SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
i-STAT CORPORATION
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(Name of Issuer)
Common Stock, with a par value of $0.15 per share
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(Title of Class of Securities)
450312 10 3
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(CUSIP Number)
Ann O. Baskins, Assistant Secretary and Managing Counsel
Hewlett-Packard Company
Corporate Legal Department
3000 Hanover Street, MS: 20BQ
Palo Alto, California 94304
(415) 857-3755
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
July 28, 1995
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the
subject of this Schedule 13D, and is filing this schedule
because of Rule 13d-1(b)(3) or (4), check the following
box [ ].
Check the following box if a fee is being paid with this
statement [ X ]. (A fee is not required only if the
reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent
of the class of securities described in Item 1; and (2)
has filed no amendment subsequent thereto reporting
beneficial ownership of five percent or less of such
class. See Rule 13d-7.)
Note: Six copies of this statement, including all
exhibits, should be filed with the Commission. See Rule
13d-1(a) for other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for
a reporting person's initial filing on this form with
respect to the subject class of securities, and for any
subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover
page shall not be deemed to be "filed" for the purpose of
Section 18 of the Securities Exchange Act of 1934 ("Act")
or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions
of the Act (however, see the Notes).
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1 Name of Reporting Person. S.S. or I.R.S. Identification
No. of Above Person
Hewlett-Packard Company I.R.S. Identification No. 94-1081436
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2 Check the Appropriate Box if a Member of a
Group (a) [ ]
Not applicable (b) [ ]
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3 SEC Use Only
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4 Source of Funds
WC
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5 Check Box if Disclosure of Legal Proceedings Is Required
Pursuant to Items 2(d) or 2(e) [ ]
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6 Citizenship or Place of Organization
California
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7 Sole Voting Power
NUMBER OF 0
SHARES
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BENEFICIALLY
OWNED BY 8 Shared Voting Power
EACH
REPORTING 2,138,702
PERSON
---------------------------------------------------------
WITH
9 Sole Dispositive Power
2,138,702
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10 Shared Dispositive Power
0
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11 Aggregate Amount Beneficially Owned by Each Reporting
Person
2,138,702
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12 Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
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13 Percent of Class Represented by Amount in Row (11)
16.2%
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14 Type of Reporting Person
CO
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SCHEDULE 13D
Item 1. Security and Issuer.
The title of the class of equity securities to which this
statement relates is Common Stock, with a par value of $0.15
per share. The name of the issuer is i-STAT Corporation, a
Delaware corporation ("i-STAT"). i-STAT's principal executive
offices are located at 303 College Road East, Princeton,
New Jersey 08540.
Item 2. Identity and Background.
This statement is being filed by Hewlett-Packard Company, a
California corporation ("Hewlett-Packard"). The address of
Hewlett-Packard's principal executive offices is 3000 Hanover Street,
Palo Alto, California 94304. Hewlett-Packard, together with its
consolidated subsidiaries (included in the term "Hewlett-Packard"
for purposes of this paragraph), is engaged worldwide in the
design, manufacture and service of electronic equipment and systems
for measurement, computation and communications. Hewlett-Packard
offers a wide variety of systems and stand alone products,
including computer systems and peripheral products, electronic test
equipment and systems, medical electronic equipment, calculators
and other personal information products, solid state components
and instrumentation for chemical analysis. These products are
used in industry, business, engineering, science, education and
medicine.
Hewlett-Packard has never been convicted in any criminal
proceeding, and is not and has not been subject to any judgment,
decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect
to such laws.
Item 3. Source and Amount of Funds or other consideration.
As more fully described below, Hewlett-Packard has acquired
2,138,702 shares of i-STAT Series B Preferred Stock, $0.10 par
value (the "Shares"). The Shares are currently convertible into
an aggregate of 2,138,702 shares of i-STAT Common Stock. The
aggregate purchase price for the Shares was $60,953,007, which
purchase price was paid with funds derived from Hewlett-Packard's
working capital and cash reserves.
Item 4. Purpose of Transaction.
Hewlett-Packard's purpose in acquiring the Shares
was to develop and maintain with i-STAT a strategic
relationship in which each company remained independent
while working together to develop and market their
products. The Shares were acquired by Hewlett-Packard
directly from i-STAT. The terms and conditions of
Hewlett-Packard's purchase of the Shares were established
in the Series B Preferred Stock Purchase Agreement dated
June 23, 1995 between i-STAT and Hewlett-Packard (the
"Stock Purchase Agreement"), which is being filed with
this statement as Exhibit A. The following summary of
Hewlett-Packard's rights to purchase i-STAT's equity
securities is qualified in its entirety by the terms of
the Stock Purchase Agreement which is hereby incorporated
by reference.
Pursuant to the Stock Purchase Agreement, Hewlett-Packard
has the right to maintain its percentage interest in the total
number of outstanding voting shares of i-STAT Common Stock in
the event of future sales by i-STAT of additional voting shares,
by purchasing additional shares of voting stock from i-STAT under
the terms specified in the Stock Purchase Agreement.
Notwithstanding the foregoing, for a period of five years
from July 28, 1995 (the "Closing Date"), Hewlett-Packard
may not purchase more than 25% of the outstanding voting
securities of i-STAT except under certain circumstances.
Subject to this 25% limitation, Hewlett-Packard always
has the right to purchase additional shares in the open
market or from third parties to maintain its ownership
position. In addition, for a period of twelve (12)
months from the Closing Date, the Shares are subject to
certain antidilution protection as set forth in the
Certificate of Designation, Preferences and Rights of
Series B Preferred Stock of i-STAT Corporation (the
"Certificate"), which is being filed with this statement
as Exhibit B. Any summary of the designation,
preferences and rights of the Shares is qualified in its
entirety by the terms of the Certificate, which is hereby
incorporated by reference.
Under the Stock Purchase Agreement, Hewlett-Packard will
be entitled to designate one (1) director of i-STAT if
Hewlett-Packard holds at least 10% but less than 20% of the
outstanding voting securities of i-STAT. If Hewlett-Packard
holds at least 20% of the outstanding voting securities of
i-STAT, Hewlett-Packard will be entitled to designate two (2)
directors of i-STAT. A reduction in Hewlett-Packard's percentage
ownership below the thresholds set forth above shall not cause
removal of Hewlett-Packard's Board representative(s) so long as
such reduction is a result of dilution and not of a sale by
Hewlett-Packard of i-STAT voting securities or, in the
case of a reduction in Hewlett-Packard's percentage
ownership below 20%, of Hewlett-Packard's failure to
exercise its maintenance rights.
In addition, the Stock Purchase Agreement includes
certain limitations on the manner in which i-STAT may
amend its Stockholder Protection Agreement, which
agreement provides for the dividend distribution to
holders of Common Stock and Series B Preferred Stock of
i-STAT of certain stock purchase rights.
See also the rights and restrictions set forth in
Item 6 of this statement.
Item 5. Interest in Securities of the Issuer.
Hewlett-Packard holds 2,138,702 shares of Series B
Preferred Stock which represents approximately 16.2% of
the outstanding voting stock of i-STAT. Hewlett-Packard
has sole dispositive power with respect to the Shares,
subject to certain restrictions on transfer and a right
of first refusal in favor of i-STAT, as described in Item
6 of this statement. Hewlett-Packard's right to vote the
Shares (or other i-STAT voting securities held by
Hewlett-Packard) is subject to certain restrictions, as
described in Item 6 of this statement, and as a result of
such restrictions, Hewlett-Packard shares the power to
direct the vote of the Shares (or other i-STAT voting
securities held by Hewlett-Packard) with i-STAT.
Except as described in this statement,
Hewlett-Packard has not effected any transactions in
shares of i-STAT Common Stock during the last 60 days.
Item 6. Contracts, Arrangements, Understandings or
Relationships With Respect to Securities of the Issuer.
The Stock Purchase Agreement imposes upon Hewlett-Packard
certain restrictions related to voting its shares of i-STAT
voting stock. The Stock Purchase Agreement also establishes a
number of restrictions on Hewlett-Packard's right to transfer its
i-STAT Preferred Stock or other voting stock, and provides that
i-STAT has a right of first refusal on transfers by Hewlett-Packard
of i-STAT voting stock. The following summary of such
restrictions and the right of first refusal is qualified
in its entirety by reference to the terms of the Stock
Purchase Agreement.
The Stock Purchase Agreement provides that Hewlett-Packard
must vote its shares in favor of i-STAT's nominees to the board
and in accordance with the recommendations of i-STAT's board on
all other matters except "significant events," subject to certain
exceptions. "Significant events" include, but are not limited to,
the following: an amendment to the i-STAT charter documents or a
sale, recapitalization, liquidation or dissolution of i-STAT.
In the case of a "significant event," Hewlett-Packard may vote
shares representing up to 15% of the outstanding voting stock of
i-STAT as it wishes, but must vote anything above 15% in
the same proportion as the votes cast by all holders. In
addition, while Hewlett-Packard's ownership of voting stock
is limited as set forth in Item 4 above, Hewlett-Packard may not
(i) make any written proposal to i-STAT regarding a potential
acquisition, merger or consolidation with, or sale of all or
substantially all of the assets that would, as a matter of law,
require i-STAT to make a disclosure, (ii) initiate or participate
in a hostile tender offer to acquire i-STAT, or (iii) solicit
proxies with respect to the voting stock or participate in an
"election contest" as defined in Regulation 14A of the Securities
Exchange Act of 1934.
i-STAT has a right of first refusal to purchase
all but not part of any of the Shares (and any other
voting securities) that HP proposes to sell or transfer
other than pursuant to an open market transaction or a
public offering, at the prices set forth in the Stock
Purchase Agreement. If i-STAT does not exercise its
right of first refusal, then Hewlett-Packard may sell
such securities at a price and on terms not less
favorable than as offered to i-STAT. In addition,
Hewlett-Packard may not sell its shares of i-STAT voting
stock in blocks representing more than 5% of the then
outstanding voting stock of i-STAT or, in the cases of a
sale to certain potential buyers, blocks representing
more than 3% of the then outstanding voting stock. Prior
to transferring any shares of i-STAT Preferred Stock,
Hewlett-Packard must convert such shares to Common Stock.
i-STAT must give written notice to Hewlett-Packard
within two business days following its receipt of (i)
written notice from any person or group putting i-STAT
reasonably on notice of the likelihood that such person
or group has acquired or proposes to acquire more than
15% of the then outstanding i-STAT voting stock, (ii) any
notice under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976 relating to i-STAT, (iii) any Statement on
Form 13D or Schedule 14D-1 under the Securities Exchange
Act of 1934 relating to voting stock of i-STAT, or (iv)
i-STAT's reaching an agreement in principle as to any
transaction which would result in a change in control of
i-STAT or involving a sale of all or substantially all of
the assets of i-STAT. In the event i-STAT desires to
enter into a merger, consolidation or other business
combination in which i-STAT would not be the surviving
corporation or a sale of all or substantially all of
i-STAT's assets, then i-STAT shall first negotiate in good
faith with Hewlett-Packard for a period of thirty (30)
days.
The Registration Rights Agreement dated July 28, 1995
between i-STAT and Hewlett-Packard (the "Registration Rights
Agreement") provides Hewlett-Packard with certain demand and
piggyback rights to register the Shares. Hewlett-Packard has
agreed that upon the request of i-STAT, it will refrain from
selling shares on the market for a period of up to 120 days
in the event i-STAT is doing an offering, whether in connection
with an underwritten public offering or an acquisition. The
foregoing summary of Hewlett-Packard's rights and
obligations under the Registration Rights Agreement is
qualified in its entirety by the terms of the
Registration Rights Agreement which is being filed with
this statement as Exhibit C and which is hereby
incorporated by reference.
Item 7. Material to be Filed as Exhibits.
The following documents are filed as exhibits to
this statement:
Exhibit A: Series B Preferred Stock Purchase Agreement
dated June 23, 1995, between Hewlett-Packard and i-STAT.
Exhibit B: Certificate of Designation, Preferences
and Rights of Series B Preferred Stock.
Exhibit C: Registration Rights Agreement dated July 28,
1995, between Hewlett-Packard and i-STAT.
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set
forth in this statement is true, complete and correct.
August 4, 1995 ANN O. BASKINS
--------------------
Ann O. Baskins
Assistant Secretary
and Managing Counsel
INDEX TO EXHIBITS
A Series B Preferred Stock Purchase Agreement dated
June 23, 1995 between i-STAT and Hewlett-Packard.
B Certificate of Designation, Preferences and Rights
of Series B Preferred Stock.
C Registration Rights Agreement dated July 28, 1995,
between Hewlett-Packard and i-STAT.
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
TABLE OF CONTENTS
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 . . . . . . . . . . . . . . . . . . . 2
1.4 Legend . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF I-STAT . . 3
2.1 Organization, Standing and Power . . . . . . . 3
2.2 Capital Structure. . . . . . . . . . . . . . . 4
2.3 Authority. . . . . . . . . . . . . . . . . . . 5
2.4 No Conflict. . . . . . . . . . . . . . . . . . 5
2.5 Accuracy of Reports . . . . . . . . . . . . . 6
2.6 Governmental Consent, etc... . . . . . . . . . 6
2.7 S-3. . . . . . . . . . . . . . . . . . . . . . 7
2.8 Intellectual Property. . . . . . . . . . . . . 7
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF PURCHASER.9
3.1 Investment . . . . . . . . . . . . . . . . . . 9
3.2 Organization . . . . . . . . . . . . . . . . .10
3.3 Authorities. . . . . . . . . . . . . . . . . .10
3.4 Government Consents. etc . . . . . . . . . . .11
3.5 Investigation. . . . . . . . . . . . . . . . .11
3.6 Purchaser. . . . . . . . . . . . . . . . . . .11
ARTICLE IV - CONDITIONS TO OBLIGATIONS OF PURCHASER . . .12
4.1 Representations and Warranties Correct . . . .12
4.2 Covenants. . . . . . . . . . . . . . . . . . .12
4.3 Opinion of Company's Counsel . . . . . . . . .12
4.4 No Order Pending . . . . . . . . . . . . . . .12
4.5 HSR Act. . . . . . . . . . . . . . . . . . . .12
4.6 No Law Prohibiting or Restriction of Such
Sale . . . . . . . . . . . . . . . . . . . . .12
4.7 Compliance Certificate . . . . . . . . . . . .13
4.8 License Agreement and Distribution Agreement .13
4.9 Registration Rights Agreement. . . . . . . . .13
4.10 Rights Plan. . . . . . . . . . . . . . . . . .13
4.11 Authorizing Resolutions. . . . . . . . . . . .13
ARTICLE V - CONDITIONS TO OBLIGATIONS OF I-STAT . . . . .13
5.1 Representations and Warranties Correct . . . .14
5.2 Covenants. . . . . . . . . . . . . . . . . . .14
5.3 No Order Pending . . . . . . . . . . . . . . .14
5.4 No Law Prohibiting or Restriction of Such
Sale . . . . . . . . . . . . . . . . . . . . .14
5.5 Compliance Certificate . . . . . . . . . . . .14
5.6 License Agreement and Distribution Agreement .14
5.7 Registration Rights Agreement. . . . . . . . .14
5.8 HSR Act. . . . . . . . . . . . . . . . . . . .15
ARTICLE VI - COVENANTS OF THE COMPANY . . . . . . . . . .15
6.1 No Objection . . . . . . . . . . . . . . . . .15
6.2 Sale of Shares . . . . . . . . . . . . . . . .15
6.3 Membership on the Board of Directors . . . . .15
6.4 Equity Method Accounting . . . . . . . . . . .18
6.5 Confidential Treatment . . . . . . . . . . . .18
6.6 Notice of Certain Transactions; Right of
First Offer. . . . . . . . . . . . . . . . . .18
6.7 HSR Act. . . . . . . . . . . . . . . . . . . .20
6.8 Restrictions on Amendments to the Rights Plan
and Adoption of New Rights Plan. . . . . . . .20
6.9 Amendment to the Rights Plan . . . . . . . . .21
6.10 Manufacturing. . . . . . . . . . . . . . . . .21
6.11 Use of Funds; Activities in Support of
Strategic Relationship . . . . . . . . . . . .21
6.12 Waivers. . . . . . . . . . . . . . . . . . . .22
ARTICLE VII - COVENANTS OF PURCHASER. . . . . . . . . . .22
7.1 Conversion Before Sale . . . . . . . . . . . .22
7.2 Voting . . . . . . . . . . . . . . . . . . . .22
7.3 Acquisition of Stock . . . . . . . . . . . . .23
7.4 Limitation on HP's Acquisition of
Voting Stock . . . . . . . . . . . . . . . . .23
7.5 Transfers of Voting Stock. . . . . . . . . . .25
7.6 Conversion of Preferred Stock. . . . . . . . .27
7.7 Other. . . . . . . . . . . . . . . . . . . . .27
7.8 Confidential Information . . . . . . . . . . .28
7.9 Solicitation of Proxies. . . . . . . . . . . .28
7.10 HSR Act . . . . . . . . . . . . . . . . . . .28
ARTICLE VIII- RIGHT TO MAINTAIN . . . . . . . . . . . . .29
8.1 Stock Plan Issuances . . . . . . . . . . . . .29
8.2 Other Issuances. . . . . . . . . . . . . . . .29
8.3 Price. . . . . . . . . . . . . . . . . . . . .31
8.4 Closing. . . . . . . . . . . . . . . . . . . .33
8.5 Notice . . . . . . . . . . . . . . . . . . . .33
8.6 Rights Plan . . . . . . . . . . . . . . . . .33
ARTICLE IX - i-STAT'S RIGHT OF FIRST REFUSAL. . . . . . .34
9.1 Right of First Refusal; Right of First Offer .34
9.2 Assignment of Rights . . . . . . . . . . . . .36
ARTICLE X - DEFINITIONS . . . . . . . . . . . . . . . . .36
10.1 Certain Definitions. . . . . . . . . . . . . .36
ARTICLE XI - MISCELLANEOUS. . . . . . . . . . . . . . . .39
11.1 Termination of Agreement . . . . . . . . . . .39
11.2 Reasonable Efforts . . . . . . . . . . . . . .40
11.3 Governing Law. . . . . . . . . . . . . . . . .41
11.4 Survival . . . . . . . . . . . . . . . . . . .41
11.5 Successors and Assigns . . . . . . . . . . . .41
11.6 Entire Agreement; Amendment. . . . . . . . . .41
11.7 Notices and Dates. . . . . . . . . . . . . . .41
11.8 Further Assurances . . . . . . . . . . . . . .43
11.9 Counterparts . . . . . . . . . . . . . . . . .43
11.10 Severability . . . . . . . . . . . . . . . . .43
11.11 Interpretation . . . . . . . . . . . . . . . .43
11.12 Public Statements. . . . . . . . . . . . . . .44
11.13 Brokers. . . . . . . . . . . . . . . . . . . .44
11.14 Costs and Expenses . . . . . . . . . . . . . .45
11.15 No Third Party Rights. . . . . . . . . . . . .45
11.16 Specific Performance . . . . . . . . . . . . .45
11.17 Mutual Drafting. . . . . . . . . . . . . . . .45
Exhibits
A Certificate of Designation, Preferences and Rights of Series B
Preferred Stock
B Registration Rights Agreement
C Opinion of Paul, Hastings, Janofsky & Walker
D Company Compliance Certificate
E Purchaser Compliance Certificate
F License Agreement
G Distribution Agreement
H Rights Plan
Schedules
Company Disclosure Schedule
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, Janofsky & Walker, 399 Park Avenue, New York, New York at
10:00 a.m., on the fifth business day following expiration or early
termination of all waiting periods imposed under the Hart-Scott-Rodino
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.
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 Robert O'Leary,
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, 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 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 mark 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.
(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 mark, 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.
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.
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, Janofsky & Walker, 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.
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 James Cyrier 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.
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 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 James Cyrier as Purchaser's initial
designee to the Company's Board of Directors, so long as Mr. Cyrier
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 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 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.
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.
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,
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
(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 - William P.
Moffitt ("Moffitt"); (B) Executive Vice President and Chief Technology
Officer - Imants R. Lauks ("Lauks"); and (C) Vice President of Systems
Development - Michael P. Zelin ("Zelin"); and (b) after the Hiring, in
three of the following four positions of the Company: Moffitt, Lauks,
Zelin 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. (a) 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.
(b) 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.
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.
(c) 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.
(d) 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.
7.6 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.
7.7 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.
7.8 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 (vi) 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.
7.9 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.
7.10 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.
(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
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.
(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 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).
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 deter-
mination 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, 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) recapitaliza-
tion, (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).
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 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
303 College Road East
Princeton, NJ 08540
Attention: President
Fax: (609) 243-0507
with a copy addressed as set forth above but to the attention of:
Paul, Hastings, Janofsky & Walker
1055 Washington Boulevard
Stamford, CT 06901
Attention: Esteban A. Ferrer, Esq.
Fax: (203) 359-3031
(b) if to Purchaser, to it at:
Hewlett-Packard Company
3000 Hanover Street
Palo Alto, CA 94304
Attention: Director, Corporate Development
Fax: (415) 852-8342
with a copy addressed as set forth above but to the attention of:
General Counsel
Fax: (415) 852-8019
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.
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 Smith Barney
Inc. ("Smith Barney") 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 Smith Barney 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 Smith Barney 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 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:
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, William P. Moffitt, President and Chief Executive
Officer, and William P. Sarther, 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:
(a) 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.
(b) 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.
(c) 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.
(d) 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.
(e) Adjustments to Conversion Price.
(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;
(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 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.
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.
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.
______________________________
William P. Moffitt
Chief Executive Officer
Attest:
__________________________
William P. Sarther
Vice President,
Chief Financial Officer
and Treasurer
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is
made as of July 28, 1995 by and between i-STAT Corporation, a
Delaware corporation (the "Company"), and Hewlett-Packard
Company ("HP").
RECITALS
WHEREAS, the Company and HP are parties to a Stock
Purchase Agreement dated June 23, 1995 (the "Purchase
Agreement"), pursuant to which, among other things, HP will
acquire certain shares of the Company's Series B Preferred
Stock (the "Series B Preferred"); and
WHEREAS, the Company is granting to HP certain demand
and piggyback registration rights in connection with HP's
purchase of the Series B Preferred pursuant to the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises
and covenants hereinafter set forth, the parties hereto agree
as follows:
1. Certain Definitions. As used in this Agreement,
the following terms shall have the following respective
meanings:
"Commission" shall mean the Securities and
Exchange Commission or any other federal agency at the time
administering the Securities Act.
"Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended, or any similar federal statute and
the rules and regulations of the Commission thereunder, all as
the same shall be in effect at the time.
"Register," "registered" and "registration" refer
to a registration effected by preparing and filing a
registration statement in compliance with the Securities Act,
and the declaration or ordering of the effectiveness of such
registration statement.
"Registrable Securities" shall mean (i) shares of
the Company's Common Stock issued or issuable pursuant to the
conversion of the Series B Preferred, (ii) any shares of
Common Stock or other capital stock of the Company acquired by
HP subsequent to the date hereof and prior to the date the
Company has effected a registration pursuant to Section 2 of
this Agreement and such registration has been declared or
ordered effective and the securities offered have been sold,
and (iii) any shares of Common Stock or other capital stock of
the Company issued or issuable in respect of the shares of the
Company's Common Stock or other securities described in
clauses (i) and (ii) upon any stock split, stock dividend,
recapitalization, or similar event.
"Registration Expenses" shall mean all expenses
incurred by the Company in complying with Sections 2 and 3
hereof, including, without limitation, all registration,
qualification and filing fees, printing expenses, escrow fees,
fees and disbursements of counsel for the Company, including
fees and disbursements of such counsel in representing HP,
blue sky fees and expenses and the expense of any special
audits incident to or required by any such registration (but
excluding the compensation of regular employees of the Company
which shall be paid in any event by the Company).
"Securities Act" shall mean the Securities Act of
1933, as amended, or any similar federal statute and the rules
and regulations of the Commission thereunder, all as the same
shall be in effect at the time.
"Selling Expenses" shall mean all underwriting
discounts, selling commissions and stock transfer taxes
applicable to the Registrable Securities registered by HP.
2. Requested Registration.
(a) Request for Registration. In case the
Company shall receive from HP a written request that the
Company effect any registration, qualification or compliance
with respect to any of the Registrable Securities, the Company
shall, as soon as practicable, use its best efforts to effect
such registration, qualification or compliance (including,
without limitation, appropriate qualification under applicable
blue sky or other state securities laws and appropriate
compliance with applicable regulations issued under the
Securities Act and any other governmental requirements or
regulations) on Form S-3, or if Form S-3 is not available then
on Form S-1 (or any successor forms of registration statements
to such Forms S-3 or S-1 or other available registration
statements) as may be so requested and as would permit or
facilitate the sale and distribution of the Registrable
Securities for which registration is requested.
Notwithstanding the foregoing, the Company shall not be obli-
gated to file a registration statement to effect any such
registration, qualification or compliance pursuant to this
Section 2:
(i) unless the amount of Registrable
Securities for which registration is requested is at least
712,900 shares (as adjusted for any stock split, stock
dividend, recapitalization or similar event) and the fair
market value (based on the Average Market Price as such term
is defined in the Purchase Agreement) of such securities is at
least $15,000,000, except that if the total number of
Registrable Securities held by HP (but not a transferee of HP)
is less than 712,900 (as adjusted) or the value of such shares
is less than $15,000,000, then HP (but not a transferee of HP)
may request registration as to all but not less than all of
such Registrable Securities under this Section 2;
notwithstanding the foregoing, if the offering of securities
made under this Section 2(a)(i) is underwritten and the
underwriter determines that marketing factors require a
limitation of the number of shares to be underwritten, then HP
shall be entitled to register such limited number of shares;
or
(ii) during the twelve (12) month period
beginning on the closing date of any registration,
qualification or compliance effected pursuant to this Section
2, provided that the securities offered under such
registration, qualification or compliance have been sold.
(b) Underwriting. If the offering of securities
made under this Section 2 is underwritten, the Company shall
(together with HP) enter into an underwriting agreement in
customary form with the managing underwriter selected for such
underwriting by HP, but subject to the Company's reasonable
approval. Notwithstanding any other provision of this Section
2, if the underwriter determines that marketing factors
require a limitation of the number of shares to be under-
written, the managing underwriter may limit the number of
Registrable Securities to be included in such registration.
3. Company Registration.
(a) Notice of Registration. If at any time the
Company shall determine to register any of its securities,
either for its own account or the account of a security holder
or holders exercising their respective demand registration
rights, other than (i) a registration relating solely to
employee benefit plans on Form S-8, or (ii) a registration on
Form S-4 relating solely to a Commission Rule 145 transaction,
the Company will:
(i) promptly give HP written notice
thereof; and
(ii) include in such registration (and any
related qualification under blue sky laws or other
compliance), and in any underwriting involved therein, all
Registrable Securities specified in a written request made
within 15 Business Days (as such term is defined in the
Purchase Agreement) after receipt of such written notice by
HP.
(b) Underwriting. In the event the Company
gives notice of a registered public offering pursuant to this
Section 3 involving an underwriting, the Company shall so
advise HP as a part of the written notice given pursuant to
Section 3(a). In such event HP's right to registration
pursuant to this Section 3 shall be conditioned upon HP's
participation in such underwriting and the inclusion of
Registrable Securities in the underwriting shall be subject to
the limitations provided herein. HP shall (together with the
Company) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other
provision of this Section 3, if the underwriter determines
that marketing factors require a limitation of the number of
shares to be underwritten, the managing underwriter may limit
the number of Registrable Securities to be included in such
registration and underwriting for the account of HP to not
less than 30% of the total value of the securities to be
distributed through such registration and underwriting.
4. Black Out. In the event the Company determines to
register securities in an offering, whether pursuant to an
underwritten public equity offering or an acquisition, the
Company on the advice of its underwriters shall notify HP and
(a) may request that HP refrain from selling Registrable
Securities under Rule 144 of the Securities Act ("Rule 144"),
and (b) shall not be obligated to file a registration
statement to effect any registration, qualification or
compliance pursuant to Section 2(a); for a period of up to 120
days from the date of such notice (the "Black Out Period").
During any such Black Out Period, HP shall still be entitled
to register shares pursuant to Section 3 of this Agreement.
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.
5. Expenses of Registration. All Registration
Expenses incurred in connection with a registration pursuant
to Sections 2 and 3 shall be borne by the Company. All
Selling Expenses relating to Registrable Securities which are
registered shall be borne by HP. Notwithstanding the
foregoing, after (i) the Company has effected two (2)
registrations pursuant to Section 2 and (ii) all such
registrations have been declared or ordered effective and the
securities offered have been sold, HP shall bear all
Registration Expenses and Selling Expenses incurred in
connection with any subsequent requested registration pursuant
to Section 2.
6. Registration Procedures. In the case of each
registration, qualification or compliance effected by the
Company pursuant to this Agreement, the Company will keep HP
advised in writing, if HP is participating in such
registration, as to the initiation of each registration,
qualification and compliance and as to the completion thereof.
At its expense the Company will:
(a) Prepare and file with the Commission a
registration statement with respect to such securities and use
all reasonable efforts to cause such registration statement to
become and remain effective for at least 60 days or until the
distribution described in the registration statement has been
completed, whichever first occurs;
(b) Furnish to HP, if HP is participating in
such registration, such reasonable number of copies of the
registration statement, preliminary prospectus, final
prospectus and such other documents as HP may reasonably
request, including correspondence with the Commission and any
exchanges on which Registrable Securities are listed; and
(c) Notify HP, if HP is participating in such
registration, of any updates or amendments to the prospectus
and furnish to HP any such updated and/or amended
prospectuses.
7. Indemnification.
(a) The Company will indemnify HP, each of its
officers, directors, employees and agents, and each person
controlling HP within the meaning of the Securities Act (the
"Affiliates"), with respect to any registration, qualification
or compliance which has been effected pursuant to this
Agreement, and each underwriter, if any, and each person who
controls any underwriter within the meaning of Section 15 of
the Securities Act (the "Underwriters"), against all expenses,
claims, losses, damages or liabilities (or actions in respect
thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or threatened, arising
out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any registration
statement, prospectus, offering circular or other document, or
any amendment or supplement thereto, incident to any such
registration, qualification or compliance, or based on any
omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which
they were made, not misleading, or any violation by the
Company of the Securities Act or any state securities law or
any rule or regulation promulgated thereunder applicable to
the Company in connection with any such registration,
qualification or compliance, and the Company will reimburse
HP, such directors, officers, employees, agents and control
persons, and each such underwriter and each person who
controls any such underwriter, for any legal and any other ex-
penses reasonably incurred in connection with investigating,
preparing or defending any such claim, loss, damage, liability
or action, provided that the Company will not be liable in any
such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue
statement or omission or alleged untrue statement or omission,
made in reliance upon and in conformity with written infor-
mation furnished to the Company by an instrument duly executed
by HP and stated to be specifically for use therein.
(b) HP will, if Registrable Securities are
included in a registration, qualification or compliance being
effected, indemnify the Company, each of its officers,
directors, employees and agents, each underwriter, if any, of
the Company's securities covered by such a registration
statement, and each person who controls the Company or such
underwriter within the meaning of Section 15 of the Securities
Act, against all claims, losses, damages and liabilities (or
actions in respect thereof), including any of the foregoing
incurred in settlement of any litigation commenced or
threatened, arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular
or other document, or any omission (or alleged omission) to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and
will reimburse the Company, such directors, officers,
employees, agents and control persons, and each such under-
writer and each person who controls such underwriter for any
legal or any other expenses reasonably incurred in connection
with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to
the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other
document incident to any such registration, qualification or
compliance in reliance upon and in conformity with written
information furnished to the Company by an instrument duly
executed by HP and the Affiliates and stated to be specif-
ically for use therein. Notwithstanding the foregoing, the
liability of HP under this subsection (b) shall be limited in
an amount equal to the public offering price of the shares
sold by HP, unless such liability arises out of or is based on
willful misconduct by HP.
(c) Each party entitled to indemnification under
this Section 7 (the "Indemnified Party") shall give notice to
the party required to provide indemnification (the
"Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be
sought, and the Indemnifying Party shall have the option to
assume the defense of any such claim or any litigation
resulting therefrom, provided that counsel for the In-
demnifying Party, who shall conduct the defense of such claim
or litigation, shall be approved by the Indemnified Party
(whose approval shall not unreasonably be withheld), and the
Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this
Agreement unless the failure to give such notice is materially
prejudicial to an Indemnifying Party's ability to defend such
action and provided further, that the Indemnifying Party shall
not assume the defense for matters as to which there is a
conflict of interest or separate and different defenses. In
the event of a conflict of interest or separate or different
defenses as determined in the reasonable opinion of counsel to
the Indemnified Party, the Indemnifying Party will pay the
legal fees and expenses of the Indemnified Party. No claim
may be settled without the consent of the Indemnifying Party
(which consent shall not be unreasonably withheld). No Indem-
nifying Party, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such claim or
litigation.
8. Information by HP. HP shall furnish to the
Company such information regarding Registrable Securities
being included in any registration, qualification or
compliance and the distribution proposed by HP as the Company
may request in writing and as shall be required in connection
with any registration, qualification or compliance referred to
in this Agreement.
9. Rule 144 Reporting. With a view to making
available the benefits of certain rules and regulations of the
Commission which may at any time permit the sale of
Registrable Securities to the public without registration, the
Company agrees to use its best efforts to:
(a) Make and keep public information available,
as those terms are understood and defined in Rule 144;
(b) File with the Commission in a timely manner
all reports and other documents required of the Company under
the Securities Act and the Exchange Act; and
(c) So long as HP owns any Registrable
Securities, to promptly furnish to HP (i) upon request a
written statement by the Company as to its compliance with the
reporting requirements of Rule 144, and of the Securities Act
and the Exchange Act, (ii) a copy of the most recent annual or
quarterly report of the Company, and such other publicly
available reports and documents of the Company and (iii) other
information in the possession of or reasonably obtainable by
the Company as HP may reasonably request in availing itself of
any rule or regulation of the Commission allowing HP to sell
any such securities without registration.
10. Transfer of Registration Rights. The rights to
cause the Company to register securities granted HP under
Sections 2 and 3 (and any other associated rights or benefits
described herein in connection with the right to register
securities) may be transferred or assigned in connection with
any transfer or assignment of Registrable Securities by HP
other than in a sale under Rule 144 or a registration effected
pursuant to Sections 2 or 3 of this Agreement.
11. Amendment. Any provision of this Agreement may be
amended or the observance thereof may be waived (either
generally or in a particular instance and either retroactively
or prospectively), only with the written consent of both
parties.
12. Termination of Registration Rights. The rights
granted to HP pursuant to this Agreement shall terminate at
such time as HP can sell all of its remaining Registrable
Securities within a single three-month period pursuant to Rule
144; provided, however, that if the Company alleges that HP
committed a "material breach" of Sections 7.1, 7.2, 7.4, 7.5,
7.7 or 7.9 of the Purchase Agreement, after the Company shall
have delivered written notice of any such alleged default to
HP and HP shall not have cured any such default within thirty
days after the delivery of such notice, and the Company and HP
cannot agree whether or not HP committed a "material breach"
of any of Sections 7.1, 7.2, 7.4, 7.5, 7.7 or 7.9, then
Section 5 of this Agreement shall be deemed amended to require
the Company and HP to split equally the Registration Expenses
for any subsequent registration effected under Section 2 of
this Agreement. If the Company and HP agree that HP
committed a "material breach" of Sections 7.1, 7.2, 7.4, 7.5,
7.7 or 7.9 of the Purchase Agreement, then Section 5 of this
Agreement shall be deemed amended to require Purchaser to pay
the Registration Expenses and Selling Expenses for any
subsequent registration effected under Section 2 of this
Agreement.
13. Governing Law. This Agreement and the legal
relations between the parties arising hereunder shall be
governed by and interpreted in accordance with the laws of the
State of New York. The parties hereto agree to submit to the
jurisdiction of the federal and state courts of the State of
New York with respect to the breach or interpretation of this
Agreement or the enforcement of any and all rights, duties,
liabilities, obligations, powers, and other relations between
the parties arising under this Agreement.
14. Entire Agreement. This Agreement constitutes the
full and entire understanding and agreement between the
parties regarding rights to registration. Except as otherwise
expressly provided herein, the provisions hereof shall inure
to the benefit of, and be binding upon the successors,
assigns, heirs, executors and administrators of the parties
hereto.
15, Notices and Dates. Any notice and 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):
if to the Company, at:
i-STAT Corporation
303A College Road East
Princeton, NJ 08540
Attention: President
Facsimile No.: (609) 243-0507
with a copy addressed as set forth above but to the attention of:
Paul, Hastings, Janofsky & Walker
1055 Washington Boulevard
Stamford, CT 06901
Attention: Esteban A. Ferrer, Esq.
Fax: (203) 359-3031
if to HP, at:
Hewlett-Packard Company
3000 Hanover Street
Palo Alto, CA 94304
Attention: Director, Corporate Development
Facsimile No.: (415) 852-8342
with a copy addressed as set forth above but to the attention of:
General Counsel
Facsimile No.: (415) 852-8019
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.
16. Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be an
original, but all of which together shall constitute one
instrument.
IN WITNESS WHEREOF, the undersigned have executed this
Registration Rights Agreement as of the date set forth above.
i-STAT CORPORATION
By_______________________
Name:____________________
Title:___________________
HEWLETT-PACKARD COMPANY
By:_______________________
Name: Gary B. Eichhorn
Title: Vice President and
General Manager
Medical Products Group
