EXHIBIT 10.5
FOURTH AMENDMENT OF
STOCK PURCHASE, REORGANIZATION
AND JOINT VENTURE AGREEMENT
This FOURTH AMENDMENT OF STOCK PURCHASE, REORGANIZATION AND JOINT
VENTURE AGREEMENT (this "Fourth Amendment") is made and entered into as of the
20th day of March, 2002, by and among CTI, INC., a Tennessee corporation
(hereinafter "CTI"); SIEMENS MEDICAL SOLUTIONS USA, INC., f/k/a Siemens Medical
Systems, Inc., a Delaware corporation (hereinafter "SIEMENS"; successor in
interest to Siemens Gammasonics, Inc.); CTI PET SYSTEMS, INC., a Tennessee
corporation ("CPS"); and XX. XXXXX X. XXXXXXXX, XX. XXXXXX XXXX, XXXXXXX X.
XXXXXXXX, and J. XXXXX XXXXX (hereinafter "MANAGEMENT").
WHEREAS, CTI, Siemens, CPS and Management heretofore made and entered
into a Stock Purchase, Reorganization and Joint Venture Agreement dated as of
December 10, 1987, as amended by (i) Amendment of Stock Purchase, Reorganization
and Joint Venture Agreement dated as of Xxxxx 00, 0000, (xx) Second Amendment of
Stock Purchase, Reorganization and Joint Venture Agreement dated as of June 30,
1997, and (iii) Third Amendment to Stock Purchase, Reorganization and Joint
Venture Agreement dated April ___, 2001 (hereinafter, the "JOINT VENTURE
AGREEMENT"); and
WHEREAS, the parties wish to further amend the Joint Venture Agreement
as set forth below.
NOW, THEREFORE, in consideration of the terms and conditions contained
herein, the parties hereto mutually agree as follows:
1. JOINT VENTURE AGREEMENT. The Joint Venture Agreement is
incorporated herein by reference. Capitalized terms not defined herein shall
have the meanings given them in the Joint Venture Agreement. As amended hereby,
the Joint Venture Agreement shall remain in full force and effect.
2. OFFICERS OF CPS. Section 13.4 of the Joint Venture Agreement
is amended by deleting the original language thereof in its entirety and
substituting in its place the following:
13.4 Officers of CPS.
(a) Siemens shall be entitled (i) to nominate one
individual to serve as either Chairman of the Board
of Directors of CPS or President of CPS; (ii) to
nominate a successor for such individual; and (iii)
to propose the removal from office of any person it
nominates under either clause (i) or (ii) above.
(b) CTI shall be entitled (i) to nominate one individual
to serve as either Chairman of the Board of Directors
of CPS or President of CPS; (ii) to nominate a
successor for such individual; and (iii) to propose
the removal from office of any person it nominates
under either clause (i) or (ii) above.
(c) The Board of Directors of CPS shall, by majority
vote, appoint one of the individuals nominated
pursuant to subpart (a) or subpart (b) above to serve
as Chairman of the Board and the other nominee to
serve as President of CPS. Specifically, if the
Chairman of the Board of Directors of CPS is the
nominee of CTI, then the President of CPS shall be
the nominee of Siemens and, similarly, if the
Chairman of the Board of Directors of CPS is the
nominee of Siemens, then the President of CPS shall
be the nominee of CTI. If either Siemens or CTI
proposes the removal of its nominee as Chairman of
the Board or President, the Board of Directors of CPS
shall promptly effect such removal and shall appoint
such party's successor nominee to serve as either
Chairman of the Board or President of CPS, as the
Board deems appropriate. In the event of an
abstention by a director that results in a tie vote
in connection with the appointment of either the
Chairman or President, (i) the nominee designated by
Siemens pursuant to subpart (a) above will serve in
the position that his or her Siemens designated
predecessor served prior to such tie vote; and (ii)
the nominee designated by CTI pursuant to subpart (b)
above will serve in the position that his or her CTI
designated predecessor served prior to such tie vote.
If the tie vote in connection with the appointment of
either the Chairman or President continues for a
period of three (3) years from the date of the
original tie vote, then the nominees designated by
Siemens and CTI will rotate offices such that (1) the
nominee designated by Siemens pursuant to subpart (a)
above will serve in the position that his or her CTI
designated predecessor served prior to such tie vote;
and (2) the nominee designated by CTI pursuant to
subpart (b) above will serve in the position that his
or her Siemens designated predecessor served prior to
such tie vote. The nominees of the parties will
continue to rotate such offices on three year terms
for so long as there continues to be a tie vote by
the Board of Directors in connection with the
appointment of either the Chairman or President.
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(d) Xx. Xxxx currently serves as both the President and
the Vice President of Research and Development of CPS
and will continue to serve in such capacities until
the Board of Directors selects a new Vice President
of Research and Development. Notwithstanding any
other term or provision contained herein, the parties
agree that the election or appointment of Xx. Xxxx'x
successor as Vice President of Research and
Development and Xx. Xxxx Xxxxxx'x successor as Vice
President of Marketing shall require the unanimous
approval of the Board of Directors of CPS.
(e) Other than as set forth in subparts (a) through (d)
above, each officer of CPS shall be appointed or
removed by the majority vote of the Board of
Directors of CPS and unless otherwise agreed to in
writing by CTI and Siemens, all future nominees to
serve as officers of CPS shall be independent of CTI
and Siemens.
(f) As soon as reasonably practicable, but not later than
October 1, 2002, the Board of Directors of CTI or the
Board of Directors of CPS, as the case may be, shall
cause (i) Xx. Xxxx to resign as an officer of CTI;
and (ii) Xxxxxxx Xxxxxxx to resign as an officer of
either CTI or CPS. Xx. Xxxx and Xx. Xxxxxxx shall
cease performing any duties or responsibilities as an
officer of CTI or CPS, as the case may be, upon the
effective date of their resignations and, thereafter,
may serve as an officer of either CTI or CPS but
shall not serve as an officer of both entities
simultaneously without the prior written consent of
Siemens. Notwithstanding the foregoing, the parties
agree that Xx. Xxxx will continue to serve as a
director of CTI and nothing contained herein shall
affect his continued service in such capacity.
3. CTI BOARD. Section 13.8 of the Joint Venture Agreement is
amended by deleting the original language thereof in its entirety and
substituting in its place the following:
13.8 CTI Board. For so long as CTI and any of its
Affiliates, in the aggregate, and Siemens and any of
its Affiliates, in the aggregate, each holds more
than twenty percent (20%) of the outstanding shares
of CPS Common Stock, Siemens shall be entitled to
nominate one individual to serve as a member of the
Board of Directors of CTI, and Management agrees to
vote its shares of CTI Common Stock for the election
of such nominee.
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4. SIEMENS COINCIDENCE OPTION. Section 4 of the Second Amendment
of Stock Purchase, Reorganization and Joint Venture Agreement dated June 30,
1997 (the "Second Amendment") is amended by deleting the original language
thereof in its entirety and substituting in its place the following:
4. Siemens Coincidence Option. Notwithstanding
any other term or provision of the Joint Venture
Agreement, Siemens shall have the right to
manufacture and distribute, without paying any
royalty or other consideration to CTI or CPS, a
sodium iodide coincidence option on its dual-headed
SPECT (single photon emission computerized
tomography) cameras having specifications and
features not to exceed those set forth on Appendix A
attached hereto. Siemens covenants and agrees that it
shall not (i) add any new features to its coincidence
option, including, without limitation, attenuation
correction provided either by radiation sources or
x-ray computerized tomographs; or (ii) modify,
enhance or improve any existing features of the
coincidence option in a manner that results in the
option, as so modified, enhanced or improved,
exceeding the specifications set forth on Appendix A.
The parties agree that the restrictions set forth in
subpart (i) above do not apply to SPECT cameras that
do not have a coincidence option. The parties further
agree that Siemens shall have the right to make image
quality maintenance and reliability improvements to
the coincidence option on the SPECT cameras, and make
such other modifications as may be necessary to
correct software defects or deficiencies, so long as
such improvements or modifications do not result in
the coincidence option on the SPECT cameras, as so
improved or modified, exceeding the specifications or
features set forth on Appendix A. Subject to the
foregoing limitations, the activities of Siemens
contemplated in this Section 4 shall not be deemed to
be in violation of the non-competition provisions of
the Joint Venture Agreement. Siemens will use, as
needed, experience, coincidence-related intellectual
property, services and other material or resources of
CPS at commercially reasonable rates.
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5. APPOINTMENT OF CTI AS A DISTRIBUTOR. The parties acknowledge
that CPS is authorized and permitted to designate CTI as a distributor of its
products and that such designation does not constitute a violation of the
non-competition provisions contained in the Joint Venture Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Fourth
Amendment on the day and year first above written.
CTI, INC.
By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
President
SIEMENS MEDICAL SOLUTIONS USA, INC.
By: /s/ Xxxxxx XxXxxxxxxx
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Xxxxxx XxXxxxxxxx
President and Chief Executive Officer
CTI PET SYSTEMS, INC.
By: /s/ Xxxxxx Xxxx
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Xxxxxx Xxxx
President
MANAGEMENT:
/s/ Xxxxx X. Xxxxxxxx
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Xx. Xxxxx X. Xxxxxxxx
/s/ Xxxxxx Xxxx
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Xx. Xxxxxx Xxxx
/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
/s/ J. Xxxxx Xxxxx
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J. Xxxxx Xxxxx
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