Document:

REVOLVING NOTE

Exhibit

10.2

 

REVOLVING

NOTE

 

	

  $25,000,000

  	

   

  	

  April 30, 2002

  

 

For value received, the undersigned, MACKIE DESIGNS

INC. (“Borrower”), promises to pay to the order of U.S. BANK NATIONAL

ASSOCIATION (“U.S. Bank”), at 1420 Fifth Avenue, Seattle, Washington

98101, or such other place or places as the holder hereof may designate in

writing, the principal sum of Twenty-Five Million Dollars ($25,000,000) or so

much thereof as advanced by U.S. Bank in lawful, immediately available

money of the United States of America, in accordance with the terms and

conditions of that certain Amended and Restated Credit Agreement of even date

herewith by and between Borrower and U.S. Bank (together with all

supplements, exhibits, amendments and modifications thereto, the “Credit Agreement”).  Borrower also promises to pay interest on

the unpaid principal balance hereof, commencing as of the first date of an

advance hereunder, in like money in accordance with the terms and conditions

and at the rate or rates provided in the Credit Agreement.

 

Borrower and all endorsers, sureties and guarantors

hereof jointly and severally waive presentment for payment, demand, notice of

nonpayment, notice of protest and protest of this Note and all other notices in

connection with the delivery, acceptance, performance, default, dishonor or

enforcement of the payment of this Note except such notices as are specifically

required by this Note or by the Credit Agreement, and they agree that the

liability of each of them shall be unconditional without regard to the

liability of any other party and shall not be in any manner affected by any

indulgence, extension of time, renewal, waiver or modification granted or

consented to by U.S. Bank. 

Borrower and all endorsers, sureties and guarantors hereof, if any, (1) consent

to any and all extensions of time, renewals, waivers or modifications that may

be granted by U.S. Bank with respect to the payment or other provisions of

this Note and the Credit Agreement; (2) consent to the release of any

property now or hereafter securing this Note with or without substitution; and

(3) agree that additional makers, endorsers, guarantors or sureties may

become parties hereto without notice to them and without affecting their

liability hereunder.

 

[This

space intentionally left blank.]

 

 

This Note is the Revolving Note referred to in the Credit Agreement and

as such is entitled to all of the benefits and obligations specified in the

Credit Agreement, including but not limited to any Collateral and any

conditions to making advances hereunder. 

Terms defined in the Credit Agreement are used herein with the same

meanings.  Reference is made to the

Credit Agreement for provisions for the repayment of this Note and the

acceleration of the maturity hereof.

 

	

   

  	

  MACKIE DESIGNS

  INC.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

  Name:

  	

   

  
	

   

  	

   

  	

  Title:

  	

   

  

 

2TERM NOTE A

Exhibit

10.3

 

TERM NOTE A

 

	

  $6,000,000

  	

   

  	

  April 30, 2002

  

 

For value received, the undersigned, MACKIE DESIGNS

INC. (“Borrower”), promises to pay to the order of U.S. BANK NATIONAL

ASSOCIATION (“U.S. Bank”), at 1420 Fifth Avenue, Seattle,

Washington 98101, or such other place or places as the holder hereof may

designate in writing, the principal sum of Six Million Dollars ($6,000,000) in

lawful immediately available money of the United States of America, in

accordance with the terms and conditions of that certain Amended and Restated

Credit Agreement of even date herewith by and between Borrower and

U.S. Bank (together with all supplements, exhibits, amendments and

modifications thereto, the “Credit Agreement”).  Borrower also promises to pay interest on the unpaid principal

balance hereof, commencing as of the date hereof, in like money in accordance

with the terms and conditions and at the rate or rates provided for in the

Credit Agreement.

 

Borrower and all endorsers, sureties and guarantors

hereof jointly and severally waive presentment for payment, demand, notice of

nonpayment, notice of protest and protest of this Note, and all other notices

in connection with the delivery, acceptance, performance, default, dishonor or

enforcement of the payment of this Note except such notices as are specifically

required by this Note or by the Credit Agreement, and they agree that the

liability of each of them shall be unconditional without regard to the

liability of any other party and shall not be in any manner affected by any

indulgence, extension of time, renewal, waiver or modification granted or

consented to by U.S. Bank. 

Borrower and all endorsers, sureties and guarantors hereof

(1) consent to any and all extensions of time, renewals, waivers or

modifications that may be granted by U.S. Bank with respect to the payment

or other provisions of this Note and the Credit Agreement; (2) consent to the

release of any property now or hereafter securing this Note with or without

substitution; and (3) agree that additional makers, endorsers, guarantors

or sureties may become parties hereto without notice to them and without

affecting their liability hereunder.

 

This Note is the Term Note A referred to in the

Credit Agreement and as such is entitled to all of the benefits and obligations

specified in the Credit Agreement, including, but not limited to, any

Collateral and any conditions to making advances hereunder.  Terms defined in the Credit Agreement are

used herein with the same meanings. 

Reference is made to the Credit Agreement for provisions for the

repayment of this Note and the acceleration of the maturity hereof.

 

	

   

  	

  MACKIE DESIGNS

  INC.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

  Name:

  	

   

  
	

   

  	

   

  	

  Title:Exhibit

10.4

 

TERM

NOTE B

 

	

  $8,632,590

  	

   

  	

  April 30, 2002

  

 

For value received, the undersigned, MACKIE DESIGNS

INC. (“Borrower”), promises to pay to the order of U.S. BANK NATIONAL

ASSOCIATION (“U.S. Bank”), at 1420 Fifth Avenue, Seattle,

Washington 98101, or such other place or places as the holder hereof may

designate in writing, the principal sum of Eight Million Six Hundred Thirty-Two

Thousand Five Hundred Ninety Dollars ($8,632,590) in lawful immediately

available money of the United States of America, in accordance with the terms

and conditions of that certain Amended and Restated Credit Agreement of even

date herewith by and between Borrower and U.S. Bank (together with all

supplements, exhibits, amendments and modifications thereto, the “Credit Agreement”).  Borrower also promises to pay interest on

the unpaid principal balance hereof, commencing as of the date hereof, in like

money in accordance with the terms and conditions and at the rate or rates

provided for in the Credit Agreement.

 

Borrower and all endorsers, sureties and guarantors

hereof jointly and severally waive presentment for payment, demand, notice of

nonpayment, notice of protest and protest of this Note, and all other notices

in connection with the delivery, acceptance, performance, default, dishonor or

enforcement of the payment of this Note except such notices as are specifically

required by this Note or by the Credit Agreement, and they agree that the

liability of each of them shall be unconditional without regard to the

liability of any other party and shall not be in any manner affected by any

indulgence, extension of time, renewal, waiver or modification granted or

consented to by U.S. Bank. 

Borrower and all endorsers, sureties and guarantors hereof

(1) consent to any and all extensions of time, renewals, waivers or

modifications that may be granted by U.S. Bank with respect to the payment

or other provisions of this Note and the Credit Agreement; (2) consent to the

release of any property now or hereafter securing this Note with or without

substitution; and (3) agree that additional makers, endorsers, guarantors

or sureties may become parties hereto without notice to them and without

affecting their liability hereunder.

 

This Note is the Term Note B referred to in the

Credit Agreement and as such is entitled to all of the benefits and obligations

specified in the Credit Agreement, including, but not limited to, any

Collateral and any conditions to making advances hereunder.  Terms defined in the Credit Agreement are

used herein with the same meanings. 

Reference is made to the Credit Agreement for provisions for the

repayment of this Note and the acceleration of the maturity hereof.

 

	

   

  	

  MACKIE DESINGNS

  INC.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

  Name:

  	

   

  
	

   

  	

   

  	

  Title:Exhibit

10.56

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement  (hereinafter this “Agreement”) dated as of May 30, 2002 (the

“Effective Date”) by and between i-STAT CORPORATION, a Delaware corporation

having a place of business at 104 Windsor Center Drive, East Windsor, New

Jersey 08520 (the “Company”), and LORIN J. RANDALL, an individual residing at

120 S. Wawaset Road, West Chester, Pennsylvania 19382 (“Employee”).

 

WITNESSETH:

 

WHEREAS, the Company desires to employ Employee and

Employee desires to be employed by the Company, all pursuant to the terms and

conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the premises and

the mutual covenants herein contained, the receipt and sufficiency of which are

hereby acknowledged, and intending to be legally bound hereby, it is agreed as

follows:

 

Section 1.  Definitions.  Unless otherwise defined herein, the

following terms shall have the following respective meanings:

 

“Benefit” means those benefits set forth in

Section 3.3 hereof.

 

“Cause” means (i) any felony conviction or

admission of guilt, (ii) any breach or nonobservance by Employee of any

material covenant set forth herein, (iii) any willful, intentional or

deliberate disobedience or neglect by Employee of the lawful and reasonable

orders or directions of the Chief Executive Officer of the Company; provided,

that the Chief Executive Officer of the Company has given Employee written

notice of such disobedience or neglect and Employee has failed to cure such

disobedience or neglect within a period reasonable under the circumstances, or

(iv) any willful or deliberate misconduct by employee that is materially

injurious to the Company.

 

“Change of Control” shall mean any of the

following:

 

A.            An

acquisition (other than directly from the Company) of any voting securities of

the Company (the “Voting Securities”) by any “Person” (as the term “person” is

used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of

1934, as amended (the “1934 Act”) immediately after which such Person has

“Beneficial Ownership” (within the meaning of Rule 13d-3 promulgated under the

1934 Act) of thirty percent (30%) or more of the combined voting power of the

Company’s then outstanding Voting Securities; provided, however, that in

determining whether a Change

 

 

of Control has occurred, Voting Securities which are acquired in a

“Non-Control Acquisition” (as defined below) shall not constitute an

acquisition which would cause a Change of Control.   A “Non-Control Acquisition” shall mean an acquisition by (i) an

employee benefit plan (or trust forming a part thereof) maintained by (x) the

Company or (y) any corporation or other Person of which a majority of its

voting power or its equity securities or equity interest is owned directly or

indirectly by the Company (a “Subsidiary”), (ii) the Company or any Subsidiary,

or (iii) any Person in connection with a Non-Control Transaction (as defined

below).

 

B.            The

individuals who, as of the date immediately before any “Change of Control” set

forth in clauses A or C hereof, are members of the Board (the “Incumbent

Board”), cease for any reason to constitute at least a majority of the Board; provided,

further, that no individual shall be considered a member of the Incumbent Board

if such individual initially assumed office as a result of either an actual or

threatened “Election Contest” (as described in Rule 14a-11 promulgated under

the 1934 Act) or other actual or threatened solicitation of proxies or consents

by or on behalf of a Person other than the Board (a “Proxy Contest”) including

by reason of any agreement intended to avoid or settle any Election Contest or

Proxy Contest.

 

C.            Approval

by the stockholders of the Company of:

 

(i)         A

merger, consolidation, or reorganization involving the Company, unless:

 

(1)           The

stockholders of the Company, immediately before such merger, consolidation or

reorganization, own, directly or indirectly, immediately following such merger,

consolidation or reorganization, at least a majority of the combined voting

power of the outstanding voting securities of the corporation resulting from

such merger or consolidation or reorganization (the “Surviving Corporation”) in

substantially the same proportion as their ownership of the Voting Securities

immediately before such merger, consolidation, or reorganization; and

 

(2)           The

individuals who were members of the Incumbent Board immediately prior to the

execution of the agreement providing for such merger, consolidation, or

reorganization constitute at least a majority of the members of the board of

directors of the Surviving Corporation or corporation Beneficially Owning,

directly or indirectly, a majority of the voting securities of the Surviving

Corporation; and

 

(3)           No

Person (other than the Company, any Subsidiary, any employee benefit plan (or

any trust forming a part thereof) maintained by the Company, the Surviving

Corporation, any Subsidiary, or any Person who, immediately prior to such

merger, consolidation or reorganization had Beneficial Ownership of fifteen

percent (15%) or more of the then outstanding Voting Securities) owns, directly

or indirectly, thirty percent (30%) or more of the combined voting power of the

Surviving Corporation’s then outstanding voting securities.

 

2

 

(4)           A

transaction described in the foregoing clauses (1) through (3) shall herein be

referred to as a “Non-Control Transaction”.

 

(ii)           A

complete liquidation or dissolution of the Company; or

 

(iii)          A

sale or other disposition of all or substantially all of the assets of the

Company to any Person (other than a transfer to a Subsidiary).

 

D.            Notwithstanding

the foregoing, a Change of Control shall not be deemed to occur solely because

(i) any Person (the “Subject Person”) acquired Beneficial Ownership of more than

the permitted amount of the outstanding Voting Securities as a result of the

acquisition of Voting Securities by the Company which by reducing the number of

Voting Securities outstanding, increases the proportional number of shares

beneficially owned by the Subject Person; provided, that if a Change of

Control would occur (but for the operation of this sentence) as a result of the

acquisition of Voting Securities by the Company, and after such acquisition by

the Company, the Subject Person becomes the Beneficial Owner of any additional

Voting Securities which increases the percentage of the then outstanding Voting

Securities beneficially owned by the Subject Person to a percentage sufficient

to constitute a Change of Control, then a Change of Control shall be deemed to

have occurred; or (ii) the acquisition of Voting Securities by holders of the

Company’s Series D Convertible Preferred Stock, par value $.10 per share.

 

“Common Stock” means the common stock of the

Company, par value $.15 per share.

 

“Diminution in Responsibility” means a material

diminution in Employee’s duties or responsibilities or the assignment to

Employee of duties which are materially inconsistent with his duties as Senior

Vice President and Chief Financial Officer of the Company or which materially

impair Employee’s ability to function in his position; provided,

however, that no Diminution in Responsibility shall be deemed to have occurred

solely as a result of the consummation by the Company of a strategic corporate

alliance, partnership or joint venture (in whatever form) pursuant to which any

substantial portion of the Company’s marketing and sales activities, or

research and development activities, or manufacturing activities come under the

control of any entity unaffiliated with the Company on the Effective Date.

 

“Permanent Disability” means Employee’s

inability to substantially perform his duties and responsibilities hereunder by

reason of any physical or mental incapacity for a period of 180 consecutive

days, or two or more periods of 90 consecutive days each in any 360-day period.

 

3

 

Section 2.               Employment; Duties.

 

2.1           During

the Term of Employment (as hereinafter defined), the Company shall employ

Employee, and Employee shall serve, as Senior Vice President — Finance, Chief

Financial Officer and Treasurer of the Company.  Employee’s responsibilities shall include such functions and

duties with respect to the Company and its subsidiaries as the Chief Executive

Officer or the Board of Directors of the Company (the “Board”) shall determine

and that are consistent with the functions and duties of a chief financial

officer of a corporation of similar size and nature.

 

2.2           During

the Term of Employment and excluding any periods of vacation and sick leave to

which Employee is entitled, (a) Employee shall devote all of his business time

to the business and affairs of the Company (except as provided below) and shall

use his best efforts to perform faithfully and efficiently the responsibilities

assigned to Employee, (b) Employee shall apply his skill and experience to the

performance of his duties in such employment, and (c) Employee shall have no

other employment.  During the Term of

Employment, it shall not be a violation of this Agreement for Employee to

devote up to two business days per calendar quarter to:  (i) serve as a director, officer or trustee

of any trade association or of any civic, educational or charitable

organization, (ii) with the prior consent of the Board, which shall not be

unreasonably withheld, serve as director of any corporation that does not

compete, directly or indirectly, with the Company, and (iii) manage his

personal investments (provided, that no such investment may exceed five

percent (5%) of the equity securities of any entity without the prior written

approval of the Board and further provided, that nothing herein shall

limit any investment in an entity whose primary purpose is not the day-to-day

operation of a particular business) and affairs.  Subject to the limitation in the preceding sentence, the Company

hereby consents to Employee serving as a member of the board of directors of

Point 5 Technologies, Inc., provided, that Point 5 Technologies, Inc.

does not engage in any business that is competitive with the Company’s

business.

 

Section 3.               Compensation And Benefits.

 

3.1           Base

Salary.  During the Term of

Employee’s employment hereunder, the Company shall pay Employee a salary at the

annual rate of Two Hundred Fifty-Seven Thousand Two Hundred Fifty dollars ($257,250)

or such greater amount as the Company’s Board of Directors may from time to

time establish pursuant to the terms hereof (the “Base Salary”).  Such Base Salary shall be reviewed annually

and may be increased, but not decreased, by the Board of Directors of the

Company in its sole discretion. The Base Salary shall be payable in accordance

with the Company’s customary payroll practices for its senior management

personnel.

 

3.2           Bonus.

 

(a)           Signing

Bonus.  On the Effective Date, the

Company will award to Employee Ten Thousand (10,000) shares of Common Stock,

pursuant to the Company’s Equity Incentive Plan, as amended (the “Incentive

Plan”), which shall not be subject to forfeiture by Employee or repurchase by

Company under any circumstances.

 

4

 

This award will be evidenced by an agreement in customary form for

grants of Common Stock to executive officers under the Incentive Plan,

consistent with the terms and conditions of this Agreement.

 

(b)           Performance

Bonus.  During the term of

Employee’s employment hereunder, Employee shall be eligible to participate in

the Company’s Annual Incentive Program (the “AIP”). For each fiscal year of the

Company ending during the Employment Term (as hereinafter defined), Employee

shall receive a bonus equal to not less than (i) 7.5% of the Base Salary in

cash, and options under the Incentive Plan (“Performance Bonus Options”) to

purchase not less than 5,000 shares of Common Stock of the Company (“Shares”),

for achieving the Minimum Level under the AIP; (ii) 15.0% of the Base Salary in

cash, and Performance Bonus Options to purchase not less than 10,000 Shares,

for achieving the Target Level under the AIP; and (iii) 22.5% of the Base

Salary in cash, and Performance Bonus Options to purchase not less than 15,000

Shares, for achieving the Maximum Level under the AIP (collectively, the

“Bonus”). Employee recognizes that the Board of Directors of the Company

reserves the right to amend or terminate the AIP at any time, in which case the

Company shall substitute therefor such other benefits and programs as shall

provide Employee with a substantially equivalent opportunity to derive

substantially equivalent rewards for performance.

 

3.3           Benefits.

 

(a)           Benefit

Plans. During the Employment Term, Employee may participate, on the same

basis and subject to the same qualifications as other senior management

personnel of the Company, in any benefit plans and policies in effect with

respect to senior management personnel of the Company.

 

(b)           Reimbursement

of Expenses. During the Employment Term, Company shall pay or promptly

reimburse Employee, upon submission of proper invoices in accordance with the

Company’s normal procedures, for all reasonable out-of-pocket business,

entertainment and travel expenses incurred by Employee in the performance of

his duties hereunder.

 

(c)           Vacation.

During the Employment Term, Employee shall be entitled to vacations in

accordance with the policies of the Company applicable to senior management

personnel from time to time.

 

(d)           Post-Retirement

Benefits. Employee shall be entitled to any post-retirement benefits

generally made available to the Company’s senior management personnel.

 

(e)           Withholding.

The Company shall be entitled to withhold from amounts payable or benefits

accorded to Employee under this Agreement all federal, state and local income,

employment and other taxes, as and in such amounts as may be required by

applicable law.

 

5

 

3.4           Stock Options.

 

(a)           Initial

Grant.  On or prior to the date

hereof, the Company shall grant to Employee an option (the “Initial Stock

Option”) to purchase Twenty-Five Thousand (25,000) shares of Common Stock at an

exercise price of $5.08 per share pursuant to the terms of the Incentive

Plan.  The Initial Stock Option shall

become exercisable over a five-year term with respect to 20% of such shares on

each anniversary of the date of grant.

 

(b)           Strategic

Incentive Program Grant.   The

Company shall grant to Employee an option (the “SIP Option”) to purchase Sixty

Thousand (60,000) shares of Common Stock at an exercise price per share to be

determined on the date of grant pursuant to the terms of the Incentive

Plan.  The SIP Option shall become

exercisable in full on the seventh anniversary of the date of grant.

 

(c)           Accelerated

Vesting of SIP Options.  Subject to

Employee’s satisfactory achievement of certain performance criteria, as

determined by the Chief Executive Officer and approved by the Board of

Directors, consistent with Employee’s duties and responsibilities, the SIP

Option shall become exercisable with respect to (i) 20,000 shares on June 30,

2003, (ii) 20,000 shares on June 30, 2004, and (iii) all remaining shares on

December 31, 2004.

 

(d)           Accelerated

Vesting of Options Due to Termination of Employment or Change of Control.  Notwithstanding Sections 3.2(b), 3.4(a),

3.4(b) and 3.4(c) hereof, the Performance Bonus Options, Initial Stock Option

and the SIP Option shall automatically become fully exercisable upon the

earlier to occur of (i) a Change of Control, (ii) the termination by Employee

of his employment with the Company for Good Reason (as hereinafter defined), or

(iii) the termination of Employee’s employment without Cause pursuant to

Section 5(d)(iii) hereof.

 

(e)           Option

Agreements.  The Performance Bonus

Options, the Initial Stock Option and the SIP Option shall be evidenced by

agreements in customary form for grants of stock options under the Incentive

Plan to executive officers of the Company, consistent with the terms and

conditions of this Agreement.

 

3.5           Relocation.

 

(a)           Reimbursement.  The Company shall reimburse Employee up to

Sixty-five Thousand dollars ($65,000) for the cost of relocating Employee’s

household to the East Windsor, New Jersey area, including but not limited to

the cost of transportation of household goods, farm equipment and animals and

real estate sales commissions and related expenses (the “Relocation Costs”); provided,

that such relocation shall be completed within twenty-four (24) months after

the Effective Date.

 

6

 

(b)           Withholding.  The Company shall, in accordance with its

normal policies and procedures for the payment of withholding tax, pay to the

Internal Revenue Service and the appropriate state and local revenue

authorities (collectively, the “Tax Authorities”), on behalf of Employee, an

amount equal to the federal (including, without limitation, Medicare taxes),

state and local income taxes (the foregoing taxes are hereinafter collectively

referred to as “Income Taxes”) required to be withheld in connection with

payment of the Relocation Costs.

 

(c)           Gross-Up.  To the extent that, as a result of the

payment of all or any portion of the Relocation Costs to Employee by the

Company as provided in this Section 3.5, Employee is obligated to pay any

income, payroll or other taxes to the Tax Authorities, the Company shall pay to

Employee, or on behalf of Employee, as the case may be, the sum of (i) all

Income Taxes due by Employee as a result of reimbursement of the Relocation

Costs, plus (ii) an amount equal to any and all Income Taxes paid or required

to be paid with respect to the receipt of the amount set forth in clause (i)

above (including, without limitation, any taxes on such additional amount). It

is the intention of the parties hereto that the Company will pay on behalf of

Employee any withholding tax due in connection with reimbursement of the

Relocation Costs and that the Company will pay to Employee any out-of-pocket

tax liability Employee experiences in connection with reimbursement of the

Relocation Costs. Any amounts payable by the Company to Employee pursuant to

this Section 3.5(c) shall be paid no later than five (5) business days before

Employee is obligated to pay any taxes to the Tax Authorities.

 

(d)           Temporary

Living.  The Company shall provide a

furnished apartment for Employee’s use, including utilities, in the East

Windsor, New Jersey area until Employee’s relocation is complete, but in no

event after May 30, 2004.

 

3.6           Term.

 This Agreement shall remain in full

force and effect for an initial period of four (4) years from the Effective

Date (the “Employment Term”) and the Employment Term shall be automatically

extended for additional one-year periods thereafter (each a “Renewal Period”)

unless Employee notifies the Board of Directors or the Board of Directors

notifies Employee that the notifying party does not desire to extend such

Employment Term at least ninety (90) days prior to the end of the expiration of

the Employment Term.  Employee’s

employment hereunder shall be coterminous with the Employment Term, unless

sooner terminated as provided in Section 5 hereof.

 

Section 4.               Representations

And Warranties By Employee And The Company.

 

4.1           Employee

hereby represents and warrants to the Company as follows:

 

(a)           The

performance by Employee of his duties and other obligations hereunder will not

conflict with or constitute a default under (whether immediately, upon the

giving of notice or lapse of time or both) any prior employment agreement,

contract, or other instrument to which is a party or by which he is bound.

 

7

 

(b)           Employee

has the right, power and legal capacity to enter and deliver this Agreement and

to perform his duties and other obligations hereunder. This Agreement

constitutes the legal, valid and binding obligation of Employee enforceable

against him in accordance with its terms.

 

4.2           The Company hereby represents and

warrants to Employee as follows:

 

(a)           The

Company is duly organized, validly existing and in good standing under the laws

of the State of Delaware, with all requisite corporate power and authority to

own its properties and conduct its business in the manner presently

contemplated.

 

(b)           The

Company has full power and authority to enter into this Agreement and to incur

and perform its obligations hereunder.

 

(c)           The

execution, delivery and performance by the Company of this Agreement does not

and will not conflict with or result in a breach or violation of or constitute

a default under (whether immediately, upon the giving of notice or lapse of

time or both) the certificate of incorporation or by-laws of the Company, or

any agreement or instrument to which the Company is a party or by which the

Company or any of its properties may be bound or affected.

 

Section 5.               Termination.  Employee’s employment hereunder will begin

on the Effective Date and shall continue until terminated upon the first to

occur of the following events:

 

(a)           Death

or Permanent Disability of Employee. 

The Company may, at its option, terminate Employee’s employment for

Permanent Disability (as herein defined). In the event of termination for death

or disability, Employee or his designated beneficiary shall be entitled to

termination benefits pursuant to Section 5(d) hereof.

 

(b)           Termination

by the Company for Cause.  In the

event of termination by the Company pursuant to this Section 5(b), the Company

shall have no further obligations to Employee under this Agreement other than

to (i) pay Employee’s then current Base Salary through the effective date of

termination, and (ii) subject to the terms hereof, pay or provide any benefits

which may be due to Employee.

 

(c)           Termination

by Employee for Good Reason.  In the

event of termination by Employee for Good Reason (as defined below) pursuant to

this Section 5(c), (i) all unvested options granted to Employee shall vest

immediately as of the date of such termination, (ii) within five (5) days

following the date of such termination, the Company shall pay Employee his

target annual bonus for the current fiscal year on a pro rata basis

corresponding to the date of termination, and (iii) continue to pay Employee 

 

8

 

monthly compensation equal to one-twelfth of Employee’s then current

Base Salary plus annual target bonus for a period of eighteen (18) months

following the date of termination. 

Employee’s right to terminate his employment pursuant to this Section

5(c) shall not be affected by his incapacity due to Permanent Disability.  The following actions or omissions by the

Company shall constitute “Good Reason”:

 

(A)          If a

Diminution of Responsibility occurs, Employee may, at his sole option by

providing written notice to the Company within sixty (60) days following such

Diminution of Responsibility, deem such Diminution of Responsibility to be

“Good Reason” under this Section 5(c); or

 

(B)           The

failure of the Company to obtain an agreement, satisfactory to Employee, from

any successor or assignee of all or substantially all of the Company’s

business, to assume the Company’s obligations to Employee under this Agreement.

 

(d)           Termination

by the Company without Cause.

 

(i)         The

Company shall give Employee not less than thirty (30) days prior written notice

of the termination of his employment without Cause and the Company shall have

the option of terminating Employee’s duties and responsibilities prior to the

expiration of the thirty-day notice period subject to payment on or prior to

the date of such termination by the Company of Employee’s then current Base

Salary for the remainder of the notice period and his target annual bonus for

the current fiscal year on a pro rata basis corresponding to the date of

termination.

 

(ii)        If

such termination shall occur, the Company shall continue to pay Employee

monthly compensation equal to one-twelfth of Employee’s then current Base

Salary plus annual target bonus for a period of twelve (12) months following

the date of termination.

 

(iii)       If

such termination shall occur within the eighteen (18) month period following a

Change of Control, then in lieu of amounts due under paragraph (ii) above, the

Company shall (A) pay Employee his target annual bonus for the current fiscal

year on a pro rata basis corresponding to the date of termination, (B) continue

to pay Employee monthly compensation equal to one-twelfth of Employee’s then

current Base Salary plus annual target bonus for a period of eighteen (18)

months following the date of termination and (C) immediately accelerate the exercisability

of all unvested stock options granted to Employee to purchase Common Stock as

of the date of such termination.

 

(e)           Termination

by Employee without Good Reason.  In

the event Employee wishes to resign without Good Reason, he shall give not less

than thirty (30) days prior written notice of such resignation and the Company

shall have the option of terminating Employee’s duties and responsibilities at

any time prior to Employee’s

 

9

 

proposed termination date, subject to payment by the Company to

Employee of the lesser of (i) Employee’s then current Base Salary for a thirty

(30) day period, or (ii) such portion of the period remaining under the notice

given by Employee.

 

(f)            Termination

Due to Non-Renewal of Agreement by the Company.  In the event the Company notifies Employee under Section 3.6 that

it shall not renew this Agreement for any Renewal Period, Employee shall be

entitled to monthly compensation equal to one-twelfth of Employee’s then current

Base Salary plus annual target bonus for a period of twelve (12) months

following the end of the Employment Term.

 

Section 6.               Change

Of Control.  Notwithstanding

anything contained in this Agreement to the contrary, if Employee’s employment

is terminated by the Company, other than for Cause, prior to a Change of

Control and such termination (i) was at the request of a third party who has

indicated an intention or taken steps reasonably calculated to effect a Change

of Control and who effectuates a Change of Control (a “Third Party”), or (ii)

otherwise occurred as a condition to, or in connection with or anticipation of,

a Change of Control which actually occurs, then for all purposes of this

Agreement, the date of the Change of Control with respect to Employee shall

mean the date immediately prior to the date of such termination of Employee’s

employment and shall entitle Employee to the benefits provided under Section

5(c) of this Agreement as though the termination of Employee’s employment was

for Good Reason.

 

Section 7.               Federal Excise Tax.

 

7.1           General

Rule.  Employee’s payments and

benefits under this Agreement and all other arrangements or programs related

thereto shall not, in the aggregate, exceed the maximum amount that may be paid

to Employee without triggering golden parachute penalties under Section 280G of

the Internal Revenue Code of 1986, as amended (the “Code”), and the provisions

related thereto with respect to such payments. 

If Employee’s benefits must be cut back to avoid triggering such

penalties, Employee’s benefits will be cut back in the priority order Employee

designates or, if Employee fails to promptly designate an order, in the

priority order designated by the Company. 

If an amount in excess of the limit set forth in this Section is paid to

Employee, Employee must repay the excess amount to the Company upon demand,

with interest at the rate provided in Code Section 1274(b)(2)(B).  Employee and the Company agree to cooperate

with each other reasonably in connection with any administrative or judicial

proceedings concerning the existence or amount of golden parachute penalties on

payments or benefits Employee receives.

 

7.2           Exception.  Section 7.1 shall apply only if it increases

the net amount Employee would realize from payments and benefits subject to

Section 7.1, after payment of income and excise taxes by Employee on such

payments and benefits.

 

10

 

7.3           Determinations.  The determination of whether the golden

parachute penalties under Code Section 280G and the provisions related thereto

shall be made by counsel chosen by Employee and reasonably acceptable to the

Company. All other determinations needed to apply this Section 7 shall be made

in good faith by the Company’s independent auditors.

 

Section 8.               Extended

Medical And Dental Benefits.  In the

event of the termination of Employee’s employment under Sections 5(a), 5(c) or

5(d) of this Agreement, and at Employee’s election, Employee and Employee’s

dependents shall continue to receive the Company’s standard employee medical

and dental benefits at the Company’s expense under such plans for (i) twelve

(12) months for termination under Sections 5(a), or 5(d)(i) or 5(d)(ii) hereof,

or (ii) eighteen (18) months for termination under Section 5(c) or Section

5(d)(iii) hereof.  Notwithstanding the

foregoing, in the event Employee becomes covered or eligible to be covered as a

primary insured (that is, not as a beneficiary under a spouse’s plan) under

another employer’s group health plan during the extended benefit periods

provided for herein, Employee shall promptly notify the Company and the Company

shall have no further obligation to provide group health benefits for Employee

and any dependents.

 

Section 9.               Confidentiality

Agreement.  Employee agrees to

execute an Employee Confidentiality and Invention Agreement with the Company,

in a form customarily employed by the Company, which provides for standard

non-solicitation and non-competition covenants covering a period of twelve (12)

months after Employee ceases to be employed by the Company for any reason or no

reason.

 

Section 10.             Release

Of Claims.  The Company may

condition payment of the cash termination benefits described in Sections 5(a),

5(c) or 5(d) of this Agreement upon the delivery by Employee of a signed

release of claims in a form customarily employed by the Company; provided,

however, that Employee shall not be required to release any rights Employee may

have to be indemnified by the Company under Section 11.5 of this Agreement or

the certificate of incorporation or by-laws of the Company.

 

Section 11.             General.

 

11.1               Notices.  Any notice or other communication under this

Agreement shall be in writing and shall be deemed to have been given:  (i) upon delivery when delivered personally;

(ii) the next business day after being sent by Federal Express or similar

overnight delivery prepaid; or (iii) three (3) days after being mailed via

registered or certified mail, postage prepaid, return receipt requested, to

either party at the address set forth in the preamble of this Agreement, or to

such other address as such party shall give by notice hereunder to the other

party.

 

11.2               Severability

of Provisions.  If any provision of

this Agreement shall be declared by a court of competent jurisdiction to be

invalid, illegal or incapable of being enforced in whole or in part, such

provision shall be interpreted so as to remain 

 

11

 

enforceable to the maximum extent permissible consistent with applicable

law and the remaining conditions and provisions or portions thereof shall

nevertheless remain in full force and effect and enforceable to the extent they

are valid, legal and enforceable, and no provision shall be deemed dependent

upon any other covenant or provision unless so expressed herein.

 

11.3               Binding

Effect.  This Agreement shall be

binding upon and shall inure to the benefit of the Company, its successors and

assigns and the Company shall require any successors and assigns to expressly

assume and agree to perform this Agreement in the same manner and to the same

extent that the Company would be required to perform it if no such succession

or assignment had taken place.

 

11.4               Entire

Agreement Modification. This Agreement and the exhibits attached hereto

contains the entire agreement of the parties relating to the subject matter

hereof, and any prior agreements or understandings between the parties hereto

which are not set forth herein are hereby superceded.  No modification of this Agreement shall be valid unless made in

writing and signed by the parties hereto.

 

11.5               Indemnification.  The Company and Employee shall execute an

indemnification agreement in the form attached hereto as Exhibit A.

 

11.6               Governing

Law.  This Agreement shall be

governed by and construed and enforced in accordance with the laws of the State

of New Jersey without regard to principles of conflict of laws.

 

11.7               Headings.  The headings of paragraphs are inserted for

convenience and shall not affect any interpretation of this Agreement.

 

11.8               Counterparts.  This Agreement may be executed in one or

more counterparts, each of which shall be deemed an original, and all of which

together shall be deemed to be one and the same instrument.

 

12

 

IN WITNESS WHEREOF, the parties hereto, intending to

be legally bound hereby, have executed this Agreement as of the day and year

first above written.

 

	

   

  	

  LORIN J. RANDALL

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  /s/ Lorin J. Randall

  	

   

  
	

   

  	

  Lorin J. Randall

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  i-STAT CORPORATION

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  /s/ William P. Moffitt

  	

   

  
	

   

  	

  William P. Moffitt

  
	

   

  	

  President and Chief Executive Officer

  

 

13

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