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EXHIBIT 99.A.2
EXECUTION COPY
STANDSTILL AGREEMENT
between
i-STAT CORPORATION
and
XXXXXX LABORATORIES
dated as of
August 3, 1998
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THIS STANDSTILL AGREEMENT (the "Agreement") is made as of August 3,
1998, between i-STAT Corporation, a Delaware corporation (the "Company"), and
Xxxxxx Laboratories, an Illinois corporation ("Purchaser").
WHEREAS, concurrent with this Agreement, the Company and Purchaser are
entering into a Common Stock Purchase Agreement (the "Stock Purchase
Agreement"), pursuant to which, among other things, Purchaser shall acquire
certain shares of the Company's Common Stock, par value $.15 per share; and
WHEREAS, in connection with the transactions contemplated by this
Agreement and the Stock Purchase Agreement, the Company and Purchaser have also
entered into (i) a Funded Research & Development and License Agreement pursuant
to which Purchaser shall reimburse the Company for the development and
manufacture of certain new products and own such resulting intellectual property
jointly with the Company, and (ii) a Marketing and Distribution Agreement (the
"Distribution Agreement") pursuant to which the Company shall sell its products
to Purchaser for distribution in the territory defined in such Distribution
Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and of the
mutual covenants and subject to the terms and conditions set forth herein below,
the Company and Purchaser agree as follows:
1. DEFINITIONS
For purposes of this Agreement, each of the following terms
shall have the following meaning:
(i) "beneficially own" and "beneficial owner" have
the meanings contemplated by Rule 13d-3 promulgated by the
Securities and Exchange Commission under the Exchange Act.
(ii) "HP" means Hewlett-Packard Company, a Delaware
corporation (as successor by merger to Hewlett-Packard
Company, a California corporation).
(iii) "HP Agreement" means the Series B Preferred
Stock Purchase Agreement dated as of June 23, 1995 between the
Company and HP.
(iv) "HP Stock" means the Voting Stock of the Company
beneficially owned by HP.
(v) "Purchaser Group" means Purchaser, its
Subsidiaries and Affiliates, their respective officers and
directors, and any person acting on behalf of Purchaser, any
of such Subsidiaries or Affiliates or their respective
officers and directors.
(vi) "Rights Agreement" means that certain
Stockholder Protection
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Agreement dated as of June 26, 1995 between the Company and
First Fidelity Bank, National Association, as rights agent.
(vii) "Voting Stock" means the Common Stock and any
other securities of the Company generally entitled to vote for
the election of directors of the Company.
Capitalized terms used herein but not defined herein shall
have the meanings given them in the Stock Purchase Agreement.
2. PURCHASER'S STANDSTILL COVENANT
(a) Purchaser covenants and agrees that during the period
beginning on the date hereof and ending on the date which is one (1)
year after the termination of the initial term of the Distribution
Agreement (unless earlier terminated pursuant to the provisions of
Section 3 of this Agreement) (the "Standstill Period"), neither
Purchaser nor any other member of the Purchaser Group will, without the
prior written consent of the Company, except as otherwise expressly
permitted in and pursuant to this Agreement and the Stock Purchase
Agreement:
(i) in any manner acquire, agree to acquire, make any
proposal to acquire or announce or disclose any intention to
make a proposal to acquire, directly or indirectly, any Voting
Stock, if, immediately after such acquisition, Purchaser would
beneficially own more than the greater of (A) 25% of the then
outstanding Voting Stock and (B) such higher percentage of the
outstanding Voting Stock which HP may be permitted to
beneficially own at any time hereafter without violation of
Section 7.4 of the HP Agreement and without adverse effect
pursuant to the Rights Agreement (or any successor plan or
agreement thereto);
(ii) propose to enter into, or announce or disclose
any intention to propose to enter into, directly or
indirectly, any merger or business combination involving the
Company or any of its Subsidiaries or to purchase, directly or
indirectly, all or substantially all of the assets of the
Company and its Subsidiaries, taken as a whole;
(iii) request the Company (or its directors,
officers, employees or agents), directly or indirectly, to
take any action which would require the Company to make a
public announcement regarding the possibility of (A) a
business combination or merger involving the Company or any of
its Subsidiaries, on the one hand, or Purchaser or any member
of the Purchaser Group, on the other hand, or (B) the sale to
Purchaser or any member of the Purchaser Group of all or
substantially all of the assets of the Company and its
Subsidiaries, taken as a whole; or
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(iv) form, join or in any way participate in a
"group" (within the meaning of Section 13(d)(3) of the
Exchange Act) or otherwise act in concert with any person for
the purpose of circumventing the provisions of this Agreement,
including, but not limited to, any agreement with respect to
the HP Stock;
(v) make, or in any way participate in, directly or
indirectly, any "solicitation" of "proxies" (as such terms are
defined or used in Regulation 14A of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), to vote, or
seek to advise or influence any person with respect to the
voting of, any Voting Stock, or become a "participant" in any
"election contest" (as such terms are used or defined in
Regulation 14A of the Exchange Act).
(b) Purchaser covenants and agrees that during the Standstill
Period no member of the Purchaser Group, as part of or together with
any other "group" (within the meaning of Section 13(d) of the Exchange
Act) which any member of the Purchaser Group may be deemed to have
joined or become a member or participant in respecting any Voting
Stock, without the prior written consent of the Company, shall in any
manner acquire, agree to acquire, make any proposal to acquire or
announce or disclose any intention to make a proposal to acquire,
directly or indirectly, any Voting Stock, if immediately after such
acquisition, such persons, in the aggregate, would beneficially own
more than 45% of the then outstanding Voting Stock.
3. TERMINATION
(a) The restrictions on the Purchaser and the Purchaser Group
included in Section 2 of this Agreement shall immediately terminate if:
(i) the Company is in material breach of this
Agreement, the Stock Purchase Agreement, or any of the other
Alliance Agreements and the applicable cure period, if any,
for such breach has expired;
(ii) a third party (other than HP or an Institutional
Investor, as such latter term is defined in the Rights
Agreement) publicly discloses that it has acquired, or has the
right to acquire Voting Stock and such acquisition will result
in such third party beneficially owning 15% or more of the
Voting Stock;
(iii) HP acquires Voting Stock and such acquisition
results in HP beneficially owning more than 25% of the Voting
Stock without violation of Section 7.4 of the HP Agreement and
without adverse effect pursuant to the Rights Agreement (or
any successor plan or agreement thereto);
(iv) the Company executes a definitive agreement with
a third party with respect to any transaction which, if
consummated, would result in the then current stockholders of
the Company owning less than a majority of the Voting Stock of
the Company or its successor, or involving a sale of all or
substantially all of the assets of the Company;
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(v) a third party makes a tender or exchange offer to
purchase any class of Voting Stock to which the Company's
response is to take any action to cause the Rights Agreement
to be inapplicable to such tender or exchange offer, to
respond neutrally or to respond favorably;
(vi) a third party solicits proxies with respect to
any class of Voting Stock in connection with, or participates
in an "election contest", as such term is used in Rule 14a-11
of Regulation 14A of the Exchange Act, relating to, the
election of at least a majority of the directors of the
Company; or
(vii) if the Stock Purchase Agreement shall have been
terminated in accordance with its terms without the Closing
(as defined therein) having occurred.
(b) The Company shall notify Purchaser in writing within two
Business Days of the occurrence of any of the events or circumstances
set forth in Section 3(a) which notice shall include an explanation in
reasonable detail of the facts and circumstances surrounding such
occurrence.
4. MISCELLANEOUS
(a) Governing Law. This Agreement and the legal relations
between the parties arising hereunder shall be governed by and
interpreted in accordance with the laws of the State of Delaware
without regard to its conflict of laws principles. The parties hereto
agree to submit to the jurisdiction of the federal and state courts of
the State of Delaware situated in Wilmington with respect to the breach
or interpretation or the enforcement of any and all rights, duties,
liabilities, obligations, powers, and other relations between the
parties arising under this Agreement. Each party acknowledges that a
breach of any of the provisions of this Agreement would cause
irreparable and immediate harm and significant injury to the
non-breaching party, and that monetary damages would not adequately
compensate the non-breaching party and would be difficult to ascertain.
Accordingly, the parties hereby agree (i) that each party shall be
entitled, in addition to any other remedy to which such party may be
entitled at law or in equity, to compel specific performance of this
Agreement in any federal court or state court of the State of Delaware
situated in Wilmington, Delaware and (ii) to waive, in any such action
for specific performance, any defense of adequacy of a remedy at law.
(b) Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. This Agreement may not be
transferred or assigned by operation of law or otherwise without the
prior written consent of the other party except that Purchaser may
assign its rights under this Agreement to any direct or indirect
Subsidiary of Purchaser. No such assignment shall relieve any member of
the Purchaser Group from its obligations hereunder.
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(c) Entire Agreement; Amendment. This Agreement constitutes
the full and entire understanding and agreement between the parties
with regard to the subject matter hereof and supersedes all prior
agreements and understandings, both written and oral, between the
parties relating to the subject matter hereof. Neither this Agreement
nor any term hereof may be amended, waived or discharged other than by
a written instrument signed by each party.
(d) Notices and Dates. Any notice or other communication given
under this Agreement shall be sufficient if in writing and delivered by
hand, by messenger or by courier, or transmitted by facsimile, to a
party at its address set forth below (or at such other address as shall
be designated for such purpose by such party in a written notice to the
other party hereto):
i. if to the Company, to it at:
i-STAT Corporation
000X Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Chief Financial Officer
Fax: (000) 000-0000
with a copy addressed as set forth above but to the attention
of:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
ii. if to Purchaser, to it at:
Xxxxxx Laboratories
000 Xxxxxx Xxxx Xxxx
Xxxx. 0XX, Bldg. AP6C
Xxxxxx Xxxx, XX 00000
Attention: Director, Technology Acquisitions,
Diagnostics Division
Fax: (000) 000-0000
with a copy addressed as set forth above but to the attention
of:
Dept. 322; Bldg. AP6D
Attention: Divisional Vice President,
Domestic Legal Operations
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Fax: (000) 000-0000
Each such notice or other communication shall for all purposes
of this Agreement be treated as effective or having been given when delivered if
delivered personally, by messenger or by courier, or upon confirmation of
receipt if sent by facsimile.
(e) Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which
shall constitute one instrument.
(f) Severability. If any provision of this Agreement is
determined to be unenforceable for any reason, it shall be adjusted
rather than voided, if possible, to achieve the intent of the parties.
In any event, all other provisions shall be deemed valid and
enforceable to the greatest possible extent.
(g) Interpretation. When a reference is made in this Agreement
to Sections, such references shall be to a Section to this Agreement
unless otherwise indicated. The words "include," "includes" and
"including" when used herein shall be deemed in each case to be
followed by the words "without limitation." Use of any gender herein to
refer to any person shall be deemed to comprehend masculine, feminine,
and neuter unless the context clearly requires otherwise.
(h) Mutual Drafting. This Agreement is the joint product of
Purchaser and the Company, and each provision hereof has been subject
to the mutual consultation, negotiation and agreement of Purchaser and
the Company and their respective legal counsel and advisers and any
rule of construction that a document shall be interpreted or construed
against the drafting party shall not be applicable.
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IN WITNESS WHEREOF, the Company and Purchaser have caused this
Agreement to be signed by their respective representatives as of the date first
above written.
XXXXXX LABORATORIES
By: _________________________
Name:
Title:
I-STAT CORPORATION
By: _________________________
Name:
Title:
