Registration Rights Agreement

REGISTRATION RIGHTS AGREEMENT


BETWEEN


I-STAT CORPORATION


AND


ABBOTT LABORATORIES


DATED AS OF


_________________, 1998


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REGISTRATION RIGHTS AGREEMENT


This Registration Rights Agreement (this "Agreement") is made as of ________ __, 1998 by and between i-STAT Corporation, a Delaware corporation (the "Company"), and Abbott Laboratories, an Illinois corporation ("Purchaser").


RECITALS


WHEREAS, the Company and Purchaser are parties to a certain Stock Purchase Agreement dated as of August 3, 1998 (the "Purchase Agreement"), pursuant to which, among other things, Purchaser is acquiring as of the date hereof and may acquire in the future certain shares (the "Shares") of the Company's Common Stock, par value $.15 per share; and


WHEREAS, the Company is granting to Purchaser certain demand and piggyback registration rights in connection with Purchaser's purchase of the Shares pursuant to the terms and conditions of this Agreement;


NOW, THEREFORE, in consideration of the mutual promises and covenants hereinafter set forth, the parties hereto agree as follows:


1. Certain Definitions. As used in this Agreement, the following terms shall have the following respective meanings:


"Affiliate" shall mean, with respect to any person, each of such person's officers, directors, employees and agents, and each other person controlling such person within the meaning of the Securities Act.


"Commission" shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.


"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.


"HP Registrable Securities" shall mean "Registrable Securities" as such term is defined in the HP Registration Agreement.


"HP Registration Agreement" shall mean that certain Registration Rights Agreement, dated as of June 23, 1995, between Hewlett-Packard Company and the Company.


"Register", "registered" and "registration" refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of the effectiveness of such registration statement.


"Registrable Securities" shall mean the Shares and any shares of Common Stock of the 3 Company issued or issuable in respect of the Shares upon any stock split, stock dividend, recapitalization, or similar event and held by Purchaser until such time as (i) a registration statement covering such securities has been declared effective by the Commission and such securities have been disposed of pursuant to such effective registration statement, or (ii) such securities may be sold pursuant to Rule 144 (or any successor or similar rule) under the Securities Act, or (iii) such securities have been transferred and may be sold by the transferee without registration under the Securities Act, after which such securities shall no longer be Registrable Securities.


"Registration Expenses" shall mean all expenses incurred by the Company in complying with Sections 2 and 3 hereof, including, without limitation, all registration, qualification and filing fees, printing expenses, escrow fees, fees and disbursements of counsel for the Company, blue sky fees and expenses and the expense of any special audits incident to or required by any such compliance (but excluding the compensation of regular employees of the Company which shall be paid in any event by the Company).


"Securities Act" shall mean the Securities Act of 1933, as amended, or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.


"Selling Expenses" shall mean all underwriting discounts, selling commissions and stock transfer taxes applicable to the Registrable Securities registered by Purchaser and all fees and disbursements of counsel for Purchaser.


2. Requested Registration.


a. Request for Registration. In case the Company shall receive from Purchaser a written request that the Company effect any registration with respect to any of the Registrable Securities, the Company shall, as soon as practicable, use all commercially reasonable efforts to effect such registration (including, without limitation, appropriate qualification under applicable blue sky or other state securities laws and appropriate compliance with applicable regulations issued under the Securities Act and any other governmental requirements or regulations) on Form S-3 or, if Form S-3 is not available, then on Form S-1 (or any successor forms of registration statements to such Forms S-3 or S-1 or other available registration statements) and as would permit or facilitate the sale and distribution of the Registrable Securities for which registration is requested. The registration statement filed pursuant to the request of Purchaser under this Section 2(a) may include securities of the Company held by officers or directors of the Company or others who, by virtue of agreements with the Company, are entitled to include their securities in any such registration, but the Company shall have no absolute right to include securities for its own account in any such registration.


b. Notwithstanding the foregoing, the Company shall not be obligated to file a registration statement to effect any such registration pursuant to this Section 2:


i. unless the amount of Registrable Securities for which
registration is 4
requested is at least 1,000,000 shares (as adjusted for any stock
split, stock dividend, recapitalization or similar event) and the fair
market value of such securities (which shall be equal to the Average
Market Price, as such term is defined in the Purchase Agreement,
multiplied by the number of such securities) is at least $15,000,000;
provided, however, that if the total number of Registrable Securities
held by Purchaser (but not a transferee of Purchaser) is less than
1,000,000 shares (as adjusted to give effect to any stock split,
reverse stock split, stock dividend, recapitalization or any similar
event or transaction) or the fair market value of such shares is less
than $15,000,000, then Purchaser (but not a transferee of Purchaser)
may request registration under this Section 2 as to all but not less
than all of such Registrable Securities as may then be held by
Purchaser; or


ii. during the twelve (12) month period beginning on the
closing date of any registration of the Company's Common Stock,
provided that the securities offered under such registration have been
sold; or


iii. if the holders of the HP Registrable Securities have
requested pursuant to Section 2 of the HP Registration Agreement that
the Company file a registration statement for an underwritten public
offering of the Company's securities at any time within 180 days prior
to the request from Purchaser under Section 2(a) hereof.


c. Underwriting. If the offering of securities made under this Section 2 is underwritten, the Company (together with Purchaser) shall enter into an underwriting agreement in customary form with the managing underwriter selected for such underwriting by the Company. Notwithstanding any other provision of this Section 2, if the underwriter determines that marketing factors require a limitation of the number of shares to be underwritten, the managing underwriter may limit the number of Registrable Securities to be included in such registration to the extent required by such limitation. Purchaser acknowledges and agrees that, if any holder of the HP Registrable Securities has requested, pursuant to Section 3 of the HP Registration Agreement, that securities of the Company held by such holder be included in such registration, the securities sought to be registered by all such holders of the HP Registrable Securities may not be reduced to less than 30% of the total value of the securities to be distributed through such registration. If the managing underwriter has not limited the number of Registrable Securities to be included in such registration, the Company may include securities for its own account or for the account of others in such registration if the number of Registrable Securities to be included in such registration will not thereby be limited.


3. Company Registration.


a. Notice of Registration. If at any time the Company shall determine to register any of its securities, either for its own account or the account of a security holder or holders exercising their respective registration rights, other than (i) a registration relating solely to employee benefit plans on Form S-8 (or similar successor form), or (ii) a registration on Form S- 4 (or similar successor form) relating solely to a Commission Rule 145 transaction, the Company will: 5
i. promptly give Purchaser written notice thereof; and


ii. use all commercially reasonable efforts to include in such
registration (and any related qualification under blue sky laws or
other compliance), and in any underwriting involved therein, all
Registrable Securities specified in a written request to the Company
made within 15 Business Days (as such term is defined in the Purchase
Agreement) after receipt of such written notice by Purchaser.


b. Underwriting. If the registration of securities pursuant to this Section 3 is underwritten, the Company shall so advise Purchaser as a part of the written notice given under Section 3(a). In such event, Purcha ...