CORPORATE GOVERNANCE
Change in Control
On September 1, 2010, ERBA purchased
all of the approximately 72.4% of the outstanding shares of the Companys Common Stock then owned by the Debregeas-Kennedy Group, for an aggregate
purchase price of approximately $15,000,000, or $0.75 per share. As a result of this share acquisition, ERBA now beneficially owns, directly or
indirectly, approximately 72.5% of the outstanding shares of the Companys Common Stock. Transasia Bio-medicals Ltd. is the parent company of
ERBA.
Board of Directors
The Board of Directors met twelve times
during the 2010 fiscal year. Each member of the Board of Directors attended at least 75% of the meetings of the Board of Directors and committees on
which he served during the 2010 fiscal year. All six of the then-serving members of the Board of Directors attended the Companys 2010 annual
meeting of stockholders, although the Company has no formal policy requiring them to do so.
Under the applicable rules of the NYSE
Amex (formerly known as the American Stock Exchange), the Company is considered a controlled company because ERBA, directly or indirectly,
beneficially owns approximately 72.5% of the issued and outstanding shares of the Companys Common Stock. On September 2, 2010, ERBA, Transasia
Bio-medicals Ltd., Erba Lachema s.r.o. and Suresh Vazirani and Kishore Kris Dudani, both of whom are current members of the Board of
Directors and both of whom are nominees for election to the Board of Directors, filed a Schedule 13D as a group, as such term is used in
Section 13(d) of the Securities Exchange Act of 1934, as amended (the
Exchange Act
), in connection with their aggregate beneficial
ownership of approximately 72.5% of the issued and outstanding shares of the Companys Common Stock. As a controlled company, the
Company is not subject to certain corporate governance requirements of the NYSE Amex, including the requirements to (i) maintain a majority of
independent directors on the Board of Directors, (ii) have a nominating committee or (iii) have a compensation committee comprised solely
of independent directors.
The Board of Directors has determined
that three of its membersPhilippe Gadal, Pharm.D., John B. Harley, M.D., Ph.D., and David M. Templetonare independent, as such
term is defined in the applicable rules of the NYSE Amex relating to the independence of directors (the
NYSE Amex independence
rules
).
In determining that Dr. Harley is
independent, the Board of Directors considered the oral consulting agreement between Dr. Harley and ImmunoVision, pursuant to which Dr. Harley was paid
$2,000 per month through July 2009, $5,000 per month from August 2009 to June 2010, and $2,000 per month thereafter, to provide ImmunoVision with
technical guidance and business assistance on an as-needed basis (in addition to the amounts he receives for his service as a member of the Board of
Directors and any committees of the Board of Directors). The Board of Directors also considered the license agreement between the Company and JK
Autoimmunity, Inc., a corporation of which Dr. Harley is the controlling shareholder, pursuant to which JK Autoimmunity, Inc. has granted an exclusive
worldwide license to the Company for certain patents, rights and technology relating to monoclonal antibodies against autoimmune RNA proteins developed
by Dr. Harley in exchange for specified royalty payments, including an annual minimum royalty of $10,000 for each licensed product utilized by the
Company. During 2010, the Company accrued an aggregate payment of $10,000 to JK Autoimmunity under such license.
Committees of the Board of Directors
The Board of Directors has established
an Audit Committee and a Compensation Committee.
Audit Committee
. From the
beginning of the 2010 fiscal year through September 1, 2010, the Audit Committee consisted of Laurent Le Portz, Chairman, and Jerry C. Benjamin. On
September 1, 2010, Philippe Gadal, Pharm.D., was appointed to the Board of Directors, the Audit Committee and the Compensation Committee. Accordingly,
from September 1, 2010 through September 30, 2010, the Audit Committee consisted of Messrs. Le Portz and Benjamin and Dr. Gadal. On September 30, 2010,
each of Messrs. Le Portz and Benjamin resigned from the Board of Directors and the committees of the Board of Directors on which
20
they served, including the Audit
Committee. Also on September 30, 2010, David M. Templeton was appointed to the Board of Directors, the Audit Committee and the Compensation Committee.
Accordingly, from September 30, 2010 through the end of the 2010 fiscal year, the Audit Committee consisted of, and the Audit Committee currently
consists of, Dr. Gadal, Chairman, and Mr. Templeton. As a smaller reporting company, as such term is defined under the Exchange Act, and in
accordance with applicable rules and regulations of the NYSE Amex, the Company is permitted to have an audit committee consisting of just two
members.
The Audit Committee met five times
during the 2010 fiscal year. The primary responsibility of the Audit Committee is to oversee the Companys financial reporting process on behalf
of the Board of Directors and the stockholders and to report the results of its activities to the Board of Directors. The Audit Committee engages the
independent auditors, approves all audit services and permitted non-audit services to be provided by the independent auditor, considers the fee
arrangement and scope of the audit, reviews the financial statements and the independent auditors report and reviews internal accounting
procedures and controls with the Companys financial and accounting staff. The Board of Directors has determined that each of Dr. Gadal and Mr.
Templeton is independent, as such term is defined in the applicable rules and regulations of the Securities and Exchange Commission
(
SEC
) and the NYSE Amex relating to directors serving on audit committees. The Board of Directors also determined that each of Dr.
Gadal and Mr. Templeton has the attributes, education and experience of an audit committee financial expert, as such term is defined in
Item 407(d)(5) of Regulation S-K. The Audit Committee operates under a written charter adopted and approved by the Board of Directors. The Audit
Committee charter is posted in the Investor Relations section of the Companys Internet web site at
www.ivaxdiagnostics.com
.
Compensation Committee
. From the
beginning of the 2010 fiscal year through September 1, 2010, the Compensation Committee consisted of Laurent Le Portz, Chairman, John B. Harley, M.D.,
Ph.D. and Lawrence G. Meyer. On September 1, 2010, Mr. Meyer resigned from the Board of Directors and the committees of the Board of Directors on which
he served, including the Compensation Committee. Also on September 1, 2010, Suresh Vazirani was appointed to the Board of Directors and the
Compensation Committee, and Philippe Gadal, Pharm.D., was appointed to the Board of Directors, the Audit Committee and the Compensation Committee.
Accordingly, from September 1, 2010 through September 14, 2010, the Compensation Committee consisted of Messrs. Vazirani and Le Portz and Drs. Gadal
and Harley. On September 14, 2010, Dr. Harley resigned from the Compensation Committee, but he remained as a member of the Board of Directors.
Accordingly, from September 14, 2010 through September 30, 2010, the Compensation Committee consisted of Messrs. Vazirani and Le Portz and Dr. Gadal.
On September 30, 2010, Mr. Le Portz resigned from the Board of Directors and the committees of the Board of Directors on which he served, including the
Compensation Committee. Also on September 30, 2010, David M. Templeton was appointed to the Board of Directors, the Audit Committee and the
Compensation Committee. Accordingly, from September 30, 2010 through the end of the 2010 fiscal year, the Compensation Committee consisted of, and the
Compensation Committee currently consists of, Mr. Vazirani, Chairman, Dr. Gadal and Mr. Templeton.
The Compensation Committee met three
times during the 2010 fiscal year. The Compensation Committee establishes and implements compensation policies and programs for executives of the
Company, including the Named Executive Officers (as defined in the introductory paragraph to the Summary Compensation Table below) and
recommends the compensation arrangements for executive management and directors. It also serves as the Stock Option Committee for the purpose of making
grants of options under the Companys stock option plans. As permitted by the rules of the NYSE Amex, the Compensation Committee does not operate
under a written charter.
Director Nominations
As a controlled company,
the Board of Directors is not required to, and does not, have a nominating committee. The Board of Directors believes that it is appropriate for the
Company to not have a nominating committee because ERBA, directly or indirectly, beneficially owns approximately 72.5% of the issued and outstanding
shares of the Companys Common Stock and, as a result, are in a position to control the election of the Companys directors. The Board of
Directors performs the function of identifying and evaluating director nominees for the Company. The Board of Directors does not consider director
nominees recommended by stockholders of the Company, other than those recommended by stockholders who also serve on the Board of Directors. While the
Board of Directors has not established specific, minimum qualifications,
21
qualities or skills that a director
nominee is required to have and the Board of Directors does not have a formal diversity policy and does not follow any ratio or formula with respect to
diversity in order to determine the appropriate composition of the Board, the Board of Directors generally considers: (i) the size of the Board of
Directors best suited to fulfill its responsibilities, (ii) the overall composition of the membership of the Board of Directors to ensure that the
Board of Directors has the requisite expertise and consists of persons with sufficiently diverse backgrounds and (iii) the reputation, independence,
integrity, education, and business, strategic and financial skills of director nominees. Both of the nominees for election as a director named in this
Proxy Statement were unanimously recommended by the full Board of Directors for submission to the stockholders of the Company as the Board of
Directors nominees.
Leadership Structure
Since September 1, 2010, Suresh
Vazirani has served as the Executive Chairman of the Board of Directors of the Company, while Kevin D. Clark has served as the Companys Chief
Executive Officer, Chief Executive Officer and President. The Board of Directors believes that the advisability of having a separate or combined
Chairman and Chief Executive Officer is dependent upon the strengths of the individuals that hold these positions and the most effective means of
leveraging these strengths. Accordingly, while in the past the Company has combined the Chairman and Chief Executive Officer positions, at this time,
given the composition of the Board of Directors, the effective interaction between Mr. Vazirani, as Executive Chairman of the Board of Directors, and
Mr. Clark, as Chief Executive Officer, Chief Operating Officer and President, and the current adverse economic environment and challenges faced by the
Company, the Board of Directors believes that separating the Chairman and Chief Executive Officer positions provides the Company with the right
foundation to pursue its strategic and operational objectives, while maintaining effective oversight and objective evaluation of the Companys
performance.
Risk Oversight
The Board of Directors is responsible
for overseeing management and the business and affairs of the Company, which includes the oversight of risk. In exercising its oversight, the Board of
Directors has allocated some areas of focus to its committees and has retained other areas of focus for itself. Pursuant to its charter, the Audit
Committee is responsible for reviewing the adequacy and appropriateness of the Companys policies with respect to risk assessment and risk
management, including the Companys major financial and accounting risk exposures and the steps management has undertaken to control them. The
Compensation Committee oversees compliance with the Companys executive compensation plans and related laws and policies. Finally, the Board of
Directors as a whole has oversight responsibility for the Companys strategic and operational risks. Further, throughout the year, the Board of
Directors reviews, considers and discusses with management the risks that may be material to the Company, including those disclosed in the
Companys quarterly and annual reports filed with the SEC. The goal of these processes is to achieve serious and thoughtful Board-level attention
to the Companys risk management process and system, the nature of the material risks faced by the Company, and the adequacy of the Companys
risk management process and system designed to respond to and mitigate these risks. While the Board of Directors recognizes that the risks which the
Company faces are not static, and that it is not possible to mitigate all risk and uncertainty all of the time, the Board of Directors believes that
the Companys systematic and proactive approach to risk management provides the Board of Directors with the proper foundation and oversight
perspective with respect to management of the material risks facing the Company.
Stockholder Communications with the Board of
Directors
The Board of Directors has provided a
process for stockholders of the Company to send communications to the Board of Directors or to a particular director. Any stockholder who wishes to
communicate with the Board of Directors or any particular director may do so by sending all such communications in writing, via United States mail,
postage prepaid, to: Secretary, IVAX Diagnostics, Inc., 2140 North Miami Avenue, Miami, Florida 33127. Each stockholder writing should include a
statement indicating that the sender is a stockholder of the Company and should specify whether the communication is directed to the full Board of
Directors or to a particular director. Company personnel will review all properly sent stockholder communications and will forward the communication to
the director or directors to whom it is intended, attempt to handle the inquiry
22
directly if it relates to a routine
or ministerial matter or not forward the communication if it is primarily commercial in nature or if it is determined to relate to an improper or
irrelevant topic.
Code of Conduct and Ethics
The Board of Directors has adopted a
Code of Conduct and Ethics, which applies to all of the Companys directors, officers and employees, and a code of ethics, also known as a Senior
Financial Officer Code of Ethics, which applies to the Companys principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions. The Code of Conduct and Ethics and the Senior Financial Officer Code of Ethics are
posted in the Investor Relations section of the Companys Internet web site at
www.ivaxdiagnostics.com
. If the Company makes an
amendment to, or grants a waiver with respect to, any provision of the Senior Financial Officer Code of Ethics, then the Company intends to disclose
the nature of such amendment or waiver by posting it in the Investor Relations section of the Companys Internet web site at
www.ivaxdiagnostics.com
or by other appropriate means as required or permitted under the applicable rules and regulations of the SEC and the
NYSE Amex.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE
Section 16(a) of the Exchange Act
requires the Companys directors, executive officers and 10% stockholders to file initial reports of ownership and reports of changes in ownership
of the Companys Common Stock and other equity securities with the SEC and the NYSE Amex. The Companys directors, executive officers and 10%
stockholders are required to furnish the Company with copies of all Section 16(a) reports they file. Based on a review of the copies of such reports
furnished to the Company and written representations from the Companys directors and executive officers that no other reports were required, the
Company believes that its directors, executive officers and 10% stockholders complied with all Section 16(a) filing requirements applicable to them for
the fiscal year ended December 31, 2010.
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
Controlling Stockholder
On September 1, 2010, ERBA purchased
all of the approximately 72.4% of the outstanding shares of the Companys Common Stock then owned by the Debregeas-Kennedy Group for an aggregate
purchase price of approximately $15,000,000, or $0.75 per share. As a result of this share acquisition, ERBA now beneficially owns, directly or
indirectly, approximately 72.5% of the outstanding shares of the Companys Common Stock. Transasia Bio-medicals Ltd. is the parent company of
ERBA.
Certain Relationships and Related
Transactions
The Company anticipates that, during
the year ending December 31, 2011, the Company will sell test kits and instruments to, and may perform contract research and development services for,
ERBA, Transasia Bio-medicals Ltd., and their affiliates. While the Company is not currently able to reasonably estimate the approximate aggregate
dollar value associated with these sales and services, the Company believes that the aggregate dollar value associated with these sales and services
could reasonably be expected to be in excess of $120,000.
IDENTIFICATION OF EXECUTIVE OFFICERS
The following individuals are executive
officers of the Company.
Name
|
|
|
|
Age
|
|
Position
|
Kevin D. Clark
|
|
|
|
48
|
|
Chief Executive Officer,
Chief Operating Officer
and President
|
|
Arthur R.
Levine
|
|
|
|
53
|
|
Chief Financial Officer,
Vice President Finance
and Secretary
|
23
All officers serve until they resign or
are replaced or removed at the pleasure of the Board of Directors. The following additional information is provided for the executive officers of the
Company.
Kevin D. Clark was named the
Companys President and Chief Executive Officer on September 3, 2010. He has served as the Companys Chief Operating Officer since September
2007 and as Chief Operating Officer of ImmunoVision, Inc., the Companys subsidiary located in Springdale, Arkansas, since 1987. Mr. Clark served
as acting Chief Executive Officer of the Company from January 2008 to September 2008. He also served as President of ImmunoVision from 1987 through
1995. Mr. Clark was a founding member of the Arkansas Biotech Association and, from 1995 through 2004, served as its Executive Vice President, and in
2002, served as its President. Since 2003, Mr. Clark has served as a member of the Executive Committee of the University of Arkansas Technology
Development Foundation, a non-profit foundation for the commercialization of technology developed at the University of Arkansas in Fayetteville. From
2000 to 2003, Mr. Clark was a member of the Advisory Board of Arkansas BioVentures, a state and federally funded incubator program for
biotechnology.
Arthur R. Levine was appointed the
Companys Chief Financial Officer in August 2010 and Vice President Finance in April 2010. Prior to joining the Company, Mr. Levine was
employed by Airspan Networks Inc., a publicly-traded vendor of wireless products and solutions, where he served as Vice President Finance and
Controller from January 2006 through September 2009 after previously serving as Director of Finance beginning in October 2005. From 2003 through 2005,
Mr. Levine served as Director of Finance of DentaQuest Ventures, Inc., a privately-held third party administrator and insurer of dental benefits. From
1995 through 2003, Mr. Levine was employed by Scitex Corporation Ltd., a publicly-traded manufacturer of digital printing equipment, where he served in
a number of financial roles, including Vice President and Corporate Controller. Mr. Levine worked at Ernst & Young LLP from 1984 through 1995. He
received a B.S. from the Wharton School of the University of Pennsylvania and is a Certified Public Accountant.
COMPENSATION OF NAMED EXECUTIVE
OFFICERS
Summary Compensation Table 2010
The following table sets forth certain
summary information concerning compensation which, during the fiscal years ended December 31, 2010 and 2009, the Company paid or accrued to or on
behalf of (i) each individual serving or acting as the Companys principal executive officer during the fiscal year ended December 31, 2010, (ii)
the only other individual (other than the Companys current principal executive officer) serving as an executive officer at December 31, 2010, and
(iii) two additional individuals who, but for the fact that such individuals were not serving as executive officers at December 31, 2010, would have
also been included under clause (ii) above (collectively, the
Named Executive Officers
).
Name and Principal
Position
|
|
|
|
Year
|
|
Salary
|
|
Bonus
|
|
Stock
Awards
|
|
Option
Awards
(6)
|
|
Non-Equity
Incentive Plan
Compensation
|
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
|
|
All Other
Compensation
(7)
|
|
Total
|
Kevin D.
Clark,
(1)
|
|
|
|
|
2010
|
|
|
$
|
227,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
227,000
|
|
Chief Executive Officer
|
|
|
|
|
2009
|
|
|
$
|
227,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
35,796
|
|
|
$
|
262,796
|
|
Charles R.
Struby, Ph.D.,
(2)
|
|
|
|
|
2010
|
|
|
$
|
234,214
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
281,136
|
|
|
$
|
515,350
|
|
Former Chief Executive Officer
|
|
|
|
|
2009
|
|
|
$
|
234,932
|
|
|
$
|
25,000
|
|
|
|
|
|
|
$
|
30,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
289,932
|
|
Arthur R.
Levine,
(3)
|
|
|
|
|
2010
|
|
|
$
|
108,575
|
|
|
|
|
|
|
|
|
|
|
$
|
32,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
141,075
|
|
Chief Financial Officer
|
|
|
|
|
2009
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Mark S.
Deutsch,
(4)
|
|
|
|
|
2010
|
|
|
$
|
84,321
|
|
|
|
|
|
|
|
|
|
|
$
|
56,935
|
|
|
|
|
|
|
|
|
|
|
$
|
159,075
|
|
|
$
|
300,331
|
|
Former Chief Financial Officer
|
|
|
|
|
2009
|
|
|
$
|
159,075
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
21,108
|
|
|
$
|
180,183
|
|
Steve E.
Lufkin,
(5)
|
|
|
|
|
2010
|
|
|
$
|
184,017
|
|
|
$
|
15,000
|
|
|
|
|
|
|
$
|
36,660
|
|
|
|
|
|
|
|
|
|
|
$
|
225,000
|
|
|
$
|
460,677
|
|
Former General Manager
|
|
|
|
|
2009
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
(1)
|
|
Mr. Clark was appointed as the Companys Chief Executive
Officer and President on September 3, 2010. Throughout the fiscal years ended December 31, 2009 and 2010, Mr. Clark served as, and Mr.
Clark
|
24
|
|
continues to serve as, the Companys Chief Operating
Officer and the Chief Operating Officer of ImmunoVision. On March 27, 2009, Mr. Clark entered into an employment agreement with the Company, which was
amended on August 31, 2010 and on September 3, 2010. The terms of Mr. Clarks employment agreement and the amendments thereto are described under
Potential Payments upon Termination or Change-in-Control below.
|
(2)
|
|
Dr. Struby served as the Companys Chief Executive Officer
and President from January 23, 2009 until his resignation from such positions on September 3, 2010. Dr. Struby was employed by the Company pursuant to
the terms of the employment agreement the Company entered into with him on March 27, 2009. In connection with his resignation as the Companys
Chief Executive Officer and President, the Company and Dr. Struby entered into a confidential general release of all claims on December 20, 2010,
pursuant to which, among other things, the Company agreed to pay Dr. Struby $205,000 in lieu of any compensation that he would otherwise have been
entitled to receive in accordance with his employment agreement. The payment contemplated by the confidential general release of all claims is required
to be made in two equal installments, the first of which was paid on or before January 5, 2011 and the second of which was paid on or before March 31,
2011. The terms of Dr. Strubys employment agreement, which has now been terminated, and his confidential general release of all claims with the
Company are described in further detail under Potential Payments upon Termination or Change-in-Control below.
|
(3)
|
|
Mr. Levine was appointed as the Companys Chief Financial
Officer effective September 1, 2010 and joined the Company as Vice President Finance on April 5, 2010. Prior to April 5, 2010, Mr. Levine was
not employed by the Company and, accordingly, he did not receive any compensation from the Company during the year ended December 31, 2009 or prior to
April 5, 2010 during the year ended December 31, 2010. On April 5, 2010, Mr. Levine entered into an employment agreement with the Company, which was
amended on September 1, 2010. The terms of Mr. Levines employment agreement and the amendment thereto are described under Potential
Payments upon Termination or Change-in-Control below.
|
(4)
|
|
Mr. Deutsch served as the Companys Chief Financial Officer
until his resignation from such positions on May 21, 2010. In connection with his resignation as the Companys Chief Financial Officer, the
Company and Mr. Deutsch entered into a separation letter agreement on May 3, 2010, pursuant to which, among other things, the Company agreed to pay Mr.
Deutsch an amount equal to his then current annual base salary. This separation payment was paid in regular bi-weekly installments until September 22,
2010, at which time the remaining amount of the separation payment was paid to Mr. Deutsch in one lump sum payment. The terms of Mr. Deutschs
separation letter agreement with the Company are described in further detail under Potential Payments upon Termination or Change-in-Control
below.
|
(5)
|
|
Mr. Lufkin served as the Companys General Manager from
January 4, 2010 until his resignation on September 30, 2010. Prior to January 4, 2010, Mr. Lufkin was not employed by the Company and, accordingly, he
did not receive any compensation from the Company during the year ended December 31, 2009 or prior to January 4, 2010 during the year ended December
31, 2010. Mr. Lufkin was employed by the Company pursuant to the terms of the employment agreement the Company entered into with him on January 4,
2010. In connection with his resignation as the Companys General Manager, the Company and Mr. Lufkin entered into a confidential general release
of all claims on September 30, 2010, pursuant to which, among other things, the Company agreed to pay Mr. Lufkin a one time lump sum payment of
$225,000. The terms of Mr. Lufkins employment agreement, which has now been terminated, and his confidential general release of all claims with
the Company are described in further detail under Potential Payments upon Termination or Change-in-Control below.
|
(6)
|
|
Represents the aggregate grant date fair value of option awards
calculated in accordance with Codification Topic 718,
Compensation Stock Compensation
. Assumptions used in the calculation of these
amounts are included in Note 11 to the Companys Consolidated Financial Statements,
Shareholders Equity
, contained in the Annual
Report on Form 10-K which the Company filed with the SEC on March 30, 2011. The amount for Mr. Deutsch in 2010 represents the incremental fair value,
computed as of the modification date in accordance with Codification Topic 718,
Compensation Stock Compensation
, attributable to the
modification of the options to purchase shares of the Companys common stock previously granted to Mr. Deutsch, which options were modified
pursuant to his separation letter agreement to remain in full force and effect until the earlier of their exercise in full or their respective
expiration dates, notwithstanding any contrary provisions contained in the Companys equity incentive
|
25
|
|
plans pursuant to which such options were granted or agreements
between the Company and Mr. Deutsch with respect to such options.
|
(7)
|
|
The 2010 items under All Other Compensation for the
applicable Named Executive Officers are as follows: Dr. Struby $205,000 of separation payments, $60,210 of expense reimbursement associated with
his relocation, and $15,926 of tax reimbursements; Mr. Deutsch $159,075 of separation payments; and Mr. Lufkin $225,000 of separation
payments. Additional information about the separation payments to Dr. Struby and Messrs. Deutsch and Lufkin is set forth under Potential Payments
upon Termination or Change-in-Control below.
|
Outstanding Equity Awards at Fiscal Year-End
2010
The following table sets forth certain
information regarding equity-based awards held by the Named Executive Officers as of December 31, 2010.
|
|
|
|
Option Awards
|
|
|
|
|
|
Number of
Securities
Underlying
Unexercised
Options
|
|
Number of
Securities
Underlying
Unexercised
Options
|
|
Name
|
|
|
|
Exercisable
|
|
Unexercisable
|
|
Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
|
|
Option
Exercise
Price
|
|
Option
Expiration
Date
|
Kevin D.
Clark
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
$
|
0.65
|
|
|
|
9/22/18
|
|
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
$
|
1.20
|
|
|
|
9/22/18
|
|
|
Charles R.
Struby, Ph.D.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arthur R.
Levine
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
$
|
0.65
|
|
|
|
4/4/20
|
|
|
Mark S.
Deutsch
|
|
|
|
|
5,116
|
(1)
|
|
|
|
|
|
|
|
|
|
$
|
7.12
|
|
|
|
3/17/11
|
|
|
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
|
$
|
4.35
|
|
|
|
7/13/15
|
|
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
$
|
0.65
|
|
|
|
9/22/18
|
|
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
$
|
1.20
|
|
|
|
9/22/18
|
|
|
Steven E.
Lufkin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
These options expired on March 17, 2011, but they are included
because they had not yet expired as of December 31, 2010.
|
Potential Payments upon Termination or
Change-in-Control
Employment Agreement with Kevin D.
Clark
. On March 27, 2009, we entered into an employment agreement with Kevin D. Clark to serve as our Chief Operating Officer. The employment
agreement has an initial term of three years and will automatically renew for successive one year periods unless either Mr. Clark or we exercise the
option to allow the employment agreement to expire at the end of the then-current term. Under the employment agreement, Mr. Clark will be paid an
initial annual base salary of $227,000, and we will review Mr. Clarks base salary at least annually. Mr. Clarks current annual base salary
is $227,000. The employment agreement also provides that Mr. Clark will be eligible to receive, among other things, equity compensation under our
equity compensation plans and an annual cash bonus upon the achievement of financial performance targets under any annual cash incentive program in
effect from time to time or otherwise in the discretion of the Board or the Compensation Committee. Mr. Clark did not receive an annual cash bonus
during 2010. In addition, under the employment agreement, we are required to reimburse Mr. Clark for business expenses incurred by him in accordance
with our policies and procedures for expense reimbursement. Upon the termination of the employment agreement by us with Cause (as defined
in the employment agreement) or upon Mr. Clarks resignation other than for Good Reason (as defined in the employment agreement), Mr.
Clark will be entitled to receive all base salary compensation which has been fully earned but has not yet been paid to him, and all of Mr.
Clarks unvested equity based awards will be forfeited. Upon the expiration of the employment agreement as a result of either our or Mr.
Clarks election to
26
allow the employment agreement to
expire at the end of the then-current term, Mr. Clark will be entitled to receive or be reimbursed for, as the case may be, all base salary and annual
cash bonus compensation which has been fully earned but has not yet been paid to him and all business expenses incurred by him which has not yet been
reimbursed (such compensation, collectively, the Clark Accrued Compensation). Upon the termination of the employment agreement by us
without Cause or as a result of Mr. Clarks Disability (as defined in the employment agreement) or death, or upon Mr.
Clarks resignation for Good Reason, including, without limitation, as a result of a Change in Control (as defined in the
employment agreement) during the initial three-year term of the employment agreement, Mr. Clark or his estate, as the case may be, will be entitled to
receive the Clark Accrued Compensation and a one-time lump sum payment in an amount equal to Mr. Clarks then-current annual base salary. In
addition, in the event we terminate the employment agreement without Cause, the employment agreement is terminated as a result of Mr.
Clarks Disability or Mr. Clark resigns for Good Reason, including, without limitation, as a result of a Change in
Control during the initial three-year term of the employment agreement, we, at our sole expense, will maintain in full force and effect for the
continued benefit of Mr. Clark and his spouse and dependents for a period of twelve months all welfare benefit plans and programs, including, without
limitation, medical, dental, disability and accidental death and dismemberment plans and programs, in which Mr. Clark or his spouse or dependents were
participating, and we, at our sole expense, will continue Mr. Clarks and his spouses and dependents medical coverage for a period
ending upon the earlier of the one year anniversary of the termination of the employment agreement and such time as Mr. Clark becomes covered by
another employer group health plan or by Medicare. The employment agreement also includes non-disclosure, non-solicitation, anti-raiding and
non-disparagement covenants by Mr. Clark.
Amendments to Employment Agreement
with Kevin D. Clark
. On August 31, 2010, Mr. Clarks employment agreement was amended to waive his right (i) to terminate his employment for
Good Reason in connection with ERBAs acquisition of the shares of our common stock from the Debregeas-Kennedy Group and (ii) to
receive the above-described severance compensation in connection therewith. Additionally, effective September 3, 2010, Mr. Clark was appointed to serve
as our Chief Executive Officer and President and his employment agreement was amended solely to reflect his new positions without any other alterations
to the terms and conditions, including the compensation terms, of his employment. Mr. Clark also continues to serve as our Chief Operating
Officer.
Employment Agreement with Charles R.
Struby, Ph.D.
On March 27, 2009, we entered into an employment agreement with Charles R. Struby, Ph.D., who then served as our Chief Executive
Officer and President. Dr. Strubys employment agreement had an initial term of three years and provided for automatic successive one year renewal
periods unless either Dr. Struby or we exercised the option to allow the employment agreement to expire at the end of the then-current term. Under the
employment agreement, Dr. Struby received an annual base salary of $250,000. In addition, under the terms and condition of the employment agreement,
Dr. Struby received a signing bonus of $25,000 and options to purchase 100,000 shares of our common stock under our 1999 Performance Equity Plan at an
exercise price of $0.37 per share, which equaled the closing price of our common stock on the NYSE Amex on March 27, 2009. These options fully vested
as of March 27, 2009 and were scheduled to expire on March 26, 2019. (As described below, Dr. Struby forfeited all of these options, effective December
20, 2010.) The employment agreement also provided that Dr. Struby would be eligible to receive, among other things, an annual cash bonus upon the
achievement of financial performance targets under any annual cash incentive program in effect from time to time or otherwise in the discretion of our
Board or Compensation Committee. Dr. Struby did not receive an annual cash bonus during 2010. In addition, under the employment agreement, we were
required to reimburse Dr. Struby for certain relocation and business expenses. The employment agreement also provided that, (i) upon the termination of
the employment agreement by us with Cause (as defined in the employment agreement) or upon Dr. Strubys resignation other than for
Good Reason (as defined in the employment agreement), Dr. Struby would be entitled to receive all base salary compensation which had been
fully earned but had not yet been paid to him, and all of Dr. Strubys unvested equity-based awards would be forfeited, (ii) upon the expiration
of the employment agreement as a result of either our or Dr. Strubys election to allow the employment agreement to expire at the end of the
then-current term, Dr. Struby would be entitled to receive or be reimbursed for, as the case may be, all base salary and annual cash bonus compensation
which had been fully earned but had not yet been paid to him and all relocation and business expenses incurred by him which had not yet been reimbursed
(such compensation, collectively, the Struby Accrued Compensation), and (iii)
27
upon the termination of the
employment agreement by us without Cause or as a result of Dr. Strubys Disability (as defined in the employment
agreement) or death, or upon Dr. Strubys resignation for Good Reason, including, without limitation, as a result of a Change in
Control (as defined in the employment agreement) during the initial three-year term of the employment agreement, Dr. Struby or his estate, as the
case may be, would be entitled to receive the Struby Accrued Compensation and a one-time lump sum payment in an amount equal to Dr. Strubys
then-current base salary. The employment agreement further provided that, in the event we terminated the employment agreement without
Cause, the employment agreement was terminated as a result of Dr. Strubys Disability or Dr. Struby resigned for
Good Reason, including, without limitation, as a result of a Change in Control during the initial three-year term of the
employment agreement, we, at our sole expense, would maintain in full force and effect for a period of twelve months for the continued benefit of Dr.
Struby and his spouse and dependents all welfare benefit plans and programs, including, without limitation, medical, dental, disability and accidental
death and dismemberment plans and programs, in which Dr. Struby or his spouse or dependents were participating, and we, at our sole expense, would
continue Dr. Strubys and his spouses and dependents medical coverage for a period ending upon the earlier of the one year anniversary
of the termination of the employment agreement and such time as Dr. Struby became covered by another employer group health plan or by Medicare. The
employment agreement also included non-disclosure, non-solicitation, anti-raiding and non-disparagement covenants by Dr. Struby.
Confidential General Release of All
Claims with Charles R. Struby, Ph.D
. In connection with Dr. Strubys resignation as our Chief Executive Officer and President on September 3,
2010, we and Dr. Struby entered into a confidential general release of all claims on December 20, 2010, pursuant to which, among other things, we
agreed to pay Dr. Struby $205,000 in lieu of any compensation that he would otherwise have been entitled to receive in accordance with his employment
agreement. The payment contemplated by the confidential general release of all claims is required to be made in two equal installments, the first of
which was paid on or before January 5, 2011 and the second of which is due on or before March 31, 2011. We also agreed, as had been contemplated by Dr.
Strubys employment agreement, to maintain in full force and effect for a period of twelve months for the continued benefit of Dr. Struby and his
spouse and dependents all welfare benefit plans and programs in which Dr. Struby or his spouse or dependents were participating at September 3, 2010
and to continue Dr. Strubys and his spouses and dependents medical coverage for a period ending upon the earlier of September 3, 2011
and such time as Dr. Struby becomes covered by another employer group health plan or by Medicare. Under the terms of the confidential general release
of all claims, Dr. Struby provided a general release in favor of us, and he forfeited in its entirety the option to purchase 100,000 shares of our
common stock which was previously granted to him under our 1999 Performance Equity Plan. The confidential general release of all claims also contains a
mutual non-disparagement covenant by and between us and Dr. Struby, and an acknowledgement by Dr. Struby that he continues to be bound by
non-disclosure, non-solicitation and anti-raiding covenants contained in his employment agreement with us.
Employment Agreement with Arthur R.
Levine
. On April 5, 2010, we entered into an employment agreement with Arthur R. Levine to serve as our Vice President Finance. Mr.
Levines employment agreement does not have a stated term. Under the employment agreement, Mr. Levine was paid an initial annual base salary of
$135,000, and we will review Mr. Levines base salary at least annually. Mr. Levines current annual base salary was increased to $170,000
effective September 1, 2010 in connection with his promotion to Chief Financial Officer. In addition, under the terms and conditions of the employment
agreement, Mr. Levine received options to purchase 50,000 shares of our common stock under our 2009 Equity Incentive Plan at an exercise price of $0.65
per share, which equaled the closing price of our common stock on the NYSE Amex on April 5, 2010. These options fully vested as of April 5, 2010 and
will expire on April 4, 2020. The employment agreement also provides that Mr. Levine will be eligible to receive, among other things, an annual cash
bonus upon the achievement of financial performance targets under any annual cash incentive program in effect from time to time or otherwise in the
discretion of our Board or Compensation Committee. Mr. Levine did not receive an annual cash bonus during 2010. In addition, under the employment
agreement, we are required to reimburse Mr. Levine for business expenses in accordance with our policies and procedures for expense reimbursement. Upon
the termination of the employment agreement by us without Cause (as defined in the employment agreement) or upon Mr. Levines
resignation for Good Reason (as defined in the employment agreement), Mr. Levine will be entitled to receive all base salary and annual
cash bonus compensation which has been fully earned but has not yet been paid to him and all
28
business expenses incurred by him
which have not yet been reimbursed and a one-time lump sum payment in an amount equal to fifty percent (50%) of Mr. Levines annual base salary in
effect as of the effective date of termination, and we, at our sole expense, would maintain in full force and effect for a period of six months for the
continued benefit of Mr. Levine and his spouse and dependents all welfare benefit plans and programs, including, without limitation, medical, dental,
disability and accidental death and dismemberment plans and programs, in which Mr. Levine or his spouse or dependents were participating. The
employment agreement also includes non-disclosure, non-solicitation, anti-raiding and non-disparagement covenants by Mr. Levine.
Amendment to Employment Agreement
with Arthur R. Levine
. On September 1, 2010, Mr. Levines employment agreement was amended to reflect that Mr. Levine was appointed to serve
as our Chief Financial Officer, that he would report directly to the Chairman of the Board of Directors and that his annual base salary was increased
to $170,000. Mr. Levine also continues to serve as our Vice President Finance.
Letter Agreement with Mark S.
Deutsch.
On May 3, 2010, we and Mr. Deutsch, our then-serving Chief Financial Officer, entered into a letter agreement pursuant to which Mr.
Deutschs employment with us ceased, effective May 21, 2010. Under the terms and conditions of the letter agreement, we agreed to pay Mr. Deutsch
a separation payment in an amount equal to his then-current annual base salary. This separation payment was be paid in regular bi-weekly installments
until September 22, 2010, at which time the remaining amount of the separation payment was paid to Mr. Deutsch in one lump-sum payment. The letter
agreement further provided that all options to purchase shares of our common stock previously granted to, and then held by, Mr. Deutsch will remain in
full force and effect until the earlier of their exercise in full or their respective expiration dates, notwithstanding any contrary provisions
contained in our equity incentive plans pursuant to which such options were granted or agreements between us and Mr. Deutsch with respect to such
options. In addition, we agreed to pay for Mr. Deutschs health insurance under COBRA until May 21, 2011. The letter agreement also includes a
release by Mr. Deutsch in favor of us, as well as a non-disparagement covenant by Mr. Deutsch.
Employment Agreement with Steven E.
Lufkin.
On January 4, 2010, we entered into an employment agreement with Steven E. Lufkin, who then served as our General Manager. Mr.
Lufkins employment agreement had an initial term of two years and provided for automatic successive one year renewal periods unless either Mr.
Lufkin or we exercised the option to allow the employment agreement to expire at the end of the then-current term. Under the employment agreement, Mr.
Lufkin received a signing bonus of $15,000 and an annual base salary of $225,000, and he was eligible to receive, among other things, an annual cash
bonus of up to 50% of his base salary upon the achievement of financial performance targets under any annual cash incentive program in effect from time
to time or otherwise in the discretion of our Board or Compensation Committee. Mr. Lufkin did not receive an annual cash bonus during 2010. In
addition, under the employment agreement, we were required to reimburse Mr. Lufkin for certain relocation and business expenses. The employment
agreement also provided that, (i) upon the termination of the employment agreement by us with Cause (as defined in the employment
agreement) or upon Mr. Lufkins resignation other than for Good Reason (as defined in the employment agreement), Mr. Lufkin would be
entitled to receive all base salary compensation which had been fully earned but had not yet been paid to him, and all of Mr. Lufkins unvested
equity-based awards would be forfeited, (ii) upon the expiration of the employment agreement as a result of either our or Mr. Lufkins election to
allow the employment agreement to expire at the end of the then-current term, Mr. Lufkin would be entitled to receive or be reimbursed for, as the case
may be, all base salary and annual cash bonus compensation which had been fully earned but had not yet been paid to him and all relocation and business
expenses incurred by him which had not yet been reimbursed (such compensation, collectively, the Lufkin Accrued Compensation), and (iii)
upon the termination of the employment agreement by us without Cause or as a result of Mr. Lufkins Disability (as defined
in the employment agreement) or death, or upon Mr. Lufkins resignation for Good Reason, including, without limitation, as a result of
a Change in Control (as defined in the employment agreement) during the initial two-year term of the employment agreement, Mr. Lufkin or
his estate, as the case may be, would be entitled to receive the Lufkin Accrued Compensation and a one-time lump sum payment in an amount equal to Mr.
Lufkins then-current base salary. The employment agreement further provided that, in the event we terminated the employment agreement without
Cause, the employment agreement was terminated as a result of Mr. Lufkins Disability or Mr. Lufkin resigned for
Good Reason, including, without limitation, as a result of a Change in Control during the initial two-year term of the
employment agreement, we, at our sole
29
expense, would maintain in full
force and effect for a period of twelve months for the continued benefit of Mr. Lufkin and his spouse and dependents all welfare benefit plans and
programs, including, without limitation, medical, dental, disability and accidental death and dismemberment plans and programs, in which Mr. Lufkin or
his spouse or dependents were participating, and we, at our sole expense, would continue Mr. Lufkins and his spouses and dependents
medical coverage for a period ending upon the earlier of the one year anniversary of the termination of the employment agreement and such time as Mr.
Lufkin became covered by another employer group health plan or by Medicare. The employment agreement also included non-disclosure, non-solicitation,
anti-raiding and non-disparagement covenants by Mr. Lufkin.
Confidential General Release of All
Claims with Steven E. Lufkin
. In connection with Mr. Lufkins resignation as our General Manager on September 30, 2010, we and Mr. Lufkin
entered into a confidential general release of all claims on September 30, 2010, pursuant to which, among other things, we agreed to pay Mr. Lufkin a
one-time lump-sum payment of $225,000. We also agreed, as had been contemplated by Mr. Lufkins employment agreement, to maintain in full force
and effect for a period of twelve months for the continued benefit of Mr. Lufkin and his spouse and dependents all welfare benefit plans and programs
in which Mr. Lufkin or his spouse or dependents were participating at September 30, 2010 and to continue Mr. Lufkins and his spouses and
dependents medical coverage for a period ending upon the earlier of September 30, 2011 and such time as Mr. Lufkin becomes covered by another
employer group health plan or by Medicare. Under the terms of the confidential general release of all claims, Mr. Lufkin provided a general release in
favor of us. The confidential general release of all claims also contains an acknowledgement by Mr. Lufkin that he continues to be bound by
non-disclosure, non-solicitation and anti-raiding covenants contained in his employment agreement with us.
COMPENSATION OF DIRECTORS
The Compensation Committee recommends
director compensation to the Board of Directors, and the Board of Directors approves director compensation, based on factors it considers appropriate,
market conditions and trends and the recommendations of management.
In accordance with the Companys
practice of compensating directors who are deemed to be independent under the NYSE Amex rules relating to the independence of directors for
their service on the Board of Directors, Audit Committee and Compensation Committee, on June 10, 2010, (i) each of the Companys directors who was
deemed to be independent under the NYSE Amex rules relating to the independence of directors was granted, in consideration for his service
on the Board of Directors, an annual cash retainer of $20,000, payable in four equal quarterly installments, (ii) each member of the Audit Committee
was granted, in consideration for his service on such committee, an annual cash retainer of $7,500, payable in four equal quarterly installments, (iii)
each member of the Compensation Committee was granted, in consideration for his service on such committee, an annual cash retainer of $5,000, payable
in four equal quarterly installments, and (iv) each of the Companys directors who was deemed to be independent under the NYSE Amex
rules relating to the independence of directors was awarded a grant of options to purchase 25,000 shares of the Companys Common Stock under the
Companys 2009 Equity Incentive Plan with an exercise price of $0.53 per share, which was the closing price of the Companys Common Stock on
the NYSE Amex on the grant date, and which fully vested immediately upon grant.
On November 10, 2010, the Compensation
Committee recommended, and the Board of Directors approved, a change to the Companys practice of compensating directors who are deemed to be
independent under the NYSE Amex rules relating to the independence of directors for his services on the Board of Directors, Audit Committee
and Compensation Committee, such that the options granted will terminate (to the extent not previously exercised or terminated) one month after such
time, if any, as the applicable directors service on the Board of Directors ceases. After their appointment to the Board of Directors, on
November 10, 2010, each of Philippe Gadal, Pharm. D., and David M. Templeton was paid and granted compensation for his services on the Board of
Directors, Audit Committee and Compensation Committee in accordance with the Companys then current practices as described in further detail above
and after giving effect to the change in practice also described above.
Prior to 2009, directors who were not
deemed to be independent under the NYSE Amex rules relating to the independence of directors, including directors who were employed by the
Company, IVAX Corporation,
30
Teva Pharmaceutical Industries
Limited or Teva North America, did not receive any compensation for their service on the Board, Audit Committee or Compensation Committee. On January
23, 2009, however, the Compensation Committee recommended, and the Board of Directors approved, a change to this practice pursuant to which
non-employee directors who were not independent under applicable NYSE Amex rules would be eligible to receive compensation for their
service on the Board of Directors. Consistent with this change in practice and the related director compensation granted during 2009, on June 10, 2010
the Board of Directors approved an annual cash retainer of $20,000 to be paid in four equal quarterly installments to each of Patrice R. Debregeas and
Paul F. Kennedy, neither of whom were at that time employed by the Company, for their service on the Board of Directors, notwithstanding the fact that
neither Mr. Debregeas nor Mr. Kennedy was an independent director under the NYSE Amex rules relating to the independence of
directors.
Upon their appointment on September 1,
2010, Suresh Vazirani and Kishore Kris Dudani stated that, as employees of ERBA, they would not require any compensation for their service
on the Board of Directors, Audit Committee or Compensation Committee. As a result, on September 1, 2010, the Compensation Committee recommended, and
the Board of Directors approved, a change to the Companys practice of compensating directors who were not deemed to be independent
under the NYSE Amex rules relating to the independence of directors, such that directors who were not deemed to be independent under the
NYSE Amex rules relating to the independence of directors, including directors who are employed by the Company or ERBA, will not receive any
compensation for their service on the Board of Directors, Audit Committee or Compensation Committee.
Director Compensation 2010
The following table sets forth certain
information regarding the compensation paid to the Companys directors for their service during the fiscal year ended December 31,
2010.
Name
|
|
|
|
Fees Earned or
Paid in Cash
|
|
Stock
Awards
|
|
Option
Awards
(5)
|
|
Non-Equity
Incentive Plan
Compensation
|
|
Change
in Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
|
|
All Other
Compensation
|
|
Total
|
Suresh
Vazirani
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kishore
Kris Dudani
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philippe
Gadal, Pharm.D.
(1)
|
|
|
|
$
|
10,833
|
|
|
|
|
|
|
$
|
7,519
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
18,352
|
|
John B.
Harley, M.D., Ph.D.
|
|
|
|
$
|
25,000
|
|
|
|
|
|
|
$
|
12,933
|
|
|
|
|
|
|
|
|
|
|
$
|
42,000
|
(6)
|
|
$
|
79,933
|
|
David M.
Templeton
(2)
|
|
|
|
$
|
8,125
|
|
|
|
|
|
|
$
|
7,519
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
15,644
|
|
Jerry C.
Benjamin
(3)
|
|
|
|
$
|
20,625
|
|
|
|
|
|
|
$
|
12,933
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
33,558
|
|
Patrice R.
Debregeas
(4)
|
|
|
|
$
|
15,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
15,000
|
|
Paul F.
Kennedy
(4)
|
|
|
|
$
|
15,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
15,000
|
|
Laurent Le
Portz
(3)
|
|
|
|
$
|
24,375
|
|
|
|
|
|
|
$
|
12,933
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
37,308
|
|
Lawrence G.
Meyer
(4)
|
|
|
|
$
|
18,750
|
|
|
|
|
|
|
$
|
12,933
|
|
|
|
|
|
|
|
|
|
|
$
|
119,000
|
(7)
|
|
$
|
150,683
|
|
(1)
|
|
Each of Messrs. Vazirani and Dudani and Dr. Gadal was appointed
to the Board of Directors on September 1, 2010.
|
(2)
|
|
Mr. Templetons appointment to the Board of Directors
became effective on September 30, 2010.
|
(3)
|
|
Each of Messrs. Benjamin and LePortz served on the Board of
Directors until his resignation from the Board of Directors on September 30, 2010.
|
(4)
|
|
Each of Messrs. Debregeas, Kennedy and Meyer served on the Board
of Directors until his resignation from the Board of Directors on September 1, 2010.
|
(5)
|
|
Represents the aggregate grant date fair value of option awards
calculated in accordance with Codification Topic 718,
Compensation Stock Compensation
. Assumptions used in the calculation of these
amounts are included in Note 11 to the Companys Consolidated Financial Statements,
Shareholders Equity
, contained in the Annual
Report on Form 10-K which the Company filed with the SEC on March 30, 2011.
|
31
|
|
The table below sets forth, as of December 31, 2010, the
aggregate number of stock options held by each of the individuals included in the table above:
|
Name
|
|
|
|
Stock Options
|
Suresh
Vazirani
|
|
|
|
|
|
|
Kishore
Kris Dudani
|
|
|
|
|
|
|
Philippe
Gadal, Pharm.D.
|
|
|
|
|
14,041
|
|
John B.
Harley, M.D., Ph.D.
|
|
|
|
|
165,000
|
|
David M.
Templeton
|
|
|
|
|
14,041
|
|
Jerry C.
Benjamin
|
|
|
|
|
75,000
|
|
Patrice R.
Debregeas
|
|
|
|
|
|
|
Paul F.
Kennedy
|
|
|
|
|
|
|
Laurent Le
Portz
|
|
|
|
|
75,000
|
|
Lawrence G.
Meyer
|
|
|
|
|
75,000
|
|
(6)
|
|
Represents the aggregate dollar amount earned by Dr. Harley
during 2010 under that certain oral consulting agreement between Dr. Harley and ImmunoVision, pursuant to which Dr. Harley was paid $2,000 per month
through July 2009, $5,000 per month from August 2009 to June 2010, and $2,000 per month thereafter, to provide ImmunoVision with technical guidance and
business assistance on an as-needed basis.
|
(7)
|
|
Represents the aggregate dollar amount earned by Mr. Meyer
during 2010 in consideration for his provision of certain legal services which he provided to the Company during the year on an as-needed
basis.
|
32
AUDIT COMMITTEE REPORT
From the beginning of the 2010 fiscal
year through September 1, 2010, the Audit Committee consisted of Laurent Le Portz, Chairman, and Jerry C. Benjamin. On September 1, 2010, Philippe
Gadal, Pharm.D., was appointed to the Board of Directors, the Audit Committee and the Compensation Committee. Accordingly, from September 1, 2010
through September 30, 2010, the Audit Committee consisted of Messrs. Le Portz and Benjamin and Dr. Gadal. On September 30, 2010, each of Messrs. Le
Portz and Benjamin resigned from the Board of Directors and the committees of the Board of Directors on which they served, including the Audit
Committee. Also on September 30, 2010, David M. Templeton was appointed to the Board of Directors, the Audit Committee and the Compensation Committee.
Accordingly, from September 30, 2010 through the end of the 2010 fiscal year, the Audit Committee consisted of, and the Audit Committee currently
consists of Dr. Gadal, Chairman, and Mr. Templeton. As a smaller reporting company, as such term is defined under the Exchange Act, and in
accordance with applicable rules and regulations of the NYSE Amex, the Company is permitted to have an audit committee consisting of just two
members.
The Audit Committee reviewed and
discussed the Companys audited consolidated financial statements for the fiscal year ended December 31, 2010 with management and the
Companys independent auditors for the fiscal year ended December 31, 2010, Grant Thornton LLP (
Grant
Thornton
).
The Audit Committee also discussed with
Grant Thornton the matters required to be discussed with audit committees under generally accepted auditing standards, including, among other things,
matters required to be discussed by the statement on Auditing Standards No. 61, as amended (AICPA,
Professional Standards
, Vol. 1. AU section
380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T.
The Audit Committee has received the
written disclosures and the letter from Grant Thornton required by applicable requirements of the Public Company Accounting Oversight Board regarding
Grant Thorntons communications with the Audit Committee concerning independence, and the Audit Committee discussed with Grant Thornton its
independence from the Company. When considering Grant Thorntons independence, the Audit Committee considered whether Grant Thorntons
provision of services to the Company was compatible with maintaining its independence. The Audit Committee also reviewed, among other things, the
amount of fees paid to Grant Thornton for audit and non-audit services.
The Audit Committee also met with Grant
Thornton, with and without management present, to discuss the results of its examinations, its evaluations of the Companys internal controls and
the overall quality of the Companys financial reporting.
Based on the Audit Committees
review and these meetings, discussions and reports, the Audit Committee recommended to the Board of Directors that the Companys audited
consolidated financial statements for the fiscal year ended December 31, 2010 be included in the Companys Annual Report on Form 10-K for the
fiscal year ended December 31, 2010.
Submitted by the Members of the Audit
Committee:
Philippe Gadal, Pharm.D., Chairman
David M.
Templeton
33
PRINCIPAL ACCOUNTING FEES AND
SERVICES
The following table sets forth the
aggregate fees billed to the Company by PricewaterhouseCoopers LLP (
PwC
), the Companys principal accountant for the fiscal
year ended December 31, 2009 and for the period from January 1, 2010 through June 11, 2010, and Grant Thornton, the Companys principal accountant
for the period from June 18, 2010 through December 31, 2010.
|
|
|
|
For the years ended
December 31,
|
|
|
|
|
|
2010
|
|
2009
|
Audit Fees
|
|
|
|
$
|
217,400
|
|
|
$
|
377,700
|
|
Audit-Related
Fees
|
|
|
|
|
|
|
|
|
|
|
Tax Fees
|
|
|
|
|
|
|
|
|
|
|
All Other
Fees
|
|
|
|
|
|
|
|
|
|
|
Total Fees
|
|
|
|
$
|
217,400
|
|
|
$
|
377,700
|
|
In the table above, pursuant to their
definitions under the applicable regulations of the SEC, audit fees are fees for professional services rendered for the audit of the
Companys annual financial statements and review of the Companys financial statements included in its quarterly reports on Form 10-Q and for
services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements; audit-related
fees are fees for assurance and related services that are reasonably related to the performance of the audit and review of the Companys
financial statements, and primarily include accounting consultations and audits in connection with potential acquisitions; tax fees are
fees for tax compliance, tax advice and tax planning; and all other fees are fees for any services not included in the first three
categories.
The Audit Committee is responsible for
pre-approving all audit services and permitted non-audit services to be performed by the Companys principal accountant, except in those instances
which do not require such pre-approval pursuant to the applicable regulations of the SEC. The Audit Committee has established policies and procedures
for its pre-approval of audit services and permitted non-audit services and, from time to time, the Audit Committee reviews and revises its policies
and procedures for pre-approval.
34
INDEPENDENT PUBLIC ACCOUNTANTS
Grant Thornton has been selected by the
Companys Audit Committee to serve as the Companys independent registered public accounting firm for the fiscal year ending December 31,
2011.
Grant Thornton acted as the
Companys independent registered public accounting firm for the fiscal year ended December 31, 2010. PwC acted as the Companys independent
registered public accounting firm for the fiscal year ended December 31, 2009.
On June 11, 2010, the Company, upon the
approval of the Audit Committee, dismissed PwC as the Companys independent registered public accounting firm. The Companys decision to
dismiss PwC was made in connection with the Companys election to engage a new independent registered public accounting firm.
The audit reports of PwC on the
Companys financial statements for the fiscal years ended December 31, 2009 and 2008 did not contain an adverse opinion or disclaimer of opinion,
nor was it qualified or modified as to uncertainty, audit scope or accounting principles.
During the fiscal years ended December
31, 2009 and 2008 and the interim period through June 11, 2010, the Company had no disagreements with PwC on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which disagreement, if not resolved to PwCs satisfaction, would have
caused PwC to make reference to the subject matter of the disagreement in connection with its reports. In addition, during that time, there were no
reportable events, as that term is defined in Item 304(a)(1)(v) of Regulation S-K.
On June 18, 2010, the Company appointed
Grant Thornton as its new independent registered public accounting firm for the Companys fiscal year ended December 31, 2010. The decision to
appoint Grant Thornton was made and approved by the Audit Committee.
During the fiscal years ended December
31, 2009 and 2008 and the interim period through June 18, 2010, the Company had not consulted with Grant Thornton regarding: (i) either the application
of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the
Companys financial statements; or (ii) any matter that was the subject of either a disagreement, as that term is defined in Item
304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of Regulation S-K, or a reportable event, as that term is defined
in Item 304(a)(1)(v) of Regulation S-K.
Representatives of Grant Thornton are
expected to be present at the Annual Meeting, will have the opportunity to make a statement if they desire to do so and will be available to respond to
appropriate questions from stockholders.
35
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED
UPON
As described above, on September 1,
2010, ERBA purchased from the Debregeas-Kennedy Group all of the approximately 72.4% of the issued and outstanding shares of the Companys Common
Stock owned by the Debregeas-Kennedy Group for $0.75 per share, or an aggregate purchase price of approximately $15,000,000. ERBA used cash on hand to
fund the purchase price. As a result of the Share Acquisition, ERBA, which previously indirectly beneficially owned 8,400 shares of the Companys
Common Stock, now directly or indirectly beneficially owns 20,034,713 shares of the Companys Common Stock, or approximately 72.5% of the issued
and outstanding shares of the Companys Common Stock, which provides ERBA with the voting power to control the election of the Companys
directors and any other matter requiring the affirmative vote or consent of a majority of the Companys stockholders. Transasia Bio-medicals Ltd.
is the parent company of ERBA.
The Board of Directors of the Company
is composed of five people Suresh Vazirani, Kishore Kris Dudani, Philippe Gadal, Ph.D., David M. Templeton and John B. Harley, M.D.,
Ph.D. Mr. Vazirani, who serves as the Companys executive Chairman of the Board of Directors, is the Chief Executive Officer and Managing Director of ERBA. Mr. Dudani
is the Marketing and Business Development RepresentativeSouth, Central and Latin America, of ERBA. On September 2, 2010, ERBA, Transasia
Bio-medicals Ltd., Erba Lachema s.r.o. and Messrs. Vazirani and Dudani filed a Schedule 13D as a group, as such term is used in Section
13(d) of the Securities Exchange Act of 1934, as amended (the
Exchange Act
). As set forth in the Schedule 13D, each of ERBA,
Transasia and Messrs. Vazirani and Dudani may be deemed to have an aggregate beneficial ownership of 20,034,713, or 72.5%, of the issued and
outstanding shares of the Companys Common Stock; provided, however, that each of Messrs. Vazarani and Dudani disclaims such beneficial ownership
except to the extent of his pecuniary interest therein. Erba Lachema s.r.o. may only be deemed to be the beneficial owner of the 8,400 shares of the
Companys Common Stock that it owns directly.
36
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND
MANAGEMENT
The following table indicates, as of
April 8, 2011, information about the beneficial ownership of the Companys common stock by (i) each director as of April 8, 2011, (ii) each Named
Executive Officer, (iii) all directors and executive officers as of April 8, 2011 as a group and (iv) each person who the Company knows beneficially
owns more than 5% of the Companys common stock. All such shares were owned directly with sole voting and investment power unless otherwise
indicated.
Name
|
|
|
|
Shares (#)
(1)
|
|
Percent of Class (%)
|
ERBA Diagnostics
Mannheim GmbH
(2)
|
|
|
|
|
20,034,713
|
|
|
|
72.5
|
%
|
Mallaustr
69-73
|
|
|
|
|
|
|
|
|
|
|
Mannheim,
Germany 68219
|
|
|
|
|
|
|
|
|
|
|
|
Transasia
Bio-medicals Ltd.
(2)
|
|
|
|
|
20,034,713
|
|
|
|
72.5
|
%
|
Transasia
House
|
|
|
|
|
|
|
|
|
|
|
8 Chandivali
Studio Road
|
|
|
|
|
|
|
|
|
|
|
Mumbai, India
400072
|
|
|
|
|
|
|
|
|
|
|
|
Suresh
Vazirani
(2)
|
|
|
|
|
20,034,713
|
|
|
|
72.5
|
%
|
Transasia
House
|
|
|
|
|
|
|
|
|
|
|
8 Chandivali
Studio Road
|
|
|
|
|
|
|
|
|
|
|
Mumbai, India
400072
|
|
|
|
|
|
|
|
|
|
|
|
Kishore
Kris Dudani
(2)
|
|
|
|
|
20,034,713
|
|
|
|
72.5
|
%
|
Transasia
House
|
|
|
|
|
|
|
|
|
|
|
8 Chandivali
Studio Road
|
|
|
|
|
|
|
|
|
|
|
Mumbai, India
400072
|
|
|
|
|
|
|
|
|
|
|
|
Kevin D. Clark
|
|
|
|
|
218,699
|
(3)
|
|
|
*
|
|
|
Charles R.
Struby, Ph.D.
(4)
|
|
|
|
|
0
|
(5)
|
|
|
|
|
|
Arthur R. Levine
|
|
|
|
|
50,000
|
(6)
|
|
|
*
|
|
|
Mark S.
Deutsch
(7)
|
|
|
|
|
128,000
|
(8)
|
|
|
*
|
|
|
Steven E.
Lufkin
(9)
|
|
|
|
|
0
|
(10)
|
|
|
|
|
|
Philippe Gadal,
Pharm.D.
|
|
|
|
|
14,041
|
(11)
|
|
|
*
|
|
|
John B. Harley,
M.D., Ph.D.
|
|
|
|
|
165,000
|
(12)
|
|
|
*
|
|
|
David M.
Templeton
|
|
|
|
|
14,041
|
(13)
|
|
|
*
|
|
|
All directors
and executive
officers as of April 8, 2011
as a group (7 persons)
|
|
|
|
|
20,903,128
|
(14)
|
|
|
74.7
|
%
|
*
|
|
Represents beneficial ownership of less than 1%.
|
(1)
|
|
For purposes of this table, beneficial ownership is computed
pursuant to Rule 13d-3 under the Exchange Act.
|
(2)
|
|
Includes 20,026,313 shares of the Companys Common Stock
owned directly by ERBA and 8,400 shares of the Companys Common Stock owned directly by Erba Lachema s.r.o. On September 2, 2010, ERBA, Transasia
Bio-medicals Ltd., Erba Lachema s.r.o. and Messrs. Vazirani and Dudani filed a Schedule 13D as a group, as such term is used in Section
13(d) of the Exchange Act. As set forth in the Schedule 13D, each of ERBA, Transasia and Messrs. Vazirani and Dudani may be deemed to have an aggregate
beneficial ownership of 20,034,713, or 72.5%, of the issued and outstanding shares of the Companys Common Stock; provided, however, that each of
Messrs. Vazarani and Dudani disclaims such beneficial ownership except to the extent of his pecuniary interest therein. Erba Lachema s.r.o. may only
be
|
37
|
|
deemed to be the beneficial owner of the 8,400 shares of the
Companys Common Stock that it owns directly.
|
(3)
|
|
Includes options to purchase 100,000 shares of the
Companys common stock granted to Mr. Clark and 97,799 shares of the Companys common stock owned by Mr. Clark through the Companys
401(k) Plan.
|
(4)
|
|
Effective September 3, 2010, Dr. Struby resigned as the
Companys Chief Executive Officer and President. However, Dr. Struby is included in this table because he is a Named Executive
Officer.
|
(5)
|
|
On December 20, 2010, the Company and Dr. Struby entered into a
confidential general release of all claims, pursuant to which, among other things, Dr. Struby forfeited in its entirety the option to purchase 100,000
shares of the Companys common stock which was previously granted to Dr. Struby. As a result, Dr. Struby no longer holds any options to purchase
shares of the Companys common stock.
|
(6)
|
|
Includes options to purchase 50,000 shares of the Companys
common stock granted to Mr. Levine.
|
(7)
|
|
Effective May 21, 2010, Mr. Deutsch resigned as the
Companys Chief Financial Officer. However, the shares of the Companys common stock beneficially owned by Mr. Deutsch are included in this
table because he is a Named Executive Officer.
|
(8)
|
|
Includes options to purchase 110,000 shares of the
Companys common stock granted to Mr. Deutsch.
|
(9)
|
|
Effective September 30, 2010, Mr. Lufkin resigned as the
Companys General Manager. However, Mr. Lufkin is included in this table because he is a Named Executive Officer.
|
(10)
|
|
Includes options to purchase 14,041 shares of the Companys
common stock granted to Dr. Gadal.
|
(11)
|
|
Includes options to purchase 165,000 shares of the
Companys common stock granted to Dr. Harley.
|
(12)
|
|
Includes options to purchase 14,041 shares of the Companys
common stock granted to Mr. Templeton.
|
(13)
|
|
Does not include the 128,000 shares of the Companys common
stock (including the options to purchase 110,000 shares of the Companys common stock) beneficially owned by Mr. Deutsch because of his
resignation as Chief Financial Officer, effective May 21, 2010.
|
38
OTHER MATTERS
As of the date of this Proxy Statement,
the Board of Directors is not aware of any matters, other than those referred to in the accompanying Notice of Meeting, to be brought before the Annual
Meeting. However, if any other matters should properly come before the Annual Meeting, the persons named as proxy holders will have the discretion to
vote any shares of the Companys Common Stock for which they hold proxies in accordance with their best judgment. If, for any reason, any of the
nominees for election to the Board of Directors is not available as a candidate for director, then the persons named as proxy holders will vote any
shares of the Companys Common Stock for which they hold proxies for such other candidate(s) as may be nominated by the Board of
Directors.
IMPORTANT NOTICE REGARDING AVAILABILITY
OF PROXY
MATERIALS FOR THE ANNUAL MEETING
This Proxy Statement (including a form
of the accompanying proxy card) is available at www.ivaxdiagnostics.com/proxystatements.html, and the Companys Annual Report to Stockholders for
the fiscal year ended December 31, 2010 is available at www.ivaxdiagnostics.com/annualreports.html.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to
be presented at the annual meeting of stockholders of the Company to be held during the fiscal year ending December 31, 2012, and to be included in the
Companys proxy statement and form of proxy for that meeting, must be in writing and in compliance with applicable rules and regulations and
received by the Secretary of the Company at its main offices at 2140 North Miami Avenue, Miami, Florida 33127 no later than December 20, 2011. In
addition to any other applicable requirements, for a stockholder to properly present any proposal at the annual meeting of stockholders of the Company
to be held during the fiscal year ending December 31, 2012, but not to be included in the Companys proxy statement and form of proxy for that
meeting, the proposal must be in writing and in compliance with the Companys Amended and Restated Bylaws, as amended, and received by the
Secretary of the Company at its main offices, as listed above, no earlier than December 20, 2011 and no later than February 18,
2012.
INCORPORATION BY REFERENCE
The Company is incorporating by
reference into this Proxy Statement certain information that is contained in the Companys Annual Report to Stockholders which is being
delivered to you together with this Proxy Statement in connection with the Annual Meeting (the
Annual Report to Stockholders
). We
incorporate by reference only the specific portions of the Annual Report to Stockholders listed below:
|
|
the section entitled Financial Statements and
Supplementary Data, which comprises Item 8 of the Annual Report on Form 10-K contained on pages F-1 to F-22 of the Annual Report to
Stockholders (and which was contained on pages F-1 to F-28 of the Annual Report on Form 10-K);
|
|
|
the section entitled
Managements Discussion and Analysis of Financial Condition and Results of Operations, which comprises Item
7 of the Annual Report on Form 10-K contained on pages 23 to 32 of the Annual Report to Stockholders (and which was
contained on pages 32 to 45 of the Annual Report on Form 10-K);
|
|
|
the section entitled Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure, which comprises Item 9 of the Annual Report on Form 10-K contained on page 34 of
the Annual Report to Stockholders (and which was contained on page 47 of the Annual Report on Form 10-K); and
|
|
|
the section entitled Quantitative and Qualitative
Disclosures About Market Risk, which comprises Item 7A of the Annual Report on Form 10-K contained on page 32 of the Annual Report
to Stockholders (and which was contained on page 45 of the Annual Report on Form 10-K).
|
39
The Annual Report on Form 10-K was
filed with the Securities and Exchange Commission on March 30, 2011 and is contained in the Annual Report to Stockholders which is being delivered to
you together with this Proxy Statement. The information incorporated by reference is considered to be part of this Proxy Statement.
BY ORDER OF THE
BOARD OF DIRECTORS
Kevin D. Clark,
President, Chief Executive Officer,
and Chief Operating Officer
April 18, 2011
40
Appendix A
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this
Agreement
) is entered into as of the 8
th
day of April, 2011, by and
between IVAX Diagnostics, Inc., a corporation organized and existing under the laws of the State of Delaware (the
Company
), and ERBA
Diagnostics Mannheim GmbH, a company headquartered in Germany (the
Purchaser
).
WHEREAS, the Company desires to sell to
the Purchaser, and the Purchaser desires to purchase from the Company, shares of the Companys common stock, par value $.01 per share (the
Common Stock
), and warrants to purchase additional shares of Common Stock, in each case on the terms and subject to the conditions
set forth in this Agreement.
NOW, THEREFORE, in consideration of the
premises and the representations, warranties, covenants and agreements contained in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereby agree as follows:
Article 1
Purchase and Sale
1.1
|
|
Purchase and Sale Transaction
.
|
(a) Subject to the terms and
conditions of this Agreement, the Company hereby agrees to issue and sell to the Purchaser, and the Purchaser hereby agrees to purchase from the
Company: (i) an aggregate of 20,000,000 shares of Common Stock (the
Shares
) at a purchase price of U.S.$0.75 per Share, which Shares
shall be sold and issued to, and purchased by, the Purchaser in installments as set forth in
Section 1.1(b)
; and (ii) warrants (the
Warrants
), substantially in the form attached hereto as
Exhibit A
, to purchase an additional 20,000,000 shares of Common
Stock (the
Warrant Shares
) at an exercise price of U.S.$0.75 per Warrant Share. The purchase and sale transactions contemplated by
the preceding sentence, together with all other transactions contemplated by this Agreement, are sometimes hereinafter referred to, collectively, as
the
Transaction
. The Shares, the Warrants and the Warrant Shares are sometimes hereinafter referred to, collectively, as the
Securities
and, individually, as a
Security
. The aggregate purchase price to be paid by the Purchaser to the
Company in consideration for the issuance of the Shares and the Warrants shall be U.S.$15,000,000 (the
Purchase
Price
).
(b) The Shares shall be sold
and issued to, and purchased by, the Purchaser as follows: (i) 6,666,667 of the Shares (the
Initial Tranche
) shall be sold and
issued to the Purchaser at the Initial Closing (as hereinafter defined), at which time the Purchaser shall pay to the Company U.S.$5,000,000.25 (the
Initial Purchase Price
); (ii) an additional 6,666,667 of the Shares (the
Second Tranche
) shall be sold and issued
to the Purchaser at the Second Closing (as hereinafter defined), at which time the Purchaser shall pay to the Company an additional U.S.$5,000,000.25
(the
Second Purchase Price
); and (iii) the remaining 6,666,666 of the Shares (the
Final Tranche
) shall be sold
and issued to the Purchaser at the Final Closing (as hereinafter defined), at which time the Purchaser shall pay to the Company an additional
U.S.$4,999,999.50 (the
Final Purchase Price
).
(a) The consummation of the
sale and issuance to, and purchase by, the Purchaser of the Initial Tranche and of the delivery to the Purchaser of the Warrants (the
Initial
Closing
) shall take place at such time as shall be fixed by mutual agreement of the Company and the Purchaser as promptly as practicable
after the satisfaction or waiver of all of the conditions precedent set forth under
Article 5
. At the Initial Closing, (i) the Purchaser shall
pay to the Company the Initial Purchase Price and (ii) the Company shall deliver to the Purchaser (A) a stock certificate representing the Initial
Tranche and (B) the Warrants.
A-1
(b) The consummation of the
sale and issuance to, and purchase by, the Purchaser of the Second Tranche (the
Second Closing
) shall take place at such time as
shall be fixed by mutual agreement of the Company and the Purchaser after the Initial Closing, but in any event by no later than six months after the
Initial Closing. At the Second Closing, (i) the Purchaser shall pay to the Company the Second Purchase Price and (ii) the Company shall deliver to the
Purchaser a stock certificate representing the Second Tranche.
(c) The consummation of the
sale and issuance to, and purchase by, the Purchaser of the Final Tranche (the
Final Closing
) shall take place at such time as shall
be fixed by mutual agreement of the Company and the Purchaser after the Initial Closing and the Second Closing, but in any event by no later than one
year after the Initial Closing. At the Final Closing, (i) the Purchaser shall pay to the Company the Final Purchase Price and (b) the Company shall
deliver to the Purchaser a stock certificate representing the Final Tranche.
(d) Each of the Initial
Closing, the Second Closing and the Final Closing shall be held at the offices of Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., 150
West Flagler Street, Miami, Florida 33130.
(e) Each of the Initial
Purchase Price, the Second Purchase Price and the Final Purchase Price shall be paid by the Purchaser to the Company by wire transfer of immediately
available funds in United States Dollars.
Article 2
Representations and Warranties of the
Company
The Company represents and warrants to
the Purchaser as follows:
2.1
Authorization
. The execution and delivery by the Company of this Agreement have been duly authorized by all
requisite corporate action. Except for authorizations, consents, waivers and approvals to be obtained at or prior to the Initial Closing, the
performance by the Company of its obligations hereunder and the issuance, sale and delivery of the Shares and the Warrants have been duly authorized by
all requisite corporate action.
2.2
No
Conflict
. Neither the execution and delivery by the Company of this Agreement, the performance by the Company of its obligations hereunder nor the
issuance, sale and delivery of the Shares or the Warrants will result in any violation of, be in conflict with, or constitute a default under, with or
without the passage of time or the giving of notice: (a) any provision of the Companys Amended and Restated Certificate of Incorporation (the
Certificate of Incorporation
) or Amended and Restated Bylaws, as amended (the
Bylaws
); (b) any provision of any
judgment, decree or order to which the Company is a party or by which it is bound; (c) any material contract or agreement to which the Company is a
party or by which it is bound; or (d) any statute, rule or governmental regulation applicable to the Company; except, in the case of each of the
foregoing, where such violation, conflict, or default would not have a Material Adverse Effect (as hereinafter defined) and except, in the case of each
of the foregoing, provisions, contracts, agreements, statutes, rules or governmental regulations as to which authorizations, consents, amendments,
waivers and approvals will have been obtained or effected at or prior to the Initial Closing. As used herein, the term Material Adverse
Effect shall mean any effect, change, event, state of fact, development, circumstance or condition (including changes in laws, rules or
regulations applicable to the Company and its business) which, when considered individually or in the aggregate with all other effects, changes,
events, state of facts, developments, circumstances and conditions, has materially and adversely affected, or could reasonably be expected to
materially and adversely affect, the results of operations, financial condition, assets, liabilities, or business of the Company and its subsidiaries
taken as a whole; provided, however, that a Material Adverse Effect shall not be deemed to include (i) any changes resulting from general
economic or political conditions, (ii) circumstances that affect the in vitro diagnostics industry and/or the health care industry generally or (iii)
force majeure events, acts of terrorism or acts of war; and provided, further, that, notwithstanding the foregoing, the changes or events described in
clauses (i) through (iii) above shall be regarded in determining
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whether a Material Adverse Effect
has occurred if the effects thereof disproportionately impact or uniquely relate to the Company.
2.3
Valid Issuance
of Shares and Warrants
. When issued, sold and delivered in accordance with this Agreement to the Purchaser upon the Purchasers payment to the
Company therefor as provided hereby, the Shares and the Warrants will have been duly authorized and will be validly issued, and the Shares will be
fully paid and nonassessable with no personal liability attaching to the ownership thereof and will be free and clear of all liens, charges and
encumbrances of any nature whatsoever except for restrictions on transfer under this Agreement and under applicable federal and state securities
laws.
2.4
Validity
.
This Agreement has been duly executed and delivered by the Company and, assuming due and valid authorization, execution and delivery hereof by the
Purchaser, constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms except: (a)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of
creditors rights generally; and (b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable
remedies.
2.5
Brokers and
Finders
. Neither the Company nor any of its subsidiaries, officers, directors or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders fees in connection with the Transaction.
Article 3
Representations and Warranties of the
Purchaser
The Purchaser represents and warrants
to the Company as follows:
3.1
Authorization
. The execution and delivery by the Purchaser of this Agreement and the performance by the Purchaser
of its obligations hereunder have been duly authorized by all requisite company action.
3.2
No
Conflict
. Neither the execution and delivery by the Purchaser of this Agreement nor the performance by the Purchaser of its obligations hereunder
will result in any violation of, be in conflict with, or constitute a default under, with or without the passage of time or the giving of notice: (a)
any provision of the Purchasers governing documents; (b) any provision of any judgment, decree or order to which the Purchaser is a party or by
which it is bound; (c) any material contract or agreement to which the Purchaser is a party or by which it is bound; or (d) any statute, rule or
governmental regulation applicable to the Purchaser; except, in the case of each of the foregoing, provisions, contracts, agreements, statutes, rules
or governmental regulations as to which authorizations, consents, amendments, waivers and approvals will have been obtained or effected at or prior to
the Initial Closing.
3.3
Validity
.
This Agreement has been duly executed and delivered by the Purchaser and, assuming due and valid authorization, execution and delivery hereof by the
Company, constitutes the legal, valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms except:
(a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of
creditors rights generally; and (b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable
remedies.
3.4
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Investment Representations
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(a) The Purchaser: (i) is an
accredited investor within the meaning of Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the
Securities Act
), and was not organized for the specific purpose of acquiring the Securities; or (ii) is not a U.S.
Person within the meaning of Rule 902 of Regulation S promulgated under the Securities Act.
(b) The Purchaser has
sufficient investment knowledge and experience so as to be able to evaluate the risks and merits of its investment in the Company, and the Purchaser is
able financially to bear the risks of its investment.
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(c) It is the present
intention that the Shares and the Warrants being purchased by the Purchaser are being acquired (and, to the extent the Warrants are exercised, the
Warrant Shares will be acquired) for the Purchasers own account for the purpose of investment and not with a present view to or for sale in
connection with any distribution thereof.
(d) The Purchaser
understands that: (i) the Securities have not been registered under the Securities Act by reason of their issuance in a transaction exempt from the
registration requirements of the Securities Act pursuant to Section 4(2) thereof or Rule 506 or 903 promulgated under the Securities Act; (ii) the
Securities must be held indefinitely (or, in the case of the Warrant, until the exercise in full or expiration or termination thereof) unless a
subsequent disposition thereof is registered under the Securities Act or is exempt from such registration; (iii) each stock certificate representing
the Shares, the Warrant and, to the extent the Warrant is exercised, any stock certificate representing the Warrant Shares acquired upon such exercise
will bear a legend, among others, to the effect of clauses (i) and (ii) above; and (iv) the Company will make a notation on its transfer books to the
effect of clauses (i) and (ii) above.
(e) The Purchaser
acknowledges that the Company has made available to the Purchaser all documents and information that the Purchaser has requested relating to the
Company, the Securities, this Agreement and the Transaction.
3.5
Brokers and
Finders
. Neither the Purchaser nor any of its subsidiaries (other than the Company and its subsidiaries), officers, directors or employees has
employed any broker or finder or incurred any liability for any brokerage fees, commissions or finders fees in connection with the
Transaction.
3.6
No Rights as
Stockholder
. The Purchaser acknowledges that, except as otherwise provided herein, its purchase obligations under this Agreement will not entitle
the Purchaser to any of the rights, including, without limitation, voting rights, information rights and rights to receive dividends or distributions,
of a stockholder of the Company until: (i) with respect to the Initial Tranche, the Initial Closing; (ii) with respect to the Second Tranche, the
Second Closing; and (iii) with respect to the Final Tranche, the Final Closing.
Article 4
Covenants and Agreements
4.1
Cooperation;
Commercially Reasonable Efforts
. The Company and the Purchaser shall cooperate with each other and use their respective commercially reasonable
efforts to take or cause to be taken all actions, and do or cause to be done all things, necessary, proper or advisable under this Agreement and
applicable laws, rules and regulations to consummate and make effective the Transaction as soon as practicable, including preparing and filing as
promptly as practicable all documentation to effect all necessary applications, notices, petitions, filings and other documents and to obtain as
promptly as practicable all necessary approvals of the Companys stockholders and all approvals, permits, consents and authorizations necessary or
advisable to be obtained from the any third party and/or any governmental entity in order to consummate the Transaction.
4.2
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Proxy Statement; Company Stockholder Meeting
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(a) As promptly as
practicable after the date of this Agreement, the Company shall prepare and file with the Securities and Exchange Commission (the
SEC
) a Notice of Meeting and Preliminary Proxy Statement relating to a meeting of the Companys stockholders (the
Company Stockholder Meeting
) to be held for the purpose of voting on the Transaction and other matters as may be deemed necessary or
advisable by the Company, including, without limitation, an amendment of the Companys Certificate of Incorporation to increase the number of
authorized shares of the Common Stock (the
Amendment
). As promptly as practicable after filing such Notice of Meeting and
Preliminary Proxy Statement, but in any event subject to the rules and regulations of the SEC, the Company shall prepare and file with the SEC, and
mail to its stockholders of record as of the close of business on the record date established by the Company for the Company Stockholder Meeting (the
Record Stockholders
), a Notice of Meeting and Definitive Proxy
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Statement relating to the Company
Stockholder Meeting. The Notice of Meeting and Preliminary Proxy Statement and Notice of Meeting and Definitive Proxy Statement are sometimes
hereinafter referred to as the
Proxy Statements
.
(b) The Purchaser shall
furnish all information concerning the Purchaser as the Company may reasonably request in connection with the preparation of the Proxy Statements,
including, without limitation, any information in response to comments received from the SEC, if applicable.
(c) The Company Stockholder
Meeting shall be called for a date which, after taking into consideration the provisions of the Certificate of Incorporation and Bylaws, the Delaware
General Corporation Law, the rules and regulations of the SEC and the NYSE Amex and the recommendations of any proxy solicitor engaged by the Company
with respect to the Company Stockholder Meeting and the Transaction, is as prompt as practicable after the Notice of Meeting and Definitive Proxy
Statement is filed with the SEC and mailed to the Record Stockholders.
(d) The Company shall use
its commercially reasonable efforts to secure all required authorizations, consents, waivers, amendments and approvals with respect to the Transaction
and the Amendment, including, without limitation, the stockholder approvals contemplated by the Proxy Statements.
(e) At the Company
Stockholder Meeting, the Purchaser shall vote all of the shares of the Common Stock which it currently beneficially owns, whether directly or
indirectly, in favor of the Transaction and the Amendment.
4.3
Additional
Listing Application
. As promptly as practicable after the date of this Agreement, but in any event after taking into consideration the rules and
regulations of the NYSE Amex with respect to the timing of, and supporting documents required to accompany, the Additional Listing Application (as
hereinafter defined), the Company shall submit to the NYSE Amex an additional listing application relating to the Shares and the Warrant Shares (the
Additional Listing Application
) and shall use its commercially reasonable efforts to secure the NYSE Amex approval of the
Additional Listing Application.
4.4
Compliance with
the Securities Act
. The Purchaser agrees that it will not resell the Securities except in accordance with an available exemption from registration
under the Securities Act or in a transaction registered under the Securities Act. The Purchaser further agrees not to engage in hedging transactions
with regard to the Securities unless in compliance with the Securities Act.
Article 5
Conditions Precedent
The respective obligations of each
party to consummate the Transaction shall be subject to the satisfaction prior to or at the Initial Closing of the following conditions, which may only
be waived in writing, in whole or in part, by mutual agreement of all of the parties (only in the case of clauses (a) and (b) below), by the Purchaser
(only in the case of clauses (c) and (d) below) and by the Company (only in the case of clauses (e) and (f) below):
(a) the Transaction and the
Amendment shall have received all requisite approvals of the stockholders of the Company;
(b) the Additional Listing
Application shall have been approved by the NYSE Amex;
(c) the representations and
warranties of the Company set forth in this Agreement shall have been true and correct in all material respects as of the date of this Agreement and
shall be true and correct in all material respects as of the date of the Initial Closing as if made on and as of such date;
(d) the Company shall have
performed in all material respects all obligations and complied in all material respects with all covenants required by this Agreement to be performed
or complied with by it at or
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prior to the Initial Closing (other
than a failure to so perform or comply which is attributable to actions or inactions by or on behalf of the Purchaser);
(e) the representations and
warranties of the Purchaser set forth in this Agreement shall have been true and correct in all material respects as of the date of this Agreement and
shall be true and correct in all material respects as of the date of the Initial Closing as if made on and as of such date; and
(f) the Purchaser shall have
performed in all material respects all obligations and complied in all material respects with all covenants required by this Agreement to be performed
or complied with by it at or prior to the Initial Closing (other than a failure to so perform or comply which is attributable to actions or inactions
by or on behalf of the Company).
To the extent any condition precedent
set forth above is satisfied or waived prior to or at the Initial Closing, such condition precedent shall be deemed satisfied or waived, as the case
may be, with respect to each of the Second Closing and the Final Closing. Accordingly, following the Initial Closing, there shall be no conditions
precedent to the Companys and the Purchasers performance of their respective obligations at each of the Second Closing and the Final
Closing.
Article 6
Adjustments
6.1
Merger or
Sale
. If, at any time prior to the Final Closing, there shall be (i) a reorganization (other than a combination, reclassification, exchange or
subdivision of securities otherwise provided for herein), (ii) a merger or consolidation of the Company with or into another entity in which the
Company is not the surviving entity, or a reverse triangular merger in which the Company is the surviving entity but the Companys shares of
capital stock outstanding immediately prior to the merger are converted by virtue of the merger into other property, whether in the form of securities,
cash or otherwise, or (iii) a sale or transfer of all or substantially all of the Companys properties and assets, then, in each case, the Shares
not yet sold, issued and delivered to, and purchased by, the Purchaser under this Agreement (collectively, the
Pending Shares
) shall
automatically be adjusted to be comprised of the number of Shares or other securities or property which the Purchaser would have owned immediately
after the consummation of such reorganization, merger, consolidation, sale or transfer, if all of the Pending Shares had been sold, issued and
delivered to, and purchased by, the Purchaser immediately before the effective date of such reorganization, merger, consolidation, sale or transfer, as
the case may be.
6.2
Reclassification
. If the Company, at any time prior to the Final Closing, by reclassification of securities or
otherwise, shall change any of the securities of the same class as the Pending Shares (the
Comparable Securities
) into the same or a
different number of securities of any other class or classes, then the Pending Shares shall automatically be adjusted to be comprised of such number
and kind of securities as would have been issuable as a result of such change with respect to the Comparable Securities immediately prior to such
reclassification or other change.
6.3
Subdivision or
Combination of Shares
. If the Company, at any time prior to the Final Closing, shall split or subdivide the Comparable Securities into a greater
number of securities of the same class, then the number of Pending Shares shall be proportionately increased and the purchase price to be paid for such
Pending Shares shall be proportionately decreased. If the Company, at any time prior to the Final Closing, shall reverse split or combine the
Comparable Securities into a lesser number of securities of the same class, then the number of Pending Shares shall be proportionately decreased and
the purchase price to be paid for such Pending Shares shall be proportionately increased.
6.4
Adjustments for
Non-Cash Dividends
. If, at any time prior to the Final Closing, the holders of the Comparable Securities shall have received, or, on or after the
record date fixed for the determination of eligible stockholders, shall have become entitled to receive, without payment therefor, other or additional
securities or property (other than cash) of the Company by way of dividend or distribution (collectively, a
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Dividend
), then, at the Initial Closing, Second Closing or Final
Closing (each, a
Closing
), as the case may be, at which Pending Shares are to be sold and issued to, and purchased by, the
Purchaser, upon payment of the Initial Purchase Price, the Second Purchase Price or the Final Purchase Price, as the case may be, the Purchaser shall
receive, in addition to the number of Pending Shares due to the Purchaser at such Closing, and without payment of any additional consideration
therefor, the amount of such other or additional securities or property (other than cash) of the Company that the Purchaser would hold on the date of
the Closing had it been the holder of record of the Comparable Security on the record date fixed with respect to the Dividend and had thereafter,
during the period from the date thereof through and including the date of the applicable Closing, retained such securities and all other additional
securities which it would have received during such period as a result of its ownership thereof, giving effect to all adjustments called for during
such period by the provisions of this
Article 6
. Notwithstanding the foregoing, in no event shall the Companys distribution of
subscription rights to purchase additional shares of Common Stock or other securities of the Company in a rights offering or similar transaction be
deemed to be a Dividend for purposes of this
Section 6.4
.
6.5
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Certain Other Matters
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(a) All calculations under
this Article 6 shall be made to the nearest cent or whole Share, as the case may be.
(b) No adjustment in the
Purchase Price shall be required unless such adjustment would require an increase or decrease of at least U.S.$0.01 per Share; provided, however, that
any adjustments which by reason of this
Section 6.5(b)
are not required to be made shall be carried forward and taken into account in any
subsequent adjustment.
(c) If, as a result of an
adjustment made pursuant to this
Article 6
, the Company shall be obligated to sell and issue, and the Purchaser shall be required to purchase,
shares of more than one class or series of capital stock of the Company, then the Board of Directors of the Company (whose determination shall be final
and conclusive) shall determine, in good faith, the allocation of the adjusted Purchase Price between or among the shares of such multiple classes or
series of capital stock of the Company.
(d) If any event shall occur
as to which the other provisions of this
Article 6
are not strictly applicable but as to which the failure to make any adjustment would not
fairly preserve the rights and obligations of the Company and the Purchaser under this Agreement in accordance with the essential intent and principles
of the adjustments set forth in this
Article 6
, then, in each such case, the Board of Directors of the Company (whose determination shall be
final and conclusive) shall determine, in good faith, the adjustment, if any, on a basis consistent with the essential intent and principles
established herein, necessary to fairly preserve the parties respective rights and obligations hereunder.
6.6
Certificate as
to Adjustments
. Upon the occurrence of each adjustment or readjustment pursuant to this
Article 6
, the Company, at its expense, shall
promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to the Purchaser a certificate setting forth, in
reasonable detail, the event requiring such adjustment or readjustment, the amount of such adjustment or readjustment, the method by which such
adjustment or readjustment was calculated, the adjusted or readjusted Purchase Price and adjusted or readjusted number of Pending
Shares.
Article 7
Termination
7.1
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Termination of this Agreement
.
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(a) This Agreement may be
terminated and the Transaction may be abandoned at any time prior to the Initial Closing as follows: (i) by mutual written consent of the Company and
the Purchaser; or (ii) by either the Company or the Purchaser: (A) after the Company Stockholder Meeting, if, at the Company Stockholder Meeting, the
Transaction or the Amendment do not receive all requisite approvals of the Companys stockholders; or (B) on or after July 11, 2011, if the
Transaction has not been consummated.
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(b) Following the Initial
Closing, this Agreement may only be terminated by mutual written consent of the Company and the Purchaser.
7.2
Effect of
Termination
. Either party electing to terminate this Agreement pursuant to
Section 7.1(a)(ii)
above may effect such termination only by
promptly delivering written notice thereof to the other party, at which time this Agreement shall be deemed terminated without any further action by
either party. Following any termination duly effected pursuant to
Section 7.1
, no party shall have any further obligations under this Agreement,
except that, to the extent any Securities were issued or delivered by the Company to the Purchaser hereunder,
Section 4.4
and
Article 8
shall survive any such termination.
Article 8
Miscellaneous
8.1
Lock-Up
. With
respect to each and every Security issued or delivered by the Company to the Purchaser hereunder, the Purchaser hereby irrevocably agrees that, until
the second anniversary of the date on which such Security was issued or delivered by the Company to the Purchaser hereunder, it will not, without the
prior written consent of the Company, which consent may be withheld in the sole discretion of the Company, directly or indirectly:
(a) offer for sale, sell,
assign, pledge or otherwise dispose of, or enter into any transaction or device that is designed to, or could be expected to, result in the disposition
by any person at any time in the future of, such Security;
(b) enter into any swap or
other derivatives transaction that transfers to any other person or entity, in whole or in part, any of the economic benefits or risks of ownership of
such Security; or
(c) publicly disclose the
intention to do either of the foregoing.
Solely for purposes of this
Section
8.1
, the Warrant Shares shall be deemed to have been issued and delivered by the Company to the Purchaser hereunder on the date of the Initial
Closing.
(a) Each stock certificate
representing the Shares shall have conspicuously endorsed thereon, in addition to any legends deemed necessary or advisable by the Company, the
following legends:
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE
DISPOSED OF 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.
THE CORPORATION IS AUTHORIZED TO ISSUE
MORE THAN ONE CLASS OF CAPITAL STOCK. A STATEMENT SETTING FORTH THE VOTING POWERS, DESIGNATIONS, PREFERENCES, LIMITATIONS, RESTRICTIONS AND RELATIVE
RIGHTS OF THE VARIOUS CLASSES OF CAPITAL STOCK IS ON FILE AT THE CORPORATIONS OFFICE. THE CORPORATION WILL FURNISH A COPY OF SUCH STATEMENT TO
ITS STOCKHOLDERS, WITHOUT CHARGE, UPON WRITTEN REQUEST TO THE CORPORATION AT ITS PRINCIPAL PLACE OF BUSINESS OR REGISTERED OFFICE.
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THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON SALE, ASSIGNMENT, PLEDGE OR OTHER DISPOSITION PURSUANT TO THAT CERTAIN STOCK PURCHASE AGREEMENT WITH THE
CORPORATION, DATED APRIL 8, 2011. UNDER SUCH AGREEMENT, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT, WITHOUT THE PRIOR WRITTEN CONSENT OF
THE CORPORATION, BE OFFERED OR SOLD, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF UNTIL THE SECOND ANNIVERSARY OF THE DATE OF THEIR ISSUANCE. A COPY OF
SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL PLACE OF BUSINESS OF THE CORPORATION.
(b) The Warrants shall have
conspicuously endorsed thereon the legend set forth on the first page of the Form of Warrant attached hereto as
Exhibit A
.
(c) To the extent the
Warrants are exercised, any stock certificate representing the Warrant Shares acquired upon such exercise shall have conspicuously endorsed thereon the
legends set forth in Section 5 of the Form of Warrant attached hereto as
Exhibit A
.
8.3
Brokerage
.
Each party will indemnify and hold harmless the other party against and in respect of any claim for brokerage or other commissions relative to this
Agreement or the Transaction, based in any way on agreements, arrangements or understandings made or claimed to have been made by such party with any
third party.
8.4
Parties in
Interest
. All representations, warranties, covenants and agreements contained in this Agreement by or on behalf of either party shall bind and
inure to the benefit of the respective successors and permitted assigns of such party whether so expressed or not; provided, however, no party may
assign, in whole or in part, this Agreement or any right or obligation hereunder, without the prior written consent of the other
party.
8.5
Notices
.
All notices and other communications hereunder shall be in writing and shall be deemed to have been duly received: (a) on the date given if delivered
personally or by facsimile; (b) two days after being sent by internationally recognized overnight delivery service; or (c) five days after having been
mailed by registered or certified mail (postage prepaid, return receipt requested); in the case of each of the foregoing, to the parties at the
following addresses (or at such other address for a party as shall be specified by like notice):
If to the
Company:
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IVAX
Diagnostics, Inc.
2140 North Miami Avenue
Miami, Florida 33127
Facsimile: (305) 324-2395
Attention: Chief Executive
Officer
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If to the
Purchaser:
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ERBA
Diagnostics Mannheim GmbH
c/o Transasia Bio-medicals Ltd.
Transasia House
8 Chandivali Studio Road
Mumbai, India 400072
Facsimile: 011
(+91) 22 2857 3030
Attention: Chief Executive Officer
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8.6
Governing
Law
. This Agreement shall be governed by and construed in accordance with the laws of the State of Florida for all purposes and in all respects,
without regard to the conflict of law provisions of such state.
8.7
Entire
Agreement
. This Agreement constitutes the sole and entire agreement of the parties with respect to the subject matter hereof.
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8.8
Counterparts
. 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.
8.9
Amendments and Waivers
. This Agreement may be amended or modified in whole or in part at any time only by a
writing signed by the parties hereto. Any term, condition or provision of this Agreement may be waived in writing at any time by the party which is
entitled to the benefits thereof. Any waiver by any party hereto of any of its rights or remedies under this Agreement shall not constitute a waiver of
any of its other rights or remedies hereunder.
8.10
Severability
. If any term or provision of this Agreement is finally deemed by a court of competent jurisdiction
to be invalid, illegal or incapable of being enforced, all other terms and provisions of this Agreement shall nevertheless remain in full force and
effect so long as the economic or legal substance of the Transaction is not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the
Transaction be consummated as originally contemplated to the fullest extent possible.
8.11
Injunctive
Relief
. It is possible that remedies at law may be inadequate and, therefore, the parties shall be entitled to equitable relief, including, without
limitation, injunctive relief, specific performance or other equitable remedies, in addition to all other remedies provided hereunder or available to
the parties at law or in equity.
8.12
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 any
term or provision of this Agreement.
[ SIGNATURE PAGE FOLLOWS ]
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IN WITNESS WHEREOF, each of the parties
has caused this Agreement to be duly executed as of the date first above written.
THE COMPANY:
IVAX Diagnostics, Inc.,
a Delaware corporation
By:
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/s/ Kevin D. Clark
Name: Kevin D. Clark
Title: Chief Executive Officer, Chief Operating Officer and President
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THE PURCHASER:
ERBA Diagnostics Mannheim
GmbH,
a company headquartered in Germany
By:
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/s/ Suresh Vazirani
Name: Suresh Vazirani
Title: Chief Executive Officer and Managing Director
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A-11
EXHIBIT A
FORM OF
WARRANT TO PURCHASE
SHARES OF COMMON
STOCK
OF
IVAX DIAGNOSTICS, INC.
THIS WARRANT AND THE SHARES (AS
HEREINAFTER DEFINED) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR
OTHERWISE DISPOSED OF 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. THIS WARRANT AND THE SHARES ARE ALSO SUBJECT TO RESTRICTIONS ON
SALE, ASSIGNMENT, PLEDGE OR OTHER DISPOSITION PURSUANT TO THAT CERTAIN STOCK PURCHASE AGREEMENT WITH THE COMPANY (AS HEREINAFTER DEFINED), DATED APRIL
8, 2011, PURSUANT TO WHICH NEITHER THIS WARRANT NOR THE SHARES MAY BE OFFERED OR SOLD, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF PRIOR TO MAY [___],
2013 WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL PLACE OF BUSINESS OF THE
COMPANY.
THIS WARRANT CERTIFIES THAT, upon the
terms and subject to the conditions set forth herein, ERBA Diagnostics Mannheim GmbH, a company headquartered in Germany (the
Holder
), for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, has been granted the
right to purchase from IVAX Diagnostics, Inc., a Delaware corporation (the
Company
), during the Term (as hereinafter defined),
20,000,000 shares (the
Shares
) of the Companys common stock, par value $0.01 per share, at an exercise price of U.S.$0.75 per
Share (the
Exercise Price
). Until the earlier of the Expiration Date (as hereinafter defined) and such time as this Warrant is
exercised in full, the Exercise Price and the number of Shares (or consideration) issuable upon exercise of this Warrant are subject to adjustment as
hereinafter provided.
1.
Term
. Upon the terms and
subject to the conditions set forth herein, this Warrant shall be exercisable, in whole or in part, at any time, or from time to time, during the
period (such period, the
Term
) commencing at 5:00 p.m., Eastern time, on May [___], 2011 (the
Effective Date
) and
ending at 5:00 p.m., Eastern time, on May [___], 2016 (the
Expiration Date
). Any portion of this Warrant remaining unexercised at
the Expiration Date shall thereafter be void.
(a)
Manner of Exercise
. The
purchase rights represented by this Warrant are exercisable by the Holder in whole or in part, at any time, or from time to time, during the Term: (i)
by the surrender of this Warrant and the Notice of Exercise (in the form attached hereto as
Exhibit A
), duly completed and executed on behalf of
the Holder, at the principal executive office of the Company located at 2140 North Miami Avenue, Miami, Florida 33127, or such other office as the
Company shall notify the Holder of in writing (the
Principal Office
); and (ii) upon payment, by bank check or wire transfer of
immediately available funds to an account designated by the Company, of the aggregate Exercise Price for the Shares to be purchased.
(b)
Time of Exercise
. This
Warrant shall be deemed to have been exercised immediately prior to the close of business on the date of its surrender for exercise as provided above
(the
Exercise Date
), and the Holder (or other individual or entity (
Person
) entitled to receive the Shares
issuable upon such exercise in accordance with the terms hereof) shall be treated for all purposes as the holder of record of such Shares as of the
close of business on such date.
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(c)
Delivery of Certificate and
Balance Warrant
. As promptly as practicable on or after the Exercise Date and in any event within fifteen (15) days thereafter, the Company, at its
expense, will issue and deliver to the Holder (or other Person entitled to receive the Shares issuable upon exercise of this Warrant in accordance with
the terms hereof) a certificate or certificates for the Shares issuable upon such exercise or, if such Shares are not certificated, other appropriate
written evidence of the issuance of the Shares. In the event that this Warrant is exercised in part, the Company at its expense shall execute and
deliver to the Holder (or its successor or permitted assignee) a new warrant of like tenor exercisable for the number of Shares for which this Warrant
may then be exercised after giving effect to all previous exercises and adjustments.
(d)
No Fractional Shares
. This
Warrant my only be exercised for whole Shares, and in no event shall any fractional Share be issued upon any exercise of this Warrant.
(e)
Limitation on Exercise
.
Notwithstanding anything to the contrary contained in this Warrant, in no event shall the Holder (or other Person entitled to receive the Shares
issuable upon exercise of this Warrant in accordance with the terms hereof) be entitled to exercise this Warrant, or to receive Shares issuable upon
exercise of this Warrant, for an amount of Shares which, as of the date of such exercise, is in excess of the number of shares of the Companys
common stock, par value $0.01 per share, that the Company has sold and issued, and the Holder has purchased, under that certain Stock Purchase
Agreement, by and between the Holder and the Company, dated April 8, 2011, pursuant to which, among other things, this Warrant was issued (the
Stock Purchase Agreement
).
(a)
Merger or Sale
. If, at any
time while this Warrant, or any portion thereof, is outstanding and unexpired, there shall be (i) a reorganization (other than a combination,
reclassification, exchange or subdivision of securities otherwise provided for herein), (ii) a merger or consolidation of the Company with or into
another entity in which the Company is not the surviving entity, or a reverse triangular merger in which the Company is the surviving entity but the
Companys shares of capital stock outstanding immediately prior to the merger are converted by virtue of the merger into other property, whether
in the form of securities, cash or otherwise, or (iii) a sale or transfer of all or substantially all of the Companys properties and assets,
then, in each case, this Warrant shall thereafter represent the right to acquire the number of Shares or other securities or property which the Holder
(or its successor or permitted assignee) would have owned immediately after the consummation of such reorganization, merger, consolidation, sale or
transfer, if the Holder (or its successor or permitted assignee) had exercised this Warrant immediately before the effective date of such
reorganization, merger, consolidation, sale or transfer, as the case may be.
(b)
Reclassification
. If the
Company, at any time while this Warrant, or any portion hereof, is outstanding and unexpired, by reclassification of securities or otherwise, shall
change any of the securities as to which purchase rights under this Warrant exist into the same or a different number of securities of any other class
or classes, then this Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as a
result of such change with respect to the securities that were subject to the purchase rights under this Warrant immediately prior to such
reclassification or other change.
(c)
Subdivision or Combination of
Shares
. If the Company, at any time while this Warrant, or any portion hereof, is outstanding and unexpired, shall split or subdivide the
securities for which this Warrant is exercisable into a greater number of securities of the same class, then the amount of securities for which this
Warrant is exercisable shall be proportionately increased and the Exercise Price shall be proportionately decreased. If the Company, at any time while
this Warrant, or any portion hereof, is outstanding and unexpired, shall reverse split or combine the securities for which this Warrant is exercisable
into a lesser number of securities of the same class, then the amount of securities for which this Warrant is exercisable shall be proportionately
decreased and the Exercise Price shall be proportionately increased.
(d)
Adjustments for Non-Cash
Dividends
. If, at any time while this Warrant, or any portion thereof, is outstanding and unexpired, the holders of the securities as to which
purchase rights under this Warrant exist at the time shall have received, or, on or after the record date fixed for the determination of
eligible
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stockholders, shall have become
entitled to receive, without payment therefor, other or additional securities or property (other than cash) of the Company by way of dividend or
distribution (collectively, a
Dividend
), then, in each case, this Warrant shall represent the right to acquire, in addition to the
number of Shares receivable upon exercise of this Warrant, and without payment of any additional consideration therefor, the amount of such other or
additional securities or property (other than cash) of the Company that the Holder (or its successor or permitted assignee) would hold on the date of
exercise of this Warrant had it been the holder of record of the security receivable upon exercise of this Warrant on the record date fixed with
respect to the Dividend and had thereafter, during the period from the date thereof through and including the date of such exercise, retained such
securities and all other additional securities which it would have received during such period as a result of its ownership thereof, giving effect to
all adjustments called for during such period by the provisions of this Warrant. Notwithstanding the foregoing, in no event shall the Companys
distribution of subscription rights to purchase additional shares of the Companys common stock, par value $0.01 per share, or other securities of
the Company in a rights offering or similar transaction be deemed to be a Dividend for purposes of this
Section 3(d)
.
(e)
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Certain Other Matters
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i. All calculations under this
Section 3
shall be made to the nearest cent or whole Share, as the case may be.
ii. No adjustment in the Exercise Price
shall be required unless such adjustment would require an increase or decrease of at least U.S.$0.01 per Share; provided, however, that any adjustments
which by reason of this
Section 3(e)(ii)
are not required to be made shall be carried forward and taken into account in any subsequent
adjustment.
iii. If, as a result of an adjustment
made pursuant to this
Section 3
, the Holder (or its successor or permitted assignee) shall become entitled to receive shares of more than one
class or series of capital stock of the Company, then the Board of Directors of the Company (whose determination shall be final and conclusive) shall
determine, in good faith, the allocation of the adjusted Exercise Price between or among the shares of such multiple classes or series of capital stock
of the Company.
iv. If any event shall occur as to
which the other provisions of this
Section 3
are not strictly applicable but as to which the failure to make any adjustment would not fairly
preserve the purchase rights represented by this Warrant in accordance with the essential intent and principles of the adjustments set forth in this
Section 3
, then, in each such case, the Board of Directors of the Company (whose determination shall be final and conclusive) shall determine,
in good faith, the adjustment, if any, on a basis consistent with the essential intent and principles established herein, necessary to fairly preserve
the purchase rights represented by this Warrant.
4.
Certificate as to
Adjustments
. Upon the occurrence of each adjustment or readjustment pursuant to
Section 3
, the Company, at its expense, shall promptly
compute such adjustment or readjustment in accordance with the terms hereof and furnish to the Holder (or its successor or permitted assignee) a
certificate setting forth, in reasonable detail, the event requiring such adjustment or readjustment, the amount of such adjustment or readjustment,
the method by which such adjustment or readjustment was calculated, the adjusted or readjusted Exercise Price and adjusted or readjusted number of
Shares or amount of other securities or property that would be received upon the exercise of this Warrant.
5.
Legends
. Each stock
certificate representing Shares issued upon exercise of this Warrant shall have conspicuously endorsed thereon, in addition to any legends deemed
necessary or advisable by the Company, the following legends:
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS
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OR PURSUANT TO AN APPLICABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
THE CORPORATION IS AUTHORIZED TO ISSUE
MORE THAN ONE CLASS OF CAPITAL STOCK. A STATEMENT SETTING FORTH THE VOTING POWERS, DESIGNATIONS, PREFERENCES, LIMITATIONS, RESTRICTIONS AND RELATIVE
RIGHTS OF THE VARIOUS CLASSES OF CAPITAL STOCK IS ON FILE AT THE CORPORATIONS OFFICE. THE CORPORATION WILL FURNISH A COPY OF SUCH STATEMENT TO
ITS STOCKHOLDERS, WITHOUT CHARGE, UPON WRITTEN REQUEST TO THE CORPORATION AT ITS PRINCIPAL PLACE OF BUSINESS OR REGISTERED OFFICE.
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON SALE, ASSIGNMENT, PLEDGE OR OTHER DISPOSITION PURSUANT TO THAT CERTAIN STOCK PURCHASE AGREEMENT WITH THE
CORPORATION, DATED APRIL 8, 2011. UNDER SUCH AGREEMENT, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED OR SOLD, ASSIGNED, PLEDGED OR
OTHERWISE DISPOSED OF PRIOR TO MAY [___], 2013, WITHOUT THE PRIOR WRITTEN CONSENT OF THE CORPORATION. A COPY OF SUCH AGREEMENT IS ON FILE AT THE
PRINCIPAL PLACE OF BUSINESS OF THE CORPORATION.
6.
Shares to be Fully Paid
. When
issued and delivered in accordance with this Warrant to the Holder (or its successor or permitted assignee) upon payment to the Company of the
applicable Exercise Price, the Shares issued by the Company pursuant to this Warrant will be fully paid and non-assessable with no personal liability
attaching to ownership thereof and will be free and clear of all liens, charges and encumbrances of any nature whatsoever except for restrictions on
transfer under the Stock Purchase Agreement and under applicable federal and state securities laws.
7.
Company to Reserve Shares
. At
all times while this Warrant, or any portion hereof, is outstanding and unexpired, the Company shall reserve and keep available, free from preemptive
rights, out of its authorized but unissued capital stock, for the purpose of effecting the exercise of this Warrant, the full number of Shares then
deliverable upon the exercise of this Warrant. The issuance of this Warrant shall constitute full authority to those officers of the Company who are
charged with the duty of executing stock certificates to execute and issue the necessary certificates for Shares upon exercise of this
Warrant.
8.
Exchange of Warrant
. If this
Warrant shall be mutilated, lost, stolen or destroyed, then the Company shall execute and deliver to the Holder (or its successor or permitted
assignee) a new warrant of like tenor and denomination and deliver the same (i) in exchange and substitution for and upon surrender and cancellation of
any mutilated Warrant or (ii) in lieu of any Warrant lost, stolen or destroyed, upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft or destruction of such Warrant (including, without limitation, a reasonably detailed affidavit with respect to the circumstances of any
loss, theft or destruction) and upon receipt of indemnity reasonably satisfactory to the Company.
9.
No Rights as Stockholder
.
Except as otherwise provided herein, this Warrant, to the extent not exercised, will not entitle the Holder to any of the rights, including, without
limitation, voting rights, information rights and rights to receive dividends or distributions, of a stockholder of the Company.
10.
Amendment
. This Warrant may
not be modified or amended, except with the prior written consent of the Holder (or its successor or permitted assignee) and the Company. Any
instrument given by or on behalf of the Holder (or its successor or permitted assignee) in connection with any consent to any modification or amendment
of this Warrant will be conclusive and binding on any and all subsequent holders of this Warrant.
11.
Transfer
. Neither this
Warrant nor the Shares have been registered under the Securities Act of 1933, as amended, or any state securities laws, and such securities may not be
offered for sale, sold, assigned, pledged, or otherwise disposed of, unless they are registered under the Securities Act of 1933, as
amended,
A-15
and such state laws or the
transaction is exempt from the registration requirements thereof. In addition, this Warrant and the Shares are subject to restrictions on transfer set
forth in the Stock Purchase Agreement, pursuant to which, among other things, neither this Warrant nor the Shares may be offered for sale, sold,
assigned, pledged or otherwise disposed of prior to May [___], 2013 without the prior written consent of the Company, which consent may be withheld in
the sole discretion of the Company. Subject to the foregoing and the following sentence, upon surrender of this Warrant as a result of a transfer
hereof, the Company, upon written request by the transferor, and at the expense of the transferee or transferor (as they may decide between
themselves), will issue and deliver to, or to the order of, the transferee a new Warrant in the name of such transferee, or as such transferee (on
payment by such transferee of any applicable transfer taxes) may direct, exercisable for the number of Shares for which this Warrant may then be
exercised after giving effect to all previous exercises and adjustments. In addition to the foregoing, and as a condition precedent to effecting any
transfer, the transferor shall notify the Company of the proposed transfer by delivering to the Principal Office a Notice of and Form of Assignment (in
the form attached hereto as
Exhibit B
), duly completed and executed on behalf of the transferor.
12.
Successors and Assigns
. This
Warrant shall be binding upon the Company and its successors and assigns and shall inure to the benefit of the Holder and its successors and permitted
assigns.
13.
Titles and Subtitles
. The
titles and subtitles used in this Warrant are for convenience only and are not to be considered in construing or interpreting any term or provision of
this Warrant.
14.
Governing Law
. This Warrant
shall be governed by and construed in accordance with the laws of the State of Florida for all purposes and in all respects, without regard to the
conflict of law provisions of such state.
[ SIGNATURE PAGE FOLLOWS ]
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IN WITNESS WHEREOF, the Company has
caused this Warrant to be executed by its duly authorized officer as of the Effective Date set forth above.
IVAX Diagnostics, Inc.,
a
Delaware corporation
By:
Name: Kevin D. Clark
Title: Chief Executive Officer, Chief Operating Officer and President
A-17
EXHIBIT A
NOTICE OF EXERCISE
Dated: ________, 20__
The undersigned hereby elects to
purchase ____ shares (the
Shares
) of common stock of IVAX Diagnostics, Inc. (the
Company
) pursuant to the terms
of the warrant issued to the undersigned, effective as of May [___], 2011, a copy of which is attached hereto (the
Warrant
), and
tenders herewith payment to the Company of U.S.$0.75 per Share, for an aggregate purchase price of U.S.$___, representing payment in full for the
Shares in accordance with the terms of the Warrant. Such aggregate purchase price is being paid [by bank check / by wire transfer of immediately
available funds to an account designated by the Company] [strike portion which is not applicable]. Until the earlier of the Expiration Date (as defined
in the Warrant) and such time as the Warrant is exercised in full, the Exercise Price (as defined in the Warrant) and the number of Shares (or
consideration) issuable upon exercise of the Warrant are subject to adjustment as provided in the Warrant.
Please issue certificate(s)
representing the Shares, and a new warrant for the unexercised portion of the Warrant [strike if not applicable], in the name of the undersigned, and
deliver such certificate(s) and new warrant [strike if not applicable] to the undersigned at the following address:
ERBA Diagnostics Mannheim GmbH
c/o Transasia Bio-medicals
Ltd.
Transasia House
8 Chandivali Studio Road
Mumbai, India 400072
Attn: Chief Executive Officer
ERBA Diagnostics
Mannheim GmbH
By:
Name:
Title:
A-18
EXHIBIT B
NOTICE OF AND
FORM OF ASSIGNMENT
(TO BE SIGNED
ONLY ON TRANSFER OF WARRANT)
For value received, the undersigned
hereby sells, assigns and transfer unto _____, federal taxpayer identification number _____, whose address is _____, _____, _____, the right
represented by the accompanying warrant to purchase shares of common stock of IVAX Diagnostics, Inc. and appoints _____, with full power of
substitution in the premises, as attorney to transfer such right on the books of IVAX Diagnostics, Inc.
Dated: ________,
20__
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(Signature must conform to name of holder as specified on the face of the Warrant)
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Address
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Signed in the
presence of:
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A-19
Appendix B
FORM OF
CERTIFICATE OF AMENDMENT
TO THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
IVAX DIAGNOSTICS, INC.
IVAX Diagnostics, Inc., a corporation
organized and existing under and by virtue of the General Corporation Law of the State of Delaware, does hereby certify:
FIRST
: That at a meeting of the
Board of Directors of the corporation resolutions were duly adopted setting forth a proposed amendment to the corporations Amended and Restated
Certificate of Incorporation, declaring said amendment to be advisable and calling a meeting of the corporations stockholders for consideration
thereof. The resolution setting forth the proposed amendment is as follows:
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RESOLVED
, that the Amended and Restated Certificate of
Incorporation of the corporation be amended by changing Article FOURTH so that, as amended hereby, said Article shall be and read as
follows:
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The total number of shares of stock which the Corporation
is authorized to issue is 105,000,000 shares, which are to be divided into two classes consisting of (i) 100,000,000 shares of common stock, par value
$0.01 per share, and (ii) 5,000,000 shares of preferred stock, par value $0.01 per share, issuable in series as may be provided from time to time by
resolution of the Board of Directors.
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SECOND
: That thereafter,
pursuant to resolution of its Board of Directors, an annual meeting of the corporations stockholders was duly called and held upon notice in
accordance with Section 222 of the General Corporation Law of the State of Delaware, at which meeting the necessary number of shares as required by
statute were voted in favor of the amendment.
THIRD
: That said amendment was
duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the corporation has
caused this certificate to be signed by its duly authorized officer, effective as of this
day of
,
2011.
By:
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Kevin D. Clark,
President, Chief Executive Officer
and Chief Operating Officer
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B-1
Appendix C
IVAX Diagnostics, Inc.
2140 North Miami Avenue
Miami, Florida 33127
PROXY
PLEASE VOTE TODAY IN ONE OF THREE
WAYS:
Vote by telephone.
Please call toll-free in the U.S. or
Canada at 1-877-456-7915 on a touch-tone telephone. There is no charge to you for the call. Please follow the simple instructions. You will be
required to provide the unique control number below.
OR
Vote by Internet.
Please access http://proxy.georgeson.com and follow the
simple instructions. You will be required to provide the unique control number below.
[ control number ]
You may vote by telephone or Internet at any time, 24 hours a
day, 7 days a week.
The deadline for voting by telephone or Internet is 11:59 p.m. (Eastern Time) on May 19, 2011.
Your vote by telephone or
Internet authorizes the proxy holders to vote your shares
in the same manner as if you had completed, signed, dated and returned a proxy
card.
OR
Vote by mail.
If you do not wish to vote by telephone or
Internet, then please complete, sign, date and return this Proxy Card in the postage pre-paid envelope provided.
This Proxy is solicited on behalf of the Board of Directors of
IVAX Diagnostics, Inc.
I (whether one or more of us) appoint
Kevin D. Clark and Arthur R. Levine, and each of them separately, as my proxies, each with the power to appoint his substitute, and authorize each of
them to vote as designated on the reverse side, all of my shares of Common Stock of IVAX Diagnostics, Inc. held of record by me at the close of
business on April 15, 2011 at the Annual Meeting of Stockholders to be held on May 20, 2011 and at any and all postponements or adjournments of such
meeting.
When properly executed and returned,
this Proxy will be voted in the manner directed by me. If no direction is indicated, this Proxy will be voted FOR all four proposals set
forth in the accompanying Proxy Statement and according to the discretion of the proxy holders on any other matters that may properly come before the
meeting or any postponement or adjournment thereof.
(continued and to be signed on the reverse
side)
C-1
The Board of Directors of IVAX Diagnostics, Inc.
unanimously recommends
a vote FOR Proposal #1, a vote FOR Proposal #2, a vote FOR Proposal #3,
and a vote
FOR all five of the nominees for director in Proposal #4.
1.
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Approval of the sale and issuance to ERBA Diagnostics Mannheim
GmbH of 20,000,000 shares of the Companys Common Stock for an aggregate purchase price of $15,000,000 and warrants to purchase an additional
20,000,000 shares of the Companys Common Stock.
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FOR
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AGAINST
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ABSTAIN
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2.
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Approval of an amendment to the Companys Amended and
Restated Certificate of Incorporation increasing the number of authorized shares of the Companys Common Stock from 50,000,000 shares to
100,000,000 shares.
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FOR
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AGAINST
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ABSTAIN
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3.
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Approval, solely for purposes of Section 203 of the Delaware
General Corporation Law, of certain future transactions between the Company and ERBA Diagnostics Mannheim GmbH and its affiliates and
associates.
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FOR
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AGAINST
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ABSTAIN
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4.
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Election of five directors to the Companys Board of
Directors.
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FOR each nominee
listed
(except as marked to the contrary) [ ]
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WITHHOLD AUTHORITY
to vote for all nominees
listed [ ]
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Name
David M. Templeton
Kishore Kris Dudani
Philippe Gadal, Pharm.D.
John B. Harley, M.D., Ph.D.
Suresh
Vazirani
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Term of Office
2012
2013
2013
2014
2014
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(INSTRUCTION: To withhold authority to vote for any individual nominee, draw a line through such nominees
name.)
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5.
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In their discretion, the proxy holders are authorized to vote
upon such other matters as may properly come before the meeting or any postponement or adjournment thereof.
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I acknowledge receipt of the
accompanying Notice of Annual Meeting and Proxy Statement for the May 20, 2011 meeting.
Date:
,
2011
Signature
Signature
(if held jointly)
(Please date this Proxy Card and sign exactly as your name or
names appear on this Proxy Card. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.)
C-2
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