**Exhibit 10.3**

 

September 27, 2005

 

Life Therapeutics, LtdP.O. Box 6126 Frenchs Forest22 Rodborough RoadNSW 2086, AustraliaAttention:  John Manusu & HariNair

 

RE:                              Retirementof Secured Promissory Note dated December 17, 2004 (the **“**Note**”**)

 

Dear Sirs:

 

This letter shall constitute our agreement with respect to theretirement (the “Payoff”) of the Note, which we hereby agree shall occurprior to 5:00 p.m., Atlanta, time, on the date hereof (the “Payoff Date”).  In exchange for (i) your proposedpayment of the outstanding principal amount of the Note, which we hereby agreeis US$6,800,000.00, prior to the stated maturity date and (ii) yourcovenants as set forth below, we hereby agree to accept the amount ofUS$6,000,000.00 in full satisfaction of the principal amount of the Note (the “DiscountedPrincipal Amount”).  Accordingly, onthe Payoff Date, you shall pay the amount (the “Payoff Sum”) set forthbelow by wire transfer of immediately available funds:

 

| Amount with respect to outstanding |   |   |         |
|------------------------------------|--------|--------|--------------|
| Principal Balance                  |   | $      | 6,000,000.00 |   |
| Interest due and payable           |   | $      | 57,334.00    |   |
| Total                              |   | $      | 6,057,334.00 |   |

 

In addition, we agree that additional interest shall accrue and bepayable at the Short-Term Applicable Federal Rate for September 2005(assuming quarterly compounding) (3.84%) for each day after the Payoff Date (inthe amount of $715.40) until we receive the Payoff Sum.  The Payoff Sum must be received, inimmediately available funds, by 5:00 P.M. (Eastern time) on the PayoffDate in order for you to avoid an additional day’s interest.

 

Subject to the terms hereof,on the Payoff Date,

•                  You shall deliver to us,

•                  the Payoff Sum, inimmediately available funds and;

•                  an executed counterpart ofthe Mutual Limited Release substantially in the form attached hereto as Schedule 2to this letter (the “Release”).

•                  We shall deliver to you,

•                  the original copy of theNote marked “paid in full”;

•                  the UCC-3 TerminationStatements with respect to the financing statements described on Schedule 3to this letter; and

•                  an executed counterpart ofthe Release.

 

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In addition to theforegoing, you covenant and agree as follows:

 

•                  You shall use yourcommercially reasonable efforts to secure a termination of our guaranty of theleases of the Charlotte, North Carolina, Columbia, South Carolina andPensacola, Florida donor centers as soon as reasonably practicable followingthe Payoff Date and

•                  You shall grant to us alicense to certain technology, as more particularly described on Schedule 1to this letter, on terms substantially as set forth on Schedule 1to this letter and on such other terms and conditions as the parties maymutually agree.

 

We agree to negotiate theterms of the license agreement that are not set forth in Schedule 1 tothis letter with you in good faith with a view toward executing the licenseagreement no later than October 15, 2005.

 

We acknowledge and agree that this letter supersedes and replaces inits entirety the letter we executed on September 13, 2005, with respect tothe Payoff.

 

If the foregoing correctly sets forth your understanding of ouragreement, please so indicate by signing a counterpart of this letter in thespace provided below.  Please return yousigned counterpart to me at the address above.

 
| Sincerely,               |
|--------------------------|
|                     |
| SEROLOGICALS CORPORATION |
|                     |
|                     |
| By:                      | /s/ Harold W. Ingalls |   |
|                     | Harold W. Ingalls |
|                     | Vice President, Finance, Chief Financial Officer |
|                     |
|                     |
| LIFE THERAPEUTICS, LTD   |
|                     |
|                     |
| By:                      | /s/ Dr. Hari Nair |   |
|                     | Dr. Hari Nair |
|                     | Managing Director/CEO |
|                          |  |  |  |

 

2

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**Schedule 1 –License Terms**

 
| **Description of Licensed  Technology:** | ** ** | **The patented technology relating  to tangential flow membrane electrophoresis, including patent rights and  patents that may from time to time issue with claims covering the Licensor’s  patented Gradiflow Device or improvements thereto and other information  relating to use of the Gradiflow Technology for the recovery of proteins and  other charged molecules from solutions containing such molecules**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** **                               | ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| **Fields of Use:**                       | ** ** | **“Bioprocessing Market**”, meaning the production of cell culture  products, such as sera, media and supplements, for use by biotechnology and  pharmaceutical companies.

** **

**“Blood Typing Market”,  meaning the production of monoclonal antibodies to assure blood-type  compatibility, for use by blood banks and hospital transfusion services.**

** **

**“Research Market”, meaning  those individuals in laboratories of academic, government, industrial,  clinical or other institutions engaged in the investigation of biological  and/or biochemical processes, and/or research and development of biological  and/or biochemical products, who determine for themselves that they are  entitled to purchase and use Licensed Products or kits labeled “For Research  Use Only - Not for any clinical, therapeutic or diagnostic use in Humans or  Animals” or a reasonable equivalent.** |
| ** **                               | ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| **Scope of License:**                    | ** ** | **A worldwide  non-exclusive,**license (i) to  use the Licensed Technology for internal business use related to cell culture  separation and for experiments, developmental work and/or for tests requiring  the recovery of molecules from solutions containing such molecules and (ii) to  use the Licensed Technology to manufacture                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

 

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| ** **        | ** ** | **products for sale within the  Fields of Use.**                                                                                                                                                                            |
|-------------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** **        | ** ** | ** **                                                                                                                                                                                                                  |
| **Term:**         | ** ** | **Subject  to early termination for breach, the later of: (a) ten years from the effective  date and (b) upon the expiration of the last to expire valid claim  within the Licensed Technology (if applicable).** |
| ** **        | ** ** | ** **                                                                                                                                                                                                                  |
| **Royalty Rate:** | ** ** | **8% of net sales of products  manufactured using the Licensed Technology. No royalty is payable with  respect to the internal use of the Licensed Technology.**                                                            |

 

2

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**Schedule 3 – Form of Release**

 

**MUTUAL LIMITED RELEASE AGREEMENT**

 

THIS MUTUAL LIMITED RELEASEAGREEMENT (this “Release”), dated as of September 27, 2005, by andamong (i) Life Therapeutics Limited (f/k/a Gradipore Limited), acorporation organized under the laws of the Commonwealth of Australia (the “Company”);Life Gels, Inc. (f/k/a Gradipore, Inc.), a Delawarecorporation (“LG”); Life Therapeutics, Inc. (f/k/a LifeTherapeutics Plasma Holdings, Inc. and Gradipore Plasma Holdings, Inc.),a Delaware corporation (“LTI”); LifeSera, Inc., (f/k/a SerologicalsSpecialty Biologics, Inc.), a Delaware corporation (“LifeSera”);Life Therapeutics Nevada, Inc. (f/k/a Serologicals Nevada, Inc.), a Nevada corporation (“Nevada”); LifeTherapeutics Business Trust (f/k/a Serologicals Business Trust), a Nevada business trust (“LBT”); LifeTherapeutics Investments, LLC (f/k/aSerologicals Investments, LLC), a Georgia limited liability company (“LLC”);Life Therapeutics Management Partnership, LP (f/k/a Serologicals Management Partnership, LP), a Delawarelimited partnership (“LP”); and Allegheny Biologicals, Inc., a Pennsylvania corporation (“Allegheny”,and together with the Company, LG, LTI, LifeSera, Nevada, LBT, LLC, and LP, collectively, the “PurchaserParties”), on the one hand, and (ii) Serologicals Corporation,a Delaware corporation (the “Holder Parent”), and Serologicals Finance Company, aDelaware corporation (“Holder” and together with the Holder Parent,collectively, the “Holder Parties”), on the other hand.

 

WITNESSETH

 

WHEREAS, LG, the Company,Holder and the Holder Parent previously entered into that certain StockPurchase Agreement dated as of December 19, 2003 as amended by thatcertain First Amendment to the Stock Purchase Agreement, dated as of January 15,2004 (the ”Stock Purchase Agreement”), pursuant to which LTIpurchased (the “Acquisition”) all of the issued and outstanding sharesof capital stock, $0.01 par value per share, of Serologicals SpecialtyBiologics, Inc. (the “Common Stock”), from Holder;

 

WHEREAS, pursuant to Section 9.2of the Stock Purchase Agreement, the Holder Parties, jointly and severally,agreed to indemnify, protect, and hold harmless the Purchaser IndemnifiedParties (as defined in the Stock Purchase Agreement) from and against anyPurchaser Losses (as defined in the Stock Purchase Agreement);

 

WHEREAS, pursuant to Section 9.4of the Stock Purchase Agreement, the Company and LG, jointly and severally,agreed to indemnify, protect, and hold harmless the Holder Indemnified Parties(as defined in the Stock Purchase Agreement) from and against any Holder Losses(as defined in the Stock Purchase Agreement);

 

WHEREAS, as consideration for the Common Stock, the Holder received twopromissory notes, the first in the amount of One Million Five Hundred ThousandDollars (U.S. $1,500,000.00) (the “Short Term Old Note”) and the secondin the amount of Eleven Million

 

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Eight Hundred Three ThousandEight Hundred Sixty-Seven Dollars (U.S. $11,803,867.00) (the “Long TermOld Note”, together with the Short Term Old Note, the “Old Notes”);

 

WHEREAS, subject to theterms and subject to the conditions of that certain Exchange Agreement, datedthe date hereof (the “Exchange Agreement”), by and between the Companyand the Holder, the Holder forgave any outstanding principal plus accrued butunpaid interest under the Old Notes in consideration for (i) a new securedpromissory note issued by the Releasors in the amount of Seven Million EightHundred Thousand Dollars (U.S. $7,800,000.00) (the “Exchange Note”) and (ii) anon-exclusive license as described under Article V of the ExchangeAgreement to use certain proprietary technology of the Company (the “PriorLicense”).

 

WHEREAS, pursuant to theExchange Agreement, the Purchaser Parties and the Holder Parties enter intothat certain Mutual Release Agreement, dated December 17, 2004 (the “PriorRelease”), pursuant to which they, among other things, released certainclaims against one another for indemnity pursuant to the Stock PurchaseAgreement; and

 

WHEREAS, subject to theterms and subject to the conditions of that certain letter agreement, dated September 27,2005 (the “Payoff Letter”), by and between the Company and the HolderParent, the Holder Parent has agreed to forgive the outstanding principalamount of the Exchange Note in consideration for the payment of the sum ofmoney stated therein and certain other accommodations described therein,including the execution and delivery of this Release.

 

NOW, THEREFORE, inconsideration of the mutual covenants and agreements herein set forth and eachact done pursuant hereto, the Purchaser Parties and the Holder Parties,intending to be legally bound, do hereby represent, warrant, covenant and agreeas follows:

 

# ARTICLE IDEFINITIONS

#  

## 1.1                                 Definitions.  Capitalized terms used and not otherwise defined herein have the meanings assignedto them in the Stock Purchase Agreement, the Exchange Agreement or the PayoffLetter (as the case may be).

##  

# ARTICLE IIRELEASE BY PURCHASER PARTIES

#  

## 2.1                                 Releases.  As consideration for the transactionscontemplated by this Release and the Payoff Letter:

##  

### (a) The Purchaser Parties,on behalf of themselves and their respective affiliates, subsidiaries, parents,directors, officers, agents, principals, representatives, employees, attorneys,successors, transferees and assigns (collectively, the “Purchaser ReleasingParties”) hereby fully, unconditionally and completely release, acquit,discharge, and agree to hold harmless ****the Holder Parties,**** theirrespective affiliates, subsidiaries, ****directors, officers, agents, principals,representatives********,****employees, attorneys, successors, transferees andassigns (hereinafter collectively referred to as “Holder Releasees”)from any and all claims, liabilities, allegations, actions, offsets

 

2

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### or demands whatsoever which the Purchaser Parties,or any of them,********have or may have************against theHolder Releasees, or any of them, whetherknown or unknown, suspected or unsuspected, choate or inchoate, and wheneverthey may have arisen from thebeginning of time until the Payoff Date with respect to the Exchange Agreement;provided, however, that in no event shall this Release, including,without limitation, any term or condition of this Section 2.1(a) haveapplicability to the Prior License.

###  

### (b) The Purchaser Parties onbehalf of themselves and their respective affiliates, subsidiaries, parents,directors, officers, agents, principals, representatives, employees, attorneys,successors, transferees and assigns, hereby fully, unconditionally andcompletely ratify and confirm the Prior Release and fully, unconditionally andcompletely waive and renounce any right they may have to contest the validityof the Prior Release for any reason.

###  

## 2.2                                 FurtherAssurances. Upon the request of the Holder Releasees, the Purchaser Partiesshall take such additional actions as the Holder Releasees shall reasonablyrequest, including the execution of documents or instruments reasonablyrequested by the Holder Releasees, to more fully evidence the releases given bythe Purchaser Parties pursuant to this Release.

##  

# ARTICLE IIIRELEASE BY HOLDER PARTIES

#  

## 3.1                                 Releases.  As consideration for the transactionscontemplated by this Release and Payoff Letter:

##  

### (a) The Holder Parties, onbehalf of themselves and their respective affiliates, subsidiaries, parents,directors, officers, agents, principals, representatives, employees, attorneys,successors, transferees and assigns (collectively, the “Holder ReleasingParties”) hereby fully, unconditionally and completely release, acquit,discharge, and agree to hold harmless ****the Purchaser Parties,****their respective affiliates, subsidiaries, ****directors, officers, agents, principals,representatives********,****employees, attorneys, successors, transferees andassigns (hereinafter collectively referred to as “Purchaser Releasees”)from any and all claims, liabilities, allegations, actions, offsets or demandswhatsoever which the Holder Parties, or either of them,********have or may have************against thePurchaser Releasees, or any of them, whetherknown or unknown, suspected or unsuspected, choate or inchoate, and wheneverthey may have arisen from thebeginning of time until the Payoff Date with respect to the Exchange Agreement,the Exchange Note and the Security Agreement; provided, however,that in no event shall this Release, including, without limitation, any term orcondition of this Section 3.1(a), have applicability to and the PriorLicense.

###  

### (b) The Holder Parties onbehalf of themselves and their respective affiliates, subsidiaries, parents,directors, officers, agents, principals, representatives, employees, attorneys,successors, transferees and assigns, hereby fully, unconditionally andcompletely ratify and confirm the Prior Release and fully, unconditionally andcompletely waive and renounce any right they may have to contest the validityof the Prior Release for any reason.

 

3

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## 3.2                                 FurtherAssurances. Upon the request of the Purchaser Releasees, the Holder Partiesshall take such additional actions as the Purchaser Releasees shall reasonablyrequest, including the execution of documents or instruments reasonablyrequested by the Purchaser Releasees, to more fully evidence the releases givenby the Holder Parties pursuant to this Release.

##  

# ARTICLE IVMISCELLANEOUS

#  

## 4.1                                 Notices.****All notices, demands andother communications provided for or permitted hereunder or under this Releaseshall be made in writing and shall be by registered or certified first-classmail, return receipt requested, by next day delivery through a recognizednational courier or personal delivery:

##  

### (a) If to the PurchaserParties, to:

###  

Life Therapeutics LimitedP.O. Box 6126 Frenchs Forest22 Rodborough RoadNSW 2086, AustraliaAttention:  John Manusu & HariNairTelecopy:  (612) 9436-2907

 

with a copy to:                                                                                         Smith Moore LLPOne Atlantic Center1201 W. Peachtree StreetSuite 3700Atlanta, GA 30309Attention:  Frank E. McDanielTelecopy:  (404) 962-1221

 

### (b) if to the Holder Parties, to:

###  

Serologicals Corporation5655 Spalding DriveNorcross, Georgia  30092Attention:  Vice President, GeneralCounsel

 

with a copy to:                                                                                         King & Spalding LLP191 Peachtree Street, N.E.Atlanta, Georgia  30303-1763Attention:  G. Roth Kehoe, Esq.

 

Any such notice,communication or delivery will be deemed given or made (a) on the fifthbusiness day after it is mailed by registered or certified mail, (b) onthe first business day

 

4

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after delivery to anappropriate customer service representative if sent by next day deliverythrough a recognized national courier, or (c) on the date of delivery ifdelivered in person.  Any party maychange its address for notice purposes by giving written notice to the otherparties in the manner specified above.

 

## 4.2                                 Entire Agreement.  ThisRelease shall be binding upon and shall inure to the benefit of the partieshereto and their respective successors, heirs, executors andadministrators.  The parties may executethis Release in any number of counterparts, each of which when executed anddelivered, shall be an original, but all of which when taken together shallconstitute one and the same instrument.

##  

## 4.3                                 Survivalof Section 5.12.  The PurchaserParties and the Holder Parties hereby acknowledge and agree that,notwithstanding any provision of this Release or the Prior Release to thecontrary, their respective obligations pursuant to Section 5.12 of theStock Purchase Agreement shall survive indefinitely.

##  

## 4.4                                 Governing Law.  ThisRelease shall be interpreted in accordance with the laws of the State ofDelaware, without regard to any jurisdiction’s conflict of law provisions.

 

 

[*signatures follow*]

 

5

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IN WITNESS WHEREOF, thePurchaser Parties and the Holder Parties have duly executed this Release as ofthe day and year first above written.

 
| ** ** | **PURCHASER PARTIES:**    |
|------------|---------------------------|
|       |                      |
|       | LIFE THERAPEUTICS LIMITED |
|       |                      |
|       |                      |
|       | By:                       | /s/ Dr. C. H. Nair |   |
|       |                      | Name: Dr. C. H. Nair |
|       |                      | Title: Director |
|       |                      |
|       |                      |
|       | LIFE GELS, INC.           |
|       |                      |
|       |                      |
|       | By:                       | /s/ Dr. C. H. Nair |   |
|       |                      | Name: Dr. C. H. Nair |
|       |                      | Title: Director |
|       |                      |
|       |                      |
|       | LIFE THERAPEUTICS, INC.   |
|       |                      |
|       |                      |
|       | By:                       | /s/ Dr. C. H. Nair |   |
|       |                      | Name: Dr. C. H. Nair |
|       |                      | Title: President |
|       |                      |
|       |                      |
|       | LIFE SERA, INC.           |
|       |                      |
|       |                      |
|       | By:                       | /s/ Dr. C. H. Nair |   |
|       |                      | Name: Dr. C. H. Nair |
|       |                      | Title: CFO and Director |

 

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|   | LIFE THERAPEUTICS NEVADA, INC.     |
|--------|------------------------------------|
|   |                               |
|   |                               |
|   | By:                                | /s/ Dr. C. H. Nair |   |
|   |                               | Name: Dr. C. H. Nair |
|   |                               | Title: Director |
|   |                               |
|   |                               |
|   | LIFE THERAPEUTICS BUSINESS TRUST   |
|   |                               |
|   |                               |
|   | By:                                | /s/ Dr. C. H. Nair |   |
|   |                               | Name: Dr. C. H. Nair |
|   |                               | Title: Director |
|   |                               |
|   |                               |
|   | LIFE THERAPEUTICS INVESTMENTS, LLC |
|   |                               |
|   |                               |
|   | By:                                | /s/ Dr. C. H. Nair |   |
|   |                               | Name: Dr. C. H. Nair |
|   |                               | Title: Director |
|   |                               |
|   |                               |
|   | LIFE THERAPEUTICS MANAGEMENT       |
|   | PARTNERSHIP, LP                    |
|   |                               |
|   |                               |
|   | By:                                | /s/ Dr. C. H. Nair |   |
|   |                               | Name: Dr. C. H. Nair |
|   |                               | Title: Director |

 

7

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|       | ALLEGHENY BIOLOGICALS, INC.  |
|------------|------------------------------|
|       |                         |
|       |                         |
|       | By:                          | /s/ Dr. C. H. Nair |   |
|       |                         | Name: Dr. C. H. Nair |
|       |                         | Title: Director |
|       |                         |
|       |                         |
| ** ** | **HOLDER PARTIES:**          |
| ** ** | ** **                   |
|       |                         |
|       | SEROLOGICALS CORPORATION     |
|       |                         |
|       |                         |
|       | By:                          | /s/ Harold W. Ingalls |   |
|       |                         | Name: Harold W. Ingalls |
|       |                         | Title: Vice President, Finance and Chief  Financial  Officer |
|       |                         |
|       |                         |
|       | SEROLOGICALS FINANCE COMPANY |
|       |                         |
|       |                         |
|       | By:                          | /s/ Harold W. Ingalls |   |
|       |                         | Name: Harold W. Ingalls |
|       |                         | Title: President |

 

8

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**Schedule 3 – Termination Statements**

 
| **Old Name of  Debtor**                      | ** ** | **New  Name of  Debtor**                      | ** ** | **Place  of Filing**             | ** ** | **Financing  Statement  No./Date of  Filing** | ** ** | **Old  Business  Address**               | ** ** | **New  Business  Address**                                 |
|----------------------------------------------|------------|-----------------------------------------------|------------|----------------------------------|------------|-----------------------------------------------|------------|------------------------------------------|------------|------------------------------------------------------------|
| Serologicals  Specialty Biologics, Inc. |       | LifeSera, Inc.                           |       | Delaware  Department of State    |       | 40105868  01/14/04                            |       | 5655  Spalding Drive  Norcross, GA 30092 |       | 736 Park  North Blvd., Suite 100  Clarkston, GA 30021 |
| Serologicals  Nevada, Inc.              |       | Life  Therapeutics Nevada, Inc.          |       | Nevada  Secretary of State       |       | 2004001589-7  01/16/04                        |       | 5655  Spalding Drive  Norcross, GA 30092 |       | 736 Park  North Blvd., Suite 100  Clarkston, GA 30021 |
| Allegheny  Biologicals, Inc.            |       | No Change                                     |       | Pennsylvania  Secretary of State |       | 20040050136  01/15/04                         |       | 5655  Spalding Drive  Norcross, GA 30092 |       | 736 Park  North Blvd., Suite 100  Clarkston, GA 30021 |
| Serologicals  Investments, LLC               |       | Life  Therapeutics Investments, LLC           |       | Georgia  Secretary of State      |       | 060200400609  01/16/04                        |       | 5655  Spalding Drive  Norcross, GA 30092 |       | 736 Park  North Blvd., Suite 100  Clarkston, GA 30021 |
| Serologicals  Management Partnership, LP     |       | Life  Therapeutics Management Partnership LP  |       | Delaware  Department of State    |       | 40105942  01/14/04                            |       | 5655  Spalding Drive  Norcross, GA 30092 |       | 736 Park  North Blvd., Suite 100  Clarkston, GA 30021 |
| Serologicals  Business Trust                 |       | Life  Therapeutics Business Trust             |       | Nevada  Secretary of State       |       | 2004001590-0  01/16/04                        |       | 5655  Spalding Drive  Norcross, GA 30092 |       | 736 Park  North Blvd., Suite 100  Clarkston, GA 30021 |
| Gradipore, Inc.                         |       | Life  Gels, Inc.                         |       | Delaware  Department of State    |       | 40105769  01/14/04                            |       | 5655  Spalding Drive  Norcross, GA 30092 |       | 736 Park  North Blvd., Suite 100  Clarkston, GA 30021 |
| Gradipore  Plasma Holdings, Inc.        |       | Life  Therapeutics Plasma Holdings, Inc. |       | Delaware  Department of State    |       | 40105645  01/14/04                            |       | 5655  Spalding Drive  Norcross, GA 30092 |       | 736 Park  North Blvd., Suite 100  Clarkston, GA 30021 |

 

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