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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 6, 1997
SEROLOGICALS CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 0-26126 58-2152225
(State of other jurisdiction) (Commission file number) (IRS Employer
Identification No.)
780 Park North Blvd.
Suite 110
Clarkston, Georgia 30021
(Address of Principal executive offices) (Zip code)
Registrant's telephone number, including area code: (404) 296-5595
(Former name or former address, if changed since last report)
CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY
FILED WITH THE COMMISSION.
Pages where confidential treatment has been requested are stamped "Confidential
Treatment Requested. The redacted material has been separately filed with the
Commission and bracketed at the appropriate place and marked with a star [*]
in this filing."
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</PAGE>
Item 2. Acquisition or Disposition of Assets
On March 6, 1997 (the "Closing Date"), Seramune, Inc. ("Seramune")
a Delaware corporation and a wholly-owned subsidiary of Serologicals
Corporation, a Delaware corporation (the "Company") acquired all of the
outstanding shares of common stock of Nations Biologics, Inc., a Louisiana
corporation, and Bloomington Plasma, Inc., a Nevada corporation. Pursuant to
the same transaction, Seronat Plasma, Inc., a Delaware corporation and a
wholly-owned subsidiary of Seramune, purchased substantially all of the
assets of Decatur Plasma, Inc., a Louisiana corporation, Lake Forest Plasma
Center, Inc., a Louisiana corporation, Southwest Plasma Company, Inc., a
Louisiana corporation, Green Street Biological Corp., a Nevada Corporation,
Riverfront Plasma Company, Inc., a Louisiana corporation and Silver State
Plasma Products, Inc., a Nevada corporation (the eight companies and their
respective subsidiaries collectively referred to as the "Nations Group").
The purchase price for the Nations Group was $14,412,000, which included (i)
the assumption and repayment of certain debt in the amount of $6,356,120,
(ii) the issuance of a $4,000,000, five-year subordinated convertible
promissory note (the "Convertible Note") to the Nations Stockholders (as
defined below)(paying interest at a rate of 4.5% per annum for the first
three years and convertible commencing in part one year from the date of
issuance at a price of $18.76 per share) and (iii) the payment of cash in the
amount of $3,808,734, subject to adjustment based on audited operating
results of the Nations Group for the year ended December 31, 1996 and
on the final balance sheet of the Nations Group as of the Closing Date.
The purchase agreement also provides for the payment of contingent
consideration and additional purchase price adjustments based primarily upon
the operating performance of the Nations Group for the 14-month period ending
February 28, 1998. The acquisition was completed pursuant to a purchase
agreement, dated as of March 6, 1997, among the Company, Seramune, Seronat
Plasma, Inc., Nations Biologics, Inc., Decatur Plasma, Inc., Bloomington
Plasma, Inc., Lake Forest Plasma Center, Inc., Southwest Plasma Company,
Inc., Riverfront Plasma Company, Inc., Green Street Biological Corp. and
Silver State Plasma Products, Inc., and Rodney L. Savoy, Barry J. Heinen,
Noel P. Dragon, Jr. and La Savoy Famille, L.C. (collectively, the "Nations
Stockholders"). The purchase price was determined through arms length
negotiations between the Company and the Nations Stockholders. The Company
utilized cash on hand and issued the Convertible Note to complete the
acquisition. In connection with the acquisition, (i) Seramune entered into
a one year employment agreement with Rodney L Savoy, providing for a salary
of $120,000 per annum and a grant of options to purchase 35,000 shares of
common stock of the Company and, among other provisions, obtained from Mr.
Savoy a covenant not to compete which would remain in effect for a period of
at least two years after the termination of Mr. Savoy's employment with
Seramune.
The Nations Group operates 16 non-specialty donor centers in Texas,
Louisiana, Illinois, California, Oklahoma, Alabama and Wisconsin which
specialize in the collection of antibodies used to produce intravenous immune
globulin (IVIG), which is used to treat patients with suppressed immune
systems and specific immune globulins to treat cytomegalovirus (CMV) and
respiratory synctial virus (RSV). As a result of the acquisition, Seramune,
or its wholly-owned subsidiaries, has become a party to or been assigned a
series of plasma supply contracts with Alpha Therapeutics Corporation and
Bayer Corporation and MedImmune, Inc.
Item 7. Financial Statements and Exhibits
(a) Financial statements of businesses acquired
Audited Combined Financial Statements of the Nations Group for
the year ended December 31, 1996.
At this time, it is impractical to file the required financial
statements referenced above. Such financial statements will be
filed as soon as practical, but no later than 60 days after the
date on which this Report on Form 8-K must be filed.
(b) Pro Forma financial information
At this time, it is impractical to file the required pro forma
financial information. Such pro forma financial information
will be filed as soon as practical, but no later than 60 days
after the date on which this Report on Form 8-K must be filed.
(c) Exhibits
(2.1) Purchase Agreement dated as of March 6, 1997, among
Serologicals Corporation, Seramune, Inc., Seronat
Plasma, Inc., Nations Biologics, Inc., Decatur Plasma,
Inc., Bloomington Plasma, Inc., Lake Forest Plasma
Center, Inc., Southwest Plasma Company, Inc., Riverfront
Plasma Company, Inc., Green Street Biological Corp.,
Silver State Plasma Products, Inc., Rodney L. Savoy,
Barry J. Heinen, Noel P. Dragon, Jr. and La Savoy
Famille, L.C.
(99.1) $4,000,000 Subordinated Convertible Promissory Note
dated March 6, 1997 from Serologicals Corporation.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1933, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Serologicals Corporation
(Registrant)
March 21, 1997 ____________________________
Harold J. Tenoso, Ph.D.
President, and
Chief Executive Officer
EXHIBIT 2.1
PURCHASE AGREEMENT
AMONG
SEROLOGICALS CORPORATION
SERAMUNE, INC.
SERONAT PLASMA, INC.
NATIONS BIOLOGICS, INC.
DECATUR PLASMA, INC.
BLOOMINGTON PLASMA, INC.
LAKE FOREST PLASMA CENTER, INC.
SOUTHWEST PLASMA COMPANY, INC.
RIVERFRONT PLASMA COMPANY, INC.
GREEN STREET BIOLOGICAL CORP.
SILVER STATE PLASMA PRODUCTS, INC.
RODNEY L. SAVOY
BARRY J. HEINEN
NOEL P. DRAGON, JR.
AND
LA SAVOY FAMILLE, L.C.
_____________________________________
AS OF MARCH 6, 1997
_____________________________________
</PAGE>
TABLE OF CONTENTS
ARTICLE I.PURCHASE AND SALE OF ASSETS AND STOCK...............................6
Section 1.01 Sale and Purchase of Assets................................6
Section 1.02 Excluded Assets............................................8
Section 1.03 Sale and Purchase of Stock.................................8
Section 1.04 No Liabilities Transferred.................................8
Section 1.05 Purchase Price and Adjustments.............................8
Section 1.06 Balance Sheet Adjustment..................................11
Section 1.07 Closing Date Financial Statements.........................11
Section 1.08 Earn-Out..................................................12
Section 1.09 Payments of Purchase Price and Adjustments................13
Section 1.10 Work Papers...............................................15
Section 1.11 Allocation of Purchase Price..............................15
Section 1.12 Transfer Taxes............................................16
ARTICLE II.THE CLOSING.......................................................16
Section 2.01 Closing Date..............................................16
Section 2.02 Deliveries at Closing.....................................16
ARTICLE III.REPRESENTATIONS AND WARRANTIES OF SELLERS AND COMPANIES..........20
Section 3.01 Organization and Qualification............................20
Section 3.02 Authority.................................................21
Section 3.03 Consents and Approvals; No Violations.....................21
Section 3.04 Capitalization............................................22
Section 3.05 Subsidiaries..............................................22
Section 3.06 Companies' Articles of Incorporation and By-laws..........22
Section 3.07 Compliance With Laws; Licenses............................22
Section 3.08 Litigation; Investigations................................23
Section 3.09 Taxes.....................................................23
Section 3.10 Employee Benefit Plans; ERISA.............................25
Section 3.11 Labor Relations...........................................27
Section 3.12 Insurance Policies........................................28
Section 3.13 Environmental Laws........................................28
Section 3.14 Financial Statements and Books and Records................29
Section 3.15 No Material Adverse Change................................29
Section 3.16 Absence of Liabilities....................................30
Section 3.17 Absence of Specified Changes..............................30
</PAGE>
Section 3.18 Corporate Names...........................................32
Section 3.19 Real Property; Leases.....................................32
Section 3.20 Equipment and Personal Property...........................33
Section 3.21 Intellectual Property.....................................33
Section 3.22 Software..................................................33
Section 3.23 Contracts.................................................34
Section 3.24 Inventory.................................................34
Section 3.25 Major Customers and Suppliers.............................34
Section 3.26 Directors, Officers and Key Employees.....................34
Section 3.27 Title to Properties; Liens................................35
Section 3.28 Intentionally Omitted.....................................35
Section 3.29 Transactions with Affiliates..............................35
Section 3.30 Valid Transfer............................................35
Section 3.32 Absence of Certain Practices..............................35
Section 3.33 Accounts Payable and Accrued Expenses.....................36
Section 3.34 Accounts Receivable.......................................36
Section 3.35 Identification of Depositories and Authority..............36
Section 3.36 WARN Act..................................................36
Section 3.37 Disclosure................................................36
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF BUYERS.........................36
Section 4.01 Organization and Qualification............................36
Section 4.02 Authority.................................................37
Section 4.03 Consents and Approvals; No Violations.....................37
ARTICLE V.CERTAIN COVENANTS..................................................37
Section 5.01 Access to Information.....................................37
Section 5.02 Conduct of Business in Normal Course......................37
Section 5.03 Consent...................................................40
Section 5.04 Further Assurances........................................40
Section 5.05 No Solicitation...........................................40
Section 5.06 Notification of Certain Matters...........................40
Section 5.07 Supplements to Schedules..................................40
Section 5.08 Confidentiality...........................................41
Section 5.09 Names of Centers..........................................42
Section 5.10 Donors....................................................42
</PAGE>
ARTICLE VI.CONDITIONS TO EACH PARTY'S OBLIGATIONS............................42
Section 6.01 Governmental Authorizations; Consents.....................42
Section 6.02 Absence of Litigation.....................................43
Section 6.03 No Injunction.............................................43
ARTICLE VII.CONDITIONS PRECEDENT TO BUYERS' OBLIGATION.......................43
Section 7.01 Accuracy of Representations and Warranties................43
Section 7.02 Performance by Sellers and the Companies..................43
Section 7.03 Opinion of Sellers' Counsel...............................43
Section 7.04 Non-Competition Agreements................................44
Section 7.05 QPP Certification.........................................44
Section 7.06 Investigations............................................44
Section 7.07 Casualty Losses; Material Change..........................44
Section 7.08 Customer Consents.........................................44
Section 7.09 Assets....................................................44
Section 7.10 Standard Operating Procedures.............................44
Section 7.11 Board of Directors........................................44
Section 7.12 Employment Agreement......................................44
Section 7.13 Termination of Related Party Agreements...................44
Section 7.14 Repayment of Indebtedness.................................44
Section 7.15 Real Estate Leases........................................45
Section 7.16 Investment Representations................................45
Section 7.17 Certain Contracts.........................................45
Section 7.18 Milwaukee Center..........................................45
Section 7.19 Transition Agreement......................................45
ARTICLE VIII.CONDITIONS PRECEDENT TO SELLERS' OBLIGATIONS....................45
Section 8.01 Accuracy of Representations and Warranties....................45
Section 8.02 Performance by Buyer..........................................45
ARTICLE IX.SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS.46
</PAGE>
ARTICLE X.INDEMNIFICATION....................................................46
Section 10.01 General Indemnity............................................46
Section 10.02 Indemnification Procedure....................................47
ARTICLE XI.TERMINATION.......................................................48
Section 11.01 Right to Terminate...........................................49
Section 11.02 Obligations to Cease.........................................49
ARTICLE XII.OBLIGATIONS AFTER THE CLOSING....................................50
Section 12.01 Tax Returns..................................................50
Section 12.02 Access to Information........................................50
Section 12.03 Employees and Employee Benefits..............................50
Section 12.04 Tax Audits...................................................51
Section 12.05 Further Assurances...........................................51
Section 12.06 Bulk Sales Compliance........................................51
Section 12.07 Inventory....................................................52
ARTICLE XIII.MISCELLANEOUS...................................................52
Section 13.01 Publicity....................................................52
Section 13.02 Costs........................................................52
Section 13.03 Headings.....................................................52
Section 13.04 Notices......................................................52
Section 13.05 Assignment and Successors....................................53
Section 13.06 Binding Effect...............................................53
Section 13.07 Governing Law; Forum; Process................................53
Section 13.08 Entire Agreement.............................................54
Section 13.09 Counterparts.................................................54
Section 13.10 Severability.................................................54
Section 13.11 No Prejudice.................................................54
Section 13.12 Words in Singular and Plural Form............................54
Section 13.13 Parties in Interest..........................................54
Section 13.14 Amendment and Modification...................................54
Section 13.15 Waiver.......................................................54
Section 13.16 Knowledge of Seller..........................................55
</PAGE>
PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of March 6, 1997, by and among Serologicals
Corporation, a Delaware corporation ("Serologicals" and a "Buyer"), Seramune,
Inc., a Delaware corporation ("Seramune" and a "Buyer"), Seronat Plasma, Inc.,
a Delaware corporation ("Newco", a "Buyer" and collectively with Serologicals
and Seramune, the "Buyers"), Nations Biologics, Inc., a Louisiana corporation
("Nations" and a "Company"), Bloomington Plasma, Inc., a Nevada corporation
("Bloomington" and a "Company"), Decatur Plasma, Inc., a Louisiana corporation
("Decatur", a "Seller" and a "Company"), Lake Forest Plasma Center, Inc., a
Louisiana corporation ("Lake Forest", a "Seller" and a "Company"), Southwest
Plasma Company, Inc., a Louisiana corporation ("Southwest", a "Seller" and a
"Company"), Riverfront Plasma Company, Inc., a Louisiana corporation
("Riverfront", a "Seller" and a "Company"), Green Street Biological Corp., a
Nevada corporation ("Green Street", a "Seller" and a "Company"), Silver State
Plasma Products, Inc., a Nevada corporation ("Silver State", a "Seller" and
collectively with Nations, Decatur, Bloomington, Lake Forest, Southwest,
Riverfront and Green Street, the "Companies"), Barry J. Heinen ("Heinen" and a
"Seller"), Noel P. Dragon, Jr. ("Dragon" and a "Seller"), La Savoy Famille,
L.C. ("La Savoy Famille" and a "Seller") and Rodney L. Savoy ("Savoy", a
"Seller" and collectively with Decatur, Lake Forest, Southwest, Riverfront,
Green Street, Silver State, Heinen, Dragon and La Savoy Famille, the
"Sellers"). Savoy, Heinen, Dragon and La Savoy Famille are sometimes
collectively referred to herein as the "Stockholders".
WHEREAS, the Companies are engaged, directly or indirectly through
subsidiaries, in the business of collecting, analyzing, processing and selling
human blood plasma and other human biological products or components and the
operation of centers ("Centers") for the conduct of such business at the
locations set forth on Schedule 1 (the business being conducted at each such
Center or Company, a "Business" and collectively the business conducted at all
Centers or Companies the "Business");
WHEREAS, upon the terms and subject to the conditions set forth in this
Agreement, Newco desires to purchase from Decatur, Lake Forest, Southwest,
Riverfront, Green Street and Silver State (collectively, the "Asset Companies")
and the Asset Companies desire to sell to Newco, substantially all of the
assets of the Asset Companies as more particularly described herein in
consideration for the payments from Newco as set forth herein;
WHEREAS, upon the terms and subject to the conditions set forth in this
Agreement, Seramune desires to purchase from Savoy, La Savoy Famille, Heinen
and Dragon and Savoy, La Savoy Famille, Heinen and Dragon desire to sell to
Seramune, all of the capital stock of Nations, more particularly described
herein in consideration for the payments from Seramune as set forth herein;
WHEREAS, upon the terms and subject to the conditions set forth in this
Agreement, Seramune desires to purchase from Savoy, Heinen and Dragon and
Savoy, Heinen and Dragon desire to sell to Seramune, all of the capital stock
of Bloomington as more particularly described herein in consideration for the
payments from Seramune as set forth herein;
</PAGE>
WHEREAS, Serologicals is the owner, directly or indirectly, of all of the
capital stock of Seramune and Newco;
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements contained herein, intending to be legally
bound hereby, the parties hereto agree as follows:
ARTICLE I.
PURCHASE AND SALE OF ASSETS AND STOCK
Section 1.01 Sale and Purchase of. Except as set forth in Section 1.02
hereof, upon the terms and subject to the conditions set forth herein, at the
Closing (as defined herein), the Asset Companies shall sell, convey, transfer,
assign and deliver to Newco, and Newco shall purchase, acquire and accept from
the Asset Companies, free and clear of all liens, charges and encumbrances
(subject to only those liens for liabilities which Newco specifically agrees in
writing to assume), all of the Asset Companies' right, title and interest in
and to all properties, assets, contracts, rights and choses in action of every
kind, character and description, whether tangible or intangible, whether real,
personal or mixed, whether accrued, contingent or otherwise, and wherever
located, that are related to or existing, used or held for use in connection
with the Business, as the same may exist on the Closing Date (as defined
herein) (the "Assets"), including, without limitation, the following:
(A) all cash, accounts receivable, prepaid expenses and unused
advances of any kind of each of the Asset Companies related to the
Business, including but not limited to those which are specified on
Schedule 1.01(A);
(B) all right, title and interest of each of the Asset Companies in
and to all contracts (including donor contracts), agreements,
arrangements, instruments, documents of any nature or description,
including but not limited to those which are specified on Schedule
1.01(B);
(C) all machinery, equipment, furniture, fixtures, office and
computer equipment, leasehold improvements, vehicles and other tangible
personal property of each of the Asset Companies related to the Business
including but not limited to those which are specified on Schedule
1.01(C);
</PAGE>
(D) to the extent permitted by law, all interests of each of the
Asset Companies in regulatory licenses, approvals, permits and
applications held by each of the Asset Companies, including but not
limited to those which are specified on Schedule 1.01(D);
(E) all donor lists and records in any form (and all software
related to any such computer records), whether past, present or future, of
each of the Asset Companies;
(F) all computer software, computer databases, computer programs,
application software, source codes, and object codes of each of the Asset
Companies related to the Business, including but not limited to those
which are specified on Schedule 1.01(F);
(G) all patents, trade secrets, inventions, processes, procedures,
research records, market surveys, copyrights, servicemarks, trade names
and know-how and other intellectual property, wherever located, of each of
the Asset Companies related to the Business and all registrations and
applications for registration of any of the foregoing, including but not
limited to those which are specified on Schedule 1.01(G);
(H) all right, title and interest of each of the Asset Companies
under the real property leases listed on Schedule 1.01(H);
(I) all inventories, immunogen cells, supplies and similar tangible
assets of each of the Asset Companies related to the Business including
but not limited to those which are specified on Schedule 1.01(I);
(J) all right, title and interest of each of the Asset Companies in
and to the corporate names of each of the Asset Companies and all names
under which each of the Asset Companies is doing business or has conducted
business during the previous five-year period, each such name being listed
on Schedule 1.01(J) hereof;
(K) all goodwill of each of the Asset Companies generated by the
Business;
(L) all books, records, correspondence, manuals, production records,
employment records, standard operating procedures, customer relation
information of each of the Asset Companies relating to the Business and
any other confidential or proprietary information pertaining to the
Business; and
(M) all other assets and properties of any nature whatsoever held by
each of the Asset Companies, either directly or indirectly, and used in,
allocated to, or required for the conduct of, the Business, including all
data, files, indices, analyses and similar information, all stationery,
invoices and other forms and all other records of any kind.
</PAGE>
Section 1.02 Excluded Assets. Notwithstanding anything to the contrary
in this Agreement, the Sellers shall retain and shall not sell, transfer,
convey or assign to Buyers, and the Buyers shall not purchase or acquire any of
the following (collectively, the "Excluded Assets"):
(a) the note receivable from Seracare recorded on the books and
records of Silver State Plasma Products, Inc.;
(b) obligations or liabilities of stockholders, officers, directors
or their affiliates to the Asset Companies; and
(c) the plasma from donor No. 00974 (Decatur) and any contracts
between Sellers and such donor (the "Decatur Donor").
Section 1.03 Sale and Purchase of Stock. The Stockholders, on the terms
and subject to the conditions hereinafter set forth, agree to sell, assign,
transfer and convey to Seramune, free and clear of all liens, claims, charges,
encumbrances, security interests, pledges, equities, assessments or
restrictions of any nature whatsoever, and Seramune agrees to purchase 1,000
shares of common stock, no par value of Nations and 2,500 shares of common
stock, no par value of Bloomington (collectively, the "Stock"), which
constitute all of the issued and outstanding shares of capital stock of Nations
and Bloomington, respectively, for the Stock Purchase Price (as hereinafter
defined), payable as set forth herein (the "Stock Purchase").
Section 1.04 No Liabilities Transferred. Notwithstanding anything to
the contrary in this Agreement, Buyers shall not assume any liabilities of the
Companies whether accrued, absolute, or contingent, recorded or unrecorded or
otherwise, other than (i) Accounts Payable and Accrued Expenses (as each are
defined hereafter) incurred in the ordinary course of business accruing up to
the Closing Date and reflected on the Balance Sheet (as defined hereafter) and
(ii) Assumed Indebtedness (as defined hereinafter).
Section 1.05 Purchase Price and Adjustments. (a) The Purchase Price
(hereafter defined) for the Assets and the Stock shall be $14,412,000 (less
Excluded Assets of $247,146), which shall consist of (a) $7,808,734 (the "Base
Payment") (as calculated on Exhibit 1.05) as adjusted below pursuant to this
Section 1.05 and Section 1.06 and (b) the estimated Assumed Indebtedness in the
amount of $6,356,120 as reflected on Exhibit 1.05 (the "Estimated Assumed
Indebtedness"), which the Buyer shall pay or assume. The Base Payment, the
Excluded Assets and the Assumed Indebtedness are referred to herein
collectively as the "Purchase Price."
(b) Intentionally omitted.
</PAGE>
Confidential Treatment Requested. The redacted material has been separately
filed with the Commission and bracketed at the appropriate place and marked
with a star [*] in this filing.
(c) In addition to the Base Payment, the Buyers and the Sellers
agree that there shall be an "Adjustment Amount." The Adjustment Amount, if
any, shall be equal to (i) the product of (1) Audited Earnings (as hereafter
defined) and (2) [*], less (ii) the sum of (x) the Base Payment and (y) the
Estimated Assumed Indebtedness. If the Adjustment Amount is a positive number
the Buyers shall pay the Adjustment Amount to the Sellers as set forth below
and if the Adjustment Amount is a negative number the Sellers shall pay the
Adjustment Amount to the Buyers as set forth below. "Audited Earnings" shall
be derived from the operations of the Companies and their subsidiaries and
shall mean the product of (A) Adjusted Earnings (as defined in Section 1.08)
for the 3 month period ended December 31, 1996 as calculated pursuant to the
Final Audit (as defined below) and (B) 4.0. The Sellers shall cause, at
Sellers' sole expense, an audit (the "Audit") of the combined financial
statements of the Companies and their subsidiaries, as of December 31, 1996 and
for the twelve month period then ended, to be completed by March 31, 1997 by a
nationally recognized accounting firm reasonably acceptable to the Buyers.
Within thirty (30) days after the delivery of the Audit, Buyers may notify
Sellers of any objections or changes thereto, specifying in reasonable detail
any such objections or changes. If Buyers have no objections or changes to the
Audit, or if Sellers and Buyers agree on resolution of all objections or
changes, then such Audit, with such changes as are agreed upon, shall be final
and binding, and shall be referred to as the "Final Audit." If Sellers and
Buyers shall fail to reach an agreement with respect to all objections or
changes, then all disputed objections or changes shall, not later than ten (10)
days after one of the parties affirmatively terminates discussion in writing
with respect to such objections or changes, be submitted to an impartial
certified public accounting firm of national standing reasonably acceptable to
Buyers on the one hand and Sellers on the other (the "Independent Auditor").
Buyers and Sellers shall use reasonable efforts to cause the Independent
Auditor, within twenty five (25) days of its appointment, to use its best
judgment in resolving the disputes submitted to it. The Audit, as adjusted
pursuant to the preceding sentence shall be final and binding and shall be
referred to as the "Final Audit". In the event that the Independent Auditor
resolves all disputes presented to it in the manner proposed by one of the
parties, the fees and expenses of the Independent Auditor relating to the
resolution of such dispute shall be paid by the other party. In all other
events, the fees and expenses of the Independent Auditor shall be shared in the
same proportion that the Buyers' position, on the one hand, and the Sellers'
position, on the other hand, initially presented to the Independent Auditor
bear to the final resolution as determined by the Independent Auditor.
Notwithstanding anything else contained herein, items of revenue and expense,
including but not limited to the CMV Deficiency (as defined below), of the
Companies and their subsidiaries which are not reflected in the Final Audit but
which would cause a revision in Audited Earnings or relate to the operations of
the Business during the three month period ended December 31, 1996 and which
are discovered by Buyers on or prior to February 28, 1998 shall be taken into
account in the period incurred in calculating the Audited Earnings for purposes
of determining the Purchase Price and the Full Earn-Out (as hereinafter
defined).
</PAGE>
(d) To the extent that any plasma held in inventory by the Companies
or their subsidiaries on December 31, 1996 as included on Schedule 3.24, which
has been represented as, labeled as, or intended to be used for, the treatment
of cytomegalovirus ("CMV Plasma"), is not shipped for sale in the ordinary
course of business by April 30, 1997 for an amount at least equal to the
operating profit per liter used in calculating the Adjusted Earnings used to
calculate the Base Payment (as reflected in Exhibit 1.05), the Base Payment
shall be deemed excessive and the Adjusted Earnings used to calculate the
Audited Earnings shall be revised to reflect the difference between (x) such
operating profit per liter multiplied by the number of liters of CMV Plasma
held in inventory by the Companies or their subsidiaries on December 31, 1996
and (y) the operating profit actually recognized, if any, for such CMV Plasma
shipped for sale on or prior to April 30, 1997 (the "CMV Deficiency").
(e) (i) In the event that at any time before the first
anniversary of the Closing Date, the Buyer shall receive notice from any
customer of the Business or the Food and Drug Administration (the "FDA") that
any Center is prohibited from shipping plasma because it exceeds QPP Viral
Marker Limits (as hereafter defined), the Purchase Price shall be deemed
excessive (the "Viral Marker Deficiency") and the Sellers shall pay a Viral
Marker Deficiency to the Buyers equal to $600,000, except with respect to the
Oakland Center, the Decatur Center, the Melrose Park Center and the South
Alameda Center (the "Start-Up Centers"), for which the Sellers shall pay a
Viral Marker Deficiency to the Buyers equal $125,000.
(ii) With respect to the Centers listed on Schedule
1.05(e)(ii) (other than the Start-Up Centers), such Centers shall be deemed to
have a Viral Marker Deficiency subject to the following: (a) if, during the
second three month period after March 31, 1997 such Center is in conformity
with the QPP Viral Marker Limits for such quarterly period (if monthly data is
not available) or for any two of such months, then such Center shall be deemed
not to have a Viral Marker Deficiency, (b) if, during the second three month
period after March 31, 1997 such Center is not in conformity with the QPP Viral
Marker Limits for such quarterly period (if monthly data is not available) or
for any two of such months, then such Center shall be deemed to have a Viral
Marker Deficiency equal to $300,000, and, if, during the third three month
period after March 31, 1997 such Center is not in conformity with the QPP Viral
Marker Limits during such quarterly period (if monthly data is not available)
or during any month, then such Center shall be deemed to have an additional
Viral Marker Deficiency equal to $300,000.
(iii) With respect to the Start-Up Centers listed on Schedule
1.05(e)(iii), such Centers shall be deemed to have a Viral Marker Deficiency
subject to the following: (a) if, during the second three month period after
March 31, 1997 such Center is in conformity with the QPP Viral Marker Limits
for such quarterly period (if monthly data is not available) or for any two of
such months, then such Center shall be deemed not to have a Viral Marker
Deficiency, (b) if, during the second three month period after March 31, 1997
such Center is not in conformity with the QPP Viral Marker Limits for such
quarterly period (if monthly data is not available) or for any two of such
months, then such Center shall be deemed to have a Viral Marker Deficiency
equal to $62,500, and, if, during the third three month period after March 31,
1997 such Center is not in conformity with the QPP Viral Marker Limits during
such quarterly period (if monthly data is not available) or during any month,
then such Center shall be deemed to have an additional Viral Marker Deficiency
equal to $62,500. "QPP Viral Marker Limits" shall mean those limits as
published from time to time by the American Blood Resource Association ("ABRA")
(those limits, as of the date of the Closing, are set forth on Schedule
1.05(e)).
</PAGE>
(iv) During the periods referred to in this Section 1.05(e),
Sellers have authority at their expense (other than for expenses required to be
incurred in the ordinary course of business), subject to the approval of the
Buyers, which approval shall not be unreasonably withheld, to take such action
as is reasonably necessary to prevent or correct conditions contributing to any
Center not being in conformity with QPP Viral Marker Limits.
Section 1.06 Balance Sheet Adjustment. The Purchase Price shall reflect
the change in the Adjusted Net Assets and Assumed Indebtedness of the Companies
as reflected on the Final Balance Sheet (as defined in Section 1.07). To the
extent, if any, that the Adjusted Net Assets on the Closing Date (inclusive)
are in excess of the Adjusted Net Assets as set forth on the September 30, 1996
financial statements as provided by Arthur Andersen, LLP (a preliminary set of
which is attached to Schedule 3.14), the Purchase Price shall increase by such
excess, and to the extent, if any, that the Adjusted Net Assets on the Closing
Date (inclusive) are less than the Adjusted Net Assets as set forth on the
September 30, 1996 financial statements as provided by Arthur Andersen, LLP (a
preliminary set of which is attached to Schedule 3.14), the Purchase Price
shall decrease by such deficiency. To the extent, if any, that the Assumed
Indebtedness is in excess of the Estimated Assumed Indebtedness, the Purchase
Price shall decrease by such excess, and to the extent, if any, that the
Assumed Indebtedness is less than the Estimated Assumed Indebtedness, the
Purchase Price shall increase by such deficiency. The net adjustment to the
Base Payment described in this Section 1.06 is referred to as the "Balance
Sheet Adjustment". For purposes of this Agreement, "Adjusted Net Assets" shall
mean total assets of the Business as calculated in accordance with Exhibit
1.08(c) (other than stockholder or intercompany receivables, amounts due from
stockholders or related parties or Excluded Assets reflected in Section 1.02)
less accounts payable, accrued expenses and other non-interest bearing
operating liabilities or obligations of the Companies; provided, however, that
any changes to Adjusted Net Assets as a result of capital improvements by the
Sellers made on or after September 30, 1996 shall be excluded from the Adjusted
Net Assets on the Closing Date; provided, further, that the Adjusted Net Assets
at September 30, 1996 shall reflect the opening balance sheets and necessary
purchase accounting adjustments related to the acquisition of the Milwaukee and
Gretna Centers and Adjusted Net Assets as of the Closing Date shall exclude any
accounts receivable balances related to the Milwaukee and Gretna Centers. For
purposes of this Agreement, "Assumed Indebtedness" shall mean the total
indebtedness of Nations, Bloomington and their respective subsidiaries
outstanding as of the Closing Date and the total indebtedness of the Asset
Companies and their respective subsidiaries as of the Closing Date, provided
that the Buyers have specifically agreed in writing to assume or pay such
indebtedness. Notwithstanding anything else contained herein, items which are
not reflected in the Final Balance Sheet but which would cause a revision in
the Balance Sheet Adjustment and which are discovered by Buyers on or prior to
February 28, 1998 shall be taken into account in the period incurred in
calculating the Adjusted Net Assets for purposes of determining the Purchase
Price and the Balance Sheet Adjustment.
</PAGE>
Confidential Treatment Requested. The redacted material has been separately
filed with the Commission and bracketed at the appropriate place and marked
with a star [*] in this filing.
Section 1.07 Closing Date Financial Statements. As promptly as
practicable after the Closing Date (but in no event later than forty five days
(45) days after the Closing Date), Sellers will prepare (i) the balance sheet
of the Companies and their subsidiaries as of the Closing Date which shall
fairly present the financial position of the Companies and their subsidiaries
as of the Closing Date (the "Balance Sheet"), (ii) the results of operations of
the Companies and their subsidiaries for the period January 1, 1997 through the
Closing Date, in each case in accordance with U.S. generally accepted
accounting principles, (iii) a complete and accurate list of inventory, by
product line, of each Company and their subsidiaries as of the Closing Date and
(iv) a certificate setting forth the amount of the Balance Sheet Adjustment and
the calculation thereof in reasonable detail (the "Certificate"). Buyers and
their representatives shall have a right to review the Balance Sheet and the
Certificate. Within thirty (30) days after the delivery of the Balance Sheet
and the Certificate, Buyers may notify Sellers of any objections or changes
thereto, specifying in reasonable detail any such objections or changes. If
Buyers have no objections or changes to the Balance Sheet or the Certificate,
or if Sellers and Buyers agree on the resolution of all objections or changes,
then such Balance Sheet and Certificate, with such changes as are agreed upon,
shall be final and binding, and shall be referred to as the "Final Balance
Sheet" and "Final Certificate", respectively. If Sellers and Buyers shall fail
to reach an agreement with respect to all objections or changes, then all
disputed objections or changes shall, not later than ten (10) days after one of
the parties affirmatively terminates discussions in writing with respect to
such objections or changes, be submitted for resolution to the Independent
Auditor. Buyers and Sellers shall use reasonable efforts to cause the
Independent Auditor, within twenty five (25) days of its appointment, to use
its best judgment in resolving the disputes submitted to it. The Balance Sheet
and/or Certificate, as adjusted pursuant to the preceding sentence shall be
final and binding and shall be referred to as the "Final Balance Sheet" and the
"Final Certificate". In the event that the Independent Auditor resolves all
disputes presented to it in the manner proposed by one of the parties, the fees
and expenses of the Independent Auditor relating to the resolution of such
dispute shall be paid by the other Party. In all other events, the fees and
expenses of the Independent Auditor shall be shared in the same proportion that
the Buyers' position, on the one hand, and the Sellers' position, on the other,
initially presented to the Independent Auditor bears to the final resolution as
determined by the Independent Auditor.
Section 1.08 Earn-Out. In addition to the Purchase Price, the Buyers
and the Sellers agree that there shall be an earn out (the "Full Earn-Out")
equal to the product of (1) [*] (the "Multiplier") and (2) (a) the quotient
determined by dividing (x) the Adjusted Earnings for the 14 month period ending
as of February 28, 1998 (the "Full Earn-Out Period") by (y) 1.167 less (b) the
Audited Earnings.
</PAGE>
(i) Advance payments against the Full Earn-Out shall be calculated
as follows: There shall be an estimated calculation (the "First Quarter Earn-
Out," the "Second Quarter Earn Out" and the "Third Quarter Earn-Out",
respectively; and each, a "Quarter Earn-Out") for each of the first three
three-month periods (the "First Earn-Out Period", "Second Earn-Out Period" and
the "Third Earn-Out Period", respectively) ending after December 31, 1996. The
First Quarter Earn-Out shall equal the product of (1) the Multiplier and (2)
(x) the Adjusted Earnings (hereafter defined) for the 3 month period ending as
of the end of the First Earn-Out Period less (y) the Audited Earnings divided
by 4.0. To the extent that the First Quarter Earn-Out is a positive number,
there shall be a cash advance to the Sellers pursuant to Section 1.09(e). The
Second Quarter Earn-Out shall equal (i) the product of (1) the Multiplier and
(2) (x) the Adjusted Earnings for the 6 month period ending as of the end of
the Second Earn-Out Period less (y) the Audited Earnings divided by 2.0, less
(ii) the First Quarter Earn-Out (if positive). To the extent the Second
Quarter Earn-Out is a positive number, there shall be a cash advance to the
Sellers pursuant to Section 1.09(e). The Third Quarter Earn-Out shall equal
(i) the product of (1) the Multiplier and (2) (x) the Adjusted Earnings for the
9 month period ending as of the end of the Third Earn-Out Period less (y) the
Audited Earnings divided by 1.3333, less (ii) the First Quarter Earn-Out and
the Second Quarter Earn-Out (in each case, if positive). To the extent the
Third Quarter Earn-Out is a positive number, there shall be a cash advance to
the Sellers pursuant to Section 1.09(e).
(ii) To the extent that the Full Earn-Out exceeds the aggregate of
the advances paid by Buyers in respect of the First Quarter Earn-Out, the
Second Quarter Earn-Out and the Third Quarter Earn-Out, such excess shall be
paid by Buyers to Sellers upon the Full Earn-Out Statement being deemed final
and binding in accordance with Section 1.09(e). To the extent that the
aggregate of the advances paid by Buyers in respect of the First Quarter Earn-
Out, the Second Quarter Earn-Out and the Third Quarter Earn-Out exceeds the
Full Earn-Out amount, such excess shall be repaid by Sellers to the Buyers upon
the Full Earn-Out Statement being deemed final and binding in accordance with
Section 1.09(e). "Adjusted Earnings" shall be derived from the income of the
Companies and shall mean earnings before interest, income taxes, depreciation,
amortization ("EBITDA"), and any other nonrecurring items as mutually agreed
by the Buyers, on the one hand, and the Sellers, on the other, calculated in
accordance with U.S. generally accepted accounting principles and by reference
to Exhibit 1.08(c). Exhibit 1.08(c) sets forth certain guidelines that shall
be used in calculating the Adjusted Earnings for the Full Earn-Out, but to the
extent anything therein is inconsistent with Section 1.08, the provisions of
Section 1.08 shall control. If the Adjusted Earnings for the 14 month period
ending as of the Full Earn-Out Period divided by 1.167 do not exceed the
Audited Earnings, the Sellers shall pay Buyers $1,000,000 (the "Deficiency
Payment") in accordance with Section 1.09(e). In the event that there are any
Center(s) not Licensed (as hereinafter defined) during any Earn-Out Period or
as of the end of the eighteen month period referred to in Section 1.09(e), the
Adjusted Earnings (if positive) derived from any such Center(s) shall be
excluded from such Earn-Out calculation.
Section 1.09 Payments of Purchase Price and Adjustments.
(a) The Base Payment payable at Closing by Buyers to or on behalf
of the Sellers shall be $7,808,734, which sum shall be paid as follows: (i)
$3,808,734 by transfer of immediately available funds to an account(s)
previously designated by Sellers as more particularly set forth on Schedule
1.09(a)(i) and (ii) delivery to the Sellers of a convertible subordinated
promissory note(s) of Serologicals in the aggregate principal amount of
$4,000,000 in the form attached hereto as Exhibit A (the "Note") as more
particularly set forth on Schedule 1.09(a)(ii).
</PAGE>
(b) Subject to offset, within ten (10) days of the parties' receipt
of the Final Balance Sheet and Final Certificate, the net amount owing to the
Buyers or Sellers, as the case may be, due to the Balance Sheet Adjustment,
shall be paid to the Buyers or Sellers, as the case may be, by transfer from
the Sellers or Buyers of immediately available funds to an account previously
designated by the Buyers or Sellers, as appropriate.
(c) Subject to offset and subject to the last sentence of Section
1.05(c), within ten (10) days of the parties' receipt of the Final Audit, the
net amount owing to the Sellers or the Buyers, as the case may be, due to the
Adjustment Amount, shall be paid to the Sellers or the Buyers, as the case may
be, by transfer from the Buyers or the Sellers of immediately available funds
to an account previously designated by the Sellers or Buyers, as appropriate.
If there is an additional adjustment attributable to Section 1.05(d) or the
last sentence of Section 1.05(c), within ten (10) days of such adjustment, the
amount owing to the Sellers or the Buyers, as the case may be, due to such
adjustment, shall be paid to the Sellers or the Buyers, as the case may be, by
transfer from the Buyers or the Sellers of immediately available funds to an
account previously designated by the Sellers or Buyers, as appropriate.
(d) Within ten (10) days of the determination of a Viral Marker
Deficiency, the net amount owing to the Buyers due to the Viral Marker
Deficiency shall be paid to the Buyers by transfer from the Sellers of
immediately available funds to an account previously designated by the Buyers.
(e) (i) Subject to offset and except as hereinafter provided, 60
days after the end of each of the First Earn-Out Period, Second Earn-Out Period
and Third Earn-Out Period, 50.0% of the First Quarter Earn-Out, Second Quarter
Earn-Out and Third Quarter Earn-Out, respectively, shall be advanced by the
Buyers to or on behalf of the Sellers (with the payment of the other 50.0%
being deferred until the payment of the "Final Earn-Out Payment" as provided
below (the Final Earn-Out Payment shall be the deferred amounts, if any, plus
the Full Period Earn-Out after giving effect to advances).
(ii) On or before the expiration of sixty (60) days from the
end of the Full Earn-Out Period, the Buyers shall prepare a statement
calculating the Full Earn-Out Payment (the "Full Earn-Out Statement") and
furnish it to Sellers. If any Seller objects to such statement, it shall
notify Buyers in writing of the basis of its objection within thirty (30)
business days after its receipt of such statement. If Sellers shall fail to
object within such thirty (30) business day period, the Full Earn-Out Statement
shall be deemed final and binding and the Final Earn-Out Payment owing to the
Sellers or the amount owing to the Buyers (including the Deficiency Payment, if
any), as the case may be, shall be paid to the Buyers or the Sellers, as the
case may be, within ten (10) days from date of receipt of acceptance or the
expiration of the thirty (30) day time period, based upon the Full Earn-Out
Statement; provided, however, that if the Full Earn-Out (less amounts advanced
pursuant to Section 1.09(e)(i)) is a positive number, Buyers shall not be
required to pay any amounts attributable to the Adjusted Earnings of any Center
which is not (i) licensed by the FDA to collect and ship plasma under Section
3.21 of the Public Health Service Act and 21 CFR Part 600-640.7 and (ii) QPP
certified (collectively, "Licensed") until ten (10) days after any such Center
is so Licensed; provided, further, that if any Center is not Licensed by the
eighteen month anniversary of the Closing Date, the Full Earn-Out and Final
Earn-Out Payment shall be adjusted to exclude the Adjusted Earnings, if
positive, attributable to such Center and the Sellers shall pay the Buyers the
amount of such adjustment (including the Deficiency Payment, if any). In the
event Sellers shall object to the Full Earn-Out Statement within the time
provided, Buyers and Sellers shall use their best efforts to resolve any
disagreement within ten (10) business days of the receipt by Buyers of Sellers'
objections. If Buyers and Sellers are unable to resolve Sellers' objections to
the Full Earn-Out Statement, then Sellers and Buyers shall submit the
unresolved objections to an Independent Auditor selected in accordance with
Section 1.07 for resolution in accordance with the terms of this Agreement.
The decision of such Independent Auditor shall be final and binding on all
parties hereto. Upon the resolution of such objection, the Full Earn-Out
Statement shall be deemed final and binding and the Final Earn-Out Payment
owing to the Sellers or the amount owing to the Buyers (including the
Deficiency Payment, if any), as the case may be, shall be paid to the Buyers or
the Sellers, as the case may be, within ten (10) days, based upon the final
determination by such Independent Auditor. In the event that the Independent
Auditor resolves all disputes presented to it in the manner proposed by one of
the parties, the fees and expenses of the Independent Auditor relating to the
resolution of such dispute shall be paid by the other party. In all other
events, the fees and expenses of the Independent Auditor shall be shared in the
same proportion that the Buyers' position, on the one hand, and the Sellers'
position, on the other, initially presented to the Independent Auditor bears to
the final resolution as determined by the Independent Auditor.
Section 1.10 Work Papers. Each Buyer, each Seller and each Company agree
to permit the other party and such other party's accounting firm and the
Independent Auditor, if any, to have reasonable access during normal business
hours to its books and records as they relate to the Companies, the Business
and the books and records of the Companies, including, without limitation, the
work papers of its accountants, and to have reasonable access to such party's
representatives or its accountants, in connection with the preparation and
review of (i) the Earn-Out, (ii) the Audit, (iii) the Certificate and Final
Certificate, (iv) the Viral Marker Deficiency and (v) the CMV Deficiency. The
expenses incurred pursuant to this Section 1.10 shall initially be incurred by
the party requesting such work papers or access, subject to the final
responsibility for the cost to be allocated pursuant to Section 1.05, 1.06,
1.07 and 1.08, as the case may be.
Section 1.11 Allocation of Purchase Price. The Purchase Price shall be
allocated among the Assets being sold hereunder in the manner required by
Treasury Regulations 1.1060--1T and as mutually agreed among the Buyers on the
one hand and the Sellers on the other. The Buyers will submit to the Sellers a
proposed allocation (the "Proposed Allocation") within one-hundred and eighty
(180) days from the Closing Date. If any Seller does not notify the Buyers
within fifteen (15) days of receipt of the Proposed Allocation of any
disagreement with the Proposed Allocation, then the Proposed Allocation shall
become the final allocation (the "Allocation"). If any Seller notifies the
Buyers within such fifteen (15) day period (the "Allocation Notice") of their
disagreement with the Proposed Allocation then the Sellers and the Buyers shall
in good faith attempt to resolve their disagreement. If such disagreement is
not resolved within fifteen (15) days from the delivery of the Allocation
Notice then such disagreement shall be resolved by a nationally recognized
independent accounting firm jointly selected by the accountants for the Sellers
on the one hand and the accountants for the Buyers on the other. In the event
the allocation is determined after delivery of the Allocation Notice either by
discussions among the Sellers and the Buyers or by an accounting firm selected
in the manner herein provided then such allocation shall become the Allocation.
The Buyers and the Sellers agree that: except as otherwise required by law
(i) the Allocation shall be binding on the Buyers and the Sellers for all
federal, state and local tax purposes, (ii) the Buyers and the Sellers shall
each execute a writing memorializing the Allocation and (iii) the Buyers and
the Sellers shall file with their respective federal income tax returns
consistent IRS Forms 8594-Asset Acquisition Statements Under Section 1060,
including any required amendment thereto which shall reflect the allocations
set forth in the Allocation. The parties acknowledge that the allocation of
the Purchase Price provided for in the Allocation will be reasonable.
Section 1.12 Transfer Taxes. The Sellers on the one hand and Buyers on
the other hand, equally, shall pay on or prior to their due date all municipal,
county, state and federal sales and transfer taxes incurred and the costs of
preparing or documenting the same, if any, in connection with the transactions
contemplated by the Agreement. The Buyers shall prepare, and each party, as
appropriate, shall in a timely manner sign and swear to any return,
certificate, questionnaire or affidavit as to matters within its knowledge
required in connection with the payment of any such tax.
ARTICLE II.
THE CLOSING
Section 2.01 Closing Date. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices of Shereff,
Friedman, Hoffman & Goodman, LLP, 919 Third Avenue, New York, New York 10022 at
11:59 p.m. on March 6, 1997 (such date and time of the Closing is referred to
herein as the "Closing Date").
Section 2.02 Deliveries at Closing.
(a) At the Closing, Sellers shall deliver to the Asset Companies
and/or the Stockholders.
(i) the cash payment as set forth in Section 1.09(a) in
immediately available funds, payable as set forth in
Section 1.09;
(ii) the duly executed Note(s);
(iii) a certificate of an authorized officer of Newco
certifying to the fulfillment of the conditions set
forth in Sections 8.01 and 8.02;
(iv) a copy of the resolutions of Newco's Board of
Directors, certified by an authorized officer,
authorizing the execution, delivery and performance of
this Agreement;
(v) a mutually satisfactory employment agreement providing
for the employment of Rodney L. Savoy (the "Employment
Agreement");
(vi) a certificate of an authorized officer of Seramune
certifying to the fulfillment of the conditions set
forth in Sections 8.01 and 8.02;
(vii) a copy of the resolutions of Seramune's Board of
Directors, certified by an authorized officer,
authorizing the execution, delivery and performance of
this Agreement; and
(viii) such other instruments and certificates as may be
reasonably requested by Sellers.
(b) At the Closing, the Asset Companies shall deliver to Newco:
(i) duly executed bill(s) of sale in the form attached
hereto as Exhibit B, transferring to Newco all
interests of the Asset Companies in the Assets to be
acquired by Newco hereunder which are in the nature of
personal property;
(ii) duly executed assignment(s) in the form attached hereto
as Exhibit C, transferring to Newco all interests of
the Asset Companies in the agreements and licenses to
be transferred to Newco hereunder;
(iii) duly executed assignment(s) in the form attached hereto
as Exhibit D, transferring to Newco all intellectual
property to be transferred to Newco hereunder;
(iv) such other bills of sale, instruments of assignment and
other documents as may be reasonably requested by Newco
in order to effect or evidence the transactions
contemplated hereunder;
(v) an opinion of counsel to the Asset Companies in the
form of Exhibit E;
(vi) a certificate of the chief executive officer of the
Asset Companies certifying to the fulfillment of the
conditions set forth in Sections 7.01 and 7.02;
(vii) a copy of the resolutions of (i) each of the Asset
Companies' Board of Directors and (ii) each of the
Asset Companies' stockholders, certified by its chief
executive officer, authorizing the execution, delivery
and performance of this Agreement;
(viii) such other instruments and certificates as may be
reasonably requested by Newco;
(ix) duly executed assignment(s) and assumption(s), in the
form attached hereto as Exhibit F, of those leases
listed on Schedule 3.19 hereto to which the Asset
Companies are a party, and the related estoppel
certificates, lien waivers and consents of the
landlord;
(x) a good standing certificate of each of the Asset
Companies;
(xi) copies of the certifications and licenses referred to
in Section 7.05;
(xii) copies of the Consents referred to in Section 5.03 and
the customer consents referred to in Section 7.08;
(xiii) payoff letters, UCC-3 termination statements and other
documentation relating to the release of security
interests on the Assets;
(xiv) a certificate of amendment changing the Asset Companies
names to other names acceptable to Newco; and
(xv) the duly executed Transition Agreement contemplated
under Section 7.19.
(c) At the Closing, the Stockholders shall deliver to Seramune:
(i) certificates representing all of the Stock, duly
endorsed for transfer in blank or accompanied by a
stock power duly endorsed in blank by the Stockholders
with any requisite documentary or stock transfer taxes
affixed thereto;
(ii) the executed Employment Agreement;
(iii) the written resignations of the Board of Nations and
Bloomington and their respective subsidiaries and such
officers of Nations and Bloomington and their
respective subsidiaries as may be requested in writing
by Seramune prior to Closing;
(iv) a good standing certificate and certified articles of
incorporation of Nations and Bloomington and their
respective subsidiaries;
(v) all books and records relating to Nations and
Bloomington and the Business which are not maintained
at Nations and Bloomington and their subsidiaries,
including without limitation, the minute books, stock
books, stock ledger and corporate seals, corporate
operation manuals, policy manual, insurance policies in
force (to the extent available), bank and checking
account records, checks, deposit slips and signature
cards, copies of Nations' and Bloomington's financial
statements and balance sheets and copies of the returns
for Nations and Bloomington and their subsidiaries
required to be filed with all the appropriate taxing
bodies for the last one (1) year (if applicable);
(vi) evidence that each of CAL Plasma LLC, Melrose Plasma
LLC and South Alameda LLC have converted to "C"
corporation status or that all of their assets are
owned by Nations and such entities shall have
terminated their legal existence;
(vii) such other bills of sale, instruments of assignment and
other documents as may be reasonably requested by
Seramune in order to effect or evidence the
transactions contemplated hereunder;
(viii) an opinion of counsel to the Sellers in the form of
Exhibit E;
(ix) a certificate of Savoy and the chief executive officer
of Nations and Bloomington certifying to the
fulfillment of the conditions set forth in Sections
7.01 and 7.02;
(x) a copy of the resolutions of (i) each of Nations' and
Bloomington's Board of Directors and (ii) each of
Nations' and Bloomington's stockholders, certified by
its chief executive officer, authorizing the execution,
delivery and performance of this Agreement;
(xi) duly executed assignment(s) and assumption(s), in the
form attached hereto as Exhibit F, of those leases
listed on Schedule 3.19 hereto to which Bloomington is
a party, and the related estoppel certificate, lien
waiver and consent of the landlord;
(xii) such other instruments and certificates as may be
reasonably requested by Seramune;
(xiii) a duly executed lease between Plasma Rentals, L.L.C.,
as landlord, and Nations, as tenant, relating to the
real property located at 2111 West North Avenue,
Milwaukee, Wisconsin;
(xiv) the Noncompetition Agreements contemplated under
Section 7.04 in the form of Exhibit G;
(xv) copies of the certifications and licenses referred to
in Section 7.05;
(xvi) copies of the Consents referred to in Section 5.03 and
the customer consents referred to in Section 7.08;
(xvii) copies of legal, valid and binding contracts for the
sale and purchase of substantially all of the plasma
collected at the Lawton Center and the Waco Center;
(xviii) payoff letters, UCC-3 termination statements and other
documentation relating to the release of all security
interests as necessary; and
(xix) the duly executed Transition Agreement contemplated
under Section 7.19.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SELLERS AND COMPANIES
Each Seller and Company, jointly and severally, represent and warrant to
the Buyers, as follows:
Section 3.01 Organization and Qualification. Each Company and its
Subsidiaries (as defined in the Securities Act of 1933, as amended (each a
"Subsidiary" and collectively, the "Subsidiaries")) is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization. Each Company and Subsidiary has all power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted, except where the failure to be so organized,
existing and in good standing or to have such power and authority would not
have a Material Adverse Effect (as defined below) on such Company or
Subsidiary. Each Company and Subsidiary is duly qualified or licensed to do
business and in good standing in each jurisdiction in which the property owned,
leased or operated by it or the nature of the business conducted by it makes
such qualification or licensing necessary, except where failure to be so duly
qualified or licensed and in good standing would not in the aggregate have a
Material Adverse Effect on such Company or Subsidiary. A true, correct and
complete list of such jurisdictions with respect to each Company and Subsidiary
is set forth on Schedule 3.01. For purposes of this Agreement, a "Material
Adverse Effect" with respect to any Company or its Subsidiaries means any
event, circumstance or condition that, individually or when aggregated with all
other similar events, circumstances or conditions could reasonably be expected
to have, or has had, a material adverse effect on: (i) the business, property,
operations, condition (financial or otherwise), results of operations or
prospects of such Company or Subsidiary, (ii) the Assets; (iii) the Stock; (iv)
the ability of such Company or Subsidiary to consummate the transactions
contemplated hereunder; or (v) the ability of the Buyers to perform and conduct
the Business after the consummation of the transactions contemplated by this
Agreement in the manner conducted prior to the consummation of such
transactions.
Section 3.02 Authority. Each Company has the requisite corporate power
and authority, and each Seller which is a natural person has the requisite
capacity, to execute and deliver this Agreement and each of the other
agreements contemplated hereby (the "Related Agreements") and to consummate the
transactions contemplated hereby and thereby. The execution, delivery and
performance of this Agreement and the Related Agreements and the consummation
of the transactions contemplated hereby and thereby have been duly authorized
by all necessary corporate action on the part of each Company and no other
corporate proceedings on the part of any Company are necessary to authorize
this Agreement or to consummate the transactions so contemplated. This
Agreement and the Related Agreements have been duly executed and delivered by
each Seller and each Company and, assuming this Agreement and the Related
Agreements constitute valid and binding obligations of the Buyers, constitute
valid and binding obligations of each Seller and each Company enforceable
against it and him in accordance with their respective terms.
Section 3.03 Consents and Approvals; No Violations. Neither the
execution, delivery or performance of this Agreement or the Related Agreements
by each Seller or each Company nor the consummation by it or him of the
transactions contemplated hereby or thereby nor compliance by it or him with
any of the provisions hereof or thereof will (i) with respect to each Company
only, conflict with or result in any breach of any provision of the charter or
by-laws of such Company, (ii) require any filing with, or permit,
authorization, consent or approval of, any court, arbitral tribunal,
administrative agency or commission or other governmental or other regulatory
authority or agency (a "Governmental Entity") or other person or entity, (iii)
result in a violation or breach of, or constitute (with or without due notice
or lapse of time or both) a default (or give rise to any right of termination,
amendment, cancellation or acceleration) under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which any Company or Subsidiary
or any Seller is a party or by which any of its or his properties or assets may
be bound or (iv) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to any Company or Subsidiary or any Seller or any of its
or his properties or assets.
Section 3.04 Capitalization. The authorized and outstanding capital
stock of each Company as of the date hereof is as set forth on Schedule 3.04
hereto. All of the outstanding shares of the capital stock of each Company are
validly issued, fully paid and non-assessable, are owned by the stockholders
and in amounts set forth on Schedule 3.04, and on the Closing Date, prior to
giving effect to the transactions hereunder, will be owned by the stockholders
and in the amounts set forth on Schedule 3.04. Except as set forth on Schedule
3.04, there are no liens, claims, charges or encumbrances on or with respect to
any outstanding shares of capital stock of any Company. There are no
outstanding (i) securities convertible into or exchangeable for any Company's
capital stock; (ii) options, warrants or other rights to purchase or subscribe
for capital stock of any Company or (iii) contracts, commitments, agreements,
understandings or arrangements of any kind relating to the issuance of any
capital stock of any Company, any such convertible or exchangeable securities
or any such options, warrants or rights. Except as set forth on Schedule 3.04,
there is no outstanding right, option or other agreement of any kind to
purchase or otherwise to receive from any Company, or any shareholder of any
Company, any ownership interest in the Business, the Subsidiaries, the Stock or
the Assets, and there is no outstanding right or security of any kind
convertible into such ownership interest.
Section 3.05 Subsidiaries. Schedule 3.05 attached hereto lists the name
of each Subsidiary and sets forth the number and class of the authorized
capital stock of each Subsidiary and the number of shares of each Subsidiary
which are issued and outstanding, all of which shares (except as set forth on
Schedule 3.05) are owned by the Company indicated therein, free and clear of
all liens, claims, charges or encumbrances of every kind. Except as set forth
in Schedule 3.05, no Company presently owns, of record or beneficially, or
controls, directly or indirectly, any capital stock, securities convertible
into capital stock or any other equity interest in any corporation, association
or business entity nor is the Company, directly or indirectly, a participant in
any joint venture, partnership or other non-corporate entity.
Section 3.06 Companies' Articles of Incorporation and By-laws. Each
Company and Subsidiary has heretofore delivered to the Buyers true and complete
copies of its respective Articles of Incorporation and By-laws (or other
applicable organizational documents) as in effect on the date hereof.
Section 3.07 Compliance With Laws; Licenses.
(a) The conduct of the Business of each Company and Subsidiary has
not violated, and as presently conducted does not violate, any federal, state,
local or foreign laws, including, but not limited to, applicable bulk sales
laws and the Clinical Laboratories Improvements Act of 1988 ("CLIA"), rules,
regulations or ordinances, or judgments, injunctions, writs, decrees, orders or
guidance documents and memos of any court or Governmental Entity, including,
but not limited to, the Occupational Safety and Health Administration, the
Department of Transportation, the Health Care Financing Administration and FDA
(collectively, the "Orders"), or any industry standards, nor has any Company
received any notice of any such violation which remains outstanding except
those listed on Schedule 3.07. No Company or Subsidiary is subject to any
Order currently in effect which could have a Material Adverse Effect.
(b) Except as set forth on Schedule 3.07, each Company and
Subsidiary possesses all licenses, permits, consents, authorizations,
registrations and approvals of, with or from Governmental Entities which have
jurisdiction over it ("Licenses"), including all export licenses, FDA Master
Files, QPP Certificates, CLIA Licenses or approvals and occupancy, fire,
business and other permits from local officials, and is in full compliance with
the terms thereof, except where the failure to hold any such license or a
violation thereof would not have a Material Adverse Effect. Schedule 3.07 sets
forth a complete and accurate list of all such Licenses and includes copies of
all QPP Certificates.
(c) Each Company and Subsidiary has adhered to standard operating
procedures accepted by the FDA and required by its customers (copies of which
standard operating procedures have previously been delivered to Buyers) and has
properly tested and/or secured appropriate testing of all blood and plasma
products necessary for conduct of its Business. Schedule 3.07 sets forth a
true, correct and complete list of all recall letters, warning letters and
"483s" and, with respect to each such letter, (i) the date of such recall,
warning or 483, (ii) the date each recall, warning or 483 first appeared in FDA
Enforcement Reports, (iii) an accurate description of the facility involving
the recall, warning or 483, (iv) the number of units involved, (v) the
distribution of each of the recalled units by state and/or country, (vi) the
reason given by the FDA for each recall, warning or 483, and (vii) any
continuing obligations arising from such recall, warning or 483.
Section 3.08 Litigation; Investigations. Schedule 3.08 sets forth a
complete and accurate list of all suits, claims, proceedings, investigations or
reviews which are pending or, to the best knowledge of the Companies,
threatened against or affecting any Company or Subsidiary, any of its
respective directors or any properties or assets used in the conduct of the
Business. Except as disclosed in Schedule 3.08, (i) no investigation or review
by any Governmental Entity with respect to any Company or Subsidiary is pending
or, to the best of the Companies' knowledge, threatened, nor has any
Governmental Entity indicated to any Company or Subsidiary an intention to
conduct the same, and (ii) there is no action, suit or proceeding pending or,
to the best of the Companies' knowledge, threatened against or affecting any
Company or Subsidiary at law or in equity, or before any Governmental Entity.
Section 3.09 Taxes. (a) The terms "Tax" and "Taxes" shall mean any
and all taxes, charges, fees, levies or other assessments, including, without
limitation, all net income, gross income, gross receipts, premium, sales, use,
ad valorem, transfer, franchise, profits, license, withholding, payroll,
employment, excise, estimated, severance, stamp, occupation, property or other
taxes, fees, assessments or charges of any kind whatsoever, together with any
interest and any penalties (including penalties for failure to file in
accordance with applicable information reporting requirements), and additions
to tax by any authority, whether federal, state, or local or domestic or
foreign. The term "Tax Return" shall mean any report, return, form,
declaration or other document or information required to be supplied to any
authority in connection with Taxes.
(b) All Tax Returns for all periods which end prior to or which
include the Closing Date that are or were required to be filed prior to Closing
by the Sellers or the Companies have been or shall be filed on a timely basis
in accordance with the applicable laws of each governmental authority. The
Sellers shall timely file or cause to be filed all franchise, income or other
Tax Returns including Tax Returns relating to the sale contemplated by the
Agreement that shall be required to be filed after the Closing Date. All such
Tax Returns that have been filed were, when filed, and continue to be, true,
correct and complete in all material respects. All such franchise, income or
other Tax Returns that will be filed shall, to the best knowledge of each of
the taxpayers be true, correct and complete in all material respects when
filed.
(c) Schedule 3.09(c) annexed hereto lists all United States
Federal, state, local and foreign income Tax Returns that have been filed since
January 1, 1990 by the Sellers or the Companies that have been audited by any
governmental authority. There are no outstanding waivers or extensions of any
statute of limitations relating to the payment of Taxes by the Sellers or the
Companies to which such parties may be liable, and no governmental authority
has either formally or informally requested such a waiver or extension.
(d) Except as set forth on Schedule 3.09(d) annexed hereto, each of
the Sellers and Companies has paid, or made adequate provision in the Financial
Statements for the payment of, all of its Taxes that have or may become due for
all periods which end prior to or which include the Closing Date, including all
Taxes reflected on the Tax Returns referred to in this Section 3.09, or in any
assessment, proposed assessment or notice, either formal or informal, received
by any of the Sellers or Companies except such Taxes, if any, (i) as are set
forth on Schedule 3.09(d) annexed hereto that are being contested in good faith
and as to which adequate reserves (determined in accordance with GAAP) have
been provided and (ii) owed by any of the Companies with respect to post-
Closing periods (determined by treating the books of the Companies as being
closed as of the Closing Date). All Taxes that any of the Taxpayers are or
were required by law to withhold or collect have been duly withheld or
collected and, to the extent required, have been paid to the appropriate
governmental authorities. There are no liens with respect to Taxes on the
Stock or any property or assets of the Companies other than permitted liens for
certain Taxes not yet due. All Taxes with respect to the Sellers personally
with respect to the Companies that may later become due and payable with
respect to any taxable period which ends prior to or which includes the Closing
Date shall be paid by such Sellers without any reimbursement or contribution by
the Buyers.
(e) None of the assets of any of the Companies are assets that the
Buyers or the Companies is or shall be required to treat as being owned by
another person pursuant to the provisions of Section 168(f)(8) of the Internal
Revenue Code of 1954, as amended and in effect immediately before the enactment
of the Tax Reform Act of 1986, or is "tax-exempt use property" within the
meaning of Section 168(h)(1) of the Code.
(f) None of the Companies have agreed to make, nor are they
required to make, any adjustments under Section 481(a) of the Code by reason of
or change in accounting method or otherwise.
(g) None of the Companies is a party to any agreement, contract,
arrangement or plan that has resulted or would result, separately or in the
aggregate, in the payment of any "excess parachute payments" within the meaning
of Section 280G of the Code.
(h) Neither Nations or Bloomington have made an election under
Section 341(f) of the Code.
(i) For purposes of this Section 3.09, references to the Companies
shall also refer to the Subsidiaries and any predecessor companies.
Section 3.10 Employee Benefit Plans;, ERISA.
(a) Attached hereto as Schedule 3.10 are complete and accurate
copies of all employee benefit plans, all employee welfare benefit plans, all
employee pension benefit plans, all multi-employer plans and all multi-employer
welfare arrangements (as defined in Sections 3(3), (1), (2), (37) and (40),
respectively, of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")), which are currently maintained and/or sponsored by any
Company (or any Subsidiary), or to which any Company (or any Subsidiary)
currently contributes, or has an obligation to contribute in the future
(including, without limitation, benefit plans or arrangements that are not
subject to ERISA, such as employment agreements and any other agreements
containing "golden parachute" provisions and deferred compensation agreements),
together with copies of any trusts related thereto and a classification of
employees covered thereby (collectively, the "Plans"). Schedule 3.10 sets
forth all of the Plans that have been terminated within the past three years.
(b) Except for the Plans, no Company (including any Subsidiary)
maintains or sponsors, or is a contributing employer to, a pension, profit-
sharing, deferred compensation, stock option, employee stock purchase or other
employee benefit plan, employee welfare benefit plan, or any other arrangement
with their respective employees whether or not subject to ERISA. All Plans are
in substantial compliance with all applicable provisions of ERISA and the
regulations issued thereunder, as well as with all other applicable laws, and,
in all material respects, have been administered, operated and managed in
substantial accordance with the governing documents. All Plans that are
intended to qualify (the "Qualified Plans") under Section 401(a) of the Code
are so qualified and have been determined by the Internal Revenue Service to be
so qualified (or application for determination letters have been timely
submitted to the IRS), and copies of the current plan determination letters,
most recent actual valuation reports, if any, most recent Form 5500, or, as
applicable, Form 5500-C/R filed with respect to each such Qualified Plan or
employee welfare benefit plan and most recent trustee or custodian report, are
included as part of Schedule 3.10. To the extent that any Qualified Plans have
not been amended to comply with applicable law, the remedial amendment period
permitting retroactive amendment of such Qualified Plans has not expired and
will not expire within 120 days after the Consummation Date. All reports and
other documents required to be filed with any governmental agency or
distributed to plan participants or beneficiaries (including, but not limited
to, annual reports, summary annual reports, actuarial reports, PBGC-1 forms,
audits or Tax Returns) have been timely filed or distributed. None of: (i)
the Sellers; (ii) any Plan; or (iii) any Company (including any Subsidiary) has
engaged in any transaction prohibited under the provisions of Section 4975 of
the Code or Section 406 of ERISA. No Plan has incurred an accumulated funding
deficiency, as defined in Section 412(a) of the Code and Section 302(l) of
ERISA; and no circumstances exist pursuant to which any Company (including any
subsidiary) could have any direct or indirect liability whatsoever (including
being subject to any statutory lien to secure payment of any such liability),
to the Pension Benefit Guaranty Corporation ("PBGC") under Title IV of ERISA or
to the Internal Revenue Service for any excise tax or penalty with respect to
any plan now or hereafter maintained or contributed to by any Company or any
member of a "controlled group" (as defined in Section 4001(a)(14) of ERISA)
that includes any Company; and no Company (including any Subsidiary) or any
member of a "controlled group" (as defined above) that include any Company
currently has (or at the Closing Date will have) any obligation whatsoever to
contribute to any "multi-employer pension plan" (as defined in ERISA Section
4001(a)(14)), nor has any withdrawal liability whatsoever (whether or not yet
assessed) arising under or capable of assertion under Title IV of ERISA
(including, but not limited to, Sections 4201, 4202, 4203, 4204, or 4205
thereof) been incurred by any Plan.
Further:
(i) there have been no terminations, partial terminations or
discontinuance of contributions to any Qualified Plan without a
determination by the Internal Revenue Service that such action does not
adversely affect the tax-qualified status of such Qualified Plan;
(ii) except as set forth on Schedule 3.10(b)(ii), no Plan which
is subject to the provisions of Title IV of ERISA, has been terminated;
(iii) there have been no "reportable events" (as that phrase is
defined in Section 4043 of ERISA) with respect to any Plan which were not
properly reported;
(iv) the valuation of assets of any Qualified Plan, as of the
Closing Date, shall equal or exceed the actuarial present value of all
accrued pension benefits under any such Qualified Plan in accordance with
the assumptions contained in the Regulations of the PBGC governing the
funding of terminated defined benefit plans;
(v) with respect to Plans which qualified as "group health
plans" under Section 4980B of the Internal Revenue Code and Section 607(1)
of ERISA and related regulations (relating to the benefit continuation
rights imposed by "COBRA"), each Company (including any Subsidiary) and
the Sellers have complied (and on the Closing Date will have compiled) in
all respects with all reporting, disclosure, notice, election and other
benefit continuation requirements imposed thereunder as and when
applicable to such plans, and no Company (nor any Subsidiary) has incurred
(and will not incur) any direct or indirect liability and is not (and will
not be) subject to any loss, assessment, excise tax penalty, loss of
federal income tax deduction or other sanction, arising on account of or
in respect to any direct or indirect failure by any Company (including any
Subsidiary) or the Sellers, at any time prior to the Closing Date to
comply with any such federal or state benefit continuation requirement,
which is capable of being assessed or asserted before or after the Closing
Date directly or indirectly against any Company (including any Subsidiary)
or the Sellers with respect to such group health plans;
(vi) no Company (including any Subsidiary) is now nor has it been
within the past five years a member of a "controlled group" as defined in
ERISA Section 4001(a)(14);
(vii) there is no pending litigation, arbitration, or disputed
claim, settlement or adjudication proceeding, and to the best of the
Companies knowledge, there is no threatened litigation, arbitration or
disputed claim, settlement or adjudication proceeding, or investigation
with respect to any Plan, or with respect to any fiduciary, administrator,
or sponsor thereof (in their capacities as such), or any party in interest
thereof;
(viii) the Balance Sheet reflects the approximate total pension,
medical and other benefit expense for all Plans, and no material funding
changes or irregularities are reflected thereon which would cause such
Balance Sheet to be not representative of prior periods; and
(ix) no Company (including any Subsidiary) has incurred liability
under Section 4062 of ERISA.
If reasonably requested by Buyers, the Companies will terminate any Plan
identified on Schedule 3.10 as the "Pension or Profit Sharing Plan to be
Terminated" substantially contemporaneously with the Closing.
Section 3.11 Labor Relations. Except as set forth on Schedule 3.11:
(i) each Company and Subsidiary has performed all material obligations with
respect to its employees, independent sales representatives, consultants,
agents, officers and directors, and has paid, including without limitation all
wages, salaries, commissions, bonuses, severance pay, vacation pay, benefits
and other direct compensation for all services performed by them to the date
hereof and all amounts required to be reimbursed to such employees; (ii) each
Company and Subsidiary is in compliance in all material respects with all
federal, state, local and foreign laws and regulations respecting employment
and employment practices, terms and conditions of employment and wages and
hours; (iii) there is no pending, or to the Companies' knowledge threatened,
charge, complaint, allegation, application or other process against any Company
or Subsidiary before the National Labor Relations Board or any comparable
state, local or foreign agency, governmental or administrative; (iv) there is
no labor strike, dispute, slowdown or work stoppage or other job action
pending, or to the Companies' knowledge, threatened against or otherwise
affecting or involving any Company or Subsidiary; and (v) no employees of any
Company or Subsidiary are covered by any collective bargaining agreements and
to the best knowledge of the Companies no effort is being made by any union to
organize any of the Companies' or their Subsidiaries' employees.
Section 3.12 Insurance Policies. Schedule 3.12 contains a complete
and accurate list of all insurance policies currently providing and that for
the past five (5) years have been providing coverage in favor of any Company or
Subsidiary (or any predecessor) specifying the insurer and type of insurance
under each. Each current policy is in full force and effect and all premiums
are currently paid and no notice of cancellation or termination has been
received with respect to any such policy. Such policies have been sufficient
for compliance with all material requirements of law. No Company or Subsidiary
(or any predecessor) has been refused any insurance with respect to its assets
and operations, nor has its coverage been limited by any insurance carrier to
which it has applied for any such insurance or with which it has carried
insurance during the last five (5) years. Each Company and Subsidiary (or any
predecessor) has insured by reputable insurers the assets used by such Company
and Subsidiary (or any predecessor) in the conduct of its business that are of
an insurable character against risks of liability, casualty and fire in
adequate amounts and consistent with prudent industry practice, and maintains
such insurance against hazards, risks and liability to persons and property to
the extent and in the manner customary for companies in similar businesses,
similarly situated, and such insurance has been effective, in full force and
effect, without interruption since the date such Company or Subsidiary (or any
predecessor) commenced business. The insurance specified on Schedule 3.12 has
been effective, in full force and effect, without interruption since the date
specified on Schedule 3.12 as the initial date of coverage.
Section 3.13 Environmental Laws. Each Company and Subsidiary (or any
predecessor) and all properties owned or operated by such Company or Subsidiary
(or any predecessor) have complied during the time such Company or Subsidiary
(or any predecessor) has operated its business and currently comply with all
Environmental Laws (as defined below) in all material respects and such Company
or Subsidiary (or any predecessor) has not received any communication (whether
from a governmental authority, private party, employee or otherwise) that
alleges that such Company or Subsidiary (or any predecessor) is not in such
compliance, and there are no circumstances that may prevent or interfere with
such compliance in the future or otherwise give rise to any liability or other
loss under such Environmental Laws. Each Company and Subsidiary has all
permits and licenses required under Environmental Laws in connection with the
operations of such Company's or Subsidiary's business including any permits or
licenses relating to disposal or emissions. No Company or Subsidiary (or any
predecessor) has been named or threatened to be named a "potentially
responsible party" within the meaning of CERCLA or any similar Federal, state
or local law. "Environmental Laws" means any applicable Federal, state, local
or foreign laws, statutes, rules, regulations, orders, consent decrees,
judgments, permits or licenses, relating to prevention, remediation, reduction
or control of pollution, or protection of the environment, natural resources
and/or human health and safety, including, without limitation, such applicable
laws, statutes, rules, regulations, orders, consent decrees, judgments, permits
or licenses relating to (a) solid waste and/or Hazardous Materials generation,
handling, transportation, use, treatment, storage or disposal, (b) air, water,
and noise pollution, (c) soil, ground, water or groundwater contamination, (d)
the manufacture, generation, processing, handling, distribution, use,
treatment, storage, transportation or release, emission or discharge into the
environment of Hazardous Materials, (e) regulation of underground and above
ground storage tanks, (f) the obtaining, sale, use, storage, disposal or
testing of any human blood or blood product and (g) the disposal of medical
waste. "Hazardous Materials" means any flammable or explosive materials,
petroleum (including crude oil and its fractions), radioactive materials,
hazardous wastes, toxic substances or related hazardous materials, chemicals,
pollutants and contaminants, including, without limitation, polychlorinated
biphenyls, friable asbestos, and any substances defined as, or included in the
definition of toxic or hazardous substances, wastes, or materials under any
federal or applicable state or local laws, ordinances, rules or regulations
including Environmental Laws.
Section 3.14 Financial Statements and Books and Records. Each Company
and Subsidiary has previously delivered to the Buyers a copy of the following
financial statements: the balance sheet of such Company as at September 30,
1996 and the related results of operations for the nine month period then ended
and the balance sheet of such company as at December 31, 1996 and the related
results of operations for the twelve month period then ended (the "Financial
Statements"). Copies of the Financial Statements are annexed as Schedule 3.14
hereto. The Financial Statements are true and accurate in all material
respects, are in accordance with the books and records of each Company and its
Subsidiaries and although the Financial Statements are not audited and do not
contain the footnotes which would be required in audited financial statements,
present fairly in all material respects the financial position and related
results of operations of such Company and its Subsidiaries as of the times and
for the periods referred to herein, in accordance with the Production Method as
defined on Exhibit 1.08(c). All of the financial books and records of each
Company and its Subsidiaries have been made available to Buyers and such books
and records completely and fairly record in all material respects such
Company's or Subsidiary's financial affairs which would normally be recorded in
financial books and records.
Section 3.15 No Material Adverse Change. Since September 30, 1996,
except as set forth in Schedule 3.15, there has been no change in the business,
operations or condition (financial or otherwise) of any Company or Subsidiary
or in their respective assets, and each Company does not know of any change
that is threatened or pending, nor has there been any damage, destruction or
loss, whether or not covered by insurance, which in each such case could have a
Material Adverse Effect.
Section 3.16 Absence of Liabilities. Except as described in Schedule
3.16, each Company and Subsidiary has no material debt, liabilities or
obligations of any nature, whether accrued, absolute, contingent or otherwise,
whether due or to become due and whether or not the amount thereof is readily
ascertainable, that are not reflected as a liability in the Financial
Statements of such Company except for liabilities incurred by such Company or
Subsidiary in the ordinary course of business consistent with past practices
which are not otherwise prohibited by, in violation of or which will result in
a breach of the representations, warranties and covenants of such Company
contained in this Agreement.
Section 3.17 Absence of Specified Changes. Except as disclosed on
Schedule 3.17, since September 30, 1996, there has not been with respect to any
Company (including any Subsidiary) any:
(a) action which would result in a material adverse change, whether
direct or indirect, in the business, operations, condition (financial or
otherwise), prospects, liabilities or assets of any Company whether or not
insured;
(b) transaction not in the ordinary course of business, including
without limitation any sale of all or substantially all of the assets of any
Company or any merger of any Company and any other entity;
(c) unfulfilled commitment as of the date of this Agreement
requiring expenditures exceeding $5,000 in the aggregate for all Companies
(excluding commitments expressly described elsewhere in this Agreement or the
Schedules hereto);
(d) material damage, destruction or loss, whether or not insured;
(e) failure to maintain in full force and effect substantially the
same level and types of insurance coverage as in effect on September 30, 1996
or destruction, damage to, or loss of any asset of any Company (whether or not
covered by insurance) that materially and adversely affects the business,
operations, condition (financial or otherwise), prospects, liabilities or
assets of such Company;
(f) material change in accounting principles, methods or practices,
investment practices, claims, payment and processing practices or policies
regarding intercompany transactions;
(g) material revaluation of any assets or material write down of
the value of any inventory;
(h) any declaration, setting aside, or payment of a dividend or
other distribution in respect of its capital stock, or any direct or indirect
redemption, purchase or other acquisition of any shares of its capital stock;
(i) issuance or sale of any shares of any equity security or of any
security convertible into or exchangeable for equity securities;
(j) amendment to its Certificate of Incorporation or By-laws;
(k) sale, assignment or transfer of any tangible or intangible
asset, including any rights to intellectual property, except in the ordinary
course of business;
(l) disposition of or lapse of any patent, trademark, tradename,
servicemark or copyright or any application for the foregoing, or disposition
of any technology, software or know-how, or any license, permit or
authorization to use any of the foregoing;
(m) mortgage, pledge or other encumbrance, including liens and
security interests, of any tangible or intangible asset;
(n) discharge or satisfaction of any lien or encumbrance or payment
or cancellation of any liability other than payment of current liabilities in
the ordinary course of business;
(o) cancellation of any debt or waiver or release of any material
contract, right or claim, except for cancellations, waivers and releases in the
ordinary course of business which do not exceed $5,000 in the aggregate;
(p) indebtedness incurred for borrowed money or any commitment to
borrow money, any capital expenditure or capital commitment requiring an
expenditure of monies in the future, any incurrence of a contingent liability
or any guaranty or commitment to guaranty the indebtedness of others entered
into, by any Company, other than customary transactions in the ordinary course
of business not in excess of $5,000 in the aggregate for all Companies;
(q) amendment, termination or revocation of, or a failure in any
material respect to perform obligations or the occurrence of any default under,
any material contract or agreement to which any Company, is, or as of September
30, 1996 was, a party or of any material license, permit or franchise required
for the continued operation of any business conducted by any Company on
September 30, 1996;
(r) increase or commitment to the increase of the salary or other
compensation payable or to become payable to any of its officers, directors or
employees, agents or independent contractors, or the payment of any bonus to
the foregoing persons except in the ordinary course of business and consistent
with past practice and applicable policies and procedures of such Company;
(s) changes to any product or establishment licenses held by any
Company or in the regulatory or licensing status of any Company; or
(t) agreement or understanding to take any of the actions described
above in this Section 3.17.
Section 3.18 Corporate Names. Schedule 3.18 sets forth a complete and
accurate list of names used by each Company or Subsidiary in addition to its
corporate name.
Section 3.19 Real Property; Leases. Except as set forth on Schedule
3.19, no Company or Subsidiary owns any real property. Schedule 3.19 sets
forth a complete and accurate list of each lease, sublease or other arrangement
pursuant to which any Company or Subsidiary leases or subleases real property
(collectively, the "Leased Premises"), and each Company has heretofore
delivered or will deliver to Buyers a complete and accurate copy of each such
lease and sublease prior to Closing. Unless otherwise noted on Schedule 3.19,
the Company or Subsidiary named therein is the sole lessee or sublessee under
each of the leases and subleases listed on Schedule 3.19 and each such lease
and sublease is valid and in full force and effect and enforceable in
accordance with its terms and has not been further supplemented, amended or
modified. Unless otherwise noted on Schedule 3.19, there exists no material
event of default or event, occurrence, condition or act, including without
limitation, the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereunder, which constitutes or would
constitute (with notice or lapse of time or both) a material default in any
respect under any of the leases or subleases on Schedule 3.19. No Company or
Subsidiary has received any notice of any event of default or any event,
occurrence, condition or act, including without limitation, the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereunder, which constitutes or would constitute (with notice or
lapse of time or both) a default in any respect under any of the leases or
subleases on Schedule 3.19. Each party to a lease or sublease listed on
Schedule 3.19 has complied with all commitments and obligations on its part to
be performed or observed under such lease or sublease. The Companies have been
in peaceable possession of the Leased Premises since the commencement of the
original term of each respective lease or sublease listed on Schedule 3.19.
The Leased Premises are structurally sound with no defects and such premises,
including without limitation, the mechanical, heating, venting and air
conditioning systems are in good operating condition and repair and are
adequate to meet all present and reasonably anticipated future requirements of
the Business, as currently conducted or as proposed to be conducted; and none
of such Leased Premises are in need of maintenance or repairs except for
ordinary, routine maintenance and repairs which are not material in nature or
cost. The real property covered by any leasehold interests listed on Schedule
3.19, the buildings, fixtures and improvements on such, and the present use
thereof, comply, in all material respects with all restrictive covenants, deeds
and other restrictions and all zoning laws, ordinances and regulations of
governmental or other authorities having jurisdiction thereof, including
provisions relating to permissible nonconforming uses, if any, and any such
premises are not presently affected, nor to the best knowledge of the Companies
threatened, by any condemnation or eminent domain proceeding or any proceeding
by a mortgagee.
Section 3.20 Equipment and Personal Property. Schedule 3.20 sets
forth a complete and accurate description of all equipment and personal
property owned by each Company and Subsidiary as well as all capital leases and
operating leases pursuant to which such Company or Subsidiary leases property.
Except as described in Schedule 3.20, all equipment and tangible personal
property used by each Company and Subsidiary is either owned, free and clear of
all liens and encumbrances other than Permitted Liens (as defined below), or
are (i) used under capital leases reflected on such consolidated balance sheet
or (ii) used under operating leases. All such leases are valid and in full
force and effect and enforceable in accordance with their terms and have not
been further supplemented, amended or modified. No Company or Subsidiary has
received any notice of, and there exists no event of default, or event,
occurrence, condition or act, including, without limitation, the execution and
delivery of this Agreement and the consummation of the transactions
contemplated herein, which constitutes or would constitute (with notice or
lapse of time or both) a default in any respect under any such lease. All of
the equipment and tangible personal property owned or leased by each Company
and Subsidiary is in good operating condition and repair, subject to normal
wear and tear, none of such assets is in need of maintenance or repairs except
for ordinary, routine maintenance and such assets are suitable for and
operating according to their intended use in accordance with industry
standards.
Section 3.21 Intellectual Property. Schedule 3.21 contains a complete
and accurate schedule of all trade names, trademarks, service marks, patents
and copyrights (including any registrations or pending applications for
registration of any of the foregoing), trade secrets, inventions, processes,
formulae, technology, technical data, information and know-how, and all
licenses or other rights relating to any of the foregoing that are attributable
to the conduct of, used in, or related to, the operations of each Company and
Subsidiary (collectively, the "Intangible Property"). Except as set forth on
Schedule 3.21, with respect to each Company and Subsidiary (i) such Company or
Subsidiary has the sole and exclusive good, valid and transferable title with
respect to the Intangible Property, (ii) no royalties or other consideration is
required in connection with such Company's or Subsidiary's use and enjoyment of
the Intangible Property and (iii) no claim has been asserted by any person
against such Company or Subsidiary with respect to the ownership or use of any
Intangible Property by such Company or Subsidiary nor has such Company or
Subsidiary asserted any similar claim against any person, and to the best
knowledge of the Companies, there exists no valid basis for any such claim.
Section 3.22 Software. Schedule 3.22 contains a complete and accurate
list of all computer software, databases and programs utilized by each Company
and Subsidiary in the conduct of its business. Except as set forth on Schedule
3.22 all such computer software, databases and programs are owned (or will be
owned on the Closing Date) by, or is licensed to (or will be licensed to), such
Company or Subsidiary, without any restrictions thereon.
Section 3.23 Contracts.
(a) Schedule 3.23 sets forth a complete and accurate list of all
contracts, agreements, arrangements and other instruments to which any Company
or Subsidiary is a party or by which it or any of its assets are bound
(hereinafter referred to collectively as the "Contracts"). Each of the
Contracts is in full force and effect and enforceable in accordance with its
terms. No Company or Subsidiary has received notice of cancellation of or
intent to cancel any of the Contracts. There exists no event of default or
occurrence, condition or act on the part of any Company or Subsidiary or, to
the best knowledge of the Companies, on the part of the other party to such
Contracts which constitutes or would constitute (with notice or lapse of time
or both) a breach under, or cause or permit acceleration of, any obligation of
any Company or Subsidiary. Except as set forth in Schedule 3.23 no consent of
any other party to the Contracts is required in connection with the execution,
delivery and performance of this Agreement by any Seller or any Company.
(b) Except as set forth on Schedule 3.23(b), no Company or
Subsidiary is a party to or bound by any agreement which limits the freedom of
any Company or Subsidiary to compete in any line of business or with any person.
Section 3.24 Inventory. Schedule 3.24 sets forth a complete and
accurate list of the inventory, by product line, of each Company and Subsidiary
as of December 31, 1996. All inventory (including human blood plasma and
immunogen and red blood cells) of each Company and Subsidiary, whether
reflected in the Financial Statements or otherwise, consists of a quality and
quantity usable in the ordinary course of business and saleable as currently
labeled and classified in the inventory records, except for items of obsolete
materials and materials of below-standard quality, all of which have been
written off or down to fair market value in the Financial Statements.
Section 3.25 Major Customers and Suppliers. Schedule 3.25 lists (i)
the names of the five largest customers (by revenues generated) for each
Company and each Subsidiary and the amount of revenues generated by each of
them during the twelve months ended December 31, 1996 and (ii) the names of the
five largest suppliers of each Company and each Subsidiary during the twelve
months ended December 31, 1996 and the approximate total purchases by each
Company and each Subsidiary from each such supplier during such period. To the
best knowledge of the Companies, except as set forth in Schedule 3.25, there
have been no adverse changes in the relationships between any Company or
Subsidiary and the customers, suppliers and donors of such Company or
Subsidiary listed on Schedule 3.25 since December 31, 1995.
Section 3.26 Directors, Officers and Key Employees. Schedule 3.26
sets forth a complete and accurate list of the names and titles of all
directors, officers and key employees of each Company and Subsidiary.
Section 3.27 Title to Properties; Liens. Each Company and Subsidiary
has good, valid and marketable title to all of its assets, free and clear of
any lien, charge or other encumbrance, except for (a) such liens or other
encumbrances specifically set forth on Schedule 3.27 and (b) liens for current
Taxes not yet due and payable.
Section 3.28 Intentionally Omitted.
Section 3.29 Transactions with Affiliates. Except as set forth on
Schedule 3.29, no officer, director or stockholder of any Company or Subsidiary
(a) has borrowed money from, or loaned money to, any Company or Subsidiary, (b)
is a party to any contract with any Company or Subsidiary, (c) has asserted or
threatened to assert any claim against any Company or Subsidiary or (d) is
engaged in any transaction with any Company or Subsidiary.
Section 3.30 Valid Transfer. At the Closing, (i) the Asset Companies
will convey to Newco good title to the Assets, free and clear of any liens,
claims, charges, encumbrances, security interests, pledges, equities,
assessments or restrictions of any nature whatsoever and (ii) the Stockholders
of Nations and Bloomington will convey to Seramune good title to the Stock,
free and clear of any liens, claims, charges, encumbrances, security interests,
pledges, equities, assessments or restrictions of any nature whatsoever. The
form of certificates representing the Stock to be delivered to Seramune at
Closing shall conform to all applicable requirements of the state of
incorporation of Nations and Bloomington, respectively.
Section 3.31 Bulk Sales. The Bulk Sales laws of the jurisdictions in
which each Company and Subsidiary conducts business are not applicable to the
transactions contemplated hereby.
Section 3.32 Absence of Certain Practices. To the best knowledge of
the Companies, none of the Sellers, the Companies, the Subsidiaries, or any
director, officer, agent, employee or other person acting on their behalf, has
given or agreed to give any gift or similar benefit of more than nominal value
to any customer, supplier, or governmental employee or official or any other
person who is or may be in a position to help or hinder any Company or
Subsidiary or assist any Company or Subsidiary in connection with any proposed
transaction involving any Company or Subsidiary, which gift or similar benefit,
if not given in the past or not continued to be given in the future, would have
materially and adversely affected the business or prospects of any Company or
Subsidiary. To the best knowledge of the Companies, no Seller, Company,
Subsidiary, or any director, officer, agent, employee, or other person acting
on behalf of any Company or Subsidiary has (i) used any corporate or other
funds for unlawful contributions, payments, gifts, or entertainment, or made
any unlawful expenditures relating to political activity to, or on behalf of,
government officials or others or (ii) accepted or received any unlawful
contributions, payments, gifts or expenditures.
Section 3.33 Accounts Payable and Accrued Expenses. All accounts
payable ("Accounts Payable") and accrued expenses ("Accrued Expenses") on the
Balance Sheet arose from bona fide transactions in the ordinary course of the
Companies' business.
Section 3.34 Accounts Receivable. All accounts receivable on the
Balance Sheet arose from bona fide transactions in the ordinary course of the
Companies' business and are collectible at the face amount thereof in the
ordinary course of business.
Section 3.35 Identification of Depositories and Authority. Schedule
3.35 lists the names and addresses of all banks, trust companies, savings and
loan associations and other financial institutions in which any Company or
Subsidiary has accounts, deposits or safe deposit boxes and the signatories
thereunder.
Section 3.36 WARN Act. None of the Sellers, the Companies or the
Subsidiaries has violated the Worker Adjustment and Retraining Notification Act
of 1988.
Section 3.37 Disclosure. No representation, warranty or statement
made by any Seller or Company in (i) this Agreement, (ii) the Schedules
attached hereto, or (iii) in any other written materials furnished or to be
furnished by any Seller or Company to Buyers or their representatives,
attorneys and accountants pursuant to this Agreement, contains or will contain
any untrue statement of a material fact, or omits or will omit to state a
material fact required to be stated herein or therein or necessary to make the
statements contained herein or therein, in light of the circumstances under
which they were made, not misleading.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF BUYERS
Each Buyer represents and warrants to each Seller, as follows:
Section 4.01 Organization and Qualification. Such Buyer is a
corporation duly organized, validly existing and in good standing under the
laws of the state of Delaware. Such Buyer has all corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted, except where the failure to be so organized, existing
and in good standing or to have such power and authority would not have a
material adverse effect on such Buyer. Such Buyer is duly qualified or
licensed to do business and in good standing in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary, except where
failure to be so duly qualified or licensed and in good standing would not in
the aggregate have a material adverse effect on such Buyer.
Section 4.02 Authority. Such Buyer has the requisite corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of such
Buyer and no other corporate proceedings on the part of such Buyer are
necessary to authorize this Agreement or to consummate the transactions so
contemplated. This Agreement has been duly executed and delivered by such
Buyer and, assuming this Agreement constitutes a valid and binding obligation
of each Seller and each Company, constitutes a valid and binding obligation of
such Buyer, enforceable against such Buyer in accordance with its terms.
Section 4.03 Consents and Approvals; No Violations. Neither the
execution, delivery or performance of this Agreement by such Buyer nor the
consummation by such Buyer of the transactions contemplated hereby nor
compliance by such Buyer with any of the provisions hereof will (i) conflict
with or result in any breach of any provision of the charter or by-laws of such
Buyer, (ii) require any filing with, or permit, authorization, consent or
approval of, any Governmental Entity (except where the failure to obtain such
permits, authorizations, consents or approvals or to make such filings would
not have a material adverse effect on such Buyer), (iii) result in a violation
or breach of, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration) under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, lease, license, contract, agreement or
other instrument or obligation to which such Buyer is a party or by which any
of its properties or assets may be bound or (iv) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to such Buyer or any
of its properties or assets, except in the case of (iii) or (iv) for
violations, breaches or defaults which would not, individually or in the
aggregate, have a material adverse effect on such Buyer.
ARTICLE V.
CERTAIN COVENANTS
Section 5.01 Access to Information. From the date hereof until the
Closing, the Buyers and the Buyers' counsel, accountants, representatives and
agents shall have full access, upon reasonable notice and during normal
business hours, to all personnel, offices, properties, books and records of
each Company and, upon reasonable notice, shall be furnished all relevant
documents, records and other information concerning the business, finances and
properties of each Company that they may reasonably request (including
obtaining copies thereof).
Section 5.02 Conduct of Business in Normal Course. Each Seller and
Company covenants and agrees, except as otherwise expressly contemplated by
this Agreement or as specifically consented to in writing by the Buyers, from
and after the date of this Agreement and until the Closing Date, to use
reasonable efforts consistent with good business judgment to preserve the
Companies' and the Subsidiaries' present business organization intact, keep
available the services of its present employees, preserve its present
relationships with entities or persons having business dealings with it and
generally operate its business in the ordinary and regular course consistent
with its prior practices, maintain its books and records in accordance with
good business practice, on a basis consistent with prior practice and in
accordance with U.S. generally accepted accounting principles, and maintain all
certificates, licenses and permits necessary for the conduct of its business as
currently conducted. Each Seller and Company covenants and agrees that, except
as otherwise expressly contemplated by this Agreement or as specifically
consented to in writing by the Buyers, from and after the date of this
Agreement and until the Closing Date, no Seller or Company shall undertake or
permit the following to occur with respect to any Company (including any
Subsidiary):
(a) action which would result in a material adverse change,
whether direct or indirect, in the business, operations, condition (financial
or otherwise), prospects, liabilities or assets of any Company, whether or not
insured;
(b) transaction not in the ordinary course of business, including
without limitation any sale of all or substantially all of the assets of any
Company or any merger of any Company and any other entity;
(c) material damage, destruction or loss, whether or not insured;
(d) unfulfilled commitment as of the date of this Agreement
requiring expenditures exceeding $5,000 in the aggregate for all Companies
(excluding commitments expressly described elsewhere in this Agreement or the
Schedules hereto);
(e) failure to maintain in full force and effect substantially
the same level and types of insurance coverage as in effect on September 30,
1996, or destruction, damage to, or loss of any asset of any Company (whether
or not covered by insurance) that materially and adversely affects the
business, operations, condition (financial or otherwise), prospects,
liabilities or assets of any Company;
(f) material change in accounting principles, methods or
practices, investment practices, claims, payment and processing practices or
policies regarding intercompany transactions;
(g) material revaluation of any assets or material write down of
the value of any inventory;
(h) any declaration, setting aside, or payment of a dividend or
other distribution in respect of its capital stock, or any direct or indirect
redemption, purchase or other acquisition of any shares of its capital stock;
(i) issuance or sale of any shares of capital stock or of any
other equity security or of any security convertible into or exchangeable for
equity securities;
(j) amendment to its Certificate of Incorporation or By-laws;
(k) sale, assignment or transfer of any tangible or intangible
asset, including any rights to intellectual property, except in the ordinary
course of business;
(l) disposition of or lapse of any patent, trademark, tradename,
servicemark or copyright or any application for the foregoing, or disposition
of any technology, software or know-how, or any license, permit or
authorization to use any of the foregoing;
(m) mortgage, pledge or other encumbrance, including liens and
security interests, of any tangible or intangible asset;
(n) discharge or satisfaction of any lien or encumbrance or
payment or cancellation of any liability other than payment of current
liabilities in the ordinary course of business;
(o) cancellation of any debt or waiver or release of any material
contract, right or claim, except for cancellations, waivers and releases in the
ordinary course of business which do not exceed $5,000 in the aggregate;
(p) any indebtedness incurred for borrowed money or any
commitment to borrow money, any capital expenditure or capital commitment
requiring an expenditure of monies in the future, any incurrence of a
contingent liability or any guaranty or commitment to guaranty the indebtedness
of others entered into, by any Company, other than customary transactions in
the ordinary course of business not in excess of $5,000 in the aggregate for
all Companies;
(q) amendment, termination or revocation of, or a failure in any
material respect to perform obligations or the occurrence of any default under,
any material contract or agreement to which any Company is, or as of September
30, 1996 was, a party or of any material license, permit or franchise required
for the continued operation of any business conducted by any Company on
September 30, 1996;
(r) increase or commitment to the increase of the salary or other
compensation payable or to become payable to any of its officers, directors or
employees, agent or independent contractors, or the payment of any bonus to the
foregoing persons except in the ordinary course of business and consistent with
past practice and applicable policies and procedures of any Company;
(s) changes to any product or establishment licenses held by any
Company or in the regulatory or licensing status of any Company; or
(t) agreement or understanding to take any of the actions
described above in this Section 5.02.
Section 5.03 Consent. Each of the parties hereto will use its best
efforts and shall fully cooperate with each other party to make promptly all
registrations, filings and applications, give all notices and obtain all
governmental and third party consents, permits, approvals, orders, authorities,
qualifications, and waivers necessary for the consummation of the transactions
contemplated hereby or that thereafter may be necessary to effectuate the
transfer or renewal of any other license, approval or authorization
(collectively, the "Consents").
Section 5.04 Further Assurances. Subject to the terms and conditions of
this Agreement, each of the parties hereto will use its best efforts to take,
or cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or advisable under applicable law and regulations to
consummate and make effective the transactions contemplated pursuant to this
Agreement.
Section 5.05 No Solicitation. From the date hereof to the Closing Date,
each Seller and Company agrees that neither they nor any of their stockholders,
employees, officers, directors or affiliates shall solicit or encourage any
third party to offer to acquire the Companies, Business, Stock, Assets or
related assets contemplated herein, or disclose directly or indirectly to any
third party any information not customarily disclosed to the public concerning
the business of the Companies or otherwise negotiate with, facilitate,
encourage or assist any third party preparing to make an offer or enter into
any agreement with any third party providing for any transaction involving a
business combination, equity investment or sale of a significant amount of the
Companies, Business, Stock, Assets or related assets contemplated herein.
Section 5.06 Notification of Certain Matters. Each party hereto agrees
to give prompt notice to the other of (i) the occurrence, or failure to occur,
of any event which occurrence or failure to occur would be likely to cause any
of its representations or warranties contained in this Agreement to be untrue
or inaccurate in any material respect at any time from the date hereof to the
Closing Date, and (ii) any material failure on its part to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied
by it hereunder; provided, however, that the delivery of or the failure to
deliver any notice pursuant to this Section 5.06 shall not limit or otherwise
affect the remedies available hereunder to the party receiving such notice.
Section 5.07 Supplements to Schedules. Prior to the Closing, the Sellers
and Companies will supplement or amend the Schedules hereto with respect to any
matter hereafter arising which, if existing or occurring at the date of this
Agreement, would have been required to be set forth or described in such
Schedules. No supplement or amendment of the Schedules made pursuant to this
Section shall be deemed to cure any breach of any representation or warranty
made in this Agreement unless either Buyer specifically agrees thereto in
writing.
Section 5.08 Confidentiality.
(a) Except as otherwise provided in this Section 5.08, each Buyer,
on the one hand, and each Seller and Company (the "Selling Group"), on the
other hand, shall keep confidential the existence and terms of this Agreement,
as well as all information and records, whether written or oral, which were
obtained, directly or indirectly, from the other party concerning the business
of the other party ("Confidential Information"). Prior to the Closing, each
Buyer and the Selling Group shall use the Confidential Information solely in
connection with its analysis and review of the transactions contemplated by
this Agreement; provided that upon and subsequent to the Closing all
Confidential Information provided to the Buyers by the Selling Group shall
become the property of the Buyers, and the Buyers shall have no further
obligations pursuant to this Section 5.08. Subsequent to the Closing, the
obligations of the Selling Group under this Section 5.08 shall continue in
effect and all confidential information previously provided by the Selling
Group to the Buyers will constitute Confidential Information which the Selling
Group shall keep confidential in accordance with the terms of this Section
5.08.
(b) Each Buyer and the Selling Group may disclose Confidential
Information to any of its directors, officers, employees, agents, financing
sources, and advisors (each a "Representative" and, collectively, the
"Representatives") who need to know such Confidential Information, for the
purpose of assisting such party in connection with the transactions
contemplated by this Agreement; provided, however, that prior to making such
disclosure, such party shall require each such Representative to be bound by
the provisions of this Section 5.08 to the same extent as if they were parties
to this Agreement and such party shall be responsible for any breach of this
Agreement by any such Representative. Each Buyer and the Selling Group (the
"Disclosing Party") may disclose Confidential Information if required (upon the
receipt of an opinion of counsel) by legal process or by operation of
applicable law; provided, however, that the Disclosing Party shall first
promptly advise and consult with the other party (the "Subject Party") and its
counsel concerning the information the Disclosing Party proposes to disclose.
The Subject Party shall have the right to seek an appropriate protective order
or other remedy concerning the Confidential Information that the Disclosing
Party proposes to disclose, and the Disclosing Party will cooperate with the
Subject Party to obtain such protective order. In the event that such
protective order or other remedy is not obtained by the Subject Party, the
Disclosing Party will disclose only that portion of the Confidential
Information which, in the written opinion of the Disclosing Party's counsel,
the Disclosing Party is legally required to disclose, and the
Disclosing Party will use its best efforts to obtain assurances that
confidential treatment will be accorded to such information.
(c) The obligations of each Buyer and the Selling Group under this
Section 5.08 do not apply to information which (i) at the time of disclosure is
generally available to and known by the public other than as a result of
disclosure in violation of clause (a) or (b) of this Section 5.08, (ii) was or
becomes available to a party on a non-confidential basis from a source other
than the other party or its agents or advisors; provided, however, that such
source is not bound by a confidentiality agreement or obligation of secrecy in
respect thereof or (iii) may be disclosed by Buyers pursuant to Section 13.01
hereof.
(d) In the event that the transactions contemplated hereby are not
consummated, all Confidential Information whether or not then in each parties'
possession, and any copies thereof, or notes or extracts therefrom shall be
returned to the other party, without retaining any copies thereof, and each
party shall destroy, as soon as practicable, all copies of any analyses,
studies, compilations or other documents prepared by it or any of its
Representatives to the extent that they contain, reflect or are generated from
any Confidential Information.
(e) Each party acknowledges and agrees that any breach by it of the
provisions of this Section 5.08 will cause the other party irreparable injury
and damage, for which it cannot be adequately compensated in damages. Each
party, therefore, expressly agrees that the other party shall be entitled to
seek injunctive relief and/or other equitable relief to prevent any
anticipatory breach or continuing breach of the provisions of this Section
5.08, or any part thereof, and to secure their enforcement. Nothing herein
shall be construed as a waiver by a party of any right it may now have or
hereafter acquire to monetary damages by reason of any injury to its property,
business or reputation or otherwise arising out of any wrongful act or omission
of a party under the provisions of this Section 5.08.
Section 5.09 Names of Centers. Each Seller agrees that it will cooperate
fully with the Buyers in preparing all filings and forms, if any, transferring
the rights to use the name(s) of the Centers to Buyers.
Section 5.10 Donors. Each of the Asset Companies agrees to assign to
Newco or Newco's designee effective as of the Closing Date each of its
contracts or arrangements relating to its donors (other than the Decatur
Donor). To the extent any such donor contracts or arrangements are not
assignable, each of the Asset Companies agrees that it shall release each of
its donors from their present contracts or arrangements effective as of the
Closing Date and will use its best efforts to ensure that such donors sign
similar contracts or arrangements with Newco or Newco's designee effective as
of the Closing Date.
ARTICLE VI.
CONDITIONS TO EACH PARTY'S OBLIGATIONS
The respective obligations of each party hereunder are subject to the
satisfaction, at or before the Closing, of the conditions set out below.
Section 6.01 Governmental Authorizations; Consents. Except as set forth
on Schedule 6.01, the Sellers and the Buyers shall have obtained all Consents
which are required for the consummation of the transactions contemplated under
this Agreement and for Buyers to be able to continue to operate the Centers and
draw and ship human blood plasma from the Centers immediately after
consummation of this Agreement, in accordance with all applicable regulations.
Section 6.02 Absence of Litigation. There shall not have been issued
and be in effect any order of any court or tribunal of competent jurisdiction
which (i) prohibits or makes illegal the purchase by the Buyers of the Assets
or the Stock, (ii) would require the divestiture by the Buyers of all or a
material portion of the Assets, the Stock, the Business or the assets of either
Buyer as a result of the transactions contemplated hereby, or (iii) would
impose limitations on the ability of either Buyer to effectively exercise full
rights of ownership of the Assets, the Stock or of a material portion of the
Business as a result of the transactions contemplated hereby.
Section 6.03 No Injunction. On the Closing Date there shall be no
effective injunction, writ, preliminary restraining order or any order of any
nature issued by a court of competent jurisdiction directing that the
transactions provided for herein or any of them not be consummated as so
provided or imposing any conditions on the consummation of the transactions
contemplated hereby which either Buyer deems unacceptable in its sole
discretion.
ARTICLE VII.
CONDITIONS PRECEDENT TO BUYERS' OBLIGATIONS
The obligation of the Buyers to purchase the Assets and the Stock is
subject to the satisfaction, at or before the Closing, of the conditions set
out below. The benefit of these conditions are for the Buyers only and may be
waived in writing by any Buyer at any time in its sole discretion.
Section 7.01 Accuracy of Representations and Warranties. The
representations and warranties of each Seller and Company shall be true and
correct in all respects as of the date when made and as of Closing Date as
though made at that time, and the Buyers shall have received certificates
attesting thereto from each Seller and Company signed by Savoy and a duly
authorized officer of each Company, respectively.
Section 7.02 Performance by Sellers and the Companies. Each Seller and
Company shall have performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by this Agreement,
including, without limitation, the deliveries required under Section 2.02(c)
and (d), and the Buyers shall have received certificates from each Seller and
Company signed by Savoy and a duly authorized officer of each Company,
respectively.
Section 7.03 Opinion of Sellers' Counsel. Buyers shall have received
from counsel to Sellers, an opinion of counsel satisfactory to Buyers, dated as
of the Closing Date and addressed to the Buyers in the form annexed hereto as
Exhibit E.
Section 7.04 Non-Competition Agreements. Buyers shall have entered
into a non-competition agreement, effective as of the Closing Date and in the
form of Exhibit G, with Savoy.
Section 7.05 QPP Certification. Except as set forth on Schedule 7.05,
each Center shall be QPP certified and licensed by the FDA to collect and ship
plasma under Section 3.21 of the Public Health Services Act and 21 CFR Part
600-640.76 as of the Closing Date.
Section 7.06 Investigations. No investigation of the Companies by the
Buyers nor any document delivered to the Buyers as contemplated by this
Agreement, shall have revealed any facts or circumstances which, in the sole
judgement either Buyer, reflect in a material adverse way on any Company, the
Assets, the Stock or the Business.
Section 7.07 Casualty Losses; Material Change. Except as set forth on
Schedule 7.07, since September 30, 1996, no Company shall have suffered (i) any
material casualty loss, (ii) any material business interruption, (iii) any
material labor difficulty or customer boycott or (iv) any material adverse
change in its business, operations, prospects or financial condition.
Section 7.08 Customer Consents. The consent of each customer of each
Company listed on Schedule 7.08 including, but not limited to, Bayer, Baxter
and Alpha, shall have been obtained to the transfer of the ownership of the
Assets and the Stock.
Section 7.09 Assets. The Assets shall be free and clear of liens,
charges or encumbrances, except for those set forth on Schedule 3.27.
Section 7.10 Standard Operating Procedures. The Buyers shall
have received true and correct copies of each Companies' standard operating
procedures accepted by the FDA and required by its customers.
Section 7.11 Board of Directors. The Board of Directors of each of
Nations and Bloomington and their respective Subsidiaries shall have duly
resigned as of the Closing Date.
Section 7.12 Employment Agreement. Seramune and Savoy shall have
entered into a mutually satisfactory employment agreement.
Section 7.13 Termination of Related Party Agreements. All existing
agreements between each Company and Subsidiary on the one hand and Savoy or
business or personal affiliates of any Company or Subsidiary or Savoy on the
other hand, other than those set forth on Schedule 7.13 shall have been
cancelled.
Section 7.14 Repayment of Indebtedness. Prior to the Closing Date
or simultaneously herewith, Savoy shall have repaid in full to each Company,
(including its Subsidiaries) all amounts owing by Savoy or business or personal
affiliates of any Company or Subsidiary or Savoy to such Company (including its
Subsidiaries).
Section 7.15 Real Estate Leases. The Buyer shall have received
assignments and assumptions of leases in the form attached hereto as Exhibit F,
and related estoppel certificates, lien waivers and consents of landlords,
relating to the leased premises listed on Schedule 3.19.
Section 7.16 Investment Representations. The Buyer shall have
received investment representations in the form attached hereto as Exhibit H
from each of the recipient(s) of the Note(s).
Section 7.17 Certain Contracts. The Buyer shall have received copies
of legal, valid and binding contracts, satisfactory to Buyers, for the sale and
purchase of all of the plasma collected at the Lawton Center and the Waco
Center.
Section 7.18 Milwaukee Center. The Buyers shall have received (i)
evidence satisfactory to them of the sale by Sellers of the real property
located at 2111 West North Avenue, Milwaukee, Wisconsin to Plasma Rentals
L.L.C. and (ii) a legal, valid and binding lease, satisfactory to Buyers,
between Plasma Rentals L.L.C., as landlord, and Nations, as tenant, with
respect to the real property located at 2111 West North Avenue, Milwaukee,
Wisconsin.
Section 7.19 Transition Agreement. The Buyers shall have entered into
a transition agreement with Sellers in the form attached hereto as Exhibit I.
ARTICLE VIII.
CONDITIONS PRECEDENT TO SELLERS' OBLIGATIONS.
The obligation of the Sellers to sell the Assets and the Stock is subject
to the satisfaction, at or before the Closing, of the conditions set out below.
The benefit of these conditions are for the Sellers only and may be waived by
any Seller in writing at any time in its sole discretion.
Section 8.01 Accuracy of Representations and Warranties. The
representations and warranties of each Buyer shall be true and correct in all
respects as of the date when made and as of the Closing Date, as though made at
that time, and the Sellers shall have received a certificate attesting thereto
signed by a duly authorized officer of each Buyer.
Section 8.02 Performance by Buyer. Each Buyer shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement, including, without limitation, the
deliveries required by Section 2.02(a) and (b), and the Sellers shall have
received a certificate of a duly authorized officer of each Buyer to such
effect.
ARTICLE IX.
SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS.
Except as otherwise specifically provided for herein, the representations,
warranties, covenants and agreements of each Buyer, each Seller and each
Company included or provided for herein, or in other instruments or agreements
delivered or to be delivered at or prior to Closing in connection herewith,
including the representations and warranties of all entities or persons made in
the certificates to be delivered to the Buyers pursuant hereto (an "Ancillary
Document"), and the obligation of each Buyer and each Seller to indemnify on
account of a breach or violation thereof shall survive for a period of thirty-
six (36) months following the Closing Date (or such longer period as set forth
in the succeeding sentences). Similarly, the obligation of each Seller to
indemnify the Buyer with respect to any liability of the Companies (other than
Assumed Indebtedness), shall survive until such liability or claim is fully
paid and discharged. There shall be no limit on the survival of the
indemnification obligations of each Seller for breaches of the representations
or warranties made by each Seller and Company as to the transfer of legal and
valid title to the Assets and Stock and to environmental matters. The
indemnification obligations of each Seller for breaches of the representations
or warranties made by each Seller and Company with respect to Taxes or Tax
matters shall survive until the expiration of the applicable statute of
limitations. Notwithstanding anything herein to the contrary, if, prior to the
expiration of any indemnification period, any Buyer, or any Seller, as the case
may be, shall have been notified of a claim for indemnity hereunder and such
claim shall not have been finally resolved before the expiration of such
period, any representation, warranty, covenant or agreement that is the basis
for such claim shall continue to survive and shall remain a basis for indemnity
as to such claim until such claim is finally resolved. All statements
contained herein and in the Schedules, the Financial Statements and the
Ancillary Documents shall be deemed representations and warranties for all
purposes of this Agreement. The respective representations and warranties of
each Seller, each Company and each Buyer contained herein or in any other
documents covered in the preceding sentence shall not be deemed waived or
otherwise affected by any investigation made by any party hereto or any
amendment or supplement to the schedules or exhibits hereto occurring after the
signing of this Agreement.
ARTICLE X.
INDEMNIFICATION.
Section 10.01 General Indemnity.
Subject to the limitations and other provisions of Article IX and this
Article X, each Seller agrees, jointly and severally, to indemnify and hold
harmless each Buyer, their respective Affiliates (as defined below), Nations,
Decatur, Bloomington and the successors and assigns of each of them, including
entities providing financing to the Buyers in their capacity as successors or
assigns of the Buyers, from, against and in respect of any and all liabilities
(whether accrued, contingent or otherwise), damages, deficiencies, costs,
claims, judgments, amounts paid in settlement, interest, penalties,
assessments, out-of-pocket expenses (including reasonable attorneys' and
auditors' fees and disbursements) or losses resulting from, incurred in
connection with or arising out of (i) any matter set forth on Schedule 3.08,
(ii) the failure of the Companies or the Subsidiaries (or any predecessor) to
have maintained professional and general liability insurance or workers
compensation insurance prior to the date hereof, (iii) any breach or alleged
breach of any representation, warranty, covenant or agreement of each Seller
and Company, or any breach or alleged breach of the representations and
warranties made in the Ancillary Documents and any actual or threatened action
or proceeding in connection with any breach or alleged breach, (iv) any
litigation to which the Buyers or any of their Affiliates is or becomes subject
relating to the conduct of the Business on or prior to the Closing Date, (v)
liabilities of the Companies, the Subsidiaries or Sellers and related liens,
charges and encumbrances not specifically assumed in writing by Buyers
hereunder and (vi) the failure of the Companies or the Subsidiaries to have
been duly qualified or licensed to do business in good standing in each
jurisdiction in which the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification or licensing
necessary ("Losses"). Each Buyer shall indemnify and hold harmless each
Seller, their respective Affiliates and their successors and assigns from,
against and in respect of any and all liabilities (whether accrued, contingent
or otherwise), damages, deficiencies, costs, claims, judgments, amounts paid in
settlement, interest, penalties, assessments, out-of-pocket expenses (including
reasonable attorneys' and auditors' fees and disbursements) or losses resulting
from, incurred in connection with or arising out of any breach or alleged
breach of any representation, warranty, covenant or agreement of each Buyer and
any actual or threatened action or proceeding in connection therewith. The
party or parties being indemnified are referred to herein as the "Indemnitee"
and the indemnifying party is referred to herein as the "Indemnitor". The term
"Affiliate" or "Affiliated" or any similar term shall mean a person that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, a specified person.
Section 10.02 Indemnification Procedure.
(a) Any party who receives notice of a potential claim that may,
in the judgment of such party, result in a Loss shall use all reasonable
efforts to provide the parties hereto notice thereof, provided that failure or
delay or alleged delay in providing such notice shall not adversely affect such
party's right to indemnification hereunder. In the event that any party shall
incur or suffer any Losses in respect of which indemnification may be sought by
such party hereunder, the Indemnitee shall assert a claim for indemnification
by written notice (a "Notice") to the Indemnitor stating the nature and basis
of such claim. In the case of Losses arising by reason of any third party
claim, the Notice shall be given within 30 days of the filing or other written
assertion of any such claim against the Indemnitee, but the failure of the
Indemnitee to give the Notice within such time period shall not relieve the
Indemnitor of any liability that the Indemnitor may have to the Indemnitee.
(b) In the case of third party claims for which indemnification
is sought, the Indemnitor shall have the option (i) to conduct any proceedings
or negotiations in connection therewith, (ii) to take all other steps to settle
or defend any such claim (provided that the Indemnitor shall not settle any
such claim without the consent of the Indemnitee which consent shall not be
unreasonably withheld) and (iii) to employ counsel to contest any such claim or
liability in the name of the Indemnitee or otherwise. In any event, the
Indemnitee shall be entitled to participate at its own expense and by its own
counsel in any proceedings relating to any third party claim. The Indemnitor
shall, within 20 days of receipt of the Notice, notify the Indemnitee of its
intention to assume the defense of such claim. If (i) the Indemnitor shall
decline to assume the defense of any such claim, (ii) the Indemnitor shall fail
to notify the Indemnitee within 20 days after receipt of the Notice of the
Indemnitor's election to defend such claim or (iii) the Indemnitee shall have
reasonably concluded that there may be defenses available to it which are
different from or in addition to those available to the Indemnitor or a
conflict exists between the Indemnitor and the Indemnitee (in which case the
Indemnitor shall not have the right to direct the defense of such action on
behalf of the Indemnitee), the Indemnitee shall defend against such claim and
the Indemnitee may settle such claim without the consent of the Indemnitor, and
Indemnitor may not challenge the reasonableness of any such settlement. The
expenses of all proceedings, contests or lawsuits in respect of such claims
shall be borne and paid by the Indemnitor and the Indemnitor shall pay the
Indemnitee, in immediately available funds, the amount of any Losses, as such
Losses are incurred. Regardless of which party shall assume the defense of the
claim, the parties agree to cooperate fully with one another in connection
therewith. In the event that any Losses incurred by the Indemnitee do not
involve payment by the Indemnitee of a third party claim, then, the Indemnitor
shall within 10 days after agreement on the amount of Losses or the occurrence
of a final non-appealable determination of such amount pay to the Indemnitee,
in immediately available funds, the amount of such Losses. Anything in this
Article X to the contrary notwithstanding, the Indemnitor shall not, without
the Indemnitee's prior written consent, settle or compromise any claim or
consent to entry of any judgment in respect thereof which imposes any future
obligation on the Indemnitee or which does not include, as an unconditional
term thereof, the giving by the claimant or plaintiff to the Indemnitee, a
release from all liability in respect of such claim.
(c) The Purchase Price provided for herein shall be deemed
excessive to the extent of the amount of any Losses for which the Sellers are
obligated to indemnify the Buyers, and the Buyers shall be entitled to offset
the amount of such Losses from amounts payable by Buyers pursuant to the Full
Earn-Out (or any advances on account thereof), the Note, the Adjustment Amount
and the Balance Sheet Adjustment.
(d) The remedies provided for in this Agreement shall not be
exclusive of any other rights or remedies available to one party against the
other, either at law or in equity.
ARTICLE XI.
TERMINATION.
Section 11.01 Right to Terminate. Notwithstanding anything to the
contrary set forth in this Agreement, this Agreement may be terminated and the
transactions contemplated herein abandoned at any time prior to the Closing:
(i) by mutual consent of any Buyer, on the one hand, and any
Seller, on the other;
(ii) by any Buyer or any Seller if the Closing shall not have
occurred by April 30, 1997, provided, however, that the
right to terminate this Agreement under this Section 11.01
shall not be available to any party whose failure to
fulfill any obligation under this Agreement has been the
cause of, or resulted in, the failure of the Closing Date
to occur on or before such date;
(iii) by any Buyer or any Seller if a court of competent
jurisdiction shall have issued an order, decree or ruling
permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this
Agreement, and such order, decree, ruling or other action
shall have become final and nonappealable;
(iv) by any Seller if any Buyer (x) breaches its
representations and warranties in any material respect, or
(y) fails to comply in any material respect with any of
its covenants or agreements contained herein; or
(v) by any Buyer if any Seller or any Company (x) breaches its
representations and warranties in any material respect, or
(y) fails to comply in any material respect with any of
its covenants or agreements contained herein.
Section 11.02 Obligations to Cease. In the event that this Agreement
shall be terminated pursuant to Section 11.01 hereof, all obligations of the
parties hereto under this Agreement shall terminate and there shall be no
liability of any party hereto to any other party except (i) for the obligations
with respect to confidentiality contained in Section 5.08 hereof, (ii) as set
forth in Section 13.02 hereof, and (iii) that nothing herein will relieve any
party from liability for any breach of this Agreement.
ARTICLE XII.
OBLIGATIONS AFTER THE CLOSING.
Section 12.01 Tax Returns. Sellers shall file, on behalf of each
Company and Subsidiary all Tax Returns for the periods ending before the
Closing Date, and shall pay all Taxes with respect to each Company and
Subsidiary for all periods through the Closing Date to the extent that these
Taxes exceed Taxes payable listed on the Final Balance Sheet. Buyers shall
have a reasonable opportunity to review any Tax Return prior to filing, which
have not been filed as of the Closing Date, for a reasonable period of time
prior to the filing thereof. Buyers shall be responsible for filing all Tax
Returns relating to Nations and Bloomington and their Subsidiaries for all
periods ending after the Closing Date.
Section 12.02 Access to Information. Each Buyer, on the one hand, and
each Seller on the other hand, shall provide the other with the right, at
reasonable times and upon reasonable notice, to have access to, and to copy and
use, any records or information and personnel which may be relevant in
connection with any audit, FDA inquiry or other examination by any authority,
or any judicial or administrative proceedings relating to the Assets, the
Companies and their Subsidiaries or the Centers. The party requesting
assistance hereunder shall reimburse the other party for reasonable expenses
incurred in providing such assistance. Any information obtained pursuant to
this Section shall be held in strict confidence and shall be used solely in
connection with the reason for which it was requested.
Section 12.03 Employees and Employee Benefits. Sellers shall use their
best efforts to make available to Buyers all employees of the Companies and the
Subsidiaries on the Closing Date. Buyers shall have no obligations to hire any
of the Companies or the Subsidiaries' employees. Sellers shall be solely
responsible for the satisfaction of all claims for benefits brought by or in
respect of any person who was an employee of the Companies or their
Subsidiaries immediately prior to the Closing under any Plan or any government
mandated benefits (worker's compensation and unemployment compensation) or
otherwise, which claims are based on occurrences prior to the Closing, or as a
result of the Closing, regardless of when notices of such claims were filed.
Sellers shall retain responsibility for and shall indemnify and hold Buyers
harmless with respect to all compensation payable, including with respect to
the benefits or other liabilities payable with respect to all Plans, relating
to employees of the Companies or their Subsidiaries who retired or terminated
employment prior to the Closing. Sellers shall have no responsibility to
provide benefits or government mandated benefits for claims arising out of
events that occurred after the Closing Date; however, Sellers shall remain
liable for any claims arising out of events that occurred prior to and on the
Closing Date.
On the Closing Date, Sellers shall retain or assume all liabilities of any
kind or description (including, without limitation, disability payments,
workers compensation awards and health benefits) with respect to any former
employees (including, without limitation, retirees and disabled persons) as of
the Closing Date.
As of the Closing, employees of the Companies and their Subsidiaries who
continue their employment with such entity shall not be restricted by the
provisions of any employment agreement or noncompetition agreement between any
such employee and Sellers or the Companies and their Subsidiaries, to the
extent that such agreement would restrict such employees from engaging in any
business conducted by such entity.
Section 12.04 Tax Audits. Each party shall have the right, at its own
expense, to control any audit or determination by any authority, initiate any
claim for refund or amended return, and contest, resolve and defend against any
assessment, notice of deficiency, or other adjustment or proposed adjustment of
Taxes for any taxable period for which that party is charged with
responsibility for filing a Tax Return under this Agreement; provided, however,
that no Seller, on the one hand, or any Buyer, on the other, shall have the
right to agree to any assessment, deficiency, settlement, or other adjustment
or proposed adjustment of Taxes that would adversely affect the interests of
the other without such other party's written consent, which consent shall not
be unreasonably withheld. Sellers shall notify Buyers, and Buyers shall notify
Sellers, as the case may be, if any taxing authority shall, upon audit or
otherwise, propose in writing an adjustment to tax items which could give rise
to a claim against or by Buyers.
Section 12.05 Further Assurances.
(a) Subject to the terms and conditions hereof, each Seller
agrees that after the Closing Date they will (i) execute and deliver such
documents to Buyers as Buyers may reasonably request in order to more
effectively vest in Buyers good title to the Stock and the Assets and to
consummate the transactions contemplated hereby and (ii) use their best efforts
to facilitate the preparation of the calculation, documentation and payment of
the adjustments required by Sections 1.05, 1.06, 1.07 and 1.08 hereof.
(b) Each Seller agrees to use his best efforts to assist Buyers
in the collection of accounts receivable included on the Balance Sheet.
(c) Registration Obligations. Serologicals agrees, to the extent
the Note is called for redemption, to use all reasonable efforts to register
for resale the shares of its common stock issuable upon conversion of the
Note(s); provided, however, the Company's obligations hereunder to effect such
registration shall be deemed satisfied if at the time the holder of the Note(s)
may sell the underlying shares of common stock pursuant to Rule 144 under the
Securities Act of 1933, as amended.
Section 12.06 Bulk Sales Compliance. The Buyers hereby waive compliance
by the Sellers with the provisions of the Bulk Sales law of any state, if
applicable to the transactions hereunder, and the Sellers agree to indemnify
and hold the Buyers harmless from any liability incurred as a result of the
failure to so comply.
Section 12.07 Inventory. The Sellers will deliver, within 45 days from
the Closing Date, a complete and accurate list of the inventory by product
lines of each Company and Subsidiary as of September 30, 1996.
ARTICLE XIII.
MISCELLANEOUS.
Section 13.01 Publicity. Sellers acknowledge that Buyers may, or may
be required by applicable law to, make a public announcement or disclosure of
this transaction, including the price and terms hereof, and Sellers consent to
any such announcement or disclosure.
Section 13.02 Costs. The Buyers on the one hand and the Sellers on the
other each represent to the other that it has not used a broker in connection
with the transactions contemplated by this Agreement. The Buyers on the one
hand and the Sellers on the other shall each pay its own costs and expenses
incurred by it in negotiating and preparing this Agreement and in closing and
carrying out the transactions contemplated by this Agreement.
Section 13.03 Headings. Subject headings are included for convenience
only and shall not affect the interpretation of any provisions of this
Agreement.
Section 13.04 Notices. Any notice, demand, request, waiver, or other
communication under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if personally served or sent by
telecopy, on the business day after notice is delivered to a courier or mailed
by express mail if sent by courier delivery service or express mail for next
day delivery and on the third day after mailing if mailed to the party to whom
notice is to be given, by first class mail, registered, return receipt
requested, postage prepaid and addressed as follows:
If to the Sellers to:
Rodney L. Savoy
105 Chapel Drive
Lafayette, LA 70506
Fax: (318) 981-6248
with a copy to:
Barry J. Heinen
1502 W. University
Lafayette, LA 70506
Fax: (318) 232-4884
and to:
Paul J. Hebert
Petroleum Tower
Suite 200
3639 Ambassador Caffrey Parkway
Lafayette, LA 70503
Fax: (318) 988-3723
If to the Buyers, to:
Russell H. Plumb
c/o Serologicals Corporation
780 Park North Boulevard, Suite 110
Clarkston, Georgia 30021
Fax: (404) 297-7933
with a copy to:
David S. Rosenthal, Esq.
Shereff, Friedman, Hoffman & Goodman, LLP
919 Third Avenue
New York, New York 10022
Fax: (212) 758-9526
Section 13.05 Assignment and Successors. Prior to Closing, neither the
Buyers nor the Sellers shall assign any rights or delegate any duties hereunder
without the prior written consent of the other, except that Buyers may
designate an affiliate or subsidiary to fulfill its obligations hereunder or
assert or enjoy any of its rights or benefits hereunder. At or after the
Closing, the Buyers may assign their rights under this Agreement to its lenders
as security for its obligations.
Section 13.06 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the parties.
Section 13.07 Governing Law; Forum; Process. This Agreement shall be
construed in accordance with, and governed by, the laws of the State of New
York as applied to contracts made and to be performed entirely in the State of
New York without regard to principles of conflicts of law. Each of the parties
hereto hereby irrevocably and unconditionally submits to the exclusive
jurisdiction of any court of the State of Georgia or any federal court sitting
in the State of Georgia for purposes of any suit, action or other proceeding
arising out of this Agreement (and agrees not to commence any action, suit or
proceedings relating hereto except in such courts). Each of the parties hereto
agrees that service of any process, summons, notice or document by U.S.
registered mail at its address set forth herein shall be effective service of
process for any action, suit or proceeding brought against it in any such
court. Each of the parties hereto hereby irrevocably and unconditionally
waives any objection to the laying of venue of any action, suit or proceeding
arising out of this Agreement, which is brought by or against it, in the courts
of the State of Georgia or any federal court sitting in the State of Georgia
and hereby further irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
Section 13.08 Entire Agreement. This Agreement, including the
Schedules hereto, sets forth the entire understanding and agreement and
supersedes any and all other understandings, negotiations or agreements between
the Sellers and the Buyers relating to the sale and purchase of the Assets and
the Stock.
Section 13.09 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, and all of which
together shall constitute a single agreement.
Section 13.10 Severability. In the event that any one or more of the
immaterial provisions contained in this Agreement shall for any reason be held
to be invalid, illegal or unenforceable, the same shall not affect any other
provision of this Agreement, but this Agreement shall be construed in a manner
which, as nearly as possible, reflects the original intent of the parties.
Section 13.11 No Prejudice. This Agreement has been jointly prepared
by the parties hereto and the terms hereof shall not be construed in favor of
or against any party on account of its participation in such preparation.
Section 13.12 Words in Singular and Plural Form. Words used in the
singular form in this Agreement shall be deemed to import the plural, and vice
versa, as the sense may require.
Section 13.13 Parties in Interest. Nothing expressed or implied in
this Agreement is intended or shall be construed to confer upon or give to any
person, firm or corporation other than the parties hereto any rights or
remedies under or by reason of this Agreement or any transaction contemplated
hereby.
Section 13.14 Amendment and Modification. This Agreement may be
amended or modified only by written agreement executed by all parties hereto.
Section 13.15 Waiver. At any time prior to the Closing, any Buyer on
the one hand or any Seller on the other may (i) extend the time for the
performance of any of the obligations or other acts of the other, (ii) waive
any inaccuracies in the representations and warranties of the other contained
herein or in any document delivered pursuant hereto, and (iii) waive compliance
with any of the agreements or conditions of the other contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall
be valid only if set forth in an instrument in writing signed by the party
granting such waiver but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or future
failure.
Section XIII.16 Knowledge of Seller. References herein to the
Companies' knowledge shall include the knowledge of Savoy.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth above.
SEROLOGICALS CORPORATION
By: __________________________________
Name:
Title:
SERAMUNE, INC.
By: __________________________________
Name:
Title:
SERONAT PLASMA, INC.
By: __________________________________
Name:
Title:
NATIONS BIOLOGICS, INC.
By: __________________________________
Name:
Title:
DECATUR PLASMA, INC.
By: __________________________________
Name:
Title:
BLOOMINGTON PLASMA, INC.
By: __________________________________
Name:
Title:
LAKE FOREST PLASMA CENTER, INC.
By: __________________________________
Name:
Title:
SOUTHWEST PLASMA COMPANY, INC.
By: __________________________________
Name:
Title:
RIVERFRONT PLASMA COMPANY, INC.
By: __________________________________
Name:
Title:
GREEN STREET BIOLOGICAL CORP.
By: __________________________________
Name:
Title:
SILVER STATE PLASMA PRODUCTS, INC.
By: __________________________________
Name:
Title:
__________________________________
RODNEY L. SAVOY
__________________________________
BARRY J. HEINEN
__________________________________
NOEL P. DRAGON, JR.
LA SAVOY FAMILLE, L.C.
By: __________________________________
Name:
Title:
EXHIBITS
A Form of Note
B Bill of Sale
C Assignment of Agreements
D Assignment of Intellectual Property
E Opinion of Counsel to the Sellers
F Form of Assignment and Assumption of Lease
G Non-Competition Agreement
H Investment Representations
I Transition Agreement
Schedule 1
LOCATIONS
1. Alameda Plasma Center (El Paso, TX)
2. American Biologicals, Inc. (Waco, TX)
3. Southwest Plasma Co., Inc. (El Paso, TX)
4. Bloomington Plasma, Inc. (Bloomington, IL)
5. Cal Plasma (Oakland, CA)
6. Decatur Plasma, Inc. (Decatur, IL)
7. Green Street Biological Corp. (Champaign, IL)
8. Gretna Plasma Center (Gretna, LA)
9. Lake Charles Plasma Center (Lake Charles, LA)
10. Lakeforest Plasma Center, Inc. (New Orleans, LA)
11. Melrose Plasma (Melrose Park, IL)
12. Milwaukee Plasma Center(Milwaukee, WI)
13. National Biologicals, Inc. (Lawton, OK)
14. Riverfront Plasma Co., Inc. (Phoenix City, AL)
15. South Alameda Plasma Center (El Paso, TX)
16. Tuscaloosa Plasma Center (Tuscaloosa, AL)
EXHIBIT 99.1
No. 1
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR QUALIFIED UNDER ANY STATE SECURITIES LAW AND MAY NOT BE TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED OR QUALIFIED THEREUNDER OR
AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE.
THE INDEBTEDNESS EVIDENCED BY THIS INSTRUMENT IS SUBORDINATED TO THE PRIOR
PAYMENT IN FULL OF CERTAIN SENIOR DEBT (AS DEFINED IN THE SUBORDINATION
AGREEMENT HEREINAFTER REFERRED TO) PURSUANT TO, AND TO EXTENT PROVIDED IN, THAT
CERTAIN SUBORDINATION AGREEMENT DATED MARCH 6, 1997 AMONG, NATIONSBANK, N.A.
(SOUTH), SEROLOGICALS CORPORATION, AND CERTAIN OTHER PARTIES. ANY HOLDER OF
THIS INSTRUMENT SHALL BE DEEMED TO BE BOUND BY, AND SUBJECT TO, THE TERMS OF
THE SUBORDINATION AGREEMENT.
PROMISSORY NOTE
$4,000,000 Atlanta, Georgia
March 7, 1997
FOR VALUE RECEIVED, SEROLOGICALS CORPORATION, a Delaware corporation (the
"Company"), hereby promises to pay to Rodney L. Savoy, ("Payee"), 105 Chapel
Drive, Lafayette, Louisiana 70506, the principal sum of Four Million Dollars
($4,000,000), on the dates and in the amounts hereinafter set forth. This
Promissory Note is issued pursuant to the Purchase Agreement, dated as the date
hereof, among the Company and the Buyers and Sellers named therein (the
"Purchase Agreement"). Capitalized terms used but not defined shall have the
respective meanings ascribed to them in the Purchase Agreement. This
Promissory Note is hereinafter referred to as this "Note."
1. Principal and Maturity Date. The principal amount of this Note shall be
due and payable on March 7, 2002 (the "Maturity Date").
2. Interest. The outstanding principal amount of this Note shall bear interest
at the per annum rate of four and one-half percent (4.50%) through the
earlier of the date of repayment, conversion or March 7, 2000 (the "Interest
Termination Date") (in each case computed on the basis of a 360 day year and
actual days elapsed). Interest shall be payable each calendar quarter, in
arrears, beginning on July 1, 1997, and on the first day of each calendar
quarter thereafter (through the Interest Termination Date) and upon the
Interest Termination Date, or the date of prepayment or conversion, if
earlier.
3. Prepayment. This Note may be prepaid, in whole or in part, upon not less
than thirty (30) days prior written notice from the Company to the Payee,
at any time or from time to time commencing on March 7, 2000, without
premium or penalty; provided, that this Note may be prepaid prior thereto
if (i) the Company undertakes an underwritten public offering of
securities, (ii) the prepayment of this Note is a prerequisite to a merger,
sale of the Company or its assets, acquisition or similar transaction, or
(iii) the Payee agrees in writing to an earlier prepayment. All
prepayments made on this Note shall be applied first to the payment of all
unpaid interest accrued on this Note, and then to the outstanding and
unpaid principal amount of this Note as of the date of the payment. The
amount of interest payable as part of each quarterly payment of interest
shall be adjusted to reflect any prepayment of principal made prior to the
due date of such quarterly payment of interest. Prepayment, in whole or in
part, shall be noted in the accounting records of the Company.
4. General Payment Provisions. All payments or prepayments of principal and
interest and other sums due pursuant to this Note shall be made by check
payable to the Payee at the address set forth above or at such other address
as Payee shall have previously designated to the Company in writing not
later than two Business Days (as defined below) prior to the date on which
such payment becomes due.
If the due date of any payment under this Note would otherwise fall on a
day which is not a Business Day, such date will be extended to the
immediately succeeding Business Day and interest shall be payable at the
rate set forth herein for the period of the extension. The term "Business
Day" shall mean any day on which commercial banks in the State of New York
are not authorized or required to close.
5. Conversion; Repayment.
(a) Conversion/Repayment and Conversion Price. The Payee may, subject to
the terms and conditions of this Section 5, beginning (i) on March 7, 1998,
with respect to one-third of the original principal amount of this Note, (ii)
on March 7, 1999 with respect to two-thirds of the original principal amount of
this Note and (iii) on March 7, 2000 with respect to the remainder of this Note,
exercise its right to (x) convert this Note to Common Stock by delivering a duly
executed notice, in the form substantially similar to Exhibit A hereto, of such
intention to the Company (the "Conversion Notice") or (y) have this Note repaid
by delivering a duly executed notice, in the form substantially similar to
Exhibit B hereto, of such intention to the Company; provided, however, that if
there shall be an offset against this Note under the Purchase Agreement, the
amount of such offset shall also be deducted from the amount of this Note which
may be converted or repaid at all applicable times by the holder, and, provided
further, that if, and to the extent, this Note or any portion thereof is called
for prepayment, the holder may exercise its right to convert to Common Stock
such portion of this Note as was called for prepayment by delivering a
Conversion Notice. The Payee shall have the right, subject to the terms and
conditions of this Section 5 (including, but not limited to, the periods during
which portions of this Note are convertible or repayable as set forth in the
preceding sentence), to, no more frequently than twice per annum in the
aggregate, (a) convert the principal amount then outstanding under this Note
(the "Note Amount"), or any portion thereof which is not less than $100,000 (or
such lesser amount as may then be outstanding under the Note), into that number
of fully-paid and nonassessable shares of Common Stock (the "Conversion
Shares"), obtained by dividing the Note Amount or such portion thereof
presented for conversion by the Conversion Price or (b) have repaid at par the
Note Amount, or any portion thereof which is not less than $100,000 (or such
lesser amount as may then be outstanding under the Note). The "Conversion
Price" shall initially be $18.76 per share. In the event of a stock split,
reverse stock split or similar event affecting the capitalization of the
Company, the Board of Directors of the Company shall adjust the Conversion
Price to appropriately reflect such event.
Upon a partial conversion or repayment of this Note, the Company shall execute
and deliver to or on the order of the holder hereof, a new Note or Notes of
authorized denominations in principal amount equal to the unconverted or
unredeemed, as the case may be, portion of this Note.
(b) Issuance of Common Stock on Conversion. In order to effect the
conversion of this Note, the Payee shall deliver to the Company at its principal
office, this Note and a duly executed Conversion Notice. The date upon which
the Company receives the Conversion Notice, the Note and any other documentation
required under this Section 5 of this Note or the Conversion Notice shall be
referred to herein as the "Effective Date." Upon the Effective Date, this Note
(or portion thereof) shall be deemed converted into shares of Common Stock in
accordance with this Section 5, at which time the rights of the Payee with
respect to this Note and the amount so converted shall cease and, subject to the
following provisions of this paragraph, the person or persons entitled to
receive the shares of Common Stock upon conversion of this Note (or portion
thereof) shall be treated for all purposes as having become the record holder or
holders of such Common Stock. As promptly as practicable after the Effective
Date, the Company shall deliver or cause to be delivered to the Payee, at the
address set forth above or at such other address as the Payee shall designate in
writing, certificates representing the number of fully paid and nonassessable
shares of Common Stock into which this Note (or portion thereof), shall be
converted in accordance with the provisions of this Section 5. If this Note is
called for prepayment it may be converted as provided herein up to and including
the close of business on the business day preceding the date of prepayment.
No fractional shares of Common Stock shall be issued upon conversion of this
Note (or portion thereof). In lieu of any fractional share of Common Stock
which would otherwise be issuable upon conversion of this Note (or portion
thereof), the Company shall pay a cash adjustment in respect of such fraction in
an amount equal to such fraction multiplied by the Conversion Price.
(c) Reserves. The Company covenants that it will at all times reserve and
keep available, free from pre-emptive rights, out of its authorized but unissued
Common Stock, solely for the purpose of issue upon conversion of this Note as
herein provided, such number of shares of Common Stock as shall then be issuable
upon the conversion of this Note. The Company covenants that all shares of
Common Stock which shall be so issuable shall, upon issuance, be duly and
validly issued and fully paid and nonassessable. The Company shall from time
to time, in accordance with applicable law, increase the authorized amount of
its Common Stock if at any time the authorized amount of its Common Stock
remaining unissued shall not be sufficient to permit the conversion of this Note
at the time outstanding.
(d) Taxes Upon Conversion. The issuance of certificates for shares of
Common Stock upon the conversion of this Note shall be made without charge to
the converting noteholder for any tax in respect of the issuance of such
certificates, and such certificates shall be issued in the respective names of,
or in such names as may be directed by, the holder of this Note; provided,
however, that the Company 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
such certificate in a name other than that of the holder of this Note, and the
Company shall not be required to issue or deliver such certificates unless or
until the person or persons requesting the issuance thereof shall have paid to
the Company the amount of such tax or shall have established to the satisfaction
of the Company that such tax has been paid; and provided, further, that in no
event shall the Company be required to pay or reimburse the holder for any
income tax payable by such holder as a result of such issuance.
(e) Legends. All certificates representing Conversion Shares shall bear a
conspicuous legend stating in substance:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR QUALIFIED UNDER ANY
STATE SECURITIES LAW AND MAY NOT BE TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN REGISTERED
OR QUALIFIED THEREUNDER OR AN EXEMPTION FROM
REGISTRATION OR QUALIFICATION IS AVAILABLE."
The Company shall, upon the request of any holder of a stock certificate
representing Conversion Shares and the surrender of such certificate, issue a
new stock certificate without such legend if (i) the stock evidenced by such
certificate has been effectively registered under the Securities Act and
qualified under any applicable state securities law and sold by the holder
thereof in accordance with such registration and qualification or (ii) such
holder shall have delivered to the Company a legal opinion reasonably
satisfactory to the Company to the effect that the restrictions set forth
herein are no longer required or necessary under the Securities Act or any
applicable state law.
6. Offset of Principal. The Company is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set-off and apply
any amounts owing from the Sellers to the Company, the Buyers or their
affiliates which arise as a payment owing pursuant to the Purchase
Agreement, including, without limitation, the provisions of Article I of the
Purchase Agreement, or as indemnification obligations of the Sellers
pursuant to Article X of the Purchase Agreement. Such amounts shall offset
and reduce, first, the principal amount of this Note, then, interest on this
Note; provided that with respect to any payment owing pursuant to Article I
of the Purchase Agreement, the amount by which the principal amount of this
Note shall be reduced shall be equal to the sum of (i) such payment and
(ii) the amount of interest previously paid on this Note in excess of
interest which would have been paid if the principal amount of this Note
had been reduced by the amount of such payment on March 7, 1997. No offset
pursuant to this Section 6 shall be deemed to be a prepayment of this Note.
The rights of the Company under this Section 6 are in addition to other
rights and remedies which the Company may have.
7. Subordination of Note. This Note is subject to the provisions of the
Subordination Agreement, dated March 6, 1997, between NationsBank, N.A.
(South), the Company and the Payee.
8. Events of Default. If one or more of the following events (an "Event of
Default") shall occur and be continuing:
(a) the Company shall default in the payment when due of any
principal of or interest under this Note and such default shall continue
unremedied for a period of 30 days after notice thereof to the Company by
Payee; or
(b) any material default by the Company in the performance of any of
its covenants or agreements in this Note, and such default shall continue
unremedied for a period of 30 days after notice thereof to the Company by
Payee; or
(c) the Company shall admit in writing its inability to, or be
generally unable to, pay its debts as such debts generally become due; or
(d) the Company shall (i) apply for or consent in writing to the
appointment of, or the taking of possession by, a receiver, custodian, trustee
or liquidator of itself or of all or a substantial part of its property, (ii)
make a general assignment for the benefit of its creditors, (iii) commence a
voluntary case under Title II of the United States Code (as now or hereafter in
effect) (the "Bankruptcy Code"), (iv) file a petition seeking to take advantage
of any other law relating to bankruptcy, insolvency, reorganization, winding-up,
or composition or readjustment of debts, (v) acquiesce in writing to any
petition filed against it in an involuntary case under the Bankruptcy Code, or
(vi) take any corporate action for the purpose of effecting any of the
foregoing; or
(e) a proceeding or case shall be commenced, without the application
or consent of the Company in any court of competent jurisdiction, seeking (i)
its liquidation, reorganization, dissolution or winding-up, or the composition
or readjustment of its debts, (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of such entity or of all or any substantial
part of its assets, or (iii) similar relief in respect of such entity, under any
law relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, and such proceeding or case shall continue
undismissed, or an order, judgment or decree approving or ordering any of the
foregoing shall be entered and continue unstayed and in effect, for a period of
60 days; or an order for relief against any such entity shall be entered in an
involuntary case under the Bankruptcy Code;
THEREUPON: (i) in the case of an Event of Default (other than an
Event of Default referred to in clause (d) or (e) above), the Payee may, by
notice to the Company, declare the principal amount then outstanding of, and the
accrued interest on, this Note and all other amounts payable by the Company
under this Note to be forthwith due and payable, whereupon such amount shall be
immediately due and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by the
Company; (ii) in the case of the occurrence of an Event of Default referred to
in clause (d) or (e) above, the principal amount then outstanding of, and the
accrued interest on, this Note shall become automatically immediately due and
payable without presentment, demand, protest or other formalities of any kind,
all of which are hereby expressly waived by the Company, and in any case Payee
may take such action as is permitted to enforce its rights hereunder; (iii) the
Company shall pay all of the expenses of the Payee incurred for the collection
of this Note, including reasonable attorneys' fees and legal expenses; and
(iv) the Payee may exercise from time to time any rights and remedies available
to it by law, including those available under any agreement or other instrument
relating to the amounts owed under this Note. No delay on the part of the Payee
in the exercise of any right or remedy shall operate as a waiver thereof, and no
single or partial exercise by the Payee of any right or remedy shall preclude
other or further exercise thereof or the exercise of any other right or remedy.
Payee may apply any funds received from the Company, in such manner and order of
priority and against such payment obligations hereunder as Payee may determine.
9. No Assignment. This Note may not be assigned by the Payee
without the prior written consent of the Company.
10. Governing Law. This Note shall be construed in accordance with,
and governed by, the laws of the State of New York as applied to contracts made
and to be performed entirely in the State of New York without regard to
principles of conflicts of law. Each of the parties hereto hereby irrevocably
and unconditionally submits to the exclusive jurisdiction of any court of the
State of Georgia or any federal court sitting in the State of Georgia for
purposes of any suit, action or other proceeding arising out of this Note (and
agrees not to commence any action, suit or proceedings relating hereto except in
such courts). Each of the parties hereto agrees that service of any process,
summons, notice or document by U.S. registered mail at its address set forth
herein shall be effective service of process for any action, suit or proceeding
brought against it in any such court. Each of the parties hereto hereby
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Note, which is brought by or
against it, in the courts of the State of Georgia or any federal court sitting
in the State of Georgia and hereby further irrevocably and unconditionally
waives and agrees not to plead or claim in any such court that any such action,
suit or proceeding brought in any such court has been brought in an
inconvenient forum.
11. Adjustment of Interest Rate. No provision of this Note shall
require the payment of interest to the extent that receipt of any such payment
by the Company would be contrary to the provisions of law applicable to the
Company limiting the maximum amount of interest that may be charged to or
collected from the Company, and if any sum in excess of such maximum rate of
interest is paid or charged, the excess will be deemed to have been a
prepayment of principal of this Note when paid, without premium or penalty, and
all payments made thereafter will be appropriately applied to interest and
principal to give effect to such maximum rate, and after such application any
excess shall be immediately refunded to the Company.
If the maximum rate of interest, if any, now permitted by law to be
charged for this transaction is increased, then for so long as the increase is
in effect, the applicable maximum rate permitted to be charged as referred to in
the paragraph immediately preceding will be deemed to be such increased rate.
If the maximum rate of interest, if any, now permitted by law to be charged for
this transaction should be eliminated so that there would be no maximum rate,
then interest on this Note shall thereafter be paid at the rate provided in
this Note.
SEROLOGICALS CORPORATION
By: ______________________________
Name: Russel H. Plumb
Title: Vice President
EXHIBIT A
[Form of Repayment Notice]
To Serologicals Corporation:
The undersigned registered holder (the "Payee") of the Note in the
principal amount indicated below and bearing the certificate number indicated
below (the "Note"), hereby irrevocably exercises his right to call for repayment
convert the principal amount of the Note indicated herein into shares of common
stock, par value $.01 per share, of Serologicals Corporation (the "Company"),
in accordance with the terms of the Note, and directs that the shares issuable
and deliverable upon such conversion together with a check in payment for
fractional shares, be issued and delivered to the Payee unless a different name
has been indicated below. If shares are to be issued in the name of a person
other than the Payee (such person being referred to as the "Transferee"), the
Note must be duly endorsed by, or accompanied by instruments of transfer in form
satisfactory to the Company and duly executed by the undersigned, and the
undersigned will pay all transfer taxes payable with respect thereto. In
addition, the Transferee must sign this notice. All capitalized terms used in
this notice and not otherwise defined shall have the respective meanings
ascribed to them in the Note.
The Payee, or in the event a Transferee shall receive the Conversion
Shares issued upon conversion of this Note, the Transferee, hereby represents
and warrants to the Company that (i) he has sufficient knowledge and experience
in financial and business matters to be capable of evaluating the merits and
risks of an investment in the Company, (ii) he is acquiring the Conversion
Shares for his own account for investment and not with a view to, or for
distribution or sale in connection with any public offering in violation of the
Securities Act of 1933, as amended (the "Securities Act"), (iii) he understands
that (x) the Conversion Shares will not have been registered for sale under the
Securities Act or qualified under applicable state securities laws and may not
be resold without registration under the Securities Act and qualification under
any applicable state securities law (y) such Conversion Shares will be issued
to him pursuant to one or more exemptions from the registration or qualification
requirements of the Securities Act and that the representations and warranties
contained herein are given with the intention that the Company may rely thereon
for purposes of claiming such exemptions and (z) the Conversion Shares shall
contain a legend substantially as set forth in Section 5(e) of the Note, (iv) he
is an "accredited investor" as defined in Section 501 of Regulation D
promulgated under the Securities Act, (v) he understands he must bear the
economic risk of Conversion Shares issued upon conversion of the Note for an
indefinite period of time as the Conversion Shares cannot be sold unless
registered under the Securities Act and any other applicable state securities
laws or sold in a transaction exempt from such registration thereunder and (vi)
representatives of the Company have (x) fully and satisfactorily answered any
questions which he deemed to ask concerning the Company and (y) furnished him
with such additional information and documents regarding the Company as he has
reasonably requested.
Principal amount of Note to be converted: $________________
Certificate Number of Note: __
Print name, address (including zip code) and social security or other taxpayer
identification number of the person in whose name the Common Stock will be
issued:
_________________________________
_________________________________
_________________________________
(Zip Code)
_________________________________
Social Security or other
Taxpayer Identification
Number
Dated:___________________________ _______________________
Signature of Noteholder
Dated:___________________________ _______________________
Signature of Transferee
EXHIBIT B
[Form of Repayment Notice]
To Serologicals Corporation:
The undersigned registered holder (the "Payee") of the Note in the
principal amount indicated below and bearing the certificate number indicated
below (the "Note"), hereby irrevocably exercises his right to call for
repayment the principal amount of the Note indicated herein, in accordance with
the terms of the Note, and directs that a check in payment therefor be issued
and delivered to the Payee unless a different name has been indicated below.
If a check is to be issued in the name of a person other than the Payee (such
person being referred to as the "Transferee"), the Note must be duly endorsed
by, or accompanied by instruments of transfer in form satisfactory to the
Company and duly executed by the undersigned, and the undersigned will pay all
transfer taxes payable with respect thereto. In addition, the Transferee must
sign this notice. All capitalized terms used in this notice and not otherwise
defined shall have the respective meanings ascribed to them in the Note.
Principal amount of Note to be called for repayment: $________________
Certificate Number of Note: __
Print name, address (including zip code) and social security or other taxpayer
identification number of the person in whose name a check will be issued:
_________________________________
_________________________________
_________________________________
(Zip Code)
_________________________________
Social Security or other
Taxpayer Identification
Number
Dated:___________________________ _______________________
Signature of Noteholder
Dated:___________________________ _______________________
Signature of Transferee
