EXHIBIT B
EXECUTION COPY
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
Dated as of June 23, 1995
between
i-STAT Corporation
and
Hewlett-Packard Company
SALE OF SERIES B PREFERRED STOCK
SALE OF SERIES B PREFERRED STOCK
TABLE OF CONTENTS
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ARTICLE I SALE OF SERIES B PREFERRED STOCK ....................................1
1.1 Sale and Issuance of Series B Preferred Stock.....................1
1.2 Closing Dates.....................................................1
1.3 Delivery..........................................................1
1.4 Legend............................................................1
ARTICLE II REPRESENTATIONS AND WARRANTIES OF i-STAT ...........................2
2.1 Organization, Standing and Power..................................2
2.2 Capital Structure.................................................2
2.3 Authority.........................................................3
2.4 No Conflict.......................................................4
2.5 Accuracy of Reports...............................................4
2.6 Governmental Consent, etc.........................................4
2.7 S-3...............................................................4
2.8 Intellectual Property.............................................5
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER .......................6
3.1 Investment........................................................6
3.2 Organization......................................................7
3.3 Authorities.......................................................7
3.4 Government Consents...............................................7
3.5 Investigation.....................................................7
3.6 Purchaser.........................................................8
ARTICLE IV CONDITIONS TO OBLIGATIONS OF PURCHASER .............................8
4.1 Representations and Warranties Correct............................8
4.2 Covenants.........................................................8
4.3 Opinion of Company's Counsel......................................8
4.4 No Order Pending..................................................8
4.5 HSR Act...........................................................8
4.6 No Law Prohibiting or Restriction of Such Sale....................8
4.7 Compliance Certificate............................................8
4.8 License Agreement and Distribution Agreement......................8
4.9 Registration Rights Agreement.....................................9
4.10 Rights Plan.......................................................9
4.11 Authorizing Resolutions...........................................9
ARTICLE V CONDITIONS TO OBLIGATIONS OF I-STAT .................................9
5.1 Representations and Warranties Correct............................9
5.2 Covenants.........................................................9
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TABLE OF CONTENTS
(continued)
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5.3 No Order Pending..................................................9
5.4 No Law Prohibiting or Restriction of Such Sale....................9
5.5 Compliance Certificate............................................9
5.6 License Agreement and Distribution Agreement......................9
5.7 Registration Rights Agreement....................................10
5.8 HSR Act..........................................................10
ARTICLE VI COVENANTS OF THE COMPANY ..........................................10
6.1 No Objection.....................................................10
6.2 Sale of Shares...................................................10
6.3 Membership on the Board of Directors.............................10
6.4 Equity Method Accounting.........................................12
6.5 Confidential Treatment...........................................12
6.6 Notice of Certain Transactions; Right of First Offer.............12
6.7 HSR Act..........................................................13
6.8 Restrictions on Amendments to the Rights Plan and Adoption
of New Rights Plan ..............................................13
6.9 Amendment to the Rights Plan.....................................14
6.10 Manufacturing....................................................14
6.11 Use of Funds; Activities in Support of Strategic Relationship....14
6.12 Waivers..........................................................14
ARTICLE VII COVENANTS OF PURCHASER ...........................................15
7.1 Conversion Before Sale...........................................15
7.2 Voting...........................................................15
7.3 Acquisition of Stock.............................................15
7.4 Limitation on HP's Acquisition of Voting Stock...................15
7.5 Transfers of Voting Stock........................................17
7.7 Conversion of Preferred Stock....................................18
7.8 Other............................................................18
7.9 Confidential Information.........................................18
7.10 Solicitation of Proxies..........................................19
7.11 HSR Act..........................................................19
ARTICLE VIII RIGHT TO MAINTAIN ...............................................19
8.1 Stock Plan Issuances.............................................19
8.2 Other Issuances..................................................19
8.3 Price............................................................21
8.4 Closing..........................................................22
8.5 Notice...........................................................22
8.6 Rights Plan......................................................22
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TABLE OF CONTENTS
(continued)
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ARTICLE IX i-STAT'S RIGHT OF FIRST REFUSAL ...................................22
9.1 Right of First Refusal; Right of First Offer.....................22
9.2 Assignment of Rights.............................................24
ARTICLE X DEFINITIONS ........................................................24
10.1 Certain Definitions...............................................24
ARTICLE XI MISCELLANEOUS .....................................................26
11.1 Termination of Agreement..........................................26
11.2 Reasonable Efforts................................................27
11.3 Governing Law.....................................................27
11.4 Survival..........................................................27
11.5 Successors and Assigns............................................27
11.6 Entire Agreement; Amendment.......................................27
11.7 Notices and Dates.................................................27
11.8 Further Assurances................................................28
11.9 Counterparts......................................................28
11.10 Severability......................................................28
11.11 Interpretation....................................................29
11.12 Public Statements.................................................29
11.13 Brokers...........................................................29
11.14 Costs and Expenses................................................29
11.15 No Third Party Rights.............................................29
11.16 Specific Performance..............................................29
11.17 Mutual Drafting...................................................30
Exhibits
A Certificate of Designation, Preferences and Rights of Series B
Preferred Stock
B Registration Rights Agreement
C Opinion of Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
D Company Compliance Certificate
E Purchaser Compliance Certificate
F License Agreement
G Distribution Agreement
H Rights Plan
Schedules
Company Disclosure Schedule
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Company Confidential
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES B PREFERRED STOCK PURCHASE AGREEMENT (the "Agreement") is made
as of this 23rd day of June, 1995, between i-STAT Corporation, a Delaware
corporation (the "Company" or "i-STAT and Hewlett-Packard Company, a California
corporation ("HP" or "Purchaser").
ARTICLE I
SALE OF SERIES B PREFERRED STOCK
1.1 Sale and Issuance of Series B Preferred Stock.
(a) The Company shall adopt (by action of its Board of Directors)
and file with the Secretary of State of Delaware on or before the Closing (as
defined below) a Certificate of Designation, Preference and Rights of Series B
Preferred Stock in the form attached hereto as Exhibit A (the "Certificate").
(b) Subject to the terms and conditions in this Agreement, CD will
issue and sell to HP, and Purchaser will purchase from CD, at the Closing (as
defined below), 2,138,702 shares (the "Shares") of Series B Preferred Stock,
$0.10 par value, of CD (the "Preferred Stock") at a purchase price of $28.50 per
share, for a total purchase price of $60,953,007. At the Closing, the Shares
shall represent at least 14.1% of the outstanding shares of capital stock of the
Company on a fully-diluted basis.
1.2 Closing Dates. The closing of the purchase and sale of the Shares (the
"Closing") shall be held at the offices of Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ at 10:00 a.m., on the fifth business day
following expiration or early termination of all waiting periods imposed under
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976 ("HSR Act") and
satisfact (or waiver, if permissible) of all other closing conditions set forth
in Articles IV and V of this Agreement or at such other time and place upon
which CD and Purchaser shall mutually agree (the date of the Closing is
hereinafter referred to as the "Closing Date").
1.3 Delivery. At the Closing, the Company will deliver to Purchaser a
certificate or certificates representing the Shares purchased by Purchaser
against payment of the purchase price therefor by wire transfer or certified or
official bank check or checks payable in New York Clearing House (next day)
funds to the order of the Company.
1.4 Legend. The certificate or certificates evidencing the Shares shall be
subject to a legend restricting transfer under the Securities Act of 1933, as
amended (the "Securities Act"), and referring to restrictions on transfer and
rights of first refusal herein, such legend to be substantially as follows:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended. Such shares may not be
sold or transferred in the absence of such registration or an
opinion of counsel reasonably satisfactory to the Company as to the
availability of an exemption from registration.
"The shares represented by this certificate are subject to
restrictions on transfer, including any sale, pledge or other
hypothecation, and rights of first refusal set forth in an agreement
dated June 23, 1995 between the Company and Hewlett-Packard Company,
a copy of which is on file at the Company's principal executive
offices."
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF i-STAT
References in this Article II to i-STAT shall be deemed to include i-STAT
and its Subsidiaries (as defined in Section 10.1). i-STAT represents and
warrants to Purchaser as follows:
2.1 Organization, Standing and Power.
(a) i-STAT is a corporation duly organized, validly existing and in
good standing under the laws of the state of Delaware and has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted and as proposed to be conducted.
i-STAT is duly qualified as a foreign corporation and is in good standing in
each jurisdiction in which the ownership of its property or the nature of its
business requires such qualification except for such failures, if any, to be so
qualified and in good standing, which either individually or in the aggregate
would not have a "Material Adverse Effect" (as hereinafter defined) on the
Company. Material Adverse Effect when used in connection with any entity means
any change or effect that is materially adverse to the business, financial
condition, operations, properties, assets or liabilities of such entity. i-STAT
is qualified as a foreign corporation in the states and countries set forth on
Schedule 2.1(a). Except as specified on Schedule 2.1(b), i-STAT has no direct or
indirect equity interest in or loans to a partnership, corporation, joint
venture, business association or other entity. i-STAT has delivered to Purchaser
complete and correct copies of the Certificate of Incorporation and Bylaws, or
similar charter documents, of i-STAT and each subsidiary of i-STAT, in each case
as amended to the date hereof and will furnish to Purchaser true and correct
copies of any amendments thereto through the term of this Agreement.
(b) i-STAT has one Subsidiary, as set forth on Schedule 2.1(b),
which is wholly-owned by i-STAT. Except for the Subsidiary, i-STAT has no
Subsidiaries or affiliated companies and does not otherwise own or control,
directly or indirectly, any equity interest in any corporation, association or
business entity.
2.2 Capital Structure.
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The authorized i-STAT capital stock consists of 25,000,000 shares of
common stock, $.15 par value (the "Common Stock"), of which at June 15, 1995,
11,049,896 shares were issued and outstanding, and 7,000,000 shares of Preferred
Stock, $.10 par value per share, none of which is issued and outstanding. All
such issued and outstanding shares have been duly authorized and validly issued
and are fully paid and non-assessable and not subject to preemptive rights
created by statute, the Certificate of Incorporation or Bylaws or any agreement
to which i-STAT is a party or by which i-STAT may be bound. All outstanding
shares of i-STAT capital stock have been issued in compliance with applicable
federal and state securities laws. The Company has reserved and outstanding the
following options and convertible securities: (i) 2,000,000 shares of Common
Stock, which number of shares will be increased to 3,000,000 subject to
stockholder approval at the Company's 1995 Annual Meeting of Stockholders,
reserved for issuance pursuant to i-STAT's 1985 Stock Option Plan, of which, at
June 21, 1995, options to purchase 189,178 shares had been exercised, options to
purchase 1,963,685 shares were outstanding, which exceeds the total number of
shares reserved for issuance under the Company's 1985 Stock Option Plan by
152,863; (ii) 60,000 shares were reserved for issuance pursuant to i-STAT's 1994
Stock Award Plan, of which at June 21, 1995, 29,050 shares remained available
for future award; and (iii) one warrant to purchase 2,000 shares of Common Stock
at a price of $7.50 per share; (iv) an option to purchase 15,000 shares of
Common Stock granted to ▇▇▇▇▇▇ ▇'▇▇▇▇▇, which option will automatically convert
to an option under i-STAT's 1985 Stock Option Plan subject to stockholder
approval at the Company's 1995 Annual Meeting of Stockholders; and (v) 1,500,000
shares of the Company's Preferred Stock (to be designated "Series A Preferred
Stock" before the Closing) reserved for issuance pursuant to i-STAT's Rights
Plan (as defined in Section 4.10). Except as described in this Section 2.2,
there are no other options, warrants, conversion privileges or other contractual
rights presently outstanding or in existence to purchase or otherwise acquire
any authorized but unissued shares of the Company's capital stock or other
securities or the capital stock or other securities of the Subsidiaries.
2.3 Authority.
(a) i-STAT has all requisite corporate rights, power and authority
to enter into this Agreement, the Registration Rights Agreement attached as
Exhibit B to this Agreement (the "Registration Rights Agreement"), the License
Agreement attached as Exhibit F hereto (the "License Agreement") and the
Distribution Agreement attached as Exhibit G hereto (the "Distribution
Agreement") and to consummate the transactions contemplated hereby and thereby.
All corporate action on the part of the Company, its directors and stockholders
necessary for the authorization, execution, delivery and performance of this
Agreement, the Registration Rights Agreement, the License Agreement and the
Distribution Agreement, the authorization, sale, issuance and delivery of the
Shares contemplated hereby, and the performance of the Company's obligations
hereunder and under the Registration Rights Agreement, the License Agreement and
the Distribution Agreement has been taken. The Company's Board of Directors, at
a meeting duly called and held, has approved this Agreement and the transactions
contemplated hereby for purposes of Section 203 of the Delaware General
Corporation Law (the "DGCL"). This Agreement, the Registration Rights Agreement,
the License Agreement and the Distribution Agreement have been duly executed and
delivered by the Company and constitute legal, valid and binding obligations of
the Company,
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enforceable against the Company in accordance with their respective terms,
subject to laws of general application relating to bankruptcy, insolvency and
the relief of debtors and rules of law governing specific performance,
injunctive relief or other equitable remedies, except that the availability of
equitable remedies is subject to the discretion of the court before which any
proceeding therefor may be brought. Upon the issuance and delivery of the Shares
as contemplated by this Agreement, such shares will be validly issued, fully
paid and non-assessable. The issuance and sale of the Shares contemplated hereby
will not give rise to any preemptive rights or rights of first refusal in
existence as of the date hereof on behalf of any person pursuant to any
provision of any agreement between i-STAT and any such person or i-STAT's
Certificate of Incorporation or Bylaws.
2.4 No Conflict. Except as set forth on Schedule 2.4 and subject to
compliance with the HSR Act, such filings as may be required pursuant to federal
and state securities laws and the filing of the Certificate of Designation,
Rights and Preferences attached as Exhibit A hereto with the State of Delaware,
the execution and delivery of this Agreement, the Registration Rights Agreement,
the License Agreement and the Distribution Agreement do not, and the
consummation of the transactions contemplated hereby and thereby will not result
in any violation of, or default (with or without notice of lapse of time, or
both), or give rise to a right of termination, cancellation or acceleration of
any obligation to or a loss of a benefit, under, any provision of the
Certificate of Incorporation or By-laws of the Company or any mortgage,
indenture, lease or other agreement or instrument, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to the Company,
its properties or assets, the effect of which would have a Material Adverse
Effect on the Company or impair or restrict its power to perform its obligations
as contemplated hereby.
2.5 Accuracy of Reports. All reports required to be filed by the Company
to the date of this Agreement under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), copies of which have been furnished to Purchaser,
have been duly filed, were in compliance with the requirements of their
respective forms, were complete and correct in all material respects as of the
dates at which the information was furnished, and contained (as of such dates)
no untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
2.6 Governmental Consent, etc. Except as provided in Schedule 2.6, no
consent, approval or authorization of or designation, declaration or filing with
any governmental authority on the part of the Company is required in connection
with the execution and delivery of this Agreement, or the offer, sale or
issuance of the Shares, or the consummation of any other transaction
contemplated hereby, except the filing of such forms with the United States
Department of Justice and the Federal Trade Commission as shall be required by
the HSR Act, and the expiration of any waiting periods thereunder and such
filings as may be required to be made with the Securities and Exchange
Commission (the "SEC"), the National Association of Securities Dealers and any
state securities commission.
2.7 S-3. The Registration Statement on Form S-3 filed by the Company with
the Securities and Exchange Commission on May 26, 1995, a copy of which has been
furnished to
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Purchaser, is in material compliance with the requirements of Form S-3 under the
Securities Act and was complete and correct in all material respects as of the
date filed and as of the date hereof, and contained no untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
2.8 Intellectual Property.
(a) Schedule 2.8(a) contains an accurate and complete list of all
material domestic and foreign patents, patent applications, trademarks,
trademark registrations and applications therefor, trade names, service marks,
service ▇▇▇▇ registrations and applications therefor, copyright registrations
and applications therefor, which are used by i-STAT or which are presently owned
or held by i-STAT or under which i-STAT owns or holds any license, or in which
i-STAT owns or holds any interest (collectively, the "i-STAT Intellectual
Property Rights"). (i) Schedule 2.8(a) further sets forth: the jurisdictions by
or in which such Intellectual Property Right has been issued or registered or in
which an application for such issuance or registration has been filed, including
the respective registration or application numbers; (ii) there are no products
which have been registered for copyright protection in the United States
Copyright Office and any foreign offices; (iii) there are no material licenses,
sublicenses and other agreements including confidential disclosure agreements as
to which i-STAT is a party and pursuant to which i-STAT is authorized to use any
intellectual property rights; (iv) there are no parties to whom i-STAT has
delivered copies of i-STAT source code, whether pursuant to an escrow
arrangement or otherwise, or parties who have the right to receive such source
code; and (v) copies of all material licenses, sublicenses, and other agreements
pursuant to which any other person is authorized to use any i-STAT Intellectual
Property Right have been delivered by i-STAT to Purchaser.
(b) To i-STAT's knowledge, i-STAT owns, or is licensed or otherwise
entitled to exercise, without restriction, all rights to all patents,
trademarks, trade names, service marks, copyrights, mask work rights, trade
secret rights and other intellectual property rights, and any applications or
registrations therefor, and all mask works, net lists, schematics, technology,
source code, know-how, computer software programs and all other tangible and
intangible information or material, that are used or currently proposed to be
used in the business of i-STAT as currently conducted or as currently proposed
to be conducted.
(c) To i-STAT's knowledge, except as set forth on Schedule 2.4,
i-STAT is not, and as a result of the execution and delivery of this Agreement
or the performance of i-STAT's obligations hereunder will not be in violation of
or lose any rights pursuant to any license, sublicense or agreement previously
provided to Purchaser.
(d) To i-STAT's knowledge, i-STAT is the owner or licensee of, with
all necessary right, title and interest in and to (free and clear of any liens,
encumbrances or security interests), the i-STAT Intellectual Property Rights and
has rights (and is not contractually obligated to pay any compensation to any
third party in respect thereof) to the use thereof or the material covered
thereby in connection with the services or products in respect of which the
i-STAT Intellectual Property Rights are being used.
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(e) To i-STAT's knowledge, no claims with respect to the i-STAT
Intellectual Property Rights have been asserted or threatened by any person, and
i-STAT does not know of any claims (i) to the effect that the manufacture, sale
or use of any product as now used or offered or proposed for use or sale by
i-STAT infringes any material copyright, patent, trade secret, or other
intellectual property right, (ii) against the use by i-STAT of any i-STAT
Intellectual Property Rights, or (iii) except with respect to pending patent and
trademark applications, challenging the ownership, validity or effectiveness of
any of the i-STAT Intellectual Property Rights.
(f) To i-STAT's knowledge, all patents and registered trademarks,
service marks, and registered copyrights held by i-STAT are valid and
subsisting.
(g) To i-STAT's knowledge, there is not now any material
unauthorized use, infringement or misappropriation of any of the i-STAT
Intellectual Property Rights by any third party, including without limitation
any employee or former employee of i-STAT; i-STAT has not been sued or charged
in writing as a defendant in any claim, suit, action or proceeding which
involves a claim of infringement of any patents, trademarks, service marks,
copyrights or other intellectual property rights and which has not been finally
terminated prior to the date hereof; there are no such charges or claims
outstanding; and to i-STAT's knowledge, except as set forth on Schedule 2.8(g),
i-STAT does not infringe any patent, trademark, service ▇▇▇▇, copyright or other
intellectual property right of another.
(h) No i-STAT Intellectual Property Right is subject to any
outstanding order, judgment, decree, stipulation or agreement restricting in any
manner the licensing thereof by i-STAT. i-STAT has not entered into any
agreement or offered to indemnify any other person against any charge of
infringement of any i-STAT Intellectual Property Right. i-STAT has not entered
into any agreement granting any third party the right to bring infringement
actions with respect to, or otherwise to enforce rights with respect to any
i-STAT Intellectual Property Right. To i-STAT's knowledge, i-STAT had the
exclusive right to file, prosecute and maintain all applications and
registrations with respect to the i-STAT Intellectual Property Rights.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to the Company as follows:
3.1 Investment. It will acquire the Shares and any other shares purchased
from the Company pursuant to this Agreement for investment for its own account,
not as a nominee or agent, and not with a view to, or for resale in connection
with, any distribution thereof. It understands that the Shares and any other
shares purchased by Purchaser from the Company pursuant to this Agreement have
not been, and will not be, registered under the Securities Act for sale to
Purchaser by reason of a specific exemption from the registration provisions of
the Securities Act which depends upon, among other things, the bona fide nature
of Purchaser's investment intent and the accuracy of Purchaser's representations
as expressed herein. Should Purchaser in the future decide to offer to dispose
of any Shares, or any interest therein, it agrees to do so only in compliance
with the Securities Act and this Agreement.
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3.2 Organization. Purchaser is a corporation duly organized and validly
existing in good standing under the laws of the State of California, with all
requisite corporate power and authority to own, lease and operate its properties
and assets and to carry on its business as presently conducted and as proposed
to be conducted.
3.3 Authorities. Purchaser has all corporate right, power and authority to
enter into this Agreement, the Registration Rights Agreement, the License
Agreement and the Distribution Rights Agreement and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement, the Registration Rights Agreement, the License Agreement and the
Distribution Agreement by Purchaser and the consummation by Purchaser of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action on behalf of Purchaser. This Agreement, the
Registration Rights Agreement, the License Agreement and the Distribution
Agreement have been duly executed and delivered by Purchaser and constitute
legal, valid and binding obligations of Purchaser, enforceable against Purchaser
in accordance with their respective terms, subject to laws of general
application relating to bankruptcy insolvency and the relief of debtors and
rules of law governing specific performance, injunctive relief or other
equitable remedies, except that the availability of equitable remedies is
subject to the discretion of the court before which any proceeding therefor may
be brought. Subject to compliance with such filings as may be required to be
made with the SEC and any exchange on which Purchaser's securities are listed,
the execution and delivery of this Agreement and the Registration Rights
Agreement do not, and the consummation of the transactions contemplated hereby
and thereby will not, conflict with or result in any violation of any obligation
under any provision of the Certificate of Incorporation or By-laws (or
corresponding instruments) of Purchaser or any mortgage, indenture, lease or
other agreement or instrument, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Purchaser, its properties or assets,
the effect of which would have a Material Adverse Effect on Purchaser or impair
or restrict its power to perform its obligations as contemplated hereby.
3.4 Government Consents. etc. No consent, approval or authorization of or
designation, declaration or filing with any governmental authority on the part
of Purchaser is required in connection with the valid execution and delivery of
this Agreement, or the purchase of the Shares, or the consummation of any other
transaction contemplated hereby, except (a) such filings as may be required to
be made with the SEC, any exchange on which Purchaser's securities are listed
and any state securities commission, and (b) the filing of such forms with the
United States Department of Justice and the Federal Trade Commission as shall be
required by the HSR Act, and the expiration of any waiting periods thereunder.
3.5 Investigation. The Company or its representatives have made available
to Purchaser all documents and information that Purchaser has requested relating
to its acquisition of the Shares. Purchaser has had a reasonable opportunity to
discuss the Company's business, management and financial affairs with the
Company's management and Purchaser has received satisfactory responses from
management of the Company to Purchaser's inquiries.
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3.6 Purchaser. Purchaser has such knowledge and experience in business and
financial matters that it is capable of evaluating the merits and risks of its
investment in the Company. The Purchaser is able to bear the economic risk of
ownership of the Shares for an indefinite period of time.
ARTICLE IV
CONDITIONS TO OBLIGATIONS OF PURCHASER
Purchaser's obligation to purchase any Shares at the Closing is, at the
option of Purchaser, which may waive any such conditions to the extent permitted
by law, subject to the fulfillment on or prior to the Closing Date of the
following conditions:
4.1 Representations and Warranties Correct. The representations and
warranties made by the Company in Article II hereof shall be true and correct
when made, and shall be true and correct in all material respects on the Closing
Date with the same force and effect as if they had been made on and as of said
date.
4.2 Covenants. All covenants, agreements and conditions contained in this
Agreement to be performed by the Company on or prior to such purchase shall have
been performed or complied with in all material respects.
4.3 Opinion of Company's Counsel. Purchaser shall have received from Paul,
Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel to the Company, an opinion addressed to it,
dated the Closing Date, in substantially the form of Exhibit C.
4.4 No Order Pending. There shall not then be in effect any order
enjoining or restraining the transactions contemplated by this Agreement.
4.5 HSR Act. Both Purchaser and the Company shall have filed such forms
with the United States Department of Justice and the Federal Trade Commission as
shall be required by the HSR Act. The applicable waiting periods under the HSR
Act shall have expired or earlier been terminated without notice from such
governmental agencies that additional inquiries are being made.
4.6 No Law Prohibiting or Restriction of Such Sale. There shall not be in
effect any law, rule or regulation prohibiting or restricting such sale or
requiring any consent or approval of any person which shall not have been
obtained to issue the Shares.
4.7 Compliance Certificate. The Company shall have delivered to the
Purchaser a certificate, executed on behalf of the Company by the President of
the Company, dated the Closing Date, and certifying to the fulfillment of the
conditions specified in Sections 4.1 and 4.2.
4.8 License Agreement and Distribution Agreement. The Company shall have
executed and delivered to Purchaser the License Agreement and the Distribution
Agreement.
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4.9 Registration Rights Agreement. The Company shall have executed and
delivered to Purchaser the Registration Rights Agreement.
4.10 Rights Plan. Prior to the execution of this Agreement, the Company
shall have provided to Purchaser its Stockholder Protection Agreement to be
adopted by the close of business on June 26, 1995 between the Company and First
Fidelity Bank, National Association, as Rights Agent, in the form attached as
Exhibit H hereto (the "Rights Plan").
4.11 Authorizing Resolutions. Purchaser shall have received a Secretary's
Certificate certifying as to the resolutions adopted by the Company's Board of
Directors approving this Agreement and the transactions contemplated hereby,
including resolutions relating to Section 203 of the DGCL, the election of ▇▇▇▇▇
▇▇▇▇▇▇ to the Company's Board of Directors at Closing, and the Rights Plan (as
described in this Agreement and set forth in Exhibit H) in form and substance
reasonably acceptable to Purchaser.
ARTICLE V
CONDITIONS TO OBLIGATIONS OF I-STAT
i-STAT's obligation to sell and issue the Shares at the Closing is, at the
option of i-STAT, which may waive any such conditions to the extent permitted by
law, subject to the fulfillment on or prior to the Closing Date of the following
conditions:
5.1 Representations and Warranties Correct. The representations and
warranties made by Purchaser in Article III hereof shall be true and correct
when made, and shall be true and correct in all material respects on the Closing
Date with the same force and effect as if they had been made on and as of said
date.
5.2 Covenants. All covenants, agreements and conditions contained in this
Agreement to be performed by Purchaser on or prior to such purchase shall have
been performed or complied with in all material respects.
5.3 No Order Pending. There shall not then be in effect any order
enjoining or restraining the transactions contemplated by this Agreement.
5.4 No Law Prohibiting or Restriction of Such Sale. There shall not be in
effect any law, rule or regulation prohibiting or restricting such sale or
requiring any consent or approval of any person which shall not have been
obtained to issue the Shares.
5.5 Compliance Certificate. Purchaser shall have delivered to the Company
a certificate, executed on behalf of Purchaser by an officer of Purchaser, dated
the Closing Date, and certifying to the fulfillment of the conditions specified
in Sections 5.1 and 5.2.
5.6 License Agreement and Distribution Agreement. Purchaser shall have
executed and delivered to the Company the License Agreement and the Distribution
Agreement.
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5.7 Registration Rights Agreement. Purchaser shall have executed and
delivered to the Company the Registration Rights Agreement.
5.8 HSR Act. Both Purchaser and the Company shall have filed such forms
with the United States Department of Justice and the Federal Trade Commission as
shall be required by the HSR Act. The applicable waiting periods under the HSR
Act shall have expired or earlier been terminated without notice from such
governmental agencies that additional inquiries are being made.
ARTICLE VI
COVENANTS OF THE COMPANY
From the execution of this Agreement and until the termination of this
Agreement in accordance with Section 11.1 hereof or the particular covenant, as
the case may be:
6.1 No Objection. Except as required by law, the Company shall not
interpose any objection or take any legal action as a plaintiff in connection
with the acquisition by Purchaser of such number of shares of Voting Stock as is
permitted to be owned by Purchaser pursuant to this Agreement.
6.2 Sale of Shares. The Company shall take such action as is reasonably
necessary subject to compliance with applicable law, to issue and sell to
Purchaser the Shares and any additional shares of capital stock which Purchaser
shall be entitled to purchase from the Company pursuant to this Agreement.
6.3 Membership on the Board of Directors.
(a) (i) At such time as Purchaser holds Voting Stock representing at
least: (A) 10% but less than 20% of the then outstanding Total Voting Power of
the Company, the Company shall cause to be nominated and recommended for
election to the Company's Board of Directors a person designated by Purchaser
and approved by the Company, or (B) 20% or more of the then outstanding Total
Voting Power of the Company, the Company shall cause to be nominated and
recommended for election to the Company's Board of Directors an aggregate of two
persons designated by Purchaser and approved by the Company, which approval in
either case shall not unreasonably be withheld.
(ii) For so long as Purchaser is entitled to designate any
person to serve on the Company's Board of Directors, the Company shall include
in the slate of nominees recommended by the Company's Board of Directors or
management to stockholders for election as directors at each annual meeting of
stockholders of the Company each person designated pursuant to this Section 6.3,
or each substitute as may be designated by Purchaser and who is reasonably
acceptable to the Company. Each such designee shall serve until his successor
(specified by Purchaser and approved by the Company) has been duly elected and
qualified. The Company shall use its best efforts to cause the shares for which
the Company's management or directors hold proxies or are otherwise entitled to
vote to be voted in favor of the election of any such designee to the extent
necessary to ensure his election so long as the Voting Stock beneficially owned
by
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Purchaser also is voted for such designee(s). In the event that any such
designee shall cease to serve as a director for any reason, the Company shall
cause to be nominated and recommended for election to fill the vacancy created
thereby with a designee of Purchaser reasonably acceptable to the Company. The
Company shall not unreasonably withhold its acceptance of any such designee. The
Company hereby agrees to accept ▇▇▇▇▇ ▇▇▇▇▇▇ as Purchaser's initial designee to
the Company's Board of Directors, so long as ▇▇. ▇▇▇▇▇▇ continues to have at
least the same degree of authority and responsibility that he currently has in
his position with Purchaser.
(iii) A reduction in Purchaser's percentage ownership below:
(A) 10% shall not cause removal of Purchaser's representative on the Company's
Board of Directors, or (B) 20% shall not cause removal of either of Purchaser's
representatives on the Company's Board of Directors, in either of Sections
6.3(a)(iii)(A) or (B) as long as the event causing the reduction is the sale or
issuance by the Company of additional shares of Voting Stock resulting in
dilution of Purchaser's percentage ownership level, and not a sale by Purchaser
of its Voting Stock; except, however, in the case of Section 6.3(a)(iii)(B)
where such reduction is a result of Purchaser's failure to exercise its
maintenance rights as provided in Article VIII.
(iv) If Purchaser loses its right under this Section 6.3 to
have the Company cause to be nominated and recommended for election to the
Company's Board of Directors any person designated by Purchaser (a "Nomination
Right"), Purchaser shall cause any of its designees then sitting on the Board to
forthwith resign from the Board, and Purchaser's Nomination Right with respect
to the Board seat vacated thereby shall terminate notwithstanding any increases
in the number of shares of Voting Stock that may thereafter be held by
Purchaser.
(b) At such time as Purchaser holds Voting Stock representing at
least 10% of the then outstanding Total Voting Power of the Company, the Company
shall permit an HP employee designated by Purchaser and approved by the Company,
which approval shall not unreasonably be withheld, to have visitation rights to
all proceedings and activities of the Company's Board of Directors, except for
"executive sessions" and committee meetings. For purposes of this Section
6.3(b), an "executive session" shall mean those portions of Board of Directors
meetings at which only members of the Board of Directors are permitted to be
present. Purchaser shall cause its designee under this Section 6.3(b) to execute
a confidential disclosure agreement with the Company mutually agreeable to the
Company and Purchaser. The Company shall provide all notices and materials to
Purchaser's representative under this Section 6.3(b) at the same time as it
provides the same to the members of the Board of Directors. Purchaser shall no
longer have any rights under this Section 6.3(b) to the extent that Purchaser
has exercised its right under Section 6.3(a) above to designate two nominees to
the Company's Board of Directors.
(c) Any designee of Purchaser shall be entitled, and the Company may
require such designee, to excuse himself from all discussions and deliberations
of the Board of Directors of the Company (or any committee constituted by the
Board) concerning competitors of Purchaser or relationships between the Company
and Purchaser. Upon notice to Purchaser's designee, the Company may refrain from
sending or providing to Purchaser, or Purchaser may refuse to receive, any
information otherwise disseminated to the directors of i-STAT concerning
competitors of
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Purchaser or relationships between i-STAT and Purchaser. i-STAT shall not be
obligated to compensate a designee-director of Purchaser on the same terms as
other outside directors but shall provide all rights and benefits provided to
the Company's other directors, including, without limitation, rights of
indemnity.
6.4 Equity Method Accounting. If Purchaser desires at some date to account
for its investment in the Company pursuant to the equity method, the Company
shall furnish to the Purchaser all information required by generally accepted
accounting principles to enable the Purchaser so to account, to the extent
reasonably available to the Company. To the extent reasonably requested by
Purchaser, the Company shall provide information, to the extent reasonably
available, regarding the Company to the Purchaser and otherwise cooperate with
Purchaser so as to enable Purchaser to prepare financial statements in
accordance with accounting principles generally accepted in the United States
and to comply with its reporting requirements, if any, under applicable United
States securities laws and regulations. If the Company incurs expenses of
independent accountants in providing information to Purchaser pursuant to this
Section 6.4, then upon presentation of copies of detailed invoices to Purchaser,
Purchaser shall reimburse the Company for any such reasonable expenses.
6.5 Confidential Treatment. The Company shall seek confidential treatment
to the fullest extent permitted from the SEC and any other governmental agency
to which the Company provides a copy of this Agreement, the Registration Rights
Agreement, the Certificate, the License or the Distribution Agreement. Prior to
seeking confidential treatment from the SEC or any other governmental agency for
any such document, the Company shall consult with Purchaser and its counsel and
provide them with a reasonable opportunity to request the inclusion of specified
provisions in any Company request for confidential treatment.
6.6 Notice of Certain Transactions; Right of First Offer.
(a) In addition to any other notices required or permitted by this
Agreement, the Company shall give Purchaser written notice within two Business
Days (as defined in Section 10.1) following receipt by the Company of any of the
following: (i) any written notice from any person or group couched in such terms
as to put the Company reasonably on notice of the likelihood that such person or
group has acquired or is proposing to acquire any shares of Voting Stock which
results in, or, if successful, would result in, such person or group owning or
having the right to acquire more than 15% of the Voting Stock of the Company
then outstanding; (ii) any notice under the HSR Act relating to the Company;
(iii) any Statement on Schedule 13D or Schedule 14D-1 (or any successor schedule
or form to such schedules) under the Exchange Act relating to any Voting Stock
of the Company; and (iv) the Company's reaching agreement in principle as to the
principal terms of any transaction which would result in the then current
stockholders of the Company owning less than a majority of the Voting Stock of
the Company or its successor, or involving a sale of all or substantially all of
the assets or the earning power of the Company. In its written notice to
Purchaser, the Company shall disclose the material terms of any related offer,
except that the Company need not disclose the name of the inquirer, purchaser or
offeror, as the case may be. The Company may not enter into any definitive
agreement relating to any such transaction until fifteen (15) Business
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Days have elapsed after Purchaser's receipt of the Company's notice under this
Section 6.6(a) during which period Purchaser may either make a competing offer
or notify the Company of its intent not to make a competing offer; provided,
however, that if the Company is required to respond to a proposal in less than
fifteen (15) Business Days, the Company may provide written notice to Purchaser
that it is reducing the time period for Purchaser's response to a shorter number
of days than fifteen Business Days, which in any event shall not be less than
six (6) Business Days.
(b) If the Company desires to enter into a merger, consolidation or
other business combination transaction in which the Company would not be the
surviving corporation or in which the Company's outstanding Voting Stock were to
be changed or exchanged for cash, stock or assets of another person, or 50% or
more of the Company's stock outstanding immediately after such merger,
consolidation or other business combination transaction would not be owned by
the stockholders of the Company immediately prior to such merger, consolidation
or other business combination transaction or all or substantially all of the
Company's assets or earning power would be sold, then the Company shall first
negotiate in good faith solely with Purchaser for a period of thirty (30)
Business Days with a view towards reaching a mutually beneficial transaction.
6.7 HSR Act. The Company shall file such forms with the United States
Department of Justice and the Federal Trade Commission as shall be required by
the HSR Act as promptly as practicable upon execution of this Agreement.
6.8 Restrictions on Amendments to the Rights Plan and Adoption of New
Rights Plan. The Board of Directors of the Company shall not amend the Rights
Plan or take any other action to (i) change the definition of "Acquiring
Person," "Exempted Person," "Institutional Investor," "Minority Investor,"
"Minority Percentage" or "Strategic Investor" (or any functionally equivalent
designations) in a manner which is adverse to the Purchaser, (ii) restrict the
Purchaser's ability as a holder of the Shares to receive one right for each
Share pursuant to the terms of the Rights Plan or (iii) treat the Purchaser as a
holder of rights in any manner which is different from the treatment afforded to
the other holders of the rights (except as may result should the Purchaser
become an "Acquiring Person" after the date of this Agreement). In addition, the
Company's Board of Directors shall not adopt any new rights plan pursuant to
which holders of rights would be entitled to purchase securities upon the
occurrence of certain "triggering events" at less than the fair market value
thereof which (i) adopts definitions of "Acquiring Person," "Exempted Person,"
"Institutional Investor," Minority Investor," Strategic Investor," or "Minority
Percentage" (or any functionally equivalent designations) which represent
changes from the existing Rights Plan in a manner which is adverse to the
Purchaser, (ii) restricts the Purchaser's ability as a holder of the Shares to
receive rights pursuant to the terms of such rights plan on the same basis as
the holders of the Company's common stock (with the Purchaser's entitlement
determined as if it had converted the Shares into shares of common stock
pursuant to the Certificate) or (iii) treats the Purchaser as a holder of rights
in any manner which is different from the treatment afforded to the other
holders of the rights (except as may result should the Purchaser become an
"Acquiring Person" or any functionally equivalent designation) after the date of
this Agreement.
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6.9 Amendment to the Rights Plan. If the Company amends the Rights Plan to
permit any person other than an Institutional Investor (a "Buyer") to acquire
15% or more of the outstanding Voting Stock of the Company without becoming an
"Acquiring Person," as defined in the Rights Plan, then the Company shall also
amend the Rights Plan to provide that Purchaser shall also be able to acquire
that number of shares of Voting Stock to reach the same percentage ownership
position in the Company that Buyer is permitted to reach without becoming an
"Acquired Person"; provided, however, that if the Company amends the Rights Plan
to permit Buyer to acquire more than 15%, but less than 25%, of the outstanding
Voting Stock, then Purchaser's rights and obligations with respect to the Rights
Plan shall remain unchanged. The Company shall not amend the Rights Plan to
permit any person who falls within the definition of an Institutional Investor
to acquire more than 20% of the outstanding Voting Stock of the Company without
becoming an "Acquiring Person."
6.10 Manufacturing. The Company shall use its best efforts to maintain the
quality and quantity of supply of components to be provided to Purchaser under
the terms of the License Agreement and the Distribution Agreement. The Company's
efforts shall include, but not be limited to, reviewing the management
organization of the Company's manufacturing activities and making use of
Purchaser's consulting resources to improve the quality, quantity and cost
structure of the Company's manufacturing efforts. The Company's compliance with
its best efforts obligation under this Section 6.10 shall be judged by reference
to what a person engaged with another person in a strategic commercial and
financial relationship of major importance would do, while at the same time
considering such factors as available resources, the costs and anticipated
benefits of such efforts and the commercial feasibility of such efforts.
6.11 Use of Funds; Activities in Support of Strategic Relationship. The
Company hereby represents and warrants that it has no present plan or intention
to use the funds from the sale of the Shares for any purpose other than the
improvement and expansion of its manufacturing operations, the development of
new blood diagnostic products, the support and expansion of its marketing
activities and plans, working capital, and general corporate purposes consistent
with the foregoing. Purchaser acknowledges, however, that the Company's plans
and intentions must of necessity be subject to change based on numerous factors,
including the degree of market acceptance of the Company's current and future
products, technological developments, competitive conditions and other factors
which require the Company to keep the interests of all of its stockholders in
mind. Subject to the foregoing, the Company acknowledges the importance of
applying funds from the sale of the Shares towards the support of its strategic
relationship with the Purchaser as evidenced by the License Agreement and the
Distribution Agreement.
6.12 Waivers. Prior to the Closing, the Company shall obtain waivers or
consents under that certain Restated Registration Rights Agreement dated May 3,
1990 (and amended June 12, 1990) as described in paragraph 2 of Schedule 2.4.
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ARTICLE VII
COVENANTS OF PURCHASER
From the execution of this Agreement (except for Section 7.4) and until
the termination of this Agreement in accordance with Section 11.1 hereof or the
particular covenant, as the case may be:
7.1 Conversion Before Sale. Prior to selling any Shares to a person other
than one of its Subsidiaries, Purchaser agrees to convert the Shares to Common
Stock.
7.2 Voting. Purchaser shall take such action as may be required so that
all shares of Voting Stock owned by Purchaser are voted in favor of nominees to
the Board of Directors of the Company in accordance with the recommendation of
the Board of Directors consistent with the provisions of Sections 6.3(a) and
provided that Purchaser shall not be so obligated if Purchaser, in its sole
discretion, determines that doing so would be adverse to Purchaser's interest in
the Company. Unless the Company otherwise consents in writing, Purchaser shall
take such action as may be required so that all shares of Voting Stock owned by
Purchaser are voted in accordance with the recommendations of the Board of
Directors on all other matters, other than Significant Events (as defined in
Section 10.1 below), to be voted on by holders of Voting Stock; provided,
however, that if Purchaser disagrees with the Board's recommendation as to any
matter, the Voting Stock owned by Purchaser may be voted with respect to such
matter in not less than the same proportion as the votes cast by all holders of
Voting Stock with respect to such matter. With respect to Significant Events,
(i) Purchaser may vote all shares of Voting Stock owned by Purchaser up to and
including that number of shares representing 15% of the outstanding Total Voting
Power of the Company (the "15% Threshold") as Purchaser determines in its sole
discretion on any Significant Event presented to be voted on by the holders of
Voting Stock, and (ii) Purchaser shall vote any other shares of Voting Stock
representing more than the 15% Threshold in not less than the same proportion as
the votes cast by all holders of Voting Stock with respect to such matter.
7.3 Acquisition of Stock. Purchaser shall advise management of the Company
as to Purchaser's general plans to increase by more than 1% its percentage
interest in the Total Voting Power of the Company reasonably in advance of any
such acquisitions. Purchaser shall advise management of the Company as promptly
as practicable, but in no event later than seven (7) Business Days, following
any acquisition by Purchaser of additional shares of Voting Stock representing
increments of more than 1% of the Total Voting Power of the Company.
7.4 Limitation on HP's Acquisition of Voting Stock.
(a) For a period of five (5) years commencing with the date of
adoption of the Rights Plan, neither HP nor any related group of persons with
whom HP has any understandings, agreements or arrangements with respect to the
Voting Stock shall acquire any shares of Voting Stock or any option, right or
warrant to acquire shares of Voting Stock or any security convertible into
shares of Voting Stock (except, in any case, by way of stock dividends or other
distributions or offerings made available to holders of any Voting Stock
generally) if, as the result of such acquisition, HP and/or any related group of
persons with whom HP has any understandings,
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agreements or arrangements with respect to the Voting Stock shall beneficially
own (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
twenty-five percent (25%) or more of the then issued and outstanding shares of
Voting Stock unless or until one or more of the following events shall have
occurred:
(i) The Company shall have committed a material breach of any
material provision of this Agreement, the License Agreement and the Distribution
Agreement (subject to the expiration of any applicable provision for cure under
any such agreement);
(ii) The Company fails to perform its obligations pursuant to
Section 6.3 hereof;
(iii) It is publicly disclosed or Purchaser otherwise learns
that any person or related group of persons, other than HP or any transferees of
HP or related group of persons with whom HP has any understandings, agreements
or arrangements with respect to the Voting Stock, shall own or have the right to
acquire fifteen percent (15%) or more of the then outstanding shares of Voting
Stock; provided, however, that this Section 7.4(a)(iii) shall not apply to any
Institutional Investor (as defined in Section 10.1 below).
(iv) Any person or related group of persons, other than HP or
any transferees of HP or related group of persons with whom HP has any
understandings, agreements or arrangements with respect to the Voting Stock,
solicits proxies with respect to any Voting Stock or participates in any
"election contest" (as such terms are used in Rule 14a-ll of Regulation 14A
under the Exchange Act) relating to the election of directors of the Company and
has removed at least a majority of the members of the Company's Board of
Directors then in office;
(v) Any person or related group of persons, other than HP or
any transferees of HP or related group of persons with whom HP has any
understandings, agreements or arrangements with respect to the Voting Stock, (A)
makes an offer (as evidenced by the filing with the SEC of a Schedule 14D-1) to
purchase or exchange for cash or other consideration any Voting Stock to which
the Company's response is to redeem the Rights Plan, or to respond neutrally or
favorably to the offer (as evidenced by the Company's filing with the SEC of a
Schedule 14D-9), or (B) following any offer by any person or related group of
persons (other than HP or any transferee of HP or related group of persons with
whom HP has any understandings, agreements or arrangements with respect to the
Voting Stock) to purchase or exchange for cash or other consideration any Voting
Stock, a court of competent jurisdiction declares the Rights Plan to be invalid
or otherwise ineffective;
(vi) The Company reaches agreement in principle as to the
principal terms of or a definitive agreement relating to any transaction which,
if successful, would result in the then current stockholders of the Company
owning less than a majority of the Voting Stock of the Company or its successor,
or involving a sale of all or substantially all of the assets or the earning
power of the Company; or
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(vii) A change, not initiated by Purchaser, occurs within any
eighteen-month period after the Closing (a) until the hiring (the "Hiring") by
the Company of a person to serve the Company in the position of Vice President
of Manufacturing (the "Vice President of Manufacturing"), in all of the
following positions of the Company: (A) President and Chief Executive
Officer--▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"); (B) Executive Vice President and Chief
Technology Officer--▇▇▇▇▇▇ ▇. Lauks ("Lauks"); and (C) Vice President of Systems
Development--▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("▇▇▇▇▇"); and (b) after the Hiring, in three of
the following four positions of the Company: ▇▇▇▇▇▇▇, Lauks, ▇▇▇▇▇ and Vice
President of Manufacturing.
(b) Nothing in this Agreement shall be deemed to constitute an
agreement or the waiver of any rights on the part of Purchaser as to the proper
discharge of the fiduciary duties to stockholders owed by the Company's Board of
Directors with respect to any refusal by the Board to comply with any requests
that may be made after the date hereof to redeem the rights issued pursuant to
the Rights Plan.
7.5 Transfers of Voting Stock. 7.6 Subject to the provisions of Article
IX, Purchaser may only sell its Voting Stock in blocks representing that number
of shares representing not more than 5% of the then outstanding Voting Stock;
provided, however, that Purchaser shall not sell such number of shares of Voting
Stock representing more than 3% of the then outstanding Voting Stock of the
Company if Purchaser has actual knowledge from publicly available sources or
otherwise that the potential buyer of the shares owns 5% or more of the
Company's outstanding Voting Stock, in which case Purchaser may not sell more
than that number of shares that will cause the buyer to own more than 9.9%
(calculated from publicly available filings as of the time not more than five
(5) Business Days before the date of signing any definitive agreement relating
to the sale of Purchaser's Shares and, in the absence of any such filing,
determined on the basis of the Purchaser's actual knowledge, if any) of the
Company's outstanding Voting Stock.
(a) Purchaser agrees to take and hold the Shares subject to the
provisions of federal and state securities laws. Purchaser agrees that prior to
any transfer of Voting Stock (other than a transfer pursuant to an effective
registration statement), it will obtain (i) a written opinion of Purchaser's
legal counsel addressed to the Company and which shall be reasonably
satisfactory in form and substance to the Company's counsel, to the effect that
the proposed transfer of Voting Stock may be effected without registration under
the Securities Act, (ii) a "no action" letter from the Securities and Exchange
Commission (the "Commission") to the effect that the proposed transfer of such
securities without registration will not result in a recommendation by the staff
of the Commission that action be taken with respect thereto, or (iii) such other
showing that may be reasonably satisfactory to legal counsel to the Company.
Each certificate representing the Voting Stock transferred as above provided,
except transfers pursuant to a currently effective registration statement, shall
bear a restrictive legend as set forth below, except that such certificate shall
not bear the restrictive legend if in the opinion of counsel for the Company (or
counsel for the transferee reasonably acceptable to the Company) such legend is
not required in order to establish compliance with any provisions of the
Securities Act.
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The shares represented by this certificate have not been registered
under the Securities Act of 1993, as amended. Such shares may not be
sold or transferred in the absence of such registration or an
opinion of counsel reasonably satisfactory to the Company as to the
availability of an exemption from registration.
(b) Purchaser will cause any proposed transferee of Voting Stock,
who has not acquired the Voting Stock pursuant to Rule 144 or an effective
registration statement, to agree to take and hold such securities subject to the
foregoing conditions.
(c) In the event the Company determines to register securities in
any offering, whether pursuant to an underwritten public equity offering or an
acquisition, the Company on the advice of its underwriters shall notify HP and
may request that HP refrain from selling Voting Stock under Rule 144 of the
Securities Act for a period of up to 120 days from the date of such notice (the
"Black Out Period"). Notwithstanding the foregoing, (i) the Company shall not be
entitled to declare a Black Out Period prior to twelve months from the end of a
previous Black Out Period, and (ii) the Black Out Period shall end immediately
upon the consummation of the underwritten public equity offering or acquisition,
or the Company's decision to no longer pursue any such transaction.
7.7 Conversion of Preferred Stock. In the event Purchaser's percentage
ownership falls below 5% of the outstanding Voting Power of the Company, other
than as a result of dilution caused by the Company's sale or issuance of
additional shares of Voting Stock, except where dilution results from
Purchaser's failure to exercise its maintenance rights pursuant to Article VIII,
then Purchaser will convert Purchaser's remaining Shares into Common Stock
pursuant to Sections 5(a) and 5(c) of the Certificate.
7.8 Other. For as long as the limitation on Purchaser's ownership on
Voting Stock described in Section 7.4 is in effect and except for any proposals
that Purchaser may make pursuant to Section 6.6, Purchaser shall not make any
written proposal to the Company regarding a potential acquisition, merger or
consolidation with, sale of all or substantially all of the assets or earning
power of, the Company that would, as a matter of law, require the Company to
make a disclosure and will not initiate or participate in a hostile tender offer
to acquire the Company.
7.9 Confidential Information.
In the course of dealings between the Company and Purchaser pursuant to
this Agreement, each party (the "Discloser") may disclose certain nontechnical
business information to the other party ("Recipient") which Discloser deems
confidential. This Agreement imposes no obligation upon Recipient with respect
to information that: (i) is or becomes public knowledge through no fault of
Recipient, (ii) was in Recipient's possession before receipt from Discloser,
(iii) is rightfully received by Recipient from a third party without a duty of
confidentiality, (iv) is disclosed by Discloser to a third party without a duty
of confidentiality on the third party, (v) is independently developed by
Recipient, (vi) is disclosed under operation of law, or (vii) is disclosed by
Recipient with Discloser's prior written approval. Recipient's obligation to
hold confidential information in confidence expires on the third anniversary of
the date of disclosure.
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7.10 Solicitation of Proxies. Without the Company's written consent, HP or
any related group of persons with whom HP has any understandings, agreements or
arrangements with respect to the Voting Stock shall not, as long as the
limitations set forth in Section 7.4 are in effect, solicit proxies with respect
to any Voting Stock, nor become a "participant" in any "election contest" (as
such terms are used in Rule 14a-11 of Regulation 14A under the Exchange Act
relating to the election of directors of the Company); provided, however, that
HP shall not be deemed to be a "participant" by reason of the membership on the
Company's Board of Directors of any member designated by HP as permitted by
Section 6.3.
7.11 HSR Act. Purchaser shall file such forms with the United States
Department of Justice and the Federal Trade Commission as shall be required by
the HSR Act as promptly as practicable upon execution of this Agreement.
ARTICLE VIII
RIGHT TO MAINTAIN
For purposes of this Article VIII, the term "Maintenance Percentage" shall
mean the percentage interest in Total Voting Power of the Company held by
Purchaser immediately prior to a reduction of Purchaser's percentage interest
resulting from an issuance by the Company of any Voting Stock (including, in
certain circumstances enumerated below, any issuance following conversion of any
security convertible into or exchangeable for Voting Stock or upon exercise of
any option, warrant or other right to acquire any Voting Stock).
8.1 Stock Plan Issuances. If the percentage interest of Purchaser in the
Total Voting Power of the Company is reduced as a result of an issuance after
the date hereof by the Company of any Voting Stock (including any issuance
resulting from the conversion or exercise of any security or other right to
acquire Voting Stock) pursuant to the Company's present or future stock option,
stock purchase or other stock plans or otherwise for compensatory purposes for
the benefit of employees, directors, consultants or others, Purchaser shall be
entitled to purchase additional shares of Voting Stock from the Company pursuant
to the terms of Section 8.2(b), in the open market or from third parties that
would result in Purchaser's retaining or achieving the Maintenance Percentage.
8.2 Other Issuances. In the event that the Company issues additional
shares of Voting Stock, other than an issuance to which Section 8.1 applies,
including, without limitation, in a public offering registered under the
Securities Act, a private sale to a third party or in connection with a merger
or acquisition by the Company, including any issuance following conversion of
any security convertible into or exchangeable for Voting Stock or upon exercise
of any option, warrant or other right to acquire any Voting Stock (collectively,
"Further Stock"), as a result of which issuance the percentage ownership in the
Company held by Purchaser is diluted below the Maintenance Percentage, Purchaser
shall be entitled to purchase additional shares of Voting Stock as provided in
this Section 8.2.
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(a) Negotiated Purchases.
(i) In the event that a person or group (the "Buyer") acquires
any Voting Stock or rights to acquire Voting Stock (including the right to
convert or exchange a debt or equity security into Voting Stock from the Company
in a Negotiated Purchase (as defined in Section 10.1 below) (the "Negotiated
Purchase Shares"), the Company shall notify Purchaser in writing before entering
into an agreement to sell Negotiated Purchase Shares. Purchaser shall notify the
Company by written notice ("Purchaser's Notice") within thirty (30) calendar
days after receipt of the Company's Notice as to whether Purchaser desires to
acquire additional shares of Voting Stock to maintain its percentage ownership
at the Maintenance Percentage and, whether Purchaser desires to acquire such
additional shares from the Company or from sources other than the Company.
(ii) If Purchaser notifies the Company within such thirty-day
period that Purchaser desires to purchase additional shares directly from the
Company then Purchaser shall have the option to purchase from the Company such
number of shares of the same Voting Stock (or rights to acquire Voting Stock) as
will cause Purchaser's percentage interest in the Total Voting Power of the
Company to be maintained at the Maintenance Percentage.
(iii) In the event Purchaser does not exercise its option to
purchase additional shares of Voting Stock (or rights to acquire Voting Stock)
from the Company pursuant to this Section 8.2(a) within the thirty-day period
described above, then the transaction shall be deemed an issuance of Further
Stock under Section 8.2(c) and Purchaser shall have the rights and be subject to
such Section 8.2(c). Notwithstanding the foregoing, if Purchaser does not elect
to participate in the Negotiated Purchase within such option period, then
Purchaser shall no longer have the right to acquire additional shares from the
Company in connection with the Negotiated Purchase to which the notice referred,
but shall retain the right to acquire additional shares from sources other than
the Company in accordance with Section 8.2(c).
(b) Public Offering. In the event of a proposed increase of Voting
Stock as a result of a public offering registered under the Securities Act, the
Company shall give written notice to Purchaser, which notice shall include the
number of shares of Voting Stock which the Company believes Purchaser is
entitled to acquire (the "Public Issuance Notice"), of an intended Public
Issuance not later than fifteen (15) business days prior to the effective date
of the registration statement for such offering, in which event Purchaser shall
deliver Purchaser's Notice within fifteen (15) business days after receipt of
the Company's Notice and within the next two (2) Business Days the Company shall
have the obligation to sell and Purchaser shall have the option to purchase such
Voting Stock as part of the Public Issuance that would result in Purchaser's
retaining or achieving (i) the Maintenance Percentage, plus (ii) that percentage
of the Total Voting Power of the Company which Purchaser would have maintained
but for the issuances referred to in Section 8.1. In the event that Purchaser
does not exercise its option to purchase additional shares of Voting Stock (or
rights to acquire Voting Stock) from the Company pursuant to this Section 8.2(b)
within the fifteen-day period described above, then the transaction shall be
deeme issuance of Further Stock under Section 8.3(b) and Purchaser shall have
the rights and be subject to such Section 8.3(c). Purchaser's
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rights under this Section 8.2(b) shall be in addition to any rights contained in
the Registration Rights Agreement.
(c) Other. In the event that i-STAT issues additional shares of
Voting Stock (other than issuances described in Section 8.2(a) or (b) above as
to which Purchaser has elected to purchase additional shares from the Company),
as a result of which issuance the percentage interest of Purchaser in the Total
Voting Power of the Company is reduced, Purchaser shall have the right to
purchase additional shares of Voting Stock in the open market or from third
parties that would result in Purchaser's retaining or achieving the Maintenance
Percentage.
8.3 Price. Purchaser must exercise its option as to all shares described
in any notice that it gives to the Company under this Article VIII or such
option may not be exercised at all. If Purchaser exercises its option to
purchase such shares from the Company pursuant to this Article VIII, the shares
shall be sold to Purchaser at the price per share determined as follows:
(a) If the event giving rise to Purchaser's rights is a sale or
issuance of Voting Stock for cash or property, including, without limitation,
for securities or assets or by way of merger in connection with the acquisition
of another company, the price shall be the price per share specified in the
agreement relating to such issuance or, if no such price is specified, the
Average Market Price per share of Voting Stock determined as of the earlier of
the date of execution of the agreement for issuance of such Voting Stock or the
public announcement of the terms of the transaction.
(b) If the event giving rise to Purchaser's rights is an issuance of
Voting Stock upon conversion of any security convertible into or exchangeable
for Voting Stock, or upon exercise of any option, warrant or right to acquire
any Voting Stock, and is not treated under Section 8.3(a), (c) or (d), the price
shall be the lower of (i) the conversion price per share of Voting Stock set
forth in the convertible security, option, warrant or right, and (ii) the
Average Market Price per share of Common Stock determined as of the date of such
conversion or exercise.
(c) If the event giving rise to Purchaser's rights is a Negotiated
Purchase and Purchaser elects to purchase additional shares (or rights to
acquire additional shares) from the Company pursuant to Section 8.2(a), then
such shares (or rights to acquire additional shares) shall be purchased on the
same terms as such shares (or rights to acquire additional shares) were
purchased from the Company by Buyer. If the purchase price paid by Buyer for
Voting Stock sold by the Company includes any property or other form of
consideration other than cash, the value of such property or other consideration
included in such purchase price shall be jointly determined by the Company and
Purchaser in good faith. If the Company and Purchaser cannot agree on the
purchase price paid by Buyer, then the parties hereby agree that the purchase
price shall be deemed to be equal to the average closing price of the Company's
Common Stock, as reported in the Wall Street Journal, for the thirty trading
days ending one day prior to the date that the transactions contemplated by the
Negotiated Purchase are publicly announced.
(d) If the event giving rise to Purchaser's rights is a public
offering, the price shall be the price per share at which the Voting Stock was
sold by the Company.
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(e) In all other cases, the price shall be the Average Market Price
per share of Voting Stock determined as of the date of the issuance and sale of
such Voting Stock.
8.4 Closing. The purchase and sale of any shares of Voting Stock to be
issued by the Company pursuant to this Article VIII shall take place at 10:00
a.m. on the fifth Business Day following the expiration or early termination of
all waiting periods imposed on such purchase and sale by the HSR Act and the
receipt of all other applicable regulatory approvals or, if no waiting period is
imposed on such purchase and sale by the HSR Act, on the third Business Day
following the Company's exercise of its option to sell and compliance with
applicable laws, rules and regulations, at the principal offices of the Company
or at such other time and place as the Company and the Purchaser may agree. The
purchase price shall be payable in cash in the form of Purchaser's check or a
wire transfer of immediately available funds. The Company and Purchaser will use
their reasonable efforts to comply with all federal and state laws, rules and
regulations and requirements of the NASD and of any stock exchange applicable to
any purchase and sale of shares of Voting Stock under this Article VIII. The
issuance of such shares shall be subject to compliance with applicable laws,
rules and regulations and requirements of any applicable stock exchange and the
absence of any order in effect enjoining or restraining such exercise or
issuance.
8.5 Notice. The Company shall provide every three months, if requested by
Purchaser, a statement from the Company of the number of shares of Voting Stock
outstanding and the nature of any transaction resulting in any increase in the
number of shares of Voting Stock outstanding from the number outstanding at the
time of the immediately preceding statement and the number of shares of Voting
Stock which the Company believes Purchaser is entitled to acquire under this
Article VIII at such time.
8.6 Rights Plan. Nothing in this Article VIII shall be construed to grant
to Purchaser any right to acquire any share or right pursuant to or under the
Rights Plan. In addition, nothing in this Section 8.6 shall be deemed to limit
the rights of all stockholders of the Company, including Purchaser, under the
Rights Plan or the privileges that such stockholders, including Purchaser, enjoy
as holders of rights pursuant to the Rights Plan.
ARTICLE IX
i-STAT'S RIGHT OF FIRST REFUSAL
Until the termination of this Agreement in accordance with Section 11.1
hereof:
9.1 Right of First Refusal; Right of First Offer. Prior to making any sale
or transfer of Voting Stock of the Company other than pursuant to open market
transactions or pursuant to a public offering, Purchaser shall give the Company
the opportunity to purchase such Voting Stock in the following manner:
(a) Purchaser shall give notice (the "Transfer Notice") to the
Company in writing of such intention specifying the amount of Voting Stock
proposed to be sold or transferred. If Purchaser (i) has received an offer from
a third party with a proposed price per share, then Purchaser shall include in
the Transfer Notice such price therefor and the other material terms upon which
such
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disposition is proposed to be made, or (ii) has not received an offer from a
third party with a proposed price per share and the other material terms upon
which such disposition may be made, then the Company shall have the right,
exercisable by written notice (the "Company Notice") to Purchaser within ten
(10) Business Days after receipt of the Transfer Notice, to propose a price (in
either of subsections 9.1(a)(i) or (ii), the "Transfer Price") and the other
material terms for a disposition to purchase all, but not less than all, of the
Voting Stock that Purchaser proposes to transfer. Purchaser shall have the
right, within ten (10) Business Days of receipt of the Company Notice to notify
the Company in writing (the "Response Notice") as to whether it accepts the
offer described in the Company Notice. For purposes of this Section 9.1, the
"Transfer Price" may refer to a predetermined formula for calculating a price at
the time of the closing of the disposition, which formula is based on the market
price of the Voting Stock over a given period ending on or prior to the closing
date of the disposition.
(b) The Company shall have the right, exercisable by written notice
given by the Company to Purchaser either within ten (10) Business Days after
receipt of such Transfer Notice in the case of Section 9.1(a)(i) above or within
ten (10) Business Days after receipt of the Response Notice, to purchase all but
not part of the Voting Stock specified in such Transfer Notice for cash (or for
such other form of consideration set forth in the Transfer Notice in the case of
Section 9.1(a)(i) above) per share equal to the applicable Transfer Price.
(c) If the Company exercises its right of first refusal under
Section 9.1(a)(i) or if Purchaser accepts the offer described in the Company
Notice under Section 9.1(a)(ii), the closing of the purchase of the Voting Stock
with respect to which such right has been exercised shall take place within
thirty (30) calendar days after the Company receives the Transfer Notice or the
Response Notice, respectively, and the Company and Purchaser shall be legally
obligated to consummate the purchase contemplated thereby and shall use their
reasonable efforts to secure any approvals required in connection therewith.
(d) If the Company does not exercise its right of first refusal
hereunder within the time specified for such exercise or does not purchase the
Voting Stock within the time specified for such purchase, or if Purchaser does
not accept the Company's offer described in the Company Notice, then Purchaser
shall be free, during the period of ninety (90) calendar days following the
expiration of such time for exercise or purchase or acceptance or rejection of
the Company's offer described in the Company Notice, as the case may be, to sell
the Voting Stock specified in such Transfer Notice, subject to the limits set
forth in Section 7.5 hereof, at a price equal to or greater than the applicable
Transfer Price and with terms on balance generally equal to or more favorable
than the terms set forth in the Transfer Notice. Purchaser's transferee shall
acquire such Voting Stock free from any of the provisions of this Agreement;
provided, however, such Voting Stock shall be subject to the provisions of the
Registration Rights Agreement and any restrictions imposed under applicable
securities laws.
(e) The Company's rights under this Section 9.1 shall terminate upon
the termination of this Agreement by Purchaser or the Company in accordance with
Section 11.1(a).
-23-
9.2 Assignment of Rights. In the event that the Company elects to exercise
a right of first refusal under this Article IX, the Company may specify, prior
to closing such purchase and upon not less than three (3) Business Days prior
notice to the Purchaser, another person as its designee to purchase the Voting
Stock to which such notice relates. If the Company shall designate another
person as the purchaser pursuant to this Article IX, the giving of notice of
acceptance of the right of first refusal by the Company shall constitute a
legally binding obligation of the Company to complete such purchase if such
designee shall fail to do so.
ARTICLE X
DEFINITIONS
10.1 Certain Definitions. As used in this Agreement:
(a) The term "Average Market Price" of any security at any date
shall be the average of the closing prices for a share or other single unit of
such security on the thirty (30) consecutive trading days ending on the trading
date last preceding the date of determination of such price on the principal
national securities exchange on which such security is listed, or, if such
security is not listed on any national securities exchange, the average of the
closing sales prices for a share of such security on the National Association of
Securities Dealers Automated Quotation Systems ("NASDAQ") or, if such closing
sales prices shall not be reported on NASDAQ, the average of the mean between
the closing bid and asked prices of a share of such security in such case as
reported by The Wall Street Journal, or, if such prices shall not be so
reported, as the same shall be reported by the National Quotation Bureau
Incorporated, or, in all other cases, the value as determined by a single
nationally recognized investment banking firm jointly selected by the Company
and Purchaser. For this purpose, the parties shall use their best efforts to
cause any determination of the value to be made within ten (10) Business Days
after the date on which the value is to be measured. The determination by the
investment banking firm selected in the manner set forth above shall be
conclusive.
(b) The term "Business Day" shall mean any day other than a day
which is a Saturday or Sunday or other day on which commercial banks in New
York, New York are authorized or required to remain closed. In no case shall any
day in the period from December 23 of a particular year to January 2 of the
following year be considered a "Business Day."
(c) The term "group" shall have the meaning comprehended by Section
13-3(d)(3) of the Exchange Act, and the rules and regulations promulgated
thereunder.
(d) The term "Institutional Investor" shall mean any person
(together with such Institutional Investor's Affiliates (as defined in the
Rights Plan) and Associates (as defined in the Rights Plan) (i) who, with the
express written approval of the Board of Directors of the Company, acquires
aggregate Beneficial Ownership (as defined in the Rights Plan) of 15% or more
but no more than 20% of the outstanding Voting Stock of the Company, provided,
however, that the Institutional Investor acquires such Beneficial Ownership in
the ordinary course of business and for investment purposes and not with the
purpose nor with the effect of changing or influencing the control of the
Company, nor in connection with or as a participant in any transaction having
such purpose or effect,
-24-
including any transaction subject to Rule 13d-3(b) of the Exchange Act, and (ii)
who is eligible to report its ownership of the Voting Stock of the Company on
Schedule 13G (or any similar successor form) under the Exchange Act.
(e) The term "Negotiated Purchase" means a transaction between the
Company and any person or group pursuant to which such person or group acquires
from the Company (or has the right to acquire from the Company) Voting Stock or
any securities convertible into or exchangeable for voting stock or any other
right to acquire voting stock. Notwithstanding the foregoing, the term
"Negotiated Purchase" shall not include (i) any agreement between the Company
and any underwriter(s) in connection with a public offering, or (ii) issuances
of Voting Stock pursuant to any present or future compensatory stock, stock
purchase or option plan or other compensatory issuances to employees, directors,
officers, consultants, or others.
(f) The term "person" shall mean any person, individual,
corporation, partnership, trust or other nongovernmental entity or any
governmental agency, court, authority or other body (whether foreign, federal
state, local or otherwise).
(g) The term "Significant Event" means (i) any proposed amendment to
the Certificate of Incorporation or Bylaws of the Company, (ii) sale of the
Company (by way of merger, disposition of all or substantially all assets or
otherwise), (iii) recapitalization, (iv) liquidation or dissolution, (v) any
vote pursuant to any provision of law or the Company's Certificate of
Incorporation or Bylaws requiring or permitting stockholders to approve any
business combination proposed by or with another person or its affiliates which
have acquired a certain percentage of the Company's shares or to grant voting
rights to such person or to waive or adopt provisions requiring such a vote,
(vi) any transaction the effect of which is to cause the Voting Stock of the
Company to be neither listed on any national securities exchange nor authorized
to be quoted on any national inter-dealer quotation system, or (vii) any action,
including, without limitation, an increase in the number of directors to greater
than sixteen or a change in the structure of the Company's Board of Directors
which Purchaser, in its sole discretion, determines would be adverse to
Purchaser's interest in the Company.
(h) The term "Subsidiary" means any corporation more than fifty
percent (50%) of whose outstanding voting securities are, or any partnership,
joint venture or other entity more than fifty percent (50%) of whose total
equity interest is, directly or indirectly, owned by another person.
(i) The term "Total Voting Power of the Company" means the total
number of votes which may be cast in the election of directors of the Company at
any meeting of stockholders of the Company if all securities entitled to vote in
the election of directors of the Company were present and voted at such meeting
(other than votes that may be cast only upon the happening of a contingency).
(j) The term "Voting Stock" means the Common Stock, Preferred Stock
and any other securities issued by the Company having the ordinary power to vote
in the election of directors of the Company (other than securities having such
power only upon the happening of a contingency).
-25-
ARTICLE XI
MISCELLANEOUS
11.1 Termination of Agreement.
(a) The Company may terminate its obligation to perform or observe
any of its covenants and agreements hereunder if Purchaser materially violates
or fails to perform materially any of the covenants or agreements of Purchaser
under this Agreement, and Purchaser may terminate its obligations to perform or
observe any of its covenants and agreements hereunder if the Company materially
violates or fails to perform materially any of the covenants or agreements of
the Company under this Agreement; provided, however, the Company or Purchaser,
as the case may be, may not terminate any of its obligations under this
Agreement pursuant to this sentence unless it shall have delivered written
notice of such default to the other party and such default shall not have been
cured within thirty (30) calendar days after the delivery of such notice.
(b) This Agreement may be terminated by Purchaser or the Company at
any time after the date which is 60 days after the commencement of the waiting
period under the HSR Act for the transactions contemplated by this Agreement
unless prior thereto the waiting period under the HSR Act shall have expired.
(c) Notwithstanding anything to the contrary in this Agreement, this
Agreement shall terminate on the date that Purchaser owns, solely as a result of
sales by Purchaser of Voting Stock, less than one (1) million shares of Voting
Stock; provided, however, that the provisions of Section 7.4, if and only if
they are still in effect, shall survive the termination of this Agreement
pursuant to this Section 11.1(c).
(d) Except as provided in Sections 11.1(c) and (e) of this
Agreement, from and after the termination of this Agreement, the covenants,
obligations and agreements of the parties set forth herein shall be of no
further force or effect and the parties shall be under no further obligation
with respect thereto.
(e) Notwithstanding the provisions of this Section 11.1, the
registration rights set forth in the Registration Rights Agreement shall survive
any termination of this Agreement; provided, however, that if the Company
alleges that Purchaser committed a "material breach" of Sections 7.1, 7.2, 7.4,
7.5, 7.7 or 7.9 of this Agreement, after the Company shall have delivered
written notice of any such alleged default to Purchaser and Purchaser shall not
have cured any such default within thirty days after the delivery of such
notice, and the Company and Purchaser cannot agree whether or not HP committed a
"material breach" of Sections 7.1, 7.2, 7.4, 7.5, 7.7 or 7.9 of this Agreement,
then Section 5 of the Registration Rights Agreement shall be deemed amended to
require the Company and Purchaser to split equally the Registration Expenses (as
defined in the Registration Rights Agreement) for any subsequent registration
effected under Section 2 of the Registration Rights Agreement. If the Company
and Purchaser agree that Purchaser has committed a material breach of Sections
7.1, 7.2, 7.4, 7.5, 7.7, or 7.9 of this Agreement, Section 5 of the Registration
Rights Agreement shall be deemed amended to require Purchaser to pay the
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Registration Expenses and Selling Expenses (each as defined in the Registration
Rights Agreement) for any subsequent registration effected under Section 2 of
the Registration Rights Agreement.
11.2 Reasonable Efforts. As long as the other party hereto is not in
default of any material obligation under this Agreement, each of the Company and
Purchaser shall use its reasonable efforts to take all actions required under
the HSR Act and under any law, rule or regulation adopted subsequent to the date
hereto in order that the respective agreements and covenants of the parties
hereto may be carried out on a timely basis in the manner contemplated by this
Agreement.
11.3 Governing Law. This Agreement shall be governed in all respects by
the laws of the State of New York as applied to contracts entered into solely
between residents of, and to be performed entirely within, such state.
11.4 Survival. The representations and warranties in Articles II and III
of this Agreement shall survive any investigation made by Purchaser or the
Company and the Closing for a period of one year.
11.5 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns. Except as otherwise provided in this Agreement, this Agreement may
not be transferred or assigned by operation of law or otherwise without the
prior written consent of the other party. Without the consent of the Company,
Purchaser may assign this Agreement as provided herein to any Subsidiary,
provided, however, that Purchaser shall take reasonable actions to ensure that
such Subsidiary shall perform any obligations of Purchaser under this Agreement.
11.6 Entire Agreement; Amendment. This Agreement and the other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subject matter hereof and
thereof and supersede all prior agreements and understandings, both written and
oral, among the parties relating to the subject matter hereof. No party shall be
liable or bound to any other party in any manner by any warranties,
representations or covenants except as specifically set forth herein. Neither
this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party against whom
enforcement of any such amendment, waiver, discharge or termination is sought.
11.7 Notices and Dates. Any notice or other communication given under this
Agreement shall be sufficient if in writing and delivered by hand, by messenger
or by courier, or transmitted by facsimile, to a party at its address set forth
below (or at such other address as shall be designated for such purpose by such
party in a written notice to the other Party hereto):
(a) if to the Company, to it at:
i-STAT Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy addressed as set forth above but to the attention of:
Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to Purchaser, to it at:
Hewlett-Packard Company
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Director, Corporate Development
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy addressed as set forth above but to the attention of:
General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given when delivered if
delivered personally, by messenger or by courier, or if sent by facsimile, upon
confirmation of receipt.
11.8 Further Assurances. The parties hereto shall do and perform or cause
to be done and performed all such further acts and things and shall execute and
deliver all such other agreements, certificates, instruments or documents as any
other party may reasonably request from time to time in order to carry out the
intent and purposes of this Agreement, the Registration Rights Agreement, the
License Agreement, the Distribution Agreement and the consummation of the
transactions contemplated hereby and thereby. Neither the Company nor Purchaser
shall voluntarily undertake any course of action inconsistent with satisfaction
of the requirements applicable to them set forth in this Agreement, the
Registration Rights Agreement, the License Agreement and the Distribution
Agreement, and each shall promptly do all such acts and take all such measures
as may be appropriate to enable them to perform as early as practicable the
obligations herein and therein required to be performed by them.
11.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which may be executed by fewer than all of the parties,
each of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
11.10 Severability. If any provision of this Agreement is determined to be
unenforceable for any reason, it shall be adjusted rather than voided, if
possible, to achieve the intent of the parties. In any event, all of the other
provisions shall be deemed valid and enforceable to the greatest possible
extent.
-28-
11.11 Interpretation. When a reference is made in this Agreement to
Sections or Exhibits, such references shall be to a Section or Exhibit to this
Agreement unless otherwise indicated. The words "include," "includes" and
"including" when used herein shall be deemed in each case to be followed by the
words "without limitation." The table of contents and headings contained in this
Agreement have been inserted for convenience of reference only and shall not be
relied upon in construing this Agreement. Use of any gender herein to refer to
any person shall be deemed to comprehend masculine, feminine, and neuter unless
the context clearly requires otherwise.
11.12 Public Statements. Each of Purchaser and the Company shall not,
without the prior approval of the other party, make or cause to be made any
press release or other public statement concerning the transactions contemplated
from time to time by this Agreement, the Registration Rights Agreement, the
License Agreement or the Distribution Agreement or disclose any of the terms and
conditions thereof, except as and only to the extent that any party hereto is
advised by legal counsel to be so obligated by law or the regulations of any
stock exchange or the NASD, but only after the Company or Purchaser shall have
consulted with the other party and its legal counsel in advance regarding the
form and substance of such press release, public statement or disclosure.
11.13 Brokers.
(a) The Company has not engaged, consented to or authorized any
broker, finder or intermediary, except ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. ("▇▇▇▇▇ ▇▇▇▇▇▇") to act
on its behalf, directly or indirectly, as a broker, finder or intermediary in
connection with the transactions contemplated by this Agreement. All fees,
commissions, and other payments owing to ▇▇▇▇▇ ▇▇▇▇▇▇ as a result of its or its
employees participation, negotiations, or other actions taken in connection with
this Agreement are the sole responsibility and obligation of the Company. The
Company hereby agrees to indemnify and hold harmless Purchaser from and against
all fees, commissions or other payments owing to ▇▇▇▇▇ ▇▇▇▇▇▇ or any other
person acting on behalf of the Company hereunder.
(b) Purchaser has not engaged, consented to or authorized any
broker, finder or intermediary, to act on its behalf, directly or indirectly, as
a broker, finder or intermediary in connection with the transactions
contemplated by this Agreement. Purchaser hereby agrees to indemnify and hold
harmless the Company from and against all fees, commissions or other payments
owning to any such person or firm acting on behalf of Purchaser hereunder.
11.14 Costs and Expenses. Each party hereto shall pay its own costs and
expenses incurred in connection herewith, including the fees of its counsel,
auditors and other representatives, whether or not the transactions contemplated
herein are consummated.
11.15 No Third Party Rights. Nothing in this Agreement shall create or be
deemed to create any rights in any person or entity not a party to this
Agreement.
11.16 Specific Performance. Each party's obligations under this Agreement
is unique. Because the breach by any party of the provisions of Articles VI,
VII, VIII and IX would cause irreparable harm and significant injury that would
be difficult to ascertain and would not be compensable by damages alone, the
parties agree that each party will have the right to enforce such
-29-
provisions by injunction, specific performance or other equitable relief without
prejudice to any other rights and remedies the enforcing party may have. The
reference to specific Articles in this Section is not a waiver of any party's
rights to seek equitable relief for breaches of other Articles and Sections.
11.17 Mutual Drafting. This Agreement is the joint product of Purchaser
and the Company, and each provision hereof has been subject to the mutual
consultation, negotiation and agreement of Purchaser and the Company and their
respective legal counsel and advisers and shall not be construed for or against
any party hereto.
IN WITNESS WHEREOF, Purchaser and the Company have caused this Agreement
to be signed by their respective representatives as of the date first above
written.
i-STAT CORPORATION
By: ___________________________________
Name:
Title:
HEWLETT-PACKARD COMPANY
By: ___________________________________
Name:
Title:
-30-
EXECUTION COPY
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES B PREFERRED STOCK OF
i-STAT CORPORATION
Pursuant to Section 151 of the General Corporation Law of the State of
Delaware
We, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President and Chief Executive Officer, and ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, Vice President, Chief Financial Officer and Treasurer, of Carpe Diem
Corporation (the "Company" or "Corporation"), a corporation organized and
existing under the General Corporation Law of the State of Delaware, in
accordance with provisions of Section 103 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by
the Certificate of Incorporation of the said Corporation, the said Board of
Directors on June 22, 1995, adopted the following resolution creating a series
of 2,138,702 shares of Preferred Stock designated as Series B Preferred Stock:
RESOLVED: that a series of the Company's Preferred Stock consisting of
2,138,702 shares of Preferred Stock, be and hereby is designated as "Series B
Preferred Stock", par value $.10 per share (the "Series B Preferred"), and that
the Series B Preferred shall have the designations, powers, preferences, rights
and qualifications, limitations and restrictions as set forth in the Certificate
of Designation, Preferences and Rights of Series B Preferred Stock (the
"Certificate") substantially in the form attached hereto as Exhibit A.
That said Certificate states that the Board of Directors does hereby fix
and herein state and express such designations, powers, preferences and relative
and other special rights and qualifications, limitations and restrictions
thereof as follows (all terms used herein which are defined in the Certificate
of Incorporation shall be deemed to have the meanings provided therein).
Section 1. Designation and Amount. The shares of such series shall be
designated "Series B Preferred Stock" and the number of shares constituting such
series shall be 2,138,702.
Section 2. Dividends and Distributions. The holders of the Series B
Preferred shall be entitled to receive dividends in preference or on an
equivalent basis to any declaration or payment of any dividend (payable other
than in Common Stock) on the Common Stock of the Corporation. Such dividends
will be in an amount determined by the Board of Directors and shall be payable
when, as and if declared by the Board of Directors, out of funds legally
available therefor. The right to such dividends on the Series B Preferred shall
not be cumulative and no right to such dividends shall accrue to holders of
Series B Preferred unless declared by the Board of Directors. Notwithstanding
the foregoing, the holders of the Series B Preferred shall be entitled to
receive a dividend, to be declared by the Board of Directors of the Company no
later than two business days following the
initial issuance of the Series B Preferred (the "Initial Issuance Date"), of one
right for each share of Series B Preferred pursuant to the Stockholder
Protection Agreement dated as of June 26, 1995 between the Corporation and First
Fidelity Bank, National Association (the "Rights Agreement").
Section 3. Liquidation Preference. In the event of any liquidation,
dissolution, or winding up of the Corporation, either voluntary or involuntary,
distributions to the stockholders of the Corporation shall be made in the
following manner:
(a) The holders of the Series B Preferred shall be entitled to
receive, prior and in preference to any distribution of any of the assets or
surplus funds of the Corporation to the holders of the Common Stock by reason of
their ownership of such stock, the amount of $28.50 per share for each share of
Series B Preferred then held by them, adjusted for any recapitalization, stock
dividend, stock split or similar event (a "Recapitalization") with respect to
such shares, plus an amount equal to all declared but unpaid dividends on the
Series B Preferred. If the assets and funds thus distributed among the holders
of the Series B Preferred shall be insufficient to permit the payment to such
holders of the full aforesaid preferential amount, then the entire assets and
funds of the Corporation legally available for distribution shall be distributed
ratably among the holders of the Series B Preferred.
(b) For purposes of this Section 3, a merger or consolidation of the
Corporation with or into any other corporation or corporations, or a sale of all
or substantially all of the assets of the Corporation, but only pursuant to a
court-approved plan of reorganization or other proceeding in a bankruptcy case
pending under the U.S. Bankruptcy Code, insolvency or similar situation, shall
be treated as a liquidation, dissolution or winding up of the Corporation.
Section 4. Voting Rights. Except as otherwise required by law or by
Section 6 hereof, the holder of each share of Series B Preferred shall be
entitled to the number of votes equal to the number of shares of Common Stock
into which such share of Series B Preferred could be converted at the record
date for determination of the stockholders entitled to vote on such matters, or,
if no such record date is established, at the date such vote is taken or any
written consent of stockholders is solicited, such votes to be counted together
with all other shares of stock of the Company having general voting power.
Holders of Series B Preferred shall be entitled to notice of any stockholders'
meeting in accordance with the Bylaws of the Corporation.
Section 5. Conversion. The shares of Series B Preferred shall be
convertible as follows:
(c) At Option of Stockholder. Each share of Series B Preferred shall
be convertible, at the option of the holder thereof, at any time after the date
of issuance of such share at the office of the Corporation or any transfer agent
for the Series B Preferred, into such number of fully paid and nonassessable
shares of Common Stock as is determined by dividing $28.50 by the Conversion
Price, determined as hereinafter provided, in effect at the time of the
conversion. The price at which shares of Common Stock shall be deliverable upon
conversion (the "Conversion Price") shall initially be $28.50 per share of
Common Stock. Such initial Conversion Price shall be subject to adjustment as
hereinafter provided.
-2-
(d) At Option of Corporation. Each s hare of Series B Preferred
shall be convertible, at the option of the Corporation, at any time after the
date which is five years after the Closing Date (as defined in the Series B
Preferred Stock Purchase Agreement dated as of June 23, 1995 between the Company
and Hewlett-Packard Company, the "Closing Date") at the office of the
Corporation or any transfer agent for the Series B Preferred, into such number
of fully paid and nonassessable shares of Common Stock as is determined by
dividing $28.50 by the Conversion Price in effect at the time of conversion.
(e) Other. In the event that the outstanding shares of Series B
Preferred represent less than 5% of the outstanding Voting Power of the Company,
other than as a result of dilution caused by the Company's sale or issuance of
additional shares of Voting Stock, except where dilution results from the
holder's failure to exercise its right to purchase additional Voting Stock from
the Company under any agreement the holder has with the Company, then such
shares of Series B Preferred shall convert into Common Stock pursuant to Section
5(a) of this Certificate.
(f) Mechanics of Conversion. No fractional shares of Common Stock
shall be issued upon conversion of Series B Pre- ferred. In lieu of any
fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the then
effective Conversion Price. Shares of Common Stock issued upon conversion of
shares of Series B Preferred shall be accompanied by the same number of Rights
(as defined in the Rights Agreement) which may be issuable pursuant to the terms
of the Rights Agreement, as it may be amended through the date of such issuance,
or any other stock purchase rights or other similar dividends which have
previously been declared with respect to the Common Stock. Before any holder of
Series B Preferred shall be entitled to convert the same into full shares of
Common Stock and to receive certificates therefor, such holder shall surrender
the certificate or certificates therefor, duly endorsed, at the office of the
Corporation or of any transfer agent for the Series B Preferred; provided,
however, that in the event of conversion at the option of the Corporation, the
outstanding shares of Series B Preferred shall be converted automatically
without any further action by the holders of such shares and whether or not the
certificates representing such shares are surrendered to the Corporation or its
transfer agent. The Corporation shall, as soon as practicable after delivery of
a certificate or certificates representing outstanding shares of Series B
Preferred submitted for conversion, issue and deliver to such holder of Series B
Preferred, a certificate or certificates for the number of shares of Common
Stock to which such holder shall be entitled as aforesaid and a check payable to
the holder in the amount of any cash amounts payable as the result of a
conversion into fractional shares of Common Stock. Such conversion shall be
deemed to have been made immediately prior to the close of business on the date
of such surrender of the shares of Series B Preferred to be converted, or in the
case of conversion at the option of the Corporation, on the record date for
conversion, which shall not be earlier than the date notice of such conversion
is received by holders of Series B Preferred, and the person or persons entitled
to receive the shares of Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder or holders of such shares of
Common Stock on such date.
(g) Adjustments to Conversion Price.
-3-
(i) Adjustments for Additional Issuances. If at any time prior
to the date which is twelve months after the Closing Date the Corporation shall
issue any Additional Stock (as defined below), then the Conversion Price for the
Series B Preferred shall be reduced, upon the closing of such issuance, to a
price such that if a shareholder converted shares of Series B Preferred into
shares of Common Stock immediately after such issuance of Additional Stock, such
holder would be entitled to receive that number of shares of Common Stock equal
to the percentage ownership (calculated as described below) represented by such
shares of Series B Preferred immediately prior to such issuance. In addition, if
at any time prior to the date which is twelve months after the Closing Date, the
Additional Stock is issued without consideration or for a consideration per
share less than the Conversion Price for the Series B Preferred as adjusted
above, then the Conversion Price for the Series B Preferred shall be further
reduced, upon the closing of such issuance, to a price equal to the
consideration per share for which the Additional Stock is issued. For purposes
of this Section 5(e), percentage ownership shall be calculated by dividing the
number of shares of Common Stock issuable upon conversion of the Series B
Preferred by the sum of (x) the Common Stock outstanding prior to the issuance
of Additional Stock and (y) the number of shares of Common Stock issuable upon
conversion of the Series B Preferred.
(A) Consideration. In the case of the issuance of Common
Stock for cash, the consideration shall be deemed to be the amount of cash paid
therefor before deducting any reasonable discounts, commissions or other
expenses allowed, paid or incurred by this Corporation for any underwriting or
otherwise in connection with the issuance and sale thereof. In the case of the
issuance of the Common Stock for a consideration in whole or in part other than
cash, the consideration other than cash shall be deemed to be the fair value
thereof as determined in good faith by the Board of Directors regardless of any
accounting treatment. In the case of the issuance of options to purchase or
rights to subscribe for Common Stock, securities by their terms convertible into
or exchangeable for Common Stock or options to purchase or rights to subscribe
for such convertible or exchangeable securities (which are not excluded from the
definition of Additional Stock), the consideration per share shall be the
consideration (determined in the manner provided above), if any, received by the
Corporation upon the issuance of such options, rights or securities plus the
minimum purchase price provided in such options, rights or securities for the
Common Stock covered thereby.
(B) "Additional Stock". "Additional Stock" shall mean
any shares of Common Stock, options to purchase or rights to subscribe for
Common Stock, securities convertible into or exchangeable for Common Stock or
options to purchase or rights to subscribe for such convertible or exchangeable
securities issued by this Corporation after the Closing Date other than:
(1) shares of Common Stock issued upon conversion
of the 2,138,702 shares of Series B Preferred;
(2) up to an aggregate of 1,965,685 shares of
Common Stock issuable upon exercise of options or warrants outstanding as of the
Closing Date;
-4-
(3) options to purchase Common Stock, and Common
Stock, issuable or issued to employees, officers, directors or consultants of
the Corporation directly, or pursuant to stock purchase or option plans, or
otherwise for compensatory purposes, which issuances and plans are approved by
the Board of Directors;
(4) up to an aggregate of 500,000 shares of Common
Stock issued or issuable in connection with an acquisition (in whatever form) of
intellectual property, which transaction is approved by the Board of Directors;
(5) up to an aggregate of 1,000,000 shares of
Common Stock issued to the public in an underwritten registered public offering
of this Corporation's Common Stock at a price per share of not less than $28.50;
and
(6) securities issued or issuable pursuant to the
Rights Agreement.
(ii) Adjustments for Subdivisions, Stock Dividends,
Combinations or Consolidation of Common Stock. In the event the outstanding
shares of Common Stock shall be subdivided (by stock split, or otherwise), into
a greater number of shares of Common Stock, or the Corporation shall declare and
pay any dividend on its Common Stock payable in shares of Common Stock, the
Conversion Price then in effect shall, concurrently with the effectiveness of
such subdivision or stock dividend, be proportionately decreased. In the event
the outstanding shares of Common Stock shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of shares of Common Stock,
the Conversion Price then in effect shall, concurrently with the effectiveness
of such combination or consolidation, be proportionately increased.
(iii) Adjustments for Other Distributions. In the event the
Corporation at any time or from time to time makes, or fixes a record date for
the determination of holders of Common Stock entitled to receive, any
distribution payable in securities of the Corporation other than shares of
Common Stock, rights issuable pursuant to the Rights Agreement, shares of the
Company's Series A Junior Participating Preferred Stock, par value $.10 per
share, issuable upon exercise of such rights and other than as otherwise
adjusted in this Section 5, then and in each such event provision shall be made
so that the holders of Series B Preferred shall receive the amount of securities
of the Corporation which they would have received had their Series B Preferred
been converted into Common Stock immediately prior to such event. Nothing
contained herein shall limit the rights of the Series B Preferred pursuant to
Section 2 hereof to receive the rights issuable pursuant to the Rights Agreement
and thereafter to enjoy all privileges of a holder of the rights pursuant to the
Rights Agreement.
(iv) Adjustments for Reclassification, Exchange and
Substitution. If the Common Stock issuable upon conversion of the Series B
Preferred shall be changed into the same or a different number of shares of any
other class or classes of stock, whether by capital reorganization,
reclassification or otherwise (other than a subdivision or combination of shares
provided for above), the Conversion Price then in effect shall, concurrently
with the effectiveness of such reorganization or reclassification, be
proportionately adjusted such that the Series B Preferred shall be convertible
-5-
into, in lieu of the number of shares of Common Stock which the holders would
otherwise have been entitled to receive, a number of shares of such other class
or classes of stock equivalent to the number of shares of Common Stock that
would have been subject to receipt by the holders upon conversion of the Series
B Preferred immediately before that change.
(c) No Impairment. Except as provided in Section 6, the Corporation
will not, by amendment of its Certificate of Incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Corporation but will at all times in good faith assist in the
carrying out of all the provisions of this Section 5 and in the taking of all
such action as may be necessary or appropriate in order to protect the
conversion rights of the holders of the Series B Preferred against impairment.
(d) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price pursuant to this Section 5,
the Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
Series B Preferred a certificate setting forth such adjustment or readjustment
and showing in detail the facts upon which such adjustment or readjustment is
based. The Corporation shall, upon the written request at any time of any holder
of Series B Preferred, furnish or cause to be furnished to such holder a like
certificate setting forth (i) such adjustments and readjustments, (ii) the
Conversion Price at the time in effect, and (iii) the number of shares of Common
Stock and the amount, if any, of other property which at the time would be
received upon the conversion of Series B Preferred.
Section 6. Protective Provisions. In addition to any other rights provided
by law, this Corporation shall not, without first obtaining the affirmative vote
or written consent of the holders of not less than a majority of the outstanding
shares of Series B Preferred:
(a) amend or repeal any provision of, or add any provision to, this
Corporation's Certificate of Incorporation if such action would materially and
adversely alter or change the rights, preferences, privileges or powers of, or
the restrictions provided for the benefit of, the Series B Preferred;
(b) authorize or issue shares of any class of stock having any
preference or priority as to dividends or assets superior to or on a parity with
any such preference or priority of the Series B Preferred;
(c) reclassify any shares of Common Stock or any other shares of
this Corporation into shares having any preference or priority as to dividends
or assets superior to or on a parity with any such preference or priority of the
Series B Preferred; or
(d) increase or decrease the aggregate number of authorized shares
of Series B Preferred.
-6-
Section 7. Status of Converted Shares. In case shares of Series B
Preferred shall be converted pursuant to Section 5 hereof, the shares so
converted shall be cancelled, retired and eliminated from the shares which the
Corporation is authorized to issue.
-7-
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and
do affirm the foregoing as true under the penalties of perjury this 23rd day of
June, 1995.
_____________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Chief Executive Officer
Attest:
____________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President,
Chief Financial Officer
and Treasurer
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