Exhibit 10.16.1


 


EXECUTION COPY


 


STOCKHOLDERS AGREEMENT


 


among


 


TALECRIS BIOTHERAPEUTICS HOLDINGS CORP.


 


TALECRIS HOLDINGS, LLC


 


and


 


BAYER HEALTHCARE LLC AND ITS AFFILIATES PARTY HERETO


 


Dated as of March 31, 2005


 

















 


TABLE OF CONTENTS


 


	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I

  	
   

  
	
  DEFINITIONS

  	
   

  
	
   

  	
   

  
	
  SECTION 1.01
  Certain Defined Terms

  	
  2

  
	
   

  	
   

  
	
  ARTICLE II

  	
   

  
	
  CERTAIN AGREEMENTS

  	
   

  
	
   

  	
   

  
	
  SECTION 2.01
  Redemption of Bayer Shares

  	
  10

  
	
   

  	
   

  
	
  SECTION 2.02
  Limitations on Other Redemptions

  	
  13

  
	
   

  	
   

  
	
  SECTION 2.03
  Preemptive Rights

  	
  14

  
	
   

  	
   

  
	
  SECTION 2.04
  Exchange Rights

  	
  15

  
	
   

  	
   

  
	
  SECTION 2.05
  Material Actions

  	
  16

  
	
   

  	
   

  
	
  SECTION 2.06
  Affiliate Transactions

  	
  16

  
	
   

  	
   

  
	
  SECTION 2.07
  Par Value of Capital Stock

  	
  17

  
	
   

  	
   

  
	
  SECTION 2.08
  Achievement of Annual Sales Targets

  	
  17

  
	
   

  	
   

  
	
  SECTION 2.09
  Restricted Payments

  	
  17

  
	
   

  	
   

  
	
  SECTION 2.10
  Board of Directors

  	
  19

  
	
   

  	
   

  
	
  ARTICLE III

  	
   

  
	
  RESTRICTIONS ON TRANSFER

  	
   

  
	
   

  	
   

  
	
  SECTION 3.01
  General Restriction

  	
  20

  
	
   

  	
   

  
	
  SECTION 3.02
  Legends

  	
  21

  
	
   

  	
   

  
	
  SECTION 3.03
  Tag-Along Rights

  	
  22

  
	
   

  	
   

  
	
  SECTION 3.04
  Drag-Along Right

  	
  23

  
	
   

  	
   

  
	
  SECTION 3.05
  Right of First Offer upon Sales of Shares

  	
  25

  
	
   

  	
   

  
	
  SECTION 3.06
  Agreement to be Bound

  	
  26

  
	
   

  	
   

  
	
  SECTION 3.07
  Compliance with Securities Laws

  	
  26

  



 


i

















 


	
  ARTICLE IV

  	
   

  
	
  REGISTRATION RIGHTS

  	
   

  
	
   

  	
   

  
	
  SECTION 4.01
  Demand Registration Rights

  	
  27

  
	
   

  	
   

  
	
  SECTION 4.02
  Piggyback Registration Rights

  	
  29

  
	
   

  	
   

  
	
  SECTION 4.03
  Registration on Form S-3

  	
  31

  
	
   

  	
   

  
	
  SECTION 4.04
  Registration Expenses

  	
  31

  
	
   

  	
   

  
	
  SECTION 4.05
  Registration Procedures

  	
  31

  
	
   

  	
   

  
	
  SECTION 4.06
  Preparation; Reasonable Investigation

  	
  34

  
	
   

  	
   

  
	
  SECTION 4.07
  Indemnification

  	
  34

  
	
   

  	
   

  
	
  SECTION 4.08
  Contribution

  	
  36

  
	
   

  	
   

  
	
  SECTION 4.09
  Nominees of Beneficial Owners

  	
  38

  
	
   

  	
   

  
	
  ARTICLE V

  	
   

  
	
  INFORMATION RIGHTS

  	
   

  
	
   

  	
   

  
	
  SECTION 5.01
  Financial Information

  	
  38

  
	
   

  	
   

  
	
  SECTION 5.02
  Requested Information

  	
  38

  
	
   

  	
   

  
	
  SECTION 5.03
  Annual Sales Achievement Information

  	
  38

  
	
   

  	
   

  
	
  SECTION 5.04
  Confidentiality

  	
  39

  
	
   

  	
   

  
	
  ARTICLE VI

  	
   

  
	
  REPRESENTATIONS

  	
   

  
	
   

  	
   

  
	
  SECTION 6.01
  Representations of the Company

  	
  40

  
	
   

  	
   

  
	
  SECTION 6.02
  Representations of Talecris LLC

  	
  42

  
	
   

  	
   

  
	
  SECTION 6.03
  Representations of Bayer

  	
  43

  
	
   

  	
   

  
	
  ARTICLE VII

  	
   

  
	
  INDEMNIFICATION

  	
   

  
	
   

  	
   

  
	
  SECTION 7.01
  Indemnification

  	
  44

  
	
   

  	
   

  
	
  SECTION 7.02
  Enforcing Claims Under Indemnity

  	
  44

  
	
   

  	
   

  
	
  SECTION 7.03
  Exclusive Remedies

  	
  46

  



 


ii

















 


	
  SECTION 7.04
  Treatment as Boot Adjustments

  	
  46

  
	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  SECTION 8.01
  Consent to Assignment

  	
  47

  
	
   

  	
   

  
	
  SECTION 8.02
  Entire Agreement and Amendments

  	
  47

  
	
   

  	
   

  
	
  SECTION 8.03
  Notices

  	
  47

  
	
   

  	
   

  
	
  SECTION 8.04
  Non-Waiver

  	
  49

  
	
   

  	
   

  
	
  SECTION 8.05
  Governing Law, Jurisdiction

  	
  49

  
	
   

  	
   

  
	
  SECTION 8.06
  Dispute Resolution of Accounting Matters

  	
  50

  
	
   

  	
   

  
	
  SECTION 8.07
  Captions

  	
  50

  
	
   

  	
   

  
	
  SECTION 8.08
  Severability

  	
  50

  
	
   

  	
   

  
	
  SECTION 8.09
  Defined Terms

  	
  50

  
	
   

  	
   

  
	
  SECTION 8.10
  Set-Off

  	
  50

  
	
   

  	
   

  
	
  SECTION 8.11
  Counterparts

  	
  51

  
	
   

  	
   

  
	
  SECTION 8.12
  Recapitalizations, Exchanges, Etc. Affecting Common Stock

  	
  51

  
	
   

  	
   

  
	
  SECTION 8.13
  Junior Preferred Stock

  	
  51

  



 


	
  SCHEDULES

  
	
   

  	
   

  
	
  SCHEDULE
  I

  	
  Affiliates
  of Bayer

  	
   

  
	
  SCHEDULE
  II

  	
  Initial
  Capitalization of the Company

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  A

  	
  Certificate
  of Incorporation

  	
   

  
	
  EXHIBIT
  B

  	
  Certificate
  of Designations for Series A Senior Convertible Preferred Stock

  	
   

  
	
  EXHIBIT
  C

  	
  Certificate
  of Designations for Series B Senior Convertible Preferred Stock

  	
   

  
	
  EXHIBIT
  D

  	
  Certificate
  of Designations for the Junior Preferred Stock

  	
   

  
	
  EXHIBIT
  E

  	
  Purchase
  Agreement for Junior Secured Convertible Notes

  	
   

  
	
  EXHIBIT
  F

  	
  Allocation
  Schedule

  	
   

  
	
  EXHIBIT
  G

  	
  Capital
  Expenditures Schedule

  	
   

  
	
  EXHIBIT
  H

  	
  Production
  Capacity Schedule

  	
   

  
	
  EXHIBIT
  I

  	
  Yield
  Schedule

  	
   

  
	
  APPENDIX
  I

  	
  Earnout
  Calculations

  	
   

  



 


iii














 


STOCKHOLDERS AGREEMENT (this “Agreement”),
dated as of March 31, 2005 (the “Effective
Date”),  among TALECRIS BIOTHERAPEUTICS HOLDINGS CORP., a Delaware corporation (the “Company”),
TALECRIS HOLDINGS, LLC, a Delaware limited liability company (“Talecris
LLC”), BAYER HEALTHCARE LLC, a Delaware limited liability company (“Bayer”),
and the Affiliates of Bayer listed on Schedule I hereto (together with Bayer, the “Bayer
Parties”).  Talecris LLC and the
Bayer Parties are collectively referred to as the “Stockholders”.
Capitalized terms not defined herein have the
meanings assigned to them in the Joint Contribution Agreement (as defined
below).


 


RECITALS


 


A.                                   As of the Effective Date, the authorized capital stock of the Company consists
of:


 


(i)                                     100,000,000 shares of Common Stock, par value $0.01 per share (the “Common
Stock”), of the Company having the rights
and preferences set forth in the Company’s Certificate of Incorporation;


 


(ii)                                  5,000,000 shares of Series A Senior Convertible Preferred Stock, par
value $0.01 per share (the “Series A Senior Convertible
Preferred Stock”), of the Company having
the rights and preferences set forth in the Company’s Certificate of
Designations for the Series A Senior Convertible Preferred Stock (the “Series A
Senior Convertible Preferred Stock Designations”);


 


(iii)                               5,000,000 shares of Series B Senior Convertible Preferred Stock, par
value $0.01 per share (the “Series B Senior Convertible
Preferred Stock”), of the Company having
the rights and preferences set forth in the Company’s Certificate of
Designations for the Series B Senior Convertible Preferred Stock (the “Series B
Senior Convertible Preferred Stock Designations”); and


 


(iv)                              10 shares of Junior Preferred Stock, par value $0.01 per share (the “Junior
Preferred Stock”), of the Company
having the rights and preferences set forth in the Company’s Certificate of
Designations for the Junior Preferred Stock (the “Junior Preferred
Stock Designations”).


 


B.                                     Pursuant to an Amended and Restated Joint Contribution Agreement, dated
as of March 30, 2005 (the “Joint Contribution
Agreement”), among Bayer, Talecris LLC, the
Company and Talecris Biotherapeutics, Inc., as may be amended from time to
time, as of the Effective Date, Bayer and its Affiliates will receive 1,000,000
shares of Common Stock and one share of Junior Preferred Stock and Talecris LLC
will receive 100,000 shares of Series A Senior Convertible Preferred Stock.
Schedule II sets forth the initial capitalization of the Company as of the
Effective Date after giving effect to the issuance of the Common Stock and
Junior Preferred Stock to Bayer and its Affiliates and the Series A Senior
Convertible Preferred Stock to Talecris LLC pursuant to the Joint Contribution
Agreement and shows the Equity Interests of the Company issuable in connection
with the Precision Acquisition.


 


1

















 


C.                                     As a condition to the consummation of the transactions contemplated by the
Joint Contribution Agreement and in order to govern certain of their rights, duties
and obligations and the relations among themselves following the consummation
of the transactions contemplated thereby, the parties hereto desire to enter
into this Agreement.


 


In
consideration of the premises and the mutual agreements and covenants hereinafter
set forth, the parties hereto hereby agree as follows:


 


ARTICLE I


 


DEFINITIONS


 


SECTION 1.01
Certain Defined Terms.


 


As used
in this Agreement, the following terms shall have the following meanings:


 


“Affiliate” of any specified Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such specified Person. For purposes of this definition, “control” (including, with
correlative meanings, the terms “controlling,” “controlled by” and “under
common control with”), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of Voting Stock, by agreement or otherwise; provided, however,
that beneficial ownership of 10% or more of the
Voting Stock of a Person shall be deemed to be control; provided, further,
that none of the Bayer Parties or any of their
Affiliates shall be considered to be an Affiliate of the Company or Talecris
LLC or any of their respective Subsidiaries.


 


“Agreement” has the meaning given such term in the Preamble.


 


“Ampersand” has the meaning given such term in Section 2.10.


 


“Ancillary Transactions” means the transactions contemplated by the Precision Acquisition, the
Senior Credit Agreement, the Second Lien Credit Agreement and the Purchase
Agreement and the issuance of Series A Senior Convertible Preferred Stock,
Series B Senior Convertible Preferred Stock and Junior Secured Convertible
Notes.


 


“Annual Achievement” has the meaning set forth in Exhibit D.


 


“Annual Net Sales” has the meaning set forth in Exhibit D.


 


“Annual Reduction” has the meaning set forth in Exhibit D.


 


“Annual Sales Target” has the meaning set forth in Exhibit D.


 


“Approved Sale” means any transaction or series of related transactions, approved by the
Board of Directors of the Company, pursuant to which a Third Party or group of
Third Parties acting together acquires (i) Equity Interests of the Company
constituting a majority of the


 


2

















 


issued and outstanding
Voting Stock of the Company (whether by merger, consolidation, sale or transfer
of the Company’s Equity Interests, or otherwise) or (ii) all or
substantially all of the Company’s assets.


 


“Bayer” has the
meaning set forth in the Preamble.


 


“Bayer Parties” has the
meaning set forth in the Preamble.


 


“Beneficial Owner” has the
meaning given such term in Rules 13d-3 and 13d-5 under the Exchange Act.


 


“Business Day” means any day
that is not a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed.


 


“Cerberus” has the
meaning given such term in Section 2.10.


 


“Change of Control” means any of
the following: (i) the sale, assignment, conveyance, transfer, lease or
other disposition of all or substantially all of the assets of Parent and its
Subsidiaries, taken as a whole, whether in one transaction or a series of
related transactions; (ii) the acquisition of Parent by another Person by
means of merger or consolidation resulting in the exchange of all or
substantially all of the outstanding securities of Parent for securities or
consideration issued, or caused to be issued, by the acquiring Person or an
Affiliate thereof other than a merger with or into a wholly owned Subsidiary or
(iii) the consummation by Parent of a transaction or series of related
transactions, including the issuance or sale of capital securities, if
immediately after the consummation of such transaction (or, in the case of a
series of transactions, the last of such transactions) any Person (other than
Cerberus, Ampersand and their respective Affiliates) shall acquire, as a result
thereof, more than 50% of the Voting Stock of Parent on a fully diluted basis.


 


“Commission” means the
United States Securities and Exchange Commission, and any successor commission
or agency having similar powers.


 


“Common Share” means any
share of Common Stock.


 


“Common Stock” has the
meaning set forth in the Recitals.


 


“Common Stock Equivalents” means, without
duplication with any other Common Stock or Common Stock Equivalents, any shares
of any class or series of any securities or any instruments (including debt
securities) of the Company directly or indirectly convertible into or
exercisable or exchangeable for (or which are convertible into or exercisable
or exchangeable for another security or instrument which is directly or
indirectly convertible into or exercisable or exchangeable for) Common Stock, whether
at the time of issuance or upon the passage of time or the occurrence of future
events.


 


“Company” has the
meaning set forth in the Preamble.


 


3

















 


“Competitor”
means any Person (other than the Company and its Affiliates) that directly or
indirectly engages or invests in the business of manufacturing, marketing, distribution,
sale and/or research and development of plasma-derived products.


 


“Confidential
Information” has the meaning set forth in Section 5.04(a).


 


“Delay
Notice” has the meaning set forth in Section 4.01(f)(ii).


 


“Demand
Exercise Notice” has the meaning set forth in Section 4.01(a).


 


“Demanding
Party” has the meaning set forth in Section 4.01(a).


 


“Demand
Registration” has the meaning set forth in Section 4.01(a).


 


“Demand
Registration Maximum Offering Size” has the meaning set forth in Section 4.01(g).


 


“Demand
Registration Request” has the meaning set forth in Section 4.01(a).


 


“Disadvantageous
Condition” means the existence of any acquisition, disposition or other
material transaction involving the Company or any of its Subsidiaries or any
material financing activity, or the unavailability of any required financial
statements, or the possession by the Company of material information which would
not be in the best interests of the Company or any of its Subsidiaries to
disclose in a Registration Statement.


 


“Disclosing
Party” has the meaning set forth in Section 5.04(c).


 


“Dispute
Notice” has the meaning set forth in Section 8.06.


 


“Drag-Along
Notice” has the meaning set forth in Section 3.04(b).


 


“Drag-Along
Sale” has the meaning set forth in Section 3.04(a).


 


“Effective
Date” has the meaning set forth in the Preamble.


 


“Employee
Plan” means any equity incentive plan, agreement, bonus, award, stock
purchase plan, stock option plan or other stock arrangement.


 


“Equity
Interests” means any shares of any class or series of any securities or
instruments (including debt securities) directly or indirectly convertible into
or exercisable or exchangeable for shares of any class or series of capital
stock of any Person (or which are convertible into or exercisable or
exchangeable for another security or instruments which is, in turn, directly or
indirectly convertible into or exercisable or exchangeable for shares of any
class or series of capital stock of such Person), whether at the time of
issuance or upon the passage of time or the occurrence of future events, whether
now authorized or not.


 


“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time
to time.


 


4

















 


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


 


“Exchange
Notice” has the meaning set forth in Section 2.04(c).


 


“Exchange
Share” means any share of Voting Stock of Parent.


 


“Fully
Diluted Common Shares” means, at any time of determination, then
outstanding shares of Common Stock plus, without duplication, all shares of
Common Stock issuable, whether at such time or upon the passage of time or the
occurrence of future events, upon the conversion, exercise or exchange of all
then outstanding Common Stock Equivalents.


 


“Fundamental
Change” means any transaction or event (including without limitation any
merger, consolidation, sale of assets, tender or exchange offer, reclassification,
compulsory share exchange or liquidation) in which all or substantially all
outstanding Common Stock is converted into or exchanged for stock, other
securities, cash or assets.


 


“GAAP”
means generally accepted accounting principles as in effect from time to time
in the United States of America applied on a consistent basis.


 


“Indebtedness”
means, as applied to any Person, without duplication, the following items to
the extent properly classified as a liability on a balance sheet prepared in
accordance with GAAP (or, with respect to clause (xi), appearing on a balance
sheet prepared in accordance with GAAP otherwise than in the stockholders
equity section thereof) or disclosed in the footnotes to such Person’s
consolidated financial statements prepared in accordance with GAAP: (i) all
indebtedness for borrowed money; (ii) that portion of obligations with
respect to capital leases, including sale and leaseback obligations, that is properly
classified as a liability on a balance sheet in accordance with GAAP; (iii) notes
payable and drafts accepted representing extensions of credit whether or not
representing obligations for borrowed money (excluding accounts payable which
are classified as current liabilities in accordance with GAAP and accrued
expenses in each case incurred in the ordinary course of business); (iv) any
obligation owed for all or any part of the deferred purchase price of property
or services (excluding any such obligations incurred under ERISA or with
respect to earn outs incurred and paid when due in connection with an
acquisition), which purchase price is-evidenced by a note or similar written
instrument (including, without limitation, any accrued management fees payable
by the Company which are not yet paid as a result of restrictions in any then
existing agreement prohibiting the Company from making such payment); (v) all
indebtedness secured by any Lien on any property or asset owned or held by that
Person regardless of whether the indebtedness secured thereby shall have been
assumed by that Person or is nonrecourse to the credit of that Person; (vi) the
face amount of any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of drawings; (vii) the
direct or indirect guaranty, endorsement (otherwise than for collection or
deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of another that
constitutes Indebtedness under another clause of this definition; (viii) any
obligation of such Person the primary purpose or intent of which is to provide
assurance to an obligee that the obligation of the obligor thereof will be paid
or discharged, or any agreement relating thereto will be complied with, or the
holders thereof will be protected (in


 


5

















 


whole or in part) against
loss in respect thereof; (ix) any liability of such Person for an
obligation of another through any agreement (contingent or otherwise) that
constitutes Indebtedness under another clause of this definition (a) to
purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation (whether
in the form of loans, advances, stock purchases, capital contributions or
otherwise) or (b) to maintain the solvency or any balance sheet item, level
of income or financial condition of another if, in the case of any agreement
described under subclauses (a) or (b) of this clause (ix), the
primary purpose or intent thereof is as described in clause (viii) above; (x) the
notional amount of all obligations of such Person in respect of any exchange
traded or over the counter derivative transaction, including, without
limitation, interest rate protection agreement, foreign currency exchange
agreement and other interest or exchange rate hedging arrangement, whether
entered into for hedging or speculative purposes; and (xi) the liquidation
preference of mandatorily redeemable, nonconvertible preferred stock (other
than the Junior Preferred Stock).


 


“Initial Common Shares” means the Common Shares issued to Bayer and its
Affiliates as of the date hereof, as adjusted for any stock splits, stock
dividends, combinations, reclassifications or reverse stock splits in respect
of such Common Shares occurring during the period between the date hereof and
the Redemption Date.


 


“Initial Shares” has the meaning set forth in Section 4.05(e).


 


“IPO”
means the initial public offering, if any, of Equity Interests of the Company
or Parent pursuant to an effective Registration Statement under the Securities
Act.


 


“Joint Contribution
Agreement” has the meaning set forth in
the Recitals.


 


“Joint Notice” has the meaning set forth in Section 3.05(b).


 


“Junior Preferred Stock” has the meaning set forth in the Recitals.


 


“Junior Preferred Stock
Designations” has the meaning set forth
in the Recitals.


 


“Junior Secured
Convertible Notes” means the Junior
Secured Convertible Notes due 2013 of the Company.


 


“Lien” means, with respect to any property or other asset
of any Person (or any revenues, income or profits of that Person therefrom) (in
each case whether the same is consensual or nonconsensual or arises by contract,
operation of law, legal process or otherwise), (i) any mortgage, lien, security
interest, pledge, assignment, hypothecation, title retention, preferential
right, counterclaim, attachment, actual, planned or threatened expropriation, seizure,
embargo, levy or other charge or encumbrance of any kind thereupon or in
respect thereof or (ii) any other arrangement under which the same is
transferred, sequestered or otherwise identified with the intention of
subjecting the same to, or making the same available for, the payment or
performance of any liability in priority to the payment of the ordinary, unsecured
creditors of that Person. For purposes of this Agreement, a Person will be
deemed to own subject to a Lien any asset that it has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale agreement, capital
lease, synthetic lease or other title retention agreement relating to that
asset.


 


6

















 


“NASD”
means the National Association of Securities Dealers, Inc.


 


“Net
Proceeds” means, with respect to a sale of Equity Interests by the Company,
the aggregate net proceeds received by the Company, after payment of
commissions, discounts and expenses incurred in connection with such sale, whether
in cash or in property (which shall be valued at the fair market value thereof
as determined by the Board of Directors of the Company in good faith).


 


“New
Issue Securities” has the meaning set forth in Section 2.03(a)(i).


 


“Notice
of Acceptance” has the meaning set forth in Section 2.03(b).


 


“Notice
of Objection” has the meaning set forth in Section 2.04(c).


 


“Notice
of Interest” has the meaning set forth in Section 3.03(b).


 


“Notice
Period” has the meaning set forth in Section 3.03(b).


 


“Offer
Period” has the meaning set forth in Section 3.05(b).


 


“Offer
Terms” has the meaning set forth in Section 3.05(a).


 


“Offered
Shares” has the meaning set forth in Section 3.05(a).


 


“Overallotment
Option Shares” has the meaning set forth in Section 4.05(e).


 


“Parent”
means Talecris LLC, any successor to Talecris LLC or any direct or indirect
upstream parent entity holding a controlling interest in the Equity Interests
of Talecris LLC other than Cerberus, Ampersand and their related funds.


 


“Parent
Equity Valuation” has the meaning set forth in Section 2.04(c).


 


“Permitted
Transferee” shall mean, with respect to any Bayer Party, (i) the
Company or Talecris LLC or (ii) any Affiliate of Bayer AG, a stock
corporation organized under the laws of the Federal Republic of Germany.


 


“Person”
means any individual, corporation (including not-for-profit), general or
limited partnership, limited liability company, joint venture, association, joint-stock
corporation, estate, trust, unincorporated organization or government or any
political subdivision, agency or instrumentality thereof or any other entity of
any kind.


 


“Piggyback
Registration Maximum Offering Size” has the meaning set forth in Section 4.02(b).


 


“Precision
Acquisition” means the acquisition by Talecris LLC or the Company, directly
or indirectly through its Affiliates, of substantially all the stock or assets
of Precision Pharma Services, Inc.


 


“Preemptive
Offeree” has the meaning set forth in Section 2.03(a)(i).


 


7

















 


“Preemptive
Rights Notice” has the meaning set forth in Section 2.03(a)(ii).


 


“Preemptive
Share” has the meaning set forth in Section 2.03(a)(ii).


 


“Pro
Rata Share” has the meaning set forth in Section 3.03(b).


 


“Prospectus”
means the prospectus included in a Registration Statement, including any
preliminary prospectus or summary prospectus, and any such prospectus or
preliminary or summary prospectus as amended or supplemented, and in each case
including all material incorporated by reference therein.


 


“Public
Offering” means an underwritten public offering of common stock of a Person
that is a corporation (or Equity Interests of a Person that is not a
corporation comparable to common stock) pursuant to an effective Registration
Statement under the Securities Act.


 


“Purchase
Agreement” means the Purchase Agreement dated as of March 31, 2005
between the Company and Talecris LLC with respect to the purchase of the Junior
Secured Convertible Notes.


 


“Qualified
Public Offering” means an IPO in which the aggregate net proceeds, after
deducting underwriters’ discounts and commissions and offering expenses, to the
Company and/or Parent equal or exceed US $75 million.


 


“Registrable
Securities” means the Shares held by the parties to this Agreement or by
any other Persons to whom incidental registration rights may be granted after
the date hereof. As to any particular Registrable Securities that have been
issued, such securities shall cease to be Registrable Securities when (i) a
Registration Statement with respect to the sale of such securities shall have
become effective under the Securities Act and such securities shall have been
disposed of under such Registration Statement; (ii) they shall have been
distributed to the public pursuant to Rule 144; (iii) they shall have
been otherwise transferred or disposed of, and new certificates therefor not
bearing a legend to the effect set forth in the first paragraph of the legend
required by Section 3.02 restricting further transfer shall have been
delivered by the Company, and subsequent transfer or disposition of them shall
not require their registration or qualification under the Securities Act or any
state securities laws or (iv) they shall have ceased to be outstanding.


 


“Registration
Expenses” has the meaning set forth in Section 4.04.


 


“Registration
Statement” means a registration statement filed by an issuer with the
Commission and all amendments and supplements to any such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.


 


“Representatives”
has the meaning set forth in Section 5.04(a).


 


“Restricted
Payments” has the meaning set forth in Section 2.09.


 


“Reviewing
Accountant” has the meaning set forth in Section 8.06.


 


8

















 


“Roll-Up” has the meaning set forth in Section 2.04(b).


 


“Rule 144” means Rule 144 (or any successor provision) under the Securities
Act.


 


“Sale”
means any sale of legal and beneficial ownership of Shares for value. The terms
“Sell” and “Sold” have corresponding meanings.


 


“Sales
Target Year” has the meaning set forth in Exhibit D.


 


“Second
Lien Credit Agreement” means the Second Lien Credit Agreement dated as of March 31,
2005 among the Company, its Subsidiaries, Cerberus-Plasma Holdings LLC and the
lenders party thereto.


 


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


 


“Selling
Party” has the meaning set forth in Section 3.05(a).


 


“Selling
Party’s Notice” has the meaning set forth in Section 3.05(a).


 


“Senior
Convertible Preferred Stock” means the Series A Senior Convertible
Preferred Stock and Series B Senior Convertible Preferred Stock
collectively.


 


“Senior
Credit Agreement” means the Credit Agreement dated as of March 31, 2005
among the Company, its Subsidiaries, JPMorgan Chase Bank, N.A. and the lenders
party thereto.


 


“Series A
Senior Convertible Preferred Stock Designations” has the meaning set forth
in the Recitals.


 


“Series B
Senior Convertible Preferred Stock Designations” has the meaning set forth
in the Recitals.


 


“Share”
means any Common Share or any share of Senior Convertible Preferred Stock.


 


“Stockholder”
has the meaning set forth in the Preamble.


 


“Subsidiary”
of any Person means (i) a corporation more than 50% of the outstanding
Voting Stock of which is owned, directly or indirectly, by such Person or by
one or more other Subsidiaries of such Person or by such Person and one or more
Subsidiaries thereof or (ii) any other Person (other than a corporation) in
which such Person or one or more other Subsidiaries of such Person or such
Person and one or more other Subsidiaries thereof, directly or indirectly, has
at least majority ownership and the power to direct the management or policies
thereof.


 


“Tag-Along
Offer Notice” has the meaning set forth in Section 3.03(a).


 


“Tag-Along
Offer Price” has the meaning set forth in Section 3.03(a).


 


9

















 


“Tag-Along
Right” has the meaning set forth in Section 3.03(a).


 


“Tag-Along
Shares” has the meaning set forth in Section 3.03(a).


 


“Tag-Along
Stockholder” has the meaning set forth in Section 3.03(a).


 


“Tag-Along
Transfer” has the meaning set forth in Section 3.03(a).


 


“Talecris
Inc.” means Talecris Biotherapeutics, Inc., a Delaware corporation.


 


“Talecris
LLC” has the meaning set forth in the Preamble.


 


“Third
Party” means, with respect to any Stockholder, any Person other than such
Stockholder, any Affiliate of such Stockholder or another Stockholder.


 


“Transfer”
means any transfer, Sale, assignment, distribution, exchange, charge, pledge, gift,
hypothecation, conveyance, encumbrance, security interest or other disposition
of Shares or of a participation or other rights therein (including any contract
therefor), whether direct or indirect or through any one or more intermediaries,
voluntary or involuntary, by transfer by reorganization, merger, sale of
substantially all of the assets or by operation of law, or for value or
otherwise, or the entering into of a transaction or other arrangement by a
Stockholder which has, or is intended to have, the effect of transferring any
economic benefit and/or risks of the ownership of the Shares, or the entering
into of any voting trust or other arrangement (other than as contemplated
herein) with respect to voting rights of such Shares, or the transfer of an
interest in any Person holding the Shares (directly or indirectly through any
other Person in which such first-named Person holds an interest) or having
other economic interest, direct or indirect, in the Shares. Any indirect
Transfer shall include the transfer of any direct or indirect economic or
beneficial interest in the Shares that would result in the transferee having
the opportunity, directly or indirectly, to profit or share in any profit
derived from a transaction in the Shares.


 


“Valuation
Firm” has the meaning set forth in Section 3.05(g).


 


“Voting
Stock” of any Person means capital stock of such Person which ordinarily
has voting power for the election of directors (or persons performing similar
functions) of such Person.


 


ARTICLE II


 


CERTAIN AGREEMENTS


 


SECTION 2.01
Redemption of Bayer Shares.


 


(a)                                  At any time from the date five years after the Effective Date up to and until
the termination of this Section 2.01 (the “Put Period”), the Bayer
Parties collectively may elect to cause the Company to redeem the Initial
Common Shares, in whole but not in part, at the Put Price.


 


10














 


(b)                                 At any time from and after the date two years after the Effective Date up
to and until the termination of this Section 2.01 (the “Call Period”),
the Company may elect to redeem the Initial Common Shares, in whole but not in
part, at the Call Price.


 


(c)                                  In the event that the Bayer Parties, on the one hand, and the Company, on
the other hand, simultaneously make an election pursuant to Section 2.01(a) and
Section 2.01(b), respectively, the election made by the Company shall
control.


 


(d)                                 Any election pursuant to Section 2.01(a) or Section 2.01(b) shall
be made by the electing party by giving to the other party a written notice of
such election (the “Notice of Election”), which election shall be
irrevocable at the time of such notice (the “Election Time”). The Notice
of Election shall state the Redemption Date and, in the case of a redemption
pursuant to Section 2.01(b), the Call Price.


 


(e)                                  The Put Price and the Call Price shall be payable in cash only out of
funds legally available to distribute to the Company’s equity holders on a day
that is no more than 45 days after the Election Time (the “Redemption Date”).
The Company may not elect to redeem the Initial Common Shares if the Board of
Directors of the Company determines, after consultation with its outside legal
and financial advisors, that it will not have funds legally available therefor
on the Redemption Date. If on the Redemption Date with respect to an election
pursuant to Section 2.01(a), the Company does not have funds legally
available for the payment of the Put Price, the Company shall provide the Bayer
Parties with a schedule of its calculation of the amount of funds legally
available therefor. If sufficient funds are not legally available, then (i) the
Bayer Parties may, in their sole discretion, elect to have the Company redeem
as many of the Bayer Parties’ respective Initial Common Shares as such funds
will allow or to withdraw the Notice of Election, (ii) all transfer
restrictions set forth in Section 3.01 and the right of first offer set forth
in Section 3.05 shall lapse in their entirety as to any Initial Common
Shares that are not able to be redeemed and (iii) at any time thereafter
when additional funds of the Corporation are legally available for the
redemption of the Initial Common Shares, such funds will be used at the
earliest permissible time to redeem or pay the balance of such shares, or such
portion thereof for which funds are then legally available. For the avoidance
of doubt, all references to funds “legally available” in this Article II
shall mean those funds available under and pursuant to Section 160 of the
Delaware General Corporation Law or any provision successor thereto. If, for
any reason, the Company fails to redeem all Initial Common Shares on the
Redemption Date, (i) the unredeemed shares shall remain outstanding and
shall continue to have all rights provided for herein, (ii) the holders of
such unredeemed shares shall have the ongoing right to be redeemed together
with such rights and remedies as may be available under applicable law, (iii) the
Company shall not pay any dividends on, or otherwise make any distributions to
the holders of, any shares of Senior Convertible Preferred Stock or other
Equity Interests of the Company then held by Talecris LLC or its Affiliates or
any cash payment on the Junior Secured Convertible Notes or any other
Indebtedness of the Company then owed to Talecris LLC or its Affiliates (other
than cash payments between the Company and its consolidated Subsidiaries) or
any advances or loans or other cash payments to Talecris LLC or its Affiliates
(other than advances or loans between the Company and its consolidated
Subsidiaries), in each case until all amounts due to the holders of the Initial
Common Shares are paid in full, (iv) the failure to redeem on the
Redemption Date shall constitute a breach of this Agreement and non-performance
of the mandatory redemption covenant and it shall be no


 


11

















 


defense thereto that
there are restrictive covenants in any other agreement prohibiting any such
mandatory redemption, and (v) the Corporation shall not redeem any shares
of its capital stock until the Junior Preferred Stock has been redeemed in full;
provided, however, that notwithstanding the provisions of this Section 2.01(e), the
Company may (a) pay any and all of its obligations owing to the lenders
pursuant to the Senior Credit Agreement and the Second Lien Credit Agreement, as
such Senior Credit Agreement or Second Lien Credit Agreement may be amended, extended,
renewed, refinanced or replaced, provided that such payments may not be made to
Talecris LLC or its Affiliates to the extent that the principal amount of
Indebtedness then owed to Talecris LLC or its Affiliates, incurred pursuant to
any such amendment, extension, renewal, refinancing or replacement, exceeds the
principal amount of the Indebtedness owed to Talecris LLC or its Affiliates
pursuant to the Credit Agreement or the Second Lien Credit Agreement prior to
such amendment, extension, renewal, refinancing or replacement, as applicable, plus
the amount of interest, fees, premiums and other expenses payable in connection
with such amendment, extension, renewal, refinancing or replacement, and (b) redeem
or repurchase any Shares to the extent permitted by Section 2.02(c).


 


(f)                                    On the Redemption Date, (i) the Bayer Parties shall deliver to the Company
certificates representing such Bayer Parties’ respective Initial Common Shares,
(ii) Bayer and the Company shall execute such instruments and agreements as are
customary under the circumstances (which agreements shall include a
representation and warranty by such Bayer Parties that, assuming that the
Company has no knowledge of any adverse claim to the Shares or Exchange Shares,
the Company will acquire such securities free of adverse claims) and (iii) the
Company shall pay the Put Price or the Call Price, as applicable, for such
Shares to such Bayer Parties in immediately available funds.


 


(g)                                 The “Put Price” shall be $15 million (or, if greater, 10% of the
amount of cash contributed by Talecris LLC to the Company on or prior to the
Effective Time in exchange for Common Stock or Common Stock Equivalents), plus
6% per annum, compounded annually, thereon from the Effective Date to the
Redemption Date.


 


(h)                                 The “Call Price” shall be, at the
applicable Election Time, the greater of (a) $15 million, plus 6% per
annum, compounded annually, thereon from the Effective Date to the Redemption
Date and (b) the Bayer Equity Fair Market Value. The “Bayer
Equity Fair Market Value” at any time
shall be the Bayer Equity Percentage multiplied by the Deemed Equity Value at
such time. The “Bayer Equity Percentage” at any time shall be the amount equal to (i) the total number of
outstanding Initial Common Shares held by the Bayer Parties divided by (ii) the
number of Fully Diluted Common Shares. Solely for purposes of calculating the
Bayer Equity Percentage, the number of outstanding Initial Common Shares held
by the Bayer Parties shall be deemed adjusted in accordance with the adjustment
provision in Section 7(d)(iii) of each of the Series A Senior
Convertible Preferred Stock Designations and Series B Senior Convertible
Preferred Stock Designations, as such section may be amended from time to time;
provided, however, that
(1) no such adjustment shall be deemed made to the extent that the Bayer
Parties were offered the right to purchase their Preemptive Share of the Common
Shares so issued or granted pursuant to Section 2.03 and, if the Bayer
Parties did not exercise such right, there was no adjustment to the then
applicable conversion rate of the Series A Senior Convertible Preferred
Stock or Series B Senior Convertible Preferred Stock in connection with
such issuance or grant and (2) no such adjustment shall be deemed made in
connection with issuance of New


 


12

















 


Issue
Securities described in clause (i), (ii) or (iv) of Section 2.03(d) provided
that any issuance of New Issue Securities described in clause (iv) of Section 2.03(d) to
lenders or purchasers that are Affiliates of the Company is in compliance with Section 2.06.
The “Deemed Equity Value” at any time shall be the amount equal to (i) 47%
of the consolidated net sales, after reduction for discounts, allowances and
rebates, of the Company, determined in accordance with GAAP, for the four
consecutive fiscal quarters ended immediately prior to such time, minus (ii) the
amount of Indebtedness of the Company and its consolidated subsidiaries
outstanding at such time; provided, however, that solely for
purposes of the calculation of the Deemed Equity Value, all outstanding
convertible debt shall be deemed converted and the term “Indebtedness” shall
not include any amounts outstanding under such debt; provided, further,
that solely for purposes of the calculation of the Deemed Equity Value, Indebtedness
shall be net of cash and cash equivalents held by the Company. In the event of
an Exchange, the Bayer Equity Fair Market Value shall be adjusted consistent
with Section 2.04(c). Any dispute as to the calculation of the Bayer
Equity Fair Market Value shall be resolved pursuant to Section 8.06.


 


(i)                                     This Section 2.01 shall terminate immediately prior to the
consummation of a Qualified Public Offering.


 


(j)                                     In determining the amount of funds legally available per subsection (e) for
the redemption provided in this Section 2.01 or for the redemption of the
Junior Preferred Stock, the Company shall value its assets at the highest
amount determined by the Board of Directors of the Company or the Board of
Managers or similar body of Parent, as the case may be, after consultation with
its outside legal and financial advisors, to be legally available.


 


SECTION 2.02
Limitations on Other Redemptions.


 


(a)                                  No shares of capital stock of the Company shall be redeemable or
purchased by the Company other than the Junior Preferred Stock prior to the
Call Period, unless the Company offers to purchase concurrently the Common
Shares held by the Bayer Parties on a pro rata basis.
During the Call Period, no Shares other than Common Shares or shares of Junior
Preferred Stock held by the Bayer Parties shall be redeemable or purchased by
the Company until the earlier of (i) the closing of a put by the Bayer
Parties pursuant to Section 2.01(a), (ii) the expiration of the Put
Period if the Bayer Parties have not delivered the Notice of Election pursuant
to Section 2.01(a) prior to such expiration and (iii) the
consummation of a Qualified Public Offering.


 


(b)                                 Without limiting the provisions in Section 2.02(a), if the Company
proposes to redeem any shares of its capital stock other than Common Shares or
shares of Junior Preferred Stock held by the Bayer Parties, it shall not redeem
such Shares if any such redemption will impair the Company’s ability to redeem
the Junior Preferred Stock in full.


 


(c)                                  Notwithstanding the provisions of Sections 2.02(a) and 2.02(b), the
Company may (i) redeem or repurchase any Shares from officers, former
officers, employees, former employees, directors or former directors of the
Company or its Affiliates upon the death, disability or termination of the
employment of such officers, former officers, employees or former employees or
termination of the term of such director or former director and (ii) redeem
or repurchase Shares deemed to occur upon (A) the exercise of stock
options if such Shares


 


13

















 


represent a portion of
the exercise price thereof and (B) the withholding of a portion of the
Shares granted or awarded to an employee to pay taxes associated therewith.


 


SECTION 2.03
Preemptive Rights.


 


(a)                                  Subject to the exceptions set forth in Section 2.03(d), the Company
shall:


 


(i)                                     not issue, sell or exchange, agree or obligate itself to issue, sell or
exchange, or reserve or set aside for issuance, sale or exchange any Equity
Interests of the Company unless the Company shall have first offered to sell
such securities (the “New Issue Securities”) to each Stockholder (in each case, a “Preemptive
Offeree”) in accordance with this Section 2.03;
and


 


(ii)                                  offer to
sell each Preemptive Offeree all or any portion of its Preemptive Share of any
proposed issuance of New Issue Securities at the same price and on the same
terms at which the Company proposes to sell such New Issue Securities, which
shall have been specified by the Company in a written offer delivered to the
Preemptive Offerees setting forth all of the terms and conditions of the
offering of the New Issue Securities (the “Preemptive Right Notice”),
which offer by its terms shall remain open and
irrevocable for a period of 15 Business Days from receipt of the Preemptive
Right Notice. The offer of the Company to sell the New Issue Securities shall
expire after such 15-Business Day period. “Preemptive Share” shall equal (i) the number of shares of New
Issue Securities multiplied by (ii) a fraction (A) the numerator of
which is equal to the number of Fully Diluted Common Shares that would be owned
by such Stockholder assuming the conversion, exercise or exchange of all Equity
Interests of the Company owned by such Stockholder and (B) the denominator
of which is equal to the Fully Diluted Common Shares.


 


(b)                                 Within 15 Business Days after receipt of the Preemptive Right Notice, the
Preemptive Offeree may give notice to the Company of its intent to accept (a “Notice of
Acceptance”) the Company’s offer to
purchase all or any portion of its Preemptive Share of New Issue Securities, which
Notice of Acceptance shall constitute an irrevocable acceptance of such offer. If
the Company does not receive a Notice of Acceptance within such 15-Business Day
period with respect to any New Issue Securities, such Preemptive Offeree shall
be deemed to have waived its opportunity to purchase such New Issue Securities,
and the Company shall be free to issue and sell such New Issue Securities (or
other securities convertible into or exercisable or exchangeable for such New
Issue Securities) to any Person on terms and conditions which, taken as a whole,
are no less favorable to the Company, at any time within 180 days after the
expiration of such 15-Business Day period. Any New Issue Securities not sold
within 180 days after the expiration of such 15-Business Day period shall
continue to be subject to the requirements of this Section 2.03.


 


(c)                                  Upon the closing of any such purchase of New Issue Securities, which shall
include full payment to the Company of the purchase price therefor, each
Preemptive Offeree shall purchase from the Company, and the Company shall sell
to such Preemptive Offeree, the number of New Issue Securities specified in the
Preemptive Offeree’s Notice of Acceptance, upon the terms and conditions
specified in the Preemptive Right Notice.


 


14

















 


(d)                                 The rights of the Preemptive Offerees under Section 2.03(a) shall
not apply to any of the following New Issue Securities:


 


(i)                                     options or other Common Stock Equivalents to purchase up to 3,333,333
shares of Common Stock (which shall be reduced by the shares of Common Stock
issuable pursuant to the Precision Acquisition) issued to the Company’s or its
Subsidiaries’ employees, consultants, directors or officers pursuant to stock
option, stock purchase, restricted stock or similar equity or incentive-based
compensation plans or agreements approved by the Company’s Board of Directors;


 


(ii)                                  New
Issue Securities issued in connection with an IPO;


 


(iii)                               New
Issue Securities issued pursuant to the exercise, conversion or exchange of any
then outstanding convertible or exchangeable securities, rights, options or
warrants, including without limitation, the Senior Convertible Preferred Stock
issued to Talecris LLC;


 


(iv)                              New
Issue Securities issued to lenders or purchasers of debt securities of the
Company or Parent or their Subsidiaries in connection with debt incurred to
such lenders or purchasers;


 


(v)                                 New Issue Securities issued in consideration of an acquisition of the
equity or assets of another Person, whether by sale, consolidation, merger or
other similar transaction; and


 


(vi)                              New
Issue Securities issued as dividends or distributions generally to holders of
Shares (including holders of Common Stock), or upon any subdivision or
combination or similar recapitalization of Shares.


 


(e)                                  This Section 2.03 shall terminate immediately prior to the
consummation of an IPO.


 


SECTION 2.04
Exchange Rights.


 


(a)                                  Immediately prior to the consummation of an IPO of Parent or Change of
Control of Parent, the Bayer Parties, on the one hand, and Talecris LLC, on the
other hand, will each be entitled to cause the Common Shares held by the Bayer
Parties to be exchanged for Equity Interests in Parent as comparable as
practicable to the Common Stock. No such exchange rights will apply to shares
of Junior Preferred Stock.


 


(b)                                 In the event Parent elects to cause the Company to become a wholly owned
subsidiary of Parent (a “Roll-Up”), Talecris
LLC will be entitled to (i) cause the Common Shares to be exchanged for
Equity Interests in Parent as comparable as practicable to the Common Stock (and
in any event having a value no less, and terms no less favorable to the Bayer
Parties, than those of their Common Shares) and (ii) cause the shares of
Junior Preferred Stock held by the Bayer Parties to be exchanged for Equity
Interests in Parent having identical rights and privileges to the Junior
Preferred Stock except as otherwise agreed by Bayer.


 


15

















 


(c)                                  As soon as practicable and no fewer than 90 days prior to the
consummation of an IPO or Change of Control of Parent or a Roll-Up, Talecris
LLC will deliver to each Bayer Party written notice of such proposed IPO, Change
of Control or Roll-Up (“Exchange Notice”), specifying the material terms
thereof and whether Talecris LLC is exercising its right to require the Shares
held by the Bayer Parties to be exchanged for Equity Interests in Parent. The
parties shall negotiate in good faith to determine the relative value of the
Common Shares and the Equity Interests of Parent into which the Common Shares
will be exchanged. During the course of the negotiations, Talecris LLC shall
make available to the Bayer Parties and their representatives such current
financial, sales and other information as Bayer may reasonably request for
purposes of determining such value. If Talecris LLC and Bayer are unable to
reach agreement as to such value within 60 days after the Bayer Parties’ receipt
of the Exchange Notice, then they shall submit the dispute to a mutually agreed,
nationally recognized investment banking firm which will perform such relative
valuation, which valuation will be binding on the parties. Talecris LLC and
Bayer shall each pay 50% of the fees and expenses of such firm.


 


(d)                                 Consistent with Section 8.12, upon the consummation of any exchange
pursuant to Section 2.04(a) or Section 2.04(b), the provisions
of this Agreement shall be adjusted such that references in this Agreement to
Shares shall be deemed to be references to the Exchange Shares, and references
in this Agreement to the Company shall be deemed to be references to Parent.


 


SECTION 2.05
Material Actions.


 


The Company
shall not, without the prior written consent of the Bayer Parties owning a
majority of the outstanding shares of the relevant class, (a) amend the
Certificate of Incorporation or Bylaws of the Company so as to adversely alter
or change the preferences, rights, privileges or powers or the restrictions
provided for the benefit of holders of Common Stock and Junior Preferred Stock
or (b) create or issue any other classes of common stock.


 


SECTION 2.06
Affiliate Transactions.


 


(a)                                  The Company will not engage in any transaction with Cerberus or Ampersand
or their respective Affiliates, unless (i) such transaction or series of
related transactions is on terms no less favorable to the Company than those
available from a Third Party and (ii)(A) if such transaction or series of
related transactions has a value in excess of $1 million, it is approved by a
disinterested majority of the Board of Directors of the Company and (B) if
such transaction has a value in excess of $10 million, the Board of Directors
of the Company receives from a nationally recognized investment banking or
appraisal firm a written opinion that the transaction is fair to the Company
and its stockholders (for the avoidance of doubt, holders of Junior Preferred
Stock are stockholders of the Company for purposes of the foregoing) from a
financial point of view; provided, however, that this Section 2.06(a) shall
not apply to issuances of Equity Interests of the Company if the Company has
complied with the provisions of Section 2.03, except that this Section 2.06(a) shall
apply to issuances of Equity Interests of the Company pursuant to Section 2.03(d)(iv) or
Section 2.03(d)(v) other than, in the case of Section 2.03(d)(v),
as the consideration for the Precision Acquisition; and provided further,
this


 


16

















 


Section 2.06(a) shall
not apply to transactions between the Company and any of its wholly owned
Subsidiaries.


 


(b)                                 Section 2.06(a) shall not apply to (i) the payment of
principal, premium and interest in respect of Indebtedness incurred in
compliance with Section 2.06(a), (ii) the payment of dividends or
distributions on any Equity Interests in compliance with this Agreement, (iii) the
redemption or repurchase of any Equity Interests in compliance with this
Agreement, (iv) the payment of customary and competitive compensation for
services provided by employees, officers, directors and consultants to the
Company or its Affiliates solely in their capacities as such, (v) the
payment of customary and competitive management fees in any year not exceeding
0.5% of the consolidated net sales, after reduction for discounts, allowances
and rebates, of the Company for such year as set forth on the financial
statements of the Company prepared in accordance with GAAP, and the
reimbursement of reasonable out-of-pocket expenses of Cerberus, Ampersand and
their respective Affiliates incurred in connection with the transactions
contemplated by the Joint Contribution Agreement and the Ancillary Transactions
not to exceed $26 million or otherwise incurred directly or indirectly in
connection with the business, operations, management or direction of the
Company not to exceed $1 million in the first twelve months following the
Effective Date and $0.5 million in each twelve-month period thereafter, (vi) the
discharge of contractual obligations pursuant to this Agreement, the Joint
Contribution Agreement and the other Transaction Documents, and the Ancillary
Transactions and (vii) the entering into of agreements with respect to any
of the foregoing.


 


SECTION 2.07
Par Value of Capital Stock.


 


All
capital stock of the Company issued on or before the date of this Agreement has
a par value of $0.01 per share. The Company, at the time it issues any shares
of capital stock, shall set the par value at $0.01 per share and declare an
amount equal to the aggregate par value thereof as stated capital and shall not
thereafter increase the capital attributed to such shares.


 


SECTION 2.08
Achievement of Annual Sales Targets.


 


The
Company shall not act, and shall cause Talecris LLC and Talecris Inc. not to
act, in bad faith with the intent of missing the Annual Sales Targets as set
forth in the Junior Preferred Stock Designations in order to reduce the Company’s
redemption obligations under the Junior Preferred Stock. As of the date hereof,
the Company’s general operating strategy is not materially inconsistent with
achievement of the Annual Sales Targets; provided, however, that
Bayer acknowledges that the Company’s general operating strategy excludes the
development, marketing and sale of, and net sales from, Plasmin.


 


SECTION 2.09
Restricted Payments.


 


At any
time during which shares of Junior Preferred Stock are outstanding, the Company
will not declare, pay or make, or agree to pay or make, (i) any cash
dividend on the Senior Convertible Preferred Stock or any other Equity
Interests of the Company then held by Talecris LLC or its Affiliates, (ii) any
cash interest payment on the Junior Secured Convertible Notes or any other
Indebtedness of the Company then owed to Talecris LLC or its Affiliates


 


17

















 


(other than cash payments
between the Company and its consolidated Subsidiaries) or any advances or loans
or other cash payments to Talecris LLC or its Affiliates (other than advances
or loans between the Company and its consolidated Subsidiaries) or (iii) any
cash payment, only to the extent in excess of 100% of the principal amount, on
the principal of the Junior Secured Convertible Notes or the principal of any
other Indebtedness of the Company then owed to Talecris LLC or its Affiliates (other
than cash payments between the Company and its consolidated Subsidiaries) (clauses
(i) through (iii) collectively, “Restricted Payments”),
except the Company may make Restricted Payments:


 


(a)                                  in an amount during any year not in excess of the amount of taxes payable
during such year by the recipients thereof (or by any Affiliate of such
recipients) on account of the income of the Company;


 


(b)                                 for the payment of reasonable general and administrative costs and
expenses;


 


(c)                                  for the payment of management fees to Cerberus or Ampersand or their
respective Affiliates pursuant to one or more management agreements;


 


(d)                                 for the payment of any and all of its obligations owing to the lenders
pursuant to the Senior Credit Agreement and the Second Lien Credit Agreement, as
such Senior Credit Agreement or Second Lien Credit Agreement may be amended, extended,
renewed, refinanced or replaced, provided that such payments may not be made to
Talecris LLC or its Affiliates to the extent that the principal amount of
Indebtedness then owed to Talecris LLC, incurred pursuant to any such amendment,
extension, renewal, refinancing or replacement, exceeds the principal amount of
the Indebtedness owed to Talecris LLC or its Affiliates pursuant to the Senior
Credit Agreement or the Second Lien Credit Agreement prior to such amendment, extension,
renewal, refinancing or replacement, as applicable, plus the amount of interest,
fees, premiums and other expenses payable in connection with such amendment, extension,
renewal, refinancing or replacement;


 


(e)                                  to the extent permitted by Section 2.02(c);


 


(f)                                    for the purchase of fractional shares arising out of stock dividends, splits
or combinations or business combinations; or


 


(g)                                 in an amount, together with the aggregate amount of all other Restricted
Payments made by the Company after the Effective Date pursuant to this
subsection (g), not to exceed at any time, without duplication, the lesser of (A) the
amount permissible pursuant to the then existing terms of the Senior Credit
Agreement and the Second Lien Credit Agreement and (B) the sum of:


 


(i)                                     25% of the aggregate net income of the Company and its Subsidiaries on a
consolidated basis, determined in accordance with GAAP, for the period (taken
as one accounting period) from the Effective Date to the end of the Company’s
most recently ended fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment, plus


 


18

















 


(ii)                                  100% of the
aggregate Net Proceeds received by the Company after the Effective Date from
the issuance or sale of any Equity Interests of the Company or any Indebtedness
or other securities of the Company convertible into or exercisable or exchangeable
for Equity Interests of the Company, but only to the extent that such
Indebtedness or securities have been so converted or exercised or exchanged.


 


Notwithstanding
the foregoing, this Section 2.09 shall not prohibit or prevent any
Restricted Payment at any time during which the Company has on deposit with a
financial institution of recognized international standing acceptable to the
Bayer Parties or their permitted transferees hereunder, as trust funds for the
benefit of the Bayer Parties or their permitted transferees hereunder, cash in
an amount equal to the sum of (i) the Put Price, plus interest accrued
thereon to the date of the intended Restricted Payment, and (ii) the
maximum Liquidation Value (as defined in the Junior Preferred Stock
Designations) of the Junior Preferred Stock determined as if all remaining
Annual Achievements in future Sales Target Years were achieved, plus dividends
accrued thereon to the fixed Redemption Date, under such terms and conditions
that ensure that the payment of the funds as provided hereunder to the Bayer
Parties or their permitted transferees hereunder shall be bankruptcy proof.


 


Any
dividend permitted in accordance with this Section 2.09 at the time
declared shall not be prohibited when made, if within 30 days after such
declaration.


 


For
the avoidance of doubt, this Section 2.09 shall not override the separate
application of any other provision of this Agreement, including without
limitation Sections 2.01, 2.02 and 2.06 hereof, or of the Junior Preferred
Stock Designations, including without limitation Sections 6 and 11 thereof.


 


SECTION 2.10
Board of Directors.


 


(a)                    At each annual or special
stockholders meeting called for the election of directors, and whenever the
stockholders of the Company act by written consent with respect to the election
of directors, each Stockholder agrees to vote or otherwise give such
Stockholder’s consent in respect of all shares of the Voting Stock of the
Company owned by such Stockholder (whether now owned or hereafter acquired),
and take all other appropriate action, and the Company shall take all necessary
and desirable actions, to cause:


 


(i)                  the Bylaws of the Company to
provide that the authorized number of directors on the board shall initially be
seven, and thereafter such number, not fewer than five, as shall be designated
by Cerberus Capital Management, L.P. (“Cerberus”) from time to
time;


 


(ii)               the election to the board
of:


 


(A)           two representatives
designated by Ampersand 2001 Limited Partnership (“Ampersand”); and


 


(B)             representatives designated
by Cerberus to fill any seat on such board not filled by the representatives
designated by Ampersand;


 


19

















 


all of which persons shall
hold office subject to their earlier removal in accordance with clause (iii) below,
the Bylaws of the Company and applicable corporate law, until their respective
successors shall have been elected and shall have qualified;


 


(iii)                 the removal from the
board of any director elected in accordance with clause (ii) above, with
or without cause, upon the written request of the Person that designated such
director for appointment; and


 


(iv)                upon any vacancy in the
board as a result of any individual designated as provided in clause (ii) above
ceasing to be a member of the board, whether by resignation or otherwise, the
election to the board to fill such vacancy, as promptly as possible, of an
individual designated by the Person that designated such first-mentioned
individual for appointment.


 


(b)                   Cerberus and Ampersand each is intended to be, and is hereby constituted,
a third party beneficiary of this Section 2.10, with full rights to
enforce this Section 2.10 as though each was a party to this Agreement.
The parties hereto acknowledge that Cerberus and Ampersand are receiving the
rights set forth in Section 2.10(a) as a result of their ownership
interest in Talecris LLC.


 


(c)                    This Section 2.10 shall terminate immediately prior to the
consummation of an IPO.


 


ARTICLE III


 


RESTRICTIONS ON TRANSFER


 


SECTION 3.01 General Restriction.


 


(a)                    No Bayer Party, without the prior written consent of the Company, which may
be given or withheld in its absolute discretion, may Transfer or permit the
Transfer of any Common Shares except as specifically provided below:


 


(i)                                     At any time, a Bayer Party may Transfer any Common Shares to Permitted
Transferees without complying with Sections 3.03 and 3.05 but subject to
compliance with Section 3.06; provided, however, that
no Bayer Party may Transfer any Common Shares to any Permitted Transferee if
the purpose of such Transfer is to dispose of such Common Shares and if the
value of such Common Shares at the time of such Transfer represents more than
20% of the net worth of such Permitted Transferee; provided, further,
that if any such Permitted Transferee, subsequent to the time of Transfer,
ceases to be a “Permitted Transferee” as defined herein, such event shall be
deemed a Transfer of Common Shares subject to the provisions of Section 3.01(a),
except if prior to such Permitted Transferee ceasing to be such, the Common
Shares are transferred to a Permitted Transferee.


 


(ii)                                  After
the expiration of one year from the Effective Date until the third anniversary
of the Effective Date, any Bayer Party may Transfer any Common


 


20














 


Shares to any Person that is not a Competitor, subject to compliance
with Sections 3.05 and 3.06.


 


(iii)                               After the third anniversary
of the Effective Date, any Bayer Party may Transfer any Common Shares to any
Person, subject to compliance with Sections 3.05 and 3.06.


 


(iv)                              At any time, a Bayer Party
may Transfer any Common Shares as may be permitted by Section 3.03 or
required by Section 2.04 or Section 3.04.


 


(v)                                 Beginning 180 days after the
consummation of an IPO (or such shorter period after the consummation of an IPO
as may be permitted by the managing underwriters of the IPO), a Bayer Party may
Transfer any Common Shares without restriction, except as required by law.


 


(b)                                 For the
avoidance of doubt, there are no restrictions on Transfer of the Junior
Preferred Stock, except as required by law, and any transferee of Junior
Preferred Stock shall succeed to the rights and obligations of any Bayer Party
with respect thereto set forth in this Agreement.


 


SECTION 3.02 Legends.


 


The Company shall affix to each certificate
evidencing Shares a legend in substantially the following form:


 


“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO REGISTRATION OF TRANSFER OF
SUCH SECURITIES WILL BE MADE ON THE BOOKS OF THE ISSUER UNLESS SUCH TRANSFER IS
MADE IN CONNECTION WITH AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR PURSUANT
TO AN EXEMPTION OR EXCLUSION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT.


 


THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AS SET FORTH IN A STOCKHOLDERS AGREEMENT, DATED AS OF MARCH 31,
2005, AS IT MAY THEREAFTER BE AMENDED, A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL CORPORATE OFFICES OF THE ISSUER (THE “STOCKHOLDERS AGREEMENT”). NO
REGISTRATION OF TRANSFER OF SUCH SECURITIES WILL BE MADE ON THE BOOKS OF THE
ISSUER UNLESS AND UNTIL SUCH RESTRICTIONS SHALL HAVE BEEN COMPLIED WITH.


 


THE HOLDER OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE IS ENTITLED
TO CERTAIN RIGHTS AND SUBJECT TO CERTAIN OBLIGATIONS AS SET FORTH IN THE AFOREMENTIONED
STOCKHOLDERS AGREEMENT.”


 


21

















 


SECTION 3.03 Tag-Along Rights.


 


(a)                                  Subject to Section 3.03(f), if at any time Talecris LLC proposes to
Sell (a “Tag-Along Transfer”), in a single transaction or series of
transactions, all or any portion of its Shares held by it (the “Tag-Along
Shares”) to a Third Party, each Bayer Party shall have the opportunity to Sell
its Pro Rata Share of the Tag-Along Shares (“Tag-Along Right”). Talecris LLC
shall provide written notice (the “Tag-Along Offer Notice”) of such Tag-Along
Transfer not later than 30 days prior to the consummation of the Tag-Along
Transfer to the Bayer Parties disclosing (i) the identity of the proposed
purchaser, (ii) the number of Tag-Along Shares, (iii) the price at
which the Tag-Along Shares are proposed to be Sold (the “Tag-Along Offer
Price”), and (iv) all other material terms and conditions of the Tag-Along
Transfer. Talecris LLC agrees to use commercially reasonable efforts to obtain
the agreement of the prospective purchaser to the participation of the Bayer
Parties in the contemplated Tag-Along Transfer, and agrees not to Transfer any
shares to a prospective purchaser that declines to allow the participation of
the Bayer Parties in accordance with this Section 3.03.


 


(b)                                 If any Bayer Party desires to exercise the Tag-Along Right, it shall,
prior to the expiration of 20 days after the Tag-Along Offer Notice is provided
(the “Notice Period”), provide
Talecris LLC with a written notice specifying the number of Common Shares which
it has an interest in Selling pursuant to the Tag-Along Transfer (a “Notice
of Interest”). The Bayer Party exercising
the Tag-Along Right may specify in the Notice of Interest a number of Common
Shares that is greater than its Pro Rata Share (as defined below); provided,
however, the Company, in its absolute
discretion, may limit the number of Common Shares to be Sold by any Bayer Party
pursuant to this Section 3.03 to its Pro Rata Share. Delivery of a Notice
of Interest shall constitute an irrevocable election by such Bayer Party to
Sell the number of Common Shares specified in such Notice of Interest pursuant
to the terms of the Tag-Along Transfer at a price equal to the Tag-Along Offer
Price. If any Bayer Party delivers a Notice of Interest, it agrees that it will
deliver to the closing of the Tag-Along Transfer certificates evidencing the
Common Shares to be Sold by it in the Tag-Along Transfer duly endorsed in blank
or accompanied by written instruments of transfer in form reasonably
satisfactory to Talecris LLC executed by such Bayer Party and will execute such
other documents containing such terms and conditions (including customary
representations and warranties that relate specifically to its Common Shares
being Sold) that Talecris LLC may reasonably request in order to consummate the
Tag-Along Transfer at the time specified by Talecris LLC. In the event that any
Bayer Party fails to deliver any of the foregoing on or before the closing,
then such Bayer Party will be deemed to have irrevocably waived all of its
rights under this Section 3.03 with respect to any future Tag-Along
Transfers. The “Pro Rata Share”
which a Bayer Party shall be entitled to Sell shall be a number of Common
Shares equal to the product obtained by multiplying (x) the total number
of Common Shares owned by such Bayer Party by (y) a fraction, the
numerator of which shall be the number of Fully Diluted Common Shares into
which Shares proposed to be Sold by Talecris LLC are convertible, exercisable
or exchangeable and the denominator shall be the total number of Shares owned
by Talecris LLC, assuming the conversion, exercise or exchange of all Equity
Interests of the Company owned by such Stockholder; provided, however, that if the proposed Third Party purchaser in the
Tag-Along Transfer is not willing to purchase the total of the Tag-Along Shares
to be Sold by Talecris LLC and the Pro Rata Share of each Bayer Party at the
same per unit Tag-Along Offer Price and on the same terms and conditions
contained in the offer for the Tag-Along Transfer, then the number of the
Tag-Along Shares to be Sold by


 


22

















 


Talecris LLC and the Pro Rata Share of each Bayer
Party shall be cut back pro rata (i.e., the number of Shares that each of
Talecris LLC and the Bayer Parties may Sell shall bear the same percentage to
total number of Shares held by each of them, assuming the conversion, exercise
or exchange of all Equity Interests of the Company owned by such Stockholder).


 


(c)                                  On the date of the consummation of the Tag-Along Transfer, Talecris LLC
shall remit or cause to be remitted to the Bayer Parties participating in the
Tag-Along Transfer the total sales price of the Common Shares sold by such
Bayer Parties, as applicable, less a pro rata portion of the documented and reasonable out-of-pocket expenses
(including, without limitation, reasonable legal fees and expenses) incurred by
Talecris LLC in connection with such Tag-Along Transfer.


 


(d)                                 If, at the end of a Notice Period, any of the Bayer Parties shall not
have exercised its Tag-Along Right, each such Bayer Party will be deemed to
have waived all of its rights under this Section 3.03 with respect to the
particular Tag-Along Transfer described in the applicable Tag-Along Offer
Notice.


 


(e)                                  Section 3.03(a) shall not apply to any Sale by Talecris LLC (i) as
part of a Public Offering by the Company in which the Bayer Parties have been
offered the right to participate on a pro rata
basis, (ii) pursuant to an Approved Sale in
which the Bayer Parties have been offered the right to participate on a pro
rata basis, (iii) to its Affiliates provided that
any such Affiliate agrees in writing to be bound by the provisions of this
Agreement affecting the Equity Interests so transferred or (iv) of less
than 10% of the Shares beneficially owned by Talecris LLC as of the date
hereof.


 


(f)                                    Notwithstanding anything to the contrary in Section 3.03, no Bayer
Party may elect to participate in a Tag-Along Transfer during the period after
the Company has given a Notice of Election pursuant to Section 2.01(b) and
the Board of Directors of the Company has determined that the Company has
sufficient funds available to pay the Call Price, and has reserved sufficient
funds therefor, and before the earlier of the payment of the Call Price and
withdrawal by the Company of the Notice of Election.


 


(g)                                 This Section 3.03 shall terminate immediately prior to the
consummation of an IPO.


 


SECTION 3.04 Drag-Along Right.


 


(a)                                  In the event that Talecris LLC proposes to Sell (the “Drag-Along
Sale”) all or any portion of the Shares
held by it to a Third Party in a single transaction or series of related
transactions that would result in such Third Party and its Affiliates becoming
the beneficial owner, directly or indirectly, of 50% or more of the Fully
Diluted Common Shares of the Company, Talecris LLC may require each Bayer Party
to participate in such Drag-Along Sale and Sell the same percentage of its Common
Shares, as the Fully Diluted Common Shares that would be Sold by Talecris LLC,
assuming the conversion, exercise or exchange of all Equity Interests of the
Company, represent to the total number of Fully Diluted Common Shares that
would be held by Talecris LLC, assuming the conversion, exercise or exchange of
all Equity


 


23

















 


Interests of the Company, on the same terms and
conditions and at the same time or times as applicable to Talecris LLC.


 


(b)                                 Talecris LLC shall, promptly upon determining the terms of the Drag-Along
Sale, deliver to each Bayer Party written notice (the “Drag-Along
Notice”) specifying the material terms of
the Drag-Along Sale, including the identity of the purchaser to which the Drag-Along
Sale is proposed to be made, the terms per Fully Diluted Common Share of such
Sale and the costs expected to be incurred by Talecris LLC in connection with
such Sale. In connection with any such Sale, each Bayer Party will agree (i) to
make or agree to any customary representations, covenants, indemnities and
agreements as Talecris LLC so long as they are made severally and not jointly
and the liabilities thereunder are borne on a pro
rata basis based on the numbers of Fully Diluted Common
Shares into which Shares sold by each Stockholder are convertible, exercisable
or exchangeable and (ii) to pay their proportionate share of the
reasonable and documented costs (including, without limitation, reasonable
legal fees and expenses) incurred by each of Talecris LLC and the Bayer Parties
in connection with such Drag-Along Sale to the extent not paid or reimbursed by
the Company or the Third Party.


 


(c)                                  Each Bayer Party agrees that it will deliver at the closing of the Drag-Along
Sale certificates evidencing the Common Shares to be sold by such Bayer Party
in the Drag-Along Sale duly endorsed in blank or accompanied by written
instruments of transfer in form reasonably satisfactory to Talecris LLC
executed by such Bayer Party, and each Bayer Party shall execute such other
documents of transfer that Talecris LLC may reasonably request in order to
consummate the Drag-Along Sale at the time specified by Talecris LLC.


 


(d)                                 On the date of the consummation of the Drag-Along Sale, Talecris LLC
shall remit or cause to be remitted to each Bayer Party its portion of the
consideration for the Common Shares sold pursuant thereto less its
proportionate share of the reasonable and documented costs (including, without
limitation, reasonable legal fees and expenses) incurred in connection with
such Drag-Along Sale, including costs incurred by the Bayer Parties, to the
extent not paid or reimbursed by the Company or the Third Party.


 


(e)                                  Anything herein to the contrary notwithstanding, Talecris LLC shall have
no obligation to any Bayer Party to Sell any Shares pursuant to this Section 3.04
as a result of any decision by Talecris LLC not to accept or consummate any
Drag-Along Sale (it being understood that any and all such decisions shall be
made by Talecris LLC in its sole discretion). The Bayer Parties shall not be
entitled to make any Sale of Common Shares directly to any Third Party pursuant
to a Drag-Along Sale (it being understood that all such Sales shall be made
only on the terms and pursuant to the procedures set forth in this Section 3.04).


 


(f)                                    Notwithstanding anything to the contrary in Section 3.04, Talecris
LLC may not require any Bayer Party to participate in any Drag-Along Sale
during the period after Bayer has given a Notice of Election pursuant to Section 2.01(a) and
before the earlier of the payment of the Put Price and withdrawal by Bayer of
the Notice of Election.


 


(g)                                 This Section 3.04 shall terminate immediately prior to the
consummation of an IPO.


 


24

















 


SECTION 3.05 Right of First Offer upon
Sales of Shares.


 


(a)                                  If at any time any Bayer Party desires to Sell all or any part of its
Common Shares to any Person pursuant to Section 3.01(a)(ii) or Section 3.01(a)(iii) (other
than as part of a Public Offering by the Company), such Bayer Party (the “Selling
Party”) shall give written notice to the Company and Talecris LLC stating
the Selling Party’s bona fide intention to make such Sale, the number of Common
Shares proposed to be Sold and the price and other terms on which such Selling
Party proposes to make such Sale. For purposes of this Agreement, any notice
stating a Selling Party’s bona fide intention to Sell Common Shares shall
hereinafter be called a “Selling Party’s Notice”; the Common Shares
covered by any Selling Party’s Notice shall hereinafter be called the “Offered
Shares”; and the price and other terms on which the Selling Party proposes
to make such Sale shall hereinafter be called the “Offer Terms”. Each
Selling Party’s Notice shall constitute an irrevocable offer by the Selling
Party to Sell the Offered Shares on the Offer Terms to the Company and/or
Talecris LLC.


 


(b)                                 The Company and Talecris LLC, acting jointly, may, within 30 days
following the date of their receipt of the Selling Party’s Notice (the “Offer
Period”), give the Selling Party a notice (the “Joint Notice”) that
states (i) the maximum amount of such Offered Shares that the Company
and/or Talecris LLC elects to purchase; (ii) that the election made in
such notice is irrevocable; and (iii) that either the Company or Talecris
LLC, or the Company and Talecris LLC together, irrevocably commit to purchase
all, and not less than all, of the Offered Shares on the Offer Terms. In
determining the allocation of the Offered Shares between the Company and Talecris
LLC, the Company shall have the right to elect to purchase any amount of the
Offered Shares up to the maximum amount, and Talecris LLC shall have the right
to elect to purchase the remainder, if any, of the Offered Shares that the
Company does not elect to purchase.


 


(c)                                  The closing of any purchase and Sale to the Company and/or Talecris LLC
pursuant to this Section 3.05 shall take place on such date as the
applicable parties shall mutually agree, but not later than 45 days following
the expiration of the Offer Period.


 


(d)                                 Upon expiration of the Offer Period, without the Offered Shares being
accepted in full by either or both Talecris LLC and the Company in accordance
with this Section 3.05, the Selling Party shall be free, for 180 days
following the expiration of the Offer Period, to Sell the Offered Shares to any
Third Party pursuant to a bona fide offer in writing upon such terms and
conditions as the Selling Party may desire; provided, however,
that the Offered Shares may be Sold to the Third Party only if the per Offered
Share purchase price actually and irrevocably paid by such Third Party is equal
to or greater than 95% of the proposed purchase price contained in the Offer
Terms.


 


(e)                                  Upon the request of the Company or Talecris LLC, the Selling Party shall
provide to Talecris LLC with documentation in a form reasonably satisfactory to
Talecris LLC that demonstrates compliance with Section 3.05(d).


 


(f)                                    If the Selling Party shall not have Sold all of the Offered Shares prior
to the expiration of the 180-day period following the Offer Period, then the
commitments set forth in the applicable Selling Party’s Notice and the Joint
Notice shall terminate, the provisions of


 


25

















 


this Section 3.05 shall again apply, and such
Selling Party shall not effect a Sale or offer to effect a Sale of any of its
Common Shares not so Sold during such period without again complying with this Section 3.05.


 


(g)                                 If, pursuant to the Offer Terms, a Selling Party proposes to sell Offered
Shares in exchange for consideration other than cash and the Company and/or
Talecris LLC deliver a Joint Notice and commit to purchase the Offered Shares,
the parties shall engage an investment banking firm of national reputation
mutually acceptable to the parties (the “Valuation Firm”) to value such
non-cash consideration for purposes of determining the price in cash that the
Company and/or Talecris LLC shall pay such Selling Party for the Offered
Shares. The Selling Party shall, and if applicable shall cause the proposed
purchaser of the Offered Shares to, make available to the Valuation Firm all
information reasonably necessary to permit the Valuation Firm to value such
non-cash consideration. The parties will instruct the Valuation Firm to use its
best efforts to complete the valuation as promptly as practicable. The
determination of the Valuation Firm shall be binding on the parties. The
Selling Party, on the one hand, and the Company and Talecris LLC, on the other
hand, shall share equally in the costs, expenses and fees of the Valuation
Firm.


 


(h)                                 This Section 3.05 shall terminate immediately prior to the
consummation of an IPO.


 


SECTION 3.06 Agreement to be Bound.


 


No Sale of Shares by any Bayer
Party, other than pursuant to Section 3.01(a)(v), Section 3.03 and Section 3.04,
shall be effective unless the transferee shall have executed and delivered to
the Company, as a condition precedent to such Sale, an agreement in form and
substance reasonably satisfactory to the Company confirming that such transferee
agrees to be bound by the terms of this Agreement, including Sections 3.01,
3.03, 3.04, 3.05, 3.07 and 5.04. Any such transferee shall succeed to the
rights of any Bayer Party hereunder.


 


SECTION 3.07 Compliance with Securities
Laws.


 


No Stockholder shall Sell any
securities of the Company, and the Company shall not transfer on its books any
securities, unless (a) the Sale is pursuant to an effective Registration
Statement under the Securities Act and under any applicable state securities or
blue sky laws or (b) such Stockholder shall have furnished the Company
with an opinion of counsel, to the extent reasonably required by the transfer
agent of the Company, to the effect that no such registration is required
because of the availability of an exemption from registration under the
Securities Act and under applicable state securities or blue sky laws. The
Company shall not require an opinion of counsel for Sales by Stockholders in
compliance with Rule 144 under the Securities Act or any successor rule.
The Company acknowledges and agrees that a Sale made in compliance with the
Securities Act and applicable state securities and blue sky laws to an entity
owning, directly or indirectly, all the common equity of such Stockholder or
any wholly owned direct or indirect subsidiary of such parent entity shall be
deemed to be in compliance with this Agreement and no such opinion of counsel
shall be required.


 


26

















 


ARTICLE IV


 


REGISTRATION RIGHTS


 


SECTION 4.01 Demand Registration Rights.


 


(a)                                  Commencing twelve months
following the consummation of an IPO but not within 180 days after the
consummation of any Public Offering, the Bayer Parties collectively shall have
the one-time right, and Talecris LLC shall have an unlimited number of rights,
to require the Company to file a Registration Statement under the Securities
Act, covering all or any part of their respective Registrable Securities, by
delivering a written notice therefor to the Company specifying the number of
Registrable Securities to be included in such registration and the intended
method of distribution thereof. Such request pursuant to this Section 4.01
is referred to herein as the “Demand Registration Request,” the
registration so requested is referred to herein as the “Demand Registration”
and the party making such request is the “Demanding Party.” As promptly
as practicable, but no later than ten Business Days after receipt of the Demand
Registration Request, the Company shall give written notice (the “Demand
Exercise Notice”) of such Demand Registration Request to all Stockholders
party hereto and any other Stockholders with piggyback registration rights
pursuant to Section 4.02 hereof or any similar agreement.


 


(b)                                 The Company shall include in
the Demand Registration the Registrable Securities of any Stockholders parties
hereto or party to any other agreement providing similar piggyback registration
rights that shall have made a written request to the Company for inclusion
thereof in such registration (which request shall specify the maximum number of
Registrable Securities intended to be disposed of by such other Stockholders)
within 30 days after the receipt of the Demand Exercise Notice.


 


(c)                                  The Company shall use its
reasonable best efforts to (i) effect the registration under the
Securities Act (including by means of a shelf registration pursuant to Rule 415
under the Securities Act if so requested by the Demanding Party and the Company
is then eligible to effect such a registration) of the Registrable Securities
which the Company has been so requested to register by the Demanding Party and
other Stockholders (to the extent permitted to be included in accordance with
the terms hereof), for distribution, in accordance with such intended method of
distribution and (ii) if requested by the Demanding Party, obtain
acceleration of the effective date of the Registration Statement relating to
such registration.


 


(d)                                 A registration requested
pursuant to this Section 4.01 will not be deemed to have been effected
unless the relevant Registration Statement has become effective; provided
that if, after it has become effective, the offering of Registrable Securities
pursuant to such registration is subject to any stop order, injunction or other
order or requirement of the Commission or other Governmental Authority for an
aggregate of more than 30 days in the 210 days following the date of
effectiveness, such registration will be deemed not to have been effected.


 


(e)                                  If a requested registration
pursuant to this Section 4.01 involves an underwritten offering, the
Demanding Party shall have the right to select an investment banker or


 


27

















 


bankers of nationally recognized standing to
administer the offering; provided, however, that such investment
banker or bankers shall be reasonably satisfactory to the Company. The Company
shall notify the Demanding Party if the Company objects to any investment
banker or manager selected by the Demanding Party pursuant to this Section 4.01(e) within
ten Business Days after the Demanding Party has notified the Company of such
selection.


 


(f)                                    Notwithstanding anything to the contrary in this Section 4.01:


 


(i)                                     If the managing underwriter of any underwritten Public Offering shall
advise the Stockholders participating in a Demand Registration that the
Registrable Securities covered by the Registration Statement cannot be sold in
such offering within a price range acceptable to the Demanding Party, then the
Demanding Party shall have the right to notify the Company that it has
determined that the Registration Statement be abandoned or withdrawn, in which
event the Company shall abandon or withdraw such Registration Statement.


 


(ii)                                  If the Board of Directors of the Company determines in good faith that a
Disadvantageous Condition exists, the Company shall, notwithstanding any other
provision of this Article IV, be entitled, upon the giving of a written
notice (a “Delay Notice”) to such effect to each holder of Registrable
Securities included or to be included in such Registration Statement, to delay
the filing of such Registration Statement until, in the judgment of the Board
of Directors of the Company, such Disadvantageous Condition no longer exists
(notice of which the Company shall promptly deliver to the holders of the
Registrable Securities with respect to which any such Registration Statement
was to have been filed); provided, however, that such delay shall
not exceed a period of 180 days from the date the Demand Registration Request
is received by the Company; provided, further, that the Company
may not utilize this right more than once in any twelve-month period.


 


(iii)                               Notwithstanding the foregoing provisions of this Section 4.01(f), no
Registration Statement filed and subsequently withdrawn pursuant to clause (i) or
by reason of any existing or anticipated Disadvantageous Condition as provided
in clause (ii) shall count as the one Registration Statement referred to
in the limitation to Bayer Parties in Section 4.01(h)(i).


 


(iv)                              If, as a result of Section 4.01(g), fewer than all of the
Registrable Securities of the Bayer Parties as to which the Bayer Parties
demanded registration have been registered, then the Bayer Parties shall be
entitled to one additional demand registration right.


 


(g)                                 In connection with any Demand Registration Request, if the managing underwriter
shall advise the Company that, in its view, the number of securities (including
all Registrable Securities) that the Company and holders of Registrable
Securities intend to include in such registration exceeds the largest number of
securities which can be sold in such offering at a price reasonably acceptable
to the Demanding Party (the “Demand Registration Maximum Offering Size”),
the Company will include first in such registration, Registrable Securities in
the following priority, up to the Demand Registration Maximum Offering Size:


 


28

















 


(i)                                     first, the Registrable Securities
that the Demanding Party proposes to include in such registration or, in the
case of a demand by Talecris LLC, the Registrable Securities of Talecris LLC
and the Bayer Parties pro rata on the basis of the relative number of Registrable Securities each such
holder has requested to be included in such registration;


 


(ii)                                  second, the Registrable Securities
that the Company proposes to include in such registration; and


 


(iii)                               third, the Registrable Securities
that other Stockholders propose to include in such registration.


 


(h)                                 In addition, the Company shall not be obligated to effect, or to take any
action to effect, any registration pursuant to this Section 4.01 with
respect to any Demanding Party, during the period starting with the date 30
days prior to the Company’s good faith estimate of the date of filing of, and
ending on a date 180 days after the effective date of, a registration subject
to Section 4.02 hereof.


 


SECTION 4.02 Piggyback Registration Rights.


 


(a)                                  At any time commencing six months following an IPO, if the Company proposes
to register any shares of Common Stock under the Securities Act on a form and
in a manner that would permit registration of Registrable Securities for sale
to the public under the Securities Act, each holder of Registrable Securities
will have the right to include its Registrable Securities in such registration
in accordance with this Section 4.02 and the Company will give prompt
written notice to all holders of Registrable Securities of its intention to do
so, describing the number of shares to be registered for sale and specifying the
form and manner and the other relevant facts involved in such proposed
registration (including, without limitation, whether or not such registration
will be in connection with an underwritten offering of its Common Stock and, if
so, the identity of the managing underwriter and whether such offering will be
pursuant to a “best efforts” or “firm commitment” underwriting). Upon the
written request of any holder of Registrable Securities delivered to the
Company within 30 days after such notice shall have been received by such
holder (which request shall specify the maximum number of Registrable
Securities intended to be disposed of by such holder and shall confirm that
such holder will dispose of such Registrable Securities pursuant to the
Company’s intended method of disposition), the Company will use its reasonable
best efforts to effect the registration under the Securities Act of all
Registrable Securities that the Company has been so requested to register by
the holders of Registrable Securities, to the extent requisite to permit the
disposition (in accordance with the Company’s intended method of disposition)
of the Registrable Securities so to be registered; provided, however,
that:


 


(i)                                     if such registration involves an underwritten offering, all holders of Registrable
Securities requesting to be included in such registration must sell their
Registrable Securities to the underwriters selected by the Company on the same
terms and conditions as apply to the Company;


 


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(ii)                                  if, at any time after giving such written notice of its intention to
register any of such Registrable Securities for sale, and prior to the
effective date of the Registration Statement filed in connection with such
registration, the Company shall determine for any reason to withdraw such
Registration Statement, the Company may, at its election, give written notice
of such determination to each holder of Registrable Securities that has
requested to register Registrable Securities and thereupon the Company shall be
relieved of its obligation to register any Registrable Securities in connection
with such registration; provided, however, that all Registration
Expenses of such withdrawn registration shall be borne by the Company in
accordance with Section 4.04 hereof; and


 


(iii)                               the Company shall have no obligation to provide piggy back registration
rights pursuant to this Section 4.02 during the period starting with the
date 30 days prior to the Company’s good faith estimate of the date of filing
of, and ending on a date 180 days after the effective date of, a registration
subject to Section 4.01 hereof; provided, however, that the
Company is using its reasonable best efforts to cause such registration
statement to become effective and all Registrable Securities requested by the
holders to be registered shall have been so registered.


 


(b)                                 In connection with any Public Offering with respect to which holders of Registrable
Securities shall have requested registration pursuant to this Section 4.02,
if the managing underwriter shall advise the Company that, in its view, the
number of securities (including all Registrable Securities) that the Company
and holders of Registrable Securities intend to include in such registration
exceeds the largest number of securities which can be sold without having an
adverse effect on such offering, including the price at which such securities
can be sold (the “Piggyback Registration Maximum Offering Size”), the
Company will include in such registration, in the following priority, up to the
Piggyback Registration Maximum Offering Size:


 


(i)                                     first, all the securities that the
Company proposes to include in such registration; and


 


(ii)                                  second, all securities requested to be
included in such registration by all other holders of securities which are
entitled to incidental registration rights (allocated, if necessary for the
offering not to exceed the Piggyback Registration Maximum Offering Size, pro
rata among such holders on the basis of the relative
number of securities each such holder shall have requested to be included in
such registration).


 


(c)                                  If a Stockholder decides not to include all of its Registrable Securities
in any Registration Statement thereafter filed by the Company, such Stockholder
shall nevertheless continue to have the right to include any Registrable
Securities in any subsequent Registration Statement or Registration Statements
as may be filed by the Company with respect to offerings of securities, all
upon the terms and conditions set forth herein.


 


30














 


SECTION 4.03 Registration on Form S-3.


 


After the date on which the
Company or Parent has effected an IPO, if the Company is entitled to use Form S-3
(or any successor form to Form S-3 regardless of its designation) for a
public offering of securities, any Bayer Party may require, upon written notice
specifying that such notice is being made pursuant to this Section 4.03,
that the Company file a Registration Statement on Form S-3 for a public
offering of securities having an aggregate value of at least $5 million; provided,
however, that the Company will not be obligated to effect more than one Form S-3
Registration Statement in any twelve-month period. Any such offering shall not
be required to be underwritten.


 


SECTION 4.04 Registration Expenses.


 


The Company shall pay all
Registration Expenses in connection with the registration of Registrable
Securities effected by it pursuant to this Article IV. “Registration
Expenses” means all expenses incident to the Company’s performance of or compliance
with Article IV, including, without limitation, all registration, filing
and qualification fees (including filing fees with respect to the NASD), all
fees and expenses of complying with state securities or “blue sky” laws
(including reasonable fees and disbursements of underwriters’ counsel in
connection with any “blue sky” memorandum or survey), all printing expenses,
all listing fees, all registrars’ and transfer agents’ fees, the fees and
disbursements of counsel for the Company and of its independent certified public
accountants, including the expenses of any special audits and/or “comfort”
letters required by or incident to such performance and compliance, but
excluding underwriting discounts and commissions, applicable transfer taxes, if
any, and the fees and disbursements of the attorneys-in-fact, the custodian and
counsel for the sellers of Registrable Securities.


 


SECTION 4.05 Registration Procedures.


 


(a)                                  If and whenever the Company is required to effect the registration of any
Registrable Securities under the Securities Act as provided in this Article IV,
the Company will:


 


(i)                                     promptly prepare and file with the Commission a Registration Statement
with respect to such Registrable Securities and use its reasonable best efforts
to cause such Registration Statement to become effective as soon as reasonably
practicable thereafter;


 


(ii)                                  prepare and file with the Commission such amendments (including
post-effective amendments) and supplements to such Registration Statement and
the Prospectus used in connection therewith as may be necessary to keep such
Registration Statement effective and to comply with the provisions of the
Securities Act with respect to the disposition of all Registrable Securities
and other securities covered by such Registration Statement until the earlier
of (a) such time as all such Registrable Securities and other securities
have been disposed of in accordance with the intended methods of disposition by
the seller or sellers thereof set forth in such Registration Statement and (b) the
expiration of six months from the date such Registration Statement first
becomes effective;


 


31

















 


(iii)                               furnish to each seller of such Registrable Securities such number of conformed
copies of such Registration Statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of the
Prospectus included in such Registration Statement, in conformity with the
requirements of the Securities Act, such documents incorporated by reference in
such Registration Statement or Prospectus and such other documents as such
seller may reasonably request in order to facilitate the Sale of such
Registrable Securities;


 


(iv)                              register or qualify all Registrable Securities and other securities
covered by such Registration Statement under such other securities or “blue
sky” laws of such jurisdictions as each seller shall reasonably request, and do
any and all other acts and things that may be necessary to enable such seller
to consummate the disposition in such jurisdictions of its Registrable
Securities covered by such Registration Statement, except that the Company
shall not for any such purpose be required to qualify generally to do business
as a foreign corporation in any jurisdiction wherein it is not so qualified, to
subject itself to taxation in respect of doing business in any such
jurisdiction or to consent to general service of process in any such
jurisdiction;


 


(v)                                 furnish to each seller of Registrable Securities, on the date that the
Registrable Securities are delivered to the underwriters for sale in connection
with a Public Offering, or, if such registration does not involve a Public
Offering on the date that the Registration Statement with respect to such
Registrable Securities becomes effective, (a) an opinion, dated such date,
of the counsel representing the Company for the purpose of such registration,
in form and substance as is customarily given to underwriters in a Public
Offering, addressed to the underwriters, if any, or if there are no such
underwriters, to the sellers of Registrable Securities in such registration and
(b) a “comfort” letter dated such date, from the independent certified
public accountants of the Company, in form and substance as is customarily given
by independent certified public accountants to underwriters in a Public
Offering, addressed to the underwriters, if any, or if there are no such
underwriters, to the sellers of Registrable Securities;


 


(vi)                              promptly notify each seller of Registrable Securities covered by such
Registration Statement at any time when a Prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any
event as a result of which the Prospectus included in such Registration
Statement, as then in effect, includes an untrue statement of a material fact
or omits to state any material fact required to be stated therein or necessary
to make the statements therein not misleading in the light of the circumstances
then existing and if it is necessary to amend or supplement such Prospectus to
comply with applicable law, and at the request of any such seller prepare and
furnish to such seller a reasonable number of copies of a supplement to or an
amendment of such Prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Securities, such Prospectus
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing and
shall otherwise comply in all material respects with applicable law;


 


32

















 


(vii)                           comply with all applicable rules and regulations of the Commission,
and make available to its security holders, as soon as reasonably practicable,
an earning statement covering a period of at least twelve months, beginning
with the first month of the first fiscal quarter after the effective date of
such Registration Statement, which earning statement shall satisfy the
provisions of Section 11(a) of the Securities Act;


 


(viii)                        send appropriate officers of the Company to attend any “road shows” and
analyst presentations and otherwise use commercially reasonable efforts to
cooperate as requested by the underwriters or sellers of Registrable Securities
in the offering, marketing or selling of the Registrable Securities;


 


(ix)                                cause all such Registrable Securities registered pursuant hereto to be
listed on a securities exchange or quoted on any interdealer quotation system,
if such listing or quotation is then permitted under the rules of such
exchange or quotation system, and provide a transfer agent, registrar and CUSIP
number for such Registrable Securities no later than the effective date of such
Registration Statement; and


 


(x)                                   issue to any underwriter to which any holder of Registrable Securities
may sell such Registrable Securities in connection with any such registration
(and to any direct or indirect transferee of any such underwriter) certificates
evidencing shares of Common Stock without the legends described in Section 3.02.


 


The Company may require each
seller of Registrable Securities as to which any registration is being effected
to furnish the Company with such information regarding such seller and the
distribution of such Registrable Securities as the Company may from time to
time reasonably request in writing and as shall be required by applicable law
or by the Commission in connection therewith.


 


(b)                                 If requested by the underwriters for any Public Offering of Registrable
Securities on behalf of a holder or holders of Registrable Securities pursuant
to a registration requested under Section 4.01 or 4.02 hereof, the Company
and the Stockholders will enter into and perform its respective obligations
under an underwriting agreement with such underwriters for such offering, such
agreement to contain such representations and warranties by the Company and the
Stockholders and such other terms and conditions as are customarily contained
in underwriting agreements with respect to secondary distributions, including,
without limitation, indemnities to the effect and to the extent provided in
Sections 4.07 and 4.08 hereof.


 


(c)                                  If any registration pursuant to Section 4.01 or 4.02 hereof shall be
in connection with an underwritten Public Offering, each Stockholder agrees, if
so required by the managing underwriter(s), not to effect any public sale or
distribution (including any sale pursuant to Rule 144) of Registrable Securities
(other than as part of such underwritten Public Offering) within seven days
prior to the anticipated effective date of the Registration Statement with
respect to such underwritten Public Offering or 90 days after the effective
date of such Registration Statement; provided, however, that the
90 day period referred to in this Section 4.05(c) may be extended to
up to 180 days upon the managing underwriter’s or underwriters’ reasonable
request.


 


33

















 


(d)                                 The Company agrees, if so required by the managing underwriter(s) in
connection with an underwritten Public Offering of Registrable Securities
pursuant to Section 4.01 or 4.02, not to effect any public sale or
distribution of any of its Equity Interests (other than as part of such
underwritten Public Offering) within seven days prior to the anticipated
effective date of the Registration Statement with respect to such underwritten
Public Offering or 90 days after the effective date of such Registration Statement,
except in connection with an Employee Plan registered on Form S-8 or an
acquisition, merger or exchange offer; provided, however, that
the 90-day period referred to in this Section 4.05(d) may be extended to up to
180 days upon the managing underwriter’s or underwriters’ reasonable request.


 


(e)                                  It is understood that in any underwritten offering of Registrable
Securities in addition to the shares (the “Initial Shares”) the
underwriters have committed to purchase, the underwriting agreement may grant
the underwriters an option to purchase a number of additional shares (the “Overallotment
Option Shares”) equal to up to 15% of the Initial Shares (or such other
maximum amount as the NASD may then permit), solely to cover over-allotments.
Shares proposed to be sold by the Company and the holders of Registrable
Securities shall be allocated between Initial Shares and Overallotment Option
Shares as agreed or, in the absence of agreement, pursuant to Sections 4.01 or
4.02 hereof.


 


(f)                                    No holder of Registrable Securities may participate in any Public
Offering hereunder unless such holder (i) agrees to sell its Registrable
Securities on the basis provided in any underwriting arrangements approved by
the persons entitled hereunder to approve such arrangements and (ii) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements and this Article IV.


 


SECTION 4.06 Preparation; Reasonable Investigation.


 


In connection with the
preparation and filing of each Registration Statement registering Registrable
Securities under the Securities Act, the Company will give the holders of
Registrable Securities on whose behalf such Registrable Securities are to be so
registered and their underwriters, if any, and their respective counsel and
accountants, the opportunity to participate in the preparation of such
Registration Statement, each Prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto, and will give
each of them such access to its books and records and such opportunities to
discuss the business of the Company with its officers and the independent
public accountants who have issued a report on its financial statements as
shall be reasonably necessary, in the opinion of such holders and such
underwriters or their respective counsel, to conduct a reasonable investigation
within the meaning of the Securities Act.


 


SECTION 4.07 Indemnification.


 


(a)                                  In the case of any Registration Statement filed under the Securities Act pursuant
to Section 4.01 or Section 4.02, the Company will, and hereby does,
indemnify and hold harmless, the seller of any Registrable Securities covered
by such Registration Statement, its directors, officers and employees, each
other Person who participates as an underwriter in the offering or sale of such
Registrable Securities, each officer, director and employee of each such


 


34

















 


underwriter, and each other Person, if any, who
controls such seller, or each officer, director an employee of such seller,
such underwriter, or each officer, director and employee of such underwriter,
within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, against any losses, claims, damages, liabilities and
expenses, joint or several, to which any such Person may become subject under
the Securities Act or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions or proceedings in respect thereof) arise
out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in any Registration Statement under
which such securities were registered under the Securities Act, any Prospectus
included therein, or any amendment or supplement thereto, or any document
incorporated by reference therein, (ii) any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading or (iii) any violation or
alleged violation by the Company of the Securities Act, the Exchange Act or
other federal or state law or any rule or regulation promulgated under the
Securities Act, the Exchange Act or other federal or state law; and the Company
will reimburse each such Person for any legal or any other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or expense; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or expense (or action or proceeding in respect
thereof) arises out of or is based upon (x) an untrue statement or alleged
untrue statement or omission or alleged omission made in such Registration
Statement, any Prospectus included therein, or any amendment or supplement
thereto, in reliance upon and in conformity with written information furnished
to the Company for use in the preparation thereof by such seller, underwriter
or non-selling controlling Person, as the case may be or (y) an untrue
statement or alleged untrue statement or omission or alleged omission made in
any preliminary Prospectus but notified to such seller and underwriter prior to
any Sale of Registrable Securities and subsequently corrected by the Company in
any final Prospectus made available to such seller or underwriter but which
final Prospectus was not used by such seller or underwriter in the Sale of
Registrable Securities that gave rise to such loss, claim, damage, liability or
expense (or action or proceeding in respect thereof). Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of such Person and shall survive the transfer of such securities by such
the seller.


 


(b)                                 The Company may require, as a condition to including any Registrable Securities
in any Registration Statement filed pursuant to this Article IV, that the
Company shall have received an undertaking reasonably satisfactory to it from (i) the
prospective seller of such Registrable Securities, to indemnify and hold
harmless (in the same manner and to the same extent as set forth in Section 4.07(a) hereof,
except that any such prospective seller shall not in any event be liable to the
Company pursuant thereto for an amount in excess of the net proceeds of the
sale of such prospective seller’s Registrable Securities so to be sold) the
Company, each officer, director and employee of the Company, each underwriter
of such securities, each officer, director and employee of each such
underwriter and each other Person, if any, who controls the Company or any such
underwriter or any officer, director or employee thereof within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act and (ii) each
such underwriter of such securities, to indemnify and hold harmless (in the
same manner and to the same extent as set forth in Section 4.07(a) hereof)
the Company, each officer, director and employee of the Company, each
prospective seller, each officer, director and employee of each prospective
seller and each other Person, if any, who controls the Company or any such


 


35

















 


prospective seller or any officer, director or
employee thereof within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, with respect to any statement in or
omission from such Registration Statement, any Prospectus included therein, or
any amendment or supplement thereto, if such statement or omission was made in
reliance upon and in conformity with written information furnished by such
prospective seller or such underwriter, as the case may be, to the Company for
use in the preparation of such Registration Statement, Prospectus, amendment or
supplement; provided, however, that the indemnity agreement
contained in this subsection 4.07(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or expense (or action or
proceeding in respect thereof) if such settlement is effected without the
consent of the indemnifying party; provided that in no event shall any
indemnity under this subsection 4.07(b) exceed the net proceeds from the
offering received by such indemnifying party. Such indemnity shall remain in
full force and effect regardless of any investigation made by the indemnified
party and shall survive the transfer of such securities by such seller.


 


(c)                                  Promptly after receipt by an indemnified party of notice of the commencement
of any action or proceeding (including any investigation by any Governmental
Authority) involving a claim referred to in Section 4.07(a) or (b) hereof,
such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party, give written notice to the latter of the
commencement of such action; provided, however, that the failure
of any indemnified party to give notice as provided herein shall not relieve
the indemnifying party of its obligations under the preceding provisions of
this Section 4.07, except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. In case any such action is
brought against an indemnified party, unless in such indemnified party’s
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim (in which case, the
indemnifying party shall not be liable for the fees and expenses of more than
one (1) counsel for all sellers of Registrable Securities, or more than
one counsel for the underwriters in connection with any one (1) action or
separate but similar or related actions), the indemnifying party will be
entitled to participate in and to assume the defense thereof, jointly with any
other indemnifying party similarly notified, to the extent that it may wish
with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to
such indemnified party for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof.


 


SECTION 4.08 Contribution.


 


(a)                                  If the indemnification provided for in Section 4.07 is unavailable
to the indemnified parties in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party shall
contribute to the amounts paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses (i) as between
the Company and the holders of Registrable Securities covered by a Registration
Statement, on the one hand, and the underwriters, on the other, in such
proportion as is appropriate to reflect the relative benefits received by the
Company and such holders, on the one hand, and the underwriters, on the other,
from the offering of the Registrable Securities, or if such allocation is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits but also the relative fault of the Company and
such holders, on the


 


36

















 


one hand, and of the underwriters, on the other, in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations and (ii) as between the Company, on the one hand, and each
holder of Registrable Securities covered by a Registration Statement, on the
other, in such proportion as is appropriate to reflect the relative fault of
the Company and of each such holder in connection with such statements or
omissions, as well as any other relevant equitable considerations. The relative
benefits received by the Company and such holders, on the one hand, and the
underwriters, on the other, shall be deemed to be in the same proportion as the
total proceeds from the offering (net of underwriting discounts and commissions
but before deducting expenses) received by the Company and such holders bear to
the total underwriting discounts and commissions received by the underwriters.
The relative fault of the Company and such holders, on the one hand, and of the
underwriters, on the other, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company and such holders or by the underwriters.
The relative fault of the Company, on the one hand, and of each such holder, on
the other, shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact relates to information
supplied by the Company or any such holder, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.


 


(b)                                 The Company and the holders of Registrable Securities agree that it would
not be just and equitable if contribution pursuant to this Section 4.08
were determined by pro rata allocation
(even if the underwriters were treated as one entity for such purpose) or by
any other method of allocation that does not take account of the equitable
considerations referred to in the next preceding paragraph. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
liabilities or expenses referred to in the next preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 4.08, no underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Registrable Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages that such
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and no holder of
Registrable Securities shall be required to contribute any amount in excess of
the amount by which the total price at which the Registrable Securities of such
holder were offered to the public exceeds the amount of any damages that such
holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The obligation of each holder
of Registrable Securities to contribute pursuant to this Section 4.08 is
several in the proportion that the proceeds of the offering received by such
holder bears to the total proceeds of the offering received by all the holders
and not joint.


 


37

















 


SECTION 4.09 Nominees of Beneficial
Owners.


 


In the event that any Registrable Securities are
held by a nominee for the Beneficial Owner thereof, the Beneficial Owner
thereof may, at its election, be treated as the holder of such Registrable
Securities for purposes of any request or other action by any holder holders of
Registrable Securities pursuant to this Agreement or any determination of any
number or percentage of shares of Registrable Securities held by any holder or
holders of Registrable Securities contemplated by this Agreement. If the
Beneficial Owner of any Registrable Securities so elects, the Company may
require assurances reasonably satisfactory to it of such Beneficial Owner’s
ownership of such Registrable Securities.


 


ARTICLE V


 


INFORMATION RIGHTS


 


SECTION 5.01 Financial Information.


 


Subject to Section 5.04, the
Company shall furnish to the Bayer Parties the following:


 


(a)                                  within 90 days after the end
of each of the Company’s fiscal years, balance sheets of the Company as of the
end of such fiscal year and statements of income, changes in stockholders’
equity and cash flows of the Company for such fiscal year, audited by one of
the “Big Four” U.S. accounting firms and a certificate of the chief financial
officer of the Company as to the Company’s compliance with its covenants set
forth in this Agreement; and


 


(b)                                 within 45 days after the end
of each of the Company’s fiscal quarters, unaudited balance sheets of the
Company as of the end of such period and unaudited statements of income,
changes in stockholders’ equity and cash flows from the beginning of the then
current fiscal year and from the beginning of such fiscal quarter to the end of
such period and a certificate of the chief financial officer of the Company as
to the Company’s compliance with its covenants set forth in this Agreement.


 


SECTION 5.02 Requested Information.


 


In connection with any proposed Sale of Common
Shares by any Bayer Party pursuant to Section 3.01(a)(ii) or Section 3.01(a)(iii) (other
than as part of a Public Offering by the Company) or Sale of any shares of
Junior Preferred Stock by Bayer, upon written request by such Bayer Party, the Company shall use its reasonable best efforts to
cooperate with such Bayer Party, at such Bayer Party’s sole cost and expense,
to provide information reasonably necessary to allow the potential purchaser to
evaluate such Sale, subject to the prior execution by the potential purchaser
of a customary confidentiality agreement reasonably satisfactory to the
Company.


 


SECTION 5.03 Annual Sales Achievement
Information.


 


So long as Bayer holds outstanding shares of Junior
Preferred Stock, as promptly as practicable following (a) the end of each
Sales Target Year, the Company shall provide Bayer


 


38

















 


with a statement setting forth the Annual Net Sales
for that year and calculations of the Annual Achievement and Annual Reduction
for that year; (b) a Partial Sale, the Company shall provide Bayer with a
statement setting forth the Special Liquidation Value, the Special Annual
Achievements and the Deficit, along with the adjusted Annual Achievements for
the remaining Sales Target Years or portions thereof; and (c) a Deemed
Liquidation or Change of Control, the Company shall provide Bayer with a
statement setting forth the Deemed Liquidation Value and the Deemed Annual
Achievements (clause (a) through (c) collectively, the “Statement
of Sales”). Upon Bayer’s prior written
request, the Company shall make available, at reasonable times and places, to
Bayer and, if Bayer so elects, Bayer’s independent certified public
accountants, at no expense, such books and records as are reasonably necessary
to review and verify the amounts set forth in the Statement of Sales and causes
of any Annual Reductions, including without limitation books and records
related to the production and sale of IGIV, Prolastin and Albumin. Any dispute
as to the calculations in a Statement of Sales shall be resolved pursuant to
Section 8.06. All capitalized terms used in this Section 5.03 and not
defined herein have the meanings given such terms in Exhibit D.


 


SECTION 5.04 Confidentiality.


 


(a)                                  The Bayer Parties from time to time will receive or have access to
Confidential Information pursuant to this Agreement. “Confidential
Information” means (i) all information,
data, agreements, documents, reports and records which are oral or in writing
containing information concerning the Company or its Affiliates or their
businesses or assets, and (ii) all memoranda, notes, analyses,
compilations, studies or other documents which include any such Confidential
Information, whether prepared by the Company, a Bayer Party or their respective
Affiliates, directors, employees, managers, members, partners, representatives
or agents (including attorneys, consultants, lenders, potential investors and
financial advisors) (collectively, “Representatives”); provided,
however, that “Confidential
Information” does not include (i) information which is obtained by such
Bayer Party after the date hereof from a source other than the Company or its
Affiliates or their respective Representatives, (ii) information which is
or becomes generally available to the public other than as a result of a
disclosure by a Bayer Party in violation of this Section 5.04, or (iii) information
developed independently by a Bayer Party after the date hereof without use of
the Confidential Information.


 


(b)                                 No Bayer Party, nor any Affiliate of any Bayer Party, shall disclose or
permit or cause to be disclosed any Confidential Information to any Person nor
use any Confidential Information for its own purposes or its own account,
except as provided in subsections (c) through (e) below and Section 5.02.


 


(c)                                  A Bayer Party (a “Disclosing Party”) may disclose the Confidential Information to its Representatives who (x) need
to know such information to permit its Representatives to review and evaluate
such Disclosing Party’s investment in the Company, (y) are informed of the
confidential nature of the Confidential Information and (z) agree to
maintain the confidentiality of the Confidential Information. The Disclosing
Party agrees to be fully responsible for any breach of this Section 5.04
by any of its Representatives.


 


(d)                                 Notwithstanding anything to the contrary set forth in this Section 5.04,
if a Bayer Party or any of its Representatives are required to disclose any
Confidential Information


 


39

















 


pursuant to any applicable law, rule or
regulation or a subpoena, court order, similar judicial process, regulatory
agency or stock exchange rule, such Bayer Party will, if possible, promptly
notify the Company of any such requirement so that the Company may seek an
appropriate protective order or waive compliance with the provisions of this Section 5.04.
If such order is not obtained, such Bayer Party and its Representatives will
disclose only that portion of the Confidential Information which they are
advised by counsel that they are legally required to so disclose.


 


(e)                                  Notwithstanding anything to the contrary set forth in this Section 5.04,
the obligations of confidentiality contained herein, as they relate to each
Bayer Party’s investment in the Company, shall not apply to the federal tax
structure or federal tax treatment of each Bayer Party’s investment in the
Company, and each of the Bayer Parties and their respective Affiliates may
disclose to any and all persons or entities, without limitation of any kind,
the federal tax structure and federal tax treatment of such Bayer Party’s
investment in the Company. The preceding sentence is intended to cause each
Bayer Party’s investment in the Company not to be treated as having been
offered under conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (or
any successor provision) of the Treasury Regulations promulgated under Section 6011
of the Internal Revenue Code of 1986, as amended, and shall be construed in a
manner consistent with such purpose. In addition, each of the parties hereto
acknowledges that it has no proprietary or exclusive rights to the tax structure
of each Bayer Party’s investment in the Company or any tax matter or tax idea
related to any Bayer Party’s investment in the Company.


 


ARTICLE VI


 


REPRESENTATIONS


 


SECTION 6.01 Representations of the Company.


 


The Company represents and warrants that:


 


(a)                                  Due Organization, Good Standing and Power. The
Company is a corporation and is duly organized or formed, validly existing and
in good standing under the laws of the state of Delaware. The Company has all
requisite corporate or other power and authority to own or lease and to operate
its assets and to conduct the business now being conducted by it. The Company
is duly authorized, qualified or licensed to do business as a foreign
corporation or other organization in good standing in each of the jurisdictions
in which its ownership of property or the conduct of its business requires such
authorization, qualification or licensing, except where the failure to have
such authorization, qualification or licensing could not reasonably be expected
to have a material adverse effect on the Company, or on the performance of its
obligations hereunder. The Company has all requisite corporate or other power
and authority under Applicable Law and its Charter Documents to enter into this
Agreement and to perform its obligations hereunder.


 


(b)                                 Authorization and Validity of Agreement. The
execution and delivery of this Agreement by the Company and the performance by
it of the obligations hereunder have been duly authorized and approved by all
necessary corporate or other action under Applicable


 


40














 


Law and the relevant Charter
Documents on the part of the Company and do not require the approval of the
equity holders of the Company. This Agreement has been duly executed and
delivered by the Company and constitutes the legal, valid and binding obligation
of the Company enforceable against it in accordance with its terms, except as
that enforceability may be (i) limited by any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally, (ii) subject to general
principles of equity (regardless of whether that enforceability is considered
in a proceeding in equity or at law) and (iii) limited by general
principles of Applicable Law regarding the enforceability of arbitral awards
and judicial decisions.


 


(c)           Lack
of Conflicts. Neither the execution and delivery of this
Agreement by the Company or the performance by the Company of its obligations
hereunder does or will (i) conflict with, or result in the breach of any
provision of, the Charter Documents of the Company, (ii) violate any
Applicable Law or any permit, order, award, injunction, decree or judgment of
any Governmental Authority applicable to or binding upon the Company or to
which any of the properties or assets of the Company is subject or (iii) violate,
conflict with or constitute a material breach or termination of, or give any
Person the right to terminate, or constitute a material default, event of
material default or an event that, with notice, lapse of time or both, would
constitute a material default or event of material default, under the terms of
any agreement to which the Company is party.


 


(d)           No
Consents. The execution and delivery of this Agreement by the
Company and the performance by the Company of its obligations hereunder do not
require any Governmental Approval. No consent (other than Governmental
Approvals) will be required to be obtained by the Company for the performance
of its obligations hereunder.


 


(e)           Issued
and Outstanding Shares. All of the issued and outstanding shares of
Senior Convertible Preferred Stock issued to Talecris LLC and all of the issued
and outstanding shares of Common Stock and Junior Preferred Stock issued to
Bayer or its Affiliates on the Effective Date have been duly authorized and are
validly issued, fully paid and non-assessable.


 


(f)            Charter
Documents. Attached hereto as Exhibit A, Exhibit B, Exhibit C
and Exhibit D are true, complete and correct copies of the Company’s
Certificate of Incorporation, Series A Senior Convertible Preferred Stock
Designations, Series B Senior Convertible Preferred Stock Designations and
Junior Preferred Stock Designations, respectively, certified as of a recent
date by the Secretary of State of Delaware, none of which have been amended or
modified since the date of such certification.


 


(g)           Talecris
LLC Contribution. The amount Talecris LLC contributed, directly or
indirectly, to the Company on or prior to the Effective Time in exchange for Series A
Senior Convertible Preferred Stock and Junior Secured Convertible Notes is $100
million. As of the Effective Time, Talecris LLC will not, and will have no
rights to, receive other Equity Interests of the Company in exchange for such
contributed amount. Attached hereto as Exhibit E are true, complete and
correct copies of the Purchase Agreement and the Junior Secured Convertible
Notes.


 


41

















 


(h)           Junior
Preferred Stock. As of the Effective Time, Bayer will be the only holder of
Junior Preferred Stock. So long as Bayer, any of its Permitted Transferees or
any of its transferees which becomes a party to this Agreement pursuant to Section 3.06
holds outstanding shares of Junior Preferred Stock, the Company will not issue
shares of Junior Preferred Stock to any Person other than Bayer.


 


SECTION 6.02
 Representations of Talecris LLC.


 


Talecris
LLC represents and warrants that:


 


(a)           Due
Organization, Good Standing and Power. Talecris LLC is a limited liability
company and is duly organized or formed, validly existing and in good standing
under the laws of the state of Delaware. Talecris LLC has all requisite company
or other power and authority to own or lease and to operate its assets and to
conduct the business now being conducted by it. Talecris LLC is duly authorized,
qualified or licensed to do business as a foreign corporation or other
organization in good standing in each of the jurisdictions in which its
ownership of property or the conduct of its business requires such
authorization, qualification or licensing, except where the failure to have
such authorization, qualification or licensing could not reasonably be expected
to have a material adverse effect on Talecris LLC or on the performance of its
obligations hereunder. Talecris LLC has all requisite company or other power
and authority under Applicable Law and its Charter Documents to enter into this
Agreement and to perform its obligations hereunder.


 


(b)           Authorization
and Validity of Agreement. The execution and delivery of this Agreement by
Talecris LLC and the performance by Talecris LLC of the obligations hereunder
have been duly authorized and approved by all necessary company or other action
under Applicable Law and the relevant Charter Documents on the part of Talecris
LLC and do not require the approval of the equity holders of Talecris LLC. This
Agreement has been duly executed and delivered by Talecris LLC and constitutes
the legal, valid and binding obligation of Talecris LLC enforceable against it
in accordance with its terms, except as that enforceability may be (i) limited
by any applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors’ rights generally, (ii) subject
to general principles of equity (regardless of whether that enforceability is
considered in a proceeding in equity or at law) and (iii) limited by
general principles of Applicable Law regarding the enforceability of arbitral
awards and judicial decisions.


 


(c)           Lack
of Conflicts. Neither the execution and delivery of this Agreement by
Talecris LLC or the performance by Talecris LLC of its obligations hereunder
does or will (i) conflict with, or result in the breach of any provision
of, the Charter Documents of Talecris LLC, (ii) violate any Applicable Law
or any permit, order, award, injunction, decree or judgment of any Governmental
Authority applicable to or binding upon Talecris LLC or to which any of the
properties or assets of Talecris LLC is subject or (iii) violate, conflict
with or constitute a material breach or termination of, or give any Person the
right to terminate, or constitute a material default, event of material default
or an event that, with notice, lapse of time or both, would constitute a
material default or event of material default, under the terms of any agreement
to which Talecris LLC is party.


 


42

















 


(d)                 No
Consents.  The execution and delivery
of this Agreement by Talecris LLC and the
performance by Talecris LLC of its obligations hereunder do not require any
Governmental Approval. No consent (other than Governmental Approvals) will be
required to be obtained by Talecris LLC for the performance of their respective
obligations hereunder.


 


(e)                  Talecris LLC
Contribution.  The amount
Talecris LLC contributed, directly or
indirectly, to the Company on or prior to the Effective Time in exchange for
Series A Senior Convertible Preferred
Stock and Junior Secured Convertible Notes is $100 million. As of the Effective Time, Talecris LLC will not, and
will have no rights to, receive other Equity Interests of the Company in exchange for such contributed amount.


 


(f)                  Ownership.
 Cerberus and Ampersand collectively
beneficially own 100% of the membership interests in
Talecris LLC.


 


SECTION 6.03  Representations of Bayer. 


 


Bayer represents
and warrants that:


 


(a)                  Due
Organization, Good Standing and Power.  Bayer is a limited liability company
duly organized, validly existing and in good standing under the laws of the
state of Delaware. Bayer has all requisite company or other power and authority
to own or lease and to operate its assets and to conduct the business now being
conducted by it. Bayer is duly authorized,
qualified or licensed to do business as a foreign corporation or other
organization in good standing in each
of the jurisdictions in which its ownership of property or the conduct of its business requires such authorization,
qualification or licensing, except where the failure to have such authorization, qualification or licensing
could not reasonably be expected to have a material adverse effect on
Bayer or on the performance of its obligations hereunder. Bayer has all
requisite company or other power and authority under Applicable Law and its
Charter Documents to enter into this
Agreement and to perform its obligations hereunder.


 


(b)                 Authorization
and Validity of Agreement.  The execution and delivery of this
Agreement by Bayer and the performance of its obligations hereunder have been
duly authorized and approved by all necessary company or
other action under Applicable Law and the relevant
Charter Documents on the part of Bayer and do not require the approval of the
equity holders of Bayer. This Agreement has been duly
executed and delivered by Bayer and constitutes
the legal, valid and binding obligation of Bayer enforceable against it in
accordance with its terms, except as that enforceability may
be (i) limited by any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally, (ii) subject to general
principles of equity (regardless of whether that enforceability
is considered in a proceeding in equity or at law) and (iii) limited by general
principles
of Applicable Law regarding the enforceability of arbitral awards and judicial
decisions.


 


(c)                  Lack
of Conflicts.  Neither the execution and delivery of this
Agreement by Bayer or the performance of its obligations
hereunder does or will (i) conflict with, or result in the breach of any
provision of, the Charter Documents of Bayer, (ii) violate any Applicable Law
or any permit, order, award, injunction, decree or judgment of any Governmental
Authority


 


43

















 


applicable to or binding upon Bayer or to which any of
its properties or assets is subject or (iii) violate, conflict with or
constitute a material breach or termination of, or give any Person the right to
terminate, or constitute a material default, event of material default or an
event that, with notice, lapse of time or both, would constitute a material
default or event of material default, under the terms of any agreement to which
Bayer is party.


 


(d)           No Consents.  The execution
and delivery of this Agreement by Bayer and the performance of its obligations
hereunder do not require any Governmental Approval. No consent (other than
Governmental Approvals) will be required to be obtained by Bayer for the
performance of its obligations hereunder.


 


ARTICLE
VII


 


INDEMNIFICATION


 


SECTION 7.01  Indemnification.


 


Subject to the provisions of
Section 4.07 and Section 4.08:


 


(a)           Indemnity by the Company.  The Company shall indemnify and hold harmless
the Bayer Parties and Talecris LLC against any and all Claims or Losses now
existing or hereinafter arising, whether known or unknown, out of: (i) any
inaccuracy in any of the representations or breach of any of the warranties
made in this Agreement by the Company or (ii) any breach or default in
performance of any of the obligations that are to be performed by the Company
under this Agreement.


 


(b)           Indemnity by Talecris LLC.  Talecris LLC shall indemnify and hold
harmless the Bayer Parties and the Company against any and all Claims or Losses
now existing or hereinafter arising, whether known or unknown, out of: (i) any
inaccuracy in any of the representations or breach of any of the warranties
made in this Agreement by Talecris LLC or (ii) any breach or default in
performance of any of the obligations that are to be performed by Talecris LLC
under this Agreement.


 


(c)           Indemnity by Bayer.  The Bayer Parties shall indemnify and hold
harmless the Company and Talecris LLC against any and all Claims or Losses now
existing or hereinafter arising, whether known or unknown, out of: (i) any
inaccuracy in any of the representations or breach of any of the warranties
made in this Agreement by the Bayer Parties or (ii) any breach or default in
performance of any of the obligations that are to be performed by the Bayer
Parties under this Agreement.


 


(d)           Survival.  The right to indemnification under this
Section shall survive indefinitely.


 


SECTION 7.02  Enforcing Claims Under Indemnity.


 


(a)           If an Indemnified Party intends to
seek indemnity under this Article 7, such Indemnified Party shall promptly
notify the Indemnifying Party in writing of such Claims setting forth the
amount of the Claim or Loss, if known, and the method of computation thereof,


 


44

















 


if known,
and containing a reference to the section of this Agreement under which the Indemnified
Party seeks indemnification; provided, however, that the failure
to provide such notice shall not affect the
obligations of the Indemnifying Party unless it is actually prejudiced thereby.
If the Indemnifying Party fails to grant the Indemnified Party with the
indemnity requested, the Indemnified Party may seek to enforce
this provision in accordance with Section 8.05.


 


(b)           In the
event such Claim involves a Claim by a third Person against the Indemnified Party, the Indemnifying Party shall
have 30 days after receipt of such notice to decide whether it will undertake, conduct and control, through counsel
of its own choosing and at its own
expense, the settlement or defense thereof, and if it so decides, the
Indemnified Party shall cooperate with it in connection therewith; provided,
however, that the Indemnifying Party may so undertake, conduct
and control the settlement or defense thereof only if it acknowledges in writing its indemnification obligations
hereunder and the Indemnified Party may participate (subject to the Indemnifying Party’s control) in
such settlement or defense through counsel chosen by it; provided, further that the fees and expenses
of such Indemnified Party’s counsel shall
be borne by the Indemnified Party. If the defendants in any action include the
Indemnified Party and the
Indemnifying Party, and the Indemnified Party shall have been advised by its counsel
in writing that there are legal defenses available to the Indemnified Party
which are materially different from or in
addition to those available to the Indemnifying Party, the Indemnified Party
shall have the right to employ its own counsel in such action, and, in such event, the reasonable fees and expenses of such
counsel shall be borne by the Indemnifying Party. The Indemnifying Party may, without the consent of the
Indemnified Party, settle or  compromise
or consent to the entry of any judgment in any action involving only the
payment of money (A) which includes
as an unconditional term thereof the delivery by the claimant or plaintiff to
the Indemnified Party of a duly executed written release of the Indemnified
Party from all Liability in respect
of such action which written release shall be reasonably satisfactory in form and substance to the Indemnified Party
and (B) if there is no finding or admission of any violation of law or any violation of any Person
and no effect on any other Claims that may be made against the Indemnified Party. The Indemnifying Party shall not,
without the written consent of the
Indemnified Party, settle or compromise any action involving relief other than
the payment of money in any manner
that, in the reasonable judgment of the Indemnified Party, would
materially and adversely affect the Indemnified Party; provided, however,
that if the Indemnified Party shall fail or
refuse to consent to a settlement, compromise or judgment proposed by the Indemnifying Party and approved by
the third Person in any such action and a judgment thereafter shall be entered
or a settlement or compromise thereafter shall be effected on terms less favorable in the aggregate to the
Indemnified Party than the settlement, compromise or judgment proposed
by the Indemnifying Party and approved by the third Person on such action, the Indemnifying Party shall have no Liability
hereunder with respect to any Claim or Loss in excess of those that were
provided for in such settlement, compromise or judgment so proposed by the
Indemnifying Party or any costs or expenses related to such Claim arising after
the date such settlement, compromise
or judgment was so proposed. So long as the Indemnifying Party is diligently contesting any such Claim in good
faith, the Indemnified Party shall not pay or settle any such Claim,
unless such settlement includes as an unconditional term thereof the delivery
by the claimant or plaintiff and by the
Indemnified Party to the Indemnifying Party of duly executed written releases of the Indemnifying Party from
all Liability in respect of such Claim which written releases shall be reasonably satisfactory in form and substance
to the Indemnifying Party.


 


45

















 


The Indemnified Party shall
cooperate fully in all aspects of any investigation, defense, pre-trial
activities, trial, compromise, settlement or discharge of any Claim in respect
of which indemnification is sought pursuant to this Section 7.02. If the
Indemnifying Party does not notify the Indemnified Party, within 30 days after
the receipt of the Indemnified Party’s notice of a claim of indemnity
hereunder, that it elects to undertake the defense thereof or does not
acknowledge its indemnification obligations with respect thereto, the
Indemnified Party shall have the right to contest, settle or compromise the
Claim, but shall not thereby waive any right to indemnity therefor pursuant to
this Agreement.


 


(c)           The Indemnified Party shall cooperate
with the Indemnifying Party in pursuing
reasonable remedies against third parties, including any insurance carrier or
potential indemnitor, other than the
Indemnifying Party, to recover any Claim or Loss against the Indemnified Party; provided, however,
the Indemnified Party shall only be required to initiate litigation or
other formal claims procedure to seek remedies against such third parties when requested by the Indemnifying Party in the
exercise of reasonable business judgment; provided, further, the
Company shall only be required to participate as a party claimant against any
of its customers where its participation is reasonably necessary to
assure recovery of a Claim or Loss that the
Company has demanded that Bayer is obligated to pay. All costs incurred by the Indemnified
Party in pursuing such remedies at the request of the Indemnifying Party shall
be borne by the Indemnifying Party. The
Indemnifying Party shall not delay any payments due and owing the Indemnified Party under this Article 7
while Claims are being pursued against any third parties under this
Section 7.02.


 


SECTION 7.03  Exclusive Remedies.


 


THE
INDEMNIFICATION PROVISIONS IN THIS ARTICLE 7 SHALL BE THE SOLE AND EXCLUSIVE
REMEDIES OF THE PARTIES FOR THE BREACH OF ANY REPRESENTATION OR WARRANTY IN
THIS AGREEMENT AND FOR THE NON-PERFORMANCE OF ANY COVENANT AND AGREEMENT IN
THIS AGREEMENT (ABSENT ACTUAL FRAUD). FOR THE CONSIDERATION PROVIDED HEREIN
EACH PARTY HEREBY COVENANTS AND AGREES NOT TO SUE ANY OTHER PARTY UPON ANY
CLAIM, DEMAND, OR CAUSE OF ACTION RELATING TO THIS AGREEMENT, INCLUDING,
WITHOUT LIMITATION, ANY CLAIM OR CAUSE OF ACTION FOR INDEMNITY OR CONTRIBUTION,
ON ANY BASIS OTHER THAN PERMITTED UNDER THE TERMS PROVIDED IN THIS ARTICLE 7
(OTHER THAN A CLAIM BASED ON ACTUAL FRAUD).


 


SECTION 7.04  Treatment as Boot Adjustments.


 


Payments under this Article 7 shall for tax purposes be
treated as an adjustment to the Boot and Contributed Cash in accordance
with Article 3 of the Joint Contribution Agreement to the extent permitted by
law.


 


46

















 


ARTICLE
VIII


 


MISCELLANEOUS


 


SECTION 8.01  Consent
to Assignment.


 


This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, and it is not intended to confer upon any other person any rights or
remedies hereunder. Neither this Agreement nor any of the rights, interests or obligations
hereunder may be assigned by any of the parties without the prior written consent of the other
party hereto, except that each party may at any time assign any or all of its
rights or obligations hereunder to one of its wholly owned subsidiaries (but no such assignment shall relieve
such party of any obligations under this Agreement). Notwithstanding the foregoing, the Company may
assign this Agreement and any or all rights or obligations hereunder to (i) any
Affiliate of the Company provided that any such Affiliate becomes a party to this Agreement, (ii) any
lender of the Company as collateral security or (iii) any successor in interest to the Company; provided
that any such successor becomes a party to this Agreement; provided that no
assignment under (i), (ii) or (iii) above shall relieve the Company from any obligation hereunder. Any Bayer
Party may assign this Agreement and any or all
rights or obligations hereunder to (i) any Affiliate of Bayer to which a Bayer
Party Transfers Common Shares in accordance
with this Agreement, provided that any such Affiliate becomes a party to this Agreement or (ii) any
successor in interest to such Bayer Party, provided that any such successor becomes a party to this
Agreement; provided that no assignment under (i) or (ii) above shall relieve Bayer from any
obligation hereunder. Talecris LLC may assign this Agreement and any or all rights or obligations
hereunder to (i) any Affiliate of Talecris LLC to which Talecris LLC transfers Shares in accordance
with this Agreement, provided that any such Affiliate becomes a party to this Agreement, and (ii) any successor in
interest to Talecris LLC provided
that any such assignee becomes a party to this Agreement; provided that
no assignment under (i) or (ii) above shall relieve Talecris LLC from any
obligation hereunder. Any purported assignment
in contravention of this Section 8.01 shall be void.


 


SECTION 8.02  Entire
Agreement and Amendments.


 


This Agreement constitutes the
entire agreement among the parties, and merges and supersedes all previous agreements and understandings
among the parties, whether oral or written, relating to the subject matter hereof. No
amendment, modification or interpretation of this Agreement will have any effect unless it is reduced
to writing, makes specific reference to this Agreement and is signed by all of the parties.


 


SECTION 8.03  Notices.


 


All notices, requests,
demands and other communications required or permitted hereunder shall be in writing and if mailed by
prepaid first-class mail or certified mail, return receipt requested, at any time other than during a general
discontinuance of postal service due to strike, lockout or otherwise, shall be deemed to have been
received on the earlier of the date shown on the receipt or three Business Days after the postmarked
date thereof and, if telexed or telecopied, the original notice shall be mailed by prepaid
first class mail within twenty-four (24)


 


47

















 


hours after sending such notice
by telex or telecopy, and shall be deemed to have been received on the next
Business Day following dispatch and acknowledgment of receipt by the recipient’s
telex or telecopy
machine. In addition, notices hereunder may be delivered by hand, in which event the notice shall be deemed effective when
delivered, or by overnight courier, in which event the notice shall be
deemed to have been received on the next Business Day following delivery to
such courier. All notices and other communications under this Agreement shall
be given to the parties hereto at the following addresses:


 


	
   

  	
  (a)

  	
  If to the Company or
  Talecris LLC:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  c/o Mark Neporent

  
	
   

  	
   

  	
  General Counsel

  
	
   

  	
   

  	
  Cerberus
  Capital Management, L.P.

  
	
   

  	
   

  	
   299
  Park Avenue, 28th Floor

  
	
   

  	
   

  	
  New York, NY 10171

  
	
   

  	
   

  	
  Fax:
  (212) 891-1540

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  c/o
  Talecris Biotherapeutics, Inc. 

  
	
   

  	
   

  	
  P.O. Box 13887

  
	
   

  	
   

  	
  79 TW Alexander Drive

  
	
   

  	
   

  	
  4101 Research Commons

  
	
   

  	
   

  	
  Research Triangle Park

  
	
   

  	
   

  	
  Raleigh,
  NC 27709

  
	
   

  	
   

  	
  Fax:
  (919) 316-6669

  
	
   

  	
   

  	
  Attn:
  General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With copies to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Alison S. Ressler, Esq. 

  
	
   

  	
   

  	
  Sullivan
  & Cromwell LLP

  
	
   

  	
   

  	
  1888 Century Park East 

  
	
   

  	
   

  	
  Suite 2100

  
	
   

  	
   

  	
  Los
  Angeles, CA 90067

  
	
   

  	
   

  	
  Fax:
  (310) 712-8800

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Raymond B. Grochowski,
  Esq.

  
	
   

  	
   

  	
  Latham
  & Watkins LLP 

  
	
   

  	
   

  	
  555
  11th Street, N.W. 

  
	
   

  	
   

  	
  Suite 1000

  
	
   

  	
   

  	
  Washington,
  D.C. 20004

  
	
   

  	
   

  	
  Fax: (202) 637-2201

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and

  



 


48

















 


	
   

  	
   

  	
  Richard
  A. Charpie 

  
	
   

  	
   

  	
  Managing General Partner 

  
	
   

  	
   

  	
  Ampersand Ventures

  
	
   

  	
   

  	
  55 William Street, Suite 240

  
	
   

  	
   

  	
  Wellesley, MA 02481 

  
	
   

  	
   

  	
  Fax: (781) 239-0824

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  If to any Bayer Party:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Paul R. Berry

  
	
   

  	
   

  	
  Vice President, General Counsel and Secretary

  
	
   

  	
   

  	
  Bayer HealthCare LLC

  
	
   

  	
   

  	
  400 Morgan Lane

  
	
   

  	
   

  	
  West Haven, CT 06516-4175

  
	
   

  	
   

  	
  Fax: (203) 812-2795

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Marilyn Mooney

  
	
   

  	
   

  	
  Fulbright & Jaworski L.L.P.

  
	
   

  	
   

  	
  801 Pennsylvania Avenue, N.W.

  
	
   

  	
   

  	
  Washington, D.C. 20004

  
	
   

  	
   

  	
  Fax:
  (202) 662-4643

  
				



 


Any
party hereto may change its address specified for notices herein by designating
a new address by notice in accordance with
this Section 8.03.


 


SECTION
8.04  Non-Waiver.


 


The waiver by any party of any breach
of any term, covenant, condition or agreement contained herein or any default
in the performance of any obligations hereunder shall not be deemed to be a
waiver of any other breach or default of the same or of any other term,
covenant, condition, agreement or obligation.


 


SECTION 8.05  Governing Law, Jurisdiction.


 


(a)           This
Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard
to conflict of laws principles.


 


(b)           Subject to Section 8.06, each of the parties
hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the jurisdiction of any Delaware State
court or federal court of the United States of America sitting in Delaware, and
any appellate court thereof, in any
action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and determined in any such Delaware State
court or, to the extent permitted by law, in such federal court. Each of the parties agrees that any action or
proceeding arising out of or


 


49

















 


relating to
this Agreement that is subject to the jurisdiction of the Delaware Superior
Court rather than the Delaware Chancery Court
shall be conducted by Summary Proceedings.


 


SECTION 8.06  Dispute Resolution of Accounting Matters.


 


In the event that Bayer disputes the Company’s
calculations of the Bayer Equity Fair Market
Value under Section 2.01(h) or any of the calculations under Section 5.03, it
shall, within 30 days of the Election Time or delivery of
the Statement of Sales, as applicable, deliver a written
notice to the Company (the “Dispute Notice”) setting forth in reasonable
detail the basis of such dispute. In the event that
the Dispute Notice is so delivered, the parties shall negotiate to attempt
to resolve the dispute. If the parties fail to resolve any such dispute within
20 days after receipt of any Dispute Notice, a
firm of independent certified public accountants of national standing
mutually and reasonably agreeable to the Company and Bayer (the “Reviewing Accountant”)
will review the dispute. The parties shall make available to the Reviewing Accountant
all work papers and all other information and material in their possession
relating to the matters asserted in the Dispute
Notice. The Reviewing Accountant shall be instructed by the parties
to use its best efforts to deliver to the parties its determination as promptly
as practicable after such submission of the dispute to the Reviewing
Accountant. The determination of the Reviewing Accountant shall be final and binding
on the parties. Each party shall bear its own expenses and
the fees and expenses of its own representatives and experts, including its independent
accountant, in connection with the preparation, review, dispute (if any) and
final determination of the Bayer Equity Fair Market Value
and Annual Net Sales, Annual Achievements and Annual
Reductions. The Company and Bayer shall share equally in the costs, expenses
and fees of the Reviewing Accountant.


 


SECTION 8.07  Captions.


 


All captions are inserted for
convenience only, and will not affect any construction
or interpretation of this Agreement.


 


SECTION 8.08  Severability.


 


Any provision of this Agreement which is or may become
prohibited or unenforceable, as a matter of
law or regulation, will be ineffective only to the extent of such prohibition
or unenforceability and shall not invalidate the remaining provisions hereof if
the essential purposes of this Agreement may be given effect despite the
prohibition or unenforceability of the affected provision.


 


SECTION 8.09  Defined
Terms.


 


Defined terms used but not otherwise
defined in this Agreement shall have the meaning ascribed to those terms in the Joint Contribution
Agreement or the Junior Preferred Stock Designations, as applicable.


 


SECTION 8.10  Set-Off.


 


No party to this Agreement shall have any right of set off
with respect to amounts it has an obligation to pay hereunder.


 


50














 


SECTION 8.11 Counterparts.


 


This Agreement may be executed
in one or more counterparts, each of which shall be deemed to be an original, and
all of which together shall be deemed to be one and the same instrument.


 


SECTION 8.12 Recapitalizations, Exchanges, Etc. Affecting Common
Stock.


 


Except as otherwise provided in
this Agreement, the provisions of this Agreement shall apply to any and all shares
of capital stock or other securities of the Company or any successor or assign
of the Company (whether by merger, consolidation, sale of assets, transfer of Equity Interests or
otherwise) which may be issued in respect of, in exchange for, or in substitution of, any
Shares by reason of any reorganization, recapitalization, reclassification,
merger, consolidation, partial or complete liquidation, sale of assets,
spin-off, stock dividend, split, distribution to stockholders or combination
of the Shares or any other change in the Company’s capital structure, in order to preserve
fairly and equitably as far as practicable, the original rights and obligations
of the parties hereto under this Agreement.


 


SECTION 8.13 Junior Preferred Stock.


 


The Allocation Schedule, the
Capital Expenditures Schedule, the Production Capacity Schedule and the Yield Schedule, as each such
term is defined in the Junior Preferred Stock Designations, are set forth in
Exhibit F, Exhibit G, Exhibit H and Exhibit I, respectively. Solely for purposes of illustrating the various
calculations set forth in the Junior Preferred Stock Designations, and not intending to limit any of
the terms and conditions thereof, set forth in Appendix I are examples of calculations of the Liquidation Value,
Special Liquidation Value and Deemed Liquidation Value, and related
amounts, under the scenarios described therein.


 


51

















 


IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed by their
respective authorized signatories thereunto duly authorized as of the day and
year first above written.


 


 


	
   

  	
  TALECRIS BIOTHERAPEUTICS
  HOLDINGS CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lawrence D. Stern

  
	
   

  	
   

  	
  Name: 

  	
  Lawrence D. Stern

  
	
   

  	
   

  	
  Title:

  	
  Executive Chairman,
  President

  
	
   

  	
   

  	
  and Chief Executive
  Officer

  
	
   

  	
   

  
	
   

  	
  TALECRIS HOLDINGS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric L. Esptein

  
	
   

  	
   

  	
  Name: 

  	
  Eric L. Esptein

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  BAYER HEALTHCARE LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph A. Akers

  
	
   

  	
   

  	
  Name: 

  	
  Joseph A. Akers

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Keith R. Abrams

  
	
   

  	
   

  	
  Name: 

  	
  Keith R. Abrams

  
	
   

  	
   

  	
  Title:

  	
  Assistant Secretary

  



 


52

















 


SCHEDULE
I


 


AFFILIATES
OF BAYER HEALTHCARE LLC


 


None


 

















 


SCHEDULE
II


 


TALECRIS
BIOTHERAPEUTICS HOLDINGS CORP.


 


Initial
Capitalization


 


	
   

  	
   

  	
   

  	
   

  	
  Issuable
  in Bayer Acquisition

  	
   

  	
  Issuable
  in Precision Acquisition

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Convertible
  from

  	
   

  	
  Convertible
  from

  	
   

  	
   

  	
   

  	
  Convertible
  from

  	
   

  
	
   

  	
   

  	
  Authorized

  	
   

  	
  Actual

  	
   

  	
  Series
  A(1)

  	
   

  	
  Junior
  Notes(2)

  	
   

  	
  Actual

  	
   

  	
  Series
  B(1)

  	
   

  
	
  Common Stock
  ($0.01 par value)

  	
   

  	
  100,000,000

  	
   

  	
  1,000,000

  	
   

  	
  900,000

  	
   

  	
  8,100,000

  	
   

  	
  —

  	
   

  	
  1,730,790

  	
   

  
	
  Preferred Stock
  ($0.01 par value):

  	
   

  	
  10,000,010

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Series A Senior
  Convertible(3)

  	
   

  	
  5,000,000

  	
   

  	
  100,000

  	
   

  	
  —

  	
   

  	
  900,000

  	
   

  	
  —

  	
   

  	
  —

  	
   

  
	
  Series B Senior
  Convertible(3)

  	
   

  	
  5,000,000

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  192,310

  	
   

  	
  —

  	
   

  
	
  Junior

  	
   

  	
  10

  	
   

  	
  1

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  
	
  Junior Secured
  Convertible Notes

  	
   

  	
   

  	
   

  	
  $

  	
  90,000,000

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  
															



 






	
  (1)

  	
  The conversion rate is 9 shares of Common Stock per
  share of Series A or Series B Senior Convertible Preferred Stock.

  
	
  (2)

  	
  The conversion rate is 10 shares of Series A Senior
  Convertible Preferred Stock per $1,000 principal amount of Junior Secured
  Convertible Notes.

  
	
  (3)

  	
  Liquidation preference is $100 per share.