<PAGE>
As filed with the Securities and Exchange Commission on March 18, 1999
Registration No. 333-_______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
-------------------------
SERACARE, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State of Incorporation)
95-4343492
(I.R.S. Employer Identification Number)
1925 Century Park East, Suite 1970
Los Angeles, California 90067
(310) 772-7777
(Address, including zip code, and telephone number, including area code, of
registrants' principal executive offices)
---------------------------
Mr. Barry Plost
Chief Executive Officer
SeraCare, Inc.
1925 Century Park East, Suite 1970
Los Angeles, California 90067
(310) 772-7777
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
---------------------------
Copies of Communications to:
David A. Krinsky, Esq.
O'Melveny & Myers LLP
610 Newport Center Drive, Suite 1700
Newport Beach, California 92660
(949) 760-9600
---------------------------
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement, subject to
market conditions and certain contractual restrictions on transfer.
<PAGE>
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed
Amount Maximum Proposed Maximum Amount of
Title of Shares To Be Aggregate Price Aggregate Offering Registration
To Be Registered Registered Per Share(2) Price(2) Fee
- ----------------- ------------ --------------- ------------------ ------------
<S> <C> <C> <C> <C>
Common Stock,
$0.001 par value
per share 1,497,175(1) $5.0625(3) $7,579,448 $2,107.09
</TABLE>
(1) Includes a number of shares of Common Stock initially issuable upon
exercise of certain warrants and options held by the selling security holders
and, pursuant to Rule 416 under the Securities Act of 1933, as amended, an
indeterminate number of shares of Common Stock as may be issued from time to
time upon exercise of such warrants or options by reason of adjustment of the
number of shares of Common Stock to be issued upon such exercises under certain
circumstances.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) Pursuant to Rule 457(c), the price of the Common Stock is based upon
the average of the high and low prices of the Common Stock on the American Stock
Exchange on March 15, 1999.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE>
SUBJECT TO COMPLETION, DATED MARCH 18, 1999
PROSPECTUS
SERACARE, INC.
1,497,175 Shares of Common Stock
- -------------------------------------------------------------------------------
These shares of our Common Stock are being sold by the selling security
holders listed beginning on page 11. SeraCare will not receive any part of the
proceeds from the sale of any of these shares.
SeraCare's Common Stock is listed on the American Stock Exchange under the
symbol "SRK". The last reported sale price of our Common Stock on the American
Stock Exchange on March 15, 1999 was $5.0625 per share.
The Common Stock may be sold in transactions on the American Stock Exchange
at market prices then prevailing, in negotiated transactions, or otherwise. See
"Plan of Distribution."
_______________________________________________________
THIS OFFERING INVOLVES MATERIAL RISKS.
SEE "RISK FACTORS" BEGINNING ON PAGE 3.
_______________________________________________________
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this prospectus is March __, 1999.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ABOUT SERACARE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SELLING SECURITY HOLDERS . . . . . . . . . . . . . . . . . . . . . . . 10
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . 17
LEGAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
WHERE YOU CAN FIND MORE INFORMATION. . . . . . . . . . . . . . . . . . 17
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE. . . . . . . . . . . . 18
</TABLE>
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<PAGE>
RISK FACTORS
THE SHARES OF OUR COMMON STOCK BEING OFFERED INVOLVE A HIGH DEGREE OF
RISK. YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING DISCUSSION OF RISKS AS WELL
AS ALL OTHER INFORMATION IN THIS PROSPECTUS BEFORE PURCHASING ANY OF THE
SHARES OF OUR COMMON STOCK OFFERED PURSUANT TO THIS PROSPECTUS.
THIS PROSPECTUS AND INFORMATION INCORPORATED BY REFERENCE CONTAIN
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE
SECURITIES ACT OF 1933 AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF
1934. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN
THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF DIFFERENT FACTORS, INCLUDING
THOSE DISCUSSED IN "RISK FACTORS" OR INCORPORATED BY REFERENCE INTO THIS
PROSPECTUS.
WE HAVE A HISTORY OF OPERATING LOSSES AND OUR FUTURE PROFITABILITY REMAINS
UNCERTAIN
In January of 1994, we filed for bankruptcy protection under Chapter 11
of the federal Bankruptcy Code. We completed our reorganization in February
1996. As of February 28, 1995, we had a stockholders deficit of $2,835,596.
For our fiscal year ended February 28, 1997, we incurred a net loss of
$511,108. For our fiscal year ended February 28, 1998, we earned net income
of $453,853, but this was largely attributable to the inclusion of other
income of $854,682 from the sale of salvage plasma material.
Although we have recorded net income of $1,515,975 for the nine months
ended November 30, 1998 (this does not include a tax provision because of our
loss carryforward status), we cannot assure you that we will be able to
sustain our recent profitability or that we will not incur significant
operating losses in the future.
WE MAY NOT BE ABLE TO SUCCESSFULLY IMPLEMENT OUR GROWTH STRATEGY
We intend to continue our strategy of growth through acquisitions and
expansion into new markets. However, our ability to successfully implement
this strategy depends on a number of factors, including our access to
capital, our ability to obtain applicable governmental approvals to collect
and distribute plasma and related products and our ability to integrate
acquired businesses into our existing operations. We cannot assure you that
we will be successful in expanding our operations or entering new markets.
WE WILL NEED ADDITIONAL CAPITAL
In order to implement our growth strategy, we will need to obtain
additional capital. We believe that our current cash balances and funds
available under our revolving line of credit will be sufficient to satisfy
our currently anticipated working capital requirements. However, we may need
additional financing in order to expand our business through internal growth
or acquisitions. Such financings may include debt and equity financings or
additional bank borrowings (subject to contractual restrictions imposed by
our creditors and investors on our ability to issue debt or equity
securities). However, we cannot assure you that we will be able to obtain
additional capital on acceptable terms. If we borrow more money we may
become subject to additional restrictive covenants. If we raise money
through the issuance of our equity securities, your stock ownership will be
diluted.
MARKET DEMAND FOR PLASMA FLUCTUATES
The demand for plasma depends in large part on the number and uses of
products which require plasma components for their manufacture or production.
Most of the plasma which we collect and sell is used in the manufacture of
therapeutic products to treat certain diseases. Several companies are
attempting to develop and market products to treat these diseases based upon
technology which would lessen or eliminate the need for human blood plasma.
Such products, if successfully developed and marketed, could reduce the
demand for plasma.
3
<PAGE>
WE MAKE A LARGE PERCENTAGE OF OUR SALES TO A SMALL NUMBER OF CUSTOMERS
As of February 28, 1999, approximately 33% of our sales were to one
customer, Grupo Grifols, S.A., of Spain. If we were to lose this or any
major customer, or if any major customer were to materially reduce its
purchases of our plasma, our business and results of operations would be
materially adversely affected.
THE PRICES WE CHARGE ARE GENERALLY FIXED, BUT OUR COSTS ARE SUBJECT TO CHANGE
We generally sell our plasma under contracts ranging from one to three
years which allow for annual pricing renegotiations. We generally agree upon
the price for our products prior to the beginning of the contract year, and
these prices are fixed for that year. Accordingly, any unforeseen increases
in the cost of collecting and selling plasma during the contract year could
materially adversely affect our operating results.
OUR BUSINESS IS HIGHLY COMPETITIVE
We compete for donors with pharmaceutical companies which may collect
plasma for their own use, other commercial plasma collection companies, and
non-profit organizations such as the American Red Cross and community blood
banks which solicit the donation of whole blood. A number of these
competitors have access to greater financial, marketing and other resources
than we do. If we are unable to maintain and expand our donor base, our
business and future prospects will be adversely affected.
WE ARE SUBJECT TO SIGNIFICANT GOVERNMENT REGULATION
Our business is heavily regulated in the United States by federal, state
and local regulations. Although the Food and Drug Administration (FDA)
administers the particulars of the Code of Federal Regulations across the
country, various state and local regulations also apply and can be, in some
cases, more restrictive.
In recent years, the FDA has increased its focus on plasma centers and
blood banks and has through legal action closed a number of blood banks and
plasma centers in the U.S. If we are unable to comply with the FDA
standards, we will be subject to fines, penalties and even closure.
As of February 28, 1999, we had obtained FDA licenses and QPP
Certification (a certification by the American Blood Resources Association
which has become the worldwide standard for plasma involving both procedural
and donor qualification standards) for all but two of our current centers.
If we are unable to obtain or maintain FDA licenses or if we experience
delays in obtaining FDA licenses our ability to continue to operate these
centers will be adversely affected. If we are unable to obtain or maintain
QPP Certification or if we experience delays in obtaining QPP Certification,
our ability to find customers for our plasma will be adversely affected.
Industry implementation of the QPP Certification program has resulted in a
decrease in qualified donors due to the higher standards required for QPP
Certification. If we are unable to locate an adequate pool of donors, our
operations could be adversely affected.
The American Blood Resources Association established a voluntary
standard effective July 1, 1997 relating to the acceptance of new donors.
This standard prohibits the further manufacturing of first-time donor plasma
into therapeutic products until a negative set of test results is obtained on
the second donation from the same donor within six months. This is intended
to further minimize the possibility of infected plasma interrupting the
therapeutic products manufacturing process cycle. Although we do not believe
that this new standard will have a significant impact on the volume of plasma
we ship to our customers, we cannot assure you that this is the case. In
addition, we may be subject to other measures or standards in the future
which may adversely affect our operations.
4
<PAGE>
As of the date of this prospectus, we believe that we are in compliance
in all material respects with laws, rules and regulations applicable to our
business. However, we cannot assure you that we will be able to continue to
comply with all applicable laws, rules and regulations or that violations
will not occur. In addition, we cannot assure you that more restrictive
laws, rules and regulations or enforcement policies will not be adopted in
the future which could make compliance more difficult or expensive or
otherwise adversely affect our business or prospects. We also cannot assure
you that any new plasma collection centers that we develop or acquire will
receive certification from the FDA.
OUR BUSINESS IS SUBJECT TO GOVERNMENTAL REFORMS AND THE ADEQUACY OF
REIMBURSEMENT
Healthcare reform is a priority of many elected and appointed officials.
Some reform measures, if adopted, could adversely affect the pricing of
therapeutic products which are made from plasma or the amount of
reimbursement available for therapeutic products from government agencies,
third party payers and other organizations.
YEAR 2000 RISKS COULD ADVERSELY AFFECT OUR BUSINESS
Many computer systems experience problems handling dates beyond the year
1999. Therefore, some computer hardware and software will need to be
modified prior to the year 2000 in order to remain functional. We believe
that we have adequately addressed the risks associated with year 2000
compliance with respect to our accounting and financial reporting systems.
In many instances, we have been informed by our software vendors that the
software we are using is year 2000 compliant. In other instances, we have
addressed the issue through software upgrades. We anticipate that the cost
associated with becoming year 2000 compliant will not be significant. We
cannot assure you, however, that there will not be a delay in, or increased
costs associated with, the implementation of any required changes, and our
inability to implement such changes expeditiously could have an adverse
effect on us.
There is also a risk that we could suffer an interruption in our
operations to the extent that our significant suppliers do not adequately
address year 2000 issues which they may have. We are dependent on our
suppliers for soft goods, bottles and medical supplies which are necessary
for our production of plasma. In addition, we are dependent upon third party
suppliers to perform certain testing functions on our plasma in order to
timely determine whether our plasma meets the necessary requirements. If our
suppliers have significant year 2000 issues, they may not be able to provide
us with essential products or services on a timely basis. Alternative
sources of supply are not readily available for certain of our key supplies
and testing functions.
We are in the process of contacting our key suppliers and other
important parties with whom we do business with respect to their year 2000
compliance. If inquiries of our key suppliers cause us to believe that such
suppliers may have significant year 2000 issues we will need to develop a
contingency plan for obtaining required supplies should those sources be
interrupted. If year 2000 issues prevent our key suppliers from timely
filling our needs, and if alternative sources of such supplies or services
are not readily available, we may be forced to curtail our operations. An
extended interruption in our operations would have a material adverse impact
on us.
WE ARE DEPENDENT ON OUR KEY PERSONNEL
Our success depends on our ability to attract, retain and motivate the
qualified personnel that will be essential to our current plans and future
development. The competition for such personnel is substantial, and we can
not assure you that we will successfully retain our key employees or attract
and retain any required additional personnel.
In particular, our success depends to a significant extent upon the
continued services of Barry Plost, our Chairman and Chief Executive Officer, Mr.
Michael Crowley, President of our Western States
5
<PAGE>
Plasma Division, and Mr. William Cone, President of our Consolidated
Technologies Division. We maintain key person life insurance coverage with
respect to each of these executives.
OUR PRINCIPAL SHAREHOLDER EXERTS SIGNIFICANT INFLUENCE ON US
Our principal shareholder, Barry Plost, is our chief executive officer
and beneficially owns approximately 19.3% of our Common Stock. Therefore, he
has the power to exert significant influence on our management and our
policies.
WE HAVE SIGNIFICANT AMOUNTS OF OPTIONS, WARRANTS AND CONVERTIBLE PREFERRED STOCK
OUTSTANDING
As of the date of this Prospectus, we have outstanding:
-- Warrants and Options to purchase an aggregate of 6,129,723 shares of
Common Stock;
-- 15,000 shares of Series B Convertible Preferred Stock, convertible
into 300,000 shares of Common Stock; and
-- 22,500 shares of Series C Preferred Stock, convertible into 500,001
shares of Common Stock.
Certain of these equity securities are also subject to anti-dilution and
other adjustments, which would require us to adjust the number of shares of
our stock that would be issuable upon the exercise or conversion of such
equity securities if such adjustment provisions were triggered. Triggering
events include the issuance of equity below certain prices, the achievement
of (or failure to achieve) certain financial targets, and the failure to meet
certain deadlines with respect to our contractual obligations to assist
certain security holders in registering for resale the shares of our Common
Stock held by them.
In addition, we have reserved for issuance 500,000 shares of our Common
Stock upon exercise of options to be granted under our 1997 Informal Stock
Compensation Plan, and an additional 1,000,000 shares of our Common Stock
issuable upon exercise of options to be granted under our 1998 Stock Option
Plan. To date, we have not granted any options under either the 1997
Informal Stock Compensation Plan or the 1998 Stock Option Plan.
Holders of our warrants and options are likely to exercise them when, in
all likelihood, we could obtain additional capital on terms more favorable
than those provided in the warrants and options. Further, while these
warrants and options are outstanding, our ability to obtain additional
financing on favorable terms may be adversely affected.
IF THE SHARES OF OUR COMMON STOCK ELIGIBLE FOR FUTURE SALE ARE SOLD, THE
MARKET PRICE OF OUR COMMON STOCK MAY BE ADVERSELY AFFECTED
If our existing security holders sell significant amounts of our Common
Stock in the public market, the market price of our Common Stock could be
adversely affected, and we may find it more difficult to sell our Common
Stock in the future at times and for prices we consider appropriate. As of
February 26, 1999, 7,644,418 shares of our Common Stock were issued and
outstanding, and an additional 6,929,724 shares were issuable upon the
exercise or conversion of certain warrants, options and other convertible
securities which we had previously issued. Several of our security holders
have registration rights pursuant to agreements with us under which they
could require us to register and sell their shares in an underwritten public
offering.
We currently have on file with the Securities and Exchange Commission a
registration statement on Form S-3 (Registration No. 333-57943) with respect
to the potential resale by the selling security holders named therein of up
to 10,383,502 shares of our Common Stock held by them or issuable to them
upon exercise or conversion of certain warrants, options and other
convertible securities which we had previously issued.
6
<PAGE>
OUR STOCK PRICE IS VOLATILE
The market price of our Common Stock has historically been volatile, and
that volatility is likely to continue. We believe that future announcements
concerning us, our competitors, governmental regulations, litigation or
unexpected losses, or the failure to meet or exceed analysts projections of
financial performance, may cause the market price of our Common Stock to
fluctuate substantially in the future. Sales of substantial amounts of our
outstanding Common Stock in the public market could also materially adversely
affect the market price of our Common Stock. These fluctuations, as well as
general economic, political and market conditions, may materially adversely
affect the market price of our Common Stock.
YOUR INVESTMENT IN OUR COMMON STOCK MAY BE RELATIVELY ILLIQUID
The trading volume in our Common Stock has historically been relatively
low. The average daily trading volume on the American Stock Exchange between
March 25, 1998 (the date on which our Common Stock was first listed for
trading on the American Stock Exchange) and February 28, 1999 has been
approximately 15,000 shares per day. Accordingly, investments in our Common
Stock may be relatively illiquid, and investors in our Common Stock must be
prepared to bear the economic risks of such investment for an indefinite
period of time.
WE CANNOT ASSURE YOU THAT OUR COMMON STOCK WILL CONTINUE TO BE LISTED ON THE
AMERICAN STOCK EXCHANGE
The American Stock Exchange retains discretion over whether to continue
listing our Common Stock. While we believe that we currently meet the
American Stock Exchange's guidelines for continued listing, we have not
historically maintained compliance with such guidelines. To date the
American Stock Exchange has allowed our Common Stock to remain listed.
However, we cannot assure you that we will continue to meet the American
Stock Exchange's guidelines for continued listing or that our Common Stock
will remain listed on the American Stock Exchange. If our Common Stock is
delisted from the American Stock Exchange, your shares may become
significantly less liquid and may decline significantly in price.
WE ARE DEPENDENT UPON OUR SUBSIDIARIES
We conduct our operations through our subsidiaries. Therefore, a
principal internal source of our cash and our ability to service our debt
depends in part upon the earnings of our subsidiaries and the distribution of
those earnings to us, or upon loans or other payments of funds by those
subsidiaries to us. Our subsidiaries are separate and distinct legal
entities and have no obligation to pay or make funds available to us. In
addition, the payment of dividends by our subsidiaries and the making of
loans and advances by our subsidiaries to us are subject to statutory and
contractual restrictions.
WE DO NOT PLAN ON PAYING CASH DIVIDENDS ON OUR COMMON STOCK
We have not paid any cash dividends on our Common Stock since our
inception and, because of our contemplated capital needs, we do not
anticipate paying any cash dividends in the foreseeable future. We
anticipate that any earnings which may be generated from our operations will
be used to finance our operations and to repay our debt. In addition, our
loan documents with our current lenders prohibit us and our subsidiaries from
paying dividends or making other types of restricted payments.
WE MAY ISSUE PREFERRED STOCK IN THE FUTURE
We are authorized to issue up to 25,000,000 shares of preferred stock,
of which 300 shares of Series A Preferred Stock, 15,000 shares of Series B
Convertible Preferred Stock and 22,500 shares of Series C Convertible
Preferred Stock are issued and outstanding. We may issue additional shares
of
7
<PAGE>
preferred stock in one or more new series. Our Board of Directors may
determine the terms of the preferred stock without further action by our
stockholders. These terms may include voting rights, preferences as to
dividends and liquidation, conversion and redemption rights, and sinking fund
provisions. Although we have no present plans to issue additional shares of
preferred stock or to create new series of preferred stock, if we do issue
additional preferred stock, it could affect your rights or even reduce the
value of our Common Stock.
CERTAIN PROVISIONS OF DELAWARE LAW MAY AFFECT THE PRICE OF OUR COMMON STOCK
We are incorporated in the State of Delaware. Certain provisions of
Delaware law applicable to us, including Section 203 of the Delaware General
Corporation Law, could have the effect of delaying, deferring or preventing a
change of control in us or our management and may discourage bids for our
Common Stock at a premium over the market price of our Common Stock. As a
result, the price of our Common Stock may be adversely affected.
8
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ABOUT SERACARE
We are an integrated collector, manufacturer and marketer of
plasma-based products and diagnostic tests. Through our wholly owned
subsidiaries, we collect and sell source and hyperimmune plasma to
manufacturers of pharmaceutical and diagnostic products. We also manufacture
biomedical materials and products and provide services to the in-vitro
diagnostic industry. For a more detailed description of our business,
including audited and unaudited financial information, see our 1998 Form
10-KSB and other documents referred to in "Incorporation of Certain Documents
by Reference."
We were incorporated under the laws of the State of Delaware in 1991.
Our principal business and executive offices are located at 1925 Century Park
East, Suite 1970, Los Angeles, California 90967. Our main telephone number
is (310) 772-7777.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares of our Common
Stock offered by the selling security holders pursuant to this prospectus. We
will receive proceeds upon the exercise of warrants and options to purchase
shares of Common Stock held by certain of the selling security holders and
offered by this prospectus. We intend to use such proceeds, if and when
received, for working capital and general corporate purposes.
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<PAGE>
SELLING SECURITY HOLDERS
The shares of our Common Stock offered pursuant to this prospectus have
been or will be issued to the selling security holders (or their assignees)
directly by us as follows:
SERIES C FINANCING. In connection with a private placement (the
"Series C Financing") consummated as of December 28, 1998, we issued and
sold 22,500 shares of our Series C Preferred Stock, $.001 par value per
share, and 281,250 Series C Warrants to purchase one share of our Common
Stock. We relied upon the exemption provided in Section 4(2) of the
Securities Act in completing the Series C Financing.
Each share of Series C Preferred Stock is convertible at the option of
the holder into a certain number of shares of our Common Stock which is
determined by dividing the liquidation preference per share of Series C
Preferred Stock by the conversion price. The liquidation preference per
share of Series C Preferred Stock is $100 per share and the initial
conversion price is $4.50 per share. The conversion price is subject to
adjustment in accordance with the terms of the Series C Certificate of
Designation and the Series C Preferred Stock Purchase Agreements (forms of
each of which are filed as exhibits to our registration statement of which
this prospectus is a part).
We have the right to force the conversion of the Series C Preferred
Stock into our Common Stock if the closing price per share of our Common
Stock for a period of 30 consecutive trading days exceeds $7.00 and if we
comply with certain registration requirements including having an effective
registration statement on file with the Securities and Exchange Commission
with respect to the shares of Common Stock into which the Series C
Preferred Stock may be converted.
Each Series C Warrant entitles the holder to purchase one share of our
Common Stock (subject to certain adjustments) initially at an exercise
price of $4.50 per share. The exercise price of the Series C Warrants is
subject to adjustment in accordance with the terms of the Series C Warrant
and the Series C Warrant Agreement (forms of each of which are filed as
exhibits to our registration statement of which this prospectus is a part).
The Series C Warrants are exercisable at any time on or before
December 28, 2003 (subject to extension under certain circumstances). We
have the right, on or before December 28, 1999, to redeem the outstanding
Series C Warrants at a price of $.01 per warrant following any period of 30
consecutive days in which the closing price per share of our Common Stock
exceeds $7.00, and if we comply with certain registration requirements
including having an effective registration statement on file with the
Securities and Exchange Commission relating to the shares of our Common
Stock underlying both the Series C Warrants and the Series C Preferred
Stock. To exercise our redemption right, we would have to provide the
holders of the Series C Warrants with a notice of our intent to exercise
our redemption rights. The holders of the Series C Warrants would then
have a minimum of 30 days to exercise their warrants.
We are registering the shares of our Common Stock issuable upon
conversion of the Series C Preferred Stock and upon exercise of the
outstanding Series C Warrants pursuant to the registration rights that we
granted to the investors in the Series C Financing. Of the shares of our
Common Stock offered under this prospectus, 500,001 shares (subject to
adjustment in accordance with the terms of the Series C Financing
documents) are issuable upon the conversion of the Series C Preferred Stock
and 281,250 shares (subject to adjustment in accordance with the terms of
the Series C Financing documents) are issuable upon the exercise of
outstanding Series C Warrants. Under the terms of the registration rights
that we granted to the investors in the Series C Financing, we have agreed
to indemnify those selling security holders who sell, pursuant
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to this prospectus, shares issued or to be issued in connection with the
Series C Financing against certain liabilities, including liabilities
under the federal securities laws.
In connection with the Series C Financing, we also issued to certain
finders 25,000 shares of our Common Stock under the terms of an agreement
with such finders. We are also registering the resale of these shares
under this prospectus.
EMPLOYEE AND DIRECTOR STOCK OPTIONS. 122,000 of the shares of our
Common Stock offered by this prospectus are issuable upon the exercise of
certain options that we granted to certain of our directors, officers and
employees as compensation for services rendered or to be rendered to us.
Each of these option grants was exempt from registration pursuant to
Section 4(2) under the Securities Act. The material terms of such options
are described in the footnotes to the table below.
The remaining shares of our Common Stock offered by this prospectus have
been issued (or are issuable upon the exercise of certain convertible securities
which have been issued) in various transactions exempt from registration
pursuant to Section 4(2) of the Securities Act as described in the footnotes to
the table below.
The following table sets forth certain information regarding beneficial
ownership of our Common Stock by the selling security holders as of March 8,
1999 and the number of shares that may be offered pursuant to this prospectus
for the account of each of the selling security holders or their transferees or
distributees from time to time. Except as described in the footnotes to the
table, to the best of our knowledge, none of the selling security holders has
had any position, office or other material relationship with us or any of our
affiliates during the past three years.
<TABLE>
<CAPTION>
Maximum Number of
Number of Number of Shares Percentage of
Shares Shares Which Beneficially Outstanding
Beneficially May Owned Shares
Owned Prior Be Sold in Following Beneficially Owned
to This This This Following This
Selling Security Holder Offering(1) Offering Offering(2) Offering(2)
- -------------------------------- ------------ ------------ ------------ ------------------
<S> <C> <C> <C> <C>
South Ferry #2, L.P. 670,833(3) 520,833(3) 150,000(4) 1.9%
The BL Squared Foundation 86,806(5) 86,806(5) 0 *
James R. Eddings 86,806(5) 86,806(5) 0 *
Kiam Interest Ltd. 86,806(5) 86,806(5) 0 *
Kenneth R. Levine 74,400(6) 15,000(6) 59,400(7) *
Marshall M. Becker 85,988(8) 10,000(8) 75,988(9) 1.0%
Amex Plasma Management, Inc. 100,000(10) 100,000(10) 0 *
A.I. International Corporate
Holdings Ltd. 337,499(11) 18,750(11) 318,749(12) 4.1%
FCIM Corporation 6,100(13) 6,100(13) 0 *
Sovereign Partners, LP 3,506(14) 3,506(14) 0 *
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Maximum Number of
Number of Number of Shares Percentage of
Shares Shares Which Beneficially Outstanding
Beneficially May Owned Shares
Owned Prior Be Sold in Following Beneficially Owned
to This This This Following This
Selling Security Holder Offering(1) Offering Offering(2) Offering(2)
- -------------------------------- ------------ ------------ ------------ ------------------
<S> <C> <C> <C> <C>
Dominion Capital Fund Limited 7,023(15) 7,023(15) 0 *
Western Equities LLC(16) 228,683(17) 228,683(17) 0 *
William Cone(18) 630,114(19) 193,750(19) 436,364(20) 5.7%
Jerry L. Burdick(21) 99,111(22) 32,000(22) 67,111(23) *
Samuel D. Anderson(24) 165,000(25) 15,000(25) 150,000(26) 1.9%
Ezzat Jallad(27) 55,000(28) 15,000(28) 40,000(29) *
Dr. Nelson Teng(30) 395,000(31) 15,000(31) 380,000(32) 4.9%
Robert J. Cresci(33) 15,000(34) 15,000(34) 0 *
Brown Brothers Harriman & Co.(35) 19,349(36) 5,556(36) 13,793(37) *
SSB Investments, Inc. 5,556(38) 5,556(38) 0 *
John Madrid 10,000(39) 10,000(39) 0 *
Charles Auger 10,000(39) 10,000(39) 0 *
Michael Messick 10,000(40) 10,000(40) 0 *
</TABLE>
- --------------------
* Less than one percent of class.
(1) Assumes the exercise of all options and warrants beneficially owned by
the selling security holder at the exercise price and for the maximum
number of shares permitted as of the date of this prospectus. Also
assumes the conversion of all preferred stock beneficially owned by
the selling security holder at the conversion price and for the
maximum number of shares permitted as of the date of this prospectus.
(2) Assumes that each selling security holder will sell all of the shares of
Common Stock offered pursuant to this prospectus, but not any other
shares of Common Stock beneficially owned by such security holder.
(3) Includes 333,333 shares of our Common Stock issuable upon conversion of
15,000 shares of Series C Preferred Stock beneficially owned by South
Ferry #2, L.P. and 187,500 shares of our Common Stock issuable upon
the exercise of 187,500 Series C Warrants beneficially owned by South
Ferry #2, L.P.
(4) Represents shares of our Common Stock issuable upon the exercise of
certain warrants beneficially owned by South Ferry #2, L.P. The
shares of our Common Stock underlying these warrants are
12
<PAGE>
included in our registration statement on Form S-3 filed on June 29,
1998 with the Securities and Exchange Commission (Registration
No. 333-57943) (This registration statement will be referred to as
our "Previous Form S-3" for convenience).
(5) Includes 55,556 shares of our Common Stock issuable upon conversion of
2,500 shares of Series C Preferred Stock beneficially owned by each of
the named selling security holders and 31,250 shares of our Common
Stock issuable upon the exercise of 31,250 Series C Warrants
beneficially owned by each such selling security holder.
(6) Includes 15,000 shares of our Common Stock issued to Mr. Levine as a
"finders fee" in connection with the Series C Financing.
(7) Includes 15,750 shares of our Common Stock issuable upon the exercise of
certain warrants beneficially owned by Mr. Levine. These shares and
an additional 43,650 shares of our Common Stock beneficially owned by
Mr. Levine are included in our Previous Form S-3.
(8) Includes 10,000 shares of our Common Stock issued to Mr. Becker as a
"finders fee" in connection with the Series C Financing.
(9) Includes 10,500 shares of our Common Stock issuable upon the exercise of
certain warrants beneficially owned by Mr. Becker. These shares and
an additional 65,488 shares of our Common Stock beneficially owned by
Mr. Becker are included in our Previous Form S-3.
(10) Includes 50,000 shares of our Common Stock and an additional 50,000
shares of our Common Stock issuable upon the exercise of warrants, all
of which shares and warrants we issued to Amex Plasma Management, Inc.
in connection with our acquisition of a plasma center pursuant to the
terms of an Asset Purchase Agreement, dated October 30, 1998, between
us and Amex Plasma Management, Inc. The warrants are exercisable at a
price of $6.00 per share and expire on October 31, 2003. The shares
of our Common Stock issued and to be issued to Amex Plasma Management,
Inc. are being registered pursuant to the registration rights provided
in the Asset Purchase Agreement.
(11) Includes 18,750 shares of our Common Stock issued to A.I. International
Corporate Holdings Ltd. as a "finders fee" in connection with certain
private placements of our securities.
(12) Includes 168,749 shares of our Common Stock issuable upon the exercise of
certain warrants beneficially owned by A.I. International Corporate
Holdings Ltd. These shares and an additional 150,000 shares of our
Common Stock beneficially owned by A.I. International Corporate
Holdings Ltd. are included in our Previous Form S-3.
(13) Represents shares of our Common Stock issued to FCIM Corporation as a
"finders fee" in connection with certain private placements of our
securities. Ezzat Jallad, one of our directors, is the executive vice
president of FCIM Corporation.
(14) Represents shares of our Common Stock issued to Sovereign Partners, LP
pursuant to certain price protection rights contained in a
subscription agreement entered into between us and Sovereign Partners,
LP in November 1997. Sovereign Partners, LP had originally purchased
109,966 shares of our Common Stock under the subscription agreement.
(15) Represents shares of our Common Stock issued to Dominion Capital Fund
Limited pursuant to certain price protection rights contained in a
subscription agreement entered into between us and Dominion Capital
Fund Limited in November 1997. Dominion Capital Fund Limited had
originally purchased 219,930 shares of our Common Stock under the
subscription agreement.
13
<PAGE>
(16) In September 1998, Western Equities LLC provided bridge financing to us
in the form of a $2,000,000 loan due thirty days after funding. In
connection with this loan, we agreed to issue to Western Equities LLC
a warrant to purchase shares of our Common Stock. The exact number of
shares of our Common Stock into which the warrant was to be
exercisable was to be determined based on the date the loan was
repaid. The loan was repaid in December 1998, and accordingly, we
issued to Western Equities LLC a warrant to purchase 228,683 shares of
our Common Stock.
(17) Represents shares of our Common Stock issuable upon the exercise of a
warrant we issued to Western Equities LLC in connection with the
promissory note referred to in footnote 16. The exercise price of the
warrant is $4.50 per share and the warrant must be exercised on or
before December 28, 2003.
(18) Mr. Cone is one of our directors and is also the President of our
Consolidated Technologies Division. In September 1998, Mr. Cone
provided bridge financing to us in the form of a $1,250,000 loan due
thirty days after funding. In connection with this loan, we agreed to
issue to Mr. Cone a warrant to purchase shares of our Common Stock.
The exact number of shares of our Common Stock into which the warrant
was to be exercisable was to be determined based on the date the loan
was repaid. The loan was repaid in February 1999, and accordingly, we
issued to Mr. Cone a warrant to purchase 193,750 shares of our Common
Stock.
(19) Includes 193,750 shares of our Common Stock which are issuable upon the
exercise of a warrant we issued to Mr. Cone in connection with the
promissory note referred to in footnote 18. The exercise price of the
warrant is $4.50 per share and the warrant must be exercised on or
before December 28, 2003.
(20) Represents shares of our Common Stock beneficially owned by Mr. Cone and
included in our Previous Form S-3.
(21) Mr. Burdick is our Executive Vice President and Chief Financial Officer
and is one of our directors.
(22) Includes 32,000 shares of our Common Stock issuable upon the exercise of
an option granted to Mr. Burdick. The exercise price of the option is
$4.25 per share and the option must be exercised on or before December
27, 2003. The option was granted to Mr. Burdick for his services as
an employee.
(23) Includes 67,110 shares of our Common Stock issuable upon the exercise of
certain options granted to Mr. Burdick. These shares and an
additional share of our Common Stock beneficially owned by Mr. Burdick
are included in our Previous Form S-3.
(24) Mr. Anderson is one of our directors and has a consulting agreement with
us. Mr. Anderson is also a trustee and a beneficiary of the Samuel
and Mary Ann Anderson Trust, which holds 191,932 shares of our Common
Stock (125,432 of such shares are included in our Previous Form S-3).
(25) Includes 15,000 shares of our Common Stock issuable upon the
exercise of an option granted to Mr. Anderson. The exercise price of
the option is $4.25 per share and the option must be exercised on or
before December 27, 2003. The option was granted to Mr. Anderson for
his service as a director.
(26) Represents shares of our Common Stock issuable upon the exercise of
certain options granted to Mr. Anderson. These shares are included in
our Previous Form S-3.
(27) Mr. Jallad is one of our directors.
14
<PAGE>
(28) Includes 15,000 shares of our Common Stock issuable upon the exercise of
an option granted to Mr. Jallad. The exercise price of the option is
$4.25 per share and the option must be exercised on or before December
27, 2003. The option was granted to Mr. Jallad for his services as a
director.
(29) Includes 15,000 shares of our Common Stock issuable upon the exercise of
certain options and included in our Previous Form S-3. These shares
and an additional 25,000 shares of our Common Stock beneficially owned
by Mr. Jallat are included in our Previous Form S-3.
(30) Dr. Teng is one of our directors.
(31) Includes 15,000 shares of our Common Stock issuable upon the exercise of
an option granted to Dr. Teng. The exercise price of the option is
$4.25 per share and the option must be exercised on or before December
27, 2003. The option was granted to Dr. Teng for his services as a
director.
(32) Includes 65,000 shares of our Common Stock issuable upon the exercise of
certain options. Dr. Teng also beneficially owns an additional
315,000 shares of our Common Stock that are included in our Previous
Form S-3.
(33) Mr. Cresci is one of our directors and is also a managing director of
Pecks Management Partners Ltd., which is the investment advisor to
each of the original investors with respect to our $16,000,000 12%
senior subordinated notes (such investors beneficially own warrants to
purchase 2,100,572 shares of our Common Stock, which warrants were
issued to the investors in connection with the $16,000,000 12% senior
subordinated notes).
(34) Represents shares of our Common Stock issuable upon the exercise of an
option granted to Mr. Cresci. The exercise price of the option is
$4.25 per share and the option must be exercised on or before December
27, 2003. The option was granted to Mr. Cresci for his services as a
director.
(35) On December 21, 1998, we entered into a Revolving Credit, Term Loan and
Security Agreement with Brown Brothers Harriman & Co. and State Street
Bank and Trust Company, providing us with a $10 million revolving line
of credit and a $7,000,000 term loan.
(36) Includes 5,556 shares of our Common Stock issuable upon the exercise of a
warrant we issued to Brown Brothers Harriman & Co. on December 21,
1998 in connection with the Revolving Credit, Term Loan and Security
Agreement referred to in footnote 35. The exercise price of the
warrant is $.01 per share and the warrant must be exercised on or
before December 21, 2003. The warrant provides for anti-dilution
adjustments upon the occurrence of certain events. The shares
issuable upon exercise of the warrant are being registered pursuant to
the registration rights contained in the warrant.
(37) Represents shares of our Common Stock issuable upon the exercise of a
warrant beneficially owned by Brown Brothers Harriman & Co. These
shares are included in our Previous Form S-3.
(38) Represents shares of our Common Stock issuable upon the exercise of a
warrant we issued to SSB Investments, Inc. as designee of State Street
Bank and Trust Company on December 21, 1998 in connection with the
Revolving Credit, Term Loan and Security Agreement referred to in
footnote 35. The exercise price of the warrant is $.01 per share and
the warrant must be exercised on or before December 21, 2003. The
warrant provides for anti-dilution adjustments upon the occurrence of
certain events. The shares issuable upon exercise of the warrant are
being registered pursuant to the registration rights contained in the
warrant.
15
<PAGE>
(39) Represents shares of our Common Stock issuable upon the exercise of
options we issued to each of Messrs. Madrid and Auger on December 28,
1998. Each of these options vests one-half on December 28 of each of
1999 and 2000. Once vested the options can be exercised at any time
during the three year period from the date they vest. The exercise
price of the options is $4.25 per share. The shares issuable upon
exercise of the options are being registered pursuant to the
registration rights contained in the options. The options were issued
to each respective employee as compensation for his services as an
employee.
(40) Represents shares of our Common Stock issuable upon the exercise of
options we issued to Mr. Messick on December 28, 1998. The options
vest one-third on December 28 of each of 1999, 2000 and 2001. Once
vested the options can be exercised at any time during the three year
period from the date of vesting. The exercise price of the options is
$4.25 per share. The shares issuable upon exercise of the options are
being registered pursuant to the registration rights contained in the
options. The options were issued to Mr. Messick as compensation for
his services as an employee.
16
<PAGE>
PLAN OF DISTRIBUTION
The shares of our Common Stock offered pursuant to this prospectus may be
sold from time to time by the selling security holders. The shares sold under
this prospectus may be sold on the American Stock Exchange, in negotiated
transactions, or a combination of these methods of sale, or otherwise, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices by one or more of the following methods:
-- through ordinary brokerage transactions in which the broker solicits
purchases;
-- sales to one or more brokers or dealers as principal, and the resale
by such brokers or dealers for their account pursuant to this
prospectus, including resales to other brokers and dealers;
-- block trades in which the broker or dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
block as principal in order to facilitate the transaction; or
-- negotiated transactions with purchasers with a broker or dealer.
Any broker or dealer participating in such sales may be deemed an
"underwriter" within the meaning of the Securities Act of 1933, as amended, and
any commissions, discounts or concessions received by a broker or dealer (which
may be in excess of customary commissions) and any gain realized by such broker
or dealer on the sale of shares may be deemed "underwriting compensation." Any
such commissions, discounts or concessions will be paid or borne by the selling
security holder or the purchasers of the shares offered by this prospectus and
not us. Except for sales involving customary selling commissions in ordinary
brokerage transactions, any such underwriter or agent will be identified, and
any compensation paid to such persons will be described, in a supplement to this
prospectus.
Any securities covered by this prospectus that qualify for sale pursuant to
Rule 144 might be sold under Rule 144 rather than pursuant to this prospectus.
LEGAL MATTERS
O'Melveny & Myers LLP has passed on the validity of the shares of our
Common Stock intended to be sold pursuant to this prospectus.
EXPERTS
The financial statements incorporated in this prospectus by reference to
our Annual Report on Form 10-KSB for the year ended February 28, 1998 have been
included in reliance upon the report dated May 15, 1998 of BDO Seidman, LLP,
independent certified public accountants, given upon the authority of said firm
as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We file reports with the Securities and Exchange Commission (the "SEC") on
a regular basis that contain financial information and results of operations.
You may read or copy any document that we file with the SEC at the SEC's Public
Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may
obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. The SEC also maintains an Internet site that contains
reports, proxy statements, information statements and other information filed
electronically with the SEC. The address of the SEC Internet site is
http://www.sec.gov.
17
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
To avoid repeating information in this prospectus that we have already
filed with the SEC, we have incorporated by reference the SEC filings listed
below. This information is considered a part of this prospectus. These
documents are as follows:
(1) Our annual report on Form 10-KSB for the fiscal year ended February 28,
1998;
(2) Our quarterly reports on Form 10-QSB for the fiscal quarters ended
May 31, August 31, and November 30, 1998;
(3) Our report on Form 8-K filed with the SEC on February 27, 1998 as amended
by our report on Form 8-K/A filed with the SEC on March 16, 1998;
(4) Our report on Form 8-K filed with the SEC on October 13, 1998 as amended
by our report on Form 8-K/A filed with the SEC on January 15, 1999 and as
further amended by our report on Form 8-K/A filed with the SEC on
March 15, 1999;
(5) The description of our Common Stock contained in our registration
statement on Form 8-A filed with the SEC on March 20, 1998; and
(6) All documents subsequently filed by us pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act, prior to the termination of the offering
of the securities covered by this prospectus.
We will provide without charge to each person, including any beneficial
owner, to whom a copy of this prospectus has been delivered, upon the written or
oral request of such person, a copy of any or all of the documents referred to
in "Incorporation of Certain Documents by Reference" which have been or may be
incorporated in this prospectus by reference. Requests for such copies should
be directed to our Secretary at SeraCare, Inc., 1925 Century Park East, Suite
1970, Los Angeles, California 90067, telephone number (310) 772-7777.
18
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS, AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY US, ANY SELLING SECURITY HOLDER OR BY ANY OTHER
PERSON. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY, ANY SECURITIES OTHER THAN THE SHARES OF COMMON STOCK OFFERED
HEREBY, OR AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, SUCH SHARES
IN ANY JURISDICTION IN WHICH, OR TO ANY PERSON TO WHOM, SUCH OFFER OR
SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN OUR AFFAIRS SINCE THE DATE HEREOF OR THAT
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
19
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
SeraCare will pay all of the expenses incident to the offering and sale of the
shares of our Common Stock covered by this registration statement other than any
commissions and discounts of underwriters, dealers or agents. Such expenses are
set forth in the following table. All of the amounts shown are estimates except
the SEC registration fee and the American Stock Exchange additional listing fee.
<TABLE>
<S> <C>
SEC registration fee . . . . . . . . . . . . . . . . . . . . . $2,107.09
American Stock Exchange additional listing fee . . . . . . . . 17,500.00
Printing . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000.00
Accounting fees and expenses . . . . . . . . . . . . . . . . . 10,000.00
Legal fees and expenses. . . . . . . . . . . . . . . . . . . . 50,000.00
Blue sky fees and expenses . . . . . . . . . . . . . . . . . . 10,000.00
Miscellaneous expenses . . . . . . . . . . . . . . . . . . . . 20,000.00
-----------
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . $129,607.09
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our Certificate of Incorporation and Bylaws, each as amended to date, require us
to indemnify our officers and directors to the fullest extent permitted by
Section 145 of the Delaware General Corporation Law and applicable law. Section
145 of the Delaware General Corporation Law provides for the indemnification of
officers, directors and other corporate agents in terms sufficiently broad to
indemnify such persons, under certain circumstances, for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -------------------
<C> <S>
3.1 Restated Articles of Incorporation(1)
3.2 Certificate of Designation of Series C Convertible
Preferred Stock
3.3 Bylaws(1)
4.1 Form of Specimen Certificate of Common Stock(3)
4.2 Form of Series C Financing Subscription Agreement
4.3 Form of Series C Warrant Agreement
4.4 Form of Series C Warrant
4.8 Securityholder Agreement(2)
5.1 Opinion of O'Melveny & Myers LLP
23.1 Consent of BDO Seidman, LLP
23.2 Consent of O'Melveny & Myers LLP (contained in Exhibit 5.1)
24.1 Power of Attorney (contained on signature page hereof)
</TABLE>
20
<PAGE>
(1) Previously filed as an exhibit to the Company's Registration Statement on
Form 10SB filed with the Commission on November 21, 1996, and incorporated
by reference.
(2) Previously filed as an exhibit to the Company's Current Report on Form 8-K
filed with the Commission on February 27, 1998, and incorporated by
reference.
(3) Previously filed as an exhibit to our Registration Statement on Form S-3
(Registration No. 333-57943) filed with the Commission on June 29, 1998,
and incorporated by reference.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) above do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") that are incorporated by reference in the registration
statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof;
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering;
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to Section
13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial BONA FIDE offering thereof;
21
<PAGE>
(5) That, for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective;
(6) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial BONA FIDE offering thereof; and
(7) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
22
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Los Angeles, State of California, on March 18, 1999.
SERACARE, INC.
By: /s/ BARRY D. PLOST
--------------------------------------------
Barry D. Plost
President and Chief Executive Officer
By: /s/ JERRY L. BURDICK
--------------------------------------------
Jerry L. Burdick
Principal Accounting and Financial Officer
23
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Barry Plost and Jerry Burdick, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this registration statement and to file the same, with all exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or either of them or their or his substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ BARRY D. PLOST Chairman of the Board, Chief March 18, 1999
- ----------------------- Executive Officer (Principal
Barry D. Plost Executive Officer) and Director
/s/ JERRY L. BURDICK Executive Vice President, Chief March 18, 1999
- ----------------------- Financial Officer and Director
Jerry L. Burdick
/s/ SAMUEL D. ANDERSON Director March 18, 1999
- -----------------------
Samuel D. Anderson
/s/ WILLIAM T. CONE Director March 18, 1999
- -----------------------
William T. Cone
/s/ ROBERT J. CRESCI Director March 18, 1999
- -----------------------
Robert J. Cresci
/s/ MICHAEL F. CROWLEY Director March 18, 1999
- -----------------------
Michael F. Crowley
/s/ EZZAT JALLAD Director March 18, 1999
- -----------------------
Ezzat Jallad
Director
- -----------------------
Dr. Nelson Teng
</TABLE>
24
<PAGE>
CERTIFICATE OF DESIGNATIONS
OF
SERACARE, INC.
-------------------------------------------
Pursuant to Section 151 of the Delaware General Corporation Law (the
"GCL"), SERACARE, INC., a Delaware corporation (the "CORPORATION"), certifies as
follows:
FIRST: Under the authority contained in Articles FOURTH and SIXTH of
the Restated Certificate of Incorporation of the Corporation, the Board of
Directors of the Corporation has classified an aggregate of twenty five thousand
(25,000) shares of the authorized but unissued shares of Preferred Stock of the
Corporation into a series which shall be designated "Series C Convertible
Preferred Stock."
SECOND: The following resolution was adopted by the Board of
Directors on January 27, 1999 and such resolution has not been modified and is
in full force and effect on the date hereof:
RESOLVED, that the Board of Directors hereby creates, from the
authorized but unissued shares of Preferred Stock of the Corporation, a series
of convertible Preferred Stock designated as Series C Convertible Preferred
Stock, par value $0.001 per share (the "SERIES C PREFERRED Stock"), and hereby
fixes the powers, designations, preferences and relative, participating,
optional or other special rights, and the qualifications, limitations or
restrictions thereof, of the shares of such series, as follows:
Section 1. SERIES C PREFERRED STOCK DIVIDENDS.
The holders of the Series C Preferred Stock shall be entitled to
receive dividends thereon at the annual rate of ten percent (10%)of the
Liquidation Preference per share, payable quarterly in arrears, from the date
funds are received by the Corporation.
Section 2. LIQUIDATION PREFERENCES.
Subject to the holders' conversion rights provided below herein, upon
any liquidation (complete or partial), dissolution or winding up of the
Corporation, or any similar distribution of its assets to its stockholders which
results in a return of capital, whether voluntary or involuntary, the holders of
the Series C Preferred Stock shall be entitled, before any distribution or
payment is made upon any Junior Securities thereinafter defined) of the
Corporation, to be paid out of the assets of the Corporation available for
distribution
<PAGE>
to its stockholders (whether from capital, surplus or earnings) an amount in
cash equal to the sum of $100 (the "LIQUIDATION PREFERENCE"), and shall not
be entitled to any further payment. The term "Junior Security" shall mean
the Corporation's Common Stock and all other equity securities of the
Corporation which are junior in rights and liquidation preference to the
Series C Preferred Stock. Written notice of such liquidation, dissolution,
winding up or other distribution of assets, stating a payment date, the
amount of the payment and the place where the amounts distributable shall be
payable, shall be mailed by certified or registered mail, return receipt
requested, not less than 60 days prior to the payment date stated therein, to
each record holder of any share of Series C Preferred Stock entitled thereto
at the address for such record holder shown on the Corporation's records. A
consolidation or merger of the Corporation into any other corporation or
corporations, or a sale of all or substantially all of the assets of the
Corporation, shall, at the option of the holders of the Series C Preferred
Stock, be deemed a liquidation, dissolution or winding up within the meaning
of this Section 2 if the shares of stock of the Corporation outstanding
immediately prior to such transaction represent immediately after such
transaction less than a majority of the voting power of the surviving
corporation (or of the acguiror of the Corporation's assets in the case of a
sale of assets). Such option may be exercised by the vote or written consent
of holders of a majority of the Series C Preferred Stock at any time within
thirty calendar days after written notice (which shall be given promptly) of
the essential terms of such transaction shall have been given to the holders
of the Series C Preferred Stock in the manner provided by law for the giving
of notice of meetings of shareholders.
Section 3. REDEMPTIONS OF SERIES C PREFERRED Stock.
3.1 REDEMPTION UPON CORPORATE CHANGE. (a) At any time after the
Series C Preferred Stock is convertible by the holders thereof in accordance
with Section 4.2(a), if a Corporate Change is to occur, the Corporation shall
redeem all of the outstanding Series C Preferred Stock immediately prior to the
consummation of such Corporate Change. Upon any such redemption, the Redemption
Price per share of Series C Preferred Stock shall be an amount equal to the
Liquidation Preference. Written notice of any impending Corporate Change, and
the substance and intended date of consummation thereof, shall be mailed by
certified or registered mail, return receipt requested, not more than sixty (60)
nor less than ten (10) days prior to the date of consummation thereof, to the
Purchaser at the address shown on the Corporation's record. Notwithstanding the
foregoing, in the event that a holder shall have delivered a Conversion Notice
to the Corporation prior to any Corporate Change, the Corporation's redemption
rights under this Section 3.1 shall terminate as to
2
<PAGE>
any shares of Series C Preferred Stock which are the subject of such holder's
Conversion Notice.
(b) "CORPORATE CHANGE" means (i) the sale, exchange or transfer of
all or substantially all of the Corporation's assets to an unaffiliated third
party, or (ii) any transaction or series of related transactions in which one
(1) or more persons (other than a holder of Series C Preferred Stock or an
affiliate thereof), other than the holders of a majority of the shares of Common
Stock outstanding on the date the Series C Preferred Stock is issued, shall
directly or indirectly acquire ownership of or control over capital stock (not
including shares held or controlled by them on the date of original issuance of
the Series C Preferred Stock) of the Corporation (or securities exchangeable for
or convertible into such stock) entitled to elect fifty percent (50%) or more of
the Corporation's Board of Directors and representing at least fifty percent
(50%) of the number of shares of Common Stock outstanding. Notwithstanding the
foregoing, no Corporate Change shall be deemed to have occurred as a result of
(A) the exercise of any options or warrants outstanding on the date hereof or
(B) any public offering of securities by the Corporation.
3.2 NOTICE OF REDEMPTION. Except as otherwise expressly provided
herein, notice of any redemption of Series C Preferred Stock, specifying the
time and place of redemption, the Redemption Price and the Section and paragraph
pursuant to which such redemption is being made, shall be mailed by certified or
registered mail, return receipt requested, to each holder of record of shares of
Series C Preferred Stock to be redeemed, at the address for such holder shown on
the Corporation's records, not more than sixty (60) nor less than thirty (30)
days (or ten (10) days, in the case of a redemption pursuant to Section 3.1)
prior to the date on which such redemption is to be made. Upon mailing any such
notice of redemption the Corporation shall become obligated to redeem at the
time of redemption specified therein (the "REDEMPTION DATE") all shares of
Series C Preferred Stock therein specified.
3.3 RIGHTS AFTER REDEMPTION DATE. Provided that the Redemption Price
is paid in full on the applicable Redemption Date, all rights of the holder of
such shares of Series C Preferred Stock as a stockholder of the Corporation, by
reason of the ownership of such shares, shall cease, except the right to receive
the Redemption Price of such shares upon presentation and surrender of the
certificate representing such shares, and such shares shall not after such
Redemption Date be deemed to be outstanding.
3.4 DEPOSIT OF REDEMPTION PRICE. If on or before the date of
redemption specified in any notice of redemption of any
3
<PAGE>
share of Series C Preferred Stock, the Corporation shall irrevocably deposit
the amount of the Redemption Price thereof with a bank or trust company
having an office in the City of New York, designated in such notice of
redemption, in trust for the benefit of the holder of such share of Series C
Preferred Stock, such share of Series C Preferred Stock shall be deemed to
have been redeemed on the date so specified, whether or not the certificate
for such share shall be surrendered for redemption and canceled.
Section 4. CONVERSION OF SERIES C PREFERRED STOCK.
4.1 AUTOMATIC CONVERSION BY CORPORATION. Providing: (A) the
Corporation has on file an effective registration statement on the date of such
Automatic Conversion, and; (B) the closing (Last Trade) price of the Common
Stock averages in excess of $7.00 per share for a thirty consecutive trading day
period prior to such Automatic Conversion; then, at the option of the
Corporation, the Corporation may automatically convert any or all shares of
Series C Preferred Stock then issued and outstanding into such number of fully
paid and non-assessable whole shares of Common Stock which is obtained by
multiplying the number of shares of Series C Preferred Stock so to be converted
by the Liquidation Preference of such shares plus any accrued but unpaid
interest and dividing the result by the Conversion Price (as defined in Section
4.4) then in effect.
4.2 CONVERSION RIGHTS OF HOLDERS OF SERIES C PREFERRED STOCK AND
PROCEDURES.
(a) The shares of Series C Preferred Stock shall be convertible by
the Holders thereof in accordance with the terms of this Section 4, at the
option of the Holder thereof at any time unless or until such Series C
Preferred Stock has been converted by the Corporation pursuant to Section 4.1
above. Series C Preferred Stock shall be convertable into such number of
fully paid and non-assessable whole shares of Common Stock which is obtained
by multiplying the number of shares of Series C Preferred Stock so to be
converted by the Liquidation Preference of such shares and dividing the
result by the Conversion Price (as defined in Section 4.4) then in effect.
(b) A holder of shares of Series C Preferred Stock may, at any
time, convert pursuant to this Section 4 all or any part (in whole numbers of
shares only) of the shares of Series C Preferred Stock held by such holder
into fully paid and non-assessable shares of Common Stock. Provided that such
Automatic Conversion is effected, the right to convert as to any particular
share shall terminate at the close of business on the day immediately prior
to the date fixed for automatic Conversion of the Series C Preferred Stock
pursuant to section 4.1 or upon
4
<PAGE>
any liquidation, dissolution, winding up or similar distribution of the
Corporation.
(c) Each conversion of Series C Preferred Stock shall be effected by
the surrender of the certificate or certificates representing the shares to be
converted at "the principal office of the Corporation (or such other office or
agency of the Corporation as the Corporation may designate by notice in writing
to the holder or holders of the Series C Preferred Stock) at any time during its
usual business hours, together with written notice by the holder of such Series
C Preferred Stock (a "CONVERSION NOTICE") stating that such holder desires to
convert the shares, or a stated number of the shares, represented by such
certificate or certificates which notice shall also specify the name or names
(with addresses) and denominations in which the certificate or certificates for
Common Stock shall be issued and shall include instructions for delivery
thereof. Such conversion shall be deemed to have been effected as of the close
of business on the date on which such certificate or certificates shall have
been surrendered and such notice shall have been received, and as of such date
(the "CONVERSION DATE") the rights of the holder of such Series C Preferred
Stock (or specified portion thereof) as such holder shall cease and the person
or persons in whose name or names any certificate or certificates for shares of
Common Stock are to be issued upon such conversion shall be deemed to have
become the holder or holders of record of the shares of Common Stock represented
thereby.
(d) As soon as possible after the Conversion Date (and in no event
more than 30 days after the Conversion Date), the Corporation shall deliver to
the converting holder or, with respect to the certificate(s) specified in (i)
below, as specified by such converting holder:
(i) a certificate or certificates representing the number of
shares of Common Stock issuable by reason of such conversion registered in
such name or names and such denomination or denominations as the converting
holder shall have specified; and
(ii) a certificate representing any shares of Series C Preferred
Stock which shall have been represented by the certificate or certificates
which shall have been delivered to the Corporation in connection with such
conversion but which shall not have been converted; and
(iii) a payment of cash in an amount equal to the value of any
fractional share of Common Stock that otherwise would be issuable in
connection with the Series C Preferred Stock converted.
5
<PAGE>
4.3 AUTHORIZATION AND ISSUANCE OF COMMON STOCK. The Corporation
covenants and agrees that:
(a) The Corporation will at all times reserve and keep available
out of its authorized but unissued shares of Common Stock, solely for the
purpose of issuing upon the conversion of the Series C Preferred Stock as
provided in this Section 4 such number of shares of Common Stock as shall
then be issuable upon the conversion of all outstanding shares of Series C
Preferred Stock. The Corporation covenants that all shares of Common Stock
which shall be so issuable shall, when issued, be duly and validly issued,
fully paid and non-assessable and free from all taxes, liens, and charges.
The Corporation will take all such action as may be necessary to assure that
all shares of Common Stock may be so issued without violation of any
applicable law or regulation or any requirements of any domestic stock
exchange upon which any shares of Common Stock may be listed.
(b) The Corporation will not take any action which results in any
adjustment of the number of shares of Common Stock which may be acquired upon
conversion of a share of Series C Preferred Stock if after such action the total
number of shares of Common Stock issuable upon conversion of the Series C
Preferred Stock then Outstanding, together with the total number of shares of
Common Stock then Outstanding and the total number of shares of Common Stock
reserved for any purpose other than issuance upon conversion of the Series C
Preferred Stock, would exceed the total number of shares of Common Stock then
authorized by the Corporation's Restated Certificate of Incorporation.
(c) The issuance of certificates for shares of Common Stock upon
conversion of shares of the Series C Preferred Stock shall be made without
charge to the holders of such shares for any issuance tax in respect thereof,
or other cost incurred by the Corporation in connection with such conversion and
the related issuance of shares of Common Stock, provided that the Corporation
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any certificate in a name
other than that of the holder of the Series C Preferred Stock converted.
(d) The Corporation will not close its books against the transfer of
any share of Series C Preferred Stock or of any share of Common Stock issued or
issuable upon the conversion of such shares in any manner which interferes with
the timely conversion of such shares.
6
<PAGE>
4.4 CONVERSION PRICE.
(a) The initial conversion price shall be four dollars and fifty
cents ($4.50) and may be adjusted from time to time as defined in 4.4 (b) the
"CONVERSION PRICE").
(b) If the Common Stock underlying the Convertible Preferred is not
registered pursuant to the 1933 Securities Act within 90 days of the Closing
Date of this agreement, the Conversion Price of the Series C Convertible
Preferred Stock shall be permanently reduced by $.50. In addition, the
Conversion Price shall be permanently reduced by an additional $.25 on each
monthly anniversary thereafter until such registration statement becomes
effective.
Section 5. ANTI-DILUTION PROVISIONS
5.1 SUBDIVISIONS AND COMBINATIONS. In the event that the Corporation
shall at any time subdivide (by any stock split, stock dividend or otherwise)
one or more classes of its outstanding Common Stock into a greater number of
shares of Common Stock, the Conversion Price in effect immediately prior to such
subdivision forthwith shall be proportionately reduced. Conversely, in the
event the outstanding shares of one or more classes of the Common Stock shall be
combined into a smaller number of shares (by reverse stock split or otherwise),
the Conversion Price in effect immediately prior to such combination shall be
proportionately increased.
5.2 DIVIDENDS. In the event that the Corporation declares a
dividend (other than a cash dividend payable out of earnings or earned surplus)
upon Common Stock, then at the option of the holders of a majority of the
outstanding shares of Series C Preferred Stock,
(1) the Corporation shall pay over to each holder, on the
dividend payment date, the stock or other securities and other property
which holder would have received if such holder had converted all of his
or its shares of Series C Preferred Stock into Common Stock and had been
the record holder of such Common Stock on the date on which a record is
taken for the purpose of such dividend, or, if a record is not taken,
the date as of which the holders of Common Stock of record entitled to
such dividend are to be determined, or
(2) the Conversion Price in effect immediately prior to the
declaration of such dividend shall be reduced by an amount equal to the
fair value of such dividend per share (as reasonably determined by the
Board of Directors of the Corporation), such reduction to be effective
on the date
7
<PAGE>
as of which a record is taken for purposes of such dividend, or if a
record is not taken, the date as of which holders of record of Common
Stock entitled to such dividend are determined, or
(3) in the case of a dividend consisting of stock or
securities (other than Common Stock, Options or Convertible Securities) or
other property distributable to holders of Common Stock, the holder of
Series C Preferred Stock may elect that, in lieu of (1) or (2) above,
lawful and adequate provisions shall be made (including without limitation
any necessary reduction in the Conversion Price) whereby such holder of
Series C Preferred Stock shall thereafter have the right to purchase and/or
receive, on the terms and conditions specified in this Certificate of
Designations and in addition to the shares of Common Stock receivable
immediately prior to the declaration of such dividend upon conversion of
his or its shares of Series C Preferred Stock, such shares of stock,
securities or property as are distributable with respect to outstanding
shares of Common Stock equal to the number of shares of Common Stock
receivable immediately prior to such declaration upon conversion of his or
its shares of Series C Preferred Stock, to the end that the provisions
hereof (including without limitation provisions for adjustments of the
Conversion Price and of the number of shares receivable upon such
conversion) shall thereafter be applicable, as nearly as may be, in
relation to such shares of stock, securities or property.
For the purposes of this Section 5.2, "DIVIDEND" shall mean any
distribution to the holders of Common Stock as such, and a dividend shall be
considered payable out of earnings or earned surplus (other than revaluation or
paid-in surplus) only to the extent that such earnings or earned surplus are
charged an amount equal to the fair value of such dividend as reasonably
determined by the Board of Directors of the Corporation.
5.3 REORGANIZATION, RECLASSIFICATION, Consolidation, MERGER OR SALE.
If any capital reorganization or reclassification of the capital stock of the
Corporation, or any consolidation or merger of the Corporation with or into
another corporation, or any sale of all or substantially all of the
Corporation's assets to another corporation shall be effected in such a way that
holders of Common Stock shall be entitled to receive (either directly or upon
subsequent liquidation) stock, securities or assets with respect to or in
exchange for Common Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate provision
(as determined reasonably and in good faith by the Board of Directors of the
Corporation) shall be made whereby each of the holders of the Series C Preferred
Stock
8
<PAGE>
shall thereafter have the right to acquire and receive upon the basis and
upon the terms and conditions specified herein and in lieu of the shares of
Common Stock of the Corporation immediately theretofore acquirable and
receivable upon the conversion of such holder's shares, such shares of stock,
securities or assets as may be issued or payable with respect to or in
exchange for a number of outstanding shares of Common Stock equal to the
number of shares of Common Stock immediately theretofore acquirable and
receivable upon conversion of such shares had such reorganization,
reclassification, consolidation, merger or sale not taken place, and in any
such case appropriate provision shall be made with respect to such holder's
rights and interests to the end that the provisions of this Section 5
(including without limitation provisions for adjustments of the Conversion
Price and of the number of shares of Common Stock acquirable and receivable
upon the exercise of the conversion rights granted in this Section 5) shall
thereafter be applicable in relation to any shares of stock, securities or
assets thereafter deliverable upon the conversion of such holder's shares.
The Corporation shall not effect any consolidation, merger or sale, unless
the successor corpoation (if other than the Corporation) resulting from such
consolidation or merger or the corporation purchasing such assets shall
assume the obligation to deliver to each such holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions, such
holder may be entitled to acquire or receive.
5.4 NOTICE OF ADJUSTMENT. Immediately upon any adjustment of the
Conversion Price, the Corporation shall send written notice thereof to all
holders of Series C Preferred Stock, which notice shall state the Conversion
Price resulting from such adjustment and the increase or decrease, if any, in
the number of shares of Common Stock acquirable and receivable upon conversions
of all shares of Series C Preferred Stock held by each such holder, setting
forth in reasonable detail the method of calculation and the facts upon which
such calculation is based.
5.5 OTHER ADJUSTMENT-RELATED NOTICES. In the event that at any time:
(a) the Corporation shall declare a dividend (or any other
distribution) upon its Common Stock payable otherwise than in cash out of
earnings or earned surplus;
(b) the Corporation shall offer for subscription pro rata to the
holders of any class of its Common Stock any additional shares of stock of
any class or other rights;
(c) there shall be any capital reorganization, or reclassification of
the capital stock of the Corporation, or consolidation or merger of the
Corporation with, or sale
9
<PAGE>
of all or substantially all of its assets to, another corporation; or
(d) there shall be any voluntary or involuntary dissolution,
liquidation, winding up or similar distribution of the
Corporation.
Then, in connection with any such event set forth in (a) through (d)
above, the Corporation shall give by first class mail, postage
prepaid, addressed to the holders of Series C Preferred Stock at the
address for each such holder as shown on the books of the Corporation:
(i) at least 30 days' prior written notice of the date on which
the books of the Corporation shall close or a record shall be taken
for such dividend, distribution or subscription rights (and specifying
the date on which the holders of Common Stock shall be entitled
thereto) or for determining rights to vote in respect of such
reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation, winding up or similar distribution; and
(ii) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation, winding up or
similar distribution, at least 30 days' prior written notice of the
date when the same shall take place (and specifying the date on which
the holders of Common Stock shall be entitled to exchange their Common
Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation, winding up or similar distribution).
5.6 NOTICE OF CERTAIN EVENTS. If any event occurs which could be
reasonably expected to negatively affect the conversion rights of the Series C
Preferred Stock then the "Corporation" shall provide written notice to the
Holders of the Series C Preferred Stock of record within thirty days of such
event.
Section 6. VOTING RIGHTS OF SERIES C PREFERRED STOCK.
Except as otherwise provided by law, by agreement among the
stockholders, or as otherwise provided in this Certificate of Designations,
Series C Preferred Stock shall entitle the holders thereof to no voting rights.
Section 7. REGISTRATION OF TRANSFER.
10
<PAGE>
The Corporation shall keep at its principal office (or such other
place as the Corporation reasonably designates) a register for the
registration of shares of Series C Preferred Stock. Upon the surrender of
any certificate representing Series C Preferred Stock at such place, the
Corporation shall, at the request of the registered holder of such
certificate, execute and deliver (at the Corporation's expense) a new
certificate or certificates in exchange therefor representing the aggregate
number of shares represented by the surrendered certificate, subject to the
requirements of applicable securities laws. Each such new certificate shall
be registered in such name and shall represent such number of shares as shall
be requested by the holder of the surrendered certificate, shall be
substantially identical in form to the surrendered certificate.
Section 8. REPLACEMENT.
Upon receipt of evidence reasonably satisfactory to the Corporation
(an affidavit of the registered holder shall be satisfactory) of the
ownership and the loss, theft, destruction or mutilation of any certificate
evidencing one or more shares of the Series C Preferred Stock and, in the
case of any such loss, theft or destruction, upon receipt of indemnity
reasonably satisfactory to the Corporation (provided that if the registered
holder is an institutional investor its own agreement of indemnity, without
bond, shall be satisfactory), or, in the case of any such mutilation, upon
surrender of such certificate, the Corporation shall (at its expense) execute
and deliver in lieu of such certificate a new certificate of like kind
representing the number of shares represented by such lost, stolen, destroyed
or mutilated certificate.
Section 9. RESTRICTIONS ON CORPORATE ACTION.
The Corporation shall not modify its Restated Certificate of
Incorporation or Bylaws so as to amend or change any of the rights, preferences
or privileges of the Series C Preferred Stock without the consent of the holders
of a majority of the Series C Preferred Stock.
Section 10. MISCELLANEOUS.
(a) The unenforceability or invalidity of any provision or provisions
of this Certificate of Designations shall not render invalid or unenforceable
any other provision or provisions herein contained.
(b) Section and paragraph headings herein are for convenience only
and shall not be construed as a part of this Certificate of Designations.
11
<PAGE>
(c) All notices to holders of Series C Preferred Stock required or
permitted hereunder shall be sent by overnight courier service, prepaid,
addressed to each such holder at the address for such holder shown on the books
of the Corporation.
IN WITNESS WHEREOF, this Certificate has been signed on this 28th day
of December, 1998, and the signature of the undersigned shall constitute the
affirmation and acknowledgment of the undersigned, under penalties of perjury,
that this Certificate is the act and deed of the undersigned and that the facts
stated in the Certificate are true.
SERACARE, INC.
By: /s/Barry D. Plost
-----------------------------------------
Barry D. Plost, President
ATTEST:
/s/ Jerry Burdick
-----------------------------------------
Jerry L. Burdick,
Executive Vice President
12
<PAGE>
-----------------------------------------------
SERACARE, INC.
Issuance and Sale of
Shares of Series C Preferred Stock
to
December 28, 1998
-----------------------------------------------
<PAGE>
The Following documents were delivered in connection with the issuance and
sale by SeraCare, Inc., a Delaware corporation (the "COMPANY") of _____ shares
of its Series C Preferred Stock on December 28, 1998, _____________________
_____________ (the "PURCHASER"):
1. Preferred Stock Purchase Agreement by and between the Company and the
Purchaser, dated as of December 28,1998
2. Certificate of Designations of Series C Preferred Stock
2
<PAGE>
PREFERRED STOCK PURCHASE AGREEMENT
This Preferred Stock Purchase Agreement (this "AGREEMENT"), dated as of
December 28, 1998, is made and entered into by and between SeraCare, Inc., a
Delaware corporation (the "COMPANY"), and ___________________________ (the
"PURCHASER").
B A C K G R 0 U N D
A. The Company desires to issue and sell to Purchaser shares
of the Company's Series C Convertible Preferred Stock, $.001 par value per share
(the "SERIES C PREFERRED Stock"), to be sold at a price of $100.00 per share
(the "PER Share PURCHASE PRICE"), in accordance with and subject to the terms
and conditions set forth in this Agreement and having the rights, preferences
and powers set forth in the Certificate of Designations, attached hereto as
Exhibit A (the "CERTIFICATE OF Designations").
B. Subject to the terms and conditions hereof and in reliance upon
the representations, warranties and agreements contained herein, Purchaser
desires to purchase the Series C Preferred Stock at an aggregate purchase price
of ________.
A G R E E M E N T
In consideration of the above premises and the representations,
warranties, covenants and agreements contained in this Agreement, and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto agree as follows:
Section 1. PURCHASE AND SALE OF SERIES C PREFERRED STOCK.
1.1 THE SERIES C PREFERRED STOCK. Upon the terms and conditions
contained herein, the Company agrees to sell and issue to Purchaser, and
Purchaser agrees to purchase (the "PURCHASE") from the Company, at a purchase
price of $100.00 per share, ______ shares of Series C Preferred Stock (the
"SHARES"), at a closing to be held as soon as practicable (the "CLOSING"), on
such date as the Company and the Purchaser may agree (the "CLOSING DATE") and
shall be held at the offices of the Company or such other place as the Company
and Purchaser may agree to.
3
<PAGE>
1.2 PAYMENT AND DELIVERY. At the Closing, the Company shall
deliver to Purchaser a stock certificate registered in such name or names as
Purchaser may designate representing the Shares against delivery to the
Company by Purchaser of the purchase price in the sum of ___________ (which
represents the product of the $100.00 price per share and the number of
Shares, the "AGGREGATE PURCHASE PRICE"), and the Aggregate Purchase Price
will be paid by wire transfer or by cashier's check payable to the order of
the Company.
Section 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchaser that:
2.1 CORPORATE POWER. QUALIFICATION AND STANDING. The Company and
the subsidiaries listed on Schedule 2.1 hereto (the "SUBSIDIARIES") are duly
organized, validly existing and in good standing under the laws of their
respective jurisdictions of incorporation and each of them is qualified to
transact business and is in good standing in each jurisdiction in which its
ownership of property or conduct of activities requires such qualification,
except where the failure to so qualify would not materially adversely affect
the operations of the Company and its Subsidiaries, taken as a whole. The
Company has all requisite corporate power and authority to enter into and to
carry out and perform its obligations under this Agreement.
2.2 SEC REPORTS; FINANCIAL STATEMENTS. The Common Stock of the
Company is registered under Section 12(b) or (g) of the Securities Exchange Act
of 1934 (the "1934 ACT"). The Company has delivered to Purchaser its Annual
Report to stockholders and its Annual Reports on Form 10-K and its quarterly
reports on Form 10-Q filed with the SEC since the filing of the most recent Form
10-K (collectively, the "SEC REPORTS"). The SEC Reports did not (as of their
respective dates) contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The audited and unaudited financial statements of the Company
included in the SEC Reports (the "FINANCIAL Statements") have been
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prepared in accordance with generally accepted accounting principles applied
on a consistent basis (except as stated in such Financial Statements or the
notes thereto) and fairly present the financial position of the Company and
its consolidated subsidiaries as of the dates thereof and the results of
their operations and changes in financial position for the periods then
ended. The Company has timely filed with the SEC all reports required to be
filed by the Company under the 1934 Act since February 28, 1997.
2.3 AUTHORIZATION; NO CONFLICT. The Company's execution and
delivery of this Agreement and issuance and sale of the Shares have been duly
authorized by all necessary corporate action, and the Shares, when issued and
paid for on the Closing Date, will be validly issued, fully paid and
non-assessable. The Common Stock issuable upon conversion of the Shares is
duly authorized and has been reserved for issuance and, upon conversion in
accordance with the Certificate of Designations, will be validly issued,
fully paid and non-assessable and the holders shall be entitled to all rights
and preferences accorded to a holder of Common Stock. The execution,
delivery and performance by the Company of its obligations under this
Agreement do not and will not conflict with or violate (i) the Restated
Certificate of Incorporation of the Company, dated February 6, 1996, as
amended by the Certificate of Designations (the "RESTATED CERTIFICATE OF
INCORPORATION") or Bylaws of the Company, (ii) in any material respect any
indenture, loan agreement, lease, mortgage or other material agreement
binding on the Company, (iii) any order of a court or administrative agency
binding on the Company, (iv) any applicable law or governmental regulation;
and such performance does not and will not require the permission or approval
of any governmental agency, and will not result in the imposition or creation
of any lien or charge against any assets of the Company.
2.4 BINDING EFFECT. This Agreement has been duly executed and
delivered by the Company and is a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms (subject
to applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to creditor's rights generally and the application of equitable
principles in any action, legal or equitable, and except as rights to indemnity
or contribution may be limited by applicable law). Prior to the Closing Date,
the Certificate of
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Designations which authorizes the Series C Preferred Stock will have been
filed with the Secretary of State of Delaware and will be in full force and
effect, enforceable against the Company in accordance with its terms.
2.5 NO DEFAULTS OR VIOLATIONS. The Company is not, and immediately
after the Closing will not be, in default under or in violation of (a) its
Restated Certificate of Incorporation or Bylaws, as amended, (b) any indenture,
mortgage, loan agreement, or other material agreement to which it is a party and
which has been filed by the Company with the SEC (the "MATERIAL AGREEMENTS"),
(c) any statute, rule, writ, injunction, judgment, decree, order or regulation
of any court or governmental authority having jurisdiction over it, or (d) any
license, permit, certification or approval or requirement of any governmental
authority or other, in each case, in any way that could reasonably be expected
to have a material adverse effect on the business or condition (financial or
otherwise) of the Company, or the Company's ability to perform its obligations
under this Agreement.
2.6 NO MATERIAL ADVERSE CHANGE. Since February 28, 1998, there have
been no material adverse changes in the business or condition (financial or
otherwise) of the Company that are not reflected in the SEC Reports and the
Financial Statements.
2.7 NO CONFLICTING REGISTRATION RIGHTS. There are currently no
agreements which preclude the Purchaser from participating in any open
registrations or registered offerings of the Company's securities as permitted
by the terms of Section 9.
2.8 MATERIAL LIABILITIES. Except for liabilities disclosed in the
Financial Statements or the SEC Reports, the Company and its Subsidiaries have
no material liabilities or obligations, absolute or contingent, other than
liabilities arising in the ordinary course of business, subsequent to the date
of the most recent audited Financial Statements or SEC Reports.
2.9 PROPERTIES. The Company and its Subsidiaries (i) have good
title to the properties and assets reflected in the Financial Statements as
owned by them, (ii) have valid leasehold interests in the properties leased
by them, and (iii) own or have the right to use
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under valid license agreements all trademarks, trade names, copyrights,
patents and other intellectual property rights material to its business and
regularly utilized by them, subject in each case to no material liens,
security interests or adverse claims, except as disclosed in the Financial
Statements or the SEC Reports.
2.10 LITIGATION. There are no material legal actions, arbitrations,
or administrative proceedings pending against the Company, except for the
matters disclosed in the SEC Reports and no actions or proceedings are pending
or, to the Company s best knowledge, threatened, which question the validity of
this Agreement or the Shares.
2.11 TAX MATTERS. The Company has filed or is in the process of
filing all tax returns required to be filed by it and has paid its taxes and has
made adequate accruals for tax liabilities on the Financial Statements in
accordance with generally accepted accounting principles.
2.12 BROKERS. Other than its letter agreement with First Equity
Capital Securities, Inc. The Company has not entered into any agreements
requiring the Company or Purchaser to pay any broker's, finder's or similar fee
or commission in connection with the transaction contemplated hereby. As set
forth in such letter agreement, First Equity Capital Securities, Inc.
compensation includes a cash payment in an amount equal to 6% of the purchase
price for the Shares and nominally priced warrants to purchase common stock of
SeraCare, Inc. equal to 5% of the number of shares of Common Stock into which
the Shares are convertible.
2.13 CAPITALIZATION. As of the date hereof, excluding the Shares to
be issued in connection with this Agreement, there are: 7,568,418 shares of the
Company's Common Stock; 1,000 shares of Series A Redeemable Preferred Stock; and
15,000 shares of Series B Redeemable Preferred Stock respectively, which are
issued and outstanding. The Company has no present intention to redeem any
shares of outstanding Common Stock and no holders of any shares of the Company's
issued and outstanding Common Stock have been granted any redemption rights with
respect thereto.
2.14 REQUIRED APPROVALS. Plasma collection centers located in Toledo,
Ohio and Pasco, Washington are
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operating under Reference Numbers pending licensing by the FDA. Centers
located in Port Arthur, Texas and Savannah, Georgia are operating under FDA
licenses transferred from other locations, but have not yet obtained QPP
certification from the American Blood Resources Association. Except as set
forth herein, the Company has obtained all permits, approvals and
certificates necessary to operate its business as presently conducted at each
of its locations.
2.15 NO GENERAL SOLICITATION. Neither the Company, nor any of its
affiliates, or, to its knowledge, any person acting on its or their behalf, has
engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D under the 1933 Act) in connection with the offer or sale
of the Shares.
2.16 NO INTEGRATED OFFERING. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would require registration of the
Shares under the Securities Act of 1933, as amended (the "1933 ACT").
Section 3. INVESTMENT REPRESENTATIONS. Purchaser acknowledges that the
Shares are not being registered under the 1933 Act, based, in part, on
reliance that the issuance of the Shares is exempt from registration under
Section 4(2) of the 1933 Act as not involving any public offering. Purchaser
further acknowledges that the Company's reliance on such exemption is
predicated, in part, on the representations set forth below made by Purchaser
to the Company.
(a) Purchaser is an "accredited investor" as such term is
defined under Rule 501(a) of the 1933 Act. Purchaser is acquiring the
Shares solely for Purchaser's own account, for investment purposes only,
and not with an intent to sell, or for resale in connection with any
distribution of all or any portion of the Shares within the meaning of the
1933 Act;
(b) In evaluating the merits and risks of an investment in the
Shares, Purchaser has relied upon the advice of Purchaser's legal counsel,
tax advisors, and/or investment advisors;
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(c) Purchaser is experienced in evaluating and investing in
companies such as the Company. The Company has afforded Purchaser or
Purchaser's advisors the opportunity during the course of negotiating the
transactions contemplated by this Agreement to ask questions of and secure
such information from the Company and its officers and directors as it
deems necessary to evaluate the merits of entering into this Agreement.
Purchaser also acknowledges that the Company has notified Purchaser that
the Company is contemplating (i) one or more acquisitions of companies in
the same or related industries as the Company, (ii) a possible financial
restructuring including both the revolving line of credit and the
$16,000,000 subordinated debentures and (iii) a possible private placement
and/or public offering of the Company's Common Stock at some point in the
future, however there can be no assurance that any acquisition, the
financial restructuring, or the private placement and/or public offering
will ever be completed;
(d) Purchaser is aware that an investment in securities of a
thinly-traded corporation such as the Company may be non-marketable and may
require Purchaser's capital to be invested for an indefinite period of
time, possibly without return. Purchaser has no need for liquidity in this
investment, has the ability to bear the economic risk of this investment,
and can afford a complete loss of the Aggregate Purchase Price;
(e) Purchaser understands that the Shares being purchased
hereunder are characterized as "restricted securities" under the federal
securities laws since the Shares are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration
under the 1933 Act only in certain limited circumstances. Purchaser
represents that Purchaser is familiar with Rule 144 promulgated under the
1933 Act, as presently in effect, and understands the resale limitations
imposed thereby and by the 1933 Act; and
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(f) At no time was Purchaser presented with or solicited by any
public or promotional meeting, newspaper or magazine article, radio or
television advertisement or any other form of general advertising relating
to the purchase hereunder.
Section 4. CONDITIONS TO OBLIGATIONS OF THE PURCHASER.
The obligation of the Purchaser to purchase the Shares is subject to
the fulfillment on or prior to the Closing Date of each of the following
conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations
and warranties of the Company shall be true and correct in all
material respects on the Closing Date;
(b) PERFORMANCE. All covenants, agreements and conditions
contained in this Agreement to be performed or complied with by the
Company on or prior to the Closing Date shall have been performed or
complied with in all material respects;
(c) FILING OF CERTIFICATE OF DESIGNATIONS. The Purchaser
shall have received evidence from the Secretary of State of Delaware
that the Certificate of Designations was accepted for filing;
(d) NO INJUNCTION. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of
competent jurisdiction which prohibits the consummation of any of the
transactions contemplated by this Agreement; and
(e) PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated hereby
and all documents and instruments incident to such transactions shall
be satisfactory in form and substance to the Purchaser and its
counsel.
Section 5. LIMITATIONS ON DISPOSITION. Purchaser agrees not to transfer the
Shares except in accordance with the express terms of this Section 5 and
unless the proposed transferee agrees with the Company in writing to be bound
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by Sections 5.1 and 5.2 of this Agreement. Any attempted transfer in
violation of this Section 5 shall be void and of no effect.
5.1 COMPLIANCE WITH SECURITIES LAWS. Without in any way limiting the
representations set forth above, Purchaser further agrees not to make any
disposition of all or any portion of the Shares, except in compliance with
applicable federal and state securities laws and unless and until:
(a) there is then in effect a registration statement under the 1933
Act covering such proposed disposition and such disposition is made in
accordance with such registration statement;
(b) such disposition is made in accordance with Rule 144 under the
1933 Act; or
(c) Purchaser shall have notified the Company of the proposed
disposition and shall have furnished the Company with a statement of the
circumstances surrounding the proposed disposition, and if requested by the
Company, Purchaser shall have furnished the Company with an opinion of
counsel acceptable to Company counsel, that such disposition will not
require registration under the 1933 Act and will be in compliance with
applicable state securities
laws.
5.2 LOCK-UP AGREEMENT. Subject to the rights contained in Section 9
hereof and provided prior notice has been given to Purchaser by the Company,
Purchaser hereby agrees not to, directly or indirectly, offer, sell, offer to
sell, contract to sell, grant any option to purchase or otherwise sell,
transfer, pledge, or dispose (or announce any offer, sale, offer of sale,
contract of sale, grant of any option to purchase or other sale, transfer,
pledge or disposition) (collectively, a "TRANSFER") of fifty percent (50%) of
the shares of Common Stock issuable upon conversion of the Shares for a
period commencing as of 14 days prior to and ending 90 days after the
effective date of a registration statement covering any underwritten public
offering of the Company's securities or such earlier date as the underwriters
may require. Purchaser agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent against the Transfer of the
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Company's securities beneficially owned by Purchaser during such period.
If Purchaser holds any shares that were not issued in this transaction then this
paragraph 5.2 shall not apply to such shares.
Section 6. STOCK CERTIFICATE LEGEND. Purchaser understands and
acknowledges that the certificate evidencing the Shares purchased by Purchaser
hereunder (or evidencing any other securities issued with respect thereto
pursuant to any stock split, stock dividend, merger or other form of
reorganization or recapitalization) shall bear, in addition to any other legends
which may be required by this Agreement or applicable state securities laws, the
following legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED ("1933 ACT") NOR HAVE THEY
BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY
STATE. NO TRANSFER OF SUCH SECURITIES WILL BE PERMITTED UNLESS A
REGISTRATION STATEMENT UNDER The 1933 ACT IS IN EFFECT AS TO SUCH
TRANSFER, THE TRANSFER IS MADE IN ACCORDANCE WITH RULE 144 UNDER
The 1933 ACT, OR IN THE OPINION OF COUNSEL (WHICH MAY BE COUNSEL
FOR THE COMPANY), REGISTRATION UNDER The 1933 Act IS UNNECESSARY
IN ORDER FOR SUCH TRANSFER TO COMPLY WITH THE 1933 ACT AND WITH
APPLICABLE STATE SECURITIES LAWS.
Upon request of a holder of Shares the Company shall remove the
foregoing legend or issue to such holder a new certificate therefor free of any
such legend, if the Company shall have received either an opinion of counsel or
a "No-action" letter of the SEC, in either case reasonably satisfactory in
substance to the Company and its counsel, to the effect that such legend is no
longer required.
Section 7. COVENANTS
The Company covenants and agrees as follows.
(a) To file and keep available adequate current public
information as is required to be filed
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and kept available for holders of restricted securities to be able to sell
such securities pursuant to Rule 144 under the 1933 Act and any successor
regulation;
(b) To file with the SEC in a timely manner all reports and
other documents required to be filed under the 1934 Act and to cause its
shares of preferred stock to continue to be traded on the OTC Bulletin
Board, NASDAQ or on a national securities exchange; and
(c) To notify the SEC and NASDAQ, in accordance with their
requirements, of the transactions contemplated by this Agreement, and shall
take all other necessary action and proceedings as may be required and
permitted by applicable law, rule and regulation, for the legal and valid
issuance and sale of the Shares and Common Stock issuable upon conversion
thereof to the Purchaser or subsequent holder.
Section 8. MISCELLANEOUS.
8.1 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be an original, and all of which together
shall constitute one and the same agreement.
8.2 GOVERNING LAW. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York
without regard to the conflicts of laws principles thereof.
8.3 JURISDICTION. All parties hereto irrevocably submit to the
non-exclusive jurisdiction of any New York or Federal court sitting in the
state of New York over any suit, action or proceeding brought by any
Purchaser arising out of or relatinq to this Agreement or the Shares.
8.4 CONSENT TO SERVICE. The Company consents to service of process
in any suit, action or proceeding of the nature referred to in Section 8.3 by
mailing a copy thereof by registered or certified mail, postage prepaid, return
receipt requested, to its address specified in or designated pursuant to Section
8.7 herein. Such service (i) shall be deemed in every respect effective service
of
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process upon the Company in any such suit, action or proceeding and (ii)
shall, to the fullest extent permitted by law, be taken and held to be valid
personal service upon and personal delivery to the Company.
8.5 ASSIGNMENTS. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
8.6 SUBSCRIPTION. Purchaser acknowledges and agrees that if for any
reason the Purchase does not close or if Purchaser's subscription is rejected
for any reason, Purchaser shall have no claims against the Company, its
directors and officers, stockholders, agents and affiliates and shall have no
interest in the Company or in any property or assets of the Company other than
for legal fees and expenses of its counsel and the return of the Aggregate
Purchase Price, or any portion thereof, which has been previously delivered to
the Company.
8.7 NOTICES. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed given when actually
delivered by hand, messenger, facsimile or courier service or, if mailed, four
days after deposit in the U.S. mail, addressed (a) if to the Purchaser, as
indicated below the Purchaser's signature, or at such other address as the
Purchaser shall have furnished to the Company in writing, or (b) if to any other
holder of any Shares, at the address of such holder as shown on the records of
the Company, or (c) if to the Company, at its address set forth below or at such
other address as the Company shall have furnished to the Purchaser and each such
other holder in writing.
8.8 DELAYS OR OMISSIONS. No delay or omission to exercise any
right, power or remedy accruing to any party to this Agreement (including any
holder of Shares), upon any breach or default of another party under this
Agreement, shall impair any such right, power or remedy of such party nor shall
it be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. All remedies, either
under this
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Agreement or by law or otherwise afforded to any party, shall be cumulative
and not alternative.
8.9 SEVERABILITY. In any case any provision of this Agreement shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
8.10 FURTHER ASSURANCES. The Company agrees to take such actions
and execute such other documents which the Purchaser may reasonably request to
carry out the intent of this Agreement and the transactions contemplated hereby.
Section 9. PIGGY-BACK AND OTHER REGISTRATION RIGHTS.
9.1 PIGGY-BACK REGISTRATION NOTICE. If, at any time, the Company
proposes to register any of its securities under the 1933 Act (including for
this purpose a registration effected by the Company for other stockholders )
then in connection with such public offering (other than a registration
form relating to: (i) a registration of securities proposed to be issued in
exchange for securities or assets or in connection with a merger or
consolidation or (ii)pursuant to a registration under forms S-8 or S-4 or
successor forms thereto), then the Company shall, each such time, promptly
give the Purchaser and each other holder of registration rights (the
Purchaser and such holders individually being referred to herein as a
"HOLDER") written notice of such registration together with a list of the
jurisdictions in which the Company intends to attempt to qualify such
securities under applicable state securities laws. Upon the written request
of any Holder given within 30 days after receipt of such written notice from
the Company, the Company shall, subject to the provisions of Section 9.2 (in
the case of an underwritten offering), cause to be registered under the 1933
Act all of the Registrable Securities that each such Holder has requested to
be registered. The terms "register," "registered," and "registration" refer
to a registration under the 1933 Act effected by preparing and filing a
registration statement (the "REGISTRATION STATEMENT") or similar document in
compliance with the 1933 Act or an amendment thereto, and the declaration or
ordering by the SEC of effectiveness of such registration statement, document
or amendment thereto. "Registerable Securities"
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shall mean (i) the shares of Common Stock issuable upon conversion of the
Series C Preferred Stock owned by Holders, (ii) the shares of Common Stock
issuable upon the conversion of any Series C Preferred Stock issued as (or
issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect
to, or in exchange for or in replacement of, such Preferred Stock, and (iii)
any other securities of the Company with respect to which any Holder has been
granted registration rights, excluding in all cases, however, any such
securities which may be freely sold without registration under the 1933 Act
or without regard to any restrictions set forth in Rule 144 under the 1933
Act.
9.2 UNDERWRITING REQUIREMENTS. The right of any Holder to
"piggyback" in an underwritten public offering of the Company's securities
pursuant to Section 9.1 shall be conditioned upon such Holder's participation
in such underwriting and the inclusion of such Holder's Registrable
Securities in the underwriting to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company and any other holders distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for underwriting
by the Company, which form will include customary indemnification obligations
of the Holders. Notwithstanding any other provision of Section 9.1 and this
Section 9.2, if the underwriter determines that marketing factors require a
limitation of the number of shares to be underwritten, then the underwriter
may exclude some or all Registrable Securities from such registration and
underwriting. Any reduction in the number of Registrable Securities included
in such registration shall be borne first by any officers or directors of the
Company, and if a limitation of the number of shares is still required,
shares held by the remaining Holders shall be excluded on a ratable basis.
The persons that are permitted to sell Common Stock following such limitation
shall be permitted to sell their Common Stock in proportion, as nearly as
practicable, to the total number of shares held by such persons at the time
of the filing of the registration statement and requested to be included in
the registration. If any Holder disapproves of the terms of any such
underwriting, it may elect to withdraw therefrom by written notice to the
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Company and the underwriter. Any Registrable Securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.
Each Holder shall be solely responsible for discounts and selling commissions
applicable to the sale of such Holder's Registrable Securities and the fees
and expenses of Holder's counsel.
9.3 REGISTRATION. Company shall insure that an effective
registration statement on Form S-3 or otherwise remains effective for at
least twenty four months from the date of conversion. The Company shall,
within 90 days of the Closing Date hereof, file an amendment to the Form S-3
Registration to register the shares of Common Stock issuable upon conversion
of Shares and/or exercise of the Series C Warrants.
9.4 REGISTRATION COVENANTS. Whenever required under this Section 9
to effect the registration of any shares of Common Stock issuable upon
conversion of Shares and/or exercise of the Series C Warrants ("Registrable
Securities"), the Company shall, as expeditiously as reasonably possible:
(i) Prepare and file with the SEC a registration statement or an
amendment thereto with respect to such Registrable Securities and use its
best efforts to cause such registration statement to become effective
within 90 days and keep such registration statement effective for a period
of not less than twenty four months from the date of conversion.
(ii) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of
the 1933 Act with respect to the disposition of all securities covered by
such registration statement.
(iii) Permit the Holder the right to review and comment as to
information relating to Holder or the Registrable Securities included in
the registration statement and furnish to the Holder such numbers of
conformed copies of the registration statement and each amendment or
supplement, including each prospectus and preliminary prospectus, in
conformity with the requirements of the 1933 Act, and such other documents
as the Holder may reasonably request in order to facilitate the disposition
of
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Registrable Securities owned by Holder for so long as Holder desires to
dispose of the securities covered by such registration statement (but not
after Holder is free to sell such securities under the provisions of Rule
144(k) under the 1933 Act).
(iv) Use its best efforts to register and qualify the securities
covered by such registration statement under the securities or blue sky
laws of such jurisdictions as shall be reasonably requested by Holder,
PROVIDED that the Company shall not be required in connection therewith or
as a condition thereto to qualify to do business or to file a general
consent to service and process in any such states or jurisdictions.
(v) Notify Holder of the happening of any event as a result of which
the prospectus included in such registration statement, as then in effect,
includes an untrue statement of material fact or omits to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing.
(vi) Furnish, at the request of Holder, an opinion of counsel of the
Company, dated the effective date or the closing date, as the case may be,
of the registration statement, as to the due authorization and issuance of
the securities being registered.
(vii) Notify the Holder promptly after the Company shall have
received notice thereof of the issuance of any stop order by the SEC
suspending the effectiveness of such registration statement and use its
best efforts to obtain withdrawal if such stop order should be issued.
9.5 HOLDER COVENANT. The Holder will furnish to the Company in
connection with any registration under this Section 9 such information regarding
itself, the Registrable Securities and other securities of the Company held by
it, and the intended method of disposition of such securities as shall be
required to effect the registration of the Registrable Securities held by
Holder.
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9.6 INDEMNIFICATION. The Company shall indemnify, defend and hold
harmless each Holder of Registrable Securities which are included in a
registration statement pursuant to the provisions of this Section 9, any
underwriter (as defined in the 1933 Act) for such Holder, and the directors,
officers and controlling persons of such Holder or underwriter from and against
any and all claims, suits, demands, causes of action, losses, damages,
liabilities, costs or expenses ("Liabilities") to which any of them may become
subject under the 1933 Act or otherwise, arising from or relating to (i) any
untrue statement or alleged untrue statement of any material fact contained in
such registration statement, any prospectus contained therein or any amendment
or supplement thereto, or (ii) the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading; PROVIDED, HOWEVER, that the Company shall not be liable in any such
case to the extent that any such Liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with written information furnished by such person
specifically for use in the preparation thereof. This indemnification will
survive the transfer of the Shares.
Each Holder of Registrable Securities included in a registration
pursuant to the provisions of this Section 9 shall indemnify, defend, and hold
harmless the Company, its directors, officers and controlling persons with
respect to, any and all Liabilities to which any of them may become subject
under the 1933 Act or otherwise, arising from or relating to (i) any untrue
statement or alleged untrue statement of any material fact contained in such
registration statement, any prospectus contained therein or any amendment or
supplement thereto, or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was so made in
reliance upon and in conformity with written information furnished by or on
behalf of such Holder for use in the preparation thereof. This indemnification
shall survive the transfer of the Shares.
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Promptly after receipt by an indemnified party pursuant to the
provisions of this Section 9.6 of notice of the commencement of any action
involving the subject matter of the foregoing indemnity provisions, such
indemnified party shall, if a claim thereof is to be made against the
indemnifying party pursuant to the provisions of this Section 9.6, promptly
notify the indemnifying party of the commencement thereof; PROVIDED, HOWEVER,
that the failure to so notify the indemnifying party shall not relieve it from
its indemnification obligations hereunder except to the extent that the
indemnifying party is materially prejudiced by such failure. If such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party shall have the right to
participate in, and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party, PROVIDED, HOWEVER, if the
defendants in any action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded that there is
conflict of interest which would prevent counsel for the indemnifying party from
also representing the indemnified party, the indemnified party shall have the
right to select separate counsel to participate in the defense of such action on
behalf of such indemnified party at the expense of the indemnifying party. After
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party pursuant to this Section 9.5 for any expense of counsel
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation, unless (i) the indemnified
party shall have employed counsel in accordance with the provisions of the
preceding sentence, or (ii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after the notice of the commencement of the action. An
indemnifying party shall not be responsible for amounts paid in settlement
without its consent, provided that its consent may not be unreasonably withheld.
Upon any settlement or entry of final judgment, the indemnifying part will
promptly indemnify the indemnified party.
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9.7 REGISTRATION EXPENSES. With respect to the inclusion of
Registrable Securities in a registration statement pursuant to this Section 9,
all fees, costs and expenses of and incidental to such registration, inclusion
and public offering shall be borne by the Company; PROVIDED, HOWEVER, that any
securityholders participating in such registration shall bear their pro rata
share of the underwriting discounts and commissions, if any. The fees, costs
and expenses of registration to be borne by the Company as provided in this
Section 9.7 shall include, without limitation, all registration, filing and NASD
fees, printing expenses, fees and disbursements of counsel and accountants for
the Company, and all legal fees and disbursements and other expenses of
complying with state securities or Blue Sky laws of any jurisdiction or
jurisdictions in which securities to be offered are to be registered and
qualified. Fees and disbursements of counsel and accountants for the selling
securityholders shall, however, be borne by the respective selling
securityholder.
9.8 ASSIGNMENT OF REGISTRATION RIGHTS. The rights of the Purchaser
to have the Company register for resale Registrable Securities shall be
automatically assignable by the Purchaser to any assignee or transferee,
provided that such transfer shall have been made in accordance with the
applicable requirements of this Agreement. Notwithstanding a transfer by
Purchaser to a third party of a portion of the Shares, Purchaser shall retain
its registration rights with respect to all Registrable Securities held by
Purchaser. If any Shares are transferred by a third party to a subsequent
transferee, such subsequent transferee shall have no registration rights with
respect to any shares of common stock which may be issued upon conversion of
such Shares.
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IN WITNESS WHEREOF, the parties have duly executed this agreement as
of the date first written above.
"The Company"
SeraCare, Inc.
A Delaware corporation
By:
-------------------------
Name:
-----------------------
Title:
----------------------
Notice Address:
1925 Century Park East, Suite 1970
Los Angeles, California 90067
"Purchaser"
By:
-------------------------
Name:
-----------------------
Title:
----------------------
Notice Address:
22
<PAGE>
The securities represented hereby have not been registered under the
Securities Act of 1933, as amended, or any state securities laws and
neither the securities nor any interest therein may be offered, sold,
transferred, pledged or otherwise disposed of except pursuant to an
effective registration statement under such Act and such laws or an
exemption from registration under such Act and such laws which, in the
opinion of counsel for the holder, which counsel and opinion are
reasonably satisfactory to counsel for this corporation, is available.
SERIES C WARRANT AGREEMENT
This Agreement (the "AGREEMENT") dated December 28, 1998 between
SeraCare, Inc., a Delaware corporation (the "COMPANY" and the "WARRANT
AGENT") and those individuals and entities purchasing Class C Convertible
Preferred Stock in the aggregate amount of up to $2,500,000.00 (the
"Convertible Preferred") from the Company (the "Purchasers").
W I T N E S S E T H :
WHEREAS, the Company proposes to issue warrants to purchase shares of
the common stock of the Company, $.001 par value (the "Common Stock"), such
right to be evidenced by a "Series C Warrant", with the Series C Warrants
being collectively referred to herein as the "Series C Warrants" or
"Warrants" as additional consideration;
WHEREAS, the Company anticipates its issuance of Series C Warrants to
purchase up to 312,500 shares of Common Stock (such shares to be received
upon exercise of the Series C Warrants are referred to herein as the "WARRANT
SHARES");
WHEREAS, the Company desires to provide for the issuance of certificates
representing the Series C Warrants (a "Series C Warrant Certificate" or
collectively the "Series C Warrant Certificates");
WHEREAS, the Company desires to act as its own warrant agent in
connection with the issuance, transfer and exchange of Series C Warrant
Certificates and the exercise of the Series C Warrants;
NOW, THEREFORE, in consideration of the above and foregoing premises and
the mutual promises and agreements hereinafter set forth, it is agreed that:
<PAGE>
1. SERIES C WARRANT CERTIFICATES.
(a) Each Series C Warrant shall entitle the holder (the
"Registered Holder," or, in the aggregate, the "Registered Holders") in whose
name the certificate shall be registered on the books maintained by the
Company to purchase one (1) share of Common Stock on the exercise thereof,
subject to modification and adjustment as provided in Section 9 hereof.
Series C Warrant Certificates shall be executed by the Company's Chairman,
President or Executive Vice President and attested to by the Company's
Secretary. The Series C Warrant Certificates shall be distributed to the
Purchasers concurrently with the tender by the Purchasers of the purchase
price of the Convertible Preferred.
(b) Subject to the provisions of Sections 3, 5, and 7 hereof, the
Company shall deliver Series C Warrant Certificates in required whole number
denominations to Registered Holders in connection with any transfer or
exchange permitted under this Agreement. Except as provided in Section 7
hereof, no certificates shall be issued except (i) certificates initially
issued hereunder, (ii) certificates issued on or after their initial issuance
date upon the exercise of any Warrant to evidence the unexercised Series C
Warrants held by the exercising Registered Holder and (iii) Series C Warrant
certificates issued after their initial issuance date, upon any transfer or
exchange of certificates or replacements of lost or mutilated certificates.
2. FORM AND EXECUTION OF SERIES C WARRANT CERTIFICATES.
(a) The Series C Warrant certificates shall be dated the date of
their issuance, whether on initial transfer or exchange or in lieu of
mutilated, lost, stolen or destroyed certificates. The form of Series C
Warrant certificate is annexed hereto as "Exhibit A."
(b) Each Series C Warrant certificate shall be numbered serially
bearing "WC" as an initial designation, and subsequent to this designation
the serial numbering of the Series C Warrant certificate should be sequential.
(c) The Series C Warrant Certificates shall be manually signed on
behalf of the Company by a proper officer thereof and shall not be valid for
any purpose unless so signed. In the event any officer of the Company who
executed certificates shall cease to be an officer of the Company such
certificates may be issued and delivered by the Company or transferred by the
Registered Holders with the same force and effect as though the person who
signed such certificate had not ceased to be an officer of the Company; and
any certificate signed on behalf of the Company by any person, who at the
actual date of the execution of such certificate was a proper officer of the
Company, shall be proper notwithstanding that at the date of
<PAGE>
execution of this Agreement any such person was not such an officer.
3. EXERCISE.
(a) Subject to the provisions of Sections 8 and 9 hereof, the
Series C Warrants, as they may be adjusted as set forth herein, may be
exercised at a price (the "WARRANT EXERCISE PRICE") of $4.50 per share of
Common Stock subject to adjustment, in whole or in part at any time during
the period commencing on the date hereof and (the "WARRANT EXERCISE PERIOD")
terminating on the date which is the later of (i) five years from the date
hereof and (ii) that date on which a registration statement relating to the
shares underlying the Series C Warrants has remained in effect for an
aggregate of two years (the "WARRANT EXPIRATION DATE"), unless extended by a
majority vote of the Board of Directors for such length of time as they, in
their sole discretion, deem reasonable and necessary).
(b) Each Series C Warrant shall be deemed to have been exercised
immediately prior to the close of business on the date ("EXERCISE DATE") of
the surrender to the Company for exercise of the Series C Warrant
certificate. The exercise form shall be executed by the Warrant Holder
thereof or his attorney duly authorized in writing and shall be delivered
together with payment to the Company at its corporate offices located at 1925
Century Park East, Suite 1970, Los Angeles, CA. 90067 (the "CORPORATE
OFFICE"), or at any such other office or agency as the Company may designate,
in cash or by official bank or certified check, of an amount equal to the
aggregate Exercise Price, in lawful money of the United States of America.
(c) Cashless Conversion: On or after that date which is one (1)
year following the date of funding, to the extent that such Series C Warrants
have not been redeemed or exercised, the Warrant represented by this
certificate (or any portion hereof) may, at the election of the Holder, be
converted into the nearest whole number of shares of Common Stock equal to
(a) the product of (i) the number of shares then elected to be converted and
issued under this Warrant and (ii) the excess, if any, of (A) the average
closing Market Price Per Share for the 5 day period preceding the date of
conversion (as determined pursuant to Section 15 below) with respect to the
date of conversion over (B) the Exercise Price in effect on the business day
next preceding the date of conversion, divided by (b) the average closing
Market Price Per Share for the 5 day period preceding the date of conversion
(as determined pursuant to Section 15 below).
(d) Unless Warrant Shares may not be issued under applicable law,
the person entitled to receive the number of Warrant Shares deliverable on
exercise shall be treated for all purposes as the holder of such Warrant
Shares as of the close of business on the Exercise Date. The Company shall
not be
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<PAGE>
obligated to issue any fractional share interest in Warrant Shares issuable
or deliverable on the exercise of any Series C Warrant or scrip or cash
therefore and such fractional shares shall be of no value whatsoever.
(e) Within fifteen days after the Exercise Date and in any event
prior to the Warrant Expiration Date, the Company, at its own expense, shall
cause to be issued and delivered to the person or persons entitled to receive
the same, a certificate or certificates in the name requested by the
Registered Holder for the number of Warrant Shares deliverable on such
exercise. No adjustment shall be made in respect of cash dividends on Warrant
Shares delivered on exercise of any Series C Warrant. All shares of Common
Stock delivered upon the exercise of the Series C Warrants shall be validly
issued, fully paid and non-assessable. Any Series C Warrants redelivered to
the Registered Holder in the event of the exercise of less than all of the
Series C Warrants pertaining to a surrendered Series C Warrant certificate,
shall be validly issued, fully paid and non-assessable.
(f) The Series C Warrants shall not entitle the holder thereof to
any of the rights of shareholders or to any dividend declared on the Common
Stock unless such holder or holders shall have exercised the Series C
Warrants prior to the record date fixed by the Board of Directors for the
determination of holders of Common Stock entitled to such dividends or other
rights.
4. REGISTRATION RIGHTS.
(a) Mandatory Registration:
(i) The Company will use its best efforts to file
with the Securities and Exchange Commission (the "COMMISSION") and to
cause to become effective no later than that date which is 90 days
from the closing of the funding (such day is referred to herein as
the "EFFECTIVE DATE"), an amendment to the S-3 registration statement
(the "AMENDED REGISTRATION STATEMENT") under the Act for the offering
and sale of the Warrant Shares, and, further, the Company shall use
its best efforts to keep such Amended Registration Statement
effective for the 24 months after the earlier of(i) the exercise in
full of all Warrants by the Holders and (ii) the redemption of all
Warrants issued to the Holders by the Company. But in any event, with
respect to the Warrant Shares, once the Warrant Shares no longer
require an effective Registration Statement in order for such Warrant
Shares to be lawfully traded under the rules and regulations of The
Securities Act of 1933, as amended ("The Act") or the Warrants
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<PAGE>
issued to the Holders have expired, the Company shall no
longer be obligated to maintain such registration. The period during
which the Initial Registration Statement remains effective is
hereinafter referred to as the "INITIAL REGISTRATION PERIOD."
(ii) The Company further agrees, if necessary, to
supplement or make amendments to the Amended Registration Statement
and any prospectus contained therein, if required by the Amended
Registration Statement form utilized by the Company or by the
instructions applicable to such registration form or by the Act or
the rules and regulations thereunder, and the Company agrees to
furnish copies of such Amended Registration Statement, prospectus,
supplement or amendment prior to its being used and/or filed with
the Commission to the record holders of the Series C Warrants whose
Warrant Shares are included in the Amended Registration Statement.
(b) Each time that the Company shall propose the registration
under the Act of any shares of Common Stock of the Company (other than
pursuant to registration under form S-8 or S-4 or successor forms thereto),
notice of such proposed registration stating the total number of shares
proposed to be the subject of such registration shall be given to the record
owners of the Warrants. Within 30 days of receipt of notice from the Company,
the holder must notify the Company in writing of its election to participate
in such registration, indicating the number of Warrant Shares to be
registered. The Company will include and maintain the inclusion of such
Warrant Shares in any registration statement filed with the Commission with
regard to such proposed registration the number of shares underlying the
Series C Warrants specified in writing by any such record owners to it within
30 days after receipt of said notice. Once such a registration statement is
effective, the Company shall maintain effectiveness for a period of one year.
(c) All Registration Expenses incurred in connection with the
offering of securities of the Company pursuant to any registration statement
filed pursuant to this Section, whether or not such registration statement
becomes effective under the Act, shall be borne by the Company, except that
all underwriting discounts and commissions shall be borne by the record
owners.
(d) The piggyback registration rights provided in this Section may
be exercised by the record owners of the Series C Warrants from time to time
in accordance with the provisions of this Section with respect to any or all
registrations under the Act of Common Stock of the Company proposed under
this Section.
5. RESERVATION OF SHARES AND PAYMENT OF TAXES.
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<PAGE>
(a) The Company covenants that it shall at all times reserve and
have available from its authorized Common Stock such number of shares as
shall then be issuable on the exercise of all outstanding Series C Warrants.
The Company covenants that all Warrant Shares shall be duly and validly
issued, fully paid and non-assessable, and shall be free from all taxes,
liens and charges with respect to the issuance thereof.
(b) The Company shall pay all documentary, stamp or similar taxes
and other government charges that may be imposed with respect of the issuance
of the Series C Warrants, and/or the issuance, transfer or delivery of any
Common Stock constituting the Warrant Shares on the exercise of the Series C
Warrants. In the event the Warrant Shares are to be delivered in a name other
than the name of the initial Registered Holder of the certificate, no such
delivery shall be made unless the person requesting the same has paid to the
Company the amount of any such taxes, charges, or transfer fees incident
thereto.
6. REGISTRATION OF TRANSFER.
(a) The Series C Warrant certificates may, subject to provisions
of the Federal Securities Laws and any applicable state securities laws, be
transferred in whole or in part. Certificates to be transferred shall be
surrendered to the Company at its Corporate Office. The Company shall
execute, issue and deliver in exchange therefor the Series C Warrant
certificates in the names and amounts that the holder making the transfer
shall have designated in writing. The Company shall keep transfer books at
its Corporate Office which shall register certificates and the transfer
thereof. On due presentment for registration of transfer of any certificate
at the Corporate Office, the Company shall execute, issue and deliver to the
transferee or transferees a new certificate or certificates representing an
equal aggregate number of securities. All such certificates shall be duly
endorsed or be accompanied by a written instrument or instruments of transfer
in form reasonably satisfactory to the Company. The established transfer fee
for any registration of transfer of certificates shall be paid by the Warrant
Holder or the person presenting the certificate for transfer.
(b) Prior to due presentment for registration or transfer thereof,
the Company may treat the Registered Holder of any certificate as the
absolute owner thereof (notwithstanding any notations of ownership or writing
thereon made by anyone), and the parties hereto shall not be affected by any
notice to the contrary.
7. LOSS OR MUTILATION.
On receipt by the Company of evidence satisfactory as to the
ownership of and the loss, theft, destruction or
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<PAGE>
mutilation of any Series C Warrant certificate, the Company shall execute and
deliver in lieu thereof a new certificate representing an equal number of
Series C Warrants. In the case of loss, theft or destruction of any
certificate, the individual requesting reissuance of a new certificate shall
be required to indemnify the Company and, at the request of the Company, to
post an open-penalty insurance or indemnity bond. In the event a certificate
is mutilated, such certificate shall be surrendered and canceled by the
Company prior to delivery of a new certificate. Applicants for a new
certificate shall also comply with such other regulations and pay such other
reasonable charges as the Company may prescribe.
8. REDEMPTION RIGHT.
The Company shall have the right and option, upon 30 days' or more
prior written notice to each Registered Holder, to call, redeem and acquire
all of the Series C Warrants which remain outstanding and unexercised at the
date fixed for redemption (the "Series C Warrant Redemption Date") at a price
of $.01 per Series C Warrant if, and only if, the average of the closing
price per share for the 30 consecutive trading day period immediately prior
to the mailing of said notification shall have exceeded $7.00 per share. The
Series C Warrant Redemption Date shall be no less than 30 days after the date
of notice and the Series C Warrant Holders shall in all events have the right
during the period immediately following the date of such notice and prior to
the Series C Warrant Redemption Date to exercise the Series C Warrants in
accordance with provisions of Section 3 hereof (the "Redemption Notice
Period").
No call for redemption and no redemption of the Series C Warrants
shall be made unless the Company shall have an effective registration
statement on file during such period from the date of mailing of the notice
of redemption through the applicable redemption date with the Securities and
Exchange Commission and all applicable State Securities' Commissions relating
to the Common Stock underlying the Series C Convertible Preferred and the
Series C Warrants, except that this obligation as it relates to the Common
Stock may be satisfied if such Common Stock is saleable by the Holder in
accordance with Rule 144. Such registration statement must remain effective
for at least twelve months from the date of such notice. In the event that
any Warrants are exercised following notice but prior to redemption, this
call option shall be deemed not to have been exercised by the Company as to
the Warrants exercised by the holders thereof.
The redemption notice shall require each Warrant Holder to
surrender to the Company on the applicable redemption date at the Corporate
Office the certificate or certificates representing the Series C Warrants to
be redeemed. Notwithstanding the fact that any Warrants called for redemption
have not been surrendered for redemption and cancellation on the applicable
redemption
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<PAGE>
date, such Warrants shall be deemed to have expired and all rights of the
holders of such unsurrendered Warrants shall cease and terminate, other than
the right to receive the redemption price without interest; provided, however
that such right to receive the redemption price shall itself expire one year
from the Redemption Date if no claim is made therefor prior to such date.
If the average closing price of the Company's common stock for the
thirty (30) day Redemption Notice Period is less than $7.00 per share, such
redemption notice shall become null and void and the Series C Warrant Holder
shall no longer be obligated to exercise such Series C Warrant within that
Redemption Notice Period.
On that date which is one (1) year following the date of funding,
to the extent that such Series C Warrants have not been redeemed or
exercised, (a) the Company's right to redeem such Series C Warrants shall
terminate and (b) any such Series C Warrants may be exercised through a
cashless exercise in accordance with Section 3(c) hereof.
9. ADJUSTMENT OF INITIAL EXERCISE
PRICE AND NUMBER OF SHARES PURCHASABLE.
For purposes hereof, the term "INITIAL EXERCISE PRICE" shall mean,
with respect to the Series C Warrants, $4.50. The Initial Exercise Price and
the number of shares of Common Stock purchasable pursuant to the Series C
Warrants shall be subject to adjustment from time to time as hereinafter set
forth in this Section 9: PROVIDED, HOWEVER, that no adjustment shall be made
unless by reason of the happening of any one or more of the events
hereinafter specified, the Exercise Price then in effect shall be changed by
one percent or more, but any adjustment that would otherwise be required to
be made but for this provision shall be carried forward and shall be made at
the time of and together with any subsequent adjustment which, together with
any adjustment or adjustment so carried forward, amounts to one percent or
more.
(a) ADJUSTMENT TO EXERCISE PRICE; FAILURE TO REGISTER. The
exercise Price shall be automatically and permanently reduced by $.50 if the
registration statement relating to the Common Stock issuable upon the
conversion of the Series C Convertible Preferred and the Series C Warrants
(the "Registration Statement") has not become effective no later than 90 day
of the funding of the Series C Convertible Preferred related to the
Purchaser's Series C Warrants. Additionally, the Exercise Price shall be
subject to further downward adjustment in the amount of $.25 upon each
monthly anniversary thereafter if the Registration Statement has not been
declared effective by such date until the Registration Statement becomes
effective.
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<PAGE>
(b) ADJUSTMENTS IN THE EVENT OF STOCK DIVIDENDS, STOCK SPLITS AND
REVERSE STOCK SPLITS. In case the Company shall at any time issue Common
Stock or securities convertible into Common Stock without consideration by
way of dividend or effect a stock split or reverse stock split of the
outstanding shares of Common Stock. (i) the number of shares of Common Stock
which immediately prior to such change the Warrant Holders shall have been
entitled to purchase pursuant to this Agreement shall be increased or
decreased, as the case may be, in direct proportion to the increase or
decrease, respectively, in the number of shares outstanding immediately prior
to such change, and (ii) the Exercise Price in effect immediately prior to
such change shall be increased or decreased, as the case may be, in inverse
proportion to such increase or decrease in the number of such shares
outstanding immediately prior to such change.
(c) RIGHT TO REDUCE EXERCISE PRICE. The Company shall have the
right to reduce the Series C Warrant Exercise Price at any time and from time
to time that such appears in the Company's best interests to do so, but only
upon approval of the Board of Directors.
(d) SUBDIVISION OR COMBINATIONS. In case the Company shall at any
time change as a whole, by subdivision or combination in any manner or by the
making of a stock dividend, which results in the number of outstanding shares
of Common Stock at such time into a different number of shares, with or
without par value, (i) the number of shares of Common Stock which immediately
prior to such change the Warrant Holders shall have been entitled to purchase
pursuant to this Agreement shall be increased or decreased, as the case may
be, in direct proportion to the increase or decrease, respectively, in the
number of shares outstanding immediately prior to such change, and (ii) the
Exercise Price in effect immediately prior to such change shall be increased
or decreased, as the case may be, in inverse proportion to such increase or
decrease in the number of such shares outstanding immediately prior to such
change.
(e) OUTSTANDING SHARES. For the purpose of Sections 9(b) and 9(d)
above, the number of shares of Common Stock outstanding at any given time
shall not include shares in the treasury of the Company but shall include the
aggregate number of shares which the holders of securities convertible into
common stock, stock dividends, combination or subdivision rights, warrants,
options, or such other rights to receive additional shares or to have their
shares converted into a lesser amount pursuant to the events described in
Sections 9(b) and 9(d) herein, shall be entitled to receive. The Common Stock
pertaining to such stock dividends, combination or subdivision rights,
warrants, options, or such other rights shall be deemed to be issued as of
the date of the offering or granting of such dividends, rights, warrants or
options, as the case may be.
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<PAGE>
(f) TERMINOLOGY OF "SHARES". Subject to the provisions of
sub-paragraph 9(h) below, whenever reference is made in this Section 9 to the
issue or sale of shares of Common Stock, or simply shares, such term shall
mean any stock of any class of the Company other than preferred stock with a
fixed limit on dividends and a fixed amount payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
Company. The shares issuable upon exercise of the Series C Warrants
shall, however, be shares of Common Stock of the Company.
(g) REORGANIZATION; ASSETS SALES; ETC. In case of any capital
reorganization or any reclassification of the capital stock of the Company or
in case of a non-surviving combination or a disposition of substantially all
of the assets of the Company other than in the ordinary course of the
Company's business, the Warrant Holders shall thereafter be entitled to
purchase (and it shall be a condition to the consummation of any such
reorganization, reclassification, non-surviving combination or disposition
that appropriate provision shall be made so that such Warrant Holder shall
thereafter be entitled to purchase) the kind and amount of shares of stock
and other securities and property receivable in such transaction by a holder
of the number of shares of Common Stock of the Company into which this
Agreement entitled the Warrant Holder to purchase immediately prior to such
capital reorganization, reclassification of capital stock, non-surviving
combination or disposition; and in any such case appropriate adjustments
shall be made in the application of the provisions of this Section 9 with
respect to rights and interests thereafter of the Warrant Holder to the end
that the provisions of this Section 9 shall thereafter be applicable, as near
as reasonably may be, in relation to any shares or other property thereafter
purchasable upon the exercise of a Series C Warrant.
(h) OPTIONS; ETC. Except for officers, directors and employees of
the Corporation, in the event the Company shall distribute to any holder of
shares of Common Stock evidences of indebtedness or rights, options or
warrants or other securities exercisable or convertible into or exchangeable
for shares of Common Stock, the Warrant Holders shall receive, upon exercise,
against payment of the Exercise Price therefor, but without further
consideration, the indebtedness or securities which would be receivable in
such transaction by a holder or holders of the number of shares of Common
Stock into which the Warrant, as applicable, entitled the holder thereof to
purchase immediately prior to such distribution.
(i) ADJUSTMENT STATEMENT. Whenever the Exercise Price is adjusted
as herein provided, the Company shall forthwith deliver to each Series C
Warrant Holder a statement signed by the President or Executive Vice
President of the Company and by its Treasurer or Secretary stating the
adjusted Exercise Price and
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number of shares for which such Warrant is exercisable, determined as
specified herein. The statement shall show in detail the facts requiring
such adjustment, including a statement of the consideration received by the
Company for any additional stock issued.
(j) PRIOR NOTICE TO SERIES C WARRANT HOLDERS. In the event
that at any time:
(1) The Company shall pay any dividend payable in stock upon
its Common Stock or make any distribution (other than cash dividends
out of earnings or earned surplus) to the holders of its Common
Stock; or
(2) The Company shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any
class or any other rights; or
(3) The Company shall effect any capital reorganization or any
reclassification of the outstanding capital stock of the Company
(other than a change in par value, or a change from par value to no
par value, or a change from no par value to par value, or a change
resulting solely from a subdivision or combination of outstanding
shares), or any consolidation or merger, or any sale, transfer or
other disposition of all or substantially all of its property,
assets, business and goodwill as an entirety, or the liquidation,
dissolution or winding up of the Company; or
(4) The Company shall declare a dividend upon its Common Stock
payable otherwise than out of earnings or earned surplus or otherwise
than in shares or any stock or obligations directly or indirectly
convertible into or exchangeable for shares;
then, in any such event, the Company shall cause at least twenty (20) days'
prior written notice to be mailed to each Warrant Holder at the address of
such holder shown on the books of the Company. The notice shall also specify
the date on which the books of the Company shall close or a record be taken
for such stock dividend, distribution or subscription rights, or the date on
which such reclassification, reorganization, consolidation, merger, sale,
transfer, disposition, liquidation, dissolution, winding up, or dividend, as
the case may be, shall take place, and the date of participation therein by
the holders of shares of Common Stock if any such date is to be fixed, and
shall also set forth such facts with respect thereto as shall be reasonably
necessary to indicate the effect of such action on the rights of the Warrant
Holder.
(k) DISPUTES. In the event that there is any dispute
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as to the computation of the Exercise Price or the number of shares of Common
Stock required to be issued upon the exercise of the Warrants, the Company
will retain an independent and nationally recognized accounting firm to
conduct an audit of the computations pursuant to the terms hereof involved in
such dispute, including the financial statements or other information upon
which such computations were based. The determination of such nationally
recognized accounting firm shall, in the absence of manifest error, be
binding. If there shall be a dispute as to the selection of such nationally
recognized accounting firm, such firm shall be appointed by the American
Institute of Certified Public Accountants ("AICPA") if willing, otherwise the
American Arbitration Association ("AAA"). If the Exercise Price or number of
shares of Common Stock as determined by such accounting firm is one percent
or more higher or lower than the calculations thereof computed by the
Company, the expenses of such accounting firm and, if any, off AICPA and AAA,
shall be borne completely by the Company. In all other cases, they shall be
borne by the complaining Warrant Holders, as applicable.
(l) CORPORATE ACTION. Before taking any action which would cause
an adjustment reducing the Exercise Price below the then par value of the
shares of Common Stock issuable upon exercise of the Series C Warrants,
the Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid and non-assessable shares of Common Stock at the adjusted Exercise
Price.
10. NOTICES.
All notices, demands, elections, opinions or requests (however
characterized or described) required or authorized hereunder shall be deemed
given sufficiently if in writing and sent by registered or certified mail,
return receipt requested and postage prepaid, or by confirmed telex,
telegram, facsimile transmission or cable to, in the case of the Company:
SeraCare, Inc.
1925 Century Park East
Suite 1970
Los Angeles, CA 90067
telecopier: (310) 772-7770
and if to the Warrant Holder at the address of such holder as set forth on
the books maintained by or on behalf of the Company.
11. BINDING AGREEMENT.
This Agreement shall be binding upon and inure to the benefit of
the Company and the Warrant Holders. Nothing in this Agreement is intended or
shall be construed to confer upon any other person any right, remedy or claim
or to impose on any other
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person any duty, liability or obligation.
12. FURTHER INSTRUMENTS.
The parties shall execute and deliver any and all such other
instruments and take any and all other actions as may be reasonably necessary
to carry out the intention of this Agreement.
13. SEVERABILITY.
If any provision of this Agreement shall be held, declared or
pronounced void, voidable, invalid, unenforceable, or inoperative for any
reason by any court of competent jurisdiction, government authority or
otherwise, such holding, declaration or pronouncement shall not affect
adversely any other provision of this Agreement, which shall otherwise remain
in full force and effect and be enforced in accordance with its terms, and
the effect of such holding, declaration or pronouncement shall be limited to
the territory or jurisdiction in which made.
14. WAIVER.
No delay or failure on the part of any party in the exercise of any
right or remedy arising from a breach of this Agreement shall operate as a
waiver of any subsequent right or remedy arising from a subsequent breach of
this Agreement.
15. RELEVANT MARKETS.
For the purposes of this Agreement, it is assumed that the Common
Stock is quoted on the American Stock Exchange, however, in the event the
Common Stock is:
(a) listed on NASDAQ, NASDAQ Small Cap, NASDAQ Bulletin Board, a
national securities exchange or admitted to unlisted trading privileges on
such exchange, the price of the Common Stock to be determined during any
applicable five (5) day trading period the "Market Price Per Share" shall be
the last reported sale price of the Common Stock on such exchange; or
(b) not quoted on the Bulletin Board listed or admitted to unlisted
trading privileges, the Market Price Per Share of the Common Stock to be
determined during any applicable five (5) day trading period shall be the
last reported sale price as reported on the "pink sheets" by the National
Daily Quotation Bureau, Inc.
16. GENERAL PROVISIONS.
THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK. This Agreement may not be
modified or amended or any term or provision hereof waived or discharged
except in writing by the
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<PAGE>
party against which such amendment, modification, waiver or discharge is
sought to be enforced. The headings of this Agreement are for convenience and
reference only and shall not limit or otherwise affect the meaning hereof.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the date first set forth above.
SERACARE, INC
By: /s/ Jerry L. Burdick
----------------------------
Executive Vice President
[CORPORATE SEAL]
ATTEST: /s/ Jerry L. Burdick
----------------------------
Secretary
WARRANTHOLDERS:
By:
----------------------------
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<PAGE>
The securities represented hereby have not been registered under
the Securities Act of 1933, as amended, or any state securities laws and
neither the securities nor any interest therein may be offered, sold,
transferred, pledged or otherwise disposed of except pursuant to an
effective registration statement under such Act and such laws or an
exemption from registration under such Act and such laws which, in the
opinion of counsel for the holder, which counsel and opinion are
reasonably satisfactory to counsel for this corporation, is available.
SERIES C WARRANT CERTIFICATE
SERACARE, INC.
Warrant No. WC- No. of C Warrants:
This certifies that, for value received and subject to the terms and
conditions set forth herein, _____________________ or their registered assign
(the "Warrant Holder") is the registered holder of ___________________________
Series C Warrants.
1. EXERCISE. The warrants evidenced hereby ("Series C Warrants"), as
they may be adjusted from time to time, may be exercised at a price of $4.50
per Warrant to acquire one (1) share of the common stock of SeraCare, Inc.
which is with par value of $0.001 (the "Common Stock" and the "Company,"
respectively). (The Common Stock acquirable upon exercise hereof is referred
to herein as "Warrant Stock.") If, at the time of any exercise of a Series C
Warrant, the Shares deliverable upon exercise of such Warrant shall not be
registered under the Securities Act, the Company may require, as a condition
of allowing such exercise, that the holder or transferee of such Warrant,
furnish to the Company an opinion of counsel of recognized standing in
securities law, to the effect that such exercise may be made without
registration under the Securities Act, provided that subject to receipt of
the aforementioned opinion, the exercise of the Warrant shall at all times be
within the control of such holder or transferee, as the case may be, and, if
required by the Company, by written representation that the shares being
acquired by the exercise of the Warrant are being purchased for investment
and not for distribution; acknowledging that such shares have not been
registered under the Securities Act of 1933, as amended (the "1933 Act"); and
agreeing that such shares may not be sold or transferred unless there is
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an effective Registration Statement for them under the 1933 Act, or in the
opinion of counsel to the Company such sale or transfer is not in violation
of the 1933 Act. No fractional shares may be acquired upon exercise hereof.
2. TERM OF WARRANT. This Series C Warrant may be exercised at any time
and from time to time in whole or in part commencing immediately upon
issuance and terminating on the date which is the later of (i) five years
from the date hereof and (ii) that date on which a registration statement
relating to the shares underlying the Series C Warrants has remained in
effect for an aggregate of two years, unless extended by a majority vote of
the Board of Directors for such length of time as they, in their sole
discretion, deem reasonable and necessary). The terms of the Series C Warrant
Agreement are hereby incorporated by reference as if fully set forth herein.
3. ADJUSTMENT OF EXERCISE PRICE. The number of shares purchasable upon
exercise of this Section C Warrant is subject to adjustment in accordance with
the Series C Warrant Agreement.
4. REDEMPTION. These Warrants may be redeemed in accordance with the
terms fully set forth in the Series C Warrant Agreement.
5. RESERVATION OF COMMON STOCK. The Company agrees that the number of
shares of Common Stock sufficient to provide for the exercise of the Series C
Warrants upon the basis set forth herein will at all times during the term of
this Series C Warrant be reserved for the exercise hereof.
6. MANNER OF EXERCISE. Exercise may be made of all or any part of the
Series C Warrants by surrendering this certificate, with the purchase form to
be provided by the Company, duly executed by the Warrant Holder or by the
Warrant Holder's duly authorized attorney, plus payment of the exercise price
therefor in cash at the office of the Company or its designated assign. A
cashless exercise may also be made by the holder in accordance with the
provisions of the Series C Warrant Agreement.
7. ISSUANCE OF COMMON STOCK UPON EXERCISE. The Company, at its own
expense, shall cause to be issued and delivered, within ten (10) days after
exercise of this Series C Warrant, a certificate or certificates in the name
or names requested by the Warrant Holder representing the number of shares of
Common Stock to which the Warrant Holder is entitled upon such exercise. All
shares of Common Stock or other securities delivered upon the exercise of
this Series C Warrant shall be validly issued, fully paid and non-assessable.
Irrespective of the date of issuance and delivery of any certificate
representing the shares of Common Stock upon the exercise of this Series C
Warrant, each person in whose name any
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<PAGE>
such certificate is to be issued will for all purposes be deemed to have
become the holder of record of the Common Stock acquired on the date on which
a duly executed notice of exercise of this Series C Warrant and payment for
the number of shares exercised are received by the Company.
8. REGISTRATION RIGHTS. The shares underlying the Series C Warrants
shall have mandatory and piggyback registration rights.
9. NO RIGHT AS STOCKHOLDER. The Warrant Holder is not, by virtue of
his ownership of this Series C Warrant, entitled to any rights whatsoever as
a stockholder of the Company.
10. ASSIGNMENT. This Series C Warrant may not be assigned without
providing the Company an opinion satisfactory to its counsel that an
exemption from registration for the transfer exists.
11. WARRANT AGREEMENT. The actual terms and conditions of this Series C
Warrant are contained in a Warrant Agreement entered into by and between the
Company and the Warrant holder, the terms and conditions of which are
incorporated herein by this reference as if fully set forth herein and made a
part hereof. To the extent of any conflict herewith, the terms and conditions
of the Warrant Agreement shall apply.
IN WITNESS WHEREOF, the Company has caused this Warrant certificate to
be signed on its behalf by its President or Senior Vice President, his
signature to be attested to by its Secretary, and its corporate seal to be
hereunto affixed this ____ day of December, 1998.
(SEAL) SERACARE, INC.
ON BEHALF OF THE COMPANY
AND AS WARRANT AGENT
BY:___________________________
ATTEST:_____________________________
NAME:________________________
TITLE:_______________________
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<PAGE>
The securities represented hereby have not been registered under
the Securities Act of 1933, as amended, or any state securities laws and
neither the securities nor any interest therein may be offered, sold,
transferred, pledged or otherwise disposed of except pursuant to an
effective registration statement under such Act and such laws or an
exemption from registration under such Act and such laws which, in the
opinion of counsel for the holder, which counsel and opinion are
reasonably satisfactory to counsel for this corporation, is available.
SERIES C WARRANT CERTIFICATE
SERACARE, INC.
Warrant No. WC- 01 No. of C Warrants:
This certifies that, for value received and subject to the terms and
conditions set forth herein, ___________________________ or their registered
assign (the "Warrant Holder") is the registered holder of _________________
__________________________________ Series C Warrants.
1. EXERCISE. The warrants evidenced hereby ("Series C Warrants"), as
they may be adjusted from time to time, may be exercised at a price of $4.50
per Warrant to acquire one (1) share of the common stock or SeraCare, Inc.
which is with par value of $0.001 (the "Common Stock" and the "Company,"
respectively). (The Common Stock acquirable upon exercise hereof is referred
to herein as "Warrant Stock.") If, at the time of any exercise of a Series C
Warrant, the Shares deliverable upon exercise of such Warrant shall not be
registered under the Securities Act, the Company may require, as a condition
of allowing such exercise, that the holder or transferee of such Warrant,
furnish to the Company an opinion of counsel of recognized standing in
securities law, to the effect that such exercise may be made without
registration under the Securities Act, provided that subject to receipt of
the aforementioned opinion, the exercise of the Warrant shall at all times be
within the control of such holder or transferee, as the case may be, and, if
required by the Company, by written representation that the shares being
acquired by the exercise of the Warrant are
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<PAGE>
being purchased for investment and not for distribution; acknowledging that
such shares have not been registered under the Securities Act of 1933, as
amended (the "1933 Act"); and agreeing that such shares may not be sold or
transferred unless there is an effective Registration Statement for them
under the 1933 Act, or in the opinion of counsel to the Company such sale or
transfer is not in violation of the 1933 Act. No fractional shares may be
acquired upon exercise hereof.
2. TERM OF WARRANT. This Series C Warrant may be exercised at any
time and from time to time in whole or in part commencing immediately upon
issuance and terminating on the date which is the later of (i) five years from
the date hereof and (ii) that date on which a registration statement relating
to the shares underlying the Series C Warrants has remained in effect for an
aggregate of two years, unless extended by a majority vote of the Board of
Directors for such length of time as they, in their sole discretion, deem
reasonable and necessary). The terms of the Series C Warrant Agreement are
hereby incorporated by reference as if fully set forth herein.
3. ADJUSTMENT OF EXERCISE PRICE. The number of shares purchasable
upon exercise of this Series C Warrant is subject to adjustment in
accordance with the Series C Warrant Agreement.
4. REDEMPTION. These Warrants may be redeemed in accordance with the
terms fully set forth in the Series C Warrant Agreement.
5. RESERVATION OF COMMON STOCK. The Company agrees that the number of
shares of Common Stock sufficient to provide for the exercise of the Series
C Warrants upon the basis set forth herein will at all times during the term
of this Series C Warrant be reserved for the exercise hereof.
6. MANNER OF EXERCISE. Exercise may be made of all or any part of the
Series C Warrants by surrendering this certificate, with the purchase form to
be provided by the Company, duly executed by the Warrant Holder or by the
Warrant Holder's duly authorized attorney, plus payment of the exercise price
therefor in cash at the office of the Company or its designated assign. A
cashless exercise may also be made by the holder in accordance with the
provisions of the Series C Warrant Agreement.
7. ISSUANCE OF COMMON STOCK UPON EXERCISE. The Company, at its own
expense, shall cause to be issued and delivered, within ten (10) days after
exercise of this Series C Warrant, a certificate or certificates in the name
or names requested by the Warrant Holder representing the number of shares of
Common Stock to which the Warrant Holder is entitled upon such exercise. All
shares of Common Stock or other securities delivered upon the exercise of this
Series C Warrant shall be validly issued, fully paid and non-assessable.
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<PAGE>
Irrespective of the date of issuance and delivery of any certificate
representing the shares of Common Stock upon the exercise of this Series C
Warrant, each person in whose name any such certificate is to be issued will
for all purposes be deemed to have become the holder of record of the Common
Stock acquired on the date on which a duly executed notice of exercise of
this Series C Warrant and payment for the number of shares exercised are
received by the Company.
8. REGISTRATION RIGHTS. The shares underlying the Series C Warrants
shall have mandatory and piggyback registration rights.
9. NO RIGHT AS STOCKHOLDER. The Warrant Holder is not, by virtue of
his ownership of this Series C Warrant, entitled to any rights whatsoever as
a stockholder of the Company.
10. ASSIGNMENT. This Series C Warrant may not be assigned without
providing the Company an opinion satisfactory to its counsel that an
exemption from registration for the transfer exists.
11. WARRANT AGREEMENT. The actual terms and conditions of this Series
C Warrant are contained in a Warrant Agreement entered into by and between
the Company and the Warrant holder, the terms and conditions of which are
incorporated herein by this reference as if fully set forth herein and made a
part hereof. To the extent of any conflict herewith, the terms and
conditions of the Warrant Agreement shall apply.
IN WITNESS WHEREOF, the Company has caused this Warrant certificate to
be signed on its behalf by its President or Senior Vice President, his
signature to be attested to by its Secretary, and its corporate seal to be
hereunto affixed this 28th day of December, 1998.
[SEAL] SERACARE, INC.
on behalf of the Company
and as Warrant Agent
By: /s/ Jerry L. Burdick
-------------------------
Executive Vice President
Attest: /s/ Jerry L. Burdick
---------------------------
Name: Jerry L. Burdick
---------------------
Title: Secretary
--------------------
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<PAGE>
EXHIBIT 5.1
[O'Melveny & Myers LLP Letterhead]
March 18, 1999
SeraCare, Inc.
1925 Century Park East, Suite 1970
Los Angeles, California 90067
Re: Registration on Form S-3 of Common Stock, $0.001 par value, of
SeraCare, Inc. (the "Company")
Ladies and Gentlemen:
At your request, we have examined the above-referenced Registration
Statement on Form S-3 (the "Registration Statement") to be filed with the
Securities and Exchange Commission in connection with the registration under the
Securities Act of 1933, as amended, of an aggregate of 1,497,175 shares of
Common Stock, $0.001 par value, of the Company (the "Common Stock") to be sold
by certain security holders of the Company. Of the 1,497,175 shares of Common
Stock covered by the Registration Statement, 110,379 shares are presently issued
and outstanding (collectively, the "Issued Shares") and 1,386,796 shares are
issuable upon the exercise of certain stock options, warrants, and other
convertible securities held by the selling security holders (collectively, the
"Issuable Shares").
We have examined and are familiar with the Certificate of Incorporation and
By-Laws of the Company (each as amended to date), the minutes of the meetings of
the stockholders and directors of the Company, and the corporate stock records
of the Company. In addition, we have made such investigations of law and have
examined such certificates of public officials and officers of the Company and
such other documents and records as we have considered necessary for purposes of
this opinion.
We have assumed the genuineness of the signatures on and the authenticity
of all documents submitted to us as originals and the conformity to original
documents submitted to us as certified or photostatic copies. We have also
relied upon the accuracy of the aforementioned certificates of public officials
and, as to matters of fact, of officers of the Company. We have also relied on
Company records and have assumed the accuracy and completeness thereof.
We are familiar with the proceedings heretofore taken in connection with
the authorization of (a) the issuance of the Issued Shares, and (b) the issuance
of the Issuable Shares upon exercise of the applicable stock options, warrants
and other convertible securities. Based upon such examination and upon such
matters of fact and law as we have deemed relevant, we are of the opinion that:
1. The Issued Shares are validly issued, fully paid and non-assessable;
and
2. Upon exercise of the applicable stock options or warrants and payment
of the applicable exercise prices in accordance with their respective
terms, or upon conversion of the securities convertible into Common
Stock and upon the issuance and delivery of certificates representing
the Issuable Shares and the countersigning of such certificates by a
duly authorized signatory of the registrar and transfer agent for the
Company's Common Stock, the Issuable Shares will be validly issued,
fully paid and non-assessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement.
Respectfully submitted,
/s/ O'MELVENY & MYERS LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement
of SeraCare, Inc. on Form S-3 of our report dated May 15, 1998, included in the
Company's Annual Report on Form 10-KSB of SeraCare, Inc. for the fiscal year
ended February 28, 1998, and to the reference to us under the heading "Experts"
in the Prospectus, which is part of this Registration Statement.
/s/ BDO SEIDMAN, LLP
- ----------------------------------
BDO Seidman, LLP
Los Angeles, California
March 18, 1999