UNITED STATES  

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

 

FORM 8-K

 

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  June 6, 2017

 

ADMA BIOLOGICS, INC.

(Exact Name of Registrant as Specified in its Charter)

 

Delaware 001-36728 56-2590442

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

 

465 Route 17 South, Ramsey, New Jersey 07446
(Address of Principal Executive Offices) (Zip Code)

 

(201) 478-5552

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

 

Emerging growth company x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

Item 1.01. Entry into a Material Definitive Agreement

 

As previously disclosed, on January 21, 2017, ADMA Biologics, Inc., a Delaware corporation (the “ Company ”) and its wholly-owned subsidiary, ADMA BioManufacturing, LLC, a Delaware limited liability company (“ Buyer ”), entered into a definitive Master Purchase and Sale Agreement (the “ Purchase Agreement ”) with Biotest Pharmaceuticals Corporation, a Delaware corporation (“ Seller ”), and for certain limited purposes set forth in the Purchase Agreement, Biotest AG, a company organized under the laws of Germany and the ultimate parent company of Seller (“ Biotest ”), and Biotest US Corporation, a Delaware corporation and subsidiary of Biotest (together with Biotest, the “ Biotest Guarantors ”), pursuant to which, on June 6, 2017 (the “ Closing Date ”), Buyer has acquired (the “ Acquisition ”) certain assets and assumed certain liabilities constituting the therapy business of Seller (the “ Business ”) , including a fully equipped plasma fractionation and purification plant for the U.S. Food and Drug Administration (the “ FDA ) licensed biologics, testing laboratories, office space, ambient and cold storage warehouses, and a commercial scale monoclonal antibody production facility (the “ Boca Facility ”).

 

Subordinated Loan Facility

 

On the Closing Date, in connection with the Acquisition, the Company, Buyer, as borrower, and Seller, as lender, entered into an unsecured, subordinated loan agreement, which provides for a subordinated term loan facility (the “ Subordinated Loan Facility ”) in an aggregate principal amount of $15,000,000 with a maturity of five years.

 

Borrowings under the Subordinated Loan Facility bear interest at a rate per annum equal to 6.00%, payable semi-annually in arrears on each of the six-month and twelve-month anniversary dates of the Closing Date.

 

Buyer may voluntarily repay the Subordinated Loan Facility at any time, in whole or in part, without prepayment premium, penalty or other breakage costs. Buyer is required to repay the Subordinated Loan Facility in full upon certain disposals of the Business, certain disposals of shares of Buyer and other change of control events in relation to Buyer or certain liquidation events of the Company.

 

All of Buyer’s obligations under the Subordinated Loan Facility are unconditionally guaranteed by the Company.

 

The Subordinated Loan Facility contains certain customary affirmative covenants. The Subordinated Loan Facility also contains certain negative covenants limiting the incurrence by the Company or Buyer of certain indebtedness, the entry by the Company and its subsidiaries (including Buyer) into certain transactions with affiliates and certain voluntary or optional prepayments by the Company and its subsidiaries of indebtedness that is contractually subordinate in right of payment to the obligations under the Subordinated Loan Facility.

 

The Subordinated Loan Facility is subordinated to (i) the Company’s existing indebtedness under the loan and security agreement dated as of June 15, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “ Senior Credit Agreement ”) among the Company, the Company’s subsidiaries and Oxford Finance, LLC (“ Oxford ”), (ii) any refinancing of the Senior Credit Agreement, in accordance with the terms and conditions of the subordination agreement dated as of the Closing Date among Oxford and Seller and (iii) any additional Indebtedness (as defined in the subordinated loan agreement) for borrowed money approved by the Company’s Board of Directors and incurred by the Company or Buyer which is secured solely by a mortgage on the owned real property acquired in connection with the Acquisition.

 

The Subordinated Loan Facility will rank pari passu with all additional indebtedness approved by the Company’s Board of Directors and incurred by the Company or Buyer which is not secured solely by the owned real property acquired in connection with the Acquisition. If such additional pari passu indebtedness is secured, then the Subordinated Loan Facility will also be secured on a pari passu basis.

 

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The Subordinated Loan Facility contains certain customary events of default. If an event of default occurs, Seller will be entitled to take various actions, including the acceleration of amounts due under the Subordinated Loan Facility.

 

The description of the Subordinated Loan Facility set forth above does not purport to be complete and is qualified in its entirety by reference to the full text of the subordinated loan agreement, a copy of which is filed by the Company as Exhibit 10.1 to this Form 8-K and is incorporated by reference into this Item 1.01.

 

Commercial Agreements

 

In addition, on the Closing Date, Buyer and Seller entered into (i) a Plasma Supply Agreement, pursuant to which Seller will supply hyperimmune plasma to Buyer for the manufacture of Nabi-HB®; and (ii) a Plasma Purchase Agreement, pursuant to which Buyer will purchase normal source plasma from Seller. Further, on the Closing Date, the Company and Seller entered into (i) a First Amendment to License Agreement (RSV immunoglobulin); (ii) a Fourth Amendment to Plasma Purchase Agreement; and (iii) a Termination of the Manufacturing and Supply Agreement and Master Services Agreement (collectively with the agreements referred to in the immediately preceding sentence, the “ Commercial Agreements ”). In addition, on the Closing Date, Buyer and Seller entered into a Transition Services Agreement, pursuant to which each of Buyer and Seller agreed to provide transition services to the other party, including services related to finance, human resources, information technologies, and clinical and regulatory services for a period of up to 24 months after the Closing Date; as well as agreements to lease certain laboratory space within the Boca Facility to Seller for a period of up to 24 months after the Closing Date (the “ Transition Services Agreement ”). Seller, the Company and ADMA Bio Centers Georgia, Inc., a Delaware corporation and a subsidiary of the Company (“ ADMA Bio Centers ”), entered into a Purchase Agreement for the transfer of the assets of the Company and ADMA Bio Centers that are exclusively used at the plasma centers operated by ADMA Bio Centers as of the Closing Date (the “ Biocenters Purchase Agreement ”).

 

The descriptions of the Commercial Agreements, Transition Services Agreement and the Biocenters Purchase Agreement set forth above do not purport to be complete and are qualified in their entirety by reference to the Commercial Agreements, Transition Services Agreement and the Biocenters Purchase Agreement, copies of which will be filed with the Company’s next Form 10-Q.

 

Stockholders Agreement and Registration Rights Agreement

 

In addition, on the Closing Date, the Company and certain stockholders of Seller entered into the Stockholders Agreement and the Registration Rights Agreement, substantially in the form previously filed by the Company as Annexes D and E to the Company’s definitive proxy statement filed on April 26, 2017, the material terms of which are described in such proxy statement and copies of which are filed as Exhibits 10.2 and 10.3, respectively, to this Form 8-K.

 

Item 2.01. Completion of Acquisition or Disposition of Assets.

 

On the Closing Date, the Company completed the Acquisition. At the effective time of the Acquisition (the “ Effective Time ”), Buyer assumed certain liabilities of Seller related to the Business, including (without limitation) related to (x) product liabilities, breach of warranty, product complaints, product returns, post-market commitments, recalls, adverse event reporting, product deviation reporting, lookbacks, market withdrawals and field corrections or similar claims for injury to person or property with respect to the Business or any product of the Business to the extent such liabilities relate to products manufactured and sold by Buyer after the closing (other than inventory transferred to Buyer at the Effective Time, which is allocated 50% to Buyer and 50% to Seller if not traceable to acts or omissions of a particular party) and (y) other regulatory matters, whether related to the pre-closing or post-closing period and including any liabilities related to the products of the Business, the FDA warning letter (i.e., the warning letter issued by the FDA to Seller in connection with outstanding issues requiring remediation at the Boca Facility), or noncompliance with applicable laws and legal proceedings related to the foregoing, but excluding such liabilities that arise out of any fraud, willful misconduct or intentional misrepresentation by Seller prior to the Effective Time (the “ Assumed Liabilities ”).

 

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Further, at the Effective Time, the Company delivered to Seller an aggregate equity interest in the Company equal to fifty (50%), less one (1) share, of the issued and outstanding capital stock of the Company (calculated as of immediately following the closing and on a post-closing issuance basis) (the “ Biotest Equity Interest ”), consisting of (x) the Company’s common stock representing twenty-five percent (25%) of the issued and outstanding common stock of the Company, equal to 4,295,580 common shares and (y) non-voting common stock equal to 8,591,160 shares of the Company’s common stock representing the balance of the Biotest Equity Interest which is convertible into common stock of the Company upon the occurrence of certain specified events.

 

The description of the Acquisition set forth above does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement, a copy of which was filed by the Company as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on January 23, 2017, and is incorporated by reference into this Item 2.01.

 

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.

 

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

Effective as of the Effective Time, the Company’s Board of Directors approved the increase of the number of authorized directors from seven to eight and the appointment of Seller’s designee, Bernhard Ehmer, as director of the Company, in accordance with the Stockholders Agreement.

 

Mr. Ehmer, age 62, has served as the chairman of the board of management of Biotest since January 2015. Prior to joining Biotest, from 2008 to 2012, Mr. Ehmer served as the president of ImClone Systems Corporation, a wholly owned subsidiary of Eli Lilly and Company, in the United States, and as a managing director of ImClone Systems International in Germany, respectively. From 2007 to 2008, Mr. Ehmer served as the chief executive officer of Fresenius Biotech in Germany. From 2000 until 2005, Mr. Ehmer headed the Business Area Oncology of Merck KgaA, Darmstadt (“ Merck KGaA ”). From 1998 until 2000, Mr. Ehmer was the head of "Global Clinical Operations" at Merck KGaA. Between 1986 and 1998, Mr. Ehmer held various functions at Boehringer Mannheim in Germany, Italy and Singapore.

 

Mr. Ehmer holds a degree in medicine and worked in Internal Medicine at the Academic Teaching Hospital of the University of Heidelberg with a focus on Cardiology/Intensive Care until he joined the pharmaceutical industry in 1986.

 

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Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

 

At the Effective Time, the Company’s certificate of incorporation, as in effect immediately prior to the Acquisition, was amended and restated in the form previously filed as Annex B to the Company’s definitive proxy statement filed on April 26, 2017 (the “ Amended and Restated Certificate of Incorporation ”).

 

A copy of the Amended and Restated Certificate of Incorporation is filed as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated by reference into this Item 5.03.

 

Item 9.01. Financial Statements and Exhibits

 

(d) Exhibits

 

Exhibit Number   Exhibit Description
2.1   Master Purchase and Sale Agreement , dated as of January 21, 2017, by and among the Company, Seller and the Biotest Guarantors (incorporated herein by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by the Company on January 21, 2017).
3.1   Amended and Restated Certificate of Incorporation of the Company.
10.1   Subordinated Loan Agreement, dated as of June 6, 2017, by and among the Company, Buyer and Seller.
10.2   Stockholders Agreement, dated as of June 6, 2017, by and between the Company and Seller
10.3   Registration Rights Agreement, dated as of June 6, 2017, by and between the Company and Seller

 

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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.

 

  ADMA Biologics, Inc.  
       
       
  By: /s/ Brian Lenz  
    Name: Brian Lenz  
    Title: Chief Financial Officer  
       
Date:  June 12, 2017      

 

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EXHIBIT INDEX

 

Exhibit Number   Exhibit Description
2.1   Master Purchase and Sale Agreement , dated as of January 21, 2017, by and among the Company, Seller and the Biotest Guarantors (incorporated herein by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by the Company on January 21, 2017).
3.1   Amended and Restated Certificate of Incorporation of the Company.
10.1   Subordinated Loan Agreement, dated as of June 6, 2017, by and among the Company, Buyer and Seller.
10.2   Stockholders Agreement, dated as of June 6, 2017, by and between the Company and Seller.
10.3   Registration Rights Agreement, dated as of June 6, 2017, by and between the Company and Seller

 

 

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AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ADMA Biologics, Inc.

 

(Pursuant to Sections 242 and 245 of the
Delaware General Corporation Law)

 

ADMA Biologics, Inc., a corporation organized and existing under the laws of the State of Delaware (the “ Corporation ”), hereby certifies as follows:

 

1.        T he present name of the Corporation is ADMA Biologics, Inc. The Corporation was originally incorporated under the name R&R Acquisition VI, Inc. by the filing of the Corporation’s original certificate of incorporation with the office of the Secretary of State of the State of Delaware on June 2, 2006.

 

2.        This Amended and Restated Certificate of Incorporation of the Corporation, which both restates and further amends the provisions of the Corporation’s certificate of incorporation, was duly adopted in accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware.

 

3.        The Corporation’s certificate of incorporation is hereby amended and restated to read in its entirety as follows:

 

ARTICLE I
Name

 

The name of the corporation is ADMA Biologics, Inc. (the “ Corporation ”).

 

ARTICLE II
Registered Office; Registered Agent

 

The address of its registered office in the State of Delaware is 2711 Centerville Road, Suite 400, Wilmington, County of New Castle, Delaware 19808. The name of its registered agent at such address is the Corporation Service Company.

 

ARTICLE III
Purpose

 

The nature of the business or purposes to be conducted or promoted by the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (as it may be amended from time to time, the “ DGCL ”).

 

 

 

 

ARTICLE IV
Capital Stock

 

Section 4.1             Authorized Shares . The total number of shares of capital stock which the Corporation shall have authority to issue is 93,591,160, divided into three classes consisting of (a) 75,000,000 shares of common stock at $.0001 par value (the “ Common Stock ”), (b) 8,591,160 shares of non-voting common stock at $.0001 par value (the “ Non-Voting Common Stock ”), and (c) 10,000,000 shares of preferred stock at $.0001 par value (the “ Preferred Stock ”). The authorized number of shares of Common Stock and Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of the stock of the Corporation entitled to vote irrespective of Section 242 of the DGCL.

 

Section 4.2             Common Stock . A statement of the designations of the Common Stock and the powers, preferences and relative, participating, optional, special and other rights and qualifications, limitations and restrictions thereof is as follows:

 

(a)                Voting Rights . Except as may otherwise be provided in this Amended and Restated Certificate of Incorporation (the “ Certificate of Incorporation ”) (including any certificate filed with the Office of the Secretary of State of the State of Delaware setting forth a copy of the resolution or resolutions providing for the issuance of a series of Preferred Stock in accordance with Section 4.4 (such certificate, a “ Preferred Stock Designation ”)) or by applicable law, each holder of Common Stock, as such, shall be entitled to one vote for each share of Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote.

 

(b)                Dividends . Subject to applicable law and the rights, if any, of the holders of any outstanding series of Preferred Stock, dividends may be declared and paid on the Common Stock out of funds legally available therefor at such times and in such amounts as the Board of Directors of the Corporation (the “ Board ”) in its discretion shall determine; provided , however , that simultaneously with the declaration and payment of any dividends on the Non-Voting Common Stock, a like dividend in form and amount per share shall also be declared and paid on the Common Stock (except that, if such dividend on the Non-Voting Common Stock is paid in the form of shares of Common Stock or Non-Voting Common Stock or rights or options to acquire Common Stock or Non-Voting Common Stock, the holders of shares of Common Stock shall receive equivalent shares of Common Stock or rights or options to acquire Common Stock, as the case may be).

 

(c)                Subdivision or Combination . If the Corporation in any manner subdivides or combines the outstanding shares of Non-Voting Common Stock, the outstanding shares of Common Stock shall be subdivided or combined in the same manner. The Corporation shall not subdivide or combine the outstanding shares of Common Stock unless a subdivision or combination is made in the same manner with respect to the Non-Voting Common Stock.

 

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(d)                Dissolution, Liquidation or Winding Up . Upon the dissolution, liquidation or winding up of the Corporation, subject to the rights, if any, of the holders of any outstanding series of Preferred Stock, the holders of the Common Stock shall be entitled to receive the assets of the Corporation available for distribution to its stockholders ratably in proportion to the number of shares of Common Stock held by them.

 

Section 4.3             Non-Voting Common Stock . A statement of the designation of the Non-Voting Common Stock and the powers, preferences and relative, participating, optional, special and other rights and qualifications, limitations and restrictions thereof is as follows:

 

(a)                Certain Definitions . For purposes of this Section 4.3 and as used throughout this Certificate of Incorporation: “ Registration Rights Agreement ” means that certain Registration Rights Agreement, by and among the Corporation and Biotest Pharmaceuticals Corporation or its permitted assignees, dated as of June 6, 2017, as it may be amended, restated, supplemented or otherwise modified from time to time; “ Stockholders Agreement ” means that certain Stockholders Agreement of the Corporation, by and among the Corporation and Biotest Pharmaceuticals Corporation or its permitted assignees, dated as of June 6, 2017, as it may be amended, restated, supplemented or otherwise modified from time to time; and each of the terms “ Affiliate ,” “ Biotest Stockholder ,” “ Business Day ,” “ Liquidation Event ,” and “ Standstill Period ” has the meaning ascribed to such term in the Stockholders Agreement.

 

(b)                Voting Rights . Except as otherwise required by applicable law, shares of Non-Voting Common Stock shall have no voting power and the holders thereof, as such, shall not be entitled to vote on any matter that is submitted to a vote of the stockholders of the Corporation; provided , however , that for so long as any shares of Non-Voting Common Stock are outstanding, the Corporation shall not, without the prior vote of the holders of at least a majority of the shares of Non-Voting Common Stock then outstanding (voting separately as a single class), amend, alter or repeal, whether by merger, consolidation or otherwise (other than in connection with a Liquidation Event (it being understood that the holder of such shares shall participate in such Liquidation Event in all respects as a holder of Common Stock in accordance with Section 4.3(d)(i)(2)), (i) this Section 4.3 or (ii) any other provision of this Certificate of Incorporation to alter or change the powers, preferences, or special rights of the shares of Non-Voting Common Stock in an adverse manner to the powers, preferences or special rights of the shares of Common Stock.

 

(c)                Dividends . Subject to applicable law and the rights, if any, of the holders of any outstanding series of Preferred Stock, dividends may be declared and paid on the Non-Voting Common Stock out of funds legally available therefor at such times and in such amounts as the Board in its discretion shall determine; provided , however , that simultaneously with the declaration and payment of any dividends on the Common Stock, a like dividend in form and amount per share shall also be declared and paid on the Non-Voting Common Stock (except that, if (i) such dividend on the Common Stock is paid in the form of shares of Common Stock or rights or options to acquire Common Stock, (ii) the holders of Non-Voting Common Stock would own more than thirty (30%) percent of the outstanding Common Stock following the issuance of such Common Stock dividend and (iii) the Standstill Period has not expired or been earlier terminated pursuant to and in accordance with the terms and conditions of the Stockholders Agreement, the holders of shares of Non-Voting Common Stock shall receive equivalent shares of Non-Voting Common Stock or rights or options to acquire Non-Voting Common Stock, as the case may be).

 

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(d)                Conversion Rights .

 

(i)                  Automatic Conversion . Each outstanding share of Non-Voting Common Stock shall automatically convert into and become one fully paid and nonassessable share of Common Stock without the payment of additional consideration by the holder thereof upon the earliest to occur of the following: (1) the expiration or earlier termination of the Standstill Period pursuant to and in accordance with the terms and conditions of the Stockholders Agreement, (2) immediately prior to the consummation of any Liquidation Event, and (3) immediately prior to (A) the taking of any action by the Board or (B) if earlier, the record date for any vote of the stockholders of the Corporation, in each case, in connection with any insolvency, voluntary or involuntary bankruptcy, liquidation, or assignment for the benefit of creditors of the Corporation or termination of the Corporation’s status as a reporting company under the Securities Exchange Act of 1934, as amended (any of the matters described in this clause (3), an “ Insolvency Matter ”). For the avoidance of doubt, if Non-Voting Common Stock is automatically converted pursuant to the foregoing clause (3), the holders of the former shares of Non-Voting Common Stock so converted will have the voting rights of the shares of Common Stock into which such former shares of Non-Voting Common Stock were automatically converted, and will be entitled to vote such shares of Common Stock, to the same extent as all other holders of shares of Common Stock as of the event causing such automatic conversion, including, in the case of automatic conversion pursuant to subclause (B), the right to vote on the Insolvency Matter in respect of which such record date for any vote of the stockholders of the Corporation was set.

 

(ii)               Conversion In Connection With Permitted Sales . Upon the consummation of any sale of a share of Non-Voting Common Stock that constitutes a permitted transfer free from any restriction under the terms and conditions of the Stockholders Agreement and each other agreement, arrangement or understanding applicable to such share of Non-Voting Common Stock, including in connection with any Board-approved recapitalization transaction involving the sale of such share or the Common Stock issued upon conversion thereof, in each case other than to an Affiliate of the holder of such share (a “ Permitted Sale ”), the share of Non-Voting Common Stock so sold shall automatically convert into and become one fully paid and nonassessable share of Common Stock without the payment of additional consideration by the holder thereof. Notwithstanding the foregoing or anything to the contrary herein, each share of Non-Voting Common Stock shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into one fully paid and nonassessable share of Common Stock if all of the following conditions are met: (1) such share is the subject of a legally binding written agreement between the holder thereof and a non-Affiliate of such holder providing for the sale of such share to such non-Affiliate in a transaction that constitutes a Permitted Sale (such agreement, as it may be amended, restated, supplemented or otherwise modified from time to time, a “ Sale Agreement ”), (2) the sale of such Common Stock into which such share otherwise automatically would convert upon the consummation of such Permitted Sale pursuant to the foregoing sentence is required to be registered under the Securities Act of 1933, as amended (the “ Securities Act ”) under the terms and conditions of such Sale Agreement, (3)  such Common Stock into which such share otherwise automatically would convert upon the consummation of such Permitted Sale constitutes a “Registrable Security or “Registrable Securities” under the Registration Rights Agreement, (4) the holder of such share has executed and delivered to the Corporation a legally binding written agreement enforceable by the Corporation that, prior to the earlier of (A) the consummation of such Permitted Sale in accordance with the Sale Agreement and (B) the expiration or earlier termination of the Standstill Period in accordance with and pursuant to the terms and conditions of the Stockholders Agreement, such holder shall not vote or otherwise transfer, without the Board’s prior written consent, any of the Common Stock issued to such holder upon conversion of such converted share of Non-Voting Common Stock, and (5) the holder of such share of Non-Voting Common Stock delivers an Optional Conversion Notice (as defined below) in respect of such share in accordance with Section 4.3(d)(vi) hereof.

 

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(iii)             Conversion in Connection With Market Sales. Notwithstanding the foregoing or anything to the contrary herein, each share of Non-Voting Common Stock shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into one fully paid and nonassessable share of Common Stock if all of the following conditions are met: (1) such holder intends and irrevocably commits to the Corporation to use its reasonable efforts to sell such Common Stock in the public market within sixty (60) days of such notice and such sale constitutes a Permitted Sale (a “ Market Sale ”); (2) the holder of such share has executed and delivered to the Corporation a legally binding written agreement enforceable by the Corporation that, prior to the earlier of (A) the consummation of such Market Sale and (B) the expiration or earlier termination of the Standstill Period in accordance with and pursuant to the terms and conditions of the Stockholders Agreement, such holder shall not vote any of the Common Stock issued to such holder upon conversion of such converted share of Non-Voting Common Stock; (3) such Market Sales shall be conducted in compliance with all applicable requirements of the Securities Act; and (4) the holder of such share of Non-Voting Common Stock delivers an Optional Conversion Notice (as defined below) in respect of such share in accordance with Section 4.3(d)(vi) hereof.

 

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(iv)              Conversion In Connection With Dilutive Issuances .

 

(1)                Subject to Section 4.3(d)(iv)(2), during the Standstill Period, each share of Non-Voting Common Stock shall be convertible, at the option of the holder thereof, without the payment of additional consideration by the holder thereof, into one fully paid and nonassessable share of Common Stock if (A) the Corporation issues additional shares of Common Stock (including upon the exercise of any conversion rights of any securities of the Corporation convertible into or exchangeable for shares of Common Stock in accordance with and pursuant to the terms of such convertible or exchangeable securities, but excluding upon the conversion of any Non-Voting Common Stock pursuant to this Section 4.3(d)) (a “ Dilutive Issuance ”), (B) as a result of such Dilutive Issuance, the percentage of the voting power of the Corporation (the “ Voting Percentage ”) represented by all of the shares of Common Stock held by the Biotest Stockholder and its Affiliates (together, “ Biotest ”) immediately following such Dilutive Issuance is lower than the Voting Percentage represented by all of the shares of Common Stock held by Biotest immediately prior to such Dilutive Issuance, and (C) the holder of such share of Non-Voting Common Stock delivers an Optional Conversion Notice (as defined below) in respect of such share in accordance with Section 4.3(d)(vi) hereof within five Business Days after the Corporation provides notice to the Biotest Stockholder (including by giving such notice to any Biotest Designee (as defined in the Stockholders Agreement)) of the consummation of such Dilutive Issuance; provided , however , that the maximum number of shares of Non-Voting Common Stock that may be converted into shares of Common Stock pursuant to this Section 4.3(d)(iv) in respect of any Dilutive Issuance (the “ Conversion Cap ”) is the number of shares that, upon conversion thereof, results in the Voting Percentage represented by all shares of Common Stock held by Biotest immediately following such conversion being equal to the Voting Percentage represented by all of the shares of Common Stock held by Biotest immediately prior to such Dilutive Issuance; provided , further , that in no event shall Biotest be permitted to hold shares of Common Stock representing a Voting Percentage greater than any applicable limitation thereon set forth in the Stockholders Agreement.

 

(2)                In connection with each Dilutive Issuance during the Standstill Period, if there is more than one holder of shares of Non-Voting Common Stock and the number of shares of Non-Voting Common Stock the holders of which have elected to exercise their optional conversion rights pursuant to this Section 4.3(d)(iv) in respect of any Dilutive Issuance (the “ Conversion Election Shares ”) exceeds the Conversion Cap for such Dilutive Issuance, then the conversion rights of the Conversion Election Shares shall be subject to limitation by the Conversion Cap in the aggregate for all such holders and prorated such that each holder of Conversion Election Shares shall be deemed to have exercised its optional conversion rights pursuant to this Section 4.3(d)(iv) in respect of such Dilutive Issuance only as to that number of Conversion Election Shares as is equal to the product of (A) the number of Conversion Election Shares held by such holder, multiplied by (B) a fraction, the numerator of which is the Conversion Cap and the denominator of which is the total number of Conversion Election Shares of all holders electing to exercise their optional conversion rights pursuant to this Section 4.3(d)(iv) in respect of such Dilutive Issuance, and the holder shall be deemed never to have elected to exercise its optional conversion rights pursuant to this Section 4.3(d)(iv) in respect of such Dilutive Issuance with respect to the remainder of such holder’s Conversion Election Shares that such holder was not permitted to convert because of the Conversion Cap and proration rights described herein.

 

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(v)                Mechanics of Automatic Conversion . Upon the occurrence of any event causing the automatic conversion of any shares of Non-Voting Common Stock pursuant to Section 4.3(d)(i) hereof or the first sentence of Section 4.3(d)(ii) hereof, no further action need be taken to effect such conversion, and any certificates previously representing shares of Non-Voting Common Stock that have been so converted shall thereafter represent the shares of Common Stock into which they have been automatically converted pursuant to Section 4.3(d)(i) hereof or the first sentence of Section 4.3(d)(ii) hereof, as applicable; provided , however , that the Corporation shall not be required to recognize the holder of any former share of Non-Voting Common Stock converted pursuant to the first sentence of Section 4.3(d)(ii) hereof as a holder of the Common Stock into which such share was converted unless and until such holder provides written notice to the Corporation of the occurrence of the Permitted Sale causing such automatic conversion, including evidence reasonably satisfactory to the Corporation that such sale pursuant to which the Non-Voting Common Stock was transferred constitutes a Permitted Sale. All holders of record of shares of Non-Voting Common Stock shall be sent written notice of the occurrence of any event causing the automatic conversion of such shares pursuant to Section 4.3(d)(i) hereof. Such notice need not be sent in advance of the occurrence of such event. No notice shall be required to be sent by the Corporation upon the occurrence of a Permitted Sale causing the automatic conversion of any share of Non-Voting Common Stock pursuant to the first sentence of Section 4.3(d)(ii) hereof. If at the time of conversion of any shares of Non-Voting Common Stock pursuant to Section 4.3(d)(i) hereof or the first sentence of Section 4.3(d)(ii) hereof there are any declared but unpaid dividends on such shares of Non-Voting Common Stock, the Corporation nevertheless shall pay out of funds legally available therefor such dividends to the holders thereof on the payment date determined by the Board in respect of such dividends.

 

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(vi)              Mechanics of Optional Conversion . In order for a holder of Non-Voting Common Stock to voluntarily convert shares of Non-Voting Common Stock into shares of Common Stock pursuant to the second sentence of Section 4.3(d)(ii) hereof or Section 4.3(d)(iii) hereof or Section 4.3(d)(iv) hereof, such holder shall (1) deliver written notice (an “ Optional Conversion Notice ”) to the Corporation in the manner provided by the Stockholders Agreement that such holder elects to convert all or any number of such holder’s shares of Non-Voting Common Stock that are then convertible pursuant to the second sentence of Section 4.3(d)(ii) hereof or Section 4.3(d)(iii) hereof or Section 4.3(d)(iv) hereof, as applicable, and (2) if such holder’s shares of Non-Voting Common Stock are certificated, surrender the certificate or certificates representing such shares of Non-Voting Common Stock at the principal office of the Corporation during usual business hours. All certificates representing shares of Non-Voting Common Stock surrendered for optional conversion pursuant to the second sentence of Section 4.3(d)(ii) hereof or Section 4.3(d)(iii) hereof or Section 4.3(d)(iv) hereof, as applicable, shall be delivered to the Corporation for cancellation and (subject to Section 4.3(d)(iv)(2) hereof if the number of Conversion Election Shares exceeds the Conversion Cap) canceled by the Corporation. An Optional Conversion Notice shall (a) state whether the holder is electing to convert such shares pursuant to the second sentence of Section 4.3(d)(ii) hereof or Section 4.3(d)(iii) hereof or Section 4.3(d)(iv) hereof and (b) (I) in the case of optional conversion pursuant to the second sentence of Section 4.3(d)(ii) hereof, attach a copy of the Sale Agreement, provide such additional information as may be reasonably requested by the Corporation to verify that the sale contemplated by the Sale Agreement constitutes a Permitted Sale, that the sale of such shares of Common Stock is required to be registered under the Securities Act pursuant to the Sale Agreement and that such shares of Common Stock constitute Registrable Securities under the Registration Rights Agreement, and contain the legally binding written agreement specified by subclause (4) of such sentence; (II) in the case of optional conversion in connection with a Market Sale pursuant to Section 4.3(d)(iii) hereof, provide such information as may be reasonably requested by the Corporation to verify that such Market Sale constitutes a Permitted Sale and that such Market Sale will comply with all applicable requirements of the Securities Act, and contain the legally binding written agreement specified by subclause (2) of Section 4.3(d)(iii) hereof; or (III) in the case of optional conversion in connection with a Dilutive Issuance pursuant to Section 4.3(d)(iv) hereof, identify the Dilutive Issuance in respect of which conversion rights are being exercised, state the number of shares of Common Stock held by such holder as of the date of the Optional Conversion Notice, immediately prior to such Dilutive Issuance and immediately following such Dilutive Issuance to enable the Corporation to determine the Conversion Cap, and provide such additional information as may be reasonably requested by the Corporation in connection therewith. No Optional Conversion Notice shall be deemed delivered to the Corporation until such time as the holder delivering the same shall have provided all information required by, and all such additional information reasonably requested by the Corporation pursuant to, subclause (b) of the immediately preceding sentence. The close of business on the fifth Business Day after the later of the date of delivery to the Corporation of the Optional Conversion Notice and, if applicable, the date of surrender of all certificates representing shares of Non-Voting Common Stock to be converted pursuant to such Optional Conversion Notice shall be the date and time of such conversion (the “ Conversion Time ”), and the shares of Common Stock issuable upon conversion of the specified shares of Non-Voting Common Stock shall be deemed to be outstanding of record as of the Conversion Time. The Corporation shall, as soon as practicable after the Conversion Time (subject to compliance with the applicable provisions of federal and state securities laws), (x) issue and deliver to such applicable holder a certificate or certificates or a notice of issuance of uncertificated shares, as applicable, representing the number of shares of Common Stock issued at the Conversion Time in accordance with the provisions hereof, (y) issue and deliver new certificates representing any Conversion Election Shares deemed not to have been converted by operation of Section 4.3(d)(iv)(2), if any, certificates for which the holder thereof may have surrendered to the Corporation for cancellation with such holder’s Optional Conversion Notice, and (z) if at such time there are any declared but unpaid dividends on the shares of Non-Voting Common Stock so converted, pay out of funds legally available therefor such dividends to the holders thereof on the payment date determined by the Board in respect of such dividends.

 

(vii)           Reservation of Shares . The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Non-Voting Common Stock pursuant to this Section 4.3(d), such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all issued and outstanding shares of Non-Voting Common Stock into shares of Common Stock.

 

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(viii)         No Conversion Tax or Charge . The issuance or delivery of certificates for Common Stock upon the conversion of shares of Non-Voting Common Stock shall be made without charge to the converting holder of shares of Non-Voting Common Stock for such certificates or for any tax in respect of the issuance or delivery of such certificates or the securities represented thereby, and such certificates shall be issued or delivered only in the respective names, as they appear on the books of the Corporation, of the registered holders of the shares of Non-Voting Common Stock converted.

 

(ix)              Status of Converted Shares . If any share of Non-Voting Common Stock shall have been converted into Common Stock pursuant to this Section 4.3(d), such share shall, to the fullest extent permitted by law, be cancelled upon such conversion and shall not be reissued as a share of Non-Voting Common Stock, and the Corporation thereafter shall take such action as may be necessary to retire such share and reduce the authorized number of shares of Non-Voting Common Stock accordingly.

 

(e)                Subdivision or Combination . If the Corporation in any manner subdivides or combines the outstanding shares of Common Stock, the outstanding shares of Non-Voting Common Stock shall be subdivided or combined in the same manner. The Corporation shall not subdivide or combine the outstanding shares of Non-Voting Common Stock unless a subdivision or combination is made in the same manner with respect to the Common Stock.

 

(f)                 Redemption . The shares of Non-Voting Common Stock shall not be redeemed or subject to redemption, whether at the option of the Corporation or any holder thereof, or otherwise.

 

(g)                Equal Status . Except as expressly provided in this Article IV, or as required by applicable law, shares of Non-Voting Common Stock and Common Stock shall have the same designations, powers, preferences and relative, participating, optional, special and other rights, and the same qualifications, limitations and restrictions and be identical in all respects as to all matters.

 

Section 4.4             Preferred Stock . The Board is hereby expressly authorized, by resolution or resolutions thereof, to provide, out of the unissued shares of Preferred Stock, for one or more series of Preferred Stock and, with respect to each such series, to fix the number of shares constituting such series and the designations, powers (including voting powers), preferences, and relative, participating, optional, special or other rights, if any, and the qualifications, limitations and restrictions, if any, of the shares of such series. The powers (including voting powers), designations, preferences and relative, participating, optional, special or other rights, if any, of each series of Preferred Stock, and the qualifications, limitations or restrictions, if any, thereof, may differ from those of any and all other series at any time outstanding.

 

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Section 4.5             Preemptive Rights . Except as otherwise provided for or fixed pursuant to the terms of this Certificate of Incorporation (including any Preferred Stock Designation) or the Stockholders Agreement, no holder of shares of capital stock of the Corporation shall be entitled to any preemptive right to subscribe for or purchase or receive any part of any new or additional issue of shares of capital stock of the Corporation, or of securities convertible into such shares, whether now or hereafter authorized or whether issued for money, for consideration other than money, or by way of dividend.

 

ARTICLE V
Duration

 

The Corporation is to have perpetual existence.

 

ARTICLE VI
Board of Directors

 

Section 6.1             Board of Directors . The business and affairs of the Corporation shall be managed by, or under the direction of, the Board. Except as otherwise provided for or fixed pursuant to the terms of any Preferred Stock Designation relating to the rights of the holders of any series of Preferred Stock to elect additional directors, the total number of directors constituting the entire Board shall be not less than five (5) nor more than eleven (11), with the then-authorized number of directors being fixed from time to time by, or in the manner provided in the by-laws. Election of directors need not be by ballot unless the by-laws so provide.

 

Section 6.2             Classified Board . The Board (other than those directors elected by the holders of any series of Preferred Stock pursuant to the terms of any Preferred Stock Designation (the “ Preferred Stock Directors ”)) shall be divided into three classes, as nearly equal in number as possible, designated as Class I, Class II and Class III. The initial term of office of the Class I directors shall expire on the date of the 2014 annual meeting of stockholders, the initial term of office of the Class II directors shall expire on the date of the 2015 annual meeting of stockholders, and the initial term of office of the Class III directors shall expire on the date of the 2016 annual meeting of stockholders. At each annual meeting of stockholders, directors elected to succeed those directors whose terms expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election, so that the term of office of one class of directors shall expire in each year. Each director shall hold office until the expiration of such director’s term of office and until such director’s successor shall have been elected and qualified, or until such director’s earlier resignation, removal or death. In case of any increase or decrease, from time to time, in the number of directors constituting the whole Board (other than Preferred Stock Directors), the number of directors in each class shall be determined by action of the Board. A director elected by the remainder of the Board to fill a vacancy shall hold office for the remainder of the term of the predecessor director and until such director’s successor has been elected and qualified, or until such director’s earlier resignation, removal or death.

 

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Section 6.3             Vacancies and Newly Created Directorships . Subject to the rights of the holders of any one or more series of Preferred Stock then outstanding and to the terms and conditions of the Stockholders Agreement, newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board resulting from death, resignation, retirement, disqualification, removal or other cause shall be filled solely by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board, or by a sole remaining director. Any director so chosen shall hold office until the next election of the class for which such director shall have been chosen and until his or her successor shall be elected and qualified. No decrease in the number of directors shall shorten the term of any incumbent director.

 

ARTICLE VII
By-laws

 

The Board shall have the power to adopt, amend or repeal the by-laws of the Corporation.

 

ARTICLE VIII
Limitation of Liability

 

To the fullest extent permitted under the DGCL, no director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. Any amendment or repeal of this Article VIII shall not adversely affect any right or protection of a director of the Corporation hereunder in respect of any act or omission occurring prior to the time of such amendment or repeal.

 

ARTICLE IX
Indemnification

 

Section 9.1             Right to Indemnification . The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person (a “ Covered Person ”) who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “ Proceeding ”), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another entity or enterprise, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement (except for judgments, fines and amounts paid in settlement in any action or suit by or in the right of the Corporation to procure a judgment in its favor) actually and reasonably incurred by such Covered Person. Notwithstanding the preceding sentence, except as otherwise provided in Section 9.3, the Corporation shall be required to indemnify a Covered Person in connection with a Proceeding (or part thereof) commenced by such Covered Person only if the commencement of such Proceeding (or part thereof) by the Covered Person was authorized by the Board.

 

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Section 9.2             Prepayment of Expenses . To the extent not prohibited by applicable law, the Corporation shall pay the expenses (including reasonable and documented out-of-pocket attorneys’ fees) incurred by a Covered Person in defending any Proceeding in advance of its final disposition; provided , however , that, to the extent required by applicable law, such payment of expenses in advance of the final disposition of the Proceeding shall be made only upon receipt of an undertaking by the Covered Person to repay all amounts advanced if it should be ultimately determined that the Covered Person is not entitled to be indemnified under this Article IX or otherwise.

 

Section 9.3             Claims . If a claim for indemnification or advancement of expenses under this Article IX is not paid in full within 30 days after a written claim therefor by the Covered Person has been received by the Corporation, the Covered Person may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense (including reasonable and documented out-of-pocket attorneys’ fees) of prosecuting such claim. In any such action the Corporation shall have the burden of proving that the Covered Person is not entitled to the requested indemnification or advancement of expenses under applicable law.

 

Section 9.4             Nonexclusivity of Rights . The rights conferred on any Covered Person by this Article IX shall not be exclusive of any other rights that such Covered Person may have or hereafter acquire under any statute, provision of this Certificate of Incorporation, the by-laws, agreement, vote of stockholders or disinterested directors or otherwise.

 

Section 9.5             Other Sources . The Corporation’s obligation, if any, to indemnify or to advance expenses to any Covered Person who was or is serving at its request as a director, officer, employee or agent of another entity or enterprise shall be reduced by any amount such Covered Person may collect as indemnification or advancement of expenses from such other entity or enterprise.

 

Section 9.6             Amendment or Repeal . Any amendment or repeal of the foregoing provisions of this Article IX shall not adversely affect any right or protection hereunder of any Covered Person in respect of any act or omission occurring prior to the time of such amendment or repeal.

 

Section 9.7             Other Indemnification and Prepayment of Expenses . This Article IX shall not limit the right of the Corporation, to the extent and in the manner permitted by applicable law, to indemnify and to advance expenses to persons other than Covered Persons when and as authorized by appropriate corporate action.

 

ARTICLE X
Written Consent Prohibited

 

Except as otherwise provided for or fixed pursuant to any Preferred Stock Designation relating to the rights of holders of any series of Preferred Stock, any action required or permitted to be taken by the stockholders of the corporation must be taken at a duly called annual or special meeting of stockholders of the corporation, and the power of stockholders to consent in writing to the taking of any action, without a duly called meeting and vote, is specifically denied.

 

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ARTICLE XI
Exclusive Forum

 

Unless the Corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Corporation, (b) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, employee or agent of the Corporation to the Corporation or the Corporation’s stockholders, (c) any action asserting a claim arising pursuant to any provision of the DGCL, this Certificate of Incorporation or the by-laws, or (d) any action asserting a claim governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware lacks jurisdiction over such action or proceeding, the Superior Court of the State of Delaware or, if the Superior Court of the State of Delaware lacks jurisdiction over such proceeding, the U.S. District Court for the District of Delaware) (the “ Chosen Court ”), in all cases subject to such court having personal jurisdiction over the indispensable parties named as defendants. To the fullest extent permitted by applicable law, any person who, or entity that, holds, purchases or otherwise acquires an interest in stock of the Corporation shall be deemed to have consented to the personal jurisdiction of the Chosen Court in any proceeding brought to enjoin any action by that person or entity that is inconsistent with the exclusive jurisdiction provided for in this Article XI. To the fullest extent permitted by applicable law, if any action the subject matter of which is within the scope of this Article XI is filed in a court other than the Chosen Court in the name of any stockholder, such stockholder shall be deemed to have consented to (a) the personal jurisdiction of the Chosen Court in connection with any action brought in such court to enforce this Article XI and (b) having service of process made upon such stockholder in any such action by service upon such stockholder’s counsel in the action as agent for such stockholder.

 

[ Signature Page Follows ]

 

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IN WITNESS WHEREOF , this Amended and Restated Certificate of Incorporation has been executed by a duly authorized officer of the Corporation on this 6 day of June, 2017.

 

   
  By:  /s/ Adam Grossman
    Name: Adam Grossman
    Title: President and Chief Executive Officer

 

[Signature Page to Amended & Restated Certificate of Incorporation]

 

 

THIS SUBORDINATED LOAN AGREEMENT AND THE INDEBTEDNESS EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THE SUBORDINATION AGREEMENT (AS DEFINED HEREIN) AND THE RESPECTIVE SUCCESSORS AND PERMITTED ASSIGNS OF THE PARTIES HERETO SHALL BE BOUND BY THE PROVISIONS OF THE SUBORDINATION AGREEMENT.

 

SUBORDINATED LOAN AGREEMENT

 

THIS SUBORDINATED LOAN AGREEMENT (as the same may from time to time be amended, modified, supplemented or restated, this “ Agreement ”) dated as of June 6, 2017 (the “ Effective Date ”) among BIOTEST PHARMACEUTICALS CORPORATION, a Delaware corporation with an office located at 5800 Park of Commerce Blvd. NW, Boca Raton, Florida 33487 (“ Biotest ”), as lender (in such capacity, “ Lender ”), ADMA BIOMANUFACTURING, LLC, a Delaware limited liability company (“ Borrower ”) with an office located at 5800 Park of Commerce Blvd. NW, Boca Raton, Florida 33487 and ADMA BIOLOGICS, INC., a Delaware corporation (“ ADMA ”) with an office located at 5800 Park of Commerce Blvd. NW, Boca Raton, Florida 33487, provides the terms on which Lender shall lend to Borrower and Borrower shall repay Lender. The parties agree as follows:

 

1. ACCOUNTING AND OTHER TERMS

 

1.1             Accounting terms not defined in this Agreement shall be construed in accordance with GAAP. Calculations and determinations must be made in accordance with GAAP. Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in Section 13. All references to “ Dollars ” or “ $ ” are United States Dollars, unless otherwise noted.

 

2. LOANS AND TERMS OF PAYMENT

 

2.1             Promise to Pay. Borrower hereby unconditionally promises to pay Lender the outstanding principal amount of the Term Loan (as defined below) advanced to Borrower by Lender and accrued and unpaid interest thereon and any other amounts due hereunder as and when due in accordance with this Agreement and the Subordination Agreement.

 

2.2 Term Loan .

 

(a)               Availability. Subject to the terms and conditions of this Agreement, Lender agrees to make a term loan to Borrower on the Effective Date in an aggregate amount of Fifteen Million Dollars ($15,000,000.00) (the “ Term Loan ”). After repayment, the Term Loan may not be re-borrowed.

 

(b)              Repayment. Borrower shall make semi-annual payments of interest in accordance with Section 2.3 commencing on the first (1 st ) Payment Date to occur following the Effective Date, and continuing on each Payment Date thereafter through and including the Payment Date immediately preceding the Maturity Date. All unpaid principal and accrued and unpaid interest with respect to the Term Loan is due and payable in full on the Maturity Date. The Term Loan may only be prepaid in accordance with Sections 2.2(c) and 2.2(d).

 

(c) Mandatory Prepayments.

 

(i)                   If the Term Loan is accelerated following the occurrence of an Event of Default, Borrower shall immediately pay to Lender, an amount equal to the sum of: (x) the outstanding principal of the Term Loan to be prepaid plus accrued and unpaid interest thereon through the prepayment date, plus (y) all other Obligations that are due and payable, including interest at the Default Rate with respect to any past due amounts.

 

(ii)                 If (A) the Borrower conveys, sells, transfers or otherwise disposes of all or substantially all of the assets of the Biotest Therapy BU to an entity that is not a member of the Group, (B) ADMA or one of its subsidiaries conveys, sells, transfers or otherwise disposes of all of the equity interests in Borrower to an entity that is not a member of the Group, (C) ADMA or one of its subsidiaries engage in a merger or in a sale of equity resulting in the Borrower ceasing to be a direct or indirect Subsidiary of ADMA, or (D) ADMA engages in a Liquidation Event (as defined in the Stockholders Agreement) that occurs other than as the direct result of action taken by Biotest to acquire additional equity interests in ADMA (such an event described in this clause (D), an “ ADMA Change of Control Event ”), then Borrower shall immediately pay to Lender, upon such disposal, an amount equal to the sum of: (x) the outstanding principal of the Term Loan plus accrued and unpaid interest thereon through the prepayment date, plus (y) all other Obligations that are due and payable.

 

 

 

 

(d)                 Permitted Prepayment of Term Loan. Borrower may prepay the Term Loan in whole at any time or from time to time in part without premium or penalty. On the date of such prepayment, Borrower shall pay to Lender an amount equal to the sum of (A) all outstanding principal of the Term Loan plus accrued and unpaid interest thereon through the prepayment date, plus (B) all other Obligations that are due and payable, including interest at the Default Rate with respect to any past due amounts.

 

2.3 Payment of Interest on the Term Loan .

 

(a)                  Interest Rate. Subject to Section 2.3(b), the principal amount outstanding under the Term Loan shall accrue interest at a rate of 6.00% per annum, which interest shall be payable in arrears in accordance with Section 2.2(b) and Section 2.3(d). Interest shall accrue on the Term Loan commencing on, and including, the Effective Date, and shall accrue on the principal amount outstanding under the Term Loan through and including the day on which the Term Loan is paid in full.

 

(b)                 Default Rate . Immediately upon the occurrence and during the continuance of an Event of Default, Obligations shall accrue interest at a per annum rate equal to the rate that is otherwise applicable thereto plus five percentage points (5.00%) (the “ Default Rate ”). Payment or acceptance of the increased interest rate provided in this Section 2.3(b) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Lender.

 

(c)                  360-Day Year. Interest shall be computed on the basis of a three hundred sixty (360) day year, and the actual number of days elapsed.

 

(d)                 Payments. Except as otherwise expressly provided herein, all payments by Borrower under the Loan Documents shall be made to Lender at Lender’s office in immediately available funds on the date specified herein. Unless otherwise provided, interest is payable semi-annually on each Payment Date. Payments of principal and/or interest received after 12:00 noon Eastern time are considered received at the opening of business on the next Business Day. When a payment is due on a day that is not a Business Day, the payment is due the next Business Day and interest shall continue to accrue until paid. All payments to be made by Borrower hereunder or under any other Loan Document, including payments of principal and interest, and all fees, expenses, indemnities and reimbursements, shall be made without set-off, recoupment or counterclaim, in lawful money of the United States and in immediately available funds.

 

2.4 Taxes .

 

(a)                  Payments Free of Taxes . Any and all payments by or on account of any obligation of Borrower under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law (as determined in the good faith discretion of Borrower or Lender, as applicable) requires the deduction or withholding of any Tax from any such payment by Borrower, then Borrower shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by Borrower shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) Lender receives an amount equal to the sum it would have received had no such deduction or withholding been made. The Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of Lender, timely reimburse Lender for the payment of Other Taxes.

 

(b)                 Indemnification by Borrower . Borrower shall indemnify Lender, within 10 days after written demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by Lender or required to be withheld or deducted from a payment to Lender and any reasonable out-of-pocket expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to Borrower by Lender shall be conclusive absent manifest error.

 

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(c)                  Evidence of Payments. As soon as practicable after any payment of Taxes by Borrower to a Governmental Authority pursuant to this Section 2.4, Borrower shall deliver to Lender the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to Lender.

 

(d)                 Status of Lender . (i) Lender shall deliver to Borrower, at the time or times reasonably requested by Borrower, such properly completed and executed documentation reasonably requested by Borrower as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, Lender, if reasonably requested by Borrower, shall deliver such other documentation prescribed by applicable law or reasonably requested by Borrower as will enable Borrower to determine whether or not Lender is subject to backup withholding or information reporting requirements and to satisfy any such requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.4(d)(ii)(1), (ii)(2) and (ii)(4) below) shall not be required if in Lender’s reasonable judgment such completion, execution or submission would subject Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of Lender.

 

(ii)                 Without limiting the generality of the foregoing,

 

(1)                 if Lender is a U.S. Person, it shall deliver to Borrower on or prior to the date on which Lender becomes a party to this Agreement (and from time to time thereafter upon the reasonable request of Borrower), executed originals of IRS Form W-9 certifying that Lender is exempt from U.S. federal backup withholding tax;

 

(2)                 if Lender is a Foreign Lender, it shall, to the extent it is legally entitled to do so, deliver to Borrower (in such number of copies as shall be requested by Borrower) on or prior to the date on which Lender becomes a party to this Agreement (and from time to time thereafter upon the reasonable request of Borrower), whichever of the following is applicable:

 

i)                in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed originals of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

 

ii) executed originals of IRS Form W-8ECI;

 

iii)              in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit A-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable; or

 

iv)              to the extent a Foreign Lender is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or IRS Form W- 8BEN-E, as applicable, a U.S. Tax Compliance Certificate substantially in the form of Exhibit A-2 or Exhibit A-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit A-4 on behalf of each such direct and indirect partner;

 

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(3)                 if Lender is a Foreign Lender, it shall, to the extent it is legally entitled to do so, deliver to Borrower (in such number of copies as shall be requested by Borrower) on or prior to the date on which Lender becomes a party to this Agreement (and from time to time thereafter upon the reasonable request of Borrower), executed originals of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit Borrower to determine the withholding or deduction required to be made; and

 

(4)                 if a payment made to Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), Lender shall deliver to Borrower at the time or times prescribed by law and at such time or times reasonably requested by Borrower such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Borrower as may be necessary for Borrower to comply with its obligations under FATCA and to determine that Lender has complied with Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (4), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify Borrower in writing of its legal inability to do so.

 

(e)                  Treatment of Certain Refunds. If Lender determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.4 (including by the payment of additional amounts pursuant to this Section 2.4), it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all reasonable out-of-pocket expenses (including Taxes) of such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Borrower, upon the request of such Lender, shall repay to such Lender the amount paid over pursuant to this paragraph (e) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that Lender is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (e), in no event will Lender be required to pay any amount to Borrower pursuant to this paragraph (e) the payment of which would place Lender in a less favorable net after-Tax position than Lender would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require any Lender to make available its Tax returns (or any other information relating to its Taxes that it reasonably deems confidential) to Borrower or any other Person.

 

(f)                   Survival . Each party’s obligations under this Section 2.4 shall survive any assignment of rights by, or the replacement of, Lender and the repayment, satisfaction or discharge of all obligations under any Loan Document.

 

2.5                 Subordination Agreement. The Subordination Agreement, provides, among other things, that certain payments from Borrower to Lender otherwise due and payable hereunder may not be paid, and in the event of any conflict between the terms of this Agreement and the terms of the Subordination Agreement, the terms of the Subordination Agreement shall govern. As between Borrower and Lender, nothing contained in the Subordination Agreement shall impair the unconditional and absolute obligation of Borrower to Lender to pay all of the Obligations as such Obligations shall become due and payable in accordance with the Loan Documents; provided that if any cash payment of interest hereunder is prohibited by the terms of the Subordination Agreement, Borrower shall not be required to make such payment in cash and the amount of such payment (the “ PIK Amount ”) shall instead be capitalized and added to the principal amount of the Term Loan (and any such PIK Amount shall bear interest in accordance with the terms of this Agreement) and the capitalization of such PIK Amount shall satisfy Borrower’s obligation hereunder with respect to such payment. If any such PIK Amount shall be so capitalized and added to the principal amount of the Term Loan as a result of a cash payment of interest having been prohibited by the terms of the Subordination Agreement, Borrower shall promptly notify Lender of such event; provided that any failure of Borrower to so notify Lender shall not affect the operation of this Section 2.5 or the capitalization of such PIK Amount. As soon as Borrower is no longer prohibited under the terms of the Subordination Agreement from making any payments due hereunder in cash, Borrower shall so notify Lender and subsequent cash payments shall resume when due.

 

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2.6                 Subordinated Indebtedness . The Obligations shall be subordinate and junior in right of payment only to (1) Borrower’s Indebtedness under the Loan and Security Agreement in accordance with the terms of the Subordination Agreement, (2) any additional Indebtedness for borrowed money approved by ADMA’s Board of Directors and incurred by ADMA or Borrower following the Effective Date which is secured solely by a mortgage on the BTBU Owned Real Property, and (3) any Refinancing of the Indebtedness under the Loan and Security Agreement as expressly provided for under the Subordination Agreement. Except as otherwise provided in the preceding sentence, the Obligations shall rank pari passu with all additional Indebtedness for borrowed money approved by ADMA’s Board of Directors and incurred by ADMA or Borrower following the Effective Date; provided that, if such pari passu Indebtedness shall be secured by any assets other than the BTBU Owned Real Property, then the Obligations shall also be secured by such assets on a pari passu basis.

 

2.7                 Unsecured Obligations . In accordance with and to the extent required under the Subordination Agreement as in effect from time to time, the Obligations are, and shall remain, unsecured. The preceding sentence shall not affect Borrower’s obligations or Lender’s rights under Section 2.6.

 

3. CONDITIONS OF LOANS

 

3.1                 Conditions Precedent to Term Loan. Lender’s obligation to make the Term Loan is subject to the condition precedent that Lender shall have received, in form and substance reasonably satisfactory to Lender:

 

(a)             copies of the Amendment Agreement, the Subordination Agreement and this Agreement, each duly executed by Borrower and ADMA;

 

(b)           a copy of each of ADMA’s and Borrower’s corporate resolutions approving entry into this Agreement;

 

(c) a customary officer’s certificate of each of Borrower and ADMA; and

 

(d)             the conditions to closing as set out in Section 7.1, 7.2 and 7.3 of the Master Purchase Agreement shall have been satisfied or waived in accordance with the terms of the Master Purchase Agreement and the transactions contemplated by the Master Purchase Agreement close simultaneously with the making of the Term Loan.

 

4. REPRESENTATIONS AND WARRANTIES

 

Each of Borrower and ADMA, as applicable, represents and warrants to Lender on the date of this Agreement as follows:

 

4.1                 Due Organization, Authorization: Power and Authority .

 

(a)                   Borrower is duly organized, validly existing and in good standing under the laws of the State of Delaware. Borrower has all limited liability company power and authority to own, lease and operate its properties and to carry on its business as such business is presently conducted. Borrower is qualified and licensed to do business and is in good standing in any jurisdiction in which the conduct of its businesses or its ownership of property requires that it be qualified except where the failure to do so could not reasonably be expected to have a Material Adverse Change.

 

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(b)                 ADMA is duly organized, validly existing and in good standing under the laws of the State of Delaware. ADMA has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as such business is presently conducted. ADMA is qualified and licensed to do business and is in good standing in any jurisdiction in which the conduct of its businesses or its ownership of property requires that it be qualified except where the failure to do so could not reasonably be expected to have a Material Adverse Change.

 

(c)                  The execution, delivery and performance by each of the Borrower and AMDA of the Loan Documents to which it is a party have been duly authorized, and do not (i) conflict with any of such Party’s organizational documents, including its respective Operating Documents, (ii) contravene, conflict with, constitute a default under or violate any material Requirement of Law applicable thereto, (iii) contravene, conflict or violate any applicable order, writ, judgment, injunction, decree, determination or award of any Governmental Authority by which such Party or any of its Subsidiaries or any of their property or assets may be bound or affected, (iv) require any action by, filing, registration, or qualification with, or Governmental Approval from, any Governmental Authority (except such Governmental Approvals which have already been obtained and are in full force and effect) or are being obtained pursuant to Section 5.1(b), or (v) constitute an event of default under any material agreement by which such Party or any of such Subsidiaries or their respective properties is bound, in each case under clauses (i) to (v) if such a case could reasonably be expected to have a Material Adverse Change. Neither Borrower nor ADMA nor any of its Subsidiaries is in default under any agreement to which it is a party or by which it or any of its assets is bound in which such default could reasonably be expected to have a Material Adverse Change.

 

4.2 Solvency. The Borrower is Solvent and the Group, taken as a whole, is Solvent.

 

4.3             Regulatory Compliance. Neither Borrower nor ADMA is an “investment company” or a company “controlled” by an “investment company” under the Investment Company Act of 1940, as amended. Borrower is not engaged as one of its important activities in extending credit for margin stock (under Regulations X, T and U of the Federal Reserve Board of Governors). ADMA and each of its Subsidiaries has complied in all respects with the U.S. federal Fair Labor Standards Act, except as would not reasonably be expected to have a Material Adverse Change. Neither ADMA nor any of its Subsidiaries has violated any laws, ordinances or rules, the violation of which could reasonably be expected to have a Material Adverse Change. ADMA and each of its Subsidiaries has obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all Governmental Authorities that are necessary to continue their respective businesses as currently conducted, where failure to do so could reasonably be expected to have a Material Adverse Change.

 

4.4             Definition of Knowledge. ” For purposes of the Loan Documents, whenever a representation or warranty is made to ADMA’s or Borrower’s knowledge or awareness, to the “best of” ADMA’s or Borrower’s knowledge, or with a similar qualification, knowledge or awareness means the actual knowledge, after reasonable investigation, of the Responsible Officers.

 

4.5             Use of Proceeds. Borrower shall use the proceeds of the Term Loan for working capital and other general corporate purposes of Borrower and its Subsidiaries; provided that, the proceeds of the Term Loan shall not be used to pay down the loans outstanding under the Loan and Security Agreement or any other Indebtedness for borrowed money of ADMA or its Subsidiaries or to make Acquisitions.

 

5. AFFIRMATIVE COVENANTS

 

ADMA and Borrower shall, and Borrower shall cause each of its Subsidiaries to, do all of the following:

 

5.1            Government Compliance .

 

(a)                  Maintain its and all of Borrower’s Subsidiaries’ legal existence and good standing in their respective jurisdictions of organization and maintain qualification in each jurisdiction in which the failure to so qualify could reasonably be expected to have a Material Adverse Change. Comply with all laws, ordinances and regulations to which Borrower or any of its Subsidiaries is subject, the noncompliance with which could reasonably be expected to have a Material Adverse Change.

 

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(b)             Obtain and keep in full force and effect, all of the material Governmental Approvals necessary for the performance by ADMA, Borrower and Borrower’s Subsidiaries relating to the Biotest Therapy BU and obligations under the Loan Documents. ADMA and Borrower shall promptly provide copies to Lender of any material Governmental Approvals obtained by Borrower or any of its Subsidiaries relating to the Biotest Therapy BU.

 

5.2            Financial Statements, Reports, Certificates. Unless otherwise provided to Lender in its capacity as a stockholder or director of ADMA and in each case only to the extent required to be delivered by ADMA to the lenders under the Loan and Security Agreement and in the form delivered to the lenders under the Loan and Security Agreement:

 

(a)             Deliver to Lender:

 

(i)                   as soon as available, but no later than forty-five (45) days after the last day of each fiscal quarter, a company prepared consolidated and consolidating balance sheet, income statement and cash flow statement covering the consolidated operations of ADMA and its Subsidiaries for such quarter (which may be on Form 10-Q and each year end on Form 10-K, if ADMA is then subject to the periodic reporting requirements of the U.S. Securities Exchange Act of 1934, as amended) certified by a Responsible Officer;

 

(ii)                 as soon as available, but no later than one hundred twenty (120) days after the last day of Borrower’s fiscal year or within five (5) days of filing with the SEC, audited consolidated financial statements prepared under GAAP, consistently applied from an independent certified public accounting firm accompanied by any management report and opinion from such Auditor;

 

(iii)

 

(1)                 sixty (60) days after Borrower’s fiscal year end, ADMA’s annual financial projections for the entire current fiscal year, which annual financial projections may not have been approved by ADMA's Board of Directors at the time of their transmittal to Lender; and

 

(2)                   to the extent not provided under subsection (1) above, as soon as available after approval thereof by ADMA’s Board of Directors, but no later than the earlier of (A) ten (10) days after the filing of ADMA's Form 10-K with the Securities and Exchange Commission or (B) ninety (90) days after Borrower’s fiscal year end, ADMA’s annual financial projections for the entire current fiscal year as approved by ADMA’s Board of Directors (such annual financial projections as originally delivered to Lender are referred to herein as the “ Annual Projections ”; provided that, any revisions of the Annual Projections approved by ADMA’s Board of Directors shall be delivered to Lender no later than ten (10) days after such approval);

 

(iv)            in the event that ADMA becomes subject to the reporting requirements under the Securities Exchange Act of 1934, as amended, within five (5) days of filing, all reports on Form 10-K, 10-Q and 8-K filed with the Securities and Exchange Commission;

 

(v)             prompt notice of any material amendments of or other material changes to the capitalization table of Borrower and of any amendments or changes to the Operating Documents of Borrower or any of its Subsidiaries, together with any copies reflecting such amendments or changes with respect thereto; and

 

(vi) other information as reasonably requested by Lender.

 

Notwithstanding the foregoing, documents required to be delivered pursuant to the terms hereof (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which Borrower or ADMA posts such documents, or provides a link thereto, on Borrower’s or ADMA’s website on the internet at Borrower’s or ADMA’s website address.

 

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(b)                 Keep proper books of record and account in accordance with GAAP in all material respects, in which full, true and correct entries shall be made of all dealings and transactions in relation to its business and activities. When an Event of Default has occurred and is continuing, Borrower shall and shall cause each of its Subsidiaries to, allow Lender, at the sole cost of Borrower, during regular business hours to visit and inspect any of its properties, to examine and make abstracts or copies from any of its books and records.

 

5.3                 Insurance . Keep Borrower’s and its Subsidiaries’ business insured for risks and in amounts standard for companies in Borrower’s and its Subsidiaries industry and location in a manner consistent with the past practice of the Group.

 

5.4                 Litigation Cooperation. Commencing on the Effective Date and continuing through the termination of this Agreement, make reasonably available to Lender during regular business hours and upon reasonable prior notice, ADMA, Borrower and each of ADMA’s and Borrower’s officers, employees and agents and ADMA’s and Borrower’s Books to the extent that Lender may reasonably deem them necessary to prosecute or defend any third-party suit or proceeding instituted by or against Lender relating to ADMA or Borrower in connection with the Loan Documents.

 

5.5                 Notices of Litigation and Default. Borrower will give prompt written notice to Lender of any litigation or governmental proceedings pending or threatened (in writing) against Borrower or any of its Subsidiaries, which ADMA or its Subsidiaries is required to deliver to the lenders under the Loan and Security Agreement. Without limiting or contradicting any other more specific provision of this Agreement, promptly (and in any event within three (3) Business Days) upon Borrower becoming aware of the existence of any Event of Default or event which, with the giving of notice or passage of time, or both, would constitute an Event of Default, Borrower shall give written notice to Lender of such occurrence, which such notice shall include a reasonably detailed description of such Event of Default or event which, with the giving of notice or passage of time, or both, would constitute an Event of Default.

 

5.6                 Further Assurances . Execute any further instruments and take further action as Lender reasonably requests to effect the purposes of this Agreement, including executing any and all financing statements, agreements and instruments, and taking all such further actions (including filing and recording of financing statements, fixture filings, mortgages, deeds of trust and other documents), which Lender may reasonably request, to effectuate the granting of a security interest in any collateral and executing any amendments to this Agreement to provide customary provisions relating to the grant of such collateral in each case to the extent required by Section 2.6 or which may be required under applicable law.

 

6. NEGATIVE COVENANTS

 

ADMA shall not, and shall not permit any of its Subsidiaries (including Borrower) to, do any of the following without the prior written consent of Lender:

 

6.1                 Indebtedness. Create, incur or assume any Indebtedness that would violate Section 2.6.

 

6.2                 Transactions with Affiliates. Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower or any of its Subsidiaries, except for transactions that are (i) with any member of the Group or (ii) in the ordinary course of Borrower’s or such Subsidiary’s business, upon fair and reasonable terms that are no less favorable to Borrower or such Subsidiary than would be obtained in an arm’s length transaction with a non-affiliated Person.

 

6.3                 Subordinated Debt . Make any optional or voluntary prepayment of any Subordinated Indebtedness except in accordance with the subordination agreement, intercreditor or other similar agreement to which such Subordinated Indebtedness is subject, unless the Obligations are also prepaid on a pro rata basis.

 

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6.4                 Compliance. Become an “investment company” or a company controlled by an “investment company”, under the Investment Company Act of 1940, as amended, or undertake as one of its important activities extending credit to purchase or carry margin stock (as defined in Regulation U of the Board of Governors of the Federal Reserve System), or use the proceeds of the Term Loan for that purpose. Except as would not reasonably be expected to have a Material Adverse Change, (i) fail to meet the minimum funding requirements of ERISA, (ii) permit a “reportable event” (other than those events as to which the 30-day notice period referred to in Section 4043(c) of ERISA has been waived) or non-exempt “prohibited transaction”, each as defined in ERISA, to occur, (iii)   fail to comply with the U.S. federal Fair Labor Standards Act or violate any other law or regulation, or permit any of its Subsidiaries to do so, (iv) withdraw or permit any Subsidiary to withdraw from participation in, permit partial or complete termination of, or permit the occurrence of any other event with respect to, any present pension, profit sharing or deferred compensation plan, in each case which could reasonably be expected to result in any liability of Borrower or any of its Subsidiaries, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other Governmental Authority.

 

7. EVENTS OF DEFAULT

 

Any one of the following shall constitute an event of default (an “ Event of Default ”) under this Agreement:

 

7.1                 Payment Default. Borrower fails to (a) make any payment of principal or interest due hereunder on its due date (including a mandatory prepayment of the Obligations pursuant to Section 2.2(c)), or (b) pay any other Obligations within three (3) Business Days after such Obligations are due and payable (which three (3) Business Day grace period shall not apply to payments due on the Maturity Date or the date of acceleration pursuant to Section 8.1 hereof).

 

7.2                 Covenant Default. ADMA, or any of its Subsidiaries, fails or neglects to perform, keep, or observe any term, provision, condition, covenant or agreement contained in this Agreement or any Loan Documents, and as to any default (other than those specified in this Section 7) under such other term, provision, condition, covenant or agreement that can be cured, has failed to cure the default within ten (10) days after the occurrence thereof; provided, however, that if the default cannot by its nature be cured within the ten (10) day period or cannot after diligent attempts by ADMA or Borrower be cured within such ten (10) day period, and such default is likely to be cured within a reasonable time, then ADMA and Borrower shall have an additional period (which shall not in any case exceed thirty (30) days) to attempt to cure such default, and within such reasonable time period the failure to cure the default shall not be deemed an Event of Default. Grace Periods provided under this Section shall not apply to any covenant in Section 6 except for Section 6.3.

 

7.3                 Attachment; Levy; Restraint on Business . (a) any material portion of ADMA’s, Borrower’s or any of their respective Subsidiaries’ assets is attached, seized, levied on, or comes into possession of a trustee or receiver, or (b) any court order enjoins, restrains, or prevents ADMA, Borrower or any of their respective Subsidiaries from conducting any part of its business.

 

7.4                 Insolvency. (a) ADMA, Borrower or any of their respective Subsidiaries begins an Insolvency Proceeding; or (b) an Insolvency Proceeding is begun against ADMA, Borrower or any of Borrower’s Subsidiaries and not dismissed or stayed within forty-five (45) days.

 

7.5                 Other Agreements. There is a default in any agreement to which ADMA, Borrower or any of their respective Subsidiaries is a party with a third party or parties resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of Seven Hundred and Fifty Thousand Dollars ($750,000); provided that if any default or event of default shall occur under the Loan and Security Agreement or any agreement which Refinances the Loan and Security Agreement (a “ Refinancing Agreement ”), it shall not constitute an Event of Default unless and until the Indebtedness under the Loan and Security Agreement or the Refinancing Agreement shall have been accelerated.

 

7.6                 Judgments. One or more judgments, orders, or decrees for the payment of money in an amount, individually or in the aggregate, of at least One Million Dollars ($1,000,000) (not covered by independent third-party insurance as to which liability has been accepted by such insurance carrier) shall be rendered against ADMA, Borrower or any of Borrower’s Subsidiaries and shall remain unsatisfied, unvacated, or unstayed for a period of twenty (20) days after the entry thereof.

 

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7.7                 Misrepresentations. ADMA, Borrower or any of Borrower’s Subsidiaries or any Person acting for ADMA, Borrower or any of Borrower’s Subsidiaries makes any representation, warranty, or other statement now or later in this Agreement, any Loan Document or in any writing delivered to Lender or to induce Lender to enter this Agreement or any Loan Document, and such representation, warranty, or other statement is incorrect in any material respect when made.

 

8. RIGHTS AND REMEDIES

 

8.1                 Rights and Remedies . Upon the occurrence and during the continuance of an Event of Default, Lender may, without notice or demand, do any or all of the following: (i) deliver notice of the Event of Default to Borrower or (ii) by notice to Borrower declare all Obligations immediately due and payable (but if an Event of Default described in Section 7.4 occurs, all Obligations shall be immediately due and payable without any action by Lender).

 

8.2                 Application of Payments. Notwithstanding anything to the contrary contained in this Agreement, upon the occurrence and during the continuance of an Event of Default, each of ADMA and Borrower irrevocably waives the right to direct the application of any and all payments at any time or times thereafter received by Lender from or on behalf of ADMA or Borrower or any of their respective Subsidiaries of all or any part of the Obligations, and, as between ADMA and Borrower on the one hand and Lender on the other, Lender shall have the continuing and exclusive right to apply and to reapply any and all payments received against the Obligations in such manner as Lender may deem advisable notwithstanding any previous application by Lender.

 

8.3                 No Waiver; Remedies Cumulative. Failure by Lender, at any time or times, to require strict performance by ADMA or Borrower of any provision of this Agreement or any other Loan Document shall not waive, affect, or diminish any right of Lender thereafter to demand strict performance and compliance herewith or therewith. No waiver hereunder shall be effective unless signed by Lender and then is only effective for the specific instance and purpose for which it is given. The rights and remedies of Lender under this Agreement and the other Loan Documents are cumulative. Lender has all rights and remedies provided under any applicable law, by law, or in equity. The exercise by Lender of one right or remedy is not an election, and Lender’s waiver of any Event of Default is not a continuing waiver. Lender’s delay in exercising any remedy is not a waiver, election, or acquiescence.

 

8.4                 Demand Waiver. Borrower waives, to the fullest extent permitted by law, demand, notice of default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of guarantees held by Lender on which Borrower or any Subsidiary is liable.

 

9. GUARANTEE

 

To induce Lender to enter into this Agreement, ADMA (as primary obligor and not as surety only) irrevocably, absolutely and unconditionally:

 

(a)                  guarantees to Lender, on the terms and subject to the conditions of this Section 9 (this “ Guarantee ”), the prompt performance of, compliance with and satisfaction of all Guaranteed Obligations of Borrower hereunder when due strictly in accordance with the terms and conditions hereof.

 

(b)                 waives any requirement that Lender exhaust any right, remedy or take any action against Borrower before proceeding hereunder, provided that Lender shall proceed simultaneously against both ADMA and Borrower hereunder unless such Party is not legally permitted to do so as a result of Equitable Exceptions (as defined in the Master Purchase Agreement), in which case Lender shall be permitted to proceed solely against ADMA hereunder subject to the terms and conditions set forth herein.

 

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(c)                  waives, to the fullest extent permitted by law, all claims of waiver, release, surrender, abstraction or compromise and all set-offs, counterclaims, cross-claims, recoupments and any circumstance which might otherwise constitute a defense available to, or a discharge of, ADMA as a guarantor, including acceptance of this Guarantee and of the Guaranteed Obligations, presentment, demand, promptness, diligence, protest, notice of non-performance, default, dishonor, notice of the Guaranteed Obligations incurred and any and all other notices not provided for herein (other than any and all notices to ADMA and Borrower required to be provided or otherwise delivered pursuant to this Agreement), and all suretyship defenses generally (other than payment of the Guaranteed Obligations in full and fraud or willful misconduct by Lender). Notwithstanding the foregoing, ADMA hereby reserves the right to raise and assert any defenses, claims, counterclaims, set-offs, cross claims, recoupments or limitations (including limitations on and exclusions of certain damages) that could be raised or asserted by Borrower, pursuant to this Agreement or applicable Law with respect to any obligation owed or claimed to be owed by Borrower to Lender under this Agreement, in each case other than defenses arising from Equitable Exceptions with respect to Borrower, and the obligations and liabilities of ADMA shall be limited thereby.

 

(d)                 waives any and all notice of the creation, renewal, extension or accrual of the Guaranteed Obligations (other than notices to ADMA and Borrower required to be provided or otherwise delivered pursuant to this Agreement) and notice of or proof of reliance by Lender upon this Guarantee or acceptance of this Guarantee. ADMA acknowledges that Lender entered into this Agreement in reliance upon this Guarantee.

 

(e)                  ADMA agrees to pay the reasonable costs and expenses of Lender in connection with the enforcement of this Guarantee only to the extent that Lender prevails in such enforcement. If Lender elects to enforce this Guarantee against ADMA and Borrower, then Lender shall pay the reasonable costs and expenses of ADMA in the event that Lender fails to prevail in such enforcement action; provided, that it is hereby acknowledged and agreed that if Lender pursues an action against ADMA and Borrower and Borrower satisfies its obligations hereunder such that AMDA does not have any direct liability, then Lender will have no liability or obligation to pay the reasonable costs and expenses of ADMA and Borrower in connection with such action.

 

(f)                   ADMA’s undertakings under this Agreement shall remain in full force and effect until final performance in full of the Guaranteed Obligations under this Agreement notwithstanding any intermediate payment or performance or the invalidity or unenforceability in whole or in part of any of the Guaranteed Obligations.

 

(g)                 The obligations of ADMA hereunder will not be discharged by: (i) any modification of, or amendment or supplement to, this Agreement approved in writing by ADMA, in each case except to the extent expressly set forth therein, (ii) any change in the structure of Borrower; (iii) any insolvency, bankruptcy, reorganization, arrangement, composition, liquidation, dissolution, or similar proceedings with respect to Borrower; or (iv) any other occurrence whatsoever, except performance in full of all obligations of Borrower in accordance with the terms and conditions of this Agreement or payment in full of the Guaranteed Obligations. In the event that any payment to Lender in respect of any Guaranteed Obligation is rescinded or must otherwise be returned to Borrower for any reason whatsoever other than the fact that Lender was not in fact entitled to the payment pursuant to the terms and conditions herein, to the extent such amount is actually returned to Borrower, ADMA shall remain fully liable hereunder with respect to such Guaranteed Obligation as if such payment had not been made.

 

(h)                 In addition to all such rights of indemnity and subrogation as ADMA may have under applicable law, the Borrower agrees that in the event a payment shall be made by ADMA under this Agreement, the Borrower shall indemnify ADMA for the full amount of such payment and ADMA shall be subrogated to the rights of the person to whom such payment shall have been made to the extent of such payment; provided , however , that such indemnification and subrogation rights shall not be exercised until the Obligations have been paid in full to Lender.

  

10. NOTICES

 

All notices, consents, requests, approvals, demands, or other communication (collectively, “ Communication ”) by any party to this Agreement or any other Loan Document must be in writing and shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual receipt and three (3) Business Days after deposit in the U.S. mail, first class, registered or certified mail return receipt requested, with proper postage prepaid; (b) upon transmission, when sent by facsimile transmission; (c) one (1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or (d) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address, facsimile number, or email address indicated below. Lender or Borrower may change its mailing address or facsimile number by giving the other party written notice thereof in accordance with the terms of this Section 10.

 

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  If to Borrower or ADMA:  

ADMA BIOLOGICS, INC.

465 Route 17 South, Ramsey, NJ 07446

Attn: Adam Grossman, President and Chief Executive Officer

Fax: (201) 478-5553

Email: agrossman@admabio.com

 
         
  with a copy (which shall not constitute notice) to:  

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, NY 10019-6064

Attention: Ariel J. Deckelbaum, Esq.

Facsimile: 212.757.3990

Email: ajdeckelbaum@paulweiss.com:

 
         
  If to Lender:  

BIOTEST PHARMACEUTICALS CORPORATION

c/o Biotest AG

Landsteinerstr. 5

63303 Dreieich

Germany

Attention: Dr. Michael Ramroth and Dr. Martin Reinecke

Facsimile:

Email: michael.ramroth@biotest.com martin.reinecke@biotest..com

 
         
  with a copy (which shall not constitute notice) to:  

Greenberg Traurig, LLP

3333 Piedmont Road NE

Suite 2500

Atlanta, GA 30305

Attn: Wayne H. Elowe, Esq.

Fax: (678) 553-2453

Email: elowew@gtlaw.com

 

 

11. CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER

 

11.1              Governing Law; Consent to Jurisdiction. New York law governs this Agreement without regard to principles of conflicts of law. ADMA, Borrower and Lender each submit to the exclusive jurisdiction of the State and Federal courts in the City of New York, Borough of Manhattan. ADMA and Borrower expressly submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and each of ADMA and Borrower hereby waives any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby consents to the granting of such legal or equitable relief as is deemed appropriate by such court. Each of ADMA and Borrower hereby waives personal service of the summons, complaints, and other process issued in such action or suit and agrees that service of such summons, complaints, and other process may be made by registered or certified mail addressed to ADMA or Borrower at the address set forth in, or subsequently provided by ADMA or Borrower in accordance with, Section 10 of this Agreement and that service so made shall be deemed completed upon the earlier to occur of ADMA’s or Borrower’s actual receipt thereof or three (3) days after deposit in the U.S. mails, first class, registered or certified mail return receipt requested, proper postage prepaid.

 

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11.2              Waiver of Jury Trial . EACH PARTY (I) ACKNOWLEDGES AND AGREES THAT ANY ACTION THAT MAY ARISE UNDER OR RELATE TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND (II) HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT. EACH PARTY (A) CERTIFIES AND ACKNOWLEDGES THAT NO REPRESENTATIVE OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) CERTIFIES AND ACKNOWLEDGES THAT IT AND THE OTHER PARTY HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION OF THIS AGREEMENT, (C) UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER AND (D) MAKES THIS WAIVER VOLUNTARILY.

 

12. GENERAL PROVISIONS

 

12.1              Successors and Assigns. This Agreement binds and is for the benefit of the successors and permitted assigns of each party. No Party may transfer, pledge or assign this Agreement or any rights or obligations under it without (i) in the case of ADMA and Borrower, the prior written consent of Lender and (ii) in the case of Lender, the prior written consent of ADMA and Borrower (which in each of (i) and (ii) such consent may be granted or withheld in such Party’s discretion). Notwithstanding the preceding sentence, (a) Lender may transfer or assign this Agreement and its rights and obligations hereunder without ADMA’s or Borrower’s consent in connection with the sale, directly or indirectly, of all or substantially all of the assets or equity interests, of Lender or any of its Affiliates (whether by sale, merger, consolidation or otherwise) to the acquirer of such assets or equity interests, (b) if Borrower conveys, sells, transfers or otherwise disposes of all of substantially all of the assets of the Biotest Therapy BU to an entity that is a member of the Group or if ADMA or one of its subsidiaries conveys, sells, transfers or otherwise disposes of all of the equity interests in Borrower to any entity that is a member of the Group, then Borrower shall simultaneously transfer and assign the Obligations, this Agreement and any Loan Documents to such entity; provided that in such event ADMA shall remain bound by this Agreement, including the Guarantee set forth in Section 9 and (c) a pledge, sale, transfer, or other disposal of equity interests in ADMA without the prior written consent of Lender shall not be prohibited by this Section 12.1 unless such pledge, sale, transfer or other disposal constitutes an ADMA Change of Control Event.

 

12.2              Indemnification . Borrower agrees to indemnify, defend and hold Lender and its respective directors, officers, employees, agents, attorneys, or any other Person affiliated with or representing Lender (each, an “Indemnified Person”) harmless against all losses, expenses, damages or other liabilities incurred, or paid by an Indemnified Person in connection with or arising from the transactions contemplated by this Agreement or the other Loan Documents (including reasonable attorneys’ fees and expenses), except for losses, expenses, damages or other liabilities directly caused by such Indemnified Person’s gross negligence, willful misconduct or breach of any Loan Document. All amounts due to Lender under this Section 12.2 shall constitute Obligations subject to the Guarantee by ADMA set forth in Section 9.

 

12.3              Time of Essence. Time is of the essence for the performance of all Obligations in this Agreement.

 

12.4              Register . Lender, acting solely for this purpose as an agent of Borrower, shall maintain at its offices a register for the recordation of the name and address of Lender and the principal amounts (and stated interest) of the Term Loan owing to Lender pursuant to the terms hereof from time to time (the “ Register” ). The entries in the Register shall be conclusive absent manifest error, and Borrower and Lender shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by Borrower, at any reasonable time and from time to time upon reasonable prior notice.

 

12.5              Severability of Provisions. Each provision of this Agreement is severable from every other provision in determining the enforceability of any provision.

 

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12.6           Correction of Loan Documents. Lender may correct patent errors and fill in any blanks in this Agreement and the other Loan Documents (other than the Subordination Agreement) consistent with the agreement of the parties .

 

12.7 Amendments in Writing; Integration.

 

(a)                  No amendment, modification, termination or waiver of any provision of this Agreement or any other Loan Document, no approval or consent thereunder, or any consent to any departure by ADMA or Borrower or any of their respective Subsidiaries therefrom, shall in any event be effective unless the same shall be in writing and signed by ADMA, Borrower and Lender.

 

(b)                 Lender may, from time to time designate covenants in this Agreement less restrictive by notification to a representative of Borrower.

 

(c)                  This Agreement and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements. All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Agreement and the Loan Documents merge into this Agreement and the Loan Documents.

 

12.8              Counterparts. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, is an original, and all taken together, constitute one Agreement.

 

12.9              Survival. All covenants, representations and warranties made in this Agreement continue in full force and effect until this Agreement has terminated pursuant to its terms and all Obligations (other than inchoate indemnity obligations and any other obligations which, by their terms, are to survive the termination of this Agreement) have been satisfied. The obligations of Borrower in Section 12.2 to indemnify Lender as well as the confidentiality provisions in Section 12.10 below, shall survive until the statute of limitations with respect to such claim or cause of action shall have run.

 

12.10          Confidentiality. In handling any confidential information of ADMA and Borrower, Lender shall exercise the same degree of care that it exercises for its own proprietary information, but disclosure of information may be made: (a) to prospective transferees or purchasers of any interest in the Obligations permitted hereunder (provided, however, Lender shall, except upon the occurrence and during the continuance of an Event of Default, obtain such prospective transferee’s or purchaser’s agreement to the terms of this provision or to similar confidentiality terms); (b) as required by law, regulation, subpoena, or other order; (c) to regulators or as otherwise required in connection with an examination or audit; (d) as Lender reasonably considers appropriate in exercising remedies under the Loan Documents; and (e) to third party service providers of the Lender so long as such service providers have executed a confidentiality agreement with Lender with terms no less restrictive than those contained herein. Confidential information does not include information that either: (i) is in the public domain or in Lender’s possession when disclosed to Lender, or becomes part of the public domain after disclosure to Lender; or (ii) is disclosed to Lender by a third party, if Lender does not know that the third party is prohibited from disclosing the information. Lenders may (i) use confidential information for any of their internal record keeping, due diligence, risk analysis, market analysis, maintenance and development of client databases, statistical and reporting purposes; (ii)    use Borrower's name and the principal terms of the Loans for customary client reference purposes; (iii) use confidential information for regulatory reporting purposes to the extent required by or advisable under applicable law; and (iv) any related purpose so long as Lender does not disclose Borrower’s identity or the identity of any person associated with Borrower unless otherwise expressly permitted by this Agreement. The provisions of the immediately preceding sentence shall survive the termination of this Agreement. The agreements provided under this Section 12.10 supersede all prior agreements, understanding, representations, warranties, and negotiations between the parties about the subject matter of this Section 12.10.

 

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12.11          Cooperation of Borrower. Each of ADMA and Borrower agrees (i) to execute any documents (including promissory notes) reasonably required to effectuate and acknowledge an assignment of the Term Loan and this Agreement to an assignee in accordance with Section 12.1, (ii) to make ADMA’s or Borrower’s management available to meet with Lender and prospective permitted assignees of the Term Loan and this Agreement (which meetings shall be arranged at mutually convenient times for ADMA, Borrower and Lender), and (iii)   to assist Lender in the preparation of information relating to the financial affairs of ADMA and Borrower as any prospective permitted assignee of the Term Loan and this Agreement reasonably may request. Subject to the provisions of Section 12.10, ADMA and Borrower authorizes Lender to disclose to any prospective assignee of the Term Loan and this Agreement, any and all information in such Lender’s possession concerning ADMA, Borrower and its financial affairs which has been delivered to such Lender by or on behalf of ADMA or Borrower pursuant to this Agreement.

 

12.12          Borrower Liability . The Borrower waives (a) any suretyship defenses available to it under any applicable law, and (b) any right to require Lender to: (i) proceed against any other person; or (ii) pursue any other remedy. Lender may exercise or not exercise any right or remedy it has against ADMA or Borrower without affecting Borrower’s liability. Notwithstanding any other provision of this Agreement or other related document, Borrower indefinitely waives enforcement of all rights that it may have at law or in equity (including, without limitation, any law subrogating Borrower to the rights of Lender under this Agreement) to seek contribution, indemnification or any other form of reimbursement from any other Person now or hereafter primarily or secondarily liable for any of the Obligations, for any payment made by Borrower with respect to the Obligations in connection with this Agreement or otherwise. Any agreement providing for indemnification, reimbursement or any other arrangement prohibited under this Section shall be null and void. If any payment is made to Borrower in contravention of this Section, Borrower shall hold such payment in trust for Lender and such payment shall be promptly delivered to Lender for application to the Obligations, whether matured or unmatured.

 

13. DEFINITIONS

 

13.1 Definitions. As used in this Agreement, the following terms have the following meanings:

 

Acquisition ” means (a) any acquisition by ADMA, Borrower or any of their respective Subsidiaries of an interest in any other Person that (i) shall then become consolidated with ADMA, Borrower or any of their respective Subsidiaries in accordance with GAAP (including, by way of merger into ADMA, Borrower or any of their respective Subsidiaries or otherwise) or (ii) constitutes a 50% or greater equity or economic interest in any Person, or (b) any acquisition by ADMA, Borrower or any of their respective Subsidiaries of all or any substantial part of the assets of any other Person or of a division or line of business of any other Person, in each case, whether by purchase, lease, exchange, issuance of equity or debt securities, merger, reorganization or any other method.

 

ADMA ” is defined in the preamble hereof.

 

ADMA Change of Control Event ” is defined in Section 2.2(c)(ii).

 

Affiliate ” of any Person is a Person that owns or controls directly or indirectly the Person, any Person that controls or is controlled by or is under common control with the Person, and each of that Person’s senior executive officers, directors, partners and, for any Person that is a limited liability company, that Person’s managers and members.

 

Agreement ” is defined in the preamble hereof.

 

Amendment Agreement ” is the Second Amendment to the Loan and Security Agreement dated as of the date hereof, by and among Oxford Finance LLC, as collateral agent, certain lenders party thereto from time to time and ADMA.

 

Biotest Therapy BU ” is defined in the Master Purchase Agreement.

 

Borrower ” is defined in the preamble hereof.

 

Borrower’s Books ” are ADMA’s or any of its Subsidiaries’ books and records including ledgers, federal, and state tax returns, records regarding ADMA’s or its Subsidiaries’ assets or liabilities, business operations or financial condition, and all computer programs or storage or any equipment containing such information.

 

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BTBU Owned Real Property ” is defined in the Master Purchase Agreement.

 

Business Day ” is any day that is not a Saturday, Sunday or a day on which banks in New York, New York are authorized or obligated by law to be closed.

 

Code ” is the U.S. Internal Revenue Code of 1986, as amended.

 

Communication ” is defined in Section 10.

 

Contingent Obligation ” is, for any Person, any direct or indirect liability, contingent or not, of that Person for (a) any indebtedness, lease, dividend, letter of credit or other obligation of another such as an obligation directly or indirectly guaranteed, endorsed, co-made, discounted or sold with recourse by that Person, or for which that Person is directly or indirectly liable; (b) any obligations for undrawn letters of credit for the account of that Person; and (c) all obligations from any interest rate, currency or commodity swap agreement, interest rate cap or collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; but “Contingent Obligation” does not include endorsements in the ordinary course of business. The amount of a Contingent Obligation is the stated or determined amount of the primary obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability for it determined by the Person in good faith; but the amount may not exceed the maximum of the obligations under any guarantee or other support arrangement.

 

Default Rate ” is defined in Section 2.3(b).

 

Dollars , ” “ dollars ” and “$” each mean lawful money of the United States.

 

Effective Date ” is defined in the preamble of this Agreement.

 

ERISA ” is the Employee Retirement Income Security Act of 1974, as amended, and its regulations.

 

Event of Default ” is defined in Section 7.

 

Excluded Taxes ” are any of the following Taxes imposed on or with respect to Lender or required to be withheld or deducted from a payment to Lender, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of Lender being organized under the laws of, or having its principal office or its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) U.S. federal withholding Taxes imposed on amounts payable to or for the account of Lender with respect to an applicable interest in the Term Loan pursuant to a law in effect on the date on which Lender acquires such interest in the Term Loan except in each case to the extent that, pursuant to Section 2.4, amounts with respect to such Taxes were payable either to Lender's assignor immediately before Lender became a party hereto, (c) Taxes attributable to Lender’s failure to comply with Section 2.4(d) and (d) any U.S. federal withholding Taxes imposed under FATCA.

 

FATCA ” is Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code.

 

Foreign Lender ” is a Lender or participant that is not a U.S. Person.

 

GAAP ” is generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other Person as may be approved by a significant segment of the accounting profession in the United States, which are applicable to the circumstances as of the date of determination.

 

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Governmental Approval ” is any consent, authorization, approval, order, license, franchise, permit, certificate, accreditation, registration, filing or notice, of, issued by, from or to, or other act by or in respect of, any Governmental Authority.

 

Governmental Authority ” is any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization.

 

Guaranteed Obligations ” means any Obligations, provided that the liability of ADMA hereunder is limited to an amount equal to (x) the amount that would render this guaranty void, voidable or unenforceable against ADMA’s creditors or creditors’ representatives under any applicable fraudulent conveyance, fraudulent transfer or similar act or under Section 544 or 548 of the Bankruptcy Code of 1978, as amended, minus (y) $1.00 (one U.S. dollar).

 

Group ” is ADMA and its Subsidiaries from time to time.

 

Indebtedness ” is (a) indebtedness for borrowed money or the deferred price of property or services, such as reimbursement and other obligations for surety bonds and letters of credit, (b) obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease obligations, and (d) Contingent Obligations.

 

Indemnified Person ” is defined in Section 12.2.

 

Insolvency Proceeding ” is any proceeding by or against any Person under the United States Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions, extensions generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief.

 

Indemnified Taxes ” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of Borrower under any Loan Document and (b) to the extent not otherwise described in clause (a) of this definition, Other Taxes.

 

IRS ” is the United States Internal Revenue Service.

 

Lender ” is Biotest Pharmaceuticals Corporation.

 

Loan and Security Agreement ” is that certain Loan and Security Agreement dated as of June 19, 2015, by and among Oxford Finance LLC, as collateral agent, certain lenders party thereto from time to time, Borrower and the other parties thereto (as the same may from time to time be amended, modified, supplemented or restated or as the same may be replaced from time to time in connection with a Refinancing).

 

Loan Documents ” are, collectively, this Agreement, the Subordination Agreement, any other subordination agreements, any notes or guaranties executed by Borrower or any other Person, and any other present or future agreement entered into by Borrower, or any other Person for the benefit of Lender in connection with this Agreement; all as amended, restated, or otherwise modified.

 

Master Purchase Agreement ” is that certain Master Purchase and Sale Agreement dated as of January 21, 2017 among Lender, Borrower, ADMA, Biotest AG and Biotest US Corporation.

 

Material Adverse Change ” is (a) a material adverse change in the business, operations or financial condition of ADMA and its Subsidiaries taken as a whole; or (b) a material impairment of the prospect of repayment of any portion of the Obligations when due.

 

Maturity Date ” is the earlier to occur of (a) a Liquidation Event (as defined in Stockholders Agreement) and (b) June 6, 2022.

 

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Obligations ” are all of Borrower’s obligations to pay when due any debts, principal, interest and other amounts Borrower owes Lender now or later, in connection with, related to, following, or arising from, out of or under, this Agreement or, the other Loan Documents, or otherwise, and including interest accruing after Insolvency Proceedings begin (whether or not allowed) and debts, liabilities, or obligations of Borrower assigned to Lender and the performance of Borrower’s duties under the Loan Documents.

 

Operating Documents ” are, for any Person, such Person’s formation documents, as certified by the Secretary of State (or equivalent agency) of such Person’s jurisdiction of organization on a date that is no earlier than thirty (30) days prior to the Effective Date, and, (a) if such Person is a corporation, its bylaws in current form, (b)   if such Person is a limited liability company, its limited liability company agreement (or similar agreement), and (c)   if such Person is a partnership, its partnership agreement (or similar agreement), each of the foregoing with all current amendments or modifications thereto.

 

Other Connection Taxes ” are, with respect to Lender, Taxes imposed as a result of a present or former connection between Lender and the jurisdiction imposing such Tax (other than connections arising from Lender having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in the Term Loan or any Loan Document).

 

Other Taxes ” are all present or future stamp, court or documentary, intangible, recording, filing, or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment by Lender of its interest in the Term Loan.

 

Party ” means Borrower, ADMA or Lender.

 

Payment Date ” is the first (1 st ) calendar day following each six calendar month period (i) commencing on and including the Effective Date and (ii) commencing on and including each Payment Date thereafter.

 

Person ” is any individual, sole proprietorship, partnership, limited liability company, joint venture, company, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency.

 

Refinancing ” shall mean any issuance of Indebtedness which is in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund the Indebtedness being Refinanced (or previous Refinancings thereof).

 

Register ” is defined in Section 12.4.

 

Requirement of Law ” is as to any Person, the organizational or governing documents of such Person, and any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

 

Responsible Officer ” is any of the President, Chief Executive Officer, or Chief Financial Officer of Borrower acting alone.

 

Solvent ” is, with respect to any Person: the fair salable value of such Person’s consolidated assets (including goodwill minus disposition costs) exceeds the fair value of such Person’s liabilities, including contingent liabilities; such Person is not left with unreasonably small capital after the transactions in this Agreement; and such Person is able to pay its debts (including trade debts) as they mature. In computing the amount of contingent liabilities at any time, such liabilities shall be computed in an amount which, in light of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

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Stockholders Agreement ” is that certain Stockholders Agreement dated as of the date hereof, by and among ADMA, Lender and the other parties thereto (as the same may from time to time be amended, modified, supplemented or restated).

 

Subordination Agreement ” is that certain Subordination Agreement, dated as of even date herewith, by and among Lender and Oxford Finance LLC, a Delaware limited liability company, in its capacity as collateral agent for the lenders under the Loan and Security Agreement (as such Subordination Agreement may from time to time be amended, modified, supplemented or restated and as the same may be replaced from time to time in connection with a Refinancing in accordance with Section 11 of the Subordination Agreement).

 

Subordinated Indebtedness ” means any Indebtedness for borrowed money incurred by ADMA or its Subsidiaries that is contractually subordinated in right of payment to the Obligations.

 

Subsidiary ” is, with respect to any Person, any Person of which more than fifty percent (50%) of the voting stock or other equity interests (in the case of Persons other than corporations) is owned or controlled, directly or indirectly, by such Person or through one or more intermediaries.

 

Term Loan ” is defined in Section 2.2(a) hereof.

 

[ Balance of Page Intentionally Left Blank ]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as ofthe Effective Date.

 

BORROWER:

 

ADMA BIOMANUF ACURING, LLC
   
By:   /s/ Adam Grossman  
Name:  Adam Grossman
 
Title: Chief Executive Officer  

 

ADMA:

 

ADMA BIOLOGICS, IN

 

By:   /s/ Adam Grossman  
Name:  Adam Grossman
 
Title: Chief Executive Officer  

 

LENDER:

 

BIOTEST PHARMACEUTICALS CORPORATION

 

By: /s/ Ileana Carlisle  
Name:  Ileana Carlisle  
Title: Chief Executive Officer  

 

 

 

 

Exhibit A-1

 

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Treated As Partnerships For

U.S. Federal Income Tax Purposes)

 

Reference is made to the Subordinated Loan Agreement, dated as of June 6, 2017 (as may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “ Loan Agreement” ), among BIOTEST PHARMACEUTICALS CORPORATION, a Delaware corporation, as lender (in such capacity, “ Lender” ), ADMA BIOMANUFACTURING, LLC, a Delaware limited liability company (the “ Borrower” ) and ADMA BIOLOGICS, INC., a Delaware corporation (“ ADMA ”). Capitalized terms used but not otherwise defined herein shall have the meanings assigned to them in the Loan Agreement.

 

Pursuant to the provisions of Section 2.4 of the Loan Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Term Loan(s) (as well as any promissory note(s) evidencing such Term Loan(s)) in respect of which it is providing this certificate, (ii) it is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a “controlled foreign corporation” related to Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the Borrower with a certificate of its non-U.S. person status on IRS Form W-8BEN or W-8BEN-E, as applicable. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform Borrower in writing and (2) the undersigned shall have at all times furnished Borrower with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding each such payment.

 

[Signature Page Follows]

 

 

 

 

  [Foreign Lender]
   
  By: 
    Name:
    Title:
       
  [Address]

 

Dated:                                                    , 20[ ]

 

[U.S. Tax Compliance Certificate]

 

 

 

 

Exhibit A-2

 

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Treated As Partnerships For

U.S. Federal Income Tax Purposes)

 

Reference is made to the Subordinated Loan Agreement, dated as of June 6, 2017 (as may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “ Loan Agreement” ), among BIOTEST PHARMACEUTICALS CORPORATION, a Delaware corporation, as lender (in such capacity, “ Lender” ), ADMA BIOMANUFACTURING, LLC, a Delaware limited liability company (the “ Borrower” ) and ADMA BIOLOGICS, INC., a Delaware corporation (“ ADMA ”). Capitalized terms used but not otherwise defined herein shall have the meanings assigned to them in the Loan Agreement.

 

Pursuant to the provisions of Section 2.4 of the Loan Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a “controlled foreign corporation” related to Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished its participating Lender with a certificate of its non-U.S. person status on IRS Form W-8BEN or W-8BEN-E, as applicable. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding each such payment.

 

[Signature Page Follows]

 

 

 

 

 

  [Foreign Participant]
   
  By: 
    Name:
    Title:
       
  [Address]

 

Dated:                                                    , 20[ ]

 

[U.S. Tax Compliance Certificate]

 

 

 

 

Exhibit A-3

 

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Treated As Partnerships For

U.S. Federal Income Tax Purposes)

 

Reference is made to the Subordinated Loan Agreement, dated as of June 6, 2017 (as may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “ Loan Agreement” ), among BIOTEST PHARMACEUTICALS CORPORATION, a Delaware corporation, as lender (in such capacity, “ Lender” ), ADMA BIOMANUFACTURING, LLC, a Delaware limited liability company (the “ Borrower” ) and ADMA BIOLOGICS, INC., a Delaware corporation (“ ADMA ”). Capitalized terms used but not otherwise defined herein shall have the meanings assigned to them in the Loan Agreement.

 

Pursuant to the provisions of Section 2.4 of the Loan Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect to such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a “controlled foreign corporation” related to Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or W-8BEN-E, as applicable, or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or W- 8BEN-E, as applicable, from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding each such payment.

 

[Signature Page Follows]

 

 

 

 

 

  [Foreign Participant]
   
  By: 
    Name:
    Title:
       
  [Address]

 

Dated:                                                    , 20[ ]

 

[U.S. Tax Compliance Certificate]

 

 

 

 

Exhibit A-4

 

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Treated As Partnerships For

U.S. Federal Income Tax Purposes)

 

Reference is made to the Subordinated Loan Agreement, dated as of June 6, 2017 (as may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “ Loan Agreement” ), among BIOTEST PHARMACEUTICALS CORPORATION, a Delaware corporation, as lender (in such capacity, “ Lender” ), ADMA BIOMANUFACTURING, LLC, a Delaware limited liability company (the “ Borrower” ) and ADMA BIOLOGICS, INC., a Delaware corporation (“ ADMA ”). Capitalized terms used but not otherwise defined herein shall have the meanings assigned to them in the Loan Agreement.

 

Pursuant to the provisions of Section 2.4 of the Loan Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Term Loan(s) (as well as any promissory note(s) evidencing such Term Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Term Loan(s) (as well as any promissory note(s) evidencing such Term Loan(s)), (iii) with respect to the extension of credit pursuant to the Loan Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of Borrower within the meaning of Section 871(h)(3)(B) of the Code, and (v) none of its direct or indirect partners/members is a “controlled foreign corporation” related to Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished Borrower with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or W-8BEN-E, as applicable, or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or W-8BEN-E, as applicable, from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform Borrower in writing and (2) the undersigned shall have at all times furnished Borrower with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding each such payment.

 

[Signature Page Follows]

 

 

 

 

 

  [Foreign Lender]
   
  By: 
    Name:
    Title:
       
  [Address]

 

Dated:                                                    , 20[ ]

 

[U.S. Tax Compliance Certificate]

 

 

 

STOCKHOLDERS AGREEMENT

 

by and among

 

ADMA Biologics, Inc.,

 

Biotest Pharmaceuticals Corporation

 

and

 

Such other Persons who become party hereto pursuant to Section 4.1(c)

 

______________________________

 

Dated: June 6, 2017

 

______________________________

 

 

 

 

  

Table of Contents

 

STOCKHOLDERS AGREEMENT 1
ARTICLE I DEFINITIONS 1
ARTICLE II REPRESENTATIONS AND WARRANTIES 8
ARTICLE III STANDSTILL 9
ARTICLE IV TRANSFER RESTRICTIONS 12
ARTICLE V  CONTRACTUAL RIGHT TO PURCHASE PREFERRED SHARES; AFTER-ACQUIRED SECURITIES 15
ARTICLE VI CORPORATE GOVERNANCE 17
ARTICLE VII PROXIES 20
ARTICLE VIII STOCK CERTIFICATE LEGEND 21
ARTICLE IX CONFIDENTIALITY 22
ARTICLE X MISCELLANEOUS 23

 

 

 

STOCKHOLDERS AGREEMENT

 

STOCKHOLDERS AGREEMENT, dated as of June 6, 2017, by and among ADMA Biologics, Inc., a Delaware corporation (the “ Company ”), Biotest Pharmaceuticals Corporation, a Delaware corporation (the “ Biotest Stockholder ”), and any other Stockholder (as hereinafter defined) or other Person (as hereinafter defined) who becomes a party hereto pursuant to Section 4.1(c) or otherwise.

 

WHEREAS, the Company, ADMA BioManufacturing, LLC, a limited liability company formed under the laws of Delaware, the Biotest Stockholder, Biotest AG, a company organized under the laws of Germany, and Biotest US Corporation, a Delaware corporation, have entered into that certain Master Purchase and Sale Agreement, dated as of January 21, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the “ Master Purchase and Sale Agreement ”), pursuant to which the Biotest Stockholder agreed to sell, transfer and deliver to the Company, and the Company agreed to purchase from the Biotest Stockholder, certain assets of the Biotest Stockholder specified in such Master Purchase and Sale Agreement, in consideration for which the Company agreed to issue to the Biotest Stockholder 4,295,580 shares of Common Stock and 8,591,160 shares of Non-Voting Common Stock (each, as hereinafter defined) and to provide such other consideration as specified in the Master Purchase and Sale Agreement; and

 

WHEREAS, in connection with the issuance of such Common Stock and Non-Voting Common Stock to the Biotest Stockholder, the Company and the Biotest Stockholder are entering into (a) that certain Registration Rights Agreement, dated as of the date hereof, pursuant to which the Biotest Stockholder is granted certain registration rights, upon the terms and subject to the conditions set forth therein, a copy of which is attached hereto as Exhibit B (as amended, restated, supplemented or otherwise modified from time to time, the “ Registration Rights Agreement ”), and (b) this Agreement, to provide for certain other rights and obligations of the Biotest Stockholder and the other Stockholders with respect to the Company, including certain restrictions on the transfer of the Equity Securities (as hereinafter defined), and to provide for, among other things, certain corporate governance and other rights, all on the terms and subject to the conditions set forth herein.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

1.1       Definitions .  As used in this Agreement, and unless the context requires a different meaning, the following terms have the meanings indicated:

 

1  

   

Affiliate ” shall mean any Person who is an “affiliate” as defined in Rule 12b-2 of the General Rules and Regulations under the Exchange Act.

 

Agreement ” means this Agreement as the same may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms and conditions hereof.

 

Beneficially Own ”, “ Beneficial Owner ” and “ Beneficial Ownership ” mean, with respect to any securities (including Derivative Instruments), having “beneficial ownership” of such securities for purposes of Rule 13d-3 or 13d-5 under the Exchange Act; provided that any Person shall be deemed to be the Beneficial Owner of, and shall be deemed to Beneficially Own and have Beneficial Ownership of, any securities (including Derivative Instruments) that such Person has the right to acquire, whether or not such right is exercisable immediately; provided , further , that, when used with respect to the Biotest Stockholder, the terms Beneficially Own, Beneficial Owner, and Beneficial Ownership shall include, without duplication, all securities (including Derivative Instruments) otherwise Beneficially Owned by all of the Biotest Stockholder’s Affiliates.

 

Board of Directors ” means the Board of Directors of the Company.

 

Business Day ” means any day other than a Saturday, Sunday or other day on which commercial banks in the State of New York are authorized or required by law or executive order to close.

 

Capital Raise ” means the issuance by the Company of Common Stock or other Equity Securities of the Company in a private placement or similar transaction pursuant to which the Company raises additional capital.  For the avoidance of doubt, a “Capital Raise” shall not include (a) the issuance of Common Stock and Non-Voting Common Stock to the Biotest Stockholder, and the payment by the Biotest Stockholder therefor, at the Closing (as defined in the Master Purchase and Sale Agreement), (b)  options to purchase Common Stock or restricted stock which may be issued pursuant to a Stock Option Plan, (c) a subdivision of the outstanding shares of Common Stock into a larger number of shares of Common Stock, (d) Equity Securities of the Company issued upon exercise, conversion or exchange of any Equity Rights of the Company issued (i) prior to the date of this Agreement, (ii) in accordance with the terms of a Stock Option Plan or (iii) in accordance with the terms of this Agreement, (e) Equity Securities of the Company issued in consideration of an acquisition, joint venture, partnership, strategic alliance or other similar transaction (whether pursuant to a stock purchase, asset purchase, merger, joint venture agreement, partnership agreement or other similar agreement or otherwise), approved in writing by the Board of Directors in accordance with the terms of this Agreement, (f) issuances to commercial banks, lessors and licensors in non-equity financing transactions (provided that the foregoing will not include any issuances to private equity or venture capital firms or any private equity division of any investment bank or commercial bank) not exceeding more than five percent (5%) in the aggregate of the outstanding Common Stock on a fully diluted basis in transactions approved in writing by the Board of Directors, or (g) issuances to the public pursuant to an effective registration statement of the Company under the Securities Act.

 

2  

  

Capital Stock ” means capital stock of the Company.

 

Cause ” shall have the meaning ascribed to such term in Adam Grossman’s employment agreement with the Company, as in effect from time to time.

 

CEO ” means the Chief Executive Officer of the Company from time to time.

 

Charter Documents ” means the certificate of incorporation and the by-laws of the Company, as the same may be amended, restated, supplemented or otherwise modified from time to time in accordance with their respective terms and applicable law.

 

Closing Date Charter ” means the Company’s certificate of incorporation in effect at the Closing (as defined in the Master Purchase and Sale Agreement).

 

Code ” means the Internal Revenue Code of 1986, as amended.

 

Common Stock ” means the “Common Stock” (as defined in the Closing Date Charter) and any other Capital Stock into which such stock is reclassified or reconstituted.

 

Confidential Information ” means all confidential or proprietary information of, and business or technical information about, the Company, including information relating to its respective financial condition, prospects, affairs, plans, products, assets, properties, intellectual property, analyses, projects, processes, systems, marketing, research or development activities, and all technical or scientific information or know-how of the Company or of any other Person as to which the Company is obligated to maintain confidentiality (in each case, whether such information is written or oral or provided through any electronic, facsimile or computer related communication), furnished by or on behalf of the Company or any of its Representatives prior to, on or following the date hereof; provided , however , that “ Confidential Information ” shall not include such information that (a) is or becomes available to the general public, other than as a result of a disclosure by the restricted party or its Affiliates or any of their respective Representatives in breach of this Agreement, (b) was available to such restricted party or its Affiliates, or becomes available to such restricted party or its Affiliates, on a non-confidential basis from a source other than the Company or its Representatives; provided, that, the source of such information was not bound by a confidentiality obligation with respect to such information, or otherwise prohibited from transmitting the information to such restricted party or its Affiliates by a contractual, legal or fiduciary obligation, or (c) is independently generated by such restricted party without use of or reference to any proprietary or confidential information of the Company.

 

3  

  

Contract ” means any contract, agreement, instrument, undertaking, indenture, commitment, loan, license, settlement, consent, note or other legally binding obligation.

 

Control ” means, when used with respect to any specified Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by Contract or otherwise, and the terms “ Controlled by ” and “ under common Control with ” shall be construed accordingly.

 

Derivative Instrument ” means any and all derivative securities (as defined under Rule 16a-1 under the Exchange Act) that increase or decrease in value as the value of any Equity Securities increases or decreases, as the case may be, including a long convertible security, a long call option and a short put option position, in each case regardless of whether (a) such derivative security conveys any voting rights in any Equity Security, (b) such derivative security is required to be, or is capable of being, settled through delivery of any Equity Security or (c) other transactions hedge the value of such derivative security.

 

Designation Rights Period ” means the period commencing on the date of this Agreement and ending upon the earlier of (a) the first time at which the Biotest Stockholder’s Beneficial Ownership of Capital Stock is less than 10% of the Capital Stock issued and outstanding (calculated on an As-Converted and Economic Interest Basis (as defined in Section 3.1(a)(i) )) and (b) such time as the Biotest Stockholder elects, in its sole discretion, to waive any of its designation rights pursuant to Section 6.1 or to remove any of the Biotest Designees then in office.

 

Equity Right ” means, with respect to any Person, any security (including any equity security, debt security or hybrid debt-equity security) or obligation convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, or any options, calls, warrants, restricted shares, deferred share awards, share units, “phantom” awards, dividend equivalents, participations, interests, rights or commitments relating to, or any share appreciation right or other instrument the value of which is determined in whole or in part by reference to the market price or value of, shares of capital stock or earnings of such Person.  For the avoidance of doubt, Equity Rights of the Company shall include the Non-Voting Common Stock.

 

Equity Securities ” means Capital Stock and Equity Rights that are directly or indirectly exercisable or exchangeable for or convertible into Capital Stock.  For the avoidance of doubt, Equity Securities shall include Common Stock and the Non-Voting Common Stock.

 

Exchange Act ” means the United States Securities Exchange Act of 1934, as amended.

 

 “ GAAP ” means United States generally accepted accounting principles consistently applied, as in effect from time to time.

 

Good Reason ” shall have the meaning ascribed to such term in Adam Grossman’s employment agreement with the Company, as in effect from time to time.

 

4  

  

Governmental Authority ” means the government of any nation, state, city, locality or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or Controlled, directly or indirectly, by any of the foregoing.

 

Grossman Family ” means Jerrold Grossman, Adam Grossman and their respective spouses, former spouses, siblings, descendants (whether natural or adopted), parents, aunts, uncles and first cousins.

 

Group ” has the meaning assigned to such term in Section 13(d)(3) of the Exchange Act.

 

 “ Lien ” means any mortgage, deed of trust, pledge, hypothecation, assignment, encumbrance, claim, lien (statutory or other) or preference, priority, right or other security interest, restriction on use or Transfer, or preferential arrangement of any kind or nature whatsoever (excluding preferred stock and equity-related preferences).

 

Liquidation Event ” means (a)(i) the merger or consolidation of the Company into or with one or more Persons, (ii) the merger or consolidation of one or more Persons into or with the Company, or (iii) a tender or exchange offer or other business combination if, in the case of the foregoing clauses (i), (ii) or (iii), the stockholders of the Company immediately prior to such merger, consolidation, or business combination, or immediately prior to the commencement of such tender or exchange offer, do not retain a majority of the voting power of the Person surviving or resulting from such merger, consolidation, tender or exchange offer or business combination, (b) the acquisition (whether by purchase, tender or exchange offer, merger or otherwise) by any Person or Group, in one transaction or a series of related transactions, of (i) a majority of the voting power of the Capital Stock or (ii) all or substantially all of the assets of the Company (calculated in accordance with Section 271(c) of the Delaware General Corporation Law), or (c) the dissolution, liquidation or winding up of the Company in accordance with the Charter Documents.

 

Non-Voting Common Stock ” means the “Non-Voting Common Stock” (as defined in the Closing Date Charter) and any other Equity Securities of the Company (other than Common Stock) into which such stock is reclassified or reconstituted.

 

Permanent Disability ” shall have the meaning ascribed to the term “Disability” in Adam Grossman’s employment agreement with the Company, as in effect from time to time.

 

Person ” means any individual, firm, corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company, Governmental Authority or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity.

 

5  

  

Preferred Shares ” means authorized shares of preferred stock under the Company’s Charter Documents as such Charter Documents may be amended from time to time.

 

Pro Rata Portion ” means, with respect to the Biotest Stockholder, on any issuance date for New Preferred Securities and to determine the Biotest Stockholder’s participation right in connection with the issuance of New Preferred Securities, the number of New Preferred Securities to be offered to the Biotest Stockholder equal to the product of (i) the total number of New Preferred Securities to be issued by the Company on such date multiplied by (ii) Biotest Stockholders’ aggregate percentage ownership of the Company determined based on a fraction, (x) the numerator of which is the Biotest Stockholders’ Beneficial Ownership of Capital Stock as of immediately prior to the issuance of the Issuance Notice (calculated on an As-Converted and Economic Interest Basis), and (y) the denominator of which is the issued and outstanding Equity Securities of the Company as of such time.

 

Representatives ” means, as to any Person, its Affiliates and its and their respective directors, officers, managers, employees, agents, attorneys, accountants, financial advisors and other advisors and representatives.

 

Required Information ” means, as to any Biotest Designee, (i) the name, age, business address and residence address of such person, (ii) the employer and principal occupation of such person, (iii) a biographical profile of such person, including educational background and business and professional experience, (iv) any other information relating to such person required by the Charter Documents or that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for the election of directors in a contested election (even if an election contest is not involved) pursuant to Section 14 of the Exchange Act, and (v) a representation of such person that he or she has reviewed, and if elected to the Board of Directors would be in compliance with, all applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the Company.

 

Securities Act ” means the United States Securities Act of 1933, as amended.

 

Shares ” means all shares of Capital Stock the holders of which are entitled to vote for members of the Board of Directors, now owned or subsequently acquired, however acquired, by a Stockholder.

 

Stock Option Plan ” means any equity plan, incentive plan or similar arrangement adopted by the Board of Directors from time to time pursuant to which the Company may issue restricted stock and options to purchase shares of Common Stock to officers, directors, employees, consultants and other services providers of the Company.

 

Stockholders ” means, collectively, the Biotest Stockholder and any Transferee thereof who has agreed to be bound by the terms and conditions of this Agreement in accordance with Section 4.1(c)(i) , and the term “Stockholder” shall mean any such Person.

 

6  

  

Subsidiary ” means, with respect to any Person, any other Person (a) more than 50% of whose outstanding shares of capital stock or other equity or voting interests representing the right to vote for the election of directors or other managing authority of such other Person are owned or Controlled, directly or indirectly, by such first Person, but such other Person shall be deemed to be a Subsidiary only so long as such ownership or Control exists, or (b) which does not have outstanding shares of capital stock or other equity or voting interests with such right to vote, as may be the case in a partnership, joint venture or unincorporated association, but more than 50% of whose ownership interests representing the right to make the decisions for such other Person is owned or Controlled, directly or indirectly, by such first Person, but such other Person shall be deemed to be a Subsidiary only so long as such ownership or Control exists.

 

Transfer ” means any direct, indirect or synthetic sale, assignment, pledge, lease, hypothecation, mortgage, gift or creation of any Lien or other disposition or transfer (by operation of law or otherwise, including by means of reference under a Derivative Instrument or by direct or indirect transfer, transfer by means of a Derivative Instrument or issuance of Equity Securities of any Person that is not a natural person), or any offer, Contract or announcement of an intention to do any of the foregoing, and “ Transferor ” and “ Transferee ” shall have correlative meanings.  Notwithstanding the foregoing, a change of control of the Biotest Stockholder shall not constitute a Transfer.

 

1.2       Other Capitalized Terms .  The following terms shall have the meanings specified in the indicated Section of this Agreement.

 

Term Section
As-Converted and Economic Interest Basis 3.1(a)(i)
Biotest Designee 6.1(a)(ii)
Biotest Designees 6.1(a)(ii)
Biotest Economic Ownership Cap 3.1(a)(i)
Biotest First Designee 6.1(a)(i)
Biotest Parties 9.1(a)
Biotest Second Designee 6.1(a)(ii)
Biotest Stockholder Preamble
Board Observer 0
CEO Candidate 0
CEO Candidates 0
Company Preamble
Compelled Party 9.1(c)
Designation Notice 6.1(e)
Exercise Period 5.1(c)
FDA 3.1(a)
Initial Appointee 6.1(c)
Initial Appointment 6.1(c)
Issuance Notice 5.1(b)

 

7  

  

Lock-Up Period 4.1(a)
Master Purchase and Sale Agreement Recitals
Meeting Materials 0
Meeting Notice 0
New Preferred Securities 5.1(a)
Proxy End Date 0
Registration Rights Agreement Recitals
Restricted Period 4.1(b)
Similar Company 0
Standstill 0
Standstill Period 3.1(a)

 

ARTICLE II

 

REPRESENTATIONS AND WARRANTIES

 

Each of the parties to this Agreement hereby represents and warrants, severally and not jointly, to each other party to this Agreement that as of the date such party executes this Agreement:

 

2.1       Existence; Authority; Enforceability .  Such party has the power and authority to enter into this Agreement and to carry out its obligations hereunder.  Such party is duly organized and validly existing under the laws of its jurisdiction of organization, and the execution of this Agreement, and the consummation of the transactions contemplated herein, have been authorized by all necessary action, and no other act or proceeding on its part is necessary to authorize the execution of this Agreement or the consummation of any of the transactions contemplated herein.  This Agreement has been duly executed by such party and constitutes its legal, valid and binding obligations, enforceable against it in accordance with its terms.

 

2.2       Absence of Conflicts .  The execution and delivery by such party of this Agreement and the performance of its obligations hereunder do not and will not (a) conflict with, or result in the breach of, any provision of the constitutive documents of such party; (b) result in any violation, breach, conflict, default or event of default (or an event which with notice, lapse of time, or both, would constitute a default or event of default), or give rise to any right of acceleration or termination or any additional payment obligation, under the terms of any contract, agreement or permit to which such party is a party or by which such party’s assets or operations are bound or affected; or (c) violate any law applicable to such party.

 

2.3       Consents .  Other than any consents which have already been obtained, no consent, waiver, approval, authorization, exemption, registration, license or declaration is required to be made or obtained by such party in connection with (a) the execution, delivery or performance of this Agreement or (b) the consummation of any of the transactions contemplated herein.

 

8  

 

ARTICLE III

 

STANDSTILL

 

3.1       General Standstill Provisions.

 

(a)           Subject to Section 3.2 , from the date hereof until the earliest of (x) the five (5) year anniversary of the date on which the U.S. Food and Drug Administration (the “ FDA ”) terminates or rescinds that certain Warning Letter issued to the Biotest Stockholder by the FDA on November 25, 2014, (y) the seven (7) year anniversary of the Closing (as defined in the Master Purchase and Sale Agreement), and (z) the termination of the Standstill (as hereinafter defined) pursuant to Section 3.3 (such earliest period, the “ Standstill Period ”), the Biotest Stockholder and the other Stockholders shall not, and shall cause their respective Affiliates and their respective Representatives (to the extent acting on their behalf) not to, directly or indirectly, without the prior written consent of, or waiver by, the Company:

 

(i)           acquire, or offer or agree to acquire, of record or beneficially, by purchase or otherwise, any Equity Securities or Derivative Instruments that would result in the Biotest Stockholder and its Affiliates collectively Beneficially Owning more than (A) 50%, less one (1) share, of the issued and outstanding shares of Capital Stock (calculated both on an as-converted to Common Stock basis and, if any outstanding shares of Capital Stock are not convertible into Common Stock, on the basis of such shares’ proportionate claim on the total assets of the Company upon liquidation, dissolution or winding up of the Company (such calculation, the “ As-Converted and Economic Interest Basis ”, and such cap, the “ Biotest Economic Ownership Cap ”)) or (B) 30% of the issued and outstanding shares of Common Stock;

 

(ii)           make or join or become a “participant” (as defined in Instruction 3 to Item 4 of Schedule 14A under the Exchange Act) in (or in any way knowingly encourage) any “solicitation” of “proxies” (as such terms are defined in Regulation 14A under the Exchange Act) or consent to vote any securities of the Company or its Affiliates (including through action by written consent), or otherwise advise or influence any Person with respect to the voting of any securities of the Company or its Affiliates, including by seeking to call a meeting of, or initiating any stockholder proposal for action by, the Company’s stockholders, or seeking to place a representative on the Board of Directors or to remove or suspend any director from the Board of Directors (in each case, other than in respect of the election, appointment or removal of a Biotest Designee in accordance with ARTICLE VI );

 

(iii)           conduct, fund or otherwise become a participant in any “tender offer” (as such term is used in Regulation 14D under the Exchange Act) involving Equity Securities, in each case not approved in advance in writing by the Board of Directors;

 

(iv)           form, join, become a member of or in any way participate in a Group (other than a Group that consists solely of the Biotest Stockholder and its Affiliates) with respect to the securities of the Company or any of its Affiliates or otherwise in connection with any transaction or matter described in this Section 3.1 ; or

 

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(v)           deposit any Equity Securities in a voting trust or similar Contract or subject any Equity Securities to any voting agreement, pooling arrangement or similar arrangement or Contract, or grant any proxy with respect to any Equity Securities (in each case, other than (A) pursuant to this Agreement or (B) to the Company or a Person specified by the Company in a proxy card (paper or electronic) provided to stockholders of the Company by or on behalf of the Company).

 

(b)           In furtherance of the foregoing, during the Standstill Period, the Biotest Stockholder and the other Stockholders shall not, and shall cause their respective Affiliates and their respective Representatives (to the extent acting on their behalf) not to, directly or indirectly, without the prior written consent of, or waiver by, the Company, (i) seek, either alone or in concert with others, to control or influence, in any manner, the management, policies, Board of Directors or stockholders of the Company or its Affiliates, including by (A) advising, assisting, encouraging, arranging or entering into any discussions, negotiations, agreements or arrangements (whether written or oral) with any third party (including any securityholders of the Company or its Affiliates) with respect to any of the foregoing, or (B) making any proposal, disclosing any plan or taking any action that would require or would reasonably be expected to require the Company or any of its Affiliates to publicly disclose any of the foregoing actions described in this Section 3.1 or the possibility of a business combination, merger or other type of transaction or matter described in this Section 3.1 , or (ii) contest the validity of, or seek an amendment, waiver, suspension or termination of, any provision of this Section 3.1 (including this subclause) or Section 7.1 (whether by legal action or otherwise); provided that this clause (ii) shall not prohibit the Biotest Stockholder from making a confidential request to the Company seeking an amendment or waiver of the provisions of this Section 3.1 , which the Company may accept or reject in its sole discretion, so long as any such request is made in a manner that does not require public disclosure thereof by any Person.

 

(c)           A breach of this Section 3.1 by any Affiliate or Representative of the Biotest Stockholder, or by any Representative of any Affiliate of the Biotest Stockholder, shall be deemed a breach by the Biotest Stockholder of this Section 3.1 .

 

(d)           Except as expressly set forth in this Section 3.1 , the Standstill shall not otherwise limit the exercise of the Biotest Stockholder’s rights in its capacity as a stockholder of the Company, including the exceptions set forth in Section 3.2 .

 

3.2       Exceptions .  The prohibitions in Section 3.1 (collectively, the “ Standstill ”) shall not apply to or otherwise restrict:

 

(a)           the issuance or transfer to, or receipt by, the Biotest Stockholder or any of its Affiliates of securities of the Company as a result of a stock split, stock dividend (or dividend of rights or options respecting stock), reorganization, recapitalization, reclassification, combination, exchange of shares or other like change approved or recommended in writing by the Board of Directors;

 

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(b)           the manner in which any Biotest Designee may (i) vote on any matter submitted to the Board of Directors or (ii) participate in deliberations or discussions of the Board of Directors (including making suggestions or raising issues to the Board of Directors) in his or her capacity as a member of the Board of Directors; or

 

(c)           the Biotest Stockholder or any of its Affiliates or its or their respective Representatives in:

 

(i)           making and submitting to the Company or the Board of Directors any confidential proposal that is intended by the Biotest Stockholder to be made and submitted on a non-publicly disclosed or announced basis;

 

(ii)           making and submitting to the Company, the Board of Directors or the Company’s stockholders any acquisition proposal (including on a publicly disclosed or announced basis), in each case, following the Company’s entry into a definitive agreement for a negotiated transaction with one or more un-Affiliated third parties that is not the Biotest Stockholder or any of its Affiliates that, if consummated, would result in the acquisition (whether by purchase, tender or exchange offer, merger or otherwise) by such third party or third parties, an entity Controlled by it or them or its or their stockholders (or similar equity holders) of (A) a majority of the voting power of the Capital Stock or (B) assets of the Company or its Subsidiaries having an aggregate market value equal to 50% or more of either the aggregate market value of all of the assets of the Company (calculated on a consolidated basis with its Subsidiaries) or the aggregate market value of all of the Capital Stock outstanding immediately prior to the Company’s entry into such definitive agreement, in each case, as determined in good faith by the Board of Directors; or

 

(iii)           (A) participating in, or purchasing securities issued or sold by the Company in, a Capital Raise or (B) acquiring Common Stock in open market purchases; provided , however , in the case of either of the foregoing clause (A) or (B), that as a result of such transaction the collective Beneficial Ownership of the Biotest Stockholder and its Affiliates of (I) Capital Stock does not exceed the Biotest Economic Ownership Cap (calculated on as As-Converted and Economic Interest Basis) or (II) Common Stock does not exceed 30% of the issued and outstanding shares of Common Stock.

 

3.3       Early Termination of the Standstill Period .  The Standstill shall immediately terminate without any further action on the part of any party hereto upon the occurrence of any of the following:

 

(a)           any Person or Group (in each case, other than the Biotest Stockholder and its Affiliates) acquires (whether through a Capital Raise, open market purchases or sales between existing stockholders of the Company or otherwise) Equity Securities and, immediately following such acquisition, the collective Beneficial Ownership of Capital Stock of such Person or Group equals or exceeds 20% of the issued and outstanding shares of Capital Stock (calculated on an As-Converted and Economic Interest Basis); provided , however , that the Standstill shall not terminate pursuant to this Section 3.3(a) solely by reason of an acquisition in a Capital Raise by (i) any member or members of the Grossman Family, (ii) any trust, corporation, partnership (general or limited) or limited liability company, all of the beneficial or equity interests in which are held by one or more members of the Grossman Family, (iii) Aisling Capital II LP, (iv) Biomark Capital Fund IV LP or (v) any Affiliate of the foregoing, that results in the Beneficial Ownership of any such Person or Group being equal to or exceeding 20% of the issued and outstanding Common Stock (as of immediately following such Capital Raise) if the Biotest Stockholder has a right to participate in such Capital Raise and elects not to acquire a number of shares of Capital Stock that is greater than or equal to the product of (x) the number of shares of Capital Stock issued in connection with such Capital Raise, multiplied by (y) a fraction the numerator of which is the number of shares of Capital Stock collectively Beneficially Owned by the Biotest Stockholder and its Affiliates and the denominator of which is the number of shares of Capital Stock Beneficially Owned collectively by all of the Persons who had the right to participate in such Capital Raise (such Beneficial Ownership being calculated, in each of the numerator and the denominator, as of immediately prior to such Capital Raise), multiplied by (z) one-half (1/2);

 

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(b)           six (6) months after the first date on which the Biotest Stockholder and its Affiliates collectively Beneficially Own less than twenty-five percent (25%) of the issued and outstanding Capital Stock (calculated on an As-Converted and Economic Interest Basis);

 

(c)           Adam Grossman (i) voluntarily leaves the employ of the Company and all of its Affiliates other than for Good Reason or, subject to Section 6.3 , as a result of his death or Permanent Disability or (ii) is terminated for Cause; or

 

(d)           the Company ceases to be a reporting company under Sections 13 and 15(d) of the Exchange Act.

 

ARTICLE IV

 

TRANSFER RESTRICTIONS

 

4.1       Lock-Up; Volume Limitations.

 

(a)           For a period of six (6) months from and after the date hereof (the “ Lock-Up Period ”), except with the prior written consent of the Board of Directors (which consent may be withheld in the sole discretion of the Board of Directors), neither the Biotest Stockholder nor any of its Affiliates shall (i) Transfer any Equity Securities or any options or warrants to purchase any Equity Securities or any securities convertible into, exercisable for, exchangeable for or that represent the right to receive Equity Securities Beneficially Owned by the Biotest Stockholder or any of its Affiliates, (ii) enter into any swap or other agreement that Transfers, in whole or in part, any of the economic consequences of ownership of Equity Securities, whether any such transaction described in clause (i) or (ii) is to be settled by delivery of Equity Securities, in cash or otherwise, or (iii) make any demand for or exercise any right with respect to the registration of any Equity Securities (except for such demands or exercises as will not require or permit any public filing or other public disclosure to be made in connection therewith until after the expiration of the Lock-Up Period).  The Biotest Stockholder hereby represents and warrants that it and each of its Affiliates now has, and, except as contemplated by this Section 4.1 , for the duration of the Lock-Up Period will have, good and marketable title to its or their, as applicable, Equity Securities, free and clear of all Liens that could impact the ability of the Biotest Stockholder or any of its Affiliates to comply with the foregoing restrictions.  The Biotest Stockholder agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of any Equity Securities during the Lock-Up Period except in compliance with the foregoing restrictions.

 

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(b)           For a period of three (3) years from and after the expiration of the Lock-Up Period (the “ Restricted Period ”), the Biotest Stockholder and its Affiliates shall not, in any twelve (12) month period, Transfer Equity Securities collectively representing more than fifteen percent (15%) of the issued and outstanding Common Stock (calculated on an As-Converted and Economic Interest Basis); provided , however , that if the market capitalization of the Company increases to an amount equal to or greater than an amount equal to or greater than an amount that is two times the amount of the market capitalization of the Company at 4:00 P.M. (Eastern Time) on June 6, 2017, then the Biotest Stockholder and its Affiliates may Transfer Equity Securities collectively representing up to twenty percent (20%) of the issued and outstanding Capital Stock (but shall not Transfer Equity Securities in excess of such amount) in any twelve (12) month period; provided , further , that from and after the earliest to occur of (x) the market capitalization of the Company increasing to an amount that is equal to or greater than an amount equal to or greater than an amount that is three times the amount of the market capitalization of the Company at 4:00 P.M. (Eastern Time) on June 6, 2017, (y) the one (1) year anniversary of the first date on which the Biotest Stockholder and its Affiliates collectively Beneficially Own Equity Securities representing less than twenty-five percent (25%) of the issued and outstanding Capital Stock (calculated on an As-Converted and Economic Interest Basis) and (z) the expiration of the Restricted Period, the Biotest Stockholder and its Affiliates may Transfer any or all of the Equity Securities then held by them at any time or from time to time.

 

(c)           Notwithstanding anything to the contrary in this Section 4.1 , the Biotest Stockholder and its Affiliates shall be permitted to Transfer Equity Securities at any time or from time to time under the following circumstances:

 

(i)           a Transfer of Capital Stock to an Affiliate of the Biotest Stockholder; provided , however , that, as conditions precedent to the effectiveness of any such Transfer, (A) the Transferee shall agree in writing to be bound by the terms and conditions of this Agreement (including, without limitation, to grant the proxies granted by Section 7.1 ) to the same extent as if such Transferee were the “Biotest Stockholder” hereunder pursuant to an instrument substantially in the form attached hereto as Exhibit A ; (B) the Transferor and the Transferee shall agree in writing that, if at any time subsequent to such Transfer, such Transferee ceases to be an Affiliate of the Biotest Stockholder, then all such Transferred Equity Securities, and all right, title and interest therein, shall, without any further action by any Person, automatically Transfer back to the Transferor (or, if such Transferor is not the Biotest Stockholder and not then an Affiliate of the Biotest Stockholder, back to the Biotest Stockholder), and the Biotest Stockholder hereby agrees to take, and to cause such former Affiliate to take (including through the commencement of an action or similar proceeding to enforce the agreement entered into between the Transferor and such former Affiliate Transferee), all such actions as the Company deems appropriate to document and effect such Transfer back; and (C) the Biotest Stockholder shall give written notice to the Company in the manner provided by Section 10.1 of its or its Affiliate’s intention to make such Transfer not less than ten (10) days prior to effecting such Transfer, which notice shall state the name and address of the Affiliate to whom such Transfer is proposed, the relationship of such Affiliate to the Biotest Stockholder, and the number and kind of Equity Securities proposed to be Transferred to such Affiliate;

 

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(ii)           a Transfer that has been approved in advance in writing by the Board of Directors (other than the Biotest Designee(s)) and is effected in accordance with all terms, conditions and limitations, if any, imposed by the Company as conditions to its granting such approval;

 

(iii)           a Transfer pursuant to and in accordance with the terms of any Liquidation Event that has been approved or recommended in writing by the Board of Directors; or

 

(iv)           a Transfer to the Company or any Subsidiary of the Company (including pursuant to any “tender offer” (as such term is used in Regulation 14D under the Exchange Act) by the Company or any of its Subsidiaries).

 

(d)           A breach of this Section 4.1 by any Affiliate of the Biotest Stockholder shall be deemed a breach by the Biotest Stockholder of this Section 4.1 .

 

4.2       Transfers in Compliance with Law .  Notwithstanding any other provision of this Agreement, no Transfer may be made pursuant to this ARTICLE IV unless the Transfer complies in all respects with applicable federal and state securities laws, including the Securities Act.  If requested by the Company, an opinion of counsel to such Transferor shall be supplied to the Company, at such Transferor’s expense, to the effect that such Transfer complies with applicable federal and state securities laws.

 

4.3       Restricted Transfers Void Ab Initio .  Any attempt to Transfer any Equity Securities or any right, title or interest therein in violation of this ARTICLE IV shall be null and void ab initio .

 

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ARTICLE V

 

CONTRACTUAL RIGHT TO PURCHASE PREFERRED SHARES; AFTER-ACQUIRED SECURITIES

 

5.1       Contractual Right to Purchase Preferred Shares.

 

(a)            Issuance of Preferred Shares . From the date hereof until the termination of the Standstill Period, the Company hereby grants to the Biotest Stockholder the right to purchase its Pro Rata Portion of any new Preferred Shares in any Capital Raise that the Company may from time to time propose to issue or sell to any Person (such aggregate number of Preferred Shares to be issued in the applicable Capital Raise, the “ New Preferred Securities ”), in each case in accordance with the terms and conditions of this Section 5.1 .

 

(b)            Additional Issuance Notices. The Company shall give written notice (an “ Issuance Notice ”) of any proposed issuance or sale described in subsection (a) above to the Biotest Stockholder within five (5) Business Days following any meeting of the Board of Directors at which any such issuance or sale is approved. The Issuance Notice shall, if applicable, be accompanied by a written offer from any prospective purchaser seeking to purchase New Preferred Securities and shall set forth the material terms and conditions of the proposed issuance, including:

 

(i)           the number and description of the New Preferred Securities proposed to be issued and the percentage of the Company's outstanding Equity Securities such issuance would represent;

 

(ii)           the proposed issuance date, which shall be at least fifteen (15) Business Days from the date of the Issuance Notice; and

 

(iii)           the proposed purchase price per share of New Preferred Securities.

 

(c)            Exercise of Right to Purchase Preferred Shares . The Biotest Stockholder shall for a period of ten (10) Business Days following the receipt of an Issuance Notice (the “ Exercise Period ”) have the right to elect irrevocably to purchase its Pro Rata Portion of the New Preferred Securities at the purchase price set forth in the Issuance Notice by delivering a written notice to the Company.  The Biotest Stockholder’s election must be received by the Company prior to the expiration of the Exercise Period and the failure of the Biotest Stockholder to deliver its written irrevocable election within the Election Period shall be deemed a waiver by the Biotest Stockholder of its right to purchase its Pro Rata Portion of the New Preferred Securities identified in the Issuance Notice.  The closing of any purchase by the Biotest Stockholder  shall be consummated concurrently with the consummation of the issuance or sale described in the Issuance Notice; provided , however , that the closing of any purchase by the Biotest Stockholder may be extended beyond the closing of the transaction in the Issuance Notice to the extent necessary to obtain any required approvals or consents of any Governmental Authority and other required third party approvals or consents (and the Company and the Biotest Stockholder shall use its respective commercially reasonable efforts to obtain such approvals); provided , that the extension pursuant to this clause subsection (c) shall not exceed sixty (60) days.

 

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(d)            Sales to the Prospective Buyer . If the Biotest Stockholder waives its right to purchase its allotment of the New Preferred Securities or elects to purchase within the Election Period and then fails to purchase its allotment of the New Preferred Securities within the time period described in subsection (c), the Company shall be free to complete the proposed issuance or sale of New Preferred Securities described in the Issuance Notice with respect to which the Biotest Stockholder waived or failed to exercise the option set forth in this Section 5.1 on terms no less favorable to the Company than those set forth in the Issuance Notice (except that the amount of New Preferred Securities to be issued or sold by the Company may be reduced).

 

(e)            Closing of the Issuance. Upon the issuance or sale of any New Preferred Securities in accordance with this Section 5.1 , the Company shall deliver to the Biotest Stockholder certificates (if any) evidencing the New Preferred Securities, which New Preferred Securities shall be issued free and clear of any liens (other than those arising hereunder and those attributable to the actions of the Biotest Stockholder), and the Company shall so represent and warrant to the Biotest Stockholder, and further represent and warrant to the Biotest Stockholder that such New Preferred Securities shall be, upon issuance thereof to the Biotest Stockholder and after payment therefor, duly authorized, validly issued, fully paid and non-assessable.  The Biotest Stockholder shall deliver to the Company the purchase price for the New Preferred Securities purchased by it by certified or bank check or wire transfer of immediately available funds. The Biotest Stockholder and the Company shall take all such other actions as may be reasonably necessary to consummate the purchase and sale including, without limitation, entering into such additional agreements as may be necessary or appropriate.

 

5.2       Review of Financial Alternatives .  Notwithstanding anything contained herein to the contrary, but subject to the proviso to this Section 5.2 , during the Standstill Period the Board of Directors of the Company shall not approve the issuance of any Preferred Shares subject to Section 5.1 , including to Affiliates of the Company, unless the Board of Directors has satisfied its fiduciary duties under applicable law with respect to the evaluation of financing alternatives which the Board of Directors determinates in good faith are reasonably available following consultation with the Company’s management team and outside financial and legal advisors; provided, however, that it is hereby acknowledged and agreed by the parties hereto that nothing herein shall expand or modify any of the fiduciary duties of the Board of Directors under applicable law.

 

5.3       After-Acquired Securities .  All of the provisions of this Agreement shall apply to all of the Equity Securities of the Company now owned or which may be issued or Transferred hereafter to the Biotest Stockholder or any of its Affiliates, as applicable, in consequence of any additional issuance, purchase, exchange or reclassification of any of such Equity Securities, corporate reorganization, or any other form of recapitalization, consolidation, merger, share split or share dividend, or which are acquired by the Biotest Stockholder or any of its Affiliates in any other manner.

 

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ARTICLE VI

 

CORPORATE GOVERNANCE

 

6.1       Board of Directors.

 

(a)           During the Designation Rights Period, the Company shall take all actions that may be necessary, and each Stockholder shall vote or cause to be voted all Shares owned by such Stockholder or over which such Stockholder has voting control, to ensure that at all such times the following persons are nominated or renominated for election to (in the case of the Company), elected to (in the case of the Stockholders), and otherwise installed in office as members of the Board of Directors:

 

(i)           one person designated (in the manner specified in Section 6.1(e) ) by the Biotest Stockholder in its reasonable discretion (the “ Biotest First Designee ”); and

 

(ii)           if either (x) the size of the Board of Directors is expanded to nine (9) or more members or (y) the Biotest Stockholder and its Affiliates collectively pay the Company at least $15,000,000 in aggregate gross cash proceeds pursuant to one or more Capital Raises, one additional person designated (in the manner specified in Section 6.1(e) ) by the Biotest Stockholder in its reasonable discretion (the “ Biotest Second Designee ” and, together with the Biotest First Designee, the “ Biotest Designees ” and each, a “ Biotest Designee ”);

 

provided , however , that neither the Company nor any Stockholder shall be required to nominate or renominate for election (in the case of the Company), vote in favor of the election of (in the case of a Stockholder), or otherwise act to install in office any Biotest Designee to whom the Board of Directors in good faith objects for a reasonable and compelling reason (which, for avoidance of doubt, may include if the Board of Directors determines in good faith that it would be inconsistent with its fiduciary duties to nominate such person for election or otherwise appoint such person to the Board of Directors); provided , further , that, as conditions precedent to the Company’s and the Stockholders’ obligations under this Section 6.1 to nominate or renominate (in the case of the Company), vote in favor of (in the case of the Stockholders), or otherwise install in office any Biotest Designee, (A) the Biotest Stockholder shall satisfy the requirements of Section 6.1(e) with respect to such Biotest Designee and (B) such Biotest Designee shall be required to deliver to the Company such person’s irrevocable resignation as a director effective upon the earlier to occur of (I) the expiration of the Designation Rights Period and (II) the delivery to the Company of the Biotest Stockholder’s written notice that the Biotest Stockholder wishes to remove such Biotest Designee (the delivery of which notice, for the avoidance of doubt, shall cause the Designation Rights Period to expire).

 

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(b)           In addition, from the date hereof until the earlier of (x) the termination or expiration of the Designation Rights Period, and (y) the termination or expiration of the Standstill  pursuant to Section 3.3 , each Stockholder shall vote or cause to be voted all Shares owned by such Stockholder or over which such Stockholder has voting control, to ensure that at all such times the other persons nominated by or on behalf of the Board of Directors are elected to and otherwise installed in office as members of the Board of Directors.

 

(c)           In connection with the initial election of any Biotest Designee to the Board of Directors (an “ Initial Appointee ”) in connection with or following the effectiveness of this Agreement or the occurrence of an event first giving rise to the Biotest Stockholder’s right to appoint a Biotest Second Designee (an “ Initial Appointment ”), the Company shall have the right, in its sole discretion, to procure the resignation of an incumbent member of the Board of Directors (who, in the case of an Initial Appointment of a Biotest Second Designee, shall not be a Biotest First Designee) or to increase the size of the Board of Directors (but subject to the Biotest Stockholder’s right to designate a Biotest Second Designee in accordance with Section 6.1(a)(ii) in the case of an increase to the size of the Board of Directors), and in either case the Company thereafter shall take all such actions as are necessary to cause the Board of Directors to fill the resulting vacancy or new directorship, as applicable, with such Initial Appointee in accordance with the Charter Documents and applicable law; provided , however , if the Charter Documents or applicable law do not permit the Board of Directors to effect an Initial Appointment in such manner, then the Company shall instead nominate the Initial Appointee for election to the Board of Directors at the next annual or special meeting of stockholders of the Company and the Stockholders shall vote in favor of the election of such Initial Appointee in accordance with Section 6.1(a) .  In connection with any Initial Appointment effected by filling a vacancy or newly created directorship with an Initial Appointee at a time when the Charter Documents provide for the classification of the Board of Directors into three classes, the Board of Directors shall have the right, to the extent permitted by the Charter Documents and applicable law, to assign such Initial Appointee to any of such classes as the Board of Directors, in its sole discretion, shall determine.

 

(d)           If at any time during the Designation Rights Period, a vacancy is created on the Board of Directors by reason of the incapacity, death, removal or resignation of a Biotest Designee, then the Biotest Stockholder shall have the right to designate (in the manner specified in Section 6.1(e) ) a replacement Biotest Designee.  Provided that the Board of Directors does not in good faith object for a reasonable and compelling reason to such replacement Biotest Designee (which, for the avoidance of doubt, may include if the Board of Directors determines in good faith that it would be inconsistent with its fiduciary duties to nominate such person for election or otherwise appoint such person to the Board of Directors), and provided further that (i) the Biotest Stockholder satisfies the requirements of Section 6.1(e) with respect to such replacement Biotest Designee and (ii) such replacement Biotest Designee first delivers to the Company the irrevocable resignation specified in clause (B) of the final proviso of Section 6.1(a) , the Company shall take all action as may be necessary to cause the Board of Directors to fill such vacancy with such replacement Biotest Designee in accordance with the Charter Documents and applicable law or, if the Charter Documents or applicable law do not permit the Board of Directors to appoint such replacement Biotest Designee to the Board of Directors in such manner, then the Company shall instead nominate such replacement Biotest Designee for election to the Board of Directors at the next annual or special meeting of stockholders of the Company and the Stockholders shall vote in favor of the election of such replacement Biotest Designee in accordance with Section 6.1(a) .

 

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(e)           To designate a Biotest Designee pursuant to Sections 6.1(a) or 6.1(d) , the Biotest Stockholder shall deliver written notice (a “ Designation Notice ”) to the Company containing the Required Information and such additional information as may be reasonably requested by the Company to enable the Board of Directors to determine whether there is a reasonable and compelling reason for it to object in good faith to such Biotest Designee.  No Designation Notice shall be deemed delivered to the Company until such time as the Biotest Stockholder shall have provided all such additional information reasonably requested by the Company pursuant to the immediately preceding sentence.

 

6.2       Board Observer .  During the Designation Rights Period, the Biotest Stockholder shall be entitled to designate one (1) person as a board observer (the “ Board Observer ”); provided, however, that the Company shall not be required to perform any of its obligations under this Section 6.2 in respect of any Board Observer to whom the Board of Directors in good faith objects for a reasonable and compelling reason (which, for the avoidance of doubt, may include if the Board of Directors determines in good faith that it would be inconsistent with its fiduciary duties to permit such person to act as a Board Observer).  The Board Observer shall have the right to attend (in person or telephonically, at his or her discretion) each meeting of the Board of Directors as an observer (and not as a director) and shall not have the right to vote at any such meeting or otherwise act on behalf of the Board of Directors or the Company; provided, however, that the Board Observer may be excluded from all or any portion of any such meeting to the extent that the Board of Directors determines in good faith (a) upon the advice of counsel that such exclusion is required to preserve the attorney-client privilege between the Company or the Board of Directors, on the one hand, and its counsel, on the other hand, or (b) that the respective interests of the Company and its Subsidiaries, on the one hand, and those of the Biotest Stockholder or its Affiliates, on the other hand, as to the matter(s) to be discussed or actions to be taken during such meeting or portion thereof, conflict or could be perceived to conflict.  The Company will send, or cause to be sent, to the Board Observer (x) the notice of the time and place of any such meeting (the “ Meeting Notice ”) at the same time and in the same manner as the Meeting Notice is sent to the directors and (y) copies of all notices, reports, minutes and other documents and materials (collectively, “ Meeting Materials ”) provided to the Board of Directors in respect of each such meeting at the same time and in the same manner as they are provided to the directors; provided, however, that: (i) the Company may redact from any Meeting Notice, and may redact or withhold entirely any Meeting Materials, to the extent that the Board of Directors determines in good faith (a) upon the advice of counsel that such redaction or withholding is required to preserve the attorney-client privilege between the Company or the Board of Directors, on the one hand, and its counsel, on the other hand, or (b) that the respective interests of the Company and its Subsidiaries, on the one hand, and those of the Biotest Stockholder or its Affiliates, on the other hand, as to the matter(s) referred to in such redactions or withheld Meeting Materials, conflict or could be perceived to conflict; (ii) the failure to deliver or make available to the Board Observer any Meeting Notice or Meeting Materials shall not affect the validity of any action taken by the Board of Directors at any meeting to which such Meeting Notice or Meeting Materials relate; and (iii) it shall be the obligation of the Biotest Stockholder at all times to provide the Company with current contact information of the Board Observer, and the Company shall not be in breach of this Section 6.2 for failing to provide or make available any Meeting Notice or Meeting Materials to the Board Observer if the Biotest Stockholder has not provided such current contact information, or has provided inaccurate or no longer current contact information, to the Company.  Notwithstanding anything to the contrary herein, prior to any Board Observer being entitled to attend any portion of any meeting of the Board of Directors or to receive any Meeting Notice or Meeting Materials, the Board Observer shall execute and deliver to the Company a customary confidentiality agreement in form and substance reasonably satisfactory to the Company.

 

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6.3       Replacement of CEO .  During the Standstill Period, in the event of the death or Permanent Disability of Adam Grossman at a time when he is the CEO, the Biotest Stockholder shall have the right to nominate three (3) candidates (which candidates shall be, in the good faith determination of the Board of Directors, qualified to serve as the chief executive officer of a company of the Company’s size, stage and industry (a “ Similar Company ”)) (each such candidate meeting such qualification, a “ CEO Candidate ” and collectively, the “ CEO Candidates ”), and the Company shall appoint one of such CEO Candidates, as the replacement CEO on customary terms and conditions (as determined in good faith by the Board of Directors) for a chief executive officer of a Similar Company.  If such initial replacement CEO shall cease to serve as the CEO for any reason during the Standstill Period, the Biotest Stockholder shall have the right to nominate three (3) CEO Candidates, and the Company shall appoint one of such CEO Candidates, as the replacement CEO to such initial replacement CEO on customary terms and conditions (as determined in good faith by the Board of Directors) for a chief executive officer of a Similar Company.  Notwithstanding anything in this Agreement to the contrary, the death or Permanent Disability of Adam Grossman shall not cause the Standstill to terminate pursuant to Section 3.3(c)(i) so long as the Company has complied with its obligations under the two immediately preceding sentences.  For the avoidance of doubt, the failure of the Biotest Stockholder to nominate CEO Candidates or otherwise act in accordance with the procedures described in this Section 6.3 shall not result in the Company being deemed not to have complied with its obligations for purposes of the immediately preceding sentence.

 

ARTICLE VII

 

PROXIES

 

7.1       Irrevocable Proxy and Power of Attorney .  Each Stockholder hereby grants until the Proxy End Date (as hereinafter defined) a proxy over such Stockholder’s Shares, and hereby constitutes and appoints as the proxy holder thereof, and grants a power of attorney in respect thereof to, the Chairman of the Board of Directors, with full power of substitution, with respect to the election of Biotest Designees to the Board of Directors in accordance with Section 6.1 and the other nominees to the Board of Directors supported by the Board of Directors, and hereby authorizes the Chairman of the Board of Directors to represent and vote, if and only if such Stockholder (i) fails to vote, or (ii) attempts to vote (whether by proxy, in person or by written consent) for a nominee to the Board of Directors other than a Biotest Designee or the other nominees to the Board of Directors supported by the Board of Directors, as applicable, all of such Stockholder’s Shares in favor of the election of the Biotest Designees and such other nominees to the Board of Directors supported by the Board of Directors, in each case, as members of the Board of Directors pursuant to and in accordance with the terms and provisions of this Agreement.  Each of the  proxy and power of attorney granted pursuant to the immediately preceding sentence is given in consideration of the agreements and covenants of the Company and the parties in connection with the transactions contemplated by this Agreement and, as such, each is coupled with an interest and shall be irrevocable unless and until the earlier of (x) the termination or expiration of the Designation Rights Period, and (y) the termination or expiration of the Standstill  pursuant to Section 3.3 (the applicable date, the “ Proxy End Date ”).  Each Stockholder hereby revokes any and all previous proxies or powers of attorney with respect to such Stockholder’s Shares and shall not hereafter, unless and until the Proxy End Date occurs, purport to grant any other proxy or power of attorney with respect to any of such Stockholder’s Shares, deposit any of such Shares into a voting trust or enter into any agreement (other than this Agreement), arrangement or understanding with any person, directly or indirectly, to vote, grant any proxy or give instructions with respect to the voting of any of such Shares, in each case, with respect to any of the matters set forth herein and other than as otherwise provided in this Agreement or a proxy granted to the Company in connection with a solicitation by the Company.

 

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ARTICLE VIII

 

STOCK CERTIFICATE LEGEND

 

8.1       Legend .  A copy of this Agreement shall be filed with the Secretary of the Company and kept with the records of the Company.  Each certificate representing Capital Stock now held or hereafter acquired by the Biotest Stockholder and its Affiliates, or by any Transferee of the Biotest Stockholder or any of its Affiliates pursuant to ARTICLE IV , shall for as long as this Agreement is effective with respect to such Capital Stock bear legends substantially in the following forms, with such modifications or adjustments thereto as may be necessary or appropriate under the circumstances pursuant to applicable laws, rules or regulations or upon the advice of outside counsel:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ ACT ”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY FOREIGN JURISDICTION.  THE SECURITIES MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.

 

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THE SALE, ASSIGNMENT, HYPOTHECATION, PLEDGE, ENCUMBRANCE OR OTHER DISPOSITION (EACH A “ TRANSFER ”) AND VOTING OF ANY OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY THE TERMS OF THAT CERTAIN STOCKHOLDERS AGREEMENT, DATED JUNE 6, 2017, AMONG ADMA BIOLOGICS, INC. (THE “ COMPANY ”) AND THE STOCKHOLDERS NAMED THEREIN (THE “ STOCKHOLDERS AGREEMENT ”). A COPY OF THE STOCKHOLDERS AGREEMENT MAY BE INSPECTED AT THE COMPANY’S PRINCIPAL OFFICE.  THE COMPANY WILL NOT REGISTER THE TRANSFER OF SUCH SECURITIES ON THE BOOKS OF THE COMPANY UNLESS AND UNTIL THE TRANSFER HAS BEEN MADE IN COMPLIANCE WITH THE TERMS OF THE STOCKHOLDERS AGREEMENT.

 

ARTICLE IX

 

CONFIDENTIALITY

 

9.1       Confidentiality.

 

(a)           The Biotest Stockholder shall, and shall direct its Affiliates and its and their respective Representatives, members, stockholders, partners, consultants and trustees (including any Biotest Designees and Board Observers) (the “ Biotest Parties ”) who have access to Confidential Information to, keep confidential and not disclose any Confidential Information without the prior written consent of the Board of Directors, unless, such disclosure:

 

(i)           shall be required (on the advice of outside legal counsel) by applicable law;

 

(ii)           is reasonably required in connection with any tax audit involving the Company or the Biotest Stockholder or its Affiliates;

 

(iii)           is reasonably required (on the advice of outside legal counsel) in connection with any litigation against the Company or the Biotest Stockholder; or

 

(iv)           is by any Person acting in his or her capacity as a member of the Board of Directors; provided , however , for the avoidance of doubt, this subclause (iv) shall in no way be deemed an authorization by the Company or the Board of Directors for any member of the Board of Directors to disclose Confidential Information or to waive or restrict the Company’s or its stockholders’ remedies against any member of the Board of Directors for misusing or wrongfully disclosing Confidential Information;

 

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provided , however , that any such disclosure pursuant to clauses (i), (ii) and (iii) shall be subject to Section 9.1(c) .

 

(b)           Confidential Information may be used by the Biotest Stockholder and the Biotest Parties only in connection with Company matters and not for any other purpose.

 

(c)           In the event that the Biotest Stockholder or any Biotest Party is required by applicable law or legal process to disclose any of the Confidential Information and intends to disclose such Confidential Information pursuant to Section 9.1(a)(i) , 9.1(a)(ii) or 9.1(a)(iii) (the “ Compelled Party ”), such Person shall use reasonable efforts to provide the Company with prompt written notice so that the Company may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Agreement, and such Compelled Party shall use reasonable efforts to cooperate with the Company in any effort to obtain a protective order or other remedy.  In the event that such protective order or other remedy is not obtained, or that the Company waives compliance with the provisions of this Section 9.1 , such Compelled Party shall furnish only that portion of the Confidential Information that is legally required and shall exercise all reasonable efforts to obtain reasonably reliable assurance that the Confidential Information shall be accorded confidential treatment.

 

(d)           For avoidance of doubt, the Biotest Designees (subject to their fiduciary duties to the Company and its stockholders) and the Board Observer (subject to the terms of the confidentiality agreement referred to in the last sentence of Section 6.2 ) may, subject to applicable law, disclose Confidential Information to the Biotest Stockholder and its Representatives.

 

(e)           The obligations of confidentiality in this Article VIII shall survive any termination of this Agreement and shall remain in full force and effect.

 

ARTICLE X

 

MISCELLANEOUS

 

10.1            Notices .  All notices, demands or other communications provided for or permitted hereunder shall be made in writing and shall be by registered or certified first class mail, return receipt requested, telecopier, email, courier service, or personal delivery:

 

(a)           if to the Company:

 

ADMA Biologics, Inc.

465 Route 17 South

Ramsey, New Jersey 07446

Attn:  Adam Grossman

Brian Lenz

Email: agrossman@admabio.com

blenz@admabio.com

Fax:  (201) 478-5553

 

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with copies (which shall not constitute notice) sent concurrently to:

 

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, NY 10019-6064

Attention:  Ariel J. Deckelbaum, Esq.

Facsimile:  212.757.3990

Email:  ajdeckelbaum@paulweiss.com

 

(b)           if to the Biotest Stockholder:

 

Biotest Pharmaceuticals Corporation

c/o Biotest AG

Landsteinerstr. 5

63303 Dreieich

Germany

Attention:  Dr. Michael Ramroth and Dr. Martin Reinecke

Facsimile:

Email:   michael.ramroth@biotest.com

martin.reinecke@biotest.com

 

and to:

 

Biotest Pharmaceuticals Corporation

5800 Park of Commerce Blvd. NW

Boca Raton, FL 33487

Attention:  Ileana Carlisle, CEO; and Donna Quinn, General Counsel

Facsimile:

Email:     icarlisle@biotestpharma.com

  dquinn@biotestpharma.com

 

with copies (which shall not constitute notice) sent concurrently to:

 

Greenberg Traurig, LLP

3333 Piedmont Road, NE

Suite 2500

Atlanta, Georgia 30305

Attention:  Wayne H. Elowe, Esq.

Facsimile:  678.553.2453

Email:  elowew@gtlaw.com

 

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(c)           if to any other Stockholder or other Person who becomes a party hereto pursuant to Section 4.1(c) :

 

at the address, telecopy number or email address shown for such Stockholder on the applicable signature page hereto, to the attention of the person who has signed this Agreement on behalf of such Stockholder.

 

All such notices, demands and other communications shall be deemed to have been duly given when delivered by hand, if personally delivered; when delivered by courier, if delivered by commercial courier service; five (5) Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt is mechanically acknowledged, if telecopied; and when receipt is confirmed, if emailed.  Any party may by notice given in accordance with this Section 10.1 designate another address or Person for receipt of notices hereunder.

 

10.2            Successors and Assigns; Third Party Beneficiaries .  This Agreement shall inure to the benefit of and be binding upon successors and permitted assigns of the parties hereto.  This Agreement is not assignable except in connection with a Transfer of Equity Securities in accordance with this Agreement; provided, however, that under no circumstance may the Biotest Stockholder assign or transfer any of its rights contained in ARTICLE VI .  No Person other than the parties hereto and their successors and permitted assigns is intended to be a beneficiary of this Agreement.

 

10.3            Amendment and Waiver.

 

(a)           No failure or delay on the part of any party hereto in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy.  The remedies provided for herein are cumulative and are not exclusive of any remedies that may be available to the parties hereto at law, in equity or otherwise.

 

(b)           Any amendment, supplement or modification of or to any provision of this Agreement shall be effective only if it is made or given in writing and signed by (i) the Company, and (ii) the Biotest Stockholder; provided , however , that any amendment, supplement or modification to this Section 10.3 shall require the written consent of the Company and each Stockholder party hereto.  Any such amendment, supplement, modification, waiver or consent provided in accordance with this Section 10.3 shall be binding upon the Company, the Biotest Stockholder and, if applicable, the other Stockholders party hereto.

 

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(c)           Any waiver of any provision of this Agreement, and any consent to any departure by any party from the terms of any provision of this Agreement, shall be effective only if it is made or given in writing and signed by the party against whom such waiver or consent is to be enforced.

 

10.4            Counterparts .  This Agreement may be executed in any number of counterparts, and by the parties hereto in separate counterparts each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

 

10.5            Specific Performance .  The parties hereto intend that each of the parties have the right to seek damages or specific performance in the event that any other party hereto fails to perform such party’s obligations hereunder.  Therefore, if any party shall institute any action or proceeding to enforce the provisions hereof, any party against whom such action or proceeding is brought hereby waives any claim or defense therein that the plaintiff party has an adequate remedy at law.  Any party seeking an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement when available pursuant to the terms of this Agreement shall not be required to provide any bond or other security in connection with any such order or injunction.

 

10.6            Governing Law; Consent to Jurisdiction .  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.  The parties hereto irrevocably submit to the exclusive jurisdiction of any state or federal court sitting in the State of Delaware over any suit, action or proceeding arising out of or relating to this Agreement or the affairs of the Company.  To the fullest extent they may effectively do so under applicable law, the parties hereto irrevocably waive and agree not to assert, by way of motion, as a defense or otherwise, any claim that they are not subject to the jurisdiction of any such court, any objection that they may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.  In connection with any such suit, action or proceeding, the parties hereby consent to service of process in the manner specified in Section 10.1 or in any other manner permitted by applicable law.

 

10.7            Severability .  If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions hereof.

 

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10.8            Interpretation; Construction .  The headings contained in this Agreement are for convenience of reference only, do not constitute part of this Agreement and shall not be deemed to limit or otherwise affect any of the provisions hereof.  Unless the context of this Agreement otherwise clearly requires, (a) references made in this Agreement to a Section or Article shall be to a Section or Article, respectively, of this Agreement, (b) references to the plural include the singular, and references to the singular include the plural, (c) words used herein, regardless of the gender specifically used, shall be deemed and construed to include any other gender, masculine, feminine or neuter, as the context requires, (d) the words “include,” “includes” and “including” do not limit the preceding terms or words and shall be deemed to be followed by the words “without limitation,” (e) the terms “hereof,” “herein,” “hereunder,” “hereto” and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement, (f) the terms “day” and “days” mean and refer to calendar day(s), (g) the terms “year” and “years” mean and refer to calendar year(s), (h) the term “dollar” or “$” means lawful currency of the United States, (i) the terms “writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form, (j) references to any Person include the successors and permitted assigns of that Person and (k) references from or through any date mean, unless otherwise specified, from and including or through and including, respectively.  Unless otherwise set forth herein, any reference in this Agreement to (i) any document, instrument or agreement (including this Agreement) (A) includes and incorporates all exhibits, schedules and other attachments thereto, (B) includes all documents, instruments or agreements issued or executed in replacement thereof and (C) means, subject to the other terms of this Agreement, such document, instrument or agreement, or replacement or predecessor thereto, as amended, modified or supplemented from time to time in accordance with its terms and in effect at any given time, and (ii) a particular law or statute means such law or statute as amended, modified, supplemented or succeeded, from time to time and in effect at any given time, and all rules and regulations promulgated thereunder.  The parties have participated jointly in negotiating and drafting this Agreement.  In the event that an ambiguity or a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.

 

10.9            Entire Agreement .  This Agreement, the Master Purchase and Sale Agreement, the Registration Rights Agreement and the other agreements contemplated hereby and thereby, together with the exhibits hereto and thereto, are intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein.  There are no restrictions, promises, representations, warranties or undertakings, other than those set forth or referred to herein or therein.  This Agreement, the Master Purchase and Sale Agreement, the Registration Rights Agreement and the other agreements contemplated hereby and thereby, together with the exhibits hereto and thereto, supersede all prior agreements and understandings among the parties with respect to such subject matter.

 

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10.10            Term of Agreement; Effect of Termination .  This Agreement shall become effective upon the execution and delivery hereof and shall terminate upon the earlier of (a) the mutual written agreement of each of the parties hereto, (b) the first date upon which neither the Biotest Stockholder nor any of its Affiliates Beneficially Owns any Equity Securities, (c) upon written notice by the Company to the Biotest Stockholder, upon a material breach by the Biotest Stockholder or any of its Affiliates of their respective representations or warranties or covenants or agreements contained herein; provided that such breach shall not have been cured within twenty (20) Business Days after written notice thereof shall have been received by the Biotest Stockholder and (d) the liquidation, dissolution or winding up of the Company.  In the event of any termination of this Agreement, there shall be no further liability or obligation hereunder on the part of any party hereto as to whom the termination is effective, and this Agreement shall thereafter be null and void as to such party; provided, however, that the rights and obligations set forth in or provided for under ARTICLE IX and this ARTICLE X (and any related definitions) shall survive such termination; and provided, further, that nothing contained in this Agreement (including this Section 10.10 ) shall relieve any party from liability for any willful and intentional breach of any of its representations, warranties, covenants or agreements set forth in this Agreement occurring prior to such termination.

 

10.11            Further Assurances .  Notwithstanding anything to the contrary herein, each of the parties hereto shall, and shall cause their respective Affiliates to, promptly execute and deliver such other certificates, instruments or other documents and promptly perform such further acts as may be reasonably required or desirable to carry out or to perform the provisions of this Agreement.

 

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the undersigned have executed, or have caused to be executed, this Agreement on the date first written above.

 

  Company:  
     
  ADMA BIOLOGICS, INC.  
       
  By:  /s/ Adam Grossman  
    Name: Adam Grossman  
    Title: President and Chief Executive Officer  
       

 

 

Signature Page to Stockholders Agreement

 

 

  

  BIOTEST STOCKHOLDER:  
       
  BIOTEST PHARMACEUTICALS CORPORATION  
       
  By:  /s/ Ileana Carlisle  
    Name: Ileana Carlisle  
    Title: Chief Executive Officer  
       

 

 

Signature Page to Stockholders Agreement

 

 

 

 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (this “ Agreement ”) is made and entered into as of June 6, 2017, by and among ADMA Biologics, Inc., a Delaware corporation (the “ Company ”), and Biotest Pharmaceuticals Corporation, a Delaware corporation (the “ Investor ”).

 

RECITALS

 

WHEREAS, the Company and the Investor are parties to the Stockholders Agreement dated June 6, 2017 (the “ Stockholders Agreement ”); and

 

WHEREAS, in order to induce the Company to enter into the Stockholders Agreement, the Investor and the Company hereby agree that this Agreement shall govern the rights of the Investor to cause the Company to register the resale of certain shares of Common Stock held by the Investor.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 

 

1.           Definitions . For purposes of this Agreement:

 

Affiliate ” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with such Person, including without limitation any general partner, managing member, officer or director of such Person or any venture capital fund now or hereafter existing that is controlled by one or more general partners or managing members of, or shares the same management company with, such Person.

 

Beneficially Own ”, “ Beneficial Owner ” and “ Beneficial Ownership ” mean, with respect to any securities (including derivative instruments), having “beneficial ownership” of such securities for purposes of Rule 13d-3 or 13d-5 under the Exchange Act; provided that any Person shall be deemed to be the Beneficial Owner of, and shall be deemed to Beneficially Own and have Beneficial Ownership of, any securities (including derivative instruments) that such Person has the right to acquire, whether or not such right is exercisable immediately; provided , further , that, when used with respect to the Investor, the terms Beneficially Own, Beneficial Owner, and Beneficial Ownership shall include, without duplication, all securities (including derivative instruments) otherwise Beneficially Owned by all of the Investor’s Affiliates.  

 

Business Day ” means any day other than a Saturday, Sunday or other day on which commercial banks in the State of New York are authorized or required by law or executive order to close.

 

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Common Stock ” means shares of the Company’s common stock, par value $0.0001 per share.

 

Damages ” means any loss, damage, or liability (joint or several) to which a party hereto may become subject under the Securities Act, the Exchange Act, or other federal or state law, insofar as such loss, damage, or liability (or any action in respect thereof) arises out of or is based upon: (i) any untrue statement or alleged untrue statement of a material fact contained in any registration statement of the Company, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; (ii) an omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or (iii) any violation or alleged violation by the indemnifying party (or any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any state securities law.

 

Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

Excluded Registration ” means: (i) a registration on Form S-8 or otherwise relating to the sale of securities to employees of the Company or its Affiliate pursuant to a stock option, stock purchase, or similar plan; (ii) a registration on Form S-4 or otherwise relating to a transaction governed by SEC Rule 145; (iii) a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities; or (iv) a registration in which the only Common Stock being registered is Common Stock issuable upon conversion or exchange of debt securities that are also being registered.

 

Form S-1 ” means Form S-1 under the Securities Act as in effect on the date hereof or any successor registration form under the Securities Act subsequently adopted by the SEC.

 

Form S-3 ” means Form S-3 under the Securities Act as in effect on the date hereof or any registration form under the Securities Act subsequently adopted by the SEC that permits incorporation of substantial information by reference to other documents filed by the Company with the SEC.

 

Holder ” means any holder of Registrable Securities who is a party to this Agreement.

 

Initiating Holders ” means, collectively, Holders who properly initiate a registration request under this Agreement.

 

Person ” means any individual, corporation, partnership, trust, limited liability company, association or other entity.

 

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Pre-Existing Registration Rights Agreements ” means the following agreements: (i) the Investor’s Rights Agreement dated as of July 17, 2007, by and among the Company, certain of its stockholders and additional investors party thereto; (ii) the Registration Rights Agreement, dated as of February 13, 2012, by and among R&R Acquisition VI, Inc. and each of the several purchasers party thereto; and (iii) the Warrant Agreement dated as of December 21, 2012, by and among the Company and Hercules Technology Growth Capital, Inc.

 

Purchase and Sale Agreement ” means the Master Purchase and Sale Agreement dated as of January 21, 2017, by and among the Investor, the Company, ADMA BioManufacturing, LLC, Biotest AG and Biotest US Corporation;

 

Registrable Securities ” means: (i) the issued and outstanding Common Stock Beneficially Owned by the Investor on the date of this Agreement; (ii) any Common Stock issued or issuable (directly or indirectly) upon conversion and/or exercise of any other securities of the Company (which may include, for the avoidance of doubt, non-voting capital stock, warrants and options) Beneficially Owned by the Investor on the date of this Agreement; (iii) any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right, or other security that is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, the shares referenced in clauses (i) and (ii) above; and (iv) any other shares of Common Stock acquired by a Holder pursuant to the terms of the Stockholders Agreement or the Purchase and Sale Agreement; provided , however , that any such Registrable Securities shall cease to be Registrable Securities upon the earliest to occur of: (a) the date on which such securities are disposed of pursuant to an effective registration statement; (b) the date on which such securities are disposed of in reliance on SEC Rule 144; or (c) the date on which such securities become eligible for resale without volume or manner-of-sale restrictions pursuant to SEC Rule 144, as reasonably determined by the Company.

 

Registrable Securities then outstanding ” means the number of shares determined by adding the number of shares of outstanding Common Stock that are Registrable Securities and the number of shares of Common Stock issuable (directly or indirectly) pursuant to then exercisable and/or convertible securities that are Registrable Securities.

 

SEC ” means the Securities and Exchange Commission.

 

SEC Rule 144 ” means Rule 144 promulgated by the SEC under the Securities Act.

 

SEC Rule 145 ” means Rule 145 promulgated by the SEC under the Securities Act.

 

SEC Rule 415 ” means Rule 415 promulgated by the SEC under the Securities Act.

 

Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

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Selling Expenses ” means all underwriting discounts, selling commissions, and stock transfer taxes applicable to the sale of Registrable Securities, and fees and disbursements of counsel for any Holder, except for the fees and disbursements of the Selling Holder Counsel borne and paid by the Company as provided in Section 2.6.

 

 2.           Registration Rights .

 

2.1.           Demand Registration.

 

(a) Form S-1 Demand . If at any time after the six-month anniversary of the date of this Agreement, the Company receives written notice (each, a “ Holder Demand Registration Notice ”) from Holders of at least a majority of the Registrable Securities then outstanding, requesting that the Company file a Form S-1 registration statement with respect to the resale of outstanding Registrable Securities of such Holders having an anticipated aggregate offering price to the public that would reasonably be expect to exceed $10 million, then the Company shall: (i) within five (5) days after the date such request is received by the Company, send notice thereof (each, a “ Company Demand Registration Notice ”) to all Holders other than the Initiating Holders; and (ii) use commercially reasonable efforts to, as soon as practicable, file a Form S-1 registration statement under the Securities Act covering all Registrable Securities that the Initiating Holders requested to be registered and any additional Registrable Securities requested to be included in such registration by any other Holders, as specified by written notice (each, a “ Piggy-Back Registration Notice ”) given by each such Holder to the Company within five (5) days of the date the Company Demand Registration Notice is given, and in each case, subject to the limitations set forth herein.

 

(b) Form S-3 Demand . If at any time after the six-month anniversary of the date of this Agreement, the Company is eligible to use a Form S-3 registration statement and the Company receives a Holder Demand Registration Notice from Holders of at least a majority of the Registrable Securities then outstanding requesting that the Company file a Form S-3 registration statement with respect to the resale of outstanding Registrable Securities of such Holders having an anticipated aggregate offering price to the public that would reasonably be expect to exceed $10 million, then the Company shall: (i) within five (5) days after the date such request is given, send a Company Demand Registration Notice to all Holders other than the Initiating Holders; and (ii) within forty-five (45) days after the date such request is given by the Initiating Holders (or if such day is not a Business Day, then by the end of the next Business Day), file a Form S-3 registration statement under the Securities Act covering all Registrable Securities requested to be included in such registration by any other Holders, as specified by a Piggy-Back Registration Notice given by each such Holder to the Company within five (5) days of the date the Company Demand Registration Notice is given, and in each case, subject to the limitations set forth herein.

 

(c) Notwithstanding the foregoing obligations, if the Company furnishes to Holders requesting a registration  or underwritten offering pursuant to this Agreement a certificate signed by the Company’s chief executive officer stating that in the good faith judgment of the Company’s Board of Directors it would be materially detrimental to the Company and its stockholders for such registration statement to either become effective or remain effective for as long as such registration statement otherwise would be required to remain effective, because such action would: (i) materially interfere with a significant acquisition, corporate reorganization, or other similar transaction involving the Company; (ii) require premature disclosure of material non-public information that the Company has a bona fide business purpose for preserving as confidential; or (iii) render the Company unable to comply with requirements under applicable law or a material agreement of the Company, then the Company shall have the right to defer taking action with respect to such filing for a period of not more than one hundred twenty (120) days after the request of the Initiating Holders is received by the Company; provided , however , that the Company may not invoke this right more than twice in any twelve (12) month period; and provided further that the Company shall not register the sale of any equity securities for its own account or that of any other stockholder during such one hundred twenty (120) day period other than an Excluded Registration.

 

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(d) The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 2.1 under the following circumstances: (i) during the period that is sixty (60) days before the Company’s good faith estimate of the date of filing of, and ending on a date that is one hundred eighty (180) days after the effective date of, a Company-initiated registration, provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; or (ii) after the Company has effected three registrations pursuant to Section 2.1. The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 2.1(a) if the Initiating Holders propose to dispose of Registrable Securities that at such time may instead be registered on Form S-3 pursuant to a request made pursuant to Section 2.1(b). The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 2.1(b) if the Company has effected any registration pursuant to Section 2.1(b) within the six (6) month period immediately preceding the date of such request. A registration shall not be counted as “effected” for purposes of this Section 2.1(d) until such time as the applicable registration statement has been declared effective by the SEC, unless the Initiating Holders withdraw their request for such registration, elect not to pay the registration expenses therefore, and forfeit their right to one demand registration statement pursuant to Section 2.6, in which case such withdrawn registration statement shall be counted as “effected” for purposes of this Section 2.1(d).

 

(e) Notwithstanding any other provision of this Agreement, if the SEC informs the Company that, as a result of the application of SEC Rule 415, less than all of the shares of Common Stock sought to be registered for resale in a secondary offering may be registered on a single registration statement, the Company agrees to promptly inform each of the Holders seeking to include Registrable Securities therein, and, following the Company’s good faith efforts to advocate for inclusion of all such Registrable Securities in such registration statement, the Company shall use its commercially reasonable efforts to file amendments to such registration statement as required by the SEC or applicable law or regulation, including the maximum number of shares of Common Stock permitted to be registered by the SEC for such secondary offering. In such circumstances (after including all shares of Common Stock proposed to be sold by other stockholders of the Company pursuant to the Pre-Existing Registration Rights Agreements), the number of Registrable Securities to be registered for resale on such registration statement shall be reduced amongst the Holders on a pro rata basis. The Company shall provide notice of such reduction to such Holders promptly following the determination thereof.

 

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2.2.           Company Registration . If the Company proposes to register (including, for this purpose, a registration effected by the Company for stockholders other than the Holders) any shares of its Common Stock under the Securities Act in connection with the public offering of such shares solely for cash (other than in an Excluded Registration), the Company shall, at such time, promptly give each Holder notice of such registration. Upon the request of each Holder given within seven (7) days after such notice is given by the Company, the Company shall, subject to the provisions of Section 2.3, cause to be registered all of the Registrable Securities that each such Holder has requested to be included in such registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.2 before the effective date of such registration, whether or not any Holder has elected to include Registrable Securities in such registration. The expenses (other than Selling Expenses) of such withdrawn registration shall be borne by the Company in accordance with Section 2.6.

 

2.3.           Underwriting Requirements.

 

(a) (i) If any Holders intend to dispose of Registrable Securities by means of an underwritten offering (each such Holder, an “ Underwriting Initiating Holder ”), they shall so advise the Company in writing as follows:

 

(A)if the Underwriting Initiating Holders intend to effect such underwritten offering pursuant to a registration statement that has not yet been filed with the SEC, such Underwriting Initiating Holders shall advise the Company of their intent to effect an underwritten offering and the amount of Registrable Securities they intend to include therein in the Holder Demand Registration Notice they furnish to the Company in accordance with Section 2.1(a) or Section 2.1(b), as applicable (and the Company shall include such information in the applicable Company Demand Registration Notice); or

 

(B) if the Underwriting Initiating Holders intend to effect such underwritten offering pursuant to a registration statement that has already been filed with the SEC in accordance with Section 2.1(a) or Section 2.1(b) (regardless of whether such registration statement has been declared effective), such Underwriting Initiating Holders shall advise the Company of their intent to effect an underwritten offering and the amount of Registrable Securities that they intend to include therein in a notice (a “ Holder Underwriting Notice ”) to be received by the Company at least twenty (20) days prior to the anticipated date of commencement of marketing efforts for such underwritten offering. Upon receiving a Holder Underwriting Notice, the Company shall: (I) within five (5) days after such receipt, send a notice (the “ Company Underwriting Notice ”) to all Holders (other than the Underwriting Initiating Holders) of Registrable Securities included in such registration statement, advising such Holders of the information contained in the Holder Underwriting Notice and of the right of such Holders under this Agreement to participate in the applicable underwritten offering; and (II) shall include in such underwritten offering all Registrable Securities requested to be included in such offering by such other Holders, as specified by written notice (each, a “ Piggy-Back Underwriting Notice ”) given by each such Holder to the Company within five (5) days of the date the Company Underwriting Notice is given, and in each case, subject to the limitations set forth herein.

 

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(ii)           The Company shall have the right to select the underwriter(s) for any underwritten offering pursuant to this Section 2.3, which shall be reasonably acceptable to a majority in interest of the participating Holders (determined according to each participating Holder’s relative share of Registrable Securities proposed to be included in such underwritten offering according to its Holder Registration Demand Notice, Holder Underwriting Notice, Piggy-Back Registration Notice or Piggy-Back Underwriting Notice, as applicable (each a “ Holder Notice ”)). In such event, the right of any Holder to include such Holder’s Registrable Securities in such underwritten offering shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their Registrable Securities through such underwriting shall (together with the Company as provided in Section 2.4(e)) enter into an underwriting agreement in customary form with the lead underwriter(s) selected for such underwriting. Notwithstanding any other provision of this Section 2.3, if the underwriter(s) advise(s) the Underwriting Initiating Holders in writing that marketing factors require a limitation on the number of shares to be underwritten, then the Underwriting Initiating Holders shall so advise all Holders of Registrable Securities that otherwise would be underwritten pursuant hereto, and the number of Registrable Securities that may be included in the underwritten offering, which number shall be determined by the Company based on the advice of the underwriter(s), shall be allocated among such Holders of Registrable Securities, including the Underwriting Initiating Holders, in proportion (as nearly as practicable) to the number of Registrable Securities originally proposed to be offered by each Holder in the applicable Holder Notices or in such other proportion as shall mutually be agreed to by all such selling Holders. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest 100 shares.

 

(iii)           Notwithstanding the foregoing, in connection with any proposed underwritten offering pursuant to this Section 2.3, the Company shall have no obligation to prepare or file the applicable registration statement or commence marketing of such offering if: (i) if the anticipated aggregate offering price to the public is not reasonably expected to exceed $10 million; or (ii) the Company has previously commenced marketing of three (3) underwritten offerings pursuant to this Agreement.

 

(b) In connection with any offering involving an underwriting of shares of the Common Stock pursuant to Section 2.2, the Company shall not be required to include any of the Holders’ Registrable Securities in such underwriting unless the Holders accept the terms of the underwriting as agreed upon between the Company and its underwriters, and then only in such quantity as the underwriters in their sole discretion determine will not jeopardize the success of the offering by the Company or other stockholders of the Company. If the total number of securities, including Registrable Securities, requested by stockholders to be included in such offering exceeds the number of securities to be sold that the underwriters in their reasonable discretion determine is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters and the Company in their sole discretion determine will not jeopardize the success of the offering. If the underwriters determine that less than all of the Registrable Securities requested to be registered can be included in such offering, then (after including all shares of Common Stock proposed to be sold by the Company and/or other stockholders of the Company pursuant to the Pre-Existing Registration Rights Agreements) the Registrable Securities that are included in such offering shall be allocated among the selling Holders in proportion (as nearly as practicable to) the number of Registrable Securities owned by each selling Holder or in such other proportions as shall mutually be agreed to by all such selling Holders. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest 100 shares.

 

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(c) For purposes of Section 2.1, a registration shall not be counted as “effected” if, as a result of an exercise of the underwriter’s cutback provisions in Section 2.3(a), fewer than fifty percent (50%) of the total number of Registrable Securities that Holders have requested to be included in such registration statement are actually included.

 

2.4.           Obligations of the Company . Whenever required under this Section 2 to effect the registration of any Registrable Securities, the Company shall:

 

(a) use commercially reasonable efforts to cause such registration statement to become effective and keep such registration statement effective for a period of up to ninety (90) days or, if earlier, until the distribution contemplated in the registration statement has been completed; provided , however , that, in the case of any registration of Registrable Securities that are intended to be offered on a continuous or delayed basis, subject to compliance with applicable SEC rules, the Company shall use commercially reasonable efforts to keep the registration statement effective (including by amendment, supplement or replacement) until such Securities are no longer Registrable Securities;

 

(b) prepare and file with the SEC such amendments and supplements to such registration statement, and the prospectus used in connection with such registration statement, as may be necessary to comply with the Securities Act in order to enable the disposition of all Registrable Securities covered by such registration statement;

 

(c) furnish to the selling Holders such numbers of copies of a prospectus, including a preliminary prospectus, as required by the Securities Act, and such other documents as the Holders may reasonably request in order to facilitate their disposition of their Registrable Securities;

 

(d) use commercially reasonable efforts to register and qualify the Registrable Securities covered by such registration statement under applicable securities laws of states or other jurisdictions; provided , that the Company shall not be required to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;

 

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(e) in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the underwriter(s) of such offering;

 

(f) use commercially reasonable efforts to cause all such Registrable Securities covered by such registration statement to be listed on a national securities exchange or trading system and each securities exchange and trading system (if any) on which similar securities issued by the Company are then listed;

 

(g) provide a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and provide a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration;

 

(h) promptly make available for inspection by the selling Holders, any managing underwriter(s) participating in any disposition pursuant to such registration statement, and any attorney or accountant or other agent retained by any such underwriter or selected by the selling Holders, all financial and other records, pertinent corporate documents, and properties of the Company, and cause the Company’s officers, directors, employees, and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant, or agent, in each case, as necessary or advisable to verify the accuracy of the information in such registration statement and to conduct appropriate due diligence in connection therewith;

 

(i) notify each selling Holder, promptly after the Company receives notice thereof, of the time when such registration statement has been declared effective or a supplement to any prospectus forming a part of such registration statement has been filed; and

 

(j) after such registration statement becomes effective, notify each selling Holder of any request by the SEC that the Company amend or supplement such registration statement or prospectus.

 

   

 

2.5.           Furnish Information . It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 2 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as is reasonably required to effect the registration or sale of such Holder’s Registrable Securities.

 

2.6.           Expenses of Registration . All expenses (other than Selling Expenses) incurred in connection with registrations, filings, or qualifications pursuant to Section 2, including all registration, filing, and qualification fees; printers’ and accounting fees; fees and disbursements of counsel for the Company; and the reasonable fees and disbursements, not to exceed $50,000 (except in the case of a long-form registration on Form S-1, where such limit shall instead be $75,000), of one law firm acting as counsel for the selling Holders (“ Selling Holder Counsel ”), shall be borne and paid by the Company; provided , however , that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 2.1 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all selling Holders shall bear such expenses pro rata based upon the number of Registrable Securities that were to be included in the withdrawn registration), unless the Holders of a majority of the Registrable Securities agree to forfeit their right to one registration pursuant to Section 2.1(a) or Section 2.1(b), as the case may be; provided further that if, at the time of such withdrawal, the Holders shall have learned of a material adverse change in the condition, business, or prospects of the Company from that known to the Holders at the time of their request and have withdrawn the request with reasonable promptness after learning of such information then the Holders shall not be required to pay any of such expenses and shall not forfeit their right to one registration pursuant to Section 2.1(a) or Section 2.1(b). All Selling Expenses relating to Registrable Securities registered pursuant to this Section 2 shall be borne and paid by the Holders pro rata on the basis of the number of Registrable Securities registered on their behalf.

 

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2.7.           Delay of Registration . No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any registration pursuant to this Agreement as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.

 

2.8.           Indemnification . If any Registrable Securities are included in a registration statement under this Section 2:

 

(a) To the extent permitted by law, the Company will indemnify and hold harmless each selling Holder, and the partners, members, officers, directors, and stockholders of each such Holder; legal counsel and accountants for each such Holder; any underwriter (as defined in the Securities Act) for each such Holder; and each Person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any Damages, and the Company will pay to each such Holder, underwriter, controlling Person, or other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided , however , that the indemnity agreement contained in this Section 2.8(a) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable for any Damages to the extent that they arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of any such Holder, underwriter, controlling Person, or other aforementioned Person expressly for use in connection with such registration.

 

(b) To the extent permitted by law, each selling Holder, severally and not jointly, will indemnify and hold harmless the Company, and each of its directors, each of its officers who has signed the registration statement, each Person (if any), who controls the Company within the meaning of the Securities Act, legal counsel and accountants for the Company, any underwriter (as defined in the Securities Act), any other Holder selling securities in such registration statement, and any controlling Person of any such underwriter or other Holder, against any Damages, in each case only to the extent that such Damages arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of such selling Holder expressly for use in connection with such registration; and each such selling Holder will pay to the Company and each other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided , however , that the indemnity agreement contained in this Section 2.8(b) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; and provided further that in no event shall the aggregate amounts payable by any Holder by way of indemnity or contribution under Sections 2.8(b) and 2.8(d) exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of fraud or willful misconduct by such Holder.

 

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(c) Promptly after receipt by an indemnified party under this Section 2.8 of notice of the commencement of any action (including any governmental action) for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.8, give the indemnifying party notice of the commencement thereof. The indemnifying party shall have the right to participate in such action and, to the extent the indemnifying party so desires, participate jointly with any other indemnifying party to which notice has been given, and to assume the defense thereof with counsel mutually satisfactory to the parties; provided , however , that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such action. The failure to give notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying party of any liability to the indemnified party under this Section 2.8, to the extent that such failure materially prejudices the indemnifying party’s ability to defend such action. The failure to give notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.8.

 

(d) To provide for just and equitable contribution to joint liability under the Securities Act in any case in which either: (i) any party otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to this Section 2.8 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact that this Section 2.8 provides for indemnification in such case; or (ii) contribution under the Securities Act may be required on the part of any party hereto for which indemnification is provided under this Section 2.8, then, and in each such case, such parties will contribute to the aggregate losses, claims, damages, liabilities, or expenses to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of each of the indemnifying party and the indemnified party in connection with the statements, omissions, or other actions that resulted in such loss, claim, damage, liability, or expense, as well as to reflect any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or allegedly untrue statement of a material fact, or the omission or alleged omission of a material fact, relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission; provided , however , that, in any such case: (x) no Holder will be required to contribute any amount in excess of the public offering price of all such Registrable Securities offered and sold by such Holder pursuant to such registration statement; and (y) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation; and provided further , that in no event shall a Holder’s liability pursuant to this Section 2.8(d), when combined with the amounts paid or payable by such Holder pursuant to Section 2.8(b), exceed the proceeds from the offering received by such Holder (net of any Selling Expenses) paid by such Holder), except in the case of willful misconduct or fraud by such Holder.

 

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(e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

 

(f) Unless otherwise superseded by an underwriting agreement entered into in connection with an underwritten public offering, the obligations of the Company and Holders under this Section 2.8 shall survive the completion of any offering of Registrable Securities in a registration under this Section 2, and otherwise shall survive the termination of this Agreement.

 

2.9.           Reports Under Exchange Act . With a view to making available to the Holders the benefits of SEC Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration, the Company shall file in a timely manner all reports and other  documents required, if any, to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted thereunder and make available information necessary to comply with SEC Rule 144, if available with respect to resales of the Registrable Securities under the Securities Act, at all times, all to the extent required from time to time to enable such Holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by.

 

2.10.          Registration Rights Subject to Stockholders Agreement . The registration rights granted to any Holder under this Agreement shall only be exercisable to the extent that the transactions contemplated thereby would be permitted by the Stockholders Agreement. To the extent that any actions required to be taken by the Company pursuant to the registration rights granted hereunder would result in a breach of, or conflict with, the terms or conditions of the Stockholders Agreement, the Company shall have no obligation to perform such actions.

 

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3.           Miscellaneous .

 

3.1.           Successors and Assigns . The rights under this Agreement may only be assigned (but only with all related obligations) by a Holder to a transferee of Registrable Securities that is an Affiliate of a Holder; provided , however , that (x) the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee and the Registrable Securities with respect to which such rights are being transferred; and (y) such transferee agrees in a written instrument delivered to the Company to be bound by and subject to the terms and conditions of this Agreement. The terms and conditions of this Agreement inure to the benefit of and are binding upon the respective successors and permitted assignees of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assignees any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided herein.

 

3.2.           Governing Law; Consent to Jurisdiction; Waiver of Jury Trial .   THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.   The parties hereto irrevocably submit to the exclusive jurisdiction of any state or federal court sitting in the State of Delaware over any suit, action or proceeding arising out of or relating to this Agreement.  To the fullest extent they may effectively do so under applicable law, the parties hereto irrevocably waive and agree not to assert, by way of motion, as a defense or otherwise, any claim that they are not subject to the jurisdiction of any such court, any objection that they may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.  In connection with any such suit, action or proceeding, the parties hereby consent to service of process in the manner specified in Section 3.5 or in any other manner permitted by applicable law. EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT.  THE SCOPE OF THIS WAIVER IS INTENDED TO INCLUDE CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.  THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS.  EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

 

3.3.           Counterparts; Facsimile . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may also be executed and delivered by facsimile signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

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3.4.           Titles and Subtitles . The titles and subtitles used in this Agreement are for convenience only and are not to be considered in construing or interpreting this Agreement.

 

3.5.           Notices .

 

(a)           All notices, demands and other communications pursuant to this Agreement shall be deemed to have been duly given when delivered by hand, if personally delivered; when delivered by courier, if delivered by commercial courier service; five (5) Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt is mechanically acknowledged, if telecopied; and when receipt is confirmed, if e-mailed.  All communications shall be sent to the respective parties to the attention of the following persons at the following addresses:

 

(i) if to the Company:

 

ADMA Biologics, Inc.

465 Route 17 South

Ramsey, New Jersey 07446

Attn:  Adam Grossman

Brian Lenz

Email: agrossman@admabio.com

blenz@admabio.com

Fax:  (201) 478-5553

 

with copies (which shall not constitute notice) sent concurrently to:

 

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, NY 10019-6064

Attention:  David S. Huntington, Esq.

Facsimile:  (212) 492-0124

Email:  dhuntington@paulweiss.com

 

(ii) if to the Investor:

 

Biotest Pharmaceuticals Corporation

c/o Biotest AG

Landsteinerstr. 5

63303 Dreieich

Germany

Attention:

Dr. Michael Ramroth ( michael.ramroth@biotest.com

and

Dr. Martin Reinecke ( martin.reinecke@biotest.com )

 

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And to:

 

Biotest Pharmaceuticals Corporation

5800 Park of Commerce Blvd. NW

Boca Raton, FL 33487

 

Attn:  Ileana Carlisle, CEO

(icarlisle@biotestpharma.com); and Donna Quinn, General Counsel (dquinn@biotestpharma.com) 

 

with copies (which shall not constitute notice) sent concurrently to:

 

Greenberg Traurig, LLP

3333 Piedmont Road, NE

Suite 2500

Atlanta, Georgia 30305

Attention:  Wayne H. Elowe, Esq.

Phone:  678.553.2249

Email:  elowew@gtlaw.com

 

(iii) if to any other Person who becomes a party hereto after the original date of this Agreement, at the address, telecopy number or e-mail address shown for such Person on the applicable signature page hereto, to the attention of the person who has signed this Agreement on behalf of such Person.

 

3.6.           Amendments and Waivers . Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance, and either retroactively or prospectively) only with the written consent of the Company and the holders of a majority of the Registrable Securities then outstanding; provided , that any provision hereof may be waived by any waiving party on such party’s own behalf, without the consent of any other party. The Company shall give prompt notice of any amendment or termination hereof or waiver hereunder to any party hereto that did not consent in writing to such amendment, termination, or waiver. Any amendment, termination, or waiver effected in accordance with this section shall be binding on all parties hereto, regardless of whether any such party has consented thereto. No waivers of or exceptions to any term, condition, or provision of this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such term, condition, or provision.

 

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3.7.           Severability . In case any one or more of the provisions contained in this Agreement is for any reason held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and such invalid, illegal, or unenforceable provision shall be reformed and construed so that it will be valid, legal, and enforceable to the maximum extent permitted by law.

 

3.8.           Aggregation of Stock . All shares of Registrable Securities held or acquired by Affiliates shall be aggregated together for the purpose of determining the availability of any rights under this Agreement and such Affiliated persons may apportion such rights as among themselves in any manner they deem appropriate.

 

   

 

3.9.           Delays or Omissions . No delay or omission to exercise any right, power, or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power, or remedy of such non-breaching or non-defaulting party, nor shall it be construed to be a waiver of or acquiescence to any such breach or default, or to any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. All remedies, whether under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

  ADMA BIOLOGICS, INC.
     
     
  By: /s/ Adam Grossman
     
     
  Name:  Adam Grossman
    (print)
     
  Title: President and Chief Executive Officer
     
   

 

  BIOTEST PHARMACEUTICALS CORPORATION
     
     
  By: /s/ Ileana Carlisle
     
     
  Name: Ileana Carlisle
    (print)
     
  Title: Chief Executive Officer

 

 

[Signature Page to Registration Rights Agreement]