EXHIBIT 10.4
EXECUTION COPY
TRANSITION SERVICES AGREEMENT
THIS TRANSITION SERVICES AGREEMENT, is dated as of, and effective as of,
February 22, 2005 (this "Agreement"), and is by and between SENTIGEN HOLDING
CORPORATION, a Delaware corporation ("Sentigen"), and CELL & MOLECULAR
TECHNOLOGIES, INC., a Delaware corporation ("CMT", and together with Sentigen,
collectively, the "Sellers"), and CHEMICON SPECIALTY MEDIA, INC., a Delaware
corporation ("CSM"), CHEMICON INTERNATIONAL, INC., a California corporation
("Chemicon"), and SEROLOGICALS CORPORATION, a Delaware corporation
("Serologicals", and together with CSM and Chemicon, collectively, the "Buyers")
(collectively, the "Parties").
RECITALS
WHEREAS, pursuant to an Asset Purchase Agreement, dated the date hereof
(the "Purchase Agreement"), by and among Sellers and Buyers, CSM has purchased
from CMT and CMT has sold to CSM, all of the assets comprising or used in the
operations of the Specialty Media Division (the "Division") of CMT; and
WHEREAS, in order to provide for an efficient and orderly transition of
the ownership and management of the business of the Division, Sellers have
agreed to enter this Agreement to provide certain transition services after the
Closing to Buyers on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein expressed and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:
ARTICLE I
CONSTRUCTION
Section 1.1. Definitions and Interpretation. Capitalized terms used but
not otherwise defined in this Agreement shall have the meanings ascribed to such
terms in the Purchase Agreement. All references to Articles and Sections shall
be deemed to be references to Articles and Sections of this Agreement unless the
context shall otherwise require. The headings of the Articles and Sections are
included for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement. Any reference in this
Agreement to a "day" or a number of "days" (without the explicit qualification
of "business") shall be interpreted as a reference to a calendar day or number
of calendar days. The definitions
of terms defined herein shall apply equally to both singular and plural forms of
the defined terms.
ARTICLE II
TRANSITION SERVICES
Section 2.1 In General. During the period beginning on the Closing Date
and ending at the close of business on June 30, 2005, subject to such extensions
as may be mutually agreed to by the parties in writing and subject to the right
of the Buyers to terminate the obligation of the Sellers hereunder as provided
below (the "Transition Period"), the Sellers agree to furnish, or to cause their
respective affiliates to furnish, to the Buyers the services specified in the
following subsections of this Article II and such other services as the Parties
shall mutually agree are necessary to effect an orderly transition of the
ownership of the business of the Division from the Sellers to Buyers (referred
to herein collectively as the "Transition Services"). During the Transition
Period, the Sellers agree to furnish, or to cause their respective affiliates to
furnish, the services of such persons whose services shall be reasonably
necessary to provide the Transition Services (the "Transition Employees"). The
Transition Employees shall be available to provide Transition Services for
Buyers but shall not be required to devote their full time and attention to the
Transition Services. The work schedule of the Transition Employees shall be as
mutually agreed upon by the parties. The Buyers shall be permitted, upon the
provision of not less than 30 days' notice to the Sellers, to instruct the
Sellers to cease providing some or all of the Transition Services.
Section 2.2. Management Information and Telecommunications Services.
During the Transition Period, the Sellers (i) shall permit the Division's
information technology equipment to remain connected to the Sellers' internal
computer network and shall provide network helpdesk and support sufficient to
ensure the operation of such equipment and such network on the same basis as the
Sellers' equipment and network operate; (ii) shall provide the Division with
access to Microsoft Outlook, Microsoft Word, Microsoft Excel and Microsoft
PowerPoint to the extent permitted by the Sellers' licenses with Microsoft
Corporation; (iii) shall provide the Division and the Buyers with access to the
Sellers' MAS 200 accounting software to the extent permitted by the Sellers'
licenses with Best Software, Inc.; (iv) shall permit the Division's
telecommunications equipment to remain connected to the Sellers' telephone
switch; and (v) shall provide local and long distance telephone service and
internet access to the Division to the extent permitted by the terms of the
Sellers' existing agreements with its service providers. If the provision of any
management information or telecommunications service to be provided by the
Sellers would infringe or violate a license, royalty agreement, or other
agreement or arrangement to which either Seller is a party, then the Sellers
shall provide Buyers with notice of said potential infringement or violation (a
"MIS Violation Notice"). Within ten days following receipt of a MIS Violation
Notice, the Sellers shall cease providing the management information service
that was subject to the MIS Violation Notice.
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Section 2.3. Accounting. During the Transition Period, the Sellers shall,
or shall cause their respective affiliates to, provide the following accounting
services to the Buyers with respect to the Division: (i) generating invoices to
customers; (ii) mailing invoices; (iii) receiving cash payments and remitting
such cash payments in accordance with Buyers' instructions; (iv) overseeing
accounts payable administration; (v) issuing to vendors checks drawn off Buyers'
accounts; (vi) recording the acquisition or disposition of fixed assets; and
(vii) assisting with the transfer of all accounting data recorded by the Sellers
to the Buyers' financial system. With respect to the accounting Transition
Services described in clause (vii) of the preceding sentence, the Sellers shall
provide batch posting reports with respect to all accounting data recorded by
the Sellers in Microsoft Excel format. The accounting Transition Services
provided pursuant to this Section 2.3 will be supervised by the Sellers' senior
accounting management. The accounting Transition Services shall not include the
following: (i) general ledger creation or maintenance; (ii) financial statement
preparation; (iii) credit analysis; or (iv) tax reporting, preparation,
compliance or planning.
Section 2.4. Document Management. During the Transition Period, the
Sellers agree to assist the Buyers to identify and to retrieve any of the
Division's historical business records that have been co-mingled with the
Sellers' historical business records.
ARTICLE III
PAYMENT FOR TRANSITION SERVICES
Section 3.1. Pricing. The Buyers shall pay to Sellers for the Transition
Services a fee for the Transition Services in accordance with the following
schedule:
SERVICE FEE
------------------------ ---------------------------------
MIS and Telecom Services $1,500 per week
Accounting $2,600 per week
Document Management $20.00 per hour of employee time
In addition to the fees set forth above, the Buyers shall reimburse the Sellers
for their out-of-pocket costs incurred in providing the Transition Services to
Buyers. Such out-of-pocket costs shall be billed at the actual amount incurred
without premium or xxxx-up.
Section 3.2. Invoices. The Sellers shall prepare and submit to the Buyers
monthly invoices for the Transition Services during each month of the Transition
Period. Such invoices shall be submitted within 15 days following the end of
each month during the Transition Period. Each such invoice shall set forth in
reasonable detail a description of the Transition Services provided during the
month covered by the invoice and a description of the manner in which the amount
invoiced was calculated.
Section 3.3. Payment of Invoices. The Buyers shall pay invoices submitted
by the Sellers promptly following receipt thereof and in any event within 45
days following receipt.
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Any undisputed amount not paid within 45 days shall bear interest at .25% per
month, or the maximum rate permitted by applicable law, whichever is less. If
the Buyers dispute the amount of any invoice, they shall pay the undisputed
amount and shall provide a notice to the Sellers describing in reasonable detail
the basis for their dispute of the remainder. The Parties shall work together in
good faith to resolve any such dispute. If the Buyers so request, the Sellers
shall permit the Buyers to examine, at their expense and during normal business
hours, the business records relevant to the computation of the disputed invoiced
amount. If the Buyers and the Sellers are unable to resolve any such dispute,
the dispute shall be submitted to arbitration in accordance with Section 8.14 of
the Purchase Agreement.
ARTICLE IV
OTHER AGREEMENTS
Section 4.1. Cash Receipts. As promptly as practicable following the
Closing Date, the Sellers shall notify the customers of the Division that the
Division has been sold to the Buyers, which notification shall include
instructions for the remission of payments to the Buyers with respect to any
accounts receivable of the Division purchased by the Buyers. From time to time,
both during the Transition Period and thereafter, the Sellers may receive
payments from third parties that belong to the Buyers. The Sellers agree to use
their best efforts to identify any such payments, to notify the Buyers of
receipt of such payments and to remit such payments to the Buyers, in each case,
as promptly as practicable. Notwithstanding anything to the contrary set forth
in this Agreement, this Section 4.1 shall survive the expiration of the
Transition Period indefinitely.
Section 4.2. Mail, Faxes and Telephone Calls. During and after the
Transition Period, the Sellers will forward all mail, faxes and telephone calls
relating to or involving the Division to the Buyers to such telephone and
facsimile number(s) and/or addresses as Buyers shall specify from time-to-time.
Notwithstanding anything to the contrary set forth in this Agreement, this
Section 4.2 shall survive the expiration of the Transition Period.
ARTICLE V
TERM AND PERFORMANCE
Section 5.1. Term. Unless otherwise specified, the Sellers' obligation to
perform the Transition Services covered by this Agreement shall terminate at the
close of business on the last day of the Transition Period or upon the written
agreement of the Parties.
Section 5.2. Performance of Transition Services. The Sellers agree to
perform the Transition Services in accordance with past practices.
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ARTICLE VI
MISCELLANEOUS
Section 6.1. Indemnification; Limitation of Liability. Each Party (the
"Indemnifying Party") shall protect, indemnify and hold harmless each other
Party for any and all losses and damages arising from (i) any material breach of
or material default in performance by the Indemnifying Party of any covenant,
agreement or obligation to be performed by such Indemnifying Party pursuant to
this Agreement; (ii) any act of fraud, embezzlement or criminal activity of the
Indemnifying Party (or any of its officers, directors, employees or agents); or
(iii) the willful misconduct or gross negligence by the Indemnifying Party in
the performance of its covenants, agreements or obligations under and pursuant
to this Agreement; provided that in no event shall any Indemnifying Party be
liable for any indirect, special, incidental, punitive or consequential damages
pursuant to this Section 6.1.
Section 6.2. Binding Effect; Assignment. This Agreement shall be binding
upon, and inure to the benefit of, the parties and their respective successors,
legal representatives and permitted assigns. No assignment of this Agreement or
of any rights or obligations hereunder may be made by either party without the
prior written consent of the other party. Any attempted assignment without the
required consent shall be null and void.
Section 6.3. Relationship of the Parties. None of the provisions of this
Agreement are intended to create nor shall they be deemed or construed by the
parties to create any partnership or joint venture relationship or other
relationship between the parties hereto, except that of independent entities
contracting with each other solely for the purpose of effecting the provisions
of this Agreement.
Section 6.4. Further Assurances. From and after the date hereof, each
party hereto will execute all such instruments and take all such actions as any
other party may reasonably request in connection with the transactions and
services contemplated by this Agreement. In addition, the parties hereto shall
cooperate with each other and shall cause their officers, employees, agents,
auditors and representatives to cooperate with each other during the Transition
Period to facilitate the orderly transition of the business of the Division.
Section 6.5. Notices. All notices, requests, demands and other
communications required or permitted to be given or delivered hereunder shall be
given in accordance with the notice provisions in Section 8.1 of the Purchase
Agreement.
Section 6.6. No Third Party Beneficiaries. The Parties hereto agree that
this Agreement is for the sole benefit of the Parties hereto and is not intended
to confer any rights or benefits on any third party, including any employee of
either Party hereto, and that there are no third party beneficiaries to this
Agreement or to any part of a specific provision of this Agreement.
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Section 6.7. Governing Law. This Agreement shall be governed, construed
and enforced in accordance with the laws of the State of New York, without
regard to choice of law principles thereof.
Section 6.8. Amendment. This Agreement may be amended, supplemented or
modified only by a written agreement signed by each party hereto. Any of the
terms or conditions of this Agreement may be waived at any time by the party
entitled to the benefit thereof but only by a written instrument signed by the
party waiving such terms or conditions. The waiver of any provision shall be
effective only in the specific instance and for the particular purpose for which
it was given. No failure to exercise, and no delay in exercising, any right or
power hereunder shall operate as a waiver thereof.
Section 6.9. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law. But if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision shall be deemed
restated to reflect the original intention of the parties as nearly as possible
in accordance with applicable law, and if capable of substantial performance,
the remaining provisions of this Agreement shall be enforced as if this
Agreement was entered into without the invalid provision.
Section 6.10. Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original, but all of which shall
constitute one and the same agreement.
Section 6.11. Force Majeure. If either Party to this Agreement shall be
prevented, hindered or delayed in the performance or observance of any of its
obligations hereunder by reason of any circumstances beyond its reasonable
control, and such delay could not have been prevented by reasonable precautions
and cannot reasonably be circumvented by the Party through the use of alternate
sources, work-around plans, or other means (a "Force Majeure"), then such Party
shall be excused from any other further performance or observance of the
obligations so affected for so long as such circumstances prevail and such Party
continues to use its best efforts to recommence performance or observance
whenever and to whatever extent possible without delay. Any Party so delayed in
its performance shall immediately notify the other and shall describe at a
reasonable level of detail the circumstances causing such delay. Notwithstanding
the foregoing, should a Party be unable to perform any of its obligations
hereunder for a period of more than 30 consecutive days by reason of a Force
Majeure, the other Party, at its option, shall have the right to terminate this
Agreement in whole or solely with respect to the section hereof under which the
non-performing Party has been unable to perform its obligations, in which case
the provision so terminated shall have no further force or effect and this
Agreement shall remain in effect as to all other provisions.
Section 6.12. Confidential Information. The Parties acknowledge that the
provision of the Transition Services will require that the Parties exchange
"Confidential Information" within the meaning of the Joint Confidentiality
Agreement dated June 15, 2004, between Sentigen Holding Corporation and
Serologicals Corporation. The Parties hereby agree to abide by the
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terms of such Joint Confidentiality Agreement with respect to any such
information exchanged by them during the term of this Agreement.
(The remainder of this page has been left blank intentionally.)
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed as of the date set forth above.
SENTIGEN HOLDING CORPORATION
/s/ Xxxxxxxx X. Xxxxx
Title: Chief Financial Officer
CELL & MOLECULAR TECHNOLOGIES, INC.
/s/ Xxxxxxxx X. Xxxxx
Title: Chief Financial Officer
CHEMICON SPECIALTY MEDIA, INC.
/s/ Xxxxxx X. Xxxxxxx
Title: Vice President, Finance, and Chief Financial Officer
CHEMICON INTERNATIONAL, INC.
/s/ Xxxxxx X. Xxxxxxx
Title: Vice President, Finance, and Chief Financial Officer
SEROLOGICALS CORPORATION
/s/ Xxxxxx X. Xxxxxxx
Title: Vice President, Finance, and Chief Financial Officer
