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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 5)*
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Gull Laboratories, Inc.
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(Name of Issuer)
Common Stock, $.001 par value
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(Title of Class of Securities)
402901 20 1
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(CUSIP Number)
Ulrich Wagner, Esq.
O'Melveny & Myers LLP
The Citicorp Center
153 East 53rd Street, 54th Floor
New York, New York 10022-4611
(212) 326-2000
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 11, 1997
(Date of Event which Requires Filing of this Statement)
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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
/ /.
Note: Six copies of this statement, including all exhibits, should e
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
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* 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).
Page 1 of __ Pages
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CUSIP NO. 358031 10 2
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
FRESENIUS AKTIENGESELLSCHAFT
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) or 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
GERMANY
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NUMBER OF 7 SOLE VOTING POWER
SHARES 4,930,693
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BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -0-
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EACH REPORT- 9 SOLE DISPOSITIVE POWER
ING PERSON 4,930,693
----------------------------------
WITH 10 SHARED DISPOSITIVE POWER
-0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,930,693
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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)
62%
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14 TYPE O REPORTING PERSON
CO
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NY1-524082.V1
2
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This Schedule 13D/A (Amendment No. 5) amends and supplements the
Statement on Schedule 13D dated May 4, 1994, as amended and supplemented by
Schedule 13D/A (Amendment No. 1) dated June 28, 1994, by Schedule 13D/A
(Amendment No. 2) dated August 15, 1994, by Schedule 13D/A (Amendment No. 3)
dated December 23, 1996 and Schedule 13D/A (Amendment No. 4) dated April 21,
1997 (as so amended, the "Statement"), filed by Fresenius Aktiengesellschaft
("Fresenius AG"), with respect to the common stock, $0.001 par value ("Common
Stock") of Gull Laboratories, Inc. ("Gull"). Capitalized terms used herein
without definition have the meanings ascribed to them in the Statement.
Item 2. IDENTITY AND BACKGROUND
Mr. Rainer Baule became a member of the Management Board of Fresenius
AG and Head of the Fresenius AG Intensive Care and Diagnostics Division on June
1, 1997. Current information with respect to Mr. Baule is set forth in Schedule
A to Amendment No. 4. Mr. Udo Werle continues to be a member of the Management
Board and Head of Finance, Administration and Personnel Matters of Fresenius AG.
However, he is no longer a member of the Management Board of Fresenius Medical
Care AG, and has been selected as the Chairman of the Supervisory Board of
Fresenius Medical Care AG.
Item 4. PURPOSE OF TRANSACTION.
Item 4 of the Statement is hereby amended by adding the following:
On July 29, 1997, Fresenius and Gull entered into an Extension
Agreement (the "Extension Agreement") to extend the Closing Date until August
15, 1997. On August 11, 1997, the shareholders of Gull, including a majority of
the shares held by persons other than Fresenius AG present and voting at the
Gull annual meeting, approved the acquisition (the "Acquisition") of the
diagnostics business of the Intensive Care and Diagnostics Division of Fresenius
AG (the "Business") by Gull GmbH, a wholly-owned subsidiary of Gull (the
"Purchaser"). The closing of the Acquisition took place on August 11, 1997.
Prior to the Closing, pursuant to a Transfer, Assignment and Assumption
Agreement dated July 3, 1997 among Fresenius AG, the Purchaser and Gull, the
Purchaser assigned its rights under the Asset Purchase Agreement to Gull, which
acquired the Business and issued the consideration to Fresenius AG on the
Closing Date. Gull then contributed the Business to the Purchaser.
Under the Asset Purchase Agreement, the purchase price for the Business
was 1,320,000 shares of Gull Common Stock, subject to adjustment, as described
in Amendment No. 4. The purchase price paid by Gull for the Business was
$10,942,800, based on an agreed value set forth in the Asset Purchase Agreement
of $8.29 per share. Such agreed value was fixed under the Asset Purchase
Agreement as the average of the closing sale prices of a share of Gull Common
Stock on the American Stock Exchange for the twenty trading days
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preceding and the twenty trading days following December 13, 1996, the date of
the first public announcement of the execution of the letter of intent for the
Acquisition. At $10-1/4 per share, the closing price for Gull Common Stock on
the Closing Date, the value of the consideration issued by Gull for the Business
was $13,530,000.
Fresenius AG continues to regard its investment in Gull as an
attractive business opportunity, both for Fresenius AG and Gull, and believes
that the sale of the Business to Gull and the combination of the Business with
Gull's existing worldwide diagnostics business could result in increased
efficiencies and enhanced performance by Gull. Accordingly, Fresenius AG
believes that the acquisition is in the best interests of Fresenius AG, Gull and
Gull's shareholders.
In connection with the closing under the Asset Purchase Agreement,
Fresenius AG and Gull entered into a Registration Rights Agreement pursuant to
which Fresenius AG has the right on two separate occasions to require that Gull
file a registration statement under the Securities Act of 1933, as amended (the
"1933 Act") for the registration of the shares of Common Stock issued to
Fresenius AG as the consideration for the Business. The Registration Rights
Agreement provides that Gull will bear the costs of registering such shares, up
to a maximum of $20,000. Fresenius AG also has the right to include such shares
in certain registration statements filed by Gull under the 1933 Act for its own
account or for the registration of shares of Common Stock held by other persons.
Other than the shares it received upon consummation of the transactions
contemplated by the Asset Purchase Agreement and related agreements, Fresenius
AG does not presently intend to acquire additional shares of Gull Common Stock,
but reserves the right to do so in open market transactions or in privately
negotiated transactions with Gull or shareholders of Gull. Whether Fresenius AG
acquires any such additional shares of Gull Common Stock will depend on
Fresenius AG's continuing evaluation of Gull, the market price for Gull Common
Stock, alternative investment opportunities which may be available, and all
other factors deemed relevant.
Except for the transactions described in this Item 4, Fresenius AG does
not have any present intention to effect or cause Gull to effect any of the
transactions described in paragraphs (a) through (j) of Item 4 of Schedule 13D.
Item 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 of the Statement is hereby amended by adding the following:
As a result of the closing under the Asset Purchase Agreement,
Fresenius AG is presently the record and beneficial owner of a total of
4,930,693 shares of Gull Common Stock. Based on 6,616,784 shares of Common Stock
outstanding on June 15, 1997
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(as set forth in Gull's Proxy Statement dated July 9, 1997 for the Gull Annual
Meeting), Fresenius AG is the beneficial owner of 62% of the Gull Common Stock,
as determined in accordance with Rule 13d-3 of the Securities and Exchange
Commission. Under a Retransfer of Shares Agreement among Fresenius AG, Gull
and the Purchaser, Fresenius AG may become obligated to return up to
33,000 shares to Gull upon the occurrence of certain events described in
Fresenius AG's Schedule 13D/A (Amendment No. 4).
Except as stated in this Item 5, Fresenius AG (and to the best of its
knowledge, the members of the Supervisory Board and the Managing Board of
Fresenius AG) does not own or have any right to acquire, directly or indirectly,
any shares of Gull Common Stock and, except as herein described, none of such
persons has effected any transaction in Gull Common Stock in the last sixty
days.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
For a description of the Extension Agreement, the Transfer, Assignment
and Assumption Agreement and the Registration Rights Agreement, see Item 4
above. The descriptions of the Extension Agreement, the Transfer, Assignment and
Assumption Agreement and the Registration Rights Agreement set forth in Item 4
are qualified in their entirety by the provisions of such agreements. Copies of
the Extension Agreement, the Transfer, Assignment and Assumption Agreement and
the Registration Rights Agreement are filed as Exhibits 1, 2 and 3,
respectively, to this Schedule 13D/A (Amendment No. 5). Copies of the Asset
Purchase Agreement and the Retransfer of Shares Agreement were filed as
Exhibits 1 and 2, respectively, to Amendment No. 4.
Item 7. MATERIALS TO BE FILED IN EXHIBITS.
EXHIBIT EXHIBIT NO.
Extension Agreement dated July 29, 1997 between 1
Fresenius AG and Gull
Transfer, Assignment and Assumption Agreement 2
among Fresenius AG, the Purchaser and Gull dated
Juy 3, 1997
Registration Rights Agreement between Gull
and Fresenius AG dated as of August 11, 1997 3
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SIGNATURES
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.
Dated: August 14, 1997 FRESENIUS AKTIENGESELLSCHAFT
By: /s/ Matthias Schmidt
----------------------------------------
Name: Matthias Schmidt
Title: Member of the Managing Board
By: Rainer Baule
----------------------------------------
Name: Rainer Baule
Title: Member of the Managing Board
S-1
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EXHIBIT INDEX
EXHIBIT EXHIBIT NO.
Extension Agreement dated July 29, 1997 between 1
Fresenius AG and Gull
Transfer, Assignment and Assumption Agreement 2
among Fresenius AG, the Purchaser and Gull dated
Juy 3, 1997
Registration Rights Agreement between Gull
and Fresenius AG dated as of August 11, 1997 3
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EXTENSION AGREEMENT
THIS EXTENSION AGREEMENT is dated July 29, 1997, and is entered into by
and between FRESENIUS AG ("Fresenius") and GULL LABORATORIES, INC. ("Gull").
WHEREAS, Fresenius, as "Seller", GULL GmbH, as "Purchaser", and Gull
entered into that certain Asset Purchase Agreement dated April 21, 1997, (the
"Agreement") for the purchase by Gull GmbH of certain assets and the assumption
of certain liabilities of the diagnostics business of the Intensive Care and
Diagnostics Division of Fresenius, all as described in the Agreement, as well as
entered into a Retransfer of Shares Agreement, dated April 21, 1997 ("Retransfer
Agreement"). The Agreement and the Retransfer Agreement are hereinafter referred
to as the "Agreements";
WHEREAS, pursuant to that certain Transfer, Assignment and Assumption
Agreement dated July 3, 1997 between Fresenius, Gull, and Gull GmbH, Gull GmbH
assigned to Gull all of Gull GmbH's rights, obligations and interest in and
under the Agreement, and Fresenius consented to such assignment subject to the
terms contained therein;
WHEREAS, pursuant to Article 18 of the Asset Purchase Agreement, one of
the conditions to closing the purchase transaction contemplated under the
Agreements is the approval of Gull's shareholders, including the majority of
non-Fresenius shareholders actually voting on the transaction; and
WHEREAS, Gull's shareholder's meeting has been adjourned until August
11, 1997, and in order to accommodate the adjournment of the shareholder's
meeting, Gull and Fresenius desire to extend the time allowed for closing of the
transaction.
NOW THEREFORE, in consideration of the foregoing and other
consideration, the sufficiency and receipt of which are hereby acknowledged, the
parties do hereby covenant and agree as follows and take the following actions:
1. Article 19, subsection 1(d) of the Asset Purchase Agreement is
hereby amended and restated by deleting said subsection as presently constituted
and substituting the following:
(d) by either the Seller or Purchaser if the Closing shall not have
occurred on or before August 15, 1997, for reasons other than the
failure of the terminating party to perform its obligations hereunder.
2. Closing shall occur as soon as practicable following conclusion of
the August 11, 1997 shareholder's meeting, provided the required shareholder
approval shall have been obtained.
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IN WITNESS WHEREOF, this Extension Agreement has been signed and
delivered by the parties as of the date first above written.
FRESENIUS AG
/s/ Frank-Joachim Simon
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By: Frank-Joachim Simon
Title: Senior Vice President
GULL LABORATORIES, INC.
/s/ George R. Evanega
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By: George R. Evanega
Title: President and Chief Executive
Officer
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TRANSFER, ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS TRANSFER ASSIGNMENT AND ASSUMPTION AGREEMENT is dated 3rd July,
1997, and is entered into by and between FRESENIUS AG ("Fresenius"), GULL GmbH
("Assignor"), and GULL LABORATORIES, INC. ("Assignee").
WHEREAS, Assignor, as "Purchaser", Assignee, and Fresenius AG
("Fresenius"), as Seller, entered into that certain Asset Purchase Agreement
dated April 21, 1997 (the "Agreement") for the purchase by Purchaser of certain
assets and the assumption of certain liabilities of the diagnostics business of
the Intensive Care and Diagnostics Division of Fresenius, all as described in
the Agreement as well as entered into a Retransfer of Shares Agreement, dated
April 21, 1997 ("Retransfer Agreement"). The Agreement and the Retransfer
Agreement hereinafter referred to as the "Agreements".
WHEREAS, Assignor desires to assign to Assignee all of Assignor's
rights, obligations, and interest in and under the Agreements as hereinafter
provided, in order that Assignee shall become the Purchaser under the Agreements
and
WHEREAS, Assignee desires to obtain the benefits and assume the duties
and obligations of Assignor with respect to the Agreements.
NOW THEREFORE, in consideration of the sum of Ten Dollars ($10.00) and
other consideration, the sufficiency and receipt of which are hereby
acknowledged, the parties do hereby covenant and agree as follows and take the
following actions:
1. Assignor does hereby assign, transfer, and set over unto Assignee
all of the Assignor' s rights, obligations, and interest in and under the
Agreements.
2. Assignee hereby accepts the foregoing assignment of Assignor's
rights, obligations, and interest in and under the Agreements, and hereby
assumes all obligations of Assignor under the Agreements. Assignee shall defend,
indemnify and hold harmless Assignor from and against any and all claims
asserted against or incurred by Assignor as a result of any acts or omissions,
after the date of this Assignment and Assumption Agreement, in connection with
the Agreements.
3. Fresenius as the Seller under the Agreements hereby consents to this
transfer, assignment and assumption which is accomplished by this Transfer,
Assignment and Assumption Agreement and agrees to the full substitution of Gull
Laboratories, Inc. for GULL GmbH as Purchaser thereunder and releases Gull GmbH
from all obligations under the Agreements.
4. After having assessed the facts which are relevant for a legal
obligation to file the transaction with the German
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Federal Cartel Office, the parties hereto agree that neither the Agreement nor
the present Transfer, Assignment and Assumption Agreement have to be filed with
the German Federal Cartel Office. Therefore, the parties further agree that
Article 18 subsec. (5) of the Agreement will be treated null and void and no
party shall have any right or shall be obligated by Article 18 subsec. (5) of
the Agreement.
5. Assignee shall fully indemnify Fresenius from all costs, liabilities
and obligations resulting out of this Transfer, Assignment and Assumption
Agreement. In particular, Assignee shall reimburse Fresenius from costs of its
attorneys and other advisers which have occurred in connection with this
Transfer, Assignment and Assumption Agreement.
6. This Transfer, Assignment and Assumption Agreement only takes effect
after the Shareholder of Gull GmbH shall have pledged all future shares in Gull
GmbH, in particular any shares which shall be created as Assignee's contribution
in kind to Gull GmbH, to Assignor according to the draft Amended Share Pledge
Agreement as Annex A.
7. The Parties herewith acknowledge that Seller will not dress up a
formal balance sheet as per the Closing Date. The Parties herewith agree to
determine the cash flow for the Interim Period based on the balance sheet and
profit and loss statement as of June 30, 1997 as amended according to the books
of the Business until the Closing Date.
IN WITNESS THEREOF, this Transfer, Assignment and Assumption Agreement
has been signed and delivered by the parties as of the date first above written.
ASSIGNOR: GULL GmbH
By: /s/ John Turner
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Title: General Manager
ASSIGNEE: GULL LABORATORIES, INC.
By: /s/ George Evanega
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Title:CEO/President
SELLER: FRESENIUS AG
By: /s/ Frank J. Simon
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Title:Senior Vice President
2
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of August 11,
1997, between GULL LABORATORIES, INC., a Utah corporation (the "Company"), and
FRESENIUS AKTIENGESELLSCHAFT, a German corporation ("Fresenius").
1. INTRODUCTION. Pursuant to the Asset Purchase Agreement dated as of
April 21, 1997 (as from time to time in effect, the "Purchase Agreement")
between the Company and Fresenius, the Company has issued to Fresenius 1,320,000
shares of the Company's Common Stock, par value $.001 per share ("Common
Stock"). This Registration Rights Agreement shall become effective upon the
closing under Purchase Agreement. Certain capitalized terms used in this
Agreement are defined in Section 3.5 hereof.
2. REGISTRATION UNDER SECURITIES ACT, ETC.
2.1. Registration on Request.
2.1.1. Requests. At any time or from time to time after the date
hereof, upon the written request of one or more Qualified Holders requesting
that the Company shall use its best efforts to effect the registration under the
Securities Act of all or any part of such Qualified Holders' Registrable
Securities and specifying the intended method of disposition thereof, the
Company shall promptly give written notice of such requested registration to all
holders of record of Registrable Securities, and thereupon the Company shall, as
expeditiously as reasonably possible, use its best efforts to effect the
registration under the Securities Act of:
(i) the Registrable Securities which the Company has been so
requested to register by such Qualified Holder or Holders, for
disposition in accordance with the intended method of disposition
stated in such request;
(ii) all other Registrable Securities the holders of which
shall have made a written request to the Company for registration
thereof within 10 days after the giving of such written notice by the
Company (which request shall specify the intended method of disposition
thereof); and
(iii) all shares of Common Stock which the Company may elect
to register (for itself or for any other Person) in connection with the
offering of Registrable Securities pursuant to this Section 2.1 by
having given notice of such election, specifying the number of shares
to be so included, to each holder of Registrable Securities within 10
days of its receipt of the notice from such Qualified Holder or
Holders;
all to the extent required to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the
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Registrable Securities and the additional shares of Common Stock, if any, so to
be registered; provided, however, that the Company shall not be required to
effect more than two registrations pursuant to this Section 2.1; and provided,
further, that if the Company shall have furnished to the Qualified Holder or
Holders requesting such registration a certificate, executed on behalf of the
Company by its Chairman or President, stating that in the good faith judgment of
a committee of disinterested members of the Board of Directors of the Company it
would be materially detrimental to the Company (without taking into account the
costs to the Company or the demands on its employees in performing the Company's
obligations under this Agreement or the effects of the proposed registration on
the market price of the Company's securities, unless such effects on such market
price would be materially detrimental to another proposed transaction in which
securities of the Company are to be issued or otherwise transferred) for a
registration statement effecting such registration to be filed, then the
Company's obligation under this Section 2.1 shall be suspended for a period of
time not to exceed the shorter of the period that is necessary to avoid such
detrimental effect and four months from the date of such certificate. If the
matter referred to in any such Company certificate has not been resolved upon
expiration of the period referred to in the preceding sentence, then at that
time the committee of disinterested members of the Board of Directors of the
Company must provide the full Board of Directors with a statement of reasons to
justify the committee's original decision that registration would be detrimental
to the Company and must indicate that registration would continue to be
detrimental to the Company. The final decision of the Board of Directors of the
Company on the desirability of registration under these circumstances will be
controlling. Subject to the other terms and conditions hereof (including without
limitation Section 2.1.4 hereof), the holders of a majority of Registrable
Securities included, or sought to be included, in any registration pursuant to
this Section 2.1 may at any time give notice to the Company that they are
withdrawing the request for such registration.
2.1.2. Registration Statement Form. Registrations under this Section
2.1 shall be on such appropriate registration form of the Commission as shall be
selected by the Company and as shall permit the disposition of such Registrable
Securities in accordance with the intended method or methods of disposition
specified in their request for such registration, provided, however, and if the
Company is not electing to register Common Stock for itself as provided in
Section 2.1.1(iii), that the Company shall use Form S-3 (or any successor form
thereto) if such form is then available to the Company for the registration of
the Registrable Securities and, at the request of one or more Qualified Holders,
shall indicate on the facing page of such form that the offering being
registered will be conducted in accordance with Rule 415 under the Securities
Act (or any successor regulation under the Securities Act providing for delayed
or continuous securities offerings.
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2.1.3. Expenses. The Company will pay all Registration Expenses in
connection with the first registration requested under this Section 2.1, up to a
maximum of $20,000. The Registration Expenses in connection with each other
registration requested under this Section 2.1 shall be allocated among all
Persons on whose behalf Registrable Securities or other securities of the
Company are included in such registration, pro rata among such Persons on the
basis of the respective aggregate proposed offering prices of the Registrable
Securities or other securities of the Company then being registered on their
behalf specified in the registration statement on file with the Commission with
respect thereto; provided, however, that if the Company shall have agreed to
bear such expenses of any such Person, then the pro rata portion of such
expenses allocated to such Person shall be borne by the Company, up to a maximum
of $20,000, unless the Company shall have agreed otherwise with such Person.
2.1.4. Effective Registration Statement. A registration requested
pursuant to this Section 2.1 will not be deemed to have been effected (i) unless
such registration has become effective and, if the method of disposition is a
firm commitment underwritten public offering, a closing shall have occurred
thereunder or (ii) if, after such registration has become effective, such
registration is interfered with by any stop order, injunction or other order or
requirement of the Commission or other governmental agency or of any court;
provided, however, that if the Company shall file a registration statement which
does not become effective solely by reason of the refusal to proceed of either
the underwriter (if any) or holders of a majority of the Registrable Securities
which are proposed to be included in such offering, such registration shall be
deemed to have been effected by the Company pursuant to this Section 2.1 unless
(subject to the further provisions of this sentence) such holders shall have
elected to pay all Registration Expenses in connection with such registration;
and provided, further, that, notwithstanding the immediately preceding proviso,
if the Company, after receipt of the request for such registration (the "First
Registration"), files a registration statement under the Act covering securities
in addition to Registrable Securities, to be offered for its own account or for
the account of any other Person (the "Second Registration"), and the holders of
a majority of the Registrable Securities which are proposed to be included in
the First Registration give notice to the Company, within ten (10) days of
notice of such Second Registration being given to such holders, that they have
determined not to proceed with the First Registration due to the effects on the
market for the Company's securities of the Second Registration, then the First
Registration shall not be deemed to have been effected.
2.1.5. Priority in Requested Registrations. If a requested registration
pursuant to this Section 2.1 involves an underwritten offering, and the managing
underwriter shall advise the Company in writing (with a copy to each holder of
Registrable Securities requesting registration) that, in its opinion, the number
of
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securities requested to be included in such registration (including securities
of the Company or any other Person which are not Registrable Securities) may
adversely affect the offering of Registrable Securities, the Company will
include in such registration to the extent of the number which the Company is so
advised can be sold in such offering without such adverse effect: (i) first, all
Registrable Securities requested to be included in such registration by the
holder or holders of Registrable Securities (or if the number of Registrable
Securities requested to be so included exceeds the number of shares of Common
Stock specified by such managing underwriter as being able to be sold in such
offering without such adverse effect, then pro rata among such holders on the
basis of the number of Registrable Securities requested to be included by such
holders), and (ii) second, to the extent of any remaining excess, securities the
Company proposes to sell and other securities of the Company included in such
registration by the holders thereof in such proportion as the Company may
determine.
2.1.6. Other Securities. Subject to the second proviso of Section 2.1.4
and to Section 2.1.5, the Company shall be entitled to include in any
registration statement referred to in this Section 2.1, for sale in accordance
with the notice of the requesting holders of Registrable Securities, shares of
Common Stock to be sold by the Company for its own account, or for the account
of holders of shares of Common Stock that are not Registrable Securities.
2.1.7. Competing Registrations. If the holders of Registrable
Securities request a registration pursuant to this Section 2.1 after the Company
has received a request for registration on behalf of one or more other Persons
having rights similar to those contained in this Section 2.1, and such other
Person or Persons give notice to the Company, within ten (10) days of notice of
such subsequent offering being given to such other Person or Persons, that they
have determined not to proceed with the requested registration due to the
effects on the market for the Company's securities of the offering so requested
by holders of Registrable Securities, then such holders of Registrable
Securities shall pay all Registration Expenses in connection with such withdrawn
registration.
2.2. Incidental Registration.
2.2.1. Notices; Obligation to Register. If the Company at any time
proposes to register any shares of Common Stock under the Securities Act (other
than (i) a registration in connection with an acquisition in a manner which
would not permit registration of Registrable Securities for sale to the public,
(ii) a registration on Form S-8, or any successor form thereto, relating to a
stock option plan, stock purchase plan, directors' plan, savings or similar
employee benefit plan or (iii) pursuant to Section 2.1 hereof), whether or not
for sale for its own account, the Company will each such time give prompt
written notice to all holders of Registrable Securities of its intention to do
so and of such
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holders' rights under this Section 2.2. Upon the written request of any such
holder made within 10 days after the receipt of any such notice (which request
shall specify the Registrable Securities intended to be disposed of by such
holder and shall state the intended method of disposition thereof), and subject
in the case of underwritten offerings to Sections 2.4.2 and 2.4.4 hereof, the
Company will use its best efforts to effect the registration under the
Securities Act of all Registrable Securities which the Company has been so
requested to register by the holders of Registrable Securities, to the extent
requisite to permit the disposition (in accordance with the intended methods
thereof as aforesaid) of the Registrable Securities so to be registered, by
inclusion of such Registrable Securities in the registration statement which
covers the shares of Common Stock which the Company proposes to register;
provided, however, that if, at any time after giving written notice of its
intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason either not to register or to delay registering
such shares of Common Stock, the Company may, at its election, give written
notice of such determination to each holder of Registrable Securities and,
thereupon, (i) in the case of a determination not to register (and provided the
Company acts in accordance with such determination), the Company shall be
relieved of its obligation to register any Registrable Securities in connection
with such registration (but not from its obligation to pay the Registration
Expenses in connection therewith), without prejudice, however, to the rights of
any holder or holders of Registrable Securities entitled to do so to request
that such registration be effected as a registration under Section 2.1 thereof,
and (ii) in the case of a determination to delay registering, the Company shall
be permitted to delay registering any Registrable Securities for the same period
as the delay in registering such other shares of Common Stock.
2.2.2. Effect on Requested Registrations; Expenses. No registration
effected pursuant to a request or requests provided for in this Section 2.2
shall be deemed to have been effected pursuant to Section 2.1 hereof. The
Company will pay all Registration Expenses in connection with each registration
of Registrable Securities requested pursuant to this Section 2.2.
2.3. Registration Procedures.
2.3.1. Procedures. If and whenever the Company is required by the
provisions of this Agreement to use its best efforts to effect or cause the
registration of any Registrable Securities under the Securities Act as provided
in this Agreement, the Company shall, as expeditiously as possible:
(a) prepare and file with the Commission (in the case of a registration
pursuant to Section 2.1 hereof and subject to the financial statement age
requirements of the Commission's accounting rules, such filing to be made within
60 days after the initial request of one or more Qualified Holders of
Registrable
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Securities) the requisite registration statement with respect to such
Registrable Securities (including or incorporating by reference such audited
financial statements as may be required by the Securities Act or the rules and
regulations promulgated thereunder) and use its best efforts to cause such
registration statement to become and remain effective, provided that before
filing such registration statement or any amendment or supplement thereto, the
Company will furnish to the counsel selected by the holders of Registrable
Securities which are to be included in such registration copies of all such
documents proposed to be filed for review,and comment;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to maintain the effectiveness of such registration
statement and to comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such registration statement
until the earliest of: (i) in the case of a registration pursuant to Section 2.1
hereof which is not effected on a Form S-3 (or any successor Form thereto), the
expiration of 120 days after such registration statement becomes effective, or
(ii) in the case of a registration pursuant to Section 2.2 hereof, such date as
the Company may determine, provided that if such registration relates to an
underwritten offering and less than all the Registrable Securities are withdrawn
from registration after the expiration of the relevant period, the shares to be
so withdrawn shall be allocated pro rata among the holders thereof on the basis
of the respective numbers of Registrable Securities held by them included in
such registration (it being understood that the shares sold pursuant to such an
offering shall have been allocated among all Persons for whose account such
shares are being registered in accordance with the priorities specified in
Section 2.1.5 or 2.4.2 hereof, as applicable), or (iii) such time as all of such
securities have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in such registration
statement;
(c) furnish to each seller of Registrable Securities covered by such
registration statement and each underwriter, if any, of the securities being
sold by such seller such number of copies of such registration statement and of
each such amendment and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus and supplements thereto
included in such registration statement (including each preliminary prospectus
and any summary prospectus), in conformity with the requirements of the
Securities Act, and such other documents, as such seller or underwriter, if any,
may reasonably request in order to facilitate the public sale or other
disposition of the Registrable Securities owned by such seller;
(d) use its best efforts to register or qualify all Registrable
Securities covered by such registration statement under such other state
securities laws or blue sky laws of such United States jurisdictions as any
seller or any underwriter, if
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<PAGE> 7
any, of the securities being sold by such seller shall reasonably request, to
keep such registrations or qualifications in effect for so long as the
registration statement filed under the Securities Act remains in effect and do
any and all other acts and things which may be reasonably necessary or advisable
to enable such seller and underwriter, if any, to consummate the disposition in
such jurisdictions of such Registrable Securities owned by such seller,
provided, however, that the Company shall not for any such purpose be required
to qualify generally to do business as a foreign corporation in any jurisdiction
wherein it would not but for the requirements of this clause (d) be obligated to
be qualified, to subject itself to taxation in any such jurisdiction or to
consent to general service of process in any such jurisdiction;
(e) notify each seller of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the Company's becoming
aware that the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing, and
promptly prepare and furnish to each seller and each underwriter, if any, a
reasonable number of copies of a prospectus supplemented or amended so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing;
(f) advise each seller of Registrable Securities covered by such
registration statement, promptly after it receives notice thereof, of the time
when such registration statement or any amendment thereto has become effective
or any related prospectus or any supplement to such prospectus or any amendment
to such prospectus has been filed, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any related
preliminary prospectus or prospectus, of the suspension of the qualification of
such Registrable Securities for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of such registration
statement or prospectus or for additional information; and in the event of the
issuance of any stop order or of any order preventing or suspending the use of
any such preliminary prospectus or prospectus or suspending any such
qualification, to use promptly all its best efforts to obtain withdrawal of such
order;
(g) file promptly all documents required to be filed with the
Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act subsequent
to the time such registration statement
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<PAGE> 8
becomes effective and during any period when any related prospectus is required
to be delivered;
(h) otherwise use its best efforts to comply with all applicable
provisions of the Securities Act and all applicable rules and regulations of the
Commission, and make available to its security holders, as soon as reasonably
practicable, an earnings statement which shall satisfy the provisions of Section
11(a) of the Securities Act;
(i) provide a transfer agent and registrar for all such Registrable
Securities covered by such registration statement not later than the effective
date of such registration statement;
(j) in connection with any offering pursuant to Section 2.1 hereof or
in connection with any underwritten offering of Registrable Securities, furnish,
at the request of any seller of Registrable Securities on the date such
securities are delivered to the underwriters for sale pursuant to such
registration or, if such securities are not being sold through underwriters, on
the date the registration statement with respect to such securities becomes
effective, (i) an opinion, dated such date, of counsel representing the Company
for purposes of such registration, addressed to the underwriters and to such
seller making such request, covering such legal matters with respect to such
registration as such seller of such Registrable Securities may reasonably
request and are customarily included in such an opinion, and (ii) letters, dated
the effective date of the registration statement and the date, if any, such
securities are delivered to the underwriters for sale pursuant to such
registration, from the independent certified public accountants of the Company,
addressed to the underwriters and to such seller making such request, covering
such financial, statistical and accounting matters with respect to such
registration as such seller of such Registrable Securities may reasonably
request and are customarily included in such letters; and
(k) use its best efforts to list all Registrable Securities covered by
such registration statement on each securities exchange on which any of the
securities of the same class as the Registrable Securities are then listed
(which shall be deemed to include any automated quotation system on which any of
such securities are then quoted).
Each holder of Registrable Securities shall be deemed to have agreed by
acquisition of such Registrable Securities that, upon receipt of any notice from
the Company of the occurrence of any event of the kind described in clause (e)
of this Section 2.3.1, such holder will forthwith discontinue such holder's
disposition of Registrable Securities pursuant to the registration statement
covering such Registrable Securities until such holder's receipt of the copies
of the supplemented or amended prospectus contemplated by clause (e) of this
Section 2.3.1 and, if so directed by the Company, will deliver to the Company
(at the Company's expense) all copies, other than permanent file copies, then in
such holder's possession of the prospectus covering such
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<PAGE> 9
Registrable Securities current at the time of receipt of such notice. In the
event the Company shall give any such notice, the period mentioned in clause (b)
of this Section 2.3.1 shall be extended by the length of the period from and
including the date when the Company shall have given such notice to and
including the date when each seller of any Registrable Securities covered by
such registration statement shall have received the copies of the supplemented
or amended prospectus contemplated by clause (e) of this Section 2.3.1.
2.3.2. Information Concerning Holders. The Company may require each
seller of Registrable Securities as to which any registration is being effected
to furnish the Company such information regarding such seller and the
distribution of such securities as the Company may from time to time reasonably
request in writing for inclusion in the registration statement in accordance
with the rules and regulations of the Commission or in connection with any
registration, qualification, compliance or filing for an exemption under state
securities laws.
2.4. Underwritten Offerings.
2.4.1. Selection of Underwriters. If a requested registration pursuant
to Section 2.1 hereof involves an underwritten offering, the underwriter or
underwriters thereof shall be selected by the holders of more than 50% of the
Registrable Securities as to which registration has been requested, shall be of
recognized national standing and shall be acceptable to the Company, which shall
not unreasonably withhold its acceptance of such underwriters.
2.4.2. Incidental Underwritten Offerings. (a) If the Company at any
time proposes to register any of its securities under the Securities Act as
contemplated by Section 2.2 hereof and such securities are to be distributed by
or through one or more underwriters, the right of any holder of Registrable
Securities to registration pursuant to Section 2.2 hereof shall be conditioned
upon such holder's participation in such underwriting and the inclusion of such
holder's Registrable Securities in such underwriting. The Company will, if
requested by any holder of Registrable Securities as provided in Section 2.2
hereof, arrange for such underwriters to include all the Registrable Securities
to be offered and sold by such holder among the securities to be distributed by
such underwriters; provided, however, that if the managing underwriter of such
underwritten offering shall inform the holders of the Registrable Securities
requesting such registration and the holders of any other securities which shall
have exercised, in respect of such underwritten offering, registration rights
with respect to such offering by letter of its belief that inclusion in such
underwritten distribution of all or a specified number of such Registrable
Securities or of such other securities so requested to be included would
interfere with the successful marketing of the Company's securities (other than
such Registrable Securities and other securities so requested to be included
pursuant to registration rights comparable to the rights under Section 2.2
hereof) or, if the offering is being made
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<PAGE> 10
pursuant to the request of holders which shall have exercised, in connection
with such underwritten offering, registration rights comparable to the rights
under Section 2.1 hereof, the securities of such holders requested to be
included in such registration ("Demand Securities") by the underwriters (such
writing to state the approximate number of such Registrable Securities and other
securities so requested to be included which may be included in such
underwritten offering without such effect), then the Company may, upon written
notice to all holders of such Registrable Securities and of such other
securities so requested to be included (other than Demand Securities), exclude
pro rata (based on the number of shares originally requested to be included in
the registration by each such holder) from such registration statement (if and
to the extent stated by such managing underwriter to be necessary to eliminate
such effect) the number of such Registrable Securities and such other securities
(other than Demand Securities) so requested to be included the registration of
which shall have been requested by each holder of Registrable Securities and by
the holders of such other securities (other than Demand Securities) so that the
resultant aggregate amount of such Registrable Securities and of such other
securities (other than Demand Securities) so requested to be included which are
included in such registration statement shall be equal to the approximate amount
stated in such managing underwriter's letter. The holders of Registrable
Securities whose Registrable Securities are to be distributed by such
underwriters shall be parties to the underwriting agreement between the Company
and such underwriters and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such holders of Registrable Securities. Such holders of
Registrable Securities shall not be required to make any representations or
warranties to or agreements with the Company or the underwriters other than
representations, warranties or agreements regarding such holders and such
holders' intended methods of distribution and other representations and
warranties customarily made by selling securityholders in connection with such
an offering.
2.4.3. Other Registration Rights. The Company represents and warrants
to Fresenius that, as of the date of this Agreement, it has not agreed to
register any securities of the Company under the Securities Act or the laws of
any other jurisdiction pursuant to registration rights which conflict with those
granted pursuant to this Agreement. The Company agrees that, except with the
consent of the holders of a majority of the Registrable Securities, it will not
grant any registration rights with respect to its securities that will conflict
with registration rights granted hereunder.
2.4.4. Holdback Agreements.
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<PAGE> 11
(a) Each holder of Registrable Securities shall be deemed to have
agreed by acquisition of such Registrable Securities, if and to the extent so
required by the managing underwriter, not to effect any public sale or
distribution, or any sale pursuant to Section 4(1) of the Securities Act (except
for private transactions in reliance on the so-called "4(1 1/2)" exemption
thereunder) or Rule 144 promulgated by the Commission under the Securities Act,
as from time to time in effect, of such securities or of any Common Stock or
other securities convertible into or exercisable for Common Stock during a
period of seven days prior to nor a period of 180 days after any underwritten
registration pursuant to Section 2.1 or 2.2 hereof has become effective, except
as part of such underwritten registration, whether or not such holder
participates in such registration.
(b) The Company agrees if and to the extent so required by the managing
underwriter, not to effect any public sale or distribution of its equity
securities or securities convertible into or exchangeable or exercisable for any
of such securities during a period of seven days prior to nor a period of 180
days after any underwritten registration pursuant to Section 2.1 hereof has
become effective, except as part of such underwritten registration and except
pursuant to a registration of securities to be offered and sold (i) pursuant to
a stock option plan, stock purchase plan, managing directors' plan, savings or
similar employee benefit plan, (ii) pursuant to an acquisition of a business,
merger or exchange of stock for stock on Form S-4 (or any successor form), (iii)
in an offering of securities other than for the account of the Company pursuant
to a registration effective at the time of such underwritten registration or
(iv) pursuant to obligations under agreements to which the Company is party as
in effect on the date hereof.
2.5. Indemnification and Contribution.
2.5.1. Indemnification by the Company. In the event of any registration
of any securities of the Company under the Securities Act, the Company will
indemnify and hold harmless in the case of any registration statement filed
pursuant to Section 2.1 or 2.2 hereof, the holder of any Registrable Securities
which are covered by such registration statement, its directors and officers,
each other Person who participates as an underwriter in the offering or sale of
such Registrable Securities and each other Person, if any, who controls such
holder or any such underwriter within the meaning of the Securities Act or the
Exchange Act, against any losses, claims, damages or liabilities (whether
arising out of a claim of a party hereto, a third party or otherwise), to which
such holder or any such director or officer or underwriter or controlling person
may become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
securities were registered under the Securities Act, any
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<PAGE> 12
preliminary prospectus, final prospectus, summary prospectus, notification or
offering circular contained therein or otherwise used or approved for use by the
Company in the offering pursuant thereto, or any amendment or supplement
thereto, 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 the Company will reimburse such holder and each such director,
officer, underwriter and controlling person for any legal or any other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, liability, action or proceeding or successfully enforcing the
provisions hereof; provided, however, that (i) the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, any such preliminary prospectus,
final prospectus, summary prospectus, notification, offering circular, amendment
or supplement in reliance upon and in conformity with information furnished to
the Company in writing by such holder or, if the Person seeking indemnification
is an underwriter, by such underwriters, in either case expressly for use
therein, and (ii) the provisions of this Section 2.5.1 shall not inure to the
benefit of any underwriter (or any Person controlling such underwriter) on
account of any losses, claims, damages, liabilities or actions arising from the
sale of securities to any Person if such underwriter failed to send or give a
copy of the related prospectus, as the same may be then amended or supplemented,
to such Person within the time required by the Securities Act. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such holder or any such director, officer, underwriter or
controlling person and shall survive the transfer of such securities by such
holder.
2.5.2. Indemnification by the Sellers. In the event of any registration
of any Registerable Securities under the Securities Act, each holder of
Registrable Securities registered under the registration statement shall
indemnify and hold harmless (in the same manner and to the same extent as set
forth in Section 2.5.1 hereof) the Company, each director of the Company, each
officer of the Company and each other Person, if any, who controls the Company
within the meaning of the Securities Act, each Person who participates as an
underwriter in the offering or sale of such Registrable Securities and each
other Person, if any, who controls such underwriter within the meaning of the
Securities Act, with respect to any statement or alleged statement in or
omission or
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<PAGE> 13
alleged omission from such registration statement, any preliminary prospectus,
final prospectus, summary prospectus, notification or offering circular
contained therein, or any amendment or supplement thereto, if and to the extent
such statement or alleged statement or omission or alleged omission was made in
reliance upon and in conformity with information furnished to the Company in
writing by such holder expressly for use therein; provided, however, that with
respect to any untrue statement or omission or alleged untrue statement or
omission made in any preliminary prospectus, this obligation shall not apply to
the extent that any loss, claim, damage, liability or expense results from the
fact that a current copy of the prospectus was not sent or given to the Person
asserting any such loss, claim, damage, liability or expense at or prior to the
written confirmation of the sale of the Registrable Securities concerned to such
Person if it is determined that it was the responsibility of the Company to
provide such Person with such current copy of the prospectus and such current
copy of the prospectus would have cured the defect giving rise to such loss,
claim, damage, liability or expense; and provided, further, that the obligations
of each such seller of Registrable Securities pursuant to any such undertaking
shall be limited to an amount equal to the aggregate sales price of the
Registrable Securities of such seller sold pursuant thereto. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Company or any such director, officer or controlling person and
shall survive the transfer of such securities by such seller.
2.5.3. Notices of Claims, etc. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in Section 2.5.1 or 2.5.2 hereof, such indemnified party will,
if a claim in respect thereof is to be made against an indemnifying party, give
prompt written notice to the latter of the commencement of such action;
provided, however, that the failure of any indemnified party to give notice as
provided herein shall not relieve the indemnifying party of its obligations
under Section 2.5.1 or 2.5.2 hereof except to the extent that the indemnifying
party is actually and materially prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party, unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, the
indemnifying party shall be entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying party similarly notified, to the
extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof (unless in
such indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, the
counsel chosen by such indemnifying party is not reasonably satisfactory to such
indemnified party or the indemnifying party does not in fact assume such
defense), the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of investigation
or enforcement. No indemnifying party shall consent to entry of any judgment or
enter into any settlement without the consent of the indemnified party (which
shall not be unreasonably withheld) if it does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a complete and unconditional release from all liability in respect of such
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<PAGE> 14
claim or litigation without any payment or consideration provided by such
indemnified party other than a payment or consideration as to which such
indemnified party is concurrently indemnified by an equal payment to such
indemnified party. No indemnified party shall consent to entry of any judgment
or enter into any settlement of any such action the defense of which has been
assumed by an indemnifying party without the consent of such indemnifying party
(which shall not be unreasonably withheld).
2.5.4. Contribution. If the indemnification provided for in Section
2.5.1 or 2.5.2 hereof is unavailable to a party that would have been an
indemnified party under such Section in respect of any losses, claims, damages
or liabilities (or actions in respect thereof) referred to therein, then each
party that would have been an indemnifying party thereunder shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the indemnifying party on the one hand and such
indemnified party on the other in connection with the statements or omissions or
alleged statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof); provided, however, that the
liability of a seller of Registrable Securities shall not exceed an amount equal
to the aggregate sales price of the Registrable Securities of such seller sold
pursuant thereto. The relative fault shall be determined by reference to, among
other things, whether the untrue statement or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the indemnifying party or such indemnified
party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
each holder of Registrable Securities agree that it would not be just and
equitable if contribution pursuant to this Section 2.5.4 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 2.5.4. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this Section 2.5.4 shall include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim (which shall be limited as provided in Section 2.5.4
hereof if the indemnifying party has assumed the defense of any such action in
accordance with the provisions thereof) and of successfully enforcing the
provisions hereof. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
2.5.5. Other Indemnification and Contribution. Indemnification and
contribution similar to that specified in Sections 2.5.1, 2.5.2, 2.5.3 and 2.5.4
hereof (with appropriate modifications) shall be given by the Company and each
seller of
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Registrable Securities with respect to any required registration or other
qualification of such Registrable Securities under any federal or state law or
regulation of any governmental authority, other than the Securities Act.
2.5.6. Payments. The indemnification and contribution required by this
Section 2.5 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
3. GENERAL.
3.1. Rule 144. So long as the Common Stock of the Company is registered
pursuant to the requirements of Section 12 of the Exchange Act, the Company
covenants that it will timely file the reports required to be filed by it under
the Securities Act or the Exchange Act (including but not limited to the reports
under Sections 13 and 15(d) of the Exchange Act referred to in subparagraph
(c)(1) of Rule 144 adopted by the Commission under the Securities Act) and the
rules and regulations adopted by the Commission thereunder, and will take such
further action as any holder of Registrable Securities may reasonably request,
all to the extent required from time to time to enable such holder to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (i) Rule 144 under the Securities Act,
as such Rule may be amended from time to time, or (ii) any similar rule or
regulation hereafter adopted by the Commission. Upon the request of any holder
of Registrable Securities, the Company will inform such holder whether it has
complied with such requirements.
3.2. Nominees for Beneficial Owners. In the event that Registrable
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its option, be treated as the holder of such
Registrable Securities for purposes of any request or other action by any holder
or holders of Registrable Securities pursuant to this Agreement (or any
determination of any number or percentage of shares constituting Registrable
Securities held by any holder or holders of Registrable Securities contemplated
by this Agreement).
3.3. Amendments and Waivers. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively) only with
the written consent of the Company, and the holders of more than 50% of the
Registrable Securities at the time outstanding. Each holder of any Registrable
Securities at the time or thereafter outstanding shall be bound by any consent
authorized by this Section 3.3, whether or not Registrable Securities shall have
been marked to indicate such consent.
3.4. Notices. Any notice or other communication in connection with this
Agreement shall be deemed to be delivered if
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in writing (or in the form of a telex or telecopy) addressed as hereinafter
provided and if either (x) actually delivered at said address (evidenced in the
case of a telex or telecopy by receipt of the correct answerback or other
communication) or (y) in the case of a letter, five business days shall have
elapsed after the same shall have been deposited in the United States mails,
postage prepaid and registered or certified: (a) if to Fresenius, at Borkenberg
14, 61440 Oberursel, Germany, attn: President-Intensive Care and Diagnostics
Division; (b) if to any other holder of Registrable Securities, to the
registered address of such holder as set forth in the Company's transfer
records; and (c) if to the Company, to the attention of its President at its
office located at 1011 East Murray Holladay Road, Salt Lake City, Utah, 84117
USA, or at such other address as the Company shall have furnished to each holder
of Registrable Securities at the time outstanding.
3.5. Certain Definitions. As used in this Agreement, the following
terms have the following respective meanings:
Affiliate: As defined in Rule 405 of the Commission under the
Securities Act.
Commission: The United States Securities and Exchange Commission, or
any other federal agency at the time administering the Exchange Act or the
Securities Act, whichever is the relevant statute for the particular purpose.
Common Stock: As defined in Section 1 of this Agreement.
Company: As defined in the Preamble to this Agreement.
Demand Securities: As defined in Section 2.4.2 of this Agreement.
Exchange Act: The Securities Exchange Act of 1934, or any similar
federal statute, and the rules and regulations of the Securities and Exchange
Commission thereunder, all as the same shall be amended from time to time.
First Registration: As defined in Section 2.1.4 of this Agreement.
NASD: The National Association of Securities Dealers, Inc.
Person: A corporation, an association, a partnership, an organization,
a trust, a business, an individual, a government or political subdivision
thereof, a governmental agency or any other entity.
Purchase Agreement: As defined in Section 1 of this Agreement.
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Qualified Holders: Any holder or group of holders of Registrable
Securities making a written request pursuant to Section 2.1 hereof for the
registration of all or part of the Registrable Securities held by such holder or
holders if on the date of such request (a) such holder is Fresenius or an
Affiliate of Fresenius, or (b) the number of shares of Common Stock to be
registered exceeds 50% of the Registrable Securities then outstanding.
Registrable Securities: The 1,320,000 shares of Common Stock issued to
Fresenius on the date of this Agreement pursuant to the terms of the Purchase
Agreement, including any securities issued or issuable with respect to such
shares of Common Stock by way of stock dividend or stock split or in connection
with a combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise, except for shares of Common Stock which have been
distributed to the public pursuant to a registration statement or Rule 144 (or
any successor provision) under the Securities Act and except for shares the
certificates evidencing which have had the legend specified in Section 3.8(a)
hereof properly removed pursuant to Section 3.8(b) hereof.
Registration Expenses: All expenses incident to the Company's
performance of or compliance with Section 2 hereof, including without limitation
all registration, filing and NASD fees, all fees and expenses of complying with
securities or blue sky laws, all printing expenses, messenger and delivery
expenses, the fees and disbursements of counsel for the Company and of its
independent public accountants, including the expenses of any special audits
and/or "cold comfort" letters required by or incident to such performance and
compliance, the reasonable fees and disbursements of a single counsel retained
by the holders of the Registrable Securities being registered and any fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities, but excluding underwriting discounts and commissions and transfer
taxes, if any, provided that, in any case where Registration Expenses are not to
be borne by the Company, such expenses shall not include salaries or fringe
benefits of Company personnel or general overhead expenses of the Company, and
shall not include premiums or other expenses relating to liability insurance
required by underwriters or the Company, or other expenses for the preparation
of financial statements or other data normally prepared by the Company in the
ordinary course of its business or which the Company would have incurred in any
event.
Second Registration: As defined in Section 2.1.4 of this Agreement.
Securities Act: The Securities Act of 1933, or any similar federal
statute, and the rules and regulations of the Commission thereunder, all as the
same shall be amended from time to time.
3.6. Determination of Percentages of Registrable Securities. For
purposes of determining any percentage or
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specified group of holders of Registrable Securities, holders of securities
which are exercisable or exchangeable for, or convertible into, Registrable
Securities shall be deemed to be holders of the Registrable Securities which are
at the time issuable upon such exercise, exchange or conversion.
3.7. Consolidation, Merger, Etc. The Company agrees not to effect any
consolidation, merger or any transfer of all or substantially all of its
properties or assets for consideration consisting of securities unless, prior to
the consummation thereof, the successor corporation or other Person (if other
than the Company) resulting from such consolidation or merger or the Person
purchasing such properties or assets shall assume, by written instrument
executed and mailed or delivered to each holder of Registrable Securities, the
due and punctual performance of the obligations of the Company hereunder. The
provisions of this Section 3.7 shall similarly apply to successive
consolidations, mergers and transfers.
3.8. Restrictive Legend. (a) Except as otherwise permitted by this
Section 3.8, each Registrable Security shall be stamped or otherwise imprinted
with a legend in substantially the following form:
"No sale, offer to sell, or transfer of the shares represented
by this certificate shall be made unless a registration statement under
the Federal Securities Act of 1933, as amended, with respect to such
shares is then in effect or an exemption from the registration
requirements of said act is then in fact applicable to said shares."
(b) With respect to any particular Registrable Securities evidenced by
a certificate or certificates bearing the legend required by Section 3.8(a), (i)
whenever such Registrable Securities shall have been effectively registered
under the Securities Act, or (ii) when, in the opinion of either outside
counsel, reasonably satisfactory to the Company, for the holder thereof or
counsel for the Company, such legend is no longer required to appear on the
certificates in order to ensure compliance with the Securities Act, the holder
thereof shall be entitled to receive from the Company, without expense (other
than applicable transfer taxes, if any), new certificates evidencing such
securities of like tenor not bearing the legend required by Section 3.8(a)
hereof.
3.9. Company Cooperation. From and after such time, if any, as the
Common Stock shall cease to be registered under the Exchange Act, the Company
agrees to cooperate in such manner as may be reasonably requested by any holder
of Registrable Securities in connection with a proposed sale or other transfer
of all or any portion of such Registrable Securities in order to permit such
holder to utilize exemptions from registration under the Securities Act and
state securities laws which may be applicable to the proposed sale or other
transfer, including without limitation, if applicable, providing to prospective
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purchasers the information specified in Rule 144A promulgated under the
Securities Act or any similar or successor rule.
3.10. Miscellaneous. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the respective successors and assigns of
the parties hereto (including without limitation the holders from time to time
of Registrable Securities), whether so expressed or not. This Agreement embodies
the entire agreement and understanding between the Company and Fresenius and
supersedes all prior agreements and understandings relating to the subject
matter hereof. This Agreement shall be construed and enforced in accordance with
and governed by the domestic substantive laws of the State of Utah, without
reference to any choice or conflict of laws principles which could cause the
application of the domestic substantive laws of any other jurisdiction. The
headings in this Agreement are for purposes of reference only and shall not
limit or otherwise affect the meaning hereof. 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.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed on the date first written above.
GULL LABORATORIES, INC.
By: /s/ George R. Evanega
--------------------------
Name: George R. Evanega
Title:President and CEO
FRESENIUS AKTIENGESELLSCHAFT
By: /s/ Rainer Baule
--------------------------
Name: Rainer Baule
Title: Member of the Management Board
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