9 Designated Expense Item Equipment Contracts
Exhibit 3.8 Unaudited 2/28/98 Balance Sheet
Exhibit 7.1(f) Form of Opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A., as counsel to
the Contributor
Exhibit 7.1(j) Form of Shareholders Non-Competition Agreements
Exhibit 7.2(f) Form of Opinion of Fowler, White, Gillen, Boggs,
▇▇▇▇▇▇▇▇▇ and Banker P.A., as counsel to HPS
Exhibit 7.2(p) Form of Employment Agreement to be executed by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ and CENTRA LLC
SCHEDULES
SCHEDULE DESCRIPTION
Schedule 3.2 List of each jurisdiction in which the Contributor are
qualified to do business as a foreign corporation by
reason of its operation of the Business or the
ownership of the Contributed Assets
Schedule 3.4 Required consents, filings and notices
Schedule 3.5 Pending Litigation and Claims
Schedule 3.7(a) List of all jurisdictions in which the Contributor or
any of its employees are licensed as insurance brokers,
agents, third party administrators or utilization
review providers, and List of each other License held
by the Contributor or its employees in connection with
the conduct of the Business or the ownership of the
Contributed Assets
Schedule 3.7(b) Disclosure of licenses not held
Schedule 3.7(d) Disclosure of persons not holding required licenses
Schedule 3.8 Disclosure of exceptions to Financial Statements
delivered to HPS
Schedule 3.10(a) Permitted Liens
Schedule 3.10(b) Tangible Leases
Schedule 3.10(c) Tangible Owned Property
Schedule 3.10(d)(i) List and description of Intellectual Property
Schedule 3.10)d((ii) List of all Computer Software and systems owned by or
licensed to the Contributor
Schedule 3.12 Material Contracts as of the Balance Sheet Date
Schedule 3.13 Material Changes
Schedule 3.14 Customers, Agents, Etc. accounting for more than 5% of
gross revenue of the Business during 1997 and 1998
Schedule 3.15 List of all Persons whose insurance, or other products
related to the Business were sold by or through the
Contributor during 1997 and 1998
Schedule 3.18 Interest in Competitors
Schedule 3.20 List of the names and locations of all banks, trust
companies, securities brokers, and other financial
institutions at which the Contributor has an account or
safe deposit box or maintains a banking, custodial,
trading, or other similar relationship, and List and
description of each such account, box, and relationship
Schedule 4.3 List of conflicts
[AS REQUIRED BY APPLICABLE LAW, THE COMPANY WILL FURNISH SUPPLEMENTALLY ANY
OMITTED EXHIBIT OR SCHEDULE UPON REQUEST]