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) August 1, 1997
---------------
HEMACARE CORPORATION
(Exact name of registrant as specified in its charter)
California 0-15223 95-3280412
(State or other (Commission File Number) (I.R.S. Employer I.D.
jurisdiction of Number)
incorporation or
organization)
4954 Van Nuys Boulevard
Sherman Oaks, California 91403
------------------------------------------
(Address of principal executive offices)
(818) 986-3883
------------------------------------------
(Registrant's telephone number, including area code)
(Not Applicable)
------------------------------------------
(Former name or former address, if changed since last report)
<PAGE> 2
Item 2. Acquisition or Disposition of Assets.
- ---------------------------------------------
(a) Pursuant to an Asset Purchase Agreement dated
August 1, 1997 (the "Agreement"), HemaCare
Corporation (the "Company" or "HemaCare") and
its wholly-owned subsidiary Gateway Community Blood
Bank, Inc. ("Gateway") entered into an agreement
with Haemonetics Corporation ("Haemonetics") to
sell substantially all the operating assets of
Gateway to Haemonetics. The assets purchased by
Haemonetics include product and supplies
inventories, the right to use the name "Gateway
Community Blood Bank, Inc.," furniture, equipment
and leasehold improvements. In addition, HemaCare
has agreed not to compete with Gateway for a period
ending twelve months following the satisfaction by
Haemonetics of all payment liabilities under the
Agreement.
The transaction closed on August 1, 1997, and in
accordance with the terms of the Agreement,
HemaCare received an initial cash payment of
$308,000 at closing. In addition, Haemonetics
assumed approximately $218,000 of capital lease
obligations and certain operating lease liabilities
related to Gateway's operations. Transaction costs,
primarily legal fees, are estimated at $53,000. Of
the initial payment amount, $200,000 is a non-
refundable advance against the Company's interest
in Gateway's future revenue. The Company is
entitled to receive a percentage of Gateway's
revenues, as defined in the Agreement, over the
five year period subsequent to August 1, 1997, not
to exceed a total of $622,000. The terms of the
sale provide for an additional $100,000 payment to
HemaCare when Gateway receives a Food and Drug
Administration blood establishment license.
Item 7. Financial Statements and Exhibits
- -------------------------------------------
(a) Not applicable.
(b) Pro forma financial information.
The following unaudited pro forma condensed consolidated
financial statements and notes give effect to the sale of
the operations of Gateway Community Blood Program, Inc.
("Gateway"), a wholly-owned subsidiary of HemaCare
Corporation ("HemaCare"), to Haemonetics Corporation
("Haemonetics").
2
<PAGE> 3
The unaudited pro forma condensed consolidated results of
operations represent the historical results of continuing
operations of HemaCare for the year ended December 31, 1996
and the six months ended June 30, 1997, adjusted to reflect
the disposition of Gateway's operations as if it had
occurred at the beginning of the period. The unaudited pro
forma consolidated balance sheet was prepared to reflect the
disposition of Gateway's operations as if it had occurred on
June 30, 1997. The pro forma information has been prepared
utilizing the historical financial statements of HemaCare
and the historical financial statements of Gateway. The pro
forma condensed financial information is based on the
estimates and assumptions set forth in the notes to the pro
forma financial statements.
Pro forma financial data is provided for comparative
purposes only and does not purport to be indicative of the
actual financial condition if the disposition had occurred
at the date of the balance sheet presented or results of
operations had the disposition occurred at the beginning of
the periods for the statements of operations presented, nor
are they necessarily indicative of the results of future
operations. The information presented below should be read
in conjunction with the information of HemaCare included in
it 1996 annual report on Form 10-K and it quarterly report
for the period ended June 30, 1997 filed on Form 10-Q.
3
<PAGE> 4
HEMACARE CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Pro Forma
As Reported (1) Gateway (2) Adjustments (3) Pro Forma
--------------- -------------- --------------- ------------
(Unaudited)
<S> <C> <C> <C> <C>
Revenues $ 10,921,000 $ 652,000 $ 10,269,000
Operating costs and expenses 9,687,000 1,757,000 7,930,000
------------- ------------- ------------- -------------
Operating profit (loss) 1,234,000 (1,105,000) 2,339,000
General and administrative expense 2,288,000 2,288,000
Interest expense (income), net 36,000 37,000 (1,000)
------------- ------------- ------------- -------------
(Loss) income from continuing
operations before income taxes (1,090,000) (1,142,000) 52,000
Provision for income taxes - - -
------------- ------------- ------------- -------------
(Loss) income from continuing
operations $ (1,090,000) $ (1,142,000) $ 52,000
============= ============= ============= =============
Per share amounts:
(Loss) income from continuing
operations $ (0.17) $ 0.01
============= =============
Weighted average common and
common equivalent shares
outstanding 6,349,940 104,328 (4) 6,454,268
============= ============= =============
</TABLE>
4
<PAGE> 5
HEMACARE CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997
<TABLE>
<CAPTION>
Pro Forma
As Reported (5) Gateway (2) Adjustments (3) Pro Forma
--------------- ------------- --------------- --------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues $ 5,595,000 $ 526,000 $ 5,069,000
Operating costs and expenses 4,740,000 760,000 3,980,000
------------- ------------ -------------- -------------
Operating profit 855,000 (234,000) 1,089,000
General and administrative expense 972,000 972,000
Interest expense (income), net 3,000 17,000 (14,000)
------------- ------------ -------------- -------------
(Loss) income from continuing operations
before income taxes (120,000) (251,000) 131,000
Provision for income taxes - - - -
------------- ------------ -------------- -------------
(Loss) income from continuing
operations $ (120,000) $ (251,000) $ 131,000
============= ============ ============== =============
Per share amounts:
(Loss) income from continuing operations $ (0.02) $ 0.02
============= ============== =============
Weighted average common and common
equivalent shares outstanding 7,187,411 16,630 (4) 7,204,041
============= ============== =============
</TABLE>
5
<PAGE> 6
HEMACARE CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Pro Forma
As Reported (6) Adjustments (3) Pro Forma
--------------- ---------------- -------------
(unaudited)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,823,000 $ 308,000 (7) $ 2,131,000
Marketable securities 192,000 192,000
Accounts receivable, net 1,409,000 1,409,000
Supplies and product inventories 457,000 (67,482) (8) 389,518
Prepaid expenses 168,000 (15,524) (8) 152,476
Note receivable from officer - current 15,000 15,000
------------- ------------ -------------
Total current assets 4,064,000 224,994 4,288,994
Plant and equipment, net of
accumulated depreciation 721,000 (242,595) (8) 478,405
Note receivable from officer -
non-current 77,000 77,000
Other assets 47,000 (27,074) (9) 19,926
------------- ------------ -------------
$ 4,909,000 $ (44,675) $ 4,864,325
============= ============ =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,094,000 $ 1,094,000
Accrued purchases and other accrued
expenses 21,000 (1,900) (8) 19,100
Accrued payroll and payroll taxes 450,000 450,000
Other accrued expenses 294,000 53,000 (10) 347,000
Current obligations under capital
leases 256,000 (78,012) (11) 177,988
Reserve for discontinued operations
- current 284,000 284,000
------------- ------------ -------------
Total current liabilities 2,399,000 (26,912) 2,372,088
Obligations under capital leases, net
of current portion 446,000 (144,514) (11) 301,486
Commitments and contingencies
Shareholders' equity:
Common stock, without par value 13,507,000 13,507,000
Accumulated deficit (11,443,000) 126,751 (12) (11,316,249)
-------------- ------------ -------------
Total shareholders' equity 2,064,000 126,751 2,190,751
-------------- ------------ -------------
$ 4,909,000 $ (44,675) $ 4,864,325
============== ============ =============
</TABLE>
6
<PAGE> 7
HEMACARE CORPORATION
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
(1) Audited consolidated condensed results of continuing
operations of HemaCare for the year ended December 31,
1996.
(2) Unaudited results of operations of Gateway for the
period indicated.
(3) Adjustments necessary to reflect the results of
operations as if the disposition of Gateway had
occurred at the beginning of the periods presented and
the balance sheet as if the disposition had occurred at
June 30, 1997.
(4) The impact of the dilutive common stock equivalents.
(5) Unaudited consolidated condensed results of continuing
operations of HemaCare for the six months ended June
30, 1997.
(6) Unaudited consolidated balance sheet of HemaCare at
June 30, 1996.
(7) Proceeds from the sale of assets to Haemonetics.
(8) Sale of net assets to Haemonetics.
(9) Write-off of Gateway organization costs.
(10) Transaction costs, primarily legal and accounting.
(11) Assumption of capital lease liabilities by Haemonetics.
(12) Gain on the disposition of assets, net of transaction
costs, primarily legal and accounting and the write-off
of Gateway organization costs. The pro forma gain is
based on the book value of the assets and liabilities
of Gateway at June 30, 1997. Actual gain will be based
on book values as of the August 1, 1997 disposition
date. However, the difference is not expected to be
material.
7
<PAGE> 8
(c) Exhibits
2.1 Asset Purchase Agreement between the
Registrant, Gateway Community Blood Program,
Inc. (a wholly owned subsidiary of the
Registrant) and Haemonetics Corporation,
dated August 1, 1997, including list of
omitted schedules. See also Exhibit 99.1
99.1 Agreement to Furnish Exhibits and Schedules
to Exhibit 2.1.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly
authorized.
HEMACARE CORPORATION
(Registrant)
Date: August 15, 1997
By: _________________________________
Hal I. Lieberman, President & CEO
8
<PAGE> 9
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibits Method of Filing
----------------
<S> <C> <C>
2.1 Asset Purchase Agreement between the Registrant,
Gateway Community Blood Program, Inc. (a wholly
owned subsidiary of the Registrant) and
Haemonetics Corporation, dated August 1, 1997,
including list of omitted schedules.
See also Exhibit 99.1............................. Filed herewith electronically
99.1 Agreement to Furnish Exhibits and Schedules
to Exhibit 2.1..................................... Filed herewith electronically
</TABLE>
9
EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
BETWEEN
HAEMONETICS CORPORATION
(BUYER)
AND
GATEWAY COMMUNITY BLOOD PROGRAM, INC.
(SELLER)
Dated: August 1, 1997
<PAGE>
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") is dated
August 1 1997, between Haemonetics Corporation, a Massachusetts
corporation ("Buyer"), and Gateway Community Blood Program,
Inc., a Missouri corporation ("Seller") and a wholly-owned
subsidiary of HemaCare Corporation, a California corporation
("Parent").
RECITALS
A. Seller is a blood bank engaged in the preparation and
distribution of human whole blood, human plasma, and other blood
derivatives (collectively "Blood Products") and in related
activities, conducted in the St. Louis, Missouri area as
delineated in Schedule A (the service area herein referred to as
the "Area").
B. Buyer and Seller intentionally limit the scope of this
agreement to the sale of assets as outlined below and no other
assets of Seller unless such limitation would materially affect
or impair Buyer's subsequent operation.
C. Seller intends to obtain required state and federal
approvals, consents, and permits, if any, to enable Seller to
convey substantially all of the assets to Buyer.
D. Buyer desires to purchase from Seller, Seller
desires to sell to Buyer the assets as set forth herein other
than the Excluded Assets (as defined herein).
NOW THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants, agreements and
conditions hereinafter set forth, and intending to be legally
bound hereby, the parties hereto agree as follows.
1. Purchase And Sale Of Assets
- ------------------------------------
1.1 Assets to be Transferred. Subject to the terms and
conditions of this Agreement, on the Closing Date (as hereinafter
defined) Seller shall sell, transfer, convey, assign, and deliver
to Buyer (or upon Buyer's request, to one or more wholly-owned
subsidiaries of Buyer as designated by Buyer), and Buyer shall
purchase and accept all of the rights, claims and assets (of
every kind, nature, character and description, whether real,
personal or mixed, whether tangible or intangible, whether
accrued, contingent or otherwise, and wherever situated) of the
Seller, other than the Excluded Assets (as hereinafter defined)
(collectively the "Purchased Assets"). The Purchased Assets
shall include, but not be limited to, the following:
(a) Leased Real Property. All of the leases and
subleases of real property with respect to real property leased
by Seller (the "Real Property Leases") described on Schedule
1.1(a) with respect to the real property described thereon (the
"Leased Real Property").
(b) Personal Property Leases. All leases of
equipment, vehicles, , furniture and other personal property
leased by Seller (the "Personal Property Leases") described in
Schedule 1.1(b).
Page 1
<PAGE>
(c) Equipment and Supplies. All equipment, vehicles,
supplies, spare parts, furniture and all other personal property
not included in inventory (other than personal property leased
pursuant to Personal Property Leases) owned, utilized or held for
use by Seller as described on Schedule 1.1(c).
(d) Inventory. All inventories of blood, blood
products, plasma, or other blood derivatives or other Blood
Products or materials of Seller whether physically stored in the
Leased Real Property or located at a hospital, a blood bank
depository, a transfusion service, a blood collection center, a
vehicle or elsewhere on the Closing Date (collectively the
"Inventory")as described on Schedule 1.1(d).
(e) Trade Rights. All the Seller's interest in any
Trade Rights. As used herein, the term "Trade Rights" shall
mean and include: (i) all United States, state and foreign
trademark rights, business identifiers, trade dress, service
marks, trade names, and brand names, including all claims for
infringement, and all registrations thereof and applications
therefor and all goodwill associated with the foregoing accruing
from the dates of first use thereof; (ii) all United States and
foreign copyrights, copyright registrations and copyright
applications, including all claims for infringement, and all
other rights associated with the foregoing and the underlying
works of authorship; (iii) all United States and foreign patents
and patent applications, including all claims for infringement
and all international proprietary rights associated therewith;
(iv) all contracts or agreements granting any right, title,
license or privilege under the intellectual property rights of
any third party; and (v) all inventions, mask works and mask work
registrations, know-how, discoveries, improvements, designs,
trade secrets, shop and royalty rights, employee covenants and
agreements respecting intellectual property and non-competition
and all other types of intellectual property. The Trade Rights
are listed on Schedule 1.1(e).
(f) Contracts. All contracts, contractual rights,
agreements, purchase orders and sales orders (hereinafter in this
Section 1.1(f), "Contracts") of Seller listed below:
(i) All Contracts for the provision of supplies,
goods or services to the Seller ("Operating Contracts") listed
in Schedule 1.1(f)(i).
(ii) All Contracts with hospitals, health systems,
third-party payors, blood bank depositories, transfusion
services, or blood collection centers relating to the sale or
distribution of Blood Products by Seller listed in Schedule
1.1(f)(ii) ("Distribution Contracts").
(iii) All Contracts not constituting Employment Contracts
(as defined below) with physicians and surgeons (including the Blood Bank
Director) or with other licensed healthcare professionals which are required
as a condition of state or federal licensure ("Administrative Contracts")
listed in Schedule 1.1(f)(iii).
(iv) Every other Contract to which Seller is a
party which is listed on Schedule 1.1(f)(iv).
Page 2
<PAGE>
Notwithstanding the provisions of Sections
1.1(f)(i), (ii), (iii) and (iv) above, Buyer shall not assume any
written or oral employment agreements between Seller and any of
its employees.
The Contracts described in Sections 1.1(f)(i),
(ii), (iii) and (iv) above are hereinafter collectively described
as the "Assumed Contracts." To the extent that any Assumed
Contract for which assignment to Buyer is provided herein is not
assignable without the consent of another party or parties, this
Agreement shall not constitute an assignment or an attempted
assignment thereof if such assignment or attempted assignment
would constitute a breach thereof. Seller and Buyer agree to use
their reasonable best efforts (without any requirement on the
part of Buyer to pay any money or agree to any change in the
terms of any such Contract) to obtain the consent of such other
party to the assignment of any such Assumed Contract to Buyer in
all cases in which such consent is or may be required for such
assignment. If any such consent shall not be obtained, Seller
agrees to cooperate with Buyer in any reasonable arrangement
proposed to Buyer designed to provide for Buyer the benefits
intended to be assigned to Buyer under the relevant Assumed
Contract, including enforcement at the cost and for the account
of Buyer of any and all rights of Seller against the other party
thereto arising out of the breach or cancellation thereof by such
other party or otherwise. If and to the extent that such
arrangement cannot be made, Buyer, upon notice to Seller, shall
have no obligation pursuant to Section 2.1 or otherwise with
respect to any such Assumed Contract and any such Assumed
Contract shall not be deemed to be a Purchased Asset hereunder.
(g) Operational Manuals and Literature. All procedure
manuals (whether or not required as a condition of a Regulatory
Authorization, as defined below), protocols, educational or
promotional literature, instructional materials and similar
materials of Seller; provided, that nothing in this Agreement
shall prevent Parent from using protocols, educational or
promotional literature, instructional materials and similar
materials in its operations which are substantially similar or
identical to those used by Seller on or prior to the Closing
Date.
(h) Records and Files and Associated Systems. All
records, files, lists, specifications, designs, drawings,
business records, operating data and other data of Seller,
including, but not limited to, apheresis and whole blood donor
lists maintained in the Area. Buyer shall have reasonable access
to and the right to copy those records to be retained by Parent.
Regardless of their location, the Buyer shall have access to the
Seller's records for the underlying systems for identification of
human blood and other Blood Products to the donors and
traceability to the recipients and all records and the underlying
systems relating to the identification and notification of donors
and recipients of positive tests for viral hepatitis and/or
antibody tests for probable causative agents for Acquired Immune
Deficiency Syndrome (collectively, "Blood Bank Records").
(i) Licenses; Permits; Other Authorizations. All
state federal or local governmental licenses, registrations,
permits, approvals or similar authorizations either held or
applied for by the Seller ("Regulatory Authorizations") are
listed on Schedule 1.1(i). To the extent Seller may lawfully
transfer such Regulatory Authorizations to Buyer, they shall be
considered Purchased Assets.
Page 3
<PAGE>
(j) Corporate Name. The name "Gateway Community
Blood Program, Inc." and all of Seller's rights to use or allow
others to use such name.
(k) Deposits and Prepaids. All deposits and prepaid
items listed on Schedule 1.1(k).
1.2 Excluded Assets. The provisions of Section 1.1
notwithstanding, Seller shall not sell, transfer, assign, convey
or deliver to Buyer, and Buyer will not purchase or accept the
following assets of Seller (collectively the "Excluded
Assets"):
(a) Consideration. The consideration delivered by
Buyer to Seller pursuant to this Agreement.
(b) Cash and Securities. All cash and securities of
the Seller.
(c) Accounts Receivables. All accounts receivables of
Seller prior to Closing.
(d) Tax Credits. Franchise tax credits and tax refund
claims (if any).
(e) Tax and Corporate Records. Seller's financial,
corporate and tax records. Prior to Closing, Buyer and its
designated agents shall have reasonable access to such records
and may make excerpts therefrom and copies thereof.
(f) Leased and Owned Personal Property. The personal
property described on Schedule 1.2.(f).
(g) Non-Transferable Regulatory Authorizations. To
the extent any Regulatory Authorization listed on Schedule 1.1(i)
cannot lawfully be sold to Buyer as a Purchased Asset, it shall
be an Excluded Asset but shall be dealt with by Buyer pursuant to
Section 7.1.
(h) Third Party Claims. All claims against third
parties arising prior to Closing.
2. ASSUMPTION OF LIABILITIES
- ---------------------------------
2.1 Liabilities to be Assumed. Subject to the terms and
conditions of this Agreement, on the Closing Date, Buyer assumes
and agrees to perform and discharge to the extent indicated below
the following, and only the following, specific debts,
liabilities and obligations of Seller (collectively the "Assumed
Liabilities"):
(a) Scheduled Liabilities. The accounts payable and
accrued liabilities accruing on and after the Closing.
(b) Contractual Liabilities. Seller's liabilities and
obligations arising on and after the Closing Date under and
pursuant to the Assumed Contracts, provided that Buyer shall not
assume any obligation to deliver products or services with
Page 4
<PAGE>
respect to which any payment has been made prior to the Closing
Date, unless (i) Seller shall remit the amount of such payments
to Buyer or (ii) a direct credit in such amount shall be provided
to Buyer in the Purchase Price (as hereinafter defined).
(c) Liabilities Under Permits and Licenses. Seller's
obligations arising from and after the Closing Date under any
Regulatory Authorization which are assigned to Buyer at the
Closing pursuant to Section 1.1(i).
2.2 Liabilities Not to be Assumed. Except as and to the
extent specifically set forth in Section 2.1, Buyer is not
assuming any debts, liabilities, obligations or contracts of
Seller and all such debts, liabilities, obligations and contracts
shall be and remain the responsibility of Seller.
Notwithstanding the provisions of Section 2.1 and without
limiting the generality of the foregoing, Buyer is not assuming
and Seller shall not be deemed to have transferred to Buyer the
following debts, liabilities, obligations and contracts of
Seller:
(a) Certain Contracts and Leases. Except as provided
in Section 2.1(b), the obligations of Seller or Parent, on behalf
of Seller, under and pursuant to the contracts and leases listed
in Schedule 2.2(a).
(b) Taxes, Penalties or Assessments Arising from
Transaction. Any United States, foreign, state or other taxes,
penalties or assessments applicable to, imposed upon or arising
out of the sale or transfer of the Purchased Assets to Buyer and
the other transactions contemplated by this Agreement, including
but not limited to any income, unrelated business income,
transfer, sales, use, gross receipts or documentary stamp taxes
or any obligation imposed on Buyer directly or indirectly arising
from the transfer of the Purchased Assets from Seller to Buyer.
Seller and Buyer agree that any applicable sales or transfer
taxes will be borne equally by the parties.
(c) Taxes. Any liability or obligation of Seller for
any state or local franchise taxes, unrelated business income,
inurement or private benefit (and any penalties or interest due
on account thereof).
(d) Blood Product and Related Liability. Any
liability or obligation of Seller arising out of or in any way
relating to or resulting from the operation by Seller prior to
Closing, which is not an Assumed Liability, including but not
limited to liabilities or obligations relating to: (i) any Blood
Product obtained, manufactured, distributed or sold prior to the
Closing Date or (ii) Seller's activities as a blood bank,
including but not limited to, reporting or failing to report
positive results for agents of viral hepatitis or antibodies
which are probable causative agents for Acquired Immune
Deficiency Syndrome. All non-assumed liabilities under this
Section 2.2(d) include any liability or obligation of Seller for
claims made for injury to person, damage to property or other
damage, whether made in product liability, tort, breach of
warranty or otherwise.
(e) Litigation Matters. Any liability or obligation
with respect to any suits, actions, claims or proceedings,
whether or not described in Schedule 2.2(e).
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<PAGE>
(f) Infringements. Any liability to a third party
under its intellectual property or other proprietary rights,
including, but not limited to, claims arising out of the
manufacture, use or sale of goods or apparatus, the performance
of services, or the copying, modifying, distributing, performing
or displaying of any work, arising prior to Closing.
(g) Transaction Expenses. All liabilities, costs,
obligations or expenses incurred by Seller in connection with
this Agreement and the transactions contemplated herein.
(h) Liability For Breach. Liabilities and obligations
of Seller for any breach or failure to perform any of Seller's
covenants and agreements contained in, or made pursuant to, this
Agreement, or, prior to the Closing, any other contract or
agreement, whether or not assumed hereunder, including any breach
arising from assignment of contracts hereunder without consent of
third parties.
(i) Liabilities to Affiliates. Liabilities and
obligations of Seller to its present or former Affiliates except
for obligations of Seller to its current employees. For
purposes of this Agreement, the term "Affiliate" shall mean and
include:
(a) any former employee, director or officer of
the Seller;
(b) any current or former spouse of any person
described in clause (i) or any person who is a member of the same
household of the person described in clause (i) or who has
resided with such person for more than 10 days in any calendar
year.
(j) Violation of Law and Regulations. Liabilities and
obligations of Seller for any violation or alleged violation of
or failure or alleged failure to comply with any statute, law,
rule, regulation, order, writ, injunction or decree of any court
or governmental authority.
(k) Employee Liabilities. Any liability of Seller as
employer of Seller's employees, whether such liability arises by
statute, contract or otherwise.
3. PURCHASE PRICE - PAYMENT
- ---------------------------------
3.1 Purchase Price. The purchase price (the "Purchase
Price") for the Purchased Assets shall be:
(a) the assumption of the Assumed Liabilities;
plus
(b) the net book value of the Seller's owned assets,
supplies, inventories, deposits and prepaids as
listed on Schedule 3.1(b) at Closing.
plus (c) Annual Installments, including a non-refundable
advance in the amount of $200,000, subject to Section 3.2(d).
plus (d) the sum of $100,000, subject to section 3.2 (e);
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<PAGE>
3.2 Payment of Purchase Price. The Purchase Price shall be
paid by Buyer as follows:
(a) Assumption of Liabilities. At the Closing, Buyer
shall deliver to Parent, for the benefit of Seller, such
documents and instruments as are reasonably required to evidence
the assumption of the Assumed Liabilities.
(b) Cash to Seller. At the Closing, Buyer shall
deliver to Parent, for the benefit of Seller, the amount required
to be paid in Sections 3.1(b) and (c), subject to any adjustments
contemplated by this Agreement, including Section 3.3.
(c) Method of Payment. Payments under Section 3.1
shall be made in the form of certified or official bank check
payable to the order of the recipient or, at the recipient's
option, by wire transfer of immediately available funds to an
account designated by the recipient not less than 48 hours prior
to the time for payment specified herein.
(d) Annual Installments. Buyer, its Affiliates,
successors, or assigns, agree to pay Parent, for the benefit of
Seller, a percentage of the annual revenue generated in the Area
for either a period of five (5) years after the Closing or until
such payments total six hundred twenty two thousand dollars
($622,000.), whichever occurs first, calculated as follows:
(i) At Closing, Buyer will advance Parent, for the
benefit of Seller, a non-refundable sum of two hundred thousand
dollars ($200,000.) ("Initial Advance").
Within thirty days after the close of Buyer's
fiscal year, Buyer will pay Seller a percentage of total gross
revenues (determined in accordance with Generally Accepted
Accounting Principles) generated in the Area during the prior
twelve months of the Buyer's fiscal year, as calculated below,
provided however that the first payment due hereunder shall be
based upon revenues derived from the Closing until March 31, 1998
(the "Annual Installment"). The final payment will be paid
forty-five (45) days after August 1, not March 31.
(ii) Up to seventy five thousand dollars ($75,000)
of each Annual Installment shall be credited against the Buyer's
Initial Advance, until the cumulative amount of such credits
equals $200,000. Should any Annual Installment exceed seventy
five thousand dollars ($75,000), Buyer will pay Seller the
remaining balance due on the Annual Installment.
<TABLE>
<CAPTION>
Fiscal Year Gross Revenue Ranges | Percentage Payments to Seller For
(millions) | Revenue within Ranges
---------------------------------|-----------------------------------
<S> | <C>
For revenue less than $1.5 | 4.0 %
For revenue between $1.5 - $2.5 | 3.0 %
For revenue between $2.5 - $4.0 | 1.5 %
For revenue of $4 and greater | 0.5 %
</TABLE>
Page 7
<PAGE>
Below is an example of how the Annual Installment
would be calculated if in year one the fiscal year gross revenue
was $2,850,000:
<TABLE>
<CAPTION>
Annual Installment Revenue Percentage Payment
Payment Amount
----------------------------------- ------------ ----------- -------------
<S> <C> <C> <C>
For revenue less than $1.5 $1,500,000 4.0 % $ 60,000
For revenue between $1.5 - $2.5 $1,000,000 3.0 % $ 30,000
For revenue between $2.5 - $4.0 $ 350,000 1.5 % $ 5,250
---------- ----------- -------------
Gross Amount Due $ 95,250
Credit Towards Initial
Advance $ 75,000
-------------
ANNUAL INSTALLMENT DUE
TO PARENT $ 20,250
========================= =============
</TABLE>
( (iii) The Buyer shall provide the Seller with a
statement of revenue generated in the Area, in the form of
Schedule 3.2(d) each quarter until the earlier of five years
after the closing or the receipt by Seller of $622,000 in Annual
Installments. Seller shall have the right of audit and, in the
event that such an audit reveals a discrepancy in Seller's favor
greater than ten percent (10%) for any quarter, as reported by a
statement of revenue provided by Buyer to Seller in accordance
with the terms of this Section, Buyer shall pay to Seller an
amount equal to such discrepancy, together with all reasonable
fees and expenses associated with such audit.
(e) Regulatory Approval. Seller has applied to the
Food and Drug Administration (FDA) for an Establishment License
and Product Licenses so indicated on Schedule 1.1(i). Buyer will
pay Seller the sum of one hundred thousand dollars ($100,000)
upon approval by FDA of all of those licenses ("Regulatory
Approval") or the decision of Buyer not to pursue regulatory
approval.
3.3 Employee Payments and Adjustments. All employees of
Seller as of the date of this Agreement are listed on Schedule
3.3 together with their gross compensation and job title. The
amount of salaries, wages and other remuneration due in respect
of periods to and including the date of Closing to such employees
of Seller and the amount of bonuses, accrued vacation, holiday or
sick pay or other benefits due to such employees for all such
periods shall be paid by Seller directly to such employees on or
before the Closing.
3.4 Allocation of Purchase Price. The aggregate Purchase
Price (including the assumption by Buyer of the Assumed
Liabilities) shall be allocated among the Purchased Assets for
tax purposes in accordance with Schedule 3.4. Seller and Buyer
will follow and use such allocation in all income, sales
registration and other tax returns, filings or other related
reports made by them to any governmental agencies. To the extent
that disclosures of this allocation are required to be made by
the parties to the Internal Revenue Service ("IRS") under the
provisions of Section 1060 of the Internal Revenue Code of 1986,
as amended (the "Code") or any regulations thereunder, Buyer
and Seller will disclose such reports to the other prior to
filing with the IRS.
Page 8
<PAGE>
4. REPRESENTATIONS AND WARRANTIES OF SELLER
- ------------------------------------------------
Seller and Parent make the following representations and
warranties to Buyer, each of which is true and correct on the
date hereof, to the knowledge of the Seller or Parent's officers,
shall remain true and correct to and including the Closing Date,
shall be unaffected by any investigation heretofore or hereafter
made by Buyer, or any knowledge of Buyer other than as
specifically disclosed in the Disclosure Schedules delivered to
Buyer at the time of the execution of this Agreement, and shall
survive for a period of two (2) years following the Closing of
the transactions provided for herein.
4.1 Corporate.
(a) Organization. Seller is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Missouri.
(b) Corporate Power. Seller has (i) all requisite
corporate power and authority to own, operate and lease its
properties, as is now being conducted, and (ii) to enter into
this Agreement and the other documents and instruments to be
executed and delivered by Seller pursuant hereto and to carry out
the transactions contemplated hereby and thereby.
(c) No Dissolution or Liquidation. The Board of
Directors of the Seller has not adopted any resolution or taken
any other action with respect to dissolution, liquidation or
winding up of the Seller, no such resolution or other action is
proposed, under consideration or contemplated, and there is no
proceeding or other action pending or, to the knowledge of the
Seller threatened, proposed or contemplated by any court,
administrative or governmental agency, instrumentality,
commission, authority, board or body with respect to any
dissolution, liquidation or winding up of the Seller, nor is
there any basis for any such proceeding or other action.
(d) Insurance Policies. All policies of liability
insurance held by Seller which are within the scope of Section
4.12 are occurrence based policies, with the exception of the
Professional Medical Liability Insurance, which is a claims made
based policy.
4.2 Authority. The execution and delivery of this
Agreement and the other documents and instruments to be executed
and delivered by Seller pursuant hereto and the consummation of
the transactions contemplated hereby and thereby have been duly
authorized by the Board of Directors of Seller. No other or
further corporate act or proceeding on the part of Seller or its
Board of Directors is necessary to authorize this Agreement or
the other documents and instruments to be executed and delivered
by Seller pursuant hereto or the consummation of the transactions
contemplated hereby. This Agreement constitutes, and when
executed and delivered, the other documents and instruments to be
executed and delivered by Seller pursuant hereto will constitute,
valid binding agreements of Seller, enforceable in accordance
with their respective terms, except as such may be limited by
bankruptcy, insolvency, reorganization or other laws affecting
creditors' rights generally, and by general equitable principles.
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<PAGE>
4.3 No Violation. Except as set forth on Schedule 4.3
of the Disclosure Schedules, the execution and delivery of this
Agreement and the other documents and instruments to be executed
and delivered by Seller pursuant hereto, and the consummation by
Seller of the transactions contemplated hereby and thereby (a)
will not violate any statute or law or any rule, regulation,
order, writ, injunction or decree of any court or governmental
authority, (b) will not require any authorization, consent,
approval, exemption or other action by or notice to any court,
administrative or governmental agency, instrumentality,
commission, authority, board or body, and (c) subject to
obtaining the consents referred to in Schedule 4.3 of the
Disclosure Schedule, will not violate or conflict with, or
constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or result in
the termination of, or accelerate the performance required by, or
result in the creation of any Lien upon any of the assets of
Seller.
4.4 Financial Statements. Included as Exhibit 4.4 are
true and complete copies of the financial statements of Seller
consisting of income statements.
4.5 Tax Matters.
(a) Tax Returns Filed. All federal, state, foreign,
county, local and other tax returns required to be filed by or on
behalf of Seller have been timely filed and when filed were true
and correct in all material respects, and the taxes shown as due
thereon were paid or adequately accrued. Seller has duly
withheld and paid all taxes which it is required to withhold and
pay relating to salaries, wages and other compensation,
remuneration or benefits paid to the employees of Seller.
(b) Tax Audits. Seller has not received from the
Internal Revenue Service or from the tax authorities of any
state, county, local or other jurisdiction any notice of
underpayment of taxes or other deficiency which has not been paid
nor any objection to any return or report filed by Seller, or any
claim for tax arising from unrelated business income, or any
claim of inurement or private benefit. There are outstanding no
agreements or waivers extending the statutory period of
limitations applicable to any tax return or report.
(c) Other. Seller has not (i) filed any consent or
agreement under Section 341(f) of the Code, (ii) applied for any
tax ruling, (iii) entered into a closing agreement with any
taxing authority, (iv) been a party to any tax allocation or tax
sharing agreement, or (v) been taxed on unrelated business
income.
4.6 Inventory. All Inventory referred to in Section 1.1(d)
consists of a quality and quantity usable and saleable in the
ordinary course of business. All Inventory is located on
premises owned or leased by Seller as reflected in this
Agreement.
4.7 Absence of Certain Changes. Except as and to the
extent set forth in Schedule 4.7 or to any other Schedule hereto,
since the date of the Letter of Intent, there has not been:
Page 10
<PAGE>
(a) No Adverse Change. Any adverse change in the
business, prospects or operations of Seller;
(b) No Damage. Any loss, damage or destruction,
whether covered by insurance or not, affecting the Purchased
Assets;
(c) No Increase in Compensation. Any increase in the
salaries, wages or other remuneration or compensation, or in any
benefits payable or to become payable to any employee or agent of
Seller (including, without limitation, any increase or change
pursuant to any bonus, pension, profit sharing, retirement or
other plan or commitment), or any bonus or other employee benefit
granted, made or accrued;
(d) No Labor Disputes. Any labor dispute or
disturbance;
(e) No Amendment of Contracts. Entry into, amendment
or termination by Seller of any contract, or any waiver of
material rights thereunder, other than in the ordinary course of
business;
(f) No Loans and Advances. Any loan or advance (other
than advances to employees in the ordinary course of business for
travel and entertainment in accordance with past practice) to any
person including, but not limited to, any officer, director or
employee of Seller, or any Affiliate;
(g) No Credit. Any grant of credit to any customer or
distributor on terms or in amounts more favorable than those
which have been extended to such customer or distributor in the
past, any other change in the terms of any credit heretofore
extended, or any other change of Seller's policies or practices
with respect tothe granting of credit;
(h) Regulatory Approval. Any denial of any Regulatory
Approval or grant of a Regulatory Approval on terms or conditions
not consistent with the relevant terms and conditions of this
Agreement;
(i) No Termination of Contracts. No termination,
notice to terminate, or occurrence of an event which, with the
passage of time or the giving of notice, would cause a
termination of any Real Property Lease, Personal Property Lease,
Operating Contract, Distribution Contract or Administrative
Contract; or
(j) No Unusual Events. Any other event or condition
not in the ordinary course of business of Seller.
4.8 Absence of Undisclosed Liabilities. Seller does not
have any liabilities, commitments or obligations (secured or
unsecured, and whether accrued, absolute, contingent, direct,
indirect or otherwise), other than commercial liabilities and
obligations incurred in the ordinary course of business and
consistent with past practice which in the aggregate have not and
will not have a material adverse effect on the business,
financial condition or results of operations of Seller. Seller or
Parent have no knowledge of any basis for the assertion against
Page 11
<PAGE>
Seller of any liability and there are no circumstances,
conditions, happenings, events or arrangements, contractual or
otherwise, which may give rise to liabilities, except commercial
liabilities and obligations incurred in the ordinary course of
the business and consistent with past practice.
4.9 No Litigation. Except as set forth in Schedule 4.9 ,
to the knowledge of Seller or Parent's officers, there is no
action, suit, arbitration or other proceeding, investigation or
inquiry pending or threatened against Seller, its directors (in
such capacity), or any of its assets, nor does Seller or any
officer or director know, or have grounds to know, of any basis
for any such proceedings, investigations or inquiries. Schedule
4.9 also identifies all such actions, suits, proceedings,
investigations and inquiries to which Seller, any of its
directors have been parties since the Seller's inception in 1995.
Except as set forth in Schedule 4.9 , neither Seller nor its
assets is subject to any judgment, order, writ or injunction of
any court, arbitrator or federal, state, foreign, municipal or
other governmental department, commission, board, bureau, agency
or instrumentality.
4.10 Compliance With Laws.
(a) Compliance. To the best of the knowledge of
Seller and Parent, their officers, except as set forth in
Schedule 4.10(a) , Seller (including each and all of its
operations, practices, properties and assets) is in compliance
with all applicable federal, state, local and foreign laws,
ordinances, orders, rules and regulations (collectively,
"Laws"), including, without limitation, those applicable to
blood banks, and related laws of the states in which the Seller
operates, discrimination in employment, occupational safety and
health, trade practices, competition and pricing, product
warranties, zoning, building and sanitation, employment,
retirement and labor relations, product labeling and advertising
and the Environmental Laws (as defined herein). Except as set
forth in Schedule 4.10(a) , Seller has not received notice of any
violation or alleged violation of, and is subject to no liability
(whether accrued, absolute, contingent, direct or indirect) for
past or continuing violation of, any Laws. All reports and
returns required to be filed by Seller with any governmental
authority have been filed, and were accurate and complete when
filed. Without limiting the generality of the foregoing:
(i) The operation of the business as it is now
conducted does not in any manner constitute a nuisance or other
tortuous interference with the rights of any person or persons in
such a manner as to give rise to or constitute the grounds for a
suit, action, claim or demand by any such person or persons
seeking compensation or damages or seeking to restrain, enjoin or
otherwise prohibit any aspect of the conduct of such business or
the manner in which it is now conducted.
(ii) Seller has made all required payments to its
unemployment compensation reserve accounts with the appropriate
governmental departments of the states where it is required to
maintain such accounts, and each of such accounts has a positive
balance.
Page 12
<PAGE>
(iii) With respect to employees, Seller has
delivered to Buyer copies of all reports of Seller since its
inception in 1995 required under the federal Occupational Safety
and Health Act of 1970, as amended, and under all other
applicable health and safety laws and regulations. The
deficiencies, if any, noted on such reports have been corrected.
(iv) Seller is in compliance with all
Environmental Laws relating to the operation at the leased Real
Property identified on Schedule 1.1(a).
(b) Licenses and Permits. Except as set forth on
Schedule 4.10(a), to the best of the knowledge of Seller, Parent,
and their officers, Seller has all licenses, permits,
registrations, approvals, authorizations and consents of all
governmental and regulatory authorities and all certification
organizations required for the conduct of the business (as
presently conducted). All such licenses, permits, registrations,
approvals, authorizations and consents are described in Schedule
1.1(i), are in full force and effect, except those applications
which have been applied for, but not yet issued and which are
identified as "Pending" on the schedule, and except as set
forth on Schedule 4.10(b)(i), are assignable to Buyer in
accordance with the terms hereof. Except as set forth in
Schedule 4.10(a), Seller (including its operations, properties
and assets) is and has been in compliance with all such permits,
registrations, approvals, authorizations and consents.
Seller has delivered to Buyer copies of all licenses,
permits, registrations, approvals, authorizations and consents of
all governmental and regulatory authorities, and has delivered
copies of all applications for such licenses, permits,
registrations, approvals, authorizations and consents, and
reports of Seller to the Federal Food and Drug Administration and
the Missouri Health Department. Furthermore, Seller has taken
all steps, including any filings with governmental or regulatory
authorities, necessary to effect transfer all licenses, permits,
registrations, approvals, authorizations and consents to Buyer
and has delivered to Buyer copies of such filings or other
relevant correspondence with the appropriate governmental or
regulatory authorities.
(c) Environmental Matters. The applicable Laws
relating to pollution or protection of the environment, including
Laws relating to emissions, discharges, generation, storage,
releases or threatened releases of pollutants, contaminants,
chemicals or industrial, toxic, hazardous or petroleum or
petroleum-based substances or wastes ("Waste") into the
environment (including, without limitation, ambient air, surface
water, ground water, land surface or subsurface strata) or
otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Waste
including, without limitation, the Clean Water Act, the Clean Air
Act, the Resource Conservation and Recovery Act, the Toxic
Substances Control Act, the Medical Waste Tracking Act of 1988
and the Comprehensive Environmental Response Compensation
Liability Act ("CERCLA"), as amended, and their state and local
counterparts, are herein collectively referred to as the
"Environmental Laws". Without limiting the generality of the
foregoing provisions of this Section 4.10(c), to the best of the
knowledge of Seller, Parent, their officers and directors, the
Seller is in full compliance with all limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in the Environmental Laws or
contained in any regulations, code, plan, order, decree,
Page 13
<PAGE>
judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder. There is no civil, criminal
or administrative action, suit, demand, claim, hearing, notice of
violation, investigation, proceeding, notice or demand letter
pending or threatened against Seller relating in any way to the
Environmental Laws or any regulation, code, plan, order, decree,
judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder. There are no past or present
(or, to the best of Seller's knowledge, future) events,
conditions, circumstances, activities, practices, incidents,
actions, omissions or plans which may interfere with or prevent
compliance or continued compliance with the Environmental Laws or
with any regulation, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered, promulgated
or approved thereunder, or which may give rise to any liability,
including, without limitation, liability under CERCLA or similar
state or local Laws, or otherwise form the basis of any claim,
action, demand, suit, proceeding, hearing, notice of violation,
study or investigation, based on or related to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling, or the emission, discharge, release or
threatened release into the environment, of any Waste.
4.11 Title to and Condition of Properties.
(a) Marketable Title. Subject only to the provision of
the leases listed in Schedules 1.1(a) and 1.1(b), Seller has good
and marketable title to all the Purchased Assets, free and clear
of all mortgages, liens (statutory or otherwise), security
interests, claims, pledges, licenses, equities, options,
conditional sales contracts, leases, purchase agreements,
financing leases, assessments, levies, easements, covenants,
reservations, restrictions, rights-of-way, exceptions,
limitations, charges or encumbrances of any nature whatsoever
(collectively, "Liens") except those described in Schedule
4.11(a). Seller has complete and unrestricted power and right to
sell, assign, convey and deliver the Purchased Assets to Buyer as
contemplated hereby except as set forth on Schedule 4.11(a). At
Closing, Buyer will receive good and marketable title to all the
Purchased Assets, free and clear of all Liens of any nature
whatsoever except those described in Schedules 1.1(a), 1.1.(b)
and 4.11(a).
(b) Condition. All tangible assets (real and
personal) constituting Purchased Assets hereunder are in good
operating condition and repair, free from any defects (except
such minor defects as do not interfere with the continuing and
safe use thereof in the conduct of the normal operations of
Seller), have been maintained consistent with the standards
generally followed in the industry and applicable legal standards
and are sufficient to carry on business of Seller as conducted
during the preceding 12 months. All buildings, plants and other
structures utilized by Seller are in good condition and repair
and have no structural defects or defects affecting the plumbing,
electrical, sewerage, or heating, ventilating or air conditioning
systems.
(c) No Condemnation or Expropriation. Neither the
whole nor any portion of the property or any other assets of
Seller to be conveyed to Buyer is subject to any governmental
decree or order to be sold or is being condemned, expropriated or
otherwise taken by any public authority with or without payment
of compensation therefore, nor to the best of Seller's, its
officers' and directors' knowledge has any such condemnation,
expropriation or taking been proposed.
Page 14
<PAGE>
4.12 Insurance. Set forth in Schedule 4.12 is a
complete and accurate list and description of all policies of
fire, casualty, general liability, product liability, healthcare
entity (Blood Bank) liability, workers compensation, health and
other forms of insurance in effect as of the Closing, with
respect to the business of Seller, true and correct copies of
which have heretofore been delivered to Buyer. Schedule 4.12
includes, without limitation, the carrier, the description of
coverage, the limits of coverage, retention or deductible
amounts, amount of annual premiums, date of expiration and the
date through which premiums have been paid with respect to each
such policy, and any pending claims in excess of ten thousand
dollars ($10,000). All such policies are valid, outstanding and
enforceable policies and provide insurance coverage for the
properties, assets and operations of Seller, of the kinds, in the
amounts and against the risks customarily maintained by
organizations similarly situated , and no such policy (nor any
previous policy) provides for or is subject to any currently
enforceable retroactive rate or premium adjustment, loss sharing
arrangement or other actual or contingent liability arising
wholly or partially out of events arising prior to the date
hereof. Schedule 4.12 indicates each policy as to which (a) the
coverage limit has been reached or (b) the total incurred losses
to date equal 75% or more of the coverage limit. No notice of
cancellation or termination has been received with respect to any
such policy, and neither Seller nor any officer or director has
knowledge of any act or omission of Seller which could result in
cancellation of any such policy prior to its scheduled expiration
date. Seller has not been refused any insurance with respect to
any aspect of the operations of Seller's business nor has its
coverage been limited by any insurance carrier to which it has
applied for insurance or with which it has carried insurance
during the last three years. Seller has duly and timely made all
claims it has been entitled to make under each policy of
insurance. There is no claim by Seller pending under any such
policies as to which coverage has been questioned, denied or
disputed by the underwriters of such policies, and neither Seller
nor any of its officers, directors knows of any basis for denial
of any claim under any such policy. Such policies are sufficient
in all material respects for compliance by Seller with all
requirements of law and with the requirements of all contracts to
which Seller is a party.
4.13 Contracts and Commitments.
(a) Schedules. Schedules 1.1(a) through 1.1(k) are
complete and correct as to the matters they purport to represent.
(b) Contracts. Schedules 1.1(f)(i), (ii), (iii), and
(iv) set forth, collectively, all Contracts of the Seller.
(c) Purchase Commitments. Seller has no purchase
commitments for Inventory (items or supplies) that, together with
amounts on hand, constitute in excess of six (6) months normal
usage, or which are at an excessive price compared with Seller's
past prices.
(d) Sales Commitments. Seller has no contracts or
commitments relating to sales of Blood Products. Seller has no
contracts or commitments except those made in the ordinary course
of the business, at arm's length, and no such contracts or
commitments are for a sales price which would result in a loss to
the Seller.
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<PAGE>
(e) Contracts With Affiliates and Certain Others.
Seller has no agreement, understanding, contract or commitment
(written or oral) with any Affiliate or officer, employee,
independent contractor, agent, consultant, distributor, blood
bank depository, transfusion service, blood collection center or
Mobile Unit that is not cancelable by Seller on notice of not
longer than 30 days without cause, liability, penalty or premium
of any nature or kind whatsoever.
(f) Powers of Attorney. The Seller has not given a
power of attorney, which is currently in effect, to any person,
firm or corporation for any purpose whatsoever.
(g) Collective Bargaining Agreements. Seller is not a
party to any collective bargaining agreements with any unions,
guilds, shop committees or other collective bargaining groups.
(h) Loan Agreements. Seller is not obligated under any
loan agreement, promissory note, letter of credit, or other
evidence of indebtedness as a signatory, guarantor or otherwise.
(i) Guarantees. Except as disclosed on Schedule
4.13(i), Seller nor Parent, on behalf of Seller, has not
guaranteed the payment or performance of any person, firm or
corporation, agreed to indemnify any person or act as a surety,
or otherwise agreed to be contingently or secondarily liable for
the obligations of any person.
(j) Burdensome or Restrictive Agreements. Seller is
not a party to nor is it bound by any agreement, deed, lease or
other instrument which is so burdensome as to materially affect
or impair the operation of Seller. Without limiting the
generality of the foregoing, Seller is not a party to nor is it
bound by any agreement requiring Seller to assign any interest in
any trade secret or proprietary information, or prohibiting or
restricting Seller from competing in the geographical area or
soliciting customers or otherwise restricting it from carrying on
the business anywhere in the world.
(k) Other Material Contracts or Commitments. Seller
nor Parent, on behalf of Seller, have no lease, contract or
commitment of any nature involving consideration or other
expenditure in excess of $10,000, or involving performance over a
period of more than three months, or which is otherwise
individually material to the operations of Seller, except as
explicitly described in Schedule 4.13(k) or in any other
Schedule.
(l) No Default. Except as disclosed on Schedule
4.13(l), Seller is not in default under any lease, contract or
commitment, nor has any event or omission occurred which through
the passage of time or the giving of notice, or both, would
constitute a default thereunder or cause the acceleration of any
of Seller's obligations or result in the creation of any Lien on
any of the Purchased Assets. No third party is in default under
any lease, contract or commitment to which Seller is a party, nor
has any event or omission occurred which, through the passage of
time or the giving of notice, or both, would constitute a default
thereunder or give rise to an automatic termination, or the right
of discretionary termination, thereof.
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<PAGE>
4.14 Labor Matters. Except as set forth in Schedule 4.14,
since its inception in 1995, Seller has not experienced any labor
disputes, union organization attempts or any work stoppage due to
labor disagreements in connection with its business. Except to
the extent set forth in Schedule 4.14, (a) Seller is in
compliance with all applicable laws respecting employment and
employment practices, terms and conditions of employment and
wages and hours, and is not engaged in any unfair labor practice;
(b) there is no unfair labor practice charge or complaint against
Seller pending or threatened; (c) there is no labor strike,
dispute, request for, slowdown or stoppage actually pending or
threatened against or affecting Seller nor any secondary boycott
with respect to products of Seller; (d) no question concerning
representation has been raised or is threatened respecting the
employees of Seller; (e) no grievance and no arbitration
proceeding arising out of or under collective bargaining
agreements, is pending and no such claim therefor exists; and (f)
there are no administrative charges or court complaints against
Seller concerning alleged employment discrimination or other
employment related matters pending or threatened before the U.S.
Equal Employment Opportunity Commission or any state or federal
court or agency.
4.15 Employment Compensation. Schedule 3.3 contains a true
and correct list of all employees to whom the Seller is paying
compensation, including bonuses and incentives for services
rendered or otherwise; and in the case of salaried employees such
list identifies the current annual rate of compensation for each
employee and in the case of hourly or commission employees
identifies certain reasonable ranges of rates and the number of
employees falling within each such range.
4.16 Trade Rights. Schedule 1.1(e) lists all Trade Rights
in which Seller now has any interest, specifying whether such
Trade Rights are owned, controlled, used or held (under license
or otherwise) by Seller, and also indicating which of such Trade
Rights are registered. All Trade Rights have been properly
registered, all pending registrations and applications have been
properly made and filed and all annuity, maintenance, renewal and
other fees relating to registrations or applications are current.
In order to conduct the business of Seller, as such is currently
being conducted or proposed to be conducted, Seller does not
require any Trade Rights that it does not already have. Seller
is not infringing and has not infringed any Trade Rights of
another in the operation of the business of Seller, nor is any
other person infringing the Trade Rights of Seller. Seller has
not granted any license or made any assignment of any Trade Right
listed on Schedule 1.1(e , nor does Seller pay any royalties or
other consideration for the right to use any Trade Rights of
others. There are no inquiries, investigations or claims or
litigation challenging or threatening to challenge Seller's
right, title and interest with respect to its continued use and
right to preclude others from using any Trade Rights of Seller.
All Trade Rights of Seller are valid, enforceable and in good
standing, and there are no equitable defenses to enforcement
based on any act or omission of Seller.
4.17 Major Customers. Schedule 1.1(f)(ii) contains a
list of the customers of Seller, since Seller's inception in
1995 showing the total dollar amount of net sales to each such
customer during each month in such period. Customers include
hospitals, health systems, third-party payors, blood bank
depositories, transfusion services, and blood collection centers.
Seller, Parent nor any of their officers have any knowledge or
information of any facts indicating, nor any other reason to
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<PAGE>
believe, that any of the customers listed on Schedule 1.1(f)(ii)
will not continue to be customers of Buyer after the Closing at
substantially the same level of purchases as heretofore except as
disclosed on Schedule 4.17.
4.18 Blood Product or Related Liability. Schedule 4.18
contains a description of all product liability claims and
similar claims, actions, litigation and other proceedings
relating directly or indirectly to Blood Products manufactured,
distributed or sold, or related services rendered, including
operation of the blood bank, donor selection, and screening, and
donor/recipient recordkeeping and notification which are
presently pending or which to Seller, Parent or any of their
officers or directors' knowledge are threatened, or which have
been asserted or commenced against Seller within the last five
(5) years, in which a party thereto either requests injunctive
relief (whether temporary or permanent) or alleges damages
(whether or not covered by insurance). There are no defects in
preparation, storage or manufacture of Blood Products which would
adversely affect performance or create an unusual risk of injury
to persons or property, specifically including Blood Products in
the Inventory. The Blood Products have been processed so as to
meet and comply with all governmental standards and
specifications currently in effect, and have received all
governmental approvals necessary to allow their distribution,
sale and use. The materials furnished with the Blood Products
provide adequate safety instructions and warnings under the
applicable law of all jurisdictions in which the Seller's
products have been sold.
4.19 No Brokers or Finders. Neither Seller nor any of its
directors, officers, employees or agents have retained, employed
or used any broker or finder in connection with the transaction
provided for herein or in connection with the negotiation
thereof.
4.20 Disclosure. No representation or warranty by Seller in
this Agreement, nor any statement, certificate, schedule or
exhibit hereto furnished or to be furnished by or on behalf of
Seller pursuant to this Agreement, nor any schedule, document or
certificate delivered to Buyer pursuant to this Agreement or in
connection with transactions contemplated hereby, contains or
shall contain any untrue statement of material fact or omits or
shall omit a material fact necessary to make the statements
contained therein not misleading. All statements and information
contained in any certificate, instrument, schedule or document
delivered by or on behalf of Seller shall be deemed
representations and warranties by the Seller.
4.21 Hart-Scott-Rodino Act Representation. Parent has no
more than $4,500,000 in assets, as reflected in Parent's most
recent balance sheet, nor more than $11,000,000 in revenues in
its most recently completed full fiscal year.
5. REPRESENTATIONS AND WARRANTIES OF BUYER
- -----------------------------------------------
Buyer makes the following representations and warranties to
Seller, each of which is true and correct on the date hereof,
shall remain true and correct to and including the Closing Date,
shall be unaffected by any investigation heretofore or hereafter
made by Seller or any notice to Seller, and shall survive the
Closing of the transactions provided for herein.
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<PAGE>
5.1 Corporate.
(a) Organization. Buyer is a corporation duly
organized, validly existing and in good standing under the laws
of the Commonwealth of Massachusetts.
(b) Corporate Power. Buyer has all requisite
corporate power to enter into this Agreement and the other
documents and instruments to be executed and delivered by Buyer
and to carry out the transactions contemplated hereby and
thereby.
5.2 Authority. The execution and delivery of this
Agreement and the other documents and instruments to be executed
and delivered by Buyer pursuant hereto and the consummation of
the transactions contemplated hereby and thereby have been duly
authorized by the Board of Directors of Buyer. No other
corporate act or proceeding on the part of Buyer or its
Shareholders is necessary to authorize this Agreement or the
other documents and instruments to be executed and delivered by
Buyer pursuant hereto or the consummation of the transactions
contemplated hereby and thereby. This Agreement constitutes, and
when executed and delivered, the other documents and instruments
to be executed and delivered by Buyer pursuant hereto will
constitute, valid and binding agreements of Buyer, enforceable in
accordance with their respective terms, except as such may be
limited by bankruptcy, insolvency, reorganization or other laws
affecting creditors' rights generally, and by general equitable
principles.
5.3 No Brokers or Finders. Neither Buyer nor any of its
directors, officers, employees or agents have retained, employed
or used any broker or finder in connection with the transaction
provided for herein or in connection with the negotiation
thereof.
5.4 Securities Laws. Buyer has complied with all state and
federal securities applicable to Buyer by reason of the
transaction contemplated by this Agreement.
5.5 Disclosure. No representation or warranty by Seller in
this Agreement, nor any statement, certificate, schedule or
exhibit hereto furnished or to be furnished by or on behalf of
Seller pursuant to this Agreement, nor any schedule, document or
certificate delivered to Buyer pursuant to this Agreement or in
connection with transactions contemplated hereby, contains or
shall contain any untrue statement of material fact or omits or
shall omit a material fact necessary to make the statements
contained therein not misleading. All statements and information
contained in any certificate, instrument, schedule or document
delivered by or on behalf of Seller shall be deemed
representations and warranties by the Seller.
5.6 Absence of Litigation. To the knowledge of Buyer,
there are no claims, actions, suits, proceedings or
investigations pending or threatened against Buyer before any
court, arbitrator or administrative, governmental or regulatory
authority or body which could reasonably be expected to adversely
affect Buyer's ability to perform it obligations under this
Agreement or as contemplated hereby.
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<PAGE>
5.7 SEC Reports. As of their respective dates, all reports
or registration statements filed by Buyer with the Securities and
Exchange Commission ("SEC") since 1995, including all exhibits
thereto and items incorporated therein by reference, do not
contain any untrue statements of a material fact or omit to state
any material fact required to be stated therein or necessary to
make the statements therein, under the circumstances in which
they were made, not misleading.
5.8 No Violation. The execution and delivery of this
Agreement and the other documents and instruments to be executed
and delivered by Buyer pursuant hereto, and the consummation by
Buyer of the transactions contemplated hereby and thereby, (a)
will not violate any statute or law or any rule, regulation,
order, writ, injunction or decree of any court or governmental
authority, (b) will not require any authorization, consent,
approval, exemption or other action by or notice to any court,
administrative or governmental agency, instrumentality,
commission, authority, board or body,, will not violate or
conflict with, or constitute a default (or an event with, with
notice or lapse of time or both, would constitute a default)
under, or result in the termination of, or accelerate the
performance required by, or result in the creation of any lien
upon, any of the assets of Buyer under any term or provisions of
Buyer's Articles of Incorporation, Bylaws or other constituent
documents of Buyer or of any contract, commitment, understanding,
arrangement, agreement or restriction of any kind or character to
which Buyer is a party or by which Buyer or any of Buyer's assets
or properties may be bound or affected.
5.9 Operations of Seller. Buyer recognizes that Parent
provides certain services and support to Seller, including
without limitation, financial reporting services and human
resources. Buyer recognizes that such services and support are
necessary for the ongoing operation of Seller's activities and
operations, and that any assets owned by Parent which are
necessary to provide such services and support are not
transferred, sold or assigned to Buyer under the terms and
provision of this Agreement. Buyer recognizes that, in order to
conduct operations in the Area in a manner similar to that
conducted by Seller, Buyer must provide the services and support
currently being provided by Parent.
6. EMPLOYEES - EMPLOYEE BENEFITS
- --------------------------------------
6.1 Employees. Seller shall terminate employment of all
employees of Seller as of Closing. Buyer shall not be
responsible for any compensation or benefits (including sick
leave or vacation pay) due from Seller to Seller's employees.
6.2 Retained Responsibilities. Seller agrees to satisfy,
or cause its insurance carriers to satisfy, all claims for
benefits, whether insured or otherwise (including, but not
limited to, workers' compensation, life insurance, medical and
disability programs), under Seller's employee benefit programs
brought by, or in respect of employees and former employees of
the Seller, which claims arise out of events occurring on or
prior to the Closing Date, in accordance with the terms and
conditions of such programs or applicable workers' compensation
statutes.
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6.3 Payroll Tax. Seller agrees to make a clean cut-off of
payroll and payroll tax reporting with respect to its employees
paying over to the federal, state and city governments those
amounts respectively withheld or required to be withheld for
periods ending on or prior to the Closing. Seller also agrees to
issue, by the date prescribed by IRS Regulations, Forms W-2 for
salaries, wages and other compensation paid through the Closing
Date.
6.4 Termination Benefits. If any action on the part of
Seller prior to the Closing, or if the sale to Buyer of the
assets of Seller pursuant to this Agreement or the transactions
contemplated hereby, shall result in any liability or claim of
liability for severance payments, termination benefits, accrued
vacation pay or other compensation or benefits, or any liability,
forfeiture, fine or other obligation by virtue of any state,
federal or local "plant-closing" or similar law, such liability
or such other liability, forfeiture, fine or other obligation or
claim of liability shall be the sole responsibility of Seller.
7. OTHER MATTERS
- ---------------------
7.1 Surrender of Certain Licenses. At and effective as of
Closing, Seller shall irrevocably cancel, surrender or otherwise
give up all Regulatory Authorizations which are Excluded Assets.
7.2 Use of Seller's Name. Following the Closing, neither
Seller nor any Affiliate shall, without the prior written consent
of Buyer (which may be withheld in Buyer's sole discretion), make
any use of the name "Gateway Community Blood Program, Inc." or
any other name confusingly similar thereto, except as may be
necessary for Seller to pay its liabilities, prepare tax returns
and other reports, and to otherwise wind up and conclude its
business, provided that the parties hereto agree that the use by
Seller or Parent of the name "Community Blood Program, Inc." or
any variation thereof in conjunction with other neighborhoods,
communities, towns or other locales shall not be considered
confusingly similar thereto.. Buyer understands that Parent's
existing corporate brochure identifies the corporate name and
will allow Parent to distribute such materials provided that,
Parent provides an insert to such brochure identifying this
transaction such that there will not be any confusion as to who
owns the assets. After the depletion of the existing supply of
brochures, or December 31, 1997, whichever occurs first, Parent
will remove corporate name from all materials.
7.3 Bulk Sales Compliance. Seller and Buyer waive
compliance with the bulk sales or bulk transfer statutes of all
states having jurisdiction.
7.4 Investigations. The respective representations and
warranties of Seller and Buyer contained herein or in any
certificates or other documents delivered at or prior to the
Closing, shall not be deemed waived or otherwise affected by any
investigation made by any party hereto.
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8. FURTHER COVENANTS OF SELLER
- ------------------------------------
Seller covenants and agrees as follows:
8.1 Access to Information and Records. During the period
prior to the Closing, Seller shall give Buyer, its counsel,
accountants and other representatives (i) access during normal
business hours to all of the properties, books, records,
contracts and documents of Seller for the purpose of such
inspection, investigation and testing as Buyer deems appropriate
(and Seller shall furnish or cause to be furnished to Buyer and
its representatives all information with respect to the business
and affairs of Seller as Buyer may request); (ii) access to
employees, agents and representatives for the purposes of such
meetings and communications as Buyer reasonably desires; and
(iii) with the prior consent of Seller in each instance (which
consent shall not be unreasonably withheld), access to suppliers,
customers and others having business dealings with Seller.
8.2 Consents. Seller will use their best efforts prior to
Closing to obtain all consents necessary for the consummation of
the transactions contemplated hereby, including, without
limitation, the consent of each lessor of real or personal
property leased by Seller under leases being assumed by Buyer
herein to assignment of the lessee's interest under the lease of
such property to Buyer. All such consents shall be in writing
and executed counterparts thereof shall be delivered to Buyer
promptly after Seller's receipt thereof but in no event later
than two business days prior to the Closing.
8.3 Other Action. Seller shall use its best efforts to
cause the fulfillment at the earliest practicable date of all of
the conditions to the parties' obligations to consummate the
transactions contemplated in this Agreement.
8.4 Disclosure. Seller shall have a continuing obligation
to promptly notify Buyer in writing with respect to any matter
hereafter arising or discovered which, if existing or known at
the date of this Agreement, would have been required to be set
forth or described in any Schedule. Seller shall amend such
Schedules to reflect such matters.
9. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
- ---------------------------------------------------
Each and every obligation of Buyer to be performed on the
Closing Date shall be subject to the satisfaction prior to or at
the Closing of each of the following conditions:
9.1 Representations and Warranties True on the Closing
Date. Each of the representations and warranties made or deemed
made by Seller in this Agreement, and the statements contained in
any Schedule or in any instrument, list, certificate or writing
delivered by Seller pursuant to this Agreement, shall be true and
correct in all material respects when made and shall be true and
correct in all material respects at and as of the Closing Date or
subsequently amended.
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9.2 Compliance With Agreement. Seller shall have in all
material respects performed and complied with all of their
agreements and obligations under this Agreement which are to be
performed or complied with by them prior to or on the Closing
Date, including the delivery of the closing documents specified
in Section 11.1 and the furnishing of all Schedules in accordance
with Section 13.
9.3 Absence of Suit. No action, suit or proceeding before
any court or any governmental authority shall have been commenced
or threatened, and no investigation by any governmental or
regulating authority shall have been commenced, against Buyer,
Seller or any of the affiliates, officers or directors of any of
them, seeking to restrain, prevent or change the transactions
contemplated hereby, or questioning the validity or legality of
any such transactions, or seeking damages in connection with, or
imposing any condition on, any such transactions.
9.4 Consents and Approvals. All approvals, consents and
waivers that are required to effect the transactions contemplated
hereby shall have been received, and executed counterparts
thereof shall have been delivered to Buyer. After the Closing,
Seller will continue to use their best effects to obtain any such
consents or approvals, and Seller shall not be relieved of any
liability hereunder for failure to perform any of its covenants
or for the inaccuracy of any representation or warranty.
9.5 Estoppel Certificates. Seller shall have delivered to
Buyer on or prior to the Closing Date an estoppel certificate or
status letter from the landlord under each Real Property Lease
which estoppel certificate or status letter will certify (i) the
lease is valid and in full force and effect; (ii) the amounts
payable by Seller under the lease and the date to which the same
have been paid; (iii) whether there are, to the knowledge of said
landlord, any defaults thereunder, and, if so, specifying the
nature thereof; and (iv) a statement that the transactions
contemplated by this Agreement will not constitute default under
the lease and that the landlord consents to the assignment of the
lease to Buyer.
9.6 Seller's Disclosure Schedules. The Schedules referred
to in Section 13 are satisfactory to Buyer, in Buyer's sole
discretion.
10. CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
- ----------------------------------------------------
Each and every obligation of Seller to be performed on the
Closing Date shall be subject to the satisfaction prior to or at
the Closing of the following conditions:
10.1 Representations and Warranties True on the Closing
Date. Each of the representations and warranties made by Buyer
in this Agreement shall be true and correct in all material
respects when made and shall be true and correct in all material
respects at and as of the Closing Date as though such
representations and warranties were made or given on and as of
the Closing Date.
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10.2 Compliance With Agreement. Buyer shall have in all
material respects performed and complied with all of Buyer's
agreements and obligations under this Agreement which are to be
performed or complied with by Buyer prior to or on the Closing
Date, including the delivery of the closing documents specified
in Section 11.2.
10.3 Absence of Suit. No action, suit or proceeding before
any court or any governmental authority shall have been commenced
or threatened, and no investigation by any governmental or
regulating authority shall have been commenced, against Buyer,
Seller or any of the affiliates, officers or directors of any of
them, seeking to restrain, prevent or change the transactions
contemplated hereby, or questioning the validity or legality of
any such transactions, or seeking damages in connection with, or
imposing any condition on, any such transactions.
10.4 Consents and Approvals. All approvals, consents and
waivers that are required to effect the transactions contemplated
hereby shall have been received, and executed counterparts
thereof shall have been delivered to Seller. After the Closing,
Buyer will continue to use their best effects to obtain any such
consents or approvals, and Buyer shall not be relieved of any
liability hereunder for failure to perform any of its covenants
or for the inaccuracy of any representation or warranty.
10.5 Removal of Guaranty. Any Guaranty of Parent used to
secure leased property will be released by the appropriate
Landlord.
11. CLOSING
- ---------------
The closing of this transaction ("the Closing") shall be
deemed to have taken place on August 1, 1997. Such date is
referred to in this Agreement as the "Closing Date".
11.1 Documents to be Delivered by Seller. At the Closing,
Seller shall deliver to Buyer the following documents, in each
case duly executed or otherwise in proper form:
(a) Bills of Sale. General warranty bills of sale and
such other instruments of assignment, transfer, conveyance and
endorsement as will be sufficient in the opinion of Buyer and its
counsel to transfer, assign, convey and deliver to Buyer the
Purchased Assets as contemplated hereby.
(b) Compliance Certificate. A certificate signed by
the chief executive officer of Seller that each of the
representations and warranties made by Seller in this Agreement,
as amended, is true and correct in all material respects on and
as of the Closing Date with the same effect as though such
representations and warranties had been made or given on and as
of the Closing Date, and that Seller have performed and complied
with all of Seller's obligations under this Agreement which are
to be performed or complied with on or prior to the Closing Date.
(c) Opinion of Counsel. The written opinions of
counsel to Seller, dated as of the Closing Date, addressed to
Buyer, substantially in the form attached as Exhibit 11.1(c)
hereto.
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(d) Certified Resolutions. A certified copy of the
resolutions of the Board of Directors of Seller authorizing and
approving the transactions contemplated by this Agreement of
Seller approving the form of this Agreement.
(e) Articles; Bylaws. A copy of the By-laws of Seller
certified by the secretary of Seller, and a copy of the Articles
of Incorporation of Seller certified by the Secretary of State of
the state of incorporation of Seller.
(f) Incumbency Certificate. Incumbency certificates
relating to each person executing any document executed and
delivered to Buyer pursuant to the terms hereof.
(g) Other Documents. All other documents, instruments
or writings required to be delivered to Buyer at or prior to the
Closing pursuant to this Agreement and such other certificates of
authority and documents as Buyer may reasonably request.
11.2 Documents to be Delivered by Buyer. At the Closing,
Buyer shall deliver to Seller the following documents, in each
case duly executed or otherwise in proper form:
(a) Cash. To Seller a certified or bank cashier's
check (or wire transfer) as required by Sections 3.1(b) and (c)
hereof.
(b) Assumption of Liabilities. Such undertakings and
instruments of assumption as will be reasonably sufficient in the
opinion of Seller and its counsel to evidence the assumption of
Seller debts, liabilities and obligations as provided for in
Article 2.
(c) Compliance Certificate. A certificate signed by
the chief executive officer of Buyer that the representations and
warranties made by Buyer in this Agreement, as amended, are true
and correct on and as of the Closing Date with the same effect as
though such representations and warranties had been made or given
on and as of the Closing Date, and that Buyer has performed and
complied with all of Buyer's obligations under this Agreement
which are to be performed or complied with on or prior to the
Closing Date.
(d) Certified Resolutions. A certified copy of the
resolutions of the Board of Directors of Buyer authorizing and
approving this Agreement and the consummation of the transactions
contemplated by this Agreement.
(e) Incumbency Certificate. Incumbency certificates
relating to each person executing any document executed and
delivered to Seller by Buyer pursuant to the terms hereof.
(f) Opinion of Counsel. The written opinion of
counsel to Buyer, dated as of the Closing Date, addressed to
Seller, substantially in the form attached as Exhibit 11.2(c)
hereto.
(g) Other Documents. All other documents, instruments
or writings required to be delivered to Seller at or prior to the
Closing pursuant to this Agreement and such other certificates of
authority and documents as Seller may reasonably request.
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12. TERMINATION
- --------------------
12.1 Right of Termination Without Breach. This Agreement
may be terminated without further liability of any party at any
time prior to the Closing:
(a) by mutual written agreement of Buyer and Seller,
or
(b) by either Buyer or Seller if the Closing shall not
have occurred on or before August 4, 1997, provided the
terminating party has not, through breach of a representation,
warranty or covenant, prevented the Closing from occurring on or
before such date.
12.2 Termination for Breach.
(a) Termination by Buyer. If (i) there has been a
material violation or breach by Seller of any of the agreements,
representations or warranties contained in this Agreement which
has not been waived in writing by Buyer, or (ii) there has been a
failure of satisfaction of a condition to the obligations of
Buyer which has not been so waived, or (iii) Seller shall have
attempted to terminate this Agreement under this Article 12 or
otherwise without grounds to do so, then Buyer may, by written
notice to Seller at any time prior to the Closing that such
violation, breach, failure or wrongful termination attempt is
continuing, terminate this Agreement with the effect set forth in
Section 12.2 hereof.
(b) Termination by Seller. If (i) there has been a
material violation or breach by Buyer of any of the agreements,
representations or warranties contained in this Agreement which
has not been waived in writing by Seller, or (ii) there has been
a failure of satisfaction of a condition to the obligations of
Seller which has not been so waived, or (iii) Buyer shall have
attempted to terminate this Agreement under this Section 12.2 or
otherwise without grounds to do so, then Seller may, by written
notice to Buyer at any time prior to the Closing that such
violation, breach, failure or wrongful termination attempt is
continuing, terminate this Agreement with the effect set forth in
Section 12.2(c) hereof.
(c) Effect of Termination. Termination of this
Agreement pursuant to this Section 12 shall not in any way
terminate, limit or restrict the rights and remedies of any party
hereto against any other party which has violated, breached or
failed to satisfy any of the representations, warranties,
covenants, agreements, conditions or other provisions of this
Agreement prior to termination hereof. In addition to the right
of any party under common law to redress for any such breach or
violation, each party whose breach or violation has occurred
prior to termination shall jointly and severally indemnify each
other party for whose benefit such representation, warranty,
covenant, agreement or other provision was made ("indemnified
party") from and against all losses, damages (including, without
limitation, consequential damages), costs and expenses
(including, without limitation, interest (including prejudgment
interest in any litigated matter), penalties, court costs, and
attorneys fees and expenses) asserted against, resulting to,
imposed upon, or incurred by the indemnified party, directly or
indirectly, by reason of, arising out of or resulting from such
breach or violation. Subject to the foregoing, the parties'
obligations under Article 12 of this Agreement shall survive
termination.
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13. DISCLOSURE SCHEDULE
- ---------------------------
The Schedules have been compiled, dated and delivered to
Buyer at Closing. Information set forth in the Disclosure
Schedule will specifically refer to the article and section of
this Agreement to which such information is responsive and such
information shall be deemed to have been disclosed with respect
to any other article or section of this Agreement or for any
other purpose. The Disclosure Schedule will include a table of
contents and/or index to all of the information and documents
contained therein. The Disclosure Schedule shall not materially
affect the representations and warranties contained in this
Agreement and, to the extent the language in the Disclosure
Schedule does not conform in every respect to the language of
such representations and warranties, such language shall be
disregarded and be of no force or effect.
14. FURTHER ASSURANCE
- -------------------------
From time to time, Buyer or Seller may request without
further consideration, that Buyer or Seller execute and deliver
such documents and take such other action as may reasonably
request in order to consummate more effectively the transactions
contemplated hereby and to vest in Buyer good, valid and
marketable title to the assets being transferred hereunder.
15. ANNOUNCEMENTS
- ---------------------
Announcements concerning the transactions provided for in
this Agreement by either Seller or Buyer shall be subject to the
approval of the other in all essential respects, except that
approval shall not be required as to any statements and other
information which it may submit to the Securities and Exchange
Commission, the Missouri Secretary of State or be required to
make pursuant to any rule or regulation of the Securities and
Exchange Commission or any state or local securities regulatory
board, or otherwise required by law.
16. ASSIGNMENT; PARTIES IN INTEREST
- ---------------------------------------
16.1 Assignment. Except as expressly provided herein, the
rights and obligations of a party hereunder may not be assigned,
transferred or encumbered without the prior written consent of
the other parties, which consent shall not be unreasonably
withheld; provided, that, in the event that, following written
notice to Buyer, Seller elects to assign or transfer all or any
part of its rights and obligations hereunder to Parent, such
assignment or transfer shall not require the consent of Buyer.
Notwithstanding the foregoing, Buyer may, without consent of
Seller, cause one or more subsidiaries of Buyer to carry out all
or part of the transactions contemplated hereby; provided,
however, that Buyer shall, nevertheless, remain liable for all of
its obligations, and those of any such subsidiary, to Seller
hereunder.
16.2 Parties in Interest. This Agreement shall be binding
upon, inure to the benefit of, and be enforceable by the
respective successors and permitted assigns of the parties
hereto. Nothing contained herein shall be deemed to confer upon
any other person any right or remedy under or by reason of this
Agreement.
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17. RESOLUTION OF DISPUTES
- ------------------------------
17.1 Arbitration. Any dispute, controversy or claim arising
out of or relating to this Agreement or any contract or agreement
entered into pursuant hereto or the performance by the parties of
its or their terms, or any claim that the execution and delivery
of such agreements constituted a violation of the securities laws
of any state or the United States or any claim for damages or
rescission of this Agreement for fraud, misrepresentation or
violation of any such securities laws, shall be settled by
binding arbitration held in Los Angeles County, California in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association then in effect, except as specifically
otherwise provided in this Article 17.
17.2 Arbitrators. If the matter in controversy (exclusive
of attorney fees and expenses) shall appear, as at the time of
the demand for arbitration, to exceed $150,000, then the panel to
be appointed shall consist of three neutral arbitrators;
otherwise, one neutral arbitrator.
17.3 Procedures; No Appeal. The arbitrator(s) shall allow
such discovery as the arbitrator(s) determine appropriate under
the circumstances and shall resolve the dispute as expeditiously
as practicable, and if reasonably practicable, within 120 days
after the selection of the arbitrator(s). The arbitrator(s)
shall give the parties written notice of the decision, with the
reasons therefor set out, and shall have 30 days thereafter to
reconsider and modify such decision if any party so requests
within 10 days after the decision. Thereafter, the decision of
the arbitrator(s) shall be final, binding, and nonappealable with
respect to all persons, including (without limitation) persons
who have failed or refused to participate in the arbitration
process.
17.4 Authority. The arbitrator(s) shall have authority to
award relief under legal or equitable principles, including
interim or preliminary relief, and to allocate responsibility for
the costs of the arbitration and to award recovery of attorneys
fees and expenses in such manner as is determined to be
appropriate by the arbitrator(s).
17.5 Entry of Judgment. Judgment upon the award rendered by
the arbitrator(s) may be entered in any court having in personam
and subject matter jurisdiction. Seller and Buyer hereby submit
to the in personam jurisdiction of the Federal and State courts
in California, for the purpose of confirming any such award and
entering judgment thereon.
17.6 Confidentiality. All proceedings under this Article
17, and all evidence given or discovered pursuant hereto, shall
be maintained in confidence by all parties.
17.7 Continued Performance. The fact that the dispute
resolution procedures specified in this Article 17 shall have
been or may be invoked shall not excuse any party from performing
its obligations under this Agreement and during the pendency of
any such procedure all parties shall continue to perform their
respective obligations in good faith, subject to any rights to
terminate this Agreement that may be available to any party.
17.8 Tolling. All applicable statues of limitation shall be
tolled while the procedures specified in this Article 17 are
pending. The parties will take such action, if any, required to
effectuate such tolling.
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18. LAW GOVERNING AGREEMENT
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This Agreement may not be modified or terminated orally, and
shall be construed and interpreted according to the internal laws
of the Commonwealth of Massachusetts, excluding any choice of law
rules that may direct the application of the laws of another
jurisdiction.
19. AMENDMENT AND MODIFICATION
- ----------------------------------
Buyer and Seller may amend, modify and supplement this
Agreement in such manner as may be agreed upon by them in
writing.
20. INDEMNIFICATION
- ------------------------
Seller agrees to indemnify and hold harmless Buyer for any
post-closing actions for any events occurring prior to Closing
relating to this transaction and not resulting from the Buyer's
negligence. Buyer agrees to indemnify and hold harmless Seller
for any events occurring after the Closing relating to this
entire transaction or Buyer's operation of business and not
resulting from the Seller's negligence. Seller shall not be
liable hereunder except to the extent that the aggregate claims
and liabilities exceed $5,000, and then only to the extent of
such excess.
21. NOTICE
- ---------------
All notices, requests, demands and other communications
hereunder shall be given in writing and shall be: (a) personally
delivered; (b) sent by telecopier, facsimile transmission or
other electronic means of transmitting written documents; or (c)
sent to the parties at their respective addresses indicated
herein by registered or certified U.S. mail, return receipt
requested and postage prepaid, or by private overnight mail
courier service. The respective addresses to be used for all
such notices, demands or requests are as follows:
(a) If to Buyer, to:
Haemonetics Corporation
400 Wood Road
Braintree, Massachusetts 02184
Attn: John F. White
President and Chief Executive Officer
(with a copy to):
Haemonetics Corporation
400 Wood Road
Braintree, Massachusetts 02184
Attn: Alicia R. Lopez
Vice President and General Counsel
or to such other person or address as Buyer shall furnish to
Seller in writing.
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(b) If to Seller, to:
HemaCare Corporation
4954 Van Nuys Boulevard
Sherman Oaks, California 91407
Attn: Hal I. Lieberman
President and Chief Executive Officer
(with a copy to)
Sheppard, Mullin, Richter & Hampton LLP
333 South Hope Street, 48th Floor
Los Angeles, California 90071
Attn: Lawrence Braun, Esquire
or to such other person or address as Seller shall furnish to
Buyer in writing.
If personally delivered, such communication shall be deemed
delivered upon actual receipt; if electronically transmitted
pursuant to this paragraph, such communication shall be deemed
delivered the next business day after transmission (and sender
shall bear the burden of proof of delivery); if sent by overnight
courier pursuant to this paragraph, such communication shall be
deemed delivered upon receipt; and if sent by U.S. mail pursuant
to this paragraph, such communication shall be deemed delivered
as of the date of delivery indicated on the receipt issued by the
relevant postal service, or, if the addressee fails or refuses to
accept delivery, as of the date of such failure or refusal. Any
party to this Agreement may change its address for the purposes
of this Agreement by giving notice thereof in accordance with
this Section.
22. EXPENSES
- ----------------
Regardless of whether or not the transactions contemplated
hereby are consummated:
22.1 Brokerage. Seller and Buyer each represent and warrant
to each other that there is no broker involved or in any way
connected with the transfer provided for herein. Buyer agrees to
hold Seller harmless from and against all claims for brokerage
commissions or finder's fees incurred through any act of Buyer in
connection with the execution of this Agreement or the
transactions provided for herein. Seller agrees to hold Buyer
harmless from and against all claims for brokerage commissions or
finder's fees incurred through any act of Seller in connection
with the execution of this Agreement or the transactions provided
for herein.
22.2 Expenses to be Paid by Buyer. Buyer shall pay, and
shall indemnify, defend and hold Seller harmless from and
against, each of the following:
(a) Transfer Taxes. Any sales, use, excise, transfer
or other similar tax imposed with respect to the transactions
provided for in this Agreement, and any interest or penalties
related thereto.
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(b) Professional Fees. All fees and expenses of
Buyer's legal, accounting, investment banking and other
professional counsel in connection with the transactions
contemplated hereby.
22.3 Other. Except as otherwise provided herein, each of
the parties shall bear its own expenses and the expenses of its
counsel and other agents in connection with the transactions
contemplated hereby.
22.4 Costs of Litigation or Arbitration. The parties agree
that (subject to the discretion, in an arbitration proceeding, of
the arbitrator as set forth in Article 17 the prevailing party in
any action brought with respect to or to enforce any right or
remedy under this Agreement shall be entitled to recover from the
other party or parties all reasonable costs and expenses of any
nature whatsoever incurred by the prevailing party in connection
with such action, including without limitation attorneys' fees
and prejudgment interest.
23. NON-COMPETITION
- -----------------------
Seller and Parent agree that for a period ending twelve (12)
months after Buyer has satisfied all payment obligations
hereunder, neither of them shall, directly or indirectly, through
an Affiliate or otherwise, enter into any contract, joint
venture, or other arrangement with any other party to supply
whole blood or blood components to customers in the Area, or to
conduct or aid any party engaged in the business of component
collection in the Area that is similar to or competitive with the
business of Gateway Blood Program, Inc.; provided that,
notwithstanding the foregoing, nothing in this Agreement shall
prevent Parent or Buyer from purchasing blood or blood products
in the Area during the period of their non-competition
obligations as provided herein.
24. ENTIRE AGREEMENT
- -------------------------
This instrument embodies the entire agreement between the
parties hereto with respect to the transactions contemplated
herein, and there have been and are no agreements,
representations or warranties between the parties other than
those set forth or provided for herein.
25. COUNTERPARTS
- --------------------
This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
26. HEADINGS
- -----------------
The headings in this Agreement are inserted for convenience
only and shall not constitute a part hereof.
27. FURTHER DOCUMENTS
- -------------------------
Buyer and Seller each agree to execute all other documents
and to take such other action or corporate proceedings as may be
necessary or desirable to carry out the terms hereof.
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28. MISCELLANEOUS
- ---------------------
28.1 Books and Records. Buyer agrees that it will cooperate
with and make available to Seller, during normal business hours,
all of Seller's corporate books and records, information and
employees ("Information") (without substantial disruption of
employment) retained and remaining in existence after the Closing
Date which are necessary or useful in connection with any tax
inquiry, audit, investigation or dispute, any litigation or
investigation or any other matter requiring any such corporate
books and records, information or employees for any reasonable
business purpose. Buyer shall (i) provide to Seller such access
to the Information as may reasonably be requested in connection
with the preparation of any return, audit, or other examination
by any taxing authority or judicial or administrative proceedings
relating to liability for taxes, and (ii) retain and provide
Seller with any records or other information that may be relevant
to such return, audit or examination, proceeding, or
determination that affects any amount required to be shown on any
tax returns of Seller for any period.
28.2 No Third Party Beneficiaries. Nothing in this
Agreement is intended or shall be construed to give any third
person or party any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained
herein.
29. SURVIVAL
- ----------------
All provisions of this Agreement shall survive the Closing.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date and year first above written.
SELLER BUYER
Gateway Community Blood Program, Inc. Haemonetics Corporation
/s/ Hal I. Lieberman /s/ John F. White
- ------------------------- --------------------------
Hal I. Lieberman John F. White
President and CEO President and CEO
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LIST OF SCHEDULES AND EXHIBITS
Summary of Payments under Section 3.2(b)
Schedule A Service Areas
Schedule 1.1(a) Real Property Leases and Subleases
Schedule 1.1(b) Personal Property Leases
Schedule 1.1(c) Owned Equipment and Supplies
Schedule 1.1(d) Inventory
Schedule 1.1(e) Trade Rights
Schedule 1.1(f)(i) Operating Contracts
Schedule 1.1(f)(ii) Distribution Contracts
Schedule 1.1(f)(iii) Administrative Contracts
Schedule 1.1(f)(iv) Other Contracts
Schedule 1.1(i) Regulatory Authorizations
Schedule 1.1(k) Deposits and Prepaids
Schedule 1.2(f) Excluded Leased and Owned Personal Property
Schedule 2.1(c) Assumed Regulatory Authorization Liabilities
Schedule 2.2(a) Certain Contracts and Leases not Assumed
Schedule 2.2(e) Litigation Matters not Assumed
Schedule 3.1(b) Net Book Value of Owned Assets, Supplies, Inventories,
Deposits and Prepaids
Schedule 3.2(d) Sample Statement of Revenue
Schedule 3.3 Employees of Seller
Schedule 3.4 Allocation of Purchase Price
Schedule 4.7 Absence of Certain Changes
Schedule 4.9 Litigation
Schedule 4.10(a) Non-Compliance with Laws
Schedule 4.10(b)(i) Non-Assignable Regulatory Authorizations
Schedule 4.11(a) Liens
Schedule 4.12 Insurance
Schedule 4.13(a) Guarantees
Schedule 4.13(k) Other Material Contracts or Commitments
Schedule 4.13(l) Defaults
Schedule 4.14 Labor Matters
Schedule 4.17 Change in Purchase Level by Major Customers
Schedule 4.18 Blood Product or Relation Liability
Exhibit 4.4 Operating Results
EXHIBIT 99.1
AGREEMENT TO FURNISH EXHIBITS AND SCHEDULES
HemaCare Corporation (the "Registrant") hereby agrees to furnish
supplementally to the Securities and Exchange Commission a copy
of any omitted exhibits or schedules to the Asset Purchase
Agreement, dated as of August 1, 1997, among Gateway Community Blood
Program, Inc. (a wholly owned subsidiary of the Registrant), the Registrant
and Haemonetics Corporation (the "Asset Purchase Agreement"), filed with this
Form 8-K.
