COMPOSITE CONFORMED COPY
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STOCK PURCHASE AGREEMENT
between
COBE LABORATORIES, INC.
and
REN CORPORATION-USA
As Amended
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(i)
TABLE OF CONTENTS
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Section Page
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ARTICLE I
DEFINITIONS
1.01 Definitions ................................. 1
ARTICLE II
PURCHASE AND SALE OF SHARES;
CLOSING
2.01 Authorization, Purchase and
Sale of Shares ........................... 7
2.02 Closing ..................................... 7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.01 Organization and Qualification;
Subsidiaries ............................. 8
3.02 Charter of Incorporation and By-Laws ........ 8
3.03 Capitalization .............................. 9
3.04 Authority Relative to This Agreement ........ 10
3.05 No Conflict; Required Filings and
Consents .................................. 10
3.06 Common Stock ................................ 11
3.07 Compliance with Laws ........................ 12
3.08 SEC Filings; Financial Statements ........... 12
3.09 Absence of Certain Changes, Events
and Conditions ............................ 13
3.10 Employee Benefit Plans ...................... 14
3.11 Owned Real Property; Leased Real Property.... 17
3.12 Intellectual Property Rights ................ 17
3.13 Environmental Matters ....................... 17
3.14 Litigation .................................. 19
3.15 Insurance ................................... 19
3.16 Agreements .................................. 19
3.17 Licenses and Permits ........................ 19
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Section Page
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3.18 Private Offering ............................ 20
3.19 Brokers ..................................... 20
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE PURCHASER
4.01 Corporate Organization ...................... 20
4.02 Authority Relative to This Agreement ........ 20
4.03 No Conflict; Required Filings and Consents... 21
4.04 Funds ....................................... 22
4.05 Securities Act .............................. 22
4.06 Brokers ..................................... 23
4.07 Business of the Purchaser's Affiliates ...... 23
ARTICLE V
ADDITIONAL AGREEMENTS
5.01 Conduct of Business by the Company
Pending the Closing ....................... 23
5.02 Required Bank Amendment ..................... 23
5.03 Access to Information ....................... 24
5.04 Notification of Certain Matters ............. 24
5.05 Further Action; Reasonable Efforts .......... 25
5.06 Public Announcements ........................ 25
5.07 Registration Rights ......................... 25
5.08 Board Representation; Committees ............ 25
5.09 Legend ...................................... 26
5.10 Purchaser's Preemptive Right ................ 26
5.11 Standstill Agreement ........................ 28
5.12 Non-Competition; Disclosure of
Opportunities ............................ 29
5.13 Supply Agreement ............................ 29
5.14 Shareholder Approval ........................ 31
5.15 The Company's Right of First Offer .......... 32
ARTICLE VI
CONDITIONS TO THE CLOSING
6.01 Conditions to Obligations of the Purchaser... 32
6.02 Conditions to Obligations of the Company .... 35
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ARTICLE VII
INDEMNIFICATION
7.01 Survival of Representations and Warranties.... 35
7.02 Indemnification by the Company................ 36
7.03 Indemnification by the Purchaser.............. 36
7.04 Materiality................................... 36
7.05 Time Period; Dollar Threshold................. 36
7.06 Notice and Defense............................ 37
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.01 Termination................................... 37
8.02 Effect of Termination......................... 39
8.03 Amendment..................................... 39
8.04 Waiver........................................ 39
ARTICLE IX
GENERAL PROVISIONS
9.01 Notices....................................... 39
9.02 Entire Agreement; Assignment.................. 40
9.03 Parties in Interest........................... 40
9.04 Governing Law................................. 40
9.05 Headings...................................... 41
9.06 Counterparts.................................. 41
9.07 Specific Performance.......................... 41
EXHIBIT A Summary of Terms of Convertible
Redeemable Preferred Stock
EXHIBIT B Contents of Opinion of Wyatt, Tarrant, ▇▇▇▇▇,
▇▇▇▇▇▇▇ & Milan
EXHIBIT C Contents of Opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
EXHIBIT D Registration Rights
EXHIBIT E Form of Shareholders' Agreement
DISCLOSURE SCHEDULE
STOCK PURCHASE AGREEMENT (this "Agreement"), as
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amended, between REN CORPORATION-USA, a Tennessee corporation
(the "Company"), and COBE LABORATORIES, INC., a Colorado
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corporation (the "Purchaser").
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W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company desires to authorize, issue,
and sell to the Purchaser, and the Purchaser desires to
purchase from the Company, the Shares (as hereinafter
defined).
NOW, THEREFORE, in consideration of the premises and
the mutual covenants and agreements hereinafter set forth,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
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SECTION 1.01. Definitions. As used in this
-----------
Agreement, the following terms shall have the following
meanings:
"Affiliate" of a Person means a Person that directly
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or indirectly, through one or more intermediaries, controls,
is controlled by, or is under common control with, the first
mentioned Person.
"Bankruptcy Proceeding" has the meaning specified in
---------------------
Section 6.01.
"Board" means the Board of Directors of the Company.
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"Business" has the meaning specified in Section 5.12.
--------
"Business Day" means any day other than a Saturday,
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Sunday, or federal holiday and consists of the time period
from 12:01 a.m. through 12:00 midnight, Eastern Standard Time.
"By-Laws" means the Restated By-Laws of the Company,
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as amended through the date hereof.
"CERCLA" has the meaning specified in the definition
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of "Environmental Laws".
2
"CERCLIS" means the Comprehensive Environmental
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Responsive, Compensation and Liability Information System, 42
U.S.C. Sec. 9616(a).
"Charter of Incorporation" means the Restated
------------------------
Charter of Incorporation of the Company, as amended through
the date hereof.
"Closing" means the completion of the transactions
-------
specified herein relating to the purchase and sale of the
Shares as contemplated by Section 2.01 hereof.
"Closing Date" means the date on which the Closing
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shall occur.
"Code" means the Internal Revenue Code of 1986, as
----
amended, together with the rules and regulations promulgated
thereunder.
"Common Stock" means the common shares of the
------------
Company, no par value.
"Company" means REN Corporation-USA, a Tennessee
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corporation.
"Company Loss" has the meaning specified in
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Section 7.03.
"Control" (including the terms "controlled by" and
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"under common control with") means the possession, directly
-------------------------
or indirectly or as trustee or executor, of the power to
direct or cause the direction of the management and/or
policies of a Person, whether through the ownership of stock,
as trustee or executor, by contract or credit arrangement or
otherwise.
"Disclosure Schedule" means the Disclosure Schedule
-------------------
dated as of the date hereof delivered to the Purchaser by the
Company and forming a part of this Agreement.
"Encumbrance" means any security interest, pledge,
-----------
mortgage, lien (including environmental liens), charge,
adverse claim or restriction of any kind, including, without
limitation, any restriction on the use, voting, transfer,
receipt of income or other exercise of any attributes of
ownership, but excluding such Encumbrances which, taken as a
whole, would not have a Material Adverse Effect.
3
"Environmental Laws" means any federal, state or
------------------
local statute, code, ordinance, rule, regulation, permit,
consent, approval, license, judgment, order, writ, judicial
decision, decree, agency interpretation, injunction or other
authorization or requirement whenever promulgated, issued, or
modified, relating to:
(a) emissions, discharges, spills, releases or
threatened releases of pollutants, contaminants,
Hazardous Substances, materials containing Hazardous
Substances, or hazardous or toxic materials or wastes
into ambient air, surface water, groundwater,
watercourses, publicly or privately owned treatment
works, drains, sewer systems, wetlands, septic systems or
onto land;
(b) the use, treatment, storage, disposal,
handling, manufacturing, transportation, or shipment of
Hazardous Substances, materials containing Hazardous
Substances or hazardous and/or toxic wastes, material,
products or by-products (or of equipment or apparatus
containing Hazardous Substances) as defined in or
regulated under the following statutes and their
implementing regulations: the Hazardous Materials
Transportation Act, 49 U.S.C. Sec. 1801 et seq., the
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Resource Conservation and Recovery Act, 42 U.S.C. Sec. 6901
et seq., the Comprehensive Environmental Response,
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Compensation and Liability Act, 42 U.S.C. Sec. 9601 et seq.
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("CERCLA"), The Clean Water Act, 33 U.S.C. Sec. 1251 et
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seq., The Clean Air Act, 42 U.S.C. Sec. 7401 et seq.,
--- -- ---
and/or the Toxic Substances Control Act, 15 U.S.C.
Sec. 2601 et seq., each as amended from time to time; or
-- ---
(c) otherwise relating to pollution or the
protection of human health or the environment.
"ERISA" means the Employee Retirement Income
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Security Act of 1974, as amended, together with the rules and
regulations promulgated thereunder.
"Exchange Act" means the Securities Exchange Act of
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1934, as amended, together with the rules and regulations
promulgated thereunder.
"Existing Regions" has the meaning specified in
----------------
Section 5.12(a).
"First Union" means First Union National Bank of
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North Carolina, a national banking association under the laws
of the United States.
4
"First Union Loan Aqreement" means the amended and
--------------------------
restated loan agreement dated as of March 18, 1990 between
the Company and First Union, as such agreement has been
amended, supplemented, restated or otherwise modified from
time to time, together with any notes, security pledge,
guaranty or other ancillary agreements executed pursuant
thereto.
"GAAP" means U.S. generally accepted accounting
----
principles and practices in effect from time to time applied
consistently throughout the periods involved.
"Hazardous Substances" means (a) hazardous
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materials, hazardous wastes and hazardous substances as
defined or regulated under any Environmental Laws, (b) any
mixtures, blends, compounds or liquids containing any
hazardous substances in any proportions, (c) petroleum and
petroleum products including crude oil and any fractions
thereof, (d) asbestos and/or any material which contains any
hydrated mineral silicates, whether friable or non-friable,
(e) PCBs, or PCB-containing materials or fluids, (f) any
other hazardous radioactive, toxic or noxious substance,
material, pollutant, or solid, liquid or gaseous waste, and
(g) any substance with respect to which a federal, state or
local agency requires environmental investigation, monitoring
or remediation.
"Identified Regions" has the meaning specified in
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Section 5.12(a).
"Intellectual Property" has the meaning specified in
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Section 3.12.
"IRS" means the United States Internal Revenue
---
Service.
"Leased Real Property" means the real property
--------------------
leased by the Company or its Subsidiaries, together with, to
the extent leased by the Company, all buildings and other
structures, facilities or improvements presently or hereafter
located thereon, all fixtures, systems, equipment and items
of personal property of the Company or its Subsidiaries
attached or appurtenant thereto and all easements, licenses,
rights and appurtenances relating to the foregoing.
"Liabilities" means any and all debts, liabilities
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and obligations, whether accrued or fixed, absolute or
contingent, mature or unmatured or determined or
5
determinable, including, without limitation, those arising
under any law, rule, regulation, or order by a governmental
authority and those arising under any contract, agreement,
commitment or undertaking.
"Loss" has the meaning specified in Section 8.03.
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"March Balance Sheet" means the balance sheet dated
-------------------
as of March 31, 1991 included in the March Financial
Statements.
"March Financial Statements" has the meaning
--------------------------
specified in Section 3.08(c).
"Material Adverse Effect" means any circumstance,
-----------------------
change, event, transaction, loss, failure, effect or other
occurrence that is, or is reasonably likely to be, materially
adverse to the business, operations, properties (including
intangible properties), condition (financial or otherwise),
assets, Liabilities, results of operations or prospects of
the Company and its Subsidiaries taken as a whole.
"1990 Balance Sheet" means the audited balance sheet
------------------
of the Company dated December 31, 1990.
"Other Regions" has the meaning specified in
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Section 5.12(b).
"Owned Real Property" means the real property owned
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by the Company or its Subsidiaries, together with all
buildings and other structures, facilities or improvements
presently or hereafter located thereon, all fixtures,
systems, equipment and items of personal property of the
Company or its Subsidiaries attached or appurtenant thereto
and all easements, licenses, rights and appurtenances
relating to the foregoing.
"Person" means an individual, corporation,
------
partnership, association, trust, joint venture,
unincorporated organization, other entity or group (as
defined in Section 13(d)(3) of the Exchange Act).
"Preferred Stock" means the shares of preferred
---------------
stock of the Company, which shall have the rights and terms
set forth in Exhibit A hereto.
"Purchase Agreement" shall mean this agreement, as
------------------
amended by the letter agreement dated as of May 24, 1991
between the Company and the Purchaser.
6
"Purchase Price" has the meaning specified in
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Section 2.01.
"Purchaser Loss" has the meaning specified in
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Section 7.02.
"Purchaser's Directors" has the meaning specified in
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Section 5.08.
"Quarterly Date" has the meaning specified in
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Section 6.14(e).
"Real Property" means the Leased Real Property and
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the Owned Real Property.
"Representation Period" has the meaning specified in
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Section 5.08(a).
"Required Bank Amendment" means the amendment in
-----------------------
form and substance satisfactory to the Purchaser and the
Company to the First Union Loan Agreement contemplated by and
on terms substantially consistent with the terms set forth in
the term sheet delivered by the Purchaser to the Company on
the date hereof.
"Restricted Period" has the meaning specified in
-----------------
Section 5.11(a).
"SEC" means the Securities and Exchange Commission.
---
"SEC Reports" means all forms, reports and documents
-----------
required to be filed by the Company with the SEC since
November 28, 1989, including, without limitation, (i) the
Company's Annual Reports on Form 10-K for the fiscal years
ended December 31, 1989 and 1990 and (ii) all other reports
or registrations filed by the Company with the SEC since
November 28, 1989.
"Securities Act" means the Securities Act of 1933,
--------------
as amended, together with the rules and regulations
promulgated thereunder.
"Shares" has the meaning specified in Section 2.01.
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"Shareholders' Agreement" has the meaning specified
-----------------------
in Section 5.11.
"Stock Option Plan" means the 1988 nonqualified
-----------------
stock option plan, as amended through the date of this
Agreement, of the Company.
7
"Subscription Notice" has the meaning specified in
-------------------
Section 5.10(a).
"Subsidiary" or "Subsidiaries" means any
---------- ------------
corporation, partnership, joint venture or other legal entity
of which the Company or any other Person, as the case may be
(either alone or through or together with any other
Subsidiary), owns, directly or indirectly, fifty percent or
more of the stock or other equity interests, the holders of
which are generally entitled to vote for the election of the
board of directors or other governing body of such
corporation or other legal entity.
"Tax" or "Taxes" means all income, gross receipts,
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sales, use, transfer, employment, franchise, profits,
property, excise or other similar taxes, estimated import
duties, fees, stamp taxes and duties, value added taxes,
assessments or charges of any kind whatsoever (whether
payable directly or by withholding), together with any
interest and any penalties, additions to tax or additional
amounts imposed by any taxing authority with respect thereto.
"Total Voting Power" means the combined voting power
------------------
of all the Voting Securities.
"Voting Securities" means any shares of any class of
-----------------
capital stock of the Company entitled to vote generally in
the election of directors.
ARTICLE II
PURCHASE AND SALE OF SHARES; CLOSING
------------------------------------
SECTION 2.01. Authorization, Purchase and Sale of
-----------------------------------
Shares. Upon the terms and subject to the conditions set
------
forth herein, at the Closing, the Company shall authorize,
issue and sell to the Purchaser, and the Purchaser shall
purchase from the Company, (i) 2,204,495 shares of Common
Stock and (ii) 462,172 shares of Preferred Stock (such shares
of Common Stock and Preferred Stock being herein the
"Shares") for an aggregate purchase price of $12,000,000 (the
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"Purchase Price").
--------------
SECTION 2.02. Closing. (a) The Closing of the
-------
purchase and sale shall take place within three Business Days
of the satisfaction of the conditions set forth herein at the
offices of Shearman & Sterling, 599 Lexington Avenue, New
York, New York, or at such other time and place as the
Company and the Purchaser may mutually agree in writing.
8
(b) At the Closing, the Company shall deliver or
cause to be delivered to the Purchaser: (i) stock
certificates evidencing the Shares registered in the name of
the Purchaser (or its designee); (ii) the certificate
referred to in Section 6.01(c); (iii) the legal opinions
referred to in Section 6.01(h); (iv) a receipt for the
Purchase Price and (v) such other documents as the Purchaser
shall reasonably request.
(c) At the Closing, the Purchaser shall deliver to
the Seller: (i) the Purchase Price, by wire transfer, to an
account or accounts designated by the Company at least two
Business Days prior to the Closing Date; (ii) the certificate
referred to in Section 6.02(a); (iii) a receipt for the
Shares and (iv) such other documents as the Company shall
reasonably request.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
The Company represents and warrants to the Purchaser
that:
SECTION 3.01. Organization and Qualification;
-------------------------------
Subsidiaries. The Company and each of its Subsidiaries is a
------------
corporation duly organized, validly existing and in good
standing under the laws of their respective jurisdictions of
incorporation, and have the requisite corporate power and
authority to own, lease and operate their properties and
carry on their business in all material respects as presently
owned or conducted. The Company and each of its Subsidiaries
is duly qualified or licensed as a foreign corporation to do
business, and is in good standing, in each jurisdiction where
the character of its properties owned, leased or operated by
it or the nature of its activities makes such qualification
or licensing necessary, except those jurisdictions, if any,
in which the failure to be so duly qualified or licensed and
in good standing would not, taken as a whole, have a Material
Adverse Effect. Schedule 3.01 of the Disclosure Schedule
sets forth a complete and correct list of each of the
Subsidiaries of the Company.
SECTION 3.02. Charter of Incorporation and
----------------------------
By-Laws. The Company has heretofore furnished to the
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Purchaser a complete and correct copy of the Charter of
9
Incorporation and the By-Laws, each as amended to date, each
of which is in full force and effect. The Company is not in
violation of any of the provisions of the Charter of
Incorporation or By-Laws, and its Subsidiaries are not in
violation of any of the provisions of their charters of
incorporation, by-laws or equivalent organizational
documents, except where such violation would not, taken as a
whole, have a Material Adverse Effect.
SECTION 3.03. Capitalization. (a) The authorized
--------------
capital stock of the Company consists of (x) 10,000,000
shares of Preferred Stock of which none is issued,
outstanding or reserved for issuance and (y) 60,000,000
shares of Common Stock, of which (i) 8,835,502 shares of
Common Stock are issued and outstanding, (ii) 0 shares of
Common Stock are held in the treasury of the Company, (iii)
an aggregate of 251,325 shares of Common Stock are subject to
outstanding options, and 500,000 shares are reserved for
issuance, pursuant to the Company's Stock Option Plan, (iv)
an aggregate of 331,838 shares of Common Stock are subject to
outstanding promissory notes that are convertible into shares
of Common Stock, (v) 180,000 shares of Common Stock are held
in escrow on behalf of the Company and certain shareholders
in connection with a settlement of a claim arising from an
acquisition of a treatment center in Douglas, Georgia, and
(vi) an aggregate of 96,700 shares of Common Stock are
subject to outstanding warrants that are convertible into
shares of Common Stock.
(b) Except as set forth in this Section 3.03 or in
Schedule 3.03(b) of the Disclosure Schedule, there are no
options, warrants or other rights, agreements, arrangements
or commitments of any character to which the Company or any
of its Subsidiaries is a party or obligating the Company or
any of its Subsidiaries to issue or sell any shares of
capital stock of, or other equity interests in, the Company
or any of its Subsidiaries. Except as set forth in Schedule
3.03(b) of the Disclosure Schedule, there are no outstanding
contractual obligations of the Company or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any
of the capital stock of the Company or any Subsidiary or to
provide funds to or make any investment (in the form of a
loan, capital contribution or otherwise) in any Subsidiary or
any other entity. Each of the outstanding shares of capital
stock of each of the Company's Subsidiaries is duly
authorized, validly issued, fully paid and nonassessable and
is owned by the Company, directly or indirectly, free and
clear of all Encumbrances except as set forth in
Schedule 3.03(b) of the Disclosure Schedule and for any
10
Encumbrances incurred pursuant to the First Union Loan
Agreement and Encumbrances for taxes not yet due and payable.
(c) Except as set forth on Schedule 3.03(c) of the
Disclosure Schedule and as set forth herein, the Company is
not party to any agreement granting registration rights to
any Person with respect to any equity or debt securities of
the Company.
SECTION 3.04. Authority Relative to This
--------------------------
Agreement. The Company has all necessary corporate power and
---------
authority to execute and deliver this Agreement and to
perform its obligations and to consummate the transactions
contemplated hereunder. The execution, delivery and
performance of this Agreement by the Company have been duly
and validly authorized by all necessary corporate action and
no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or to consummate the
transactions contemplated by this Agreement. This Agreement
has been duly and validly executed and delivered by the
Company and, assuming the due authorization, execution and
delivery hereof by the Purchaser and payment for the Shares
as contemplated by this Agreement, constitutes the legal,
valid and binding obligation of the Company enforceable
against the Company in accordance with its terms (except in
each such case as enforceability may be limited by
bankruptcy, insolvency, reorganization and other similar laws
now or hereafter in effect relating to or affecting
creditors' rights generally and to the extent that 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 and except as rights to
indemnity and contribution under Section 5.07 may be limited
by Federal or state securities laws).
SECTION 3.05. No Conflict; Required Filings and
---------------------------------
Consents. (a) Assuming the satisfaction of the conditions
--------
set forth in Article VI hereof, the execution and delivery of
this Agreement by the Company do not, and the performance of
this Agreement (including, without limitation, the
consummation of the transactions contemplated hereunder and
the conversion or redemption, if any, of the Preferred Stock)
will not, (i) conflict with or violate the Charter of
Incorporation or By-Laws, (ii) conflict with or violate the
charters of incorporation or by-laws or equivalent
organizational documents of any of the Company's
11
Subsidiaries, (iii) conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to the
Company or any of its Subsidiaries or by which its or any of
their respective properties are bound or affected, or
(iv) result in any breach of or constitute a default (or an
event which with notice or lapse of time or both would become
a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or
assets of the Company or any of its Subsidiaries pursuant to
any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, insurance policy or other instrument
or obligation to which the Company or any of its Subsidiaries
is a party, or by which the Company or any of its
Subsidiaries or its or any of their respective properties are
bound or affected, except in the case of clauses (ii), (iii)
and (iv) above for such conflicts which would not, taken as a
whole, have a Material Adverse Effect.
(b) The execution and delivery of this Agreement by
the Company do not, and the performance of this Agreement by
the Company (including, without limitation, the consummation
of the transactions hereunder and the conversion or
redemption, if any, of the Preferred Stock) will not, require
any consent, approval, authorization or permit of, or filing
(other than filings, if any, required on Form 8-K with the
SEC) with or notification to, any governmental or regulatory
authority, domestic or foreign, on the part of the Company or
any of its Subsidiaries.
SECTION 3.06. Common Stock; Preferred Stock.
-----------------------------
Assuming all conditions set forth in Article VI are
satisfied, following the consummation of the transactions
hereunder, all shares of Common Stock and Preferred Stock
subject to issuance pursuant to this Agreement (including,
without limitation, the Common Stock issuable upon conversion
of the Preferred Stock), upon such issuance against payment
for such shares of Common Stock as contemplated by this
Agreement or upon conversion of the Preferred Stock, as the
case may be, shall (i) be duly authorized, validly issued,
fully paid and nonassessable and (ii) not be subject to any
Encumbrances (other than those that may be incurred by the
Purchaser). With respect to the shares of Common Stock, such
shares shall have accorded to them full voting rights. With
respect to the shares of Preferred Stock, such shares will be
convertible into shares of Common Stock in accordance with
the terms of the Preferred Stock. None of the Shares nor the
shares of Common Stock issuable upon conversion of the
12
Preferred Stock are "Control Shares" as such term is defined
in the Tennessee Business Corporation Act.
SECTION 3.07. Compliance with Laws. Except as set
--------------------
forth in Schedule 3.07 of the Disclosure Schedule, neither
the Company nor any of its Subsidiaries is in conflict with,
or violation of, any law, rule, regulation, order, judgment
or decree applicable to the Company or any of its
Subsidiaries or by which the Company or any of its
Subsidiaries or any of its or their respective properties are
bound or affected, except for any such conflicts or
violations which would not, individually or in the aggregate,
have a Material Adverse Effect.
SECTION 3.08. SEC Filings; Financial Statements.
---------------------------------
(a) The Company has filed all forms, reports, statements and
documents required to be filed with the SEC since
November 28, 1989, including, without limitation, the SEC
Reports. The SEC Reports (i) were each prepared in
accordance with, and at the time of filing complied in all
material respects with, the requirements of the Securities
Act, or the Exchange Act, as the case may be, and (ii) did
not at the time they were filed contain any untrue statement
of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading. None of the Company's
Subsidiaries is required to file any forms, reports or other
documents with the SEC.
(b) Each of the consolidated financial statements
(including, in each case, any related notes thereto)
contained in the SEC Reports has been prepared in accordance
with GAAP (except as may be indicated in the notes thereto),
and each presents fairly the consolidated financial position
of the Company and its consolidated Subsidiaries at the
respective dates thereof and the consolidated results of its
operations and changes in cash flows for the periods
indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring
year-end adjustments which were not and are not expected to
be material in amount.
(c) Schedule 3.08(c) of the Disclosure Schedule
hereto sets forth the unaudited consolidated balance sheet of
the Company and its Subsidiaries and the unaudited statement
of operations and statement of cash flows for the three-month
period ended March 31, 1991 (the "March Financial
---------------
13
Statements"). The March Financial Statements have been
----------
prepared in accordance with GAAP (except as may be indicated
in the notes thereto) and present fairly the financial
condition of the Company and its consolidated Subsidiaries as
of March 31, 1991 and the consolidated results of its
operations and changes in cash flows for the three-month
period ended March 31, 1991 except that the March Financial
Statements are subject to normal or recurring year-end
adjustments which are not expected to be material in amount.
(d) Except as set forth in Schedule 3.08(d) of the
Disclosure Schedule hereto and as and to the extent set forth
on the March Financial Statements, including the notes
thereto, neither the Company nor any of its Subsidiaries has
any Liabilities, including, without limitation, liabilities
for taxes which would be required to be reflected on a
balance sheet or in the notes thereto prepared in accordance
with GAAP except for liabilities or obligations incurred in
the ordinary course of business since March 31, 1991 which
would not, taken as a whole, have a Material Adverse Effect.
SECTION 3.09. Absence of Certain Changes, Events
----------------------------------
and Conditions. (a) Since January 1, 1991, except as
--------------
disclosed in the March Financial Statements and in Schedule
3.09(a) of the Disclosure Schedule, there has not been any
change having a Material Adverse Effect. Except as disclosed
in Schedule 3.09(a) of the Disclosure Schedule, there are no
conditions known to the Company existing, with respect to the
markets, proposed marketing plans, products, facilities,
existing and prospective technologies, capabilities or
personnel, of the Company that reasonably would be expected
to have a Material Adverse Effect.
(b) Since January 1, 1991, the Company has been
operated only in the ordinary course. As amplification and
not limitation of the foregoing, except as disclosed in
Schedule 3.09(b) of the Disclosure Schedule and except as
disclosed in the March Financial Statements, neither the
Company nor any of its Subsidiaries has, since January 1,
1991:
(i) made any change in any method of accounting or
accounting practice or policy used by the Company, other
than such changes required by GAAP that are identified in
Schedule 3.09(b)(i) of the Disclosure Schedule;
(ii) made any material changes in the customary
methods of operations of the Company, including practices
14
and policies relating to purchasing, inventory,
marketing, selling or pricing;
(iii) failed to maintain the Company's plant,
property and equipment in good repair, ordinary wear and
tear excepted;
(iv) redeemed any of the Company's capital stock or
declared, made or paid any dividends or distributions
(whether in cash, securities or property) to the
Company's stockholders or otherwise with respect to the
Common Stock;
(v) issued or sold any of the Company's stock,
notes, bonds or other securities, or any option or
warrant to purchase the same;
(vi) amended or restated the Company's Charter of
Incorporation or By-Laws;
(vii) merged with, been merged with, entered into a
consolidation with or acquired (by purchase, merger,
consolidation, stock acquisition or otherwise) a
substantial portion of the assets of any other entity or
business of any other corporation, partnership,
association or other business entity or any division
thereof, or otherwise acquired assets other than in the
ordinary course and in accordance with past practice; or
(viii) agreed, whether in writing or otherwise, to
take any of the actions specified in this Section
3.09(b), except for those contemplated by this Agreement
and the Required Bank Amendment.
SECTION 3.10. Employee Benefit Plans.
----------------------
(a) Schedule 3.10(a) of the Disclosure Schedule sets forth
(i) all employee benefit plans (within the meaning of Section
3(3) of ERISA) and all bonus, stock option, stock purchase,
restricted stock, incentive, deferred compensation, retiree
medical, dental or life insurance, supplemental retirement,
severance or other benefit plans, programs or arrangements,
and all employment, termination, severance or other contracts
or agreements with respect to which the Company or any of its
Subsidiaries is a party (including, without limitation, all
medical director agreements and non competition agreements),
with respect to which the Company or any of its Subsidiaries
has any obligation (whether primary or secondary) or which
are maintained, contributed to or sponsored by the Company or
15
any of its Subsidiaries for the benefit of any current or
former employee, officer or director of the Company or any
one of its Subsidiaries and (ii) each employee benefit plan
for which the Company or one of its Subsidiaries could incur
liability under Section 4069 of ERISA, in the event such plan
were terminated, or under Section 4212(c) of ERISA, or in
respect of which the Company or one of its Subsidiaries
remains secondarily liable under Section 4204 of ERISA
(collectively, the "Plans"). Each Plan (other than a
-----
multiemployer plan, within the meaning of Section 3(37) or
40001(a)(3) of ERISA (a "Multiemployer Plan")) is in writing
------------------
and, with respect to each such Plan, the Company has
previously furnished or made available to the Purchaser a
true and complete copy of each Plan and (i) a copy of each
trust or other funding arrangement, (ii) the most recent
summary plan description and any relevant summary of material
modifications, (iii) the most recently filed IRS Form 5500,
(iv) the most recently received IRS determination letter for
each such Plan, and (v) the most recently prepared actuarial
report and financial statement, if applicable, in connection
with each such Plan. Except as contemplated herein or as
required by ERISA or the Code, the Company and its
Subsidiaries have no express commitment (i) to create, incur
material liability with respect to or cause to exist any
other employee benefit plan, program or arrangement, (ii) to
enter into any material contract or agreement to provide
compensation or benefits to any individual or (iii) to modify
or terminate any Plan.
(b) None of the Plans is a Multiemployer Plan, or a
single employer pension plan, within the meaning of Section
4001(a)(15) of ERISA, for which the Company or one of its
Subsidiaries could incur liability under Section 4063 or 4064
of ERISA (a "Multiple Employer Plan") having a Material
----------------------
Adverse Effect. Neither the Company nor any of its
Subsidiaries has incurred any liability having a Material
Adverse Effect with respect to a withdrawal from any
Multiemployer Plan or Multiple Employer Plan, and no fact or
event exists which could give rise to such liability. Except
as set forth in Schedule 3.10(b) of the Disclosure Schedule,
none of the Plans provides for the payment of material
severance or similar-type benefits to any person and none of
the Plans obligates the Company or any of its Subsidiaries to
make any payment or provide any benefit that could be subject
to a tax under Section 4999 of the Code.
(c) Except as set forth in Schedule 3.10(c) of the
Disclosure Schedule, none of the Plans provides for or
16
promises retiree medical, dental or life insurance benefits
to any current or former employee, officer or director of the
Company or any of its Subsidiaries, or their beneficiaries.
(d) Each Plan (other than a Multiemployer Plan)
that is intended to be qualified under Section 401(a) of the
Code has received a favorable determination letter from the
IRS after 1985 providing that it is so qualified and each
trust established in connection with any Plan (other than a
Multiemployer Plan) that is intended to be exempt from
federal income taxation under Section 501(a) of the Code has
received a determination letter from the IRS after 1985
providing that it is so exempt and no fact or event has
occurred since the date of such determination letter that
could adversely affect the qualified status of any such Plan
or the exempt status of any such trust. None of the Plans
(other than a Multiemployer Plan) is subject to the laws of
any jurisdiction outside of the United States.
(e) Neither the Company nor any of its Subsidiaries
has engaged in any nonexempt prohibited transaction (within
the meaning of Section 406 of ERISA or Section 4975 of the
Code) with respect to any Plan. Neither the Company nor any
of its Subsidiaries has incurred any liability having a
Material Adverse Effect for any tax arising under Section
4971, 4972, 4979, 4980 or 4980B of the Code. None of the
employees of the Company or its Subsidiaries currently
participates in, or, within the five years preceding the date
hereof, has participated in, a Plan (other than a
Multiemployer Plan) subject to Title IV of ERISA or Section
412 of the Code, and neither the Company nor any of its
Subsidiaries has incurred any liability having a Material
Adverse Effect under, arising out of or by operation of Title
IV of ERISA or Section 412 of the Code in connection with
such Plan. No complete or partial termination has occurred
within the five years preceding the date hereof with respect
to any Plan (other than a Multiemployer Plan). None of the
assets of the Company or its Subsidiaries is the subject of
any lien having a Material Adverse Effect arising under
Section 302(f) of ERISA or Section 412(n) of the Code.
Neither the Company nor any of its Subsidiaries has been
required to post any security having a Material Adverse
Effect under Section 307 of ERISA or Section 401(a)(29) of
the Code.
(f) Each Plan (other than a Multiemployer Plan) is
now and has been operated in all material respects in
accordance with the requirements of all applicable laws
17
(including, without limitation, ERISA and the Code) and with
the requirements of the terms of such Plan. All employer
contributions, premiums, payments or amounts required to be
made, paid or accrued with respect to any Plan (other than a
Multiemployer Plan) have been made, paid or accrued on or
before their due dates.
SECTION 3.11. Owned Real Property. The Company has
-------------------
valid fee interests in all of its Owned Real Property and
good and marketable title thereto, and such Owned Real
Property is owned by the Company or a Subsidiary free and
clear of all Encumbrances except (i) as set forth on
Schedule 3.11 of the Disclosure Schedule, (ii) Encumbrances
for current taxes not yet due and payable or being contested
in good faith by appropriate proceedings, (iii) Encumbrances
to secure indebtedness incurred pursuant to the First Union
Credit Agreement and (iv) imperfections of title, easements,
pledges, charges and encumbrances which do not interfere with
the Company's ability to use the owned real property or which
do not, individually or in the aggregate, have a Material
Adverse Effect.
SECTION 3.12. Intellectual Property Rights. Except
----------------------------
as set forth in Schedule 3.12 of the Disclosure Schedule, the
Company holds valid title to, or valid and subsisting
licenses in, the patents, patent rights, trademarks, service
marks, trademark rights, trade names, trade name rights, and
registered copyrights owned or used by the Company or any of
its Subsidiaries in the conduct of its business
(collectively, the "Intellectual Property"), free and clear
---------------------
of all Encumbrances. The consummation of the transactions
hereunder will not result in the termination or material
impairment of any of the Company's Intellectual Property.
SECTION 3.13. Environmental Matters. Except as
---------------------
would not, individually or in the aggregate, have a Material
Adverse Effect:
(a) All facilities and property presently owned or
leased by the Company or any of its Subsidiaries have
been, and continue to be, owned and operated by the
Company and its Subsidiaries in material compliance with
all applicable Environmental Laws.
(b) Neither the Company nor any of its Subsidiaries
has received notice of any pending or threatened claims,
complaints or requests for information with respect to
any alleged violation of any Environmental Laws.
(c) There have been no material releases, as
defined under any Environmental Laws, of Hazardous
18
Substances that give rise to necessary costs of response
at, on, from or under any property now or previously
owned or leased by the Company or any of its Subsidiaries
during the period in which any such property was owned or
leased by the Company or a Subsidiary.
(d) The Company and its Subsidiaries have been
issued and are in material compliance with all permits,
certificates, approvals, licenses, registrations, orders,
administrative consent orders and any other
authorizations, approvals or consents relating to
Environmental Laws or Hazardous Substances necessary to
the operation of their businesses.
(e) Neither the Company nor any of its Subsidiaries
has received notice that property presently owned or
leased, or previously owned or leased, by the Company or
any of its Subsidiaries is listed or proposed for listing
in the National Priorities List created pursuant to
CERCLA or on the CERCLIS or any similar state list of
sites requiring investigation or cleanup.
(f) Neither the Company nor any of its Subsidiaries
has transported or arranged for the transportation of any
Hazardous Substances to any location which is listed on
the National Priorities List or any similar state list,
nor has any of them received notice of pending or
threatened claims as a result of transporting or
arranging to transport Hazardous Substances to any
location.
(g) There are no polychlorinated biphenyls (other
than may be contained in electrical transformers which
are labeled, operated and maintained in accordance with
all Environmental Laws) or asbestos-containing materials
present at any property now or previously owned or leased
by the Company or by any Subsidiary during the period in
which any such property was owned or leased by the
Company or a Subsidiary.
(h) Neither the Company nor any of its Subsidiaries
has received notice of pending or threatened claims
against the Company or any of its Subsidiaries arising
out of any operations, action, inaction or status of any
previously divested property, whether or not the subject
of any indemnity, under any Environmental Laws or
involving any Hazardous Substances.
19
SECTION 3.14. Litigation. Except as to matters set
----------
forth in Schedule 3.14 of the Disclosure Schedule, there is
no pending or, to the best of the knowledge of the Company or
any of its Subsidiaries threatened, litigation, arbitration
or governmental investigation or legal, administrative or
regulatory proceeding against the Company or any of its
Subsidiaries or to which any of their respective properties
is or would be subject that (a) if adversely determined,
would have a Material Adverse Effect; or (b) relates to this
Agreement or the Required Bank Amendment. Except as set
forth in Schedule 3.14 of the Disclosure Schedule, there are
no material citations, fines or penalties heretofore asserted
against the Company or its Subsidiaries under any federal,
state or local law which remain unpaid or which otherwise
bind the assets of the Company or its Subsidiaries.
SECTION 3.15. Insurance. All insurance policies,
---------
including, without limitation, medical malpractice policies
of the Company, are set forth in Schedule 3.15 of the
Disclosure Schedule and are in full force and effect. The
Company will maintain all insurance policies in force through
the Closing Date.
SECTION 3.16. Agreements. Each agreement,
----------
contract, lease, license commitment or instrument (including
any and all amendments thereto) to which the Company or any
of its Subsidiaries is a party involving aggregate annual
payments of at least $100,000 and which is material,
individually or in the aggregate, to the business, operations
or financial condition of the Company and its Subsidiaries is
in full force and effect and constitutes a legal, valid and
binding obligation of the respective parties thereto, and
except as set forth on Schedule 3.16 of the Disclosure
Schedule, neither the Company nor any of its Subsidiaries is
in default or breach of (with or without the giving of notice
or the passage of time) any such agreement or instrument,
except breaches or defaults, if any, that would not have a
Material Adverse Effect. The Company is not aware of any
third party being in material breach of any of such
agreements.
SECTION 3.17. Licenses and Permits. Except as
--------------------
would not have a Material Adverse Effect, the Company has all
governmental licenses, permits and other governmental
authorizations and approvals required for the conduct of its
businesses as now conducted, and all such material licenses,
permits, authorizations and approvals will remain in full
force and effect immediately following the consummation of
the transactions hereunder.
20
SECTION 3.18. Private Offering. (a) Assuming the
----------------
accuracy of the representations and warranties of the
Purchaser, the sale of the Shares hereunder is exempt from
the registration and prospectus delivery requirements of the
Securities Act.
(b) No form of general solicitation or general
advertising (including, without limitation, advertisements,
articles, notices or other communications published in any
newspaper, magazine or other medium or broadcast over
television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or
general advertising) was used by the Company or any other
Person acting on behalf of the Company in respect of the
Shares or in connection with the offer and sale of the Shares.
SECTION 3.19. Brokers. No broker, finder or
-------
investment banker, other than ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Co.
Incorporated, is entitled to any brokerage, finder's or other
fee or commission in connection with the transactions
hereunder based upon arrangements made by or on behalf of the
Company.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
-----------------------------------------------
The Purchaser represents and warrants to the Company
that:
SECTION 4.01. Corporate Organization. The
----------------------
Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of Colorado and has the
requisite corporate power and authority and any necessary
governmental authority to own, operate or lease the
properties that it purports to own, operate or lease and to
carry on its business as it is now being conducted.
SECTION 4.02. Authority Relative to This Agreement.
-------------------------------------
The Purchaser has all necessary corporate power
and authority to execute and deliver this Agreement and to
perform its obligations and to consummate the transactions
contemplated hereunder. The execution and delivery of this
Agreement by the Purchaser and the purchase of the Shares as
provided in Section 2.01 hereof by the Purchaser hereunder
have been duly and validly authorized by all necessary
21
corporate action of the Purchaser and no other corporate
proceedings on the part of the Purchaser are necessary to
authorize this Agreement or the purchase of the Shares by the
Purchaser as contemplated hereby. This Agreement has been
duly and validly executed and delivered by the Purchaser and,
assuming the due authorization, execution and delivery by the
Company, constitutes the legal, valid and binding obligation
of the Purchaser enforceable against the Purchaser in
accordance with its terms (except in each such case as
enforceability may be limited by bankruptcy, insolvency,
reorganization and other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally
and to the extent that 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 and
except as rights to indemnity and contribution under Section
5.07 may be limited by Federal or state securities laws).
SECTION 4.03. No Conflict; Required Filings and
---------------------------------
Consents. (a) The execution and delivery of this Agreement
--------
by the Purchaser do not, and the performance of this
Agreement by the Purchaser will not, (i) conflict with or
violate the articles of incorporation or by-laws or
equivalent organizational documents of the Purchaser, (ii)
conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to the Purchaser or by which it
or its properties are bound or affected, or (iii) result in
any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default)
under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the property or
assets of the Purchaser pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which
the Purchaser is a party or by which the Purchaser or any of
its properties is bound or affected, except, in the case of
this clause (iii) and clause (ii) above, for any such
breaches, defaults or other occurrences which would not,
individually or in the aggregate, have a material adverse
effect on the business, operations, properties (including
intangible properties), condition (financial or otherwise),
assets or liabilities of the Purchaser.
(b) The execution and delivery of this Agreement by
the Purchaser do not, and the performance of this Agreement
by the Purchaser (including, without limitation, the
22
consummation of the transactions hereunder) will not, require
any consent, approval, authorization or permit of, or filing
with or notification to, any governmental or regulatory
authority, domestic or foreign.
SECTION 4.04. Funds. The Purchaser has and,
-----
immediately prior to the Closing, will have the funds
necessary to consummate the purchase of the Shares hereunder.
SECTION 4.05. Securities Act. The Shares purchased
--------------
by the Purchaser pursuant to this Agreement are being
acquired for investment only and not with a view to any sale
or distribution (within the meaning of the Securities Act) of
the Shares or any part thereof. The Purchaser agrees at all
times to sell or otherwise dispose of all or any part of the
Shares so acquired by the Purchaser (and any securities
issued in exchange therefor) only pursuant to a registration,
or exemption therefrom, under the Securities Act and in
compliance with applicable state securities laws. The
Purchaser will take any steps necessary to insure that any
purchaser will agree not to sell or otherwise dispose of
Shares except in compliance with the requirements contained
in the preceding sentence. The Purchaser is an "accredited
investor" within the meaning of Rule 501 promulgated under
the Securities Act and has such knowledge and experience in
financial and business matters as to be capable of evaluating
the merits and risks of an investment in the Shares. The
Purchaser has received all the information it deems material
to its evaluation of the business, assets, liabilities,
financial condition and results of operations of the Company
and all the information it has requested from the Company and
considers necessary or appropriate for deciding whether to
purchase the Shares. The Purchaser has the ability to bear
the economic risks of the Purchaser's prospective investment
and the Purchaser is able, without materially impairing its
financial condition, to hold the Shares for an indefinite
period of time and to suffer complete loss on its
investment. The Purchaser understands and has fully
considered for purposes of this investment the risks of this
investment and understands that: (i) this investment is
suitable only for an investor who is able to bear the
economic consequences of losing his or its entire investment;
(2) the Shares represent an extremely speculative investment
which involves a high degree of risk of loss; (3) there are
substantial restrictions on the transferability of the Shares
and accordingly, it may not be possible for the Investor to
liquidate his or its investment in the Shares in case of
emergency; and (4) there have been no representations as to
the possible future value, if any, of the Shares.
23
The Purchaser understands and acknowledges that the
sale of the Shares pursuant to this Agreement will not be
registered under the Securities Act on the grounds that the
offering and sale of securities contemplated by this
Agreement are exempt from registration pursuant to Section
4(2) of the Securities Act, and that the Company's reliance
upon such exemption is predicated in part upon the
Purchaser's representations set forth in this Agreement.
SECTION 4.06. Brokers. No broker, finder or
-------
investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions
hereunder based upon arrangements made by or on behalf of the
Purchaser.
SECTION 4.07. Business of the Purchaser's
---------------------------
Affiliates. Neither the Purchaser nor any of its Affiliates
----------
is actively, directly or indirectly, engaged in the Business,
or has directly or indirectly made any material investments
in any entity engaged directly or indirectly in the Business,
in North America nor is the Purchaser or any such Affiliates
currently engaged in any negotiations with respect to
acquisition of or investment in any entity that is so engaged
(except for negotiations with the Company). The Purchaser
shall not enter into any such negotiations with any Person
(other than the Company) between the date hereof and the
earlier of the Closing Date or the termination of this
Agreement.
ARTICLE V
ADDITIONAL AGREEMENTS
---------------------
SECTION 5.01. Conduct of Business by the Company
----------------------------------
Pending the Closing. Except as contemplated by this
-------------------
Agreement, the Company covenants and agrees that, during the
period between the date of this Agreement and through and
including the Closing Date, unless the Purchaser shall
otherwise agree in writing, the businesses of the Company and
its Subsidiaries shall be conducted only in, and the Company
and its Subsidiaries shall not take any action except in, the
ordinary course of business and in a manner consistent with
past practice.
SECTION 5.02. Required Bank Amendment. As promptly
-----------------------
as practicable after the execution of this Agreement, the
24
Company shall negotiate in good faith with First Union the
terms of the Required Bank Amendment. The Company shall use
its best efforts to negotiate and enter into the Required
Bank Amendment as soon as reasonably practicable after the
date hereof. The Company shall (a) consult with the
Purchaser with respect to the terms and conditions of the
Required Bank Amendment and (b) afford the Purchaser and its
representatives the reasonable opportunity to participate in
all negotiations relating to the Required Bank Amendment and
the restructuring of the financing contemplated thereby.
SECTION 5.03. Access to Information. (a) From the
---------------------
date hereof to the Closing Date, the Company shall, and shall
cause its Subsidiaries, officers, directors, employees,
auditors and other agents to, afford the officers, employees,
auditors and other agents of the Purchaser reasonable access
at all reasonable times to its officers, employees, agents,
properties, offices, plants and other facilities and to all
books and records, and shall furnish the Purchaser with all
financial, operating and other data and information with
respect to the business and properties of the Company as the
Purchaser, through its officers, employees or agents, may
reasonably request. The Purchaser agrees to maintain the
strict confidentiality of such data and information and not
to disclose such data to any third party. The Purchaser
further confirms its obligations pursuant to that certain
confidentiality letter agreement executed and delivered prior
to the date hereof by and between the Company and the
Purchaser.
(b) No investigation pursuant to this Section 5.03
shall affect any representations or warranties of the parties
herein or the conditions to the obligations of the parties
hereto.
SECTION 5.04. Notification of Certain Matters. The
-------------------------------
Company shall give prompt notice to the Purchaser, and the
Purchaser shall give prompt notice to the Company, of (i) the
occurrence, or non-occurrence, of any event the occurrence,
or non-occurrence, of which would be likely to cause any
representation or warranty contained in this Agreement to be
untrue or inaccurate and (ii) any failure of the Company or
the Purchaser, as the case may be, to comply with or satisfy
any covenant, condition or agreement to be complied with or
satisfied by it hereunder; provided, however, that the
-------- -------
delivery of any notice pursuant to this Section 5.04 shall
not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
25
SECTION 5.05. Further Action; Reasonable Efforts.
----------------------------------
Upon the terms and subject to the conditions hereof, each of
the parties hereto shall use all reasonable efforts to take,
or cause to be taken, all appropriate action, and to do or
cause to be done all things necessary, proper or advisable
under applicable laws and regulations to consummate and make
effective the transactions contemplated hereunder.
SECTION 5.06. Public Announcements. The Purchaser
--------------------
and the Company shall consult with each other before issuing
any press release or otherwise making any public statements
with respect to the transactions contemplated hereunder and
shall not issue any such press release or make any such
public statement prior to such consultation, except as may
be, and to the extent, required by law or any listing
agreement with the National Association of Securities
Dealers.
SECTION 5.07. Registration Rights. Effective at
-------------------
the Closing, the Purchaser shall have the registration rights
set forth in Exhibit D.
SECTION 5.08. Board Representation; Committees.
--------------------------------
(a) The Company agrees, effective upon the Closing
Date, to decrease the size of the Board to seven directors
and to appoint to the Board two persons designated by the
Purchaser (the "Purchaser's Directors"), one with his term
----------- ---------
expiring at the Company's 1992 annual stockholders' meeting
(the "1992 Meeting") and the other with his term expiring at
---- -------
the Company's 1993 annual stockholders' meeting (the
"Purchaser's 1993 Director"). On or prior to the 1992
----------- ---- --------
Meeting, the size of the Board shall be reduced to five
members.
(b) From and after the 1992 Meeting and during the
period in which the Purchaser owns at least 15% of the issued
and outstanding Common Stock, the Purchaser may request the
Company to include, as a nominee for the Board recommended by
the Board, one person designated by the Purchaser, who,
unless he shall resign prior to the expiration of his term,
may be the Purchaser's 1993 Director, and such person shall
be nominated by the Company unless the Board, in the exercise
of its fiduciary duties, reasonably shall determine that he
is not qualified to serve on the Board and each of the
committees specified in subsection (d). If the Board shall
reasonably determine that such designee of the Purchaser is
not so qualified, the Purchaser shall have the opportunity to
specify one or more additional designees who shall be so
included as a nominee subject to the qualification set forth
in the immediately preceding sentence.
26
(c) Effective on the Closing Date and throughout
the period in which the Purchaser owns at least 15% of the
issued and outstanding Common Stock (the "Representation
--------------
Period"), the Company agrees to constitute a Human Resource
------
Committee of the Board which shall, among other things, make
recommendations with respect to the employment practices of
the Company and the hiring and firing of senior officers of
the Company.
(d) Effective on the Closing Date and throughout
the Representation Period, the Company agrees to place one of
the Purchaser's Directors on each of the Executive, Audit,
Compensation and Human Resources Committees of the Board and
to cause each of the Executive, Audit, Compensation and Human
Resources Committees to consist of three members.
(e) During the Representation Period, the Purchaser
also shall have the right to have an observer at all meetings
of the Board and each of the committees of the Board.
SECTION 5.09. Legend. The Purchaser agrees that
------
all certificates representing the Shares issued pursuant to
this Agreement shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
SECURITIES LAWS OF ANY STATE AND NEITHER THE SECURITIES
NOR ANY INTEREST THEREIN MAY BE SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREUNDER. THE SHARES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT (IN CERTAIN CIRCUMSTANCES) TO A
RIGHT OF FIRST OFFER AS SET FORTH IN THE STOCK PURCHASE
AGREEMENT DATED AS OF MAY 11, 1991 BETWEEN THE COMPANY
AND COBE LABORATORIES, INC."
SECTION 5.10. Purchaser's Preemptive Rights.
-----------------------------
During the Representation Period, the Company covenants and
agrees that:
(a) In the event that the Company proposes to issue
Common Stock or any other Voting Securities, it shall
give the Purchaser ten days' prior written notice of such
intention, describing the estimated price and the other
terms upon which the Company proposes to issue the same
(the "Subscription Notice"). The Purchaser shall have
------------ ------
the option to purchase from the Company at the time of
such issuance the number of shares of Common Stock or
other Voting Securities, as the case may be, necessary to
permit the Purchaser to maintain the percentage of Common
Stock owned by the Purchaser immediately prior to such
issuance or the percentage of Total Voting Power it had
27
immediately prior to such issuance for the price and upon
the other terms upon which the Company actually effects
such issuance.
(b) Within 15 days of the end of each March 31st,
June 30th, September 30th and December 31st (each a
"Quarterly Date") following the Closing Date, the Company
--------------
shall notify the Purchaser of the number of shares of
Common Stock and the number of Voting Securities
outstanding as of each such Quarterly Date. The
Purchaser shall have the option to purchase from the
Company additional shares of Common Stock to the extent
necessary to permit the Purchaser to maintain the higher
of (i) the percentage of shares of Common Stock or Voting
Securities owned by the Purchaser as of the immediately
preceding Quarterly Date, after giving effect to any
purchases thereafter pursuant to this Section 5.10(b), or
(ii) 20% of the issued and outstanding shares of Common
Stock and 20% of Total Voting Power. The Purchaser may
exercise such option by delivery to the Company of
written notice of its intention to exercise such option
within 30 days of such Quarterly Date. The per share
purchase price for such shares of Common Stock shall be
equal to the average of the averages of the closing bid
and asked prices of the Common Stock on each day during
the calendar quarter ending on the Quarterly Date. The
closing of the purchase of such shares of Common Stock
shall take place within five days of the receipt of the
written notice delivered by the Purchaser to the Company
pursuant to this Section 5.10(b).
(c) In the event that the Preferred Stock is
redeemed in accordance with its terms, the Purchaser, in
lieu of its rights under Section 5.10(b), shall have the
option to purchase from the Company on April 30, 1992
additional shares of Common Stock to the extent necessary
to permit the Purchaser to maintain the higher of (i) the
percentage of shares of Common Stock or Voting Stock
owned by the Purchaser as of September 30, 1991 after
giving effect to the redemption of the Preferred Stock
and any other purchases pursuant to Section 5.10(b), or
(ii) 19.99% of the issued and outstanding shares of
Common Stock and 19.99% of the Total Voting Power. The
Purchaser may exercise such option by delivery to the
Company of written notice of its intention to exercise
such option on or prior to April 25, 1992. The per share
purchase price for such shares of Common Stock shall be
equal to the average of the averages of the closing bid
and asked prices of the Common Stock on each day during
the period beginning on the Closing Date and ending on
March 31, 1992. The closing of the purchase of such
28
shares of Common Stock shall take place within five days
of the receipt of the written notice delivered by the
Purchaser to the Company pursuant to this Section 5.10(c).
(d) In the event that the Shareholders under the
Agreement and Release dated as of January 1, 1991 (the
"Release Agreement") among the Company and such
Shareholders elect Option 1 as set forth in Section 5 of
the Release Agreement and 300,000 shares of Common Stock
(the "Escrowed Shares") are delivered out of Escrow to
such Shareholders, the Purchaser shall have the option to
purchase on the Exercise Date (as hereinafter defined)
69,000 shares of Common Stock at a per share purchase
price equal to the average of the averages of the closing
bid and asked prices of the Common Stock for each trading
day from the Closing Date up to the Exercise Date. The
"Exercise Date" shall mean the date that is 15 Business
Days after the date of delivery of the Escrowed Shares to
such Shareholders or, in the event that the Preferred
Stock is redeemed in accordance with its terms, the later
of (i) April 30, 1992 or (ii) the day that is 15 Business
Days after such delivery of the Escrowed Shares. The
Purchaser may exercise the option set forth herein by
delivery notice thereof to the Company no later than five
(5) Business Days prior to the Exercise Date.
SECTION 5.11. Standstill Agreement. For a period
--------------------
of five years after the Closing Date, neither the Purchaser
nor any entity controlled by Investment ▇▇ ▇▇▇▇▇ ("Cardo"),
nor any other person acting in the capacity as agent for any
of the foregoing, shall (nor shall it assist or encourage
others to) directly or indirectly, unless specifically
requested to do so in writing in advance by the Board of
Directors of the Company, (i) acquire or agree, offer, seek
or propose to acquire, or cause to be acquired, ownership
(including, without limitation, beneficial ownership as
defined in Rule 13d-3 under the Exchange Act) any securities
of the Company, any debt claims of the Company, any
securities convertible or exchangeable into or exercisable
for any securities or assets of the Company, or any rights or
options to acquire such ownership (including from a third
party), except pursuant to (A) the Purchaser's right to
purchase set forth in Section 5.10 hereof and (B) the
Purchaser's right to purchase set forth in the Shareholders'
Agreement, among the Purchaser, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, M.D.
and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D. substantially in the form of
Exhibit E hereto (the "Shareholders' Agreement"); (ii)
------------ ---------
propose to enter into any merger or business combination
involving the Company, except and unless the Company enters
into a definitive agreement with a third party contemplating
a merger, consolidation or similar transaction in which all
29
or a majority of the Company's equity securities or
substantially all of its assets are to be acquired by such
third party pursuant to such definitive agreement (a
"Business Combination"), the Purchaser shall be permitted,
-------- -----------
notwithstanding clauses (i) and (v) of this paragraph, to
make a Financially Superior Offer to the Board of Directors
of the Company (but not directly to the stockholders of the
Company) ("Financially Superior Offer" means a proposal by
----------- -------- ----
the Purchaser to acquire at least the same percentage of the
Company's equity securities as contemplated in the Business
Combination, with at least the same evidence of financial
ability to consummate the Business Combination and at least
the same degree of financial commitment in such Business
Combination, and with material conditions substantially
similar to those set forth in the Business Combination);
(iii) make, or in any way participate, directly or
indirectly, in any "solicitation" of "proxies" (as such terms
are used in the Exchange Act) to vote, or seek to advise or
influence any persons with respect to the voting of, any
securities of (or debt claims with respect to) the Company;
(iv) form, join or participate in a "group" (within the
meaning of Section 13(d)(3) of the Exchange Act) with respect
to any securities of the Company except to the extent that
being party to the Shareholders' Agreement constitutes
formation of a group; (v) otherwise act, alone or in concert
with others, to seek to control or exercise (other than
through its representation on the Board of Directors) a
controlling influence over the management, Board of Directors
or the business and affairs of the Company; (vi) call, or
seek or propose to call, a meeting of the Company's
shareholders; and (vii) enter into any discussions,
negotiations, arrangements or understandings with any third
party with respect to any of the foregoing.
SECTION 5.12. Non-Competition; Disclosure of
------------------------------
Opportunities. (a) The Purchaser's Non-Compete. During the
------------- ---------------------------
Representation Period and for one year thereafter (the
"Restricted Period"), without the prior written consent of
-----------------
the Company, the Purchaser shall not engage in, and shall not
invest in any entity that engages in, providing renal
dialysis services to patients and related laboratory services
(the "Business") in North America within a 75 mile radius of
--------
(i) each of the Company's treatment centers that are existing
as of the date of this Agreement (the "Existing Regions") or
-------- -------
(ii) each location that has been identified in the strategic
business plan of the Company that is approved, from time to
time, by the Board of Directors of the Company as a location
of likely expansion (except to the extent that such strategic
business plan is subsequently modified to delete such
location) (the "Identified Regions"). The restrictions set
---------- -------
forth in this paragraph shall apply only to the Purchaser's
activities in North America.
30
(b) Disclosure of Opportunities by the Purchaser.
--------------------------------------------
During the Representation Period, the Purchaser shall
(i) disclose to the Chief Executive Officer of the Company
all investment and acquisition opportunities of renal
dialysis services centers located in North America in areas
outside of the Existing Regions and the Identified Regions
(the "Other Regions") that the Purchaser has identified and
-------------
(ii) engage in good faith discussions with the Company
concerning strategic business ventures with respect to the
identified opportunities in the Other Regions.
Notwithstanding anything to the contrary in the foregoing
sentence, the Company shall not acquire or invest (or attempt
to do so) in such opportunities in the Other Regions which
the Purchaser has so identified and disclosed without the
Purchaser's prior written consent. In the event that the
Purchaser shall not or shall no longer actively pursue any
investment or acquisition opportunities so disclosed to the
Company, the Purchaser shall notify the Company of such event
and it shall, upon written request by the Company, provide
the Company with its written consent to permit the Company to
acquire or invest in such opportunities.
(c) Non-Solicitation of Employees. During the
-----------------------------
Restricted Period, neither the Purchaser nor any other entity
controlled by Gambro shall solicit or endeavor to entice away
from the Company or any of its Affiliates any of their
respective employees (or employ any such employee until one
year after such employee leaves the employ of the Company or
such Affiliate), and the Company and its Affiliates shall do
none of the foregoing with respect to the employees of the
Purchaser or any other entity controlled by Gambro.
SECTION 5.13. Supply Agreement. (a) Subject to
----------------
the immediately following sentence, with respect to renal
dialysis machines and the bloodlines used therewith in the
Company's business, the Company shall, and shall cause its
Subsidiaries to, purchase, and the Purchaser shall sell to
the Company, a minimum of 75% of the aggregate requirements
of the Company and its subsidiaries for such renal dialysis
machines and 100% of the bloodlines used with such renal
dialysis machines from the Purchaser on overall terms and
conditions, including, without limitation, price, volume,
delivery and service, that are no less favorable than the
overall terms and conditions offered by the Purchaser to
independent third parties for the same renal dialysis
machines and bloodlines. Nothing contained herein shall
require the Company to purchase renal dialysis machines for
any treatment facility if the medical director of such
facility has submitted to the Company a written objection to
the use of such machines which includes the reasons for such
objection. Accordingly, the 75% minimum specified in the
31
first sentence of this paragraph shall be reduced only to the
extent that medical directors in charge of facilities which
have generated more than 25% of the Company's aggregate
purchases of renal dialysis machines have delivered such
written objections.
(b) Upon the written request of the Company, but
not more than once during any six month period, the Company's
external auditors shall have access, upon reasonable notice
and during normal business hours, to the relevant sales
records of the Purchaser solely for the purpose of
determining whether the Company has received overall terms
and conditions for the purchase of renal dialysis machines
and bloodlines no less favorable than those offered to third
parties independent of the Company and the Purchaser. The
Company shall cause such auditors to report to the Company
only whether the terms and conditions are no less favorable
than those offered to independent third parties. The Company
shall cause the auditors not to disclose any specific
information received by the auditors from the Purchaser
during the course of its review.
(c) The obligations set forth in this Section 5.13
shall terminate upon the earlier occurrence of (i) the sixth
year anniversary of the Closing Date or (ii) the Purchaser
owns less than twenty percent of the issued and outstanding
Common Stock for a period of 45 consecutive days after any
Quarterly Date.
(d) To the extent required by applicable law and
the By-Laws, as determined in good faith by the Company on
advice of its counsel, the specific transactions contemplated
in this Section 5.13 shall be reviewed by a majority of the
members of the Board who have no financial interest in such
transaction.
Section 5.14. Shareholder Approval. The Company
--------------------
agrees to include in the proxy statement to be disseminated
to the shareholders of the Company prior to the next annual
meeting of the Company both (1) a resolution to confer voting
rights to the shares of Common Stock issuable upon conversion
of the Preferred Stock purchased by the Purchaser hereunder
and any other shares of Common Stock acquired by the
Purchaser pursuant to this Agreement or the Shareholders'
Agreement, except that the Company shall have no obligation
to include in such shareholders' resolution any such shares
of Common Stock that would entitle the Purchaser and its
associates, immediately upon acquisition of such shares, to
exercise or direct the exercise of the voting power of the
Company in the election of its directors equal to one-third
or more of all such voting power, and (2) a resolution
32
approving the convertibility and conversion of the Preferred
Stock to Common Stock as required pursuant to Part III,
Section 5(i)(d) of Schedule D of the By-Laws of the National
Association of Securities Dealers, Inc. The Company shall
use its best efforts to solicit from the shareholders of the
Company eligible to vote on such resolutions proxies in favor
of such resolutions and shall take all other action necessary
or advisable to secure the vote of the shareholders required
to approve such resolutions. In the event that such approval
of the shareholders is not obtained at such annual meeting,
the Company shall redeem the Preferred Stock in accordance
with its terms.
SECTION 5.15. The Company's Right of First Offer.
----------------------------------
During the period beginning on the Closing Date and ending on
the third anniversary of the Closing Date, in the event that
the Purchaser desires to sell in a single transaction or in a
series of related transactions shares of Common Stock that
constitute in excess of 50% of the shares of Common Stock
then owned by the Purchaser (the "Offered Shares"), the
--------------
Purchaser shall first offer (the "Offer") in writing such
-----
Offered Shares to the Company at a specified price (the
"Offer Price"). The Company shall have 30 days to accept
-----------
such Offer (the "Offer Period"). In the event that the
------------
Company does not accept the Offer in the Offer Period, the
Purchaser may sell the Offered Shares to a third party during
the 90 day period following the end of the Offer Period (the
"Sales Period") for a price equal to or in excess of the
------------
Offer Price and on other terms no less favorable than
previously offered to the Company; provided, however, that if
-------- -------
during the Sales Period, the Purchaser desires to sell the
Offered Shares for less than the Offer Price (the "Lower
-----
Price") or on other terms that are more favorable to the
-----
third party purchaser than previously offered to the Company,
the Purchaser shall offer the Offered Shares to the Company
at the Lower Price or on such other terms, and the Company
shall have five days to accept such offer.
ARTICLE VI
CONDITIONS TO THE CLOSING
-------------------------
SECTION 6.01. Conditions to Obligations of the
--------------------------------
Purchaser. The obligations of the Purchaser to effect the
---------
Closing shall be subject to the prior fulfillment of each of
the following conditions:
(a) Required Bank Amendment. The Required Bank
-----------------------
Amendment, in form and substance satisfactory to the
33
Purchaser, shall have been executed and delivered by the
parties thereto and shall be in full force and effect,
and a copy thereof shall have been provided to the
Purchaser.
(b) Representations and Warranties; Agreements and
----------------------------------------------
Covenants. Except for changes permitted or contemplated
---------
hereby or consented to by the Purchaser and except for
matters waived or consented to by the Purchaser pursuant
to Section 8.04, (i) the representations and warranties
of the Company contained in this Agreement which are
qualified as to materiality shall be true in all respects
and all other representatives and warranties shall be
true and correct in all material respects on and as of
the Closing, with the same force and effect as if made as
of the Closing, (ii) all the agreements contained in this
Agreement to be performed or complied with by the
Company, at or before the Closing, shall have been
performed or complied with in all material respects and
(iii) the Purchaser shall have received a certificate of
the Company, signed by the Chief Executive Officer
thereof, as to the fulfillment of the conditions set
forth in the foregoing clauses (i) and (ii).
(c) No Cessation Order. No order, ruling or
------------------
determination having the effect of ceasing the trading of
the Common Stock shall have been issued or made by the
SEC or other regulatory authority and be continuing and
no proceedings for that purpose shall have been
instituted and be pending.
(d) Litigation. There shall have been no order or
----------
preliminary or permanent injunction entered in any action
or proceeding before any federal, state or foreign court
or governmental, administrative or regulatory authority
or agency, or no other action taken or threatened, or
statute, rule, regulation, legislation, interpretation,
judgment or order enacted, entered, enforced,
promulgated, amended, issued or deemed applicable to the
Purchaser, the Company or any Subsidiary or Affiliate of
the Purchaser, by any federal, state or foreign
legislative body, court, government or governmental,
administrative or regulatory authority or agency which
shall have remained in effect and which shall have had
the effect of: (i) making illegal, materially delaying
or otherwise directly or indirectly restraining or
prohibiting the consummation of the transactions
hereunder (including, without limitation, the purchase of
the Shares and the conversion or redemption of the
Preferred Stock); (ii) prohibiting or materially limiting
the ownership of the Shares; (iii) imposing material
34
limitations on the ability of the Purchaser to exercise
full rights of ownership of any of the Shares, including,
without limitation, the right to vote any shares of
Common Stock; or (iv) requiring divestiture by the
Purchaser of any Shares.
(e) Calamities. There shall not have occurred and
----------
be continuing (i) any general suspension of, or
limitation on prices for or trading in, securities on any
United States securities exchange, (ii) a declaration of
a banking moratorium or any suspension of payments in
respect of banks in the United States, (iii) any
limitation (whether or not mandatory) by any government
or governmental, administrative or regulatory authority
or agency, domestic or foreign, or other event that
materially adversely affects the ability of the Purchaser
to purchase the Shares hereunder, or (iv) a commencement
of a war or armed hostilities or other national or
international calamity directly involving the United
States or Sweden.
(f) Bankruptcy; Insolvency; Etc. No proceeding
---------------------------
shall have been instituted or consented to by or against
the Company seeking to adjudicate it bankrupt or
insolvent, or seeking liquidation, winding-up,
reorganization, arrangement, adjustment, protection,
relief, or composition of its debts under any law
relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee,
custodian or other similar official for it or any
substantial part of its property (each such action being
a "Bankruptcy Proceeding"), and the Company shall not
---------- ----------
have taken any corporate action to authorize any
Bankruptcy Proceeding.
(g) No Material Adverse Effect. No fact, event or
--------------------------
condition (financial or otherwise) shall have occurred
with respect to the Company or any of its Subsidiaries
having, individually or in the aggregate, a Material
Adverse Effect.
(h) Opinion. The Purchaser shall have received an
-------
opinion from Wyatt, Tarrant, ▇▇▇▇▇, ▇▇▇▇▇▇ & Milan
substantially to the effect of Exhibit B hereto and an
opinion from ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ substantially to the effect
of Exhibit C hereto.
(i) Right of First Offer. The Shareholders'
--------------------
Agreement shall have been executed and delivered by the
parties thereto.
35
SECTION 6.02. Conditions to Obligations of the
--------------------------------
Company. The obligations of the Company to effect the
-------
Closing shall be subject to the prior fulfillment of each of
the following conditions:
(a) Representations and Warranties. (i) The
------------------------------
representations and warranties of the Purchaser contained
in this Agreement and in any certificates or agreements
of the Purchaser delivered pursuant hereto shall be true
and correct in all material respects on and as of the
Closing, with the same force and effect as if made as of
the Closing, (ii) all the agreements contained in this
Agreement and in any certificates or agreements of the
Purchaser delivered pursuant hereto to be performed or
complied with by the Purchaser, at or before the Closing,
shall have been performed or complied with in all
material respects and (iii) the Company shall have
received a certificate of the Purchaser, signed by a duly
authorized officer thereof, as to the fulfillment of the
conditions set forth in the foregoing clauses (i) and
(ii).
(b) Litigation. There shall have been no order or
----------
preliminary or permanent injunction entered in any action
or proceeding before any federal, state or foreign court
or governmental, administrative or regulatory authority
or agency by any federal, state or foreign legislative
body, court, government or governmental, administrative
or regulatory authority or agency which shall have
remained in effect and which shall have had the effect of
making illegal the consummation of any of the
transactions hereunder.
ARTICLE VII
INDEMNIFICATION
---------------
SECTION 7.01. Survival of Representations and
-------------------------------
Warranties. The representations and warranties of the
----------
Company in Article III shall survive the Closing until the
second anniversary of the Closing Date; provided, however,
-------- -------
that representations and warranties dealing with Tax matters
shall survive for a period ending six months after the
expiration of the applicable statute of limitations. Neither
the period of survival nor the liability of any party with
respect to the parties' representations and warranties shall
be reduced by any investigation made at any time by or on
behalf of any party.
36
SECTION 7.02. Indemnification by the Company. The
------------------------------
Purchaser, and its Affiliates, officers, directors,
employees, agents, successors and assigns, shall be
indemnified and held harmless by the Company for any and all
Liabilities, losses, damages, claims, costs and expenses,
interest, awards, judgments and penalties (including, without
limitation, legal costs and expenses) actually suffered or
incurred by them (hereinafter a "Purchaser Loss"), arising
--------------
out of or resulting from:
(a) the breach of any representation or warranty
made by the Company contained herein or in any document
delivered by the Company hereunder at the Closing; or
(b) the breach of any covenant or agreement by the
Company contained herein.
SECTION 7.03. Indemnification by the Purchaser.
--------------------------------
The Company, and its Affiliates, officers, directors,
employees, agents, successors and assigns, shall be
indemnified and held harmless by the Purchaser for any and
all Liabilities, losses, damages, claims, costs and expenses,
interest, awards, judgments and penalties (including, without
limitation, legal costs and expenses) actually suffered or
incurred by them (hereinafter a "Company Loss" and, together
------- ----
with a Purchaser Loss, a "Loss"), arising out of or resulting
----
from:
(a) the breach of any representation or warranty
made by the Purchaser contained herein or in any document
delivered by the Purchaser hereunder at the Closing; or
(b) the breach of any covenant or agreement by the
Purchaser contained herein.
SECTION 7.04. Materiality. Notwithstanding
-----------
anything in this Agreement to the contrary, for purposes of
application of the indemnity provisions of this Article, the
amount of any Purchaser Loss or Company Loss arising from the
breach of such representation, warranty, covenant or
agreement shall be the entire amount of any such Loss
actually incurred by the respective Indemnitee as a result of
such breach and not just that portion of such Loss that
exceeds the relevant level of materiality.
SECTION 7.05. Time Period; Dollar Threshold. (a)
-----------------------------
The indemnification obligations of the Company and the
Purchaser under this Article VII shall continue for the same
period of survival specified in Section 7.01 for each such
representation and warranty and shall terminate with the
expiration of the two year survival period for each such
representation, warranty and covenant. Any claim or demand
37
against the Company or the Purchaser which is pending or
asserted at or prior to the expiration of any survival period
may continue to be asserted and indemnified against.
(b) Neither the Company nor the Purchaser shall be
entitled to indemnification under this Article VII unless and
until the aggregate amount of the claims against the other
party exceeds $500,000. If the aggregate amount of such
claims against either party exceeds $500,000, then that party
may claim indemnification for the entire aggregate amount of
such claims.
(c) The provisions of this Article VII shall be the
sole and exclusive remedy (other than injunctive relief) of
the Company or the Purchaser (regardless of against whom
asserted) for the matters subject to indemnification.
SECTION 7.06. Notice and Defense. Each party shall
------------------
within 30 days of learning of any asserted liability or
damage claimed to give rise to indemnification hereunder
notify the party obligated to indemnify it hereof in writing;
provided, however, that the failure of the indemnified party
-------- -------
to so notify the indemnifying party shall not relieve the
indemnifying party of its obligations hereunder unless, and
only to the extent that, such failure to notify prejudices
the indemnifying party. Thereafter, the indemnifying party
shall have, at its election, the right to compromise or
defend any such matter at its sole cost and expense through
counsel chosen by it. If the indemnifying party so
undertakes to compromise and defend, the indemnifying party
shall notify the other party of its intention to do so. The
indemnifying party must defend such matter diligently or the
indemnified party may assume control of the defense of such
matter. Each party agrees in all cases to cooperate with the
defending party and its counsel in the compromise of or
defending of any such liabilities or claims. The defending
party and the nondefending party may be represented by the
same counsel unless such representation would be
inappropriate due to actual or potential differing interests
between them. In addition, the nondefending party shall at
all times be entitled to monitor such defense through the
appointment of counsel of its own choosing, at it own cost
and expense.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
---------------------------------
SECTION 8.01. Termination. (a) This Agreement may
-----------
be terminated and the transactions contemplated hereby may be
38
abandoned at any time prior to the Closing Date:
(i) By mutual written consent duly authorized by
the Boards of Directors of the Company and the Purchaser;
or
(ii) By the Purchaser, if (A) (1) any Person, other
than the Purchaser, shall have acquired, or shall have
been granted any option or right, conditional or
otherwise, to acquire, beneficial ownership of 20% or
more of the outstanding shares of the Company's Common
Stock, or (2) any group (other than a group including the
Purchaser) shall have been formed which beneficially owns
20% or more of the outstanding shares of the Company's
Common Stock; or (B) the Company shall have entered into
an agreement with a third party with respect to any
acquisition or purchase of all or a substantial portion
of the assets of, or any equity interest in, the Company
or any of its Subsidiaries or any business combination
with the Company or any of its Subsidiaries by such third
party; or
(iii) By the Purchaser or the Company, if any court
of competent jurisdiction in the United States or other
United States governmental authority shall have issued an
order, decree, or ruling or taken any other action
restraining, enjoining or otherwise prohibiting any of
the transactions hereunder and such order, decree, ruling
or other action shall have become final and
nonappealable; or
(iv) By the Purchaser or the Company, if the Closing
shall not have occurred by May 31, 1991 or such later
date as the Company and the Purchaser shall hereafter
agree; provided, however, that the right to terminate
-------- -------
this Agreement under this Section 8.01(a)(iv) shall not
be available to any party whose wilful failure to fulfill
any material obligation under this Agreement has been the
cause of, or resulted in, the failure of the Closing to
occur on or before such date; or
(v) By the Purchaser, in the event the Required
Bank Amendment is not executed by the parties thereto
prior to May 20, 1991.
(b) This Agreement shall terminate (without any
action or notice (in writing or otherwise) by any of the
parties hereto) if any Bankruptcy Proceeding shall have been
instituted or consented to by or against the Company.
39
SECTION 8.02. Effect of Termination. In the event
---------------------
of the termination of this Agreement pursuant to Section
8.01, this Agreement shall forthwith become void and have no
effect and there shall be no liability on the part of any
party hereto or its Affiliates, directors, officers or
shareholders; provided, however, that nothing herein shall
-------- -------
relieve any party from liability for any breach hereof prior
to such termination.
SECTION 8.03. Amendment. This Agreement may be
---------
amended by the parties hereto by action taken by or on behalf
of the Company and the Purchaser at any time prior to the
Closing Date. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
SECTION 8.04. Waiver. At any time prior to the
------
Closing Date, either party hereto may (a) extend the time for
the performance of any of the obligations or other acts of
the other party hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any
document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions contained herein.
Any such extension or waiver shall be valid if set forth in
an instrument in writing signed by the party to be bound
thereby. The failure of either party to assert any of its
rights hereunder shall not constitute a waiver of any such
rights.
ARTICLE IX
GENERAL PROVISIONS
------------------
SECTION 9.01. Notices. All notices, requests,
-------
claims, demands and other communications hereunder shall be
in writing and shall be given (and shall be deemed to have
been duly given upon receipt) by delivery in person, by
cable, telecopy, telegram or telex or by registered or
certified mail (postage prepaid, return receipt requested) to
the respective parties at the following addresses (or at such
other address for a party as shall be specified by like
notice):
(a) if to the Purchaser:
Cobe Laboratories, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mats ▇▇▇▇▇▇▇▇▇
40
with a copy to:
Shearman & Sterling
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
(b) if to the Company:
REN Corporation-USA
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
SECTION 9.02. Entire Agreement; Assignment. This
----------------------------
Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both
written and oral, between the parties with respect to the
subject matter hereof. This Agreement shall not be assigned
by operation of law or otherwise, except that the Purchaser
may assign all or any of its rights and obligations hereunder
to any wholly owned Subsidiary of Gambro upon the execution
of a written instrument whereby such assignee agrees to
assume all of the Purchaser's obligations hereunder and be
bound by all the terms and conditions of this Agreement;
provided that no such assignment shall relieve the Purchaser
--------
of its obligations hereunder if such assignee does not
perform such obligations.
SECTION 9.03. Parties in Interest. This Agreement
-------------------
shall be binding upon and inure solely to the benefit of each
party hereto, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other person
any rights, benefits or remedies of any nature whatsoever
under or by reason of this Agreement.
SECTION 9.04. Governing Law. This Agreement shall
-------------
be governed by, and construed in accordance with, the laws of
the State of New York, regardless of the laws that might
otherwise govern under applicable principles of conflicts of
laws thereof.
41
SECTION 9.05. Headings. The descriptive headings
--------
contained in this Agreement are included for convenience of
reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 9.06. Counterparts. This Agreement may be
------------
executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
SECTION 9.07. Specific Performance. The parties
--------------------
hereto agree that irreparable damage would occur in the event
any of the provisions of this Agreement were not to be
performed in accordance with the terms hereof and that the
parties shall be entitled to specific performance of the
terms hereof, in addition to any other remedy at law or
equity.
IN WITNESS WHEREOF, the Purchaser and the Company
have each caused this Agreement to be executed by its duly
authorized officer as of the date first written above.
COBE LABORATORIES, INC.
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Title: Vice President and Chief
Financial Officer
REN CORPORATION-USA
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, M.D.
--------------------------------
Title: Chairman of the Board and
Chief Executive Officer
EXHIBIT A
---------
CONVERTIBLE REDEEMABLE
PREFERRED STOCK
SUMMARY OF TERMS
----------------
NUMBER OF SHARES 459,172
LIQUIDATION PREFERENCE $4.50 per share
CONVERSION Each share of Preferred Stock will
be automatically converted into
one share of Common Stock upon
approval by the shareholders of
both (i) voting rights for the
Purchaser for such underlying
shares of Common Stock, and (ii)
the conversion of the Preferred
Stock to Common Stock as required
pursuant to Part III, Section
5(i)(d) of Schedule D of the
By-Laws of the National Association
of Securities Dealers, Inc.
REDEMPTION If such voting rights for the
Purchaser have not been approved
by the Company by September 30,
1991, then each share of Preferred
Stock shall be automatically
redeemed at a per share price (the
"Redemption Price") equal to the
higher of (a) $4.50 plus interest
on such amount at a rate equal to
the Citibank base rate announced
from time to time during the
period from the purchase of the
Preferred Stock through the
Redemption Date and (b) the
average of the averages of the
closing bid and asked prices of
the Common Stock during the 30
trading days prior to the
Redemption Date. The Redemption
Price shall be payable as follows:
(i) $4.36 of the per share
Redemption Price shall be payable
in cash, and (ii) the remainder of
the per share Redemption Price
shall be payable by issuance of a
promissory note in a principal
amount equal to such remainder.
DIVIDENDS Equal to any dividends paid on the
Common Stock.
VOTING RIGHTS None.
EXHIBIT B
---------
CONTENTS OF OPINION OF
WYATT, TARRANT, ▇▇▇▇▇, ▇▇▇▇▇▇ & MILAN
1. The Company is a corporation duly organized, validly
existing and in good standing under the laws of Tennessee and
has the requisite corporate power and authority to own, lease
and operate its properties and carry on its business in all
material respects as presently owned or conducted. The
Company is duly qualified or licensed as a foreign
corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned,
leased or operated by it or the nature of its activities
makes such qualification or licensing necessary, except those
jurisdictions, if any, in which the failure to be so duly
qualified or licensed and in good standing would not, taken
as a whole, have a Material Adverse Effect.
2. The Company is not in violation of any of the provisions
of the Charter of Incorporation or By-Laws, except where such
violation would not, individually or in the aggregate, have a
Material Adverse Effect.
3. The Company has all necessary corporate power and
authority to execute and deliver the Agreement and to perform
its obligations and to consummate the transactions
contemplated thereunder. The execution, delivery and
performance of the Agreement by the Company have been duly
and validly authorized by all necessary corporate action and
no other corporate proceedings on the part of the Company are
necessary to authorize the Agreement or to consummate the
transactions contemplated thereunder.
4. (a) The execution and delivery of the Agreement by
the Company do not, and the performance of the Agreement
(including, without limitation, the consummation of the
transactions contemplated thereunder and the conversion or
redemption of the Preferred Stock) will not, (i) conflict
with or violate the Charter of Incorporation or By-Laws, (ii)
conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to the Company or by which its
or any of its properties are bound or affected, or
(iii) result in any breach of or constitute a default (or an
event which with notice or lapse of time or both would become
a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or
assets of the Company which would have a Material Adverse
Effect, taken as a whole, pursuant to any note, bond,
2
mortgage, indenture, contract, agreement, lease, license,
permit, insurance policy or other instrument or obligation
and which note, bond, mortgage, indenture, contract,
agreement, license, permit, insurance policy or other
instrument or obligation is listed on the Disclosure Schedule
and other schedules appended to the Agreement and to which
the Company is a party, or by which the Company or its
properties are bound or affected.
(b) The execution and delivery of the Agreement by
the Company do not, and the performance of the Agreement by
the Company (including, without limitation, the consummation
of the transactions thereunder and the conversion or
redemption of the Preferred Stock) will not, require any
consent, approval, authorization or permit of, or filing
(other than filings, if any, required on Form 8-K with the
SEC) with or notification to, any governmental or regulatory
authority, domestic or foreign, on the part of the Company.
5. Following the consummation of the transactions
thereunder, all shares of Common Stock and Preferred Stock
subject to issuance pursuant to the Agreement and the Common
Stock issuable upon conversion of the Preferred Stock, upon
such issuance against payment for such shares of Common Stock
and Preferred Stock as contemplated by the Agreement or upon
conversion of the Preferred Stock, as the case may be, shall
(i) be duly authorized, validly issued, fully paid and
nonassessable, (ii) not be subject to any Encumbrances and
(iii) such shares of Common Stock shall have accorded to them
voting rights. The shares of Preferred Stock shall be
convertible into shares of Common Stock in accordance with
the terms of the Preferred Stock. None of the Shares nor the
shares of Common Stock issuable upon conversion of the
Preferred Stock are "Control Shares" as such term is defined
in the Tennessee Business Corporation Law.
The following assumptions shall be made:
1. Reliance upon representations and warranties of the
Company and upon certificates of certain public officials
2. Authenticity of all documents submitted to us as copies,
genuineness of all signatures, and conformity to the
originals of all documents submitted to counsel as copies
3. Due authorization, execution and delivery of the Agreement by the
Purchaser
4. Neither the Purchaser nor any Affiliate of the Purchaser
has acquired any shares of Voting Securities other than
the Shares during the ninety day period prior to the
3
Closing, and neither the Purchaser nor any Affiliate of
the Purchaser will acquire any shares of Voting
Securities other than the Shares during a period of
ninety days after the Closing
5. Compliance by the Company, the Purchaser and any
Affiliate of either the Company or the Purchaser with the
covenants, representations, warranties and agreements
made and to be performed by them pursuant to the
Agreement.
EXHIBIT C
---------
CONTENTS OF OPINION OF ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
The Agreement has been duly and validly executed and
delivered by the Company and, assuming the due authorization,
execution and delivery hereof by the Purchaser and payment
for the Shares as contemplated by the Agreement, constitutes
the legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, or other similar laws affecting
creditors' rights generally and by the availability of
equitable remedies, and except to the extent that
enforceability of the indemnification and contribution
provisions set forth in Article IV of Exhibit C to the
Agreement concerning Registration Rights may be limited by
applicable law.
EXHIBIT D
---------
REGISTRATION RIGHTS
-------------------
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. Terms defined in the
-----------
Stock Purchase Agreement (the "Agreement") dated as of
---------
May 11, 1991 between REN Corporation-USA, a Tennessee
corporation (the "Company"), and Cobe Laboratories, Inc., a
-------
Colorado corporation (the "Purchaser"), are used herein as
---------
therein defined. In addition, the following terms, as used
herein, have the following meanings:
"Demand Registration" means a Demand Registration as
-------------------
defined in Section 2.02.
"Piggyback Registration" means a Piggyback
----------------------
Registration as defined in Section 2.03.
"Registrable Securities" means shares of Common
----------------------
Stock owned from time to time by the Purchaser and any other
Subsidiary of Gambro.
"Underwriter" means a securities dealer who
-----------
purchases any Registrable Securities as principal and not as
part of such dealer's market making activities.
ARTICLE II
REGISTRATION RIGHTS
SECTION 2.01. Registrable Securities. The
----------------------
Registration Rights provided herein apply to Registrable
Securities, but with respect to any particular Registrable
Security, only so long as such security continues to be a
Registrable Security. Any Registrable Security will cease to
be a Registrable Security when (i) a registration statement
covering such Registrable Security has been declared
effective by the SEC and it has been disposed of pursuant to
such effective registration statement, (ii) it is sold under
circumstances in which all of the applicable conditions of
Rule 144 under the Securities Act (or any similar provisions
then in force) are met, (iii) it has been otherwise
2
transferred, the Company has delivered a new certificate or
other evidence of ownership for it not bearing the legend
required pursuant to the Agreement and it may be resold without
subsequent registration under the Securities Act or any blue sky
law then in force or (iv) it shall have ceased to be outstanding.
SECTION 2.02. Demand Registration. (a) During the
-------------------
period commencing on the third anniversary of the Agreement and
ending on the tenth anniversary thereof (the "Registration
------------
Period"), the Purchaser may make a written request for
------
registration under the Securities Act of all or part of its
Registrable Securities (a "Demand Registration") provided,
------------------- --------
however, that the Company shall not be obligated (i) to effect
-------
more than one Demand Registration in any 12 month period, (ii)
to effect a Demand Registration for less than 500,000 shares of
Common Stock, (iii) to effect a Demand Registration within six
months of the Purchaser selling any Registrable Securities
pursuant to a Piggyback Registration under Section 2.03 or (iv)
to effect more than two Demand Registrations during the
Registration Period. Such request will specify the number of
shares of Registrable Securities proposed to be sold and will
also specify the intended method of disposition thereof. A
registration will not count as a Demand Registration until it
has become effective.
(b) If the Purchaser so elects, the offering of such
Registrable Securities pursuant to such Demand Registration
shall be in the form of an underwritten offering. The Purchaser
and the Company shall jointly select the book-running and other
managing Underwriters in connection with such offering and any
additional investment bankers and managers to be used in
connection with the offering.
SECTION 2.03. Piggyback Registration. If the Company
----------------------
proposes to file a registration statement under the Securities
Act with respect to an offering of Common Stock (i) for the
Company's own account (other than a registration statement on
Form S-4 or S-8 (or any substitute form that may be adopted by
the SEC)), or (ii) for the account of any of its holders of
Common Stock, then the Company shall give written notice of such
proposed filing to the Purchaser as soon as practicable (but in
no event less than ten days before the anticipated filing date),
and such notice shall offer subject to the terms and conditions
hereof the Purchaser the opportunity to register such
Registrable Securities as the Purchaser may request on the same
terms and conditions as the Company's or such holders' Common
Stock (a "Piggyback Registration").
----------------------
3
SECTION 2.04. Reduction of Offering. Notwithstanding
---------------------
anything contained herein, if the managing Underwriter or
Underwriters of an offering described in Section 2.02 or 2.03
shall advise the Company that (i) the size of the offering that
the Purchaser, the Company and any other Persons intend to make
or (ii) the kind of securities that the Purchaser, the Company
and such other Persons intend to include in such offering are
such that the success of the offering would be materially and
adversely affected, then (A) if the size of the offering is the
basis of such Underwriter's advice, the amount of Registrable
Securities to be offered for the account of the Purchaser shall
be reduced to the extent necessary to reduce the total amount of
securities to be included in such offering to the amount
recommended by such managing Underwriter or Underwriters;
provided, however, that (x) in the case of a Demand
-------- -------
Registration, the amount of Registrable Securities to be offered
for the account of the Purchaser shall be reduced only after the
amount of securities to be offered for the account of the
Company and such other Persons has been reduced to zero, and (y)
in the case of a Piggyback Registration, if securities are being
offered for the account of Persons other than the Company, then
the proportion by which the amount of such Registrable
Securities intended to be offered for the account of the
Purchaser is reduced shall not exceed the proportion by which
the amount of such securities intended to be offered for the
account of such other Persons is reduced; and (B) if the
combination of securities to be offered is the basis of such
Underwriter's advice, (x) the Registrable Securities to be
included in such offering shall be reduced as described in
clause (A) above (subject to the proviso in clause (A)), or (y)
in the case of a Piggyback Registration, if the actions
described in sub-clause (x) of this clause (B) would, in the
judgment of the managing Underwriter, be insufficient to
eliminate the adverse effect that inclusion of the Registrable
Securities requested to be included would have on such offering,
such Registrable Securities will be excluded from such offering.
ARTICLE III
REGISTRATION PROCEDURES
SECTION 3.01. Filings; Information. Whenever the
--------------------
Purchaser requests that any Registrable Securities be registered
pursuant to Section 2.02 hereof, the Company will use its best
efforts to effect the registration of such Registrable
Securities as quickly as practicable, and in connection with any
such request:
(a) The Company will as expeditiously as possible
prepare and file with the SEC a registration statement on
4
any form for which the Company then qualifies and which
counsel for the Company shall deem appropriate and available
for the sale of the Registrable Securities to be registered
thereunder in accordance with the intended method of
distribution thereof, and use its best efforts to cause such
filed registration statement to become and remain effective
for a period of not less than 90 days; provided, however,
-------- -------
that if the Company shall furnish to the Purchaser a
certificate signed by its Chief Executive Officer or Chief
Financial Officer stating that in his or her good faith
judgment it would be detrimental or otherwise
disadvantageous to the Company or its shareholders for such
a registration statement to be filed, or, in the case of an
effective registration statement, for sales to be effected
thereunder, the Company shall have a period of not more than
120 days within which to file such registration statement
measured from the date of receipt of the request in
accordance with Section 2.02 or, in the case of an effective
registration statement, the Company shall be entitled to
require the Purchaser to refrain from selling Registrable
Securities under such registration statement for a period of
up to 120 days. If the Company furnishes a notice under
this paragraph at a time when a registration statement filed
pursuant to this Agreement is effective, the Company shall
extend the period during which such registration statement
shall be maintained effective as provided in this Section
3.01(a) hereof by the number of days during the period from
and including the date of the giving of notice under this
paragraph to the date when sales under the registration
statement may recommence.
(b) The Company will, if requested, prior to filing
such registration statement or any amendment or supplement
thereto, furnish to the Purchaser and each managing
Underwriter, if any, copies thereof, and thereafter furnish
to the Purchaser and each such Underwriter, if any, such
number of copies of such registration statement, each
amendment and supplement thereto (in each case including all
exhibits thereto and documents incorporated by reference
therein) and the prospectus included in such registration
statement (including each preliminary prospectus) as the
Purchaser or such Underwriter may reasonably request in
order to facilitate the sale of the Registrable Securities.
(c) After the filing of the registration statement,
the Company will promptly notify the Purchaser of any stop
order issued or, to the knowledge of the Company, threatened
to be issued by the Commission and take all necessary
5
actions required to prevent the entry of such stop order or
to remove it if entered.
(d) The Company will endeavor to qualify the
Registrable Securities for offer and sale under such other
securities or blue sky laws of such jurisdictions in the
United States as the Purchaser reasonably (in light of the
Purchaser's intended plan of distribution) requests;
provided, however, that the Company will not be required to
-------- -------
(i) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for
this paragraph (d), (ii) subject itself to taxation in any
such jurisdiction or (iii) consent to service of process in
any such jurisdiction.
(e) The Company shall, as promptly as practicable,
notify the Purchaser, at any time when a prospectus relating
to the sale of the Registrable Securities is required by law
to be delivered in connection with sales by an Underwriter
or dealer, of the occurrence of an event requiring the
preparation of a supplement or amendment to such prospectus
so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will 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, in the light of the
circumstances under which they were made, not misleading,
and as promptly as practicable make available to the
Purchaser and to the Underwriters any such supplement or
amendment. The Purchaser agrees that, upon receipt of any
notice from the Company of the happening of any event of the
kind described in the preceding sentence, the Purchaser will
forthwith discontinue the offer and sale of Registrable
Securities pursuant to the registration statement covering
such Registrable Securities until receipt of the copies of
such supplemented or amended prospectus and, if so directed
by the Company, the Purchaser will deliver to the Company
all copies, other than permanent file copies then in the
Purchaser's possession, of the most recent prospectus
covering such Registrable Securities at the time of receipt
of such notice. In the event the Company shall give such
notice, the Company shall extend the period during which
such registration statement shall be maintained effective as
provided in Section 3.01(a) hereof by the number of days
during the period from and including the date of the giving
of such notice to the date when the Company shall make
available to the Purchaser such supplemented or amended
prospectus.
6
(f) The Company will enter into customary agreements
(including an underwriting agreement in customary form and
satisfactory in form and substance to the Company in its
reasonable judgment) and take such other actions as are
reasonably required in order to expedite or facilitate the
sale of such Registrable Securities.
(g) The Company will furnish to the Purchaser and to
each managing Underwriter, if any, a signed counterpart,
addressed to the Purchaser and each Underwriter, of (i) an
opinion or opinions of counsel to the Company and (ii) a
comfort letter or comfort letters from the Company's
independent public accountants, each in customary form and
covering such matters of the type customarily covered by
opinions or comfort letters delivered to such parties.
(h) The Company will make generally available to its
securityholders, as soon as reasonably practicable, an
earnings statement covering a period of 12 months, beginning
within three months after the effective date of the
registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities
Act and the rules and regulations of the Commission
thereunder.
(i) The Company will use its best efforts to cause all
such Registrable Securities to be listed on each securities
exchange, if any, and the National Association of Securities
Dealers' interdealer quotation system on which similar
securities issued by the Company are then listed.
The Company may require the Purchaser promptly to
furnish in writing to the Company such information regarding the
Purchaser, the plan of distribution of the Registrable
Securities and other information as the Company may from time to
time reasonably request or as may be legally required in
connection with such registration.
SECTION 3.02. Registration Expenses. In connection
---------------------
with any Demand Registration, the Company, the Purchaser and any
other Persons registering Registrable Securities in any such
registration shall each pay its pro rata portion, calculated on
the basis of the number of Registrable Securities to be
registered by each of them, the following expenses (the
"Registration Expenses") incurred in connection with such
---------------------
registration: (i) all filing fees with the Commission, (ii)
fees and expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel in
connection with blue sky qualifications of the Registrable
Securities), (iii) printing expenses, (iv) the fees and expenses
7
incurred in connection with the listing of the Registrable
Securities, (v) fees and expenses of counsel and independent
certified public accountants for the Company (including the
expenses of any comfort letters pursuant to Section 3.01(g)
hereof) and (vi) the reasonable fees and expenses of any
additional experts retained by the Company in connection with
such registration. The Company shall pay all Registration
Expenses expenses incurred in connection with each Piggyback
Registration. The Company, the Purchaser and each other Person
registering Registrable Securities shall be responsible for any
underwriting discounts or commission that may be payable upon
the sale of its Registrable Securities. The Company shall pay
internal Company expenses (including, without limitation, all
salaries and expenses of its officers and employees performing
legal or accounting duties) relating to any Demand Registration
or Piggyback Registration.
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
SECTION 4.01. Indemnification by the Company. The
------------------------------
Company agrees to indemnify and hold harmless the Purchaser, its
employees, officers and directors, and each Person, if any, who
controls the Purchaser within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages and liabilities
caused by any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or
prospectus relating to the Registrable Securities (as amended or
supplemented if the Company shall have furnished any amendments
or supplements thereto) or any preliminary prospectus, 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 not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or
omission based upon information furnished in writing to the
Company by or on behalf of the Purchaser expressly for use
therein; provided, however, that the foregoing indemnity
-------- -------
agreement with respect to any preliminary prospectus shall not
inure to the benefit of the Purchaser if a copy of the current
prospectus was not provided to a purchaser and such current
prospectus would have cured the defect giving rise to such loss,
claim, damage or liability or for any sales occurring after the
Company has informed the Purchaser under Section 3.01(e) and
prior to the delivery by the Company of any supplement or
amendment to such prospectus. The Company also agrees to
8
indemnify any Underwriters of the Registrable Securities, their
officers and directors and each person who controls such
underwriters on substantially the same basis as that of the
indemnification of the Purchaser provided in this Section 4.01.
SECTION 4.02. Indemnification by the Purchaser. The
--------------------------------
Purchaser agrees to indemnify and hold harmless the Company, its
officers and directors, and each Person, if any, who controls
the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Company to the
Purchaser, but only with reference to information furnished in
writing by or on behalf of the Purchaser expressly for use in
any registration statement or prospectus relating to the
Registrable Securities, or any amendment or supplement thereto,
or any preliminary prospectus. The Purchaser also agrees to
indemnify and hold harmless Underwriters of the Registrable
Securities, their officers and directors and each person who
controls such Underwriters on substantially the same basis as
that of the indemnification of the Company provided in this
Section 4.02.
SECTION 4.03. Conduct of Indemnification Proceedings.
--------------------------------------
In case any proceeding (including any governmental
investigation) shall be instituted involving any Person in
respect of which indemnity may be sought pursuant to Section
4.01 or 4.02, such Person (the "Indemnified Party") shall
-----------------
promptly notify the Person against whom such indemnity may be
sought (the "Indemnifying Party") in writing and the
------------------
Indemnifying Party, upon the request of the Indemnified Party,
shall retain counsel reasonably satisfactory to such Indemnified
Party to represent such Indemnified Party and any others the
Indemnifying Party may designate in such proceeding and shall
pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any Indemnified Party shall
have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such
Indemnified Party unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the Indemnified
Party and the Indemnifying Party and representation of both
parties by the same counsel would be inappropriate due to actual
or potential differing interests between them. It is understood
that the Indemnifying Party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be
liable for the fees and expenses of more than one separate firm
of attorneys (in addition to any local counsel) at any time for
all such Indemnified Parties, and that all such fees and
9
expenses shall be reimbursed as they are incurred. In the case
of any such separate firm for the Indemnified Parties, such firm
shall be designated in writing by the Indemnified Parties. The
Indemnifying Party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled
with such consent, or if there be a final judgment for the
plaintiff, the Indemnifying Party shall indemnify and hold
harmless such Indemnified Parties from and against any loss or
liability (to the extent stated above) by reason of such
settlement or judgment.
SECTION 4.04. Contribution. If the indemnification
------------
provided for in this Article IV is unavailable to the
Indemnified Parties in respect of any losses, claims, damages or
liabilities referred to herein, then each such 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 or liabilities
(i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, the Purchaser and the
Underwriters from the offering of the securities, or (ii) if the
allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) but
also the relative fault of the Company, the Purchaser and the
Underwriters in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities,
as well as any other relevant equitable considerations. The
relative benefits received by the Company, the Purchaser and the
Underwriters shall be deemed to be in the same proportion as the
total proceeds from the offering (net of underwriting discounts
and commissions but before deducting expenses) received by each
of the Company and the Purchaser and the total underwriting
discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the
prospectus, bear to the aggregate public offering price of the
securities. The relative fault of the Company, the Purchaser
and the Underwriters shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of
a material fact or the omission or alleged omission to state a
material fact relates to information supplied by such party and
the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company and the Purchaser agree that it would not
be just and equitable if contribution pursuant to this Section
4.04 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by
any other method of allocation which does not take account of
10
the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an
Indemnified Party as a result of the losses, claims, damages or
liabilities referred to in the immediately preceding paragraph
shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of
this Section 4.04, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total
price at which the securities underwritten by it and distributed
to the public were offered to the public exceeds the amount of
any damages which such Underwriter has otherwise been required
to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission, and the Purchaser shall not be
required to contribute any amount in excess of the amount by
which the net proceeds of the offering (before deducting
expenses) received by the Purchaser exceeds the amount of any
damages which the Purchaser has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission
or alleged omission. 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 who was not guilty of such fraudulent misrepresentation.
ARTICLE V
MISCELLANEOUS
SECTION 5.01. Participation in Underwritten
-----------------------------
Registrations. No Person may participate in any underwritten
-------------
registered offering contemplated hereunder unless such Person
(a) agrees to sell its securities on the basis provided in any
underwriting arrangements and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the
terms of such underwriting arrangements and these Registration
Rights.
SECTION 5.02. Rule 144. The Company covenants that it
--------
will use its best efforts to file any reports required to be
filed by it under the Securities Act and the Exchange Act and
that it will take such further action as the Purchaser may
reasonably request, all to the extent required from time to time
to enable the Purchaser to sell Registrable Securities without
registration under the Securities Act within the limitation of
the exemptions provided by Rule 144 under the Securities Act, as
such Rule may be amended from time to time, or any similar rule
11
or regulation hereafter adopted by the Commission. Upon the
request of the Purchaser, the Company will deliver to the
Purchaser a written statement as to whether it has complied with
such requirements.
SECTION 5.03. Holdback Agreements. (a) The Purchaser
-------------------
agrees not to offer, sell, contract to sell or otherwise dispose
of any Registrable Securities, or any securities convertible
into or exchangeable or exercisable for such securities, during
the 14 days prior to, and during the 90 day period beginning on,
the effective date of any registration statement registering the
Registrable Securities other than the Registrable Securities to
be sold pursuant to such registration statement.
(b) The Company agrees not to offer, sell, contract to
sell or otherwise dispose of any securities similar to the
Registrable Securities to be sold pursuant hereto, or any
securities convertible into or exchangeable or exercisable for
such securities, during the 14 days prior to, and during the
ninety 90 day period beginning on, the effective date of any
registration statement registering the Registrable Securities
other than any shares of Common Stock sold upon the exercise of
an option or warrant or the conversion of a security outstanding
at such date.
EXHIBIT E
---------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, M.D.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
c/o Ren Corporation USA
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dated as of May 11, 1991
COBE LABORATORIES, INC.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Right of First Offer Agreement
------------------------------
Gentlemen:
We refer to the Stock Purchase Agreement (the
"Purchase Agreement") dated the date hereof between Cobe
------------------
Laboratories, Inc., a Colorado corporation ("Cobe"), and Ren
----
Corporation USA, a Tennessee corporation ("Ren").
---
Capitalized terms used herein without definition shall have
the same meaning given to them in the Purchase Agreement.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, M.D. ("▇▇. ▇▇▇▇▇▇▇▇▇▇") and
--------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D. ("▇▇. ▇▇▇▇▇▇▇▇") are each
------------
shareholders, directors and officers of Ren. As an
inducement for Cobe to enter into the Purchase Agreement and
consummate the equity investment contemplated thereunder, ▇▇.
▇▇▇▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇▇ agree with Cobe as follows:
(a) Right of First Offer. In the event that either
--------------------
▇▇. ▇▇▇▇▇▇▇▇▇▇ or ▇▇. ▇▇▇▇▇▇▇▇ (a "Selling Party") desires
-------------
to sell shares of Common Stock owned by him (the "Offered
-------
Shares") in a single transaction or series of related
------
transactions to a person or "group" (as such term is
defined in Section 13(d)(3) of the Exchange Act) and
(i) such Offered Shares in the aggregate equal or exceed
five percent of the then outstanding shares of Common
Stock or (ii) such Offered Shares are being sold to a
person or group that immediately following the sale of
the Offered Shares in the contemplated transaction or
transactions shall own 10% or more of the then
outstanding shares of Common Stock, then the Selling
Party shall first offer (the "Offer") such Offered Shares
-----
2
to Cobe at a specified price (the "Offer Price"). Cobe
-----------
shall have 30 days to accept such Offer (the "Offer
-----
Period"). In the event Cobe does not accept the Offer in
------
the Offer Period, the Selling Party may sell the Offered
Shares to a third party during the 90 days' period
following the end of the Offer Period (the "Sales
-----
Period") for a price equal to to or in excess of the
------
Offer Price and on other terms no less favorable than
previously offered to Cobe; provided, however, that if
-------- -------
during the Sales Period, the Selling Party desires to
sell the Offered Shares for less than the Offer Price
(the "Lower Price") or on other terms that are more
-----------
favorable to the purchaser than previously offered to
Cobe, the Selling Party shall offer the Offered Shares to
Cobe at the Lower Price or on such other terms, and
Purchaser shall have five days to accept such offer.
Notwithstanding anything to the contrary in the
foregoing, the provisions of this paragraph (a) shall not
apply to purchases and sales of Common Stock between ▇▇.
▇▇▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇▇.
(b) ▇▇. ▇▇▇▇▇▇▇▇▇▇ further agrees with Cobe that the
transactions contemplated by the Purchase Agreement shall
not constitute a "Change in Control" for purposes of the
-----------------
Employment Agreement dated September 11, 1989, by and
between Ren and ▇▇. ▇▇▇▇▇▇▇▇▇▇, as amended.
(c) ▇▇. ▇▇▇▇▇▇▇▇ further agrees with Cobe that the
transactions contemplated by the Purchase Agreement shall
not constitute a "Change in Control" for purposes of the
Employment Agreement dated , by and
----------------------
between Ren and ▇▇. ▇▇▇▇▇▇▇▇.
(d) Effectiveness; Term. This Letter Agreement
-------------------
shall be effective as of the Closing Date.
If you accept and agree to the foregoing, please so
indicate by signing in the space provided below.
--------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, M.D.
--------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
Accepted and Agreed as of
the date first written above:
COBE LABORATORIES, INC.
By
---------------------------
Name:
Title:
COBE LABORATORIES, INC.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
May 24, 1991
REN Corporation - USA
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Gentlemen:
Reference is made to the Stock Purchase Agreement dated
as of May 11, 1991 (the "Agreement") between Cobe Laboratories,
Inc. and REN Corporation - USA.
Section 1.01 shall be amended by adding the following
additional definition:
"Purchase Agreement" shall mean this Agreement, as
amended by the letter agreement dated as of May 24, 1991 between
the Company and the Purchaser.
Section 5.08(b) shall be amended in its entirety to
read as follows:
(b) From and after the 1992 Meeting and during the
period in which the Purchaser owns at least 15% of the
issued and outstanding Common Stock, the Purchaser may
request the Company to include, as a nominee for the Board
recommended by the Board, one person designated by the
Purchaser, who, unless he shall resign prior to the
expiration of his term, may be the Purchaser's 1993
Director, and such person shall be nominated by the
Purchaser unless the Board, in the exercise of its fiduciary
duties, reasonably shall determine that he is not qualified
to serve on the Board and each of the committees specified
in subsection (d). If the Board shall reasonably determine
that such designee of the Purchaser is not so qualified, the
Purchaser shall have the opportunity to specify one or more
additional designees who shall be so included as a nominee
subject to the qualification set forth in the immediately
preceding sentence.
Section 5.10 is amended by amending subsection (b) in
its entirety to read as follows and by adding the following
subsections (c) and (d) thereto:
(b) Within 15 days of the end of each March 31st,
June 30, September 30th and December 31st (each a "Quarterly Date")
--------------
following the Closing Date, the Company shall notify the
Purchaser of the number of shares of Common Stock and the number
of Voting Securities outstanding as of each such Quarterly
Date. The Purchaser shall have the option to purchase from the
Company additional shares of Common Stock to the extent
necessary to permit the Purchaser to maintain the higher of (i)
the percentage of shares of Common Stock or Voting Securities
owned by the Purchaser as of the immediately preceding Quarterly
Date, after giving effect to any purchases thereafter pursuant
to this Section 5.10(b), or (ii) 19.99% of the issued and
outstanding shares of Common Stock and 19.99% of Total Voting
Power. The Purchaser may exercise such option by delivery to
the Company of written notice of its intention to exercise such
option within 30 days of such Quarterly Date. The per share
purchase price for such shares of Common Stock shall be equal to
the average of the averages of the closing bid and asked prices
of the Common Stock on each day during the calendar quarter
ending on the Quarterly Date. The closing of the purchase of
such shares of Common Stock shall take place within five days of
the receipt of the written notice delivered by the Purchaser to
the Company pursuant to this Section 5.10(b).
(c) In the event that the Preferred Stock is redeemed in
accordance with its terms, the Purchaser, in lieu of its rights
under Section 5.10(b), shall have the option to purchase from
the Company on April 30, 1992 additional shares of Common Stock
to the extent necessary to permit the Purchaser to maintain the
higher of (i) the percentage of shares of Common Stock or Voting
Stock owned by the Purchaser as of September 30, 1991 after
giving effect to the redemption of the Preferred Stock and any
other purchases pursuant to Section 5.10(b), or (ii) 19.99% of
the issued and outstanding shares of Common Stock and 19.99% of
the Total Voting Power. The Purchaser may exercise such option
by delivery to the Company of written notice of its intention to
exercise such option on or prior to April 25, 1992. The per
share purchase price for such shares of Common Stock shall be
equal to the average of the averages of the closing bid and
asked prices of the Common Stock on each day during the period
beginning on the Closing Date and ending on March 31, 1992. The
closing of the purchase of such shares of Common Stock shall
take place within five days of the receipt of the written notice
delivered by the Purchaser to the Company pursuant to this
Section 5.10(c).
(d) In the event that the Shareholders under the Agreement
and Release dated as of January 1, 1991 (the "Release
Agreement") among the Company and such Shareholders elect Option
1 as set forth in Section 5 of the Release Agreement and 300,000
shares of Common Stock (the "Escrowed Shares") are delivered out
of Escrow to such Shareholders, the Purchaser shall have the
option to purchase on the Exercise Date (as hereinafter defined)
69,000 shares of Common Stock at a per share purchase price
equal to the average of the averages of the closing bid and
asked prices of the Common Stock for each trading day from the
Closing Date up to the Exercise Date. The "Exercise Date" shall
mean the date that is 15 Business Days after the date of
delivery of the Escrowed Shares to such Shareholders or, in the
event that the Preferred Stock is redeemed in accordance with
its terms, the later of (i) April 30, 1992 or (ii) the day that
is 15 Business Days after such delivery of the Escrowed Shares.
The Purchaser may exercise the option set forth herein by
delivery notice thereof to the Company no later than five (5)
Business Days prior to the Exercise Date.
Section 5.14 is hereby amended to read in its entirety
as follows:
Section 5.14. Shareholder Approval. The Company
--------------------
agrees to include in the proxy statement to be disseminated
to the shareholders of the Company prior to the next annual
meeting of the Company both (1) a resolution to confer
voting rights to the shares of Common Stock issuable upon
conversion of the Preferred Stock purchased by the Purchaser
hereunder and any other shares of Common Stock acquired by
the Purchaser pursuant to this Agreement or the
Shareholders' Agreement, except that the Company shall have
no obligation to include in such shareholders' resolution
any such shares of Common Stock that would entitle the
Purchaser and its associates, immediately upon acquisition
of such shares, to exercise or direct the exercise of the
voting power of the Company in the election of its directors
equal to one-third or more of all such voting power, and (2)
a resolution approving the convertibility and conversion of
the Preferred Stock to Common Stock as required pursuant to
Part III, Section 5(i)(d) of Schedule D of the By-Laws of
the National Association of Securities Dealers, Inc. The
Company shall use its best efforts to solicit from the
shareholders of the Company eligible to vote on such
resolutions proxies in favor of such resolutions and shall
take all other action necessary or advisable to secure the
vote of the shareholders required to approve such
resolutions. In the event that such approval of the
shareholders is not obtained at such annual meeting, the
Company shall redeem the Preferred Stock in accordance with
its terms.
Except as expressly modified hereby, all provisions of
the Agreement shall remain in full force and effect.
This amendment supercedes all prior agreements,
discussions or correspondence between the parties concerning the
subject matter of said provisions.
COBE LABORATORIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President and
Chief Financial Officer
Agreed to by:
REN Corporation - USA
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, M.D.
Chairman of the Board and
Chief Executive Officer
EXECUTION COPY
AMENDMENT ▇▇. ▇ ▇▇ ▇▇▇
▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇▇ PURCHASE AGREEMENT
AMENDMENT NO, 2, dated as of March 17, 1992 (this
"Amendment") to the Stock Purchase Agreement, dated as of May
---------
11, 1991, as amended by Amendment No. 1, dated May 24, 1991,
between REN CORPORATION-USA, a Tennessee corporation (the
"Company") and COBE LABORATORIES, INC., a Colorado
-------
corporation (the "Purchaser").
---------
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Company and the Purchaser have entered
into as of May 11, 1991 a Stock Purchase Agreement (the
"Purchase Agreement"; capitalized terms used and not defined
------------------
herein being used herein as defined in the Purchase
Agreement);
WHEREAS, the Company and the Purchaser entered into
on May 24, 1991 an Amendment No. 1 to the Purchase Agreement;
and
WHEREAS, the Company and the Purchaser have
determined that it is in their mutual interests to further
amend the Purchase Agreement as hereinafter set forth.
NOW THEREFORE, in consideration of the premises and
of the mutual agreements and understandings hereinafter set
forth, the Purchaser and the Company agree as follows:
SECTION 1. Amendments to the Purchase Agreement.
------------------------------------
The Purchase Agreement is, effective as of the date hereof,
hereby amended as follows:
(a) New defined terms shall be added to Section
1.01, immediately following the definition of
"Affiliate", to read as follows:
"'Amendment No. 1' means the Amendment No. 1,
---------------
dated May 24, 1991, to this Agreement between the
Company and the Purchaser.
'Amendment No. 2' means the Amendment No. 2,
---------------
dated March 17, 1992, to this Agreement between the
Company and the Purchaser."
(b) The defined term "Purchase Agreement" shall be
restated in full to read as follows:
2
"'Purchase Agreement' means this Agreement, as
amended by Amendment No. 1 and Amendment No. 2."
(c) Sections 5.08(a) and (b) shall be restated in
full to read as follows:
"(a) The Company agrees, effective upon the
Closing Date, to decrease the size of the Board to
seven directors and to appoint to the Board two
persons designated by the Purchaser (members of the
Board designated by the Purchaser pursuant to this
Section 5.08 are referred to as the "Purchaser's
-----------
Directors"), one with his original term expiring at
---------
the Company's 1992 annual stockholders' meeting and
the other with his original term expiring at the
Company's 1993 annual stockholders' meeting.
Without the prior written consent of the Purchaser,
the Company, acting through the Board, shall not
increase the size of the Board beyond seven members.
(b) Effective on the Closing Date and so long
as the Purchaser owns at least 20% of the issued and
outstanding Common Stock, the Purchaser shall have
the right to request that the Company include (x)
one person designated by the Purchaser as a nominee
to serve as a member of the "Class Three Directors"
(as such term is used in the By-Laws; provided that
--------
for purposes of this Agreement, such term shall be
further defined to be that class of directors of the
Board whose term next expires at the 1992 annual
stockholders' meeting) of the Board and (y) one
person designated by the Purchaser to serve as a
member of the "Class One Directors" (as such term is
used in the By-Laws; provided that for purposes of
--------
this Agreement, such term shall be further defined
to be that class of directors of the Board whose
term next expires at the 1993 annual stockholders'
meeting) of the Board, and such persons shall be
nominated by the Company. In the event the
Purchaser owns 15% or more but less than 20% of the
issued and outstanding Common Stock, the Purchaser
shall have the right to request that the Company
include one person designated by the Purchaser as a
nominee to serve as a member of either the Class
Three Directors or the Class One Directors of the
Board, and such person shall be nominated by the
Company. If the Board, in the exercise of its
fiduciary duties, reasonably shall determine that
any person designated by the Purchaser to be a
nominee to the Board pursuant to this Section 5.08
3
is not qualified to serve on the Board and each of
the committees specified in subsection (d) of this
Section 5.08, the Purchaser shall have the
opportunity to specify one or more additional
designees who shall be so included as a nominee
subject to the reasonable determination by the
Board, in the exercise of their fiduciary duties,
that any such additional designee is not qualified
to serve on the Board and each of the committees
specified in this Section 5.08. The Board shall
recommend to the stockholders of the Company for
election the designees of the Purchaser who are
nominated by the Company to serve as members of the
Board. In the event that a vacancy is created on the
Board at any time by the death, disability,
retirement, resignation or removal (with or without
cause) of a Purchaser's Director, the Purchaser
shall have the right to select a nominee to fill
such vacancy. If the remaining Board members, in
the exercise of their fiduciary duties, reasonably
shall determine that such nominee is not qualified
to serve on the Board and each of the committees
specified in subsection (d) of this Section 5.08,
the Purchaser shall have the opportunity to select
one or more additional nominees. Subject to the
qualification set forth in the immediately preceding
sentence, the remaining members of the Board shall
elect to the Board to fill such vacancy any such
nominee of the Purchaser."
(d) The second sentence of Section 5.10(b) shall be
restated in full to read as follows:
"The Purchaser shall have the option to purchase
from the Company additional shares of Common Stock
to the extent necessary to permit the Purchaser to
maintain 30% of the issued and outstanding shares of
Common Stock and 30% of the Total Voting Power."
SECTION 2. Counterparts. This Amendment may be
------------
executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement.
SECTION 3. Governing Law. This Amendment shall be
-------------
governed by, and construed in accordance with, the laws of
the State of New York applicable to contracts executed in and
to be performed in that State.
4
IN WITNESS WHEREOF, each of the Purchaser and the
Company has caused this Amendment to be executed as of the
date first written above by their respective officers
thereunto duly authorized.
REN CORPORATION-USA
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Chief Executive
Officer
COBE LABORATORIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President and
Chief Financial
Officer
AMENDMENT ▇▇. ▇
▇▇ ▇▇▇
▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇▇ PURCHASE AGREEMENT
AMENDMENT NO. 3, dated as of October 1, 1992 (this
"Amendment"), to the Stock Purchase Agreement, dated as of
---------
May 11, 1991, as amended by Amendment No. 1, dated May 24,
1991, and Amendment No. 2, dated March 17, 1992, between REN
CORPORATION-USA, a Tennessee corporation (the "Company"), and
-------
COBE LABORATORIES, INC., a Colorado corporation (the
"Purchaser").
---------
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company and the Purchaser have entered
into a Stock Purchase Agreement, dated as of May 11, 1991
(the "Purchase Agreement"; capitalized terms used and not
------------------
defined herein being used herein as defined in the Purchase
Agreement);
WHEREAS, the Company and the Purchaser have entered
into Amendment No. 1, dated as of May 24, 1991 to the
Purchase Agreement; and
WHEREAS, the Company and the Purchaser have entered
into Amendment No. 2, dated as of March 17, 1992 to the
Purchase Agreement; and
WHEREAS, the Company and the Purchaser have
determined that it is in their mutual interests to further
amend the Purchase Agreement as hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and
of the mutual agreements and understandings hereinafter set
forth, the Purchaser and the Company agree as follows:
SECTION 1. Amendments to the Purchase Agreement.
------------------------------------
The Purchase Agreement is, effective as of the date hereof,
hereby amended as follows:
(a) New defined terms shall be added to Section
1.01, immediately following the definition of
"Amendment No. 2", to read as follows:
"'Amendment No. 3' means the Amendment No. 3,
---------------
dated October 1, 1992, to this Agreement between the
Company and the Purchaser."
(b) The defined term "Purchase Agreement" shall be
restated in full to read as follows:
2
"'Purchase Agreement' means this Agreement, as
------------------
amended by Amendment ▇▇. ▇, ▇▇▇▇▇▇▇▇▇ ▇▇. ▇ and
Amendment No. 3."
(c) Sections 5.08 shall be restated in full to read
as follows:
"(a) The Company agrees, effective upon the
Closing Date (as defined in the Stock Purchase
Agreement dated as of July 2, 1992 between the
Company and the Purchaser), to increase the size of
the Board to nine directors and to appoint as
directors three persons designated by the Purchaser
(such three directors, together with the two members
of the Board previously designated by the Purchaser
being the 'Purchaser's Directors'), one such
---------------------
additional Purchaser's Director with his term
expiring at the Company's 1993 annual stockholders'
meeting and the other two additional Purchaser's
Directors with their term expiring at the Company's
1994 annual stockholders' meeting. Without the
prior written consent of the Purchaser, the Company,
acting through the Board, shall not change the size
of the Board.
(b) Effective on the Closing Date and so long
as the Purchaser owns a majority of the issued and
outstanding Common Stock, the Purchaser shall have
the right to request that the Company include (x)
two persons designated by the Purchaser as a nominee
to serve as a member of the 'Class One Directors'
(as such term is used in the By-Laws; provided that
--------
for purposes of this Agreement, such term shall be
further defined to be that class of directors of the
Board whose term next expires at the 1993 annual
stockholders' meeting) of the Board, (y) two persons
designated by the Purchaser to serve as a member of
the 'Class Two Directors' (as such term is used in
the By-Laws; provided that for purposes of this
--------
Agreement, such term shall be further defined to be
that class of directors of the Board whose term next
expires at the 1994 annual stockholders' meeting) of
the Board and (z) one person designated by the
Purchaser to serve as a member of the 'Class Three
Directors' (as such term is used in the By-Laws;
provided that for purposes of this Agreement, such
--------
term shall be further defined to be that class of
directors of the Board whose term next expires at
the 1995 annual stockholders' meeting) of the
3
Board, and such persons shall be nominated by the
Company. If the Board, in the exercise of its
fiduciary duties, reasonably shall determine that
any person designated by the Purchaser to be a
nominee to the Board pursuant to this Section 5.08
is not qualified to serve on the Board and the
committees specified in subsection (c) of this
Section 5.08 for which such person has been
designated to serve upon by the Purchaser, the
Purchaser shall have the opportunity to specify one
or more additional designees who shall be so
included as a nominee subject to the reasonable
determination by the Board, in the exercise of their
fiduciary duties, that any such additional designee
is qualified to serve on the Board and such
committees. The Board shall recommend to the
stockholders of the Company for election the
designees of the Purchaser who are nominated by the
Company to serve as members of the Board. In the
event that a vacancy is created on the Board at any
time by the death, disability, retirement,
resignation or removal (with or without cause) of a
Purchaser's Director, the Purchaser shall have the
right to select a nominee to fill such vacancy. If
the remaining Board members, in the exercise of
their fiduciary duties, reasonably shall determine
that such nominee is not qualified to serve on the
Board and the committees specified in subsection (c)
of this Section 5.08 for which such person has been
designated to serve upon by the Purchaser, the
Purchaser shall have the opportunity to select one
or more additional nominees. Subject to the
qualification set forth in the immediately preceding
sentence, the remaining members of the Board shall
elect to the Board to fill such vacancy any such
nominee of the Purchaser.
(c) Effective on the Closing Date and so long
as the Purchaser owns a majority of the issued and
outstanding Common Stock, the Company agrees to
place two of the Purchaser's Directors on each of
the Executive, Compensation and Human Resources
Committees, each of which is to consist of three
members and to place two of the Purchaser's
Directors on the Audit Committee, which is to
consist of four members."
(d) The second sentence of Section 5.10(b) shall be restated
in full to read as follows:
"The Purchaser shall have the option to purchase
from the Company additional shares of Common Stock
4
to the extent necessary to permit the Purchaser to
maintain 50.1% of the issued and outstanding shares
of Common Stock and 50.1% of the Total Voting Power."
(e) Article VIII is amended by adding a new
Section 8.05 at the end thereof to read as follows:
"SECTION 8.05. Disinterested Directors.
-----------------------
Effective on the Closing Date and so long as the
Purchaser's Directors constitute a majority of the
Board, no amendment of this Agreement by which the
Company is to be bound shall be effective unless
approved by a majority of the members of the Board
who are not Purchaser's Directors."
SECTION 2. Counterparts. This Amendment may be
------------
executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement.
SECTION 3. Governing Law. This Amendment shall be
-------------
governed by, and construed in accordance with, the laws of
the State of New York, applicable to contracts executed in
and to be performed entirely within that state.
IN WITNESS WHEREOF, each of the purchaser and the
Company has caused this Amendment to be executed as of the
date first written above by their respective officers
thereunto duly authorized.
REN CORPORATION-USA
By /s/
-------------------------
Name:
Title: President
COBE LABORATORIES, INC.
By /s/
-------------------------
Name:
Title: President
EXHIBIT A
---------
FORM OF AMENDMENT ▇▇. ▇ ▇▇ ▇▇▇
▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇▇ PURCHASE AGREEMENT
AMENDMENT NO. 3, dated as of __________, 1992 (this
"Amendment"), to the Stock Purchase Agreement, dated as of
---------
May 11, 1991, as amended by Amendment No. 1, dated May 24,
1991, and Amendment No. 2, dated March 17, 1992, between REN
CORPORATION-USA, a Tennessee corporation (the "Company"), and
-------
COBE LABORATORIES, INC., a Colorado corporation (the
"Purchaser").
---------
W I T N E S S E T H:
-------------------
WHEREAS, the Company and the Purchaser have entered
into a Stock Purchase Agreement, dated as of May 11, 1991
(the "Purchase Agreement"; capitalized terms used and not
------------------
defined herein being used herein as defined in the Purchase
Agreement);
WHEREAS, the Company and the Purchaser have entered
into Amendment No. 1, dated as of May 24, 1991 to the
Purchase Agreement; and
WHEREAS, the Company and the Purchaser have entered
into Amendment No. 2, dated as of March 17, 1992 to the
Purchase Agreement; and
WHEREAS, the Company and the Purchaser have
determined that it is in their mutual interests to further
amend the Purchase Agreement as hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and
of the mutual agreements and understandings hereinafter set
forth, the Purchaser and the Company agree as follows:
SECTION 1. Amendments to the Purchase Agreement.
------------------------------------
The Purchase Agreement is, effective as of the date hereof,
hereby amended as follows:
(a) New defined terms shall be added to Section
1.01, immediately following the definition of
"Amendment No. 2", to read as follows:
"'Amendment No. 3' means the Amendment No. 3,
---------------
dated , 1992, to this Agreement between
----------------
the Company and the Purchaser."
(b) The defined term "Purchase Agreement" shall be
restated in full to read as follows:
A-2
"'Purchase Agreement' means this Agreement, as
------------------
amended by Amendment ▇▇. ▇, ▇▇▇▇▇▇▇▇▇ ▇▇. ▇ and
Amendment No. 3."
(c) Sections 5.08 shall be restated in full to read
as follows:
"(a) The Company agrees, effective upon the
Closing Date (as defined in the Stock Purchase
Agreement dated as of July 2, 1992 between the
Company and the Purchaser), to increase the size of
the Board to nine directors and to appoint as
directors three persons designated by the Purchaser
(such three directors, together with the two members
of the Board previously designated by the Purchaser
being the 'Purchaser's Directors'), one such
---------------------
additional Purchaser's Director with his term
expiring at the Company's 1993 annual stockholders'
meeting and the other two additional Purchaser's
Directors with their term expiring at the Company's
1994 annual stockholders' meeting. Without the
prior written consent of the Purchaser, the Company,
acting through the Board, shall not change the size
of the Board.
(b) Effective on the Closing Date and so long
as the Purchaser owns a majority of the issued and
outstanding Common Stock, the Purchaser shall have
the right to request that the Company include (x)
two persons designated by the Purchaser as a nominee
to serve as a member of the `Class One Directors'
(as such term is used in the By-Laws; provided that
--------
for purposes of this Agreement, such term shall be
further defined to be that class of directors of the
Board whose term next expires at the 1993 annual
stockholders' meeting) of the Board, (y) two persons
designated by the Purchaser to serve as a member of
the 'Class Two Directors' (as such term is used in
the By-Laws; provided that for purposes of this
--------
Agreement, such term shall be further defined to be
that class of directors of the Board whose term next
expires at the 1994 annual stockholders' meeting) of
the Board and (z) one person designated by the
Purchaser to serve as a member of the 'Class Three
Directors' (as such term is used in the By-Laws;
provided that for purposes of this Agreement, such
--------
term shall be further defined to be that class of
directors of the Board whose term next expires at
the 1995 annual stockholders' meeting) of the
A-3
Board, and such persons shall be nominated by the
Company. If the Board, in the exercise of its
fiduciary duties, reasonably shall determine that
any person designated by the Purchaser to be a
nominee to the Board pursuant to this Section 5.08
is not qualified to serve on the Board and the
committees specified in subsection (c) of this
Section 5.08 for which such person has been
designated to serve upon by the Purchaser, the
Purchaser shall have the opportunity to specify one
or more additional designees who shall be so
included as a nominee subject to the reasonable
determination by the Board, in the exercise of their
fiduciary duties, that any such additional designee
is qualified to serve on the Board and such
committees. The Board shall recommend to the
stockholders of the Company for election the
designees of the Purchaser who are nominated by the
Company to serve as members of the Board. In the
event that a vacancy is created on the Board at any
time by the death, disability, retirement,
resignation or removal (with or without cause) of a
Purchaser's Director, the Purchaser shall have the
right to select a nominee to fill such vacancy. If
the remaining Board members, in the exercise of
their fiduciary duties, reasonably shall determine
that such nominee is not qualified to serve on the
Board and the committees specified in subsection (c)
of this Section 5.08 for which such person has been
designated to serve upon by the Purchaser, the
Purchaser shall have the opportunity to select one
or more additional nominees. Subject to the
qualification set forth in the immediately preceding
sentence, the remaining members of the Board shall
elect to the Board to fill such vacancy any such
nominee of the Purchaser.
(c) Effective on the Closing Date and so long
as the Purchaser owns a majority of the issued and
outstanding Common Stock, the Company agrees to
place two of the Purchaser's Directors on each of
the Executive, Compensation and Human Resources
Committees, each of which is to consist of three
members and to place two of the Purchaser's
Directors on the Audit Committee, which is to
consist of four members."
(d) The second sentence of Section 5.10(b) shall be
restated in full to read as follows:
"The Purchaser shall have the option to purchase
from the Company additional shares of Common Stock
A-4
to the extent necessary to permit the Purchaser to
maintain 50.1% of the issued and outstanding shares
of Common Stock and 50.1% of the Total Voting Power."
(e) Article VIII is amended by adding a new
Section 8.05 at the end thereof to read as follows:
"SECTION 8.05. Disinterested Directors.
-----------------------
Effective on the Closing Date and so long as the
Purchaser's Directors constitute a majority of the
Board, no amendment of this Agreement by which the
Company is to be bound shall be effective unless
approved by a majority of the members of the Board
who are not Purchaser's Directors."
SECTION 2. Counterparts. This Amendment may be
------------
executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement.
SECTION 3. Governing Law. This Amendment shall be
-------------
governed by, and construed in accordance with, the laws of
the State of New York, applicable to contracts executed in
and to be performed entirely within that state.
IN WITNESS WHEREOF, each of the Purchaser and the
Company has caused this Amendment to be executed as of the
date first written above by their respective officers
thereunto duly authorized.
REN CORPORATION-USA
By
--------------------
Name:
Title:
COBE LABORATORIES, INC.
By
--------------------
Name:
Title:
EXHIBIT B
---------
CONTENTS OF OPINIONS OF
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ AND/OR
WYATT, TARRANT, ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇
1. The Company is a corporation duly organized, validly
existing and in good standing under the laws of Tennessee and
has the requisite corporate power and authority to own, lease
and operate its properties and carry on its business in all
material respects as presently owned or conducted. The
Company is duly qualified or licensed as a foreign
corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned,
leased or operated by it, or the nature of its activities
makes such qualification or licensing necessary, except those
jurisdictions, if any, in which the failure to be so duly
qualified or licensed and in good standing would not, taken
as a whole, have a Material Adverse Effect.
2. The Company is not in violation of any of the provisions
of the Charter of Incorporation or By-Laws, except where such
violation would not, individually or in the aggregate, have a
Material Adverse Effect.
3. The Company has all necessary corporate power and
authority to execute and deliver the Agreement and to perform
its obligations and to consummate the transactions
contemplated thereunder. The execution, delivery and
performance of the Agreement by the Company have been duly
and validly authorized by all necessary corporate action and
no other corporate proceedings on the part of the Company are
necessary to authorize the Agreement or to consummate the
transactions contemplated thereunder.
4. (a) The execution and delivery of the Agreement by the
Company do not, and the performance of the Agreement
(including, without limitation, the consummation of the
transactions contemplated thereunder) will not, (i) conflict
with or violate the Charter of Incorporation or By-Laws, (ii)
conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to the Company, or by which its
or any of its properties are bound or affected, or
(iii) result in any breach of or constitute a default (or an
B-2
event which with notice or lapse of time or both would become
a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or
result in the creation of a lien or encumbrance on any of the
properties or assets of the Company which would have a
Material Adverse Effect, taken as a whole, pursuant to any
note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, insurance policy or other instrument or
obligation, and which note, bond, mortgage, indenture,
contract, agreement, license, permit, insurance policy or
other instrument or obligation to which the Company is a
party, or by which the Company or its properties are bound or
affected.
(b) The execution and delivery of the Agreement by the
Company do not, and the performance of the Agreement by the
Company (including, without limitation, the consummation of
the transactions thereunder) will not require any consent,
approval, authorization or permit of, or filing (other than
filings, if any, required on Form 8-K with the SEC and the
HSR Act) with or notification to, any governmental or
regulatory authority, on the part of the Company.
5. Following the consummation of the transactions
thereunder, all the Shares subject to issuance pursuant to
the Agreement, upon such issuance against payment for such
Shares as contemplated by the Agreement shall (i) be duly
authorized, validly issued, fully paid and nonassessable,
(ii) not be subject to any Encumbrances and (iii) such Shares
shall have accorded to them voting rights.
6. The Agreement has been duly and validly executed and
delivered by the Company and, assuming the due authorization,
execution and delivery hereof by the Purchaser, and payment
for the Shares as contemplated by the Agreement, constitutes
the legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting
creditors' rights generally and by the availability of
equitable remedies.
The following assumptions shall be made:
1. Reliance upon representations and warranties of the
Company and upon certificates of certain public officials;
B-3
2. Authenticity of all documents submitted to us as copies,
genuineness of all signatures, and conformity to the
originals of all documents submitted to counsel as copies;
3. Due authorization, execution and delivery of the
Agreement by the Purchaser;
4. Compliance by the Company, the Purchaser and any
Affiliate of either the Company or the Purchaser with the
covenants, representations, warranties and agreements
made, and to be performed by them pursuant to the
Agreement.
AMENDMENT ▇▇. ▇
▇▇ ▇▇▇
▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇▇ PURCHASE AGREEMENT
AMENDMENT NO. 4, dated as of April 26, 1994 (this "Amendment"),
to the Stock Purchase Agreement dated as of May 11, 1991, as amended by
Amendment No. 1 dated May 24, 1991, Amendment No. 2 dated March 17, 1992, and
Amendment No. 3 dated as of October 1, 1992 (as so amended, the "Purchase
--------
Agreement"; capitalized terms used and not defined herein being used herein
---------
as defined in the Purchase Agreement), between REN CORPORATION-USA, a Tennessee
corporation (the "Company"), and COBE LABORATORIES, INC., a Colorado corporation
-------
(the "Purchaser").
---------
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company and the Purchaser have entered into a Stock
Purchase Agreement dated as of May 11, 1991; and
WHEREAS, the Company and the Purchaser have determined that it is
in their mutual interests to further amend the Purchase Agreement as hereinafter
set forth;
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements and understandings hereinafter set forth, the Purchaser and
the Company agree as follows:
SECTION 1. Amendments to the Purchase Agreement. The Purchase
------------------------------------
Agreement is, effective as of the date hereof, hereby amended as follows:
(a) New defined terms shall be added to Section 1.01,
immediately following the definition of "Amendment No. 3", to read as follows:
"'Amendment No. 4' means the Amendment No. 4, dated as of
----------------
April 26 , 1994, to this Agreement between the Company and the
Purchaser."
(b) The defined term "Purchase Agreement" shall be restated in
full to read as follows:
"Purchase Agreement" means this Agreement, as amended by
------------------
Amendment ▇▇. ▇, ▇▇▇▇▇▇▇▇▇ ▇▇. ▇, ▇▇▇▇▇▇▇▇▇ ▇▇. ▇ and Amendment No. 4."
(c) Sections 5.08 shall be restated in full to read as follows:
"(a)(i) The Company agrees, from and after the date of
this Amendment No. 4 (the "Effective Date"), that the number of
--------------
directors on the Board will be that number that is determined
from time to time in accordance with the bylaws
of the Company; that in each election of directors of the Company, the
Purchaser shall have the right to cause the Company to include as nominees to
serve as members of the Board that number of persons designated by the Purchaser
so that the number of all such persons so designated by the Purchaser from time
to time constitute a majority of the members of the Board (each such nominee
after being duly elected and qualified to be a director of the Company and each
director serving on the Board on the Effective Date who was so designated by the
Purchaser being a "Purchaser's Director"); and that such persons shall be
--------------------
nominated by the Company.
(ii) From and after the date of this Amendment No. 4, Purchaser's
Directors shall constitute a majority of the members of each of the Executive
and Compensation Committees and one half of the members of the Audit Committee.
(b)(i) From and after the date of this Amendment No. 4, whenever the
number of directors on the Board is increased, the number of Purchaser's
Directors will be increased, if necessary, to the smallest number of directors
necessary to maintain a majority of Purchaser's Directors on the Board. Each
additional Purchaser's Director nominated to the Board will be designated as a
member of the class of directors (as such term is used in the bylaws of the
Company) which has the fewest Purchaser's Directors prior to such designation.
If more than one class of directors is eligible for the designation, the
designation will be made to the last class among such classes to stand for
election. If more than one Purchasers's Director is nominated to the Board as
a result of any increase in the number of Purchaser's Directors, the additional
Purchaser's Directors will be designated as a member of a class in sequence
applying the procedure set forth in this Section 5.08(b)(i).
(ii) From and after the date of this Amendment No. 4, whenever the
number of directors on the Board is decreased, the number of Purchaser's
Directors will be decreased, if necessary, to the smallest number of directors
necessary to maintain a majority of Purchaser's Directors on the Board and the
number of seats in each class designated to be filled by Purchaser's Directors
will be adjusted so that the number of Purchaser's Directors in each class is
as nearly equal as is possible.
(c) If the Board, in the exercise of its fiduciary duties, reasonably
shall determine that any person designated by the Purchaser to be a nominee to
the Board pursuant to this Section 5.08 is not qualified to serve on the Board
or any committee specified in subsection (a)(ii) of this Section 5.08, the
Purchaser shall have the opportunity to specify one or more additional designees
who shall be so included as a nominee, subject to the reasonable determination
by the Board, in the exercise of its fiduciary duties, that any such additional
designee is qualified to serve on the Board or such committee. The Board shall
recommend to the
stockholders of the Company for election the designees of the Purchaser who are
nominated by the Company to serve as members of the Board.
(d) In the event that a vacancy is created on the Board at any time by
the death, disability, retirement, resignation or removal (with or without
cause) of a Purchaser's Director, the Purchaser shall have the right to select
a nominee to fill such vacancy. If the remaining Board members, in the exercise
of their fiduciary duties, reasonably shall determine that such nominee is not
qualified to serve on the Board and the committees specified in subsection
(a)(ii) of this Section 5.08 for which such person has been designated to serve
upon by the Purchaser, the Purchaser shall have the opportunity to select one or
more additional nominees. Subject to the qualification set forth in the
immediately preceding sentence, the remaining members of the Board shall elect
to the Board to fill such vacancy any such nominee of the Purchaser.
SECTION 2. Counterparts. This Amendment may be executed in one
------------
or more counterparts, and by the different parties hereto in separate
counterpart, each of which when executed shall be deemed to be an original, but
all of which taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, each of the Purchaser and the Company has
caused this Amendment to be executed as of the date first written above by their
respective officers thereunto duly authorized.
REN CORPORATION-USA
By: /s/
-------------------------
Name:
Title: President/CEO
COBE LABORATORIES, INC.
By: /s/
-------------------------
Name:
Title: President