General Statement of Beneficial Ownership — Schedule 13D
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SC 13D General Statement of Beneficial Ownership 21± 87K
2: EX-1 Underwriting Agreement 61± 255K
3: EX-2 Plan of Acquisition, Reorganization, Arrangement, 29± 120K
Liquidation or Succession
4: EX-3 Articles of Incorporation/Organization or By-Laws 34± 121K
5: EX-4 Instrument Defining the Rights of Security Holders 10± 35K
EX-3 — Articles of Incorporation/Organization or By-Laws
Exhibit 3
Conformed Copy
STOCKHOLDER AGREEMENT
dated as of April 28, 1995
among
HLR Holdings Inc.,
Roche Holdings, Inc.,
Hoffmann-La Roche Inc.
and
National Health Laboratories Holdings Inc.
TABLE OF CONTENTS
Page
----
ARTICLE 1
DEFINITIONS
1.1. Definitions................................................. 1
ARTICLE 2
CORPORATE GOVERNANCE
2.1. Composition of the Board of Directors....................... 7
2.2. Solicitation and Voting of Shares........................... 9
2.3. Committees of the Board of Directors........................ 10
2.4. Management Committee........................................ 11
2.5. Notice for Board and Committee Meetings..................... 12
2.6. Vacancies on Board Committees and the Management Committee.. 12
2.7. Approval Required for Certain Actions....................... 12
2.8. Enforcement of this Agreement............................... 15
2.9. Certificate of Incorporation and By-laws.................... 15
2.10. Governance of Company Subsidiaries.......................... 15
2.11. Strategic Planning Process.................................. 15
2.12. Operating Planning Processes................................ 16
2.13. Headquarters of the Company................................. 16
ARTICLE 3
ANTI-DILUTIVE RIGHTS
3.1. Anti-dilutive Rights........................................ 16
ARTICLE 4
ACQUISITIONS OF ADDITIONAL EQUITY SECURITIES
4.1. Limitation on Additional Acquisitions....................... 17
ARTICLE 5
TRANSFERS OF EQUITY SECURITIES
5.1. Transfers of Equity Securities.............................. 18
ARTICLE 6
REGISTRATION RIGHTS
6.1. Demand Registration......................................... 18
6.2. Conditions to Demand Registrations.......................... 18
6.3. Additional Conditions to Demand Offerings................... 19
6.4. Piggyback Registration...................................... 20
6.5. Reduction of Offering....................................... 20
6.6. Filings; Registration Procedures............................ 21
6.7. Registration Expenses....................................... 23
6.8. Indemnification by the Company.............................. 23
6.9. Indemnification by the Investor............................. 24
6.10. Conduct of Indemnification Proceedings...................... 24
6.11. Contribution................................................ 25
ARTICLE 7
FURNISHING OF INFORMATION
7.1. Furnishing of Information................................... 26
ARTICLE 8
COVENANTS
8.1. Rule 144 and Rule 144A...................................... 27
8.2. No Inconsistent Agreements.................................. 28
ARTICLE 9
MISCELLANEOUS
9.1. Notices..................................................... 28
9.2. Amendments; Waivers......................................... 29
9.3. Severability................................................ 29
9.4. Entire Agreement............................................ 29
9.5. Successors and Assigns...................................... 30
9.6. Parties in Interest......................................... 30
9.7. Counterparts; Effectiveness................................. 30
9.8. Governing Law............................................... 30
9.9. Specific Performance........................................ 30
9.10. Termination................................................. 30
9.11. Waiver of Jury Trial........................................ 31
STOCKHOLDER AGREEMENT
STOCKHOLDER AGREEMENT dated as of April 28, 1995 among HLR Holdings
Inc., a Delaware corporation ("HLR"), Roche Holdings, Inc., a Delaware
corporation ("Holdings") (HLR and Holdings are referred to herein collectively
as the "Investor"), Hoffmann-La Roche Inc., a New Jersey corporation (the
"Roche Holder" and, for purposes of Articles 6 and 8, the Roche Holder shall
be deemed to be, together with HLR and Holdings, the "Investor"), and National
Health Laboratories Holdings Inc., a Delaware corporation (the "Company").
WHEREAS, the Company, the Investor and Roche Biomedical Laboratories,
Inc., a wholly-owned subsidiary of the Investor ("RBL"), entered into an
Agreement and Plan of Merger dated as of December 13, 1994 (the "Merger
Agreement") pursuant to which among other things (i) RBL is being merged with
and into the Company (the "Merger"), (ii) all of the issued and outstanding
stock of RBL (except for shares held by RBL in its treasury) is being
converted in the Merger into shares of Common Stock (as defined below) of the
Company, (iii) Roche Holder is purchasing certain warrants (the "Roche
Warrants") from the Company at the Effective Time and (iv) shares of the
Company's Common Stock are being converted in the Merger into the Conversion
Consideration (as defined in the Merger Agreement), all upon the terms and
subject to the conditions set forth in the Merger Agreement; and
WHEREAS, the Investor, the Company, Mafco Holdings Inc., a Delaware
corporation ("Mafco") and National Health Care Group, Inc., a Delaware
corporation ("NHCG") and a significant stockholder of the Company, have
entered into the Sharing and Call Option Agreement dated as of December 13,
1994 providing, among other things, certain rights and obligations with
respect to the Company's Common Stock held by NHCG (the "Sharing and Call
Option Agreement"); and
WHEREAS, in connection with the Merger, the Investor, Roche Holder
and the Company desire to set forth certain agreements and understandings
regarding the Investor's and Roche Holder's interests in the Company;
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and agreements contained herein, the Investor, Roche Holder and the
Company hereby agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1. Definitions. Capitalized terms used and not defined
herein shall have the meanings assigned to them in the Merger Agreement. As
used in this Agreement, the following terms shall have the following meanings:
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control
with such Person, provided that no member of the Investor Group shall be
deemed an Affiliate of any other stockholder solely by reason of any
investment in the Company. For the purpose of this definition, the term
"control" (including with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities or by contract or otherwise.
"Annual Operating Plan" means, for any year, the operating plan of
the Company and its Subsidiaries which plan shall provide for an analysis of
gross profits, summary of operating expenses, personnel levels, pricing,
budgets for niche businesses, cash flows, capital expenditures and return on
funds assigned, and shall be consistent with the then applicable Strategic
Plan or the Initial Synergy Plan (as applicable) of the Company.
"Anti-dilutive Rights" has the meaning set forth in Section 3.1(a)
hereof.
"Associate" has the same meaning as in Rule 12b-2 promulgated under
the Exchange Act as in effect on the date hereof.
"Audit Committee" means the Audit Committee of the Board of Directors
described in Section 2.3(a)(i)hereof.
"Board" or "Board of Directors" means the Board of Directors of the
Company except where the context requires otherwise.
"Business Day" means any day except a Saturday, Sunday or other day
on which commercial banking institutions in New York City are authorized by
law or executive order to close.
"By-laws" means the by-laws of the Company, as amended from time to
time in accordance herewith.
"Certificate of Incorporation" means the certificate of incorporation
of the Company, as amended from time to time in accordance herewith.
"Common Stock" means the common stock of the Company, par value $.01
per share.
"Company" has the meaning set forth in the recitals of this
Agreement.
"Demand Registration" has the meaning described in Section 6.1(a)
hereof.
"Director" means a member of the Board of Directors.
"Discriminatory Transaction" means any transaction or other corporate
action (other than those imposed pursuant to the express terms of this
Agreement and other than those imposed with identical effect on all
stockholders) which would (x) impose limitations on the legal rights of the
Investor or any of its Affiliates or Associates as a stockholder of the
Company, including, without limitation, any action which would impose
restrictions based upon the size of security holding, nationality of a
securityholder, the business in which a securityholder is engaged or other
considerations applicable to the Investor and not to stockholders generally,
(y) deny any benefit to the Investor or any of its Affiliates or Associates,
proportionately as a holder of any class of Voting Stock, that is made
available to other holders of any class of Voting Stock or (z) otherwise
materially adversely discriminate against the Investor, its Affiliates or its
Associates as stockholders of the Company.
"Effectiveness of this Agreement" means the Effective Time (as
defined in the Merger Agreement).
"Employee Benefits Committee" means the Employee Benefits Committee
of the Board of Directors described in Section 2.3(a)(iii) hereof.
"Equity Security" means (i) any Common Stock or other Voting Stock,
(ii) any debt or equity securities of the Company convertible into or
exchangeable for Common Stock or other Voting Stock or (iii) any options,
rights or warrants (including the Warrants and any similar securities) issued
by the Company to acquire Common Stock or other Voting Stock.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"GAAP" means generally accepted accounting principles in effect in
the United States.
"HLR" has the meaning set forth in the recitals of this Agreement.
"Holdings" has the meaning set forth in the recitals of this
Agreement.
"Indebtedness" of any Person means, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person under conditional sale or other title retention agreements relating to
property or assets purchased by such Person, (iii) all obligations of such
Person issued or assumed as the deferred purchase price of property or
services, (iv) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any lien on property owned or acquired by such Person, whether or
not the obligations secured thereby have been assumed, (v) all guarantees by
such Person of Indebtedness of others, (vi) all obligations of such Person in
respect to interest rate protection agreements, foreign currency exchange
agreements or other interest or exchange rate hedging arrangements, in each
case other than those entered into primarily as a hedge, and (vii) all capital
lease obligations of such Person.
"Indemnified Party" has the meaning set forth in Section 6.10 hereof.
"Indemnifying Party" has the meaning set forth in Section 6.10
hereof.
"Independent Director" means a Director of the Company who is none of
(i) an officer, employee, Affiliate or Associate of the Company or an officer,
employee or director of any Affiliate or Associate of the Company, (ii) an
officer, employee, director, Affiliate or Associate of the Investor or (iii)
an Investor Director.
"Initial Period" has the meaning set forth in Section 2.1(b) hereof.
"Initial Synergy Plan" means the Strategic Plan applicable to the
initial two-year period following the Effectiveness of this Agreement.
"Inspectors" has the meaning set forth in Section 6.6(h) hereof.
"Investor" has the meaning set forth in the recitals of this
Agreement.
"Investor Director" means a Director who has been designated for such
position by the Investor in accordance with Section 2.1(b) hereof.
"Investor Group" means the Investor and its Affiliates (other than
the Company and its Subsidiaries).
"Investor Group Interest" means the percentage of Total Voting Power,
determined on the basis of the number of shares of Voting Stock actually
outstanding, that is controlled, directly or indirectly, by the Investor and
its Affiliates (other than the Company and its Subsidiaries).
"Maintenance Securities" has the meaning set forth in Section 3.1(a)
hereof.
"Management Committee" means the Management Committee of the Company
as described in Section 2.4 hereof.
"Market Purchase" means an acquisition of Equity Securities that is
within the definition of "Rule 10b-18 purchase" under Rule 10b-18(a)(3)
promulgated under the Exchange Act as in effect on the date hereof that
satisfies the conditions of Rule 10b-18(b).
"Merger" has the meaning set forth in the recitals of this Agreement.
"Merger Agreement" has the meaning set forth in the recitals of this
Agreement.
"Nominating Committee" means the Nominating Committee of the Board of
Directors as described in Section 2.3(a)(ii) hereof.
"Other Holders" means holders of Equity Securities other than any
member of the Investor Group.
"Person" means an individual, a partnership, a joint venture, a
corporation, a trust, an incorporated or unincorporated organization, a
government or any department or agency thereof.
"Piggyback Registration" has the meaning set forth in Section 6.4
hereof.
"Public Offering" means an underwritten public offering of Equity
Securities pursuant to an effective Registration Statement under the
Securities Act.
"RBL" has the meaning set forth in the recitals of this Agreement.
"Records" has the meaning set forth in Section 6.6(h) hereof.
"Registrable Securities" means Equity Securities (including any
Common Stock or other Voting Stock issuable upon any conversion or exercise of
any Equity Securities which are convertible securities) held by the Investor
Group which are Restricted Securities until (i) a registration statement
covering such securities has been declared effective by the SEC and such
securities have been disposed of pursuant to such effective registration
statement, (ii) such securities are sold under circumstances in which all of
the applicable conditions of Rule 144 (or any similar provisions then in
force) are met, or such securities may be sold pursuant to Rule 144(k) or
(iii) such securities are otherwise transferred, the Company has delivered a
new certificate or other evidence of ownership for such securities not bearing
a legend restricting transfer of such securities and such securities may be
resold without subsequent registration under the Securities Act.
"Registration Expenses" means (i) all registration and filing fees,
(ii) fees and expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel in connection with
blue sky qualifications of the securities registered), (iii) printing
expenses, (iv) internal expenses of the Issuer (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties), (v) reasonable fees and disbursements of counsel for the
Company and customary fees and expenses for independent certified public
accountants retained by the Company (including the expenses of any comfort
letters or costs associated with the delivery by independent certified public
accountants of a comfort letter or comfort letters), (vi) the reasonable fees
and expenses of any special experts retained by the Company in connection with
such registration, (vii) reasonable fees and expenses of one counsel for the
Investor selected by the Investor, (viii) fees and expenses in connection with
any review of underwriting arrangements by the National Association of
Securities Dealers, Inc. including fees and expenses of any "qualified
independent underwriter" and (ix) fees and disbursements of underwriters
customarily paid by issuers or sellers of securities; but shall not include
any underwriting fees, discounts or commissions attributable to the sale of
Registrable Securities, or any out-of-pocket expenses (except as set forth
in clause (vii) above) of the Investor (or the agents who manage their
accounts) or any fees and expenses of underwriter's counsel.
"Registration Statement" means a registration statement filed by the
Company with the SEC in accordance with the Securities Act.
"Restricted Securities" means any Equity Securities which are
restricted securities within the meaning of Rule 144(a)(3) (or any successor
provision), promulgated under the Securities Act.
"Roche Holder" has the meaning set forth in the recitals of this
Agreement.
"Roche Warrants" has the meaning set forth in the recitals of this
Agreement.
"Rule 144" and "Rule 144A" means Rule 144 and Rule 144A, as amended,
respectively (or any successor provisions), promulgated under the Securities
Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"Sharing and Call Option Agreement" has the meaning set forth in the
recitals of this Agreement.
"Special Majority Vote of the Board" means approval by a majority of
the entire Board of Directors, which majority includes a majority of all
Investor Directors and at least one Independent Director.
"Strategic Plan" means the strategic plan of the Company and its
Subsidiaries which sets forth the strategic direction for the Company and its
Subsidiaries and their businesses (by strategic business units) for a period
of five fiscal years and which provides for, among other things: an analysis
of the business environment, business objectives and strategies, business
revenues, financial forecasts, capital plans, acquisition and divestiture
plans, if any, business segment analysis, and niche business plans.
"Strategic Review" means a review and process that determines whether
the Strategic Plan is still valid, reviews progress to date, updates key
elements of the Strategic Plan, if deemed necessary, and proposes
modifications in objectives and strategies if deemed necessary. Such process
shall include a review of (i) whether assumptions (including, as to market
factors, competition, regulation, patents, etc.) are still valid; (ii) whether
objectives are still realistic; (iii) whether strategies and programs are on
track; (iv) whether resource assessments are still valid; and (v) and updated
outlook (financial and nonfinancial) if material deviations are expected.
"Subsidiary" has the same meaning as in Rule 12b-2 promulgated under
the Exchange Act, as in effect on the date hereof.
A "Substantial Part" of any Person means, as of any date of
determination, more than 10% of the fair market value of the total assets of
such Person and its Subsidiaries as of the end of such Person's most recent
fiscal quarter ending prior to such date of determination.
"13D Group" means any group of Persons formed for the purpose of
acquiring, holding, voting or disposing of Voting Stock which would be
required under Section 13(d) of the Exchange Act, and the rules and
regulations thereunder (as in effect, and based on legal interpretations
thereof existing, on the date hereof), to file a statement on Schedule 13D with
the SEC as a "person" within the meaning of Section 13(d)(3) of the Exchange
Act if such group beneficially owned Voting Stock representing more than 5% of
any class of Voting Stock then outstanding.
"Total Voting Power" means the aggregate number of votes entitled to
be voted in an election of Directors of the Company by all of the outstanding
Voting Stock.
"Voting Power" means the ability to vote or to control, directly or
indirectly, by proxy or otherwise, the voting of any Voting Stock in the
election of Directors.
"Voting Stock" means securities having the right to vote generally in
any election of Directors of the Company.
"Warrant Agreement" means the agreement between the Company and the
warrant agent designated therein pursuant to which, warrants, including the
Roche Warrants, are being issued as contemplated by the Merger Agreement.
"Warrant Shares" means Common Stock issued upon exercise of the
Warrants.
"Warrants" means the warrants issued pursuant to the Warrant
Agreement, including the Roche Warrants.
All terms defined in this Agreement in the singular shall have a
comparable meaning when used in the plural, and vice versa. For the purpose
of this Agreement, the phrases "to the knowledge of" or "known to" mean, with
respect to any Person, (i) known to any officer or senior manager of such
Person or any Subsidiary of such Person or (ii) could reasonably be expected
to be known to any such officer or senior manager.
ARTICLE 2
CORPORATE GOVERNANCE
SECTION 2.1. Composition of the Board of Directors. In
consideration of the Investor's interest in the Company following consummation
of the Merger, the composition of the Board of Directors shall be determined
as provided in this Article 2. The composition of the Board of Directors and
the manner of selecting members thereof shall be as follows:
(a) At and after the Effectiveness of this Agreement, the Board of
Directors shall be comprised of seven Directors. The number of Directors
comprising the Board may be changed only with the approval of the Board in
accordance with Section 2.7.
(b) Immediately upon the Effectiveness of this Agreement, the Company,
through its Board of Directors, shall cause to be duly appointed to its Board
three individuals designated prior to the Merger by the Investor to the
Company, which individuals shall include Mr. Jean-Luc Belingard, Mr. Thomas P.
Mac Mahon and Dr. James Powell (unless any such individual is unable to serve
in such capacity, in which event the Board shall duly elect as a Director one
or more substitute individuals designated by the Investor prior to the
Merger), provided that any individual so designated other than the
aforementioned Persons shall be reasonably acceptable to a majority of the
Independent Directors in office immediately prior to the Effectiveness of
this Agreement. (Each individual designated by the Investor to be a
Director pursuant to the terms of this Agreement shall be referred to
herein as an "Investor Director" and all such Persons shall be referred to
herein as the "Investor Directors".) For a period commencing at the
Effectiveness of this Agreement and ending at the first anniversary thereof
(the "Initial Period"), Mr. James R. Maher shall (unless he is unwilling
or unable to serve) be a Director and shall be elected by the Board of
Directors to serve as Chairman of the Board for such Initial Period.
During the Initial Period, Mr. Mac Mahon shall be elected by the Board of
Directors to serve as Vice Chairman of the Board. Following the Initial
Period (or at such earlier time as Mr. Maher shall die, resign, retire or
be disqualified or removed from office), (i) Mr. Maher shall resign his
positions and not stand for reelection as a Director or as a member of any
committee of the Board or of the Management Committee (if he is then
serving on any such committee) and (ii) Mr. Mac Mahon shall be elected by
the Board of Directors to serve as the Chairman of the Board. The position
of Vice Chairman will be eliminated after the Initial Period. During the
Initial Period, the remaining three Directors shall be Independent
Directors and shall be Persons mutually acceptable to the Investor and a
majority of the members of the Board of Directors in office immediately
prior to the Effectiveness of this Agreement and may include one or more
Persons who were Independent Directors prior to the Effective Time, such
Persons to serve in each case until the expiration of the term of his
respective election (or any earlier termination, resignation or removal).
(c) Except as otherwise provided in Section 2.1(b) with respect to the
Initial Period, at all times from and after the Effectiveness of this
Agreement, the Directors shall be nominated as follows (it being understood
that such nomination shall include any nomination of any incumbent Director
for reelection to the Board of Directors):
(i) the Investor shall have the right to designate three
Investor Directors, each of whom shall be nominated for Director by the
Nominating Committee; and
(ii) the Nominating Committee shall nominate the remaining
Directors, each of whom (A) shall have an outstanding reputation for
personal integrity and distinguished achievement in areas relevant to
the Company (in applying the foregoing criteria the Nominating Committee
shall be guided by the quality of the individuals currently serving as
Directors of the Company) and (B) shall be an Independent Director.
The composition of the Board of Directors may be changed only with the
approval of the Board in accordance with Section 2.7.
(d) If (i) at any time the Investor Group Interest is less than 30%
but at least 20%, the Investor shall have the right to designate for
nomination two Investor Directors and (ii) at any time the Investor Group
Interest shall be less than 20% but at least 10%, the Investor shall have the
right to designate for nomination one Investor Director.
(e) If at any time when Mr. Mac Mahon (or any successor) shall be
serving as Chairman of the Board, he (or such successor) dies, resigns,
retires, is disqualified or is removed from office, such position shall be
filled by the Board in accordance with Section 2.7.
(f) The Investor and the Nominating Committee, respectively, shall
have the right to designate any replacement for a Director designated for
nomination or nominated in accordance with this Section 2.1 by the Investor or
the Nominating Committee, respectively, upon the death, resignation,
retirement, disqualification or removal from office for other cause of such
Director. Such replacement for any Independent Director shall also be an
Independent Director conforming to the standard set forth in Section
2.1(c)(ii). The Board of Directors shall duly appoint as a Director each
Person so designated to fill a vacancy on the Board.
(g) Without limiting the generality of 2.1(c) Section , in the event
that at any time after the Effectiveness of this Agreement the number of
Investor Directors on the Board of Directors differs from the number that
the Investor has the right (and desire) to designate, (i) if the number of
Investor Directors exceeds such number, the Investor shall promptly take
all appropriate action to cause to resign that number of the Investor
Directors as is required to make the remaining number of such Investor
Directors conform to the provisions of this Agreement or (ii) if the number
of Investor Directors otherwise is less than such number, the Board shall
take all necessary action to create sufficient vacancies on the Board to
permit the Investor to designate the full number of Investor Directors
which it is entitled (and desires) to designate pursuant to the provisions
of this Agreement (such action may include but need not be limited to
seeking the resignation or removal of Directors or, at the request of the
Investor and/or calling a special meeting of the shareholders of the
Company for the purpose of removing Directors to create such vacancies to
the extent permitted by applicable law). Upon the creation of any vacancy
pursuant to the preceding sentence, the Investor shall designate the Person
to fill any such vacancy in accordance with the provisions of this
Agreement and the Board of Directors shall elect each Person so designated.
SECTION 2.2. Solicitation and Voting of Shares. (a) With respect
to each meeting of stockholders of the Company at which Directors are to be
elected, the Company shall use its best efforts to solicit from the
stockholders of the Company eligible to vote in the election of Directors
proxies in favor of the nominees selected in accordance with Section 2.1.
(b) In any election of Directors or any meeting of the stockholders
of the Company called expressly for the removal of Directors, so long as the
Board of Directors includes (and will include after any such election or
removal) the number of Investor Directors (and the proportion of the entire
Board the Investor is entitled (and desires) to designate as nominees for
Investor Directors hereunder) contemplated by Section 2.1, the Investor
shall be, and shall use its best efforts to cause its Affiliates to be,
present for purposes of establishing a quorum, and shall vote all of their
shares of Voting Stock (i) in favor of any nominee or Director selected in
accordance with Section 2.1, (ii) in favor of removal of any Director as
contemplated by Section 2.1(g), and (iii) against the removal of any Director
designated in accordance with Section 2.1 other than (A) for cause and (B)
pursuant to Section 2.1(g). In any other matter submitted to a vote of the
stockholders of the Company, the Investor Group may vote any or all of its
shares of Voting Stock and other Equity Securities in its sole discretion
unless such matter was approved by the Investor or a majority of the
Investor Directors in accordance with Section 2.7, in which case the
Investor shall, and shall use its best efforts to cause its Affiliates to,
vote all of their Voting Stock and any other Equity Securities in favor of
such matter.
(c) The Investor agrees that it will, and will use its best efforts to
cause its Affiliates (other than the Company and its Subsidiaries) to, take
all action as a stockholder of the Company or as is otherwise reasonably
within its control, as necessary to effect the provisions of this Agreement.
SECTION 2.3. Committees of the Board of Directors. (a) Subject to
the general oversight and authority of the full Board of Directors, the Board
of Directors shall establish, empower, maintain and elect the members of the
following committees of the Board of Directors at all times while this
Agreement is in effect:
(i) an Audit Committee, comprised solely of Independent
Directors;
(ii) a Nominating Committee which shall, subject to Section 2.1,
be responsible for recommending the nomination of Directors and be
comprised and conduct itself as follows:
(A) after the Effectiveness of this Agreement, the
Nominating Committee shall be composed of two Independent Directors
and one Investor Director;
(B) a majority of the Independent Directors shall designate
the Independent Directors who shall serve on the Nominating Committee
and a majority of the Investor Directors shall designate the Investor
Director who shall serve on the Nominating Committee;
(C) a quorum of the Nominating Committee required for any
action thereby shall require the attendance of all members thereof;
and
(D) the Nominating Committee shall act by majority vote of
the entire Nominating Committee;
(iii) an Employee Benefits Committee, responsible, among other
things, for (A) recommending to the Board of Directors, for approval by
a majority of the Board of Directors (subject to Section 2.7), (I) the
adoption and amendment of all employee benefit plans and arrangements
and (II) the engagement of, terms of any employment agreements and
arrangements with and termination of employment of, all Persons who are
or would be designated by the Company as "officers" for purposes of
Section 16 of the Exchange Act (such Persons being referred to herein as
"Section 16 Officers") and (B) granting under and administering the
Company's stock option incentive plans with respect to the participation
therein of Section 16 Officers, which committee shall be comprised
solely of Investor Director(s) and Independent Directors (with
Independent Directors constituting a majority), who constitute
"disinterested persons" (as such term is defined in Rule 16b-3(c) under
the Exchange Act), and the Chairman of which committee shall, subject to
Section 2.1(b), be Mr. Jean-Luc Belingard until his successor is
duly elected; and
(iv) such other committees as the Board of Directors deems
necessary or desirable to establish, empower and maintain, provided that
such committees are approved by a Special Majority Vote of the Board and
are established in compliance with the terms of this Agreement.
(b) Except as otherwise provided in this Agreement or as agreed by a
majority of the Independent Directors and the Investor Directors, the number
of Investor Directors serving on each committee of the Board of Directors
shall be the same proportion of the total membership of such committee as the
number of Investor Directors is of the entire Board of Directors, with a
minimum of one member so long as the Investor is entitled hereunder to
designate one Investor Director. Any members of any committee which are
Investor Directors shall, in the event of any vacancy in such membership, be
replaced by a majority of the Investor Directors.
(c) If the Investor Group Interest shall be less than 30% but more
than 20%, the number of Investor Directors serving on each committee of the
Board of Directors (other than the Audit Committee) shall be (x) two, if such
committee shall have five or more total members, or (y) one, in all other
cases. If the Investor Group Interest shall be less than 20% but more than
10%, the number of Investor Directors serving on each committee of the Board
of Directors (other than the Audit Committee) shall be one. Any members of
any committee which are Investor Directors shall, in the event of any vacancy
in such membership, be replaced by a majority of the Investor Directors.
SECTION 2.4. Management Committee. (a) Immediately after the
Effectiveness of this Agreement, the Company shall establish a Management
Committee, which shall be comprised and conduct itself as follows:
(i) the Management Committee shall be comprised of (A) the
President and Chief Executive Officer of the Company, who shall serve as
the Chairman of the Management Committee, (B) the Chief Operating
Officer of the Company, (C) the Chief Financial Officer of the Company,
(D) the Chief Administrative Officer of the Company, (E) the General
Counsel for the Company, (F) the Executive Vice President, Sales and
Marketing of the Company, (G) the Executive Vice President, Human
Resources of the Company, (H) the Chairman of the Board and (I) the Vice
Chairman of the Board, if any, and may include other Board members or
executive officers of the Company, in each case in accordance with
Section 2.7; and
(ii) the Management Committee shall act by a consensus of the
members thereof, provided that such consensus includes the approval of
the Chairman of the Management Committee.
(b) The Management Committee shall have the following
responsibilities, authority and duties, and such other responsibilities,
authority and duties as the Board (acting by Special Majority Vote of the
Board) may from time to time grant, subject to the other provisions of this
Agreement, the Certificate of Incorporation and the By-laws:
(i) review and approval of the Strategic Plan prior to
consideration and approval by the Board in accordance with Section 2.7;
(ii) review and approval of the Annual Operating Plan and annual
operating budget of the Company prior to consideration and approval of
the Board in accordance with Section 2.7; and
(iii) overseeing the implementation of the Initial Synergy Plan,
including the attainment of the synergy goals of such Plan and the
integration of the businesses of RBL and its Subsidiaries (prior to the
Merger) and the Company.
(c) Meetings of the Management Committee shall be conducted at least
six times per year, or more often as determined by the Chairman of the
Management Committee, in his discretion.
SECTION 2.5. Notice for Board and Committee Meetings. (a) No
action by the Board of Directors or any committee of the Board of Directors
shall be valid unless taken at a meeting for which seven days prior notice has
been duly given or waived by the Directors or the members of such committee,
as the case may be. Such notice shall include a description of the general
nature of the business to be transacted at the meeting, and no other business
may be transacted at such meeting unless all Directors or members of the
committee as the case may be, are present and consent to the consideration of
such other business.
(b) In the case of committee meetings, any committee member unable to
participate in Person at any meeting shall be given the opportunity to
participate by telephone.
(c) Each of the committees established by the Board of Directors
pursuant to Section 2.3 and the Management Committee established pursuant to
Section 2.4 shall establish and adopt such other rules and procedures for its
operation and governance (consistent with the terms of this Agreement and the
Company's Certificate of Incorporation and By-laws) as it shall determine
appropriate and may seek such consultation and advice as to matters within its
purview as it shall require.
SECTION 2.6. Vacancies on Board Committees and the Management
Committee. In the event that any Investor Director or Independent Director
ceases to serve on any committee of the Board of Directors or on the
Management Committee, the majority of the Investor Directors and the majority
of the Independent Directors shall designate, respectively, a replacement
member. If after a reasonable time, no successor to such Director is
designated in accordance with the terms hereof to serve on such committee, the
number of members of such committee may be reduced if such reduction does not
(and no such reduction is intended to) result in a change of the relative
authorities within such committee among the Investor Directors (taken as a
group) and the Independent Directors (taken as a group).
SECTION 2.7. Approval Required for Certain Actions. (a) So long
as the Investor Group Interest shall be 30% or more, no action by the Company
or any Subsidiary (including but not limited to any action by their respective
boards of directors or any committee thereof) shall be taken with respect to
any of the following matters without the approval of the Board which approval
shall be by a Special Majority Vote of the Board:
(i) the appointment of any of the Chairman of the Board, Chief
Executive Officer, President, Secretary, Treasurer, General Counsel,
Chief Financial Officer, Chief Operating Officer or Chief Administrative
Officer or other executive officer in any similar capacity of the
Company or any Subsidiary thereof (and the election of any directors to
the board of directors of any such Subsidiary);
(ii) the approval of each Strategic Plan and each Annual
Operating Plan developed subsequent to the Effectiveness of this
Agreement and any material amendment to, modification of, or deviation
from, the Initial Synergy Plan or any other Strategic Plan;
(iii) any merger or consolidation of the Company or any of its
Subsidiaries with or into any Person other than the Company or any of
its Subsidiaries;
(iv) any amendment to the Certificate of Incorporation or By-laws
or any adoption of or amendment to the certificate of incorporation or
by-laws of any Subsidiary of the Company;
(v) any acquisition of assets, business, operations or
securities by the Company or any Subsidiary thereof by merger or
otherwise (whether in one transaction or a series of related
transactions) which assets, business, operations or securities would
constitute a Substantial Part of the Company measured prior to such
transaction;
(vi) any sale, asset exchange, lease, exchange, mortgage, pledge,
transfer or other disposition by merger or otherwise by the Company or
any of its Subsidiaries (in one transaction or a series of related
transactions) of any Subsidiary of the Company or assets of the Company
or any Subsidiary thereof which constitutes a Substantial Part of the
Company;
(vii) the settling of any litigation, investigation or proceeding
involving (A) any governmental authority or (B) any amount proposed to
be paid in settlement is in excess of $5,000,000;
(viii) any material transaction between (x) the Company or any of
its Subsidiaries, on the one hand, and (y) any stockholder or Affiliate
of the Company (other than any Subsidiary of the Company and other than
the Investor and its Affiliates), on the other hand (other than as
specifically contemplated by the Sharing and Call Option Agreement);
(ix) the issuance of any security of the Company or any
Subsidiaries of the Company (other than as specifically contemplated by
the Merger Agreement or the Warrant Agreement or pursuant to the
exercise of existing employee stock options);
(x) capital expenditures individually in excess of $1,000,000 or
in the aggregate in excess of $50,000,000 per annum or which represent
in the aggregate 110% or more of the total amount provided for in the
Annual Operating Plan for such year;
(xi) a reclassification, combination, split, subdivision or
redemption, purchase or other acquisition, directly or indirectly, of
any debt or equity securities or other capital stock of the Company
except as provided in the Merger Agreement and the Warrant Agreement;
(xii) any change in the size or composition of the Board of
Directors or any committee thereof or of the Management Committee or the
establishment of a new committee of the Board;
(xiii) any incurrence, assumption or issuance by the Company or any
of its Subsidiaries of Indebtedness other than (x) Indebtedness existing
immediately after the Effective Time) and any refinancings thereof and
(y) other Indebtedness in an aggregate principal amount at any one time
outstanding not to exceed $25,000,000;
(xiv) the declaration of any dividend or the making of any other
distribution with respect to, or the redemption, repurchase or other
acquisition of, any class of securities of the Company or any of its
Subsidiaries, except as expressly otherwise provided in the Merger
Agreement or the Warrant Agreement;
(xv) the proposal or entry into by the Company or any of its
Subsidiaries of any Discriminatory Transaction;
(xvi) any relocation of the headquarters of the Company;
(xvii) the determination of compensation, benefits, perquisites and
other incentives for executive officers (other than officers whose total
compensation including employee stock options and similar incentives
does not exceed $150,000 annually) and the approval or amendment of any
plans or contracts in connection therewith;
(xviii) the adoption or implementation of any takeover defense
measures, including the institution, amendment or redemption by the
Company or any of its Subsidiaries of any stockholder rights plan or
similar plan or device, or any change of control matters (including
change of control provisions in agreements to which the Company or any
Subsidiary thereof is a party);
(xix) any transaction involving or any action by the Company or
any Subsidiary (A) leading to a circumstance in which any Person or 13D
Group (other than the Investor and/or its Affiliates) shall beneficially
own Equity Securities representing a percentage of Total Voting Power,
or any equity interest in the Company greater than 15% or (B) requiring
the approval of holders of a majority of the Voting Stock or Equity
Securities;
(xx) any change in the fiscal year or the accounting or tax
principles, or policies with respect to the financial statements,
records or affairs of the Company or any Subsidiary, except as required
by GAAP or by law; or
(xxi) the dissolution of the Company or any of its Subsidiaries
thereof; the adoption of a plan of liquidation of the Company or any
Subsidiaries; or any action by the Company or any of its Subsidiaries to
commence any suit, case, proceeding or other action (A) under any
existing or future law of any jurisdiction relating to bankruptcy,
insolvency, reorganization or relief of debtors seeking to have an order
for relief entered with respect to the Company or any of its
Subsidiaries, or seeking to adjudicate the Company or any of its
Subsidiaries a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding up, liquidation, dissolution,
composition or other relief with respect to the Company or any of its
Subsidiaries or (B) seeking appointment of a receiver, trustee,
custodian or other similar official for the Company or any of its
Subsidiaries thereof, or for all or any Substantial Part of the Company
or any of its Subsidiaries thereof, or making a general assignment for
the benefit of the creditors of the Company or any of its Subsidiaries
thereof.
SECTION 2.8. Enforcement of this Agreement. A majority of the
Independent Directors shall have full and complete authority on behalf of the
Company to enforce the terms of this Agreement.
SECTION 2.9. Certificate of Incorporation and By-laws. The Company
and the Investor shall take or cause to be taken all lawful action necessary
to ensure at all times that the Company's Certificate of Incorporation and
By-laws are not at any time inconsistent with the provisions of this
Agreement. Not later than the Effectiveness of this Agreement, the Board of
Directors shall amend the Company's By-laws to reflect the provisions of this
Article 2. At the Investor's request the Board of Directors shall adopt (and
if necessary submit and recommend for approval by stockholders) such other
amendments to the Company's Certificate of Incorporation or By-laws as may be
reasonably necessary to implement the provisions of this Agreement.
SECTION 2.10. Governance of Company Subsidiaries. The governance of
each Subsidiary of the Company shall be conducted in a manner consistent with
the governance of the Company as provided in this Agreement. In particular, a
Subsidiary shall not take or agree to take any action which, if taken by the
Company would require approval of the Investor or a Special Majority Vote of
the Board pursuant to the terms of this Agreement, unless such action is first
approved by the Investor or a Special Majority Vote of the Board, as the case
may be. The Board of Directors shall select the Persons who from time to time
shall be elected as the directors of the Company's Subsidiaries subject to
Section 2.7.
SECTION 2.11. Strategic Planning Process. (a) The parties have
cooperated in preparing the Initial Synergy Plan. The President and Chief
Executive Officer of the Company shall, on an annual basis, cause to be
prepared and proposed to the Management Committee, a Strategic Plan covering a
five-year period beginning with the period 1997-2001. Each year the Strategic
Plan shall be proposed to the Management Committee not later than May 1st. In
connection with the preparation of each Strategic Plan, the President and
Chief Executive Officer shall confer on a reasonable basis with the
Management Committee and the Board of Directors.
(b) From time to time, at the request of the President and Chief
Executive Officer, and at least once a year during the fourth and fifth fiscal
years of a Strategic Plan and prior to the budgeting process for the following
year, the President and Chief Executive Officer will hold a Strategic Review
with the Management Committee of the Company and, in light of such review, the
Management Committee of the Company may propose to the Board of Directors
revisions or updates to the Strategic Plan in light of changed circumstance.
(c) Any proposed Strategic Plan or any revisions or updates to the
current Strategic Plan will require approval of the Board of Directors,
subject to Section 2.7.
SECTION 2.12. Operating Planning Processes. The President and Chief
Executive Officer will be responsible for the preparation, on an annual basis,
of a proposed Annual Operating Plan for each fiscal year which shall be
consistent with the then applicable Initial Synergy Plan or Strategic Plan, as
the case may be, and shall be submitted to the Management Committee not later
than two months before the beginning of such fiscal year. The financial and
operating performance goals in each Annual Operating Plan shall be determined
by reference to the applicable Strategic Plan, taking into account such
factors as the President and Chief Executive Officer determines are
appropriate. Any proposed Annual Operating Plan will require approval of the
Board of Directors, subject to Section 2.7.
SECTION 2.13. Headquarters of the Company. As of the Effective
Time, the headquarters of the Company shall be the location designated by the
Management Committee in accordance with Section 2.4(a).
ARTICLE 3
ANTI-DILUTIVE RIGHTS
SECTION 3.1. Anti-dilutive Rights. (a) Except as provided in
Section 3.1(c) below, the Company shall not issue, sell or transfer any Equity
Securities to any Person unless the Investor is offered in writing the right
to purchase, at the same price and on the same terms proposed to be issued and
sold, an amount of such Equity Securities (the "Maintenance Securities") as is
necessary for the Investor Group to maintain the Investor Group Interest as it
existed immediately prior to such issuance (the "Anti-dilutive Rights"). The
Investor shall have the right, during the period specified in Section 3.1(b)
to accept the offer for any or all of the Maintenance Securities.
(b) If the Investor does not deliver to the Company written notice of
acceptance of any offer made pursuant to Section 3.1(a) within 20 Business
Days after the Investor's receipt of such offer, the Investor shall be
deemed to have waived its right to purchase all or any part of its
Maintenance Securities as set forth in such offer but the Investor shall
retain its rights under this Article with respect to future offers.
(c) The Anti-dilutive Rights set forth above shall not apply to (i)
the grant or exercise of options to purchase Common Stock or the issuance of
shares of Common Stock to employees of the Company or any of its Subsidiaries
(other than employees who are also employees of a stockholder, their
Affiliates or any subsidiary of a stockholder) or otherwise pursuant to a
stock option or similar plan in existence on the date hereof or otherwise
adopted by the Board of Directors hereafter, (ii) the issuance of Warrant
Shares, or of shares of Common Stock issuable upon exercise of any option,
warrant, convertible security or other rights to purchase or subscribe for
Common Stock which, in each case, had been issued in compliance with
Section 3.1(a) or Section 3.1(c)(i), (iii) securities issued pursuant to
any stock split, stock dividend or other similar stock recapitalization, or
(iv) shares of Common Stock issued pursuant to any Public Offering,
provided that the action referred to in clause (i), (iii) or (iv) of this
Section 3.1(c) as the case may be, shall have been approved (to the extent
required) in accordance with the provisions of this Agreement.
(d) A closing for the purchase of Maintenance Securities pursuant to
this Section 3.1(d) shall occur on the later of (i) the date on which such
public or private issuance occurs and (ii) such date as may be agreed to by
the Investor and the Company, at a time and place specified by the Investor
in a notice provided to the Company at least ten (10) days prior to such
specified closing date. In connection with such closing, the Company and
the Investor shall provide such customary closing certificates and opinions
as the Investor or the Company, as appropriate, shall reasonably request.
ARTICLE 4
ACQUISITIONS OF ADDITIONAL EQUITY SECURITIES
SECTION 4.1. Limitation on Additional Acquisitions. (a) From the
Effectiveness of this Agreement until the first anniversary thereof, the
Investor shall not, and shall use its best efforts to cause each member of the
Investor Group not to, directly or indirectly, purchase or otherwise acquire
any Equity Securities of the Company if, after giving effect thereto, the
Investor Group Interest would exceed 49.99%. Notwithstanding the foregoing,
the Investor Group or one or more members thereof may acquire, directly or
indirectly, by purchase or otherwise, Equity Securities resulting in the
Investor Group Interest exceeding such limitation in the event (i) any Person
or Group makes an Acquisition Proposal (as defined in the Merger Agreement);
(ii) Mafco or any Affiliate thereof shall after the Effective Time acquire
Equity Securities representing 1% or more of the Total Voting Power; (iii) any
Person or Group acquires beneficial ownership of Equity Securities
representing 5% or more of Total Voting Power (10% or more in the case of
beneficial ownership permitted to be reported on Schedule 13G under the
Exchange Act); or (iv) there shall have been a material adverse change in the
business, financial condition or operations of the Company for, or which would
reasonably be expected to continue for, a sustained period and the Investor
shall have determined in good faith that the acquisition of additional Equity
Securities is reasonably necessary to protect its investment in the Company.
(b) From the first anniversary of the Effectiveness of this Agreement
until the third anniversary of the Effectiveness of this Agreement, the
Investor shall not and shall use its best efforts to cause each member of the
Investor Group not to, directly or indirectly, purchase or otherwise acquire,
or propose or offer to purchase or acquire, any Equity Securities of the
Company, whether by tender offer, Market Purchase, privately negotiated
purchase, merger or otherwise, except that the Investor Group may acquire
Equity Securities to the extent that after giving effect thereto, the Investor
Group Interest would not exceed 75%.
(c) Anything to the contrary notwithstanding in Section 4.1(a) or (b),
the Investor Group may acquire Equity Securities, notwithstanding the fact
that, after giving effect thereto, the Investor Group Interest would exceed
75%, if the Investor Group (or a member or Affiliate thereof, as the case may
be) offers, prior to consummating such purchase, to purchase all outstanding
Equity Securities and holders of Equity Securities representing more than 50%
of the outstanding Equity Securities (excluding any Equity Securities held by
the Investor Group) accept such offer and the Investor Group ( or a member or
Affiliate thereof, as the case may be) consummates such purchase.
ARTICLE 5
TRANSFERS OF EQUITY SECURITIES
SECTION 5.1. Transfers of Equity Securities. The Investor agrees
not to sell or otherwise transfer any Equity Securities except pursuant to (x)
Section 9.5 hereof and (y) (i) a Public Offering in accordance with Article 6,
(ii) Rule 144 or Rule 144A, or (iii) any other transaction in compliance with
the Securities Act, state securities laws and other applicable laws.
ARTICLE 6
REGISTRATION RIGHTS
SECTION 6.1. Demand Registration. (a) From and after the
Effectiveness of this Agreement, the Investor may make a written request to
the Company for registration under the Securities Act of Registrable
Securities subject to the conditions set forth in Section 6.2 and
Section 6.3 hereof (a "Demand Registration"). Such request will specify
the number of shares of or warrants constituting Registrable Securities
proposed to be sold and will also specify the intended method of
disposition thereof. Following the Investor's request, the Company will
use its best efforts to effect, as expeditiously as possible, the
registration under the Securities Act of the Registrable Securities which
the Company has been so requested to register by the Investor so as to
permit the disposition (in accordance with the intended methods thereof as
aforesaid) of such Registrable Securities.
(b) If the Investor so elects, the offering of such Registrable
Securities pursuant to such Demand Registration shall be in the form of Public
Offering. The Investor shall select the managing underwriters and any
additional investment bankers and managers to be used in connection with a
Demand Registration pursuant to a Public Offering, provided that such managing
underwriters shall be of national standing and any additional investment
bankers or managers must be reasonably satisfactory to the Company.
SECTION 6.2. Conditions to Demand Registrations. The obligations
of the Company to take the actions contemplated by Section 6.1 with respect
to an offering of Registrable Securities shall be subject to the following
conditions:
(a) the Registrable Securities requested to be registered shall
(unless reduced pursuant to Section 6.5) constitute at least 2% of the
equivalent outstanding Equity Securities or at least 5% of the Registrable
Securities at such time, whichever amount is smaller;
(b) there shall not have been consummated more than one offering
pursuant to a Demand Registration within the preceding 12 month period;
(c)(x) if the Investor Group Interest shall be less than 30% but more
than 20%, no more than three other Demand Registrations shall have been
effected after the date on which the Investor Group Interest was reduced to
less than 30%, (y) if the Investor Group Interest shall be less than 20% but
more than 10%, no more than two other Demand Registrations shall have been
effected after the date on which the Investor Group Interest was reduced to
less than 20% and (z) if the Investor Group Interest shall be less than 10%,
no more than one other Demand Registration shall have been effected after the
date on which the Investor Group Interest was reduced to less than 10%;
(d) the Investor shall conform to all applicable requirements of the
Securities Act and the Exchange Act with respect to the offering and sale of
securities and shall advise each underwriter, broker or dealer through which
any of the Registrable Securities are offered that the Registrable Securities
are part of a distribution that is subject to the prospectus delivery
requirements of the Securities Act; and
(e) the Investor shall use all reasonable efforts to effect as wide a
distribution of such Registrable Securities as is reasonably practicable, and
in no event shall any sale of Registrable Securities be made knowingly to any
Person who beneficially owns 5% or more of the Total Voting Power (including
such Person's Affiliates and any Person which to the knowledge of the Investor
is, or who, after giving effect to such sale, would be part of any 13D Group).
SECTION 6.3. Additional Conditions to Demand Offerings.
Notwithstanding the provisions of Sections 6.1 and 6.2, the Company's
obligations pursuant to Section 6.1 shall be suspended if (a) the fulfillment
of such obligations would require the Company to make a disclosure that
would, in the reasonable good faith judgment of the Company's Board of
Directors, be materially detrimental to the Company and premature, (b) the
Company has filed a Registration Statement with respect to Equity
Securities to be distributed in a Public Offering and it is advised by its
lead or managing underwriter that an offering by the Investor of the
Registrable Securities would materially adversely affect the distribution
of such Equity Securities or (c) the fulfillment of such obligations would
require the Company to prepare audited financial statements not required to
be prepared for the Company to comply with its obligations under the
Exchange Act as of any date not coincident with the last day of any fiscal
year of the Company. Such obligations of the Company shall be reinstated
(x) in the case of clause (a) above, upon the making of such disclosure by
the Company (or, if earlier, when such disclosure would either no longer be
necessary for the fulfillment of such obligations or no longer be
detrimental), (y) in the case of clause (b) above, upon the conclusion of
any period during which the Company would not, pursuant to the terms of its
underwriting arrangements, be permitted to sell securities of the Company
for its own account and (z) in the case of clause (c) above, as soon as it
would no longer be necessary to prepare such financial statements to comply
with the Exchange Act.
SECTION 6.4. Piggyback Registration. If the Company proposes to
file a Registration Statement under the Securities Act with respect to an
offering of any securities of the Company (a) for the Company's own account
(other than a Registration Statement on Form S-4 or S-8 (or any substitute
form that may be adopted by the SEC) or (b) the account of any Other Holder
(other than Mafco or any of its Affiliates), then the Company shall give
written notice of such proposed filing to the Investor as soon as practicable
(but in no event less than 20 Business Days before the anticipated filing
date), and such notice shall offer the Investor the opportunity to register
such number of shares of (or Warrants constituting) Registrable Securities as
the Investor may request on the same terms and conditions as those applicable
to the Securities of the Company or of the Other Holders in the offering (a
"Piggyback Registration"). Upon the written request of the Investor made
within ten days after the receipt of notice from the Company (which request
shall specify the amount and types of Registrable Securities intended to be
issued or disposed of), the Company will use its best efforts to effect the
registration under the Securities Act of all such Registrable Securities which
the Company has been so requested to register by such Investor, to the extent
requisite to permit the disposition of such Registrable Securities to be so
registered, provided that (i) if such registration involves a Public Offering,
the Investor must sell its Registrable Securities to the underwriters on the
same terms and conditions as apply to the Company and (ii) if, at any time
after giving written notice of its intention to register any securities of the
Company pursuant to this Section 6.4 and prior to the effective date of the
Registration Statement filed in connection with such registration, the Company
shall determine for any reason not to register such securities, the Company
shall give written notice to the Investor and, thereupon, shall be relieved of
its obligation to register any Registrable Securities in connection with such
registration (without prejudice, however, to rights of the Investor under
Section 6.1 hereof). No registration effected under this Section 6.4 shall
relieve the Company of its obligations to effect any Demand Registration to
the extent required by Section 6.1 hereof.
SECTION 6.5. Reduction of Offering. Notwithstanding anything
contained herein, if the managing underwriter of an offering described in
Section 6.1 or Section 6.4 delivers a written opinion to the Company
advising that (a) the size of the offering that the Investor, the Company
and any Other Holders intend to make or (b) the combination of securities
that the Investor, the Company and such Other Holders intend to include in
such offering are such that the success of the offering would be materially
and adversely affected, then (A) if the size of the offering is the basis
of such underwriter's opinion, the amount of Registrable Securities to be
offered for the account of the Investor shall be reduced to the extent
necessary to reduce the total amount of securities to be included in such
offering to the amount recommended by such managing underwriter, provided
that (x) in the case of a Demand Registration, the amount of Registrable
Securities to be offered for the account of the Investor shall be reduced
only after the amount of securities to be offered for the account of the
Company and such Other Holders has been reduced to zero, and (y) in the
case of a Piggyback Registration, if securities are being offered for the
account of Other Holders, then the proportion by which the amount of such
Registrable Securities intended to be offered for the account of the
Investor is reduced shall not exceed the proportion by which the amount of
such securities intended to be offered for the account of such Other
Holders is reduced; and (B) if the combination of securities to be offered
is the basis of such underwriter's opinion, (x) the Registrable Securities
to be included in such offering shall be reduced as described in clause (A)
above (subject to the proviso in clause (A)), and (y) in the case of a
Piggyback Registration, if the actions described in sub-clause (x) of this
clause (B) would, in the judgment of the managing underwriter, be
insufficient substantially to eliminate the adverse effect that inclusion
of the Registrable Securities requested to be included would have on such
offering, such Registrable Securities will be excluded from such offering.
SECTION 6.6. Filings; Registration Procedures. Whenever the
Investor requests that any Registrable Securities be registered pursuant to
Section 6.1 hereof, the Company will use its reasonable efforts to effect the
registration of such Registrable Securities as promptly as is practicable, and
in connection with any such request:
(a) The Company will as expeditiously as possible prepare and file
with the SEC a Registration Statement on any form for which the Company then
qualifies and which counsel for the Company shall deem appropriate and
available for the sale of the Registrable Securities to be registered
thereunder in accordance with the intended method of distribution thereof. A
registration will not count as a Demand Registration until a Registration
Statement shall have become effective under the Securities Act and remained
effective for at least 270 days (or such shorter period in which all
Registrable Securities of the Investor included in such registration have
actually been sold thereunder), provided that, if after any Registration
Statement requested pursuant to Section 6.1 becomes effective, such
Registration Statement is interfered with by any stop order, injunction or
other order or requirement of the Commission or other governmental agency
or court solely due to the actions or omissions to act of the Company, such
registration shall not be considered a Demand Registration.
(b) The Company will, if requested, prior to filing such Registration
Statement or any amendment or supplement thereto, furnish to the Investor and
each applicable managing underwriter, if any, copies thereof, and thereafter
furnish to the Investor and each such underwriter such number of copies of
such Registration Statement, amendment and supplement thereto (in each case
including all exhibits thereto and documents incorporated by reference
therein) and the prospectus included in such Registration Statement (including
each preliminary prospectus) as the Investor or each such underwriter may
reasonably request in order to facilitate the sale of the Registrable
Securities.
(c) The Company will use all reasonable efforts to cause the
Registerable Securities to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company to enable the Investor to consummate
the disposition of such Registrable Securities.
(d) After the filing of the Registration Statement, the Company will
(i) prepare and file with the SEC such amendments and post-effective
amendments to the registration statement as may be necessary to keep such
registration statement effective for a reasonable period not to exceed 270
days; cause the related prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
under the Securities Act, and (ii) comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by
such registration statement during the applicable period in accordance with
the intended methods of disposition by the sellers thereof set forth in such
registration statement or supplement to such prospectus and promptly notify the
Investor of any stop order issued or, to the Company's knowledge, threatened
to be issued by the SEC and take all reasonable actions required to prevent
the entry of such stop order or to remove it if entered.
(e) The Company will endeavor to qualify the Registrable Securities
for offer and sale under such other securities or blue sky laws of such
jurisdictions in the United States as the Investor reasonably requests,
provided that the Company will not be required to (i) qualify generally to do
business in any jurisdiction where it would not otherwise be required to
qualify but for this Section 6.6(e), (ii) subject itself to taxation in any
such jurisdiction or (iii) consent to general service of process in any
such jurisdiction.
(f) The Company will as promptly as is practicable notify the
Investor, at any time when a prospectus relating to the sale of the
Registrable Securities is required by law to be delivered in connection with
sales by an underwriter or dealer, of the occurrence of any event requiring
the preparation of a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and promptly make available to the Investor and to the
underwriters, if any such supplement or amendment. The Investor agrees that,
upon receipt of any notice from the Company of the occurrence of any event of
the kind described in the preceding sentence, the Investor will forthwith
discontinue the offer and sale of Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities until receipt by
the Investor and the underwriters, if any, of the copies of such supplemented
or amended prospectus and, if so directed by the Company, the Investor will
deliver to the Company all copies, other than permanent file copies then in
the Investor's possession, of the most recent prospectus covering such
Registrable Securities at the time of receipt of such notice. In the event
the Company shall give such notice, the Company shall extend the period during
which such Registration Statement shall be maintained effective as provided in
Section 6.6(a) hereof by the number of days during the period from and
including the date of the giving of such notice to the date when the
Company shall make available to the Investor such supplemented or amended
prospectus.
(g) The Company will enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the sale of the
Registrable Securities covered by a Registration Statement in accordance
herewith.
(h) The Company shall make available for inspection by the Investor,
any underwriter participating in any disposition pursuant to such
registration, and any attorney, accountant or other agent retained by the
Investor or any such underwriter (collectively, the "Inspectors"), all
financial and other records, pertinent corporate documents and properties of
the Company (collectively, the "Records") as shall be reasonably necessary to
enable them to exercise their due diligence responsibility, and cause the
officers, directors and employees of the Company to supply all information
reasonably requested by any such Inspector in connection with such
registration, provided that (i) records and information obtained hereunder
shall be used by such Persons only to exercise their due diligence
responsibility and (ii) records or information which the Company determines,
in good faith, to be confidential shall not be disclosed by the Inspectors
unless (x) the disclosure of such Records or information is necessary to avoid
or correct a misstatement or omission in the Registration Statement or (y) the
release of such Records or information is ordered pursuant to a subpoena or
other order from a court or governmental authority of competent jurisdiction.
The Investor shall use reasonable efforts, prior to any such disclosure, to
inform the Company that such disclosure is necessary to avoid or correct a
misstatement or omission in the Registration Statement. The Investor further
agrees that it will, upon learning that disclosure of such Records or
information is sought in a court or governmental authority, give notice to the
Company and allow the Company, at the expense of the Company, to undertake
appropriate action to prevent disclosure of the Records or information deemed
confidential; the Investor agrees that information obtained by it as a result
of such inspections shall be deemed confidential and shall not be used by it
as the basis for any market transactions in the securities of the Company or
its Affiliates unless and until such information is made generally available
to the public.
(i) The Company will furnish to the Investor and to each underwriter,
if any, a signed counterpart, addressed to the Investor or such underwriter,
if any, of (i) an opinion or opinions of counsel to the Company and (ii) a
comfort letter or comfort letters from the Company's independent public
accountants, each in customary form and covering such matters of the type
customarily covered by opinions or comfort letters, as the case may be, as the
Investor or the managing underwriter reasonably requests.
(j) The Company will make generally available to its security holders,
as soon as reasonably practicable, an earnings statement covering a period of
12 months, beginning within three months after the effective date of the
Registration Statement, which earnings statement shall satisfy the provisions
of Section 11(a) of the Securities Act.
(k) The Company will use its reasonable efforts to cause all such
Registrable Securities to be listed on each securities exchange on which
similar securities issued by the Company are then listed.
(l) The Company may require the Investor promptly to furnish in
writing to the Company such information regarding the Investor, the plan of
distribution of the Registrable Securities and other information as the
Company may from time to time reasonably request or as may be legally required
in connection with such registration.
SECTION 6.7. Registration Expenses. In connection with any Demand
Registration or any Piggyback Registration, the Company shall pay the
Registration Expenses.
SECTION 6.8. Indemnification by the Company. The Company agrees to
indemnify, to the fullest extent permitted by law, the Investor and directors,
officers and controlling Persons of the Investor (within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act) against
any and all losses, claims, damages, liabilities and expenses (including
attorneys' fees) caused by any untrue or alleged untrue statement of material
fact contained in any Registration Statement or prospectus (each as amended
and or supplemented, if the Company shall have furnished any amendments or
supplements thereto) or preliminary prospectus relating to the Registrable
Securities, or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
(in the case of a prospectus, in the light of the circumstances under which
they were made) not misleading, provided that the Company shall not be
required to indemnify the Investor or the officers, directors or controlling
Persons of the Investor for any losses, claims, damages, liabilities or
expenses resulting from any such untrue statement or omission if such untrue
statement or omission is made in reliance on and conformity with any
information with respect to the Investor furnished to the Company by the
Investor expressly for use therein, and further provided that the foregoing
indemnity agreement with respect to any preliminary prospectus shall not inure
to the benefit of the Investor if a copy of the most current at the time of
the delivery of the Registrable Securities prospectus was not provided to
purchaser and such current prospectus would have cured the defect giving rise
to such loss, claim, damage or liability. In connection with an underwritten
offering, the Company will indemnify any underwriter thereof, the officers and
directors of such underwriter, and each Person who controls such underwriter
(within the meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act) to the same extent as provided above with respect to the
indemnification of the Investor, provided that such underwriter agrees to
indemnify the Company to the same extent as provided below with respect to the
indemnification of the Company by the Investor.
SECTION 6.9. Indemnification by the Investor. In connection with
any registration in which the Investor is participating, the Investor will
furnish to the Company in writing such information and affidavits with respect
to the Investor as the Company reasonably requests for use in connection with
any such registration, prospectus, or preliminary prospectus and agrees to
indemnify the Company, its directors, its officers who sign the Registration
Statement and each Person, if any, who controls the Company (within the
meaning of either Section 15 of the Securities Act or of Section 20 of the
Exchange Act) to the same extent as the foregoing indemnity from the Company
to the Investor, but only with respect to information relating to the Investor
furnished to the Company in writing by the Investor expressly for use in the
Registration Statement, the prospectus, any amendment or supplement thereto,
or any preliminary prospectus.
SECTION 6.10. Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant to
Section 6.8 or Section 6.9, such Person (the "Indemnified Party") shall
promptly notify the Person against whom such indemnity may be sought (the
"Indemnifying Party") in writing and the Indemnifying Party, upon request
of the Indemnified Party, shall retain counsel reasonably satisfactory to
the Indemnified Party to represent the Indemnified Party and any others the
Indemnifying Party may designate in such proceeding and shall pay the fees
and disbursements of such counsel related to such proceeding. In any such
proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Party unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the Indemnifying Party and the Indemnified
Party and the Indemnified Party shall have been advised by counsel that
representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is
understood that the Indemnifying Party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for
the fees and expenses of more than one separate firm (in addition to any
local counsel) at any time for all such Indemnified Parties, and that all
such fees and expenses shall be reimbursed as they are incurred. In the
case of any such separate firm for the Indemnified Parties, such firm shall
be designated in writing by the Indemnified Parties. The Indemnifying
Party shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if there
be a final judgment for the plaintiff, the Indemnifying Party agrees to
indemnify the Indemnified Party from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an Indemnified Party shall have requested an
Indemnifying Party to reimburse the Indemnified Party for fees and expenses
of counsel as contemplated by the third sentence of this Section 6.10, the
Indemnifying Party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (A) such settlement is
entered into more than 30 days after receipt by such Indemnifying Party of
the aforesaid request and (B) such Indemnifying Party shall not have
reimbursed the Indemnified Party in accordance with such request or
reasonably objected in writing, on the basis of the standards set forth
herein, to the propriety of such reimbursement prior to the date of such
settlement. No Indemnifying Party shall, without the prior written consent
of the Indemnified Party, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Party is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release
of such Indemnified Party from all liability on claims that are the subject
matter of such proceeding.
SECTION 6.11. Contribution. (a) If the indemnification provided
for in this Article from the Indemnifying Party is unavailable to an
Indemnified Party hereunder in respect of any losses, claims, damages,
liabilities or expenses referred to in this Article , then the Indemnifying
Party, in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such losses,
claims, damages, liabilities or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, the
Investor and the underwriters from the offering of the securities, or (ii) if
the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) but also the relative fault of the Company,
the Investor and the underwriters in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company, the Investor and the underwriters shall be deemed to
be in the same respective proportions as the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting expenses)
received by each of the Company and the Investor Group and the total
underwriting discounts and commissions received by the underwriters, in each
case as set forth in the table on the cover of the prospectus, bear to the
aggregate public offering price of the securities. The relative fault of the
Company, the Investor and the underwriters shall be determined by reference
to, among other things, whether any action in question, including any untrue
or alleged untrue statement of a material fact or omission or alleged omission
to state a material fact, has been made by, or relates to information supplied
by, each such party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount
paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include, subject
to the limitations set forth in Section 6.10, any legal or other fees or
expenses reasonably incurred by such party in connection with any
investigation or proceeding.
(b) The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 6.11 were determined by pro rata
allocation (even if the underwriters were treated as one entity for such
purpose or by any other method of allocation which does not take into account
the equitable considerations referred to in the immediately preceding
Section 6.11(a). Notwithstanding the provisions of this Article , no
underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Equity Securities underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages which such underwriter has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or
alleged omission, and the Investor shall not be required to contribute any
amount in excess of the amount by which the net proceeds of the offering
(before deducting expenses) received by the Investor Group exceeds the
amount of any damages which the Investor has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. 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.
(c) If indemnification is available under this Article , the
Indemnifying Party shall indemnify each Indemnified Party to the full extent
provided in Sections 6.8 and 6.9 without regard to the relative fault of said
Indemnifying Party or Indemnified Party or any other equitable consideration
provided for in this Section 6.11.
ARTICLE 7
FURNISHING OF INFORMATION
SECTION 7.1. Furnishing of Information. (a) The Company will
furnish or make available to the Investor any documents filed by the Company
pursuant to each of Section 13, 14 and 15(d) of the Exchange Act (or successor
provisions) and all annual, quarterly or other reports furnished to the
Company's public security holders and all such other information concerning
the Company and its Subsidiaries as the Investor may reasonably request.
(b) From and after the Effectiveness of this Agreement, the Company
shall furnish to the Investor:
(i) within 60 days after the end of each fiscal year, its
consolidated balance sheet and related statements of income and changes
in financial position, showing the financial condition of the Company
and its consolidated Subsidiaries as of the close of such fiscal year
and the results of its operations and the operations of such Subsidiaries
during such year, all audited by the Company's independent public
accountants of recognized international standing and accompanied by an
opinion of such accountants (which shall not be qualified in any
material respect) to the effect that such consolidated financial
statements fairly present the financial condition and results of
operations of the Company on a consolidated basis in accordance with
GAAP consistently applied; and
(ii) within 30 days after the end of each of the first three
fiscal quarters of each fiscal year, its consolidated balance sheet and
related statements of income and changes in financial position, showing
the financial condition of the Company and its consolidated Subsidiaries
as of the close of such fiscal quarter and the results of its operations
and the operations of such Subsidiaries during such fiscal quarter and
the then elapsed portion of the fiscal year, all certified by one of the
senior financial officers as fairly presenting the financial condition
and results of operations of the Company on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end
audit adjustments.
(c) At the request of the Investor, at such time as the Investor is
required to include the financial results of the Company in the Investor's
financial statements, the Company shall cooperate with and assist the Investor
in the translation of the financial statements referred to in Subsection (a)
above in order to conform such financial statements to international
accounting standards.
(d) The Company shall deliver to the Investor, within a reasonable
period of time after receipt of a request from the Investor, the statement
required by Treasury Department Regulation Section 1.897-2(h)(1) (relating to
the Company's and each of its Subsidiaries' status as a United States Real
Property Holding Corporation) without regard to whether the Company's Equity
Securities are publicly traded at the time such statement is requested.
ARTICLE 8
COVENANTS
SECTION 8.1. Rule 144 and Rule 144A. (a) The Company covenants
that it will file the reports required to be filed by it under the Securities
Act and the Exchange Act and the rules and regulations adopted by the SEC
thereunder, and it will take such further action as the Investor may
reasonably request, all to the extent required from time to time to enable the
Investor to sell Shares 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 SEC. Upon the request of the Investor,
the Company will deliver to the Investor a written statement as to whether it
has complied with such reporting requirements.
(b) If the Investor desires to transfer any of its securities of the
Company pursuant to Rule 144A, the Company will promptly, upon request by the
Investor, use its best efforts to facilitate the consummation of such Rule
144A transaction in accordance with the requirements of such Rule and with
such request and shall take all necessary or appropriate actions in connection
therewith, including but not limited to (i) preparing of an offering
memorandum with respect to such transaction containing information customarily
included in connection with Rule 144A transactions of the type contemplated by
the request, (ii) taking the actions, to the extent requested by the Investor,
referred to in Section 6.6(e), (h) and (i) and (iii) conducting "road show"
presentations as reasonably requested by such Investor. Notwithstanding the
previous sentence, if the Investor Group Interest shall be less than 30%, the
Company will only be required to facilitate the consummation of such Rule 144A
transaction as follows: (x) if the Investor Group Interest shall be less than
30% but more than 20%, no more than three other Rule 144A transactions shall
have been effected after the date on which the Investor Group Interest was
reduced to less than 30%, (y) if the Investor Group Interest shall be less
than 20% but more than 10%, no more than two other Rule 144A transactions
shall have been effected after the date on which the Investor Group Interest
was reduced to less than 20% and (z) if the Investor Group Interest shall be
less than 10%, no more than one other Rule 144A transaction shall have been
effected after the date on which the Investor Group Interest was reduced to
less than 10%. The Company shall pay all expenses in connection with any Rule
144A transaction pursuant hereto to the same extent the Company would be
obligated to pay Registration Expenses in connection with a Demand or
Piggyback Registration pursuant to Section 6.7.
SECTION 8.2. No Inconsistent Agreements. The Company is not bound
by any agreement and will not hereafter enter into any agreement, with respect
to its securities which conflicts or is inconsistent with the rights granted
to the Investor, the Investor Group or Investor Directors.
ARTICLE 9
MISCELLANEOUS
SECTION 9.1. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including by
telecopy or similar writing) and shall be given:
if to the Investor, to: HLR Holdings Inc.
1403 Foulk Road
Suite 102
P.O. Box 8985
Wilmington, Delaware 19899
Attention: William D. Johnston
Telecopy: (302) 571-1253
Roche Holdings, Inc.
c/o Peter Schiller
Hoffstots Lane
Sands Point, NY 11050
Telecopy: (516) 944-9730
if to the Roche Holder, to:Hoffmann-La Roche Inc.
340 Kingsland Street
Nutley, New Jersey 07110
Attention: General Counsel
Telecopy: (201) 235-2800
if to the Company, to: National Health Laboratories Holdings Inc.
(to be renamed Laboratory Corportion
of America Holdings)
358 South Main Street
Burlington, North Carolina 27215
Attention: General Counsel
in each case,
with a copy to: Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: Peter R. Douglas, Esq.
Telecopy: (212) 450-4800
if to Directors, to their respective business addresses with a copy
to the Investor and to the Company,
or such other address or telecopy number as such party may hereafter specify
for the purpose by notice to each the other party hereto. Each such notice,
request or other communication shall be effective (a) if given by telecopy,
when such telecopy is transmitted to the telecopy number specified in this
Section and the appropriate confirmation is received or (b) if given by any
other means, when delivered at the address specified in this Section.
SECTION 9.2. Amendments; Waivers. (a) Any provision of this
Agreement may be amended or waived if, and only if, such amendment or waiver
is in writing and signed, in the case of an amendment, by the Investor and the
Company, or in the case of a waiver, by the party against whom the waiver is
to be effective, provided that no such amendment or waiver by the Company
shall be effective without the approval of a majority of the Independent
Directors.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 9.3. Severability. If any provision of this Agreement or
the application thereof to either party or set of circumstances shall, in any
jurisdiction and to any extent, be finally held invalid or unenforceable, such
term or provision shall only be ineffective as to such jurisdiction, and only
to the extent of such invalidity or unenforceability, without invalidating or
rendering unenforceable any other terms or provisions of this Agreement or
under any other circumstances, and the parties shall negotiate in good faith a
substitute provision which comes as close as possible to the invalidated or
unenforceable term or provision, and which puts each party in a position as
nearly comparable as possible to the position it would have been in but for
the finding of invalidity or unenforceability, while remaining valid and
enforceable.
SECTION 9.4. Entire Agreement. The Merger Agreement, this
Agreement, and the agreements contemplated hereby and thereby constitute the
entire agreement among the parties hereto with respect to the subject matter
hereof and thereof and supersede all prior agreements and undertakings, both
written and oral, between the parties with respect to the subject matter
hereof.
SECTION 9.5. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, provided that no party may
assign, delegate or otherwise transfer all or any of its rights or obligations
under this Agreement without the consent of the other party hereto, except
that the Investor may assign, delegate or otherwise transfer all or any of its
rights or obligations under this Agreement to any other member of the Investor
Group without the consent of the Company, provided that such member agrees in
writing to be bound by the provisions hereof. The Investor shall cause any
Person who shall have acquired 30% of the Total Voting Power from the Investor
to agree in writing to assume the obligations of the Investor hereunder and to
be bound by the provisions hereof whereupon such Person shall become entitled
to all of the rights and benefits accruing to the Investor hereunder.
SECTION 9.6. Parties in Interest. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto and each Person who
becomes a party hereto or bound by the terms of this Agreement, and nothing in
this Agreement, express or implied, is intended to or shall confer upon any
other Person, other than the parties hereto and their respective permitted
successors and assigns, any right, benefit or remedy of any nature or kind
whatsoever under or by reason of this Agreement.
SECTION 9.7. Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective upon the Effectiveness of
this Agreement.
SECTION 9.8. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware applicable
to contracts executed and to be fully performed in that State. All actions
and proceedings arising out of or relating to this Agreement shall be brought
by the parties and heard and determined only in a Delaware state court or a
federal court sitting in that State and the parties hereto consent to
jurisdiction before and waive any objections of venue to the Delaware Chancery
Court.
SECTION 9.9. Specific Performance. The Company and the Investor
each acknowledge and agree that the Investor's and the Company's respective
remedies at law for a breach or threatened breach of any of the provisions of
this Agreement would be inadequate and, in recognition of that fact, each
agrees that, in the event of a breach or threatened breach by the Company or
the Investor of the provisions of this Agreement, in addition to any remedies
at law, the Investor and the Company, respectively, without posting any bond
shall be entitled to obtain equitable relief in the form of specific
performance, a temporary restraining order, a temporary or permanent
injunction or any other equitable remedy which may then be available.
SECTION 9.10. Termination. Except as provided below, the provisions
of this Agreement shall terminate if the Investor Group Interest shall be less
than 30%, provided, however, that (x) the provisions of Sections 2.1(a),
2.1(d), 2.1(f) (insofar as it relates to the replacement of an Investor
Director), 2.1(g), 2.2, 2.3(b), 2.3(c), 2.6 (insofar as it relates to the
replacement of an Investor Director) and 2.9 (insofar as the first sentence
thereof) shall not terminate unless the Investor Group Interest shall be
less than 10%, (y) the provisions of Articles 6 and 8 shall not terminate
until such time as the Investor Group does not own any Registrable
Securities (except for Section 6.4, which shall terminate if the Investor
Group Interest shall be less than 20%) and (z) Article 7 shall not
terminate unless the Investor Group Interest shall be less than 20%.
Article 1 and Article 9 shall not terminate unless as set forth above all
other provisions of this Agreement shall have terminated. In the event
that the Investor Group Interest shall be greater than 50%, then the
provisions of Article 2 shall terminate but shall be reinstated, at the
request of the Investor, if the Investor Group Interest shall later be 50%
or lower.
SECTION 9.11. Waiver of Jury Trial. Each of the parties hereto
hereby irrevocably waives all right to trial by jury in any action, proceeding
or counterclaim (whether based on contract, tort or otherwise) arising out of
or relating to this Agreement or the actions of any of them in the
negotiation, administration, performance and enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and
year first above written.
HLR HOLDINGS INC.
By: /s/ Bradford T. Smith
------------------------------
Name: Bradford T. Smith
Title: Assistant Secretary
ROCHE HOLDINGS, INC.
By: /s/ Henri B. Meier
------------------------------
Name: Henri B. Meier
Title: Vice President & Treasurer
HOFFMANN-LA ROCHE INC.
By: /s/ Thomas P. MacMahon
------------------------------
Name: Thomas P. MacMahon
Title: Senior Vice President
NATIONAL HEALTH LABORATORIES HOLDINGS
INC.
By: /s/ James R. Maher
------------------------------
Name: James R. Maher
Title: President & Chief Executive
Officer
Dates Referenced Herein and Documents Incorporated by Reference
↑Top
Filing Submission 0000950103-95-000163 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)
Copyright © 2024 Fran Finnegan & Company LLC – All Rights Reserved.
About — Privacy — Redactions — Help —
Wed., May 1, 5:42:05.1am ET 
