<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 8-K
CURRENT REPORT:
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JUNE 22, 1998 (JUNE 16, 1998)
NU-TECH BIO-MED, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE 0-11772 25-1411971
(STATE OR OTHER JURISDICTION OF (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER
INCORPORATION) IDENTIFICATION NO.)
476 MAIN STREET, SUITE 3-DFL
WAKEFIELD, RHODE ISLAND 02879
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (401) 789-9995
<PAGE> 2
ITEM 5. OTHER EVENTS.
THIS REPORT ON FORM 8-K REFERS TO AND SUMMARIZES CERTAIN
AGREEMENTS, CONTRACTS AND DOCUMENTS RELATING TO NU-TECH BIO- MED, INC. ANY
DESCRIPTION OF THE TERMS OR PROVISIONS OF SUCH AGREEMENTS, CONTRACTS AND
DOCUMENTS DOES NOT PURPORT TO BE COMPLETE AND IN EACH INSTANCE REFERENCE IS MADE
TO THE ACTUAL AGREEMENT, CONTRACT OR DOCUMENT BEING DISCUSSED WHICH IS FILED AS
AN EXHIBIT HERETO.
On June 16, 1998, Nu-Tech Bio-Med, Inc. (the "Registrant") sold
67,500 shares(the "Shares"), representing approximately 2.7% of the issued and
outstanding capital stock of PCL, of common stock (the "Common Stock") of
Physicians Clinical Laboratory, Inc ("PCL") for the aggregate purchase price of
$750,000 to Oaktree Capital Management, LLC, acting as agent on behalf of
certain funds and accounts ("Oaktree"). The proceeds from the sale of the Shares
will be used by the Registrant for working capital. The sale of the Shares was
completed in connection with the loan (the "Loan") of $4,000,000 to PCL by
Oaktree. Following the completion of a reorganization of PCL under chapter 11 of
the Bankruptcy Code, Nu-Tech owned approximately 52.6% of the issued and
outstanding capital stock of PCL. In June 1998, PCL's business required
$4,000,000(the "Required Amount") for working capital purposes, the Registrant,
however, did not have sufficient monies available to loan the Required Amount to
PCL. Oaktree , the holder of approximately 44% of the issued and outstanding
capital stock of PCL and approximately 96% of the outstanding principal amount
of the Registrant's Senior Secured Notes due 2004, agreed to loan PCL the
Required Amount. As consideration for the Loan, PCL required and received
certain promissory notes and the right to purchase from the Shares and the right
to elect a majority of the Board of Directors of PCL. As a result of the sale of
the Shares, the Registrant and Oaktree now own 49.9% and 46.8%, respectively, of
the outstanding and issued capital stock shares of Common Stock of PCL.
In connection with the sale of the Shares, (the "Transaction")
the Registrant entered into the following agreements: (A) the Stock Purchase
Agreement, dated as of June 12, 1998 between the Registrant and Oaktree,
attached hereto as Exhibit 99.1 (the "Stock Purchase Agreement"); and (B) the
Amended and Restated Stockholders Agreement, dated as of June 12, 1998, by and
among the Registrant, PCL, Oaktree and J. Marvin Feigenbaum attached hereto as
Exhibit 99.2 (the "Stockholders Agreement"). The following is a brief discussion
of the substantive provisions of the Stockholders Agreement:
(i) Transfer Restrictions. None of the shares of Common Stock or any
securities exercisable for or convertible into the Common Stock (the
"Securities") held by the Stockholders may be transferred unless (A) the
transferee shall deliver to Registrant, a written acknowledgment that the
Securities are subject to the Stockholders Agreement; (B) such transfer shall be
made pursuant to a public offering registered under the Securities Act and in
accordance with applicable state law; (C) such transfer is made to an affiliate
of the transferring Stockholder; (D) such transfer is made by the Registrant in
a pro rata distribution of Securities to its stockholders or (E) such transfer
is made by Oaktree in a distribution to its partners. In addition, the
Stockholders agree that they will not, without the prior written consent of
Registrant, transfer any shares of Common Stock to Cerberus Partners, L.P. or
any entity which owns, directly or indirectly, 5% or more of the issued and
outstanding equity securities of any entity that conducts clinical or
specialized laboratory services as its principal business.
<PAGE> 3
(ii) Stockholder Share Purchase Rights. If the Registrant desires in
good faith to issue or transfer the securities, the Registrant shall deliver a
written notice to the proposed transfer to each Stockholder (the "Transfer
Notice"), which notice shall contain a description of the proposed transaction
and the terms thereof, and shall be accompanied by a copy of the bona fide third
party written offer. If the Registrant receives authority from its Board of
Directors, it may issue the Securities on the terms set forth in the Transfer
Notice; subsequently (except in certain circumstances set forth in the
Shareholders Agreement), the Registrant shall make the offer to sell to each
Stockholder a pro rata portion of the Securities based upon such Stockholder's
holdings of New Common Stock. Any Stockholder may, by written notice, accept
such offer, in whole or in part, within thirty (30) days after receipt of the
offer.
(iii) Composition of Board of Directors. The Board of Directors, as
specified in the Stockholders Agreement is comprised of:
Dr. Nathan Rubin
Mr. J. Marvin Feigenbaum
Mr. Matthew S. Barrett
Mr. David Sterling
Mr. Kenneth Liang
(iv) Voting Agreement. At the next annual or special meeting called
for the purpose of electing directors, each Stockholder shall elect five members
of the Board of Directors, of which two individuals shall be designated by
Nu-Tech and three individuals shall be designated by the Oaktree. If a director
designated by Oaktree or Nu-Tech vacates such position for any reason prior to
the expiration of his or her term, then Oaktree or Nu-Tech shall have the right
to nominate a replacement so long as it continues to beneficially own the
percentage of outstanding Securities specified in the Stockholders Agreement.
(v) Corporate Governance. During such time as Nu-Tech has the right
to designate Directors under the Shareholders Agreement, an affirmative vote of
at least one Director who is appointed by Nu-Tech shall be required to: (A)
authorize or propose to authorize any agreement of the Registrant other than
issuances of securities pursuant to warrants, employee benefit plans, management
incentive plans or employment agreements with officers of Registrant; (B) issue,
or propose to issue any capital stock; (C) modify or propose to modify the
Certificate of Incorporation or the Bylaws of Registrant; (D) or any security
exercisable or exchangeable for or convertible into any of its capital stock;
(E) effect or propose to effect a recapitalization or propose to or
reorganization of Registrant in any form; (F) consolidate or merge, or transfer
all or substantially all of the properties and assets of Registrant; (G) incur,
or cause any subsidiary of Registrant to incur any indebtedness or other payment
obligation out of the ordinary course of business (other than amounts borrowed
pursuant to the Loan and Security Agreement), that exceeds $1,000,000 when
aggregated with all other outstanding indebtedness of Registrant and its
subsidiary; (H) make any capital expenditure that exceeds $1,000,000 when
aggregated with all other capital expenditures in the immediately preceding
twelve month period; or (I) modify the employment agreement or otherwise approve
any compensation arrangement or other transaction for the benefit of Mr.
Feigenbaum other than as provided in the employment agreement.
-2-
<PAGE> 4
In addition, upon the affirmative vote of two directors,
Registrant shall institute claims for indemnification pursuant to the provisions
of the Stock Purchase Agreement between Registrant and Nu-Tech dated as of
September 30, 1997. The Stockholders shall take all actions necessary to cause
the Board of Directors to adopt resolutions that establish an Indemnity
Committee.
(vi) Option. Pursuant to terms of the Stockholders agreement, Nu-Tech
has granted to Oaktree an exclusive option (the "Option") to purchase all of the
Securities held at the time of exercise of such Option (the "Option Shares") by
Nu-Tech for aggregate consideration of $10,000,000 (the "Option Price"). The
Option is exercisable by Oaktree on or prior to the earlier of (x) December 31,
2000 or (y) in the event that shareholder approval of the Option is required by
the stockholders of Nu-Tech and such approval is not obtained prior to December
31, 1998 (the "Stockholder Termination Date"), then December 31, 1998. The
Option shall be exercisable for a period of ninety (90) days following each date
on which (i) one or more directors nominated by Nu-Tech fails to affirmatively
vote for any action described in section (v) above that would require the
approval of a director nominated by Nu-Tech and (ii) such action is approved by
a majority of the members of the Board of Directors (each such date, a
"Triggering Event").
Oaktree may exercise the Option by delivering written notice to
Nu-Tech of its intent to so exercise the Option and specifying the date on which
the closing of such exercise of the Option shall occur, which shall in no event
be later than ninety (90) days following the Triggering Event (the "Option
Closing"). In the event that Oaktree exercises the Option prior to the
Stockholder Termination Date and, as of such date, the Nu-Tech Stockholder
Approval has not been obtained, the Option Closing shall occur as soon as
practicable following the date on which Nu-Tech Stockholder Approval is
obtained. In the event the Nu-Tech Stockholder Approval is not obtained prior to
the Stockholder Termination Date, the exercise of the Option shall be deemed to
have not occurred and Oaktree shall have no obligation to deliver the Option
Price to Nu-Tech.
(vii) Buy-Sell Agreement. Subject to receipt of the Nu-Tech Stockholder
Approval, if necessary, from and after December 31, 2000 until the date that is
five years following the date the that Nu-Tech Stockholder Approval is obtained,
either Oaktree or Nu-Tech (the "Initiating Stockholder") may give written
notice (the "Buy/Sell Offering Notice") to the other party (the "Responding
Stockholder") of the Initiating Stockholder's intent to purchase all (but not
less than all) of the Securities that the Responding Stockholder owns.
The Initiating Stockholder shall specify in the Buy/Sell Offering
Notice the cash purchase price per share at which the Initiating Stockholder
would be willing to purchase all of the Securities that the Responding
Shareholder owns, which consideration shall not be less than $0.81 per share
(subject to adjustment to reflect any and all stock splits, stock dividends and
other combinations and reclassifications of Securities occurring following the
date of the Stockholders Agreement) and the date on which such transaction will
be consummated (which such date shall not be more than ninety (90) nor less than
fifteen (15) days after the date of receipt by the Responding Stockholder of the
Buy/Sell Offering Notice (the "Buy/Sell Closing")).
Upon receipt of the Buy/Sell Offering Notice, the Responding
Stockholder shall be obligated either:
-3-
<PAGE> 5
(i) To sell to the Initiating Stockholder for cash all of
its Securities on the date, at the price per share and on the terms set forth in
the Buy/Sell Offering Notice; or
(ii) To purchase all of the Securities owned by the
Initiating Stockholder for cash on the date, at the price per share and on the
terms set forth in the Buy/Sell Offering Notice. If the Responding Stockholder
elects to purchase the shares of the Initiating Stockholder, the offer of the
Initiating Stockholder to purchase the Responding Stockholder's shares shall be
deemed to be null and void and the Initiating Stockholder shall be deemed to
have accepted an offer by the Responding Stockholder to purchase the Initiating
Stockholder's shares at the per share purchase price proposed by the Initiating
Stockholder.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS
(a) N/A
(b) N/A
(c) EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
<S> <C>
99.1 Stock Purchase Agreement, dated as of June 12,
1998 between the Registrant and Oaktree Capital
Management, LLC, acting as agent on behalf of
certain funds and accounts ("Oaktree").
99.2 Amended and Restated Stockholders Agreement, dated
as of June 12, 1998, by and among the Registrant,
Physicians Clinical Laboratory, Inc., Oaktree and
J. Marvin Feigenbaum.
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
NU-TECH BIO-MED, INC.
By: /s/ J. Marvin Feigenbaum
-----------------------------------------
J. Marvin Feigenbaum
Chairman of the Board, President and
-4-
<PAGE> 6
Chief Executive Officer
Date: June 22, 1998
-5-
<PAGE> 1
EXHIBIT 99.1
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT dated as of June ___, 1998 (this
"Agreement") is made and entered into by and between Oaktree Capital Management,
LLC ("OCM") as agent and on behalf of certain funds and accounts listed on
Schedule I hereto (each such fund and account being referred to herein as a
"Purchaser" and collectively as the "Purchasers") and Nu-Tech Bio-Med, Inc.
("Seller").
WHEREAS, Seller owns 1,315,000 shares of common stock, par value
$.01 per share ("Common Stock"), of Physicians Clinical Laboratory, Inc., a
Delaware corporation (the "Company"), constituting approximately 52.6% of the
issued and outstanding shares of capital stock of the Company as of the date
hereof (such shares being referred to herein as the "Shares"); and
WHEREAS, Seller desires to sell, and Purchasers desire to
purchase, 67,500 of the Shares, constituting 2.7% of the issued and outstanding
shares of Common Stock, on the terms and subject to the conditions set forth in
this Agreement (the "Purchased Shares"), which will cause Purchasers and Seller
to hold the number of shares set forth opposite each such party's name on
Schedule II attached hereto.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE II
SALE OF SHARES AND CLOSING
2.2 Purchase and Sale. Against receipt of the purchase price
provided in Section 1.2 hereof, Seller hereby sells, transfers and assigns to
each Purchaser all of the right, title and interest of Seller in and to the
number of Purchased Shares set forth opposite such Purchaser's name on Schedule
I attached hereto, and each Purchaser hereby purchases from the Sellers all of
such Purchased Shares.
2.4 Purchase Price. The aggregate purchase price for the
Purchased Shares is $750,000 (the "Purchase Price"). Seller hereby acknowledges
receipt of the Purchase Price by wire transfer of immediately available funds.
EXH. 99.1 - 1
<PAGE> 2
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchasers as follows:
4.2 Organization of Seller. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the state of
its incorporation. Seller has full power and authority to execute and deliver
this Agreement and to perform its obligations hereunder and to consummate the
transactions contemplated hereby, including without limitation to own, hold,
sell and transfer (pursuant to this Agreement) the Purchased Shares.
4.4 Title to Purchased Shares. Seller owns the Purchased Shares,
and is the sole record and beneficial owner of such Purchased Shares, free and
clear of all Liens. The delivery of a certificate or certificates representing
the Purchased Shares, in genuine and unaltered form, duly endorsed in blank or
accompanied by duly executed stock powers endorsed in blank will transfer to
Purchasers good and valid title to the Purchased Shares, free and clear of all
Liens (except such as may be imposed on the Purchased Shares by the Purchasers).
4.6 Authority. The execution and delivery by Seller of this
Agreement and the performance by Seller of its obligations hereunder have been
duly and validly authorized, no other action on the part of Seller or its
stockholders being necessary. This Agreement has been duly and validly executed
and delivered by Seller and constitutes a legal, valid and binding obligation of
Seller enforceable against Seller in accordance with its terms, except to the
extent such enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
generally the enforcement of creditors' rights and (ii) the availability of
equitable remedies (whether in a proceeding in equity or at law).
4.8 No Conflicts. The execution and delivery by Seller of this
Agreement do not, and the performance by Seller of its obligations under this
Agreement and the consummation of the transactions contemplated hereby will not:
(a) conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the certificate or articles of
incorporation or by-laws (or other comparable organizational documents) of
Seller;
(b) conflict with or result in a violation or breach of any term
or provision of any Law or Order applicable to Seller or the Purchased Shares;
or
(c) (i) conflict with or result in a violation or breach of, (ii)
constitute (with or without notice or lapse of time or both) a default under,
(iii) require Seller to obtain any consent from any Person as a result or under
the terms of, or (iv) result in the creation or imposition of
EXH. 99.1 - 2
<PAGE> 3
any Lien (other than such Liens as may be created by this Agreement) upon Seller
or the Purchased Shares under, any Contract to which Seller is a party.
4.10 Governmental Approvals and Filings. No consent, approval or
action of, filing with or notice to any Governmental or Regulatory Authority on
the part of Seller is required in connection with the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby.
4.12 Legal Proceedings. There are no Actions or Proceedings
pending or, to the knowledge of Seller, threatened against, relating to or
affecting Seller (or to the knowledge of Seller, the Company) which could
reasonably be expected to result in the issuance of an Order restraining,
enjoining or otherwise prohibiting or making illegal the consummation of any of
the transactions contemplated by this Agreement.
4.14 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by Seller directly with
Purchasers without the intervention of any Person on behalf of Seller in such
manner as to give rise to any valid claim by any Person against Purchasers or
the Company for a finder's fee, brokerage commission or similar payment.
4.16 Agreements Relating to Shares. Other than documents listed
on Schedule 3.8 (the "Seller Agreements"), there are no (i) Contracts or other
arrangements concerning the acquisition, disposition or the voting of the
Purchased Shares, (ii) options with respect to the Purchased Shares, including
without limitation any form of preemptive rights or claims of third parties or
(iii) outstanding proxies, shareholder agreements, voting trusts, powers of
attorney or comparable delegations of authority concerning the Purchased Shares.
Each Seller Agreement is valid, binding and in full force and effect.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASERS
Each Purchaser, severally but not jointly, hereby represents and
warrants to Sellers as follows:
6.2 Organization. Purchaser is a limited partnership duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization. Purchaser has full power and authority to execute
and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby.
6.4 Authority. The execution and delivery by Purchaser of this
Agreement, and the performance by Purchaser of its obligations hereunder, have
been duly and validly authorized,
EXH. 99.1 - 3
<PAGE> 4
no other action on the part of Purchaser, its general partner or their
respective partners and members being necessary. This Agreement has been duly
and validly executed and delivered by Purchaser and constitutes a legal, valid
and binding obligation of Purchaser enforceable against Purchaser in accordance
with its terms, except to the extent such enforceability may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting generally the enforcement of creditors' rights and (ii)
the availability of equitable remedies (whether in a proceeding in equity or at
law).
6.6 No Conflicts. The execution and delivery by Purchaser of this
Agreement do not, and the performance by Purchaser of its obligations under this
Agreement and the consummation of the transactions contemplated hereby will not:
(a) conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the partnership agreement, articles of
organization or operating agreement (or other comparable organizational
documents) of Purchaser or its general partner;
(b) conflict with or result in a violation or breach of any term
or provision of any Law or Order applicable to Purchaser;
(c) (i) conflict with or result in a violation or breach of, (ii)
constitute (with or without notice or lapse of time or both) a default under, or
(iii) require Purchaser to obtain any consent from any Person as a result or
under the terms of, any Contract to which Purchaser is a party.
6.8 Governmental Approvals and Filings. No consent, approval or
action of, filing with or notice to any Governmental or Regulatory Authority on
the part of Purchaser is required in connection with the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby.
6.10 Legal Proceedings. There are no Actions or Proceedings
pending or, to the knowledge of Purchaser, threatened against, relating to or
affecting Purchaser which could reasonably be expected to result in the issuance
of an Order restraining, enjoining or otherwise prohibiting or making illegal
the consummation of any of the transactions contemplated by this Agreement.
6.12 Purchase for Investment. The Purchased Shares will be
acquired by Purchaser (or, if applicable, its permitted assigns hereunder) for
its own account for the purpose of investment, it being understood that the
right to dispose of such Purchased Shares shall be entirely within the
discretion of Purchaser (or such assignee, as the case may be) subject to the
Amended and Restated Stockholders dated as of even date herewith by and among
the Company, OCM as agent and on behalf of the Purchasers, the Seller and J.
Marvin Feigenbaum ("Stockholders Agreement").
EXH. 99.1 - 4
<PAGE> 5
6.14 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by Purchaser directly
with Sellers without the intervention of any Person on behalf of Purchaser in
such manner as to give rise to any valid claim by any Person against Sellers or
the Company for a finder's fee, brokerage commission or similar payment.
ARTICLE VIII
REPRESENTATIONS OF OCM
OCM represents that it has full power and authority to execute
and deliver this Agreement on behalf of the Purchasers, that the execution and
delivery by OCM of this Agreement on behalf of the Purchasers have been duly and
validly authorized and this Agreement constitutes the legal, valid and binding
obligation of Purchasers enforceable in accordance with its terms, except to the
extent such enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
generally the enforcement of creditors' rights and (ii) the availability of
equitable remedies (whether in a proceeding in equity or at law).
ARTICLE X
DEFINED TERMS
10.2 Definitions. (a) Defined Terms. As used in this Agreement,
the following defined terms have the meanings indicated below:
"Actions or Proceedings" means any action, suit, proceeding,
arbitration or Governmental or Regulatory Authority investigation or audit.
"Business Day" means a day other than Saturday, Sunday or any
other day on which banks located in the State of New York are authorized or
obligated to close.
"Company" means Physician's Clinical Laboratory, Inc., a Delaware
corporation. Unless the context requires otherwise, all references to the
Company herein shall be deemed to include all of the consolidated subsidiaries
of the Company.
"Contract" means any agreement, lease, license, evidence of
indebtedness, mortgage, indenture, security agreement or other contract (whether
written or oral).
EXH. 99.1 - 5
<PAGE> 6
"Governmental or Regulatory Authority" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States, any foreign country or any domestic or foreign state, county,
city or other political subdivision.
"Law" means all laws, statutes, rules, regulations, ordinances
and other pronouncements having the effect of law of the United States, any
foreign country or any domestic or foreign state, county, city or other
political subdivision or of any Governmental or Regulatory Authority.
"Liens" means any mortgage, pledge, assessment, security
interest, lease, lien, adverse claim, levy, charge or other encumbrance of any
kind, or any conditional sale Contract, title retention Contract or other
Contract to give any of the foregoing.
"Order" means any writ, judgment, decree, injunction or similar
order of any Governmental or Regulatory Authority (in each such case whether
preliminary or final).
"Person" means any natural person, corporation, general
partnership, limited partnership, proprietorship, other business organization,
trust, union, association or Governmental or Regulatory Authority.
ARTICLE XII
MISCELLANEOUS
12.2 Further Assurances. Sellers and Purchasers shall execute and
deliver such other documents and instruments (including officers' certificates
and opinions of counsel), provide such materials and information and take such
other actions as may be reasonably requested to cause such party to fulfill its
obligations under this Agreement.
12.4 Assignment. Subject to applicable securities laws and the
provisions of the Stockholders Agreement, Purchasers may assign their rights
pursuant to this Agreement without obtaining any consent of the Seller. Seller
may not assign any of its rights or obligations pursuant to this Agreement to
any Person without the prior written consent of the Purchasers.
12.6 Indemnification. Each of the Seller on the one hand, and the
Purchasers, severally and not jointly, on the other, shall indemnify the other
party hereto, and its respective officers, directors, employees, agents and
Affiliates, in respect of, and hold each of them harmless from and against, any
and all losses, damages, fines, fees, penalties, deficiencies and expenses
(including court costs and reasonable attorneys' fees of the prevailing party in
any dispute), or of any claim, default or assessment, incurred or sustained by
any of them or to which any of them becomes subject relating to any breach by it
of a representation or warranty or nonperformance by it of any covenant or
agreement in this Agreement. A party seeking
EXH. 99.1 - 6
<PAGE> 7
indemnification shall provide reasonable notice to the other party of its, or a
third party's, claim and give the other party the reasonable opportunity to
participate in resolution of the dispute. A party seeking indemnification shall
not be entitled to indemnification to the extent the other party is prejudiced
by a failure to provide such reasonable notice or opportunity to participate.
12.8 Survival. Except for the representations and warranties of
Seller set forth in Section 2.2 and 2.3 which shall survive indefinitely, all
warranties, representations and covenants made by each of the Seller and the
Purchasers herein or in any certificate or other instrument delivered by it or
on its behalf under this Agreement shall be considered to have been relied upon
by the other party hereto and shall survive the consummation of the transactions
contemplated hereby for a period of two years regardless of any investigation
made by or on behalf of the other party hereto. All statements in any such
certificate or other instrument so delivered shall constitute representations
and warranties by the parties hereunder.
12.10 Notices. All communication under this Agreement shall be in
writing and shall be personally delivered, sent by facsimile transmission or
mailed by first class mail, postage prepaid:
i) if to the Seller
NU-TECH BIO-MED, INC.
Attn: Mr. J. Marvin Feigenbaum
476 Main Street
Wakefield, Rhode Island 02879
Fax: 401-789-9934
ii) if to the Purchasers, to
OAKTREE CAPITAL MANAGEMENT, LLC
Attn: Mr. Matthew Barrett
550 S. Hope Street, 22nd Floor
Los Angeles, California 90071
Fax: 213-694-1599
or at such other address as the appropriate party to this Agreement may have
furnished in writing to each other party hereto.
Any notice shall be deemed to have been duly given when delivered by hand if
personally delivered, by confirmation of completed facsimile transmission if
delivered by facsimile, and if sent by mail, two (2) Business Days after being
deposited in the mail, postage prepaid.
EXH. 99.1 - 7
<PAGE> 8
12.12 Entire Agreement. This Agreement supersedes all prior
discussions and agreements between the parties with respect to the subject
matter hereof, and contains the sole and entire agreement between the parties
hereto with respect to the subject matter hereof.
12.14 Amendment. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each
party hereto.
12.16 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to a
Contract executed and performed in such State, without giving effect to the
conflicts of laws principles thereof.
12.18 Counterparts. This Agreement may be executed in any number
of counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
12.20 Limitation of Liability. Each of the parties hereto
acknowledges that in no event shall any of the partners, officers, directors,
shareholders, employees, agents, affiliates or investment managers (collectively
"Representatives") of OCM, as agent and on behalf of the funds and accounts set
forth on Schedule I attached hereto (the "Funds"), have any obligation or
liability to such party for any action taken or omitted by or on behalf of such
Funds or in connection herewith (such obligation and liability being the sole
responsibility of such Funds). Each party hereto further acknowledges and agrees
that (a) all obligations and liabilities of each Fund under this Agreement or in
connection herewith are enforceable solely against such Fund and its assets and
not against the assets of OCM, any other Fund or any Representatives of OCM and
(b) the obligations and liabilities of each Fund shall be several in the
proportions set forth on Schedule I hereto and not joint and several.
EXH. 99.1 - 8
<PAGE> 9
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officer of each party hereto as of the date
first above written.
NU-TECH BIO-MED, INC.
------------------------------
Name:
Title:
OAKTREE CAPITAL MANAGEMENT,
LLC, as agent and on behalf of certain
funds and accounts
------------------------------
Name:
Title:
------------------------------
Name:
Title:
EXH. 99.1 - 9
<PAGE> 10
SCHEDULE I
FUNDS AND ACCOUNTS
<TABLE>
<S> <C>
OCM Opportunities Fund, L.P. 54.0%
Columbia/HCA Master Retirement Trust 4.0%
(Separate Account I)
OCM Opportunities Fund II, L.P. 41.0%
Columbia/HCA Master Retirement Trust 1.0%
(Separate Account II)
</TABLE>
EXH. 99.1 - 10
<PAGE> 11
SCHEDULE II
<TABLE>
<CAPTION>
STOCKHOLDER SECURITIES
- ----------- ----------
<S> <C>
Nu-Tech Bio-Med, Inc. 1,247,500
OCM Opportunities Fund, L.P.
Columbia/HCA Master Retirement Trust
(Separate Account I)
OCM Opportunities Fund II, L.P.
Columbia/HCA Master Retirement Trust
(Separate Account II)
</TABLE>
EXH. 99.1 - 11
<PAGE> 1
EXHIBIT 99.2
AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
This AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (this
"Agreement") is made and entered into as of June __, 1998, by and among
Physicians Clinical Laboratory, Inc., a Delaware corporation (the "Company"),
and each of the entities listed under the caption "Stockholders" on the
signature pages hereof (collectively, the "Stockholders").
W I T N E S S E T H
WHEREAS, the Stockholders acquired the Securities (as defined
below) in exchange for claims against the Company that were relieved pursuant to
the Company's Plan of Reorganization approved by a court of appropriate
jurisdiction (the "Plan") or in connection with compensation arrangements
between the Company and such Stockholder or pursuant to a purchase of Securities
from other Stockholders;
WHEREAS, in connection with the acquisition of the Securities by
the Stockholders, the Company and certain of the Stockholders entered into that
certain Stockholders Agreement dated as of September 30, 1997 (the "Initial
Agreement");
WHEREAS, since the date of execution of the Initial Agreement,
certain of the Stockholders have sold a portion of their Securities to other
Stockholders;
WHEREAS, the Company and the Stockholders have agreed that it is
in the best interests of the parties hereto to amend and restate the Initial
Agreement to reflect the agreements among the Company and the Stockholders
resulting from the changes in relative holdings of the Stockholders;
WHEREAS, on the date hereof the Stockholders own the Securities
in the number of shares and percentage of outstanding Securities set forth in
Schedule I; and
WHEREAS, the Company and the Stockholders deem it to be in their
best interests to provide for continuity in the control and operation of the
Company and for various other matters set forth herein.
NOW, THEREFORE, in consideration of the agreements and mutual
covenants set forth herein, the parties agree as follows:
SECTION (a) DEFINITIONS. As used in this Agreement, the
following terms have the following meanings:
EXH. 99.2 - 1
<PAGE> 2
"15% Notes" has the meaning assigned to such term in
Section 8(d).
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise;
provided that beneficial ownership of 10% or more of the voting stock of a
Person shall be deemed to be control.
"Agreement" means this Agreement, as the same shall be amended
from time to time.
"Articles" means the Certificate of Incorporation of the Company
as in effect on the date hereof and, following the date of filing with the
Secretary of State of the State of Delaware, the Certificate of Incorporation as
amended and restated in the form attached hereto as Exhibit A.
"Business Day" means a day other than Saturday, Sunday or any
other day on which banks located in the State of California or New York are
authorized or obligated to close.
"Buy/Sell Offering Notice" has the meaning assigned to such term
in Section 8(a).
"Buy/Sell Closing" has the meaning assigned to such term in
Section 8(b).
"Cerberus" means Cerberus Partners, L.P. and any Affiliate of
Cerberus.
"Common Stock" means the Company's common stock, $0.01 par value
per share.
"Company" has the meaning assigned to such term in the preamble.
"Company Transferee" has the meaning assigned to such term in
Section 3(a).
"Company Transfer Notice" has the meaning assigned to such term
in Section 3(a).
"Company Transfer Securities" has the meaning assigned to such
term in Section 3(a).
"Employment Agreement" means that certain Employment Agreement
dated as of September 30, 1997 by and between the Company and J. Marvin
Feigenbaum, as amended.
"Exchange Act" has the meaning assigned to such term in
Section 4(a).
"Initiating Stockholder" has the meaning assigned to such term in
Section 8(a).
"Initial Public Offering" means the public offering of shares of
Common Stock of the Company pursuant to a Registration Statement in a
transaction where (A) the aggregate Proceeds to be paid to the Company in such
public offering (aggregated with the proceeds paid to the Company in any prior
public offerings of shares of Common Stock of the Company in any prior public
offerings of
EXH. 99.2 - 2
<PAGE> 3
shares of Common Stock of the Corporation pursuant to a Registration Statement)
are not less than $10,000,000 and (B) the number of shares of Common Stock sold
pursuant to such Registration Statement (aggregated with the shares previously
sold pursuant to any Registration Statement filed by the Company, including in
each case any shares sold or to be sold by selling shareholders) is not less
than fifteen percent (15%) of the fully-diluted number of outstanding shares of
Common Stock after giving pro forma effect to such Initial Public Offering.
"Nu-Tech" means Nu-Tech Bio-Med, Inc.
"Nu-Tech Stockholder Approval" has the meaning assigned to such
term in Section 9.
"Oaktree Holders" has the meaning assigned to such term in
Section 4(a).
"OCM" has the meaning assigned to such term in Section 4(a).
"Offer to Sell" has the meaning assigned to such term in
Section 3(b).
"Option" has the meaning assigned to such term in Section 6(a).
"Option Closing" has the meaning assigned to such term in
Section 6(b).
"Option Price" has the meaning assigned to such term in
Section 6(a).
"Option Shares" has the meaning assigned to such term in
Section 6(a).
"Person" shall mean any individual, corporation, partnership,
limited liability company, joint venture, association, joint stock company,
trust, unincorporated organization or government or agency or political
subdivision thereof.
"Proceeds" shall mean the proceeds of the Company in a public
offering net of underwriting discounts and commissions and before deducting any
other expenses payable by the Company.
"Pro Rata" shall mean, with respect to any offer of shares of
Common Stock or securities exercisable or convertible into shares of Common
Stock, an offer based on the relative percentages of Common Stock then held by
or issuable to all of the Stockholders to whom such offer is made.
"Public Offering" means any offering of Common Stock to the
public, including the Initial Public Offering, either on behalf of the Company
or any of its stockholders, pursuant to an effective Registration Statement
under the Securities Act.
"Qualifying Acquisition" has the meaning assigned to such term in
Section 3(a).
"Registration Statement" means a registration statement filed by
the Company pursuant to the Securities Act, other than registrations on Form S-8
or Form S-4 or any other registration form to be used for a business combination
or any successor form to either of such forms.
"Resolutions" has the meaning assigned to such term in
Section 5(b).
EXH. 99.2 - 3
<PAGE> 4
"Responding Stockholder" has the meaning assigned to such term in
Section 8(a).
"Securities" shall mean the shares of Common Stock and any
securities exercisable for or convertible into shares of Common Stock, and
whenever an amount of Securities is calculated or used in any provision of this
Agreement, exercisable and convertible securities shall be counted as the number
of shares of Common Stock issuable upon such exercise or conversion.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Stockholders" has the meaning assigned to such term in the
preamble.
"Stockholder Termination Date" has the meaning assigned to such
term in Section 9.
"Stock Purchase Agreement" has the meaning assigned to such term
in Section 5(b).
"Transfer" has the meaning assigned to such term in Section 2(a).
"Transfer Notice" has the meaning assigned to such term in
Section 2.
"Triggering Event" has the meaning assigned to such term in
Section 6(a).
"Voting Stock" has the meaning assigned to such term in
Section 3(a).
"Warrants" means the warrants issued pursuant to the Plan.
SECTION (A) GENERAL PROVISIONS REGARDING TRANSFER.
i)General Restrictions. Subject to
Section 14(g), so long as this Agreement shall remain in force, none of the
Securities may be issued, sold, assigned, transferred, given away or in any way
disposed of by the Stockholders (any of the foregoing being hereinafter referred
to as a "Transfer") unless:
(i) the Person in whose favor such Transfer is made shall
deliver to the Company a written acknowledgment that the Securities to be
transferred are subject to this Agreement and that such Person and such Person's
successors in interest are bound hereby on the same terms as the Transferor of
such Securities, but prior to any such Transfer, the Person proposing to make
such Transfer shall give the Company (1) notice describing the manner and
circumstances of the proposed Transfer and (2) if reasonably requested by the
Company, a written opinion in form and substance reasonably satisfactory to
legal counsel of the Company to the effect that the proposed Transfer may be
effected without registration under the Securities Act or any applicable state
law;
(ii) such Transfer shall be made pursuant to a public
offering registered under the Securities Act and in accordance with applicable
state law;
(iii) such Transfer is made to a Person who is an
Affiliate of the transferring Stockholder;
EXH. 99.2 - 4
<PAGE> 5
(iv) such Transfer is made by Nu-Tech in a pro rata
distribution of Securities to its stockholders; or
(v) such Transfer is made by the Oaktree Holders in a
distribution of Securities to its partners.
Any attempted Transfer other than in accordance with this Agreement shall be
void, and the Company shall refuse to recognize any such Transfer and shall not
reflect on its records any change in record ownership of the Securities pursuant
to any such attempted Transfer.
(a) Mechanics of Transfer. Any Stockholder
who Transfers Securities shall (i) take all such actions and execute and deliver
all such documents as may be necessary or reasonably requested by the Company in
order to consummate the Transfer of such Securities and (ii) pay to the Company
such amounts as may be required for any applicable stock transfer taxes.
(b) Restrictions on Transfers by
Stockholders. Each of the Stockholders hereby agrees that, so long as this
Agreement is in effect, it will not, without the prior written consent of the
Company, sell or otherwise transfer any of the shares of Common Stock held by
such Stockholder to Cerberus or any entity, other than a Stockholder, which
owns, directly or indirectly, 5% or more of the issued and outstanding equity
securities of any entity that conducts clinical or specialized laboratory
services as its principal business.
SECTION (c) PREEMPTIVE RIGHTS. If the Company
proposes to issue or otherwise Transfer any Securities to any Person, then the
Company shall make the offer to sell and otherwise comply with the requirements
set forth in this Section 3. Notwithstanding the foregoing, (A) the Company may
Transfer Securities, and any right, title or interest therein, without making
the offer to sell set forth in this Section 3 in connection with (i) an Initial
Public Offering, (ii) the issuance of up to 200,000 shares of Common Stock to
management and employees of the Company pursuant to the Company's 1997 Equity
and Performance Incentive Plan or any other incentive plan which provides for
the issuance of Securities exclusively to directors, officers or employees of
the Company, (iii) the issuance of shares of Common Stock pursuant to the
Employment Agreement and the Warrants or (iv) an issuance of Securities in
consideration for and upon consummation of (x) a merger with respect to which
the holders of Voting Stock immediately prior to such merger beneficially own
not less than a majority of the issued and outstanding shares of Voting Stock of
the surviving entity or (y) an acquisition of assets or stock by the Company so
long as, in either the case of (x) or (y), such transaction has been approved by
the affirmative vote of at least one director appointed by Nu-Tech if, at the
time such merger is consummated, Nu-Tech has the right to nominate directors
pursuant to Section 4 hereof and the approval of the transaction by such
director is required pursuant to Section 5 hereof (a "Qualifying Acquisition")
and (B) any rights or obligations pursuant to this Section 3 shall terminate
upon an Initial Public Offering. For purposes of this Section 3, "Voting Stock"
shall mean stock of the Company of any class or series entitled to vote
generally in the election of directors of the Company.
(d) Transfer Notice. If the Company desires
in good faith to Transfer any Securities to any Person and the Company is
required to make an offer to sell pursuant to paragraph (a) of this Section 3,
the Company shall deliver a written notice of the proposed Transfer (the
"Company Transfer Notice") to each Stockholder. The Company Transfer Notice
shall contain a description of the proposed transaction and the terms thereof
including the number of Securities and type of Securities proposed to be
transferred (collectively, the "Company Transfer Securities"), the name of each
person to whom or in favor of whom the proposed Transfer is to be made (the
"Company
EXH. 99.2 - 5
<PAGE> 6
Transferee") and a description of the consideration to be received by
the Company upon Transfer of the Company Transfer Securities. The Company
Transfer Notice shall be accompanied by a copy of the bona fide third party
written offer (for purposes of this Section 3, an executed letter of intent
stating the terms of such offer, or incorporating by reference a separate
summary of terms, shall be deemed a written offer). On a day that is not earlier
than ten (10) days following the delivery of the Company Transfer Notice and
after having received the requisite approval from the Board of Directors, the
Company may issue the Company Transfer Securities to the Company
Transferee on the terms set forth in the Company Transfer Notice.
(e) Terms of Offer. Upon completion of the
issuance of the Company Transfer Securities referred to in paragraph (b) above,
the Company shall deliver a written offer to sell (the "Offer to Sell") to each
Stockholder a Pro Rata portion of the Company Transfer Securities based upon
such Stockholder's holdings of Common Stock. The Offer to Sell shall be on the
same terms and conditions, and shall be for the same consideration, as described
in the Company Transfer Notice; provided, however, that any such Stockholder
may, at its option, pay fair market value in cash in lieu of any non-cash
consideration.
(f) Acceptance of Offer. For a period of
thirty (30) days after receipt of an Offer to Sell, any Stockholder may, by
written notice to the Company, accept the Offer to Sell in whole or in part.
(g) Transfer of Shares. Transfers of
Securities pursuant to offers made and accepted in accordance with this Section
3 shall occur simultaneously on a Business Day not more than sixty (60) days
after the last date on which any offer made in accordance with this Section 3
could have been accepted and each such Transfer shall be made in accordance with
Sections 2(a) and (b).
SECTION (h) BOARD OF DIRECTORS.
i) Designated Directors. The
Board of Directors of the Company shall consist of the following members:
Dr. Nathan Rubin
Mr. J. Marvin Feigenbaum
Mr. Matthew S. Barrett
Mr. David Sterling
Mr. Kenneth Liang
Each of such director shall hold office until the next annual or special meeting
called on or after the date one year from the date hereof for the purpose of
electing directors in accordance with the provisions of the Company's Bylaws.
Thereafter, each Stockholder shall cause all Securities that are entitled to
vote and are beneficially owned by such Stockholder or its Affiliates, with
respect to which such Stockholder or its Affiliates may direct the voting, or
that are registered in the name of such Stockholder or its Affiliates to be
voted as required, and will otherwise take or cause to be taken all such other
action as may be necessary,
(a) to cause the Board of Directors of the Company to consist of
five (5) members, and (until such time as Nu-Tech and its
Affiliates no longer beneficially own at least 20% of the issued
and outstanding Common Stock, to elect two individuals designated
in writing by Nu-Tech, as members
EXH. 99.2 - 6
<PAGE> 7
of the Board of Directors, and (until such time as (A) funds and
accounts managed by Oaktree Capital Management, LLC ("OCM") and
their respective Affiliates (collectively, the "Oaktree Holders")
no longer beneficially own more than 30% of the issued and
outstanding Common Stock or (B) any "person" (as defined in
Section 13(a) of the Exchange Act of 1934, as amended (the
"Exchange Act")) or a "group" (as defined in Section 13(a)(3) and
14(a)(2) of the Exchange Act), other than Nu-Tech and its
Affiliates, holds a number of shares of Common Stock of the
Company that is greater than the number of shares of Common Stock
of the Company held by the Oaktree Holders, to elect three
individuals designated in writing by OCM; provided, that the
requirement that the Oaktree Holders or Nu-Tech and its
Affiliates beneficially own more than 30% or 20%, respectively,
of the issued and outstanding Common Stock shall be adjusted in
the event of the issuance by the Company of shares of Common
Stock in a Qualifying Acquisition such that the percentage of the
issued and outstanding Common Stock required to be beneficially
owned by the Oaktree Holders or Nu-Tech and its Affiliates, as
applicable, following such issuance of Common Stock shall be
equal to the quotient determined by dividing (x) the aggregate
number of shares of Common Stock that equals the specified
percentage of the issued and outstanding shares of Common Stock
as of the date hereof by (y) the sum of (I) the number of shares
of Common Stock issued and outstanding as of the date hereof plus
(II) the number of shares of Common Stock issued in such
Qualifying Acquisition, plus (III) the number of shares of Common
Stock issued in all previously consummated Qualifying
Acquisitions.
(i) Filling Vacancies, etc. At such time as
a vacancy is created on the Board of Directors by the death, removal or
resignation of any one of the directors, the remaining directors shall meet in
person or by telephone for the purpose of approving and appointing a director to
fill such vacancy in accordance with the provisions of the Bylaws of the
Company. Notwithstanding the foregoing sentence, if a director designated by OCM
or Nu-Tech, as the case may be, resigns or is removed from or vacates such
position for any reason prior to the expiration of his or her term as a director
of the Company, then, OCM or Nu-Tech, respectively, shall have the right to
nominate a replacement designee so long as it continues to beneficially own not
less than the applicable percentage of outstanding Securities set forth in
paragraph (a) of this Section 4, and the other Stockholders shall cause the
directors to elect such replacement designee to the Board of Directors or the
Stockholders shall vote their Securities at any regular or special meeting
called for the purpose of filling positions on the Board of Directors, or in any
written consent executed in lieu of such a meeting of stockholders, and shall
take all other actions necessary, to ensure the election to the Board of
Directors of such replacement designee to fill the unexpired term of the
director whom such new designee is replacing. Each director elected to the
initial Board of Directors and each nominee to the Board of Directors shall
provide each of the Stockholders with his or her resume prior to such time as he
or she is elected to the Board of Directors.
(j) Voting Agreement. All parties to this
Agreement agree that this Section 4 shall constitute a voting agreement within
the meaning of Section 218 of the Delaware General Corporation Law.
(k) Termination. The rights and obligations
of the Stockholders pursuant to this Section 4 shall terminate on the date that
is the earlier of (i) ten years from the date hereof and (ii) the date on which
Nu-Tech ceases to own at least 20% of the issued and outstanding shares of
Common Stock held by Nu-Tech on the date hereof.
EXH. 99.2 - 7
<PAGE> 8
SECTION (l) CORPORATE GOVERNANCE.
i) During such time as Nu-Tech has
the right to appoint directors pursuant to Section 4 hereof, the affirmative
vote of at least one director appointed by Nu-Tech pursuant to Section 4 hereof
shall be required to:
ii) authorize, issue or enter into,
or proposing to authorize, issue or enter into, any agreement, including,
without limitation, options, warrants or other rights providing for the issuance
or sale (contingent or otherwise) of any equity securities or any notes or debt
securities containing equity features (including, without limitation, any notes
or debt securities convertible into or exchangeable for equity securities, or
containing provisions that set or provide a mandatory formula for determining,
directly or indirectly, the participation in earnings and profits, or options,
warrants or rights to acquire securities exchangeable or exercisable for any
such securities) of the Company other than issuances of securities pursuant to
the Warrants, employee benefit plans, management incentive plans or employment
agreements with officers of the Company;
iii) issue, or propose to issue, any
capital stock whether of the same series as, or of a different series from, the
Securities;
iv) supplement, modify, amend,
rescind, alter or restate, or propose to supplement, modify, amend, rescind,
alter or restate, in any manner the Articles or the By-Laws of the Company;
v) directly or indirectly, redeem,
purchase or otherwise acquire, or propose to redeem, purchase or otherwise
acquire, any of its capital stock, including any options, warrants or rights to
acquire any of its capital stock, or any security exercisable or exchangeable
for or convertible into any of its capital stock, directly or indirectly;
vi) liquidate or dissolve or propose
to liquidate or dissolve, or effecting, or propose to effect, a recapitalization
or reorganization of the Company in any form of transaction;
vii) consolidate or merge, or
propose to consolidate or merge, with or into any other Person or transfer (by
lease, assignment, sale or otherwise) all or substantially all of the properties
and assets of the Company, in a single transaction or through a series of
related transactions;
viii) incur, or cause any subsidiary
of the Company to incur, after the date hereof, any indebtedness or other
payment obligation out of the ordinary course of business (other than amounts
borrowed pursuant to that certain Loan and Security Agreement dated as of
September 30, 1997, by and between Bio-Cypher Funding Corp., a Delaware
corporation, and Daiwa Healthco-2, LLC, as in effect on the date hereof) that,
when aggregated with all other then outstanding indebtedness of the Company and
its subsidiaries incurred after the date hereof and payment obligations of the
Company and its subsidiaries incurred after the date hereof, exceeds $1,000,000;
ix) make any Capital Expenditure (as
hereinafter defined) after the date hereof that, when aggregated with all other
Capital Expenditures made in the immediately preceding twelve (12) month period,
which initial twelve (12) month period shall begin on
EXH. 99.2 - 8
<PAGE> 9
the date hereof, exceed $1,000,000. As used herein, "Capital Expenditure" means
expenditures made in connection with the purchase, construction or improvement
of items properly categorized, in accordance with generally accepted accounting
principles, on the balance sheet of the Company as property, plant or equipment,
but not including any Capital Expenditures that are made out of the proceeds of
casualty insurance covering any property, plant and equipment of the Company; or
x) modify, amend, extend or renew
the Employment Agreement or otherwise approve any compensation arrangement or
other transaction for the benefit of Mr. Feigenbaum other than as provided in
the Employment Agreement;
provided, however, that the affirmative vote of a director appointed by Nu-Tech
shall not be required to approve any of the foregoing actions following the
Stockholder Termination Date (as defined herein) if the Nu-Tech Stockholder
Approval has not been obtained prior to the Stockholder Termination Date; and,
provided further, that if, prior to the Stockholder Termination Date, both of
the directors nominated by Nu-Tech fail to affirmatively vote for any action
described in this Section 5(a) and the action is approved by a majority of the
directors constituting the Board of Directors, then the Company may take such
action despite the provisions of this Section 5(a) if OCM notifies Nu-Tech in
writing that it has elected to exercise the Option described in Section 6
hereof.
(m) During such period of time as
indemnification claims may be instituted pursuant to that certain Stock Purchase
Agreement by and between the Company and Nu-Tech dated as of February 24, 1997
(the "Stock Purchase Agreement") and notwithstanding anything to the contrary
contained in the General Corporation Law of the State of Delaware or the
contrary vote of directors constituting the majority of the Board of Directors,
upon the affirmative vote of two directors, the Company shall institute claims
for indemnification pursuant to Section 10.6 of the Stock Purchase Agreement. In
furtherance of the foregoing, the Stockholders shall take or cause to be taken
all action as may be necessary to cause the Board of Directors to adopt
resolutions substantially in the form attached hereto as Exhibit A (the
"Resolutions"), which Resolutions shall establish an Indemnity Committee
composed of two Directors designated by OCM and, so long as Nu-Tech is entitled
to designate Directors pursuant to Section 4 hereof, one Director designated by
Nu-Tech, which committee shall have the sole authority to institute such claims
for indemnification and which committee shall cease to be a committee of the
Board of Directors of the Company at such time as the Company is no longer
permitted to institute claims for indemnification pursuant to the Stock Purchase
Agreement. Further, the Stockholders shall take or cause to be taken all action
as may be necessary to ensure that the Resolutions are not amended or rescinded,
and that no resolutions inconsistent therewith are adopted by the Board of
Directors, until the expiration of the term of the Indemnity Committee as set
forth in the Resolutions. In addition, the Company shall reimburse any such
director for the reasonable costs and expenses incurred by such director in
prosecuting claims instituted on behalf of the Company pursuant to the
provisions of this Section 5(b) and shall, to the fullest extent permitted by
Delaware law and the certificate of incorporation and bylaws of the Company,
indemnify and hold harmless such director for any liability incurred in
connection with the initiation or prosecution of such claims.
SECTION (n) OPTION.
(o) Nu-Tech hereby grants to OCM an
exclusive option (the "Option"), exercisable in OCM's sole and absolute
discretion, to purchase all of the Securities held at the time of exercise of
such Option (the "Option Shares") by Nu-Tech for aggregate consideration of
$10,000,000 (the "Option Price"). The Option is exercisable by OCM on or prior
to the earlier of (x)
EXH. 99.2 - 9
<PAGE> 10
December 31, 2000 or (y) if the Nu-Tech Stockholder Approval is not obtained
prior to the Stockholder Termination Date, the Stockholder Termination Date and
in each case shall be exercisable for a period of ninety (90) days following
each date on which (i) one or more directors nominated by Nu-Tech fails to
affirmatively vote for any action described in Section 5(a) of this Agreement
that would, pursuant to the terms of Section 5(a) of this Agreement, require the
approval of a director nominated by Nu-Tech and (ii) such action is approved by
a majority of the members of the Board of Directors (each such date, a
"Triggering Event").
(p) OCM may exercise the Option by
delivering written notice to Nu-Tech of its intent to so exercise the Option and
specifying the date on which the closing of such exercise of the Option shall
occur, which shall in no event be later than ninety (90) days following the
Triggering Event (the "Option Closing"). In connection with the exercise of the
Option and the Option Closing, Nu-Tech will make such representations and
warranties as are customary in similar transactions and as may be reasonably
requested by OCM regarding ownership of, and ability to transfer, the shares of
Common Stock subject to the Option. At the Option Closing, Nu-Tech shall sell,
transfer and assign, and OCM, or its designees, shall purchase, all of Nu-Tech's
right, title and interest in and to the Option Shares and OCM or its designees,
will pay the Option Price by wire transfer of immediately available funds to
such account or accounts as Nu-Tech may reasonably direct by written notice
delivered to OCM, or its designees, by Nu-Tech at least one Business Day before
the date of the Option Closing. Simultaneously with the receipt of the Option
Price, Nu-Tech will assign and transfer to OCM, or its designees, all of
Nu-Tech's right, title and interest in and to the Option Shares by delivering to
OCM a certificate or certificates representing the Option Shares, in genuine and
unaltered form, duly endorsed in blank with requisite stock transfer tax stamps,
if any, attached. In the event that OCM exercises the option described herein
prior to the Stockholder Termination Date and, as of such date, the Nu-Tech
Stockholder Approval has not been obtained, the Option Closing shall occur as
soon as practicable following the date on which Nu-Tech Stockholder Approval is
obtained and at such closing Nu-Tech shall transfer and deliver to OCM or its
designees all right, title and interest in the Option Shares as described in
this Section 6 together with all property or cash received by Nu-Tech as
distributions from the Company following the date on which OCM exercises the
Option and prior to the date on which the Option Closing occurs; provided that
in the event the Nu-Tech Stockholder Approval (as defined in Section 9) is not
obtained prior to the Stockholder Termination Date, the exercise of the Option
shall be deemed to have not occurred and OCM shall have no obligation to deliver
the Option Price to Nu-Tech. The obligations of Nu-Tech pursuant to this Section
6 shall be binding upon any transferees of any Securities held by Nu-Tech and
the successors in interest of Nu-Tech.
SECTION (q) VOTING AGREEMENT.
Feigenbaum hereby agrees that in the event that following the
purchase by Oaktree Holders of the Option Shares pursuant to the provisions of
Section 6 hereof or the purchase by the Oaktree Holders of Securities held by
Nu-Tech pursuant to Section 8 hereof, the Oaktree Holders beneficially own less
than 90% of the issued and outstanding shares of Common Stock, Feigenbaum and
each of his successors and transferees shall vote or cause to be voted all
Securities held by Feigenbaum and each of his successors and transferees as
directed by OCM and Feigenbaum will, and will cause each of his successors and
transferees to, execute such proxies and take all action deemed necessary by OCM
to cause such Securities to be so voted. The parties agree that this Section 7
shall constitute a voting agreement within the meaning of Section 218 of the
Delaware General Corporation Law.
EXH. 99.2 - 10
<PAGE> 11
SECTION (r) BUY-SELL AGREEMENT.
(s) Subject to receipt of the Nu-Tech
Stockholder Approval, from and after December 31, 2000 until the date that is
five years following the date the that Nu-Tech Stockholder Approval is obtained,
either OCM or Nu-Tech (the "Initiating Stockholder") may give written notice
(the "Buy/Sell Offering Notice") to the other party (the "Responding
Stockholder") of the Initiating Stockholder's intent to rely on this Section 8
and to purchase all (but not less than all) of the Securities that the
Responding Stockholder owns, whereupon the provisions set forth in this Section
8 shall apply.
(t) The Initiating Stockholder shall specify
in the Buy/Sell Offering Notice the cash purchase price per share at which the
Initiating Stockholder would be willing to purchase all of the Securities that
the Responding Shareholder owns, which consideration shall not be less than
$0.81 per share (subject to adjustment to reflect any and all stock splits,
stock dividends and other combinations and reclassifications of Securities
occurring following the date of this Agreement) and the date on which such
transaction will be consummated (which such date shall not be more than ninety
(90) nor less than fifteen (15) days after the date of receipt by the Responding
Stockholder of the Buy/Sell Offering Notice (the "Buy/Sell Closing")). "Cash"
for purposes of this Agreement shall mean same-day funds denominated in U.S.
dollars. In connection with the Buy/Sell Closing, the participating Stockholders
will make such representations and warranties as are customary in similar
transactions and as may be reasonably requested by the other party to such
transaction, including representations regarding ownership of, ability to
transfer and ability to purchase the Securities. At the Buy/Sell Closing, the
selling Stockholder shall sell, transfer and assign, and the purchasing
Stockholder, or its designees, shall purchase, all of the selling Stockholder's
right, title and interest in and to the Common Stock. At the Buy/Sell Closing,
the purchasing Stockholders will pay the purchase price by wire transfer of
immediately available funds to such account or accounts as selling Stockholder
may reasonably direct by written notice delivered to the purchasing Stockholder
by the selling Stockholder at least one Business Day before the date of the
Buy/Sell Closing. Simultaneously, the selling Stockholder will assign and
transfer to the purchasing Stockholder, all of the selling Stockholder's right,
title and interest in and to the Common Stock by delivering a certificate or
certificates representing such shares, in genuine and unaltered form, duly
endorsed in blank with requisite stock transfer tax stamps, if any, attached.
(u) Upon receipt of the Buy/Sell Offering
Notice, the Responding Stockholder shall be obligated either:
i) To sell to the Initiating
Stockholder for Cash all of its Securities on the date, at the price per share
and on the terms set forth in the Buy/Sell Offering Notice; or
ii) To purchase all of the
Securities owned by the Initiating Stockholder for cash on the date, at the
price per share and on the terms set forth in the Buy/Sell Offering Notice. If
the Responding Stockholder elects to purchase the shares of the Initiating
Stockholder, the offer of the Initiating Stockholder to purchase the Responding
Stockholder's shares shall be deemed to be null and void and the Initiating
Stockholder shall be deemed to have accepted an offer by the Responding
Stockholder to purchase the Initiating Stockholder's shares at the per share
purchase price proposed by the Initiating Stockholder.
EXH. 99.2 - 11
<PAGE> 12
The Responding Stockholder shall notify the Initiating Stockholder of its
election within thirty (30) days after receipt of the Buy/Sell Offering Notice.
Failure to give notice within the required time period shall be deemed an
election by the Responding Stockholder to sell its shares under subsection (a)
above.
(v) Notwithstanding anything to the contrary
herein, the obligations of OCM and the Oaktree Holders to sell Securities
pursuant to this Section 8 shall be conditioned upon the payment in full and in
cash by the Company of all unpaid principal and accrued and unpaid interest with
respect to the 15% Senior Secured Notes (the "15% Notes") of the Company due
2001 then outstanding (including all 15% Notes issued in payment of interest
obligations on the 15% Notes).
(e) The obligations of Nu-Tech pursuant to this Section 6 shall
be binding upon any transferees of any Securities held by Nu-Tech and the
successors in interest of Nu-Tech.
SECTION (w) NU-TECH STOCKHOLDER APPROVAL. Nu-Tech
hereby agrees to use its best efforts to obtain all necessary approvals of the
stockholders of Nu-Tech for the transactions described in Section 6 and Section
8 of this Agreement (the "Nu-Tech Stockholder Approval") as promptly as
practicable and in any event prior to the date that is the earlier of (a) one
hundred and twenty (120) days following the date on which the audit of Nu-
Tech's financial statements for the year ended March 31, 1998 has been completed
and (b) December 31, 1998 (the "Stockholder Termination Date").
SECTION (x) CERTIFICATE OF INCORPORATION.
Each of the parties hereto agrees that the Amended and Restated
Certificate of Incorporation attached hereto as Exhibit A is approved as the
Certificate of Incorporation of the Company and the parties hereto agree that
such Amended and Restated Certificate of Incorporation shall be filed with the
Secretary of State of the State of Delaware as promptly as practicable following
the earlier of the date on which the Company is in good standing in the State of
Delaware or the date on which the Secretary of State of the State of Delaware
shall accept such document for filing.
SECTION (y) CERTIFICATES.
(z) Restrictive Endorsements. Each
certificate evidencing any Securities shall bear a legend in substantially the
following form:
"The securities evidenced by this certificate are subject to an Amended
and Restated Stockholders Agreement dated as of June 12, 1998, copies of
which are on file at the principal office of the Company and will be
furnished to the holder on request to the Secretary of the Company. Such
Stockholders Agreement provides, among other things, for certain prior
rights to purchase and certain obligations to sell and to purchase the
shares represented by this certificate and certain restrictions on
voting, sale, transfer, pledge, hypothecation or other disposition of
the securities evidenced by this certificate. By accepting the shares of
stock represented by this certificate the holder agrees to be bound by
such Stockholder's Agreement"
(aa) Replacement Certificates. Upon receipt
by the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of any certificate evidencing any Securities, and (in
the case of loss, theft or destruction) of indemnity reasonably
EXH. 99.2 - 12
<PAGE> 13
satisfactory to the Company, upon surrender and cancellation of such certificate
or receipt of such indemnity, the Company will execute, register and deliver a
new certificate of like tenor in lieu of such lost, stolen, destroyed or
mutilated certificate.
SECTION (bb) REPRESENTATIONS. Each Stockholder
represents that such Stockholder is the record and beneficial owner of the
number of issued and outstanding Securities appearing opposite such
Stockholder's name in Schedule I attached hereto, free and clear of any option,
lien, encumbrance or charge of any kind whatsoever, except as created by or
described in this Agreement.
SECTION (cc) EQUITABLE RELIEF. The parties hereto
agree and declare that legal remedies may be inadequate to enforce the
provisions of this Agreement and that equitable relief, including specific
performance and injunctive relief, may be used to enforce such provisions.
SECTION (dd) MISCELLANEOUS.
(ee) Notices. All communications under this
Agreement shall be in writing and shall be personally delivered, sent by
facsimile transmission or mailed by first class mail, postage prepaid:
i) if to the Company, at
Physicians Clinical Laboratory, Inc.
3301 C Street
Sacramento, California 95816
Attention: Chief Financial Officer
ii) if to the Stockholders, at
NU-TECH BIO-MED, INC.
Attn: Mr. J. Marvin Feigenbaum
476 Main Street
Wakefield, Rhode Island 02879
Fax: 401-789-9934
OAKTREE CAPITAL MANAGEMENT, LLC
Attn: Mr. Matthew Barrett
550 S. Hope Street, 22nd Floor
Los Angeles, California 90071
Fax: 213-694-1599
J. Marvin Feigenbaum
C/O NU-TECH BIO-MED, INC.
476 Main Street
Wakefield, Rhode Island 02879
Fax: 401-789-9934
EXH. 99.2 - 13
<PAGE> 14
or at such other address as the appropriate party to this Agreement may have
furnished in writing to each other party hereto, or
iii) if to any other Person who is
the registered holder of any Securities to the address for the purpose of such
holder as it appears in the stock ledger of the Company.
Any notice shall be deemed to have been duly given when delivered by hand if
personally delivered, by confirmation of completed facsimile transmission if
delivered by facsimile, and if sent by mail, two (2) Business Days after being
deposited in the mail, postage prepaid.
(ff) Waiver. No failure or delay on the part
of the parties or any of them in exercising any right, power or privilege
hereunder, nor any course of dealing between the parties or any of them shall
operate as a waiver of any such right, power or privilege nor shall any single
or partial exercise of any such right, power or privilege preclude the
simultaneous or later exercise of any other right, power or privilege. The
rights and remedies herein expressly provided are cumulative and are not
exclusive of any rights or remedies which the parties or any of them would
otherwise have. No notice to or demand on the Company in any case shall entitle
the Company to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the other parties or any
of them to take any other or further action in any circumstances without notice
or demand.
(gg) Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall be deemed to be an
original but all of which together shall constitute one and the same instrument.
(hh) Governing Law. This Agreement shall be
construed in accordance with and governed by the laws of the State of Delaware.
(ii) Filing. A copy of this Agreement and of
all amendments hereto shall be filed at the principal office of the Company.
(jj) Amendment or Termination. This
Agreement may be amended or terminated at any time only by an instrument in
writing signed by holders of shares of Common Stock representing 75% of shares
of Common Stock held by the Stockholders as of the date hereof (subject to
adjustment for stock splits, stock dividends and similar combinations and
reclassifications of Common Stock).
(g) Benefit and Binding Effect. Except as otherwise provided in
this Agreement, no right under this Agreement shall be assignable and any
attempted assignment in violation of this provision shall be void. The rights of
Nu-Tech pursuant to Section 8 hereof and the obligations of OCM, as agent on
behalf of certain funds and accounts pursuant to Section 8 hereof shall be
binding upon and inure only to the benefit of Nu-Tech and OCM, respectively, and
shall not be assignable to or transferable to any successor holder of
Securities. Subject to the foregoing and compliance with the terms of this
Agreement regarding Transfer of Securities, this Agreement shall be binding upon
and inure to the benefit of the parties and their successors and permitted
assigns. This Agreement does not create and shall not be construed as creating
any rights enforceable by any Person not a party hereto.
EXH. 99.2 - 14
<PAGE> 15
(h) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provisions in every other respect and of the
remaining provisions contained herein shall not be affected or impaired thereby.
SECTION 14. LIMITATIONS ON LIABILITY.
Each of the parties hereto acknowledges that in no event shall
any of the partners, officers, directors, shareholders, employees, agents,
affiliates or investment managers (collectively "Representatives") of OCM, as
agent and on behalf of the funds and accounts set forth on Schedule II attached
hereto (the "Funds"), have any obligation or liability to such party for any
action taken or omitted by or on behalf of such Funds or in connection herewith
(such obligation and liability being the sole responsibility of such Funds).
Each party hereto further acknowledges and agrees that (a) all obligations and
liabilities of each Fund under this Agreement or in connection herewith are
enforceable solely against such Fund and its assets and not against the assets
of OCM, any other Fund or any Representatives of OCM and (b) the obligations and
liabilities of each Fund shall be several in the proportions set forth on
Schedule II hereto and not joint and several.
[signature page follows]
EXH. 99.2 - 15
<PAGE> 16
IN WITNESS WHEREOF, the parties hereto have executed this
Stockholders Agreement as of the day and year first above written.
The Company: PHYSICIANS CLINICAL LABORATORY, INC.
By:
-------------------------------
J. Marvin Feigenbaum
Chief Operating Officer
Stockholders:
NU-TECH BIO-MED, INC.
By:
------------------------
J. Marvin Feigenbaum
Chief Executive Officer
OAKTREE CAPITAL MANAGEMENT, LLC, as agent
and on behalf of certain funds and accounts
By:
------------------------
Name:
Title:
By:
------------------------
Name:
Title:
------------------------
J. Marvin Feigenbaum
EXH. 99.2 - 16
<PAGE> 17
SCHEDULE I
<TABLE>
<CAPTION>
STOCKHOLDER SECURITIES
- ----------- ----------
<S> <C>
Nu-Tech Bio-Med, Inc.
Oaktree Capital Management, LLC,
as agent and on behalf of the
funds and accounts set forth on
Schedule II hereto
J. Marvin Feigenbaum
</TABLE>
EXH. 99.2 - 17
<PAGE> 18
SCHEDULE II
<TABLE>
<S> <C>
OCM Opportunities Fund, L.P. 54.0%
Columbia/HCA Master Retirement Trust 4.0%
(Separate Account I)
OCM Opportunities Fund II, L.P. 41.0%
Columbia/HCA Master Retirement Trust 1.0%
(Separate Account II)
</TABLE>
EXH. 99.2 - 18
